THE PRUDENTIAL
INSTITUTIONAL
FUND
SEMI-ANNUAL REPORT
MARCH 31, 1996
GROWTH STOCK FUND
STOCK INDEX FUND (LOGO)
INTERNATIONAL STOCK FUND
ACTIVE BALANCED FUND
BALANCED FUND
INCOME FUND
MONEY MARKET FUND
<PAGE>
THE PRUDENTIAL TABLE OF
(LOGO) INSTITUTIONAL CONTENTS
FUND
<TABLE>
<S> <C>
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 30
MONEY MARKET FUND 34
FINANCIAL STATEMENTS 37
NOTES TO FINANCIAL STATEMENTS 45
</TABLE>
<PAGE>
<PAGE>
THE PRUDENTIAL LETTER TO
(LOGO) INSTITUTIONAL SHAREHOLDERS
FUND
May 20, 1996
We are pleased to provide you with the Semi-Annual Report of The Prudential
Institutional Fund for the six months ended March 31, 1996. A combination of
continued gains in the equity markets, albeit with more volatility, along with
strong cash flow from shareholders and retirement plan participants, resulted
in
significant increases in the size of many of the Fund's portfolios. Total net
assets grew to $957.9 million at March 31, 1996 from $784.9 million at September
30, 1995. The Fund has seven portfolios, each with a distinct investment
objective designed to allow investors the opportunity to select various options
to match different goals and risk tolerances.
Economy
The U.S. economy is growing sluggishly, on the order of 2% per year and
inflation is restrained at just under 3% per year. At the outset of 1996, the
focus of most commentators was on the deceleration of growth at the end of 1995
and the potentially debilitating effects of adverse weather conditions in early
1996. The prevailing fear was that the U.S. was slipping into or possibly
already in the midst of a recession. Sentiment has shifted dramatically and
market commentators are now talking about the ``growth scare'' that is pushing
interest rates higher. The focal point for this shift in sentiment about the
economy was Fed Chairman Greenspan's February statement to Congress on the state
of the economy. Subsequent employment reports that were much better than
expected added to the new sentiment that ``strong'' underlying economic growth
of 2% or more would force interest rates higher.
Market Review
The February shift in sentiment about the economy led to a dramatic shift in
the U.S. stock and bond markets. At that point, the S&P 500 was at its all-time
high of 661 and the yield on 30-year U.S. Treasuries was about 6.0%. Greenspan's
statement can essentially serve as the demarcation point to end the 1995 stock
and bond rallies. From that point until the end of March, long-term treasury
yields rose about 70 basis points to 6.7% and the S&P 500 fluctuated in the 640
to 660 range, ending the period at 645. For the six month period as a whole,
stocks gained nearly 12%, while bonds returned about 2.4% as measured by the
Lehman Aggregate Index.
Foreign stocks, as represented by the Morgan Stanley Europe, Australia and
Far East Index (EAFE) moved in roughly the same pattern as the U.S. stock market
during this six month period but the gain in foreign stocks was a more modest
7%.
Fund Performance
As a result of the continued strength in the financial markets, each of the
Fund's portfolios achieved absolute positive returns for the six month period.
Since each portfolio's inception, returns have been very positive and compare
satisfactorily versus the benchmarks. This performance information and portfolio
holdings along with comments from each portfolio's adviser may be found on the
following pages.
1
<PAGE>
THE PRUDENTIAL LETTER TO
(LOGO) INSTITUTIONAL SHAREHOLDERS
FUND
Summary
The economy and markets are in an uncertain period characterized by
heightened volatility. This underscores our belief that investors need to focus
on the longer-term and continue to exercise a disciplined approach to investing
their retirement savings. We look forward to continuing to provide you with the
investment options and services you need to help you accomplish your goals.
Sincerely,
Mark R. Fetting
President
2
<PAGE>
THE PRUDENTIAL GROWTH STOCK FUND
(LOGO) 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 managed approximately
$30 billion in equity, balanced, and fixed income accounts at March 31, 1996.
ADVISER'S COMMENTS: Over the six month period ended March 31, 1996, the most
obvious issue in the portfolio was the upheaval in technology stocks, an area
of
significant growth in the portfolio over time. This correction in technology
stocks is not unusual for this sector. ``Tech'' stocks are often volatile
because their underlying fundamentals have historically been more volatile in
the short term. The complexity for investors is that investment decisions must
be made over a reasonable time frame in order to capture the potential long-term
return that comes from growth. In general, we focus our attention on a company's
growth prospects over a 12-18 month time horizon. Short-term problems may either
be a precursor of long-term problems or may represent opportunities. While there
have been some short term fundamental disappointments, at this point we feel
that the opportunities far outweigh the risks in the group and therefore
continue to maintain a substantial over-weighting relative to the S&P 500. The
sector diversification in the portfolio has allowed us to withstand a
substantial ``hit'' in technology stocks, not without pain, but by and large our
non-technology holdings continue to do well.
As a result of the ongoing complexity in the economy, where some days the
expectation is recession and others it's runaway inflation, the consumer staple
stocks still look attractive due to their ability to deliver earnings growth in
almost any environment. With the group rotation going on in the market overall,
there is the need to maintain our focus on owning stocks of companies which are
delivering earnings growth while not ``over-paying'' in terms of valuation. We
look forward to the months ahead with the expectation that the attractive
valuations in the portfolio will be better recognized for the growth inherent
in
the companies, especially in technology.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Periods ended 3/31/96 Fund S&P 500
<S> <C> <C>
-------------------------- ------- --------
Six Months................ 5.43% 11.71%
One Year.................. 31.56% 32.10%
From Inception (11/5/92).. 17.25% 16.73%
</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 S&P 500 Index is a commonly used unmanaged indicator of stock market
performance.
3
<PAGE>
THE PRUDENTIAL GROWTH STOCK FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
LONG-TERM INVESTMENTS
Common Stocks--98.5%
Aerospace/Defense--3.5%
115,500 Boeing Co.......................... $10,005,188
-----------
Airlines--1.7%
56,800 AMR Corp.(a)....................... 5,083,600
-----------
Automobiles & Trucks--1.4%
69,200 General Motors Corp................ 3,944,400
-----------
Beverages--3.1%
40,800 Coca-Cola Co....................... 3,371,100
87,300 PepsiCo Inc........................ 5,521,725
-----------
8,892,825
-----------
Capital Goods--0.6%
34,100 Duracell International Inc......... 1,692,213
-----------
Chemicals--1.4%
3,170 Ciba-Geigy Ltd. (Switzerland)...... 3,961,502
-----------
Commercial Services--1.3%
125,750 CUC International, Inc.(a)......... 3,678,188
-----------
Computer Software & Services--18.0%
93,400 3Com Corp.(a)...................... 3,724,325
110,800 America Online Inc................. 6,204,800
84,800 AutoDesk, Inc...................... 3,201,200
162,800 Cisco Systems, Inc.(a)............. 7,549,850
Computer Associates International,
93,950 Inc.............................. 6,729,169
206,900 EMC Corp.(a)....................... 4,525,937
100,300 Macromedia Inc..................... 4,287,825
57,100 Microsoft Corp.(a)................. 5,888,437
71,000 SAP AG (ADR) (Germany)............. 3,390,250
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
<C> <S> <C>
54,400 Seagate Technology, Inc.(a)........ $ 2,978,400
104,300 Symbol Technologies, Inc.(a)....... 3,663,538
-----------
52,143,731
-----------
Cosmetics & Soaps--1.2%
66,700 Gillette Co........................ 3,451,725
-----------
Drugs & Medical Supplies--10.4%
156,500 Astra AB Class A (Sweden).......... 7,234,170
58,300 Johnson & Johnson Co............... 5,378,175
98,200 Lilly (Eli) & Co................... 6,383,000
80,000 Pfizer Inc......................... 5,360,000
Smith Kline Beecham PLC (ADR)
108,900 (United Kingdom)................. 5,608,350
-----------
29,963,695
-----------
Electronics--5.9%
76,600 Hewlett-Packard Co................. 7,200,400
96,700 Intel Corp......................... 5,499,813
160,900 LSI Logic Corp.(a)................. 4,304,075
-----------
17,004,288
-----------
Financial Services--6.3%
184,700 Federal National Mortgage Assn..... 5,887,312
68,833 First Data Corp.................... 4,852,726
70,500 Mutual Risk Management, Ltd........ 2,916,938
106,600 The PMI Group Inc.................. 4,650,425
-----------
18,307,401
-----------
Hospital Management--3.8%
90,300 Phycor, Inc.(a).................... 3,973,200
112,500 United Healthcare Corp............. 6,918,750
-----------
10,891,950
-----------
Insurance--2.4%
33,100 CIGNA Corp......................... 3,781,675
63,700 ITT Hartford Group Inc............. 3,121,300
-----------
6,902,975
-----------
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
THE PRUDENTIAL GROWTH STOCK FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Leisure--4.4%
132,500 Disney (Walt) Co................... $ 8,463,437
72,200 ITT Corp. (New).................... 4,332,000
-----------
12,795,437
-----------
Lodging--0.8%
24,400 Hilton Hotels Corp................. 2,293,600
-----------
Machinery--1.1%
83,700 Harnischfeger Industries, Inc...... 3,243,375
-----------
Media--8.1%
Clear Channel Communications,
93,600 Inc.(a).......................... 5,288,400
154,100 Eagle River Interactive Inc.(a).... 2,003,300
128,800 Omnicom Group...................... 5,796,000
Reuters Holdings PLC (ADR)
100,300 (United Kingdom)................. 6,532,037
54,700 Scholastic Corp.(a)................ 3,760,625
-----------
23,380,362
-----------
Miscellaneous Basic Industry--0.9%
77,500 Applied Materials, Inc.(a)......... 2,702,813
-----------
Petroleum Services--1.1%
Schlumberger, Ltd. (ADR)
39,100 (Netherlands).................... 3,093,788
-----------
Restaurants--1.6%
Lone Star Steakhouse & Saloon,
122,500 Inc.(a).......................... 4,685,625
-----------
Retail--9.6%
153,100 AutoZone, Inc.(a).................. 5,186,262
117,100 Corporate Express, Inc.(a)......... 3,864,300
168,000 General Nutrition Cos., Inc.(a).... 4,200,000
137,400 Gymboree Corp.(a).................. 3,589,575
74,833 Home Depot, Inc.................... 3,582,630
65,400 Kohls Corp.(a)..................... 4,144,725
73,900 Micro Warehouse, Inc.(a)........... 3,066,850
-----------
27,634,342
-----------
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
Technology--2.6%
41,500 Broderbund Software Inc............ $ 1,566,625
32,333 Chiron Corp.(a).................... 3,176,717
60,500 Intuit Inc......................... 2,722,500
-----------
7,465,842
-----------
Telecommunications--6.3%
Ericsson (L.M.) Telephone Co.,
136,600 (ADR) (Sweden)................... 2,919,825
161,700 MCI Communications Corp............ 4,891,425
54,600 Nokia Corp. (ADR) (Finland)........ 1,870,050
97,000 Tellabs, Inc.(a)................... 4,692,375
Vodafone Group PLC (ADR)
101,500 (United Kingdom)................. 3,806,250
-----------
18,179,925
-----------
Transportation--1.0%
Wisconsin Central Transportation
44,400 Corp.(a)......................... 2,952,600
-----------
Total common stocks
(cost $221,117,430)................ 284,351,390
-----------
Principal
Amount
(000) SHORT-TERM INVESTMENT
- - --------
Repurchase Agreement--1.4%
$ 4,122 Joint Repurchase Agreement Account,
5.35%, 04/01/96 (Note 4)
(cost $4,122,000)................ 4,122,000
-----------
Total Investments--99.9%
(cost $225,239,430; Note 3)........ 288,473,390
Other assets in excess of
liabilities--0.1%................ 398,096
-----------
Net Assets--100%................... $288,871,486
-----------
-----------
</TABLE>
- - ---------------
(a) Non-income producing security.
ADR--American Depository Receipt.
See Notes to Financial Statements.
5
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
(LOGO) 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 $5.9 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 .10% for the six months ended March 31, 1996.
The first half of this Fund's fiscal year from
September 30, 1995 through March 31, 1996
witnessed the end of 1995's robust rally in the U.S.
stock market, and the beginning of a period of
increased market volatility with more uncertain
returns for stocks. In calendar 1995, the stock
market gained more than 37% as the S&P 500 Index
was driven steadily higher by strong corporate
earnings and declining interest rates. This idyllic
period for stocks did not end with the 1995 calendar
year, but continued on into early February until Fed
Chairman Greenspan made some innocuous
comments about the strength of the economy, in
conjunction with his semi-annual testimony to
Congress. At that point, the S&P 500 was trading at
its all-time high of 661. The rising interest rates
unnerved the stock market and the S&P 500 has
oscillated between the 640 and 660 level, exhibiting
no clear direction but increasing volatility.
If we focus only on the first half of the fiscal year,
ended March 31, then long-term interest rates fell
from 6.4% at the beginning of the period to about
6.0% in early February, then shot up to 6.7% at the
end of March. Stocks fared much better. The S&P
500 started the period at about 580 and even though
it slipped from its mid-February high of 661, it still
finished the period at 645. With dividends included,
this amounts to nearly a 12% gain for the half year.
We remain moderately optimistic about corporate
earnings and the stock market. However, there is
great uncertainty with regard to the outlook for
interest rates and this raises the specter of greater
volatility in the stock market for the second half of
this fiscal year.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Periods ended 3/31/96 Fund S&P 500
<S> <C> <C>
------------------------- ------- --------
Six Months............... 11.44% 11.71%
One Year................. 31.30% 32.10%
From inception
(11/5/92)................ 16.06% 16.73%
</TABLE>
Results from inception are average annual returns. Fund performance figures are
historical, reflect reinvestment of dividends and distributions 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 returns would have been lower.
The S&P 500 Index is a commonly used unmanaged indicator of stock market
performance. ``Standard & Poor'sT,'' ``S&PT,'' ``S&P 500T,'' ``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
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
LONG-TERM INVESTMENTS
Common Stocks and Equivalents--96.0%
Aerospace/Defense--2.2%
8,200 Allied-Signal, Inc................. $ 484,825
10,000 Boeing Co.......................... 866,250
1,800 General Dynamics Corp.............. 105,300
5,730 Lockheed Corp...................... 434,764
5,000 Loral Corp......................... 245,000
3,300 McDonnell Douglas Corp............. 302,363
1,400 Northrop Corp...................... 89,075
7,000 Raytheon Co........................ 358,750
6,300 Rockwell International Corp........ 370,912
-----------
3,257,239
-----------
Airlines--0.3%
2,250 AMR Corp.(a)....................... 201,375
1,500 Delta Airlines, Inc................ 115,313
4,100 Southwest Airlines Co.............. 121,462
1,900 USAir Group Inc.(a)................ 34,675
-----------
472,825
-----------
Aluminum--0.4%
6,500 Alcan Aluminum Ltd................. 209,625
5,100 Aluminum Co. of America............ 319,388
1,850 Reynolds Metals Co................. 109,381
-----------
638,394
-----------
Automobiles & Trucks--2.3%
11,000 Chrysler Corp...................... 684,750
1,100 Cummins Engine, Inc................ 44,412
3,000 Dana Corp.......................... 100,125
1,800 Echlin Inc......................... 65,250
31,100 Ford Motor Co...................... 1,069,062
21,800 General Motors Corp................ 1,160,850
3,600 Genuine Parts Co................... 162,000
1,200 Johnson Controls, Inc.............. 89,550
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
<C> <S> <C>
2,420 Navistar International Corp.(a).... $ 25,108
1,500 Safety Kleen Corp.................. 21,563
-----------
3,422,670
-----------
Banking--6.9%
13,130 Banc One Corp...................... 467,756
3,200 Bank of Boston Corp................ 158,800
5,800 Bank of New York Co., Inc.......... 298,700
10,800 BankAmerica Corp................... 837,000
2,300 Bankers Trust NY Corp.............. 163,013
2,800 Barnett Banks, Inc................. 174,300
4,600 Boatmen's Bancshares............... 180,550
5,200 Chase Manhattan Corp............... 382,200
7,300 Chemical Banking Corp.............. 514,650
14,100 Citicorp........................... 1,128,000
3,400 Comerica, Inc...................... 141,950
4,000 CoreStates Financial Corp.......... 169,500
2,900 Fifth Third Bancorp................ 168,200
4,200 First Bank System, Inc............. 250,425
9,301 First Chicago Corp................. 385,991
2,200 First Interstate Bank Corp......... 381,700
8,300 First Union Corp................... 502,150
7,687 Fleet Financial Group, Inc......... 311,323
1,700 Golden West Financial Corp......... 91,163
4,000 Great Western Financial Corp....... 96,500
3,300 H.F. Ahmanson & Co................. 80,025
6,800 KeyCorp............................ 262,650
4,025 Mellon Bank Corp................... 221,878
5,400 Morgan (J.P.) & Co., Inc........... 448,200
4,100 National City Corp................. 144,013
8,600 NationsBank Corp................... 689,075
10,300 Norwest Corp....................... 378,525
9,900 PNC Financial Corp................. 304,425
1,600 Republic New York Corp............. 95,200
3,300 Suntrust Banks, Inc................ 231,000
4,300 U.S. Bancorp....................... 146,200
1,450 Wells Fargo & Co................... 378,450
-----------
10,183,512
-----------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Beverages--3.7%
1,200 Adolph Coors Co.................... $ 21,450
7,400 Anheuser Busch Cos., Inc........... 498,575
2,000 Brown-Forman Corp.................. 80,250
36,500 Coca-Cola Co....................... 3,015,812
22,900 PepsiCo Inc........................ 1,448,425
10,900 Seagram Co., Ltd................... 352,888
-----------
5,417,400
-----------
Chemicals--2.6%
3,200 Air Products & Chemicals, Inc...... 174,800
7,600 Dow Chemical Co.................... 660,250
16,200 duPont (E.I.) de Nemours & Co...... 1,344,600
2,300 Eastman Chemical Co................ 158,987
2,800 Grace (W.R.) & Co.................. 219,100
3,200 Hercules, Inc...................... 198,400
3,400 Monsanto Co........................ 521,900
1,900 Nalco Chemical Co.................. 58,425
2,000 Rohm & Haas Co..................... 133,000
1,500 Sigma-Aldrich...................... 85,875
4,000 Union Carbide Corp................. 198,500
-----------
3,753,837
-----------
Chemical-Specialty--0.4%
4,225 Engelhard Corp..................... 98,759
1,900 Great Lakes Chemical Corp.......... 128,013
4,300 Morton International, Inc.......... 165,013
4,300 Praxair, Inc....................... 171,462
1,300 Raychem Corp....................... 83,850
-----------
647,097
-----------
Commercial Services--0.2%
5,250 CUC International, Inc.(a)......... 153,563
2,400 Deluxe Corp........................ 75,300
800 Harland (John H.) Co............... 17,600
2,900 Moore Corp. Ltd.................... 56,550
1,400 Ogden Corp......................... 27,300
-----------
330,313
-----------
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
Computer Software & Services--3.8%
4,700 3Com Corp.(a)...................... $ 187,412
1,500 AutoDesk, Inc...................... 56,625
8,400 Automatic Data Processing, Inc..... 330,750
5,300 Bay Networks, Inc.(a).............. 162,975
2,100 Cabletron Systems, Inc.(a)......... 139,125
1,900 Ceridian Corp.(a).................. 81,700
16,000 Cisco Systems, Inc.(a)............. 742,000
Computer Associates International,
7,000 Inc.............................. 501,375
1,650 Computer Sciences Corp.(a)......... 116,119
4,500 EMC Corp.(a)....................... 98,438
1,300 Intergraph Corp.(a)................ 20,800
6,000 Micron Technology Inc.............. 188,250
17,300 Microsoft Corp.(a)................. 1,784,062
10,800 Novell, Inc.(a).................... 144,450
12,650 Oracle Systems Corp.(a)............ 596,131
4,600 Silicon Graphics Inc.(a)........... 115,000
5,400 Sun Microsystems Inc.(a)........... 236,250
3,300 Tandem Computers Inc.(a)........... 29,288
-----------
5,530,750
-----------
Construction--0.2%
2,400 Fluor Corp......................... 163,800
1,200 Foster Wheeler Corp................ 53,250
800 Kaufman & Broad Home Corp.......... 12,800
700 Pulte Corp......................... 18,813
-----------
248,663
-----------
Consumer Goods--0.5%
900 Centex Corp........................ 27,900
1,300 Fleetwood Enterprises, Inc......... 32,175
4,700 Lowes Companies, Inc............... 168,025
4,600 Masco Corp......................... 133,400
3,200 Maytag Corp........................ 64,800
1,500 Owens-Corning Fiberglas Corp.(a)... 60,188
Pioneer Hi Bred International,
2,400 Inc.............................. 126,300
1,300 Stanley Works...................... 71,500
2,200 Whirlpool Corp..................... 121,550
-----------
805,838
-----------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Containers--0.2%
900 Ball Corp.......................... $ 27,900
1,500 Bemis, Inc......................... 47,063
3,600 Crown Cork & Seal, Inc.(a)......... 175,500
-----------
250,463
-----------
Cosmetics & Soaps--2.2%
800 Alberto Culver Co.................. 30,800
1,950 Avon Products, Inc................. 167,212
1,500 Clorox Co.......................... 129,188
4,200 Colgate-Palmolive Co............... 327,075
12,900 Gillette Co........................ 667,575
International Flavors & Fragrances
3,250 Inc.............................. 155,594
20,000 Procter & Gamble Co................ 1,695,000
-----------
3,172,444
-----------
Diversified Gas--0.2%
3,000 Coastal Corp....................... 118,500
500 Eastern Enterprises, Inc........... 17,750
2,100 Enserch Corp....................... 34,125
1,500 NICOR Inc.......................... 40,125
700 Oneok Inc.......................... 16,713
-----------
227,213
-----------
Drugs & Medical Supplies--8.9%
23,000 Abbott Laboratories................ 937,250
2,400 ALZA Corp.(a)...................... 73,800
9,100 American Home Products Corp........ 986,212
7,700 Amgen, Inc.(a)..................... 447,562
1,700 Bard (C.R.), Inc................... 60,563
1,600 Bausch & Lomb, Inc................. 59,200
7,900 Baxter International Inc........... 357,475
1,900 Becton Dickinson & Co.............. 155,563
3,300 Biomet, Inc.(a).................... 46,200
5,000 Boston Scientific Corp.(a)......... 230,000
14,650 Bristol-Myers Squibb Co............ 1,254,406
19,400 Johnson & Johnson Co............... 1,789,650
16,000 Lilly (Eli) & Co................... 1,040,000
6,800 Medtronic, Inc..................... 405,450
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
35,800 Merck & Co., Inc................... $ 2,228,550
18,500 Pfizer Inc......................... 1,239,500
14,655 Pharmacia & Upjohn, Inc............ 584,368
10,600 Schering-Plough Corp............... 616,125
2,000 St. Jude Medical, Inc.(a).......... 74,625
1,600 United States Surgical Corp........ 52,400
4,000 Warner Lambert Co.................. 413,000
-----------
13,051,899
-----------
Electronics--3.9%
3,700 Advanced Micro Devices, Inc.(a).... 63,825
3,000 Amdahl Corp.(a).................... 25,500
6,284 AMP Inc............................ 260,000
3,700 Apple Computer, Inc................ 90,881
800 Cray Research, Inc.(a)............. 23,300
1,100 Data General Corp.(a).............. 16,088
4,400 Digital Equipment Corp.(a)......... 242,550
1,300 EG&G, Inc.......................... 29,088
6,500 Emerson Electric Co................ 524,875
2,000 General Instrument Corp.(a)........ 54,750
1,100 Harris Corp........................ 68,063
14,900 Hewlett-Packard Co................. 1,400,600
23,900 Intel Corp......................... 1,359,312
3,800 LSI Logic Corp.(a)................. 101,650
17,200 Motorola, Inc...................... 911,600
3,900 National Semiconductors Corp.(a)... 54,113
1,300 Perkin Elmer Corp.................. 70,362
1,800 Tandy Corp......................... 83,250
1,000 Tektronix, Inc..................... 32,500
5,500 Texas Instruments Inc.............. 279,812
550 Thomas & Betts Corp................ 41,250
-----------
5,733,369
-----------
Financial Services--3.0%
14,000 American Express Co................ 691,250
1,500 Beneficial Corp.................... 86,438
3,100 Block (H&R), Inc................... 111,988
4,958 Dean Witter Discover & Co.......... 283,845
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Financial Services, cont'd.
5,300 Federal Home Loan Mortgage Corp.... $ 451,825
31,800 Federal National Mortgage Assn..... 1,013,625
6,500 First Data Corp.................... 458,250
3,900 Green Tree Financial Corp.......... 134,062
2,900 Household International Corp....... 195,025
6,425 MBNA Corp.......................... 190,341
5,100 Merrill Lynch & Co., Inc........... 309,825
4,500 Morgan Stanley Group, Inc.......... 232,875
3,100 Salomon, Inc....................... 116,250
1,950 Transamerica Corp.................. 146,006
-----------
4,421,605
-----------
Food & Beverage--2.6%
15,295 Archer-Daniels-Midland Co.......... 281,046
7,200 Campbell Soup Co................... 438,300
7,100 ConAgra, Inc....................... 288,437
4,200 CPC International, Inc............. 291,375
296 Earthgrains Co..................... 8,843
1,000 Fleming Cos., Inc.................. 14,250
4,650 General Mills, Inc................. 271,444
1,800 Giant Foods, Inc................... 59,400
10,700 Heinz (H.J.) Co.................... 354,437
2,200 Hershey Foods Corp................. 163,900
6,350 Kellogg Co......................... 481,012
3,900 Quaker Oats Co..................... 130,163
3,100 Ralston Purina Co.................. 207,313
14,100 Sara Lee Corp...................... 460,012
5,400 Sysco Corp......................... 177,525
3,400 Wrigley (W.M.) Junior Co........... 199,325
-----------
3,826,782
-----------
Forest Products--1.5%
1,400 Boise Cascade Corp................. 58,800
2,800 Champion International Corp........ 126,700
2,650 Georgia Pacific Corp............... 183,844
8,817 International Paper Co............. 347,165
2,400 James River Corp................... 61,800
8,108 Kimberly Clark Corp................ 604,046
3,100 Louisiana Pacific Corp............. 75,563
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
1,600 Mead Corp.......................... $ 86,400
800 Potlatch Corp...................... 34,200
3,100 Stone Container Corp............... 43,400
1,600 Temple Inland Inc.................. 75,000
2,000 Union Camp Corp.................... 99,250
3,000 Westvaco Corp...................... 88,125
5,900 Weyerhaeuser Co.................... 272,137
1,600 Willamette Industries, Inc......... 96,400
-----------
2,252,830
-----------
Gas Pipelines--0.6%
4,518 Cinergy Corp....................... 135,540
1,600 Columbia Gas System, Inc.(a)....... 73,400
2,700 Consolidated Natural Gas Co........ 117,450
7,300 Enron Corp......................... 269,187
3,400 Noram Energy Corp.................. 31,450
4,400 Panhandle Eastern Corp............. 136,950
1,100 Peoples Energy Corp................ 35,613
2,900 Williams Cos., Inc................. 146,087
-----------
945,677
-----------
Hospital Management--1.2%
2,700 Beverly Enterprises, Inc.(a)....... 29,700
12,952 Columbia Healthcare Corp........... 747,978
1,100 Community Psychiatric Centers...... 9,213
4,600 Humana, Inc.(a).................... 115,575
1,800 Manor Care, Inc.................... 70,650
3,400 Service Corp. International........ 165,750
700 Shared Medical Systems Corp........ 42,175
6,000 Tenet Healthcare Corp.(a).......... 126,000
4,500 U.S. HealthCare Inc................ 206,437
5,100 United Healthcare Corp............. 313,650
-----------
1,827,128
-----------
Housing Construction
1,100 Armstrong World Industries......... 68,338
-----------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Insurance--3.6%
3,300 Aetna Life & Casualty Co........... $ 249,150
Alexander & Alexander Services,
1,400 Inc.............................. 26,425
12,974 Allstate Corp...................... 546,530
5,900 American General Corp.............. 203,550
American International Group,
13,812 Inc.............................. 1,293,148
2,550 Chubb Corp......................... 239,381
2,250 CIGNA Corp......................... 257,062
2,400 General Re Corp.................... 349,800
3,400 ITT Hartford Group Inc............. 166,600
2,025 Jefferson-Pilot Corp............... 109,097
3,000 Lincoln National Corp.............. 152,250
2,100 Marsh & McLennan Cos............... 195,038
2,700 Providian Corp..................... 120,488
3,700 SAFECO Corp........................ 123,950
2,500 St. Paul Companies, Inc............ 138,750
2,050 Torchmark Corp..................... 92,250
9,231 Travelers, Inc..................... 609,246
2,100 UNUM Corp.......................... 124,950
3,200 USF&G Corp......................... 49,600
1,350 USLIFE Corp........................ 39,656
4,900 Wachovia Corp...................... 219,275
-----------
5,306,196
-----------
Leisure--1.4%
1,500 Bally Entertainment Group(a)....... 25,875
2,800 Brunswick Corp..................... 64,400
19,692 Disney (Walt) Co................... 1,257,826
2,900 Harrahs Entertainment Inc.(a)...... 85,187
2,600 Hasbro, Inc........................ 96,200
3,500 ITT Corp. (New).................... 210,000
1,000 King World Productions, Inc.(a).... 41,375
8,087 Mattel, Inc........................ 219,360
500 Outboard Marine Corp............... 9,563
-----------
2,009,786
-----------
Lodging--0.2%
1,400 Hilton Hotels Corp................. 131,600
3,600 Marriott International, Inc.(a).... 171,000
-----------
302,600
-----------
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
Machinery--1.2%
800 Briggs & Stratton Corp............. $ 34,500
2,100 Case Corp.......................... 106,837
5,800 Caterpillar Inc.................... 394,400
900 Cincinnati Milacron, Inc........... 23,625
3,100 Cooper Industries, Inc............. 120,900
7,600 Deere & Co......................... 317,300
3,300 Dover Corp......................... 150,975
2,300 Eaton Corp......................... 138,575
1,000 Giddings & Lewis, Inc.............. 19,000
1,400 Harnischfeger Industries, Inc...... 54,250
3,200 Ingersoll Rand Co.................. 130,400
1,102 PACCAR Inc......................... 53,722
2,150 Parker Hannifin Corp............... 80,625
1,200 Snap-On Tools Corp................. 56,100
900 Timken Co.......................... 41,513
1,100 Varity Corp.(a).................... 47,575
-----------
1,770,297
-----------
Media--1.9%
6,950 Comcast Corp....................... 122,928
4,400 Donnelley (R.R.) & Sons, Co........ 151,800
2,800 Dow Jones & Co., Inc............... 107,800
4,900 Dun & Bradstreet Corp.............. 297,062
4,050 Gannett, Inc....................... 272,363
2,300 Interpublic Group Cos., Inc........ 108,675
1,450 Knight-Ridder, Inc................. 98,781
1,500 McGraw Hill, Inc................... 130,125
800 Meredith Corp...................... 33,000
2,900 New York Times Co.................. 84,100
11,200 Time Warner, Inc................... 457,800
3,200 Times Mirror Co.................... 126,000
1,900 Tribune Co......................... 125,163
13,700 U.S. West Media Group, Inc.(a)..... 282,562
10,639 Viacom Inc.(a)..................... 448,168
-----------
2,846,327
-----------
Mineral Resources--1.0%
1,300 ASARCO Inc......................... 45,500
Barrick Gold Corp. (ADR)
10,200 (Canada)......................... 309,825
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Mineral Resources, cont'd.
2,750 Cyprus Minerals Co................. $ 77,688
3,900 Echo Bay Mines, Ltd................ 52,650
Freeport-McMoRan Copper & Gold
6,000 Inc.............................. 189,750
4,000 Homestake Mining Co................ 77,500
3,500 INCO, Ltd.......................... 110,687
2,798 Newmont Mining Corp................ 158,437
2,000 Phelps-Dodge Corp.................. 137,250
6,900 Placer Dome, Inc................... 199,237
3,740 Santa Fe Pacific Gold Corp......... 59,840
-----------
1,418,364
-----------
Miscellaneous Basic Industry--4.9%
5,200 Applied Materials, Inc.(a)......... 181,350
6,100 Browning Ferris Industries, Inc.... 192,150
900 Crane Co........................... 36,338
1,800 Ecolab, Inc........................ 54,000
1,050 FMC Corp.(a)....................... 78,881
48,600 General Electric Co................ 3,784,725
1,400 General Signal Corp................ 50,750
1,500 Grainger (W.W.) Inc................ 100,687
3,400 Illinois Tool Works, Inc........... 219,725
3,400 ITT Industries Inc................. 86,700
3,400 Loews Corp......................... 257,125
2,200 Mallinckrodt Group Inc............. 82,775
1,300 Millipore Corp..................... 49,725
250 NACCO Industries, Inc.............. 14,219
3,233 Pall Corp.......................... 82,846
5,600 PPG Industries, Inc................ 273,700
1,600 Teledyne, Inc...................... 44,800
2,500 Textron, Inc....................... 200,000
900 Trinova Corp....................... 28,688
1,900 TRW Inc............................ 169,337
4,400 Tyco International Ltd............. 157,300
3,600 United Technologies Corp........... 404,100
12,000 Westinghouse Electric Corp......... 231,000
14,200 WMX Technologies, Inc.............. 450,850
-----------
7,231,771
-----------
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
Miscellaneous Consumer Growth--2.1%
1,900 Allergan, Inc...................... $ 70,063
2,400 American Greetings Corp............ 66,300
2,500 Black & Decker Corp................ 94,687
6,700 Corning, Inc....................... 234,500
2,700 Dial Corp.......................... 75,600
10,000 Eastman Kodak Co................... 710,000
1,100 Jostens, Inc....................... 24,613
Minnesota Mining & Manufacturing
12,200 Co............................... 791,475
1,300 Polaroid Corp...................... 58,500
1,800 Premark International Inc.......... 96,525
4,500 Rubbermaid, Inc.................... 127,687
4,700 Unilever N.V....................... 638,025
3,000 Whitman Corp....................... 72,750
-----------
3,060,725
-----------
Office Equipment & Supplies--2.2%
3,700 Alco Standard Corp................. 192,863
1,500 Avery Dennison Corp................ 81,000
7,700 Compaq Computer Corp.(a)........... 297,412
3,700 Honeywell, Inc..................... 204,425
International Business Machines
16,500 Corp............................. 1,833,562
4,400 Pitney Bowes, Inc.................. 215,600
5,300 Unisys Corp.(a).................... 31,800
3,150 Xerox Corp......................... 395,325
-----------
3,251,987
-----------
Petroleum--8.0%
2,700 Amerada Hess Corp.................. 148,500
14,400 Amoco Corp......................... 1,040,400
1,800 Ashland Oil, Inc................... 69,075
4,750 Atlantic Richfield Co.............. 565,250
3,600 Burlington Resources Inc........... 133,650
18,900 Chevron Corp....................... 1,060,762
36,150 Exxon Corp......................... 2,950,744
1,500 Kerr McGee Corp.................... 95,250
1,000 Louisiana Land & Exploration Co.... 46,625
11,500 Mobil Corp......................... 1,332,562
9,200 Occidental Petroleum Corp.......... 246,100
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Petroleum, cont'd.
1,300 Pennzoil Co........................ $ 51,675
7,600 Phillips Petroleum Co.............. 300,200
Royal Dutch Petroleum Co. (ADR)
15,600 (Netherlands).................... 2,203,500
Santa Fe Energy Resources,
2,900 Inc.(a).......................... 30,450
2,200 Sun Co., Inc....................... 63,525
5,100 Tenneco, Inc....................... 284,963
7,700 Texaco, Inc........................ 662,200
7,200 Unocal Corp........................ 240,300
8,400 USX Marathon Corp.................. 161,700
1,500 Western Atlas, Inc.(a)............. 90,000
-----------
11,777,431
-----------
Petroleum Services--0.9%
4,200 Baker Hughes Inc................... 122,850
5,300 Dresser Industries, Inc............ 161,650
3,300 Halliburton Co..................... 187,687
700 Helmerich & Payne, Inc............. 23,625
1,700 McDermott International, Inc....... 32,725
3,000 Oryx Energy Co.(a)................. 41,625
2,400 Rowan Cos., Inc.(a)................ 30,600
Schlumberger, Ltd. (ADR)
7,000 (Netherlands).................... 553,875
2,600 Sonat Inc.......................... 93,600
-----------
1,248,237
-----------
Railroads--1.0%
4,165 Burlington Northern Inc............ 342,051
2,300 Consolidated Rail Corp............. 164,738
6,100 CSX Corp........................... 278,312
3,800 Norfolk Southern Corp.............. 323,000
6,000 Union Pacific Corp................. 411,750
-----------
1,519,851
-----------
Restaurants--0.8%
4,850 Darden Restaurants Inc............. 65,475
600 Luby's Cafeterias, Inc............. 13,875
20,300 McDonald's Corp.................... 974,400
Ryan's Family Steak Houses,
900 Inc.(a).......................... 8,100
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
700 Shoney's Inc.(a)................... $ 6,300
3,400 Wendy's International, Inc......... 61,625
-----------
1,129,775
-----------
Retail--4.9%
7,300 Albertsons, Inc.................... 271,012
4,200 American Stores Co................. 138,600
700 Brown Group, Inc................... 9,450
2,500 Charming Shoppes, Inc.............. 12,891
2,800 Circuit City Stores, Inc........... 83,650
2,100 Dayton Hudson Corp................. 178,237
3,200 Dillard Department Stores, Inc..... 110,800
Federated Department Stores,
5,800 Inc.(a).......................... 187,050
4,200 Gap, Inc........................... 232,575
Great Atlantic & Pacific Tea
1,000 Inc.............................. 31,000
2,100 Harcourt General, Inc.............. 95,287
13,866 Home Depot, Inc.................... 663,835
13,000 K mart Corp........................ 121,875
3,600 Kroger Co.(a)...................... 145,800
9,188 Limited, Inc....................... 174,572
2,200 Liz Claiborne, Inc................. 75,350
600 Longs Drug Stores Corp............. 28,350
7,200 May Department Stores Co........... 347,400
3,000 Melville Corp...................... 107,625
1,100 Mercantile Stores, Inc............. 67,513
4,700 Newell Co.......................... 125,725
4,200 NIKE, Inc.......................... 341,250
2,400 Nordstrom, Inc..................... 116,250
6,500 Penney (J.C.), Inc................. 323,375
1,900 Pep Boys - Manny, Moe & Jack....... 63,650
5,852 Price Costco, Inc.(a).............. 109,725
2,200 Reebok International, Ltd.......... 60,775
2,400 Rite-Aid Corp...................... 74,100
11,300 Sears Roebuck & Co................. 550,875
2,500 Sherwin Williams Co................ 110,937
1,100 Stride Rite Corp................... 10,038
1,900 Supervalue, Inc.................... 58,663
2,000 TJX Companies, Inc................. 50,250
7,900 Toys 'R' Us Inc.(a)................ 213,300
66,600 Wal-Mart Stores, Inc............... 1,540,125
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Retail, cont'd.
7,200 Walgreen Co........................ $ 234,900
4,400 Winn-Dixie Stores, Inc............. 147,950
4,000 Woolworth Corp..................... 62,500
-----------
7,277,260
-----------
Rubber--0.2%
2,500 Cooper Tire & Rubber............... 64,375
800 Goodrich (B.F.) Co................. 63,600
4,400 Goodyear Tire & Rubber Co.......... 224,400
-----------
352,375
-----------
Steel--0.3%
2,800 Armco Inc.(a)...................... 15,050
3,200 Bethlehem Steel Corp.(a)........... 42,000
1,400 Inland Steel Industries, Inc....... 34,650
2,600 Nucor Corp......................... 153,725
2,400 USX Corp. - U.S. Steel Group....... 83,100
2,850 Worthington Industries, Inc........ 56,644
-----------
385,169
-----------
Telecommunications--1.5%
1,333 360 Communications Co.............. 31,825
5,400 ALLTEL Corp........................ 167,400
1,725 Andrew Corp.(a).................... 65,981
3,400 DSC Communications Corp.(a)........ 91,800
19,900 MCI Communications Corp............ 601,975
7,400 Northern Telecom Ltd............... 353,350
2,100 Scientific Atlanta, Inc............ 37,275
10,100 Sprint Corp........................ 383,800
19,100 Tele Communications, Inc.(a)....... 354,544
2,600 Tellabs, Inc.(a)................... 125,775
-----------
2,213,725
-----------
Textiles--0.2%
2,100 Fruit of the Loom, Inc.(a)......... 54,338
National Service Industries,
1,500 Inc.............................. 54,375
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
1,200 Russell Corp....................... $ 32,100
600 Springs Industries, Inc............ 27,600
1,800 VF Corp............................ 99,450
-----------
267,863
-----------
Tobacco--1.7%
5,300 American Brands Inc................ 224,588
24,250 Philip Morris Cos., Inc............ 2,127,937
5,600 UST, Inc........................... 178,500
-----------
2,531,025
-----------
Trucking & Shipping--0.3%
1,100 Caliber Systems Inc................ 47,163
1,300 Consolidated Freightways, Inc...... 33,313
1,700 Federal Express Corp.(a)........... 118,787
8,600 Laidlaw Inc........................ 91,375
2,400 Ryder System, Inc.................. 65,400
800 Yellow Corp........................ 10,000
-----------
366,038
-----------
Utility-Communications--6.8%
14,500 AirTouch Communications(a)......... 451,313
16,100 Ameritech Corp..................... 877,450
46,500 AT&T Corp.......................... 2,848,125
12,700 Bell Atlantic Corp................. 784,225
28,900 BellSouth Corp..................... 1,069,300
28,100 GTE Corp........................... 1,232,887
12,500 NYNEX Corp......................... 623,437
12,500 Pacific Telesis Group.............. 345,313
17,700 SBC Communications Inc............. 931,462
6,300 Unicom Corp........................ 170,100
13,700 US West Communications, Inc........ 443,538
3,700 WorldCom Inc.(a)................... 170,200
-----------
9,947,350
-----------
Utility-Electric--3.1%
5,400 American Electric Power, Inc....... 225,450
4,300 Baltimore Gas & Electric Co........ 118,788
4,400 Carolina Power & Light Co.......... 163,900
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
THE PRUDENTIAL STOCK INDEX FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Utility-Electric, cont'd.
6,000 Central & South West Corp.......... $ 171,000
6,800 Consolidated Edison Co............. 216,750
4,300 Detroit Edison Co.................. 144,588
5,100 Dominion Resources, Inc............ 202,087
5,900 Duke Power Co...................... 297,950
13,100 Edison International............... 224,337
6,700 Entergy Corp....................... 187,600
5,400 FPL Group, Inc..................... 244,350
3,500 General Public Utilities Corp...... 115,500
7,600 Houston Industries, Inc............ 164,350
4,300 Niagara Mohawk Power Corp.......... 28,488
2,000 Northern States Power Co........... 97,500
4,600 Ohio Edison Co..................... 104,075
4,600 PP&L Resources Inc................. 112,125
2,500 Pacific Enterprises................ 64,688
12,100 Pacific Gas & Electric Co.......... 273,762
8,400 Pacificorp......................... 175,350
6,500 PECO Energy Co..................... 173,062
7,100 Public Service Enterprise Group.... 195,250
19,400 Southern Co........................ 463,175
6,500 Texas Utilities Co................. 268,937
2,900 Union Electric Co.................. 118,900
-----------
4,551,962
-----------
Total common stocks
(cost $114,921,129)................ 141,252,400
-----------
Preferred Stock
50 Teledyne Inc. (Cum), Ser. E
(cost $234)...................... 725
-----------
Total stocks
(cost $114,921,363)................ 141,253,125
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
SHORT-TERM INVESTMENTS--4.3%
U.S. Government--0.3%
United States Treasury Bill
$ 350 (b) 4.975%, 6/13/96................... $ 346,469
Repurchase Agreement--4.0%
5,929,000
5,929 Joint Repurchase Agreement
Account,
5.35%, 04/01/96 (Note 4)........
-----------
Total short-term investments
(cost $6,275,469)................. 6,275,469
-----------
Total Investments--100.3%
(cost $121,196,832; Note 3)....... 147,528,594
Liabilities in excess of other
assets--(0.3%).................. (443,917)
-----------
Net Assets--100%.................. $147,084,677
-----------
-----------
</TABLE>
- - ---------------
(a) Non-income producing security.
(b) Pledged as initial margin on futures contracts.
ADR--American Depository Receipt.
See Notes to Financial Statements.
15
<PAGE>
THE PRUDENTIAL INTERNATIONAL STOCK FUND
(LOGO) 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, L.P. Mercator is
dedicated to global and international common stock investing. Organized in 1984,
Mercator is a conservative, value-oriented manager, which places great emphasis
on capital preservation. Mercator manages $1.9 billion for institutional
clients.
ADVISER'S COMMENTS: The Fund was +4.86% vs. +7.06% for the EAFE Index. The
Index performed well in the period due mainly to the rally in the Japanese stock
market and the flow of funds into international portfolios.
The Fund with its significant underweighting in Japan and exposure to European
cyclicals, which were poor performers early in the period, lagged the index.
Currency markets were relatively quiet; however, the Japanese yen hit a cyclical
low against the U.S. dollar offsetting some of the gains in Japanese stocks. The
U.S. broad rally ended and interest rates rose putting pressure on U.S. stocks.
Interest rates still have room to move lower in many overseas countries. This
may prove to be an additional positive factor for foreign stocks.
Many European stocks, particularly cyclicals, recovered nicely from the
depressed price levels seen late last year. Investors have apparently become
more sanguine regarding the global economic outlook and bought economically
sensitive stocks. Several corporate restructurings and a merger had a positive
impact on the portfolio. Markets that performed well were France, Spain,
Switzerland and the Netherlands. The laggards were the United Kingdom, Norway,
Korea and Italy. Our underweighting in Japan continues based on very high stock
valuations. Our only holding in Germany was sold and positions were reduced in
Norway and Switzerland, all based on high price levels. Undervalued stocks were
bought in the United Kingdom, Italy, New Zealand and the Netherlands.
The Fund is well positioned; offering very attractive valuation levels, i.e.,
low price/cash flow multiple, low price/book value ratio and a relatively high
dividend yield. Importantly, the forecasted earnings growth rate for the
portfolio is very favorable for the long term.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Periods ended 3/31/96 Fund EAFE Index
<S> <C> <C>
------------------------- ------------- -------------
Six Months............... 4.86% 7.06%
One Year................. 17.67% 12.33%
From Inception
(11/5/92)................ 16.33% 15.96%
</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.
16
<PAGE>
THE PRUDENTIAL INTERNATIONAL STOCK FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - -------------------------------------------------------------
LONG-TERM INVESTMENTS--94.0%
Common Stocks
Argentina--2.6%
44,000 Telecom Argentina (ADR) ......... $ 1,826,000
(Utilities)
115,000 YPF Sociedad Anonima (ADR) ...... 2,314,375
(Oil & Gas) -----------
4,140,375
-----------
Australia--7.1%
880,000 CSR, Ltd. ....................... 2,933,241
(Multi-Industry)
600,000 Mayne Nickless Ltd. ............. 3,192,388
(Multi-Industry)
300,000 National Australia Bank Ltd. .... 2,675,973
(Commercial Banking)
900,000 Pioneer International Ltd. ...... 2,690,057
(Building Materials & -----------
Components)
11,491,659
-----------
Canada--5.0%
130,000 Bank of Nova Scotia ............. 2,933,407
(Commercial Banking)
270,000 Canadian Tire Corp., Ltd., Class A 3,269,125
.
(Automotive Parts)
145,000 MacMillan Bloedel Ltd. .......... 1,848,743
(Forestry & Paper) -----------
8,051,275
-----------
Finland--1.4%
136,000 Outokumpu O.V. .................. 2,296,955
(Metals - Non Ferrous) -----------
Value
Shares Description (Note 1)
- - -------------------------------------------------------------
<C> <S> <C>
France--7.7%
12,000 Chargeurs Reunis S.A. ........... $ 3,070,571
(Multi-Industry)
30,075 Christian Dior S.A. ............. 4,006,020
(Textiles & Apparel)
20,000 Peugeot S.A. .................... 3,049,131
(Automobile Manufacturing)
35,000 Societe Nationale Elf Aquitaine 2,372,705
............................... -----------
(Energy)
12,498,427
-----------
Italy--3.8%
1,200,000 Banca Fideuram S.P.A. ........... 1,766,730
(Financial Services)
215,000 Benetton Group S.P.A. (ADR) ..... 2,459,688
(Textiles & Apparel)
2,100,000 Parmalat Finanziaria S.P.A. ..... 1,930,019
(Agriculture) -----------
6,156,437
-----------
Japan--5.6%
305,000 Hitachi, Ltd. ................... 2,958,955
(Electrical Equipment)
180,000 Matsushita Electric Industrial 2,921,642
Co., Ltd. .
(Electrical Equipment)
54,000 Sony Corp. ...................... 3,218,843
(Electronics) -----------
9,099,440
-----------
Netherlands--11.7%
29,000 AKZO N.V. ....................... 3,222,027
(Chemicals)
30,000 Gamma Holding N.V. .............. 1,271,925
(Textiles & Apparel)
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
THE PRUDENTIAL INTERNATIONAL STOCK FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - -------------------------------------------------------------
Netherlands, cont'd
52,000 Internationale - Nederlanden
Group N.V. .................... $ 3,774,042
(Insurance)
90,000 KLM Royal Dutch Airlines ........ 3,129,914
(Airlines / Military Technology)
65,000 Knp Bt (kon) Nv ................. 1,627,555
(Forestry & Paper)
110,000 Pakhoed Holdings N.V. ........... 2,947,260
(Energy Equipment & Services)
110,000 Stork N.V. ...................... 3,080,319
(Machinery & Engineering) -----------
19,053,042
-----------
New Zealand--5.3%
1,320,000 Carter Holt Harvey Ltd. ......... 2,912,716
(Forestry & Paper)
700,000 Fisher & Paykel Industries Ltd. 2,240,656
...............................
(Consumer Durable Goods)
1,400,000 Lion Nathan Ltd. ................ 3,451,564
(Beverages & Tobacco) -----------
8,604,936
-----------
Norway--4.8%
100,000 Hafslund Nycomed A.S. ........... 2,725,623
(Health & Personal Care)
70,000 Orkla A.S. ...................... 3,058,149
(Food & Household Products)
127,900 Unitor A.S. ..................... 1,952,201
(Business & Public Services) -----------
7,735,973
-----------
South Korea--6.0%
85,000 Korea Zinc ...................... 1,868,968
(Metals - Non Ferrous)
30,575 L.G. Construction Ltd. .......... 676,187
(Construction & Housing)
Value
Shares Description (Note 1)
- - -------------------------------------------------------------
17,600 Pohang Iron & Steel Co., Ltd. ... $ 1,273,455
(Metal - Steel)
35,000 Sam Yang Co. .................... 1,261,745
(Misc. Materials & Commodities)
6,580 Sam Yang Co., new shares ........ 222,908
(Misc. Materials & Commodities)
18,189 Samsung Electronics Co., Ltd. ... 2,139,198
(Manufacturing)
4,879 Samsung Electronics Co., Ltd., new
shares ........................ 545,126
(Manufacturing)
60,020 Tong Yang Cement Co. ............ 1,718,694
(Construction & Housing) -----------
9,706,281
-----------
Spain--5.8%
87,000 Banco Bilbao Vizcaya, S.A. ...... 3,245,981
(Commercial Banking)
21,000 Banco de Andalucia S.A. ......... 2,919,134
(Commercial Banking)
355,000 Iberdrola S.A. .................. 3,275,515
(Utilities) -----------
9,440,630
-----------
Sweden--6.4%
65,000 Electrolux AB ................... 3,169,643
(Appliances)
145,000 SKF International AB ............ 3,194,286
(Consumer Goods)
60,000 Svedala Industri AB ............. 1,953,536
(Engineering & Contruction)
90,000 Volvo AB ........................ 2,090,194
(Automobile Manufacturing) -----------
10,407,659
-----------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
THE PRUDENTIAL INTERNATIONAL STOCK FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - -------------------------------------------------------------
Switzerland--10.2%
4,100 Ciba-Geigy Ltd. ................. $ 5,123,710
(Chemicals)
13,000 Merkur Holding AG ............... 2,563,995
(Merchandising)
3,225,178
5,200 SMH-Swiss Corp. for
Microelectronics and Watchmaking
Industries Ltd..................
(Electronics)
4,800 Sulzer Brothers Ltd. ............ 3,182,543
(Machinery & Engineering)
8,500 Zurich Versicherun .............. 2,439,782
(Insurance) -----------
16,535,208
-----------
United Kingdom--10.6%
360,076 Allied-Lyons PLC ................ 2,698,825
(Beverages & Tobacco)
1,070,000 Coats Viyella PLC ............... 3,381,062
(Textiles & Apparel)
445,000 Lloyds Abbey Life PLC ........... 3,668,198
(Insurance)
210,000 National Westminster Bank PLC ... 2,037,201
(Commercial Banking)
Value
Shares Description (Note 1)
- - -------------------------------------------------------------
473,000 Takare PLC ...................... $ 1,086,667
(Health Services)
570,000 Tesco PLC ....................... 2,318,842
(Food & Household Products)
196,000 Whitbread PLC ................... 2,033,034
(Beverages & Tobacco) -----------
17,223,829
-----------
Total common stocks
(cost $131,032,274)............... 152,442,126
-----------
Principal
Amount
(000) SHORT-TERM INVESTMENT--6.9%
- - ----------
Repurchase Agreement
$ 11,189 Joint Repurchase Agreement
Account,
5.35%, 4/01/96 (Note 4)
(cost $11,189,000)................ 11,189,000
-----------
Total Investments--100.9%
(cost $142,221,274; Note 3)....... 163,631,126
Liabilities in excess of other
assets--(0.9%).................. (1,424,946)
-----------
Net Assets--100%.................. $162,206,180
-----------
-----------
</TABLE>
- - ---------------
ADR--American Depository Receipt.
See Notes to Financial Statements.
19
<PAGE>
THE PRUDENTIAL ACTIVE BALANCED FUND
(LOGO) 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
attempt to maximize the Fund's total investment
return.
ADVISER: Jennison Associates Capital Corp.
ADVISER'S COMMENTS: The six month period
ended March 31, 1996 was one of divergent
performance between stocks and bonds. The S&P
500 gained 11.7% while the Lehman Gov't/Corp.
Bond Index was only up 2.2%, less than the coupon
rate on that index. The Active Balanced Fund was
up 5.5% for the period, which compares to the
60%/40% benchmark return of 7.9%. The lower
than benchmark performance was due in large part
to the lower than benchmark equity weighting that
was maintained during the period.
Regarding the equity market, the recent rise in
interest rates exasperated some of the valuation
concerns we already had with regard to equities.
The equity market is being driven in part on the
assumption that while first quarter corporate profits
will be disappointing, a recovery will be
forthcoming later in the year. If the earnings
rebound scenario comes into question the stock
market could become vulnerable to a corrective
phase. Accordingly, we are maintaining our lower
than benchmark equity exposure which at the end
of the six month period was at 49% of the portfolio.
Although we do believe the next major move in
interest rates will be down, we also believe it is
somewhat too early to take a more aggressive bond
position at this time. Accordingly, we ended the
period with roughly the same exposure to bonds as
we started the period at 34%. The bond portfolio
continues to be all in Treasury issues and had an
ending period average duration 5.75 years.
We ended the period with cash reserves of about
17% which gives us the flexibility to respond to
opportunities that may develop in the second half
of the fiscal year.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Composite
Periods ended 3/31/96 Fund Index (1)
<S> <C> <C>
------------------------- ------- ----------
Six Months............... 5.51% 7.91%
One Year................. 17.38% 23.63%
From Inception (1/4/93).. 10.62% 12.38%
</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/Corp Index, an unmanaged indicator of bond market
performance. The Fund, on average, has been invested approximately 45% in
stocks, 34% in bonds and 21% in short-terms for each of the periods. The S&P 500
returned 11.71%, 32.10% and 15.94% and the Lehman Index returned 2.21%, 10.93%
and 7.05% for each period, respectively.
20
<PAGE>
THE PRUDENTIAL ACTIVE BALANCED FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
LONG-TERM INVESTMENTS--82.8%
Common Stocks--49.0%
Aerospace/Defense--0.4%
6,200 Boeing Co.......................... $ 537,075
-----------
Airlines--1.3%
19,600 Delta Airlines, Inc................ 1,506,750
1,800 UAL Corp........................... 375,300
-----------
1,882,050
-----------
Automobiles & Trucks--2.6%
70,800 General Motors Corp................ 3,770,100
-----------
Banking--5.3%
61,100 Boatmen's Bancshares............... 2,398,175
34,900 Chemical Banking Corp.............. 2,460,450
40,000 Fleet Financial Group, Inc......... 1,620,000
102,300 Hibernia Corp...................... 1,086,937
-----------
7,565,562
-----------
Capital Goods--0.4%
12,200 Duracell International, Inc........ 605,425
-----------
Chemicals--2.1%
37,800 Betz Laboratories, Inc............. 1,757,700
45,700 Dexter Corp........................ 1,211,050
-----------
2,968,750
-----------
Commercial Services--1.5%
24,150 CUC International, Inc.(a)......... 706,388
29,200 York International Corp............ 1,430,800
-----------
2,137,188
-----------
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
<C> <S> <C>
Computer Software & Services--1.8%
49,100 EMC Corp.(a)....................... $ 1,074,062
35,400 Geoworks........................... 1,062,000
13,700 Symbol Technologies, Inc.(a)....... 481,213
-----------
2,617,275
-----------
Drugs & Medical Supplies--1.1%
Smith Kline Beecham PLC (ADR)
17,700 (United Kingdom)................. 911,550
27,100 Vertex Pharmaceuticals, Inc........ 718,150
-----------
1,629,700
-----------
Electronics--2.1%
12,900 Hewlett-Packard Co................. 1,212,600
10,500 Intel Corp......................... 597,187
44,500 International Rectifier Corp.(a)... 801,000
13,800 LSI Logic Corp.(a)................. 369,150
-----------
2,979,937
-----------
Financial Services--0.5%
14,700 The PMI Group Inc.................. 641,288
-----------
Forest Products--0.4%
8,300 Georgia Pacific Corp............... 575,813
-----------
Insurance--3.0%
9,400 Aetna Life & Casualty Co........... 709,700
24,500 CIGNA Corp......................... 2,799,125
16,200 ITT Hartford Group Inc............. 793,800
-----------
4,302,625
-----------
Leisure--1.2%
37,200 Brunswick Corp..................... 855,600
13,900 ITT Corp. (New).................... 834,000
-----------
1,689,600
-----------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
THE PRUDENTIAL ACTIVE BALANCED FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Lodging--0.8%
12,200 Hilton Hotels Corp................. $ 1,146,800
-----------
Machinery--0.5%
19,147 Harnischfeger Industries, Inc...... 741,946
-----------
Media--6.6%
46,100 Dow Jones & Co., Inc............... 1,774,850
13,800 Dun & Bradstreet Corp.............. 836,625
10,700 McGraw-Hill, Inc................... 928,225
90,400 New York Times Co.................. 2,621,600
28,500 Omnicom Group...................... 1,282,500
9,200 Scholastic Corp.(a)................ 632,500
19,400 Tribune Co......................... 1,277,975
-----------
9,354,275
-----------
Mineral Resources--1.4%
34,874 Newmont Mining Corp................ 1,974,740
-----------
Miscellaneous Basic Industry--3.6%
80,550 Avalon Properties, Inc............. 1,731,825
7,900 Champion International Corp........ 357,475
18,600 Mead Corp.......................... 1,004,400
34,500 Reynolds Metals Co................. 2,039,812
-----------
5,133,512
-----------
Office Equipment & Supplies--0.5%
International Business Machines
6,500 Corp............................. 722,313
-----------
Petroleum--1.7%
9,500 Tenneco, Inc....................... 530,813
55,100 Unocal Corp........................ 1,838,962
-----------
2,369,775
-----------
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
Petroleum Services--2.2%
29,200 Anadarko Petroleum Corp............ $ 1,620,600
51,700 Dresser Industries, Inc............ 1,576,850
-----------
3,197,450
-----------
Railroads--1.2%
10,901 Southern Pacific Rail Corp.(a)..... 256,174
20,900 Union Pacific Corp................. 1,434,262
-----------
1,690,436
-----------
Retail--2.6%
9,800 Harcourt General, Inc.............. 444,675
98,779 Limited, Inc....................... 1,876,801
74,200 Price Costco, Inc.(a).............. 1,391,250
-----------
3,712,726
-----------
Steel--0.9%
35,500 USX Corp. -U.S. Steel Group........ 1,229,188
-----------
Technology--0.6%
11,100 Adobe Systems, Inc................. 357,975
4,505 Chiron Corp.(a).................... 442,616
-----------
800,591
-----------
Telecommunications--1.7%
81,700 MCI Communications Corp............ 2,471,425
-----------
Trucking & Shipping--1.0%
51,400 Ryder System, Inc.................. 1,400,650
-----------
Total common stocks
(cost $57,243,618)............... 69,848,215
-----------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
THE PRUDENTIAL ACTIVE BALANCED FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
DEBT OBLIGATIONS--33.8%
U.S. Government Securities
United States Treasury Notes,
$ 3,015 8.875%, 11/15/98................. $ 3,228,884
5,510 7.50%, 11/15/01.................. 5,847,487
17,435 6.25%, 2/15/03................... 17,383,218
14,750 5.75%, 8/15/03................... 14,245,255
United States Treasury Bonds,
3,020 10.75%, 8/15/05.................. 3,926,000
3,230 7.875%, 2/15/21.................. 3,606,489
------------
Total debt obligations
(cost $47,235,281)............. 48,237,333
------------
Total long-term investments
(cost $104,478,899)............ 118,085,548
------------
SHORT-TERM INVESTMENT
Repurchase Agreement--16.7%
23,888 Joint Repurchase Agreement
Account,
5.35%, 04/01/96 (Note 4)
(cost $23,888,000)............. 23,888,000
------------
Total Investments--99.5%
(cost $128,366,899; Note 3)...... 141,973,548
Other assets in excess of
liabilities--0.5%.............. 714,503
------------
Net Assets--100%................. $142,688,051
------------
------------
</TABLE>
- - ---------------
(a) Non-income producing security.
ADR--American Depository Receipt.
See Notes to Financial Statements.
23
<PAGE>
THE PRUDENTIAL BALANCED FUND
(LOGO) 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 $22 billion in equity, balanced, and fixed income
accounts.
ADVISER'S COMMENTS: The first half of this Fund's fiscal year from September
30, 1995 through March 31, 1996 witnessed the end of 1995's robust rally in both
the U.S. stock and bond markets, and the beginning of a period of increased
market volatility with more uncertain returns for both stocks and bonds. In
calendar 1995, the stock market gained more than 37% as the S&P 500 Index was
driven steadily higher by strong corporate earnings and declining interest
rates. The 30-year U.S. Treasury bond yield fell steadily during 1995 from
nearly 8% to the 6% level, generating a more than 18% gain in the U.S. bond
market, as represented by the Lehman Aggregate Index.
If we focus only on the first half of the Fund's fiscal year ended March 31,
then long-term interest rates fell from 6.4% at the beginning of the period to
about 6.0% in early February, then shot up to 6.7% at the end of March. The net
rise in interest rates undermined bond returns, limiting them to about 2% for
the six month period. Stocks fared much better. The S&P 500 started the period
at about 580 and even though it slipped from its mid-February high of 661, it
still finished the period at 645. With dividends included, this amounts to
nearly a 12% gain for the half year. Throughout this period, our strategy in the
Balanced Fund was to tilt the portfolio in favor of stocks, with essentially the
maximum 50% of the portfolio allocated to the Fund's stock manager. For this six
month period, the Fund generated a 6.5% return.
We remain moderately optimistic about corporate earnings and the stock market.
However, there is great uncertainty with regard to the outlook for interest
rates and this raises the specter of greater volatility in both the bond and
stock markets for the second half of this fiscal year.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Composite
Periods ended 3/31/96 Fund Index (1)
<S> <C> <C>
------------------------- ------- ----------
Six Months............... 6.53% 6.53%
One Year................. 18.16% 19.92%
From Inception
(11/5/92)................ 11.23% 11.26%
</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% T-Bill return. For each of the
periods, the Fund, on average, has been invested 45% in stocks, 43% in bonds and
12% in short-terms. The S&P 500 returned 11.71%, 32.10% and 16.73%; the Lehman
Gov't/Corp Index returned 2.21%, 10.93% and 7.30%; and T-Bills returned 2.65%,
5.58% and 4.45% for each period, respectively.
24
<PAGE>
THE PRUDENTIAL BALANCED FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
LONG-TERM INVESTMENTS--88.7%
Common Stocks--44.5%
Aerospace/Defense--1.2%
4,200 Allied-Signal, Inc................. $ 248,325
7,600 General Motors Corp., Class H...... 480,700
10,400 Litton Industries, Inc.(a)......... 478,400
-----------
1,207,425
-----------
Automobiles & Trucks--0.5%
23,100 Smith (A.O.) Corp.................. 545,737
-----------
Banking--2.0%
6,300 Bank of Boston Corp................ 312,637
8,400 Bank of New York Co., Inc.......... 432,600
8,578 First Chicago Corp................. 355,987
23,600 Norwest Corp....................... 867,300
-----------
1,968,524
-----------
Chemicals--4.2%
21,000 Agrium, Inc........................ 271,602
9,400 Cytec Industries, Inc.(a).......... 794,300
8,000 duPont (E.I.) de Nemours & Co...... 664,000
7,900 Grace (W.R.) & Co.................. 618,175
Imperial Chemical Inds. (ADR)
8,000 (United Kingdom)................. 456,000
22,700 Mississippi Chemical Corp.......... 459,675
6,600 Olin Corp.......................... 574,200
36,100 Uniroyal Chemical Corp.(a)......... 347,462
-----------
4,185,414
-----------
Chemical-Specialty--0.7%
19,500 Ferro Corp......................... 553,312
3,100 OM Group, Inc...................... 115,088
-----------
668,400
-----------
Communication Equipment--0.3%
13,500 Oak Industries, Inc.(a)............ 335,812
-----------
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
<C> <S> <C>
Computer Hardware--0.2%
Lexmark International Group,
12,500 Inc.(a).......................... $ 242,188
-----------
Computer Software & Services--0.5%
12,000 Automatic Data Processing, Inc..... 472,500
-----------
Consumer Services--0.7%
17,600 ADT Ltd.(a)........................ 310,200
13,000 Pittston Brinks Group.............. 347,750
-----------
657,950
-----------
Diversified Consumer Products--0.7%
30,000 Whitman Corp....................... 727,500
-----------
Drugs & Medical Supplies--0.5%
8,000 Schering-Plough Corp............... 465,000
-----------
Electrical Equipment--0.5%
15,600 Belden, Inc........................ 460,200
-----------
Electronics--1.5%
28,000 Anixter International, Inc.(a)..... 472,500
6,000 Emerson Electric Co................ 484,500
5,600 Marshall Industries(a)............. 170,800
10,600 SGS-Thomson Microelectronics
N.V.(a) (France)................. 384,250
-----------
1,512,050
-----------
Enginerring & Construction--0.9%
32,000 Giant Cement Holding, Inc.(a)...... 404,000
21,400 Martin Marietta Corp............... 486,850
-----------
890,850
-----------
Exploration & Production--1.7%
19,400 Cabot Oil & Gas Corp............... 276,450
30,000 Cross Timbers Oil Co............... 517,500
12,900 Enron Oil and Gas Corp............. 340,237
11,000 Parker & Parsley Petroleum Co...... 253,000
6,700 Seagull Energy Corp.(a)............ 151,588
10,500 Vintage Petroleum, Inc............. 213,938
-----------
1,752,713
-----------
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
THE PRUDENTIAL BALANCED FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Financial Services--1.2%
12,400 Dean Witter Discover & Co.......... $ 709,900
8,600 Finova Group, Inc.................. 469,775
-----------
1,179,675
-----------
Hospital Management--1.1%
Community Health Systems,
4,700 Inc.(a).......................... 192,700
7,000 Quorum Health Group(a)............. 164,500
33,000 Tenet Healthcare Corp.(a).......... 693,000
-----------
1,050,200
-----------
Household Products--0.3%
13,000 Libbey, Inc........................ 284,375
-----------
Housing Related--1.5%
13,000 Ethan Allen Interiors, Inc.(a)..... 341,250
Furniture Brands International,
33,000 Inc.............................. 305,250
16,000 Owens Corning Fiberglas Corp.(a)... 642,000
9,000 USG Corp.(a)....................... 228,375
-----------
1,516,875
-----------
Insurance--4.0%
8,600 Allmerica Financial Corp........... 226,825
9,000 Berkley (W. R.) Corp............... 416,250
10,500 Equitable Iowa Cos................. 375,375
10,000 NAC Re Corp........................ 326,250
9,700 National Re Corp................... 327,375
15,400 Penncorp Financial Group, Inc...... 485,100
Reinsurance Group of America,
21,000 Inc.............................. 769,125
15,000 TIG Holdings, Inc.................. 487,500
6,000 Travelers, Inc..................... 396,000
12,900 Western National Corp.............. 209,625
-----------
4,019,425
-----------
Integrated Producers--0.7%
20,000 Total S.A. (ADR) (France).......... 680,000
-----------
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
Machinery--2.8%
18,000 Applied Power, Inc................. $ 587,250
Gardner Denver Machinery,
26,000 Inc.(a).......................... 617,500
Global Industrial Technologies,
26,000 Inc.............................. 624,000
8,200 Harnischfeger Industries, Inc...... 317,750
9,000 Sundstrand Corp.................... 366,750
6,900 Varity Corp.(a).................... 298,425
-----------
2,811,675
-----------
Media--3.0%
20,000 Comcast Corp. Class A.............. 347,500
14,900 Cox Communications, Inc.(a)........ 325,938
3,600 Gannett Co., Inc................... 242,100
18,800 Hollinger International, Inc....... 225,600
6,900 Knight-Ridder, Inc................. 470,062
29,200 Tele Communications, Inc., Ser. A,
TCI Group(a)..................... 542,025
7,300 Telecom Inc. Liberty Media......... 192,537
10,000 Time Warner, Inc................... 408,750
8,237 Times Mirror Co.................... 324,332
-----------
3,078,844
-----------
Metals - Non Ferrous--0.3%
6,800 UCAR International, Inc.(a)........ 264,350
-----------
Miscellaneous Basic Industry--6.0%
15,400 Coltec Inds., Inc.(a).............. 186,725
8,700 Crane Co........................... 351,263
5,000 Danaher Corp....................... 185,000
Fisher Scientific International,
15,000 Inc.............................. 573,750
7,000 FMC Corp.(a)....................... 525,875
29,700 Hanson PLC (ADR)
(United Kingdom)................. 445,500
10,000 IDEX Corp.......................... 388,750
9,000 Illinois Tool Works, Inc........... 581,625
9,000 Kennametal, Inc.................... 325,125
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
THE PRUDENTIAL BALANCED FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Miscellaneous Basic Industry, cont'd.
19,760 Mark IV Industries, Inc............ $ 434,720
14,000 Pentair, Inc....................... 353,500
20,000 Tyco International Ltd............. 715,000
19,100 United Dominion Inds............... 463,175
11,000 York International Corp............ 539,000
-----------
6,069,008
-----------
Office Equipment & Supplies--0.5%
1,700 Honeywell, Inc..................... 93,925
International Business Machines
3,500 Corp............................. 388,937
-----------
482,862
-----------
Petroleum--0.7%
18,000 Occidental Petroleum Corp.......... 481,500
Santa Fe Energy Resources,
21,600 Inc.(a).......................... 226,800
-----------
708,300
-----------
Petroleum Services--0.6%
41,000 Oryx Energy Co.(a)................. 568,875
-----------
Railroads--1.6%
6,400 Burlington Northern Inc............ 525,600
11,600 Canadian Pacific Ltd............... 232,000
13,350 Illinois Central Corp.............. 380,475
7,000 Union Pacific Corp................. 480,375
-----------
1,618,450
-----------
Retail--1.6%
16,300 Best Products, Inc.(a)............. 38,713
10,100 Dillard Department Stores, Inc..... 349,712
4,900 Eckerd Corp.(a).................... 235,812
11,800 Harcourt General, Inc.............. 535,425
8,500 May Department Stores Co........... 410,125
-----------
1,569,787
-----------
Value
Shares Description (Note 1)
- - ------------------------------------------------------------
Rubber--0.2%
4,500 Goodyear Tire & Rubber Co.......... $ 229,500
-----------
Telecommunications--1.3%
20,700 Frontier Corp...................... 652,050
20,900 MCI Communications Corp............ 632,225
-----------
1,284,275
-----------
Trucking & Shipping--0.3%
12,900 Pittston Burlington Company........ 253,163
-----------
Utility-Communications--0.7%
9,100 Airtouch Communications, Inc.(a)... 283,238
5,900 AT&T Corp.......................... 361,375
-----------
644,613
-----------
Total common stocks
(cost $35,215,626)................. 44,406,515
-----------
Principal
Amount
(000) DEBT OBLIGATIONS--44.2%
- - --------
Asset Backed Securities--3.2%
American Express Master Trust,
Series 1994-3, Class A,
$ 430 7.85%, 8/15/05..................... 454,858
Chemical Credit Card Trust,
Series 1995-3, Class A,
400 6.23%, 4/15/05..................... 392,872
Circuit City Credit Card Master
Trust,
Series 1994-2, Class A,
300 8.00%, 11/15/03.................... 315,094
Discover Card Master Trust I,
Series 1994-1, Class A,
400 6.70%, 2/16/00..................... 404,000
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
THE PRUDENTIAL BALANCED FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Asset Backed Securities, cont'd.
Nationsbank Credit Card Master
Trust,
Series 1993-2, Class A,
$ 400 6.00%, 12/15/05.................. $ 383,624
Prime Credit Card Master Trust,
Series 1995-1, Class A,
400 6.75%, 11/15/05.................. 401,872
Sears Credit Account Master Trust
II,
Series 1995-5, Class A,
500 6.05%, 1/16/08................... 484,840
Standard Credit Card Master
Trust,
Series 1995-1, Class A,
400 8.25%, 1/7/07.................... 433,624
------------
Total asset backed securities
(cost $3,340,011)................ 3,270,784
------------
Corporate Bonds--8.2%
African Development Bank,
400 7.70%, 7/15/02................... 419,316
(Banking)
American General Finance Corp.,
400 7.25%, 5/15/05................... 406,168
(Financial Services)
Caterpillar, Inc.,
250 9.375%, 7/15/00.................. 274,450
(Industrials)
Comdisco Inc.,
300 6.50%, 6/15/00................... 298,329
(Commercial Services)
Commercial Credit Group, Inc.,
200 7.875%, 7/15/04.................. 211,666
(Financial Services)
Disney, (Walt) Co.,
400 6.75%, 3/30/06................... 398,212
(Leisure)
Principal
Amount Value
(000) Description (Note 1)
- - ------------------------------------------------------------
<C> <S> <C>
Federal Express Corp.,
$ 350 10.00%, 9/1/98................... $ 377,272
(Trucking & Shipping)
Finova Capital Corp.,
300 6.28%, 11/1/99................... 296,676
100 6.30%, 11/1/99................... 98,955
(Financial Services)
Ford Motor Credit Co.,
400 9.375%, 12/15/97................. 419,824
320 7.50%, 6/15/04................... 329,683
(Financial Services)
General Motors Acceptance Corp.,
450 9.625%, 5/15/00.................. 497,322
(Financial Services)
Greyhound Financial Corp.,
100 8.50%, 5/1/98.................... 104,033
(Financial Services)
Hanson PLC.,
400 7.375%, 1/15/03.................. 407,572
(Miscellaneous Basic Industry)
(United Kingdom)
Hydro Quebec Corp.,
250 8.40%, 1/15/22................... 266,958
(Utilities) (Canada)
Lehman Brothers, Inc.,
200 7.125%, 7/15/02.................. 200,592
(Financial Services)
Nationsbank Corp.,
500 6.50%, 3/15/06................... 482,110
(Banking)
Norwest Corp.,
300 7.125%, 4/1/00................... 306,111
(Banking)
Petroliam Nasional Berhad,
500 6.875%, 7/1/03................... 496,565
(Petroleum) (Malaysia)
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
THE PRUDENTIAL BALANCED FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- - ------------------------------------------------------------
Corporate Bonds, cont'd.
Salomon, Inc.,
$ 200 8.64%, 2/27/98................... $ 205,838
(Financial Services)
Sears Roebuck & Co.,
100 9.48%, 7/24/01................... 112,375
(Retail)
Sears Roebuck Acceptance Corp.,
300 6.75%, 9/15/05................... 294,978
(Financial Services)
Tenneco Credit Corp.,
600 9.625%, 8/15/01.................. 673,164
(Financial Services)
Texas Utilities Co.,
300 6.375%, 8/1/97................... 300,612
(Utilities)
Union Oil Co.,
300 7.75%, 4/20/05 ................. 310,131
(Petroleum) ------------
Total corporate bonds
(cost $8,245,157)................ 8,188,912
------------
Sovereign Bond--0.3%
Republic of Italy
6.875%, 9/27/23
300 (cost $278,274)................ 269,193
------------
U.S. Government Securities--32.5%
United States Treasury Bond,
5,150 11.25%, 2/15/15.................. 7,568,080
United States Treasury Notes,
4,100 5.375%, 5/31/98.................. 4,062,198
3,900 6.375%, 1/15/99.................. 3,943,875
2,900 7.50%, 10/31/99.................. 3,035,024
1,600 6.375%, 1/15/00.................. 1,619,248
350 6.875%, 3/31/00.................. 359,733
Principal
Amount Value
(000) Description (Note 1)
- - ------------------------------------------------------------
United States Treasury Notes,
$ 500 6.125%, 7/31/00.................. $ 500,310
6,600 6.25%, 2/15/03................... 6,580,398
4,500 7.25%, 8/15/04................... 4,747,500
------------
Total U.S. Government securities
(cost $32,455,321)............... 32,416,366
------------
Total debt obligations
(cost $44,318,763)............... 44,145,255
------------
Total long-term investments
(cost $79,534,389)............... 88,551,770
------------
SHORT-TERM INVESTMENTS--10.8%
Corporate Bond--0.4%
400 General Electric Capital Corp.,
8.75%, 11/26/96 ................
(Financial Services)
407,176
------------
Repurchase Agreement--10.4%
10,344 Joint Repurchase Agreement Account,
5.35%, 04/01/96 (Note 4)......... 10,344,000
------------
Total short-term investments
(cost $10,747,456)............... 10,751,176
------------
Total Investments--99.5%
(cost $90,281,845; Note 3)....... 99,302,946
Other assets in excess of
liabilities--0.5%.............. 501,089
------------
Net Assets--100%................. $ 99,804,035
------------
------------
</TABLE>
- - ---------------
(a) Non-income producing security.
ADR--American Depository Receipt.
See Notes to Financial Statements.
29
<PAGE>
THE PRUDENTIAL INCOME FUND
(LOGO) 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 $23
billion in fixed income accounts.
ADVISER'S COMMENTS: The first quarter of 1996
brought a dramatic end to the bull market trend of
1995. A series of economic reports pointing to a
strengthening economy, in particular a stronger
labor market, dashed market expectations of further
Fed easing and re-ignited inflation fears.
Thirty-year Treasury bonds ended the first quarter
yielding 6.67%, three-quarters of a percent higher
than at year end 1995. The single Fed easing of the
quarter left the Federal Funds Target Rate at 5.25%.
For the six-month period ended March 31, 1996, the
Lehman Aggregate Index returned 2.41%, 4.26% for
the fourth quarter of 1995 and -1.77% for first
quarter 1996. Mortgages posted the highest absolute
return of 2.86%, followed by corporates at 2.23%
and governments at 2.20%.
Since our last report to you six months ago, we have
continued to increase corporate exposure in the
Income Fund. We are now overweighted in the
sector, relative to the Lehman Aggregate, by 20%.
We believe corporates will continue to generate
favorable total returns relative to Treasuries. Strong
supply/demand technicals, combined with stable to
improving credit fundamentals, will provide
support to this sector. In the mortgage market,
prepayment fears subsided as interest rates rose
and investors reemerged. We increased our market
value weighting modestly and will continue to add
exposure as rates stabilize in the new, higher
trading range.
<TABLE>
PERFORMANCE RESULTS:
<CAPTION>
Lehman
Aggregate
Periods ended 3/31/96 Fund Index
<S> <C> <C>
------------------------- ------- ---------
Six Months............... 2.35% 2.41%
One Year................. 10.12% 10.79%
From Inception (3/1/93).. 5.53% 5.75%
</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 comparable future results. The Manager is currently limiting the expenses of
the Fund. Without this reduction of expenses, the total return would have been
lower.
30
<PAGE>
THE PRUDENTIAL INCOME FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- - -------------------------------------------------------------
LONG-TERM INVESTMENTS--93.2%
Asset Backed Securities--8.3%
Chemical Credit Card Trust I,
Series 1995-3, Class A, 6.23%,
$ 500 4/15/05........................ $ 496,406
Circuit City Credit Card Master
Trust, Series 1994-2, Class A,
500 8.00%, 11/15/03.................. 535,790
Discover Card Master Trust I,
Series 1994-1, Class A,
500 6.70%, 2/16/00................... 505,000
Nationsbank Credit Card Master
Trust,
Series 1993-2, Class A,
500 6.00%, 12/15/05................ 479,530
Series 1995-1, Class A,
500 6.45%, 4/15/03................. 501,875
Prime Credit Card Master Trust,
Series 1995-1, Class A,
600 6.75%, 11/15/05................ 602,808
Sears Credit Account Master Trust
II,
Series 1995-5, Class A,
600 6.05%, 1/16/08................. 575,700
Standard Credit Card Master
Trust,
Series 1994-4, Class A,
500 8.25%, 11/07/03................ 536,715
Series 1995-1, Class A,
500 8.25%, 1/07/07................. 542,030
------------
Total asset backed securities
(cost $4,777,202).............. 4,775,854
------------
Corporate Bonds--29.4%
African Development Bank,
500 7.75%, 12/15/01.................. 523,480
500 6.50%, 3/15/04................... 493,150
(Banking)
Principal
Amount Value
(000) Description (Note 1)
- - -------------------------------------------------------------
American General Finance Corp.,
$ 500 7.25%, 5/15/05 ................. $ 507,710
(Financial Services)
Associates Corp. of North
America,
400 7.25%, 5/15/98................... 408,392
500 6.625%, 6/15/05.................. 489,470
(Financial Services)
Burlington Northern Santa Fe
Corp.,
600 7.00%, 12/15/25 ................ 551,232
(Railroads)
Columbia Healthcare Corp.,
500 7.58%, 9/15/25 ................. 493,125
(Hospital Management)
Comdisco Inc.,
500 6.50%, 6/15/00 ................. 497,215
(Commercial Services)
Digital Equipment Corp.,
250 8.625%, 11/01/12 ............... 253,728
(Electronics)
Disney (Walt) Co.,
700 6.75%, 3/30/06 ................. 696,871
(Leisure)
Dresdner Bank AG,
500 7.25%, 9/15/15 ................. 492,090
(Banking) (Germany)
Equity Lord Realty Corp.,
300 10.50%, 12/30/97 ............... 313,500
(Real Estate)
Federal Express Corp.,
500 10.00%, 9/01/98 ................ 538,960
(Trucking & Shipping)
Finova Capital Corp.,
400 6.28%, 11/01/99.................. 395,568
100 6.30%, 11/01/99.................. 98,955
(Financial Services)
Ford Motor Credit Co.,
500 6.50%, 10/04/00 ................ 501,875
(Financial Services)
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
THE PRUDENTIAL INCOME FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- - -------------------------------------------------------------
Corporate Bonds, cont'd.
General Electric Capital Corp.,
$ 500 7.95%, 2/02/98 ................. $ 517,495
(Financial Services)
Glaxo Wellcome PLC,
500 6.125%, 1/25/06 ................ 472,187
(Drugs & Medical Supplies)
Grand Metropolitan Investment
Corp.,
800 Zero Coupon, 1/06/04 ........... 468,872
(Financial Services)
(United Kingdom)
Household Finance Corp.,
1,000 6.375%, 6/30/00 ................ 991,270
(Financial Services)
Hydro Quebec Corp.,
400 7.49%, 7/30/03................... 410,864
500 8.40%, 1/15/22................... 533,915
(Utilities) (Canada)
IC Industries Financial Corp.,
705 8.00%, 7/01/96 ................. 708,306
(Financial Services)
International Bank For
Reconstruction & Development,
400 8.625%, 10/15/16 ............... 461,352
(Banking)
ITT Corp. (New),
500 7.375%, 11/15/15 ............... 483,750
(Leisure)
Lehman Brothers Holdings, Inc.,
400 7.625%, 7/15/99 ................ 408,272
(Financial Services)
News America Holdings, Inc.,
300 7.60%, 10/11/15 ................ 286,677
(Media)
Petro-Canada,
500 9.25%, 10/15/21 ................ 576,505
(Petroleum) (Canada)
Principal
Amount Value
(000) Description (Note 1)
- - -------------------------------------------------------------
Salomon Inc.,
$ 400 8.64%, 2/27/98................... $ 411,676
250 6.50%, 8/15/03 ................. 232,570
(Financial Services)
Sears Roebuck Acceptance Corp.,
500 6.75%, 9/15/05 ................. 491,630
(Financial Services)
SunAmerica, Inc.,
275 6.58%, 1/15/02 ................. 268,565
(Insurance)
Tenaga Nasional Berhad,
500 7.50%, 11/01/25 ................ 480,165
(Utilities) (Malaysia)
Tenneco Credit Corp.,
400 10.125%, 12/01/97 .............. 424,004
(Financial Services)
Time Warner Inc.,
300 9.15%, 2/01/23 ................. 322,938
(Media)
Union Bank of Finland, Ltd.,
250 5.25%, 6/15/96 ................. 249,465
(Banking) (Finland)
Viacom Inc.,
400 7.625%, 1/15/16 ................ 373,000
(Media) ------------
Total corporate bonds
(cost $16,988,095)............. 16,828,799
------------
Foreign Government Obligation--1.0%
New Zealand Government Bond,
10.50%, 7/16/00
500 (cost $559,455)................ 535,151
------------
Sovereign Bond--0.7%
Republic of Italy,
450 6.875%, 9/27/23
(cost $415,478).................. 403,172
------------
</TABLE>
See Notes to Financial Statements.
32
<PAGE>
THE PRUDENTIAL INCOME FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- - -------------------------------------------------------------
U.S. Government and Agency
Securities--53.8%
Federal Home Loan Mortgage Corp.,
$ 500 7.00%, 8/15/23 (CMO)............. $ 469,685
Federal National Mortgage Assn.,
500 6.50%, 2/25/24 (CMO)............. 417,185
1,000(a) 6.50%, 15 yr..................... 1,014,060
4,000(a) 6.50%, 30 yr..................... 3,797,480
2,216 7.00%, 9/01/23 - 7/01/24......... 2,159,026
1,000 7.50%, 15 yr..................... 1,014,060
2,634 9.50%, 10/01/19 - 3/01/25........ 2,809,613
500 9.50%, 30 yr..................... 533,435
Government National Mortgage
Assn.,
1,206 7.00%, 2/15/09 - 6/15/23......... 1,198,078
2,000(a) 7.00%, 30 yr..................... 1,948,120
171 7.50%, 6/15/23 - 7/15/23......... 171,821
1,128 9.00%, 9/15/19 - 7/15/21......... 1,208,258
Tennessee Valley Authority,
600 7.25%, 7/15/43................... 566,910
United States Treasury Bonds,
240 6.875%, 8/15/25.................. 243,749
50 7.625%, 2/15/25.................. 55,024
450 9.00%, 11/15/18.................. 559,548
1,250 12.00%, 8/15/13.................. 1,804,487
United States Treasury Notes,
900 6.25%, 2/15/03................... 897,327
3,500 6.375%, 1/15/99.................. 3,539,375
400 6.375%, 1/15/00.................. 404,812
500 6.875%, 3/31/00.................. 513,905
800 7.25%, 8/15/04................... 844,000
1,950 8.25%, 7/15/98................... 2,049,937
1,800 8.625%, 8/15/97.................. 1,869,462
Principal
Amount Value
(000) Description (Note 1)
- - -------------------------------------------------------------
United States Treasury Strips,
$ 800 Zero Coupon, 8/15/08............. $ 351,000
700 Zero Coupon, 8/15/11............. 244,881
500 Zero Coupon, 11/15/11............ 171,595
------------
Total U.S. government and agency
securities
(cost $30,705,657)............. 30,856,833
------------
Total long-term investments
(cost $53,516,943)............. 53,399,809
------------
SHORT-TERM INVESTMENT--20.1%
Repurchase Agreement
Joint Repurchase Agreement
11,549 Account,
5.35%, 4/01/96 (Note 4)
(cost $11,549,000)............. 11,549,000
------------
Total Investments--113.3%
(cost $65,065,943; Note 3)..... 64,948,809
Liabilities in excess of other
assets--(13.3%)................ (7,623,163)
------------
Net Assets--100%................. $ 57,325,646
------------
------------
</TABLE>
- - ---------------
(a) Mortgage dollar roll, see Note 1.
CMO--Collateralized Mortgage Obligation.
See Notes to Financial Statements.
33
<PAGE>
THE PRUDENTIAL MONEY MARKET FUND
(LOGO) 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 is a
business unit of The Prudential Investment
Corporation which specializes in domestic and
international fixed income management. PGA
currently manages approximately $23 billion in
fixed income accounts, including over $2.5 billion in
money market accounts.
ADVISER'S COMMENTS: Over the last six months,
money market yields have trended slightly lower.
In response, your Fund has been invested in
securities with somewhat longer maturities. These
investments increase the average maturity of the
Fund. Over the last six months, the Fund
maintained a longer average maturity than other
money market funds. 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.
Short-term interest rates are primarily influenced by
the Federal Reserve's Open Market Committee
(FOMC). Over the past six months, the FOMC has
engineered two decreases of the target level of the
Federal Funds rate, the rate that large banks lend to
one another overnight. The Federal Funds rate was
changed in two quarter-point moves from 5.75% to
the current rate of 5.25%. In Congressional
testimony, Fed Chairman Greenspan characterized
the second of these moves as ``insurance'' against
the possibility of recession.
The Fed was reacting to an undesirable slow rate of
economic growth during 1995. Economists disagree
about to what extent slow growth has been due to
temporary factors that will disappear over time.
Some of the temporary factors are: unintended
inventory accumulation that occurred when exports
to Mexico collapsed, the decrease in government
spending particularly during the government
shutdowns, and the severe winter weather. If
temporary factors are the biggest restraint, then
growth could be expected to increase in the future
and interest rates may rise again. If the restraints on
growth are more fundamental, the Fed will have to
lower rates further to re-stimulate the economy. We
will be watching upcoming economic data closely,
trying to ascertain the future growth trend.
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, 1996, the current seven-day yield
was 4.90%. The net asset value remained at $1.00
per share.
An investment in the Fund is neither insured or 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 4.58%.
34
<PAGE>
THE PRUDENTIAL MONEY MARKET FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- - -------------------------------------------------------------
BEARER DEPOSIT NOTES -
YANKEE--0.9%
Grand Metropolitan Investment Corp.,
8.125%, 8/15/96
$ 555 (amortized cost $560,141)...... $ 560,141
------------
COMMERCIAL PAPER--39.7%
American Home Products Corp.,
2,000 5.40%, 5/1/96.................... 1,991,000
Aristar, Inc.,
960 5.36%, 4/12/96................... 958,428
2,000 5.22%, 4/15/96................... 1,995,940
Countrywide Funding Corp.,
1,704 5.39%, 5/3/96.................... 1,695,836
1,300 5.47%, 5/8/96.................... 1,292,691
Duracell, Inc.,
1,382 5.60%, 4/1/96.................... 1,382,000
Enterprise Funding Corp.,
1,224 5.42%, 5/1/96.................... 1,218,472
Finova Capital Corp.,
2,961 5.25%, 4/26/96................... 2,950,205
First Data Corp.,
3,000 5.43%, 4/2/96.................... 2,999,548
General Motors Acceptance Corp.,
200 5.40%, 4/4/96.................... 199,910
Household International Inc.,
800 5.24%, 4/2/96.................... 799,884
Lehman Brothers, Inc.,
399 5.60%, 4/1/96.................... 399,000
Nynex Corp.,
2,980 5.30%, 4/8/96.................... 2,976,929
Whirlpool Financial Corp.,
820 5.20%, 4/26/96................... 817,039
2,100 5.43%, 5/10/96................... 2,087,645
------------
Total commercial paper
(amortized cost $23,764,527)..... 23,764,527
------------
Principal
Amount Value
(000) Description (Note 1)
- - -------------------------------------------------------------
DEPOSIT NOTES--2.5%
Society National Bank Cleveland,
$ 1,000 6.70%, 4/15/96................... $ 1,000,351
500 6.00%, 4/25/96................... 499,843
------------
Total deposit notes
(amortized cost $1,500,194)...... 1,500,194
------------
LOAN PARTICIPATION--3.3%
Morgan Stanley Group Inc.,
5.60%, 4/3/96
2,000 (amortized cost $2,000,000).... 2,000,000
------------
MEDIUM-TERM OBLIGATIONS--19.6%
Associates Corp. of North America,
250 4.48%, 10/15/96.................. 248,249
Ford Motor Credit Corp.,
1,120 8.25%, 5/15/96................... 1,123,125
600 8.875%, 8/1/96................... 605,413
215 5.625%, 3/3/97................... 214,779
General Electric Co.,
840 7.875%, 5/1/96................... 841,296
Household Finance Corp.,
1,250 7.80%, 11/1/96................... 1,264,227
International Lease Finance
Corp.,
500 5.00%, 5/28/96................... 499,177
375 6.625%, 6/1/96................... 375,302
Norwest Corporation,
500 4.93%, 11/15/96.................. 497,245
400 7.875%, 1/30/97.................. 408,349
PHH Corporation,
2,200 8.00%, 1/1/97.................... 2,243,194
Potomac Electric Power Co.,
500 6.25%, 5/28/96................... 500,772
Sears Roebuck Acceptance Corp.,
1,635 8.55%, 8/1/96.................... 1,648,508
100 8.99%, 9/27/96................... 101,614
590 7.48%, 2/19/97................... 600,916
</TABLE>
See Notes to Financial Statements.
35
<PAGE>
THE PRUDENTIAL MONEY MARKET FUND
(LOGO) INSTITUTIONAL PORTFOLIO OF INVESTMENTS
FUND MARCH 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
- - -------------------------------------------------------------
MEDIUM-TERM OBLIGATIONS, cont'd.
Transamerica Finance Corp.,
$ 600 8.55%, 6/15/96................... $ 603,072
------------
Total medium-term obligations
(amortized cost $11,775,238)..... 11,775,238
------------
VARIABLE RATE OBLIGATIONS(a)--33.5%
American Express Centurion Bank,
1,900 5.349%, 4/16/96.................. 1,899,785
1,000 5.379%, 4/17/96.................. 999,991
Bank One Columbus N.A.,
2,700 5.34%, 4/1/96.................... 2,699,126
Caterpillar Financial Services
N.V.,
350 5.47%, 5/29/96................... 350,414
Fleet National Bank,
1,300 5.625%, 4/30/96.................. 1,300,262
Ford Motor Credit Corp.,
200 5.692%, 6/17/96.................. 200,069
350 5.40%, 2/18/97................... 350,344
General Motors Acceptance Corp.,
2,000 5.51%, 4/1/96.................... 1,999,970
350 5.622%, 6/18/96.................. 350,367
Goldman Sachs Group, L.P.,
2,700 5.438%, 4/29/96.................. 2,700,000
Household Finance Corp.,
1,700 5.34%, 4/1/96.................... 1,699,714
John Deere Capital Corp.,
1,000 5.767%, 4/22/96.................. 1,000,677
Key Bank New York,
1,400 5.33%, 4/1/96.................... 1,399,515
Lehman Brothers, Inc.,
2,000 5.509%, 4/1/96................... 2,000,000
Money Market Auto Loan Trust,
100 5.575%, 4/15/96.................. 100,000
Principal
Amount Value
(000) Description (Note 1)
- - -------------------------------------------------------------
Morgan Stanley Group, Inc.,
$ 1,000 5.375%, 5/15/96.................. $ 1,000,000
------------
Total variable rate obligations
(amortized cost $20,050,234)..... 20,050,234
------------
U.S. GOVERNMENT AGENCY OBLIGATION--0.7%
Federal Home Loan Banks,
4.36%, 4/25/96
400 (amortized cost $399,668)...... 399,668
------------
Total investments--100.2%
(amortized cost
$60,050,002(b))................ 60,050,002
Liabilities in excess of other
assets--(0.2%)................. (119,819)
------------
Net Assets--100%................. $ 59,930,183
------------
------------
</TABLE>
- - ---------------
(a) 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.
(b) The cost of securities for federal income tax purposes is substantially the
same as for financial reporting purposes.
The industry classification of portfolio holdings and other net assets shown as
a percentage of net assets as of March 31, 1996 were as follows:
<TABLE>
<S> <C>
Personal Credit Institutions.............. 18.7%
Commercial Banks.......................... 16.4
Security Brokers & Dealers................ 13.5
Business Credit (Finance)................. 12.1
Information Services...................... 5.0
Mortgage Bankers.......................... 5.0
Phone Communication....................... 5.0
Household Appliances...................... 4.8
Auto Rental & Leasing..................... 3.8
Pharmaceutical............................ 3.3
Misc. Electric, Equipment, Supply......... 2.3
Asset Backed.............................. 2.2
Bank Holding Co........................... 1.5
Equipment Rental & Leasing................ 1.5
Electric & Equipment, Computer............ 1.4
Financial Services........................ 1.3
Food & Kindred Products................... 0.9
Electric Services......................... 0.8
Federal Credit............................ 0.7
Liabilities in excess of other assets..... (0.2)
-----
100.0%
-----
-----
</TABLE>
See Notes to Financial Statements.
36
<PAGE>
THE PRUDENTIAL STATEMENT OF ASSETS
(LOGO) INSTITUTIONAL AND LIABILITIES
FUND MARCH 31, 1996
<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
(a)...................... $288,473,390 $147,528,594 $163,631,126
$141,973,548 $99,302,946 $64,948,809 $60,050,002
Cash....................... 571 -- 365
3,578 2,454 344 664
Foreign currency, at value
(cost $120,455).......... -- -- 120,201
-- -- -- --
Receivable for investments
sold..................... 1,843,811 110,805 --
159,396 222,356 -- --
Interest and dividends
receivable............... 244,056 237,503 486,827
694,471 662,192 679,143 423,064
Receivable for Fund shares
sold..................... 836,874 419,537 507,136
469,950 397,983 60,429 47,347
Deferred expenses and other
assets................... 22,618 21,921 22,047
23,402 21,788 25,157 23,503
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Total assets........... 291,421,320 148,318,360 164,767,702
143,324,345 100,609,719 65,713,882 60,544,580
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Liabilities
Payable for investments
purchased................ 1,894,523 780,201 1,838,999
505,568 555,826 8,346,485 387,225
Payable for Fund shares
reacquired............... 379,951 350,236 440,038
2,721 151,391 6,891 195,043
Accrued expenses........... 59,193 56,018 104,667
27,875 33,386 17,866 17,517
Due to broker - variation
margin................... -- 29,750 --
-- -- -- --
Management fee payable..... 184,161 1,164 159,906
84,218 54,094 10,568 7,913
Administration fee
payable.................. 32,006 16,314 17,912
15,912 10,987 6,426 6,699
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Total liabilities...... 2,549,834 1,233,683 2,561,522
636,294 805,684 8,388,236 614,397
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Net Assets................. $288,871,486 $147,084,677 $162,206,180
$142,688,051 $99,804,035 $57,325,646 $59,930,183
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Net assets were comprised
of:
Shares of beneficial
interest, at par......... $ 16,906 $ 9,836 $ 10,275 $
11,342 $ 7,936 $ 5,781 $ 59,930
Paid-in capital in excess
of par................... 223,817,874 119,565,666 140,973,229
124,739,121 88,818,388 57,616,118 59,870,253
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
223,834,780 119,575,502 140,983,504
124,750,463 88,826,324 57,621,899 59,930,183
Undistributed net
investment income
(loss)................... (362,804) 536,299 183,078
1,026,586 671,956 -- --
Accumulated net realized
gain (loss) on
investments.............. 2,165,314 596,539 (364,666 )
3,304,353 1,284,654 (179,120) --
Net unrealized appreciation
(depreciation) on
investments and foreign
currencies............... 63,234,196 26,376,337 21,404,264
13,606,649 9,021,101 (117,133) --
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Net assets, March 31,
1996..................... $288,871,486 $147,084,677 $162,206,180
$142,688,051 $99,804,035 $57,325,646 $59,930,183
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Shares of beneficial
interest issued and
outstanding.............. 16,906,186 9,835,809 10,275,205
11,341,527 7,936,350 5,780,560 59,930,183
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Net asset value per
share.................... $ 17.09 $ 14.95 $ 15.79 $
12.58 $ 12.58 $ 9.92 $ 1.00
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
(a) Identified cost........ $225,239,430 $121,196,832 $142,221,274
$128,366,899 $90,281,845 $65,065,943 $60,050,002
</TABLE>
See Notes to Financial Statements.
37
<PAGE>
THE PRUDENTIAL STATEMENT OF
(LOGO) INSTITUTIONAL OPERATIONS
FUND SIX MONTHS ENDED MARCH 31, 1996
(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................. $ 142,475 $ 222,810 $ 299,227 $
2,194,088 $ 1,500,344 $ 1,839,465 $ 1,716,542
Dividends (a)............ 835,346 1,295,809 1,257,014
610,799 246,391 -- --
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Total income........... 977,821 1,518,619 1,556,241
2,804,887 1,746,735 1,839,465 1,716,542
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Expenses
Management fee........... 885,234 242,455 828,186
482,513 312,574 139,295 132,163
Administration fee....... 168,078 80,560 95,715
91,614 59,348 37,027 38,798
Custodian's fees and
expenses................. 46,000 68,000 138,000
38,000 34,000 30,000 29,000
Registration fees........ 34,000 20,000 17,000
28,000 12,000 14,000 11,000
Transfer agent's fees and
expenses............... 28,969 13,885 16,497
15,790 10,229 6,382 6,964
Reports to
shareholders............. 15,000 15,000 15,000
7,500 15,000 7,500 7,500
Legal fees............... 7,500 7,500 7,500
7,500 7,500 7,500 7,500
Amortization of
organization
expenses............... 6,693 6,693 6,693
6,606 6,693 6,525 6,606
Audit fee................ 6,000 5,000 7,500
6,000 5,000 5,000 4,500
Trustees' fees........... 6,000 6,000 6,000
6,000 6,000 6,000 6,000
Miscellaneous............ 1,762 769 1,337
919 753 790 1,188
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Total expenses......... 1,205,236 465,862 1,139,428
690,442 469,097 260,019 251,219
Expense recovery
(subsidy) (Note 2)..... 59,383 (102,179) 12,836
(1,136) (22,563) (65,010) (75,031)
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Net expenses............... 1,264,619 363,683 1,152,264
689,306 446,534 195,009 176,188
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Net investment income
(loss)................... (286,798) 1,154,936 403,977
2,115,581 1,300,201 1,644,456 1,540,354
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Realized and Unrealized
Gain (Loss) on Investment
and Foreign Currency
Transactions
Net realized gain (loss) on:
Securities
transactions............. 5,181,317 329,077 2,870,670
3,822,493 1,674,656 553,480 774
Financial futures
contracts................ -- 706,645 --
-- -- -- --
Foreign currency
transactions............. (76,006) -- (63,741 )
-- -- -- --
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
5,105,311 1,035,722 2,806,929
3,822,493 1,674,656 553,480 774
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Net change in unrealized
appreciation
(depreciation) on:
Securities and foreign
currencies............... 9,168,246 10,803,505 4,083,056
1,492,196 2,639,177 (1,011,659) --
Financial futures
contracts................ -- (148,650) --
-- -- -- --
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
9,168,246 10,654,855 4,083,056
1,492,196 2,639,177 (1,011,659) --
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Net gain (loss) on
investments and foreign
currencies............... 14,273,557 11,690,577 6,889,985
5,314,689 4,313,833 (458,179) 774
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
Net Increase in Net Assets
Resulting from
Operations................. $ 13,986,759 $ 12,845,513 $7,293,962 $
7,430,270 $ 5,614,034 $ 1,186,277 $ 1,541,128
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
------------ ------------ -------------
- - ------------ ----------- ----------- -----------
(a) Net of foreign withholding taxes of $17,997, $1,988, $160,696, $1,168 and
$4,070, respectively.
</TABLE>
See Notes to Financial Statements.
38
<PAGE>
THE PRUDENTIAL STATEMENT OF CHANGES
(LOGO) INSTITUTIONAL IN NET ASSETS
FUND (UNAUDITED)
<TABLE>
<CAPTION>
GROWTH
STOCK INTERNATIONAL
STOCK
INDEX STOCK
FUND
FUND FUND
---------------------------
- - ---------------------------- ---------------------
Six Months Year Six Months
Year Six Months
Ended Ended Ended
Ended Ended
March 31, September 30, March 31,
September 30, March 31,
1996 1995 1996
1995 1996
------------ ------------ -------------
- - -------------- ---------------------
<S> <C> <C> <C>
<C> <C>
Increase (Decrease) in
Net Assets
Operations
Net investment income
(loss)............... $ (286,798) $ (111,660) $ 1,154,936
$ 1,829,951 $ 403,977
Net realized gain
(loss) on investments
and foreign currency
transactions......... 5,105,311 814,853 1,035,722
4,044,854 2,806,929
Net change in
unrealized
appreciation
on investments and
foreign currencies... 9,168,246 47,538,274 10,654,855
13,914,900 4,083,056
------------ ------------- ------------
------------------- ------------
Net increase in net
assets resulting from
operations........... 13,986,759 48,241,467 12,845,513
19,789,705 7,293,962
------------ ------------- ------------
------------------- ------------
Dividends and
distributions
Dividends to
shareholders from net
investment income.... -- (48,781) (2,181,628)
(1,015,394) (1,739,771)
Distributions to
shareholders from net
realized gains....... -- -- (4,441,171)
(165,297) --
------------ ------------- ------------
------------------- ------------
Total dividends and
distributions........ -- (48,781) (6,622,799)
(1,180,691) (1,739,771)
------------ ------------- ------------
------------------- ------------
Fund share transactions
Net proceeds from
shares sold.......... 133,171,200 138,943,129 57,112,238
52,960,096 57,849,159
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ -- 48,781 6,622,799
1,180,691 1,739,771
Cost of shares
redeemed............. (78,791,867) (73,635,170) (24,817,640)
(20,924,559) (39,622,163)
------------ ------------- ------------
------------------- ------------
Net increase in net
assets from Fund
share transactions... 54,379,333 65,356,740 38,917,397
33,216,228 19,966,767
------------ ------------- ------------
------------------- ------------
Net increase............ 68,366,092 113,549,426 45,140,111
51,825,242 25,520,958
Net Assets
Beginning of period.... 220,505,394 106,955,968 101,944,566
50,119,324 136,685,222
------------ ------------- ------------
------------------- ------------
End of period.......... $288,871,486 $ 220,505,394 $147,084,677
$ 101,944,566 $162,206,180
------------ ------------- ------------
------------------- ------------
------------ ------------- ------------
------------------- ------------
<CAPTION>
INTERNATIONAL ACTIVE
STOCK BALANCED
FUND FUND
---------------- ---------------------------
Year Six Months Year
Eneded Ended Ended
September 30, March 31, September 30,
1995 1996 1995
--------------- ----------- --------------
<S> <C> <C> <C>
Increase (Decrease) in
Net Assets
Operations
Net investment income
(loss)............... $ 1,884,332 $ 2,115,581 $ 3,695,777
Net realized gain
(loss) on investments
and foreign currency
transactions......... (3,084,946) 3,822,493 1,585,229
Net change in
unrealized
appreciation
on investments and
foreign currencies... 9,333,213 1,492,196 12,809,504
------------- ------------ -------------
Net increase in net
assets resulting from
operations........... 8,132,599 7,430,270 18,090,510
------------- ------------ -------------
Dividends and
distributions
Dividends to
shareholders from net
investment income.... (750,797) (3,972,956) (2,260,245)
Distributions to
shareholders from net
realized gains....... (2,440,090) (1,932,789) (272,788)
------------- ------------ -------------
Total dividends and
distributions........ (3,190,887) (5,905,745) (2,533,033)
------------- ------------ -------------
Fund share transactions
Net proceeds from
shares sold.......... 93,624,206 17,976,072 54,908,716
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 3,190,887 5,905,745 2,533,033
Cost of shares
redeemed............. (67,895,915) (16,070,178) (20,823,769)
------------- ------------ -------------
Net increase in net
assets from Fund
share transactions... 28,919,178 7,811,639 36,617,980
------------- ------------ -------------
Net increase............ 33,860,890 9,336,164 52,175,457
Net Assets
Beginning of period.... 102,824,332 133,351,887 81,176,430
------------- ------------ -------------
End of period.......... $ 136,685,222 $142,688,051 $ 133,351,887
------------- ------------ -------------
------------- ------------ -------------
</TABLE>
See Notes to Financial Statements.
39
<PAGE>
THE PRUDENTIAL STATEMENT OF CHANGES
(LOGO) 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,
1996 1995 1996
1995 1996 1995
------------ ------------- -----------
- - ------------- ------------ -------------
<S> <C> <C> <C>
<C> <C> <C>
Increase (Decrease) in
Net Assets
Operations
Net investment
income............... $ 1,300,201 $ 2,258,681 $ 1,644,456
$ 2,862,527 $ 1,540,354 $ 2,813,967
Net realized gain on
investments and
foreign currency
transactions......... 1,674,656 2,196,076 553,480
92,951 774 --
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currencies... 2,639,177 6,413,335 (1,011,659)
2,865,097 -- --
------------ ------------- -----------
- - ------------- ------------ -------------
Net increase in net
assets resulting from
operations........... 5,614,034 10,868,092 1,186,277
5,820,575 1,541,128 2,813,967
------------ ------------- -----------
- - ------------- ------------ -------------
Dividends and
distributions
Dividends to
shareholders from net
investment income.... (2,334,680) (1,529,788) (1,644,456)
(2,862,527) (1,541,128) (2,813,967)
Distributions to
shareholders from net
realized gains....... (2,472,014) (269,963) --
-- -- --
------------ ------------- -----------
- - ------------- ------------ -------------
Total dividends and
distributions........ (4,806,694) (1,799,751) (1,644,456)
(2,862,527) (1,541,128) (2,813,967)
------------ ------------- -----------
- - ------------- ------------ -------------
Fund share transactions
Net proceeds from
shares sold.......... 21,877,936 26,091,264 7,888,653
11,549,255 22,399,365 55,919,976
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends and
distributions........ 4,806,694 1,799,751 1,644,456
2,862,527 1,541,128 2,813,967
Cost of shares
redeemed............. (9,797,881) (19,161,993) (4,046,651)
(6,473,780) (22,064,387) (47,010,598)
------------ ------------- -----------
- - ------------- ------------ -------------
Net increase in net
assets from Fund
share transactions... 16,886,749 8,729,022 5,486,458
7,938,002 1,876,106 11,723,345
------------ ------------- -----------
- - ------------- ------------ -------------
Net increase............ 17,694,089 17,797,363 5,028,279
10,896,050 1,876,106 11,723,345
Net Assets
Beginning of period.... 82,109,946 64,312,583 52,297,367
41,401,317 58,054,077 46,330,732
------------ ------------- -----------
- - ------------- ------------ -------------
End of period.......... $ 99,804,035 $82,109,946 $57,325,646
$52,297,367 $ 59,930,183 $58,054,077
------------ ------------- -----------
- - ------------- ------------ -------------
------------ ------------- -----------
- - ------------- ------------ -------------
</TABLE>
See Notes to Financial Statements.
40
<PAGE>
THE PRUDENTIAL FINANCIAL HIGHLIGHTS
(LOGO) INSTITUTIONAL (UNAUDITED)
FUND
<TABLE>
<CAPTION>
STOCK
GROWTH
INDEX
STOCK
FUND
FUND
---------------------------
- - ---------------------------------------------------------
Year
November 5, Ended
Six Months Year Ended September
1992(a) Six Months September
Ended 30,
Through Ended 30,
March 31, -----------------------
September 30, March 31, ---------
1996 1995 1994
1993 1996 1995
---------- --------- ---------
- - ------------- ---------- ---------
<S> <C> <C> <C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning
of period.................. $ 16.21 $ 12.00 $ 12.10
$ 10.00 $ 14.22 $ 11.27
---------- --------- ---------
- - ---------- ---------- ---------
Income from investment
operations:
Net investment income
(loss) (b)................. (.02) -- --
.04 .12 .23
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions............... .90 4.22 (.06)
2.08 1.46 2.97
---------- --------- ---------
- - ---------- ---------- ---------
Total from investment
operations............... .88 4.22 (.06)
2.12 1.58 3.20
---------- --------- ---------
- - ---------- ---------- ---------
Less distributions:
Dividends from net
investment income.......... -- (.01) (.01)
(.02) (.28) (.22)
Distributions from net
realized gains............. -- -- (.03)
-- (.57) (.03)
---------- --------- ---------
- - ---------- ---------- ---------
Total distributions........ -- (.01) (.04)
(.02) (.85) (.25)
---------- --------- ---------
- - ---------- ---------- ---------
Net asset value, end of
period..................... $ 17.09 $ 16.21 $ 12.00
$ 12.10 $ 14.95 $ 14.22
---------- --------- ---------
- - ---------- ---------- ---------
---------- --------- ---------
- - ---------- ---------- ---------
TOTAL RETURN(d)............. 5.43% 35.14% (0.50)%
21.22% 11.44% 29.02%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of period
(000)...................... $288,871 $ 220,505 $ 106,956
$47,998 $147,085 $ 101,945
Average net assets (000).... $252,924 $ 149,985 $ 71,449
$17,592 $121,227 $ 71,711
Ratios to average
net assets: (b)
Expenses................... 1.00%(c) 1.00% 1.00%
1.00%(c) .60%(c) .60%
Net investment income...... (.23)%(c) (.07)% .04%
.31%(c) 1.91%(c) 2.55%
Portfolio turnover rate..... 29% 64% 65%
84% 1% 11%
Average commission rate paid
per share.................. $ 0.0650 N/A N/A
N/A $ 0.0250 N/A
<CAPTION>
Year November 5,
Ended 1992(a)
September Through
30, September 30,
1994 1993
--------- -------------
<S> <C> <C>
PER SHARE OPERATING PERFORMA
Net asset value, beginning
of period.................. $ 11.12 $ 10.00
--------- ---------
Income from investment
operations:
Net investment income
(loss) (b)................. .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(d)............. 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: (b)
Expenses................... .60% .60%(c)
Net investment income...... 2.34% 2.41%(c)
Portfolio turnover rate..... 2% 1%
Average commission rate paid
per share.................. N/A N/A
</TABLE>
- - ---------------
(a) Commencement of investment operations.
(b) Net of expense subsidy/recovery.
(c) Annualized.
(d) 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. Total return includes the effect
of expense subsidies.
See Notes to Financial Statements.
41
<PAGE>
THE PRUDENTIAL FINANCIAL HIGHLIGHTS
(LOGO) INSTITUTIONAL (UNAUDITED)
FUND
<TABLE>
<CAPTION>
ACTIVE
INTERNATIONAL
BALANCED
STOCK
FUND
FUND
---------------------------
- - ---------------------------------------------------------
Year
November 5, Ended
Six Months Year Ended September
1992(a) Six Months September
Ended 30,
Through Ended 30,
March 31, -----------------------
September 30, March 31, ---------
1996 1995 1994
1993 1996 1995
---------- --------- ---------
- - ------------- ---------- ---------
<S> <C> <C> <C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning
of period.................. $ 15.25 $ 14.84 $ 12.35
$ 10.00 $ 12.46 $ 10.92
---------- --------- ---------
- - ---------- ---------- ---------
Income from investment
operations:
Net investment income(b).... .04 .18 .13
.16 .19 .33
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions............... .69 .66 2.54
2.21 .48 1.54
---------- --------- ---------
- - ---------- ---------- ---------
Total from investment
operations............... .73 .84 2.67
2.37 .67 1.87
---------- --------- ---------
- - ---------- ---------- ---------
Less distributions:
Dividends from net
investment income.......... (.19) (.10) (.03)
(.02) (.37) (.29)
Distributions from net
realized gains............. -- (.33) (.15)
-- (.18) (.04)
---------- --------- ---------
- - ---------- ---------- ---------
Total distributions........ (.19) (.43) (.18)
(.02) (.55) (.33)
---------- --------- ---------
- - ---------- ---------- ---------
Net asset value, end of
period..................... $ 15.79 $ 15.25 $ 14.84
$ 12.35 $ 12.58 $ 12.46
---------- --------- ---------
- - ---------- ---------- ---------
---------- --------- ---------
- - ---------- ---------- ---------
TOTAL RETURN(d)............. 4.86% 5.95% 21.71%
23.74% 5.51% 17.66%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of period
(000)...................... $162,206 $ 136,685 $ 102,824
$31,708 $142,688 $ 133,352
Average net assets (000).... $144,032 $ 118,927 $ 68,476
$14,491 $137,861 $ 104,821
Ratios to average
net assets:(b)
Expenses................... 1.60%(c) 1.60% 1.60%
1.60%(c) 1.00%(c) 1.00%
Net investment income...... .56%(c) 1.58% 1.08%
1.44%(c) 3.07%(c) 3.53%
Portfolio turnover rate..... 9% 20% 21%
15% 21% 30%
Average commission rate paid
per share.................. $ 0.0194 N/A N/A
N/A $ 0.0650 N/A
<CAPTION>
Year January 4,
Ended 1993(a)
September Through
30, September 30,
1994 1993
--------- -------------
<S> <C> <C>
PER SHARE OPERATING PERFORMA
Net asset value, beginning
of period.................. $ 11.05 $ 10.00
--------- ----------
Income from investment
operations:
Net investment income(b).... .24 .21
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(d)............. 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:(b)
Expenses................... 1.00% 1.00%(c)
Net investment income...... 3.06% 2.68%(c)
Portfolio turnover rate..... 40% 47%
Average commission rate paid
per share.................. N/A N/A
</TABLE>
- - ---------------
(a) Commencement of investment operations.
(b) Net of expense subsidy/recovery.
(c) Annualized.
(d) 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. Total return includes the effect
of expense subsidies.
See Notes to Financial Statements.
42
<PAGE>
THE PRUDENTIAL FINANCIAL HIGHLIGHTS
(LOGO) INSTITUTIONAL (UNAUDITED)
FUND
<TABLE>
<CAPTION>
BALANCED
INCOME
FUND
FUND
- - ---------------------------------------------------------
- - ------------------------
November 5, Year
Six Months Year Ended September 30,
1992(a) Six Months Ended
Ended
Through Ended September
March 31, ------------------------
September 30, March 31, 30,
1996 1995 1994
1993 1996 1995
---------- --------- ---------
- - ------------- ---------- ---------
<S> <C> <C> <C> <C>
<C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period.................. $ 12.49 $ 11.08 $ 11.80
$ 10.00 $ 9.98 $ 9.38
---------- --------- ---------
- - ---------- ---------- ---------
Income from investment
operations:
Net investment income(b).... .17 .18 .31
.31 .29 .59
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions............... .62 1.53 (.52)
1.54 (.06) .60
---------- --------- ---------
- - ---------- ---------- ---------
Total from investment
operations............... .79 1.71 (.21)
1.85 .23 1.19
---------- --------- ---------
- - ---------- ---------- ---------
Less distributions:
Dividends from net
investment income.......... (.34) (.25) (.23)
(.05) (.29) (.59)
Distributions from net
realized gains............. (.36) (.05) (.28)
-- -- --
---------- --------- ---------
- - ---------- ---------- ---------
Total distributions........ (.70) (.30) (.51)
(.05) (.29) (.59)
---------- --------- ---------
- - ---------- ---------- ---------
Net asset value, end of
period..................... $ 12.58 $ 12.49 $ 11.08
$ 11.80 $ 9.92 $ 9.98
---------- --------- ---------
- - ---------- ---------- ---------
---------- --------- ---------
- - ---------- ---------- ---------
TOTAL RETURN(d)............. 6.53% 15.90% (1.88)%
18.58% 2.35% 13.11%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of period
(000)...................... $ 99,804 $82,110 $64,313
$27,663 $ 57,326 $52,297
Average net assets (000).... $ 89,307 $70,914 $44,048
$17,401 $ 55,718 $46,386
Ratios to average
net assets: (b)
Expenses................... 1.00%(c) 1.00% 1.00%
1.00%(c) .70%(c) .70%
Net investment income...... 2.91%(c) 3.19% 2.86%
3.16%(c) 5.90%(c) 6.17%
Portfolio turnover rate..... 37% 65% 52%
74% 53% 145%
Average commission rate paid
per share.................. $ 0.0597 N/A N/A
N/A N/A N/A
<CAPTION>
Year March 1,
Ended 1993(a)
September Through
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 income(b).... .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(d)............. (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: (b)
Expenses................... .70% .70%(c)
Net investment income...... 5.24% 4.62%(c)
Portfolio turnover rate..... 83% 93%
Average commission rate paid
per share.................. N/A N/A
</TABLE>
- - ---------------
(a) Commencement of investment operations.
(b) Net of expense subsidy.
(c) Annualized.
(d) 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. Total return includes the effect
of expense subsidies.
See Notes to Financial Statements.
43
<PAGE>
THE PRUDENTIAL FINANCIAL HIGHLIGHTS
(LOGO) INSTITUTIONAL (UNAUDITED)
FUND
<TABLE>
<CAPTION>
MONEY
MARKET
FUND
- - --------------------------------------------------------------------
January 4,
Six Months
1993(a)
Ended Year Ended September 30,
Through
March 31,
- - --------------------------- September 30,
1996 1995 1994
1993
---------- ---------
- - --------- -------------
<S> <C> <C> <C>
<C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period.................. $ 1.00 $ 1.00 $
1.00 $ 1.00
Net investment income and
net realized gains(b)...... .03 .05
.03 .02
Dividends from net
investment income.......... (.03) (.05)
(.03) (.02)
---------- ---------
- - --------- ----------
Net asset value, end of
period..................... $ 1.00 $ 1.00 $
1.00 $ 1.00
---------- ---------
- - --------- ----------
---------- ---------
- - --------- ----------
TOTAL RETURN(d)............. 2.64% 5.47%
3.32% 2.08%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of period
(000)...................... $ 59,930 $58,054
$46,331 $30,235
Average net assets (000).... $ 58,739 $52,446
$38,170 $25,296
Ratios to average
net assets: (b)
Expenses................... .60%(c) .60%
.60% .60%(c)
Net investment income...... 5.24%(c) 5.37%
3.34% 2.73%(c)
</TABLE>
- - ---------------
(a) Commencement of investment operations.
(b) Net of expense subsidy.
(c) Annualized.
(d) 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. Total return includes the effect
of expense subsidies.
See Notes to Financial Statements.
44
<PAGE>
THE PRUDENTIAL NOTES TO
(LOGO) INSTITUTIONAL FINANCIAL STATEMENTS
FUND (UNAUDITED)
The Prudential Institutional Fund (the ``Company'') is registered under the
Investment Company Act of 1940 as an open-end, diversified management investment
company. The Company was established as a Delaware business trust on May 11,
1992 and consists of seven separate funds (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
45
<PAGE>
THE PRUDENTIAL NOTES TO
(LOGO) 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 and those 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. Expenses
are recorded on the accrual basis which may require the use of certain estimates
by management.
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 their
existing portfolio securities, or securities the Funds intend to purchase,
against fluctuations in value. Under a variety of circumstances, 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 and the underlying
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.
46
<PAGE>
THE PRUDENTIAL NOTES TO
(LOGO) 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 losses on foreign currency transactions represent net foreign
exchange 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 securities 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.
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 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
47
<PAGE>
THE PRUDENTIAL NOTES TO
(LOGO) INSTITUTIONAL FINANCIAL STATEMENTS
FUND (UNAUDITED)
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, 1996, the application of this statement
affected 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 $(76,006) $76,006
International Stock Fund (63,741) 63,741
</TABLE>
Net investment income, net realized gains and net assets were not affected
by
this change.
Deferred Organizational Expenses: Approxi-
mately $450,000 of costs were incurred in connection with the organization and
initial registration of the Company and have been deferred and are being
amortized ratably over the period of benefit not to exceed 60 months from the
date each of the Funds' commenced investment operations.
Note 2. Agreements
The Company has entered into a management agreement with PIFM. Pursuant to
this agreement, PIFM has responsibility for all investment advisory services and
supervises the subadviser's performance of such services. PIFM is an indirect,
wholly-owned subsidiary of The Prudential Insurance Company of America
(Prudential).
PIFM has entered into subadvisory agreements with The Prudential Investment
Corporation (``PIC''), Jennison Associates Capital Corp. (``Jennison'') and
Mercator Asset Management, L.P. (``Mercator''). PIC and Jennison are
wholly-owned subsidiaries 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. The fees
are computed daily and payable monthly at the annual rates 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 March 31, 1996, PIFM subsidized the following amounts:
<TABLE>
<CAPTION>
Percentage
of Average Amount per
Fund Net Assets Share
- - --------------------------- ------------- ------------------
<S> <C> <C>
Stock Index Fund .17% $ .011
Active Balanced Fund .002 .0001
Balanced Fund .05 .003
Income Fund .23 .011
Money Market Fund .25 .001
</TABLE>
48
<PAGE>
<PAGE>
THE PRUDENTIAL NOTES TO
(LOGO) INSTITUTIONAL FINANCIAL STATEMENTS
FUND (UNAUDITED)
PIFM also recovered the following amounts of operating expenses it previously
subsidized for the six months ended March 31, 1996:
<TABLE>
<CAPTION>
Percentage
of Average Amount per
Net Assets Share
------------- ------------------
<S> <C> <C>
Growth Stock Fund .05% $ .004
International Stock Fund .02 .001
</TABLE>
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 the 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. Portfolio Securities
Purchases and sales of portfolio securities, excluding short-term
investments, for the six months ended March 31, 1996 were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
- - ---------------------------- ------------ -----------
<S> <C> <C>
Growth Stock Fund $125,001,676 $72,554,977
Stock Index Fund 47,804,297 948,671
International Stock Fund 28,187,107 11,866,927
Active Balanced Fund 28,778,511 23,901,019
Balanced Fund 40,800,913 29,694,202
Income Fund 30,157,486 28,424,962
</TABLE>
On March 31, 1996, the Stock Index Fund purchased 17 financial futures
contracts on the S&P 500 Index expiring June, 1996. The cost of such contracts
was $5,491,050. The value of such contracts on March 31, 1996 was $5,535,625,
thereby resulting in an unrealized gain of $44,575.
The federal income tax basis and unrealized appreciation/depreciation of the
Fund's investments as of March 31, 1996 were as follows:
<TABLE>
<CAPTION>
Net Unrealized
Appreciation/
(Depreciation)
--------------- Gross Unrealized
Fund Basis Appreciation Depreciation
- - ------------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Growth Stock Fund $225,390,343 $63,083,047 $66,420,094 $3,337,047
Stock Index Fund 121,241,374 26,287,220 27,491,663 1,204,443
International
Stock Fund 142,221,274 21,409,852 25,461,090 4,051,238
Active Balanced
Fund 128,545,569 13,427,979 13,990,099 562,120
Balanced Fund 90,294,873 9,008,073 9,842,011 833,938
Income Fund 65,076,580 (127,771) 544,801 672,572
</TABLE>
The following Funds elected to treat net losses incurred in the eleven month
period ended September 30, 1995 as having occurred in the current fiscal year:
<TABLE>
<CAPTION>
Capital Currency
---------- --------
<S> <C> <C>
Growth Stock Fund -- $ 4,000
International Stock Fund $3,066,000 169,000
Balanced Fund -- 1,000
</TABLE>
For federal income tax purposes, the following Funds have a capital loss
carryforward as of September 30, 1995 which expires in 2003:
<TABLE>
<S> <C>
Growth Stock Fund $2,825,300
Income Fund 723,300
</TABLE>
The average monthly balance of dollar rolls outstanding during the six months
ended March 31, 1996 for the Income Fund was approximately $6,397,000. The
maximum amount of dollar rolls outstanding at any month-end during the six
months ended March 31, 1996 was $6,991,530 as of January 31, 1996 which was
10.8% of total assets. The amount of dollar rolls outstanding at March 31, 1996,
was $6,723,720, which was 10.2% of total assets.
49
<PAGE>
THE PRUDENTIAL NOTES TO
(LOGO) INSTITUTIONAL FINANCIAL STATEMENTS
FUND (UNAUDITED)
Note 4. 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,
1996, the Company had a 4.60% undivided interest, in the aggregate, in the
repurchase agreements in the joint account which represented $67,021,000 in
principal amount, in the aggregate, as follows:
<TABLE>
<CAPTION>
Percentage Principal
Company Interest Amount
- - ---------------------------- ---------- -----------
<S> <C> <C>
Growth Stock Fund .28% $ 4,122,000
Stock Index Fund .41 5,929,000
International Stock Fund .77 11,189,000
Active Balanced Fund 1.64 23,888,000
Balanced Fund .71 10,344,000
Income Fund .79 11,549,000
</TABLE>
As of such date, each repurchase agreement in the joint account and the
collateral therefor was as follows:
Bear, Stearns & Co., Inc., 5.30%, in the principal amount of $387,000,000,
repurchase price $387,170,925, due 4/1/96. The value of the collateral including
accrued interest was $395,137,122.
CS First Boston Corp., 5.50%, in the principal amount of $150,000,000,
repurchase price $150,068,750, due 4/1/96. The value of the collateral including
accrued interest was $153,001,819.
Goldman Sachs & Co., 5.40%, in the principal amount of $463,000,000,
repurchase price $463,208,350, due 4/1/96. The value of the collateral including
accrued interest was $472,260,747.
Nomura Securities, Inc., 5.375%, in the principal amount of $100,000,000,
repurchase price $100,044,792, due 4/1/96. The value of the collateral including
accrued interest was $102,398,695.
Smith Barney, Inc., 5.284%, in the principal amount of $355,886,000,
repurchase price $356,042,708, due 4/1/96. The value of the collateral including
accrued interest was $363,004,234.
Note 5. 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, 1996 and the year ended September 30, 1995 were as follows:
Six months ended March 31, 1996:
<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 8,107,640 -- (4,805,656) 3,301,984
Stock Index Fund 3,893,782 467,712 (1,694,486) 2,667,008
International Stock
Fund 3,795,911 116,606 (2,601,769) 1,310,748
Active Balanced Fund 1,438,229 483,285 (1,283,160) 638,354
Balanced Fund 1,748,784 395,938 (784,163) 1,360,559
Income Fund 780,386 162,743 (400,473) 542,656
Money Market Fund 22,399,365 1,541,128 (22,064,387) 1,876,106
</TABLE>
Year ended September 30, 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 9,932,496 4,078 (5,248,506) 4,688,068
Stock Index Fund 4,340,797 107,238 (1,725,892) 2,722,143
International Stock
Fund 6,497,880 228,737 (4,691,305) 2,035,312
Active Balanced Fund 4,883,689 242,395 (1,856,069) 3,270,015
Balanced Fund 2,303,919 168,832 (1,702,980) 769,771
Income Fund 1,204,925 296,456 (675,384) 825,997
Money Market Fund 55,919,976 2,813,967 (47,010,598) 11,723,345
</TABLE>
50
<PAGE>
THE PRUDENTIAL NOTES TO
(LOGO) INSTITUTIONAL FINANCIAL STATEMENTS
FUND (UNAUDITED)
Of the shares outstanding at March 31, 1996, PIFM and affiliates owned the
following shares:
<TABLE>
<CAPTION>
Fund Shares
- - -------------------------- ----------
<S> <C>
Growth Stock Fund 5,800,387
Stock Index Fund 4,642,203
International Stock Fund 5,647,337
Active Balanced Fund 2,485,468
Balanced Fund 3,883,087
Income Fund 2,975,746
Money Market Fund 28,544,777
</TABLE>
Note 6. Proposed Reorganization
On May 17, 1996, the Trustees of the Fund approved an Agreement and a Plan
of
Reorganization (the ``Plan of Reorganization'') for the Fund. Under the Plan of
Reorganization, substantially all of the assets and liabilities of the Growth
Stock Fund, Balanced Fund, Income Fund and Money Market Fund will be transferred
at net asset value for equivalent value Class Z shares of Prudential Jennison
Fund, Inc., Prudential Allocation Fund (Balanced Portfolio), Prudential
Government Income Fund, Inc. and Prudential MoneyMart Assets, Inc.,
respectively. These Funds will then cease operations. Stock Index Fund and
Active Balanced Fund will remain with The Prudential Institutional Fund (to be
renamed the Prudential Dryden Fund) as Class Z shares. Active Balanced Fund will
begin offering Classes A, B and C shares and Stock Index Fund will offer Class
A
shares. International Stock Fund will join the Prudential Global Fund as a
separate series of a newly named Prudential World Fund. The existing
shareholders will become Class Z shareholders and the Fund will also begin
offering Classes A, B and C shares. The successor funds will be managed by PMF,
PMFS will provide transfer agency services and Prudential Securities
Incorporated, a wholly-owned subsidiary of Prudential, will act as distributor.
The Plan of Reorganization requires the approval of shareholders of the Fund
to become effective. A proxy will be mailed to shareholders of the Fund for
shareholder meetings in the fall of 1996. If the Plan of Reorganization is
approved, it is expected that the reorganizations will take place shortly after
the meetings. All funds involved will share pro rata in the costs of the
reorganizations.
51
<PAGE>
THE PRUDENTIAL
(LOGO) INSTITUTIONAL
FUND
Trustees
Mark R. Fetting, Chairman
David A. Finley
William E. Fruhan, Jr.
August G. Olsen
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
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Institutional Fund Management, Inc.
30 Scranton Office Park
Moosic, PA 18507
Investment Advisers
The Prudential Investment Corporation
751 Broad Street
Newark, NJ 07102
Jennison Associates Capital Corp.
466 Lexington Avenue
New York, NY 10017
Mercator Asset Management, L.P.
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 Auditors
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281
Legal Counsel
Kirkpatrick and Lockhart LLP
1800 Massachusetts Ave., N.W.
Washington, D.C. 20036
The accompanying financials statements as of March 31, 1996 were not audited
and, accordingly, no opinion is expressed on them.
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
The Prudential Institutional Fund
21 Prudential Plaza
751 Broad Street
Newark, NJ 07102-3777
<PAGE>
The Prudential Institutional Fund
21 Prudential Plaza
751 Broad Street
Newark, NJ 07102-3777
(LOGO)
Bulk Rate
U.S. Postage
PAID
Permit No. 2145
Newark, N.J.
95133-11/95
