(ICON)
Prudential
Jennison
Growth
Fund
SEMI
ANNUAL
REPORT
March 31, 1998
(LOGO)
<PAGE>
Prudential Jennison Growth Fund
A Series of the Prudential Jennison Series Fund,
Inc.
Performance At A Glance.
Over the six-month period ended March 31, 1998,
the Prudential Jennison Growth
Fund provided an excellent return by historical
standards. Our financial stocks
benefited from low interest rates and inflation,
and our consumer staples and
pharmaceutical holdings also delivered
dependable earnings. Although we
performed in line with the average Lipper Growth
Fund over the six-month
period, over the past 12 months our returns
averaged nearly 10 percentage
points higher than the Lipper average.
Cumulative Total Returns1
As of 3/31/98
<TABLE>
<CAPTION>
Six One
Five Since
Months Year
Years Inception2
<S> <C> <C>
<C> <C>
Class A 11.51% 53.78%
N/A 71.61%
Class B 11.05 52.69
N/A 68.57
Class C 11.05 52.69
N/A 68.57
Class Z 11.60 54.09
157.69% 188.36
Lipper Growth Fund Avg.3 11.55 42.90
137.63 ***
</TABLE>
Average Annual Total Returns1
As of 3/31/98
<TABLE>
<CAPTION>
One
Five Since
Year
Years Inception2
<S> <C>
<C> <C>
Class A 46.09%
N/A 22.49%
Class B 47.69
N/A 23.28
Class C 51.69
N/A 24.20
Class Z 54.09
20.85% 21.67
</TABLE>
Past performance is not indicative of future
results. Principal and investment
return will fluctuate so that an investor's
shares, when redeemed, may be worth
more or less than their original cost.
1Source: Prudential Investments Fund Management
and Lipper Analytical Services.
The cumulative total returns do not take into
account sales charges. The
average annual returns do take into account
applicable sales charges. The Fund
charges a maximum front-end sales load of 5% for
Class A shares and a declining
contingent deferred sales charge (CDSC) of 5%,
4%, 3%, 2%, 1% and 1% for six
years for Class B shares. Class C shares have a
1% CDSC for one year. Class B
shares will automatically convert to Class A
shares, on a quarterly basis,
approximately seven years after purchase. Class
Z shares are not subject to a
sales charge or a distribution fee.
2Inception dates: 11/2/95 for Class A, B, and C
shares; 4/15/96 for Class Z
shares. On 9/20/96, The Prudential Institutional
Fund - Growth Stock Fund
merged into the Prudential Jennison Growth Fund,
Class Z shares. Performance
prior to 9/20/96 is for the Growth Stock Fund,
which had an inception date of
11/5/92.
3Lipper returns are for all funds in each share
class for the six-month, 1-,
and 5-year periods.
***Lipper Since Inception returns are 72.47% for
Classes A, B, and C and
159.80% for Class Z and are for all funds in
each share class.
How Investments Compared.
(As of 3/31/98)
(GRAPH)
U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds
Source: Lipper Analytical Services. Financial
markets change, so a mutual
fund's past performance should never be used to
predict future results. The
risks to each of the investments listed above
are different -- we provide 12-
month total returns for several Lipper mutual
fund categories to show you that
reaching for higher returns means tolerating
more risk. The greater the risk,
the larger the potential reward or loss. In
addition, we've included historical
20-year average annual returns. These returns
assume the reinvestment of
dividends.
U.S. Growth Funds will fluctuate a great deal.
Investors have received higher
historical total returns from stocks than from
most other invest-ments. Smaller
capitalization stocks offer greater potential
for long-term growth but may be
more volatile than larger capitalization stocks.
General Bond Funds provide more income than
stock funds, which can help smooth
out their total returns year by year. But their
prices still fluctuate
(sometimes significantly) and their returns have
been historically lower than
those of stock funds.
General Municipal Debt Funds invest in bonds
issued by state governments, state
agencies and/or municipalities. This investment
provides income that is usually
exempt from federal and state income taxes.
U.S. Taxable Money Funds attempt to preserve a
constant share value; they don't
fluctuate much in price but, historically, their
returns have been generally
among the lowest of the major investment
categories.
<PAGE>
David Poiesz, Fund Manager
Peter Reinemann, Associate Fund Manager
Portfolio
Managers' (PICTURES)
Report
The Prudential Jennison Growth Fund invests
primarily in stocks of medium and
large companies (generally those with a total
market value of more than $1
billion) that we believe have above-average
prospects for growth. The Fund
may also invest in stocks of foreign companies,
investment-grade bonds, and
securities issued or backed by the U.S.
government and its agencies, such as
mortgage-backed securities. There can be no
assurance that the Fund will
achieve its investment objective.
Strategy Session.
Drugs. Our drug stocks paid off handsomely. Our
largest holding, Pfizer, which
recently released Viagra on the market, had the
second-best return in the
portfolio (the share price rose 67% over the six-
month period), and therefore
had the largest total impact. We expect that the
public enthusiasm for some of
Pfizer's new drugs will eventually run its
course, so we have taken some
profits and trimmed back our exposure. The
prices of our other drug holdings
fluctuated due to takeover speculation
(SmithKline Beecham) and concern about
new product launches (Eli Lilly). We have used
these opportunities to cut back
on those with takeover speculation and have
added to those with short-term
controversy -- selling on the highs and buying
on the lows.
Financials. We still like financial stocks.
Stable interest rates and inflation
have fostered solid business performance. We
believe the stock prices have room
for further gains as the sector faces
consolidation and productivity
improvements.
Technology. Some technology stocks have done
very well while others have been
hurt by transitions to new products, inventory
problems, and the economic
slowdown in Asia. Temporary problems can present
opportunities to buy at
attractive prices because other investors focus
on one or two quarters of
earnings while we look out four to six quarters.
Technology stocks have been
under pressure since late 1995 and appear poised
to improve in the near future.
Our Investment Style.
We are growth investors with a difference.
Jennison tries to identify stocks'
potential for earnings growth over the coming 12
to 18 months. We look for
firms that can control their own destinies and
have room to grow, so we tend
to focus on medium- to large-sized companies.
Because we use a longer time
horizon than many growth investors, we can
weather the turbulence, or even
benefit, when a well-managed company has a short-
term disappointment.
Portfolio Composition.
Sectors expressed as a percentage
of net assets as of 3/31/98.
(PIE CHART)
<PAGE>
What Went Well.
A Time For Strong Performers.
A broad range of stocks in almost all of our
favorite sectors contributed
excellent returns over the six months. In
addition to Pfizer, big contributors
included technology stocks Cisco Systems, Dell
Computer, SAP AG, Microsoft,
and Tellabs (some of whose products allow phone
signals to be transmitted over
cable TV lines). Each had earnings growth at or
above expectations, despite
the Asian economic difficulties.
Among drug companies, SmithKline Beecham was the
subject of takeover
speculation, to the benefit of our portfolio. We
also profited by realizing
early that Monsanto should be priced like a drug
company on the basis of its
ownership of Searle. Other investors are
beginning to recognize the emerging
pharma-ceutical story in this company.
Other strong performances came from Morgan
Stanley, Dean Witter & Co., a
financial services company; Vodafone Group, the
U.K.-based wireless
communications company; Clear Channel
Communications, media and broadcasting;
and General Electric, which continues to perform
well despite a big run in the
stock. General Electric rose 28% during the
reporting period, an unusually fast
pace for such a large company.
And Not So Well.
Poor Performers Dropped.
We eliminated several poor performers from the
portfolio. Reuters Holdings was
sold because we no longer believe it can reach
our revenue growth goals for the
company. Phycor had planned to merge with
MedPartners until MedPartners
announced a large charge against its earnings
that drove its stock down 50%.
We believe this revealed risks in Phycor's long-
term business model. We also
lost confidence in Corporate Express' ability to
take advantage of its
opportunities with its current management.
The main issue that affected many of our
holdings was the impact of Asian
events on the short-term earnings growth of many
of our technology holdings.
The stocks affected ranged from Compaq and
Hewlett Packard to Intel, Texas
Instruments, and Applied Materials. We believe
this issue is a short-term
concern and will be addressed by inventory
corrections over a three- to six-
month period, after which the strong
underpinnings of their businesses should
re-emerge.
Five Largest Holdings.
3.5% Pfizer, Inc.
Pharmaceuticals
2.8% Chase Manhattan Corp.
Banks & Financial Svcs.
2.6% General Electric Co.
Diversified Operations
2.5% Cisco Systems, Inc.
Networking
2.2% Morgan Stanley,
Dean Witter & Co.
Banks & Financial Svcs.
Expressed as a percentage of net assets as of
3/31/98.
Looking Ahead.
We believe stock selection will continue to be
critical in technology for a
while. Profitable investments in the sector can
be made by paying careful
attention to the price for which a company is
selling. We are currently at
the lower end of our historical weighting range,
so we expect to increase our
holdings.
We still like our drug holdings, but will
actively manage both the companies
and their weightings according to our views
about their changing growth
opportunities. The huge success of Pfizer, based
upon expectations of its new
drug, Viagra, will require careful analysis.
Financials also remain attractive. Both the
broad-based companies resulting
from consolidations and focused niche players
should be strong performers as
long as interest rates and inflation remain
favorable.
- ------------------------------------------------
- -------------------------------
1
<PAGE>
President's Letter
May 15, 1998
(PHOTO)
See You On the Net!
Dear Shareholder:
We are proud to be part of the worldwide web and
we invite you to visit our
two web sites, if you have not already done so.
Yes, we currently offer two
sites -- each with its own distinctive identity.
http://www.prudential.com
The Prudential web site features information on
personal investing, retirement
planning, commercial and residential real estate
opportunities, as well as
insurance products for life, health, home and
property.
You can look up performance data on your
Prudential mutual funds, learn about
proven investment strategies, or take one of our
many interactive quizzes that
will help guide you in determining long-term
goals -- like how much to save
for your child's college education or for your
retirement.
http://www.prusec.com
The Prudential Securities Virtual Branch Office
is a full-service brokerage
web site specifically designed to provide
investors with the information they
need to make informed financial decisions. It
was rated the No. 1 full-service
brokerage web site of its type by Financial Net
News (February 1998), a
subsidiary of Institutional Investor magazine,
and was also rated among the
top corporate web sites by Fortune magazine
(Winter 1998).
What investors can find here are -- daily market
commentaries, stock quotes,
economic forecasts, product news, and current
market research, in addition to
interactive investing programs. Investors,
through their Prudential Securities
Financial Advisors, may also enroll in
Prudential Online(R) and have access to
their personal account information which
includes balances, security values,
transactions and account activities. They can
also easily E-mail their
Financial Advisor.
Both sites also contain professional
opportunities for people who are searching
for employment or considering a change of career
paths.
We plan to make further enhancements to our web
pages as the year progresses.
So please, the next time you are "web browsing"
or "surfing the net," pay us a
visit. Let us know what you think and what you'd
like to see added in the
future.
Sincerely,
Brian M. Storms
President, Prudential Mutual Funds & Annuities
- ------------------------------------------------
- -------------------------------
2
<PAGE>
Portfolio of Investments
PRUDENTIAL JENNISON SERIES FUND, INC.
as of March 31, 1998 (Unaudited)
PRUDENTIAL JENNISON GROWTH FUND
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
- ------------------------------------------------
- ------------
LONG-TERM INVESTMENTS--98.4%
COMMON STOCKS--98.4%
- ------------------------------------------------
- ------------
Aerospace/Defense--1.7%
502,400 Boeing Co.
$ 26,187,600
- ------------------------------------------------
- ------------
Banks & Financial Services--12.7%
324,400 Chase Manhattan Corp.
43,753,450
134,800 Citicorp
19,141,600
233,000 Fleet Financial Group, Inc.
19,819,562
682,550 MBNA Corp.
24,443,822
83,500 Merrill Lynch & Co., Inc.
6,930,500
477,490 Morgan Stanley, Dean Witter & Co.
34,797,084
435,900 Schwab (Charles) Corp.
16,564,200
468,300 Washington Mutual, Inc.
33,585,891
- --------------
199,036,109
- ------------------------------------------------
- ------------
Business Services--4.5%
637,625 Cendant Corp.(a)
25,265,891
430,400 Gartner Group, Inc.(a)
16,086,200
377,600 Mastering, Inc.(a)
4,248,000
531,800 Omnicom Group, Inc.
25,027,837
- --------------
70,627,928
- ------------------------------------------------
- ------------
Cellular Communications--1.2%
182,300 Vodafone Group PLC (ADR)
(United Kingdom)
18,936,413
- ------------------------------------------------
- ------------
Chemicals--2.0%
609,700 Monsanto Co.
31,704,400
- ------------------------------------------------
- ------------
Computer Systems/Peripherals--7.8%
917,000 Compaq Computer Corp.(a)
23,727,375
444,500 Dell Computer Corp.(a)
30,114,875
387,100 Diebold, Inc.
17,032,400
401,600 Hewlett-Packard Co.
25,451,400
508,200 Symbol Technologies, Inc.
24,997,088
- --------------
121,323,138
Diversified Operations--2.6%
470,300 General Electric Co.
$ 40,533,981
- ------------------------------------------------
- ------------
EDP Software & Services--5.8%
344,700 Intuit, Inc.(a)
16,674,863
357,800 Microsoft Corp.(a)
32,023,100
584,400 Parametric Technology Corp. (a)
19,467,825
160,200 SAP AG (ADR)(Germany)
22,687,636
- --------------
90,853,424
- ------------------------------------------------
- ------------
Electronic Components--3.3%
290,800 Intel Corp.
22,700,575
651,500 International Rectifier Corp.(a)
7,655,125
388,600 Texas Instruments, Inc.
21,032,975
- --------------
51,388,675
- ------------------------------------------------
- ------------
Health Care Services--1.1%
599,200 Healthsouth Corp.(a)
16,815,050
- ------------------------------------------------
- ------------
Hotels--3.4%
982,400 Hilton Hotels Corp.
31,314,000
473,400 Promus Hotel Corp.(a)
22,604,850
- --------------
53,918,850
- ------------------------------------------------
- ------------
Household & Personal Care Products--1.6%
209,700 Gillette Co.
24,888,769
- ------------------------------------------------
- ------------
Industrial Technology/Instruments--1.9%
473,300 Applied Materials, Inc.(a)
16,713,406
350,700 KLA Tencor Corp.(a)
13,414,275
- --------------
30,127,681
</TABLE>
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments
PRUDENTIAL JENNISON SERIES FUND, INC.
as of March 31, 1998 (Unaudited)
PRUDENTIAL JENNISON GROWTH FUND
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
- ------------------------------------------------
- ------------
Insurance--6.8%
566,400 ACE, Ltd.
$ 21,346,200
249,700 MGIC Investment Corp.
16,402,169
701,666 Mutual Risk Management, Ltd.
23,768,936
493,800 Provident Companies, Inc.
16,943,512
511,100 UNUM Corp.
28,206,331
- --------------
106,667,148
- ------------------------------------------------
- ------------
Machinery--1.4%
325,300 Case Corp.
22,161,063
- ------------------------------------------------
- ------------
Media--4.9%
551,300 CBS Corp.
18,709,744
256,900 Clear Channel
Communications, Inc.(a)
25,176,200
311,900 The Walt Disney Co.
33,295,325
- --------------
77,181,269
- ------------------------------------------------
- ------------
Networking--3.4%
386,400 3Com Corp.(a)
13,886,250
584,500 Cisco Systems, Inc.(a)
39,965,187
- --------------
53,851,437
- ------------------------------------------------
- ------------
Oil Services--1.5%
305,600 Schlumberger, Ltd.
23,149,200
- ------------------------------------------------
- ------------
Pharmaceuticals--11.3%
255,800 American Home Products Corp.
24,396,925
425,100 Eli Lilly & Co.
25,346,587
555,300 Pfizer, Inc.
55,356,469
337,800 Schering Plough Corp.
27,594,037
364,700 Smithkline Beecham, PLC (ADR)
(United Kingdom)
22,816,544
131,400 Warner-Lambert Co.
22,379,062
- --------------
177,889,624
- ------------------------------------------------
- ------------
Retail--8.9%
564,000 AutoZone, Inc.(a)
19,105,500
548,906 Dollar General Corp.
21,235,810
537,150 Gap, Inc.
$ 24,171,750
405,300 Home Depot, Inc.
27,332,419
253,600 Kohl's Corp.(a)
20,731,800
462,800 Sears, Roebuck & Co.
26,582,075
- --------------
139,159,354
- ------------------------------------------------
- ------------
Telecommunications--3.6%
508,800 AirTouch Communications, Inc.(a)
24,899,400
712,100 WorldCom Inc.(a)
30,664,806
- --------------
55,564,206
- ------------------------------------------------
- ------------
Telecommunications Equipment--5.6%
510,700 Ciena Corp.(a)
21,768,588
198,200 Motorola, Inc.
12,015,875
194,700 Nokia Corp. (ADR) (Finland)
21,015,431
501,600 Tellabs, Inc.(a)
33,669,900
- --------------
88,469,794
- ------------------------------------------------
- ------------
Trucking & Shipping--1.4%
316,700 FDX Corp.(a)
22,525,288
Total long-term investments
(cost $1,124,333,254)
1,542,960,401
- --------------
Principal
Amount
(000)
- ------------------------------------------------
- ------------
SHORT-TERM INVESTMENT--1.5%
Repurchase Agreement--1.5%
$ 23,887 State Street Bank & Trust Co.,
5.00%, due 4/1/98, in the
amount of $23,890,318 (cost
$23,887,000; value of the
collateral including accrued
interest-$24,368,325)
23,887,000
- ------------------------------------------------
- ------------
Total Investments--99.9%
(cost $1,148,220,254; Note 4)
1,566,847,401
Other assets in excess of
liabilities--0.1%
1,530,519
- --------------
Net Assets--100%
$1,568,377,920
- --------------
- --------------
</TABLE>
- ---------------
(a) Non-income producing security.
ADR--American Depository Receipt.
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 4
<PAGE>
Statement of Assets and Liabilities
PRUDENTIAL JENNISON SERIES FUND, INC.
(Unaudited)
PRUDENTIAL JENNISON GROWTH FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
<CAPTION>
Assets
March 31, 1998
- ---------------
<S>
<C>
Investments, at value (cost
$1,148,220,254).................................
...............................
$1,566,847,401
Cash............................................
................................................
........... 130,116
Receivable for Series shares
sold............................................
..............................
6,927,244
Receivable for investments
sold............................................
................................
5,661,019
Dividends and interest
receivable......................................
....................................
1,138,136
Deferred expenses and other
assets..........................................
...............................
111,973
- --------------
Total
assets..........................................
................................................
.. 1,580,815,889
- --------------
Liabilities
Payable for investments
purchased.......................................
...................................
7,189,853
Payable for Series shares
reacquired......................................
.................................
3,645,836
Management fee
payable.........................................
............................................
771,096
Distribution fees
payable.........................................
.........................................
505,527
Accrued expenses and other
liabilities.....................................
................................
262,991
Withholding taxes
payable.........................................
.........................................
62,666
- --------------
Total
liabilities.....................................
................................................
.. 12,437,969
- --------------
Net
Assets..........................................
................................................
....... $1,568,377,920
- --------------
- --------------
Net assets were comprised of:
Common stock, at
par.............................................
....................................... $
100,772
Paid-in capital in excess of
par.............................................
........................... 1,104,289,308
- --------------
1,104,390,080
Accumulated net investment
loss............................................
.............................
(1,771,678)
Accumulated net realized gain on
investments.....................................
....................... 47,132,371
Net unrealized appreciation on
investments.....................................
......................... 418,627,147
- --------------
Net assets, March 31,
1998............................................
.....................................
$1,568,377,920
- --------------
- --------------
Class A:
Net asset value and redemption price per
share
($192,729,059 / 12,329,412 shares of
common stock issued and
outstanding)............................
$15.63
Maximum sales charge (5% of offering
price)..........................................
................... .82
- --------------
Maximum offering price to
public..........................................
..............................
$16.45
- --------------
- --------------
Class B:
Net asset value, offering price and
redemption price per share
($535,940,276 / 34,953,614 shares of
common stock issued and
outstanding)............................
$15.33
- --------------
- --------------
Class C:
Net asset value, offering price and
redemption price per share
($34,581,238 / 2,255,384 shares of common
stock issued and
outstanding)..............................
$15.33
- --------------
- --------------
Class Z:
Net asset value, offering price and
redemption price per share
($805,127,347 / 51,233,288 shares of
common stock issued and
outstanding)............................
$15.71
- --------------
- --------------
</TABLE>
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 5
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
PRUDENTIAL JENNISON GROWTH FUND
Statement of Operations (Unaudited)
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income (Loss)
March 31, 1998
<S>
<C>
Income
Dividends (net of foreign withholding
taxes of $80,276).....................
$ 5,062,637
Interest.................................
909,843
-
- -------------
Total income..........................
5,972,480
-
- -------------
Expenses
Management fee...........................
3,938,345
Distribution fee--Class A................
194,325
Distribution fee--Class B................
2,238,115
Distribution fee--Class C................
140,025
Transfer agent's fees and expenses.......
899,000
Registration fees........................
100,000
Reports to shareholders..................
90,000
Custodian's fees and expenses............
65,000
Legal fees and expenses..................
30,000
Amortization of deferred organization
expense...............................
20,000
Audit fee................................
10,000
Directors' fees and expenses.............
4,000
Miscellaneous............................
15,348
-
- -------------
Total expenses........................
7,744,158
-
- -------------
Net investment loss.........................
(1,771,678)
-
- -------------
Realized and Unrealized Gain
on Investments
Net realized gain on investment
transactions.............................
74,543,539
Net change in unrealized appreciation on
investments..............................
84,851,179
-
- -------------
Net gain on investments.....................
159,394,718
-
- -------------
Net Increase in Net Assets
Resulting from Operations...................
$157,623,040
-
- -------------
-
- -------------
</TABLE>
PRUDENTIAL JENNISON SERIES FUND, INC.
PRUDENTIAL JENNISON GROWTH FUND
Statement of Changes in Net Assets (Unaudited)
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended
Increase (Decrease) March 31,
September 30,
in Net Assets 1998
1997
<S> <C>
<C>
Operations
Net investment loss......... $ (1,771,678)
$ (3,451,314)
Net realized gain on
investments.............. 74,543,539
90,453,012
Net change in unrealized
appreciation of
investments.............. 84,851,179
224,732,097
--------------
- --------------
Net increase in net assets
resulting from
operations............... 157,623,040
311,733,795
--------------
- --------------
Distributions from net realized
gains (Note 1)
Class A..................... (12,677,688)
- --
Class B..................... (37,861,226)
- --
Class C..................... (2,330,817)
- --
Class Z..................... (55,817,957)
- --
--------------
- --------------
(108,687,688)
- --
--------------
- --------------
Series share transactions (net
of share conversions) (Note
5)
Net proceeds from shares
sold..................... 520,318,724
859,180,110
Net asset value of shares
issued in reinvestment of
distributions............ 106,812,422
- --
Cost of shares reacquired... (307,118,438)
(666,161,401)
--------------
- --------------
Net increase in net assets
from Series share
transactions............. 320,012,708
193,018,709
--------------
- --------------
Total increase................. 368,948,060
504,752,504
Net Assets
Beginning of period............ 1,199,429,860
694,677,356
--------------
- --------------
End of period.................. $1,568,377,920
$1,199,429,860
--------------
- --------------
--------------
- --------------
</TABLE>
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 6
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
Notes to Financial Statements (Unaudited)
PRUDENTIAL JENNISON GROWTH FUND
- ------------------------------------------------
- --------------------------------
Prudential Jennison Growth Fund (the 'Series')
is a separately managed series of
Prudential Jennison Series Fund, Inc., formerly
Prudential Jennison Fund, Inc.
(the 'Fund'). The Fund was incorporated in
Maryland on August 10, 1995 and is
registered under the Investment Company Act of
1940 as a diversified, open-end
management investment company. The Series had no
significant operations other
than the issuance of 3,334 shares of Class A and
3,333 shares of Class B and
Class C common stock for $100,000 on September
13, 1995 to Prudential
Investments Fund Management LLC ('PIFM').
Investment operations commenced on
November 2, 1995.
The Series' investment objective is to achieve
long-term growth of capital by
investing primarily in equity securities (common
stock, preferred stock and
securities convertible into common stock) of
established companies with
above-average growth prospects.
- ------------------------------------------------
- ------------
Note 1. Accounting Policies
The following is a summary of significant
accounting policies followed by the
Series in the preparation of its financial
statements.
Securities Valuation: Securities listed on a
securities exchange (other than
options on securities and indices) are valued at
the last sales price on the day
of valuation, or, if there was no sale on such
day, at the mean between the
closing bid and asked prices on such day or at
the bid price in the absence of
an asked price, as provided by a pricing
service. Securities that are actively
traded in the over-the-counter market, including
listed securities for which the
primary market is believed to be over-the-
counter, are valued by an independent
pricing service. Convertible debt securities
that are actively traded in the
over-the-counter market, including listed
securities for which the primary
market is believed to be over-the-counter, are
valued at the mean between the
most recently quoted bid and asked prices
provided by a principal market maker
or independent pricing agent. Options on
securities and indices traded on an
exchange are valued at the mean between the most
recently quoted bid and asked
prices provided by the respective exchange.
Futures contracts and options
thereon are valued at the last sales price as of
the close of business of the
exchange. Securities for which market quotations
are not readily available are
valued at fair value as determined in good faith
by or under the direction of
the Board of Directors of the Fund.
Short-term securities which mature in more than
60 days are valued at current
market quotations. Short-term securities which
mature in 60 days or less are
valued at amortized cost.
All securities are valued as of 4:15 p.m., New
York time.
Securities Transactions and Net Investment
Income: Securities transactions are
recorded on the trade date. Realized gains or
losses on sales of securities are
calculated on the identified cost basis.
Dividend income is recorded on the
ex-dividend date; interest income is recorded on
the accrual basis and is net of
discount accretion and premium amortization.
Expenses are recorded on the
accrual basis which may require the use of
certain estimates by management.
Net investment income (loss), other than
distribution fees, and realized and
unrealized gains or losses are allocated daily
to each class of shares based
upon the relative proportion of net assets of
each class at the beginning of the
day.
Dividends and Distributions: The Series expects
to pay dividends of net
investment income, if any, semi-annually and to
make distributions of any net
capital gains at least annually. Dividends and
distributions are recorded on the
ex-dividend date. Income distributions and
capital gain distributions are
determined in accordance with income tax
regulations which may differ from
generally accepted accounting principles.
Taxes: It is the Series' policy to continue to
meet the requirements of the
Internal Revenue Code applicable to regulated
investment companies and to
distribute all of its taxable net income to its
shareholders. Therefore, no
federal income tax provision is required.
Withholding taxes on foreign dividends have been
provided for in accordance with
the Series' understanding of the applicable
country's tax rules and rates.
Deferred Organization Expenses: Approximately
$200,000 of expenses were incurred
in connection with the organization of the Fund.
These costs have been deferred
and are being amortized ratably over a period of
sixty months from the date the
Series commenced investment operations.
- ------------------------------------------------
- ------------
Note 2. Agreements
The Fund has a management agreement with PIFM.
Pursuant to a subadvisory
agreement between PIFM and Jennison Associates
Capital Corp. ('Jennison'),
Jennison furnishes investment advisory services
in connection with the
management of the Fund. Under the subadvisory
agreement, Jennison, subject to
the supervision of PIFM, is responsible for
managing the assets of the Series in
accordance with its investment objectives and
policies.
The management fee paid PIFM will be computed
daily and payable monthly, at an
annual rate of .60 of 1% of the average daily
net assets of the Series. PIFM
pays Jennison a subadvisory fee at an annual
rate of .30 of 1% of the average
daily net assets of the Series up to and
including
- ------------------------------------------------
- --------------------------------
7
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
Notes to Financial Statements (Unaudited)
PRUDENTIAL JENNISON GROWTH FUND
- ------------------------------------------------
- --------------------------------
$300 million and .25 of 1% of such assets in
excess of $300 million. PIFM also
pays the cost of compensation of officers and
employees of the Fund, occupancy
and certain clerical and bookkeeping costs of
the Fund. The Fund bears all other
costs and expenses.
The Fund has a distribution agreement with
Prudential Securities Incorporated
('PSI'), which acts as the distributor of the
Class A, Class B, Class C and
Class Z shares. The Fund compensates PSI for
distributing and servicing the
Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution,
(the 'Class A, B and C Plans'), regardless of
expenses actually incurred by PSI.
The distribution fees are accrued daily and
payable monthly. No distribution or
service fees are paid to PSI as distributor of
the Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund
compensates PSI for
distribution-related activities at an annual
rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A,
B and C shares, respectively.
Such expenses under the plans were .25 of 1%, 1%
and 1% of the average daily net
assets of the Class A, B and C shares,
respectively, for the six months ended
March 31, 1998.
PSI has advised the Series that it has received
approximately $523,500 in
front-end sales charges resulting from sales of
Class A shares during the six
months ended March 31, 1998. From these fees,
PSI paid such sales charges to
affiliated broker-dealers, which in turn paid
commissions to salespersons and
incurred other distribution costs.
PSI has advised the Series that for the six
months ended March 31, 1998, it
received approximately $364,300 and $4,000 in
contingent deferred sales charges
imposed upon certain redemptions by Class B and
C shareholders, respectively.
PIFM, Jennison and PSI are indirect, wholly
owned subsidiaries of The Prudential
Insurance Company of America.
The Fund, along with other affiliated registered
investment companies (the
'Funds'), has a credit agreement (the
'Agreement') with an unaffiliated lender.
The maximum commitment under the Agreement is
$200,000,000. Interest on any such
borrowings outstanding will be at market rates.
The purpose of the Agreement is
to serve as an alternative source of funding for
capital share redemptions. The
Series has not borrowed any amounts pursuant to
the Agreement during the six
months ended March 31, 1998. The Funds pay a
commitment fee at an annual rate of
.055 of 1% on the unused portion of the credit
facility. The commitment fee is
accrued and paid quarterly on a pro rata basis
by the Funds. The Agreement
expired on December 30, 1997 and has been
extended through December 29, 1998
under the same terms.
- ------------------------------------------------
- ------------
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a
wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the
six months ended March 31, 1998,
the Series incurred fees of approximately
$872,000 for the services of PMFS. As
of March 31, 1998, approximately $161,000 of
such fees were due to PMFS.
Transfer agent fees and expenses in the
Statement of Operations include certain
out-of-pocket expenses paid to nonaffiliates.
For the six months ended March 31, 1998, PSI
earned approximately $3,900 in
brokerage commissions from portfolio
transactions executed on behalf of the
Series.
- ------------------------------------------------
- ------------
Note 4. Portfolio Securities
Purchases and sales of investment securities,
other than short-term investments,
for the six months ended March 31, 1998 were
$507,289,543 and $310,503,272,
respectively.
The cost of investments for federal income tax
purposes at March 31, 1998, was
$1,149,102,494 and, accordingly, net unrealized
appreciation of investments for
federal income tax purposes was $417,744,907
(gross unrealized
appreciation--$432,671,101; gross unrealized
depreciation--$14,926,194).
- ------------------------------------------------
- ------------
Note 5. Capital
The Series offers Class A, Class B, Class C and
Class Z shares. Class A shares
are sold with a front-end sales charge of up to
5%. Class B shares are sold with
a contingent deferred sales charge which
declines from 5% to zero depending on
the period of time the shares are held. Class B
shares automatically convert to
Class A shares on a quarterly basis
approximately seven years after purchase. A
special exchange privilege is also available for
shareholders who qualified to
purchase Class A shares at net asset value.
Class C shares are sold with a
contingent deferred sales charge of 1% during
the first year. Class Z shares are
not subject to any sales or redemption charge
and are offered for sale to a
limited group of investors.
There are 3 billion shares of $.001 par value
common stock authorized which are
divided into three series, each of which offers
four classes, designated Class
A, Class B, Class C and Class Z, each of which
consists
- ------------------------------------------------
- --------------------------------
8
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
Notes to Financial Statements (Unaudited)
PRUDENTIAL JENNISON GROWTH FUND
- ------------------------------------------------
- --------------------------------
of 250 million authorized shares. Of the shares
outstanding at March 31, 1998,
PIFM owned 10,000 shares of the Series.
Transactions in shares of common stock were as
follows:
<TABLE>
<CAPTION>
Class A Shares
Amount
- ----------------------------------- -----------
- -------------
<S> <C>
<C>
Six months ended March 31, 1998:
Shares sold........................ 6,201,806
$ 90,322,186
Shares issued in reinvestment of
distributions.................... 913,659
12,215,617
Shares reacquired..................
(4,405,206) (64,157,690)
-----------
- -------------
Net increase in shares outstanding
before conversion................ 2,710,259
38,380,113
Shares issued upon conversion from
Class B.......................... 197,876
2,866,311
-----------
- -------------
Net increase in shares
outstanding...................... 2,908,135
$ 41,246,424
-----------
- -------------
-----------
- -------------
Year ended September 30, 1997
Shares sold........................ 25,998,077
$ 330,048,473
Shares reacquired..................
(24,630,004) (310,892,744)
-----------
- -------------
Net increase in shares outstanding
before conversion................ 1,368,073
19,155,729
Shares issued upon conversion from
Class B.......................... 263,019
3,525,367
-----------
- -------------
Net increase in shares
outstanding...................... 1,631,092
$ 22,681,096
-----------
- -------------
-----------
- -------------
<CAPTION>
Class B
- -----------------------------------
Six months ended March 31, 1998:
Shares sold........................ 9,015,610
$ 128,950,273
Shares issued in reinvestment of
distributions.................... 2,776,715
36,513,797
Shares reacquired..................
(4,271,763) (60,164,723)
-----------
- -------------
Net increase in shares outstanding
before conversion................ 7,520,562
105,299,347
Shares reacquired upon conversion
into
Class A..........................
(201,525) (2,866,311)
-----------
- -------------
Net increase in shares
outstanding...................... 7,319,037
$ 102,433,036
-----------
- -------------
-----------
- -------------
Year ended September 30, 1997
Shares sold........................ 11,358,438
$ 145,846,890
Shares reacquired..................
(4,716,088) (59,467,575)
-----------
- -------------
Net increase in shares outstanding
before conversion................ 6,642,350
86,379,315
Shares reacquired upon conversion
into Class A.....................
(266,196) (3,525,367)
-----------
- -------------
Net increase in shares
outstanding...................... 6,376,154
$ 82,853,948
-----------
- -------------
-----------
- -------------
<CAPTION>
Class C Shares
Amount
- ----------------------------------- -----------
- -------------
<S> <C>
<C>
Six months ended March 31, 1998:
Shares sold........................ 616,057
$ 8,880,804
Shares issued in reinvestment of
distributions.................... 172,793
2,272,229
Shares reacquired..................
(189,533) (2,705,557)
-----------
- -------------
Net increase in shares
outstanding...................... 599,317
$ 8,447,476
-----------
- -------------
-----------
- -------------
Year ended September 30, 1997
Shares sold........................ 560,427
$ 7,367,068
Shares reacquired..................
(307,304) (3,823,506)
-----------
- -------------
Net increase in shares
outstanding...................... 253,123
$ 3,543,562
-----------
- -------------
-----------
- -------------
<CAPTION>
Class Z
- -----------------------------------
Six months ended March 31, 1998:
Shares sold........................ 20,056,092
$ 292,165,461
Shares issued in reinvestment of
distributions.................... 4,155,680
55,810,779
Shares reacquired..................
(12,456,271) (180,090,468)
-----------
- -------------
Net increase in shares
outstanding...................... 11,755,501
$ 167,885,772
-----------
- -------------
-----------
- -------------
Year ended September 30, 1997
Shares sold........................ 30,018,513
$ 375,917,679
Shares reacquired..................
(23,558,475) (291,977,576)
-----------
- -------------
Net increase in shares
outstanding...................... 6,460,038
$ 83,940,103
-----------
- -------------
-----------
- -------------
</TABLE>
- ------------------------------------------------
- --------------------------------
9
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
Financial Highlights (Unaudited)
PRUDENTIAL JENNISON GROWTH FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
<CAPTION>
Class A Class B
- ------------------------------------------------
- - -------------
November 2,
Six Months Year 1995(a)
Six Months
Ended Ended Through
Ended
March 31, September 30, September 30,
March 31,
1998 1997 1996
1998
- ------------- ------------- ------------
- - -------------
<S>
<C> <C> <C>
<C>
PER SHARE OPERATING PERFORMANCE
*Net asset value, beginning of
period................... $ 15.39
$ 10.97 $ 10.00 $ 15.18
- ------------- ------------- ------
- -------------
Income from investment operations
Net investment income
(loss)(d)........................
(.01) (.03) (.03)
(.06)
Net realized and unrealized gain on investment
transactions....................................
.... 1.56 4.45
1.00 1.52
- ------------- ------------- ------
- -------------
Total from investment
operations.................... 1.55
4.42 .97 1.46
Less distributions
Distributions from net realized
gains.................. (1.31)
- -- -- (1.31)
- ------------- ------------- ------
- -------------
Net asset value, end of
period......................... $ 15.63
$ 15.39 $ 10.97 $ 15.33
- ------------- ------------- ------
- -------------
- ------------- ------------- ------
- -------------
TOTAL
RETURN(c).......................................
. 11.51% 40.29%
9.70% 11.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000)........................ $ 192,729
$ 145,022 $85,440 $ 535,940
Average net assets
(000)............................... $
155,887 $ 105,982 $70,667
$ 448,853
Ratios to average net assets:
Expenses, including distribution
fees............... 1.04%(e)
1.09% 1.23%(e) 1.79%(e)
Expenses, excluding distribution
fees............... .79%(e)
.84% .98%(e) .79%(e)
Net investment income
(loss)........................
(.13)%(e) (.25)% (.37)%(e)
(.88)%(e)
Portfolio turnover
rate................................
24% 63% 42%
24%
Average commission rate paid per
share................. $ .0579 $
.0596 $ .0611 $ .0579
<CAPTION>
November 2,
Year 1995(a)
Ended Through
September 30, September 30,
1997 1996
- ------------- -------------
<S>
<C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period................... $ 10.89 $
10.00
- ------------- -------------
Income from investment operations
Net investment income
(loss)(d)........................ (.12)
(.10)
Net realized and unrealized gain on investment
transactions....................................
.... 4.41 .99
- ------------- -------------
Total from investment
operations.................... 4.29
.89
Less distributions
Distributions from net realized
gains.................. --
- --
- ------------- -------------
Net asset value, end of
period......................... $ 15.18
$ 10.89
- ------------- -------------
- ------------- -------------
TOTAL
RETURN(c).......................................
. 39.39% 8.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000)........................ $ 419,405
$ 231,541
Average net assets
(000)............................... $
299,476 $ 162,412
Ratios to average net assets:
Expenses, including distribution
fees............... 1.84%
1.98%(e)
Expenses, excluding distribution
fees............... .84%
.98%(e)
Net investment income
(loss)........................ (1.00)%
(1.12)%(e)
Portfolio turnover
rate................................
63% 42%
Average commission rate paid per
share................. $ .0596 $
.0611
</TABLE>
- ---------------
(a) Commencement of investment operations.
(b) Commencement of offering of Class Z shares.
(c) Total return does not consider the effects
of sales loads. Total return is
calculated assuming a purchase of shares on
the first day and a sale on the
last day of each period reported and
includes reinvestment of dividends and
distributions. Total returns for periods of
less than a full year are not
annualized.
(d) Calculated based upon weighted average
shares outstanding during the period.
(e) Annualized.
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 10
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
Financial Highlights (Unaudited)
PRUDENTIAL JENNISON GROWTH FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
<CAPTION>
Class C Class Z
- ------------------------------------------------
- - -------------
November 2,
Six Months Year 1995(a)
Six Months
Ended Ended Through
Ended
March 31, September 30, September 30,
March 31,
1998 1997 1996
1998
- ------------- ------------- ------------
- - -------------
<S>
<C> <C> <C>
<C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period................... $ 15.18
$ 10.89 $ 10.00 $ 15.45
- ------ ------------- ------
- -------------
Income from investment operations
Net investment income
(loss)(d)........................ (.06)
(.12) (.10) .01
Net realized and unrealized gain on investment
transactions....................................
.... 1.52 4.41
.99 1.56
- ------ ------------- ------
- -------------
Total from investment
operations.................... 1.46
4.29 .89 1.57
- ------ ------------- ------
- -------------
Less distributions
Distributions from net realized
gains............... (1.31)
- -- -- (1.31)
- ------ ------------- ------
- -------------
Net asset value, end of
period......................... $ 15.33
$ 15.18 $ 10.89 $ 15.71
- ------ ------------- ------
- -------------
- ------ ------------- ------
- -------------
TOTAL
RETURN(c).......................................
. 11.05% 39.39%
8.90% 11.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000)........................ $34,581
$ 25,134 $15,281 $ 805,127
Average net assets
(000)...............................
$28,082 $ 18,248 $12,550
$ 683,567
Ratios to average net assets:
Expenses, including distribution
fees............... 1.79%(e)
1.84% 1.98%(e) .79%(e)
Expenses, excluding distribution
fees............... .79%(e)
.84% .98%(e) .79%(e)
Net investment income
(loss)........................
(.88)%(e) (1.00)% (1.12)%(e)
.12%(e)
Portfolio turnover
rate................................
24% 63% 42%
24%
Average commission rate paid per
share................. $ .0579 $
.0596 $ .0611 $ .0579
<CAPTION>
April 15,
Year 1996(b)
Ended Through
September 30, September 30,
1997 1996
- ------------- -------------
<S>
<C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period................... $ 10.98 $
10.32
- ------------- -------------
Income from investment operations
Net investment income
(loss)(d)........................ --
(.02)
Net realized and unrealized gain on investment
transactions....................................
.... 4.47 .68
- ------------- -------------
Total from investment
operations.................... 4.47
.66
- ------------- -------------
Less distributions
Distributions from net realized
gains............... --
- --
- ------------- -------------
Net asset value, end of
period......................... $ 15.45
$ 10.98
- ------------- -------------
- ------------- -------------
TOTAL
RETURN(c).......................................
. 40.71% 6.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000)........................ $ 609,869
$ 362,416
Average net assets
(000)............................... $
455,684 $ 26,829
Ratios to average net assets:
Expenses, including distribution
fees............... .84%
.98%(e)
Expenses, excluding distribution
fees............... .84%
.98%(e)
Net investment income
(loss)........................ --
(.12)%(e)
Portfolio turnover
rate................................
63% 42%
Average commission rate paid per
share................. $ .0596 $
.0611
</TABLE>
- ---------------
(a) Commencement of investment operations.
(b) Commencement of offering of Class Z shares.
(c) Total return does not consider the effects
of sales loads. Total return is
calculated assuming a purchase of shares on
the first day and a sale on the
last day of each period reported and
includes reinvestment of dividends and
distributions. Total returns for periods of
less than a full year are not
annualized.
(d) Calculated based upon weighted average
shares outstanding during the period.
(e) Annualized.
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 11
<PAGE>
Getting The Most From Your Prudential Mutual
Fund.
When you invest through Prudential Mutual Funds,
you receive financial advice
through a Prudential Securities financial
advisor or Prudential/Pruco
Securities registered representative. Your
advisor or representative can
provide you with the following services:
There's No Reward Without Risk; But Is This Risk
Worth It?
Your financial advisor or registered
representative can help you match the
reward you seek with the risk you can tolerate.
And risk can be difficult to
gauge -- sometimes even the simplest investments
bear surprising risks. The
educated investor knows that markets seldom move
in just one direction -- there
are times when a market sector or asset class
will lose value or provide little
in the way of total return. Managing your own
expectations is easier with help
from someone who understands the markets and who
knows you!
Keeping Up With The Joneses.
A financial advisor or registered representative
can help you wade through the
numerous mutual funds available to find the ones
that fit your own individual
investment profile and risk tolerance. While the
newspapers and popular
magazines are full of advice about investing,
they are aimed at generic groups
of people or representative individuals, not at
you personally. Your financial
advisor or registered representative will review
your investment objectives
with you. This means you can make financial
decisions based on the assets and
liabilities in your current portfolio and your
risk tolerance -- not just based
on the current investment fad.
Buy Low, Sell High.
Buying at the top of a market cycle and selling
at the bottom are among the
most common investor mistakes. But sometimes
it's difficult to hold on to an
investment when it's losing value every month.
Your financial advisor or
registered representative can answer questions
when you're confused or worried
about your investment, and remind you that
you're investing for the long haul.
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Edward D. Beach
Delayne Dedrick Gold
Robert F. Gunia
Douglas H. McCorkindale
Mendel A. Melzer, CFA
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
Jennison Associates LLC
466 Lexington Avenue
New York, NY 10017
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse 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
The views expressed in this report and
information about the Fund's portfolio
holdings are for the period covered by this
report and are subject to change
thereafter.
The accompanying financial statements as of
March 31, 1998 were not audited
and, accordingly, no opinion is expressed on
them.
This report is not authorized for distribution
to prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
BULK RATE
U.S. POSTAGE
PAID
Permit 6807
New York, NY
74437E107
74437E206 MF168E2
74437E305 Cat#42M155P
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(ICON)
Prudential
Jennison
Growth &
Income
Fund
SEMI
ANNUAL
REPORT
March 31, 1998
(LOGO)
<PAGE>
Prudential Jennison Growth & Income Fund
A Series of the Prudential Jennison Series Fund,
Inc.
Performance At A Glance.
As the stock market rose substantially during
the six-month reporting period,
the Prudential Jennison Growth & Income Fund's
return trailed the Lipper
Growth & Income Average because we didn't expect
stocks to rally as much as
they did. In fact, we held as much as 18% of
our assets in cash, and avoided
investing in the most expensive stocks, which,
to our surprise, led the market
higher. We believe our defensive position will
benefit us in the months
ahead.
Cumulative Total Returns1 As of
3/31/98
<TABLE>
<CAPTION>
Six One Since
Months Year Inception2
<S> <C> <C> <C>
Class A 5.55% 31.06% 36.92%
Class B 5.17 30.08 35.49
Class C 5.17 30.08 35.49
Class Z 5.75 31.47 37.80
Lipper Growth
& Income Avg3 12.49 40.15 ***
</TABLE>
Average Annual Total Returns 1As
of 3/31/98
<TABLE>
<CAPTION>
One
Since
Year
Inception2
<S> <C> <C>
Class A 24.50%
20.76%
Class B 25.08
21.71
Class C 29.08
24.35
Class Z 31.47
25.87
</TABLE>
Past performance is not indicative of future
results. Principal and investment
return will fluctuate so that an investor's
shares, when redeemed, may be worth
more or less than their original cost.
1Source: Prudential Investments Fund Management
and Lipper Analytical Services.
The cumulative returns do not take into account
sales charges. The average
annual returns do take into account applicable
sales charges. The Fund charges
a maximum front-end sales load of 5% for Class A
shares and a declining
contingent deferred sales charge (CDSC) of 5%,
4%, 3%, 2%, 1% and 1% for six
years for Class B shares. Class C shares have a
1% CDSC for one year. Class B
shares will automatically convert to Class A
shares on a quarterly basis,
approximately seven years after purchase. Class
Z shares are not subject to a
sales charge or a distribution fee.
2Inception date: 11/7/96 for Class A, B, C, and
Z shares.
3Lipper returns are for all funds in each share
class for the six-month and
1-year periods.
***Lipper Since Inception returns are 45.83% for
Classes A, B, C, and Z and
are for all funds in each share class.
How Investments Compared.
(As of 3/31/98)
(GRAPH)
Source: Lipper Analytical Services. Financial
markets change, so a mutual
fund's past performance should never be used to
predict future results. The
risks to each of the investments listed above
are different -- we provide
12-month total returns for several Lipper mutual
fund categories to show you
that reaching for higher returns means
tolerating more risk. The greater the
risk, the larger the potential reward or loss.
In addition, we've included
historical 20-year average annual returns. These
returns assume the
reinvestment of dividends.
U.S. Growth Funds will fluctuate a great deal.
Investors have received higher
historical total returns from stocks than from
most other investments. Smaller
capitalization stocks offer greater potential
for long-term growth but may be
more volatile than larger capitalization stocks.
General Bond Funds provide more income than
stock funds, which can help smooth
out their total returns year by year. But their
prices still fluctuate
(sometimes significantly) and their returns have
been historically lower than
those of stock funds.
General Municipal Debt Funds invest in bonds
issued by state governments, state
agencies and/or municipalities. This investment
provides income that is usually
exempt from federal and state income taxes.
U.S. Taxable Money Funds attempt to preserve a
constant share value; they
don't fluctuate much in price but, historically,
their returns have been
generally among the lowest of the major
investment categories.
<PAGE>
Bradley Goldberg, Fund Manager
(PHOTO)
Portfolio
Manager's Report
The Prudential Jennison Growth & Income Fund
invests primarily in stocks of
established companies with growth prospects we
believe to be largely
unrecognized by the market. We seek strong
total investment returns by
combining a focus on earnings growth with
attention to the current price of a
share. This discipline discourages us from
paying too much for projected
growth or from continuing to hold a stock when
the market offers more than a
fair price. There can be no assurance that the
Fund will reach its investment
objective.
A Hybrid Strategy.
We use a hybrid strategy of growth and value
investing. We want our stocks to
have both greater earnings growth than the
market and lower cost. To get that
combination, we look at stocks where we think we
are ahead of the consensus in
our expectations of earnings momentum or
earnings sustainability. We're
somewhat contrarian -- we look where many
portfolio managers don't.
Strategy Session.
- ------------------------------------------------
- -------------------------------
Earnings & Growth.
We combine a growth strategy -- looking for long-
term earnings growth at faster
rates than the overall market -- and a value
strategy -- looking for companies
selling significantly below the average ratio of
price to earnings. The
appreciation potential of holdings must be, in
our opinion, at least two or
three times the possible downside. There is a
contrarian element to this
approach: If most investors had agreed with our
view that these companies can
achieve high, long-term earnings growth, the
stocks would be selling at
premium prices.
CIGNA is currently our largest holding, and is
benefiting from low inflation
and interest rates. We've held CIGNA for some
time; it still offers
considerably more reward potential than risk as
the company refocuses on
selling to the growing world market. We believe
that CIGNA's earnings will
grow faster than they have in the past. It is a
good investment value because
its share price has yet to reflect this.
Polaroid Added.
Polaroid is a new holding for the Fund. We
began following this company
closely when it acquired new management. We
expect the new team to use
Polaroid's globally recognized brand name to
restore superior earnings growth.
Polaroid shares sell at a fraction of the price
of other well-known brands,
such as Coca-Cola and Gillette. We have
confidence in its management's recent
aggressive steps to reduce production costs and
increase the rate of new
product introductions.
<PAGE>
What Went Well.
- ------------------------------------------------
- -
Exuberant Stocks.
Since their Asia-induced lows in October 1997,
stocks have risen 20%, bringing
the three-year return on the S&P 500 to 134%. We
consider this substantially
more than normal, considering long-term rates of
profit and dividend growth.
In the technology sector, our Digital Equipment
shares rose sharply when Compaq
Computer announced its intention to acquire the
company. Xerox and Symbol
Technologies also performed well because their
operating results exceeded
analysts' expectations.
Consolidation and restructuring activity
accelerated in the financial services
sector, and our stocks, such as Fleet Financial,
benefited. Low inflation and
interest rates caused rapid economic growth and
very active financial markets,
an excellent setting for the earnings of
companies in this sector. Stocks in
the consumer sector - such as The New York
Times, American Greetings, The
Limited, Inc., Tribune Co., Vodaphone, and Dial
Corporation - contributed
to performance.
And Not So Well.
- ------------------------------------------------
- -
Too Much Cash.
The extremely high values that investors are
placing on companies today and
our generally cautious stance toward stocks led
us to hold a substantial
position in cash - about 18% at March 31. We
also held a small short position
in what we perceived to be particularly
overvalued stocks. Short positions,
where we sell a stock we don't own with the goal
of buying it back at lower
prices, have represented 4% to 7% of our assets.
We are doing this because
many of today's most popular stocks are more
highly valued than at any other
time in this century and we believe they may
move toward historical levels.
However, this defensive strategy has reduced our
returns, particularly when
compared with our fully invested competitors. We
continue to feel, nonetheless,
that keeping this partial shock absorber is the
right strategy, particularly
for the conservative investor who selects growth
and income funds. Some stocks
in the energy and basic materials sectors tended
to lag the broad market when
investors became concerned about slowing
economic activity in Asia and lower
commodity prices. Waste Management also suffered
from a reshuffling of its
top management and from accounting issues.
Alumax was hurt by a decline in
aluminum prices. Union Pacific incurred serious
operating problems.
Five Largest Holdings.
3.2% CIGNA Corp.
Insurance
2.7% The Limited, Inc.
Retail
2.6% Sears, Roebuck & Co.
Retail
2.4% Chase Manhattan Corp.
Banking
2.3% Ryder System, Inc.
Business Services
Expressed as a percentage of net assets as of
3/31/98.
Looking Ahead.
- ------------------------------------------------
- -
We are pleased by management actions in basic
materials companies - companies
that produce chemicals and metals. In order to
improve returns to
shareholders, these companies are restructuring
and cutting costs rather than
adding capacity to fight for larger market
share. Given the supply and demand
balance for basic materials, we think this is
the right course. We will also
continue to hold cash and short positions to
provide a small cushion from
possible downturns in the market. Although we
believe the economy will
continue to grow and interest rates and
inflation will remain low, current
stock prices may already reflect the benefits of
this attractive environment.
1
<PAGE>
President's Letter
May 15, 1998
- ------------------------------------------------
- -------------------------------
(PHOTO)
See You On the Net!
Dear Shareholder:
We are proud to be part of the worldwide web and
we invite you to visit our
two web sites, if you have not already done so.
Yes, we currently offer two
sites -- each with its own distinctive identity.
http://www.prudential.com
The Prudential web site features information on
personal investing, retirement
planning, commercial and residential real estate
opportunities, as well as
insurance products for life, health, home and
property.
You can look up performance data on your
Prudential mutual funds, learn about
proven investment strategies, or take one of our
many interactive quizzes that
will help guide you in determining long-term
goals -- like how much to save for
your child's college education or for your
retirement.
http://www.prusec.com
The Prudential Securities Virtual Branch Office
is a full-service brokerage web
site specifically designed to provide investors
with the information they need
to make informed financial decisions. It was
rated the No. 1 full-service
brokerage web site of its type by Financial Net
News (February 1998), a
subsidiary of Institutional Investor magazine,
and was also rated among the
top corporate web sites by Fortune magazine
(Winter 1998).
What investors can find here are -- daily market
commentaries, stock quotes,
economic forecasts, product news, and current
market research, in addition to
interactive investing programs. Investors,
through their Prudential Securities
Financial Advisors, may also enroll in
Prudential Online(R) and have access to
their personal account information which
includes balances, security values,
transactions and account activities. They can
also easily E-mail their
Financial Advisor.
Both sites also contain professional
opportunities for people who are searching
for employment or considering a change of career
paths.
We plan to make further enhancements to our web
pages as the year progresses.
So please, the next time you are "web browsing"
or "surfing the net," pay us a
visit. Let us know what you think and what you'd
like to see added in the
future.
Sincerely,
Brian M. Storms
President, Prudential Mutual Funds & Annuities
2
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
Portfolio of Investments
PRUDENTIAL JENNISON GROWTH &
as of March 31, 1998 (Unaudited) INCOME
FUND
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
- ------------------------------------------------
- ------------
LONG-TERM INVESTMENTS--86.5%
COMMON STOCKS--85.3%
- ------------------------------------------------
- ------------
Aircraft/Defense Electronics--6.5%
47,600 Boeing Co.
$ 2,481,150
38,700 General Motors Corp., Class H
2,609,831
20,200 Lockheed Martin Corp.
2,272,500
39,040 Raytheon Co.
2,220,400
- ------------
9,583,881
- ------------------------------------------------
- ------------
Airlines--0.6%
7,500 Delta Airlines, Inc.
886,875
- ------------------------------------------------
- ------------
Aluminum--2.7%
16,300 Aluminum Co. of America
1,121,644
45,800 Reynolds Metals Co.
2,813,837
- ------------
3,935,481
- ------------------------------------------------
- ------------
Automotive Parts--1.2%
34,500 B.F. Goodrich Co.
1,761,656
- ------------------------------------------------
- ------------
Banking--6.4%
26,200 Chase Manhattan Corp.
3,533,725
36,300 Fleet Financial Group, Inc.
3,087,768
136,300 Hibernia Corp., Class A
2,802,669
- ------------
9,424,162
- ------------------------------------------------
- ------------
Business Services--6.4%
46,200 Cendant Corp.
1,830,675
40,900 Hertz Corp.
1,881,400
80,000 Ogden Corp.
2,300,000
89,200 Ryder System, Inc.
3,389,600
- ------------
9,401,675
- ------------------------------------------------
- ------------
Cellular Communications--0.8%
11,000 Vodafone Group PLC (ADR)
(United Kingdom)
1,142,625
Computer Systems/Peripherals--6.6%
52,600 Digital Equipment Corp.(a)
$ 2,751,637
33,500 Hewlett-Packard Co.
2,123,063
19,500 International Business Machines
Corp.
2,025,563
34,350 Symbol Technologies, Inc.(a)
1,689,591
60,700 Unisys Corp.(a)
1,153,300
- ------------
9,743,154
- ------------------------------------------------
- ------------
EDP/Software Services--0.8%
136,500 Intergraph Corp.(a)
1,155,984
- ------------------------------------------------
- ------------
Foods--2.0%
62,000 Dole Food Co., Inc.
2,999,250
- ------------------------------------------------
- ------------
Hotels--2.3%
105,600 Hilton Hotels Corp.
3,366,000
- ------------------------------------------------
- ------------
Household & Personal Care Products--0.8%
50,000 The Dial Corp.
1,196,875
- ------------------------------------------------
- ------------
Insurance--5.2%
23,100 CIGNA Corp.
4,735,500
26,200 NAC Re Corp.
1,373,862
58,300 TIG Holdings, Inc.
1,534,019
- ------------
7,643,381
- ------------------------------------------------
- ------------
Machinery--1.6%
35,300 Case Corp.
2,404,813
- ------------------------------------------------
- ------------
Manufacturing--1.5%
42,200 Kennametal, Inc.
2,220,775
</TABLE>
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 3
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
Portfolio of Investments
PRUDENTIAL JENNISON GROWTH &
as of March 31, 1998 (Unaudited) INCOME
FUND
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
- ------------------------------------------------
- ------------
Media--2.1%
59,300 CBS Corp.
$ 2,012,494
18,231 Chris-Craft Industries, Inc.(a)
1,074,490
- ------------
3,086,984
- ------------------------------------------------
- ------------
Oil Services--1.4%
21,000 Baker Hughes, Inc.
845,250
22,100 Smith International, Inc.(a)
1,216,881
- ------------
2,062,131
- ------------------------------------------------
- ------------
Paper & Forest Products--4.8%
67,200 Boise Cascade Corp.
2,423,400
42,500 Champion International Corp.
2,308,281
118,600 Stone Container Corp.
1,482,500
12,600 Temple-Inland, Inc.
782,775
- ------------
6,996,956
- ------------------------------------------------
- ------------
Petroleum--2.7%
15,700 Anadarko Petroleum Corp.
1,083,300
21,700 Burlington Resources, Inc.
1,040,244
48,900 Unocal Corp.
1,891,819
- ------------
4,015,363
- ------------------------------------------------
- ------------
Pharmaceuticals--0.6%
10,600 Smithkline Beecham PLC (ADR)
(United Kingdom)
663,162
4,600 Vertex Pharmaceuticals, Inc.(a)
146,913
- ------------
810,075
- ------------------------------------------------
- ------------
Photography/Imaging Technology--2.6%
55,500 Polaroid Corp.
2,442,000
12,100 Xerox Corp.
1,287,894
- ------------
3,729,894
Publishing--6.4%
41,000 American Greetings Corp., Class A
$ 1,886,000
29,100 McGraw-Hill Companies, Inc.
2,213,419
42,900 New York Times Co., Class A
3,003,000
31,400 Tribune Co.
2,213,700
- ------------
9,316,119
- ------------------------------------------------
- ------------
Real Estate Investment Trusts--2.4%
66,071 Meditrust Corp.-Paired Stock
2,039,942
60,300 Tower Realty Trust, Inc.
1,484,888
- ------------
3,524,830
- ------------------------------------------------
- ------------
Retail--6.6%
55,800 AutoZone, Inc.(a)
1,890,225
66,800 Sears, Roebuck & Co.
3,836,825
137,500 The Limited, Inc.
3,944,531
- ------------
9,671,581
- ------------------------------------------------
- ------------
Savings & Loan--1.4%
27,700 Washington Mutual, Inc.
1,986,609
- ------------------------------------------------
- ------------
Specialty Chemicals--5.0%
51,700 Betzdearborn, Inc.
2,917,819
40,700 Dexter Corp.
1,683,962
39,200 Minerals Technologies, Inc.
1,974,700
23,300 Morton International, Inc.
764,531
- ------------
7,341,012
- ------------------------------------------------
- ------------
Steel & Metals--2.4%
47,000 British Steel PLC (ADR)
(United Kingdom)
1,139,750
64,700 USX-U.S. Steel Group, Inc.
2,442,425
- ------------
3,582,175
</TABLE>
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 4
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
Portfolio of Investments
PRUDENTIAL JENNISON GROWTH &
as of March 31, 1998 (Unaudited) INCOME
FUND
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
- ------------------------------------------------
- ------------
Telecommunications--0.4%
12,600 WorldCom Inc.(a)
$ 542,588
- ------------------------------------------------
- ------------
Transportation--1.1%
54,600 Knightsbridge Tankers Ltd.
1,556,100
- ------------
Total common stocks
(cost $101,834,843)
125,089,004
- ------------
- ------------------------------------------------
- ------------
PREFERRED STOCK--1.2%
33,300 USX-U.S. Steel Group, Inc.
Conv., 6.75%
(cost $1,593,524)
1,660,837
- ------------
Total long-term investments
(cost $103,428,367)
126,749,841
- ------------
SHORT-TERM INVESTMENTS--13.7%
<CAPTION>
Principal
Moody's Amount
Rating (000)
- ------------------------------------------------
- ------------
COMMERCIAL PAPER--3.1%
P-1 $ 4,573 General Electric
Capital Corp.
5.59%, 4/2/98
(cost $4,573,000)
4,573,000
- -------------
- ------------------------------------------------
- ------------
REPURCHASE AGREEMENT--3.8%
5,538 State Street Bank &
Trust Co.,
5.00%, due 4/1/98
in
the amount of
$5,538,769 (cost
$5,538,000; value
of
the collateral
including accrued
interest-
$5,652,937) 5,538,000
- -------------
<CAPTION>
Principal
Amount
(000)
U.S. GOVERNMENT SECURITIES--6.8%
United States Treasury Bills
$10,000(b) 5.235%, 4/30/98
(cost $9,957,829)
$ 9,957,829
- ------------
Total short-term investments
(cost $20,068,829)
20,068,829
- ------------
Total investments before
short sales--100.2%
(cost $123,497,196; Note 4)
146,818,670
- ------------
COMMON STOCKS SOLD SHORT(a)--(4.4%)
<CAPTION>
Shares
- ------------------------------------------------
- ------------
Household & Personal Care Products--(1.0%)
(16,800) Procter & Gamble Co.
(1,417,500)
- ------------------------------------------------
- ------------
Integrated Oil--(1.4%)
(29,900) Exxon Corp.
(2,021,987)
- ------------------------------------------------
- ------------
Machinery--(1.0%)
(37,600) Dover Corp.
(1,428,800)
- ------------------------------------------------
- ------------
Telecommunications Equipment--(1.0%)
(11,900) Lucent Technologies, Inc.
(1,521,713)
- ------------
Total common stocks sold short
(proceeds at cost $6,133,356)
(6,390,000)
- ------------
Total investments, net of
short sales--95.8%
140,428,670
Other assets in excess of
liabilities--4.2%
6,181,038
- ------------
Net Assets--100%
$146,609,708
- ------------
- ------------
</TABLE>
- ---------------
(a) Non-income producing securities.
(b) $6,430,000 of principal amount pledged as
collateral for short sales.
ADR--American Depository Receipt.
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 5
<PAGE>
PRUDENTIAL JENNNISON SERIES FUND, INC.
Statement of Assets and Liabilities
PRUDENTIAL JENNISON GROWTH &
(Unaudited) INCOME
FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
Assets
March 31,1998
<S>
<C>
Investments, at value (cost
$123,497,196)...................................
............................... $
146,818,670
Cash............................................
................................................
........... 107,813
Receivable for securities sold
short...........................................
............................ 6,133,356
Receivable for investments
sold............................................
................................
1,036,236
Receivable for Series shares
sold............................................
..............................
404,746
Due from Broker for securities sold
short...........................................
....................... 241,669
Dividends and interest
receivable......................................
....................................
183,914
Other
assets..........................................
................................................
..... 671
- --------------
Total
assets..........................................
................................................
.. 154,927,075
- --------------
Liabilities
Investments sold short, at value (proceeds
$6,133,356).....................................
................ 6,390,000
Payable for investments
purchased.......................................
...................................
1,353,236
Payable for Series shares
reacquired......................................
.................................
302,838
Accrued
expenses........................................
................................................
... 99,060
Distribution fee
payable.........................................
..........................................
98,467
Management fee
payable.........................................
............................................
73,766
- --------------
Total
liabilities.....................................
................................................
.. 8,317,367
- --------------
Net
Assets..........................................
................................................
....... $ 146,609,708
- --------------
- --------------
Net assets were comprised of:
Common stock, at
par.............................................
....................................... $
11,410
Paid-in capital in excess of
par.............................................
........................... 120,170,389
- --------------
120,181,799
Undistributed net investment
income..........................................
........................... 301,239
Accumulated net realized gain on
investments.....................................
....................... 3,061,840
Net unrealized appreciation on
investments.....................................
......................... 23,064,830
- --------------
Net assets, March 31,
1998............................................
..................................... $
146,609,708
- --------------
- --------------
Class A:
Net asset value and redemption price per
share
($37,308,111 / 2,898,870 shares of common
stock issued and
outstanding)..............................
$12.87
Maximum sales charge (5.0% of offering
price)..........................................
................. .68
- --------------
Maximum offering price to
public..........................................
..............................
$13.55
- --------------
- --------------
Class B:
Net asset value, offering price and
redemption price per share
($99,799,686 / 7,771,259 shares of common
stock issued and
outstanding)..............................
$12.84
- --------------
- --------------
Class C:
Net asset value, offering price and
redemption price per share
($8,281,962 / 644,896 shares of common
stock issued and
outstanding).................................
$12.84
- --------------
- --------------
Class Z:
Net asset value, offering price and
redemption price per share
($1,219,949 / 94,451 shares of common
stock issued and
outstanding)..................................
$12.92
- --------------
- --------------
</TABLE>
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 6
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
PRUDENTIAL JENNISON GROWTH &
INCOME FUND
Statement of Operations (Unaudited)
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income
March 31, 1998
<S> <C>
Income
Dividends (net of foreign
withholding taxes of $1,505).... $
1,024,248
Interest and discount earned.......
625,019
-------
- --------------
Total income....................
1,649,267
-------
- --------------
Expenses
Distribution fee--Class A..........
43,022
Distribution fee--Class B..........
450,222
Distribution fee--Class C..........
36,889
Management fee.....................
398,201
Transfer agent's fees and
expenses........................
86,000
Custodian's fees and expenses......
56,000
Registration fees..................
43,000
Reports to shareholders............
38,000
Dividends on securities sold
short...........................
32,776
Legal fees and expenses............
20,000
Audit fee..........................
10,000
Directors' fees and expenses.......
4,000
Miscellaneous......................
7,107
-------
- --------------
Total expenses..................
1,225,217
-------
- --------------
Net investment income.................
424,050
-------
- --------------
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) on:
Investment transactions............
5,675,200
Financial futures transactions.....
(119,265)
Short sales........................
(630,297)
-------
- --------------
4,925,638
-------
- --------------
Net change in unrealized
appreciation/depreciation on:
Investments........................
2,243,151
Short sales........................
(215,054)
-------
- --------------
2,028,097
-------
- --------------
Net gain on investments...............
6,953,735
-------
- --------------
Net Increase in Net Assets Resulting
from Operations....................... $
7,377,785
-------
- --------------
-------
- --------------
</TABLE>
PRUDENTIAL JENNISON SERIES FUND, INC.
PRUDENTIAL JENNISON GROWTH &
INCOME FUND
Statement of Changes in Net Assets (Unaudited)
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Six Months
Ended
November 7, 1996(a)
Increase (Decrease) March 31,
Through
in Net Assets 1998
September 30, 1997
<S> <C>
<C>
Operations
Net investment income..... $ 424,050
$ 311,051
Net realized gain on
investment
transactions........... 4,925,638
4,530,772
Net change in unrealized
appreciation of
investments............ 2,028,097
21,036,733
--------------
- --------------------
Net increase in net assets
resulting from
operations............. 7,377,785
25,878,556
--------------
- --------------------
Dividends and distributions
(Note 1):
Dividends from net
investment income
Class A................ (127,948)
(173,413)
Class B................ (28,063)
(87,383)
Class C................ (2,276)
(9,043)
Class Z................ (4,048)
(1,688)
--------------
- --------------------
(162,335)
(271,527)
--------------
- --------------------
Distributions from net
realized gains
Class A................ (1,652,658)
- --
Class B................ (4,349,846)
- --
Class C................ (352,855)
- --
Class Z................ (39,211)
- --
--------------
- --------------------
(6,394,570)
- --
--------------
- --------------------
Series share transactions
(net of share conversions)
(Note 5)
Net proceeds from shares
sold................... 26,401,663
125,652,781
Net asset value of shares
issued in reinvestment
of dividends and
distributions.......... 6,204,096
248,524
Cost of shares
reacquired............. (16,940,595)
(21,384,670)
--------------
- --------------------
Net increase in net assets
from Series share
transactions........... 15,665,164
104,516,635
--------------
- --------------------
Total increase............... 16,486,044
130,123,664
Net Assets
Beginning of period.......... 130,123,664
- --
--------------
- --------------------
End of period................ $ 146,609,708
$130,123,664
--------------
- --------------------
--------------
- --------------------
</TABLE>
- ---------------
(a) Commencement of investment operations.
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 7
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
PRUDENTIAL JENNISON GROWTH &
Notes to Financial Statements (Unaudited) INCOME
FUND
- ------------------------------------------------
- --------------------------------
Prudential Jennison Growth & Income Fund (the
'Series') is a separately managed
series of Prudential Jennison Series Fund, Inc.,
formerly Prudential Jennison
Fund, Inc. (the 'Fund'). The Fund was
incorporated in Maryland on August 10,
1995 and is registered under the Investment
Company Act of 1940 as a
diversified, open-end management investment
company. Investment operations
commenced on November 7, 1996.
The Series' investment objective is to achieve
long-term growth of capital and
income, with current income as a secondary
objective. The Series seeks to
achieve its objectives by investing primarily in
common stocks of established
companies with growth prospects believed to be
underappreciated by the market.
- ------------------------------------------------
- ------------
Note 1. Accounting Policies
The following is a summary of significant
accounting policies followed by the
Series in the preparation of its financial
statements.
Securities Valuation: Securities listed on a
securities exchange (other than
options on securities and indices) are valued at
the last sales price on the day
of valuation, or, if there was no sale on such
day, at the mean between the
closing bid and asked prices on such day or at
the bid price in the absence of
an asked price as provided by a pricing service.
Securities that are actively
traded in the over-the-counter market, including
listed securities for which the
primary market is believed to be over-the-
counter, are valued by an independent
pricing service. Convertible debt securities
that are actively traded in the
over-the-counter market, including listed
securities for which the primary
market is believed to be over-the-counter, are
valued at the mean between the
most recently quoted bid and asked prices
provided by a principal market maker
or independent pricing agent. Options on
securities and indices traded on an
exchange are valued at the mean between the most
recently quoted bid and asked
prices provided by the respective exchange.
Futures contracts and options
thereon are valued at the last sales price as of
the close of business of the
exchange. Securities for which market quotations
are not readily available are
valued at fair value as determined in good faith
by or under the direction of
the Board of Directors of the Fund.
Short-term securities which mature in more than
60 days are valued at current
market quotations. Short-term securities which
mature in 60 days or less are
valued at amortized cost.
All securities are valued as of 4:15 p.m., New
York time.
Securities Transactions and Net Investment
Income: Securities transactions are
recorded on the trade date. Realized gains or
losses on sales of securities are
calculated on the identified cost basis.
Dividend income is recorded on the
ex-dividend date; interest income is recorded on
the accrual basis. Expenses are
recorded on the accrual basis which may require
the use of certain estimates by
management.
Net investment income, other than distribution
fees, and realized and unrealized
gains or losses are allocated daily to each
class of shares based upon the
relative proportion of net assets of each class
at the beginning of the day.
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 Series 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 Series 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 Series invests in financial futures
contracts in order to hedge its existing
portfolio securities, or securities the Series
intends to purchase, against
fluctuations in value caused by changes in
prevailing interest rates. Should
interest rates move unexpectedly, the Series 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.
Short Sales: The Series may sell a security it
does not own in anticipation of a
decline in the market value of that security
(short sale). When the Series makes
a short sale, it must borrow the security sold
short and deliver it to the
broker-dealer through which it made the short
sale. The proceeds received from
the short sale are maintained as collateral for
its obligation to deliver the
security upon conclusion of the sale. In
addition, the Series may have to make
additional subsequent deposits with the broker
equal to the change in the market
value of the security sold short. The Series may
have to pay a fee to borrow the
particular security and may be obligated to pay
over any payments received on
such borrowed securities. A gain, limited to the
price at which the Series 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.
Dividends and Distributions: The Series expects
to pay dividends of net
investment income, if any, semi-annually and to
make distributions of any
- ------------------------------------------------
- --------------------------------
8
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
PRUDENTIAL JENNISON GROWTH &
Notes to Financial Statements (Unaudited) INCOME
FUND
- ------------------------------------------------
- --------------------------------
net capital gains at least annually. Dividends
and distributions are recorded on
the ex-dividend date. Income distributions and
capital gain distributions are
determined in accordance with income tax
regulations which may differ from
generally accepted accounting principles.
Taxes: It is the Series' policy to meet the
requirements of the Internal Revenue
Code applicable to regulated investment
companies and to distribute all of its
taxable net income to its shareholders.
Therefore, no federal income tax
provision is required.
Withholding taxes on foreign dividends have been
provided for in accordance with
the Series' 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 a subadvisory
agreement between PIFM and Jennison
Associates Capital Corp. ('Jennison'), Jennison
furnishes investment advisory
services in connection with the management of
the Fund. Under the subadvisory
agreement, Jennison, subject to the supervision
of PIFM, is responsible for
managing the assets of the Series in accordance
with its investment objectives,
and policies.
The management fee paid PIFM is computed daily
and payable monthly, at an annual
rate of .60 of 1% of the average daily net
assets of the Series. PIFM pays
Jennison a subadvisory fee at an annual rate of
.30 of 1% of the average daily
net assets of the Series up to and including
$300 million and .25 of 1% of such
assets in excess of $300 million. PIFM also pays
the cost of compensation of
officers and employees of the Fund, occupancy
and certain clerical and
bookkeeping costs of the Fund. The Fund bears
all other costs and expenses.
The Fund has a distribution agreement with
Prudential Securities Incorporated
('PSI'), which acts as the distributor of the
Class A, Class B, Class C and
Class Z shares of the Fund. The Fund compensates
PSI for distributing and
servicing the Fund's Class A, Class B and Class
C shares, pursuant to plans of
distribution, (the 'Class A, B and C Plans')
regardless of expenses actually
incurred by them. The distribution fees are
accrued daily and payable monthly.
No distribution or service fees are paid to PSI
as distributor of the Class Z
shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund
compensates PSI for
distribution-related activities at an annual
rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A,
B and C shares, respectively.
Such expenses under the plans were .25 of 1%, 1%
and 1% of average daily net
assets of the Class A, B and C shares,
respectively, for the six months ended
March 31, 1998.
PSI has advised the Series that it has received
approximately $87,300 in
front-end sales charges resulting from sales of
Class A shares during the six
months ended March 31, 1998. From these fees,
PSI paid such sales charges to
affiliated broker-dealers, which in turn paid
commissions to salespersons and
incurred other distribution costs.
PSI has advised the Series that for the six
months ended March 31, 1998, it
received approximately $113,700 and $900 in
contingent deferred sales charges
imposed upon certain redemptions by Class B and
C shareholders, respectively.
PIFM, Jennison and PSI are wholly owned
subsidiaries of The Prudential Insurance
Company of America.
The Series, along with other affiliated
registered investment companies (the
'Funds'), has a credit agreement (the
'Agreement') with an unaffiliated lender.
The maximum commitment under the Agreement is
$200,000,000. Interest on any such
borrowings outstanding will be at market rates.
The purpose of the Agreement is
to serve as an alternative source of funding for
capital share redemptions. The
Series has not borrowed any amounts pursuant to
the Agreement during the six
months ended March 31, 1998. The Funds pay a
commitment fee at an annual rate of
.055 of 1% on the unused portion of the credit
facility. The commitment fee is
accrued and paid quarterly on a pro rata basis
by the Funds. The Agreement
expired on December 30, 1997 and has been
extended through December 29, 1998
under the same terms.
- ------------------------------------------------
- ------------
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a
wholly owned subsidiary of PIFM,
serves as the Series' transfer agent. During the
six months ended March 31,
1998, the Series incurred fees of approximately
$72,400 for the services of
PMFS. As of March 31, 1998, approximately
$13,300 of such fees were due to PMFS.
Transfer agent fees and expenses in the
Statement of Operations include certain
out-of-pocket expenses paid to nonaffiliates.
For the six months ended March 31, 1998, PSI
earned approximately $8,900 in
brokerage commissions from portfolio
transactions executed on behalf of the
Series.
- ------------------------------------------------
- --------------------------------
9
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
PRUDENTIAL JENNISON GROWTH &
Notes to Financial Statements (Unaudited) INCOME
FUND
- ------------------------------------------------
- --------------------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities,
other than short-term investments,
for the six months ended March 31, 1998 were
$49,665,963 and $45,656,464,
respectively.
The cost basis of the investments for federal
income tax purposes at March 31,
1998, was $123,508,331 and, accordingly, net
unrealized appreciation of
investments for federal income tax purposes was
$23,310,340 (gross unrealized
appreciation-$24,545,271; gross unrealized
depreciation--$1,234,931).
- ------------------------------------------------
- ------------
Note 5. Capital
The Series offers Class A, Class B, Class C and
Class Z shares. Class A shares
are sold with a front-end sales charge of up to
5%. Class B shares are sold with
a contingent deferred sales charge which
declines from 5% to zero depending on
the period of time the shares are held. Class B
shares will automatically
convert to Class A shares on a quarterly basis
approximately seven years after
purchase. A special exchange privilege is also
available for shareholders who
qualified to purchase Class A shares at net
asset value. Class C shares are sold
with a contingent deferred sales charge of 1%
during the first year. Class Z
shares are not subject to any sales or
redemption charge and are offered
exclusively for sale to a limited group of
investors.
There are 3 billion shares of $.001 par value
common stock authorized which are
divided into three Series, each of which offers
four classes, designated Class
A, Class B, Class C and Class Z, each of which
consists of 250 million
authorized shares.
Transactions in shares of common stock were as
follows:
<TABLE>
<CAPTION>
Class A Shares
Amount
- -------------------------------------- --------
- -- -----------
<S> <C>
<C>
Six months ended March 31, 1998:
Shares sold...........................
598,947 $ 7,331,226
Shares issued in reinvestment of
dividends and distributions.........
145,428 1,700,057
Shares reacquired.....................
(571,788) (7,004,390)
--------
- -- -----------
Net increase in shares outstanding
before conversion...................
172,587 2,026,893
Shares issued upon conversion from
Class B.............................
22,046 272,092
--------
- -- -----------
Net increase in shares outstanding....
194,633 $ 2,298,985
--------
- -- -----------
--------
- -- -----------
<CAPTION>
Class A Shares
Amount
- -------------------------------------- --------
- -- -----------
<S> <C>
<C>
November 7, 1996* through
September 30, 1997:
Shares sold...........................
3,742,825 $39,152,598
Shares issued in reinvestment of
dividends...........................
14,160 157,166
Shares reacquired.....................
(1,113,963) (12,460,182)
--------
- -- -----------
Net increase in shares outstanding
before conversion...................
2,643,022 26,849,582
Shares issued upon conversion from
Class B.............................
61,215 732,819
--------
- -- -----------
Net increase in shares outstanding....
2,704,237 $27,582,401
--------
- -- -----------
--------
- -- -----------
<CAPTION>
Class B
- --------------------------------------
Six months ended March 31, 1998:
Shares sold...........................
1,273,394 $15,688,280
Shares issued in reinvestment of
dividends and distributions.........
351,206 4,109,107
Shares reacquired.....................
(639,871) (7,848,745)
--------
- -- -----------
Net increase in shares outstanding
before conversion...................
984,729 11,948,642
Shares reacquired upon conversion from
Class A.............................
(22,079) (272,092)
--------
- -- -----------
Net increase in shares outstanding....
962,650 $11,676,550
--------
- -- -----------
--------
- -- -----------
November 7, 1996* through
September 30, 1997:
Shares sold...........................
7,590,360 $79,524,546
Shares issued in reinvestment of
dividends...........................
7,661 80,973
Shares reacquired.....................
(728,030) (8,137,956)
--------
- -- -----------
Net increase in shares outstanding
before conversion...................
6,869,991 71,467,563
Shares reacquired upon conversion into
Class A.............................
(61,382) (732,819)
--------
- -- -----------
Net increase in shares outstanding....
6,808,609 $70,734,744
--------
- -- -----------
--------
- -- -----------
<CAPTION>
Class C
- --------------------------------------
Six months ended March 31, 1998:
Shares sold...........................
121,129 $ 1,483,837
Shares issued in reinvestment of
dividends and distributions.........
30,071 351,829
Shares reacquired.....................
(59,293) (731,206)
--------
- -- -----------
Net increase in shares outstanding....
91,907 $ 1,104,460
--------
- -- -----------
--------
- -- -----------
November 7, 1996* through
September 30, 1997:
Shares sold...........................
608,639 $ 6,265,784
Shares issued in reinvestment of
dividends and distributions.........
827 8,698
Shares reacquired.....................
(56,477) (614,072)
--------
- -- -----------
Net increase in shares outstanding....
552,989 $ 5,660,410
--------
- -- -----------
--------
- -- -----------
</TABLE>
- ------------------------------------------------
- --------------------------------
10
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
PRUDENTIAL JENNISON GROWTH &
Notes to Financial Statements (Unaudited) INCOME
FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
<CAPTION>
Class Z Shares
Amount
- -------------------------------------- --------
- -- -----------
<S> <C>
<C>
Six months ended March 31, 1998:
Shares sold...........................
152,879 $ 1,898,320
Shares issued in reinvestment of
dividends
and distributions...................
3,675 43,103
Shares reacquired.....................
(109,191) (1,356,254)
--------
- -- -----------
Net increase in shares outstanding....
47,363 $ 585,169
--------
- -- -----------
--------
- -- -----------
November 7, 1996* through
September 30, 1997:
Shares sold...........................
62,839 $ 709,853
Shares issued in reinvestment of
dividends...........................
146 1,687
Shares reacquired.....................
(15,897) (172,460)
--------
- -- -----------
Net increase in shares outstanding....
47,088 $ 539,080
--------
- -- -----------
--------
- -- -----------
</TABLE>
- ---------------
* Commencement of investment operations.
- ------------------------------------------------
- --------------------------------
11
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
PRUDENTIAL JENNISON GROWTH &
Financial Highlights (Unaudited) INCOME
FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
<CAPTION>
Class A Class B
- ----------------------------------- --------
- --
Six months November 7, 1996(a) Six
months
Ended Through Ended
March 31, September 30, March
31,
1998 1997 1998
- ---------- -------------------- --------
- --
<S>
<C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period..........................................
. $ 12.89 $ 10.00 $
12.86
- ---------- ------ --------
- --
Income from investment operations
Net investment
income..........................................
................ .07 .09
.03
Net realized and unrealized gain on investment
transactions.................... .58
2.87 .57
- ---------- ------ ---------
- -
Total from investment
operations......................................
...... .65 2.96
.60
- ---------- ------ ---------
- -
Less distributions
Dividends from net investment
income..........................................
. (.05) (.07)
- --(d)
Distributions from net realized
gains..........................................
(.62) -- (.62)
- ---------- ------ ----------
Total
distributions...................................
...................... (.67)
(.07) (.62)
- ---------- ------ ----------
Net asset value, end of
period..........................................
....... $ 12.87 $ 12.89
$ 12.84
- ---------- ------ ----------
- ---------- ------ ----------
TOTAL
RETURN(c).......................................
......................... 5.55%
29.72% 5.17%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000)...........................................
..... $ 37,308 $ 34,846 $
99,800
Average net assets
(000)...........................................
............ $ 34,512 $ 27,008
$ 90,292
Ratios to average net assets(b):
Expenses, including distribution
fees.......................................
1.30% 1.58% 2.05%
Expenses, excluding distribution
fees.......................................
1.05% 1.33% 1.05%
Net investment
income..........................................
............. 1.19% .90%
.44%
Portfolio turnover
rate............................................
............ 42% 55%
42%
Average commission rate paid per
share.........................................
$ .0607 $ .0588 $ .0607
<CAPTION>
November 7, 1996(a)
Through
September 30,
1997
- -------------------
<S>
<C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period..........................................
. $ 10.00
- ------
Income from investment operations
Net investment
income..........................................
................ .02
Net realized and unrealized gain on investment
transactions.................... 2.86
- ------
Total from investment
operations......................................
...... 2.88
- ------
Less distributions
Dividends from net investment
income..........................................
. (.02)
Distributions from net realized
gains..........................................
- --
- ------
Total
distributions...................................
...................... (.02)
- ------
Net asset value, end of
period..........................................
....... $ 12.86
- ------
- ------
TOTAL
RETURN(c).......................................
......................... 28.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000)...........................................
..... $87,558
Average net assets
(000)...........................................
............ $62,575
Ratios to average net assets(b):
Expenses, including distribution
fees.......................................
2.33%
Expenses, excluding distribution
fees.......................................
1.33%
Net investment
income..........................................
............. .15%
Portfolio turnover
rate............................................
............ 55%
Average commission rate paid per
share.........................................
$ .0588
</TABLE>
- ---------------
(a) Commencement of investment operations.
(b) Annualized.
(c) Total return does not consider the effects
of sales loads. Total return is
calculated assuming a purchase of shares on
the first day and a sale on the
last day of each period reported and
includes reinvestment of dividends and
distributions. Total returns for periods of
less than a full year are not
annualized.
(d) Less than $.005 per share.
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 12
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.
PRUDENTIAL JENNISON GROWTH &
Financial Highlights (Unaudited) INCOME
FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
<CAPTION>
Class C Class Z
- ----------------------------------- --------
- --
Six months November 7, 1996(a) Six
months
Ended Through Ended
March 31, September 30, March
31,
1998 1997 1998
- ---------- -------------------- --------
- --
<S>
<C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period..........................................
. $12.86 $10.00
$12.93
- ----- ----- -----
Income from investment operations
Net investment
income..........................................
................ .03 .02
.09
Net realized and unrealized gain on investment
transactions.................... .57
2.86 .58
- ----- ----- -----
Total from investment
operations......................................
...... .60 2.88
.67
- ----- ----- -----
Less distributions
Dividends from net investment
income..........................................
. --(d) (.02)
(.06)
Distributions from net realized
gains..........................................
(.62) -- (.62)
- ----- ----- -----
Total
distributions...................................
...................... (.62)
(.02) (.68)
- ----- ----- -----
Net asset value, end of
period..........................................
....... $12.84 $12.86
$12.92
- ----- ----- -----
- ----- ----- -----
TOTAL
RETURN(c).......................................
......................... 5.17%
28.83% 5.75%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000)...........................................
..... $8,282 $7,111
$1,220
Average net assets
(000)...........................................
............ $7,398 $5,631
$ 896
Ratios to average net assets(b):
Expenses, including distribution
fees.......................................
2.05% 2.33% 1.05%
Expenses, excluding distribution
fees.......................................
1.05% 1.33% 1.05%
Net investment
income..........................................
............. .44% .15%
1.44%
Portfolio turnover
rate............................................
............ 42% 55%
42%
Average commission rate paid per
share.........................................
$.0607 $.0588 $.0607
<CAPTION>
November 7, 1996(a)
Through
September 30,
1997
- -------------------
<S>
<C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period..........................................
. $ 10.00
- -----
Income from investment operations
Net investment
income..........................................
................ .10
Net realized and unrealized gain on investment
transactions.................... 2.92
- -----
Total from investment
operations......................................
...... 3.02
- -----
Less distributions
Dividends from net investment
income..........................................
. (.09)
Distributions from net realized
gains..........................................
- --
- -----
Total
distributions...................................
...................... (.09)
- -----
Net asset value, end of
period..........................................
....... $ 12.93
- -----
- -----
TOTAL
RETURN(c).......................................
......................... 30.30%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000)...........................................
..... $ 609
Average net assets
(000)...........................................
............ $ 227
Ratios to average net assets(b):
Expenses, including distribution
fees.......................................
1.33%
Expenses, excluding distribution
fees.......................................
1.33%
Net investment
income..........................................
............. 1.15%
Portfolio turnover
rate............................................
............ 55%
Average commission rate paid per
share.........................................
$ .0588
</TABLE>
- ---------------
(a) Commencement of investment operations.
(b) Annualized.
(c) Total return does not consider the effects
of sales loads. Total return is
calculated assuming a purchase of shares on
the first day and a sale on the
last day of each period reported and
includes reinvestment of dividends and
distributions. Total returns for periods of
less than a full year are not
annualized.
(d) Less than $.005 per share.
- ------------------------------------------------
- --------------------------------
See Notes to Financial Statements. 13
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Edward D. Beach
Delayne Dedrick Gold
Robert F. Gunia
Douglas H. McCorkindale
Mendel A. Melzer, CFA
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
Jennison Associates LLC
466 Lexington Avenue
New York, NY 10017
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse 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
The views expressed in this report and
information about the Fund's portfolio
holdings are for the period covered by this
report and are subject to change
thereafter.
The accompanying financial statements as of
March 31, 1998 were not audited
and, accordingly, no opinion is expressed on
them.
This report is not authorized for distribution
to prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
BULK RATE
U.S. POSTAGE
PAID
Permit 6807
New York, NY
74437E503
74437E602 MF172E2
74437E701 Cat#42M248I
74437E800
(ICON)
Prudential
Jennison
Active
Balanced
Fund
(formerly the Prudential
Active Balanced Fund)
SEMI
ANNUAL
REPORT
March 31, 1998
(LOGO)
<PAGE>
Prudential Jennison Active Balanced Fund
A Series of the Prudential Jennison Series Fund,
Inc.
Performance At A Glance.
As the stock market rose substantially over our
six-month reporting period,
the Fund's return trailed the Lipper Balanced
Fund Average because of our low
weighting in stocks and our contrarian avoidance
of the rapidly rising blue-
chip stocks. We are concerned that stock prices
appear to be based on overly
optimistic earnings growth assumptions and would
be vulnerable should
corporate profits falter because of rising wage
costs, higher interest rates,
lower export growth, or foreign competition.
Cumulative Total Returns1
As of 3/31/98
<TABLE>
<CAPTION>
Six
One Five Since
Months
Year Years Inception2
<S> <C>
<C> <C> <C>
Class A 5.92%
22.59% N/A 24.44%
Class B 5.38
21.58 N/A 23.21
Class C 5.38
21.58 N/A 23.21
Class Z 6.03
22.87 77.20% 84.47
Lipper Balanced
Fds Avg.3 8.92
28.13 92.67 ***
</TABLE>
Average Annual Total Returns1
As of 3/31/98
<TABLE>
<CAPTION>
One Five Since
Year Years Inception2
<S>
<C> <C> <C>
Class A
16.46% N/A 12.76%
Class B
16.58 N/A 13.44
Class C
20.58 N/A 16.16
Class Z
22.87 12.12% 12.41
</TABLE>
Past performance is not indicative of future
results. Principal and investment
return will fluctuate so that an investor's
shares, when redeemed, may be worth
more or less than their original cost.
1Source: Prudential Investments Fund Management
and Lipper Analytical Services.
The cumulative total returns do not take into
account sales charges. The
average annual returns do take into account
applicable sales charges. The Fund
charges a maximum front-end sales load of 5% for
Class A shares and a declining
contingent deferred sales charge (CDSC) of 5%,
4%, 3%, 2%, 1% and 1% for six
years for Class B shares. Class C shares have a
1% CDSC for one year. Class B
shares will automatically convert to Class A
shares, on a quarterly basis,
approximately seven years after purchase. Class
Z shares are not subject to a
sales charge or a distribution fee.
2Inception dates: 11/7/96 for Class A, B, and C
shares; 1/4/93 for Class Z
shares.
3Lipper returns are for all funds in each share
class for the six-month, 1-
and 5-year periods.
***Lipper Since Inception returns are 30.28% for
Classes A, B, and C, and
102.05% for Class Z and are for all funds in
each share class category.
How Investments Compared.
(As of 3/31/97)
(GRAPH)
U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds
Source: Lipper Analytical Services. Financial
markets change, so a mutual
fund's past performance should never be used to
predict future results. The
risks to each of the investments listed above
are different -- we provide 12-
month total returns for several Lipper mutual
fund categories to show you that
reaching for higher returns means tolerating
more risk. The greater the risk,
the larger the potential reward or loss. In
addition, we've included historical
20-year average annual returns. These returns
assume the reinvestment of
dividends.
U.S. Growth Funds will fluctuate a great deal.
Investors have received higher
historical total returns from stocks than from
most other invest-ments.
Smaller capitalization stocks offer greater
potential for long-term growth but
may be more volatile than larger capitalization
stocks.
General Bond Funds provide more income than
stock funds, which can help smooth
out their total returns year by year. But their
prices still fluctuate
(sometimes significantly) and their returns have
been historically lower than
those of stock funds.
General Municipal Debt Funds invest in bonds
issued by state governments,
state agencies and/or municipalities. This
investment provides income that is
usually exempt from federal and state income
taxes.
U.S. Taxable Money Funds attempt to preserve a
constant share value; they don't
fluctuate much in price but, historically, their
returns have been generally
among the lowest of the major investment
categories.
<PAGE>
Bradley Goldberg, Fund Manager
Portfolio
Manager's Report (PICTURE)
The Prudential Jennison Active Balanced Fund
seeks the higher returns that
stocks have historically provided, while trying
to avoid the risks inherent in
an all-stock portfolio. The Fund invests in a
combination of stocks, bonds,
and lower-risk money market instruments, such as
short-term U.S. Treasury
securities. By diversifying in this way, the
Fund seeks to benefit from rising
stock markets and to provide investors with
greater protection if stocks fall.
There can be no assurance that the Fund will
meet its investment objective.
A Hybrid Strategy.
In stocks, we use a hybrid strategy of growth
and value investing, aiming at
both greater earnings growth than the market and
lower cost. We look at
companies we think will produce better earnings
momentum or the sustained
earnings that most investors expect. We're
somewhat contrarian -- we look
where most portfolio managers don't. Our bond
investment strategy is cautious.
We use bonds to stabilize price swings of the
portfolio.
Strategy Session.
We Were Flexible.
We emphasize whichever is most favorable --
stocks, bonds, or cash -- on the
basis of their potential risk and rewards. We
have continued to hold a lower
proportion of stocks than the average balanced
fund: 49% of our portfolio was
in stocks at the end of the quarter, while most
balanced funds generally hold
60%. Bonds are more attractive over the next 12
to 18 months when we take into
account the possibility they will rise in price
if interest rates fall, as we
suspect they might. We have raised our bond
allocation to 45% of the fund.
Cash represented approximately 6% of our net
assets as of March 31, 1998.
Stocks. CIGNA is currently our largest holding.
CIGNA has been in the portfolio
for some time and still offers a very compelling
risk/reward relationship as
the company refocuses on selling to the growing
world market. Their traditional
insurance market has become commodity-like, so
we believe that CIGNA's earnings
will grow faster than they have in the past. We
believe they are a good
investment value because their share price has
yet to reflect this.
Polaroid is a new holding. We began following
this company closely when it
acquired new management. We expect the new team
to use Polaroid's globally
recognized brand name to restore superior
earnings growth.
Bonds. We believe that today's difference in
yield between corporate bonds and
Treasuries is too small to justify taking the
increased risk of corporates, so
we remain predominantly in Treasury bonds.
Portfolio Composition.
Expressed as a percentage of
total net assets as of 3/31/98.
(PIE CHART)
<PAGE>
What Went Well.
Since their Asia-induced lows in October 1997,
stocks have risen 20%, bringing
the three-year return on the S&P 500 to 134%.
This is substantially more than
normal, considering long-term rates of profit
and dividend growth.
In the technology sector, our Digital Equipment
shares rose sharply when
Compaq Computer announced its intention to
acquire the company. Xerox
Corporation and Symbol Technologies also
performed well because their
operating results exceeded analysts'
expectations.
Consolidation and restructuring activity
accelerated in the financial services
sector, and our stocks benefited. Low inflation
and interest rates caused
rapid economic growth and very active financial
markets, an excellent setting
for the earnings of companies in this sector.
And Not So Well.
The extremely high values that investors are
placing on companies today and
our generally cautious stance toward stocks led
us to reduce our stock
allocation. We are doing this because many of
today's most popular stocks cost
more for the amount of earnings they represent
than at any other time this
century. Weakening commodity prices and concern
about the impact of the
economic slowdown in Asia hurt our stocks in the
energy and basic materials
sectors. However, our defensive strategy has
reduced our returns, particularly
when compared with our fully invested
competitors. We continue to believe,
nonetheless, that keeping this conservative
strategy is the right one for a
balanced fund.
Five Largest Holdings.
2.1% CIGNA Corp.
Insurance
2.0% The Limited, Inc.
Retail
1.5% McGraw-Hill Cos., Inc.
Publishing
1.4% Sears, Roebuck & Co.
Retail
1.3% Chase Manhattan Corp.
Banks
Expressed as a percentage of net assets as of
3/31/98.
Looking Ahead.
We are pleased by management actions in the
basic materials sector. In order
to improve returns to shareholders, these
companies are restructuring and
cutting costs rather than adding capacity to
fight for larger market shares.
Given the supply and demand balance for basic
materials, we think this is the
right course. We will also continue to hold a
relatively light stock
allocation. Although we believe the economy will
continue to grow and interest
rates and inflation will remain low, current
stock prices may already reflect
the benefits of this attractive environment.
- ------------------------------------------------
- -------------------------------
1
<PAGE>
President's Letter
May 15, 1998
(PHOTO)
See You On the Net!
Dear Shareholder:
We are proud to be part of the worldwide web and
we invite you to visit our
two web sites, if you have not already done so.
Yes, we currently offer two
sites -- each with its own distinctive identity.
http://www.prudential.com
The Prudential web site features information on
personal investing, retirement
planning, commercial and residential real estate
opportunities, as well as
insurance products for life, health, home and
property.
You can look up performance data on your
Prudential mutual funds, learn about
proven investment strategies, or take one of our
many interactive quizzes that
will help guide you in determining long-term
goals -- like how much to save
for your child's college education or for your
retirement.
http://www.prusec.com
The Prudential Securities Virtual Branch Office
is a full-service brokerage
web site specifically designed to provide
investors with the information they
need to make informed financial decisions. It
was rated the No. 1 full-service
brokerage web site of its type by Financial Net
News (February 1998), a
subsidiary of Institutional Investor magazine,
and was also rated among the
top corporate web sites by Fortune magazine
(Winter 1998).
What investors can find here are -- daily market
commentaries, stock quotes,
economic forecasts, product news, and current
market research, in addition to
interactive investing programs. Investors,
through their Prudential Securities
Financial Advisors, may also enroll in
Prudential Online(R) and have access to
their personal account information which
includes balances, security values,
transactions and account activities. They can
also easily E-mail their
Financial Advisor.
Both sites also contain professional
opportunities for people who are
searching for employment or considering a change
of career paths.
We plan to make further enhancements to our web
pages as the year progresses.
So please, the next time you are "web browsing"
or "surfing the net," pay us a
visit. Let us know what you think and what you'd
like to see added in the
future.
Sincerely,
Brian M. Storms
President, Prudential Mutual Funds & Annuities
- ------------------------------------------------
- -------------------------------
2
<PAGE>
Portfolio of Investments
PRUDENTIAL JENNISON SERIES FUND, INC.*
as of March 31, 1998
PRUDENTIAL JENNISON
(Unaudited) ACTIVE
BALANCED FUND
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
- ------------------------------------------------
- ------------
LONG-TERM INVESTMENTS--93.9%
COMMON STOCKS--48.3%
- ------------------------------------------------
- ------------
Aircraft/Defense Electronics--2.4%
28,900 Boeing Co.
$ 1,506,412
12,500 Lockheed Martin Corp.
1,406,250
24,784 Raytheon Co.--Class A
1,409,590
- -------------
4,322,252
- ------------------------------------------------
- ------------
Airlines-->0.4%
6,200 Delta Air Lines, Inc.
733,150
- ------------------------------------------------
- ------------
Aluminum--2.0%
12,400 Aluminum Co. of America
853,275
33,800 Reynolds Metals Co.
2,076,587
29,400 British Steel PLC (ADR) (United
Kingdom)
712,950
- -------------
3,642,812
- ------------------------------------------------
- ------------
Banks--3.8%
18,200 Chase Manhattan Corp.
2,454,725
24,400 Fleet Financial Group, Inc.
2,075,525
113,900 Hibernia Corp. U.A.
2,342,069
- -------------
6,872,319
- ------------------------------------------------
- ------------
Business Services--4.0%
28,375 Cendant Corp.
1,124,359
33,100 Hertz Corp - Class A
1,522,600
47,900 Ogden Corp.
1,377,125
17,200 Omnicom Group
809,475
64,300 Ryder System, Inc.
2,443,400
- -------------
7,276,959
- ------------------------------------------------
- ------------
Computers Systems/Peripherals--3.8%
34,000 Digital Equipment Corp.(a)
1,778,625
23,300 Hewlett-Packard Co.
1,476,638
19,300 International Business Machines
Corp.
$ 2,004,787
21,550 Symbol Technologies, Inc.
1,059,991
37,700 Unisys Corp.
716,300
- -------------
7,036,341
- ------------------------------------------------
- ------------
Electronics--0.2%
36,900 International Rectifier Corp.(a)
433,575
- ------------------------------------------------
- ------------
Food--1.0%
38,500 Dole Food Co., Inc.
1,862,437
- ------------------------------------------------
- ------------
Household & Personal Care Products--0.4%
33,100 The Dial Corp.
792,331
- ------------------------------------------------
- ------------
Insurance--2.8%
19,100 CIGNA Corp.
3,915,500
21,700 NAC Re Corp.
1,137,894
- -------------
5,053,394
- ------------------------------------------------
- ------------
Hotels--1.1%
64,500 Hilton Hotels Corp.
2,055,937
- ------------------------------------------------
- ------------
Machinery--0.8%
21,400 Case Corp.
1,457,875
- ------------------------------------------------
- ------------
Media--0.7%
37,300 CBS Corp.
1,265,869
- ------------------------------------------------
- ------------
Motor Vehicles & Equipment--1.7%
30,100 General Motors Corp.
2,029,869
22,700 B.F. Goodrich Co.
1,159,119
- -------------
3,188,988
</TABLE>
- ------------------------------------------------
- --------------------------------
*See page 9 3
See Notes to Financial Statements.
<PAGE>
Portfolio of Investments
PRUDENTIAL JENNISON SERIES FUND, INC.*
as of March 31, 1998
PRUDENTIAL JENNISON
(Unaudited) ACTIVE
BALANCED FUND
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
- ------------------------------------------------
- ------------
Oil & Gas Services--1.4%
15,400 Baker Hughes, Inc.
$ 619,850
13,500 Smith International, Inc.(a)
743,343
29,900 Unocal Corp.
1,156,756
- -------------
2,519,949
- ------------------------------------------------
- ------------
Paper--2.4%
41,000 Boise Cascade Corp.
1,478,563
26,100 Champion International Corp.
1,417,556
77,500 Stone Container Corp.
968,750
8,000 Temple-Inland, Inc.
497,000
- -------------
4,361,869
- ------------------------------------------------
- ------------
Petroleum - Domestic--0.7%
9,600 Anadarko Petroleum Corp.
662,400
13,300 Burlington Resources, Inc.
637,569
- -------------
1,299,969
- ------------------------------------------------
- ------------
Pharmaceuticals--0.1%
3,100 Vertex Pharmaceuticals, Inc.(a)
99,006
- ------------------------------------------------
- ------------
Photography Imaging Technology--1.3%
36,200 Polaroid Corp.
1,592,800
7,400 Xerox Corp.
787,638
- -------------
2,380,438
- ------------------------------------------------
- ------------
Publishing--4.5%
28,700 American Greetings Corp.
1,320,200
35,500 McGraw-Hill Companies, Inc.
2,700,219
30,900 New York Times Co.
2,163,000
29,400 Tribune Co.
2,072,700
- -------------
8,256,119
- ------------------------------------------------
- ------------
Real Estate Investment Trust--2.3%
57,550 Avalon Properties, Inc.
1,668,950
46,900 Meditrust Corp.
1,448,037
41,500 Tower Realty Trust, Inc.
$ 1,021,938
- -------------
4,138,925
- ------------------------------------------------
- ------------
Retail--4.4%
35,200 AutoZone, Inc.(a)
1,192,400
41,200 Boise Cascade Office Products
Corp.(a)
782,800
129,179 The Limited, Inc.
3,705,823
42,800 Sears, Roebuck & Co.
2,458,325
- -------------
8,139,348
- ------------------------------------------------
- ------------
Savings & Loan--0.9%
22,700 Washington Mutual, Inc.
1,628,016
- ------------------------------------------------
- ------------
Specialty Chemicals--2.7%
36,000 Betzdearbon Inc.
2,031,750
29,500 Dexter Corp.
1,220,562
25,400 Minerals Technologies, Inc.
1,279,525
14,700 Morton International, Inc.
482,344
- -------------
5,014,181
- ------------------------------------------------
- ------------
Steel & Metal--1.8%
29,400 Kennametal, Inc.
1,547,175
46,700 USX Corp.-U.S. Steel Group
1,762,925
- -------------
3,310,100
- ------------------------------------------------
- ------------
Telecommunication Services--0.2%
8,000 WorldCom Inc.
344,500
- ------------------------------------------------
- ------------
Trucking & Other Transportation--0.5%
29,500 Knightsbridge Tankers Ltd.
840,750
- -------------
Total common stocks
(cost $68,184,884)
88,327,409
- -------------
- ------------------------------------------------
- ------------
PREFERRED STOCK--0.7%
24,400 USX-Capital Trust Conv. Ptd. 6.75%
(cost $1,168,530)
1,216,950
- -------------
</TABLE>
- ------------------------------------------------
- --------------------------------
*See page 9 4
See Notes to Financial Statements.
<PAGE>
Portfolio of Investments
PRUDENTIAL JENNISON SERIES FUND, INC.*
as of March 31, 1998
PRUDENTIAL JENNISON
(Unaudited) ACTIVE
BALANCED FUND
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Shares Description
Value (Note 1)
<C> <S>
<C>
- ------------------------------------------------
- ------------
DEBT OBLIGATIONS--44.9%
- ------------------------------------------------
- ------------
Corporate Bonds--1.8%
$1,565 American Home Products
7.70%, 2/15/00
$ 1,603,327
1,570 General Motors Acceptance Corp.
6.75%, 2/7/02
1,601,180
- -------------
Total corporate bonds
(cost $3,194,012)
3,204,507
- ------------------------------------------------
- ------------
U.S. Government Securities--43.1%
United States Treasury Bonds
4,100 12.00%, 8/15/13
6,022,531
14,150 7.875%, 2/15/21
17,366,861
United States Treasury Notes
4,865 8.875%, 11/15/98
4,962,300
10,245 7.50%, 11/15/01
10,851,709
20,435 6.25%, 2/15/03
20,936,271
18,470 5.75%, 8/15/03
18,536,307
- -------------
Total U.S. Government securities
(cost $76,063,103)
78,675,979
- -------------
Total debt obligations
(cost $79,257,115)
81,880,486
- -------------
Total long-term investments
(cost $148,627,333)
171,424,845
- -------------
SHORT-TERM INVESTMENT--5.7%
- ------------------------------------------------
- ------------
Repurchase Agreement--5.7%
$10,427 Joint Repurchase Agreement Account
5.952%, 04/01/98 (Note 5)
(cost $10,427,000)
$ 10,427,000
- ------------------------------------------------
- ------------
Total Investments--99.6%
(cost $159,037,529; Note 4)
181,851,845
Other assets in excess of
liabilities--0.4%
774,752
- -------------
Net Assets--100%
$ 182,626,597
- -------------
- -------------
</TABLE>
- ---------------
(a) Non-income producing security.
ADR--American Depository Receipt.
- ------------------------------------------------
- --------------------------------
*See page 9 5
See Notes to Financial Statements.
<PAGE>
PRUDENTIAL JENNNISON SERIES FUND, INC.*
Statement of Assets and Liabilities
PRUDENTIAL JENNISON
(Unaudited) ACTIVE
BALANCED FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
Assets
March 31, 1998
<S>
<C>
Investments, at value (cost
$159,037,529)...................................
...............................
$181,851,845
Cash............................................
................................................
........... 9,912
Dividends and interest
receivable......................................
....................................
1,100,264
Receivable for investments
sold............................................
................................
683,606
Receivable for Fund shares
sold............................................
................................
373,684
Other
assets..........................................
................................................
..... 2,796
- --------------
Total
assets..........................................
................................................
. 184,022,107
- --------------
Liabilities
Payable for investments
purchased.......................................
...................................
886,719
Payable for Fund shares
reacquired......................................
...................................
306,512
Management fee
payable.........................................
............................................
141,078
Accrued
expenses........................................
................................................
... 60,109
Distribution fee
payable.........................................
..........................................
1,092
- --------------
Total
liabilities.....................................
................................................
. 1,395,510
- --------------
Net
Assets..........................................
................................................
....... $182,626,597
- --------------
- --------------
Net assets were comprised of:
Common stock, at
par.............................................
....................................... $
13,207
Paid-in capital in excess of
par.............................................
........................... 152,096,647
- --------------
152,109,854
Undistributed net investment
income..........................................
........................... 1,272,037
Accumulated net realized gain on
investments.....................................
....................... 6,430,390
Net unrealized appreciation on
investments.....................................
......................... 22,814,316
- --------------
Net assets, March 31,
1998............................................
.....................................
$182,626,597
- --------------
- --------------
Class A:
Net asset value and redemption price per
share
($2,077,240 / 150,401 shares of beneficial
interest issued and
outstanding)..........................
$13.81
Maximum sales charge (5% of offering
price)..........................................
................... .73
Maximum offering price to
public..........................................
..............................
$14.54
Class B:
Net asset value, offering price and
redemption price per share
($991,801 / 71,958 shares of beneficial
interest issued and
outstanding).............................
$13.78
Class C:
Net asset value, offering price and
redemption price per share
($105,221 / 7,634 shares of beneficial
interest issued and
outstanding)..............................
$13.78
Class Z:
Net asset value, offering price and
redemption price per share
($179,452,335 / 12,976,758 shares of
beneficial interest issued and
outstanding).....................
$13.83
</TABLE>
- ------------------------------------------------
- --------------------------------
*See page 9 6
See Notes to Financial Statements.
<PAGE>
PRUDENTIAL JENNISON SERIES FUND, INC.*
PRUDENTIAL JENNISON
ACTIVE BALANCED FUND
Statement of Operations (Unaudited)
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income
March 31, 1998
<S> <C>
Income
Interest.............................. $
2,957,634
Dividends.............................
760,763
----
- --------------
Total income.........................
3,718,397
----
- --------------
Expenses
Management fee........................
598,119
Distribution fee--Class A.............
1,762
Distribution fee--Class B.............
2,038
Distribution fee--Class C.............
221
Transfer agent's fees and expenses....
138,000
Registration fees.....................
100,000
Custodian's fees and expenses.........
45,000
Reports to shareholders...............
30,000
Legal fees and expenses...............
10,000
Audit fee and expenses................
10,000
Organization expense..................
3,404
Trustees' fees........................
3,335
Miscellaneous.........................
1,530
----
- --------------
Total expenses.......................
943,409
----
- --------------
Net investment income....................
2,774,988
----
- --------------
Realized and Unrealized Gain
on Investments
Net realized gain on investment
transactions..........................
9,318,886
Net change in unrealized appreciation on
investments...........................
(1,974,132)
----
- --------------
Net gain on investments..................
7,344,754
----
- --------------
Net Increase in Net Assets
Resulting from Operations................ $
10,119,742
----
- --------------
----
- --------------
</TABLE>
PRUDENTIAL JENNISON SERIES FUND, INC.*
PRUDENTIAL JENNISON
ACTIVE BALANCED FUND
Statement of Changes in Net Assets (Unaudited)
- ------------------------------------------------
- ------------
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended
Increase (Decrease) March 31,
September 30,
in Net Assets 1998
1997
<S> <C>
<C>
Operations
Net investment gain............ $
2,774,988 $ 4,516,834
Net realized gain on
investments.................
9,318,886 11,725,117
Net change in unrealized
appreciation (depreciation)
on investments..............
(1,974,132) 13,786,966
------------
- -- ------------
Net increase in net assets
resulting from operations...
10,119,742 30,028,917
------------
- -- ------------
Dividends and distributions
Dividends to shareholders from
net investment income
Class A.....................
(24,889) (64)
Class B.....................
(4,933) (6)
Class C.....................
(273) (6)
Class Z.....................
(4,664,569) (4,627,738)
------------
- -- ------------
(4,694,664) (4,627,814)
------------
- -- ------------
Distributions to shareholders
from net realized gains
Class A.....................
(82,174) (128)
Class B.....................
(24,906) (12)
Class C.....................
(1,378) (12)
Class Z.....................
(13,860,433) (9,255,475)
------------
- -- ------------
(13,968,891) (9,255,627)
------------
- -- ------------
Fund share transactions (Note 6)
Net proceeds from shares
sold........................
78,442,784 55,048,728
Net asset value of shares
issued in reinvestment of
distributions...............
18,663,277 13,883,406
Cost of shares reacquired......
(65,816,004) (78,785,554)
------------
- -- ------------
Net increase (decrease) in net
assets from Fund share
transactions................
31,290,057 (9,853,420)
------------
- -- ------------
Total increase....................
22,746,244 6,292,056
Net Assets
Beginning of period...............
159,880,353 153,588,297
------------
- -- ------------
End of period..................... $
182,626,597 $159,880,353
------------
- -- ------------
------------
- -- ------------
</TABLE>
- ------------------------------------------------
- --------------------------------
*See page 9 7
See Notes to Financial Statements.
<PAGE>
PRUDENTIAL JENNNISON SERIES FUND, INC.
Notes to Financial Statements
PRUDENTIAL JENNISON
(Unaudited) ACTIVE
BALANCED FUND
- ------------------------------------------------
- --------------------------------
The Prudential Jennison Active Balanced Fund
(the 'Fund') is a separately
managed series of Prudential Jennison Series
Fund, Inc. (the 'Series'), formerly
Prudential Jennsion Fund, Inc. (the 'Jennison
Fund'). The Jennison Fund was
incorporated in Maryland on August 10, 1995 and
is registered under the
Investment Company Act of 1940 as a diversified,
open-end management investment
company. Investment operations commenced on
November 7, 1996. Prior to January
15, 1998, the Fund was known as Prudential
Active Balanced Fund (the
'Portfolio'), a separately managed series of
Prudential Dryden Fund (the
'Company') (see Note 7).
The Fund's investment objective is to achieve
total returns approaching equity
returns while accepting less risk than an all-
equity portfolio. The Fund seeks
to achieve its objective through an actively-
managed portfolio of equity
securities, fixed-income securities and money
market instruments.
- ------------------------------------------------
- ------------
Note 1. Accounting Policies
The following is a summary of significant
accounting policies followed by the
Fund.
Securities Valuation: Securities, including
options, warrants, futures contracts
and options thereon, for which the primary
market is a national securities
exchange, commodities exchange, board of trade
or Nasdaq 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 mean
between the closing bid and asked
prices quoted on such day or at the bid price in
the absence of an asked price.
Securities that are actively traded in the over-
the-counter market, including
listed securities for which the primary market
is believed to be
over-the-counter, are valued by a principal
market maker or independent pricing
agent.
U.S. government securities for which market
quotations are readily available are
valued at a price provided by an independent
broker/dealer or pricing service.
Securities for which reliable market quotations
are not available or for which
the pricing agent or principal market maker does
not provide a valuation or
methodology or provides a valuation or
methodology that, in the judgment of the
subadviser, does not represent fair value, are
valued at fair value as
determined under procedures established by the
Trustees.
In connection with transactions in repurchase
agreements, it is the Fund's
policy that its custodian or designated
subcustodians, under triparty repurchase
agreements, as the case may be, take possession
of the underlying collateral
securities, the value of which exceeds the
principal amount of the repurchase
transaction, including accrued interest. To the
extent that any repurchase
transaction exceeds one business day, the value
of the collateral is
marked-to-market on a daily basis to ensure the
adequacy of the collateral. If
the seller defaults and the value of the
collateral declines or, if bankruptcy
proceedings are commenced with respect to the
seller of the security,
realization of the collateral by the Fund may be
delayed or limited.
Securities Transactions and Net Investment
Income: Securities transactions are
recorded on the trade date. Realized gains or
losses on sales of securities are
calculated on the identified cost basis.
Dividend income is recorded on the
ex-dividend date and interest income is recorded
on the accrual basis. Expenses
are recorded on the accrual basis which may
require the use of certain estimates
by management.
Net investment income (other than distribution
fees) and unrealized and realized
gains or losses are allocated daily to each
class of shares based upon the
relative proportion of net assets of each class
at the beginning of the day.
Dividends and Distributions: Dividends and
distributions of the Fund are
declared in cash and automatically reinvested in
additional shares of the Fund.
The Fund will declare and distribute its net
investment income and net capital
gains, if any, at least annually. Dividends and
distributions are recorded on
the ex-dividend date.
Income distributions and capital gain
distributions are determined in accordance
with income tax regulations which may differ
from generally accepted accounting
principles.
Taxes: It is the Fund's policy to continue to
meet the requirements of the
Internal Revenue Code applicable to regulated
investment companies and to
distribute all of its taxable net investment
income to its shareholders.
Therefore, no federal income tax provision is
required.
Withholding taxes on foreign dividends have been
provided for in accordance with
the Fund's understanding of the applicable
country's tax rules and rates.
Deferred Organizational Expenses: Approximately
$450,000 of costs were incurred
in connection with the organization and initial
registration of the Company and
have been deferred and are being amortized
ratably
- ------------------------------------------------
- --------------------------------
8
<PAGE>
PRUDENTIAL JENNNISON SERIES FUND, INC.
Notes to Financial Statements
PRUDENTIAL JENNISON
(Unaudited) ACTIVE
BALANCED FUND
- ------------------------------------------------
- --------------------------------
over a period of 60 months from the date each of
the Fund's commenced investment
operations.
- ------------------------------------------------
- ------------
Note 2. Agreements
The Fund has a management agreement with
Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to a subadvisory
agreement between PIFM and Jennison
Associates Capital Corp. ('Jennison'), Jennison
furnishes investment advisory
services in connection with the management of
the Fund. Under the subadvisory
agreement, Jennison, subject to the supervision
of PIFM, is responsible for
managing the assets of the Fund in accordance
with its investment objectives and
policies.
The management fee paid PIFM is computed daily
and payable monthly, at an annual
rate of .65 of 1% of the average daily net
assets of the Fund. PIFM pays
Jennsion a subadvisory fee at an annual rate of
.30 of 1% of the average daily
net assets of the Fund up to and including $300
million and .25 of 1% of the
Fund's average daily net assets in excess of
$300 million. PIFM also pays the
cost of compensation of officers and employees
of the Fund, occupancy and
certain clerical and bookkeeping costs of the
Fund. The Fund bears all other
costs and expenses.
The Fund has a distribution agreement with
Prudential Securities Incorporated
('PSI'), which acts as the distributor of the
Class A, Class B, Class C and
Class Z shares of the Fund. The Fund compensates
PSI for distributing and
servicing the Fund's Class A, Class B and Class
C shares, pursuant to plans of
distribution, (the 'Class A, B and C Plans')
regardless of expenses actually
incurred by them. The distributions fees are
accrued daily and payable monthly.
No distribution or service fees are paid to PSI
as distributor of the Class Z
shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund
compensates PSI for
distribution-related activities at an annual
rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A,
B and C shares, respectively.
Such expenses under the Plans were .25 of 1%, 1%
and 1% of average daily net
assets of the Class A, B and C shares,
respectively, for the six months ended
March 31, 1998.
PSI has advised the Fund that it received
approximately $750 in front-end sales
charges resulting from sales of Class A shares
during the six months ended March
31, 1998. From these fees, PSI paid such sales
charges to affiliated
broker-dealers, which in turn paid commissions
to salespersons and incurred
other distribution costs.
PSI has advised the Fund that for the six months
ended March 31, 1998, it
received approximately $500 in contingent
deferred sales charges imposed upon
redemptions by certain Class B and Class C
shareholders.
Jennison, PIFM and PSI are wholly owned
subsidiaries of The Prudential Insurance
Company of America.
The Fund, along with other affiliated registered
investment companies (the
'Funds'), entered into a credit agreement (the
'Agreement') with an unaffiliated
lender. The maximum commitment under the
Agreement is $200,000,000. Interest on
any such borrowings outstanding will be at
market rates. The purpose of the
Agreement is to serve as an alternative source
of funding for capital share
redemptions. The Fund has not borrowed any
amounts pursuant to the Agreement
during the six months ended March 31, 1998. The
Funds pay a commitment fee at an
annual rate of .055 of 1% on the unused portion
of the credit facility. The
commitment fee is accrued and paid quarterly on
a pro rata basis by the Funds.
The Agreement expired on December 30, 1997 and
has been extended through
December 29, 1998 under the same terms.
- ------------------------------------------------
- ------------
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a
wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the
six months ended March 31, 1998,
the Fund incurred fees of approximately $131,500
for the services of PMFS. As of
March 31, 1998, approximately $20,300 of such
fees were due to PMFS. Transfer
agent fees and expenses in the Statement of
Operations also include certain
out-of-pocket expenses paid to nonaffiliates.
- ------------------------------------------------
- ------------
Note 4. Portfolio Securities
Purchases and sales of portfolio securities,
excluding short-term investments,
for the six months ended March 31, 1998
aggregated $77,472,859 and $58,314,086,
respectively. Purchases and sales of U.S.
government obligations were
$31,404,541 and $16,044,268, respectively.
The cost basis of investments for federal income
tax purposes is $159,054,333.
As of March 31, 1998, net unrealized
appreciation for federal income tax
purposes was $22,797,512 (gross unrealized
appreciation--$23,389,261, gross
unrealized depreciation--$591,749).
- ------------------------------------------------
- --------------------------------
9
<PAGE>
PRUDENTIAL JENNNISON SERIES FUND, INC.
Notes to Financial Statements
PRUDENTIAL JENNISON
(Unaudited) ACTIVE
BALANCED FUND
- ------------------------------------------------
- --------------------------------
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered
investment companies, transfers
uninvested cash balances into a single joint
account, the daily aggregate
balance of which is invested in one or more
joint repurchase agreements
collateralized by U.S. Treasury or federal
agency obligations. At March 31,
1998, the Fund had a 0.8% undivided interest in
the repurchase agreements in the
joint account. The undivided interest
represented $10,427,000 in principal
amount. As of such date, each repurchase
agreement in the joint account and the
collateral therefore was as follows:
Credit Suisse First Boston Corp., 6.00%, in the
principal amount of
$388,000,000, repurchase price $388,064,667, due
4/1/98. The value of the
collateral including accrued interest is
$402,989,454.
SBC Warburg Asia Ltd., 5.92%, in the principal
amount of $263,000,000,
repurchase price $263,043,249, due 4/1/98. The
value of the collateral including
accrued interest is $268,277,527.
UBS Securities, Inc., 5.95%, in the principal
amount of $106,691,000, repurchase
price $106,708,634, due 4/1/98. The value of the
collateral including accrued
interest is $108,827,671.
Morgan Stanley & Co., Inc., 5.94%, in the
principal amount of $125,000,000,
repurchase price $125,020,625, due 4/1/98. The
value of the collateral including
accrued interest is $127,500,925.
Salomon Smith Barney, 5.93%, in the principal
amount of $388,000,000, repurchase
price $388,063,912, due 4/1/98. The value of the
collateral including accrued
interest is $396,440,446.
- ------------------------------------------------
- ------------
Note 6. Capital
The Fund offers Class A, Class B, Class C and
Class Z shares. Class A shares are
sold with a front-end sales charge of up to 5%.
Class B shares are sold with a
contingent deferred sales charge which declines
from 5% to zero depending on the
period of time the shares are held. Class B
shares will automatically convert to
Class A shares on a quarterly basis
approximately seven years after purchase. A
special exchange privilege is also available for
shareholders who qualify to
purchase Class A shares at net asset value.
Class C shares are sold with a
contingent deferred sales charge of 1% during
the first year. Class Z shares are
not subject to any sales or redemption charge
and are offered exclusively for
sale to a limited group of investors.
There are 3 billion shares of $.001 par value
common stock authorized which are
divided into three Series, each of which offers
four classes, designated Class
A, Class B, Class C and Class Z, each of which
consists of 250 million
authorized shares.
Transactions in shares of common stock were as
follows:
<TABLE>
<CAPTION>
Class A Shares
Amount
- ----------------------------------- ----------
- ------------
<S> <C>
<C>
Six months ended March 31, 1998:
Shares sold........................ 134,825
$ 1,834,156
Shares issued in reinvestment of
dividends and distributions...... 8,312
107,053
Shares reacquired..................
(61,449) (846,978)
----------
- ------------
Net increase in shares
outstanding...................... 81,688
$ 1,094,231
----------
- ------------
----------
- ------------
November 7, 1996(a)
through September 30, 1997:
Shares sold........................ 68,711
$ 971,421
Shares issued in reinvestment of
dividends and distributions...... 15
183
Shares reacquired..................
(13) (178)
----------
- ------------
Net increase in shares
outstanding...................... 68,713
$ 971,426
----------
- ------------
----------
- ------------
<CAPTION>
Class B
- --------------------------------
Six months ended March 31, 1998:
Shares sold........................ 55,877
$ 767,285
Shares issued in reinvestment of
dividends and distributions...... 2,309
29,757
Shares reacquired..................
(1,057) (14,335)
----------
- ------------
Net increase in shares
outstanding...................... 57,129
$ 782,707
----------
- ------------
----------
- ------------
November 7, 1996(a)
through September 30, 1997:
Shares sold........................ 14,903
$ 197,257
Shares issued in reinvestment of
dividends and distributions...... 1
9
Shares reacquired..................
(75) (964)
----------
- ------------
Net increase in shares
outstanding...................... 14,829
$ 196,302
----------
- ------------
----------
- ------------
<CAPTION>
Class C
- -----------------------------------
Six months ended March 31, 1998:
Shares sold........................ 7,589
$ 101,832
Shares issued in reinvestment of
dividends and distributions...... 127
1,642
Shares reacquired..................
(448) (6,212)
----------
- ------------
Net increase in shares
outstanding...................... 7,268
$ 97,262
----------
- ------------
----------
- ------------
</TABLE>
- ------------------------------------------------
- --------------------------------
10
<PAGE>
PRUDENTIAL JENNNISON SERIES FUND, INC.
Notes to Financial Statements
PRUDENTIAL JENNISON
(Unaudited) ACTIVE
BALANCED FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
<CAPTION>
Class C Shares
Amount
- ----------------------------------- ----------
- ------------
<S> <C>
<C>
November 7, 1996(a)
through September 30, 1997:
Shares sold........................ 365
$ 5,122
Shares issued in reinvestment of
dividends and distributions...... 1
9
Shares reacquired.................. --
- --
----------
- ------------
Net increase in shares
outstanding...................... 366
$ 5,131
----------
- ------------
----------
- ------------
<CAPTION>
Class Z
- -----------------------------------
Six months ended March 31, 1998:
Shares sold........................ 5,354,578
$ 75,739,511
Shares issued in reinvestment of
dividends and distributions...... 1,437,147
18,524,825
Shares reacquired..................
(4,795,611) (64,948,479)
----------
- ------------
Net increase in shares
outstanding...................... 1,996,114
$ 29,315,857
----------
- ------------
----------
- ------------
Year ended September 30, 1997:
Shares sold........................ 4,174,112
$ 53,874,928
Shares issued in reinvestment of
dividends and distributions...... 1,097,487
13,883,205
Shares reacquired..................
(6,097,293) (78,784,412)
----------
- ------------
Net decrease in shares
outstanding......................
(825,694) $(11,026,279)
----------
- ------------
----------
- ------------
</TABLE>
- ---------------
(a) Commencement of offering of Class A, B, and
C shares.
- ------------------------------------------------
- ------------
Note 7. Reorganization
On August 26, 1997, the Board of Trustees of the
Portfolio approved an Agreement
and Plan of Conversion and Liquidation (the
'Plan of Reorganization'). The Plan
of Reorganization was approved by applicable
shareholders on January 15, 1998.
Under the Plan of Reorganization, all of the
assets of the Portfolio were
transferred to Prudential Jennison Series Fund,
Inc.--Prudential Jennison Active
Balanced Fund, Inc. in exchange for Class A,
Class B, Class C and Class Z shares
of the Fund and the assumption by the Fund of
all of the liabilities, if any, of
the Portfolio.
On May 14, 1998, the Board of Directors approved
a change of the investment
company's name from Prudential Jennison Series
Fund Inc. to The Prudential
Investment Portfolios, Inc. and a change in the
series name of The Prudential
Jennison Active Balanced Fund series to The
Prudential Active Balanced Fund (the
Fund), effective June 1, 1998.
- ------------------------------------------------
- --------------------------------
11
<PAGE>
PRUDENTIAL JENNNISON SERIES FUND, INC.*
PRUDENTIAL JENNISON
Financial Highlights (Unaudited) ACTIVE
BALANCED FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
<CAPTION>
Class A Class B
Class C
- --------------------------- ----------------
- ----------- ---------
Six November 7, Six
November 7, Six
Months 1996(a) Months
1996(a) Months
Ended Through Ended
Through Ended
March 31, September 30, March 31,
September 30, March 31,
1998 1997 1998
1997 1998
- --------- ------------- --------- --
- ----------- ---------
<S>
<C> <C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period................... $ 14.41
$13.40 14.34 $13.40 $
14.34
- --------- ----- ---------
- ----- ---------
Income from investment operations:
Net investment
income..................................
.18(b) .21(b) .12(b)
.19(b) .12(b)
Net realized and unrealized gain on investment
transactions....................................
.... .58 1.97 .57
1.92 .57
- --------- ----- ---------
- ----- ---------
Total from investment
operations.................... .76
2.18 .69 2.11
.69
- --------- ----- ---------
- ----- ---------
Less distributions:
Dividends from net investment
income................... (.32)
(.39) (.21) (.39)
(.21)
Distributions from net realized
gains.................. (1.04)
(.78) (1.04) (.78)
(1.04)
- --------- ----- ---------
- ----- ---------
Total
distributions.................................
(1.36) (1.17) (1.25)
(1.17) (1.25)
- --------- ----- ---------
- ----- ---------
Net asset value, end of
period......................... $ 13.81
$ 14.41 $ 13.78 $ 14.34
$ 13.78
- --------- ----- ---------
- ----- ---------
- --------- ----- ---------
- ----- ---------
TOTAL
RETURN(d).......................................
. 22.59% 17.48% 21.58%
16.91% 21.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)........................ $ 2,077
$ 990 $ 992 $ 213
$ 105
Average net assets
(000)............................... $ 1,414
$ 100 $ 409 $ 71
$ 44
Ratios to average net assets:
Expenses, including distribution
fees............... 1.28%(c)
1.31%(c) 2.03%(c) 2.06%(c)
2.03%(c)
Expenses, excluding distribution
fees............... 1.03%(c)
1.06%(c) 1.03%(c) 1.06%(c)
1.03%(c)
Net investment
income...............................
2.73%(c) 2.69%(c) 1.96%(c)
1.94%(c) 1.91%(c)
For Class A, B, C and Z shares
Portfolio turnover
rate............................. 35%
50% 35% 50%
35%
<CAPTION>
November 7,
1996(a)
Through
September 30,
1997
- -------------
<S>
<C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period................... $ 13.40
- -----
Income from investment operations:
Net investment
income..................................
.13(b)
Net realized and unrealized gain on investment
transactions....................................
.... 1.98
- -----
Total from investment
operations.................... 2.11
- -----
Less distributions:
Dividends from net investment
income................... (.39)
Distributions from net realized
gains.................. (.78)
- -----
Total
distributions.................................
(1.17)
- -----
Net asset value, end of
period......................... $ 14.34
- -----
- -----
TOTAL
RETURN(d).......................................
. 16.91%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)........................ $ 5
Average net assets
(000)............................... $ 1
Ratios to average net assets:
Expenses, including distribution
fees............... 2.06%(c)
Expenses, excluding distribution
fees............... 1.06%(c)
Net investment
income...............................
1.94%(c)
For Class A, B, C and Z shares
Portfolio turnover
rate............................. 50%
</TABLE>
- ---------------
(a) Commencement of offering of Class A, B and C
shares.
(b) Calculated based upon weighted average
shares outstanding during the year.
(c) Annualized.
(d) Total return does not consider the effects
of sales loads. Total return is
calculated assuming a purchase of shares on
the first day and a sale on the
last day of each period reported and
includes reinvestment of dividends and
distributions. Total return for periods of
less than a full year are not
annualized. Total return includes the effect
of expense subsidies where
applicable.
- ------------------------------------------------
- --------------------------------
*See page 9 12
See Notes to Financial Statements.
<PAGE>
PRUDENTIAL JENNNISON SERIES FUND, INC.*
PRUDENTIAL JENNISON
Financial Highlights (Unaudited) ACTIVE
BALANCED FUND
- ------------------------------------------------
- --------------------------------
<TABLE>
<CAPTION>
Class Z
- ------------------------------------------------
- ------------
Six
Months
Ended Year Ended September 30,
March 31, ----------------------------------
- ------------
1998 1997 1996 1995
1994
- --------- -------- -------- --------
- -------
<S>
<C> <C> <C> <C>
<C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period................... $ 14.45 $
13.01 $ 12.46 $ 10.92 $ 11.05
- --------- -------- -------- --------
- -------
Income from investment operations:
Net investment
income..................................
.21(e) .39(e) .29(b) .33(b)
.24(b)
Net realized and unrealized gain (loss) on
investment
transactions....................................
.... .56 2.22 .81
1.54 (.12)
- --------- -------- -------- --------
- -------
Total from investment
operations.................... .77
2.61 1.10 1.87 .12
- --------- -------- -------- --------
- -------
Less distributions:
Dividends from net investment
income................... (.35)
(.39) (.37) (.29) (.14)
Distributions from net realized
gains.................. (1.04)
(.78) (.18) (.04) (.11)
- --------- -------- -------- --------
- -------
Total
distributions.................................
(1.39) (1.17) (.55) (.33)
(.25)
- --------- -------- -------- --------
- -------
Net asset value, end of
period......................... $ 13.83
$ 14.45 $ 13.01 $ 12.46 $ 10.92
- --------- -------- -------- --------
- -------
- --------- -------- -------- --------
- -------
TOTAL
RETURN(d).......................................
. 22.87% 21.34% 9.11%
17.66% 1.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)........................ $179,452
$158,672 $153,588 $133,352 $81,176
Average net assets
(000)............................... $182,675
$154,199 $142,026 $104,821 $58,992
Ratios to average net assets:
Expenses, including distribution
fees............... 1.03%(c) 1.06%
1.00%(b) 1.00%(b) 1.00%(b)
Expenses, excluding distribution
fees............... 1.03%(c) N/A
N/A N/A N/A
Net investment
income...............................
3.02%(c) 2.94% 3.09%(b) 3.53%(b)
3.06%(b)
<CAPTION>
January 4,
1993(a)
Through
September 30,
1993
- -------------
<S>
<C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period................... $ 10.00
- ------
Income from investment operations:
Net investment
income..................................
.21(b)
Net realized and unrealized gain (loss) on
investment
transactions....................................
.... .84
- ------
Total from investment
operations.................... 1.05
- ------
Less distributions:
Dividends from net investment
income................... --
Distributions from net realized
gains.................. --
- ------
Total
distributions.................................
- --
- ------
Net asset value, end of
period......................... $ 11.05
- ------
- ------
TOTAL
RETURN(d).......................................
. 10.50%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)........................ $38,786
Average net assets
(000)............................... $12,815
Ratios to average net assets:
Expenses, including distribution
fees............... 1.00%(b)/(c)
Expenses, excluding distribution
fees............... N/A
Net investment
income...............................
2.68%(b)/(c)
</TABLE>
- ---------------
(a) Commencement of investment operations.
(b) Net of expense subsidy.
(c) Annualized.
(d) Total return does not consider the effects
of sales loads. Total return is
calculated assuming a purchase of shares on
the first day and a sale on the
last day of each period reported and
includes reinvestment of dividends and
distributions. Total return for periods of
less than a full year are not
annualized. Total return includes the effect
of expense subsidies where
applicable.
(e) Calculated based upon weighted average
shares outstanding during the year.
N/A--Data not required for these periods.
- ------------------------------------------------
- --------------------------------
*See page 9 13
See Notes to Financial Statements.
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Edward D. Beach
Delayne Dedrick Gold
Robert F. Gunia
Douglas H. McCorkindale
Mendel A. Melzer, CFA
Thomas T. Mooney
Stephen P. Munn
Richard A. Redeker
Robin B. Smith
Louis A. Weil, III
Clay T. Whitehead
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
Jennison Associates LLC
466 Lexington Avenue
New York, NY 10017
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse 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
The views expressed in this report and
information about the Fund's portfolio
holdings are for the period covered by this
report and are subject to change
thereafter.
The accompanying financial statements as of
March 31, 1998 were not audited
and, accordingly, no opinion is expressed on
them.
This report is not authorized for distribution
to prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
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Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
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