The Prudential
Institutional
Fund
Semi-Annual Report
March 31, 1995
Growth Stock Fund
Stock Index Fund
International Stock Fund
Active Balanced Fund
Balanced Fund
Income Fund
Money Market Fund
<PAGE>
THE PRUDENTIAL TABLE OF
INSTITUTIONAL CONTENTS
FUND
LETTER TO SHAREHOLDERS 1
GROWTH STOCK FUND 3
STOCK INDEX FUND 6
INTERNATIONAL STOCK FUND 16
ACTIVE BALANCED FUND 20
BALANCED FUND 24
INCOME FUND 29
MONEY MARKET FUND 32
FINANCIAL STATEMENTS 35
NOTES TO FINANCIAL STATEMENTS 43
<PAGE>
THE PRUDENTIAL LETTER TO
INSTITUTIONAL SHAREHOLDERS
FUND
May 17, 1995
We are pleased to provide you with the Semi-Annual Report of The Prudential
Institutional Fund for the six months ended March 31, 1995. During this period,
the total net assets of the Fund's seven portfolios have grown steadily from
$493.1 million on September 30, 1994 to $601.8 million on March 31, 1995. Each
of the portfolios has a distinct investment objective designed to allow
shareholders the opportunity to select various options to match different goals
and risk tolerances.
Economy
The first signs of an aging recovery were apparent in the fourth quarter of
1994, following a series of short-term interest rate increases by the Federal
Reserve which began earlier in the year. After the sixth rate increase in
November, the housing sector slowed, holiday sales fell below expectations and
the upward movement in leading economic indicators was finally broken.
During the first quarter of 1995, the dollar lost value against major
currencies, manufacturing jobs declined, and the core Producer Price Index (PPI)
moderated. A clear deceleration from 1994's GDP growth rate of 4% permitted a
respite from the interest rate spiral that depressed stock and bond returns in
1994.
Market Review
As the Federal Reserve continued implementing its interest-rate-tightening
policy during the last half of the year, volatility was evident in both the
stock and bond markets. Despite solid earnings, the stock market, as measured
by
the S&P 500 Index, ended the last quarter of 1994 down 0.02%. Foreign stocks
were down 1.02% for the quarter, as measured by the Morgan Stanley Europe,
Australia and Far East Index (EAFE).
The bond market reacted to negative news throughout the fourth quarter,
especially when news that Orange County's aggressive use of leveraged derivative
securities caused the fund's value to plummet. By the end of the quarter, the
Treasury yield curve had flattened and the bond market, as measured by the
Lehman Aggregate Index, was up slightly--0.38%.
In contrast to 1994, both stock and bond markets posted gains during the
first quarter of 1995. Although the dollar fell significantly against the Yen
(and to a lesser degree against the Deutschmark), the S&P 500 was up nearly
10%--one of the largest gains on record. Foreign stocks as measured by the EAFE
Index were up 1.86% for the quarter. Bonds rallied steadily throughout the
quarter and yields on 30-year Treasury bonds declined by 0.4%, leaving interest
rates below levels last seen in July 1994. The bond market, as measured by the
Lehman Aggregate, was 5.04% ahead for the quarter.
Fund Performance
Each of the Funds achieved positive absolute results for the six-month period
ending March 31, 1995, with the exception of the International Stock Fund. This
is a turnaround from the one-year period ended September 30, 1994, when returns
were slightly negative for most funds and very positive for the International
Stock Fund. This illustrates the benefit to investors of diversification in
dampening portfolio volatility.
Since each Fund's inception, returns have been positive and competitive with
the respective
1
<PAGE>
THE PRUDENTIAL LETTER TO
INSTITUTIONAL SHAREHOLDERS
FUND
comparable benchmarks. Performance information, comments from each investment
adviser and holdings for each Fund can be found on the following pages.
Summary
Investment markets continue to be volatile, often moving rapidly over short
time periods. As a result, it is important to again emphasize the need to focus
on the longer-term. Investors who look beyond the short-term volatility may be
rewarded in accordance with the risk assumed. We are pleased with the Funds'
performance thus far and continue to look forward to meeting the investment and
retirement needs of our shareholders.
Sincerely,
Mark R. Fetting
President
2
<PAGE>
THE PRUDENTIAL GROWTH STOCK FUND
INSTITUTIONAL
FUND
OBJECTIVE: Seeks 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 companies that demonstrate superior sales growth, high
levels of unit growth, high return on assets and equity, and a strong balance
sheet, as well as being attractively valued in the judgment of the Adviser.
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 $22
billion in equity, balanced, and fixed income accounts.
ADVISER'S COMMENTS: During the six-month period ended March 31, 1995, the Fund
benefited from the strong performance of technology stocks, but volatility in
this sector was demonstrated repeatedly by large drops in stocks which did not
meet short-term expectations. During the period, the Fund outperformed the
Lipper Growth Funds Average return of 6.0%, but underperformed the Standard &
Poor's 500 Index. Had it not been for the exposure in the portfolio to the
devaluation of the Mexican peso in December 1994, the Fund would have
outperformed the S&P 500. The Mexican stocks in the Fund were eliminated as
quickly as possible, but the damage was done. An encouraging sign was the
renewed strength of the traditional consumer growth stocks, particularly the
larger companies. These are well represented in the Fund and have underperformed
for the three years leading up to the middle of 1994, but may be starting a
period of significant outperformance. We remain encouraged by the strong
earnings growth prospects of the portfolio companies and their
uncharacteristically low valuation compared to the market in general. As the
economy slows, we believe these dynamics position the Fund well for the
foreseeable future.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Periods ended 3/31/95 Fund S&P 500
<S> <C> <C>
-------------------------- ------------- --------
Six Months................ +8.30% +9.72%
One Year.................. +10.41 +15.57
From Inception (11/5/92).. +11.77 +10.88
</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
is no guarantee of future results. The Manager is currently limiting the
expenses of the Fund. Without this reduction of expenses, the total return would
have been lower.
The S&P 500 Index is a commonly used unmanaged indicator of stock market
performance.
3
<PAGE>
THE PRUDENTIAL GROWTH STOCK FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS
Common Stocks--96.2%
Aerospace/Defense--2.1%
53,500 Boeing Co.......................... $ 2,882,313
-----------
Beverages--3.6%
48,300 Coca-Cola Co....................... 2,728,950
60,200 PepsiCo Inc........................ 2,347,800
-----------
5,076,750
-----------
Capital Goods--2.0%
63,400 Duracell International Inc......... 2,837,150
-----------
Computer Software & Services--21.1%
12,300 America Online Inc................. 913,275
63,400 AutoDesk, Inc...................... 2,670,725
98,000 Cisco Systems, Inc.*............... 3,736,250
Computer Associates International,
52,100 Inc.............................. 3,093,437
60,900 CUC International, Inc.*........... 2,367,488
27,200 Electronic Arts, Inc............... 615,400
109,300 EMC Corp.*......................... 1,830,775
50,400 Microsoft Corp.*................... 3,584,700
62,300 Novell, Inc.*...................... 1,183,700
42,900 Oracle Systems Corp.*.............. 1,340,625
47,500 Silicon Graphics Inc.*............. 1,686,250
52,600 Sun Microsystems Inc.*............. 1,827,850
60,000 Sybase, Inc.*...................... 2,400,000
74,000 Symbol Technologies, Inc.*......... 2,275,500
-----------
29,525,975
-----------
Consumer Goods--1.1%
45,500 Lowes Companies, Inc............... 1,569,750
-----------
Cosmetics & Soaps--1.9%
32,400 Gillette Co........................ 2,644,650
-----------
<CAPTION>
Value
Shares Description (Note 1)
- ------------------------------------------------------------
<C> <S> <C>
Drugs & Medical Supplies--5.4%
109,700 Astra AB Class A (Sweden).......... $ 2,910,464
38,100 Pfizer Inc......................... 3,267,075
Smith Kline Beecham PLC (ADR)
36,900 (United Kingdom)................. 1,383,750
-----------
7,561,289
-----------
Electronics--11.1%
18,800 AMP Inc............................ 676,800
41,400 Hewlett-Packard Co................. 4,983,525
63,400 Intel Corp......................... 5,381,075
57,700 Motorola, Inc...................... 3,151,862
45,800 Sensormatic Electronics Corp....... 1,282,400
-----------
15,475,662
-----------
Financial Services--4.4%
28,500 Federal National Mortgage Assn..... 2,319,187
34,000 First Financial Mgmt. Corp......... 2,456,500
51,400 Mutual Risk Management, Ltd........ 1,432,775
-----------
6,208,462
-----------
Health Care Services--2.5%
78,600 Humana, Inc.*...................... 2,014,125
37,200 Value Health, Inc.*................ 1,422,900
-----------
3,437,025
-----------
Hospital Management--2.3%
69,900 United Healthcare Corp............. 3,267,825
-----------
Insurance--2.1%
American International Group,
27,900 Inc.............................. 2,908,575
-----------
Leisure--2.8%
72,300 Disney (Walt) Co................... 3,859,012
-----------
Lodging--2.7%
27,400 Hilton Hotels Corp................. 2,031,025
45,200 Promus Cos., Inc.*................. 1,695,000
-----------
3,726,025
-----------
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
THE PRUDENTIAL GROWTH STOCK FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Machinery--1.0%
49,000 Harnischfeger Industries, Inc...... $ 1,372,000
-----------
Media--5.3%
Clear Channel Communications,
32,700 Inc.*............................ 1,945,650
19,700 McGraw-Hill, Inc................... 1,413,475
35,200 Omnicom Group...................... 1,927,200
Reuters Holdings PLC (ADR) (United
45,000 Kingdom)......................... 2,070,000
-----------
7,356,325
-----------
Miscellaneous Basic Industry--2.9%
44,900 Applied Materials, Inc.*........... 2,475,112
33,900 Cerner Corp.*...................... 1,644,150
-----------
4,119,262
-----------
Office Equipment & Supplies--2.6%
65,000 Compaq Computer Corp.*............. 2,242,500
11,700 Xerox Corp......................... 1,373,288
-----------
3,615,788
-----------
Railroads--1.0%
24,500 Consolidated Rail Corp............. 1,375,063
-----------
Restaurants--2.7%
Lone Star Steakhouse & Saloon,
53,000 Inc.............................. 1,437,625
69,300 McDonald's Corp.................... 2,364,862
-----------
3,802,487
-----------
Retail--5.0%
55,750 Dollar General Corp................ 1,463,438
58,633 Home Depot, Inc.................... 2,594,510
32,700 Kohls Corp. *...................... 1,446,975
35,900 Nordstrom, Inc..................... 1,462,925
-----------
6,967,848
-----------
Value
Shares Description (Note 1)
- ------------------------------------------------------------
Technology--4.9%
53,300 Adobe Systems, Inc................. $ 2,638,350
28,233 Chiron Corp.*...................... 1,517,524
50,300 LSI Logic Corp.*................... 2,640,750
-----------
6,796,624
-----------
Telecommunications--4.3%
Ericsson (L.M.) Telephone Co.,
24,700 (ADR) (Sweden)................... 1,526,769
24,300 Nokia Corp. (ADR) (Finland)........ 1,786,050
Vodafone Group PLC (ADR)
82,100 (United Kingdom)................. 2,719,562
-----------
6,032,381
-----------
Transportation--1.4%
Wisconsin Central Transportation
40,700 Corp.*........................... 1,938,338
-----------
Total common stocks
(cost $114,674,811)................ 134,356,579
-----------
Principal
Amount
(000) SHORT-TERM INVESTMENT
- --------
Repurchase Agreement--1.9%
$ 2,675 Joint Repurchase Agreement Account,
6.29%, 4/3/95 (Note 5)
(cost $2,675,000)................ 2,675,000
-----------
Total Investments--98.1%
(cost $117,349,811; Note 4)........ 137,031,579
Other assets in excess of
liabilities--1.9%................ 2,625,484
-----------
Net Assets--100%................... $139,657,063
-----------
-----------
- ---------------
* Non-income producing security.
ADR--American Depository Receipt.
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
INSTITUTIONAL
FUND
OBJECTIVE: Seeks 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 Adviser
accomplishes 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 $3.7 billion in
stock index funds.
ADVISER'S COMMENTS: The Fund continued to meet its objective of tracking the
S&P 500 Index. Before fees, the Stock Index Fund led the S&P 500 Index by 0.1%
for the six months ended March 31, 1995.
The fourth quarter of 1994 was characterized by the same volatility that was
evident in the market throughout the year. The S&P moved between a high of 473
and a low of 445--a spread of 28 index points, or more than 5%. Despite
fluctuations in the stock market which accompanied the Federal Reserve's sixth
rate hike, stocks were even for the quarter.
By the end of the first quarter in 1995, the S&P 500 was up nearly 10%--one of
the best returns on record. The first quarter's gains were largely value-driven.
Last year, the negative impact of rising interest rates offset the positive
effects of strong corporate earnings. That trend was reversed in 1995.
Earnings are still strong and lower interest rates have allowed earnings to be
fully reflected in rising stock prices. The historical average annual return in
stocks about equals the first quarter's results and subsequent increases in
stock prices will have to be accompanied by corresponding reductions in interest
rates for valuations to remain attractive.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Periods ended 3/31/95 Fund S&P 500
<S> <C> <C>
------------------------- ------------- --------
Six Months............... +9.52% +9.72%
One Year................. +15.35 +15.57
From Inception
(11/5/92)................ +10.27 +10.88
</TABLE>
Returns from inception are average annual returns. Fund performance figures are
historical, reflect reinvestment of dividends and are net of expenses.
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 is no guarantee of future results. The Manager is currently limiting
the expenses of the Fund. Without this reduction of expenses, the total return
would have been lower.
The S&P 500 Index is a commonly used unmanaged indicator of stock market
performance. ``Standard & Poor's,'' ``S&P,'' ``S&P 500,'' ``Standard & Poor's
500,'' and ``500'' are trademarks of McGraw-Hill, Inc. and have been licensed
for use by The Prudential Insurance Company of America and its
affiliates and subsidiaries. The Fund is not sponsored, endorsed, sold or
promoted by S&P, and S&P makes no representation regarding the advisability of
investing in the Fund.
6
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS
Common Stocks and Equivalents--83.2%
Aerospace/Defense--1.7%
4,400 Allied-Signal, Inc................. $ 172,700
5,300 Boeing Co.......................... 285,537
500 E-Systems, Inc..................... 22,688
1,000 General Dynamics Corp.............. 47,000
3,530 Lockheed Corp...................... 186,648
1,300 Loral Corp......................... 55,250
1,900 McDonnell Douglas Corp............. 105,925
800 Northrop Corp...................... 39,100
2,000 Raytheon Co........................ 145,750
3,400 Rockwell International Corp........ 132,600
-----------
1,193,198
-----------
Airlines--0.3%
1,250 AMR Corp.*......................... 80,937
800 Delta Airlines, Inc................ 50,200
2,200 Southwest Airlines Co.............. 39,325
900 USAir Group Inc.................... 5,513
-----------
175,975
-----------
Aluminum--0.4%
3,500 Alcan Aluminum Ltd................. 93,187
2,800 Aluminum Co. of America............ 115,850
950 Reynolds Metals Co................. 46,788
-----------
255,825
-----------
Automobiles & Trucks--2.1%
5,600 Chrysler Corp...................... 234,500
700 Cummins Engine, Inc................ 31,325
1,500 Dana Corp.......................... 38,250
900 Echlin Inc......................... 34,650
16,000 Ford Motor Co...................... 432,000
11,900 General Motors Corp................ 526,574
1,900 Genuine Parts Co................... 75,763
600 Johnson Controls, Inc.............. 30,525
1,020 Navistar International Corp.*...... 13,005
900 Safety Kleen Corp.................. $ 16,088
-----------
1,432,680
-----------
Banking--4.6%
6,337 Banc One Corp...................... 180,605
1,700 Bank of Boston Corp................ 50,575
2,600 Bank of New York, Inc.............. 85,475
5,800 BankAmerica Corp................... 279,850
1,200 Bankers Trust NY Corp.............. 62,700
1,500 Barnett Banks, Inc................. 68,250
2,000 Boatmen's Bancshares............... 60,500
2,800 Chase Manhattan Corp............... 99,750
3,800 Chemical Banking Corp.............. 143,450
6,200 Citicorp........................... 263,500
2,200 CoreStates Financial Corp.......... 70,400
1,400 First Chicago Corp................. 70,175
1,300 First Fidelity Bancorp, Inc........ 64,350
1,200 First Interstate Bank Corp......... 94,800
2,800 First Union Corp................... 121,450
2,100 Fleet Financial Group, Inc......... 67,988
1,000 Golden West Financial Corp......... 38,250
2,000 Great Western Financial Corp....... 37,500
1,800 H.F. Ahmanson & Co................. 32,400
3,800 KeyCorp............................ 107,350
2,325 Mellon Bank Corp................... 94,744
3,000 Morgan (J.P.) & Co., Inc........... 183,000
2,300 National City Corp................. 61,237
4,400 NationsBank Corp................... 223,300
2,400 NBD Bancorp, Inc................... 78,000
4,800 Norwest Corp....................... 121,800
3,700 PNC Financial Corp................. 90,187
1,900 Shawmut National Corp.............. 50,113
1,900 Suntrust Banks, Inc................ 101,650
1,500 U.S. Bancorp....................... 39,000
850 Wells Fargo & Co................... 132,918
-----------
3,175,267
-----------
Beverages--3.0%
500 Adolph Coors Co.................... 8,188
4,100 Anheuser Busch Cos., Inc........... 240,362
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Beverages, cont'd.
1,100 Brown-Forman Corp.................. $ 36,713
20,200 Coca-Cola Co....................... 1,141,300
12,400 PepsiCo Inc........................ 483,600
5,800 Seagram Co., Ltd................... 184,150
-----------
2,094,313
-----------
Chemicals--2.4%
1,800 Air Products & Chemicals, Inc...... 93,825
550 Albemarle Corp..................... 7,013
4,400 Dow Chemical Co.................... 321,200
10,700 duPont (E.I.) de Nemours & Co...... 647,350
1,300 Eastman Chemical Co................ 72,313
1,500 Grace (W.R.) & Co.................. 79,875
1,800 Hercules, Inc...................... 83,925
1,800 Monsanto Co........................ 144,450
1,000 Nalco Chemical Co.................. 33,625
1,100 Rohm & Haas Co..................... 64,900
800 Sigma-Aldrich...................... 31,000
2,300 Union Carbide Corp................. 70,437
-----------
1,649,913
-----------
Chemical - Specialty--0.4%
1,550 Engelhard Corp..................... 45,918
300 First Mississippi Corp............. 7,875
1,100 Great Lakes Chemical Corp.......... 68,613
2,300 Morton International, Inc.......... 66,700
2,100 Praxair, Inc....................... 48,825
700 Raychem Corp....................... 28,438
-----------
266,369
-----------
Commercial Services--0.1%
1,300 Deluxe Corp........................ 37,050
500 Harland (John H.) Co............... 11,313
1,500 Moore Corp. Ltd.................... 29,250
700 Ogden Corp......................... 14,087
-----------
91,700
-----------
Computer Software & Services--2.6%
800 AutoDesk, Inc...................... $ 33,700
2,200 Automatic Data Processing, Inc..... 138,600
700 Ceridian Corp.*.................... 23,363
4,000 Cisco Systems, Inc.*............... 152,500
Computer Associates International,
2,500 Inc.............................. 148,437
850 Computer Sciences Corp............. 41,969
25 Harris Computer Systems Inc........ 438
700 Intergraph Corp.*.................. 8,313
800 Lotus Development Corp.*........... 30,600
1,600 Micron Technology Inc.............. 121,600
9,200 Microsoft Corp. *.................. 654,350
5,800 Novell, Inc.*...................... 110,200
6,750 Oracle Systems Corp.*.............. 210,937
2,200 Silicon Graphics Inc............... 78,100
1,500 Sun Microsystems Inc.*............. 52,124
1,800 Tandem Computers Inc.*............. 27,900
-----------
1,833,131
-----------
Construction--0.1%
1,300 Fluor Corp......................... 62,725
500 Foster Wheeler Corp................ 16,938
400 Kaufman & Broad Home Corp.......... 4,750
400 Pulte Corp......................... 9,400
-----------
93,813
-----------
Consumer Goods--0.5%
500 Centex Corp........................ 12,063
700 Fleetwood Enterprises, Inc......... 16,537
2,500 Lowes Companies, Inc............... 86,250
2,500 Masco Corp......................... 69,063
1,700 Maytag Corp........................ 29,113
700 Owens Corning Fiberglas Corp....... 25,200
Pioneer Hi Bred International,
1,300 Inc.............................. 46,800
100 Skyline Corp....................... 1,775
700 Stanley Works...................... 27,562
1,200 Whirlpool Corp..................... 65,700
-----------
380,063
-----------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Containers--0.1%
500 Ball Corp.......................... $ 17,188
800 Bemis, Inc......................... 23,500
1,400 Crown Cork & Seal, Inc............. 61,425
-----------
102,113
-----------
Cosmetics & Soaps--2.0%
400 Alberto Culver Co.................. 11,850
1,050 Avon Products, Inc................. 63,525
800 Clorox Co.......................... 48,000
2,300 Colgate-Palmolive Co............... 151,800
3,500 Gillette Co........................ 285,687
International Flavors & Fragrances
1,750 Inc.............................. 90,344
10,800 Procter & Gamble Co................ 715,500
-----------
1,366,706
-----------
Diversified Gas--0.1%
1,600 Coastal Corp....................... 46,000
300 Eastern Enterprises, Inc........... 8,325
1,000 Enserch Corp....................... 14,875
800 NICOR Inc.......................... 20,000
400 Oneok Inc.......................... 7,550
-----------
96,750
-----------
Drugs & Medical Supplies--6.8%
12,700 Abbott Laboratories................ 452,438
1,200 ALZA Corp.*........................ 25,500
4,800 American Home Products Corp........ 342,000
2,100 Amgen, Inc.*....................... 141,487
800 Bard (C.R.), Inc................... 22,100
900 Bausch & Lomb, Inc................. 32,175
4,400 Baxter International Inc........... 144,100
1,100 Becton Dickinson & Co.............. 59,675
1,700 Biomet, Inc.*...................... 28,688
2,300 Boston Scientific Corp.*........... 56,638
8,050 Bristol-Myers Squibb Co............ 507,150
10,100 Johnson & Johnson Co............... 600,950
4,600 Lilly (Eli) & Co................... $ 336,375
1,800 Medtronic, Inc..................... 124,875
19,800 Merck & Co., Inc................... 843,974
5,000 Pfizer Inc......................... 428,750
3,000 Schering-Plough Corp............... 223,125
700 St. Jude Medical, Inc.............. 30,275
900 United States Surgical Corp........ 20,475
2,700 Upjohn Co.......................... 96,525
2,100 Warner Lambert Co.................. 164,325
-----------
4,681,600
-----------
Electronics--3.5%
1,500 Advanced Micro Devices, Inc.*...... 50,813
1,700 Amdahl Corp........................ 18,700
3,300 AMP Inc............................ 118,800
1,900 Apple Computer, Inc................ 66,974
400 Cray Research, Inc.*............... 7,350
400 Data General Corp.*................ 2,950
2,200 Digital Equipment Corp............. 83,325
800 EG&G, Inc.......................... 12,000
3,500 Emerson Electric Co................ 232,750
600 Harris Corp........................ 28,725
4,000 Hewlett-Packard Co................. 481,500
6,500 Intel Corp......................... 551,687
9,200 Motorola, Inc...................... 502,550
1,900 National Semiconductors Corp.*..... 33,250
700 Perkin Elmer Corp.................. 20,388
1,000 Tandy Corp......................... 47,750
500 Tektronix, Inc..................... 20,000
1,500 Texas Instruments Inc.............. 132,750
350 Thomas & Betts Corp.*.............. 22,663
500 Zenith Electronics Corp............ 3,875
-----------
2,438,800
-----------
Financial Services--2.1%
7,900 American Express Co................ 275,512
800 Beneficial Corp.................... 31,400
1,700 Block (H&R), Inc................... 73,738
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Financial Services, cont'd.
2,658 Dean Witter Discover & Co.......... $ 108,314
2,800 Federal Home Loan Mortgage Corp.... 169,400
4,350 Federal National Mortgage Assn..... 353,980
1,700 First Data Corp.................... 88,188
1,500 Household International Corp....... 65,250
2,350 MBNA Corp.......................... 68,150
3,000 Merrill Lynch & Co., Inc........... 127,875
1,700 Salomon, Inc....................... 57,588
1,150 Transamerica Corp.................. 65,119
-----------
1,484,514
-----------
Food & Beverage--2.5%
8,096 Archer-Daniels-Midland Co.......... 150,788
3,900 Campbell Soup Co................... 188,663
3,900 ConAgra, Inc....................... 129,188
2,300 CPC International, Inc............. 124,488
600 Fleming Cos., Inc.................. 13,575
2,450 General Mills, Inc................. 146,081
900 Giant Foods. Inc................... 21,488
3,900 Heinz (H.J.) Co.................... 150,150
1,400 Hershey Foods Corp................. 71,575
3,550 Kellogg Co......................... 207,230
2,100 Quaker Oats Co..................... 69,563
1,600 Ralston Purina Co.................. 76,400
7,500 Sara Lee Corp...................... 195,937
2,900 Sysco Corp......................... 76,125
1,800 Wrigley (W.M.) Junior Co........... 79,875
-----------
1,701,126
-----------
Forest Products--1.5%
700 Boise Cascade Corp................. 24,325
1,500 Champion International Corp........ 64,875
600 Federal Paper Board, Inc........... 17,100
1,450 Georgia Pacific Corp............... 115,637
2,000 International Paper Co............. 150,250
1,200 James River Corp................... 31,200
2,500 Kimberly Clark Corp................ 130,000
1,700 Louisiana Pacific Corp............. 46,963
900 Mead Corp.......................... 48,263
400 Potlatch Corp...................... $ 16,850
1,200 Scott Paper Co..................... 107,250
1,400 Stone Container Corp............... 32,025
900 Temple Inland Inc.................. 40,387
1,100 Union Camp Corp.................... 57,063
1,000 Westvaco Corp...................... 41,500
3,200 Weyerhaeuser Co.................... 124,400
-----------
1,048,088
-----------
Gas Pipelines--0.6%
2,318 Cinergy Corp....................... 57,660
800 Columbia Gas System, Inc.*......... 23,700
1,500 Consolidated Natural Gas Co........ 57,937
4,000 Enron Corp......................... 132,000
1,700 Noram Energy Corporation........... 9,138
2,300 Panhandle Eastern Corporation...... 52,900
500 Peoples Energy Corp................ 12,500
1,400 Williams Cos., Inc................. 42,875
-----------
388,710
-----------
Hospital Management--0.9%
1,200 Beverly Enterprises, Inc.*......... 17,400
5,652 Columbia Healthcare Corp........... 243,036
700 Community Psychiatric Centers...... 9,013
1,000 Manor Care, Inc.................... 30,375
National Medical Enterprises,
3,000 Inc.............................. 47,625
1,500 Service Corp. International........ 42,000
400 Shared Medical Systems Corp........ 14,650
2,500 U.S. HealthCare Inc................ 110,625
2,700 United Healthcare Corp............. 126,225
-----------
640,949
-----------
Housing Construction
600 Armstrong World Industries......... 27,375
-----------
Insurance--2.8%
1,800 Aetna Life & Casualty Co........... 102,600
Alexander & Alexander Services,
600 Inc.............................. 14,175
3,200 American General Corp.............. 103,200
American International Group,
4,975 Inc.............................. 518,644
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Insurance, cont'd.
1,350 Chubb Corp......................... $ 106,650
1,150 CIGNA Corp......................... 85,963
800 Continental Corp................... 15,700
1,300 General Re Corp.................... 171,600
750 Jefferson-Pilot Corp............... 44,344
1,500 Lincoln National Corp.............. 60,375
1,200 Marsh & McLennan Cos............... 98,550
1,500 Providian Corp..................... 52,687
1,000 SAFECO Corp........................ 54,750
1,300 St. Paul Companies, Inc............ 65,000
1,150 Torchmark Corp..................... 47,725
5,031 Travelers, Inc..................... 194,321
1,100 UNUM Corp.......................... 49,775
1,300 USF&G Corp......................... 18,200
300 USLIFE Corp........................ 11,438
2,700 Wachovia Corp...................... 95,850
-----------
1,911,547
-----------
Leisure--0.9%
800 Bally Entertainment Group*......... 6,800
1,500 Brunswick Corp..................... 30,188
8,400 Disney (Walt) Co................... 448,350
400 Handleman Co....................... 4,300
1,400 Hasbro, Inc........................ 47,250
600 King World Productions, Inc........ 23,625
3,450 Mattel, Inc........................ 84,956
300 Outboard Marine Corp............... 6,300
-----------
651,769
-----------
Lodging--0.3%
800 Hilton Hotels Corp................. 59,300
1,900 Marriott International, Inc........ 66,025
1,600 Promus Cos., Inc.*................. 60,000
-----------
185,325
-----------
Machinery--1.1%
500 Briggs & Stratton Corp............. 18,438
3,200 Caterpillar Inc.................... 178,000
500 Cincinnati Milacron, Inc........... 11,438
300 Clark Equipment Co................. $ 24,750
1,800 Cooper Industries, Inc............. 69,750
1,400 Deere & Co......................... 113,750
900 Dover Corp......................... 58,274
1,200 Eaton Corp......................... 65,100
500 Giddings & Lewis, Inc.............. 8,500
700 Harnischfeger Industries, Inc...... 19,600
1,600 Ingersoll Rand Co.................. 52,600
602 PACCAR Inc......................... 25,585
800 Parker Hannifin Corp............... 35,400
700 Snap-On Tools Corp................. 25,550
150 SPX Corp........................... 2,175
500 Timken Co.......................... 17,750
700 Varity Corp.*...................... 26,600
-----------
753,260
-----------
Media--2.2%
2,400 Capital Cities/ABC, Inc............ 211,800
1,020 CBS, Inc........................... 65,280
3,650 Comcast Corp....................... 57,031
2,400 Donnelley (R.R.) & Sons, Co........ 82,500
1,500 Dow Jones & Co., Inc............... 56,813
2,700 Dun & Bradstreet Corp.............. 142,088
2,150 Gannett, Inc....................... 114,755
1,200 Interpublic Group Cos., Inc........ 44,850
850 Knight-Ridder, Inc................. 48,025
800 McGraw-Hill, Inc................... 57,400
600 Meredith Corp...................... 15,600
1,500 New York Times Co.................. 34,688
5,900 Time Warner, Inc................... 222,725
2,000 Times Mirror Co. (The)............. 38,500
1,100 Tribune Co......................... 60,775
5,639 Viacom Inc.*....................... 252,345
-----------
1,505,175
-----------
Mineral Resources--0.8%
700 ASARCO Inc......................... 18,463
Barrick Gold Corp. (ADR)
5,400 (Canada)......................... 135,000
1,450 Cyprus Minerals Co................. 41,143
1,800 Echo Bay Mines, Ltd................ 18,675
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Mineral Resources, cont'd.
2,100 Homestake Mining Co................ $ 38,850
1,800 INCO, Ltd.......................... 50,175
1,398 Newmont Mining Corp................ 59,765
1,100 Phelps-Dodge Corp.................. 62,563
600 Pittston Minerals Group............ 16,500
3,700 Placer Dome, Inc................... 90,187
2,540 Santa Fe Pacific Gold Corp......... 32,067
-----------
563,388
-----------
Miscellaneous Basic Industry--4.3%
1,300 Applied Materials, Inc.*........... 71,663
Bassett Furniture Industries,
225 Inc.............................. 5,906
3,100 Browning Ferris Industries, Inc.... 105,400
500 Crane Co........................... 15,188
1,100 Ecolab, Inc........................ 26,675
550 FMC Corp.*......................... 33,275
26,900 General Electric Co................ 1,455,962
700 General Signal Corp................ 24,938
800 Grainger (W.W.) Inc................ 50,400
1,800 Illinois Tool Works, Inc........... 87,975
1,700 ITT Corp........................... 174,462
1,200 Mallinckrodt Group Inc............. 40,500
400 Millipore Corp..................... 22,300
400 Morrison Knudsen Corp.............. 2,400
150 NACCO Industries, Inc.............. 8,175
1,733 Pall Corp.......................... 36,393
3,300 PPG Industries, Inc................ 124,574
100 Strattec Security Corp............. 1,125
808 Teledyne, Inc...................... 21,119
1,400 Textron, Inc....................... 79,275
400 Trinova Corp....................... 12,250
1,000 TRW Inc............................ 68,875
1,200 Tyco International Ltd............. 63,450
2,000 United Technologies Corp........... 138,250
5,600 Westinghouse Electric Corp......... 79,100
7,600 WMX Technologies, Inc.............. 209,000
100 Zurn Industries, Inc............... 1,838
-----------
2,960,468
-----------
Miscellaneous Consumer Growth--2.1%
1,000 Allergan, Inc...................... $ 29,500
1,200 American Greetings Corp............ 35,850
1,300 Black & Decker Corp................ 37,538
3,600 Corning, Inc....................... 129,600
1,400 Dial Corp.......................... 35,525
5,400 Eastman Kodak Co................... 286,874
700 Jostens, Inc....................... 13,913
Minnesota Mining & Manufacturing
6,600 Co............................... 383,625
700 Polaroid Corp...................... 24,325
1,000 Premark International Inc.......... 44,125
2,500 Rubbermaid, Inc.................... 82,500
2,500 Unilever N.V....................... 328,125
1,600 Whitman Corp....................... 30,600
-----------
1,462,100
-----------
Office Equipment & Supplies--2.0%
900 Alco Standard Corp................. 65,250
900 Avery Dennison Corp................ 35,888
4,100 Compaq Computer Corp.*............. 141,450
2,000 Honeywell, Inc..................... 74,750
International Business Machines
9,200 Corp............................. 753,250
2,400 Pitney Bowes, Inc.................. 86,400
2,800 Unisys Corp.*...................... 25,900
1,650 Xerox Corp......................... 193,668
-----------
1,376,556
-----------
Petroleum--7.8%
1,500 Amerada Hess Corp.................. 74,063
7,800 Amoco Corp......................... 496,274
900 Ashland Oil, Inc................... 32,063
2,550 Atlantic Richfield Co.............. 293,250
2,000 Burlington Resources Inc........... 81,500
10,200 Chevron Corp....................... 489,600
19,550 Exxon Corp......................... 1,304,962
800 Kerr McGee Corp.................... 40,800
500 Louisiana Land & Exploration Co.... 18,688
1,300 Maxus Energy Corp.*................ 7,150
6,300 Mobil Corp......................... 583,537
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Petroleum, cont'd.
4,900 Occidental Petroleum Corp.......... $ 107,187
700 Pennzoil Co........................ 33,163
4,100 Phillips Petroleum Co.............. 150,163
8,400 Royal Dutch Petroleum Co........... 1,008,000
1,400 Santa Fe Energy Resources, Inc..... 13,474
1,700 Sun Co., Inc....................... 48,450
2,800 Tenneco Inc........................ 131,950
4,100 Texaco Inc......................... 272,650
3,800 Unocal Corp........................ 109,250
4,400 USX Marathon Corp.................. 77,000
800 Western Atlas, Inc.*............... 34,500
-----------
5,407,674
-----------
Petroleum Services--0.7%
2,200 Baker Hughes Inc................... 44,825
2,900 Dresser Industries, Inc............ 61,625
1,800 Halliburton Co..................... 65,475
400 Helmerich & Payne, Inc............. 10,850
900 McDermott International, Inc....... 24,638
1,500 Oryx Energy Co..................... 18,938
1,000 Rowan Cos., Inc.*.................. 6,500
3,800 Schlumberger, Ltd.................. 226,574
1,400 Sonat Inc.......................... 42,000
-----------
501,425
-----------
Railroads--0.9%
1,400 Burlington Northern Inc............ 83,125
1,200 Consolidated Rail Corp............. 67,350
1,700 CSX Corp........................... 133,875
2,100 Norfolk Southern Corp.............. 140,438
2,275 Santa Fe Pacific Corp.............. 52,325
3,200 Union Pacific Corp................. 176,000
-----------
653,113
-----------
Restaurants--0.6%
400 Luby's Cafeterias, Inc............. 8,500
11,000 McDonald's Corp.................... 375,375
Ryan's Family Steak Houses,
900 Inc.*............................ 6,075
500 Shoney's Inc.*..................... 5,375
1,600 Wendy's International, Inc......... $ 26,200
-----------
421,525
-----------
Retail--5.1%
4,000 Albertsons, Inc.................... 129,000
2,200 American Stores Co................. 56,375
300 Brown Group, Inc................... 8,700
1,100 Bruno's, Inc....................... 9,900
1,700 Charming Shoppes, Inc.............. 9,563
1,500 Circuit City Stores, Inc........... 39,563
1,100 Dayton Hudson Corp................. 78,650
1,800 Dillard Department Stores, Inc..... 49,725
2,300 Gap, Inc........................... 81,650
600 Great Atlantic & Pacific Tea Co.... 13,574
1,200 Harcourt General, Inc.............. 46,800
300 Hartmarx Corp.*.................... 1,613
7,066 Home Depot, Inc.................... 312,671
7,200 K mart Corp........................ 99,000
1,800 Kroger Co.*........................ 47,475
5,600 Limited, Inc....................... 129,500
1,100 Liz Claiborne, Inc................. 19,525
300 Longs Drug Stores Corp............. 9,938
3,900 May Department Stores Co........... 144,300
1,700 Melville Corp...................... 63,325
600 Mercantile Stores, Inc............. 26,774
2,500 Newell Co.......................... 63,750
1,200 NIKE, Inc.......................... 89,550
1,300 Nordstrom, Inc..................... 52,975
100 Oshkosh 'B' Gosh, Inc.............. 1,425
3,700 Penney (J.C.), Inc................. 166,037
1,000 Pep Boys - Manny, Moe & Jack....... 31,000
2,952 Price Costco, Inc.*................ 43,542
1,300 Reebok International, Ltd.......... 46,313
1,300 Rite-Aid Corp...................... 31,850
5,500 Sears Roebuck & Co................. 293,562
1,400 Sherwin Williams Co................ 47,425
800 Stride Rite Corp................... 10,100
1,100 Supervalue, Inc.................... 29,425
1,200 TJX Companies, Inc................. 15,750
4,500 Toys 'R' Us Inc.*.................. 115,312
36,100 Wal-Mart Stores, Inc............... 920,550
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Retail, cont'd.
1,900 Walgreen Co........................ $ 91,437
1,200 Winn-Dixie Stores, Inc............. 67,050
2,000 Woolworth Corp..................... 36,750
-----------
3,531,424
-----------
Rubber--0.2%
1,300 Cooper Tire & Rubber............... 36,888
400 Goodrich (B.F.) Co................. 17,750
2,400 Goodyear Tire & Rubber Co.......... 88,200
-----------
142,838
-----------
Steel--0.3%
1,500 Armco Inc.......................... 10,313
1,600 Bethlehem Steel Corp............... 25,800
700 Inland Steel Industries, Inc.*..... 19,250
1,400 Nucor Corp......................... 78,750
1,200 USX Corp. - U.S. Steel Group....... 40,500
1,450 Worthington Industries, Inc........ 28,818
-----------
203,431
-----------
Telecommunications--1.9%
2,900 ALLTEL Corp........................ 83,375
8,600 Ameritech Corp..................... 354,750
850 Andrew Corp.*...................... 34,637
1,800 DSC Communications Corp.*.......... 58,613
100 M/A-Com, Inc.*..................... 988
10,600 MCI Communications Corp............ 218,625
4,000 Northern Telecom Ltd............... 151,500
1,200 Scientific Atlanta, Inc............ 28,050
5,500 Sprint Corp........................ 166,375
9,600 Tele Communications, Inc........... 201,600
-----------
1,298,513
-----------
Textiles--0.1%
National Service Industries,
800 Inc.............................. 21,600
600 Russell Corp....................... 17,775
300 Springs Industries, Inc............ 11,250
1,000 VF Corp............................ $ 53,125
-----------
103,750
-----------
Tobacco--1.6%
3,100 American Brands Inc................ 121,675
13,550 Philip Morris Cos., Inc............ 884,138
3,100 UST, Inc........................... 98,425
-----------
1,104,238
-----------
Trucking & Shipping--0.3%
600 Consolidated Freightways, Inc.*.... 15,975
900 Federal Express Corp.*............. 60,863
4,300 Laidlaw Inc........................ 37,625
600 Roadway Services, Inc.............. 28,950
1,300 Ryder System, Inc.................. 31,200
400 Yellow Corp........................ 6,400
-----------
181,013
-----------
Utility - Communications--6.1%
7,700 AirTouch Communications*........... 209,825
24,600 AT&T Corp.......................... 1,273,050
6,900 Bell Atlantic Corp................. 363,975
7,800 BellSouth Corp..................... 464,100
15,100 GTE Corp........................... 502,075
6,600 NYNEX Corp......................... 261,525
6,600 Pacific Telesis Group.............. 199,650
9,400 Southwestern Bell Corp............. 395,975
3,600 Texas Utilities Co................. 114,300
7,200 U.S. West, Inc..................... 288,000
3,400 Unicom Corp........................ 80,750
1,600 Union Electric Co.................. 56,600
-----------
4,209,825
-----------
Utility - Electric--2.8%
2,900 American Electric Power, Inc....... 92,075
2,300 Baltimore Gas & Electric Co........ 54,338
2,500 Carolina Power & Light Co.......... 67,813
3,000 Central & South West Corp.......... 72,750
3,700 Consolidated Edison Co............. 100,824
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Utility - Electric, cont'd.
2,300 Detroit Edison Co.................. $ 62,963
2,700 Dominion Resources, Inc............ 97,200
3,200 Duke Power Co...................... 123,200
3,600 Entergy Corp....................... 75,150
2,900 FPL Group, Inc..................... 105,487
1,800 General Public Utilities Corp...... 52,425
2,100 Houston Industries, Inc............ 80,063
2,200 Niagara Mohawk Power Corp.......... 30,250
1,100 Northern States Power Co........... 48,400
2,400 Ohio Edison Co..................... 48,000
1,300 Pacific Enterprises................ 32,175
6,800 Pacific Gas & Electric Co.......... 169,150
4,400 Pacificorp......................... 85,250
3,500 PECO Energy Co..................... 87,938
3,800 Public Service Enterprise Group.... 104,024
7,000 SCE Corp........................... 109,374
10,200 Southern Co........................ 207,824
-----------
1,906,673
-----------
Total common stocks
(cost $51,571,533)................. 57,654,008
-----------
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
SHORT-TERM INVESTMENTS--14.8%
U. S. Government--0.8%
$ 550D United States Treasury Bill
5.76%, 6/1/95
(cost $544,632)................. $ 544,632
-----------
Repurchase Agreement--14.0%
Joint Repurchase Agreement
9,688DD Account,
6.29%, 4/3/95, (Note 5)
(cost $9,688,000)............... 9,688,000
-----------
Total short-term investments
(cost $10,232,632)................ 10,232,632
-----------
Total Investments--98.0%
(cost $61,804,165; Note 4)........ 67,886,640
Other assets in excess of
liabilities--2.0%............... 1,378,967
-----------
Net Assets--100%.................. $69,265,607
-----------
-----------
--------
* Non-income producing security.
D Pledged as initial margin on futures contracts.
DD Hedged by S&P 500 Index futures. See Note 4.
ADR--American Depository Receipt.
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
THE PRUDENTIAL INTERNATIONAL STOCK FUND
INSTITUTIONAL
FUND
OBJECTIVE: Seeks 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 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 $1.6 billion for institutional clients.
ADVISER'S COMMENTS: For the first half of the fiscal year, the Fund returned
- -5.58% vs. the EAFE index of +0.82%. We have seen a continuation of the trend
that began in November 1994. Foreign stocks have been laggards as investors
grapple with interest rates, currency issues and the business cycle. Since many
domestic investors chose to ``stay at home'', flows into international stock
funds declined. We expect this trend to change as investors recognize the values
available in foreign stocks relative to U.S. stocks.
After careful analysis of the situation in Mexico, we decided to eliminate our
positions. The problems will take longer to solve than we originally thought and
the risks are great. While we owned some very good companies, they are at the
mercy of the government. The economy suffers from a volatile currency, high
inflation, very high interest rates and no official government policy on the
peso. The risks of bankruptcies have increased over the last month.
Consequently, we see little upside potential over the medium term.
Looking at other markets, we took profits in France and New Zealand. On the buy
side, money was invested in some undervalued stocks in Sweden and Korea. We are
finding undervalued stocks in the Netherlands, Switzerland, Norway, Australia
and Korea. On a more selective basis, a few companies in Sweden and Spain are
appealing following recent price declines. Japan as a market is still
overvalued, although some issues are beginning to look more attractively priced
as the market continues its decline. As we have mentioned before, stock
selectivity is very important and portfolios should be well diversified by
country and industry. We believe the long-term outlook for the stocks in the
Fund is very good based on attractive valuation levels.
<TABLE>
PERFORMANCE RESULTS:
EAFE
Periods ended 3/31/95 Fund Index
<S> <C> <C>
------------------------- ------------- ----------
Six Months............... -5.58% +0.82%
One Year................. -1.53 +6.08
From Inception
(11/5/92)................ +15.80 +17.52
</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 is no guarantee of future results. Investing in foreign markets
involves additional risks such as currency fluctuations and political and social
developments, which are described in the Fund's prospectus.
The EAFE Index is a commonly used, unmanaged indicator of the performance of
international stock markets.
16
<PAGE>
THE PRUDENTIAL INTERNATIONAL STOCK FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
LONG-TERM INVESTMENTS
Common Stocks--92.0%
Argentina--2.5%
27,000 Telecom Argentina ............... $ 1,167,750
(Utilities)
87,000 YPF Sociedad Anonima (ADR) ...... 1,653,000
(Oil & Gas) -----------
2,820,750
-----------
Australia--5.9%
740,000 CSR Ltd. ........................ 2,345,138
(Multi-Industry)
270,000 National Australia Bank Ltd. .... 2,292,368
(Commercial Banking)
900,000 Pioneer International Ltd. ...... 2,102,664
(Building Materials & -----------
Components)
6,740,170
-----------
Canada--3.1%
100,000 Bank of Nova Scotia ............. 1,932,229
(Commercial Banking)
125,000 MacMillan Bloedel Ltd. .......... 1,610,190
(Forestry & Paper) -----------
3,542,419
-----------
Finland--3.4%
263,000 Enso-Gutzeit Oy, Class R ........ 2,019,100
(Forestry & Paper)
124,000 Outokumpu Oy .................... 1,843,728
(Metals - Non Ferrous) -----------
3,862,828
-----------
France--5.8%
10,000 Chargeurs S.A. .................. 2,100,010
(Multi-Industry)
23,075 Christian Dior S.A. ............. $ 2,129,742
(Textiles & Apparel)
17,000 Peugeot S.A. .................... 2,389,438
(Automobile Manufacturing) -----------
6,619,190
-----------
Germany--1.8%
8,000 Volkswagen A.G. ................. 2,025,427
(Automobile Manufacturing) -----------
Italy--0.5%
550,000 Bca Fideuram S.P.A. ............. 564,020
(Financial Services) -----------
Netherlands--12.5%
20,000 AKZO N.V. ....................... 2,184,623
(Chemicals)
19,000 Gamma Holding N.V. .............. 992,740
(Textiles & Apparel)
52,000 Internationale-Nederlanden Groep 2,565,279
N.V.
(Insurance)
77,000 KLM Royal Dutch Airlines ........ 2,266,174
(Airline/Military Technology)
78,000 Knp Bt (kon) Nv ................. 2,295,605
(Forestry & Paper)
84,000 Pakhoed Holdings N.V. ........... 2,325,165
(Energy Equipment & Services)
63,000 Stork N.V. ...................... 1,658,110
(Machinery & Engineering) -----------
14,287,696
-----------
New Zealand--3.6%
700,000 Fisher & Paykel Industries Ltd. 1,817,049
(Consumer Durable Goods)
1,160,000 Lion Nathan Ltd. ................ 2,311,560
(Beverages & Tobacco) -----------
4,128,609
-----------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
THE PRUDENTIAL INTERNATIONAL STOCK FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
- -------------------------------------------------------------
<C> <S> <C>
Norway--7.9%
195,000 Aker A.S. ....................... $ 2,404,088
(Multi-Industry)
112,000 Hafslund Nycomed A.S. ........... 2,207,478
(Health & Personal Care)
72,000 Orkla A.S. ...................... 2,522,833
(Food & Household Products)
127,900 Unitor Shipping Service, A.S. ... 1,805,061
(Business & Public Services) -----------
8,939,460
-----------
South Korea--8.6%
140 Dong Shin Pharmaceuticals ....... 7,634
(Health & Personal Care)
80,821 Korea First Bank ................ 854,163
(Commercial Banking)
21,113 Korea Long Term Credit Bank ..... 653,543
(Commercial Banking)
72,000 Korea Zinc ...................... 1,893,019
(Metals - Non Ferrous)
30,575 Lucky Development Co. ........... 590,037
(Construction & Housing)
4,500 Pohang Iron & Steel Co., Ltd. ... 377,089
(Metals - Steel)
15,733 Samsung Electronics Co., Ltd. ... 2,347,418
(Manufacturing)
25,000 Sam Yang Co. .................... 1,065,277
(Misc. Materials & Commodities)
54,120 Tong Yang Cement Corp. .......... 1,962,647
(Construction & Housing) -----------
9,750,827
-----------
Spain--6.0%
87,000 Banco Bilbao Vizcaya ............ 2,206,696
(Commercial Banking)
21,000 Banco de Andalucia .............. 2,291,059
(Commercial Banking)
320,000 Iberdrola ....................... $ 1,890,508
(Utilities)
23,614 Prosegur Compania ............... 409,223
(Business & Public Services) -----------
6,797,486
-----------
Sweden--6.8%
44,000 Electrolux AB ................... 1,992,271
(Appliances)
105,000 Pharmacia AB .................... 1,861,917
(Commercial Banking)
122,000 SKF International AB ............ 2,031,255
(Consumer Goods)
110,000 Volvo AB ........................ 1,898,464
(Automobile Manufacturing) -----------
7,783,907
-----------
Switzerland--12.5%
2,000 Alusuisse-Lonza Holding AG ...... 1,084,470
(Metals - Non Ferrous)
4,100 Ciba-Geigy Ltd. ................. 2,726,454
(Chemicals)
3,500 Hero ............................ 1,916,369
(Food & Household Products)
9,200 Merkur Holding AG ............... 2,591,778
(Merchandising)
3,500 SMH - Swiss Corp. for
Microelectronics and Watchmaking
Industries Ltd.................. 1,746,368
(Electronics)
3,800 Sulzer Brothers Ltd. ............ 2,399,435
(Machinery & Engineering)
1,700 Zurich Insurance Co. ............ 1,737,007
(Insurance) -----------
14,201,881
-----------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
THE PRUDENTIAL INTERNATIONAL STOCK FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- -------------------------------------------------------------
United Kingdom--11.1%
248,076 Allied-Domecq PLC ............... $ 2,134,013
(Beverages & Tobacco)
460,000 Ladbroke Group PLC .............. 1,259,396
(Leisure & Tourism)
445,000 Lloyds Abbey Life PLC ........... 2,577,234
(Insurance)
210,000 National Westminster Bank PLC ... 1,800,763
(Commercial Banking)
135,000 Rank Organisation PLC ........... 879,179
(Leisure & Tourism)
525,375 Tesco PLC ....................... 2,263,961
(Food & Household Products)
196,000 Whitbread PLC ................... 1,749,546
(Beverages & Tobacco) -----------
12,664,092
-----------
Total common stocks
(cost $99,056,517)................ 104,728,762
-----------
Principal
Amount
(000) SHORT-TERM INVESTMENTS
- ----------
Repurchase Agreement--8.1%
$ 9,238 Joint Repurchase Agreement
Account,
6.29%, 4/3/95 (Note 5)
(cost $9,238,000)............... 9,238,000
-----------
Total Investments--100.1%
(cost $108,294,517; Note 4)....... 113,966,762
Liabilities in excess of other
assets--(0.1%).................. (114,082)
-----------
Net Assets--100%.................. $113,852,680
-----------
-----------
- ---------------
ADR--American Depository Receipt.
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
THE PRUDENTIAL ACTIVE BALANCED FUND
INSTITUTIONAL
FUND
OBJECTIVE: Seeks to achieve total returns approaching equity returns, while
accepting less risk than an all-equity portfolio, through an actively-managed
portfolio of equity securities, fixed income securities and money market
instruments.
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:
- 40-75% will be invested in common stocks, preferred stocks and other
equity-related securities.
- 25-60% will be invested in investment-grade fixed income securities.
- 0-35% will be invested in money market instruments.
The Fund's investments will be actively shifted among these asset classes to
capitalize on intermediate-term valuation opportunities and to maximize the
Fund's total investment return.
ADVISER: Jennison Associates Capital Corp. is dedicated to achieving superior
investment results for institutional investors. Founded in 1969 and acquired by
The Prudential in 1985, Jennison adheres to clearly defined investment
philosophies. Jennison manages over $22 billion in equity, balanced, and fixed
income accounts.
ADVISER'S COMMENTS: The six months ending March 31, 1995 proved to be a
continuation of the extreme ``rotational'' nature that has recently
characterized the markets. The Fund entered this period relatively cautiously
on
equities believing that on a risk/reward basis, bonds would give stocks tough
competition. Although stocks as measured by the popular averages did better than
anticipated during the period (S&P 500 up 9.7%), the ``average stock'' as
represented by overall market breadth did not fare nearly as well. Bonds during
this period did manage a 5.4% gain as measured by the Lehman
Government/Corporate Index, a welcome relief from the negative performance of
the previous six month period.
Overall, the Prudential Institutional Active Balanced Fund managed to ``hold its
own'' during this six-month period. While the Fund's 5.8% return was
unimpressive relative to a normal blend of equities and bonds, this return
compared favorably with the Lipper Balanced Funds average which recorded a 4.9%
return, attesting to the difficulty of dealing with the aforementioned
rotational stock market.
The Fund ended the period still relatively defensive towards equities and
neutral on bonds. Importantly, the stocks in the portfolio have extremely strong
earnings growth characteristics and are selling at appealing valuation levels.
A
sell off in the equity market in general would encourage a higher overall equity
allocation. The bond exposure continues to be the highest quality, invested all
in U.S. government bonds, and is focused in the intermediate maturity area,
where we believe the yield curve has the best risk/reward potential.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Composite
Periods ended 3/31/95 Fund Index (1)
<S> <C> <C>
------------------------- ------------- ----------
Six Months............... +5.77% +7.98%
One Year................. +7.03 +11.17
From Inception (1/4/93).. +7.73 +7.75
</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 is no guarantee of 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: 60% S&P 500 Index and
40% Lehman Government/Corporate Index, an unmanaged indicator of bond market
performance. The Fund, on average, has been invested approximately 41% in
stocks, 38% in bonds and 21% in short-terms for each of the periods. The S&P 500
returned 9.72%, 15.57% and 9.49%; and the Lehman Index returned 5.37%, 4.57% and
5.15% for each period, respectively.
20
<PAGE>
THE PRUDENTIAL ACTIVE BALANCED FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--69.2%
Common Stocks--37.5%
Aerospace/Defense--0.4%
8,000 Boeing Co.......................... $ 431,000
-----------
Airlines--1.4%
11,800 Delta Airlines, Inc................ 740,450
7,800 UAL Corp........................... 819,000
-----------
1,559,450
-----------
Automobiles & Trucks--1.4%
34,800 General Motors Corp................ 1,539,900
-----------
Banking--2.5%
42,300 Boatmen's Bancshares............... 1,279,575
6,700 Chemical Banking Corp.............. 254,046
17,800 Fleet Financial Group, Inc......... 576,275
71,300 Hibernia Corp...................... 552,575
-----------
2,662,471
-----------
Capital Goods--0.5%
11,900 Duracell International, Inc........ 532,525
-----------
Chemicals--0.4%
20,000 Dexter Corp........................ 437,500
-----------
Computer Software & Services--1.3%
14,800 CUC International, Inc.*........... 575,350
22,400 Novell, Inc.*...................... 425,600
13,700 Symbol Technologies, Inc.*......... 421,275
-----------
1,422,225
-----------
Diversified Gas--0.5%
19,600 Coastal Corp....................... $ 563,500
-----------
Drugs & Medical Supplies--0.9%
3,600 Amgen, Inc.*....................... 242,550
11,100 Smith Kline Beecham PLC (ADR)
(United Kingdom)................. 416,250
24,000 Vertex Pharmaceuticals, Inc........ 324,000
-----------
982,800
-----------
Electronics--2.8%
10,000 Hewlett-Packard Co................. 1,203,750
14,200 Intel Corp......................... 1,205,225
25,300 International Rectifier Corp.*..... 607,200
-----------
3,016,175
-----------
Forest Products--1.0%
13,700 Georgia Pacific Corp............... 1,092,575
-----------
Insurance--2.0%
8,700 Aetna Life & Casualty Co........... 495,900
22,500 CIGNA Corp......................... 1,681,875
-----------
2,177,775
-----------
Lodging--1.1%
16,400 Hilton Hotels Corp................. 1,215,650
-----------
Machinery--0.5%
18,647 Harnischfeger Industries, Inc...... 522,116
-----------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
THE PRUDENTIAL ACTIVE BALANCED FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Media--4.9%
16,000 Dow Jones & Co., Inc............... $ 606,000
13,800 Dun & Bradstreet Corp.............. 726,225
11,700 McGraw-Hill, Inc................... 839,475
41,500 New York Times Co.................. 959,687
9,400 Omnicom Group...................... 514,650
7,400 Scholastic Corp.*.................. 403,300
22,200 Tribune Co......................... 1,226,550
-----------
5,275,887
-----------
Mineral Resources--1.3%
33,874 Newmont Mining Corp................ 1,448,114
-----------
Miscellaneous Basic Industry--3.9%
12,900 Avalon Properties, Inc............. 253,163
22,000 Blanch E W Holdings, Inc........... 407,000
18,000 Champion International Corp........ 778,500
10,700 Coflexip (ADR) (France)............ 292,912
7,300 ITT Corp........................... 749,163
7,500 Mead Corp.......................... 402,187
14,000 Reynolds Metals Co................. 689,500
9,300 United Technologies Corp........... 642,862
-----------
4,215,287
-----------
Miscellaneous Consumer Growth--0.5%
11,200 Eastman Kodak Co................... 595,000
-----------
Office Equipment & Supplies--1.5%
17,400 Apple Computer, Inc................ 613,350
6,300 Compaq Computer Corp.*............. 217,350
6,600 Xerox Corp......................... 774,675
-----------
1,605,375
-----------
Petroleum--0.9%
14,200 Tenneco Inc........................ 669,175
3,900 Texaco Inc......................... 259,350
-----------
928,525
-----------
Petroleum Services--1.4%
9,900 Anadarko Petroleum Corp............ $ 433,125
50,000 Dresser Industries, Inc............ 1,062,500
-----------
1,495,625
-----------
Railroads--0.8%
15,800 Southern Pacific Rail Corp.*....... 276,500
10,800 Union Pacific Corp................. 594,000
-----------
870,500
-----------
Retail--1.8%
9,400 Harcourt General, Inc.............. 366,600
52,600 Limited, Inc....................... 1,216,375
10,200 Nordstrom, Inc..................... 415,650
-----------
1,998,625
-----------
Steel--0.9%
27,600 USX Corp. -U.S. Steel Group........ 931,500
-----------
Technology--1.1%
15,700 Adobe Systems, Inc................. 777,150
8,405 Chiron Corp.*...................... 451,769
-----------
1,228,919
-----------
Telecommunications--1.1%
26,300 MCI Communications Corp............ 542,438
18,700 Vodafone Group PLC (ADR)
(United Kingdom)................. 619,437
-----------
1,161,875
-----------
Trucking & Shipping--0.7%
31,700 Ryder System, Inc.................. 760,800
-----------
Total common stocks
(cost $36,720,478)................. 40,671,694
-----------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
THE PRUDENTIAL ACTIVE BALANCED FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
DEBT OBLIGATIONS--31.7%
U. S. Government Securities
United States Treasury Notes,
$ 3,015 8.875%, 11/15/98................. $ 3,193,066
4,510 7.50%, 11/15/01.................. 4,588,925
14,465 6.25%, 2/15/03................... 13,621,980
14,205 5.75%, 8/15/03................... 12,886,634
------------
Total debt obligations
(cost $35,104,318)............... 34,290,605
------------
Total long-term investments
(cost $71,824,796)............... 74,962,299
------------
SHORT-TERM INVESTMENT
Repurchase Agreement--21.9%
23,728 Joint Repurchase Agreement Account,
6.29%, 4/3/95 (Note 5)
(cost $23,728,000)............. 23,728,000
------------
Total Investments--91.1%
(cost $95,552,796; Note 4)....... 98,690,299
Other assets in excess of
liabilities--8.9%.............. 9,656,655
------------
Net Assets--100%................. $108,346,954
------------
------------
-------
* Non-income producing security.
ADR--American Depository Receipt.
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
THE PRUDENTIAL BALANCED FUND
INSTITUTIONAL
FUND
OBJECTIVE: Seeks 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 approximately $18 billion in equity, balanced and fixed income
accounts.
ADVISER'S COMMENTS: Following the November 1994 elections, the Federal Reserve
raised short-term interest rates for the sixth time during the year. Stock and
bond markets were down for 1994 and the Balanced Fund underperformed its
benchmark for the year, primarily because of underweighted positions in the
consumer sector of the stock market. Both the stock and bond markets fared much
better during the first quarter of 1995. The S&P 500 Index was up 9.74% for the
quarter--one of the best on record. The stock market benefited from strong
earnings and the lack of further interest rate hikes. The Fund's allocation was
overweight in stocks (over 46% of assets) for the quarter. However, the value
stock holdings in the Fund's portfolio underperformed the broader market index
(S&P 500) for the quarter. Smaller stocks, particularly value-oriented ones,
generally did not fare as well as the broader market indices. Bonds were
slightly underweight for the quarter, while cash was somewhat overweight.
Although we continue to favor stocks and would like to see the trend continue,
we do not expect further gains of this magnitude. We believe the better values
appear to be in stocks as long as inflation remains under control and future
tightening by the Federal Reserve is moderate.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Composite
Periods ended 3/31/95 Fund Index (1)
<S> <C> <C>
------------------------- ------------- ----------
Six Months............... +4.48% +7.07%
One Year................. +6.11 +9.55
From Inception (11/5/92) +8.48 +7.90
</TABLE>
Results from inception are average annual returns. Fund performance figures are
historical and reflect reinvestment of dividends. 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 is no guarantee
of 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% Treasury-Bill return. The Fund,
on average, has been invested 45% in stocks, 42% in bonds and 13% in short-terms
for each of the periods. The S&P 500 returned 9.72%, 15.57% and 10.88%;
the Lehman Government/Corporate Index returned 5.37%, 4.57% and 5.83%, and
Treasury-Bills returned 2.80%, 4.88% and 3.85% for each period, respectively.
24
<PAGE>
THE PRUDENTIAL BALANCED FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--91.4%
COMMON STOCKS--47.8%
Aerospace/Defense--1.3%
10,100 General Motors Corp., Class H...... $ 416,625
15,100 Martin Marietta Corp.*............. 290,675
5,200 Rockwell International Corp........ 202,800
-----------
910,100
-----------
Automobiles & Trucks--1.4%
5,000 Danaher Corp....................... 143,125
7,300 Ford Motor Co...................... 197,100
12,000 General Motors Corp................ 466,500
5,000 Modine Manufacturing Co............ 167,500
-----------
974,225
-----------
Banking--3.0%
20,800 Bank of New York, Inc.............. 683,800
23,700 KeyCorp............................ 669,525
31,200 Norwest Corp....................... 791,700
-----------
2,145,025
-----------
Capital Goods--0.1%
Fisher Scientific International,
2,900 Inc.............................. 86,275
-----------
Chemicals--2.2%
6,000 Air Products & Chemicals, Inc...... 312,750
5,300 Eastman Chemical Co................ 294,813
9,000 Grace (W.R.) & Co.................. 479,250
9,500 IMC Fertilizer Group, Inc.......... 464,312
-----------
1,551,125
-----------
Chemical - Specialty--0.5%
3,100 OM Group, Inc...................... $ 77,500
26,500 Uniroyal Chemical Corp............. 301,438
-----------
378,938
-----------
Commercial Services--0.6%
11,000 York International Corp............ 431,750
-----------
Computer Software & Services--0.8%
9,400 Automatic Data Processing Inc...... 592,200
-----------
Construction--0.4%
28,000 Giant Cement Holding Inc........... 322,000
-----------
Consumer Goods--1.5%
11,000 Ethan Allen Interiors, Inc.*....... 229,625
13,000 Libbey Inc......................... 242,125
16,000 Owens Corning Fiberglas Corp....... 576,000
-----------
1,047,750
-----------
Drugs & Medical Supplies--2.9%
10,900 Abbott Laboratories................ 388,312
10,100 Baxter International Inc........... 330,775
3,600 Pfizer Inc......................... 308,700
4,000 Schering-Plough Corp............... 297,500
4,400 Sybron Corp........................ 158,400
28,800 Whitman Corp....................... 550,800
-----------
2,034,487
-----------
Electronics--2.2%
7,860 Baldor Electric Co................. 218,115
14,800 Emerson Electric Co................ 984,200
9,100 Intel Corp......................... 349,213
-----------
1,551,528
-----------
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
THE PRUDENTIAL BALANCED FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Financial Services--1.7%
12,400 Dean Witter Discover & Co.......... $ 505,300
10,000 Equitable Companies, Inc........... 338,750
6,800 First Data Corp.................... 352,750
-----------
1,196,800
-----------
Food & Beverage--0.2%
4,000 Sbarro, Inc........................ 110,500
-----------
Forest Products--0.5%
7,000 Caraustar Inds., Inc............... 119,000
4,800 Pentair, Inc....................... 202,800
-----------
321,800
-----------
Gas Pipelines--1.9%
19,400 Cabot Oil & Gas Corp............... 303,125
12,900 Enron Corp......................... 317,662
15,700 Mesa, Inc.*........................ 96,163
8,900 Parker & Parsley Petroleum Co...... 201,362
6,700 Seagull Energy Corp.*.............. 132,325
10,500 Total S.A., (ADR) (France)......... 315,000
-----------
1,365,637
-----------
Health Care--0.3%
10,000 Quorum Health Group................ 207,500
-----------
Hospital Management--1.6%
11,362 Columbia Healthcare Corp........... 488,566
6,300 Healthtrust-The Hospital Co.*...... 237,037
National Medical Enterprises,
27,400 Inc.............................. 434,975
-----------
1,160,578
-----------
Insurance--3.1%
7,300 Emphesys Financial Group, Inc...... 262,800
11,000 John Alden Financial Corp.......... 202,125
3,900 NAC Re Corp........................ 117,975
9,700 National Re Corp................... $ 283,725
16,000 Penncorp Financial Group, Inc...... 282,000
Reinsurance Group of America,
17,200 Inc.............................. 466,550
15,000 TIG Holdings, Inc.................. 337,500
20,000 Western National Corp.............. 250,000
-----------
2,202,675
-----------
Machinery--0.3%
21,000 Gardner Denver Machinery, Inc...... 236,250
-----------
Media--2.1%
8,700 Comcast Corp....................... 135,394
9,400 Gannett, Inc....................... 501,725
6,600 National Data Corp................. 114,675
News Corp. Ltd. (ADR)
9,800 (Australia)...................... 169,050
3,300 TCA Cable TV, Inc.................. 86,212
6,937 Times Mirror Co. (The)............. 133,537
6,400 Tribune Co......................... 353,600
-----------
1,494,193
-----------
Mineral Resources--0.6%
7,000 Cominco Ltd........................ 195,996
20,000 INDRESCO, Inc.*.................... 255,000
-----------
450,996
-----------
Miscellaneous Basic Industry--6.2%
21,100 ADT Ltd.*.......................... 258,475
15,600 Belden, Inc........................ 343,200
19,500 Ferro Corp......................... 494,813
3,500 FMC Corp.*......................... 211,750
12,300 General Electric Co................ 665,737
11,600 Illinois Tool Works, Inc........... 566,950
15,200 Mark IV Industries, Inc............ 311,600
12,300 Potash Corp. of Saskatchewan Inc. 547,350
................................
(Canada)
3,800 Schulman (A.), Inc................. 115,900
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
THE PRUDENTIAL BALANCED FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Miscellaneous Basic Industry, cont'd.
15,737 Tyco International Ltd............. $ 832,094
-----------
4,347,869
-----------
Miscellaneous Consumer Growth--0.1%
1,100 Eastman Kodak Co................... 58,438
-----------
Office Equipment & Supplies--0.7%
International Business Machines
5,600 Corp............................. 458,500
-----------
Oil & Gas - Equipment & Services--0.7%
20,700 Frontier Corp...................... 468,338
-----------
Petroleum--2.4%
5,500 Amoco Corp......................... 349,937
25,000 Cross Timbers Oil Co............... 350,000
8,200 Royal Dutch Petroleum Co........... 984,000
-----------
1,683,937
-----------
Petroleum Services--0.6%
33,300 Oryx Energy Co..................... 420,412
-----------
Publishing--0.1%
8,300 American Publishing Co., Class A... 88,188
-----------
Railroads--2.3%
6,400 Burlington Northern Inc............ 380,000
11,700 Chicago & North Western
Holdings Co...................... 406,575
8,900 Illinois Central Corp.............. 307,050
Kansas City Southern Industries,
9,000 Inc.............................. 365,625
2,400 Norfolk Southern Corp.............. 160,500
-----------
1,619,750
-----------
Retail--1.8%
40,000 Best Products, Inc................. $ 232,500
12,000 Caldor Corp.*...................... 256,500
8,400 Harcourt General, Inc.............. 327,600
23,500 Stride Rite Corp................... 296,687
3,200 VF Corp............................ 170,000
-----------
1,283,287
-----------
Rubber--0.4%
7,800 Goodyear Tire & Rubber Co.......... 286,650
-----------
Steel--0.3%
3,200 Carpenter Technology Corp.......... 184,800
-----------
Technology--0.5%
10,000 Coltec Inds., Inc.*................ 172,500
5,500 Litton Industries Inc.............. 197,313
-----------
369,813
-----------
Telecommunications--1.2%
20,900 MCI Communications Corp............ 431,063
20,600 Tele Communications, Inc.*......... 432,600
-----------
863,663
-----------
Utility - Communications--1.2%
9,100 Airtouch Communications............ 247,975
11,100 AT&T Corp.......................... 574,425
-----------
822,400
-----------
Total common stocks
(cost $30,897,357)................. 33,728,377
-----------
PREFERRED STOCK
Media--0.1%
Times Mirror Co. (The)
2,963 Series B (cost $55,956)............ 63,704
-----------
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
THE PRUDENTIAL BALANCED FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
DEBT OBLIGATIONS--43.5%
Corporate Bonds--2.3%
General Electric Capital Corp.,
$ 400 8.75%, 11/26/96.................. $ 410,184
Greyhound Financial Corp.,
100 8.50%, 5/1/98.................... 102,440
International Lease Finance
Corp.,
200 5.50%, 4/1/97.................... 193,458
Pacific Gas & Electric Co.,
300 7.875%, 3/1/02................... 302,199
Salomon Inc.,
200 8.64%, 2/27/98................... 204,326
Sears Roebuck & Co.,
100 9.48%, 7/24/01................... 107,735
Texas Utilities Co.,
300 6.375%, 8/1/97................... 293,154
------------
Total corporate bonds
(cost $1,608,529)................ 1,613,496
------------
U. S. Government Securities--41.2%
United States Treasury Bonds,
1,500 10.75%, 8/15/05.................. 1,868,205
6,500 11.25%, 2/15/15.................. 8,947,640
United States Treasury Notes,
$ 1,900 7.25%, 11/15/96.................. $ 1,915,143
3,700 6.00%, 11/30/97.................. 3,617,342
700 5.625%, 1/31/98.................. 676,921
5,000 9.00%, 5/15/98................... 5,283,600
5,500 6.375%, 1/15/99.................. 5,384,005
700 7.50%, 10/31/99.................. 711,046
500 7.75%, 11/30/99.................. 512,810
200 7.75%, 1/31/00................... 205,250
------------
Total U. S. Government Securities
(cost $30,055,975)............... 29,121,962
------------
Total debt obligations
(cost $31,664,504)............... 30,735,458
------------
Total long-term investments
(cost $62,617,817)............... 64,527,539
------------
SHORT-TERM INVESTMENT
Repurchase Agreement--7.0%
4,954 Joint Repurchase Agreement Account,
6.29%, 4/3/95, (Note 5)
(cost $4,954,000).............. 4,954,000
------------
Total Investments--98.4%
(cost $67,571,817; Note 4)....... 69,481,539
Other assets in excess of
liabilities--1.6%................ 1,134,275
------------
Net Assets--100%................. $ 70,615,814
------------
------------
--------
* Non-income producing security.
ADR--American Depository Receipt.
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
THE PRUDENTIAL INCOME FUND
INSTITUTIONAL
FUND
OBJECTIVE: Seeks to achieve a high level of income over the longer term, while
providing reasonable safety of principal.
INVESTMENT APPROACH: This Fund is primarily an investment grade, intermediate
maturity, fixed income portfolio. It is managed with the objective of
outperforming the Lehman Aggregate Index, a benchmark which is commonly used by
institutional pension funds as a proxy for the U.S. investment grade debt
market. Historically, the returns of the index itself compare favorably with
that of the average general fixed income mutual fund. The Fund attempts to
outperform the index through issue and sector selection. Forecasting interest
rates plays only a subsidiary role in the management of the portfolio.
ADVISER: The Income Fund is managed by Prudential Global Advisers (PGA), a
business unit of Prudential Investment Corporation. PGA specializes in domestic
and global fixed income management. PGA manages approximately $21 billion in
fixed income accounts.
ADVISER'S COMMENTS: Interest rates on 30-year Treasury bonds declined from a
high of 8.17% during 1994 to 7.88% by year end, and 7.43% by the end of the
first quarter. The shape of the yield curve, which flattened suddenly and
aggressively during the fourth quarter, reversed somewhat during the first
quarter, largely due to the market's expectations that the Federal Reserve's
February 50 basis point tightening might be this cycle's last. The spread
between two-year and 30-year Treasuries, which narrowed from 123 to 19 basis
points over the fourth quarter, widened out again to 65 basis points by March
31.
Since our last report to you six months ago, returns across all sectors of the
fixed income market were positive. The Lehman Aggregate returned 5.44%, the bulk
of the returns occurring in the most recent quarter (5.04%). Governments
returned 5.08%, corporates were up 6.38% and mortgages up 5.69% for the
six-month period.
The Income Fund remained modestly overweighted in corporates (which outperformed
other sectors particularly during the first quarter, due to strong investor
appetite for yield) and gradually increased mortgage pass-through exposure from
a neutral 30% to 40% of market value (approximately a 10% overweighting versus
the Lehman Aggregate). Holdings of corporates remained at approximately 17%,
governments 36% and cash 9%.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Lehman
Aggregate
Periods ended 3/31/95 Fund Index
<S> <C> <C>
------------------------- ------------- ----------
Six Months............... +5.17% +5.44%
One Year................. +4.30 +4.99
From Inception (3/1/93).. +3.41 +3.54
</TABLE>
Results from inception are average annual returns. Fund performance figures are
historical and reflect reinvestment of dividends. 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 is no guarantee
of future results. The Manager is currently limiting the expenses of the Fund.
Without this reduction of expenses, the total return would have been lower.
The Lehman Aggregate Index is a commonly used unmanaged indicator of broad bond
market performance.
29
<PAGE>
THE PRUDENTIAL INCOME FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--92.2%
Corporate Bonds--14.5%
Associates Corp. of North
America,
$ 400 7.25%, 5/15/98................... $ 397,412
Atlantic Richfield Co.,
400 9.875%, 3/1/16................... 465,596
Equity Lord Realty Corp.,
300 10.50%, 12/30/97................. 315,219
General Electric Capital Corp.,
500 7.95%, 2/2/98.................... 508,090
General Motors Acceptance Corp.,
350 8.00%, 4/10/97................... 353,391
500 7.875%, 3/7/01................... 500,590
Grand Metropolitan Investment
Corp.,
800 Zero Coupon, 1/6/04.............. 399,000
Household Finance Corp.,
1,000 7.80%, 11/1/96................... 1,009,180
IC Industries Financial Corp.,
705 8.00%, 7/1/96.................... 708,666
Intermediate American Development
Bank,
435 8.50%, 3/15/11................... 458,968
International Lease Finance
Corp.,
300 5.50%, 4/1/97.................... 290,187
Salomon Inc.,
400 8.64%, 2/27/98................... 403,268
SunAmerica, Inc.,
275 6.58%, 1/15/02................... 254,389
Tenneco Credit Corp.,
400 10.125%, 12/1/97................. 424,084
Union Bank of Finland,
250 5.25%, 6/15/96................... 243,673
------------
Total corporate bonds
(cost $6,804,822)................ 6,731,713
------------
Foreign Government Obligations--2.0%
New Zealand Government Bond,
$ 500 10.50%, 7/16/00.................. $ 538,906
Province of Quebec,
400 9.00%, 5/8/01.................... 417,875
------------
Total foreign government
obligations (cost
$1,024,396).................... 956,781
------------
U. S. Government and
Agency Securities--75.7%
Federal Home Loan Mortgage Corp.,
823 7.00%, 7/1/08.................... 799,055
375 4.578%, 6/1/24................... 373,828
Federal National Mortgage Assn.,
502 6.453%, 1/1/25................... 510,701
1,833 6.50%, 1/1/99-10/25/24........... 1,641,747
2,311 7.00%, 9/1/23-7/1/24............. 2,176,165
1,485 8.00%, 9/1/09-7/1/24............. 1,479,019
1,000 9.00%, 1/1/99.................... 1,027,180
Government National Mortgage
Assn.,
3,847 7.00%, 2/15/09-1/1/99............ 3,664,893
722 7.50%, 12/15/22-7/15/23.......... 697,177
3,000 8.50%, 1/1/99.................... 3,041,250
2,889 9.00%, 1/1/99-7/15/21............ 2,986,378
Tennessee Valley Authority,
600 7.25%, 7/15/43................... 531,360
United States Treasury Bonds,
500 8.75%, 8/15/20................... 564,455
600 9.00%, 11/15/18.................. 691,686
1,350 12.00%, 8/15/13.................. 1,858,154
United States Treasury Notes,
3,400 5.25%, 7/31/98................... 3,225,206
1,700 5.75%, 10/31/97.................. 1,654,049
2,400 6.375%, 1/15/99.................. 2,349,384
500 7.125%, 2/29/00.................. 500,937
2,900 8.625%, 8/15/97.................. 3,010,113
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
THE PRUDENTIAL INCOME FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
U.S. Government and Agency
Securities, cont'd.
United States Treasury Strips,
$ 1,500 Zero Coupon, 2/15/08............. $ 578,265
2,000 Zero Coupon, 8/15/08............. 740,120
1,500 Zero Coupon, 8/15/11............. 434,760
1,500 Zero Coupon, 11/15/11............ 426,405
1,000 Zero Coupon, 8/15/13............. 247,390
------------
Total U. S. Government and Agency
Securities
(cost $35,673,369)............... 35,209,677
------------
Total long-term investments
(cost $43,502,587)............... 42,898,171
------------
SHORT-TERM INVESTMENTS--25.8%
Corporate Bond--0.9%
Ashland Oil, Inc.
400 9.85%, 9/15/95 (cost $408,280)... 404,980
------------
Repurchase Agreement--24.9%
11,574 Joint Repurchase Agreement Account,
6.29%, 4/3/95
(cost $11,574,000) (Note 5).... 11,574,000
------------
Total short-term investments
(cost $11,982,280)............... 11,978,980
------------
Total Investments--118.0%
(cost $55,484,867; Note 4)....... 54,877,151
Liabilities in excess of other
assets--(18.0%)................ (8,372,360)
------------
Net Assets--100%................. $ 46,504,791
------------
------------
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
THE PRUDENTIAL MONEY MARKET FUND
INSTITUTIONAL
FUND
OBJECTIVE: Seeks to achieve high current income, preservation of principal and
maintenance of liquidity.
INVESTMENT APPROACH: The Fund invests in U.S. dollar-denominated money market
instruments, including commercial paper and bank obligations such as
certificates of deposits and banker's acceptance notes from domestic and foreign
issuers. The Fund will maintain a dollar-weighted average portfolio maturity of
90 days or less and purchase only instruments maturing in 13 months or less,
which have been determined to present minimal credit risks. The Fund's yield
will fluctuate, and the Fund seeks to maintain a net asset value of $1.00 per
share for purchases and redemptions.
ADVISER: Prudential Global Advisors (PGA) is a business unit of The Prudential
Investment Corporation which specializes in domestic and international fixed
income management. PGA currently manages approximately $21 billion in fixed
income accounts, including $4 billion in money market assets.
ADVISER'S COMMENTS: Over the last six months, money market yields have risen
substantially, and have shown significant volatility as well. Your Fund tried
to
take advantage of this environment. The Fund's seven-day current yield is now
over 5.5%, its highest since inception.
Since our last report, the Federal Reserve, in an effort to slow the economy and
head off potential inflation, continued to raise rates to levels that have not
been seen in several years. The Federal Reserve arranged two monetary tightening
steps during the past six months. On November 15 the rate was increased by a
surprisingly large .75% to 5.5%, and on February 1, the rate was again
increased, this time by a well-anticipated .5% to 6.0%.
The Fund took advantage of the changes in rates by investing in shorter
securities until the November 15 move, and then in somewhat longer securities
through year-end, when rates were at their highest levels of the six-month
period. The average maturity of the Fund was over 50 days for most of late
November and December. After the turn of the year, the Fund focused on shorter
securities until the February 1 tightening, moving the average maturity below
25
days in January. After the February move, the Fund returned to a more neutral
posture, ending the quarter at 36 days. In general, a shorter average maturity
allows the Fund to incorporate new rates more quickly, while a longer average
maturity allows the Fund to hang on to higher rates for a longer time.
We have continued to maintain a high quality portfolio. At the end of March, all
the portfolio's investments were rated high quality by at least two or more
nationally recognized rating agencies, or if unrated, deemed to be of equivalent
quality.
PERFORMANCE RESULTS:
As of March 31, 1995, the current seven-day yield was 5.65%. The net asset
value remained at $1.00 per share.
An investment in the Fund is neither insured nor guaranteed by the U.S.
government and there can be no assurance that the Fund will be able to maintain
a stable net asset value of $1.00 per share. The Manager is currently limiting
the expenses of the Fund. Without this reduction, the seven-day yield would have
been 5.32%.
32
<PAGE>
THE PRUDENTIAL MONEY MARKET FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
BANK NOTES--1.8%
NationsBank Corp.,
9.90%, 5/19/95
$ 1,000 (amortized cost $999,821)...... $ 999,821
------------
CERTIFICATES OF DEPOSIT -
YANKEE--5.6%
ABN Amro Bank N.V.,
2,000 6.17%, 5/5/95.................... 1,999,566
Sumitomo Bank, Ltd.,
1,000 6.47%, 4/3/95.................... 1,000,002
------------
Total Certificates of Deposit - Yankee
(amortized cost $2,999,568)...... 2,999,568
------------
COMMERCIAL PAPER -
DOMESTIC--55.9%
American Express Credit Corp.,
1,500 6.05%, 5/22/95................... 1,487,144
American Home Products Corp.,
2,500 6.05%, 5/30/95................... 2,475,212
Chemical Banking Corp.,
2,600 6.05%, 6/5/95.................... 2,571,599
Duracell International Inc.,
2,500 6.15%, 4/7/95.................... 2,497,438
Finova Capital Corp.,
2,500 6.20%, 4/13/95................... 2,494,833
General Electric Capital Corp.,
1,000 6.43%, 4/13/95................... 997,857
General Motors Acceptance Corp.,
1,800 6.17%, 4/13/95................... 1,796,298
Honeywell, Inc.,
2,000 6.06%, 5/15/95................... 1,985,187
Household International Corp.,
2,000 6.18%, 5/1/95.................... 1,989,700
ITT Corp.,
$ 2,100 6.12%, 4/7/95.................... $ 2,097,858
NationsBank Corp.,
1,600 6.05%, 6/2/95.................... 1,583,329
Nynex Corp.,
2,500 6.08%, 5/17/95................... 2,480,578
Pennsylvania Power &
Lighting Co.,
2,500 6.07%, 4/10/95................... 2,496,206
PHH Corp.,
500 3.01%, 4/3/95.................... 499,841
Phillip Morris Cos., Inc.,
2,500 6.05%, 5/16/95................... 2,481,092
------------
Total Commercial Paper - Domestic
(amortized cost $29,934,172)... 29,934,172
------------
COMMERCIAL PAPER - FOREIGN--8.9%
Abbey National North America
Corp.,
2,200 6.07%, 6/5/95.................... 2,175,889
American Honda Finance Corp.,
1,400 6.05%, 4/6/95.................... 1,398,824
1,000 6.12%, 5/15/95................... 992,520
Mitsubishi International Corp.,
200 6.07%, 4/5/95.................... 199,864
------------
Total Commercial Paper - Foreign
(amortized cost $4,767,097).... 4,767,097
------------
VARIABLE RATE OBLIGATIONS--19.2%
American Express Centurion Bank,
1,000 6.125%, 4/28/95.................. 999,951
Beneficial Corp.,
1,500 6.36%, 4/3/95.................... 1,500,027
1,000 6.07%, 4/19/95................... 999,795
</TABLE>
See Notes to Financial Statements.
33
<PAGE>
THE PRUDENTIAL MONEY MARKET FUND
INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
VARIABLE RATE OBLIGATIONS, cont'd.
Goldman Sachs Group, L.P.,
$ 2,000 6.3125%, 5/30/95................. $ 2,000,000
Lehman Brothers, Inc.,
1,000 6.325%, 4/24/95.................. 1,000,000
Merrill Lynch & Co., Inc.,
500 6.135%, 4/3/95................... 499,951
Money Market Auto Loan Trust,
1,000 6.275%, 4/17/95.................. 1,000,000
Money Market Credit Card Trust,
273 6.22%, 4/10/95................... 272,727
Morgan Stanley Group, Inc.,
1,000 6.4375%, 5/15/95................. 1,000,000
PNC Bank of North America,
1,000 5.92%, 4/4/95.................... 999,952
------------
Total Variable Rate Obligations
(amortized cost $10,272,403)... 10,272,403
------------
MEDIUM - TERM OBLIGATIONS--4.2%
Ford Motor Credit Corp.,
1,000 5.15%, 3/15/96................... 985,903
General Motors Acceptance Corp.,
500 3.13%, 5/8/95.................... 500,537
International Lease Corp.,
750 6.75%, 5/5/95.................... 750,360
------------
Total Medium-Term Obligations
(amortized cost $2,236,800).... 2,236,800
------------
TIME DEPOSIT - EURODOLLAR--3.1%
Sanwa Bank, Ltd.,
6.4375%, 4/3/95
$ 1,661 (amortized cost $1,661,000).... $ 1,661,000
------------
Total Investments--98.7%
(amortized cost $52,870,861*).... 52,870,861
Other assets in excess of
liabilities--1.3%.............. 681,085
------------
Net Assets--100%................. $ 53,551,946
------------
------------
--------
* For purposes of amortized cost valuation, the maturity
date of these instruments is considered to be the next
date on which the security can be redeemed at par or the
next date on which the rate of interest is adjusted.
** The cost of securities for federal income tax purposes
is substantially the same as for financial reporting
purposes.
</TABLE>
The industry classification of portfolio holdings and other net assets shown as
a percentage of net assets as of March 31, 1995 were as follows:
<TABLE>
<S> <C>
Commercial Banks...................... 23.5%
Personal Credit Institutions.......... 19.0
Business Credit (Finance)............. 9.3
Security Brokers & Dealers............ 8.4
Misc. Electrical Equip................ 4.7
Electric Services..................... 4.6
Pharmaceutical........................ 4.6
Telecommunications.................... 4.6
Tobacco............................... 4.6
Financial Services.................... 3.9
Regulating Controls................... 3.7
Bank Holding Co....................... 3.0
Asset Backed.......................... 2.4
Equip. Rental & Leasing............... 1.4
Auto Rent & Lease..................... 1.0
Other assets in excess of liabilities 1.3
-----
100.0%
-----
-----
</TABLE>
See Notes to Financial Statements.
34
<PAGE>
THE PRUDENTIAL STATEMENT OF ASSETS
INSTITUTIONAL AND LIABILITIES
FUND MARCH 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
GROWTH STOCK INTERNATIONAL
ACTIVE MONEY
STOCK INDEX STOCK
BALANCED BALANCED INCOME MARKET
FUND FUND FUND
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
<C> <C> <C>
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Assets
Investments, at value*...... $137,031,579 $67,886,640 $113,966,762 $
98,690,299 $69,481,539 $54,877,151 $52,870,861
Cash........................ 839 539 162
779 106 174 --
Foreign currency, at value
(cost $82,159 and 236,121,
respectively)............. -- -- 82,360
-- 236,447 -- --
Receivable for investments
sold...................... 1,439,211 30,604 143,156
128,862 12,438 8,029,793 --
Interest and dividends
receivable................ 132,226 139,690 353,084
527,159 604,814 489,976 196,188
Receivable for Fund shares
sold...................... 3,974,151 1,974,656 338,532
9,832,299 831,383 787,656 1,612,359
Due from Manager............ -- 10,080 --
-- -- -- 13,956
Deferred expenses and other
assets.................... 38,338 36,524 37,943
39,110 36,684 40,823 37,915
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Total assets............ 142,616,344 70,078,733 114,921,999
109,218,508 71,203,411 64,225,573 54,731,279
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Liabilities
Bank overdraft.............. -- -- --
-- -- -- 82,696
Payable for investments
purchased................. 2,419,766 491,496 424,860
760,579 256,720 17,592,090 739,266
Payable for Fund shares
reacquired................ 380,492 193,228 422,301
20,259 241,582 82,060 316,476
Accrued expenses............ 66,464 82,882 100,786
25,506 48,834 32,098 34,995
Due to broker-variation
margin.................... -- 38,000 --
-- -- -- --
Management fee payable...... 77,475 -- 108,676
54,216 32,600 9,357 --
Administration fee
payable................... 15,084 7,520 12,696
10,994 7,861 5,177 5,900
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Total liabilities....... 2,959,281 813,126 1,069,319
871,554 587,597 17,720,782 1,179,333
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Net Assets.................. $139,657,063 $69,265,607 $113,852,680
$108,346,954 $70,615,814 $46,504,791 $53,551,946
------------ ----------- -------------
- ------------ ----------- ----------- -----------
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Net assets were comprised
of:
Shares of beneficial
interest, at par.......... $ 10,754 $ 5,740 $ 8,377 $
9,675 $ 6,274 $ 4,867 $ 53,552
Paid-in capital in excess of
par....................... 126,820,659 61,459,852 111,475,576
103,461,767 67,271,887 48,456,647 53,498,394
------------ ----------- -------------
- ------------ ----------- ----------- -----------
126,831,413 61,465,592 111,483,953
103,471,442 67,278,161 48,461,514 53,551,946
Undistributed net investment
income.................... (22,617) 1,053,796 1,173,941
2,153,368 1,665,082 -- --
Accumulated net realized
gain (loss) on
investments............... (6,833,501) 500,844 (4,487,560)
(415,359) (237,478) (1,349,006) --
Net unrealized appreciation
(depreciation) on
investments and foreign
currencies................ 19,681,768 6,245,375 5,682,346
3,137,503 1,910,049 (607,717) --
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Net assets, March 31,
1995...................... $139,657,063 $69,265,607 $113,852,680
$108,346,954 $70,615,814 $46,504,791 $53,551,946
------------ ----------- -------------
- ------------ ----------- ----------- -----------
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Shares of beneficial
interest issued and
outstanding............... 10,753,597 5,740,004 8,376,919
9,674,681 6,274,194 4,867,039 53,551,946
------------ ----------- -------------
- ------------ ----------- ----------- -----------
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Net asset value per share... $ 12.99 $ 12.07 $ 13.59 $
11.20 $ 11.25 $ 9.56 $ 1.00
------------ ----------- -------------
- ------------ ----------- ----------- -----------
------------ ----------- -------------
- ------------ ----------- ----------- -----------
*Identified cost............ $117,349,811 $61,804,165 $108,294,517 $
95,552,796 $67,571,817 $55,484,868 $52,870,861
</TABLE>
See Notes to Financial Statements.
35
<PAGE>
THE PRUDENTIAL STATEMENT OF
INSTITUTIONAL OPERATIONS
FUND SIX MONTHS ENDED MARCH 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
GROWTH STOCK INTERNATIONAL
ACTIVE MONEY
STOCK INDEX STOCK
BALANCED BALANCED INCOME MARKET
FUND FUND FUND
FUND FUND FUND FUND
------------ ----------- -------------
- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
<C> <C> <C>
Net Investment Income
Income
Interest.................. $ 71,796 $ 236,698 $ 267,166 $
1,674,432 $ 1,130,176 $ 1,492,774 $ 1,419,901
DividendsD................ 545,080 672,158 923,244
389,313 274,931 -- --
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Total income............ 616,876 908,856 1,190,410
2,063,745 1,404,433 1,492,774 1,419,901
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Expenses
Management fee............ 413,380 113,787 625,298
304,267 228,176 107,113 110,235
Administration fee........ 79,561 37,354 73,255
58,560 43,816 28,861 33,003
Custodian's fees and
expenses.................. 43,000 72,000 102,000
37,000 58,000 34,000 22,000
Registration fees......... 28,000 10,000 16,000
12,000 12,000 9,000 12,000
Transfer agent's fees and
expenses................ 14,601 8,004 13,444
10,747 8,059 5,297 6,057
Reports to shareholders... 7,000 7,000 7,000
5,000 7,000 5,000 5,000
Amortization of
organization expenses... 6,638 6,638 6,638
6,606 6,638 6,503 6,606
Legal fees................ 5,500 5,500 5,500
5,500 5,500 5,500 5,500
Audit fee................. 5,000 5,000 6,500
5,000 5,000 5,000 4,000
Trustees' fees............ 4,300 4,300 4,300
4,300 4,300 4,300 4,300
Miscellaneous............. 2,264 1,791 1,862
871 1,994 339 700
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Total expenses.......... 609,244 271,374 861,797
449,851 380,483 210,913 209,401
Expense recovery (subsidy)
(Note 2)................ (18,696) (100,693) 8,182
(15,183) (54,517) (61,019) (62,420)
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Net expenses................ 590,548 170,681 869,979
434,668 325,966 149,894 146,981
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Net investment income....... 26,328 738,175 320,431
1,629,077 1,079,141 1,342,880 1,272,920
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Realized and Unrealized Gain
(Loss) on Investment and
Foreign Currency
Transactions
Net realized gain (loss) on:
Securities................ (3,002,645) 66,790 (4,255,845)
(137,594) (10,780) (523,455) --
Futures transactions...... -- 476,920 --
-- -- -- --
Foreign currency
transactions.............. (120,847) -- (85,461)
-- (14,819) -- --
------------ ----------- -------------
- ------------ ----------- ----------- -----------
(3,123,492) 543,710 (4,341,306)
(137,594) (25,599) (523,455) --
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Net change in unrealized
appreciation
(depreciation) on:
Securities................ 13,154,092 4,186,518 (2,305,649)
3,832,554 1,941,460 1,362,854 --
Financial futures
contracts................. -- 252,275 --
-- -- -- --
------------ ----------- -------------
- ------------ ----------- ----------- -----------
13,154,092 4,438,793 (2,305,649)
3,832,554 1,941,460 1,362,854 --
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Net gain (loss) on
investments and foreign
currencies................ 10,030,600 4,982,503 (6,646,955)
3,694,960 1,915,861 839,399 --
------------ ----------- -------------
- ------------ ----------- ----------- -----------
Net Increase (Decrease) in
Net Assets Resulting from
Operations................ $ 10,056,928 $ 5,720,678 $(6,326,524) $
5,324,037 $ 2,995,002 $ 2,182,279 $ 1,272,920
------------ ----------- -------------
- ------------ ----------- ----------- -----------
------------ ----------- -------------
- ------------ ----------- ----------- -----------
DNet of foreign withholding taxes of $11,615, $765, $106,205, $872, $1,158,
respectively.
</TABLE>
See Notes to Financial Statements.
36
<PAGE>
THE PRUDENTIAL STATEMENT OF CHANGES
INSTITUTIONAL IN NET ASSETS
FUND (UNAUDITED)
<TABLE>
<CAPTION>
GROWTH STOCK
INTERNATIONAL
STOCK INDEX
STOCK
FUND FUND
FUND
--------------------------
- ---------------------------- -------------------------
Year
Year
Six Months Ended Six Months
Ended Six Months
Ended September Ended
September Ended
March 31, 30, March 31,
30, March 31,
1995 1994 1995
1994 1995
------------ ----------- -------------
- ------------ -----------
Increase (Decrease) in
Net Assets
<S> <C> <C> <C> <C>
<C>
Operations
Net investment
income............... $ 26,328 $ 25,287 $ 738,175 $
892,321 $ 320,431
Net realized gain
(loss) on investments
and foreign currency
transactions......... (3,123,492) (3,778,648) 543,710
186,406 (4,341,306)
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currencies... 13,154,092 3,531,929 4,438,793
380,870 (2,305,649)
------------ ------------- -------------
- ------------- ------------
Net increase (decrease)
in net assets
resulting from
operations........... 10,056,928 (221,432) 5,720,678
1,459,597 (6,326,524)
------------ ------------- -------------
- ------------- ------------
Net equalization
credits................. 17,047 44,776 184,354
289,937 277,903
------------ ------------- -------------
- ------------- ------------
Dividends and
distributions
Dividends to
shareholders from net
investment income.... (48,781) (43,709) (1,015,394)
(481,228) (750,797)
------------ ------------- -------------
- -------------- ------------
Distributions to
shareholders from net
realized gains....... -- (131,129) (165,297)
(106,939) (2,440,090)
------------ ------------- -------------
- -------------- ------------
Fund share transactions
Net proceeds from
shares sold.......... 47,441,734 80,605,272 23,639,198
29,356,230 41,496,203
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 48,781 174,838 1,180,691
588,167 3,190,887
Cost of shares
redeemed............. (24,814,614) (21,470,653) (10,397,947)
(8,128,767) (24,419,234)
------------ ------------- -------------
- -------------- ------------
Net increase in net
assets from Fund
share transactions... 22,675,901 59,309,457 14,421,942
21,815,630 20,267,856
------------ ------------- -------------
- -------------- ------------
Net increase............ 32,701,095 58,957,963 19,146,283
22,976,997 11,028,348
Net Assets
Beginning of period.... 106,955,968 47,998,005 50,119,324
27,142,327 102,824,332
------------ ------------- -------------
- -------------- ------------
End of period.......... $139,657,063 $ 106,955,968 $69,265,607
$50,119,324 $113,852,680
------------ ------------- -------------
- -------------- ------------
------------ ------------- -------------
- -------------- ------------
<CAPTION>
ACTIVE
BALANCED
FUND
--------------------------------
Year Six Year
Ended Months Ended
September Ended September
30, March 31, 30,
1994 1995 1994
------------- ------------- -------------
Increase (Decrease) in
Net Assets
<S> <C> <C> <C>
Operations
Net investment
income............... $ 736,785 $ 1,629,077 $ 1,805,400
Net realized gain
(loss) on investments
and foreign currency
transactions......... 2,235,681 (137,594) 119,065
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currencies... 5,701,535 3,832,554 (1,395,057)
------------- ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 8,674,001 5,324,037 529,408
------------- ------------- -------------
Net equalization
credits................. 695,692 440,806 296,744
------------- ------------- -------------
Dividends and
distributions
Dividends to
shareholders from net
investment income.... (98,619) (2,260,245) (503,768)
------------- ------------- -------------
Distributions to
shareholders from net
realized gains....... (493,097) (272,788) (395,817)
------------- ------------- -------------
Fund share transactions
Net proceeds from
shares sold.......... 86,220,384 33,112,482 56,588,609
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 591,716 2,533,033 899,585
Cost of shares
redeemed............. (24,473,332) (11,706,801) (15,023,860)
------------- ------------- -------------
Net increase in net
assets from Fund
share transactions... 62,338,768 23,938,714 42,464,334
------------- ------------- -------------
Net increase............ 71,116,745 27,170,524 42,390,901
Net Assets
Beginning of period.... 31,707,587 81,176,430 38,785,529
------------- ------------- -------------
End of period.......... $ 102,824,332 $ 108,346,954 $81,176,430
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
See Notes to Financial Statements.
37
<PAGE>
THE PRUDENTIAL STATEMENT OF CHANGES
INSTITUTIONAL IN NET ASSETS
FUND (UNAUDITED)
<TABLE>
<CAPTION>
MONEY
BALANCED
INCOME MARKET
FUND
FUND FUND
-------------------------------
- ------------------------------- -------------------------------
Six Months Year Six Months
Year Six Months Year
Ended Ended Ended
Ended Ended Ended
March 31, September 30, March 31,
September 30, March 31, September 30,
1995 1994 1995
1994 1995 1994
------------- ------------- -------------
------------- ------------- -------------
<S> <C> <C> <C>
<C> <C> <C>
Increase (Decrease) in
Net Assets
Operations
Net investment
income............... $ 1,079,141 $ 1,261,344 $ 1,342,880
$ 1,982,080 $ 1,272,920 $ 1,276,052
Net realized gain
(loss) on investments
and foreign currency
transactions......... (25,599) 163,359 (523,455)
(826,533) -- 1,550
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currencies... 1,941,460 (1,878,445) 1,362,854
(2,659,530) -- --
------------- ------------- -------------
------------- ------------- -------------
Net increase (decrease)
in net assets
resulting from
operations........... 2,995,002 (453,742) 2,182,279
(1,503,983) 1,272,920 1,277,602
------------- ------------- -------------
------------- ------------- -------------
Net equalization
credits................ 140,460 721,188 --
-- -- --
------------- ------------- -------------
------------- ------------- -------------
Dividends and
distributions
Dividends to
shareholders from net
investment income.... (1,529,788) (604,065) (1,342,880)
(1,982,080) (1,272,920) (1,277,602)
------------- ------------- -------------
------------- ------------- -------------
Distributions to
shareholders from net
realized gains....... (269,963) (735,383) --
(137,236) -- --
------------- ------------- -------------
------------- ------------- -------------
Fund share transactions
Net proceeds from
shares sold.......... 12,829,586 42,441,610 6,654,124
15,768,473 33,125,917 32,311,167
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 1,799,751 1,339,448 1,342,880
2,119,316 1,272,920 1,277,602
Cost of shares
redeemed............. (9,661,817) (6,059,058) (3,732,929)
(7,878,160) (27,177,623) (17,493,001)
------------- ------------- -------------
------------- ------------- -------------
Net increase in net
assets from Fund
share transactions... 4,967,520 37,722,000 4,264,075
10,009,629 7,221,214 16,095,768
------------- ------------- -------------
------------- ------------- -------------
Net increase............ 6,303,231 36,649,998 5,103,474
6,386,330 7,221,214 16,095,768
Net Assets
Beginning of period.... 64,312,583 27,662,585 41,401,317
35,014,987 46,330,732 30,234,964
------------- ------------- -------------
------------- ------------- -------------
End of period.......... $70,615,814 $64,312,583 $46,504,791
$41,401,317 $53,551,946 $46,330,732
------------- ------------- -------------
------------- ------------- -------------
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
See Notes to Financial Statements.
38
<PAGE>
THE PRUDENTIAL FINANCIAL HIGHLIGHTS
INSTITUTIONAL (UNAUDITED)
FUND
<TABLE>
<CAPTION>
GROWTH
STOCK
STOCK
INDEX
FUND
FUND
- ------------------------------------------------ -----------
Six
November 5, Six
Months Year
1992* Months
Ended Ended
Through Ended
March 31, September 30,
September 30, March 31,
1995 1994
1993 1995
----------- -------------
------------- -----------
<S> <C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 12.00 $ 12.10
$ 10.00 $ 11.27
----------- -------------
------------- -----------
Income from investment operations:
Net investment incomeD........................ .01 --
.04 .14
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions................................. .99 (.06)
2.08 .91
----------- -------------
------------- -----------
Total from investment operations............. 1.00 (.06)
2.12 1.05
----------- -------------
------------- -----------
Less distributions:
Dividends from net investment income.......... (.01) (.01)
(.02) (.22)
Distributions from net realized gains......... -- (.03)
-- (.03)
----------- -------------
------------- -----------
Total distributions........................... (.01) (.04)
(.02) (.25)
----------- -------------
------------- -----------
Net asset value, end of period................ $ 12.99 $ 12.00
$ 12.10 $ 12.07
----------- -------------
------------- -----------
----------- -------------
------------- -----------
TOTAL RETURN#................................. 8.30%
(0.50)% 21.22% 9.52%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 139,657 $ 106,956
$ 47,998 $ 69,266
Average net assets (000)...................... $ 118,433 $ 71,449
$ 17,592 $ 57,050
Ratios to average net assets: D
Expenses..................................... 1.00%DD 1.00%
1.00%DD .60%DD
Net investment income........................ .04%DD .04%
.31%DD 2.59%DD
Portfolio turnover rate....................... 34% 65%
84% 1%
<CAPTION>
November 5,
Year 1992*
Ended Through
September 30, September 30,
1994 1993
------------- -------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 11.12 $ 10.00
------------- -------------
Income from investment operations:
Net investment incomeD........................ .26 .23
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions................................. .11 .94
------------- -------------
Total from investment operations............. .37 1.17
------------- -------------
Less distributions:
Dividends from net investment income.......... (.18) (.05)
Distributions from net realized gains......... (.04) --
------------- -------------
Total distributions........................... (.22) (.05)
------------- -------------
Net asset value, end of period................ $ 11.27 $ 11.12
------------- -------------
------------- -------------
TOTAL RETURN#................................. 3.33% 11.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 50,119 $ 27,142
Average net assets (000)...................... $ 38,098 $ 18,807
Ratios to average net assets: D
Expenses..................................... .60%
.60%DD
Net investment income........................ 2.34%
2.41%DD
Portfolio turnover rate....................... 2% 1%
</TABLE>
- ---------------
* Commencement of investment operations.
D Net of expense subsidy.
DD 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.
39
<PAGE>
THE PRUDENTIAL
INSTITUTIONAL FINANCIAL HIGHLIGHTS
FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTERNATIONAL
ACTIVE
STOCK
BALANCED
FUND
FUND
- ------------------------------------------------ -----------
Six
November 5, Six
Months Year
1992* Months
Ended Ended
Through Ended
March 31, September 30,
September 30, March 31,
1995 1994
1993 1995
----------- -------------
------------- -----------
<S> <C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 14.84 $ 12.35
$ 10.00 $ 10.92
----------- -------------
------------- -----------
Income from investment operations:
Net investment income......................... .05 .13D
.16D .17D
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions................................. (.87) 2.54
2.21 .44
----------- -------------
------------- -----------
Total from investment operations............. (.82) 2.67
2.37 .61
----------- -------------
------------- -----------
Less distributions:
Dividends from net investment income.......... (.10) (.03)
(.02) (.29)
Distributions from net realized gains......... (.33) (.15)
-- (.04)
----------- -------------
------------- -----------
Total distributions........................... (.43) (.18)
(.02) (.33)
----------- -------------
------------- -----------
Net asset value, end of period................ $ 13.59 $ 14.84
$ 12.35 $ 11.20
----------- -------------
------------- -----------
----------- -------------
------------- -----------
TOTAL RETURN#................................. (5.58)% 21.71%
23.74% 5.77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 113,853 $ 102,824
$ 31,708 $ 108,347
Average net assets (000)...................... $ 109,046 $ 68,476
$ 14,491 $ 87,172
Ratios to average net assets:D
Expenses..................................... 1.60%DD 1.60%
1.60%DD 1.00%DD
Net investment income........................ .59%DD 1.08%
1.44%DD 3.75%DD
Portfolio turnover rate....................... 14% 21%
15% 19%
<CAPTION>
January 4,
Year 1993*
Ended Through
September 30, September 30,
1994 1993
------------- -------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 11.05 $ 10.00
------------- -------------
Income from investment operations:
Net investment income......................... .24D .21D
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions................................. (.12) .84
------------- -------------
Total from investment operations............. .12 1.05
------------- -------------
Less distributions:
Dividends from net investment income.......... (.14) --
Distributions from net realized gains......... (.11) --
------------- -------------
Total distributions........................... (.25) --
------------- -------------
Net asset value, end of period................ $ 10.92 $ 11.05
------------- -------------
------------- -------------
TOTAL RETURN#................................. 1.07% 10.50%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 81,176 $ 38,786
Average net assets (000)...................... $ 58,992 $ 12,815
Ratios to average net assets:D
Expenses..................................... 1.00%
1.00%DD
Net investment income........................ 3.06%
2.68%DD
Portfolio turnover rate....................... 40% 47%
</TABLE>
- ---------------
* Commencement of investment operations.
D Net of expense recovery/subsidy.
DD 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.
40
<PAGE>
THE PRUDENTIAL FINANCIAL HIGHLIGHTS
INSTITUTIONAL (UNAUDITED)
FUND
<TABLE>
<CAPTION>
BALANCED
INCOME
FUND
FUND
- ------------------------------------------------ -----------
Six
November 5, Six
Months Year
1992* Months
Ended Ended
Through Ended
March 31, September 30,
September 30, March 31,
1995 1994
1993 1995
----------- -------------
------------- -----------
<S> <C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 11.08 $ 11.80
$ 10.00 $ 9.38
----------- -------------
------------- -----------
Income from investment operations:
Net investment incomeD........................ .18 .31
.31 .29
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions................................. .29 (.52)
1.54 .18
----------- -------------
------------- -----------
Total from investment operations............. .47 (.21)
1.85 .47
----------- -------------
------------- -----------
Less distributions:
Dividends from net investment income.......... (.25) (.23)
(.05) (.29)
Distributions from net realized gains......... (.05) (.28)
-- --
----------- -------------
------------- -----------
Total distributions........................... (.30) (.51)
(.05) (.29)
----------- -------------
------------- -----------
Net asset value, end of period................ $ 11.25 $ 11.08
$ 11.80 $ 9.56
----------- -------------
------------- -----------
----------- -------------
------------- -----------
TOTAL RETURN#................................. 4.48%
(1.88)% 18.58% 5.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 70,616 $ 64,313
$ 27,663 $ 46,505
Average net assets (000)...................... $ 65,372 $ 44,048
$ 17,401 $ 42,963
Ratios to average net assets: D
Expenses..................................... 1.00%DD 1.00%
1.00%DD .70%DD
Net investment income........................ 3.31%DD 2.86%
3.16%DD 6.30%DD
Portfolio turnover rate....................... 38% 52%
74% 98%
<CAPTION>
March 1,
Year 1993*
Ended Through
September 30, September 30,
1994 1993
------------- -------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 10.33 $ 10.00
------------- -------------
Income from investment operations:
Net investment incomeD........................ .52 .27
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions................................. (.91) .33
------------- -------------
Total from investment operations............. (.39) .60
------------- -------------
Less distributions:
Dividends from net investment income.......... (.52) (.27)
Distributions from net realized gains......... (.04) --
------------- -------------
Total distributions........................... (.56) (.27)
------------- -------------
Net asset value, end of period................ $ 9.38 $ 10.33
------------- -------------
------------- -------------
TOTAL RETURN#................................. (3.91)% 6.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 41,401 $ 35,015
Average net assets (000)...................... $ 37,802 $ 25,626
Ratios to average net assets: D
Expenses..................................... .70%
.70%DD
Net investment income........................ 5.24%
4.62%DD
Portfolio turnover rate....................... 83% 93%
</TABLE>
- ---------------
* Commencement of investment operations.
D Net of expense subsidy.
DD 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.
41
<PAGE>
THE PRUDENTIAL FINANCIAL HIGHLIGHTS
INSTITUTIONAL (UNAUDITED)
FUND
<TABLE>
<CAPTION>
MONEY
MARKET
FUND
- -------------------------------------------------------
Six
January 4,
Months
Year 1993*
Ended
Ended Through
March 31,
September 30, September 30,
1995
1994 1993
-----------
- ------------- -------------
<S> <C> <C>
<C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 1.00 $
1.00 $ 1.00
-----------
- ------------- -------------
Net investment income and net realized
gainsD....................................... .03
.03 .02
Dividends from net investment income.......... (.03)
(.03) (.02)
-----------
- ------------- -------------
Net asset value, end of period................ $ 1.00 $
1.00 $ 1.00
-----------
- ------------- -------------
-----------
- ------------- -------------
TOTAL RETURN#................................. 2.59%
3.32% 2.08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 53,552 $
46,331 $ 30,235
Average net assets (000)...................... $ 49,128 $
38,170 $ 25,296
Ratios to average net assets: D
Expenses..................................... .60%DD
.60% .60%DD
Net investment income........................ 5.20%DD
3.34% 2.73%DD
</TABLE>
- ---------------
* Commencement of investment operations.
D Net of expense subsidy.
DD 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.
42
<PAGE>
THE PRUDENTIAL NOTES TO
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 (Fund or Funds): Growth Stock Fund,
Stock Index Fund, International Stock Fund, Active Balanced Fund, Balanced Fund,
Income Fund and Money Market Fund. The Company had no operations until July 7,
1992 when 10,000 shares of beneficial interest (2,500 shares each of Growth
Stock Fund, Stock Index Fund, International Stock Fund and Balanced Fund) were
sold for $100,000 to Prudential Institutional Fund Management, Inc. (``PIFM'').
Investment operations commenced on: November 5, 1992 for the Growth Stock Fund,
Stock Index Fund, International Stock Fund and Balanced Fund; January 4, 1993
for the Active Balanced Fund and Money Market Fund; and March 1, 1993 for the
Income 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; Active Balanced Fund--total
returns approaching equity returns, while accepting less risk than an all-equity
portfolio, through an actively-managed portfolio of equity securities, fixed
income securities and money market instruments; Balanced Fund--long-term total
return consistent with moderate portfolio risk; Income Fund--a high level of
income over the longer term while providing reasonable safety of principal; and
Money Market Fund--high current income, preservation of principal and
maintenance of liquidity, while maintaining a $1.00 net asset value per share.
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
43
<PAGE>
THE PRUDENTIAL NOTES TO
INSTITUTIONAL FINANCIAL STATEMENTS
FUND (UNAUDITED)
recognized bank or dealer. Forward currency exchange contracts shall be valued
at the current cost of covering or offsetting such contracts.
Securities held by the Money Market Fund are valued at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at its cost on the date of purchase and thereafter assuming a constant
amortization to maturity of the difference between the principal amount due at
maturity and cost. Short-term securities held by the other Funds which mature
in
more than 60 days are valued at current market quotations. Short-term securities
held by the other Funds 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 for 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 custodian or designated subcustodians, as the case may be under
triparty repurchase agreements, take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. 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,
the Fund is required to pledge to the broker an amount of cash and/or other
assets equal to a certain percentage of the contract amount. This amount is
known as the ``initial margin.'' Subsequent payments, known as ``variation
margin,'' are made or received by the Fund each day, depending on the daily
fluctuations in the value of the underlying security. Such variation margin is
recorded for financial statement purposes on a daily basis as unrealized gain
or
loss. When the contract expires or is closed, the gain or loss is realized and
is presented in the statement of operations as net realized gain (loss) on
financial futures contracts.
The Funds invest in financial futures contracts in order to hedge its
existing portfolio securities, or securities the Funds intend to purchase,
against fluctuations in value caused by changes in prevailing interest rates.
Should interest rates move unexpectedly, a Fund may not achieve the anticipated
benefits of the financial futures contracts and may realized 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 hedge assets.
Dollar Rolls: The Fund may enter into dollar rolls in which the Fund sells
securities for delivery in the current month and simultaneously contracts to
repurchase somewhat similar securities on a specified future date. During the
roll period, the Fund forgoes principal and interest paid on the securities. The
Fund is compensated by the interest earned on the cash proceeds of the initial
sale and by the lower repurchase price at the future date.
Foreign Currency Translation: The books and records of the Funds are
maintained in U.S. dollars.
44
<PAGE>
THE PRUDENTIAL NOTES TO
INSTITUTIONAL FINANCIAL STATEMENTS
FUND (UNAUDITED)
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 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 (except for the Income and Money Market 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 of each Fund are
declared in cash and automatically reinvested in additional shares of the Fund.
The Income Fund and Money Market Fund will declare dividends of their net
investment income and, for the Money Market Fund, net capital gain (loss), daily
and distribute such dividends monthly. Each other Fund will declare and
distribute a dividend of its net investment income, if any, at least annually.
Except for the Money Market Fund, each Fund will declare and distribute 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
45
<PAGE>
THE PRUDENTIAL NOTES TO
INSTITUTIONAL FINANCIAL STATEMENTS
FUND (UNAUDITED)
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.
Reclassification of Capital Accounts: The Company accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distributions by Investment Companies.
For the six months ended March 31, 1995, the application of this statement
effected undistributed net investment income (``UNI'') and accumulated net
realized gain (loss) on investments (``G/L'') by the following amounts:
<TABLE>
<CAPTION>
UNI G/L
--------- --------
<S> <C> <C>
Growth Stock
Fund $(120,847) $120,847
International
Stock Fund (85,461) 85,461
Balanced Fund (14,819) 14,819
</TABLE>
Net investment income, net realized gains and net assets were not affected
by
this change.
Deferred Organizational Expenses: Costs incurred of approximately $450,000,
in connection with the organization and initial registration of the Company have
been deferred and are amortized ratably over the period of benefit not to exceed
60 months from the date each of the Funds' commence of 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 a 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 and the Active Balanced Fund. PIC serves as
subadviser to the Balanced Fund, the Stock Index Fund, the Income Fund and the
Money Market 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.
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
Active Balanced Fund .70
Balanced Fund .70
Income Fund .50
Money Market Fund .45
</TABLE>
PIFM has voluntarily agreed to subsidize a portion of the operating expenses
of the Funds until September 30, 1996. Such expenses may be recovered by PIFM
through December 31, 1996 so long as the total expense ratios do not exceed
certain predetermined levels set forth in the Company's prospectus. For the six
months ended
46
<PAGE>
<PAGE>
THE PRUDENTIAL NOTES TO
INSTITUTIONAL FINANCIAL STATEMENTS
FUND (UNAUDITED)
March 31, 1995, PIFM subsidized the following amounts:
<TABLE>
<CAPTION>
Percentage
of Average Amount per
Fund Net Assets Share
- --------------------------- ------------- ------------------
<S> <C> <C>
Growth Stock Fund .03% $ .007
Stock Index Fund .36 .019
Active Balanced Fund .03 .002
Balanced Fund .17 .009
Income Fund .28 .024
Money Market Fund .25 .001
</TABLE>
PIFM also recovered $8,182 (.02% of average daily net assets; $.001 per
share) of operating expenses it previously subsidized on behalf of the
International Stock Fund.
The Company has entered into an administration agreement with Prudential
Mutual Fund Management, Inc. (``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, 1995, Prudential Securities Incorporated,
an affiliate of PIFM, earned approximately $1,000 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, 1995 were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
- ----------------------------- ----------- -----------
<S> <C> <C>
Growth Stock Fund $66,062,004 $39,553,314
Stock Index Fund 10,425,019 412,600
International Stock Fund 31,920,123 13,521,985
Active Balanced Fund 21,629,141 12,998,538
Balanced Fund 29,483,588 21,667,528
Income Fund 44,234,843 38,947,328
</TABLE>
The federal income tax basis and unrealized appreciation/depreciation of the
Fund's investments as of March 31, 1995 were as follows:
<TABLE>
<CAPTION>
Net Unrealized
Appreciation/
Depreciation
-------------- Gross Unrealized
Fund Basis Appreciation Depreciation
- ------------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Growth Stock Fund $117,529,911 $ 19,509,668 $21,040,286 $1,530,618
Stock Index Fund 61,807,542 6,079,098 7,129,661 1,050,563
International Stock
Fund 108,294,517 5,672,245 9,375,223 3,702,978
Active Balanced
Fund 95,552,796 3,137,503 4,617,011 1,479,508
Balanced Fund 67,615,023 1,866,516 3,296,166 1,429,650
Income Fund 55,569,374 (692,223) 179,862 872,085
</TABLE>
On March 31, 1995, the Stock Index Fund purchased 38 financial futures
contracts on the S&P 500 Index expiring in June, 1995. The cost of such
contracts was $9,420,700. The value of such contracts on March 31, 1995 was
$9,583,600 thereby resulting in an unrealized gain of $162,900.
The following Funds elected to treat net losses incurred in the eleven month
period ended September 30, 1994 as having occurred in the current fiscal year:
<TABLE>
<CAPTION>
Capital Currency
---------- --------
<S> <C> <C>
Growth Stock Fund $3,796,000 --
International Stock Fund -- $186,000
Income Fund 828,000 --
</TABLE>
47
<PAGE>
THE PRUDENTIAL NOTES TO
INSTITUTIONAL FINANCIAL STATEMENTS
FUND (UNAUDITED)
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 March 31,
1995, the Company had a 7.93% undivided interest, in the aggregate, in the
repurchase agreements in the joint account which represented $61,857,000 in
principal amount, in the aggregate, as follows:
<TABLE>
<CAPTION>
Percentage Principal
Company Interest Amount
- ---------------------------- ---------- -----------
<S> <C> <C>
Growth Stock Fund .34% $ 2,675,000
Stock Index Fund 1.24 9,688,000
International Stock Fund 1.19 9,238,000
Active Balanced Fund 3.04 23,728,000
Balanced Fund .64 4,954,000
Income Fund 1.48 11,574,000
</TABLE>
As of such date, each repurchase agreement in the joint account and the
collateral therefor was as follows:
Bear, Stearns & Co., Inc., 6.15%, in the principal amount of $30,000,000,
repurchase price $30,015,375, due 4/3/95. The value of the collateral including
accrued interest is $30,655,525.
First Boston Corp., 6.30%, in the principal amount of $250,000,000,
repurchase price $250,131,250, due 4/3/95. The value of the collateral including
accrued interest is $255,156,250.
Goldman, Sachs & Co., 6.30%, in the principal amount of $250,000,000,
repurchase price $250,131,250, due 4/3/95. The value of the collateral including
accrued interest is $255,156,250.
Smith Barney, Inc., 6.30%, in the principal amount of $250,000,000,
repurchase price $250,131,250, due 4/3/95. The value of the collateral including
accrued interest is $255,156,250.
Note 6. Capital
Each Fund has authorized an unlimited number of shares of beneficial interest
at $.001 par value per share.
Transactions in shares of beneficial interest during the six months ended
March 31, 1995 and the year ended September 30, 1994 were as follows:
Six months ended March 31, 1995:
<TABLE>
<CAPTION>
Shares
Issued in
Reinvestment Increase
Shares of Dividends/ Shares in Shares
Fund Sold Distributions Redeemed Outstanding
- ----------------------- ---------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Growth Stock Fund 3,853,431 4,079 (2,020,042) 1,837,463
Stock Index Fund 2,103,876 107,238 (917,768) 1,293,346
International Stock
Fund 2,983,452 228,737 (1,764,415) 1,447,774
Active Balanced Fund 3,113,095 242,395 (1,113,967) 2,241,523
Balanced Fund 1,209,123 168,832 (909,781) 468,174
Income Fund 708,799 144,439 (398,106) 455,132
Money Market Fund 33,125,917 1,272,920 (27,177,623) 7,221,214
</TABLE>
Year ended September 30, 1994:
<TABLE>
<CAPTION>
Shares
Issued in
Reinvestment Increase
Shares of Dividends/ Shares in Shares
Fund Sold Distributions Redeemed Outstanding
- ---------------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Growth Stock Fund 6,739,890 14,450 (1,804,735) 4,949,605
Stock Index Fund 2,697,792 52,328 (744,579) 2,005,541
International Stock
Fund 6,022,403 42,326 (1,702,734) 4,361,995
Active Balanced Fund 5,244,905 81,781 (1,404,380) 3,922,306
Balanced Fund 3,900,150 118,117 (556,779) 3,461,488
Income Fund 1,613,971 216,368 (809,032) 1,021,307
Money Market Fund 32,311,167 1,277,602 (17,493,001) 16,095,768
</TABLE>
Of the shares outstanding at March 31, 1995, PIFM and affiliates owned the
following shares:
<TABLE>
<CAPTION>
Fund Shares
- -------------------------- ----------
<S> <C>
Growth Stock Fund 3,920,636
Stock Index Fund 3,018,769
International Stock Fund 4,894,922
Active Balanced Fund 2,366,254
Balanced Fund 3,247,346
Income Fund 2,804,030
Money Market Fund 27,059,657
</TABLE>
48
<PAGE>
THE PRUDENTIAL
INSTITUTIONAL
FUND
Trustees
William P. Link, Chairman
Mark R. Fetting
David A. Finley
William E. Fruhan, Jr.
August G. Olsen
Eric A. Simonson
Herbert G. Stolzer
Officers
Mark R. Fetting, President
Thomas A. Early, Vice President
Robert F. Gunia, Vice President
Walter E. Watkins, Jr., Vice President
Eugene S. Stark, Treasurer
S. Jane Rose, 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 LLP
Two World Financial Center
New York, NY 10281
Legal Counsel
Kirkpatrick and Lockhart
1800 M Street, N.W.
Washington, D.C. 20036
The accompanying financial statements as of March 31, 1995 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
<PAGE>
The Prudential Institutional Fund Bulk Rate
21 Prudential Plaza U.S. Postage
751 Broad Street PAID
Newark, NJ 07102-3777 Permit No. 2145
Newark, N.J.
(LOGO)<PAGE>
