<PAGE>
EXHIBIT 99.17(f)
PRUDENTIAL BALANCED FUND
Gateway Center Three
100 Mulberry Street, 4th Floor
Newark, New Jersey 07102-4077
----------------
IMPORTANT PROXY MATERIALS
----------------
PLEASE VOTE NOW!
----------------
August , 2000
Dear Shareholder:
I am inviting you to vote on an important proposal to reorganize Prudential
Balanced Fund into Prudential Active Balanced Fund. A shareholder meeting of
Prudential Balanced Fund is scheduled for September 21, 2000. This package
contains information about the proposal and includes materials you will need
to vote by mail, through the internet or by telephone.
The Board of Trustees of Prudential Balanced Fund has reviewed the
reorganization proposal and has recommended that it be presented to
shareholders for their consideration. Although the Trustees have determined
that a reorganization is in the shareholders' best interest, the final
decision is yours.
If approved, the reorganization would give you the opportunity to
participate in a larger fund with similar investment policies and investment
objectives and identical class structures. The combined fund would have a
better long-term performance record and benefit from increased economies of
scale. To help you understand the proposal, we are including a section that
answers commonly asked questions about these transactions. The accompanying
proxy statement includes a detailed description of the proposed
reorganization.
Please read the enclosed materials carefully and cast your vote. Remember,
your vote is extremely important, no matter how large or small your holdings.
By voting now, you can help avoid additional costs that are incurred with
follow-up letters and calls.
TO VOTE, YOU MAY USE ANY OF THE FOLLOWING METHODS:
--BY MAIL. Please complete, date and sign your proxy card before mailing it
in the enclosed postage-paid envelope.
--BY INTERNET. Have your proxy card available. Go to the web site:
WWW.PROXYVOTE.COM. Enter your 12-digit control number from your proxy
card. Follow the simple instructions found on the web site.
--BY TELEPHONE. Call 1-800-690-6903 toll free. Enter your 12-digit control
number from your proxy card. Follow the simple instructions.
SPECIAL NOTE FOR SYSTEMATIC INVESTMENT PLANS AND THOSE WITH OUTSTANDING
CERTIFICATES (E.G., AUTOMATIC INVESTMENT PLAN, SYSTEMATIC EXCHANGE, ETC.)
Shareholders on systematic investment plans must contact their Financial
Advisor or call our customer service division, toll free, at 1-800-225-1852 to
change their options. Otherwise, starting , 2000, future purchases shall
be made in shares of the Prudential Active Balanced Fund if the reorganization
is approved.
Shareholders with outstanding certificates are also urged to contact their
Financial Advisors or call our customer service division to deposit their
certificates.
If you have any questions before you vote, please call us at 1-800-225-1852.
We're glad to help you understand the proposal and assist you in voting. Thank
you for your participation.
Sincerely,
John R. Strangfeld
President
<PAGE>
IMPORTANT INFORMATION TO HELP YOU UNDERSTAND
AND VOTE ON THE PROPOSAL
Please read the enclosed proxy statement for a complete description of the
reorganization proposal. As a quick reference, the following provides a brief
overview of the proposal.
WHAT PROPOSAL AM I BEING ASKED TO VOTE ON?
You are being asked to approve a reorganization of Prudential Balanced Fund
(Balanced Fund) into Prudential Active Balanced Fund (Active Balanced Fund).
WHAT IS THE REASON FOR THIS REORGANIZATION?
The proposed reorganization is intended to combine two similarly managed
funds with the goal of increased economies of scale and a better long-term
performance record. The reorganization is also desirable because of the
inability of Balanced Fund to keep its net outflows to a minimum, increase its
net asset base, keep investors and build an investment portfolio that can
effectively pursue the Fund's objective. Active Balanced Fund has built an
investment portfolio that can more fully implement its objective of income and
long-term growth of capital.
DO THE FUNDS HAVE SIMILAR INVESTMENT POLICIES?
Yes. Both Funds are classified as "balanced" funds, which means they have
the ability to invest in stocks, bonds and money market instruments. As a
result, they are grouped in the same Lipper Balanced investment category. The
Funds have very similar investment objectives. Balanced Fund seeks to provide
total investment return consistent with moderate risk. Active Balanced Fund
seeks income and long-term growth of capital by investing in a portfolio of
equity, fixed-income and money market securities that is actively managed to
capitalize on opportunities created by perceived misvaluation. Balanced Fund
invests up to 75% of its total assets in equity-related securities and Active
Balanced Fund invests between 40% and 75% in the same. Balanced Fund invests
up to 30% of its assets in foreign securities compared to Active Balanced,
which invests up to 35%. Balanced Fund invests at least 25% of its total
assets in fixed-income obligations, while Active Balanced Fund invests between
25% and 60%.
WHO ARE THE PORTFOLIO MANAGERS FOR THESE FUNDS?
James Scott and Mark Stumpp currently manage the equity portion of both Active
Balanced Fund and Balanced Fund. Messrs. Scott and Stumpp began managing
Balanced Fund in May 2000. Prudential Investments' Fixed Income Liquidity Team,
headed by Michael Lillard, is primarily responsible for the fixed-income portion
of Active Balanced Fund, and Prudential Investments' Fixed Income Corporate
Team, headed by Steven Kellner, is primarily responsible for the fixed-income
portion of Balanced Fund.
HOW DO THE EXPENSE STRUCTURES OF THE FUNDS COMPARE?
<TABLE>
<CAPTION>
ACTIVE
ANNUAL FUND OPERATING EXPENSES BALANCED PRO FORMA
(AS A % OF AVERAGE NET ASSETS) FUND* FUND** COMBINED**
------------------------------ -------- -------- ----------
<S> <C> <C> <C>
Class A............................................ 1.17% 1.41% 1.05%
Class B............................................ 1.92% 2.16% 1.80%
Class C............................................ 1.92% 2.16% 1.80%
Class Z............................................ 0.92% 1.16% 0.80%
</TABLE>
----------
* Ratios are for the fiscal year ended July 31, 1999. For the fiscal year
ended July 31, 2000, the Distributor contractually agreed to waive .05 of
1% of its distribution and service fee for Class A shares, limiting this
fee to .25 of 1% of the average daily net assets of the Class A shares.
** Ratios are for the fiscal year ended September 30, 1999. For the fiscal year
ending September 30, 2000, the Distributor has contractually agreed to waive
.05 of 1% of its distribution and service fee for Class A shares, limiting
this fee to .25 of 1% of the average daily net assets of the Class A shares.
Pro forma combined figures are based on annualized expenses incurred for the
six months ended January 31, 2000.
<PAGE>
IS THE REORGANIZATION A TAXABLE EVENT FOR FEDERAL INCOME TAX PURPOSES?
Typically, the exchange of shares pursuant to a reorganization does not
result in a gain or loss for federal income tax purposes. A description of the
conditions necessary to avoid tax recognition is included in the proxy
statement.
WHAT WILL BE THE SIZE OF ACTIVE BALANCED FUND AFTER THE REORGANIZATION?
If the proposal is approved, the combined fund is estimated to have over
$1.2 billion in assets.
WHAT HAS BEEN THE COMPARATIVE PERFORMANCE OF THE FUNDS?
A. The table below shows average annual total returns (which include the
deduction of sales charges) for Active Balanced Fund, its Lipper peer group
and two relevant indexes over the 1 and 5 year and since inception periods.
Please keep in mind that past performance is no guarantee of future results
and you may have a gain or loss when you sell your shares.
AVERAGE ANNUAL TOTAL RETURNS(1) AS OF MARCH 31, 2000
PRUDENTIAL ACTIVE BALANCED FUND
<TABLE>
<CAPTION>
SINCE
1 YEAR 5 YEARS INCEPTION
------ ------- ---------
<S> <C> <C> <C> <C>
Class A shares......................... 6.45% N/A 12.13% (since 11-7-96)
Class B shares......................... 6.26% N/A 12.58% (since 11-7-96)
Class C shares......................... 9.15% N/A 12.69% (since 11-7-96)
Class Z shares......................... 12.38% 14.38% 12.28% (since 1-4-93)
S&P 500(2)............................. 17.93% 26.75% N/A(2)
Lehman Govt./Corp.(3).................. 1.70% 7.13% N/A(3)
Lipper Average(4)...................... 10.32% 15.35% N/A(4)
</TABLE>
----------
(1) The Fund's returns are after deduction of sales charges and expenses.
Without the distribution and service (12b-1) fee waiver for Class A
shares, the returns would have been lower.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P 500)--an
unmanaged index of 500 stocks of large U.S. companies--gives a broad look
at how stock prices have performed. These returns do not include the
effect of any sales charges or operating expenses of a mutual fund. These
returns would be lower if they included the effect of sales charges and
operating expenses. S&P 500 returns since the inception of each class are
26.59% for Class A, Class B and Class C shares and 21.08% for Class Z
shares. Source: Lipper Inc.
(3) The Lehman Brothers Government/Corporate Bond Index (Lehman Govt./Corp.)
is a weighted index of public, fixed-rate, nonconvertible domestic
corporate debt securities rated at least investment grade and public
obligations of the U.S. Treasury. These returns do not include the effect
of any sales charges or operating expenses of a mutual fund. These returns
would be lower if they included the effect of sales charges and operating
expenses. Lehman Govt./Corp. returns since the inception of each class are
5.89% for Class A, Class B and Class C shares and 6.58% for Class Z
shares. Source: Lipper Inc.
(4) The Lipper Average is based on the average return of all mutual funds in
the Lipper Balanced Fund category and does not include the effect of any
sales charges. Again, these returns would be lower if they included the
effect of sales charges. Lipper returns since the inception of each class
are 13.90% for Class A, Class B and Class C shares and 12.56% for Class Z
shares. Source: Lipper Inc.
2
<PAGE>
B. The table below shows average annual total returns (which include the
deduction of sales charges) for Balanced Fund, its Lipper peer group and
two relevant indexes over the 1, 5 and 10 year and since inception periods.
Please keep in mind that past performance is no guarantee of future results
and you may have a gain or loss when you sell your shares.
AVERAGE ANNUAL TOTAL RETURNS(1) AS OF MARCH 31, 2000
PRUDENTIAL BALANCED FUND
<TABLE>
<CAPTION>
SINCE
1 YEAR 5 YEARS 10 YEARS INCEPTION
------ ------- -------- ---------
<S> <C> <C> <C> <C> <C>
Class A shares................ 7.16% 12.11% 11.12% 11.06% (since 1-22-90)
Class B shares................ 6.99% 12.32% 10.86% 9.56% (since 1-15-87)
Class C shares................ 9.87% 12.22% N/A 11.33% (since 8-1-94)
Class Z shares................ 13.07% N/A N/A 12.59% (since 3-1-96)
S&P 500(2) ................... 17.93% 26.75% 8.07% N/A(2)
Lehman Govt./Corp.(3)......... 1.70% 7.13% 18.82% N/A(3)
Lipper Average(4)............. 10.32% 15.35% 12.37% N/A(4)
</TABLE>
----------
(1) The Fund's returns are after deduction of sales charges and expenses.
Without the distribution and service (12b-1) fee waiver for Class A
shares, the returns would have been lower.
(2) The Standard & Poor's 500 Composite Stock Price Index (S&P 500)--an
unmanaged index of 500 stocks of large U.S. companies--gives a broad look at
how stock prices have performed. These returns do not include the effect of
any sales charges or operating expenses of a mutual fund. These returns
would be lower if they included the effect of sales charges and operating
expenses. S&P 500 returns since the inception of each class are 18.94% for
Class A, 16.82% for Class B, 25.64% for Class C and 25.17% for Class Z
shares. Source: Lipper Inc.
(3) The Lehman Brothers Government/Corporate Bond Index (Lehman Govt./Corp.)is a
weighted index of public, fixed-rate, nonconvertible domestic corporate debt
securities rated at least investment grade and public obligations of the
U.S. Treasury. These returns do not include the effect of any sales charges
or operating expenses of a mutual fund. These returns would be lower if they
included the effect of sales charges and operating expenses. Lehman Brothers
Govt./Corp. returns since the inception of each class are 7.95% for Class A,
7.72% for Class B, 6.97% for Class C and 5.85% for Class Z shares. Source:
Lipper Inc.
(4) The Lipper Average is based on the average return of all mutual funds in the
Lipper Balanced Fund category and does not include the effect of any sales
charges. Again, these returns would be lower if they included the effect of
sales charges. Lipper returns since the inception of each class are 12.38%
for Class A, 10.98% for Class B, 10.98% for Class C and 13.68% for Class Z
shares. Source: Lipper Inc.
3
<PAGE>
HOW WILL YOU DETERMINE THE NUMBER OF SHARES OF PRUDENTIAL ACTIVE BALANCED FUND
THAT I WILL RECEIVE?
As of the close of business of the New York Stock Exchange on the Closing
Date of the reorganization, shareholders will receive the number of full and
fractional Class A, Class B, Class C or Class Z shares of Active Balanced
Fund, respectively, that is equal in value to the net asset value of their
Class A, Class B, Class C or Class Z shares of Balanced Fund on that date. The
anticipated Closing Date is September 29, 2000.
WHAT IF THERE ARE NOT ENOUGH VOTES TO REACH QUORUM BY THE SCHEDULED
SHAREHOLDER MEETING DATE?
If we do not receive sufficient votes to hold the meeting, we or Shareholder
Communications Corporation, a proxy solicitation firm, may contact you by mail
or telephone to encourage you to vote. Shareholders should review the proxy
materials and cast their vote to avoid additional mailings or telephone calls.
If there are not sufficient votes to approve the proposal by the time of the
Shareholder Meeting (September 21, 2000), the meeting may be adjourned to
permit further solicitation of proxy votes.
HAS EACH FUND'S BOARD OF DIRECTORS/TRUSTEES APPROVED THE PROPOSAL?
Yes. The majority of each of the Board of Trustees of Balanced Fund and the
Board of Directors of The Prudential Investment Portfolios, Inc. has approved
the proposal and recommends that you vote to approve it.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each share you own of
Balanced Fund on the record date. The record date is June 30, 2000.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy card,
and mailing it in the enclosed postage paid envelope. You can also vote your
shares by calling 1-800-690-6903, entering your 12-digit control number from
your proxy card and following the simple instructions. Lastly, you can vote
your shares by going to the Internet web site: www.proxyvote.com, entering
your 12-digit control number from your proxy card and following the simple
instructions found on the web site. If you need any assistance, or have any
questions regarding the proposal or how to vote your shares, please call
Prudential at (800) 225-1852.
HOW DO I SIGN THE PROXY CARD?
INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names appear
on the account registration shown on the card.
JOINT ACCOUNTS: Both owners must sign and the signatures should conform
exactly to the names shown on the account registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her capacity.
For example, a trustee for a trust should include his/her title, such as "Jane
Doe, Trustee"; or an authorized officer of a company should indicate his/her
position with the company, such as "John Smith, President."
4
