<PAGE>
(ICON)
The
Target Portfolio
Trust
a
Semiannual Report
June 30, 2000
(LOGO)
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(ICON)
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The Target Portfolio Trust
Table of Contents
Page
Shareholder Letter 2
Target's Shareholder Services 9
Portfolio of Investments:
Large Capitalization Growth Portfolio 10
Large Capitalization Value Portfolio 12
Small Capitalization Growth Portfolio 18
Small Capitalization Value Portfolio 21
International Equity Portfolio 26
International Bond Portfolio 29
Total Return Bond Portfolio 31
Intermediate-Term Bond Portfolio 35
Mortgage Backed Securities Portfolio 39
U.S. Government Money Market Portfolio 41
Statements of Assets and Liabilities 42
Statements of Operations 44
Statements of Changes in Net Assets 46
Financial Highlights 48
Notes to Financial Statements 55
I
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Dear Target Shareholder:
Turbulent times for the equity markets
Not only did the first half of 2000 include some of the
most turbulent days in U.S. stock market history, there
were dramatic reversals of fortune at other time scales
as well-by quarter and by month. Many of these reversals
canceled each other out, so that by the end of June the
S&P 500 had only a small net loss, and the Russell 2000
Index of small-cap stocks only a modest gain.
The main market stories over this period were the net
correction (downward) of extended telecommunications
stocks and the seesaw-like rise of healthcare, power
utilities, and energy stocks. The technology sector
skyrocketed up, corrected, then moved ahead again in a
sharp June advance. Cyclical stocks-basic materials (such
as paper and forest products, and metals), consumer
cyclicals (such as retail, autos, and hotels), and
capital goods (such as engineering and construction)-had
steep declines. These trends were global in scope (except
for capital goods, which had a moderately good local
currency return in Europe that translated into a
marginally positive return for dollar-based investors).
The result was a net advantage over the six months for
growth-over-value investing, except among small caps
where the most speculative technology stocks fell so much
in March through May that they couldn't catch up in their
June surge. Small-cap energy (excluding integrated oil
companies) and healthcare stocks (the Russell 2000
sectors) had excellent catch-up returns of 52% and 36%,
respectively. Overall, mid-cap stocks had the best
performance of any market capitalization class, with mid-
cap growth stocks the only equity market capitalization
range with strong return.
Average Annual Total Returns as of June 30, 2000
Since
Portfolios One Year Five Years Inception1
Large Capitalization Growth 50.96* 31.23 21.63
Large Capitalization Value -20.81 9.53 8.61
Small Capitalization Growth 36.99* 17.62 14.85 (14.84)2
Small Capitalization Value 2.13 10.45 9.97 (9.96)2
International Equity 11.21 12.06 12.30
International Bond -5.83 -1.53 (-1.55)2 0.94 (0.84)2
Total Return Bond 3.69 5.54 5.69 (5.62)2
Intermediate-Term Bond 4.26 5.37 5.43 (5.42)2
Mortgage-Backed Securities 3.74 5.33 5.55 (5.48)2
Note: The average annual return for the Target
Portfolios assumes the imposition of the maximum Target
advisory fee of 1.5% for stock portfolios and 1.0% for
the bond portfolios.
Performance data represents past performance, and is no
guarantee of future results. Investment return and
principal value will fluctuate, so that an investors
shares, when redeemed, may be worth more or less than
their original cost.
* The fund's performance was achieved by investing in
technology stocks during a period of unprecedented
returns in that sector of the market. There can be no
assurance that this performance can be repeated in the
future.
1 The inception date for all portfolios is 1/5/93, except
for International Bond, which is 5/17/94. Past
performance is not indicative of future results.
2 Without waiver of management fees and/or expense
subsidization, the Portfolio's Average Annual Total
Returns would have been lower, as indicated in
parentheses ( ).
This pattern was driven by rapid U.S. economic growth,
which led the Federal Reserve to continue to raise
interest rates. Rising interest rates hurt the stocks of
rapidly growing companies whose value lies in their
future earnings: the present value of such future
earnings is reduced in a rising interest rate
environment.
2
<PAGE>
Moreover, the fear that rising interest rates would slow
economic growth hurt both growth and cyclical stocks.
Also, a growing global imbalance of supply and demand for
oil created a turnaround in energy. Oil service companies
performed quite well. A shortage of electricity-
generating capacity in the United States, as well as low
inventories of the natural gas that is burned by many new
generation plants, strengthened the domestic utility
sector stocks overall, although some companies remain
vulnerable to rising fuel prices.
Only the Nordic region provided moderately good returns,
led by Sweden. Other than that, the picture was generally
bleak, except for a few scattered individual countries
with good returns: Canada, France, Malaysia, Israel,
Venezuela, and the Czech Republic.
How did our funds perform?
The Large Capitalization Growth Portfolio, managed by
Columbus Circle Investors and Oak Associates, posted a
strong 18.94% return over the six-month review period.
The Portfolio's technology holdings contributed
significantly to the Portfolio's return, and helped it
outperform its peers. In particular, Oak Associates'
semiconductor holdings generated strong returns. When
technology stocks underwent a correction in the second
half of the period, Columbus Circle Investors' emphasis
on the consumer staples, healthcare, and utility stock
sectors helped offset some losses attributable to
technology positions.
Performance Summary as of June 30, 2000
12/31/99 6/30/00 Six-Month* No. of
Portfolios NAV NAV Total Return Funds**
Large Capitalization Growth $25.68 $30.38 18.94%
Lipper Large-Cap Growth
Fund Avg. 2.98 541
Large Capitalization Value 13.01 11.67 -7.75
Lipper Multi-Cap Value
Fund Avg. -0.47 508
Small Capitalization Growth 17.47 18.20 14.58
Lipper Small-Cap Growth
Fund Avg. 9.45 281
Small Capitalization Value 14.97 16.10 8.70
Lipper Small-Cap Value
Fund Avg. 6.56 342
International Equity 17.37 16.21 -4.01
Lipper International Value
Fund Avg. -4.56 701
International Bond 8.48 8.07 -3.15
Lipper International
Income Fund Avg. -0.85 58
Total Return Bond 9.86 9.97 3.98
Lipper Corporate Debt
BBB-Rated Fund Avg. 2.24 154
Intermediate-Term Bond 9.92 9.97 3.45
Lipper Intermediate
Investment-Grade Debt
Fund Avg. 3.06 294
Mortgage Backed Securities 9.97 10.00 3.48
Lipper U.S. Mortgage
Fund Avg. 3.38 63
U.S. Government Money Market 1.00 1.00 2.59
Lipper U.S. Gov't Money
Fund Avg. 2.66 130
U.S. Government Money
Market 7-Day Current Yield: 6.11%1
1 An investment in the U.S. Government Money Market
Portfolio is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government
agency. Although the Portfolio seeks to preserve the
value of your investment at $1.00 per share, it is
possible to lose money by investing in the Portfolio.
* Source: Lipper Inc. for Lipper averages and Prudential
Investments Fund Management LLC for Target returns.
Target returns are in boldface type. Total returns assume
the reinvestment of all dividends and distributions, and
take into account all charges and expenses applicable to
an investment in each portfolio, except the annual Target
advisory fee. For retail accounts, the maximum annual
advisory fee is 1.5% of equity portfolio assets and 1.0%
of bond and money market assets. For retirement accounts,
the maximum advisory fees are 1.25% and 1.35%,
respectively. Past performance is not indicative of
future results, and an investor's shares, when redeemed,
may be worth more or less than their original cost.
The Lipper Average is unmanaged. Large-Cap Growth funds
normally invest in companies with long-term earnings
expected to grow significantly faster than the earnings
of stocks represented in a major unmanaged stock index.
Multi-Cap Value funds seek long-term growth of capital by
investing in companies that are considered undervalued
relative to a major unmanaged stock index based on price-
to-earnings, book value, asset value, or other factors.
Small-Cap Growth funds normally invest in companies with
long-term earnings expected to grow significantly faster
than the earnings of stocks represented in a major
unmanaged stock index. Small-Cap Value funds seek long-
term growth of capital by investing in companies that are
considered undervalued relative to a major unmanaged
stock index based on price-to-current earnings, book
value, asset value, or other factors. International funds
invest their assets in securities with primary trading
markets outside the United States. International Income
funds invest primarily in U.S. dollar and non-U.S. dollar
debt securities of issuers located in at least three
countries, excluding the United States, except in periods
of market weakness. Corporate Debt BBB-Rated funds invest
at least 65% of their assets in corporate and government
debt issues rated in the top four credit-quality grades.
Intermediate Investment-Grade Debt funds invest at least
65% of their assets in investment-grade debt issues
(rated in the top four credit-quality grades) with
dollar-weighted average maturities of five to ten years.
U.S. Mortgage funds invest at least 65% of their assets
in mortgages/securities issued or guaranteed as to
principal and interest by the U.S. government and certain
federal agencies. U.S. Government Money Market funds
invest principally in financial instruments issued or
guaranteed by the U.S. government, its agencies or
instrumentalities, with dollar-weighted average
maturities of less than 90 days. These money market funds
intend to keep a constant net asset value (NAV).
** Represents the number of funds in each respective
Lipper category.
3
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Oak Associates' focus on pharmaceutical stocks also
performed well. Both managers had a focus on the
financial sector, which created a drag on performance
when financial stocks fell late in the period in response
to interest rate moves.
The Large Capitalization Value Portfolio, managed by
Mercury Advisors (formerly known as Hotchkis and Wiley)
and J.P. Morgan (which replaced INVESCO in May), lost
7.75% over the six-month review period, and
underperformed its benchmark. The Portfolio's performance
is primarily attributable to (1) the ongoing out-of-favor
status of value stocks, and (2) the managers' strict
adherence to their investment disciplines, which resulted
in a lack of exposure to growth-oriented stocks. (It is
important to note that even value indexes include
positions that are not value oriented. For example,
significant portions of the Russell 1000 Value Index are
exposed to the clearly growth-oriented technology and
healthcare sectors.)
Factors that helped performance included Mercury
Advisors' strong security selection in electric
utilities-which did well when underlying fundamentals for
the group showed considerable improvement-and J.P.
Morgan's emphasis in the capital markets sector. J.P.
Morgan's positions in the energy and consumer staple
sectors also added modestly to returns.
The Small Capitalization Growth Portfolio, managed by
Fleming Asset Management USA and Sawgrass Asset
Management, returned 14.58% over the period,
outperforming its benchmark. Both managers focus on high-
growth companies that are attractively valued. This
strategy worked well for the Portfolio over the six-month
review period, as evidenced by the fact that the
Portfolio's technology holdings were the primary reason
for outperformance during a period of extreme turbulence
in the technology market. During the first three months
of the period, investor enthusiasm drove the technology
market up steeply. A sharp correction
followed as concern grew that stocks in the sector were
highly overvalued. A slight rebound in June did little to
offset the sector's losses. Strong stock selection helped
Fleming's technology position outperform during April's
decline (and June's rebound), while Sawgrass' focus on
semiconductor manufacturers and semiconductor equipment
manufacturers generated strong returns early in the
period. As the period
progressed, Sawgrass actively reduced its
holdings in the sector, given the view that they were
unattractively valued. This step ultimately
preserved first-quarter gains in the wake of the tech
market selloff.
The Small Capitalization Value Portfolio, managed by
Lazard Asset Management and Wood Struthers & Winthrop,
generated a return of 8.70% over the period. In a period
distinguished by the market's shift back to a focus on
company fundamentals, strong stock selection helped the
Portfolio outperform its benchmark. Among Wood Struthers
& Winthrop's top 20
performing holdings, every industry sector was
represented. Most of these stocks advanced due to strong
earnings prospects. Lazard found
4
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that stock selection- particularly within the technology,
consumer discretionary, and
producer manufacturing sectors-made the most significant
contribution to return. Both managers have confidence in
the long-term fundamentals of their holdings. They
believe that the market's focus on fundamentals should
persist since, even in a "new economy," a company's true
value is a function of the return it is able to generate
on shareholders' capital.
The International Equity Portfolio, managed by Lazard
Asset Management, returned -4.01% over the period. Wide
recognition of the potential growth prospects of leading
equipment and services companies in the technology,
media, and telecommunications sectors (collectively know
as "TMT") drove the international markets upward early in
the period. However, recognition that stocks within these
sectors had risen to very expensive levels led to a
correction that produced negative six-month returns in
most markets. The Portfolio was able to outperform its
benchmark on a relative basis due to a stock selection
process that focused on companies possessing strong
fundamentals and attractive relative value. In
particular, strong returns were generated within the
technology and auto sectors. However, a large position in
the utility sector detracted significantly from
performance when the market reacted negatively to merger
news. Lazard will continue to seek out relative value
opportunities among traditional companies whose
competitive position and strategic vision will enable
them to excel in the transition to a "new economy." In
addition, the manager will seek to take advantage of the
weakness in TMT to invest in financially productive
companies at attractive prices. Finally, Lazard believes
the market's shift in focus back to fundamentals should
persist since, even in a "new economy," a company's true
value is a function of the return it is able to generate
on shareholders' capital.
A good first half for U.S. Treasuries
Prices of most U.S. Treasury securities climbed during
the first half of 2000, leaving prices of other U.S.
fixed-income securities far behind. Favorable technical
factors and moderating economic growth sparked a rally,
primarily in longer-term Treasuries.
However, Treasuries began 2000 on a weak note. The U.S.
economy had expanded rapidly in late 1999. Investors
therefore feared the Federal Reserve (the "Fed") might
repeatedly increase short-term interest rates to prevent
the economy from exceeding what the central bank believes
to be its speed limit. In anticipation, investors
required higher bond yields, which forced bond prices
lower.
However, the selloff soon turned into a rally-at least
for longer-term Treasuries. The U.S. Treasury Department
cut back issuance of its securities because a growing
federal budget surplus has reduced its borrowing needs.
It also commenced its program to buy back up to $30
billion of older, mostly longer-term Treasuries by the
end of 2000. Taken together, these two developments set
off a stampede to buy longer-term Treasuries.
5
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The enthusiasm for longer-term Treasuries faded as it
became clear the Fed's quarter-point rate hikes in
February and March would be
followed by a half-point increase in mid-May. Some
investors worried that the Fed might prove too heavy-
handed and trigger an economic downturn that would sap
corporate earnings. Not surprisingly, prices of
investment-grade and high-yield U.S. corporate bonds were
hit even harder than Treasuries during this time. High-
yield bonds (also known as "junk" bonds) also suffered
because a growing number of companies failed to make
interest and principal payments on their high-yield bonds in May.
Not until reports began to reveal that the economy was
gradually losing steam did prices of U.S. fixed-income
securities once again turn higher. Signs of moderating
economic growth were interpreted to mean that the Fed's
moves to increase interest rates might end. Amid this
change in market sentiment, prices in U.S. debt
securities markets gained in June. Nevertheless, among
U.S. bond markets, the Treasury market finished in first
place for the six-month period, helped by the strong
performance of its longer-term securities earlier in the
year.
Although Treasuries performed impressively, the top
fixed-income market for the first half of 2000 was
emerging market bonds, based on the Lehman Brothers
indexes. They returned a solid 7.59%, as economic
fundamentals in several developing countries proved
stronger than expected. Rising prices of oil, gas, and
other natural resources strengthen the economies of some
developing nations that export these commodities.
Improving economic conditions, in turn, boosted their
foreign currency reserves. Moreover, some countries cut their
financing costs by swapping new bonds for older debt
securities. These positive developments and others
attracted investors to emerging market bonds.
Among nations with developed economies, the government
bond markets of Australia, Canada, and the United Kingdom
posted attractive returns on a local currency basis, but
lower returns when expressed in U.S. dollars. Their
central banks, which have repeatedly increased short-term
rates to keep their respective economies from
overheating, are widely believed to be near the end of
their current tightening cycles.
How did our funds perform?
The International Bond Portfolio, managed by Delaware
International Advisors, generated a negative return of
3.15%, underperforming its benchmark. During the period,
factors that helped performance included security choice-
particularly U.S. Treasury TIPS (inflation protection
bonds)-and a moderately short duration. With regard to
specific countries, overweights in Canada, Sweden and the
United States, and underweights in Japan and the United
Kingdom, benefited performance. Conversely, an overweight
position in New Zealand detracted significantly from
performance. Persistent current account deficits and
6
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concerns about the economic rigor of the new government
drove the New Zealand dollar down. Although it recovered
slightly later in the period, the benefit to the
Portfolio was minimal.
The Total Return Bond Portfolio and The Intermediate-Term
Bond Portfolio, managed by Pacific Investment Management
Company (PIMCO), returned 3.98% and 3.45%, respectively,
over the period. Both Portfolios outperformed their
benchmarks.
Unequivocally, the strongest contributor to both
Portfolios' returns during the period was the managers'
underweight position in corporate bonds. Corporates
suffered significantly as they lagged Treasuries due to
widening yield premiums. The bulk of the Portfolios'
corporate positions were in mortgage-backed securities,
which were not badly impacted. Additionally, a focus on
shorter-maturity, higher-credit-quality corporates
contributed to performance. Below-investment-grade bonds
underperformed as continued credit concerns offset
relatively high yields.
The Mortgage-Backed Securities Portfolio, managed by
Wellington Management, returned 3.48% over the period,
outperforming its benchmark. The Federal Reserve raised
interest rates by 100 basis points during the period,
pushing short Treasury yields up, while long Treasury
yields fell by nearly 50 basis points over expectations
that the U.S. Treasury's buyback effort would grow in
size. Non-Treasury sectors were the most adversely
affected by this occurrence. However, the manager's
positioning in attractively valued securities-with an
emphasis on Government National Mortgage Association-
issued securities (GNMAs)-proved beneficial to
performance. The mortgage sector followed the same pro-
Treasury theme that impacted the entire bond market; that
is, the further removed a security was from a liquid,
full-faith Treasury, the more detrimental it was to its
performance. Thus, mortgages as a whole underperformed
Treasuries. However, within the mortgage sector itself, a
more interesting story emerged: GNMAs, the lone heirs to
the government's full-faith backing, separated from their
agency counterparts, the Federal National Mortgage
Association (FNMA) and the Federal Home Loan Mortgage
Corporation (FHLMC). Fear that a change in FNMA's and
FHLMC's Government Sponsored Entities (GSE) status,
combined with declining new GNMA supply, led GNMAs-in a
rare divergence-to strongly outperform other agency
mortgages in the first quarter of the year. At the end of
the six-month period, GNMAs remained ahead, despite the
recovery of the full mortgage sector in the second
quarter.
The U.S. Government Money Market Portfolio, also managed
by Wellington Management, returned 2.59% over the review
period, underperforming its benchmark. The Federal
Reserve responded to strong economic data early in the
second quarter by aggressively raising short-term rates
50 basis points in mid-May. This was the sixth rate hike
in the current tightening cycle, for a cumulative
increase of 175 basis points in the Fed funds rate since
June of last year. In this environment, most of
7
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Wellington's transactions were short term in order to
"rollover" at higher yields. The manager also utilized
term repurchase agreements and opportunistically
purchased securities maturing in one year, which
enhanced the portfolio's return.
Market volatility reinforces need for diversification
There are never any guarantees as to the direction the
financial markets will take. More certain is the fact
that there will always be divergent performance among
asset classes. The behavior of the financial markets over
the past six months underscores this point, and provides
the basis for a strong argument in favor of maintaining a
broadly diversified portfolio.
The Target program was designed to provide you with a
convenient way to access a variety of investments that
can help you meet your diversification needs. Each
portfolio invests in a different asset class, such as
small-capitalization stocks, large-capitalization stocks,
or international bonds. Over time, portfolios that have
broad representation among asset classes have
demonstrated better performance than those that are
concentrated in only one or two asset classes.
In addition, investment decisions for the portfolios
strictly adhere to a portfolio's intended investment
objective. In other words, you won't find the large-
capitalization portfolio investing in small-
capitalization stocks. This commitment to style
consistency is one way you can be assured that your
investment is working the way you intended it to.
During volatile market periods, it's easy to lose sight
of your original investment objectives. The Target
program can help you maintain your investment objectives,
and broaden them as well.
Sincerely,
John R. Strangfeld, President
The Target Portfolio Trust
8
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Target's Shareholder Services
Target strives to demonstrate that known managers can
make a difference, asset allocation can minimize
volatility, and quality services are worth paying
for. So here's a sampling of the services you
receive as a Target shareholder. This short
list should confirm that your choice to use Target
was the right one for you and your family.
Consulting Services
1) A Financial Advisor's professional guidance.
2) Questionnaire process that addresses your
investment needs.
3) A personalized Investment Policy Statement (the
evaluation) details your risk profile.
4) Ninety recommended asset allocations or
unlimited number of customized
allocations are available.
5) Access to top investment advisers that manage
Target portfolios.
6) Adviser monitoring helps ensure that they are
performing as expected over the long term.
7) Adviser changes are made if long-term
performance is poor.
8) Free unlimited allocation changes help you
respond to changing market conditions.
9) Research services from Ibbotson Associates used
for allocation construction.
10) IRA analysis details your overall IRA allocation
and suggests a new one, if appropriate.
Reporting Services
1) Customized quarterly reports contain time-
weighted and dollar-weighted returns.
2) Detailed tax information, including gains,
losses, and average cost per share.
3) Quarterly market commentaries address stock,
bond, and international markets.
4) Quarterly adviser comments focus on their specific
market expertise.
(ICON)
9
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THE TARGET PORTFOLIO TRUST
Large Capitalization Growth
Portfolio
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--98.0%
Common Stocks
Banks--2.2%
114,000 Bank of America Corp.......... $ 4,902,000
303,000 MBNA Corp..................... 8,218,875
------------
13,120,875
------------
Broadcasting--1.1%
48,800 AMFM, Inc.*................... 3,367,200
32,700 Univision Communications, 3,384,450
Inc.,
Class A*....................
------------
6,751,650
------------
Business Services--1.9%
55,600 Omnicom Group, Inc............ 4,951,875
48,100 Waters Corp.*................. 6,003,481
------------
10,955,356
------------
Computers & Business Equipment--0.6%
143,300 Compaq Computer Corp.......... 3,663,106
------------
Computer Software & Services--11.6%
121,000 Bea Systems Inc............... 5,981,938
15,500 Check Point Software Tech 3,282,125
Ltd.........................
324,000 EMC Corp.*.................... 24,927,750
110,000 Exodus Communications, 5,066,875
Inc.*.......................
55,000 Foundry Networks Inc.......... 6,077,500
147,200 Microsoft Corp.*.............. 11,776,000
67,000 Oracle Systems Corp.*......... 5,632,188
39,000 Siebel Systems Inc.*.......... 6,378,937
------------
69,123,313
------------
Drugs & Healthcare--9.4%
18,000 Affymetrix, Inc.*............. 2,972,250
192,000 HCA-The Healthcare Company.... 5,832,000
158,000 Medtronic, Inc................ 7,870,375
152,200 Merck & Co., Inc.............. 11,662,325
56,900 PE Corp....................... 3,748,288
281,825 Pfizer, Inc................... 13,527,600
VALUE
SHARES DESCRIPTION (NOTE 1)
41,000 Pharmacia Corp............... $ 2,119,188
57,000 QLT Phototherapeutics*....... 4,406,812
73,000 Teva Pharmaceutical 4,046,937
Industries
Ltd. (ADR).................
------------
56,185,775
------------
Electronic Components--10.8%
531,600 Applied Materials, Inc. *.... 48,176,250
447,000 Atmel Corp.*................. 16,483,125
------------
64,659,375
------------
Electronics--18.2%
197,000 CIENA Corp.*................. 32,837,437
1,150,000 Cisco Systems, Inc.*......... 73,096,875
100,000 Motorola, Inc................ 2,906,250
------------
108,840,562
------------
Entertainment--0.6%
94,000 Walt Disney Co. (The)........ 3,648,375
------------
Financial Services--5.6%
80,100 Chase Manhattan Corp......... 3,689,606
232,575 Citigroup Inc................ 14,012,644
150,000 Morgan Stanley Dean Witter & 12,487,500
Co.........................
86,000 Wells Fargo Co............... 3,332,500
------------
33,522,250
------------
Food & Beverages--3.0%
79,000 Anheuser Busch Companies, 5,900,313
Inc........................
159,000 PepsiCo, Inc................. 7,065,562
114,000 SYSCO Corp................... 4,802,250
------------
17,768,125
------------
Insurance--2.2%
81,562 American International Group, 9,583,535
Inc........................
39,700 CIGNA Corp................... 3,711,950
------------
13,295,485
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
10
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<TABLE>
<CAPTION>
<C> <S> <C>
VALUE
SHARES DESCRIPTION (NOTE 1)
Internet--1.0%
74,000 America Online, Inc........... $ 3,903,500
18,000 Yahoo!, Inc.*................. 2,229,750
------------
6,133,250
------------
Oil & Gas--1.6%
57,000 Coastal Corp.................. 3,469,875
92,800 Enron Corp.................... 5,985,600
------------
9,455,475
------------
Oil Field / Equipment & Services--1.4%
53,000 BJ Services Co.*.............. 3,312,500
70,000 Schlumberger, Ltd............. 5,223,750
------------
8,536,250
------------
Pollution Control--0.5%
150,000 Waste Management, Inc......... 2,850,000
------------
Retail--1.9%
69,500 Home Depot, Inc............... 3,470,656
59,000 Kohl's Corp.*................. 3,281,875
77,000 Wal-Mart Stores, Inc.......... 4,437,125
------------
11,189,656
------------
Semiconductors & Equipment--20.8%
253,000 Intel Corp.................... 33,822,938
424,000 Linear Technology Corp........ 27,109,500
400,000 Maxim Integrated Products, 27,175,000
Inc. *......................
440,000 Xilinx Inc.*.................. 36,327,500
------------
124,434,938
------------
Telecommunication--1.3%
20,000 Aspect Communications 786,250
Corp.*......................
41,000 Copper Mountain Networks, 3,613,125
Inc.*.......................
27,500 VoiceStream Wireless Corp..... 3,198,164
------------
7,597,539
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
Utilities--2.3%
134,600 AES Corp.*................... $ 6,141,125
115,000 Calpine Corp.*............... 7,561,250
------------
13,702,375
------------
Total long-term investments 585,433,730
(cost $230,617,860)........
------------
SHORT-TERM INVESTMENTS--2.1%
Principal
Amount
(000) Repurchase Agreements
--------
$ 7,518 State Street Bank & Trust 7,518,000
Co.,
5.25%, dated 6/30/00, due
7/3/00 in the amount of
$7,521,289 (cost
$7,518,000; collateralized
by $6,895,000 U.S. Treasury
Bonds, 7.250%, 5/15/16,
value of collateral
including accrued interest
is $7,674,853).............
5,160 State Street Bank & Trust 5,160,000
Co.,
5.25%, dated 6/30/00, due
7/3/00 in the amount of
$5,162,257 (cost
$5,160,000; collateralized
by $5,150,000 U.S. Treasury
Notes, 6.250%, 1/31/02,
approximate value of
collateral including
accrued
interest is $5,268,557)....
------------
Total short-term investments 12,678,000
(cost $12,678,000).........
------------
Total Investments--100.1%
(cost $243,295,860; Note 598,111,730
4).........................
Liabilities in excess of (481,265)
other
assets--(0.1%).............
------------
Net Assets--100%............. $597,630,465
------------
------------
</TABLE>
---------------
* Non-income producing.
ADR--American Depository Receipt.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
11
<PAGE>
THE TARGET PORTFOLIO TRUST
Large Capitalization Value
Portfolio
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--97.8%
Common Stocks
Aerospace--3.7%
10,700 B.F. Goodrich Co.............. $ 364,469
19,600 Boeing Co..................... 819,525
27,700 Honeywell International, 933,144
Inc.........................
102,600 Lockheed Martin Corp.......... 2,545,762
29,800 Northrop Grumman Corp......... 1,974,250
38,100 TRW, Inc...................... 1,652,587
------------
8,289,737
------------
Airlines--0.1%
1,300 AMR Corp.*.................... 34,369
400 Northwest Airlines Corp....... 12,175
4,900 Southwest Airlines Co......... 92,794
------------
139,338
------------
Aluminum--1.8%
2,300 Alcan Aluminum Ltd............ 71,300
137,776 Alcoa Inc..................... 3,995,504
------------
4,066,804
------------
Apparel & Textiles--0.6%
13,300 Jones Apparel Group, Inc.*.... 312,550
52,800 Russell Corp.................. 1,056,000
------------
1,368,550
------------
Auto Parts--1.8%
84,500 Dana Corp..................... 1,790,344
84,362 Delphi Automotive Systems 1,228,522
Corp........................
14,500 Goodyear Tire & Rubber Co..... 290,000
8,300 Lear Corp..................... 166,000
33,800 Meritor Automotive, Inc....... 371,800
20,000 Tenneco Automotive, Inc....... 105,000
12,884 Visteon Corp.................. 156,216
------------
4,107,882
------------
Automobiles--3.5%
98,400 Ford Motor Co................. 4,231,200
VALUE
SHARES DESCRIPTION (NOTE 1)
7,140 General Motors Corp (Class $ 626,554
'H' Stock).................
54,839 General Motors Corp.......... 3,184,090
------------
8,041,844
------------
Banks--6.3%
7,000 Associated Banc Corp......... 152,688
26,900 Bank of America Corp......... 1,156,700
86,060 Bank One Corp................ 2,285,969
23,800 BankNorth Group, Inc......... 364,437
16,700 Charter One Financial, 384,100
Inc........................
23,400 Dime Bancorp, Inc............ 368,550
12,800 First Capital, Inc........... 285,600
30,300 First Security Corp.......... 410,944
6,000 First Tennessee National 99,375
Corp.......................
88,200 First Union Corp............. 2,188,462
800 Firstar Corporation.......... 17,335
2,600 Firstmerit Corp.............. 16,850
13,800 Fleet Boston Financial 469,200
Corp.......................
1,800 Golden West Financial 73,463
Corp.......................
12,100 GreenPoint Financial Corp.... 226,875
14,200 Hibernia Corp................ 154,425
77,100 KeyCorp...................... 1,358,887
9,500 Marshall & Ilsley Corp....... 394,250
5,100 Mercantile Bankshares 152,044
Corp.......................
19,400 North Fork Bancorporation, 293,425
Inc........................
15,600 PNC Bank Corp................ 731,250
9,900 Regions Financial Corp....... 196,763
14,700 SouthTrust Corp.............. 332,588
19,700 Summit Bancorp............... 485,112
12,400 TCF Financial Corp........... 318,525
22,600 U.S. Bancorp................. 435,050
27,800 UnionBanCal Corp............. 516,037
10,700 Wells Fargo & Co............. 414,625
------------
14,321,769
------------
Building & Construction--0.3%
23,200 Harsco Corp.................. 591,600
------------
Building Products--1.3%
165,400 CNH Global NV................ 1,529,950
66,600 Georgia-Pacific Corp......... 1,440,225
1,900 USG Corp..................... 57,712
------------
3,027,887
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
12
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
VALUE
SHARES DESCRIPTION (NOTE 1)
Business Services--1.0%
5,500 Automatic Data Processing, $ 291,500
Inc.........................
7,000 Cendant Corp.*................ 98,000
90,200 Xerox Corp.................... 1,871,650
------------
2,261,150
------------
Chemicals--2.3%
15,400 Air Products & Chemicals, 474,512
Inc.........................
55,500 Dow Chemical Co............... 1,675,406
31,100 Eastman Chemical Co........... 1,485,025
800 IMC Global, Inc............... 10,400
14,500 PPG Industries, Inc........... 642,531
9,800 Praxair, Inc.................. 366,888
14,500 Rohm & Haas Co................ 500,250
------------
5,155,012
------------
Computers & Business Equipment--0.8%
8,700 Apple Computer, Inc........... 455,662
2,500 Compaq Computer Corp.......... 63,900
300 Dell Computer Corp.*.......... 14,794
5,600 Hewlett-Packard Co............ 699,300
1,500 Lexmark International Group, 100,875
Inc. *......................
4,700 Sun Microsystems, Inc......... 427,406
------------
1,761,937
------------
Conglomerate--3.1%
8,300 General Electric Co........... 439,900
14,600 ITT Industries, Inc........... 443,475
1,600 Minnesota Mining & 132,000
Manufacturing Co............
204,600 Philip Morris Companies, 5,434,687
Inc.........................
10,200 Tyco International, Ltd....... 483,225
------------
6,933,287
------------
Consumer Products--2.9%
63,800 Eastman Kodak Co.............. 3,796,100
3,000 Estee Lauder Cos, Inc......... 148,312
5,100 Fort James Corp............... 117,938
42,500 Fortune Brands, Inc........... 980,156
10,100 Gillette Co................... 352,869
20,200 Procter & Gamble Co........... 1,156,450
------------
6,551,825
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
Containers--0.5%
120,000 Pactiv Corp.*................ $ 945,000
9,500 Smurfit-Stone Container 122,313
Corp.*.....................
------------
1,067,313
------------
Domestic Oil--1.4%
1,000 Apache Corp.................. 58,813
5,000 Conoco, Inc.................. 110,000
29,513 Conoco, Inc. (Class B)....... 724,913
7,700 Sunoco, Inc.................. 226,669
5,300 Union Pacific Resources 116,600
Group, Inc.................
77,400 USX - Marathon Group......... 1,939,837
------------
3,176,832
------------
Drugs & Healthcare--2.9%
5,500 Abbott Laboratories.......... 245,094
7,500 ALZA Corp.*.................. 443,437
13,300 American Home Products 781,375
Corp.......................
15,100 Baxter International, Inc.... 1,061,719
2,100 Becton, Dickinson & Co....... 60,244
7,900 Bristol-Myers Squibb Co...... 460,175
700 C.R. Bard, Inc............... 33,688
200 Cardinal Health, Inc......... 14,800
6,700 CIGNA Corp................... 626,450
4,700 Eli Lilly & Co............... 469,412
300 Forest Laboratories, Inc..... 30,300
200 Genetech, Inc.*.............. 34,400
700 Genzyme Corp................. 41,606
13,700 HCA-The Healthcare Corp...... 416,137
800 Human Genome Sciences, 106,700
Inc........................
100 Incyte Pharmaceuticals, 8,219
Inc.*......................
400 Johnson & Johnson............ 40,750
700 Merck & Co., Inc............. 53,638
14,800 Pharmacia Corporation........ 764,975
2,300 St. Jude Medical, Inc.*...... 105,512
17,500 Tenet Healthcare Corp.*...... 472,500
1,600 UnitedHealth Group, Inc...... 137,200
1,600 Wellpoint Health Networks, 115,900
Inc........................
------------
6,524,231
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
13
<PAGE>
THE TARGET PORTFOLIO TRUST
Large Capitalization Value
Portfolio (cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<C> <S> <C>
Electric Utilities--8.0%
8,800 Allegheny Energy, Inc......... $ 240,900
37,820 American Electric Power Co., 1,120,417
Inc.........................
7,100 Cinergy Corp.................. 180,606
41,700 CMS Energy Corp............... 922,612
19,100 CP& L Energy, Inc............. 610,006
8,400 Dominion Resources, Inc....... 360,150
64,500 DTE Energy Co................. 1,971,281
40,300 Dynegy Inc., ( Class A )...... 2,752,994
45,400 Edison International.......... 930,700
37,200 Entergy Corp.................. 1,011,375
5,000 FPL Group, Inc................ 247,500
27,600 General Public Utilities 746,925
Corp........................
7,700 NiSource, Inc................. 143,413
29,900 PECO Energy Co................ 1,205,344
21,200 PG&E Corp..................... 522,050
15,200 Pinnacle West Capital Corp.... 514,900
55,535 PPL Corp...................... 1,218,299
26,500 Public Service Enterprise 917,563
Group Inc...................
39,301 Scana Corp.................... 948,137
37,332 TXU Corp...................... 1,101,294
23,500 Wisconsin Energy Corp......... 465,594
------------
18,132,060
------------
Electrical Equipment--0.7%
200 Altera Corp.*................. 20,388
14,000 Cooper Industries, Inc........ 455,875
10,400 Emerson Electric Co........... 627,900
4,900 Johnson Controls, Inc......... 251,431
1,800 W.W. Grainger, Inc............ 55,463
------------
1,411,056
------------
Electronics--1.9%
2,100 3Com Corp.*................... 121,012
1,435 Agilent Technologies, Inc..... 105,831
8,800 Cisco Systems, Inc.*.......... 559,350
4,000 Electronic Data Systems 165,000
Corp........................
31,100 Motorola, Inc................. 903,844
VALUE
SHARES DESCRIPTION (NOTE 1)
4,200 Quantum Corp................. $ 40,688
2,800 Raytheon Co., ( Class B)..... 53,900
23,900 Rockwell International 752,850
Corp.......................
3,700 Seagate Technology, Inc.*.... 203,500
800 Solectron Corp.*............. 35,500
5,200 Texas Instruments, Inc....... 357,175
------------
3,296,650
------------
Entertainment--0.6%
13,800 Seagram Co., Ltd............. 800,400
12,600 Walt Disney Co. (The)........ 489,037
------------
1,289,437
------------
Financial Services--10.9%
1,400 A.G. Edwards, Inc............ 54,600
1,100 Ameritrade Holding Corp...... 12,788
12,400 AXA Financial, Inc........... 421,600
12,400 Bear Stearns Cos., Inc....... 516,150
5,400 Capital One Financial........ 240,975
7,800 Charles Schwab Corp.......... 262,278
3,700 Chase Manhattan Corp......... 170,431
14,900 CIT Group, (The)*............ 242,125
98,200 Citigroup, Inc............... 5,916,550
6,300 E*Trade Group Inc............ 103,950
8,900 Federal Home Loan Mortgage 360,450
Corp.......................
68,400 Federal National Mortgage 3,569,625
Association................
5,300 Financial Security Assurance 402,137
Holdings, Ltd..............
6,700 Franklin Resources, Inc...... 203,513
9,600 Goldman Sachs Group, Inc..... 910,800
50,965 Household International, 2,118,233
Inc........................
6,800 Lehman Brothers Holdings 643,025
Inc........................
11,500 MBIA, Inc.................... 554,156
16,900 Merrill Lynch & Co., Inc..... 1,943,500
29,000 Morgan Stanley Dean Witter 2,414,250
Discover & Co..............
13,400 PaineWebber Group, Inc....... 609,700
3,200 Providian Financial Corp..... 288,000
9,400 TD Waterhouse Group, Inc..... 162,738
93,600 Washington Mutual, Inc....... 2,702,700
------------
24,824,274
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
14
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
VALUE
SHARES DESCRIPTION (NOTE 1)
Food & Beverages--1.1%
16,200 Anheuser Busch Companies, $ 1,209,937
Inc.........................
2,400 Bestfoods..................... 166,200
2,100 General Mills, Inc............ 80,325
7,300 H.J. Heinz Co................. 319,375
3,400 Kellogg Co.................... 101,150
7,100 Quaker Oats Co................ 533,388
1,300 Ralston Purina Co............. 25,919
2,200 Unilever NV................... 94,600
------------
2,530,894
------------
Forest Products--1.7%
63,200 Georgia-Pacific Corp.......... 1,659,000
2,100 Kimberly-Clark Corp........... 120,487
46,400 Weyerhaeuser Co............... 1,995,200
------------
3,774,687
------------
Gas & Pipeline Utilities--0.7%
2,600 American Water Works Co., 65,000
Inc.........................
8,400 El Paso Energy Corp........... 427,875
12,500 Enron Corp.,.................. 806,250
8,000 Williams Companies, Inc. 333,500
(The).......................
------------
1,632,625
------------
Hotels & Restaurants--0.6%
11,000 Marriott International, 396,688
Inc.........................
16,600 McDonald's Corp............... 546,762
12,200 Starwood Hotels & Resorts 397,262
Worldwide, Inc..............
------------
1,340,712
------------
Household Appliances & Home
Furnishings--0.3%
14,900 Whirlpool Corp................ 694,713
------------
Industrial Machinery--0.5%
7,900 Caterpillar, Inc.............. 267,612
100 Deere & Co.................... 3,700
6,800 Eaton Corp.................... 455,600
4,000 Ingersoll-Rand Co............. 161,000
5,800 PACCAR, Inc................... 230,188
------------
1,118,100
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
Insurance--8.9%
47,200 Aetna, Inc................... $ 3,029,650
142,700 Allstate Corp................ 3,175,075
33,558 American General Corp........ 2,047,038
16,200 American International Group, 1,903,500
Inc........................
13,300 Aon Corp..................... 413,131
12,200 Hartford Financial Svcs. 682,438
Grp........................
17,500 John Hancock Financial 414,531
Svcs.......................
59,900 Lincoln National Corp........ 2,163,888
74,670 Metlife, Inc................. 1,572,737
23,740 ReliaStar Financial Corp..... 1,244,866
55,400 SAFECO Corp.................. 1,101,075
63,500 St. Paul Companies, Inc...... 2,166,937
10,300 Torchmark Corp............... 254,281
------------
20,169,147
------------
International Oil--6.2%
23,100 Chevron Corp................. 1,959,169
91,700 Exxon Mobil Corp............. 7,198,450
104,700 Occidental Petroleum Corp.... 2,205,244
20,100 Phillips Petroleum Co........ 1,018,819
6,200 Royal Dutch Petroleum Co..... 381,687
25,000 Texaco, Inc.................. 1,331,250
------------
14,094,619
------------
Media--0.5%
18,300 Comcast Corp................. 741,150
9,300 Fox Entertainment Group, 282,487
Inc........................
2,600 Time Warner, Inc............. 197,600
------------
1,221,237
------------
Mining--0.4%
23,000 Phelps Dodge Corp............ 855,313
------------
Oil Field / Equipment & Services--0.9%
10,400 Baker Hughes, Inc............ 332,800
2,600 Cooper Cameron Corp.*........ 171,600
2,100 Diamond Offshore Drilling, 73,763
Inc........................
2,400 ENSCO International Inc.*.... 85,950
13,300 Global Marine Inc.*.......... 374,894
45,000 Ultramar Diamond Shamrock 1,116,562
Corp.......................
------------
2,155,569
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
15
<PAGE>
THE TARGET PORTFOLIO TRUST
Large Capitalization Value
Portfolio (cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<C> <S> <C>
Paper--1.4%
4,000 Bowater Inc................... $ 176,500
89,914 International Paper Co........ 2,680,561
8,500 Temple-Inland, Inc............ 357,000
------------
3,214,061
------------
Pollution Control--0.4%
54,200 Waste Management, Inc......... 1,029,800
------------
Publishing--0.8%
16,600 Gannett Co., Inc.............. 992,887
7,400 Knight-Ridder, Inc............ 393,588
8,400 New York Times Co............. 331,800
------------
1,718,275
------------
Railroads & Equipment--1.2%
9,700 Burlington Northern, Inc...... 222,494
22,900 CSX Corp...................... 485,194
101,600 Norfolk Southern Corp......... 1,511,300
14,700 Union Pacific Corp............ 546,656
------------
2,765,644
------------
Real Estate Investment Trust--0.6%
13,000 Crescent Real Estate Equities, 266,500
Inc.........................
9,200 Equity Office Properties 253,575
Trust.......................
4,100 Prologis Trust................ 87,381
10,000 Public Storage, Inc........... 234,375
4,500 Simon Property Group, Inc..... 99,844
11,800 Vornado Realty Trust.......... 410,050
------------
1,351,725
------------
Retailing--2.8%
600 Best Buy Co., Inc............. 37,950
1,400 Circuit City Stores, Inc...... 46,463
12,400 Federated Department Stores, 418,500
Inc.*.......................
5,100 Gap, Inc...................... 159,375
8,600 Kroger Co.*................... 189,737
1,200 Lowe's Companies, Inc......... 49,275
67,800 May Department Stores Co...... 1,627,200
56,400 Penny (J.C.) Co., Inc......... 1,039,875
56,800 Sears, Roebuck & Co........... 1,853,100
4,800 Target Corp................... 278,400
VALUE
SHARES DESCRIPTION (NOTE 1)
10,300 The Limited, Inc............. $ 222,737
19,400 TJX Companies, Inc........... 363,750
2,500 Wal-Mart Stores, Inc......... 144,063
------------
6,430,425
------------
Semiconductors & Equipment--0.5%
2,900 Advanced Micro Devices, 224,025
Inc.*......................
1,700 Applied Materials, Inc.*..... 154,062
2,700 Intel Corp................... 260,956
900 Lattice Semiconductor 62,213
Corp.*.....................
5,400 National Semiconductor 306,450
Corp.......................
------------
1,107,706
------------
Software--0.6%
800 Adobe Systems, Inc........... 104,000
800 BMC Software Corp. *......... 29,188
2,200 Citrix Systems, Inc.......... 41,662
14,200 Computer Associates Int'l., 726,862
Inc........................
900 Doubleclick, Inc............. 34,313
2,500 Microsoft Corp.*............. 200,000
700 Siebel Systems Inc.*......... 114,494
400 Symantec Corp................ 21,575
100 Tibco Software, Inc.......... 10,723
400 VERITAS Software Corp.*...... 45,206
------------
1,328,023
------------
Steel--0.7%
11,200 Allegheny Technologies, 201,600
Inc........................
6,400 Nucor Corp................... 212,400
62,600 USX Corp.-U.S. Steel Group... 1,162,012
------------
1,576,012
------------
Telecommunication--10.6%
2,300 Allegiance Telecom Inc....... 147,200
36,900 ALLTEL Corp.................. 2,285,494
113,000 AT&T Corp.................... 3,573,625
58,600 AT&T Corp. - Liberty Media... 1,421,050
68,000 Bell Atlantic Corp........... 3,455,250
18,300 BellSouth Corp............... 780,038
1,200 Exodus Communications, 55,275
Inc........................
10,600 Global Crossing, Ltd......... 278,913
44,900 GTE Corp..................... 2,795,025
16,300 Mediaone Group Inc........... 1,077,837
3,000 Nortel Networks Corp......... 204,750
115,892 SBC Communications, Inc...... 5,012,329
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
16
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
VALUE
SHARES DESCRIPTION (NOTE 1)
Telecommunication (cont'd)
100 Sprint Corp................... $ 5,100
17,000 Sprint Corp. (PCS Group)...... 1,011,500
1,200 Tellabs, Inc.................. 82,125
5,100 US West, Inc.................. 437,325
29,300 WorldCom, Inc................. 1,344,137
------------
23,966,973
------------
Toys & Amusements--0.1%
8,700 Hasbro, Inc................... 131,044
11,300 Mattel, Inc................... 149,019
------------
280,063
------------
Trucking & Freight Forwarding--0.2%
5,500 FedEx Corp.................... 209,000
19,000 Ryder System, Inc............. 359,813
------------
568,813
------------
Total common stocks
(cost $224,890,920)......... 221,265,611
------------
Common Stock Unit--0.2%
2,680 S&P 500 Depository Receipts 389,354
(cost $369,572).............
------------
Total long-term investments
(cost $225,260,492)......... 221,654,965
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
SHORT-TERM INVESTMENT--1.9%
4,270 Seven Seas Series Government $ 4,269,577
Fund
6.26%**, 7/3/00
(cost $4,269,577)..........
Total Investments--99.7%
(cost $229,530,069; Note 225,924,542
4).........................
Other assets in excess of 614,681
liabilities--0.3%..........
------------
Net Assets--100%............. $226,539,223
------------
------------
</TABLE>
---------------
* Non-income producing.
** Rate represents yield at purchase date.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
17
<PAGE>
THE TARGET PORTFOLIO TRUST
Small Capitalization Growth
Portfolio
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--96.4%
Common Stocks
Auto/Truck Equipment--0.5%
30,500 Oshkosh Truck Corp........... $ 1,090,375
------------
Banks--1.5%
72,200 Silicon Valley Bancshares.... 3,077,525
------------
Business Services--6.8%
74,570 ACNielsen Corp.*............. 1,640,540
55,580 Acxiom Corp.*................ 1,514,555
47,850 AnswerThink Consulting Group, 795,506
Inc.*......................
35,800 ChoicePoint, Inc.*........... 1,593,100
13,800 Critical Path, Inc.*......... 804,713
44,885 CSG Systems International, 2,516,365
Inc.*......................
51,600 Hall, Kinion & Associates, 1,718,925
Inc.*......................
55,300 Interim Services, Inc.*...... 981,575
158,445 Pegasus Systems, Inc.*....... 1,723,089
36,600 ProBusiness Services, 972,188
Inc.*......................
------------
14,260,556
------------
Commercial Services--4.8%
102,790 On Command Corp.*............ 1,464,757
28,700 Iron Mountain, Inc.*......... 975,800
51,719 Pfsweb Inc.*................. 242,433
12,800 Plexus Corp.*................ 1,446,400
52,500 Quanta Services, Inc.*....... 2,887,500
32,900 Quintiles Transnational 464,713
Corp.......................
38,900 Ritchie Bros. Auctioneers, 931,169
Inc.*......................
47,300 Vicor Corp.*................. 1,646,631
------------
10,059,403
------------
Computers & Business Equipment--2.7%
35,200 Black Box Corp.*............. 2,786,850
66,050 Cybex Computer Products 2,840,150
Corp.*.....................
------------
5,627,000
------------
Computer Services--1.6%
43,600 McAfee.com Corp.*............ 1,136,325
105,100 Mentor Graphics Corp.*....... 2,088,862
------------
3,225,187
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
Construction Materials--1.4%
48,900 Dycom Industries, Inc.*...... $ 2,249,400
23,500 Insituform Technologies, 637,438
Inc.*......................
------------
2,886,838
------------
Distribution/Wholesaler--0.9%
82,300 Daisytek International 776,706
Corp.*.....................
23,700 Tech Data Corp.*............. 1,032,431
------------
1,809,137
------------
Drugs & Healthcare--4.9%
7,220 Abgenix, Inc.*............... 865,385
36,050 Aclara Biosciences Inc.*..... 1,836,297
5,100 Alpharma Inc................. 317,475
20,300 Aurora Biosciences Corp.*.... 1,384,206
39,500 Genzyme Transgenics Corp.*... 1,071,438
38,800 Lexicon Genetics Inc.*....... 1,333,750
9,950 Myriad Genetics, Inc.*....... 1,473,377
66,300 SICOR Inc.*.................. 530,400
14,250 Vertex Pharmaceuticals, 1,501,594
Inc........................
------------
10,313,922
------------
Educational Services--1.7%
38,600 Learning Tree International, 2,364,250
Inc........................
80,325 Sylvan Learning Systems, 1,104,469
Inc.*......................
------------
3,468,719
------------
Electrical Equipment--1.8%
63,600 Kent Electronics Corp.*...... 1,896,075
36,000 Littelfuse, Inc.*............ 1,764,000
------------
3,660,075
------------
Electronics--15.4%
80,500 Actel Corp.*................. 3,672,812
34,200 Avnet, Inc................... 2,026,350
59,600 Cable Design Technologies 1,996,600
Corp.*.....................
44,800 Cognex Corp.*................ 2,318,400
23,925 CyberOptics Corp.*........... 1,106,531
38,450 Electronics for Imaging, 973,266
Inc.*......................
21,900 FEI Company*................. 667,950
22,500 FSI International, Inc.*..... 487,969
83,000 General Semiconductor, 1,224,250
Inc.*......................
18,000 Integrated Device Technology, 1,077,750
Inc.*......................
34,700 International Rectifier 1,943,200
Corp.*.....................
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
18
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
VALUE
SHARES DESCRIPTION (NOTE 1)
Electronics (cont'd)
26,700 Jabil Circuit, Inc.*......... $ 1,324,987
137,650 KEMET Corp.*................. 3,449,853
39,110 Mettler-Toledo International, 1,564,400
Inc.*......................
24,800 Power-One, Inc............... 2,825,650
129,600 Sensormatic Electronics 2,049,300
Corp.......................
86,000 Silicon Valley Group, 2,225,250
Inc.*......................
13,300 TelCom Semiconductor, 536,987
Inc.*......................
8,300 Varian Semiconductor 521,344
Equipment
Associates, Inc.*..........
------------
31,992,849
------------
Financial Services--6.3%
46,300 Affiliated Managers Group, 2,106,650
Inc.*......................
150,370 AmeriCredit Corp.*........... 2,556,290
26,650 Brown & Brown, Inc........... 1,385,800
16,900 Dain Rauscher Corp........... 1,115,400
3,055 M & T Bank Corp.............. 1,374,750
28,790 T. Rowe Price Associates, 1,223,575
Inc........................
51,000 Texas Regional Bancshares, 1,294,125
Inc........................
64,150 Waddell & Reed Financial, 2,104,922
Inc........................
------------
13,161,512
------------
Health Care--1.7%
33,200 First Health Group Corp.*.... 1,089,375
104,500 Oxford Health Plans, Inc.*... 2,488,406
------------
3,577,781
------------
Hospital Management--0.6%
58,300 LifePoint Hospitals, Inc.*... 1,297,175
------------
Household Appliances & Home
Furnishings--0.3%
60,650 Falcon Products, Inc......... 576,175
------------
Household Products--1.7%
146,300 NBTY, Inc.................... 932,663
68,970 Scotts Company (The)*........ 2,517,405
------------
3,450,068
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
Industrial Machinery--1.7%
60,820 Applied Power, Inc........... $ 2,037,470
23,700 Brooks Automation, Inc.*..... 1,515,319
------------
3,552,789
------------
Leisure Time--1.7%
81,450 American Classic Voyages 1,679,906
Co.*.......................
114,300 Aztar Corp.*................. 1,771,650
------------
3,451,556
------------
Medical & Dental Supplies--0.9%
18,350 Henry Schein, Inc.*.......... 316,537
75,225 STAAR Surgical Co.*.......... 841,580
30,490 Ventana Medical Systems, 716,515
Inc.*......................
------------
1,874,632
------------
Medical Technology--1.9%
35,100 IMPATH, Inc.*................ 1,904,175
29,700 Quest Diagnostics, Inc.*..... 2,125,406
------------
4,029,581
------------
Miscellaneous--0.3%
94,020 Hollywood.com, Inc.*......... 728,655
------------
Network--2.3%
78,500 Anixter International, 2,080,250
Inc.*......................
55,900 Apex Inc.*................... 2,445,625
13,025 Stratos Lightwave, Inc.*..... 363,072
------------
4,888,947
------------
Oil Field/Equipment & Services--2.3%
30,000 CARBO Ceramics, Inc.......... 1,053,750
45,300 Helmerich & Payne, Inc....... 1,693,088
66,600 Valero Energy Corp........... 2,114,550
------------
4,861,388
------------
Oil Field/Exploration & Production--3.7%
20,060 Devon Energy Corp............ 1,127,121
109,440 Newfield Exploration Co. *... 4,281,840
100,000 Vintage Petroleum, Inc....... 2,256,250
------------
7,665,211
------------
Publishing--3.7%
59,155 Information Holdings, 2,188,735
Inc.*......................
92,690 Penton Media, Inc............ 3,244,150
100,100 PRIMEDIA Inc.*............... 2,277,275
------------
7,710,160
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
19
<PAGE>
THE TARGET PORTFOLIO TRUST
Small Capitalization Growth
Portfolio (cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<C> <S> <C>
Real Estate Investment Trust--0.7%
52,710 SL Green Realty Corp......... $ 1,409,992
------------
Real Estate Management Services--0.9%
144,800 Grubb & Ellis Co.*........... 850,700
85,730 Trammell Crow Co.*........... 921,598
------------
1,772,298
------------
Restaurants--0.7%
55,250 Cheesecake Factory, Inc. 1,519,375
(The)*.....................
------------
Retail Trade--7.0%
26,875 CDW Computer Centers, 1,679,687
Inc.*......................
83,800 Chico's Fas, Inc.*........... 1,676,000
46,400 Factory 2-U Stores Inc.*..... 1,754,500
50,500 Hot Topic, Inc.*............. 1,616,000
19,800 Insight Enterprises, Inc.*... 1,174,388
63,100 PC Connection, Inc.*......... 3,596,700
28,100 Talbots, Inc. (The).......... 1,543,744
47,869 Tractor Supply Co.*.......... 792,830
27,700 Tweeter Home Entertainment 841,388
Group, Inc.*...............
------------
14,675,237
------------
Software--6.1%
47,900 Advent Software, Inc.*....... 3,089,550
32,400 Digital Island Inc.*......... 1,575,450
4,700 DSET Corp.*.................. 142,763
21,800 Kana Communications, Inc.*... 1,348,875
54,350 net. Genesis Corp.*.......... 981,697
23,925 Rainbow Technologies, 1,163,353
Inc.*......................
24,700 Rational Software Corp.*..... 2,295,556
55,426 Wind River Systems, Inc.*.... 2,099,260
------------
12,696,504
------------
Steel--2.0%
55,900 Maverick Tube Corp.*......... 1,628,087
52,800 Shaw Group Inc. (The)*....... 2,488,200
------------
4,116,287
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
Telecommunication--4.4%
59,500 Andrew Corp.*................ $ 1,996,969
69,650 Cabletron Systems, Inc.*..... 1,758,662
38,160 Choice One Communications 1,557,405
Inc.*......................
34,885 NorthEast Optic Network, 2,149,788
Inc.*......................
19,100 Polycom, Inc.*............... 1,797,191
------------
9,260,015
------------
Transportation--1.5%
97,150 American Freightways Corp.... 1,408,675
21,050 Expeditors International of 999,875
Washington, Inc............
49,400 Swift Transportation Co., 691,600
Inc........................
------------
3,100,150
------------
Total common stocks 200,847,074
(cost $168,699,230)........
------------
SHORT-TERM INVESTMENTS--2.9%
6,005 Seven Seas Money Market Fund 6,005,233
6.38%**....................
------------
Total short-term Investments 6,005,233
(cost $6,005,233)..........
------------
Total Investments--99.3%
(cost $174,704,463; Note 206,852,307
4).........................
Other assets in excess 1,556,410
of liabilities--(0.7%).....
------------
Net Assets--100%............. $208,408,717
------------
------------
</TABLE>
------------------
* Non-income producing security.
** Rate represents yield at purchase date.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
20
<PAGE>
Small Capitalization Value
Portfolio
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--97.8%
Common Stocks
Aerospace--0.7%
10,800 AAR Corp...................... $ 129,600
17,600 Martin Marietta Materials, 711,700
Inc.*.......................
------------
841,300
------------
Airlines--0.3%
15,700 Alaska Air Group, Inc......... 425,863
------------
Apparel & Textiles--0.1%
31,300 Culp, Inc..................... 160,413
------------
Auto Parts--0.4%
18,200 Snap-On, Inc.................. 484,575
------------
Auto Related--1.9%
19,100 Borg-Warner Automotive, 670,887
Inc.........................
42,500 Modine Manufacturing Co....... 1,147,500
54,512 Myers Industries, Inc......... 586,004
------------
2,404,391
------------
Automobiles--0.5%
49,700 Tower Automotive, Inc.*....... 621,250
------------
Banks--5.4%
26,070 Associated Banc Corp.......... 568,652
21,600 Bank United Corp.............. 760,050
14,800 Chittenden Corp............... 361,675
40,700 Firstmerit Corp............... 869,962
38,790 HUBCO, Inc.................... 870,351
63,400 Independent Bank Corp......... 717,213
31,750 People's Bank*................ 583,406
29,700 Southwest Bancorporation of 616,275
Texas, Inc.*................
31,400 Staten Island Bancorp, Inc.... 553,425
53,150 Susquehanna Bancshares, 757,387
Inc.........................
7,100 Wilmington Trust Corp......... 303,525
------------
6,961,921
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
Building & Construction--2.3%
28,600 Carlisle Co., Inc............ $ 1,287,000
12,850 Dycom Industries, Inc.*...... 591,100
14,100 Granite Construction, Inc.... 345,450
24,000 Hughes Supply, Inc........... 474,000
9,300 Insituform Technologies, 252,262
Inc.*......................
------------
2,949,812
------------
Business Services--7.4%
33,900 ACNielson Corp............... 745,800
23,200 Acxiom Corp.*................ 632,200
26,400 American Management Systems, 866,662
Inc.*......................
5,500 BISYS Group, Inc.*........... 338,250
58,100 Bowne & Co., Inc............. 584,631
6,500 Choicepoint, Inc............. 289,250
8,900 DeVry, Inc.*................. 235,294
40,400 Gartner Group, Inc., Cl.A.... 484,800
28,000 Heller Financial, Inc........ 574,000
24,800 Interim Services, Inc........ 440,200
16,900 ITT Educational Services, 296,806
Inc........................
17,500 Maximus, Inc................. 387,188
23,500 Medquist, Inc.*.............. 799,000
35,200 Metro Information Services, 352,000
Inc........................
16,200 National Data Corp........... 372,600
37,600 Profit Recovery Group 625,100
International, Inc.........
11,400 Radisys Corp................. 646,950
15,300 The Standard Register Co..... 218,025
20,800 United Stationers, Inc.*..... 673,400
------------
9,562,156
------------
Chemicals--4.9%
31,100 Cambrex Corp................. 1,399,500
28,550 Ferro Corp................... 599,550
13,400 Fuller (H.B.) Co............. 610,538
63,400 Hanna (M.A.) Co.............. 570,600
5,200 Minerals Technologies, 239,200
Inc........................
27,200 OM Group, Inc................ 1,196,800
81,587 RPM, Inc..................... 826,068
36,600 Tetra Tech, Inc.............. 837,225
------------
6,279,481
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
21
<PAGE>
THE TARGET PORTFOLIO TRUST
Small Capitalization Value
Portfolio (cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<C> <S> <C>
Collateralized Mortgage Obligations--0.8%
42,180 Varco International, Inc...... $ 980,685
------------
Communication--0.6%
18,600 Allen Telecom, Inc.*.......... 328,988
5,400 Black Box Corp.*.............. 427,528
------------
756,516
------------
Computers & Business Equipment--2.0%
45,100 MTS Systems Corp.............. 281,875
47,900 Mentor Graphics Corp.......... 952,012
41,600 Micron Electronics, Inc....... 520,000
10,600 Paradyne Corp................. 345,162
26,800 Transaction Systems 458,950
Architects, Inc.............
------------
2,557,999
------------
Construction & Mining Equipment--0.5%
48,800 JLG Industries, Inc........... 579,500
------------
Containers & Glass--0.3%
44,000 Packaging Corp. of America.... 445,500
------------
Diversified Industrials--1.6%
30,600 Brady (W.H.) Co............... 994,500
30,300 Teleflex, Inc................. 1,122,994
------------
2,117,494
------------
Drugs & Healthcare--9.3%
25,800 AmeriSource Health Corp., 799,800
Cl.A*.......................
48,800 Apria Healthcare Group, 597,800
Inc.*.......................
34,100 Arrow International, Inc...... 1,142,350
48,600 DENTSPLY International, 1,497,487
Inc.........................
10,300 Enzon, Inc.................... 437,750
17,200 Hooper Holmes, Inc............ 137,600
16,900 Inamed Corp................... 618,962
93,400 Invacare Corp................. 2,451,750
17,850 Jones Pharmaceutical, Inc..... 712,884
104,200 Meridian Diognostic........... 814,062
54,100 Pharmaceutical Product 1,136,100
Development Inc.............
44,900 STERIS Corp.(a)............... 398,488
VALUE
SHARES DESCRIPTION (NOTE 1)
15,100 Varian Medical Systems, $ 590,788
Inc.*......................
21,100 Vital Signs, Inc............. 382,438
7,900 West Pharmaceutical Services, 170,838
Inc........................
------------
11,889,097
------------
Electric Utilities--0.3%
33,120 Sierra Pacific Resources..... 416,070
------------
Electrical Equipment--5.4%
19,700 Anixter International, 522,050
Inc.*......................
16,900 Belden, Inc.................. 433,062
10,000 Benchmark Electronics, 365,625
Inc........................
28,300 Federal Signal Corp.......... 466,950
22,500 Littelfuse, Inc.............. 1,102,500
26,400 Polaroid Corp................ 476,850
42,700 Sensormatic Electronics 675,194
Corp.*.....................
18,800 Technitrol, Inc.............. 1,821,250
55,400 Woodhead Industries, Inc..... 1,011,050
------------
6,874,531
------------
Electronics--11.2%
53,900 Ametek Aerospace Prods, 943,250
Inc........................
29,800 Bell & Howell Co.*........... 722,650
43,800 C&D Technologies............. 2,474,700
4,400 Credence Systems Corp.*...... 242,825
27,200 Dallas Semiconductor Corp.... 1,108,400
21,900 Electro Scientific 964,284
Industries, Inc.*..........
16,200 Electronics for Imaging, 410,063
Inc.*......................
23,100 General Semiconductor, 340,725
Inc........................
20,700 Harman International 1,262,700
Industries, Inc............
16,400 KEMET Corp.*................. 411,025
4,500 Lam Research Corp.*.......... 168,750
24,650 Methode Eletronics, Inc...... 952,106
71,100 Pioneer Standard Electronics, 1,048,725
Inc........................
39,800 Rogers Corp.*................ 1,393,000
4,500 Tektronix, Inc............... 333,000
34,200 Varian, Inc.................. 1,577,475
------------
14,353,678
------------
Food - Service/Lodging--0.5%
57,000 Marcus Corp.................. 691,125
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
22
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
VALUE
SHARES DESCRIPTION (NOTE 1)
Foods--3.9%
12,900 American Italian Pasta Co., $ 266,869
Cl.A*.......................
26,650 Lancaster Colony Corp......... 511,347
36,800 Performance Food Group Co..... 1,177,600
38,400 Ralcorp Holdings, Inc.*....... 470,400
61,900 United Natural Foods, Inc..... 851,125
56,200 Universal Foods Corp.......... 1,039,700
17,200 Whole Foods Market, Inc....... 710,575
------------
5,027,616
------------
Gas & Pipeline Utilities--2.4%
23,600 Equitable Resources, Inc...... 1,138,700
22,600 National Fuel Gas Co.......... 1,101,750
34,900 Washington Gas Light Co....... 839,781
------------
3,080,231
------------
Homebuilders--1.0%
17,700 Kaufman & Broad Home Corp..... 350,681
44,100 Toll Brothers, Inc.*.......... 904,050
------------
1,254,731
------------
Hotels & Restaurants--0.5%
14,600 Lone Star Steakhouse & Saloon, 147,825
Inc.*.......................
46,300 Prime Hospitality Corp.*...... 436,956
------------
584,781
------------
Household Appliances & Home
Furnishings--1.5%
24,000 Bassett Furniture Industries, 303,000
Inc.........................
45,000 Chromcraft Revington, Inc.*... 523,125
20,700 Ethan Allen Interiors, Inc.... 496,800
42,700 Furniture Brands 645,837
International, Inc.*........
------------
1,968,762
------------
Industrial Machinery--2.0%
23,425 Crane Co...................... 569,520
22,400 Graco, Inc.................... 728,000
16,109 Mark IV Industries, Inc....... 336,276
10,200 Polaris Industries, Inc....... 326,400
34,400 Regal-Beloit Corp............. 552,550
2,400 Watts Industries, Inc., 30,300
Cl.A........................
------------
2,543,046
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
Insurance--4.4%
18,300 Arthur J. Gallagher & Co..... $ 768,600
25,000 Brown & Brown, Inc........... 1,300,000
26,000 Everest Reinsurance Group, 854,750
Ltd........................
14,100 HCC Insurance Holdings, 266,137
Inc........................
52,900 Horace Mann Educators 793,500
Corp.......................
33,200 Protective Life Corp......... 883,950
15,272 Radian Holdings Group, 790,326
Inc........................
------------
5,657,263
------------
Manufacturing--2.8%
14,800 Beckman Coulter, Inc......... 863,950
45,550 Flowserve Corp............... 686,097
103,200 Quantum Corp................. 1,141,650
18,200 Roper Industries, Inc........ 466,375
------------
3,158,072
------------
Miscellaneous--2.8%
7,100 Adolph Coors Co.............. 429,550
22,600 American National Can Group, 381,375
Inc........................
40,800 AptarGroup, Inc.............. 1,101,600
5,550 CIRCOR International, 45,441
Inc.*......................
45,900 Flowers Industries, Inc...... 915,131
55,500 Whitman Corp................. 686,812
------------
3,559,909
------------
Office Equipment--0.4%
23,800 HON Industries, Inc.......... 559,300
------------
Oil & Gas--2.8%
9,800 Devon Energy Corp............ 550,638
39,200 Helmerich & Payne, Inc....... 1,465,100
22,600 Louis Dreyfus Natural Gas 707,663
Corp.*.....................
74,500 Pennzoil Quaker State Co..... 898,656
------------
3,622,057
------------
Oil & Gas - Production/Pipeline--1.2%
21,000 Barrett Resources Corp.*..... 639,187
77,650 Santa Fe Snyder Corp......... 883,269
------------
1,522,456
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
23
<PAGE>
THE TARGET PORTFOLIO TRUST
Small Capitalization Value
Portfolio (cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<C> <S> <C>
Paper & Paper Products--0.3%
46,200 Wausau Paper Co............... $ 395,588
------------
Printing & Publishing--2.1%
103,150 Banta Corp.................... 1,953,403
40,400 Mail-Well, Inc.*.............. 348,450
10,900 Pulitzer, Inc................. 459,844
------------
2,761,697
------------
Professional Services--2.0%
18,900 CDI Corp.*.................... 385,088
16,500 Houghton Mifflin Co........... 770,344
29,100 HSB Group, Inc................ 905,737
29,000 R.H. Donnelley Corp.*......... 561,875
------------
2,623,044
------------
Publishing--0.6%
21,600 Valassis Communications, 823,500
Inc.*.......................
------------
Real Estate Investment Trust--2.2%
15,300 Catellus Development Corp.*... 229,500
15,400 Chateau Communities, Inc...... 435,050
9,000 Chelsea GCA Realty............ 311,062
25,800 FelCor Lodging Trust, Inc..... 477,300
18,800 Kilroy Realty Corp.*.......... 487,625
25,600 Liberty Property Trust........ 664,000
10,800 Mack Cali Realty Corp......... 277,425
------------
2,881,962
------------
Retail - Apparel--1.0%
3,400 Abercrombie & Fitch Co........ 41,438
21,500 Lands End, Inc................ 717,562
22,300 The Men's Wearhouse, Inc.*.... 497,569
------------
1,256,569
------------
Retail - Grocery--0.6%
65,100 Ruddick Corp.................. 768,994
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
Retail - Trade--2.1%
53,300 Borders Group, Inc.*......... $ 829,481
77,700 Pier 1 Imports, Inc.......... 757,575
104,100 Venator Group, Inc.*......... 1,067,025
------------
2,654,081
------------
Savings and Loan--1.0%
16,925 Astoria Financial Corp....... 435,819
36,800 Webster Financial Corp....... 816,500
------------
1,252,319
------------
Software--2.1%
7,400 Affiliated Computer Services, 244,662
Inc........................
7,300 Answerthink Consulting 121,363
Group......................
10,900 Dendrite International, 363,106
Inc........................
20,000 Diebold, Inc................. 557,500
62,800 Progress Software Corp....... 1,126,475
30,200 Storage Technology Corp...... 330,313
------------
2,743,419
------------
Telecommunication--0.8%
10,800 Antec Corp................... 448,875
66,000 Brightpoint, Inc............. 571,313
------------
1,020,188
------------
Trucking & Freight Forwarding--0.9%
24,100 CNF Transportation, Inc...... 548,275
54,000 Werner Enterprises, Inc...... 624,375
------------
1,172,650
------------
Total common stocks 125,245,592
(cost $106,169,490)........
------------
Warrant*
33,910 Wilshire Technologies, Inc. 0
expiring 11/28/02 @ $0
(cost $0)..................
------------
Total long-term investments 125,245,592
(cost $106,169,490)........
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
24
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL US$
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
<C> <S> <C>
SHORT-TERM INVESTMENTS--2.8%
U.S. Government Securities--1.3%
United States Treasury Bills
$ 730 Zero Coupon,7/27/00........... $ 727,444
55 4.95%, 7/27/00................ 54,833
45 5.20%, 7/27/00................ 44,848
40 5.30%, 7/27/00................ 19,930
45 5.35%, 7/27/00................ 44,828
50 5.43%, 7/27/00................ 49,815
30 5.45%, 7/27/00................ 29,878
110 5.47%, 7/27/00................ 109,582
75 5.62%, 7/27/00................ 74,688
25 5.65%, 7/27/00................ 24,895
80 5.66%, 7/27/00................ 79,667
75 5.70%, 7/27/00................ 74,688
30 5.71%, 7/27/00................ 29,878
15 5.74%, 7/27/00................ 14,935
25 5.76%, 7/27/00................ 24,917
220 5.51%, 8/31/00................ 217,242
------------
Total U.S. government
securities
(cost $1,622,478)........... 1,622,068
------------
Money Market Fund--1.5%
1,974 Seven Seas Money Market Fund, 1,974,370
6.30%* (cost $1,974,370)....
------------
Total short-term Investments
(cost $3,596,848)........... 3,596,438
------------
Total Investments--100.3%
(cost $109,766,338; Note 4)... 128,842,030
Liabilities in excess of other
assets--(0.3%).............. (383,942)
------------
Net Assets--100%.............. $128,458,088
------------
------------
</TABLE>
---------------
* Non-income producing security.
** Rate represents yield at purchase date.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
25
<PAGE>
THE TARGET PORTFOLIO TRUST
International Equity Portfolio
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--96.3%
Common Stocks
Australia--1.9%
405,722 Broken Hill Proprietary Co., $ 4,792,180
Ltd.........................
------------
Denmark--1.2%
45,300 Tele Danmark A.S.............. 3,048,710
------------
Finland--0.8%
86,080 UPM Kymmene OYJ............... 2,136,696
------------
France--13.6%
108,750 Alcatel....................... 7,132,686
19,570 AXA SA........................ 3,082,776
29,060 Banque Nationale de Paris..... 2,796,554
15,680 Cie de Saint Gobain........... 2,119,710
15,313 Lagardere SCA................. 1,169,546
72,791 Rhone-Poulenc SA, Ser. A...... 5,312,786
18,100 Suez Lyonnaise des Eaux....... 3,170,894
44,185 Total SA, Ser. B.............. 6,774,660
37,401 Vivendi....................... 3,301,089
------------
34,860,701
------------
Germany--8.4%
11,979 Allianz AG.................... 4,303,501
81,600 Bayerische Vereinsbank AG..... 5,270,954
18,902 Deutsche Telekom AG........... 1,079,136
134,800 Lufthansa AG.................. 3,115,672
21,600 Siemens AG.................... 3,258,202
97,600 Thyssen Krupp AG.............. 1,588,698
57,400 Veba AG....................... 2,767,390
------------
21,383,553
------------
VALUE
SHARES DESCRIPTION (NOTE 1)
Italy--2.9%
75,650 Alleanza Assicurazioni...... $ 1,007,512
537,900 Eni SpA..................... 3,106,877
192,100 Sao Paolo Imi SpA........... 3,409,368
-----------
7,523,757
-----------
Japan--22.7%
13,000 Acom Co., Ltd............... 1,092,880
87,000 Canon, Inc.................. 4,329,297
242,000 Fuji Bank, Ltd.............. 1,838,292
115,000 Fujitsu, Ltd................ 3,977,664
123,000 Kao Corp.................... 3,755,902
209,000 Nippon Paper Ind., Ltd...... 1,426,097
317 Nippon Telegraph & Telephone 4,212,525
Corp......................
1,258,000 Nissan Motor Co., Ltd.*..... 7,410,113
100 NTT Mobile Communication 2,704,868
Network, Inc..............
24,400 Orix Corp................... 3,598,888
394,000 Sakura Bank................. 2,721,851
101,000 Sankyo Co., Ltd............. 2,279,770
54,100 Sony Corp................... 5,047,736
108,000 Sumitomo Electric Industris, 1,850,469
Ltd.......................
471,000 Sumitomo Trust & Banking 3,351,444
Co., Ltd..................
44,000 TDK Corp.................... 6,319,778
292,000 The Industrial Bank of 2,212,601
Japan, Ltd................
-----------
58,130,175
-----------
Netherlands--7.1%
69,100 Akzo Nobel NV............... 2,935,656
141,700 Getronics NV................ 2,184,789
67,500 Heineken NV................. 4,108,195
76,100 ING Groep NV................ 5,143,812
77,436 Philips Electronics NV...... 3,652,052
-----------
18,024,504
-----------
Portugal--1.5%
351,200 Portugal Telecom............ 3,943,020
-----------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
26
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES DESCRIPTION (NOTE 1)
<S> <C> <C>
Singapore--3.0%
518,850 Overseas Chinese Banking $ 3,575,168
Corp., Ltd................
640,328 United Overseas Bank, 4,189,754
Ltd.......................
-----------
7,764,922
-----------
Spain--3.1%
217,400 Endesa SA................... 4,211,228
168,141 Telefonica SA............... 3,611,796
-----------
7,823,024
-----------
Sweden--3.0%
142,700 Electrolux AB, Ser. B....... 2,208,452
190,900 Investor AB................. 2,608,101
189,800 Svenska Handelsbanken AB, 2,754,467
Ser. A....................
-----------
7,571,020
-----------
Switzerland--4.3%
33,985 ABB AG, Ser. A*............. 4,067,659
312 Roche Holdings AG........... 3,037,185
7,720 Zurich Allied AG............ 3,814,332
-----------
10,919,176
-----------
United Kingdom--22.8%
498,000 BP Amoco plc................ 4,777,340
577,128 British Aerospace plc....... 3,597,799
309,664 British Energy plc.......... 841,052
199,100 British Telecommunications 2,572,744
plc.......................
448,012 Cadbury Schweppes plc....... 2,942,029
433,399 Diageo plc.................. 3,888,751
143,700 GKN plc..................... 1,832,955
395,800 Great Universal Stores 2,545,261
plc.......................
262,800 Halifax Group plc........... 2,521,054
298,805 HSBC Holdings............... 3,415,780
430,738 Imperial Chemical Industries 3,418,426
plc.......................
826,700 Invensys plc................ 3,102,181
347,700 National Grid Co., plc...... 2,741,006
159,639 Prudential Corp. plc........ 2,338,201
378,400 Reed International plc...... 3,292,202
VALUE
SHARES DESCRIPTION (NOTE 1)
366,100 Smithkline Beecham plc...... $ 4,791,631
1,057,100 Tesco plc................... 3,286,968
744,300 Vodafone AirTouch plc....... 3,006,954
71,083 Zeneca Group plc............ 3,318,092
-----------
58,230,426
-----------
Total long-term investments 246,151,864
(cost $202,755,371).......
-----------
Principal
Amount
(000) SHORT-TERM INVESTMENTS--3.2%
----------
United States Treasury Bills
$ 45 4.95%, 7/27/00.............. 44,835
245 5.20%, 7/27/00.............. 244,101
80 5.24%, 7/27/00.............. 79,702
70 5.27%, 7/27/00.............. 69,734
455 5.33%, 7/27/00.............. 453,278
215 5.35%, 7/27/00.............. 214,185
330 5.44%, 7/27/00.............. 328,767
155 5.55%, 7/27/00.............. 154,412
4,110 5.51%, 8/31/00.............. 4,071,892
1,150 5.55%, 8/31/00.............. 1,139,185
85 5.57%, 8/31/00.............. 84,206
1,240 5.635%, 8/31/00............. 1,228,319
-----------
Total short-term investments 8,112,616
(cost $8,112,020).........
-----------
Total Investments--99.5%
(cost $210,867,391; Note 254,264,480
4)........................
Other assets in excess of 1,406,549
liabilities--0.5%.........
-----------
Net Assets--100%............ $255,671,029
-----------
-----------
</TABLE>
------------------
* Non-income producing securities.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
27
<PAGE>
THE TARGET PORTFOLIO TRUST
International Equity Portfolio
(cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
The industry classification of portfolio holdings shown as a
percentage of net assets as of June 30, 2000 (Unaudited) was as follows:
Telecommunications............................... 15.4%
Financial Services............................... 15.0
Electronics...................................... 5.8
Oil & Gas........................................ 5.7
Insurance........................................ 5.7
Food & Beverage.................................. 5.6
Computers........................................ 4.9
Chemicals........................................ 4.6
Pharmaceuticals.................................. 3.9
Automobiles & Trucks............................. 3.6
U.S. Government Securities....................... 3.2
Aerospace/Defense................................ 2.6
Diversified Industries........................... 2.4
Energy........................................... 2.0
Natural Resources Sector......................... 1.9
Engineering & Equipment.......................... 1.6
Cosmetics/Toiletries............................. 1.5
Manufacturing.................................... 1.4
Leasing.......................................... 1.4
Miscellaneous.................................... 1.3
Publishing....................................... 1.3
Medical Products & Services...................... 1.3
Diversified Manufacturing........................ 1.3
Industrials...................................... 1.2
Electrical Equipment............................. 1.2
Retail........................................... 1.0
Consumer Durable Goods........................... 0.9
Forest Products.................................. 0.8
Paper & Packaging................................ 0.6
Miscellaneous Services........................... 0.4
-----
99.5
Other assets in excess of liabilities............ 0.5
100.0%
-----
-----
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
28
<PAGE>
International Bond Portfolio
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL US$
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--94.3%
Australia--7.1%
Int'l. Bank Recon. & Dev.,
A$ 1,000 5.50%, 5/14/03.............. $ 583,099
New South Wales Treasury
Corp.,
800 6.50%, 5/1/06............... 478,918
Queensland Treasury Corp.,
600 8.00%, 8/14/01.............. 366,186
-----------
1,428,203
-----------
Canada--6.6%
Deutsche Fin(Neth),
C$ 900 7.00%, 1/7/04............... 616,926
Province of Ontario,
1,000 8.00%, 3/11/03.............. 706,040
-----------
1,322,966
-----------
Eurobonds--47.2%
Belgium Gov't. Bonds,
EUR 1,000 5.75%, 9/28/10.............. 966,252
Depfa Pfandriefbank,
1,700 5.00%, 2/3/05............... 1,588,096
Dutch Gov't. Bonds,
700 7.50%, 1/15/23.............. 823,334
Finnish Gov't. Bonds,
1,000 9.50%, 3/15/04.............. 1,088,358
French Gov't. Bonds,
1,500 4.00%, 10/25/09............. 1,290,278
German Gov't. Bonds,
300 6.50%, 7/15/03.............. 297,294
1,500 4.00%, 7/4/09............... 1,304,598
Obrig Do Tes Medio Prazo,
1,000 3.625%, 8/19/04............. 896,845
750 5.375%, 6/23/08............. 708,507
Treuhandanstah
500 6.875%, 6/11/03............. 499,786
-----------
9,463,348
-----------
PRINCIPAL US$
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
Germany--7.5%
Austrian Gov't. Bonds,
DM 1,000 7.25%, 5/3/07............... $ 529,133
Halifax PLC,
2,000 5.625%, 7/23/07............. 963,082
-----------
1,492,215
-----------
Japan--6.5%
Italian Gov't. Bonds,
Y 50,000 0.372%, 5/12/02............. 467,636
Kingdom of Spain,
50,000 5.75%, 3/23/02.............. 514,585
30,000 3.10%, 9/20/06.............. 312,002
-----------
1,294,223
-----------
New Zealand--14.8%
Int'l. Bank Recon. & Dev.,
NZ$ 2,500 7.25%, 5/27/03.............. 1,165,714
750 5.375%, 11/6/03............. 331,419
New Zealand Gov't. Bonds,
100 5.50%, 4/15/03.............. 45,315
3,000 7.00%, 7/15/09.............. 1,426,298
-----------
2,968,746
-----------
United States--4.6%
U.S. Treasury Bonds,
US$ 106 3.625%, 4/15/28 (TIPS)...... 100,857
U.S. Treasury Notes,
540 3.375%, 1/15/07 (TIPS)...... 518,019
318 3.625%, 1/15/08 (TIPS)...... 308,095
-----------
926,971
-----------
Total long-term investments 18,896,672
(cost $20,718,039)........
-----------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
29
<PAGE>
THE TARGET PORTFOLIO TRUST
International Bond Portfolio
(cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL US$
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
<C> <S> <C>
SHORT-TERM INVESTMENTS--3.7%
Repurchase Agreements
$ 747 State Street Bank & Trust Co. $ 747,000
2.00%, dated 6/30/00, due
7/03/00, in the amount of
747,125 (cost $747,000;
collateralized by $770,000
U.S. Treasury Notes, 5.50%,
3/31/03, approximate value
of the collateral including
interest is $763,263).......
------------
Total Investments--98.0%
(cost $21,465,039; Note 4).... 19,643,672
Other assets in excess of
liabilities--2.0%........... 402,268
------------
Net Assets--100%.............. $ 20,045,940
------------
------------
</TABLE>
------------------
(TIPS)--Treasury inflationary protection securities.
Portfolio securities are classified according to the security's currency
denomination.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
30
<PAGE>
Total Return Bond Portfolio
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
<C> <C> <S> <C>
LONG-TERM
INVESTMENTS--109.7%
Corporate Bonds--36.8%
Airlines--1.6%
United Airlines, Inc.,
Baa1 $ 1,000 10.85%, 2/19/15......... $ 1,054,480
------------
Automobiles & Parts--1.7%
Federal-Mogul Corp.,
Ba2 850 7.75%, 7/1/06........... 618,883
TRW Inc., Note,
Baa1 500 8.75%, 5/15/06.......... 509,868
------------
1,128,751
------------
Banking--10.8%
Asian Development Bank,
Aaa 900 5.82%, 6/16/28.......... 825,950
Bank of Tokyo Mitsubishi
Ltd.,
A3 800 8.40%, 4/15/10.......... 809,005
Capital One Bank,
Baa2 1,200 DD 7.085%, 7/28/03......... 1,216,200
GS Escrow Corp.,
Ba1 1,300 6.75%, 8/1/01........... 1,263,248
KBC Bank Funding Trust
III,
A1 600 9.86%, 11/29/49......... 613,202
MBNA Bank, Inc.,
Baa1 100 6.853%, 8/7/01.......... 99,888
Baa1 500 6.875%, 7/15/04......... 474,650
Baa1 1,100 7.175%, 12/10/02........ 1,083,188
Royal Bank Scotland
Group PLC,
A1 700 9.118%, 12/31/49........ 722,379
------------
7,107,710
------------
Cable--1.5%
Clear Channel
Communications
Senior Note,
Baa3 1,000 DD 7.312%, 6/15/02......... 1,000,000
------------
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
Financial Services--17.0%
Associates Corporation
North America,
Aa3 $ 1,300 6.903%, 5/8/03.......... $ 1,311,336
Conseco Finance
Securitization Corp.,
A3 1,000 8.85%, 12/1/31.......... 1,012,665
Ford Credit Auto Owner
Trust,
Aaa 899 5.77%, 11/15/01......... 896,330
Ford Motor Credit Co.,
A2 1,200 5.75%, 2/23/04.......... 1,130,268
General Motors
Acceptance Corp.,
A2 1,300DD 6.54%, 4/5/04........... 1,297,002
A2 500DD 7.02%, 4/5/04........... 499,260
Heller Financial, Inc.,
A3 800 6.50%, 7/22/02.......... 780,272
A3 1,100DD 6.635%, 4/28/03......... 1,104,070
Lehman Brothers
Holdings, Inc.,
A2 1,100 7.169%, 9/3/02.......... 1,092,069
A3 200 7.19%, 4/2/02........... 200,967
Morgan Stanley Dean Witter & Co.,
Aa3 1,400 6.50%, 1/28/02.......... 1,400,414
PS Colorado Credit
Corp.,
Baa1 500DD 7.47%, 5/30/02.......... 499,410
------------
11,224,063
------------
Industrials--2.0%
Wachovia Corp.,
A1 700 6.941%, 5/2/05.......... 699,209
Westpoint Stevens, Inc.,
B1 700 7.875%, 6/15/05......... 584,500
------------
1,283,709
------------
Oil & Gas Equipment & Services--0.8%
R & B Falcon Corp.,
Ba3 600 6.50%, 4/15/03.......... 552,000
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
31
<PAGE>
THE TARGET PORTFOLIO TRUST
Total Return Bond Portfolio
(cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
<C> <C> <S> <C>
Recreation--1.0%
Green Tree Recreational Equipment,
Aaa $ 632 6.55%, 7/15/28.......... $ 623,094
------------
Waste Management--0.4%
Waste Management Inc.,
Ba1 300 6.125%, 7/15/01......... 290,573
------------
Total corporate bonds
(cost $24,864,554).... 24,264,380
------------
U.S. Government Agency Mortgage
Backed Securities--43.2%
Federal Home Loan
Mortgage Corp.,
900 5.50%, 7/17/30.......... 785,839
6.00%, 5/15/28 -
2,000 7/17/30............... 1,757,960
6.50%, 9/15/18 -
684 12/15/21 (I/O)........ 70,890
3,000 7.00%, 12/31/99......... 2,898,990
1,889 7.20%, 10/1/06.......... 1,878,169
7.50%, 9/1/16 -
1,312 7/1/17................ 1,300,923
407 7.691%, 1/1/24.......... 414,242
955 8.00%, 9/15/29.......... 952,532
11 9.25%, 1/1/10........... 10,787
Federal National Mortgage Assn.,
1,987 5.00%, 4/1/14........... 1,813,790
2,000 5.50%, 7/17/30.......... 1,753,275
1,020 7.192%, 1/1/20.......... 1,029,663
Government National
Mortgage Assn.,
3,100 6.00%, 7/24/30.......... 2,854,914
264 6.375%, 6/20/23......... 264,662
4,350 6.50%, 7/24/30.......... 4,128,411
6.75%, 7/20/22 -
1,569 7/20/27............... 1,576,474
7.375%, 2/20/17 -
1,342 2/20/26............... 1,344,789
7.50%, 2/15/27 -
3,655 12/31/99.............. 3,629,208
------------
Total U.S. government
agency
mortgage backed
securities
(cost $28,487,930).... 28,465,518
------------
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
Foreign Corporate Bonds--2.0%
Hellenic Finance,
A2 $ 700 2.00%, 7/15/03.......... $ 655,713
Petroleos Mexicanos,
Ba3 700DD 9.437%, 7/15/05......... 700,000
------------
Total foreign securities
(cost $1,383,038)..... 1,355,713
------------
Collateralized Mortgage
Obligation--6.9%
Allied Capital
Commercial
Mortgage Trust,
AAPoundPound 520 6.31%, 9/25/03.......... 509,833
American Housing Trust
1,
Senior Mortgage Pass
Through Certificate,
Series 1-5 Class A,
Aaa 12 8.625%, 8/25/18......... 12,053
Champion Home Loan
Equity,
Series 1995, Class
A2-3,
Aaa 413 8.033%, 2/25/28......... 421,939
Countrywide
Collateralized
Mortgage Obligation,
Aaa 7 8.643%, 11/25/24........ 7,421
GMAC Commercial Mortgage
Security, Inc.,
Mortgage Certificate,
Aa2 677 6.806%, 4/15/08......... 643,040
JP Morgan Commercial
Mortgage Finance
Corporation,
AAPoundPound 500 6.903%, 4/15/10......... 499,981
Resecuritization
Mortgage Trust,
AAPoundPound 480 6.50%, 4/19/29.......... 470,218
Residential Asset
Securitiziation Trust,
AAPoundPound 1,089 6.50%, 9/25/14.......... 1,043,113
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
32
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
<C> <C> <S> <C>
Collateralized Mortgage Obligation
(cont'd)
Vendee Mortgage Trust,
AAPoundPound $ 1,000 7.00%, 9/1/27........... $ 939,680
------------
Total collateralized
mortgage obligations
(cost $4,621,594)..... 4,547,278
------------
Municipals--3.1%
Arlington Texas
Independent School
District, Refunding,
Aaa 500 5.00%, 2/15/24.......... 443,586
Chicago Illinois Water
Revenue,
Aaa 1,750 5.25%, 11/1/27.......... 1,576,738
------------
Total municipals
(cost $1,948,522)..... 2,020,324
------------
Foreign Government Bonds--1.3%
German Government Bonds,
Aaa 50 6.25%, 1/4/24........... 51,793
NR 170 6.25%, 1/4/30........... 181,571
United Mexican States,
NR 600 DD 10.021%, 4/7/04......... 625,500
------------
Total foreign government
bonds
(cost $812,861)....... 858,864
------------
U.S. Government Securities--16.4%
United States Treasury
Bonds,
Aaa 318 3.625%, 4/15/28......... 302,655
Aaa 3,600 8.75%, 8/15/20.......... 4,628,232
United States Treasury
Notes,
Aaa 1,513 3.375%, 1/15/07......... 1,450,837
Aaa 2,887 3.625%, 7/15/02......... 2,867,046
Aaa 1,378 3.625%, 1/15/08......... 1,335,609
Aaa 209 3.875%, 1/15/09......... 205,580
------------
Total U.S. government
securities
(cost $10,744,794).... 10,789,959
------------
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
Total long-term
investments
(cost $72,863,227).... $ 72,302,036
------------
SHORT-TERM INVESTMENTS--16.9%
Automobiles & Parts--0.5%
Delphi Automotive
Systems Corp.,
P1 $ 300 6.78%, 7/5/00........... 299,774
------------
Cable--1.1%
Tele-Communications,
Inc.,
A2 700 7.362%, 3/12/01......... 700,524
------------
Electrical Power--2.0%
Kentucky Power Company,
NR 1,300 7.304%, 11/2/00......... 1,300,480
------------
Financial Services--5.4%
Conoco, Inc.,
P2 1,600 6.49%, 7/12/00.......... 1,596,720
General Electric Capital
Corp.,
P1 200 6.75%, 9/1/00........... 197,158
P1 100 6.75%, 9/13/00.......... 98,469
P1 200 6.90%, 7/6/00........... 199,819
Orix Credit Alliance,
Inc.,
Baa2 1,300 6.785%, 4/16/01......... 1,294,293
Washington Mutual Fin.
Corp.,
P2 200 6.95%, 8/30/00.......... 197,717
------------
3,584,176
------------
Health Care--0.7%
Columbia/HCA Healthcare
Corp.,
Ba2 450 6.875%, 7/15/01......... 438,930
------------
Industrials--1.5%
Alcoa Inc.,
P1 100 6.57%, 7/5/00........... 99,927
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
33
<PAGE>
THE TARGET PORTFOLIO TRUST
Total Return Bond Portfolio
(cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
<C> <C> <S> <C>
Industrials (cont'd)
Ingersoll-Rand Co.,
P2 $ 300 6.75%, 7/13/00........ $ 299,325
P2 600 6.92%, 9/5/00......... 592,388
------------
991,640
------------
Railroads--0.6%
Norfolk Southern
Corp.,
P2 400 6.85%, 7/27/00........ 398,021
------------
Retail--1.2%
Tyco Industries Inc.,
P2 800 7.05%, 7/26/00........ 796,083
------------
Telecommunications--0.1%
AT&T Corp.,
P1 100 6.58%, 9/20/00........ 98,520
------------
Utilities--1.5%
Niagara Mohawk Power
Corp.,
Baa2 1,000 6.875%, 3/1/01........ 993,870
------------
Total corporate bonds
(cost $9,623,440)... 9,602,018
------------
Foreign Corporate Bonds--1.3%
Republic of Argentina,
B1 90,000 5.50%, 3/27/01........ 847,971
------------
Total foreign
corporate bonds
(cost $746,184)..... 847,971
------------
U.S. Government Securities--0.4%
United States Treasury
Notes
Aaa 270 D 5.125%, 8/31/00....... 269,619
------------
Total US government
securities
(cost $269,553)..... 269,619
------------
Repurchase Agreement--0.6%
State Street Bank &
Trust
Co., 2.00%, dated
6/30/00 due 7/3/00
in the amount of
$417,070) cost
$417,000; value of
collateralized
including accrued
interest is
417 $428,313)........... 417,000
------------
Total short-term
investments
(cost
$11,056,243)........ 11,136,608
------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
DESCRIPTION (NOTE 1)
<C> <C> <S> <C>
Total Investments Before
Outstanding
Written--126.6%
(cost $83,919,470;
Note 4)............ $ 83,438,644
OUTSTANDING PUT OPTIONS
WRITTEN*
<CAPTION>
Contracts
---------
<C> <C> <S> <C>
Eurodollar Futures
expiring 3/16/01
8 $92.75............. (1,425)
Eurodollar Midcurve 1 Year Future,
23 expiring 12/15/00.... (675)
United States
Treasury Bonds
Futures,
expiring 8/24/00
3 $94................ (1,078)
------------
Total outstanding put
options written
(premium received
$7,016)............ (3,178)
------------
OUTSTANDING CALL OPTIONS
WRITTEN*
Eurodollar Futures,
expiring 3/16/01
10 $93.25............. (1,100)
United States
Treasury Bonds
Futures,
expiring 8/24/00
23 $100............... (8,625)
------------
Total outstanding
call
options written
(premium received
$10,446)........... (9,725)
------------
Total Investments, Net of
Outstanding
Options Written--126.6%
(cost $83,902,008)... 83,425,741
Liabilities in excess
of
other
assets--(26.6%).... (17,504,455)
------------
Net Assets--100%..... $ 65,921,286
------------
------------
</TABLE>
---------------
* Non-income producing securities.
D Pledged as initial margin on financial futures
contracts.
DD Rate shown reflects current rate on variable rate
instrument.
PoundPound Standard & Poor's Rating.
(I/O)--Interest Only.
(MTN)--Medium Term Notes.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
34
<PAGE>
Intermediate-Term Bond
Portfolio
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
<C> <C> <S> <C>
LONG-TERM INVESTMENTS--123.5%
Corporate Bonds--57.2%
Airlines--1.4%
United Airlines, Inc.,
Baa1 $ 1,500 10.85%, 2/19/15....... $ 1,581,720
------------
Auto & Truck--2.0%
Daimlerchrysler N.A.
Holdings,
A1 2,300 6.67%, 9/25/01........ 2,296,872
------------
Banking--8.5%
Export - Import Bank
Korea,
Baa2 300 6.50%, 11/15/06....... 285,474
Korea Development
Bank,
Baa2 2,000 7.125%, 9/17/01....... 1,985,720
MBNA America Bank,
Baa1 2,000DD 7.175%, 12/10/02...... 1,969,434
National Australia
Bank Ltd.,
A1 1,000DD 7.434%, 5/19/10....... 998,387
Royal Bank of Scotland
Group PLC,
A1 1,100 9.118%, 3/31/10....... 1,135,167
Sumitomo Trust &
Banking Co., Ltd.,
Baa2 1,500DD 9.40%, 12/29/49....... 1,465,872
Wachovia Corp.,
A1PoundPound 1,900DD 6.941%, 5/2/05........ 1,897,853
------------
9,737,907
------------
Cable--0.6%
Cox Communications,
Inc.,
Baa2 300DD 6.15%, 8/1/03......... 288,213
TCI Communications,
Inc.,
A2 400DD 7.36188%, 3/12/01..... 400,300
------------
688,513
------------
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
Commercial Services--0.7%
Cox Enterprises Inc.,
Baa1 $ 800DD 7.553%, 5/1/03.......... $ 798,542
------------
Financial Services--29.1%
AT&T Capital Corp.,
A1 2,200DD 6.44125%, 4/9/01........ 2,202,145
Associates Corp. of
N.A.,
Aa3 2,200DD 6.903%, 5/8/03.......... 2,219,184
Bear Stearns & Co.,
Inc.,
A2 3,400DD 7.358%, 11/30/04........ 3,405,637
Capital One Bank
Baa2 2,300DD 7.71125%, 6/23/03....... 2,300,000
Chase Manhattan Corp.,
A1 500 7.625%, 1/15/03......... 502,500
Ford Motor Credit Co.,
A2 1,100DD 6.541%, 7/16/02......... 1,105,742
A2 2,300DD 7.23%, 6/30/05.......... 2,299,034
Fugi JGB Investment,
LLC.,
Baa2 300DD 9.87%, 12/31/49......... 292,024
General Motors
Acceptance Corp.,
A2 2,100DD 6.54%, 4/5/04........... 2,096,892
A2 1,200 7.625%, 6/15/04......... 1,203,911
Heller Financial Inc.,
A3 1,900DD 6.635%, 4/28/03......... 1,907,030
Household Finance Corp.,
A2 3,300DD 7.028%, 8/6/02.......... 3,329,601
Lehman Brothers Holdings, Inc.,
A3 1,500DD 7.169%, 9/3/02.......... 1,489,185
A3 700DD 7.19%, 4/2/02........... 703,383
Orix Credit Alliance
Inc.,
Baa2 2,100 6.785%, 4/16/01......... 2,090,781
PaineWebber Group, Inc.
Baa1 2,000DD 7.362%, 11/27/00........ 2,001,200
QWest Capital Funding
Inc.,
Baa1 2,300 6.875%, 8/15/01......... 2,287,994
Transamerica Finance
Corp.,
A3 2,000DD 7.06%, 12/14/01......... 1,999,092
------------
33,435,335
------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
35
<PAGE>
THE TARGET PORTFOLIO TRUST
Intermediate-Term Bond
Portfolio (cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
<C> <C> <S> <C>
Health Care Services--1.0%
HCA-The Healthcare
Corp.,
Ba2 $ 300 6.91%, 6/15/05........ $ 272,250
Hospital Corp.,
Ba2 1,000 Zero Coupon, 6/1/01... 920,940
------------
1,193,190
------------
Industrials--2.6%
Golden State Holdings,
Ba1 1,800 6.75%, 8/1/01......... 1,749,112
Ba1 400DD 7.39125%, 8/1/03...... 380,961
Westpoint Stevens
Inc.,
B1 800 7.875%, 6/15/05....... 668,000
International Game Technology,
Ba1 200 7.875%, 5/15/04....... 192,000
------------
2,990,073
------------
Petroleum Services--1.3%
Occidental Petroleum
Corp.,
Baa3 1,600DD 6.40%, 4/1/03......... 1,545,248
------------
Telecommunications--4.0%
Deutsche Telekom
International
Finance,
Aa2 2,300 7.75%, 6/15/05........ 2,295,400
Grupo Iusacell S.A. de
C.V.,
B1 1,250 14.25%, 12/1/06....... 1,309,375
Vodafone Airtouch PLC,
A2 1,000 6.692%, 12/19/01...... 999,063
------------
4,603,838
------------
Utilities--6.0%
Niagara Mohawk Power Corp.,
Baa2 2,000 6.875%, 3/1/01........ 1,987,740
Texas Utilities Co.,
Baa3 3,000DD 5.94%, 10/15/01....... 2,935,380
Baa3 2,000DD 6.50%, 8/16/02........ 1,973,992
------------
6,897,112
------------
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
Total corporate bonds
(cost $66,315,321).... $ 65,768,350
U.S. Government Agency
Mortgage Backed Securities--49.4%
Federal Home Loan
Mortgage Corp.,
$ 4,000 5.50%, 12/31/99......... 3,841,882
124 6.00%, 4/1/24........... 113,591
6.50%, 9/15/18 -
1,135 12/15/21 (I/O)........ 117,844
53 9.25%, 1/1/10........... 54,473
Federal National
Mortgage Assn.,
243 6.00%, 12/25/08......... 241,034
122 6.217%, 12/1/30......... 118,400
1,671 6.50%, 5/1/06........... 1,628,716
555 6.624%, 8/1/24.......... 544,836
806 7.781%, 7/1/25.......... 823,646
Government National
Mortgage Assn.,
4,300 6.00%, 12/31/99......... 3,960,042
6.375%, 5/20/23 -
1,366 6/20/23............... 1,368,108
8,100 6.50%, 12/15/99......... 7,687,386
643 7.125%, 10/20/24........ 646,410
7.375%, 1/20/24 -
1,280 2/20/26............... 1,282,934
32,750 7.50%, 12/31/99......... 32,514,528
1,747 8.50%, 3/20/25.......... 1,782,810
------------
Total U.S. government
agency
mortgage backed
securities
(cost $56,803,457).... 56,726,640
------------
Foreign Government Bonds--2.7%
Federal Republic of
Germany,
NR Euro290 6.25%, 1/4/30........... 309,739
German Government Bonds,
Aaa Euro90 6.25%, 1/4/24........... 93,227
Republic of Argentina,
B1 Y150,000 5.50%, 3/27/01.......... 1,413,285
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
36
<PAGE>
<TABLE>
<CAPTION>
<C> <C> <S> <C>
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
Foreign Government Bonds (cont'd)
United Mexican States,
Baa3 $ 1,200DD 10.02%, 4/7/04........ $ 1,251,000
------------
Total foreign
government
bonds (cost
$2,810,163)......... 3,067,251
------------
Foreign Corporate Bonds--1.8%
Hellenic Finance
S.C.A.,
A2 Euro1,200 2.00%, 7/15/03........ 1,124,080
Petroleos Mexicanos,
9.437%, 7/15/05,
Baa2 1,000DD MTN................. 1,000,000
------------
Total foreign
corporate
bonds (cost
$2,186,519)......... 2,124,080
------------
Collateralized Mortgage
Obligations--6.8%
Champion Home Loan
Equity,
Aaa 621DD 8.033073%, 2/25/28.... 633,519
Countrywide Mortgage
Backed Securities,
Inc.,
Aaa 1,723 6.75%, 5/25/24........ 1,686,528
EQCC Home Equity Loan Trust,
Aaa 3,000 5.765%, 3/20/29....... 2,917,500
Ford Credit Auto Owner
Trust,
Aaa 1,453 5.77%, 11/15/01....... 1,447,918
Independent National
Mortgage Corp.,
Aa1 7DD 8.738%, 11/25/24...... 7,421
Residential Asset
Securities Corp.,
Aaa 308DD 6.9513%, 10/25/27..... 307,124
Southern Pacific
Secured
Assets Corp.,
Aaa 811DD 6.821%, 7/25/29....... 804,472
------------
Total collateralized
mortgage
obligations
(cost $7,886,509)... 7,804,482
------------
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
Municipals--0.7%
Honolulu Hawaii City & County,
4.75%, 7/1/28
Aaa $ 1,000 (cost $826,220)....... $ 836,120
------------
U.S. Government Securities--4.9%
United States Treasury
Notes,
Aaa 2,485 3.375%, 1/15/07......... 2,383,518
Aaa 1,710 3.625%, 7/15/02 TIPS.... 1,698,537
Aaa 1,378 3.625%, 1/15/08......... 1,335,609
Aaa 245 5.125%, 8/31/00......... 244,655
------------
Total U.S. government
securities
(cost $5,606,226)..... 5,662,319
------------
Total long-term
investments
(cost $142,434,415)... 141,989,242
------------
SHORT-TERM INVESTMENTS--19.5%
Corporate Bonds--18.5%
Telecommunications--1.0%
AT&T Corp.,
P1 900 6.51%, 7/12/00.......... 898,210
P1 300 6.56%, 7/10/00.......... 299,508
------------
1,197,718
------------
Electrical Power--1.7%
American Electric Power,
P2 2,000 6.86%, 8/16/00.......... 1,982,469
------------
Financial Services--4.8%
American Express Credit
Corp.,
P1 1,600 6.54%, 9/12/00.......... 1,573,840
General Electric Capital Corp.,
P1 1,200 6.12%, 7/10/00.......... 1,198,164
P1 200 6.55%, 9/11/00.......... 197,016
P1 2,300 6.59%, 7/18/00.......... 2,292,842
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
37
<PAGE>
THE TARGET PORTFOLIO TRUST
Intermediate-Term Bond
Portfolio (cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
<C> <C> <S> <C>
Washington Mutual
Finance,
P2 $ 200 6.85%, 8/30/00........ $ 197,717
------------
5,459,579
------------
Food & Beverage--1.1%
Conagra Inc.,
P2 1,100 6.75%, 7/25/00........ 1,095,050
Nabisco Inc.,
P2 200 6.86%, 8/10/00........ 198,475
------------
1,293,525
------------
Medical Products & Services--0.2%
Becton Dickinson &
Co.,
P1 200 6.55%, 7/5/00......... 199,854
------------
Miscellaneous Consumer--1.2%
Houston Industry
Finance,
P2 1,400 6.95%, 7/5/00......... 1,398,919
------------
Oil & Gas-Domestic--0.6%
Conoco Inc.,
P2 700 6.49%, 7/12/00........ 698,565
------------
Paper--1.7%
International Paper
Co.,
P2 2,000 6.75%, 7/13/00........ 1,995,500
------------
Telecommunications--6.1%
British
Telecommunications
PLC,
P1 4,000 6.50%, 7/5/00......... 3,997,111
SBC Communications
Inc.,
P1 3,000 6.69%, 7/12/00........ 2,993,868
------------
6,990,979
------------
PRINCIPAL
MOODY'S AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
Utilities--0.1%
National Rural
Utilities Coop Fin.,
P1 $ 100 6.59%, 9/18/00......... $ 98,224
------------
Repurchase Agreement--1.0%
State Street Bank &
Trust Co.,
3.50%, dated 6/30/00
due 7/3/00 in the
amount of $1,103,322
(cost $1,103,000,
collateralized by
$1,135,000 U.S. Trea-
sury Notes, 5.500%,
3/31/03; value of
collateral including
accrued interest is
1,103 $1,125,589).......... 1,103,000
------------
Total short-term
investments
(cost $22,424,014)... 22,418,332
------------
Total Investments--143.0%
(cost US
$164,858,431)........ 164,407,574
Liabilities in excess
of other
assets--(43.0%)...... (49,453,150)
------------
Net Assets--100%....... $114,954,424
------------
------------
</TABLE>
---------------
D-- Pledged as initial margin on financial futures contracts.
DD--Rate shown reflects current rate on variable rate instrument.
PoundPound--Standard & Poor's Rating.
LLC--Limited Liability Company.
S.A.--Sociedad Anonima (Spanish Corporation).
(I/O)--Interest Only.
(MTN)--Medium Term Notes.
(TIPS)--Treasury Inflation Protection Securities.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
38
<PAGE>
Mortgage Backed Securities
Portfolio
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--104.0%
Collateralized Mortgage Obligation--28.5%
Chase Commercial Mortgage
Securities Corp.,
$ 1,000 7.37%, 2/19/07.............. $ 999,308
Federal Home Loan Mortgage
Corp.,
170 5.50%, 8/15/21, PAC......... 158,662
59 5.80%, 8/15/19, PAC......... 59,096
100 5.95%, 6/15/19, PAC......... 98,781
2,842 6.00%, 5/15/08 - 5/15/23, 2,670,243
PAC.......................
1,060 6.50%, 11/15/22, PAC........ 1,002,357
359 7.00%, 3/15/23, PAC......... 346,097
76 7.25%, 1/15/07, PAC......... 75,916
2,365 7.50%, 6/15/22, PAC/ I/O.... 165,540
1,476 8.00%, 12/15/06 - 7/15/21, 1,497,895
PAC.......................
532 9.00%, 6/01/09 - 10/15/20... 548,742
Federal National Mortgage
Assn.,
926 5.00%, 3/25/21, PAC......... 846,372
614 6.196%, 1/25/09............. 607,472
1,693 6.00%, 4/25/08 - 10/25/22, 1,577,895
PAC.......................
800 6.25%, 1/25/09, PAC......... 768,000
636 6.50%, 12/25/19 - 12/25/23, 582,533
PAC.......................
976 7.00%, 9/25/19 - 9/25/20, 239,754
PAC/ I/O..................
779 7.385%, 3/25/21............. 780,791
805 7.50%, 5/25/07 - 7/25/22.... 799,483
663 8.00%, 8/25/06 - 5/25/24, 676,979
PAC.......................
511 8.50%, 7/25/18 - 6/25/21, 521,403
PAC.......................
First Boston Mortgage
Securities,
499 Zero Coupon, 4/25/17, P/O... 390,434
499 8.985%, 4/25/17............. 123,228
681 6.96%, 1/20/04.............. 676,053
First Union-Lehman Brothers
Commerical Mortgage,
1,000 6.60%, 5/18/07.............. 967,406
Salomon Brothers Mortgage Securities,
211 6.00%, 12/25/11............. 204,329
-----------
Total collateralized
mortgage obligation
(cost $17,454,086)........ 17,384,769
-----------
PRINCIPAL
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
U.S. Government Agency Mortgage
Pass-Through Obligations--74.1%
Federal Home Loan Mortgage
Corp.,
$ 758 6.00%, 5/01/11 - 3/01/30..... $ 704,004
253 6.50%, 2/01/04............... 248,480
6 7.25%, 7/01/06............... 5,821
1,067 7.50%, 3/01/08 - 9/30/26..... 1,053,209
38 8.25%, 12/01/05 - 5/01/08.... 37,665
180 8.50%, 6/01/03 - 7/01/21..... 182,846
98 8.75%, 12/01/08.............. 100,121
190 9.00%, 1/01/02 - 10/01/05.... 197,115
16 10.00%, 1/01/04.............. 15,836
47 10.50%, 11/01/19............. 50,331
36 11.50%, 3/01/16.............. 40,008
15 12.75%, 11/01/13............. 16,286
23 13.25%, 5/01/13.............. 25,455
5 14.00%, 6/01/11.............. 5,267
Federal National Mortgage
Assn.,
982 5.50%, 2/01/29 - 6/01/29..... 872,330
1,303 6.00%, 5/25/10 - 6/01/29..... 1,226,133
88 6.18%, 7/01/08............... 82,552
49 6.295%, 6/01/08.............. 46,191
78 6.30%, 1/01/08............... 73,736
72 6.34%, 1/01/08............... 68,438
52 6.39%, 1/01/06............... 50,243
78 6.43%, 1/01/08............... 74,262
492 6.447%, 1/01/08.............. 469,255
3,000 6.50%, 6/01/29 - 1/01/30..... 2,830,415
315 6.527%, 5/25/30.............. 296,679
642 6.55%, 9/01/07............... 615,679
53 6.812%, 10/01/07............. 51,990
565 6.981%, 6/01/07.............. 554,835
2,367 7.00%, 4/01/29 - 1/01/30..... 2,284,608
311 7.024%, 6/01/07.............. 306,463
606 7.04%, 3/01/07............... 596,927
63 7.28%, 10/01/06.............. 62,630
248 7.50%, 2/01/20............... 247,772
2,990 7.50%, 10/31/26.............. 2,947,482
88 7.75%, 10/01/19.............. 86,723
690 8.00%, 3/01/07 - 12/01/22.... 700,260
752 8.50%, 1/01/07............... 764,664
143 9.75%, 8/01/10 - 11/01/16.... 148,982
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
39
<PAGE>
THE TARGET PORTFOLIO TRUST
Mortgage Backed Securities
Portfolio (cont'd)
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
<C> <S> <C>
U.S. Government Agency Mortgage
Pass-Through Obligations (cont'd)
Government National Mortgage
Assn.,
$ 2,602 6.50%, 5/15/23 - 1/15/29.... $ 2,474,839
9,777 7.00%, 7/15/16 - 10/15/28... 9,508,079
10,579 7.50%, 3/15/07 - 11/30/25 10,533,882
849 8.00%, 1/15/08 - 5/15/17.... 869,895
700 8.25%, 6/20/17 - 7/20/17.... 707,668
182 8.50%, 3/15/05 - 4/20/17.... 188,055
1,997 9.00%, 10/20/01 - 1/15/20... 2,079,333
582 9.50%, 9/15/02 - 1/15/21.... 613,958
267(a) 13.00%, 2/15/11............. 304
42 13.50%, 6/15/10 - 5/15/11... 47,864
68 14.00%, 6/15/11 - 4/15/12... 78,065
26 16.00%, 4/15/12 - 5/15/12... 30,873
Total U.S. government agency mortgage
pass-through obligations
(cost $46,097,794).......... 45,274,508
-----------
U.S. Government Securities--1.4%
United States Treasury
Bonds,
250 8.125%, 8/15/19............. 302,228
450 8.75%, 5/15/20.............. 577,615
-----------
Total U.S. government
securities
(cost $830,986)........... 879,843
-----------
Total long-term investments
(cost $64,382,866)........ 63,539,120
-----------
PRINCIPAL
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
SHORT-TERM INVESTMENTS--2.3%
$ 1,401 Paine Webber, 6.55%, dated $ 1,401,000
6/30/00 due 7/3/00 in the
amount of $1,401,765 (cost
$1,401,000,
collaterlized by $1,435,000
U.S. Treasury Notes, 5.50%,
2/28/03. Value of
collateral including
accrued
interest-$1,435,658).......
-----------
Total Investments Before
Investment Sold
Short--106.3%
(cost $65,783,866; Note 4)... 64,940,120
-----------
Investment Sold
Short--(4.9%)
(3,000) Government National Mortgage (2,978,430)
Assn.,
7.50% (Proceeds
$2,977,500)................
-----------
Total Investments, net of
Investment Sold
Short--101.4%
(cost $62,806,366; Note 4)... 61,961,690
Liabilities in excess of (845,032)
other
assets--(1.4%).............
-----------
Net Assets-->100%............ $61,116,658
-----------
-----------
</TABLE>
---------------
I/O--Interest Only Security.
PAC--Planned Amortization Class.
P/O--Principal Only.
(a)--Reflects actual dollar amount (not rounded).
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
40
<PAGE>
U.S. Government Money Market
Portfolio
Portfolio of Investments June
30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
<C> <S> <C>
Federal Home Loan Bank--42.6%
$ 5,000 6.426%, 10/25/00.............. $ 4,998,125
5,000 6.52%, 3/28/01................ 4,997,781
5,000 6.609%, 10/4/00............... 4,998,234
2,000 6.47%, 6/21/01................ 1,872,397
3,000 6.525%, 12/20/00.............. 2,998,238
20,000 6.57%, 7/3/00................. 19,992,700
------------
39,857,475
------------
Federal National Mortgage Association--17.1%
5,000 6.50%, 11/13/00............... 4,998,437
5,000 6.38875%, 8/4/00.............. 4,999,721
6,000 6.55%, 3/20/01................ 5,998,669
------------
15,996,827
------------
Total Investments before
repurchase agreement........ 55,854,302
------------
PRINCIPAL
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
Repurchase Agreements--37.8%
$ 18,000 Paribas, 6.60%, dated 6/30/00 $18,000,000
due 7/3/00 in the amount of
$18,009,900 (cost
$18,000,000; collateralized
by $14,694,000 U.S.
Treasury Notes, 11.75%,
2/5/10; value of collateral
including accrued
interest-$18,378,980)......
17,325 Warburg Dillon Read LLC, 17,325,000
6.60%, dated 6/30/00 due
7/3/00 in the amount of
$17,334,529 (cost
$17,325,000; collateralized
by $16,047,000 U.S.
Treasury Notes, 6.75%,
8/15/26; value of
collateral including
accrued
interest-$17,640,417)......
-----------
35,325,000
-----------
Total Investments--97.5%
(amortized cost 91,179,302
$91,179,302*)..............
Other assets in excess of 2,343,083
liabilities--2.5%..........
-----------
Net Assets--100%............. $93,522,385
-----------
-----------
</TABLE>
---------------
* Federal income tax basis of portfolio securities is the same as for financial
reporting purposes.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
41
<PAGE>
THE TARGET PORTFOLIO TRUST
Statements of Assets and
Liabilities
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
SMALL
LARGE CAPITALIZATION LARGE CAPITALIZATION SMALL CAPITALIZATION CAPITALIZATION
GROWTH PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO VALUE PORTFOLIO
<S> <C> <C> <C> <C>
ASSETS
---------------------------------------------------------------------------------------------------------------------------------
Investments, at value* $585,433,730 $225,924,542 $206,852,307 $ 128,842,030
---------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement 12,678,000 -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Cash 37,753 -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Foreign currency, at value
(cost $1,523,406; $70,478;
$80,100; $140,555) -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Receivable for Portfolio shares
sold 1,338,192 931,552 583,450 516,766
---------------------------------------------------------------------------------------------------------------------------------
Receivable for investments sold 1,253,835 4,734,155 5,133,305 54,922
---------------------------------------------------------------------------------------------------------------------------------
Dividends and interest receivable 133,572 631,197 61,088 95,950
---------------------------------------------------------------------------------------------------------------------------------
Due from broker-variation margin -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Deferred expenses and other assets 3,467 3,204 2,183 2,118
---------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on forward
currency contracts -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Total assets 600,878,549 232,224,650 212,632,333 129,511,786
LIABILITIES
---------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on swap -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Payable to custodian -- 269,079 -- 91,838
---------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 2,347,699 5,017,588 3,776,394 561,693
---------------------------------------------------------------------------------------------------------------------------------
Payable for Portfolio shares
reacquired 633,081 213,311 322,900 185,375
---------------------------------------------------------------------------------------------------------------------------------
Accrued expenses and other
liabilities 112,544 38,378 18,069 143,470
---------------------------------------------------------------------------------------------------------------------------------
Dividends payable -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Outstanding options written
(premium received $17,462) -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Withholding taxes payable -- 13,654 -- --
---------------------------------------------------------------------------------------------------------------------------------
Deferred trustees' fees 10,000 8,900 8,338 8,141
---------------------------------------------------------------------------------------------------------------------------------
Due to Manager 144,760 124,517 97,915 63,181
---------------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on forward
currency contracts -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Investments sold short at value
(proceeds received $2,977,500
(Note 1)) -- -- -- --
---------------------------------------------------------------------------------------------------------------------------------
Total liabilities 3,248,084 5,685,427 4,223,616 1,053,698
NET ASSETS $597,630,465 $226,539,223 $208,408,717 $ 128,458,088
---------------------------------------------------------------------------------------------------------------------------------
Net assets were comprised of:
Shares of beneficial interest,
at par $ 19,673 $ 19,416 $ 11,449 $ 7,976
---------------------------------------------------------------------------------------------------------------------------------
Paid-in capital, in excess of
par 224,366,766 218,381,619 143,031,231 103,555,379
---------------------------------------------------------------------------------------------------------------------------------
224,386,439 218,401,035 143,042,680 103,563,355
Undistributed (distributions in
excess of)
net investment income (698,801) 2,630,786 (460,801) 384,033
---------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized gains
(losses) 19,126,957 9,112,929 33,678,994 5,435,008
---------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation/depreciation 354,815,870 (3,605,527) 32,147,844 19,075,692
---------------------------------------------------------------------------------------------------------------------------------
Net assets, June 30, 2000 $597,630,465 $226,539,223 $208,408,717 $ 128,458,088
---------------------------------------------------------------------------------------------------------------------------------
Shares of beneficial interest
issued and outstanding 19,672,852 19,415,956 11,448,616 7,976,365
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering price
and redemption price per share $30.38 $11.67 $18.20 $16.10
---------------------------------------------------------------------------------------------------------------------------------
*Identified cost of investments
before investments
sold short. $243,295,860 $229,530,069 $174,704,463 $ 109,766,338
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
42
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL U.S. GOVERNMENT
EQUITY INTERNATIONAL TOTAL RETURN INTERMEDIATE-TERM MORTGAGE BACKED MONEY
PORTFOLIO BOND PORTFOLIO BOND PORTFOLIO BOND PORTFOLIO SECURITIES PORTFOLIO MARKET PORTFOLIO
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------
$254,264,480 $ 19,643,672 $ 83,438,644 $ 164,407,574 $ 64,940,120 $ 55,854,302
-----------------------------------------------------------------------------------------------------------------------------
-- -- -- -- -- 35,325,000
-----------------------------------------------------------------------------------------------------------------------------
3,045 252 360,372 -- 461 --
-----------------------------------------------------------------------------------------------------------------------------
1,546,177 71,305 78,442 138,022 -- --
-----------------------------------------------------------------------------------------------------------------------------
794,529 70,609 213,411 572,749 73,404 3,898,362
-----------------------------------------------------------------------------------------------------------------------------
-- -- 5,671,431 154,647 2,977,500 --
-----------------------------------------------------------------------------------------------------------------------------
456,175 454,618 1,053,535 1,179,716 400,811 378,080
-----------------------------------------------------------------------------------------------------------------------------
-- -- 9,789 3,609 -- --
-----------------------------------------------------------------------------------------------------------------------------
3,313 556 11,609 1,264 1,095 20,196
-----------------------------------------------------------------------------------------------------------------------------
-- -- 6,383 10,614 -- --
-----------------------------------------------------------------------------------------------------------------------------
257,067,719 20,241,012 90,843,616 166,468,195 68,393,391 95,475,940
-----------------------------------------------------------------------------------------------------------------------------
-- -- 34,025 3,338 -- --
-----------------------------------------------------------------------------------------------------------------------------
-- -- -- 110,717 -- 520
-----------------------------------------------------------------------------------------------------------------------------
854,083 -- 24,584,412 50,817,890 3,922,356 --
-----------------------------------------------------------------------------------------------------------------------------
250,204 48,371 95,373 324,122 164,077 1,808,348
-----------------------------------------------------------------------------------------------------------------------------
120,496 96,758 176,491 28,194 80,865 --
-----------------------------------------------------------------------------------------------------------------------------
-- 32,157 -- 178,552 100,821 126,531
-----------------------------------------------------------------------------------------------------------------------------
-- -- 12,903 -- -- --
-----------------------------------------------------------------------------------------------------------------------------
18,791 3,084 -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
8,872 6,103 7,804 8,057 7,804 8,535
-----------------------------------------------------------------------------------------------------------------------------
144,244 8,599 10,620 41,698 22,380 9,621
-----------------------------------------------------------------------------------------------------------------------------
-- -- 702 1,203 -- --
-----------------------------------------------------------------------------------------------------------------------------
-- -- -- -- 2,978,430 --
-----------------------------------------------------------------------------------------------------------------------------
1,396,690 195,072 24,922,330 51,513,771 7,276,733 1,953,555
$255,671,029 $20,045,940 $65,921,286 $114,954,424 $61,116,658 $93,522,385
-----------------------------------------------------------------------------------------------------------------------------
15,770
$ $ 2,485 $ 6,611 $ 11,524 $ 6,109 $ 93,522
-----------------------------------------------------------------------------------------------------------------------------
194,274,302 23,469,764 68,948,239 118,590,109 62,854,912 93,428,863
-----------------------------------------------------------------------------------------------------------------------------
194,290,072 23,472,249 68,954,850 118,601,633 62,861,021 93,522,385
(8,967,063) (1,043,914) 237,098 231,549 126,723 --
-----------------------------------------------------------------------------------------------------------------------------
26,930,301 (551,283) (2,885,924) (3,461,377) (1,026,410) --
-----------------------------------------------------------------------------------------------------------------------------
43,417,719 (1,831,112) (384,738) (417,381) (844,676) --
-----------------------------------------------------------------------------------------------------------------------------
$255,671,029 $20,045,940 $65,921,286 $114,954,424 $61,116,658 $93,522,385
-----------------------------------------------------------------------------------------------------------------------------
15,769,612 2,485,175 6,611,020 11,524,474 6,109,470 93,522,385
-----------------------------------------------------------------------------------------------------------------------------
$16.21 $8.07 $9.97 $9.97 $10.00 $1.00
-----------------------------------------------------------------------------------------------------------------------------
$210,867,391 $21,465,039 $83,919,470 $164,858,431 $65,783,866 $91,179,302
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
43
<PAGE>
THE TARGET PORTFOLIO TRUST
Statements of Operations
Six Months Ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
SMALL
LARGE CAPITALIZATION LARGE CAPITALIZATION SMALL CAPITALIZATION CAPITALIZATION
GROWTH PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO VALUE PORTFOLIO
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME
------------------------------------------------------------------------------------------------------------------------------------
Income
Interest $ 261,948 $ 77,713 $ 137,825 $ 64,237
------------------------------------------------------------------------------------------------------------------------------------
Dividends 900,181 3,459,952 146,215 896,189
------------------------------------------------------------------------------------------------------------------------------------
Less: Foreign withholding taxes (2,549) (18,028) -- --
------------------------------------------------------------------------------------------------------------------------------------
Total income 1,159,580 3,519,637 284,040 960,426
------------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fee 1,688,651 706,496 579,036 412,321
------------------------------------------------------------------------------------------------------------------------------------
Custodian's fees and expenses 42,000 52,000 54,000 52,000
------------------------------------------------------------------------------------------------------------------------------------
Transfer agent's fees and expenses 75,000 64,000 63,000 58,000
------------------------------------------------------------------------------------------------------------------------------------
Registration fees 10,000 15,000 11,000 16,000
------------------------------------------------------------------------------------------------------------------------------------
Reports to shareholders 18,000 32,000 16,000 16,000
------------------------------------------------------------------------------------------------------------------------------------
Audit fees 7,000 7,000 7,000 7,000
------------------------------------------------------------------------------------------------------------------------------------
Legal fees and expenses 7,000 6,000 5,000 6,000
------------------------------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 6,000 3,000 9,000 7,000
------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 4,730 3,355 805 1,524
------------------------------------------------------------------------------------------------------------------------------------
Total expenses 1,858,381 888,851 744,841 575,845
------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (698,801) 2,630,786 (460,801) 384,581
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS
------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investment transactions 19,278,846 9,118,548 34,057,111 5,638,421
------------------------------------------------------------------------------------------------------------------------------------
Financial futures contracts -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Foreign currency transactions -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Options written -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total net realized gain (loss) 19,278,846 9,118,548 34,057,111 5,638,421
------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation/depreciation on:
Investments 77,953,058 (32,328,338) (6,736,872) 4,083,651
------------------------------------------------------------------------------------------------------------------------------------
Financial futures contracts -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Foreign currencies -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Options written -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Swaps -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation/depreciation 77,953,058 (32,328,338) (6,736,872) 4,083,651
------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) 97,231,904 (23,209,790) 27,320,239 9,722,072
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ 96,533,103 $(20,579,004) $ 26,859,438 $ 10,106,653
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
44
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL U.S. GOVERNMENT
EQUITY INTERNATIONAL TOTAL RETURN INTERMEDIATE-TERM MORTGAGE BACKED MONEY
PORTFOLIO BOND PORTFOLIO BOND PORTFOLIO BOND PORTFOLIO SECURITIES PORTFOLIO MARKET PORTFOLIO
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------
$ 148,500 $ 628,137 $2,196,716 $ 3,776,279 $2,338,611 $2,817,360
---------------------------------------------------------------------------------------------------------------------------
3,187,503 -- -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
(466,964) (1,719) -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
2,869,039 626,418 2,196,716 3,776,279 2,338,611 2,817,360
---------------------------------------------------------------------------------------------------------------------------
884,627 57,175 145,201 247,664 139,878 118,081
---------------------------------------------------------------------------------------------------------------------------
130,000 61,000 56,000 60,000 63,000 35,000
---------------------------------------------------------------------------------------------------------------------------
63,000 18,000 25,000 34,000 27,000 20,000
---------------------------------------------------------------------------------------------------------------------------
25,000 4,000 7,000 7,000 5,000 51,000
---------------------------------------------------------------------------------------------------------------------------
25,000 15,000 9,000 11,000 11,000 8,000
---------------------------------------------------------------------------------------------------------------------------
10,000 7,000 7,000 6,000 7,000 2,500
---------------------------------------------------------------------------------------------------------------------------
6,000 1,000 4,000 4,000 4,000 11,000
---------------------------------------------------------------------------------------------------------------------------
8,000 1,000 5,000 6,000 1,000 4,500
---------------------------------------------------------------------------------------------------------------------------
3,640 987 323 734 2,401 2,394
---------------------------------------------------------------------------------------------------------------------------
1,155,267 165,162 258,524 376,398 260,279 252,475
---------------------------------------------------------------------------------------------------------------------------
1,713,772 461,256 1,938,192 3,399,881 2,078,332 2,564,885
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
26,275,544 (1,197,530) 2,582 (303,401) (289,222) --
---------------------------------------------------------------------------------------------------------------------------
-- -- (167,507) 44,783 -- --
---------------------------------------------------------------------------------------------------------------------------
(3,503,397) (44,925) 97,879 215,314 -- --
---------------------------------------------------------------------------------------------------------------------------
-- -- 156,564 41,907 -- --
---------------------------------------------------------------------------------------------------------------------------
22,772,147 (1,242,455) 89,518 (1,397) (289,222) --
---------------------------------------------------------------------------------------------------------------------------
(35,499,379) (34,097) 329,301 323,235 421,030 --
---------------------------------------------------------------------------------------------------------------------------
-- -- 286,866 307,968 -- --
---------------------------------------------------------------------------------------------------------------------------
26,417 (4,479) 3,837 (18,116) -- --
---------------------------------------------------------------------------------------------------------------------------
-- -- 18,492 -- -- --
---------------------------------------------------------------------------------------------------------------------------
-- -- (34,025) (3,338) -- --
---------------------------------------------------------------------------------------------------------------------------
(35,472,962) (38,576) 604,471 609,749 421,030 --
---------------------------------------------------------------------------------------------------------------------------
(12,700,815) (1,281,031) 693,989 608,352 131,808 --
---------------------------------------------------------------------------------------------------------------------------
$(10,987,043) $ (819,775) $2,632,181 $ 4,008,233 $2,210,140 $2,564,885
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
45
<PAGE>
THE TARGET PORTFOLIO TRUST
Statements of Changes in Net
Assets (Unaudited)
<TABLE>
<CAPTION>
LARGE CAPITALIZATION LARGE CAPITALIZATION SMALL CAPITALIZATION
GROWTH PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO
----------------------------- ----------------------------- -----------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31, June 30, December 31,
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS
------------------------------------------------------------------------------------------------------------------------
Operations
Net investment
income (loss) $ (698,801) $ (629,096) 2,630,786 $ 4,868,583 (460,801) $ (680,508)
------------------------------------------------------------------------------------------------------------------------
Net realized gain
(loss) on
investment and
foreign currency
transactions 19,278,846 39,273,492 9,118,548 34,792,274 34,057,111 38,143,040
------------------------------------------------------------------------------------------------------------------------
Net change in
unrealized
appreciation/
depreciation of
investments 77,953,058 142,004,420 (32,328,338) (51,549,029) (6,736,872) 4,193,728
------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets
resulting from
operations 96,533,103 180,648,816 (20,579,004) (11,888,172) 26,859,438 41,656,260
------------------------------------------------------------------------------------------------------------------------
Dividends and
Distributions
Dividends from net
investment income -- -- -- (5,225,370) -- --
------------------------------------------------------------------------------------------------------------------------
Dividends in excess
of net investment
income -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------
Distributions from
net
realized gains (2,740,676) (43,879,009) (6,918,738) (32,765,017) (16,420,842) (20,559,728)
------------------------------------------------------------------------------------------------------------------------
Tax return of
capital
distributions -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------
Total distributions (2,740,676) (43,879,009) (6,918,738) (37,990,387) (16,420,842) (20,559,728)
------------------------------------------------------------------------------------------------------------------------
Portfolio share
transactions(a)
Net proceeds from
shares sold 71,847,949 114,931,932 37,441,262 77,536,152 27,460,525 54,990,278
------------------------------------------------------------------------------------------------------------------------
Net asset value of
shares issued in
reinvestment of
dividends and
distributions 2,673,514 42,595,350 6,755,978 36,982,534 15,958,207 19,982,699
------------------------------------------------------------------------------------------------------------------------
Cost of shares
reacquired (86,153,703) (108,629,468) (52,316,687) (85,971,350) (32,051,814) (68,448,742)
------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets from
Portfolio share
transactions (11,632,240) 48,897,814 (8,119,447) 28,547,336 11,366,918 6,524,235
------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) 82,160,187 185,667,621 (35,617,189) (21,331,223) 21,805,514 27,620,767
NET ASSETS
------------------------------------------------------------------------------------------------------------------------
Beginning of period 515,470,278 329,802,657 262,156,412 283,487,635 186,603,203 158,982,436
------------------------------------------------------------------------------------------------------------------------
End of period(b) $597,630,465 $515,470,278 $226,539,223 $262,156,412 $208,408,717 $186,603,203
------------------------------------------------------------------------------------------------------------------------
(a) Fund share transactions are at $1 per share for the U.S. Government Money Market Portfolio.
(b) Includes
undistributed net
investment income
of $ -- $ -- $ 2,630,786 $ -- $ -- $ --
------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SMALL CAPITALIZATION
VALUE PORTFOLIO
--------------------------------
Six Months
Ended Year Ended
June 30, December 31,
2000 1999
<S> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS
-----------------------------------------------------------
Operations
Net investment
income (loss) $ 384,581 $ 1,006,632
---------------------------------------------------------------
Net realized gain
(loss) on
investment and
foreign currency
transactions 5,638,421 1,354,411
-------------------------------------------------------------------
Net change in
unrealized
appreciation/
depreciation of
investments 4,083,651 (1,250,361)
-----------------------------------------------------------------------
Net increase
(decrease) in net
assets
resulting from
operations 10,106,653 1,110,682
---------------------------------------------------------------------------
Dividends and
Distributions
Dividends from net
investment income (7,803) (1,036,917)
-------------------------------------------------------------------------------
Dividends in excess
of net investment
income -- --
-----------------------------------------------------------------------------------
Distributions from
net
realized gains (1,225,044) (845,701)
---------------------------------------------------------------------------------------
Tax return of
capital
distributions -- --
-------------------------------------------------------------------------------------------
Total distributions (1,232,847) (1,882,618)
-----------------------------------------------------------------------------------------------
Portfolio share
transactions(a)
Net proceeds from
shares sold 16,947,571 43,989,353
---------------------------------------------------------------------------------------------------
Net asset value of
shares issued in
reinvestment of
dividends and
distributions 1,204,186 1,831,438
-------------------------------------------------------------------------------------------------------
Cost of shares
reacquired (25,577,474) (59,596,106)
-----------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets from
Portfolio share
transactions (7,425,717) (13,775,315)
---------------------------------------------------------------------------------------------------------------
Total increase
(decrease) 1,448,089 (14,547,251)
NET ASSETS
-------------------------------------------------------------------------------------------------------------------
Beginning of period 127,009,999 141,557,250
-----------------------------------------------------------------------------------------------------------------------
End of period(b) $128,458,088 $ 127,009,999
------------------------------------------------------------------------------------------------------------------------
(a) Fund share transa
(b) Includes
undistributed net
investment income
of $ 384,033 $ 13,760
------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
46
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL
EQUITY BOND TOTAL RETURN INTERMEDIATE-TERM
PORTFOLIO PORTFOLIO BOND PORTFOLIO BOND PORTFOLIO
------------------------------ ----------------------------- ----------------------------- -----------------------------
Six Months Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31, June 30, December 31, June 30, December 31,
2000 1999 2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
$ 1,713,772 $ 3,084,788 $ 461,256 $ 983,030 $ 1,938,192 $ 3,648,256 $ 3,399,881 $ 6,094,710
------------------------------------------------------------------------------------------------------------------------------------
22,772,147 22,795,682 (1,242,455) (580,220 ) 89,518 (2,856,428) (1,397) (3,082,233)
------------------------------------------------------------------------------------------------------------------------------------
(35,472,962) 29,633,191 (38,576) (2,120,481 ) 604,471 (1,275,770) 609,749 (1,606,379)
------------------------------------------------------------------------------------------------------------------------------------
(10,987,043) 55,513,661 (819,775) (1,717,671 ) 2,632,181 (483,942) 4,008,233 1,406,098
------------------------------------------------------------------------------------------------------------------------------------
(4,708,348) (3,084,788) (417,994) (728,282 ) (1,906,339) (3,649,343) (3,362,513) (5,989,108)
------------------------------------------------------------------------------------------------------------------------------------
-- (2,677,890) -- (15,039 ) -- -- -- (123,288)
------------------------------------------------------------------------------------------------------------------------------------
(1,883,339) (18,824,138) -- (533,458 ) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
-- -- -- (357,823 ) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
(6,591,687) (24,586,816) (417,994) (1,634,602 ) (1,906,339) (3,649,343) (3,362,513) (6,112,396)
------------------------------------------------------------------------------------------------------------------------------------
55,500,469 510,600,358 4,658,340 9,337,260 13,856,014 30,284,247 26,261,226 51,530,513
------------------------------------------------------------------------------------------------------------------------------------
6,406,339 23,927,794 376,651 1,568,393 1,716,668 3,444,914 2,985,731 5,771,282
------------------------------------------------------------------------------------------------------------------------------------
(63,653,632) (534,749,224) (10,242,857) (12,103,726 ) (17,646,217) (29,405,059) (27,929,265) (44,887,078)
------------------------------------------------------------------------------------------------------------------------------------
(1,746,824) (221,072) (5,207,866) (1,198,073 ) (2,073,535) 4,324,102 1,317,692 12,414,717
------------------------------------------------------------------------------------------------------------------------------------
(19,325,554) 30,705,773 (6,445,635) (4,550,346 ) (1,347,693) 190,817 1,963,412 7,708,419
------------------------------------------------------------------------------------------------------------------------------------
274,996,583 244,290,810 26,491,575 31,041,921 67,268,979 67,078,162 112,991,012 105,282,593
------------------------------------------------------------------------------------------------------------------------------------
$255,671,029 $ 274,996,583 $ 20,045,940 $26,491,575 $ 65,921,286 $67,268,979 $114,954,424 $112,991,012
------------------------------------------------------------------------------------------------------------------------------------
$ -- $ -- $ -- $ -- $ 237,098 $ 107,366 $ 231,549 $ --
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
U.S. GOVERNMENT
MORTGAGE BACKED MONEY
SECURITIES PORTFOLIO MARKET PORTFOLIO
----------------------------- -----------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31,
2000 1999 2000 1999
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------
$ 2,078,332 $ 4,434,232 $ 2,564,885 $ 9,131,861
------------------------------------------------------------------------------------------------------------------------------------
(289,222) (256,634) -- 2,539
------------------------------------------------------------------------------------------------------------------------------------
421,030 (3,075,447) -- --
------------------------------------------------------------------------------------------------------------------------------------
2,210,140 1,102,151 2,654,885 9,134,400
------------------------------------------------------------------------------------------------------------------------------------
(2,047, 362) (4,506,298) (2,564,885) (9,134,400)
------------------------------------------------------------------------------------------------------------------------------------
-- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
-- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
-- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
(2,047,362) (4,506,298) (2,564,885) (9,134,400)
------------------------------------------------------------------------------------------------------------------------------------
7,740,850 19,032,932 636,384,471 7,084,700,140
------------------------------------------------------------------------------------------------------------------------------------
1,706,034 3,919,458 2,044,077 5,438,487
------------------------------------------------------------------------------------------------------------------------------------
(15,864,611) (25,046,551) (630,628,568) (7,143,264,709)
------------------------------------------------------------------------------------------------------------------------------------
(6,417,727) (2,094,161) 7,799,980 (53,126,082)
------------------------------------------------------------------------------------------------------------------------------------
(6,254,949) (5,498,308) 7,799,980 (53,126,082)
------------------------------------------------------------------------------------------------------------------------------------
67,371,607 72,869,915 85,722,405 138,848,487
------------------------------------------------------------------------------------------------------------------------------------
$ 61,116,658 $67,371,607 $ 93,522,385 $ 85,722,405
------------------------------------------------------------------------------------------------------------------------------------
$ -- $ 126,723 $ 95,753 $ -- $ --
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
47
<PAGE>
THE TARGET PORTFOLIO TRUST
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
LARGE CAPITALIZATION
GROWTH PORTFOLIO
---------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, ------------------------------------------------------------
2000 1999 1998 1997 1996(b) 1995(b)
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
-----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $25.68 $18.29 $13.58 $12.97 $12.13 $9.74
-----------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income gains (loss) (.04) (.03) (.01) --(c) .02 .10
-----------------------------------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on
investment transactions 4.88 9.79 6.00 2.61 2.33 2.41
-----------------------------------------------------------------------------------------------------------
Total from investment
operations 4.84 9.76 5.99 2.61 2.35 2.51
-----------------------------------------------------------------------------------------------------------
Less distributions
Dividends from net investment income -- -- -- (.01) (.02) (.10)
-----------------------------------------------------------------------------------------------------------
Distributions in excess of net
investment income -- -- -- -- -- (.01)
-----------------------------------------------------------------------------------------------------------
Distributions from net realized gains (.14) (2.37) (1.28) (1.99) (1.49) (.01)
-----------------------------------------------------------------------------------------------------------
Total distributions (.14) (2.37) (1.28) (2.00) (1.51) (.12)
-----------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.38 $25.68 $18.29 $13.58 $12.97 $12.13
-----------------------------------------------------------------------------------------------------------
TOTAL RETURN(a) 18.94% 55.37% 44.22% 20.77% 21.09% 25.76%
-----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
-----------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $597,630 $515,470 $329,803 $243,895 $220,782 $180,077
-----------------------------------------------------------------------------------------------------------
Average net assets (000) $565,977 $385,995 $277,794 $242,233 $202,736 $162,982
-----------------------------------------------------------------------------------------------------------
Ratios to average net assets
Expenses .66%(c) .68% .68% .73% .82% .78%
-----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.25)%(c) (.16)% (.05)% (.01)% .19% .88%
-----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 26% 50% 54% 82% 65% 154%
-----------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
(b) Calculated based upon average shares outstanding during the year.
(c) Annualized.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
48
<PAGE>
<TABLE>
<CAPTION>
LARGE CAPITALIZATION SMALL CAPITALIZATION
VALUE PORTFOLIO GROWTH PORTFOLIO
--------------------------------------------------------------------------- -------------------------------------------------
Six Months Six Months
Ended Year Ended December 31, Ended Year Ended December 31,
June 30, ------------------------------------------------------------ June 30, ----------------------------------
2000 1999 1998 1997(b) 1996(b) 1995(b) 2000 1999 1998 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------------------
$13.01 $15.87 $16.21 $13.97 $12.57 $10.22 $17.47 $15.35 $15.57 $14.93
--------------------------------------------------------------------------------------------------------------------------------
.14 .27 .28 .31 .31 .33 (.04) (.06) (.05) (.05)
--------------------------------------------------------------------------------------------------------------------------------
)
(1.11 (1.00) 1.34 3.77 2.07 2.89 2.36 4.35 .48 3.02
--------------------------------------------------------------------------------------------------------------------------------
)
(.97 (.73) 1.62 4.08 2.38 3.22 2.32 4.29 .43 2.97
--------------------------------------------------------------------------------------------------------------------------------
-- (.29) (.27) (.28) (.31) (.30) -- -- -- --
--------------------------------------------------------------------------------------------------------------------------------
-- -- -- -- (.03) -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------------
(.37) (1.84) (1.69) (1.56) (.64) (.37) (1.59) (2.17) (.65) (2.33)
--------------------------------------------------------------------------------------------------------------------------------
(.37) (2.13) (1.96) (1.84) (.98) (.67) (1.59) (2.17) (.65) (2.33)
--------------------------------------------------------------------------------------------------------------------------------
$11.67 $13.01 $15.87 $16.21 $13.97 $12.57 $18.20 $17.47 $15.35 $15.57
--------------------------------------------------------------------------------------------------------------------------------
(7.75)% (4.37)% 10.25% 29.80% 19.17% 32.08% 14.58% 29.20% 2.55% 20.85%
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
$226,539 $262,156 $283,488 $275,093 $227,706 $187,596 $208,409 $186,603 $158,982 $165,898
--------------------------------------------------------------------------------------------------------------------------------
$236,793 $279,900 $282,078 $253,579 $208,898 $163,124 $194,073 $150,593 $162,654 $156,570
--------------------------------------------------------------------------------------------------------------------------------
%(c)
.75 .73% .71% .72% .77% .76% .77%(c) .80% .77% .79%
--------------------------------------------------------------------------------------------------------------------------------
2.23%(c) 1.74% 1.65% 1.90% 2.33% 2.83% (.48)%(c) (.45)% (.35)% (.36)%
--------------------------------------------------------------------------------------------------------------------------------
48% 36% 24% 21% 22% .59% .87% 207% 69% 106%
--------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
----------
1996(b) 1995(b)
<C> <C>
--------------------------------------------------------------------------------------------------------------------------------
$14.15 $11.59
--------------------------------------------------------------------------------------------------------------------------------
(.02) .02
--------------------------------------------------------------------------------------------------------------------------------
2.63 2.84
--------------------------------------------------------------------------------------------------------------------------------
2.61 2.86
--------------------------------------------------------------------------------------------------------------------------------
-- (.02)
--------------------------------------------------------------------------------------------------------------------------------
-- --
--------------------------------------------------------------------------------------------------------------------------------
(1.83) (.28)
--------------------------------------------------------------------------------------------------------------------------------
(1.83) (.30)
--------------------------------------------------------------------------------------------------------------------------------
$14.93 $14.15
--------------------------------------------------------------------------------------------------------------------------------
18.88% 24.62%
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
$147,469 $121,533
--------------------------------------------------------------------------------------------------------------------------------
$141,496 $107,649
--------------------------------------------------------------------------------------------------------------------------------
.89% .85%
--------------------------------------------------------------------------------------------------------------------------------
(.32)% .12%
--------------------------------------------------------------------------------------------------------------------------------
108% 120%
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
49
<PAGE>
THE TARGET PORTFOLIO TRUST
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
SMALL CAPITALIZATION
VALUE PORTFOLIO
--------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, ----------------------------------------------------------
2000 1999 1998(c) 1997(c) 1996(c) 1995(c)
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
-----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $14.97 $14.98 $17.50 $15.22 $13.07 $11.07
-----------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income (loss) .05 .11 .08 .08 .11 .14
-----------------------------------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on
investment transactions 1.24 .10 (1.27) 4.37 2.71 2.00
-----------------------------------------------------------------------------------------------------------
Total from investment
operations 1.29 .21 (1.19) 4.45 2.82 2.14
-----------------------------------------------------------------------------------------------------------
Less distributions
Dividends from net investment income --(d) (.12) (.07) (.08) (.11) (.14)
-----------------------------------------------------------------------------------------------------------
Distributions in excess of net
investment income -- -- -- (.01) -- --
-----------------------------------------------------------------------------------------------------------
Distributions from net realized gains (.16) (.10) (1.26) (2.08) (.56) --
-----------------------------------------------------------------------------------------------------------
Distributions in excess of net
realized gains -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------
Tax return of capital distributions -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------
Total distributions (.16) (.22) (1.33) (2.17) (.67) (.14)
-----------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.10 $14.97 $14.98 $17.50 $15.22 $13.07
-----------------------------------------------------------------------------------------------------------
TOTAL RETURN(b) 8.70% 1.39% (6.62)% 29.98% 21.75% 19.21%
-----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
-----------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $128,458 $127,010 $141,557 $163,414 $126,672 $97,594
-----------------------------------------------------------------------------------------------------------
Average net assets (000) $124,052 $129,077 $153,756 $144,160 $110,564 $88,085
-----------------------------------------------------------------------------------------------------------
Ratios to average net assets
Expenses .93%(e) .87% .79% .81% .92% 1.00%
-----------------------------------------------------------------------------------------------------------
Net investment income (loss) .62%(e) .75% .48% .45% .77% 1.14%
-----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 42% 39% 36% 60% 110%
-----------------------------------------------------------------------------------------------------------
</TABLE>
(a) Net of expense subsidies.
(b) 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.
(c) Calculated based upon average shares outstanding during the year.
(d) Less than $.005 per share.
(e) Annualized.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
50
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL
EQUITY PORTFOLIO BOND PORTFOLIO
--------------------------------------------------------------------------- ----------------------------------------------
Six Months Six Months
Ended Year Ended December 31, Ended Year Ended December 31,
June 30, ------------------------------------------------------------ June 30, -------------------------------
2000 1999 1998 1997 1996(c) 1995(c) 2000 1999 1998 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------
$17.37 $15.54 $14.27 $14.82 $13.64 $11.95 $8.48 $9.52 $9.17 $10.17
-----------------------------------------------------------------------------------------------------------------------------
.12 .23 .23 .21 .25 .17 .16 .30 .31 .42
-----------------------------------------------------------------------------------------------------------------------------
(.85) 3.29 1.98 1.32 1.79 1.67 (.43) (.84) .45 (1.00)
-----------------------------------------------------------------------------------------------------------------------------
(.73) 3.52 2.21 1.53 2.04 1.84 (.27) (.54) .76 (.58)
-----------------------------------------------------------------------------------------------------------------------------
(.12) (.23) (.10) (.41) (.22) (.11) (.14) (.23) (.31) --
-----------------------------------------------------------------------------------------------------------------------------
(.19) (.17) -- -- -- -- -- -- (.06) (.06)
-----------------------------------------------------------------------------------------------------------------------------
(.12) (1.29) (.84) (1.67) (.64) (.04) -- (.16) (.04) --(d)
-----------------------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- -- (.11) -- (.36)
-----------------------------------------------------------------------------------------------------------------------------
(.43) (1.69) (.94) (2.08) (.86) (.15) (.14) (.50) (.41) (.42)
-----------------------------------------------------------------------------------------------------------------------------
$16.21 $17.37 $15.54 $14.27 $14.82 $13.64 $8.07 $8.48 $9.52 $9.17
-----------------------------------------------------------------------------------------------------------------------------
(4.01)% 23.30% 15.49% 10.60% 15.25% 15.38% (3.15)% (5.88)% 8.55% (5.73)%
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
$255,671 $274,997 $244,291 $237,851 $240,563 $191,598 $20,046 $26,492 $31,042 $31,189
-----------------------------------------------------------------------------------------------------------------------------
$254,139 $246,148 $246,335 $245,536 $221,626 $183,414 $22,996 $29,300 $30,720 $35,163
-----------------------------------------------------------------------------------------------------------------------------
.91%(e) .93% .91% .93% .99% 1.02% 1.44%(e) 1.25% 1.54% 1.35%
-----------------------------------------------------------------------------------------------------------------------------
1.36%(e) 1.25% 1.42% 1.15% 1.77% 1.32% 4.03%(e) 3.36% 3.38% 4.44%
-----------------------------------------------------------------------------------------------------------------------------
28% 35% 45% 37% 39% 76% 30% 132% 110% 202%
-----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
1996 1995
<S> <C>
-----------------------------------------------------------------------------------------------------------------------------
$10.19 $9.57
-----------------------------------------------------------------------------------------------------------------------------
.51 .57(a)
-----------------------------------------------------------------------------------------------------------------------------
(.08) .82
-----------------------------------------------------------------------------------------------------------------------------
.43 1.39
-----------------------------------------------------------------------------------------------------------------------------
(.21) (.57)
-----------------------------------------------------------------------------------------------------------------------------
-- --
-----------------------------------------------------------------------------------------------------------------------------
(.24) (.20)
-----------------------------------------------------------------------------------------------------------------------------
-- --
-----------------------------------------------------------------------------------------------------------------------------
-- --
-----------------------------------------------------------------------------------------------------------------------------
(.45) (.77)
-----------------------------------------------------------------------------------------------------------------------------
$10.17 $10.19
-----------------------------------------------------------------------------------------------------------------------------
4.45% 14.66%
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
$41,780 $34,660
-----------------------------------------------------------------------------------------------------------------------------
$38,788 $29,510
-----------------------------------------------------------------------------------------------------------------------------
1.34% 1.00%(a)
-----------------------------------------------------------------------------------------------------------------------------
5.02% 5.56%(a)
-----------------------------------------------------------------------------------------------------------------------------
226% 456%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
51
<PAGE>
THE TARGET PORTFOLIO TRUST
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
TOTAL RETURN
BOND PORTFOLIO
------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, --------------------------------------------------------
2000 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $9.86 $10.49 $10.56 $10.28 $10.62 $9.48
---------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .27 .56 .58 .57 .57 .62(a)
---------------------------------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on
investment transactions .11 (.63) .27 .35 (.09) 1.18
---------------------------------------------------------------------------------------------------------
Total from investment
operations .38 (.07) .85 .92 .48 1.80
---------------------------------------------------------------------------------------------------------
Less distributions
Dividends from net investment income (.27) (.56) (.58) (.54) (.56) (.58)
---------------------------------------------------------------------------------------------------------
Distributions in excess of net
investment income -- -- -- -- -- --
---------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- -- (.34) (.10) (.26) (.08)
---------------------------------------------------------------------------------------------------------
Distributions in excess of net
realized gains -- -- -- -- -- --
---------------------------------------------------------------------------------------------------------
Total distributions (.27) (.56) (.92) (.64) (.82) (.66)
---------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.97 $9.86 $10.49 $10.56 $10.28 $10.62
---------------------------------------------------------------------------------------------------------
TOTAL RETURN(b) 3.98% (.67)% 8.28% 9.23% 5.02% 19.63%
---------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
---------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $65,921 $67,269 $67,078 $50,411 $49,218 $45,118
---------------------------------------------------------------------------------------------------------
Average net assets (000) $64,888 $65,911 $61,786 $48,123 $47,246 $37,023
---------------------------------------------------------------------------------------------------------
Ratios to average net assets
Expenses .80%(c) .82% .81% .91% .94% .85%(a)
---------------------------------------------------------------------------------------------------------
Net investment income 6.01%(c) 5.54% 5.54% 5.54% 5.67% 6.21%(a)
---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 226% 368% 327% 323% 340% 141%
---------------------------------------------------------------------------------------------------------
</TABLE>
(a) Net of expense subsidies.
(b) 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.
(c) Annualized.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
52
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE-TERM MORTGAGE BACKED
BOND PORTFOLIO SECURITIES PORTFOLIO
------------------------------------------------------------------------- ----------------------------------------------
Six Months Six Months
Ended Year Ended December 31, Ended Year Ended December 31,
June 30, ---------------------------------------------------------- June 30, -------------------------------
2000 1999 1998 1997 1996 1995 2000 1999 1998 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------
$ 9.92 $ 10.36 $ 10.42 $ 10.30 $ 10.51 $ 10.47 $ 9.97 $ 10.47 $ 10.45 $ 10.21
---------------------------------------------------------------------------------------------------------------------------
.30 .56 .63 .58 .59 .63 .32 .66 .64 .64
---------------------------------------------------------------------------------------------------------------------------
.05 (.43) .09 .28 (.07) .94 .02 (.50) .01 .23
---------------------------------------------------------------------------------------------------------------------------
.35 .13 .72 .86 .52 1.57 .34 .16 .65 .87
---------------------------------------------------------------------------------------------------------------------------
(.30) (.57) (.61) (.57) (.59) (.60) (.31) (.66) (.63) (.63)
---------------------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
-- -- (.17) (.17) (.14) (.02) -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- -- -- -- --
---------------------------------------------------------------------------------------------------------------------------
(.30) (.57) (.78) (.74) (.73) (.62) (.31) (.66) (.63) (.63)
---------------------------------------------------------------------------------------------------------------------------
$9.97 $9.92 $10.36 $10.42 $10.30 $10.51 $10.00 $9.97 $10.47 $10.45
---------------------------------------------------------------------------------------------------------------------------
3.45% 1.30% 7.09% 8.57% 5.22% 16.87% 3.48% 1.54% 6.37% 8.82%
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
$114,954 $112,991 $105,283 $95,071 $100,392 $77,125 $61,117 $67,372 $72,870 $71,596
---------------------------------------------------------------------------------------------------------------------------
$110,678 $108,243 $101,219 $95,575 $81,723 $68,628 $62,510 $70,244 $73,737 $71,757
---------------------------------------------------------------------------------------------------------------------------
.68%(c) .67% .66% .71% .73% .79% .84%(c) .80% .70% .88%
---------------------------------------------------------------------------------------------------------------------------
6.18%(c) 5.63% 5.71% 5.64% 5.69% 6.09% 6.69%(c) 6.31% 6.14% 6.21%
---------------------------------------------------------------------------------------------------------------------------
197% 253% 249% 249% 311% 93% 24% 14% 24% 128%
---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
1996 1995
<S> <C>
---------------------------------------------------------------------------------------------------------------------------
$ 10.31 $ 9.51
---------------------------------------------------------------------------------------------------------------------------
.65 .68(a)
---------------------------------------------------------------------------------------------------------------------------
(.12) .83
---------------------------------------------------------------------------------------------------------------------------
.53 1.51
---------------------------------------------------------------------------------------------------------------------------
(.63) (.68)
---------------------------------------------------------------------------------------------------------------------------
-- (.03)
---------------------------------------------------------------------------------------------------------------------------
-- --
---------------------------------------------------------------------------------------------------------------------------
-- --
---------------------------------------------------------------------------------------------------------------------------
(.63) (.71)
---------------------------------------------------------------------------------------------------------------------------
$10.21 $10.31
---------------------------------------------------------------------------------------------------------------------------
5.56% 16.18%
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
$73,867 $69,759
---------------------------------------------------------------------------------------------------------------------------
$72,214 $65,149
---------------------------------------------------------------------------------------------------------------------------
.91% .85%(a)
---------------------------------------------------------------------------------------------------------------------------
6.44% 6.79%(a)
---------------------------------------------------------------------------------------------------------------------------
102% 154%
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
53
<PAGE>
THE TARGET PORTFOLIO TRUST
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
U.S. GOVERNMENT
MONEY MARKET PORTFOLIO
----------------------------------------------------------------------
Six
Months
Ended
June 30, Year Ended December 31,
-------- ---------------------------------------------------------
2000 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------------------------------------------------------------------------------------------------------
Income from investment operations
Net investment income .026 .045 .048 .049 .045 .051(a)
-------------------------------------------------------------------------------------------------------
Total from investment
operations .026 .045 .048 .049 .045 .051
-------------------------------------------------------------------------------------------------------
Less distributions
Dividends from net investment income (.026) (.045) (.048) (.049) (.045) (.051)
-------------------------------------------------------------------------------------------------------
Total distributions (.026) (.045) (.048) (.049) (.045) (.051)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(b) 2.59% 4.67% 4.88% 4.95% 4.53% 5.25%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
-------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $93,522 $85,722 $138,848 $42,326 $27,397 $18,855
-------------------------------------------------------------------------------------------------------
Average net assets (000) $94,984 $196,853 $106,500 $37,675 $19,132 $20,173
-------------------------------------------------------------------------------------------------------
Ratios to average net assets
Expenses .53%(c) .43% .55% .65% .89% .75%(a)
-------------------------------------------------------------------------------------------------------
Net investment income 5.43%(c) 4.64% 4.85% 4.91% 4.49% 5.18%(a)
-------------------------------------------------------------------------------------------------------
</TABLE>
(a) Net of expense subsidies.
(b) 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.
(c) Annualized.
--------------------------------------------------------------------------------
See Notes to Financial Statements beginning on page 55
54
<PAGE>
THE TARGET PORTFOLIO TRUST
Notes to Financial Statements
The Target Portfolio Trust (the 'Fund') is an open-end management
investment company. The Fund was established as a Delaware business
trust on July 29, 1992 and consists of ten separate portfolios (the
'Portfolio' or 'Portfolios'). All the Portfolios are diversified, as
defined under the Investment Company Act of 1940, except for the
International
Bond Portfolio. Investment operations commenced on January 5, 1993 with the
exception of the International Bond Portfolio which commenced on May 17, 1994.
The ten Portfolios comprising the Fund and the investment objectives of
each Portfolio are as follows:
Large Capitalization Long-term capital appreciation through
Growth Portfolio.... investment primarily in common stocks
that, in the investment adviser's opinion,
should have earnings growth faster than
that of the S&P 500;
Large Capitalization Total return of capital appreciation and
Value dividend income through investment
Portfolio........... primarily in common stocks that, in the
adviser's opinion, are undervalued;
Small Capitalization Maximum capital appreciation through
Growth investment primarily in small company
Portfolio........... common stocks that in the investment
adviser's opinion should have earnings
growth faster than that of the U.S.
economy in general;
Small Capitalization Above average capital appreciation through
Value investment in common small company stocks
Portfolio........... that, in the adviser's opinion, are
undervalued or overlooked in the market-
place;
International Equity Capital appreciation through investment
Portfolio........... primarily in stocks of companies domiciled
outside the United States;
International Bond High total return through investment
Portfolio........... primarily in high quality foreign debt
securities;
Total Return Bond Total return of current income and capital
Portfolio........... appreciation through investment primarily
in fixed-income securities of varying
maturities with a dollar-weighted average
portfolio maturity of more than four years
but not more than fifteen years;
Intermediate-Term Current income and reasonable stability of
Bond principal through investment primarily in
Portfolio........... high quality fixed-income securities of
varying maturities with a dollar-weighted
average portfolio maturity of more than
three years but not more than ten years;
Mortgage Backed High current income primarily and capital
Securities appreciation secondarily each consistent
Portfolio........... with the protection of capital through
investment primarily in mortgage-related
securities;
U.S. Government Money Maximum current income consistent with
Market Portfolio.... maintenance of liquidity and preservation
of capital through investment exclusively
in short-term securities issued or
guaranteed by the U.S. Government, its
agencies or instrumentalities.
The ability of issuers of debt securities (other than those issued or
guaranteed by the U.S. Government) held by the Portfolios to meet their
obligations may be affected by economic or political 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 in the preparation of its financial statements.
Securities Valuations: Securities, including options, futures contracts
and options thereon, for which the primary market is on a national securities
exchange, commodities exchange or board of trade 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, including options, 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, are 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 are
valued at a price provided by an independent broker/dealer or pricing service.
Quotations of foreign securities in a foreign currency are converted to
U.S. dollar equivalents at the current rate obtained from a recognized bank or
dealer.
Securities for which market quotations are not available, are valued in
good faith under procedures adopted by the Trustees.
Securities held by the U.S. Government Money Market Portfolio are valued
at amortized cost, which approximates market value. Short-term securities held
by the other portfolios which mature in sixty days or less 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 portfolios which mature in more than sixty days are valued at current
market quotations.
In connection with transactions in repurchase agreements, it is the Fund's
policy that its custodian take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. If the seller defaults, and the value
of the collateral declines or, if bankruptcy proceedings are commenced with
respect to the seller of the security, realization of the collateral by the Fund
may be delayed or limited.
All securities (except those of the U.S. Government Money Market
Portfolio) are valued as of 4:15 p.m., New York time. The U.S. Government Money
Market Portfolio calculates net asset value as of 4:30 p.m., New York time.
Securities Transactions and Net 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. The Fund
amortizes premiums and discounts paid on purchases of portfolio securities as
adjustments to interest income. Expenses are recorded on the accrual basis which
may require the use of certain estimates by management.
--------------------------------------------------------------------------------
55
<PAGE>
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 Portfolio 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 Portfolio 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 Portfolio invests in financial futures contracts in order to hedge its
existing portfolio securities, or securities the Portfolio intends to purchase,
against fluctuations in value caused by changes in prevailing interest rates.
Should interest rates move unexpectedly, the Portfolio may not achieve the
anticipated benefits of the financial futures contracts and may realize a loss.
The use of futures transactions involves the risk of imperfect correlation in
movements in the price of futures contracts, interest rates and the underlying
hedged assets. The International Equity Portfolio, International Bond Portfolio,
Intermediate-Term Bond Portfolio, Mortgage-Backed Securities Portfolio and Total
Return Bond Portfolio are the only portfolios that may invest in financial
futures contracts.
Foreign Currency Translation: The books and records of the Portfolios are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
(i) market value of investment securities, other assets and
liabilities--at the closing rates of exchange;
(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Portfolios are presented at the foreign
exchange rates and market values at the close of the fiscal period, the
Portfolios 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 Portfolios do not isolate the effect of changes in
foreign exchange rates from the fluctuations arising from changes in the market
prices of long-term portfolio securities sold during the fiscal period.
Accordingly, these realized foreign currency gains (losses) are included in the
reported net realized gains (losses) on investment transactions.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from sales and maturities of short-term
securities, 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, interest and foreign taxes recorded
on the Fund's books and the U.S. dollar equivalent amounts actually received or
paid. Net currency gains and losses from valuing foreign currency denominated
assets and liabilities at period-end exchange rates are reflected as a component
of net unrealized appreciation/depreciation on investments and foreign
currencies.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the level of governmental supervision and
regulation of foreign securities markets and the possibility of political or
economic instability.
Foreign Currency Forward Contracts: The International Equity Portfolio,
International Bond Portfolio, Intermediate-Term Bond Portfolio and Total Return
Bond Portfolio may enter into foreign currency forward contracts in order to
hedge their exposure to changes in foreign currency exchange rates on their
foreign portfolio holdings. A foreign currency forward contract is a commitment
to purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Portfolio enters into foreign currency forward contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings or on specific receivables and payables denominated in a
foreign currency. The contracts are valued daily at current exchange rates and
any unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments. Gain or loss is realized on the settlement date of
the contract equal to the difference between the settlement value of the
original and renegotiated forward contracts. This gain or loss, if any, is
included in net realized gain (loss) on foreign currency transactions. Risks may
arise upon entering into these contracts from the potential inability of the
counter parties to meet the terms of their contracts.
Short Sales: Certain portfolios of the Fund may sell a security it does
not own in anticipation of a decline in the market value of that security (short
sale). When a Portfolio makes a short sale, it must borrow the security sold
short and deliver it to the buyer. The proceeds of the short sale will be
retained by the broker-dealer through which it made the short sale as collateral
for its obligation to deliver the security upon conclusion of the sale. The
Portfolio may have to pay a fee to borrow the particular security and may be
obligated to remit any interest or dividends received on such borrowed
securities. A gain, limited to the price at which the Portfolio sold the
security short, or a loss, unlimited in magnitude, will be recognized upon the
termination of a short sale if the market price at termination is less than or
greater than, respectively, the proceeds originally received.
Options: The International Equity Portfolio, the International Bond
Portfolio, the Intermediate-Term Bond Portfolio, the Total Return Bond Portfolio
and the Mortgage-Backed Securities Portfolio may either purchase or write
options in order to hedge against adverse market movements or fluctuations in
value caused by changes in prevailing interest rates or foreign currency
exchange rates with respect to securities or currencies which the Portfolio
currently owns or intends to purchase. When the Portfolio purchases an option,
it pays a premium and an amount equal to that premium is recorded as an
investment. When the Portfolio writes an option, it receives a premium and an
amount equal to that premium is recorded as a liability. The investment or
liability is adjusted daily to reflect the current market value of the option.
If an option expires unexercised, the Fund realizes a gain or loss to the extent
of the premium received or paid. If an option is exercised, the premium received
or paid is an adjustment to the proceeds from the sale or the cost basis of the
purchase in determining whether the Portfolio has realized a gain or loss. The
difference between the premium and the amount received or paid on effecting a
closing purchase or sale transaction is also treated as a realized gain or loss.
Gain or loss on purchased options is included in net realized gain (loss) on
investment transactions. Gain or loss on written options is presented separately
as net realized gain (loss) on written option transactions.
The Portfolio, as writer of an option, has no control over whether the
underlying securities or currencies may be sold (called) or purchased (put). As
a result, the Portfolio bears the market risk of an unfavorable change in the
price of the security or currency underlying the written option. The Portfolio,
as purchaser of an option, bears the risk of the potential inability of the
counterparties to meet the terms of their contracts.
Swaps: The Intermediate-Term Bond Portfolio may enter into a swap in order
to hedge against adverse movements in interest notes. A swap is an agreement
between two parties to exchange a series of cash flows at specified intervals.
Based on a notional amount, each party pays an interest rate or the change in
the value of a security. Dividends and interest on the securities in the swap
are included in the value of the
--------------------------------------------------------------------------------
56
<PAGE>
exchange. The swaps are valued daily at current market value and any unrealized
gain or loss is included in net unrealized appreciation or depreciation on
investments. Gain or loss is realized on the termination date of the swap and is
equal to the difference between the Portfolio's basis in the swap and the
proceeds of the closing transaction, including any fees. During the period that
the swap agreement is open, the Portfolio may be subject to risk from the
potential inability of the counterparty to meet the terms of the agreement.
Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with American Institute of Certified
Public Accountants (AICPA) Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distributions by Investment Companies. Net investment income,
net realized gains and net assets were not affected by this change. For the six
months ended June 30, 2000, the application of this statement resulted in the
following reclassifications:
<TABLE>
<CAPTION>
Undistributed
Accumulated Net
Net Gain/ Investment
Portfolio Ref. Loss Income
--------------------------- ------- ------------ ------------
<S> <C> <C> <C>
International Equity....... (a) $ 3,503,397 $(3,503,397 )
International Bond......... (a) 968,503 (968,503 )
Total Return Bond.......... (a) (97,879 ) 97,879
Intermediate-Term Bond..... (a) (213,724 ) 213,724
---------------
(a) Reclass of net foreign currency gains/losses.
</TABLE>
Dividends and Distributions: The International Bond Portfolio, Total
Return Bond Portfolio, Intermediate-Term Bond Portfolio and Mortgage Backed
Securities Portfolio declare dividends of their net investment income daily and
pay such dividends monthly. The U.S. Government Money Market Portfolio declares
net investment income and any net capital gain (loss) daily and pays such
dividends monthly. Each other Portfolio declares and pays a dividend of its net
investment income, if any, at least annually. Each Portfolio except for the U.S.
Government Money Market Portfolio declares and pays its net capital gains, if
any, at least annually.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Taxes: For federal income tax purposes, each portfolio in the Fund is
treated as a separate tax-paying entity. It is the intent of each Portfolio 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 interest and dividends have been provided for
in accordance with the Portfolios' understanding of the applicable country's tax
rules and rates.
-------------------------------------------------------------------
Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund
Management LLC ('PIFM') pursuant to which PIFM manages the investment operations
of the Fund, administers the Fund's affairs and is responsible for the
selection, subject to review and approval of the Trustees, of the advisers. PIFM
supervises the advisers' performance of advisery services and makes
recommendations to the Trustees as to whether the advisers' contracts should be
renewed, modified or terminated. PIFM pays for the costs pursuant to the
advisery agreements, the cost of compensation of officers of the Fund, occupancy
and certain clerical and accounting costs of the Fund. The Fund bears all other
costs and expenses.
The advisers noted below each furnished investment advisery services in
connection with the management of the Portfolios. Effective May 25, 2000, J.P.
Morgan Investment Management, Inc. became the subadviser of the Large
Capitalization Value Portfolio and will serve this portfolio under the same
terms and conditions as under the agreement with INVESCO Capital Management,
Inc. Effective July 1, 2000, Hotchkis and Wiley, the subadviser for the Large
Capitalization Value Portfolio, changed their name to Mercury Advisors. Each of
the two advisers of the domestic equity Portfolios--the Large Capitalization
Growth Portfolio, Large Capitalization Value Portfolio, Small Capitalization
Growth Portfolio and Small Capitalization Value Portfolio--manages approximately
50% of the assets of the respective Portfolio. In general, in order to maintain
an approximately equal division of assets between the two advisers, all daily
cash inflows (i.e., subscriptions and reinvested distributions) and outflows
(i.e., redemptions and expenses items) are divided between the two advisers as
PIFM deems appropriate. In addition, there will be a periodic rebalancing of
each Portfolio's assets to take account of market fluctuations in order to
maintain the approximately equal allocation. As a consequence, each Portfolio
will allocate assets from the better performing of the two advisers to the
other.
<TABLE>
<CAPTION>
Portfolio Adviser
------------------------- ------------------------------------------
<S> <C>
Large Capitalization
Growth................. Oak Associates, Ltd., and
Columbus Circle Investors
Large Capitalization
Value.................. J.P. Morgan Investment Management, Inc.
and
Mercury Advisors
Small Capitalization
Growth................. Sawgrass Asset Management, L.L.C.
and Fleming Asset Management USA
Small Capitalization
Value.................. Wood, Struthers & Winthrop Management
Corp. and Lazard Asset Management
International Equity..... Lazard Asset Management
International Bond....... Delaware International Advisers Ltd.
Total Return Bond and
Intermediate-Term
Bond................... PIMCO
Mortgage Backed
Securities and U.S.
Government Money
Market................. Wellington Management Company, LLP
</TABLE>
The management fee paid PIFM is computed daily and payable monthly, at an
annual rate of the average daily net assets of the Portfolios specified below
and PIFM, in turn, pays each adviser a fee for its services.
<TABLE>
<CAPTION>
Total
Portfolio Management Fee Adviser Fee
-------------------------------- -------------- -----------
<S> <C> <C>
Large Capitalization Growth..... .60% .30%
Large Capitalization Value...... .60% .30%
Small Capitalization Growth..... .60% .40%
Small Capitalization Value...... .60% .40%
International Equity............ .70% .40%
International Bond.............. .50% .30%
Total Return Bond............... .45% .25%
Intermediate-Term Bond.......... .45% .25%
Mortgage Backed Securities...... .45% .25%
U.S. Government Money Market.... .25% .125%
</TABLE>
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS'). PIMS serves the Fund without compensation.
PIFM and PIMS are wholly owned subsidiaries of The Prudential Insurance
Company of America.
--------------------------------------------------------------------------------
57
<PAGE>
-------------------------------------------------------------------
Note 3. Other Transactions
with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of
PIFM, serves as the Fund's transfer agent. The following amounts represent the
fees PMFS charged for the six months ended June 30, 2000 as well as the fees due
PMFS as of June 30, 2000.
<TABLE>
<CAPTION>
Amount incurred
for the Amount Due
six months ended as of
June 30, June 30,
Portfolio 2000 2000
------------------------------- ----------------- ------------
<S> <C> <C>
Large Capitalization Growth.... $74,700 $ 13,400
Large Capitalization Value..... 63,400 10,900
Small Capitalization Growth.... 62,400 10,800
Small Capitalization Value..... 57,400 9,900
International Equity........... 62,000 10,700
International Bond............. 17,500 2,900
Total Return Bond.............. 35,500 5,700
Intermediate-Term Bond......... 33,600 6,000
Mortgage Backed Securities..... 26,900 4,500
U.S. Government Money Market... 18,000 3,000
</TABLE>
For the six months ended June 30, 2000, Prudential Securities Incorporated
('PSI') earned approximately $19,700 and $76,739 in brokerage commissions on
behalf of certain portfolio transactions executed with the Large Capitalization
Value Portfolio and Small Capitalization Growth Portfolio, respectively.
-------------------------------------------------------------------
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, excluding short-term
investments and written options, for the six months ended June 30, 2000 were as
follows:
<TABLE>
<CAPTION>
Portfolio Purchases Sales
------------------------------------ ------------ ------------
<S> <C> <C>
Large Capitalization Growth......... $143,984,812 $153,082,768
Large Capitalization Value.......... 113,735,516 127,495,833
Small Capitalization Growth......... 165,032,053 174,347,683
Small Capitalization Value.......... 26,603,950 36,189,167
International Equity................ 68,712,374 82,415,200
International Bond.................. 6,701,022 12,486,233
Total Return Bond................... 170,311,344 172,828,361
Intermediate-Term Bond.............. 275,387,800 253,974,411
Mortgage Backed Securities.......... 14,664,147 14,809,027
</TABLE>
The federal income tax basis and unrealized appreciation/
depreciation of each of the Portfolios' investments, excluding written options
as of June 30, 2000, were as follows:
<TABLE>
<CAPTION>
Net
Unrealized
Appreciation Gross Unrealized
Portfolio Basis (Depreciation) Appreciation Depreciation
--------------------- ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C>
Large Capitalization
Growth............. $243,331,737 $ 354,779,993 $356,488,814 $ 1,708,821
Large Capitalization
Value.............. 229,530,069 (3,605,527) 22,867,713 26,473,240
Small Capitalization
Growth............. 174,805,716 32,046,591 44,086,808 12,040,217
Small Capitalization
Value.............. 109,766,338 19,075,692 27,917,947 8,842,255
International
Equity............. 210,867,391 43,397,089 56,574,026 13,176,937
International Bond... 21,532,721 (1,889,049) 102,471 1,991,520
Total Return Bond.... 83,919,470 (480,826) 675,714 1,156,540
Intermediate-Term
Bond............... 164,858,431 (450,857) 770,649 1,221,506
Mortgage Backed
Securities......... 62,806,366 (844,676) 686,038 1,530,714
</TABLE>
For federal income tax purposes, International Bond Portfolio, Total
Return Bond Portfolio, Intermediate-Term Bond Portfolio and Mortgage Backed
Securities Portfolio had a capital loss carryforward as of December 31, 1999.
Accordingly, no capital gain distributions are expected to be paid to
shareholders of the International Bond Portfolio, Total Return Bond Portfolio
and Mortgage Backed Securities Portfolio until future net gains have been
realized in excess of such carryforward. In addition, certain Portfolios have
elected to treat net currency losses incurred in the two-month period ended
December 31, 1999 as having occurred in the current fiscal year.
<TABLE>
<CAPTION>
Net Losses
in two
Months Ended
Capital Loss Expiration December 31,
Portfolio Carryforward Year 1999
----------------------------- ------------ ---------- ---------------
<S> <C> <C> <C>
International Equity......... $ -- -- $ 28,139
International Bond
Portfolio.................. 211,700 2007 95,861
Total Return Bond
Portfolio.................. 2,722 2007 352,900
Intermediate-Term Bond
Portfolio.................. 3,241,758 2007 276,982
Mortgage Backed Securities
Portfolio.................. 458,600 2002 --
237,400 2007 35,900
</TABLE>
At June 30, 2000, the Total Return Bond and Intermediate-Term Bond
Portfolios bought financial futures contracts. The unrealized
appreciation/depreciation on such contracts as of June 30, 2000 were as follows:
<TABLE>
<CAPTION>
Total Return Bond Portfolio:
Value at Value at Unrealized
Number of Expiration June 30, Trade Appreciation
Contracts Type Date 2000 Date (Depreciation)
---------- ---------------- ---------- ------------ ---------- --------------
Long Positions:
<C> <S> <C> <C> <C> <C>
71 10-yr. T-Note Sep 2000 $ 6,992,391 $6,872,875 $ 119,516
3 Eurodollar Mar 2001 696,713 696,300 413
20 Eurodollar Jun 2001 4,644,000 4,630,750 13,250
7 Munibond Sep 2000 670,031 630,875 39,156
Short Positions:
2 10-yr. Eurobond Sep 2000 210,140 210,846 706
16 30-yr. T-Bonds Sep 2000 1,557,500 1,487,500 (70,000)
--------------
$ 103,041
--------------
--------------
</TABLE>
--------------------------------------------------------------------------------
58
<PAGE>
<TABLE>
<CAPTION>
Intermediate-Term Bond Portfolio:
Value at Value at Unrealized
Number of Expiration June 30, Trade Appreciation
Contracts Type Date 2000 Date (Depreciation)
---------- -------------------- ---------- ------------ ---------- --------------
Long Positions:
<C> <S> <C> <C> <C> <C>
33 5-yr. T-Note Sept. 2000 $3,267,516 $3,239,156 $ 28,360
------
------
</TABLE>
The Total Return Bond Portfolio entered into interest rate swap
agreements. Under the agreement the Portfolio receives the excess, if any, of a
floating rate over a fixed rate. The portfolio paid a transaction fee for the
agreement. Details of the swaps at June 30, 2000 are as follows:
<TABLE>
<CAPTION>
Notional Value at Unrealized
Amount Fixed Floating Termination Amortized June 30, Appreciation
(000) Rate Rate Date Cost 2000 (Depreciation)
--------- -------- ------------- ----------- --------- --------- --------------
<C> <C> <S> <C> <C> <C> <C>
30 year US
$ 1,400 1.112% swap spread 2/16/2005 $ -- $ 16,787 $ 16,787
10 year US
1,200 1.310% swap spread 6/17/2002 -- (4,200 ) (4,200)
1,000 7.000% 3 month LIBOR 9/28/2000 1,200 (1,914 ) (714)
1,300 7.000% 3 month LIBOR 9/22/2000 1,690 (1,390 ) 300
1,400 7.000% 3 month LIBOR 9/15/2000 1,715 (1,242 ) 473
10 year US
4,000 1.320% swap spread 6/15/2001 -- (16,000 ) (16,000)
4,000 7.498% 3 month LIBOR 5/8/2003 -- (29,536 ) (29,536)
190 6.175% 6 month LIBOR 5/22/2030 -- (2,899 ) (2,899)
50 6.250% 6 month LIBOR 1/24/2024 4,492 (4,378 ) 114
190,000 6.175% 6 month LIBOR 8/31/2000 1,184 (1,181 ) 3
4,900 7.750% 3 month LIBOR 9/13/2000 15,190 (13,544 ) 1,647
-------
$(34,025)
-------
-------
</TABLE>
The Intermediate-Term Bond Portfolio entered into 4 interest swap
agreements. Under the agreement the Portfolio receives the excess, if any, of a
floating rate over a fixed rate. The Portfolio paid a transaction fee for the
agreement. Details of the swaps at June 30, 2000 are as follows:
<TABLE>
<CAPTION>
Notional Value at Unrealized
Amount Fixed Floating Termination Amortized June 30, Appreciation
(000) Rate Rate Date Cost 2000 (Depreciation)
--------- -------- ------------- ----------- --------- --------- --------------
<C> <C> <S> <C> <C> <C> <C>
$ 320 6.175% 6 month LIBOR 5/22/30 $ -- $(4,883) $ (4,883)
90 6.25 6 month LIBOR 1/4/24 (8,086) (7,880) 206
(2,300 7.00 3 month LIBOR 9/22/00 (2,990) (2,460) 530
(2,400) 7.00 3 month LIBOR 9/15/00 (2,820) (2,011) 809
------
$ (3,338)
------
------
</TABLE>
At June 30, 2000, the Total Return Bond Portfolio had outstanding forward
currency contracts to sell foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
------------------------- --------------- ---------- --------------
<S> <C> <C> <C>
Eurodollar,
expiring 7/26/00 $ 664,527 $ 663,825 $ (702)
Japanese Yen,
expiring 7/19/00 873,150 879,533 6,383
--------------- ---------- --------------
$ 1,537,677 $1,543,358 $ 5,681
--------------- ---------- --------------
--------------- ---------- --------------
</TABLE>
At June 30, 2000, the Intermediate-Term Bond Portfolio had outstanding
forward currency contracts to sell foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
------------------------- --------------- ---------- --------------
<S> <C> <C> <C>
Eurodollar,
expiring 7/26/00 $ 1,138,259 $1,139,462 $ (1,203)
1,462,467 1,451,853 10,614
--------------- ---------- --------------
$ 2,600,726 $2,591,315 $ 9,411
--------------- ---------- --------------
--------------- ---------- --------------
</TABLE>
Transactions in options written during the six months ended June 30, 2000,
were as follows:
<TABLE>
<CAPTION>
Number of Premiums
Total Return Bond Portfolio Contracts Received
---------------------------------------- --------- --------
<S> <C> <C>
Options outstanding at December 31,
1999.................................. 140 $48,754
Options written......................... 161 60,363
Options terminated in closing purchase
transactions.......................... (38) (32,917 )
Options expired......................... (221) (58,738 )
--- --------
Options outstanding at June 30, 2000.... 42 $17,462
--- --------
--- --------
</TABLE>
--------------------------------------------------------------------------------
Note 5. Capital
The 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
June 30, 2000 were as follows:
<TABLE>
<CAPTION>
Shares
Issued in
Reinvestment Increase/
of Dividends (Decrease)
Shares and Shares in Shares
Portfolio Sold Distributions Reacquired Outstanding
-------------------------------------- ------------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Large Capitalization Growth
Portfolio........................... 2,486,095 101,462 (2,988,006) (400,449)
Large Capitalization Value
Portfolio........................... 3,077,337 537,896 (4,343,835) (728,602)
Small Capitalization Growth
Portfolio........................... 1,514,996 1,005,558 (1,750,693) 769,861
Small Capitalization Value
Portfolio........................... 1,098,333 76,456 (1,683,880) (509,091)
International Equity Portfolio........ 3,414,721 422,582 (3,902,606) (65,303)
International Bond Portfolio.......... 576,092 46,653 (1,260,656) (637,911)
Total Return Bond Portfolio........... 1,402,661 173,721 (1,789,594) (213,212)
Intermediate-Term Bond Portfolio...... 2,649,788 301,207 (2,818,963) 132,032
Mortgage Backed Securities Portfolio.. 780,062 171,959 (1,599,560) (647,539)
</TABLE>
--------------------------------------------------------------------------------
59
<PAGE>
Transactions in shares of beneficial interest during the year ended
December 31, 1999 were as follows:
<TABLE>
<CAPTION>
Shares
Issued in
Reinvestment Increase/
of Dividends (Decrease)
Shares and Shares in Shares
Portfolio Sold Distributions Reacquired Outstanding
-------------------------------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Large Capitalization Growth
Portfolio........................... 5,316,176 1,844,182 (5,115,193) 2,045,165
Large Capitalization Value
Portfolio........................... 4,949,283 2,840,847 (5,511,583) 2,278,547
Small Capitalization Growth
Portfolio........................... 3,515,117 1,238,085 (4,434,609) 318,593
Small Capitalization Value
Portfolio........................... 2,990,699 127,626 (4,083,584) (965,259)
International Equity Portfolio........ 31,285,882 1,444,349 (32,619,836) 110,395
International Bond Portfolio.......... 1,036,333 173,070 (1,347,551) (138,148)
Total Return Bond Portfolio........... 2,983,019 340,231 (2,891,426) 431,824
Intermediate-Term Bond Portfolio...... 5,097,285 571,696 (4,435,925) 1,233,056
Mortgage Backed Securities Portfolio.. 1,860,018 384,091 (2,447,653) (203,544)
</TABLE>
--------------------------------------------------------------------------------
60
<PAGE>
(ICON)
<PAGE>
Trustees
Eugene C. Dorsey
Robert F. Gunia
Maurice Holmes
Robert E. LaBlanc
Douglas H. McCorkindale
Thomas T. Mooney
David R. Odenath, Jr.
John R. Strangfeld
Stephen Stoneburn
Clay T. Whitehead
Officers
John R. Strangfeld
President
Robert F. Gunia
Vice President
David R. Odenath, Jr.
Vice President
Grace C. Torres
Treasurer
Marguerite E.H. Morrison
Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Advisers
Columbus Circle Investors
Metro Center
One Station Plaza
Stamford, CT 06902
Delaware International
Advisers Ltd.
80 Cheapside
London, EC2V6EE
United Kingdom
Fleming Asset Management USA
320 Park Avenue
New York, NY 10022
Mercury Advisors
725 South Figueroa Street
Suite 4000
Los Angeles, CA 90017
J.P. Morgan Investment
Management Inc.
522 Fifth Avenue
New York, NY 10036
Lazard Asset Management
30 Rockefeller Plaza
New York, NY 10112
Oak Associates, Ltd.
3875 Embassy Parkway
Suite 250
Akron, OH 44333
Pacific Investment
Management Company
840 Newport Center Drive
Newport Beach, CA 92660
Sawgrass Asset Management, LLC
4337 Pablo Oaks Court
Jacksonville, FL 32224
Wellington
Management Company
75 State Street
Boston, MA 02109
Wood Struthers & Winthrop Management Corp.
277 Park Avenue
New York, NY 10172
Distributor
Prudential Investment
Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and
Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund
Services LLC
194 Wood Avenue South
Iselin, NJ 08830
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795
This report is not authorized for distribution to
prospective investors unless preceded or accompanied by a
current prospectus.
875921 87 6
875921 20 7
875921 10 8
875921 40 5
875921 30 6
875921 50 4
875921 88 4
875921 80 1
875921 70 2
875921 60 3
TMF 158 E
