UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number:   811-07064
Exact name of registrant as specified in charter:   The Target Portfolio Trust
Address of principal executive offices:   655 Broad Street, 6th Floor
  Newark, New Jersey 07102
Name and address of agent for service:   Andrew R. French
  655 Broad Street, 6th Floor
  Newark, New Jersey 07102
Registrant’s telephone number, including area code:   800-225-1852
Date of fiscal year end:   7/31/2022
Date of reporting period:   7/31/2022


Item 1 – Reports to Stockholders


LOGO

PGIM CORPORATE BOND FUND

 

    

 

ANNUAL REPORT

JULY 31, 2022

 

LOGO

To enroll in e-delivery, go to pgim.com/investments/resource/edelivery


Table of Contents

 

Letter from the President

   3      

Your Fund’s Performance

   4      

Growth of a $10,000 Investment

   5      

Strategy and Performance Overview

   8      

Fees and Expenses

   11      

Holdings and Financial Statements

   13      

Approval of Advisory Agreements

         

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

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.

Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. PGIM Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies. © 2022 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

 

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Letter from the President

 

LOGO     

Dear Shareholder:

 

We hope you find the annual report for the PGIM Corporate Bond Fund informative and useful. The report covers performance for the 12-month period that ended July 31, 2022.

 

The attention of the global economy and markets turned during the period from the impact of the COVID-19 pandemic to the challenge of rapidly rising inflation. Prices for a wide range of goods and services rose in response to economic reopenings, supply-chain disruptions, pandemic-related governmental stimulus and Russia’s invasion of Ukraine.

As inflation surged at its fastest rate in more than 40 years, central banks, led by the US Federal Reserve, sought to restrain the trend by aggressively hiking interest rates, prompting concerns of a potential recession.

After rising to record levels during the closing months of 2021, US stocks retreated in 2022 in the face of rising prices, slowing economic growth and uncertainties related to the war in Ukraine. Growth-oriented stocks suffered the sharpest losses as investors turned for protection to traditionally defensive, value-oriented stocks. Large-cap equities ended the period in negative territory but outperformed their small-cap counterparts by a significant margin. International developed markets trailed the US market, while emerging markets lagged further behind.

Rising rates and economic uncertainty drove fixed-income prices broadly lower as well. US and global investment-grade bonds, along with US high yield corporate bonds and emerging market debt, all posted negative returns for the period.

Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

At PGIM Investments, we provide access to active investment strategies across the global markets in the pursuit of consistent outperformance for investors. PGIM is the world’s 11th-largest investment manager with more than $1.5 trillion in assets under management. Our scale and investment expertise allow us to deliver a diversified suite of actively managed solutions across a broad spectrum of asset classes and investment styles.

Thank you for choosing our family of funds.

Sincerely,

 

LOGO

Stuart S. Parker, President

PGIM Corporate Bond Fund

September 15, 2022

 

PGIM Corporate Bond Fund    3


Your Fund’s Performance (unaudited)

Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at pgim.com/investments or by calling (800) 225-1852.

 

    Average Annual Total Returns as of 7/31/22  
    One Year (%)   Five Years (%)   Ten Years (%)   Since Inception (%)    

Class A

       

(with sales charges)

  -16.36   0.47   N/A     1.68 (05/28/2015)  

(without sales charges)

  -13.55   1.14   N/A     2.15 (05/28/2015)  

Class C

       

(with sales charges)

  -15.06   0.38   N/A     1.36 (05/28/2015)  

(without sales charges)

  -14.23   0.38   N/A     1.36 (05/28/2015)  

Class R

       

(without sales charges)

  -13.80   0.88   N/A     1.86 (05/28/2015)  

Class Z

       

(without sales charges)

  -13.29   1.41   2.21      

Class R6

       

(without sales charges)

  -13.37   1.39   N/A     2.37 (05/28/2015)  

Bloomberg US Credit Index

       
    -12.15   1.70   2.48      

    

 
Average Annual Total Returns as of 7/31/22 Since Inception (%)  
            Class A, Class C, Class R, Class R6
(05/28/2015)
 

Bloomberg US Credit Index

                2.33  

Since Inception returns are provided for any share class that has less than 10 fiscal years of returns. Since Inception returns for the Index are measured from the closest month-end to the class’ inception date.

 

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Growth of a $10,000 Investment (unaudited)

 

LOGO

The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the Bloomberg US Credit Index by portraying the initial account values at the beginning of the 10-year period (July 31, 2012) and the account values at the end of the current fiscal year (July 31, 2022), as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing charges and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.

Past performance does not predict future performance. Total returns and the ending account values in the graph include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.

 

PGIM Corporate Bond Fund    5


Your Fund’s Performance (continued)

 

       
     Class A          Class C       Class R      Class Z    Class R6 
       
Maximum initial sales charge   3.25% of the public offering price   None   None   None   None
       
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value at redemption)   1.00% on sales of $500,000 or more made within 12 months of purchase   1.00% on sales made within 12 months of purchase   None   None   None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)   0.25%   1.00%   0.75% (0.50% currently)   None   None

Benchmark Definitions

Bloomberg US Credit Index—The Bloomberg US Credit Index measures the performance of investment grade corporate debt and agency bonds that are dollar denominated and have a remaining maturity of greater than one year.

Investors cannot invest directly in an index. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes that may be paid by an investor.

 

  Distributions and Yields as of 7/31/22               
     Total Distributions
Paid for
12 Months ($)
   SEC 30-Day
Subsidized
Yield* (%)
   SEC 30-Day
Unsubsidized
Yield** (%)

Class A

   0.53    3.73    3.00

Class C

   0.44    3.13    0.93

Class R

   0.50    3.62    -27.49  

Class Z

   0.55    4.10    3.68

Class R6

   0.55    4.11    3.70

*SEC 30-Day Subsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s net expenses (net of any expense waivers or reimbursements). The investor experience is represented by the SEC 30-Day Subsidized Yield.

**SEC 30-Day Unsubsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s gross expenses. The investor experience is represented by the SEC 30-Day Subsidized Yield.

 

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  Credit Quality expressed as a percentage of total investments as of 7/31/22 (%)       

AAA

     5.9   

AA

     12.5   

A

     20.4   

BBB

     52.9   

BB

     1.9   

Cash/Cash Equivalents

     6.4   
   

Total

     100.0   

Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s Investors Service, Inc. (Moody’s), S&P Global Ratings (S&P), or Fitch, Inc. (Fitch). Credit ratings reflect the common nomenclature used by both S&P and Fitch. Where applicable, ratings are converted to the comparable S&P/Fitch rating tier nomenclature. These rating agencies are independent and are widely used. The Not Rated category consists of securities that have not been rated by an NRSRO. Credit ratings are subject to change.

 

PGIM Corporate Bond Fund    7


Strategy and Performance Overview* (unaudited)

How did the Fund perform?

The PGIM Corporate Bond Fund’s Class Z shares returned –13.29% in the 12-month reporting period that ended July 31, 2022, underperforming the –12.15% return of the Bloomberg US Credit Index (the Index).

What were the market conditions?

 

 

US investment grade corporate bond spreads widened during the reporting period as rate volatility remained high, and corporates remained challenged by elevated inflationary pressures, a hawkish Federal Reserve (Fed), growing recession risk, and continued heightened geopolitical risk.

 

 

During the period, the Index generated total returns and excess returns of –12.15% and -2.40%, respectively, while spreads on the Index widened by 53 basis points (bps) to 134 bps as of July 31, 2022. (One basis point equals 0.01%.)

 

 

By quality, AA-rated bonds and A-rated bonds outperformed BBB-rated bonds as investors sought the relative safety of higher-quality credits.

 

 

While technicals remained solid through the second half of 2021, rate volatility, higher front-end rates, and macroeconomic uncertainty caused investment grade corporate bond mutual fund flows to turn decidedly negative during the latter part of the period.

 

 

Following a record $1.4 trillion in 2021, investment grade gross issuance slowed in the first seven months of 2022 as more issuers elected to wait out rate volatility and rising spreads and yields. Gross issuance totaled $825 billion through the first seven months of 2022, down 4% from the year-earlier period.

 

 

Meanwhile, fundamentals remained strong, with revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) both moving in a positive direction. Rating agency actions continued to trend positively as well, with the market seeing $49 billion bonds that were upgraded to investment grade (rising stars) through the first half of 2022.

What worked?

 

 

While overall security selection detracted from returns, selection in municipal bonds, commercial mortgage-backed securities (CMBS), and Treasuries added to results. Although overall sector allocation detracted, underweight exposure, relative to the Index, to emerging markets and municipal bonds contributed positively to performance.

 

 

Within corporates, positioning in revenue education, property & casualty, and upstream energy contributed to performance.

 

 

In individual security selection, the Fund benefited from underweights to Oracle Corporation (technology) and Berkshire Hathaway Inc. (property & casualty), along with an overweight to Ovintiv Inc. (upstream energy), each relative to the Index.

 

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What didn’t work?

 

 

Overall security selection detracted from performance during the period, with selection in investment grade corporates the largest detractor. Selection in emerging markets also detracted.

 

 

Overall sector allocation undermined relative performance as well, with overweight allocations to investment grade corporates and CMBS, relative to the Index, being the most significant detractors.

 

 

The Fund’s positioning in technology, retailers & restaurants, and banking detracted from performance.

 

 

In individual security selection, the Fund’s overweight exposure to Bank of America Corporation (banking) and AutoNation, Inc. (retailers & restaurants), along with an underweight to Apple Inc. (technology), each relative to the Index, limited results.

Did the Fund use derivatives?

The Fund’s investment strategy does not heavily rely on derivative strategies, although it does employ Treasury futures on a limited basis. Treasury futures are used to manage the Fund’s duration and interest-rate risk. Duration measures the sensitivity of the price (the value of principal) of a bond to a change in interest rates. Using futures is more efficient than managing interest-rate risk through the purchase and sale of cash corporate bonds. This derivative strategy contributed positively to performance during the period.

Current outlook

 

 

While the corporate bond market’s entry point has become more attractive, PGIM Fixed Income remains cautious on spreads, primarily due to the more challenging macroeconomic outlook. The shift in global central bank policy and rates, along with persistent inflation, present risks to the economy and markets. Additionally, high and persistent inflation may begin to erode corporate margins, particularly among companies with more direct consumer exposure and/or substantial commodity inputs, and will likely introduce an elevated level of earnings volatility.

 

 

Corporate fundamentals require a nuanced view. On one hand, they remain strong and trending positively. Furthermore, the compression of the current credit cycle means that many companies simply didn’t have enough time to take substantial equity-friendly action at the expense of creditors, and leverage ratios remain consistent with pre-COVID-19 levels (2.9x gross or 2.4x net). However, earnings growth and profit margins may have peaked, and profit estimates may decline as well.

 

 

PGIM Fixed Income remains selectively opportunistic, continuing to favor certain BBB issuers for carry-and-spread compression in deleveraging names. PGIM Fixed Income also maintains the Fund’s modest, higher-quality BB allocation to both potential rising stars as well as “best ideas” among strong BB names that offer spreads well in excess of most BBBs.

 

PGIM Corporate Bond Fund    9


Strategy and Performance Overview* (continued)

 

 

Within industrials, PGIM Fixed Income favors BBB issuers that are preserving or improving credit metrics, liquidity, and ratings over their much tighter-trading, higher-quality peers. PGIM Fixed Income’s constructive view on BBB energy has been bolstered by strengthening oil and gas demand, as well as supply disruptions and shifting capital flows, all of which have increased prices, making energy one of the few sectors to benefit from the elevated inflationary environment.

* This strategy and performance overview, which discusses what strategies or holdings (including derivatives, if applicable) affected the Fund’s performance, is compiled based on how the Fund performed relative to the Fund’s assigned index and is viewed for performance attribution purposes at the aggregate Fund level, which in most instances will not directly correlate to the amounts disclosed in the Statement of Operations which conform to U.S. generally accepted accounting principles

 

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Fees and Expenses (unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 held through the six-month period ended July 31, 2022. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

Actual Expenses

The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information

 

PGIM Corporate Bond Fund    11


Fees and Expenses (continued)

 

 

provided in the expense table. Additional fees have the effect of reducing investment returns.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

     
PGIM Corporate Bond Fund       

Beginning

  Account Value  

  February 1, 2022  

  

Ending

Account Value

  July 31, 2022  

  

Annualized

Expense

Ratio Based on the

  Six-Month Period  

  

Expenses Paid

During the

Six-Month Period*  

     
 Class A    Actual    $1,000.00    $   906.00    0.80%    $3.78
     
   Hypothetical    $1,000.00    $1,020.83    0.80%    $4.01
     
 Class C    Actual    $1,000.00    $   902.30    1.55%    $7.31
     
   Hypothetical    $1,000.00    $1,017.11    1.55%    $7.75
     
 Class R    Actual    $1,000.00    $   904.60    1.05%    $4.96
     
   Hypothetical    $1,000.00    $1,019.59    1.05%    $5.26
     
 Class Z    Actual    $1,000.00    $   906.90    0.55%    $2.60
     
   Hypothetical    $1,000.00    $1,022.07    0.55%    $2.76
     
 Class R6    Actual    $1,000.00    $   906.80    0.55%    $2.60
     
     Hypothetical    $1,000.00    $1,022.07    0.55%    $2.76

*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended July 31, 2022, and divided by the 365 days in the Fund’s fiscal year ended July 31, 2022 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

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PGIM Corporate Bond Fund

Schedule of Investments

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

LONG-TERM INVESTMENTS    92.5%

           

COMMERCIAL MORTGAGE-BACKED SECURITIES    5.3%

           

BANK,

           

Series 2019-BN16, Class A3

   3.741%    02/15/52      200      $ 198,153  

Benchmark Mortgage Trust,

           

Series 2019-B09, Class A4

   3.751    03/15/52      200        195,416  

CCUBS Commercial Mortgage Trust,

           

Series 2017-C01, Class A3

   3.283(cc)    11/15/50      250        241,093  

CFCRE Commercial Mortgage Trust,

           

Series 2016-C07, Class A2

   3.585    12/10/54      273        267,064  

Citigroup Commercial Mortgage Trust,

           

Series 2016-GC37, Class A3

   3.050    04/10/49      175        169,441  

Deutsche Bank Commercial Mortgage Trust,

           

Series 2017-C06, Class A3

   3.269    06/10/50      75        73,371  

JPMCC Commercial Mortgage Securities Trust,

           

Series 2017-JP06, Class A4

   3.224    07/15/50      100        96,938  

Morgan Stanley Bank of America Merrill Lynch Trust,

           

Series 2016-C29, Class A3

   3.058    05/15/49      184        178,124  

Series 2016-C31, Class A4

   2.840    11/15/49      283        270,262  

Wells Fargo Commercial Mortgage Trust,

           

Series 2017-C40, Class A3

   3.317    10/15/50      200        194,906  
           

 

 

 

TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(cost $1,939,916)

                          1,884,768  
           

 

 

 

CORPORATE BONDS    86.1%

           

Aerospace & Defense    0.8%

                           

Boeing Co. (The),

           

Sr. Unsec’d. Notes

   3.200    03/01/29      30        27,174  

Sr. Unsec’d. Notes

   5.805    05/01/50      80        79,385  

Sr. Unsec’d. Notes

   5.930    05/01/60      100        98,957  

Lockheed Martin Corp.,

           

Sr. Unsec’d. Notes

   4.300    06/15/62      65        64,292  
           

 

 

 
              269,808  

Agriculture    1.5%

                           

Altria Group, Inc.,

           

Gtd. Notes

   3.400    02/04/41      150        103,512  

BAT Capital Corp. (United Kingdom),

           

Gtd. Notes

   4.390    08/15/37      50        41,346  

Gtd. Notes

   4.700    04/02/27      200        197,859  

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    13


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Agriculture (cont’d.)

                           

BAT International Finance PLC (United Kingdom),

           

Gtd. Notes

   1.668%    03/25/26      100      $ 90,243  

Gtd. Notes

   4.448    03/16/28      100        95,650  
           

 

 

 
              528,610  

Airlines    1.0%

                           

Delta Air Lines, Inc./SkyMiles IP Ltd.,

           

Sr. Sec’d. Notes, 144A

   4.500    10/20/25      55        54,244  

Southwest Airlines Co.,

           

Sr. Unsec’d. Notes

   5.125    06/15/27      230        238,203  

United Airlines, Inc.,

           

Sr. Sec’d. Notes, 144A

   4.375    04/15/26      40        38,510  

Sr. Sec’d. Notes, 144A

   4.625    04/15/29      25        23,042  
           

 

 

 
              353,999  

Auto Manufacturers    3.1%

                           

Ford Motor Credit Co. LLC,

           

Sr. Unsec’d. Notes

   3.350    11/01/22      265        264,810  

Sr. Unsec’d. Notes

   4.950    05/28/27      200        196,486  

General Motors Co.,

           

Sr. Unsec’d. Notes

   5.400    04/01/48      135        121,828  

Sr. Unsec’d. Notes

   6.125    10/01/25      200        210,277  

General Motors Financial Co., Inc.,

           

Gtd. Notes

   4.000    01/15/25      150        148,739  

Stellantis Finance US, Inc.,

           

Gtd. Notes, 144A

   2.691    09/15/31      205        167,813  
           

 

 

 
                      1,109,953  

Auto Parts & Equipment    0.7%

                           

Aptiv PLC/Aptiv Corp.,

           

Gtd. Notes

   3.250    03/01/32      35        30,736  

BorgWarner, Inc.,

           

Sr. Unsec’d. Notes, 144A

   5.000    10/01/25      200        203,791  
           

 

 

 
              234,527  

 

See Notes to Financial Statements.

 

14


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Banks    21.7%

                           

Banco Santander SA (Spain),

           

Sr. Unsec’d. Notes

   3.800%    02/23/28      200      $ 189,655  

Bank of America Corp.,

           

Sr. Unsec’d. Notes

   2.299(ff)    07/21/32      45        37,754  

Sr. Unsec’d. Notes

   2.572(ff)    10/20/32      320                274,072  

Sr. Unsec’d. Notes, MTN

   1.898(ff)    07/23/31      305        252,242  

Sr. Unsec’d. Notes, MTN

   2.087(ff)    06/14/29      75        66,244  

Sr. Unsec’d. Notes, MTN

   2.676(ff)    06/19/41      250        189,255  

Sr. Unsec’d. Notes, MTN

   3.384(ff)    04/02/26      130        127,106  

Sr. Unsec’d. Notes, MTN

   3.824(ff)    01/20/28      100        98,096  

Sr. Unsec’d. Notes, MTN

   4.271(ff)    07/23/29      240        237,950  

BNP Paribas SA (France),

           

Sr. Unsec’d. Notes, 144A, MTN

   3.052(ff)    01/13/31      200        175,618  

BPCE SA (France),

           

Sr. Unsec’d. Notes, 144A

   2.375    01/14/25      250        238,445  

Citigroup, Inc.,

           

Jr. Sub. Notes, Series V

   4.700(ff)    01/30/25(oo)      25        22,087  

Sr. Unsec’d. Notes

   2.561(ff)    05/01/32      55        47,245  

Sr. Unsec’d. Notes

   4.412(ff)    03/31/31      300        297,011  

Sub. Notes

   4.300    11/20/26      200        202,453  

Sub. Notes

   4.450    09/29/27      100        100,338  

Sub. Notes

   4.600    03/09/26      300        306,207  

Credit Agricole SA (France),

           

Sr. Unsec’d. Notes, 144A

   1.247(ff)    01/26/27      255        227,669  

Credit Suisse Group AG (Switzerland),

           

Sr. Unsec’d. Notes, 144A

   1.305(ff)    02/02/27      250        215,752  

Deutsche Bank AG (Germany),

           

Sr. Unsec’d. Notes

   1.447(ff)    04/01/25      160        149,985  

Sr. Unsec’d. Notes

   2.222(ff)    09/18/24      150        145,046  

Sr. Unsec’d. Notes

   3.950    02/27/23      100        100,050  

Goldman Sachs Group, Inc. (The),

           

Sr. Unsec’d. Notes

   1.948(ff)    10/21/27      145        132,147  

Sr. Unsec’d. Notes

   1.992(ff)    01/27/32      65        53,554  

Sr. Unsec’d. Notes

   3.814(ff)    04/23/29      20        19,373  

Sub. Notes

   5.150    05/22/45      150        151,294  

HSBC Holdings PLC (United Kingdom),

           

Sr. Unsec’d. Notes

   1.589(ff)    05/24/27      200        178,238  

JPMorgan Chase & Co.,

           

Jr. Sub. Notes, Series I, 3 Month LIBOR + 3.470%

   6.276(c)    10/30/22(oo)      98        97,558  

Sr. Unsec’d. Notes

   1.953(ff)    02/04/32      300        249,533  

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    15


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Banks (cont’d.)

                           

JPMorgan Chase & Co., (cont’d.)

           

Sr. Unsec’d. Notes

   2.522%(ff)    04/22/31      150      $ 131,487  

Sr. Unsec’d. Notes

   2.525(ff)    11/19/41      110        81,610  

Sr. Unsec’d. Notes

   2.545(ff)    11/08/32      90        77,322  

Sr. Unsec’d. Notes

   3.328(ff)    04/22/52      55        43,859  

Sr. Unsec’d. Notes

   3.882(ff)    07/24/38      95        88,374  

Sr. Unsec’d. Notes

   3.964(ff)    11/15/48      75        67,028  

Sr. Unsec’d. Notes

   4.452(ff)    12/05/29      350        349,996  

Morgan Stanley,

           

Sr. Unsec’d. Notes, GMTN

   2.239(ff)    07/21/32      515        434,259  

Sr. Unsec’d. Notes, GMTN

   4.431(ff)    01/23/30      225        225,421  

Sr. Unsec’d. Notes, MTN

   3.971(ff)    07/22/38      235        221,582  

Societe Generale SA (France),

           

Sr. Unsec’d. Notes, 144A

   1.488(ff)    12/14/26      200        177,533  

Sr. Unsec’d. Notes, 144A, MTN

   2.625    01/22/25      200        191,074  

State Street Corp.,

           

Sr. Unsec’d. Notes

   2.203(ff)    02/07/28      165        154,368  

UBS Group AG (Switzerland),

           

Sr. Unsec’d. Notes, 144A

   4.125    09/24/25      200        200,463  

Wells Fargo & Co.,

           

Sr. Unsec’d. Notes, MTN

   2.393(ff)    06/02/28      240        220,221  

Sr. Unsec’d. Notes, MTN

   2.572(ff)    02/11/31      410        361,511  

Sr. Unsec’d. Notes, MTN

   3.526(ff)    03/24/28      135        130,499  
           

 

 

 
              7,738,584  

Beverages    1.6%

                           

Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc. (Belgium),

           

Gtd. Notes

   4.900    02/01/46      240        241,446  

Anheuser-Busch InBev Worldwide, Inc. (Belgium),

           

Gtd. Notes

   5.550    01/23/49      110        120,485  

Bacardi Ltd. (Bermuda),

           

Gtd. Notes, 144A

   2.750    07/15/26      100        93,390  

Constellation Brands, Inc.,

           

Gtd. Notes

   5.250    11/15/48      50        51,313  

Sr. Unsec’d. Notes

   2.875    05/01/30      80        72,335  
           

 

 

 
              578,969  

 

See Notes to Financial Statements.

 

16


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest    
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Biotechnology    0.1%

                           

Amgen, Inc.,

           

Sr. Unsec’d. Notes

   3.000%    01/15/52      55      $ 41,644  

Building Materials    1.1%

                           

Johnson Controls International PLC,

           

Sr. Unsec’d. Notes

   4.950    07/02/64      54        49,243  

Martin Marietta Materials, Inc.,

           

Sr. Unsec’d. Notes

   2.400    07/15/31      15        12,720  

Sr. Unsec’d. Notes

   4.250    12/15/47      50        43,338  

Masco Corp.,

           

Sr. Unsec’d. Notes

   2.000    02/15/31      195        158,375  

Owens Corning,

           

Sr. Unsec’d. Notes

   4.300    07/15/47      100        84,595  

Vulcan Materials Co.,

           

Sr. Unsec’d. Notes

   3.500    06/01/30      40        37,266  
           

 

 

 
              385,537  

Chemicals    1.1%

                           

Dow Chemical Co. (The),

           

Sr. Unsec’d. Notes

   3.600    11/15/50      70        55,822  

Sr. Unsec’d. Notes

   4.800    05/15/49      55        51,592  

Huntsman International LLC,

           

Sr. Unsec’d. Notes

   2.950    06/15/31      75        63,687  

LYB International Finance III LLC,

           

Gtd. Notes

   3.375    10/01/40      145                115,806  

Gtd. Notes

   3.625    04/01/51      65        49,844  

Westlake Corp.,

           

Sr. Unsec’d. Notes

   2.875    08/15/41      15        10,945  

Yara International ASA (Brazil),

           

Sr. Unsec’d. Notes, 144A

   4.750    06/01/28      40        38,733  
           

 

 

 
              386,429  

Commercial Services    1.0%

                           

California Institute of Technology,

           

Sr. Unsec’d. Notes

   4.700    11/01/2111      50        50,308  

Equifax, Inc.,

           

Sr. Unsec’d. Notes

   2.350    09/15/31      110        91,846  

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    17


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Commercial Services (cont’d.)

                           

Massachusetts Institute of Technology,

           

Unsec’d. Notes

   3.885%    07/01/2116      100      $ 86,866  

Trustees of the University of Pennsylvania (The),

           

Sr. Unsec’d. Notes

   3.610    02/15/2119      160        123,794  
           

 

 

 
                      352,814  

Computers    0.6%

                           

Fortinet, Inc.,

           

Sr. Unsec’d. Notes

   2.200    03/15/31      175        145,759  

Leidos, Inc.,

           

Gtd. Notes

   2.300    02/15/31      35        28,926  

Gtd. Notes

   4.375    05/15/30      30        28,511  
           

 

 

 
              203,196  

Diversified Financial Services    1.0%

                           

Cantor Fitzgerald LP,

           

Sr. Unsec’d. Notes, 144A

   4.875    05/01/24      40        40,184  

Jefferies Group LLC/Jefferies Group Capital Finance, Inc.,

           

Sr. Unsec’d. Notes

   2.625    10/15/31      170        137,124  

Nomura Holdings, Inc. (Japan),

           

Sr. Unsec’d. Notes

   2.172    07/14/28      200        171,983  
           

 

 

 
              349,291  

Electric    7.9%

                           

AEP Texas, Inc.,

           

Sr. Unsec’d. Notes

   3.450    05/15/51      115        92,383  

Commonwealth Edison Co.,

           

First Mortgage

   4.700    01/15/44      100        101,946  

Dominion Energy South Carolina, Inc.,

           

First Mortgage

   4.600    06/15/43      150        148,276  

DTE Electric Co.,

           

General Ref. Mortgage

   3.950    06/15/42      75        67,013  

Duke Energy Carolinas LLC,

           

First Mortgage

   3.450    04/15/51      90        76,685  

Emera US Finance LP (Canada),

           

Gtd. Notes

   3.550    06/15/26      200        194,177  

 

See Notes to Financial Statements.

 

18


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Electric (cont’d.)

                           

Entergy Corp.,

           

Sr. Unsec’d. Notes

   2.950%    09/01/26      100      $ 96,138  

Interstate Power & Light Co.,

           

Sr. Unsec’d. Notes

   2.300    06/01/30      150        131,708  

Liberty Utilities Finance GP1,

           

Gtd. Notes, 144A

   2.050    09/15/30      230        195,682  

MidAmerican Energy Co.,

           

First Mortgage

   3.950    08/01/47      20        18,521  

Mississippi Power Co.,

           

Sr. Unsec’d. Notes, Series 12-A

   4.250    03/15/42      140        127,650  

NextEra Energy Capital Holdings, Inc.,

           

Gtd. Notes

   2.250    06/01/30      22        19,363  

NRG Energy, Inc.,

           

Sr. Sec’d. Notes, 144A

   2.000    12/02/25      35        32,031  

Pacific Gas & Electric Co.,

           

First Mortgage

   3.950    12/01/47      100        72,399  

First Mortgage

   4.000    12/01/46      100        71,773  

PPL Electric Utilities Corp.,

           

First Mortgage

   4.750    07/15/43      100        101,699  

Progress Energy, Inc.,

           

Sr. Unsec’d. Notes

   7.000    10/30/31      190        220,176  

Public Service Electric & Gas Co.,

           

Sr. Sec’d. Notes, MTN

   3.650    09/01/42      75        67,203  

Public Service Enterprise Group, Inc.,

           

Sr. Unsec’d. Notes

   1.600    08/15/30      53        43,881  

Puget Energy, Inc.,

           

Sr. Sec’d. Notes

   3.650    05/15/25      400        392,443  

Puget Sound Energy, Inc.,

           

First Mortgage

   2.893    09/15/51      20        14,928  

San Diego Gas & Electric Co.,

           

First Mortgage

   4.300    04/01/42      75        69,799  

Sr. Sec’d. Notes, Series VVV

   1.700    10/01/30      100        85,332  

Southern California Edison Co.,

           

First Ref. Mortgage

   5.500    03/15/40      200        204,823  

Vistra Operations Co. LLC,

           

Sr. Sec’d. Notes, 144A

   3.550    07/15/24      150        145,327  

Sr. Sec’d. Notes, 144A

   3.700    01/30/27      45        42,227  
           

 

 

 
                      2,833,583  

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    19


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Electronics    0.2%

                           

Amphenol Corp.,

           

Sr. Unsec’d. Notes

   2.200%    09/15/31      100      $ 85,733  

Engineering & Construction    0.4%

                           

Mexico City Airport Trust (Mexico),

           

Sr. Sec’d. Notes, 144A

   5.500    07/31/47      200        152,139  

Entertainment 0.6%

                           

Magallanes, Inc.,

           

Gtd. Notes, 144A

   5.050    03/15/42      20        17,758  

Gtd. Notes, 144A

   5.141    03/15/52      215        187,856  

Gtd. Notes, 144A

   5.391    03/15/62      10        8,770  
           

 

 

 
                      214,384  

Environmental Control    0.2%

                           

Waste Connections, Inc.,

           

Sr. Unsec’d. Notes

   2.200    01/15/32      100        85,482  

Foods    1.3%

                           

JBS USA LUX SA/JBS USA Food Co./JBS USA Finance, Inc.,

           

Gtd. Notes, 144A

   3.000    02/02/29      35        30,211  

Gtd. Notes, 144A

   3.000    05/15/32      55        44,034  

Kraft Heinz Foods Co.,

           

Gtd. Notes

   5.000    07/15/35      37        37,688  

Mars, Inc.,

           

Gtd. Notes, 144A

   3.600    04/01/34      25        24,105  

Mondelez International, Inc.,

           

Sr. Unsec’d. Notes

   2.625    03/17/27      130        124,530  

Smithfield Foods, Inc.,

           

Sr. Unsec’d. Notes, 144A

   2.625    09/13/31      205        163,868  

Tyson Foods, Inc.,

           

Sr. Unsec’d. Notes

   5.100    09/28/48      50        52,882  
           

 

 

 
              477,318  

Healthcare-Services    3.0%

                           

AHS Hospital Corp.,

           

Sr. Unsec’d. Notes, Series 2021

   2.780    07/01/51      30        21,972  

 

See Notes to Financial Statements.

 

20


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Healthcare-Services (cont’d.)

                           

Elevance Health, Inc.,

           

Sr. Unsec’d. Notes

   4.625%    05/15/42      100      $ 100,507  

HCA, Inc.,

           

Gtd. Notes

   5.000    03/15/24      100        101,437  

Gtd. Notes

   5.250    06/15/49      50        46,857  

Gtd. Notes

   5.500    06/15/47      25        24,167  

Gtd. Notes, 144A

   3.125    03/15/27      130        122,597  

Mayo Clinic,

           

Unsec’d. Notes

   3.774    11/15/43      85        77,794  

OhioHealth Corp.,

           

Unsec’d. Notes, Series 2020

   3.042    11/15/50      35        27,849  

Piedmont Healthcare, Inc.,

           

Sec’d. Notes, Series 2042

   2.719    01/01/42      55        41,942  

Presbyterian Healthcare Services,

           

Unsec’d. Notes

   4.875    08/01/52      75        79,368  

Sentara Healthcare,

           

Sr. Unsec’d. Notes, Series 2021

   2.927    11/01/51      100        76,353  

Texas Health Resources,

           

Sec’d. Notes

   4.330    11/15/55      130        123,830  

UnitedHealth Group, Inc.,

           

Sr. Unsec’d. Notes

   2.900    05/15/50      130        102,986  

Sr. Unsec’d. Notes

   3.050    05/15/41      80        68,098  

Sr. Unsec’d. Notes

   4.750    05/15/52      45        47,626  
           

 

 

 
              1,063,383  

Housewares 0.3%

                           

Newell Brands, Inc.,

           

Sr. Unsec’d. Notes

   4.000    12/01/24      100        99,123  

Insurance 2.3%

                           

Arch Capital Finance LLC,

           

Gtd. Notes

   5.031    12/15/46      100        96,188  

Berkshire Hathaway Finance Corp.,

           

Gtd. Notes

   3.850    03/15/52      190        172,109  

Chubb INA Holdings, Inc.,

           

Gtd. Notes

   2.850    12/15/51      95        72,064  

Gtd. Notes

   3.050    12/15/61      55        41,126  

CNA Financial Corp.,

           

Sr. Unsec’d. Notes

   3.900    05/01/29      80        77,049  

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    21


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Insurance (cont’d.)

                           

Corebridge Financial, Inc.,

           

Sr. Unsec’d. Notes, 144A

   3.650%    04/05/27      45      $ 43,327  

Everest Reinsurance Holdings, Inc.,

           

Sr. Unsec’d. Notes

   3.500    10/15/50      110        86,239  

Hartford Financial Services Group, Inc. (The),

           

Sr. Unsec’d. Notes

   2.900    09/15/51      35        25,257  

Liberty Mutual Group, Inc.,

           

Gtd. Notes, 144A

   5.500    06/15/52      50        49,695  

Markel Corp.,

           

Sr. Unsec’d. Notes

   3.450    05/07/52      140        108,335  

MetLife, Inc.,

           

Sr. Unsec’d. Notes

   5.000    07/15/52      30        31,952  
           

 

 

 
                      803,341  

Iron/Steel    0.1%

                           

Steel Dynamics, Inc.,

           

Sr. Unsec’d. Notes

   2.800    12/15/24      20        19,557  

Sr. Unsec’d. Notes

   3.250    01/15/31      25        22,268  
           

 

 

 
              41,825  

Lodging    0.3%

                           

Marriott International, Inc.,

           

Sr. Unsec’d. Notes, Series EE

   5.750    05/01/25      100        104,353  

Machinery-Diversified    0.1%

                           

Flowserve Corp.,

           

Sr. Unsec’d. Notes

   2.800    01/15/32      55        43,828  

Media    1.6%

                           

Charter Communications Operating LLC/Charter

           

Communications Operating Capital,

           

Sr. Sec’d. Notes

   3.500    06/01/41      15        11,007  

Sr. Sec’d. Notes

   3.700    04/01/51      190        133,258  

Sr. Sec’d. Notes

   6.384    10/23/35      180        189,037  

Cox Communications, Inc.,

           

Gtd. Notes, 144A

   2.950    10/01/50      135        96,001  

Discovery Communications LLC,

           

Gtd. Notes

   3.950    06/15/25      28        27,756  

 

See Notes to Financial Statements.

 

22


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity

Date

  

    Principal    

Amount

(000)#

            Value          

CORPORATE BONDS (Continued)

         

Media (cont’d.)

                         

FactSet Research Systems, Inc.,

         

Sr. Unsec’d. Notes

   2.900%   03/01/27      75     $ 72,112  

Paramount Global,

         

Sr. Unsec’d. Notes

   5.250   04/01/44      50       43,928  
         

 

 

 
            573,099  

Mining    2.4%

                         

Barrick North America Finance LLC (Canada),

         

Gtd. Notes

   7.500   09/15/38      75       89,816  

Freeport-McMoRan, Inc.,

         

Gtd. Notes

   4.375   08/01/28      200       190,366  

Kinross Gold Corp. (Canada),

         

Gtd. Notes

   5.950   03/15/24      300       306,877  

Newmont Corp.,

         

Gtd. Notes

   2.800   10/01/29      200       180,758  

Teck Resources Ltd. (Canada),

         

Sr. Unsec’d. Notes

   5.400   02/01/43      100       92,555  
         

 

 

 
            860,372  

Miscellaneous Manufacturing    0.6%

                         

Hillenbrand, Inc.,

         

Gtd. Notes

   5.000   09/15/26      100       97,247  

Pentair Finance Sarl,

         

Gtd. Notes

   4.500   07/01/29      65       63,470  

Textron, Inc.,

         

Sr. Unsec’d. Notes

   2.450   03/15/31      75       63,540  
         

 

 

 
            224,257  

Office/Business Equipment    0.4%

                         

CDW LLC/CDW Finance Corp.,

         

Gtd. Notes

   5.500   12/01/24      150       152,329  

Xerox Corp.,

         

Sr. Unsec’d. Notes

   4.625   03/15/23      4       3,995  
         

 

 

 
            156,324  

 

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    23


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

  

Maturity

Date

  

    Principal    

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

           

Oil & Gas    3.2%

                           

Aker BP ASA (Norway),

           

Sr. Unsec’d. Notes, 144A

   3.750%    01/15/30      150      $ 138,318  

Canadian Natural Resources Ltd. (Canada),

           

Sr. Unsec’d. Notes

   6.250    03/15/38      100        108,686  

Cenovus Energy, Inc. (Canada),

           

Sr. Unsec’d. Notes

   2.650    01/15/32      10        8,599  

Sr. Unsec’d. Notes

   4.250    04/15/27      200        199,542  

Sr. Unsec’d. Notes

   5.250    06/15/37      125        126,314  

Sr. Unsec’d. Notes

   5.400    06/15/47      15        15,041  

ConocoPhillips Co.,

           

Gtd. Notes

   4.300    11/15/44      55        53,094  

Devon Energy Corp.,

           

Sr. Unsec’d. Notes

   5.000    06/15/45      55        53,487  

Diamondback Energy, Inc.,

           

Gtd. Notes

   4.250    03/15/52      45        38,908  

Helmerich & Payne, Inc.,

           

Sr. Unsec’d. Notes

   2.900    09/29/31      90        79,293  

Marathon Petroleum Corp.,

           

Sr. Unsec’d. Notes

   3.800    04/01/28      90        86,988  

Petrobras Global Finance BV (Brazil),

           

Gtd. Notes

   5.600    01/03/31      65        63,416  

Petroleos Mexicanos (Mexico),

           

Gtd. Notes

   5.950    01/28/31      100        77,250  

Gtd. Notes

   6.350    02/12/48      60        39,450  

Gtd. Notes, MTN

   6.750    09/21/47      80        54,260  
           

 

 

 
              1,142,646  

Packaging & Containers    1.3%

                           

AptarGroup, Inc.,

           

Sr. Unsec’d. Notes

   3.600    03/15/32      60        54,965  

Berry Global, Inc.,

           

Sr. Sec’d. Notes

   0.950    02/15/24      90        85,553  

Sr. Sec’d. Notes

   1.570    01/15/26      130        118,394  

Graphic Packaging International LLC,

           

Sr. Sec’d. Notes, 144A

   1.512    04/15/26      75        68,470  

 

See Notes to Financial Statements.

 

24


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity

Date

  

    Principal    

Amount

(000)#

            Value          

CORPORATE BONDS (Continued)

         

Packaging & Containers (cont’d.)

                         

Sealed Air Corp.,

         

Sr. Sec’d. Notes, 144A

   1.573%   10/15/26      85     $ 75,730  

Sonoco Products Co.,

         

Sr. Unsec’d. Notes

   3.125   05/01/30      70       63,258  
         

 

 

 
            466,370  

Pharmaceuticals    2.9%

                         

AbbVie, Inc.,

         

Sr. Unsec’d. Notes

   4.050   11/21/39      95       89,417  

Sr. Unsec’d. Notes

   4.250   11/21/49      20       18,773  

Sr. Unsec’d. Notes

   4.400   11/06/42      130       124,151  

Bristol-Myers Squibb Co.,

         

Sr. Unsec’d. Notes

   3.900   03/15/62      35       31,775  

Sr. Unsec’d. Notes

   4.625   05/15/44      100       103,350  

Cigna Corp.,

         

Gtd. Notes

   4.900   12/15/48      150       151,431  

Sr. Unsec’d. Notes

   2.375   03/15/31      25       22,092  

CVS Health Corp.,

         

Sr. Unsec’d. Notes

   1.750   08/21/30      100       83,930  

Sr. Unsec’d. Notes

   2.700   08/21/40      55       41,992  

Sr. Unsec’d. Notes

   4.780   03/25/38      100       99,745  

Sr. Unsec’d. Notes

   5.125   07/20/45      100       102,192  

Mylan, Inc.,

         

Gtd. Notes

   5.200   04/15/48      40       32,501  

Utah Acquisition Sub, Inc.,

         

Gtd. Notes

   3.950   06/15/26      140       132,528  

Viatris, Inc.,

         

Gtd. Notes

   3.850   06/22/40      25       18,260  
         

 

 

 
            1,052,137  

Pipelines    5.9%

                         

Boardwalk Pipelines LP,

         

Gtd. Notes

   3.400   02/15/31      100       88,282  

Colonial Enterprises, Inc.,

         

Gtd. Notes, 144A

   3.250   05/15/30      90       84,462  

El Paso Natural Gas Co. LLC,

         

Gtd. Notes, 144A

   3.500   02/15/32      145       132,181  

 

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    25


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity

Date

  

    Principal    

Amount

(000)#

            Value          

CORPORATE BONDS (Continued)

         

Pipelines (cont’d.)

                         

Energy Transfer LP,

         

Sr. Unsec’d. Notes

   5.000%   05/15/50      45     $ 39,761  

Sr. Unsec’d. Notes

   5.400   10/01/47      150       137,508  

Sr. Unsec’d. Notes

   6.250   04/15/49      15       15,133  

Sr. Unsec’d. Notes, Series 20Y

   5.800   06/15/38      15       14,590  

Enterprise Products Operating LLC,

         

Gtd. Notes

   4.800   02/01/49      70       67,959  

Gtd. Notes

   4.850   03/15/44      100       96,408  

Florida Gas Transmission Co. LLC,

         

Sr. Unsec’d. Notes, 144A

   2.300   10/01/31      100       83,847  

Kinder Morgan, Inc.,

         

Gtd. Notes

   3.600   02/15/51      50       38,910  

Magellan Midstream Partners LP,

         

Sr. Unsec’d. Notes

   3.250   06/01/30      60       54,792  

Sr. Unsec’d. Notes

   4.200   10/03/47      80       67,807  

Midwest Connector Capital Co. LLC,

         

Gtd. Notes, 144A

   3.900   04/01/24      75       73,777  

MPLX LP,

         

Sr. Unsec’d. Notes

   2.650   08/15/30      95       82,467  

Sr. Unsec’d. Notes

   3.500   12/01/22      35       34,977  

Sr. Unsec’d. Notes

   4.000   03/15/28      45       44,049  

Sr. Unsec’d. Notes

   4.500   07/15/23      110       110,562  

Sr. Unsec’d. Notes

   4.950   03/14/52      120       108,908  

Sr. Unsec’d. Notes

   5.200   12/01/47      75       69,575  

Northern Natural Gas Co.,

         

Sr. Unsec’d. Notes, 144A

   3.400   10/16/51      25       19,416  

ONEOK, Inc.,

         

Gtd. Notes

   2.200   09/15/25      150       140,891  

Gtd. Notes

   3.100   03/15/30      45       39,910  

Gtd. Notes

   4.350   03/15/29      2       1,935  

Gtd. Notes

   4.500   03/15/50      30       24,871  

Gtd. Notes

   4.950   07/13/47      150       133,209  

Targa Resources Corp.,

         

Gtd. Notes

   4.950   04/15/52      20       17,900  

Transcontinental Gas Pipe Line Co. LLC,

         

Sr. Unsec’d. Notes

   3.950   05/15/50      80       69,394  

 

 

See Notes to Financial Statements.

 

26


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity

Date

  

    Principal    

Amount

(000)#

            Value          

CORPORATE BONDS (Continued)

         

Pipelines (cont’d.)

                         

Western Midstream Operating LP,

         

Sr. Unsec’d. Notes

   5.750%(cc)   02/01/50      10     $ 8,956  

Williams Cos., Inc. (The),

         

Sr. Unsec’d. Notes

   4.300   03/04/24      200       201,008  
         

 

 

 
            2,103,445  

Real Estate    0.6%

                         

Ontario Teachers’ Cadillac Fairview Properties Trust (Canada),

         

Sr. Unsec’d. Notes, 144A

   4.125   02/01/29      200       200,113  

Real Estate Investment Trusts (REITs)    6.3%

                         

Brixmor Operating Partnership LP,

         

Sr. Unsec’d. Notes

   3.650   06/15/24      75       73,973  

Sr. Unsec’d. Notes

   4.050   07/01/30      15       13,859  

Sr. Unsec’d. Notes

   4.125   06/15/26      200       197,719  

Broadstone Net Lease LLC,

         

Gtd. Notes

   2.600   09/15/31      160       131,381  

CubeSmart LP,

         

Gtd. Notes

   2.250   12/15/28      50       43,411  

Duke Realty LP,

         

Sr. Unsec’d. Notes

   1.750   02/01/31      100       83,457  

GLP Capital LP/GLP Financing II, Inc.,

         

Gtd. Notes

   3.350   09/01/24      100       96,356  

Gtd. Notes

   4.000   01/15/31      170       151,793  

Gtd. Notes

   5.375   11/01/23      60       59,849  

Healthpeak Properties, Inc.,

         

Sr. Unsec’d. Notes

   2.125   12/01/28      145       129,318  

Invitation Homes Operating Partnership LP,

         

Gtd. Notes

   2.300   11/15/28      45       38,696  

Kimco Realty Corp.,

         

Sr. Unsec’d. Notes

   3.200   04/01/32      125       112,683  

Phillips Edison Grocery Center Operating Partnership I LP,

         

Gtd. Notes

   2.625   11/15/31      115       91,483  

SITE Centers Corp.,

         

Sr. Unsec’d. Notes

   3.625   02/01/25      306       298,837  

Sun Communities Operating LP,

         

Gtd. Notes

   2.300   11/01/28      85       74,336  

 

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    27


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Real Estate Investment Trusts (REITs) (cont’d.)

                           

Ventas Realty LP,

           

Gtd. Notes

   3.500%    02/01/25      295      $ 290,501  

VICI Properties LP,

           

Sr. Unsec’d. Notes

   4.750    02/15/28      110        108,096  

Welltower, Inc.,

           

Sr. Unsec’d. Notes

   2.750    01/15/31      50        43,483  

Sr. Unsec’d. Notes

   2.800    06/01/31      185        161,130  

WP Carey, Inc.,

           

Sr. Unsec’d. Notes

   2.250    04/01/33      65        51,789  
           

 

 

 
              2,252,150  

Retail    2.0%

                           

Alimentation Couche-Tard, Inc. (Canada),

           

Sr. Unsec’d. Notes, 144A

   3.800    01/25/50      100        77,115  

AutoNation, Inc.,

           

Sr. Unsec’d. Notes

   3.850    03/01/32      90        80,214  

Sr. Unsec’d. Notes

   4.750    06/01/30      165        159,070  

AutoZone, Inc.,

           

Sr. Unsec’d. Notes

   1.650    01/15/31      120        98,319  

Best Buy Co., Inc.,

           

Sr. Unsec’d. Notes

   1.950    10/01/30      200        165,744  

Tractor Supply Co.,

           

Sr. Unsec’d. Notes

   1.750    11/01/30      160        130,601  
           

 

 

 
              711,063  

Semiconductors    2.2%

                           

Broadcom Corp./Broadcom Cayman Finance Ltd.,

           

Gtd. Notes

   3.875    01/15/27      40        39,476  

Broadcom, Inc.,

           

Gtd. Notes, 144A

   2.450    02/15/31      135        112,847  

Sr. Unsec’d. Notes, 144A

   3.419    04/15/33      303        261,905  

Microchip Technology, Inc.,

           

Gtd. Notes

   4.250    09/01/25      70        69,655  

Sr. Sec’d. Notes

   0.972    02/15/24      240        229,031  

NXP BV/NXP Funding LLC/NXP USA, Inc. (China),

           

Gtd. Notes

   3.150    05/01/27      75        71,100  
           

 

 

 
              784,014  

 

 

See Notes to Financial Statements.

 

28


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Shipbuilding    0.3%

                           

Huntington Ingalls Industries, Inc.,

           

Gtd. Notes

   3.483%    12/01/27      100      $ 95,489  

Software    0.5%

                           

Broadridge Financial Solutions, Inc.,

           

Sr. Unsec’d. Notes

   2.600    05/01/31      60        52,258  

Fidelity National Information Services, Inc.,

           

Sr. Unsec’d. Notes

   3.100    03/01/41      35        26,692  

Oracle Corp.,

           

Sr. Unsec’d. Notes

   3.600    04/01/50      60        43,661  

Sr. Unsec’d. Notes

   3.900    05/15/35      45        38,778  
           

 

 

 
              161,389  

Telecommunications    2.8%

                           

AT&T, Inc.,

           

Sr. Unsec’d. Notes

   3.500    06/01/41      270        226,531  

Sr. Unsec’d. Notes

   3.550    09/15/55      139        108,112  

Sr. Unsec’d. Notes

   3.650    09/15/59      22        17,168  

Motorola Solutions, Inc.,

           

Sr. Unsec’d. Notes

   2.300    11/15/30      200        163,580  

T-Mobile USA, Inc.,

           

Sr. Sec’d. Notes

   2.250    11/15/31      160        134,911  

Sr. Sec’d. Notes

   3.875    04/15/30      210        201,958  

Verizon Communications, Inc.,

           

Sr. Unsec’d. Notes

   2.650    11/20/40      175        134,689  
           

 

 

 
              986,949  

Transportation    0.5%

                           

FedEx Corp.,

           

Gtd. Notes

   4.500    02/01/65      100        88,461  

Ryder System, Inc.,

           

Sr. Unsec’d. Notes, MTN

   1.750    09/01/26      95        87,636  
           

 

 

 
              176,097  

 

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    29


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

           

Trucking & Leasing    0.4%

                           

Penske Truck Leasing Co. LP/PTL Finance Corp.,

           

Sr. Unsec’d. Notes, 144A

   1.200%    11/15/25      80      $ 72,105  

Sr. Unsec’d. Notes, 144A

   1.700    06/15/26      90        81,330  
           

 

 

 
              153,435  

Water    0.2%

                           

American Water Capital Corp.,

           

Sr. Unsec’d. Notes

   3.750    09/01/47      100        87,542  
           

 

 

 

TOTAL CORPORATE BONDS
(cost $34,278,870)

 

     30,724,744  
           

 

 

 

MUNICIPAL BONDS    0.3%

 

Michigan    0.2%

                           

University of Michigan,

 

Taxable, Revenue Bonds, Series A

   4.454    04/01/2122      60        56,572  

Texas    0.1%

                           

Texas Private Activity Bond Surface Transportation Corp.,

 

Taxable, Revenue Bonds, Series B

   3.922    12/31/49      50        43,868  
           

 

 

 

TOTAL MUNICIPAL BONDS
(cost $110,000)

 

     100,440  
           

 

 

 

SOVEREIGN BOND    0.6%

 

Mexico Government International Bond (Mexico),

 

Sr. Unsec’d. Notes

(cost $250,000)

   2.659    05/24/31      250        214,125  
           

 

 

 

 

See Notes to Financial Statements.

 

30


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
   Maturity
Date
       Principal    
Amount
(000)#
             Value          

U.S. TREASURY OBLIGATIONS    0.2%

        

U.S. Treasury Bonds

   2.250%    02/15/52      20      $ 16,853  

U.S. Treasury Notes

   2.875    05/15/32      50        50,891  
           

 

 

 

TOTAL U.S. TREASURY OBLIGATIONS
(cost $64,428)

 

     67,744  
           

 

 

 

TOTAL LONG-TERM INVESTMENTS
(cost $36,643,214)

 

     32,991,821  
           

 

 

 
              

Shares

        

SHORT-TERM INVESTMENT    6.2%

 

UNAFFILIATED FUND

           

Dreyfus Government Cash Management (Institutional Shares)
(cost $2,213,589)

     2,213,589        2,213,589  
           

 

 

 

TOTAL INVESTMENTS    98.7%
(cost $38,856,803)

 

     35,205,410  

Other assets in excess of liabilities(z)    1.3%

 

     448,521  
           

 

 

 

NET ASSETS    100.0%

 

   $ 35,653,931  
           

 

 

 

 

Below is a list of the abbreviation(s) used in the annual report:

USD—US Dollar

144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and, pursuant to the requirements of Rule 144A, may not be resold except to qualified institutional buyers.

GMTN—Global Medium Term Note

LIBOR—London Interbank Offered Rate

LP—Limited Partnership

MTN—Medium Term Note

REITs—Real Estate Investment Trust

 

#

Principal amount is shown in U.S. dollars unless otherwise stated.

(c)

Variable rate instrument. The interest rate shown reflects the rate in effect at July 31, 2022.

(cc)

Variable rate instrument. The rate shown is based on the latest available information as of July 31, 2022. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description.

(ff)

Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end.

(oo)

Perpetual security. Maturity date represents next call date.

(z)

Includes net unrealized appreciation/(depreciation) and/or market value of the below holdings which are excluded from the Schedule of Investments:

 

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    31


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

Futures contracts outstanding at July 31, 2022:

 

Number
of
Contracts

    

Type

 

Expiration
Date

  Current
Notional
Amount
             Value /
Unrealized
Appreciation
(Depreciation)
          
  Long Positions:          
  9      2 Year U.S. Treasury Notes   Sep. 2022   $ 1,894,148       $ (3,577  
  5      5 Year U.S. Treasury Notes   Sep. 2022     568,633         8,939    
  6      10 Year U.S. Treasury Notes   Sep. 2022     726,844         16,867    
  6      20 Year U.S. Treasury Bonds   Sep. 2022     864,000         24,531    
  4      30 Year U.S. Ultra Treasury Bonds   Sep. 2022     633,250         13,252    
          

 

 

   
             60,012    
          

 

 

   
  Short Position:          
  15      10 Year U.S. Ultra Treasury Notes   Sep. 2022     1,968,750         (43,512  
          

 

 

   
           $ 16,500    
          

 

 

   

Summary of Collateral for Centrally Cleared/Exchange-traded Derivatives:

Cash and securities segregated as collateral, including pending settlement for closed positions, to cover requirements for centrally cleared/exchange-traded derivatives are listed by broker as follows:

 

Broker

   Cash and/or Foreign Currency            Securities Market Value        

Citigroup Global Markets, Inc.

    $ 200,000     $
   

 

 

     

 

 

 

Fair Value Measurements:

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1—unadjusted quoted prices generally in active markets for identical securities.

Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.

Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of July 31, 2022 in valuing such portfolio securities:

 

     Level 1      Level 2    

Level 3

 

Investments in Securities

                        

Assets

            

Long-Term Investments

            

Commercial Mortgage-Backed Securities

   $      $ 1,884,768        $    

Corporate Bonds

            30,724,744             

Municipal Bonds

            100,440             

 

See Notes to Financial Statements.

 

32


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

     Level 1     Level 2      Level 3  

Investments in Securities (continued)

       

Assets (continued)

       

Long-Term Investments (continued)

       

Sovereign Bond

   $     $ 214,125        $—  

U.S. Treasury Obligations

           67,744          —  

Short-Term Investment

       

Unaffiliated Fund

     2,213,589                —  
  

 

 

   

 

 

    

 

 

 

Total

   $ 2,213,589     $ 32,991,821        $—  
  

 

 

   

 

 

    

 

 

 

Other Financial Instruments*

       

Assets

       

Futures Contracts

   $ 63,589     $        $—  
  

 

 

   

 

 

    

 

 

 

Liabilities

       

Futures Contracts

   $ (47,089   $        $—  
  

 

 

   

 

 

    

 

 

 

 

 

*

Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation (depreciation) on the instrument, and OTC swap contracts which are recorded at fair value.

Industry Classification:

The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of July 31, 2022 were as follows:

 

Banks

     21.7

Electric

     7.9  

Real Estate Investment Trusts (REITs)

     6.3  

Unaffiliated Fund

     6.2  

Pipelines

     5.9  

Commercial Mortgage-Backed Securities

     5.3  

Oil & Gas

     3.2  

Auto Manufacturers

     3.1  

Healthcare-Services

     3.0  

Pharmaceuticals

     2.9  

Telecommunications

     2.8  

Mining

     2.4  

Insurance

     2.3  

Semiconductors

     2.2  

Retail

     2.0  

Beverages

     1.6  

Media

     1.6  

Agriculture

     1.5  

Foods

     1.3  

Packaging & Containers

     1.3  

Chemicals

     1.1

Building Materials

     1.1  

Airlines

     1.0  

Commercial Services

     1.0  

Diversified Financial Services

     1.0  

Aerospace & Defense

     0.8  

Auto Parts & Equipment

     0.7  

Miscellaneous Manufacturing

     0.6  

Entertainment

     0.6  

Sovereign Bond

     0.6  

Computers

     0.6  

Real Estate

     0.6  

Transportation

     0.5  

Software

     0.5  

Office/Business Equipment

     0.4  

Trucking & Leasing

     0.4  

Engineering & Construction

     0.4  

Lodging

     0.3  

Municipal Bonds

     0.3  

Housewares

     0.3  
 

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    33


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

Industry Classification (continued):

 

Shipbuilding

     0.3

Water

     0.2  

Electronics

     0.2  

Environmental Control

     0.2  

U.S. Treasury Obligations

     0.2  

Machinery-Diversified

     0.1  

Iron/Steel

     0.1  

 

Biotechnology

     0.1
  

 

 

 
     98.7  

Other assets in excess of liabilities

     1.3  
  

 

 

 
     100.0
  

 

 

 
 

 

Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:

The Fund invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is interest rate contracts risk. See the Notes to Financial Statements for additional detail regarding these derivative instruments and their risks. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

Fair values of derivative instruments as of July 31, 2022 as presented in the Statement of Assets and Liabilities:

 

    

Asset Derivatives

   

Liability Derivatives

 

Derivatives not accounted for as

hedging instruments, carried at

fair value

  

Statement of

Assets and

Liabilities Location

   Fair
Value
   

Statement of

Assets and

Liabilities Location

   Fair
Value
 

Interest rate contracts

   Due from/to broker-variation margin futures    $ 63,589   Due from/to broker-variation margin futures    $ 47,089
     

 

 

      

 

 

 

 

*

Includes cumulative appreciation (depreciation) as reported in the schedule of open futures and centrally cleared swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities.

The effects of derivative instruments on the Statement of Operations for the year ended July 31, 2022 are as follows:

 

Amount of Realized Gain (Loss) on Derivatives Recognized in Income        

Derivatives not accounted for as hedging

instruments, carried at fair value

   Futures  

Interest rate contracts

   $ (8,136
  

 

 

 

 

See Notes to Financial Statements.

 

34


PGIM Corporate Bond Fund

Schedule of Investments  (continued)

as of July 31, 2022

 

Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income  

Derivatives not accounted for

as hedging instruments,

carried at fair value

  Futures  

Interest rate contracts

  $ 39,561  
 

 

 

 

For the year ended July 31, 2022, the Fund’s average volume of derivative activities is as follows:

 

Derivative Contract Type    Average Volume of Derivative Activities*

Futures Contracts - Long Positions (1)

     $ 4,177,250

Futures Contracts - Short Positions (1)

       2,669,830

 

*

Average volume is based on average quarter end balances as noted for the year ended July 31, 2022.

(1)

Notional Amount in USD.

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    35


Statement of Assets and Liabilities

as of July 31, 2022

 

Assets

 

Unaffiliated investments (cost $38,856,803)

   $ 35,205,410  

Dividends and interest receivable

     327,531  

Deposit with broker for centrally cleared/exchange-traded derivatives

     200,000  

Receivable for Fund shares sold

     13,730  

Due from broker—variation margin futures

     5,203  

Due from Manager

     3,252  

Prepaid expenses and other assets

     344  
  

 

 

 

Total Assets

     35,755,470  
  

 

 

 

Liabilities

        

Audit fee payable

     40,000  

Payable for Fund shares purchased

     26,805  

Custodian and accounting fees payable

     10,008  

Shareholders’ reports payable

     9,227  

Legal fees and expenses payable

     5,626  

Accrued expenses and other liabilities

     5,133  

Distribution fee payable

     2,438  

Affiliated transfer agent fee payable

     873  

Trustees’ fees payable

     813  

Dividends payable

     616  
  

 

 

 

Total Liabilities

     101,539  
  

 

 

 

Net Assets

   $ 35,653,931  
  

 

 

 
          

Net assets were comprised of:

  

Shares of beneficial interest, at par

   $ 3,509  

Paid-in capital in excess of par

     39,662,181  

Total distributable earnings (loss)

     (4,011,759
  

 

 

 

Net assets, July 31, 2022

   $ 35,653,931  
  

 

 

 

 

See Notes to Financial Statements.

 

36


Class A

 

Net asset value and redemption price per share,

($7,622,336 ÷ 748,898 shares of beneficial interest issued and outstanding)

   $ 10.18  

Maximum sales charge (3.25% of offering price)

     0.34  
  

 

 

 

Maximum offering price to public

   $ 10.52  
  

 

 

 

Class C

        

Net asset value, offering price and redemption price per share,

($945,213 ÷ 93,087 shares of beneficial interest issued and outstanding)

   $ 10.15      
  

 

 

 

Class R

        

Net asset value, offering price and redemption price per share,

($11,418 ÷ 1,124 shares of beneficial interest issued and outstanding)

   $ 10.15  
  

 

 

 

Class Z

        

Net asset value, offering price and redemption price per share,

($14,150,288 ÷ 1,393,261 shares of beneficial interest issued and outstanding)

   $ 10.16  
  

 

 

 

Class R6

        

Net asset value, offering price and redemption price per share,

($12,924,676 ÷ 1,273,128 shares of beneficial interest issued and outstanding)

   $ 10.15  
  

 

 

 

  Net asset value per share may not recalculate due to rounding.

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    37


Statement of Operations

Year Ended July 31, 2022

 

Net Investment Income (Loss)

 

Income

  

Interest income

   $ 1,213,573  

Unaffiliated dividend income

     2,892  

Affiliated dividend income

     364  
  

 

 

 

Total income

     1,216,829  
  

 

 

 

Expenses

  

Management fee

     177,948  

Distribution fee(a)

     31,635  

Registration fees(a)

     50,661  

Custodian and accounting fees

     44,108  

Audit fee

     40,000  

Transfer agent’s fees and expenses (including affiliated expense of $5,213)(a)

     24,876  

Shareholders’ reports

     22,047  

Legal fees and expenses

     20,667  

Trustees’ fees

     9,860  

Miscellaneous

     20,978  
  

 

 

 

Total expenses

     442,780  

Less: Fee waiver and/or expense reimbursement(a)

     (193,469

Distribution fee waiver(a)

     (31
  

 

 

 

Net expenses

     249,280  
  

 

 

 

Net investment income (loss)

     967,549  
  

 

 

 

Realized And Unrealized Gain (Loss) On Investment Transactions

        

Net realized gain (loss) on:

  

Investment transactions

     (113,631

Futures transactions

     (8,136
  

 

 

 
     (121,767
  

 

 

 

Net change in unrealized appreciation (depreciation) on:

  

Investments

     (6,419,607

Futures

     39,561  
  

 

 

 
     (6,380,046
  

 

 

 

Net gain (loss) on investment transactions

     (6,501,813
  

 

 

 

Net Increase (Decrease) In Net Assets Resulting From Operations

   $ (5,534,264
  

 

 

 

 

(a)    Class specific expenses and waivers were as follows:

 

    

Class A

   

Class C

   

Class R

   

Class Z

   

Class R6

 
Distribution fee      18,898       12,645       92              
Registration fees      13,769       10,614       5,364       13,500       7,414  
Transfer agent’s fees and expenses      7,156       1,671       48       15,856       145  
Fee waiver and/or expense reimbursement      (44,036     (16,039     (5,448     (77,573     (50,373
Distribution fee waiver                  (31            

 

See Notes to Financial Statements.

 

38


Statements of Changes in Net Assets

 

 

     Year Ended
July 31,
 
     2022     2021  

Increase (Decrease) in Net Assets

                

Operations

    

Net investment income (loss)

   $ 967,549     $ 1,013,467  

Net realized gain (loss) on investment transactions

     (121,767     1,424,442  

Net change in unrealized appreciation (depreciation) on investments

     (6,380,046     (1,332,811
  

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

     (5,534,264     1,105,098  
  

 

 

   

 

 

 

Dividends and Distributions

    

Distributions from distributable earnings

    

Class A

     (336,755     (164,159

Class C

     (49,452     (29,929

Class R

     (545     (287

Class Z

     (769,860     (651,718

Class R6

     (704,737     (291,029
  

 

 

   

 

 

 
     (1,861,349     (1,137,122
  

 

 

   

 

 

 

Fund share transactions (Net of share conversions)

    

Net proceeds from shares sold

     11,304,035       23,013,326  

Net asset value of shares issued in reinvestment of dividends and distributions

     1,851,138       1,132,370  

Cost of shares purchased

     (13,297,842     (24,124,417
  

 

 

   

 

 

 

Net increase (decrease) in net assets from Fund share transactions

     (142,669     21,279  
  

 

 

   

 

 

 

Total increase (decrease)

     (7,538,282     (10,745

Net Assets:

                

Beginning of year

     43,192,213       43,202,958  
  

 

 

   

 

 

 

End of year

   $ 35,653,931     $ 43,192,213  
  

 

 

   

 

 

 

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    39


Financial Highlights

 

 

 

Class A Shares

 

            
             Year Ended July 31,         
      2022     2021     2020     2019     2018  
   
Per Share Operating Performance(a):                                         
Net Asset Value, Beginning of Year      $12.33       $12.34       $11.48       $10.81       $11.32  
Income (loss) from investment operations:                                         
Net investment income (loss)      0.26       0.26       0.31       0.34       0.32  
Net realized and unrealized gain (loss) on investment transactions      (1.88     0.03       0.89       0.69       (0.49
Total from investment operations      (1.62     0.29       1.20       1.03       (0.17
Less Dividends and Distributions:                                         
Dividends from net investment income      (0.30     (0.30     (0.34     (0.36     (0.34
Distributions from net realized gains      (0.23     -       -       -       -  
Total dividends and distributions      (0.53     (0.30     (0.34     (0.36     (0.34
Net asset value, end of year      $10.18       $12.33       $12.34       $11.48       $10.81  
Total Return(b):      (13.55 )%      2.42     10.59     9.73     (1.51 )% 
                 
   

 

Ratios/Supplemental Data:

 

            
Net assets, end of year (000)      $7,622       $6,980       $5,021       $3,053       $2,565  
Average net assets (000)      $7,559       $6,654       $3,260       $2,698       $2,200  
Ratios to average net assets(c):                                         
Expenses after waivers and/or expense reimbursement      0.80     0.80     0.80     0.80     0.80
Expenses before waivers and/or expense reimbursement      1.38     1.37     1.89     2.22     2.25
Net investment income (loss)      2.32     2.17     2.66     3.14     2.89
Portfolio turnover rate(d)      26     61     50     71     70

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(c)

Does not include expenses of the underlying funds in which the Fund invests.

(d)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

40


   

 

Class C Shares

 

            
             Year Ended July 31,         
      2022     2021     2020     2019     2018  
   
Per Share Operating Performance(a):                                         
Net Asset Value, Beginning of Year      $12.30       $12.31       $11.45       $10.79       $11.29  
Income (loss) from investment operations:                                         
Net investment income (loss)      0.17       0.17       0.23       0.26       0.24  
Net realized and unrealized gain (loss) on investment transactions      (1.88     0.03       0.88       0.68       (0.48
Total from investment operations      (1.71     0.20       1.11       0.94       (0.24
Less Dividends and Distributions:                                         
Dividends from net investment income      (0.21     (0.21     (0.25     (0.28     (0.26
Distributions from net realized gains      (0.23     -       -       -       -  
Total dividends and distributions      (0.44     (0.21     (0.25     (0.28     (0.26
Net asset value, end of year      $10.15       $12.30       $12.31       $11.45       $10.79  
Total Return(b):      (14.23 )%      1.66     9.79     8.83     (2.16 )% 
              
   

 

Ratios/Supplemental Data:

 

            
Net assets, end of year (000)      $945       $1,667       $1,783       $1,386       $952  
Average net assets (000)      $1,265       $1,741       $1,627       $1,053       $1,050  
Ratios to average net assets(c):                                         
Expenses after waivers and/or expense reimbursement      1.55     1.55     1.55     1.55     1.55
Expenses before waivers and/or expense reimbursement      2.82     2.45     3.03     3.49     3.54
Net investment income (loss)      1.51     1.43     1.92     2.38     2.12
Portfolio turnover rate(d)      26     61     50     71     70

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(c)

Does not include expenses of the underlying funds in which the Fund invests.

(d)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    41


Financial Highlights  (continued)

 

 

 

Class R Shares

 

            
      Year Ended July 31,  
      2022     2021     2020     2019     2018  
   
Per Share Operating Performance(a):                                         
Net Asset Value, Beginning of Year      $12.30       $12.31       $11.45       $10.79       $11.29  
Income (loss) from investment operations:                                         
Net investment income (loss)      0.23       0.23       0.29       0.31       0.29  
Net realized and unrealized gain (loss) on investment transactions      (1.88     0.03       0.87       0.68       (0.47
Total from investment operations      (1.65     0.26       1.16       0.99       (0.18
Less Dividends and Distributions:                                         
Dividends from net investment income      (0.27     (0.27     (0.30     (0.33     (0.32
Distributions from net realized gains      (0.23     -       -       -       -  
Total dividends and distributions      (0.50     (0.27     (0.30     (0.33     (0.32
Net asset value, end of year      $10.15       $12.30       $12.31       $11.45       $10.79  
Total Return(b):      (13.80 )%      2.17     10.34     9.37     (1.67 )% 
                                          

 

Ratios/Supplemental Data:

 

                                        
Net assets, end of year (000)      $11       $13       $13       $20       $18  
Average net assets (000)      $12       $13       $19       $19       $12  
Ratios to average net assets(c):                                         
Expenses after waivers and/or expense reimbursement      1.05     1.05     1.05     1.05     1.05
Expenses before waivers and/or expense reimbursement      45.50     67.05     81.14     65.60     109.57
Net investment income (loss)      2.04     1.93     2.45     2.88     2.66

Portfolio turnover rate(d)

     26     61     50     71     70

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(c)

Does not include expenses of the underlying funds in which the Fund invests.

(d)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

42


 

 

Class Z Shares

 

            
      Year Ended July 31,  
      2022     2021     2020     2019     2018  
   
Per Share Operating Performance(a):                                         
Net Asset Value, Beginning of Year      $12.30       $12.31       $11.45       $10.79       $11.29  
Income (loss) from investment operations:                                         
Net investment income (loss)      0.28       0.29       0.34       0.37       0.35  
Net realized and unrealized gain (loss) on investment transactions      (1.87     0.03       0.88       0.67       (0.48
Total from investment operations      (1.59     0.32       1.22       1.04       (0.13
Less Dividends and Distributions:                                         
Dividends from net investment income      (0.32     (0.33     (0.36     (0.38     (0.37
Distributions from net realized gains      (0.23     -       -       -       -  
Total dividends and distributions      (0.55     (0.33     (0.36     (0.38     (0.37
Net asset value, end of year      $10.16       $12.30       $12.31       $11.45       $10.79  
Total Return(b):      (13.29 )%      2.68     10.89     9.92     (1.18 )% 
                                          

 

Ratios/Supplemental Data:

 

                                        
Net assets, end of year (000)      $14,150       $18,965       $26,655       $17,356       $18,247  
Average net assets (000)      $16,421       $24,059       $21,000       $16,929       $20,078  
Ratios to average net assets(c):                                         
Expenses after waivers and/or expense reimbursement      0.55     0.55     0.55     0.55     0.55
Expenses before waivers and/or expense reimbursement      1.02     1.02     1.18     1.41     1.32
Net investment income (loss)      2.50     2.43     2.91     3.39     3.12

Portfolio turnover rate(d)

     26     61     50     71     70

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(c)

Does not include expenses of the underlying funds in which the Fund invests.

(d)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

 

See Notes to Financial Statements.

PGIM Corporate Bond Fund    43


Financial Highlights  (continued)

 

 

 

Class R6 Shares

 

            
      Year Ended July 31,  
      2022     2021     2020     2019     2018  
   
Per Share Operating Performance(a):                                         
Net Asset Value, Beginning of Year      $12.30       $12.31       $11.45       $10.79       $11.29  
Income (loss) from investment operations:                                         
Net investment income (loss)      0.28       0.29       0.34       0.37       0.35  
Net realized and unrealized gain (loss) on investment transactions      (1.88     0.03       0.88       0.67       (0.48
Total from investment operations      (1.60     0.32       1.22       1.04       (0.13
Less Dividends and Distributions:                                         
Dividends from net investment income      (0.32     (0.33     (0.36     (0.38     (0.37
Distributions from net realized gains      (0.23     -       -       -       -  
Total dividends and distributions      (0.55     (0.33     (0.36     (0.38     (0.37
Net asset value, end of year      $10.15       $12.30       $12.31       $11.45       $10.79  
Total Return(b):      (13.37 )%      2.68     10.89     9.92     (1.18 )% 
                                          

 

Ratios/Supplemental Data:

 

                                        
Net assets, end of year (000)      $12,925       $15,567       $9,730       $8,778       $11  
Average net assets (000)      $14,287       $10,732       $9,091       $4,552       $11  
Ratios to average net assets(c):                                         
Expenses after waivers and/or expense reimbursement      0.55     0.55     0.55     0.55     0.55
Expenses before waivers and/or expense reimbursement      0.90     0.91     1.17     1.42     121.08
Net investment income (loss)      2.53     2.42     2.93     3.39     3.12

Portfolio turnover rate(d)

     26     61     50     71     70

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(c)

Does not include expenses of the underlying funds in which the Fund invests.

(d)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

44


Notes to Financial Statements

 

 

1.

Organization

The Target Portfolio Trust (the “Registered Investment Company” or “RIC”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The RIC is organized as a Delaware Statutory Trust. These financial statements relate only to the PGIM Corporate Bond Fund (the “Fund”), a series of the RIC. The fund is classified as a diversified fund for purposes of the 1940 Act.

The investment objective of the Fund is high current income consistent with the preservation of principal.

 

2.

Accounting Policies

The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to U.S. generally accepted accounting principles (“GAAP”). The Fund consistently follows such policies in the preparation of its financial statements.

Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. As described in further detail below, the Fund’s investments are valued daily based on a number of factors, including the type of investment and whether market quotations are readily available. The RIC’s Board of Trustees (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or the “Manager”). Pursuant to the Board’s delegation, the Manager has established a Valuation Committee responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A record of the Valuation Committee’s actions is subject to the Board’s review at its first quarterly meeting following the quarter in which such actions take place.

For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities

 

PGIM Corporate Bond Fund    45


Notes to Financial Statements (continued)

 

trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.

Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 - Fair Value Measurement.

Common or preferred stocks, exchange-traded funds and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.

Investments in open-end funds (other than exchange-traded funds) are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.

Fixed income securities traded in the OTC market are generally classified as Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors’ valuation techniques used to derive the evaluated bid price are based on evaluating observable inputs, including but not limited to, yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations and reported trades. Certain Level 3 securities are also valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.

Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be

 

 

46


    

 

classified as Level 3 in the fair value hierarchy. Altering one or more unobservable inputs may result in a significant change to a Level 3 security’s fair value measurement.

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the Manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.

Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:

(i) market value of investment securities, other assets and liabilities — at the exchange rate as of the valuation date;

(ii) purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period unrealized and realized foreign currency gains (losses) are included in the reported net change in unrealized appreciation (depreciation) on investments and net realized gains (losses) on investment transactions on the Statements of Operations.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.

Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker

 

 

PGIM Corporate Bond Fund    47


Notes to Financial Statements (continued)

 

an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin.” Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on futures transactions.

The Fund invested in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates. Should interest rates move unexpectedly, the Fund 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. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Such class specific expenses and waivers include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.

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 and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.

 

 

 

48


    

 

Dividends and Distributions: Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess of par, as appropriate. The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.

 

 Expected Distribution Schedule to Shareholders*    Frequency

 Net Investment Income

   Monthly

 Short-Term Capital Gains

   Annually

 Long-Term Capital Gains

   Annually

 

*

Under certain circumstances, the Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year.

Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

 

3.

Agreements

The RIC, on behalf of the Fund, has a management agreement with the Manager. Pursuant to this agreement, the Manager has responsibility for all investment advisory services and supervises the subadviser’s performance of such services.

The Manager has entered into subadvisory agreements with PGIM, Inc., which provides subadvisory services to the Fund through its business unit PGIM Fixed Income, and PGIM Limited (collectively the “subadviser”). The Manager pays for the services of the subadviser.

Fees payable under the management agreement are computed daily and paid monthly. For the reporting period ended July 31, 2022, the contractual and effective management fee rates were as follows:

 

 Contractual Management Rate   

Effective Management Fee, before any waivers

and/or expense reimbursements

 0.45% of average daily net assets up to and including $5 billion;

   0.45%

 0.425% of average daily net assets exceeding $5 billion.

    

The Manager has contractually agreed, through November 30, 2023, to limit total annual operating expenses after fee waivers and/or expense reimbursements. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales.

 

 

PGIM Corporate Bond Fund    49


Notes to Financial Statements  (continued)

 

Where applicable, the Manager agrees to waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class. In addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The expense limitations attributable to each class are as follows:

 

   
  Class   

Expense

Limitations 

A

       0.80 %

C

       1.55

R

       1.05

Z

       0.55

R6

       0.55

The RIC, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class R, Class Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class C and Class R shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate based on average daily net assets per class. The distribution fees are accrued daily and payable monthly.

The Fund’s annual gross and net distribution rate, where applicable, are as follows:

 

     
  Class    Gross Distribution Fee   Net Distribution Fee 

A

       0.25 %       0.25 %

C

       1.00       1.00

R

       0.75       0.50

Z

       N/A       N/A

R6

       N/A       N/A

For the year ended July 31, 2022, PIMS received front-end sales charges (“FESL”) resulting from sales of certain class shares and contingent deferred sales charges (“CDSC”) imposed upon redemptions by certain shareholders. From these fees, PIMS paid such sales charges

 

 

50


to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs. The sales charges are as follows where applicable:

 

     
 Class    FESL      CDSC  

 A

   $ 5,563        $    1  

 C

            156  

PGIM Investments, PGIM, Inc., PGIM Limited and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

 

4.

Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.

The Fund may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), a fund of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services to the Core Fund. In addition to the realized and unrealized gains on investments in the Core Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income”. Effective January 2022, the Fund changed its overnight cash sweep vehicle from the Core Fund to an unaffiliated money market fund.

The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the year ended July 31, 2022, no 17a-7 transactions were entered into by the Fund.

 

5.

Portfolio Securities

The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended July 31, 2022, were as follows:

 

   
Cost of Purchases    Proceeds from Sales                                             

$10,076,891

   $12,990,979                                             

A summary of the cost of purchases and proceeds from sales of shares of an affiliated mutual fund for the year ended July 31, 2022, is presented as follows:

 

PGIM Corporate Bond Fund    51


Notes to Financial Statements (continued)

 

 

               
Value,
Beginning
of Year
  Cost of
Purchases
    Proceeds
from Sales
    Change in
Unrealized
Gain
(Loss)
  Realized
Gain
(Loss)
  Value,
End of Year
  Shares,
End
of Year
  Income
 Short-Term Investments - Affiliated Mutual Fund:     

 PGIM Core Ultra Short Bond Fund(1)(wb)

 $401,336   $ 5,459,736     $ 5,861,072     $—   $—   $—     $364

 

(1)

 The Fund did not have any capital gain distributions during the reporting period.

(wb)

 PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Core Ultra Short Bond Fund.

 

6.

Distributions and Tax Information

Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date.

For the year ended July 31, 2022, the tax character of dividends paid by the Fund were $1,095,805 of ordinary income and $765,544 of long-term capital gains. For the year ended July 31, 2021, the tax character of dividends paid by the Fund was $1,137,122 of ordinary income.

As of July 31, 2022, the accumulated undistributed earnings on a tax basis was $77,394 of ordinary income.

The United States federal income tax basis of the Fund’s investments and the net unrealized depreciation as of July 31, 2022 were as follows:

 

       
  Tax Basis    Gross
Unrealized
Appreciation
   Gross
Unrealized
Depreciation
  Net
Unrealized
Depreciation 
 $39,129,289    $80,962    $(3,988,341)   $(3,907,379)

The differences between GAAP basis and tax basis were primarily attributable to the differences in the treatment of premium amortization for GAAP and tax purposes and other GAAP to tax differences.

The Fund elected to treat post-October capital losses of approximately $181,000 as having been incurred in the following fiscal year (July 31, 2023).

The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax

 

 

52


    

 

authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended July 31, 2022 are subject to such review.

 

7.

Capital and Ownership

The Fund offers Class A, Class C, Class R, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 3.25%. Investors who purchase $500,000 or more of Class A shares and sell those shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1.00% on sales although these purchases are not subject to a front-end sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. 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 CDSC of 1% on sales made within 12 months of purchase. Class C shares will automatically convert to Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class R shares are available to certain retirement plans, clearing and settlement firms. Class R, Class Z and Class R6 shares are not subject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.

Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest, below.

The RIC has authorized an unlimited number of shares of beneficial interest of the Fund at $0.001 par value per share.

As of July 31, 2022, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:

 

     
 Class    Number of Shares    Percentage of Outstanding Shares

R

       1,124        100.0 %

Z

       161        0.1

R6

       852,728        67.0

At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:

 

     
      Number of Shareholders    Percentage of Outstanding Shares

Affiliated

       1        24.2 %

Unaffiliated

       4        64.4

 

PGIM Corporate Bond Fund    53


Notes to Financial Statements (continued)

 

Transactions in shares of beneficial interest were as follows:

 

     

Share Class

     Shares       Amount  

Class A

                

Year ended July 31, 2022:

                

Shares sold

     281,364     $ 3,214,051  

Shares issued in reinvestment of dividends and distributions

     29,127       329,258  

Shares purchased

     (140,698     (1,549,962

Net increase (decrease) in shares outstanding before conversion

     169,793       1,993,347  

Shares issued upon conversion from other share class(es)

     13,058       147,576  

Net increase (decrease) in shares outstanding

     182,851     $ 2,140,923  

Year ended July 31, 2021:

                

Shares sold

     333,625     $ 4,067,339  

Shares issued in reinvestment of dividends and distributions

     13,312       161,788  

Shares purchased

     (177,567     (2,146,115

Net increase (decrease) in shares outstanding before conversion

     169,370       2,083,012  

Shares issued upon conversion from other share class(es)

     7,728       93,270  

Shares purchased upon conversion into other share class(es)

     (17,952     (218,992

Net increase (decrease) in shares outstanding

     159,146     $ 1,957,290  

Class C

                

Year ended July 31, 2022:

                

Shares sold

     4,758     $ 56,004  

Shares issued in reinvestment of dividends and distributions

     4,314       49,395  

Shares purchased

     (44,406     (502,194

Net increase (decrease) in shares outstanding before conversion

     (35,334     (396,795

Shares purchased upon conversion into other share class(es)

     (7,053     (84,984

Net increase (decrease) in shares outstanding

     (42,387   $ (481,779

Year ended July 31, 2021:

                

Shares sold

     26,096     $ 315,873  

Shares issued in reinvestment of dividends and distributions

     2,459       29,818  

Shares purchased

     (30,228     (366,914

Net increase (decrease) in shares outstanding before conversion

     (1,673     (21,223

Shares purchased upon conversion into other share class(es)

     (7,677     (93,397

Net increase (decrease) in shares outstanding

     (9,350   $ (114,620

Class R

                

Year ended July 31, 2022:

                

Shares issued in reinvestment of dividends and distributions

     47     $ 545  

Net increase (decrease) in shares outstanding

     47     $ 545  

 

 

54


    

 

     
Share Class    Shares     Amount  

Year ended July 31, 2021:

                

Shares issued in reinvestment of dividends and distributions

     24     $ 288  

Net increase (decrease) in shares outstanding

     24     $ 288  

Class Z

                

Year ended July 31, 2022:

                

Shares sold

     598,589     $ 6,778,032  

Shares issued in reinvestment of dividends and distributions

     67,257       767,208  

Shares purchased

     (807,839     (9,380,870

Net increase (decrease) in shares outstanding before conversion

     (141,993     (1,835,630

Shares purchased upon conversion into other share class(es)

     (6,036     (62,592

Net increase (decrease) in shares outstanding

     (148,029   $ (1,898,222

Year ended July 31, 2021:

                

Shares sold

     1,510,097     $ 18,369,097  

Shares issued in reinvestment of dividends and distributions

     53,559       649,487  

Shares purchased

     (1,761,864     (21,434,780

Net increase (decrease) in shares outstanding before conversion

     (198,208     (2,416,196

Shares issued upon conversion from other share class(es)

     23,319       283,740  

Shares purchased upon conversion into other share class(es)

     (449,168     (5,376,610

Net increase (decrease) in shares outstanding

     (624,057   $ (7,509,066

Class R6

                

Year ended July 31, 2022:

                

Shares sold

     112,660     $ 1,255,948  

Shares issued in reinvestment of dividends and distributions

     62,070       704,732  

Shares purchased

     (167,228     (1,864,816

Net increase (decrease) in shares outstanding

     7,502     $ 95,864  

Year ended July 31, 2021:

                

Shares sold

     21,589     $ 261,017  

Shares issued in reinvestment of dividends and distributions

     23,979       290,989  

Shares purchased

     (14,551     (176,608

Net increase (decrease) in shares outstanding before conversion

     31,017       375,398  

Shares issued upon conversion from other share class(es)

     444,146       5,311,989  

Net increase (decrease) in shares outstanding

     475,163     $ 5,687,387  

 

8.

Borrowings

The RIC, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary

 

PGIM Corporate Bond Fund    55


Notes to Financial Statements (continued)

 

funding for capital share redemptions. The table below provides details of the current SCA in effect at the reporting period-end as well as the prior SCA.

 

     
      Current SCA    Prior SCA
Term of Commitment    10/1/2021 – 9/29/2022    10/2/2020 – 9/30/2021
Total Commitment    $ 1,200,000,000    $ 1,200,000,000
Annualized Commitment Fee on the Unused Portion of the SCA    0.15%    0.15%
Annualized Interest Rate on Borrowings    1.20% plus the higher of (1) the effective federal funds rate, (2) the one-month LIBOR rate or (3) zero percent    1.30% plus the higher of (1) the effective federal funds rate, (2) the one-month LIBOR rate or (3) zero percent

Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Participating Funds in the SCA equitably.

The Fund utilized the SCA during the year ended July 31, 2022. The average daily balance for the 7 days that the Fund had loans outstanding during the period was $723,857, borrowed at a weighted average interest rate of 1.30%. The maximum loan balance outstanding during the period was $2,373,000. At July 31, 2022, the Fund did not have an outstanding loan balance.

 

9.

Risks of Investing in the Fund

The Fund’s risks include, but are not limited to, some or all of the risks discussed below. For further information on the Fund’s risks, please refer to the Fund’s Prospectus and Statement of Additional Information.

Active Trading Risk: The Fund actively and frequently trades its portfolio securities. High portfolio turnover results in higher transaction costs, which can affect the Fund’s performance and have adverse tax consequences. In addition, high portfolio turnover may also mean that a proportionately greater amount of distributions to shareholders will be taxed as ordinary income rather than long-term capital gains compared to investment companies with lower portfolio turnover.

 

 

56


    

 

Bond Obligations Risk: As with credit risk, market risk and interest rate risk, the Fund’s holdings, share price, yield and total return may fluctuate in response to bond market movements. The value of bonds may decline for issuer-related reasons, including management performance, financial leverage and reduced demand for the issuer’s goods and services. Certain types of fixed income obligations also may be subject to “call and redemption risk,” which is the risk that the issuer may call a bond held by the Fund for redemption before it matures and the Fund may lose income.

Credit Risk: This is the risk that the issuer, the guarantor or the insurer of a fixed income security, or the counterparty to a contract, may be unable or unwilling to make timely principal and interest payments, or to otherwise honor its obligations. Additionally, fixed income securities could lose value due to a loss of confidence in the ability of the issuer, guarantor, insurer or counterparty to pay back debt. The lower the credit quality of a bond, the more sensitive it is to credit risk.

Economic and Market Events Risk: Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth or the functioning of the securities markets, may at times result in unusually high market volatility, which could negatively impact performance. Relatively reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.

Emerging Markets Risk: The risks of foreign investments are greater for investments in or exposed to emerging markets. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable, than those of more developed countries. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Low trading volumes may result in a lack of liquidity and price volatility. Emerging market countries may have policies that restrict investment by non-U.S. investors, or that prevent non-U.S. investors from withdrawing their money at will.

The Fund may invest in some emerging markets that subject it to risks such as those associated with illiquidity, custody of assets, different settlement and clearance procedures and asserting legal title under a developing legal and regulatory regime to a greater degree than in developed markets or even in other emerging markets.

Foreign Securities Risk: Investments in securities of non-U.S. issuers (including those denominated in U.S. dollars) may involve more risk than investing in securities of U.S. issuers. Foreign political, economic and legal systems, especially those in developing and emerging market countries, may be less stable and more volatile than in the United States. Foreign legal systems generally have fewer regulatory requirements than the U.S. legal system, particularly those of emerging markets. In general, less information is publicly available with respect to non-U.S. companies than U.S. companies. Non-U.S. companies generally are not subject to the same accounting, auditing, and financial reporting standards as are U.S. companies. Additionally, the changing value of foreign currencies and changes

 

PGIM Corporate Bond Fund    57


Notes to Financial Statements (continued)

 

in exchange rates could also affect the value of the assets the Fund holds and the Fund’s performance. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.

Investments in emerging markets are subject to greater volatility and price declines.

In addition, the Fund’s investments in non-U.S. securities may be subject to the risks of nationalization or expropriation of assets, imposition of currency exchange controls or restrictions on the repatriation of non-U.S. currency, confiscatory taxation and adverse diplomatic developments. Special U.S. tax considerations may apply.

Increase in Expenses Risk: Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table in the Fund’s prospectus for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.

Interest Rate Risk: The value of your investment may go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration debt securities. For example, a fixed income security with a duration of three years is expected to decrease in value by approximately 3% if interest rates increase by 1%. This is referred to as “duration risk.” When interest rates fall, the issuers of debt obligations may prepay principal more quickly than expected, and the Fund may be required to reinvest the proceeds at a lower interest rate. This is referred to as “prepayment risk.” When interest rates rise, debt obligations may be repaid more slowly than expected, and the value of the Fund’s holdings may fall sharply. This is referred to as “extension risk.” The Fund may lose money if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.

Junk Bonds Risk: High-yield, high-risk bonds have predominantly speculative characteristics, including particularly high credit risk. Junk bonds tend to have lower market liquidity than higher-rated securities. The liquidity of particular issuers or industries within a particular investment category may shrink or disappear suddenly and without warning. The non-investment grade bond market can experience sudden and sharp price swings and become illiquid due to a variety of factors, including changes in economic forecasts, stock market activity, large sustained sales by major investors, a high profile default or a change in the market’s psychology.

Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its

 

 

58


    

 

affiliates, may from time to time own or control a substantial amount of the Fund’s shares. There is no requirement that these entities maintain their investment in the Fund. There is a risk that such large shareholders or that the Fund’s shareholders generally may redeem all or a substantial portion of their investments in the Fund in a short period of time, which could have a significant negative impact on the Fund’s NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Fund’s ability to implement its investment strategy. The Fund’s ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.

LIBOR Risk: Many financial instruments use or may use a floating rate based on the London Interbank Offered Rate, or “LIBOR,” which is the offered rate for short-term Eurodollar deposits between major international banks. Over the course of the last several years, global regulators have indicated an intent to phase out the use of LIBOR and similar interbank offering rates (“IBOR”). There still remains uncertainty regarding the nature of any replacement rates for LIBOR and the other IBORs as well as around fallback approaches for instruments extending beyond the any phase-out of these reference rates. The lack of consensus around replacement rates and the uncertainty of the phase out of LIBOR and other IBORs may result in increased volatility in corporate or governmental debt, floating rate and other loans, derivatives and other instruments invested in by the Fund as well as loan facilities used by the Fund.

The potential effect of a transition away from LIBOR on the Fund or the financial instruments in which the Fund invests cannot yet be determined. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect the Fund’s performance and/or net asset value. Certain proposed replacement rates to LIBOR, such as the Secured Overnight Financing Rate (“SOFR”), are materially different from LIBOR, and changes in the applicable spread for instruments previously linked to LIBOR will need to be made in order for instruments to pay similar rates. Uncertainty and risk also remain regarding the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently, the transition away from LIBOR to other reference rates may lead to reduced coupons on debt held by the Fund, higher rates required to be paid by the Fund on bank lines of credit due to increases in spreads, increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, adversely affecting the Fund’s performance. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Because the usefulness of LIBOR and the other IBORs as benchmarks could deteriorate during the transition period, these effects could be experienced until the anticipated discontinuance date in 2023 for the majority of the LIBOR rates.

 

PGIM Corporate Bond Fund    59


Notes to Financial Statements (continued)

 

Liquidity Risk: Liquidity risk is the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. The Fund may invest in instruments that trade in lower volumes and are more illiquid than other investments. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments cannot be readily sold at the desired time or price, the Fund may have to accept a lower price or may not be able to sell the instrument at all. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.

Management Risk: The value of your investment may decrease if judgments by the subadviser about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements are incorrect.

Market Disruption and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or conflicts (including Russia’s military invasion of Ukraine), geopolitical developments (including trading and tariff arrangements, sanctions and cybersecurity attacks), instability in regions such as Asia, Eastern Europe and the Middle East, terrorism, natural disasters and public health epidemics (including the outbreak of COVID-19 globally).

The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long-term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain securities held by the Fund could be significantly impacted, which could lead to such securities being valued at zero.

COVID-19 and the related governmental and public responses have had and may continue to have an impact on the Fund’s investments and net asset value and have led and may continue to lead to increased market volatility and the potential for illiquidity in certain classes of securities and sectors of the market. They have also had and may continue to result in periods of business disruption, business closures, inability to obtain raw materials, supplies and component parts, and reduced or disrupted operations for the issuers in which

 

 

60


    

 

the Fund invests. The occurrence, reoccurrence and pendency of public health epidemics could adversely affect the economies and financial markets either in specific countries or worldwide.

Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.

Mortgage-Backed and Asset-Backed Securities Risk: Mortgage-backed and asset-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to similar risk of decline in market value during periods of rising interest rates. The values of mortgage-backed and asset-backed securities become more volatile as interest rates rise. In a period of declining interest rates, the Fund may be required to reinvest more frequent prepayments on mortgage-backed and asset-backed securities in lower-yielding investments.

U.S. Government and Agency Securities Risk: U.S. Government and agency securities are subject to market risk, interest rate risk and credit risk. Not all U.S. Government securities are insured or guaranteed by the full faith and credit of the U.S. Government; some are only insured or guaranteed by the issuing agency, which must rely on its own resources to repay the debt. Some agency securities carry no guarantee whatsoever and the risk of default associated with these securities would be borne by the Fund. The maximum potential liability of the issuers of some U.S. Government securities held by the Fund may greatly exceed their current resources, including their legal right to support from the U.S. Treasury. No assurance can be given that the U.S. government would provide financial support to any such issuers if it is not obligated to do so by law. It is possible that these issuers will not have the funds to meet their payment obligations in the future. In addition, the value of U.S. Government securities may be affected by changes in the credit rating of the U.S. Government.

 

10.

Recent Accounting Pronouncement and Regulatory Developments

In March 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-04, which provides optional guidance for applying GAAP to contract modifications, hedging relationships and other transactions affected by the reference rate reform if certain criteria are met. ASU 2020-04 is elective and is effective on March 12, 2020 through December 31, 2022. Management does not expect ASU 2020-04 to have a material impact on the financial statements.

 

 

PGIM Corporate Bond Fund    61


Report of Independent Registered Public Accounting Firm

 

To the Board of Trustees of The Target Portfolio Trust and Shareholders of PGIM Corporate Bond Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Corporate Bond Fund (one of the funds constituting The Target Portfolio Trust, referred to hereafter as the “Fund”) as of July 31, 2022, the related statement of operations for the year ended July 31, 2022, the statements of changes in net assets for each of the two years in the period ended July 31, 2022, including the related notes, and the financial highlights for each of the two years in the period ended July 31, 2022 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2022, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period ended July 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Fund as of and for the year ended July 31, 2020 and the financial highlights for each of the periods ended on or prior to July 31, 2020 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated September 16, 2020 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2022 by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP

New York, New York

September 16, 2022

We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.

 

 

62


Tax Information  (unaudited)

 

We are advising you that during the fiscal year ended July 31, 2022, the Fund reported the maximum amount allowed per share but not less than $.23 per share for Class A, C, R, Z and R6 shares as a capital gain distribution in accordance with Section 852(b)(3)(C) of the Internal Revenue Code.

For the tax year ended July 31, 2022, the Fund reports 86.06% as interest-related dividends in accordance with Sections 871(k)(1) and 881(e)(1) of the Internal Revenue Code.

In January 2023, you will be advised on IRS Form 1099-DIV or substitute Form 1099-DIV, as to the Federal tax status of the distributions received by you in calendar year 2022.

 

 

PGIM Corporate Bond Fund    63


Liquidity Risk Management Program  (unaudited)

 

Consistent with Rule 22e-4 under the 1940 Act (the “Liquidity Rule”), the Fund has adopted and implemented a liquidity risk management program (the “LRMP”). The Fund’s LRMP seeks to assess and manage the Fund’s liquidity risk, which is defined as the risk that the Fund is unable to meet investor redemption requests without significantly diluting the remaining investors’ interests in the Fund. The Board has approved PGIM Investments LLC (“PGIM Investments”), the Fund’s investment manager, to serve as the administrator of the Fund’s LRMP. As part of its responsibilities as administrator, PGIM Investments has retained a third party to perform certain functions, including providing market data and liquidity classification model information.

The Fund’s LRMP includes a number of processes designed to support the assessment and management of its liquidity risk. In particular, the Fund’s LRMP includes no less than annual assessments of factors that influence the Fund’s liquidity risk; no less than monthly classifications of the Fund’s investments into one of four liquidity classifications provided for in the Liquidity Rule; a 15% of net assets limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); establishment of a minimum percentage of the Fund’s assets to be invested in investments classified as “highly liquid” (as defined under the Liquidity Rule) if the Fund does not invest primarily in highly liquid investments; and regular reporting to the Board.

At a meeting of the Board on March 1-3, 2022, PGIM Investments provided a written report (“LRMP Report”) to the Board addressing the operation, adequacy, and effectiveness of the Fund’s LRMP, including any material changes to the LRMP for the period from January 1, 2021 through December 31, 2021 (“Reporting Period”). The LRMP Report concluded that the Fund’s LRMP was reasonably designed to assess and manage the Fund’s liquidity risk and was adequately and effectively implemented during the Reporting Period. There were no material changes to the LRMP during the Reporting Period. The LRMP Report further concluded that the Fund’s investment strategies continue to be appropriate given the Fund’s status as an open-end fund.

There can be no assurance that the LRMP will achieve its objectives in the future. Additional information regarding risks of investing in the Fund, including liquidity risks presented by the Fund’s investment portfolio, is found in the Fund’s Prospectus and Statement of Additional Information.

 

 

PGIM Corporate Bond Fund


INFORMATION ABOUT BOARD MEMBERS AND OFFICERS (unaudited)

 

Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.

 

     
Independent Board Members            
     

Name

Year of Birth

Position(s)

Portfolios Overseen

   Principal Occupation(s) During Past
Five Years
   Other Directorships Held During Past
Five Years
   Length of
Board Service
       

Ellen S. Alberding

1958

Board Member

Portfolios Overseen: 97

   President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); formerly Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018).    None.    Since September 2013
     

Kevin J. Bannon

1952

Board Member

Portfolios Overseen: 97

   Retired; formerly Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.    Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).    Since July 2008

 

PGIM Corporate Bond Fund


    

 

     
Independent Board Members            
     

Name

Year of Birth

Position(s)

Portfolios Overseen

   Principal Occupation(s) During Past
Five Years
   Other Directorships Held During Past
Five Years
   Length of
Board Service
       

Linda W. Bynoe

1952

Board Member

Portfolios Overseen: 94

   President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Limited LLC (formerly Telemat Ltd) (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer).    Trustee of Equity Residential (residential real estate) (since December 2009); Director of Northern Trust Corporation (financial services) (since April 2006); formerly Director of Anixter International, Inc. (communication products distributor) (January 2006-June 2020).    Since March 2005
     

Barry H. Evans

1960

Board Member

Portfolios Overseen: 96

   Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer - Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management (asset management).    Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).    Since September 2017
     

Keith F. Hartstein

1956

Board Member

& Independent Chair Portfolios Overseen: 97

   Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); formerly Executive Committee of the IDC Board of Governors (October 2019-December 2021); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).    None.    Since September 2013

 

 

Visit our website at pgim.com/investments


    

 

     
Independent Board Members            
     

Name

Year of Birth

Position(s)

Portfolios Overseen

   Principal Occupation(s) During Past
Five Years
   Other Directorships Held During Past
Five Years
   Length of
Board Service
       

Laurie Simon Hodrick

1962

Board Member

Portfolios Overseen: 93

   A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly Visiting Professor of Law, Stanford Law School (2015-2021); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008).    Independent Director, Andela (since January 2022) (global talent network); Independent Director, Roku (since December 2020) (communication services); formerly Independent Director, Synnex Corporation (2019-2021) (information technology); formerly Independent Director, Kabbage, Inc. (2018-2020) (financial services); formerly Independent Director, Corporate Capital Trust (2017-2018) (a business development company).    Since September 2017
     

Brian K. Reid

1961

Board Member

Portfolios Overseen: 96

   Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017).    None.    Since March 2018

 

PGIM Corporate Bond Fund


    

 

     
Independent Board Members            
     

Name

Year of Birth

Position(s)

Portfolios Overseen

   Principal Occupation(s) During Past
Five Years
   Other Directorships Held During Past
Five Years
   Length of
Board Service
       

Grace C. Torres

1959

Board Member

Portfolios Overseen: 96

   Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.    Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank; formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank.    Since November 2014

 

 

     
Interested Board Members            
     

Name

Year of Birth

Position(s)

Portfolios Overseen

   Principal Occupation(s) During Past
Five Years
   Other Directorships Held During Past
Five Years
   Length of
Board Service
       

Stuart S. Parker

1962

Board Member & President

Portfolios Overseen: 96

   President, Chief Executive Officer, Chief Operating Officer and Officer in Charge of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); President and PEO (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011); Investment Company Institute - Board of Governors (since May 2012).    None.    Since January 2012

 

Visit our website at pgim.com/investments


    

 

     
Interested Board Members            
     

Name

Year of Birth

Position(s)

Portfolios Overseen

   Principal Occupation(s) During Past
Five Years
   Other Directorships Held During Past
Five Years
   Length of
Board Service
       

Scott E. Benjamin

1973

Board Member & Vice President

Portfolios Overseen: 97

   Executive Vice President (since May 2009) of PGIM Investments LLC; Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006).    None.    Since March 2010

 

 

 

   
Fund Officers(a)      
   

Name

Year of Birth

Fund Position

   Principal Occupation(s) During Past Five Years   

Length of

Service as Fund

Officer

     

Claudia DiGiacomo

1974

Chief Legal Officer

   Chief Legal Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Chief Legal Officer, Executive Vice President and Secretary of PGIM Investments LLC (since August 2020); Chief Legal Officer of Prudential Mutual Fund Services LLC (since August 2020); Chief Legal Officer of PIFM Holdco, LLC (since August 2020); Vice President and Corporate Counsel (since January 2005) of Prudential; and Corporate Counsel of AST Investment Services, Inc. (since August 2020); formerly Vice President and Assistant Secretary of PGIM Investments LLC (2005-2020); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004).    Since December 2005

 

PGIM Corporate Bond Fund


    

 

   
Fund Officers(a)      
   

Name

Year of Birth

Fund Position

   Principal Occupation(s) During Past Five Years   

Length of

Service as Fund

Officer

     

Isabelle Sajous

1976

Chief Compliance Officer

   Chief Compliance Officer (since April 2022) of PGIM Investments LLC, the PGIM Funds, Target Funds, PGIM ETF Trust, PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, Advanced Series Trust, The Prudential Series Fund and Prudential’s Gibraltar Fund, Inc.; Chief Compliance Officer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; Vice President, Compliance of PGIM Investments LLC (since December 2020); formerly Director, Compliance (July 2018-December 2020) of Credit Suisse Asset Management LLC; and Vice President, Associate General Counsel & Deputy Chief Compliance Officer of Cramer Rosenthal McGlynn, LLC (August 2014-July 2018).    Since April 2022
   

Andrew R. French

1962

Secretary

   Vice President (since December 2018) of PGIM Investments LLC; Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President and Corporate Counsel (2010-2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.    Since October 2006
   

Melissa Gonzalez

1980

Assistant Secretary

   Vice President and Corporate Counsel (since September 2018) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director and Corporate Counsel (March 2014-September 2018) of Prudential.    Since March 2020
   

Patrick E. McGuinness

1986

Assistant Secretary

   Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Director and Corporate Counsel (since February 2017) of Prudential; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.    Since June 2020
   

Debra Rubano

1975

Assistant Secretary

   Vice President and Corporate Counsel (since November 2020) of Prudential; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc; formerly Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary of numerous funds in the Allianz fund complex (2015-2020).    Since December 2020
   

Kelly A. Coyne

1968

Assistant Secretary

   Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010); Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.    Since March 2015

 

Visit our website at pgim.com/investments


    

 

   

Fund Officers(a)

 

     
   

Name

Year of Birth

Fund Position

   Principal Occupation(s) During Past Five Years   

Length of

Service as Fund

Officer

     

Christian J. Kelly

1975

Treasurer and Principal Financial and Accounting Officer

   Vice President, Head of Fund Administration of PGIM Investments LLC (since November 2018); Principal Financial Officer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly, Treasurer and Principal Accounting Officer (March 2022- July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007).    Since January 2019
   

Lana Lomuti

1967

Assistant Treasurer

   Vice President (since 2007) and Director (2005-2007), within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.    Since April 2014
   

Russ Shupak

1973

Assistant Treasurer

   Vice President (since 2017) and Director (2013-2017), within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Assistant Treasurer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.    Since October 2019
   

Deborah Conway

1969

Assistant Treasurer

   Vice President (since 2017) and Director (2007-2017), within PGIM Investments Fund Administration.    Since October 2019
   

Elyse M. McLaughlin

1974

Assistant Treasurer

   Vice President (since 2017) and Director (2011-2017), within PGIM Investments Fund Administration; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.    Since October 2019
   

Kelly Florio

1978

Anti-Money Laundering Compliance Officer

   Vice President, Corporate Compliance, Global Compliance Programs and Compliance Risk Management (since December 2021) of Prudential; formerly, Head of Fraud Risk Management (October 2019 to December 2021) at New York Life Insurance Company; formerly, Head of Key Risk Area Operations (November 2018 to October 2019), Director of the US Anti-Money Laundering Compliance Unit (2009-2018) and Bank Loss Prevention Associate (2006 -2009) at MetLife.    Since June 2022

(a) Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.

Explanatory Notes to Tables:

 

Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC.

 

Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410.

 

There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75.

 

PGIM Corporate Bond Fund


    

 

“Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.

 

“Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Mutual Funds, Target Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM Private Real Estate Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

 

As used in the Fund Officers table “Prudential” means The Prudential Insurance Company of America.

 

Visit our website at pgim.com/investments


Approval of Advisory Agreements (unaudited)

 

The Fund’s Board of Trustees

The Board of Trustees (the “Board”) of PGIM Corporate Bond Fund (the “Fund”)1 consists of ten individuals, eight of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Trustee. The Board has established five standing committees: the Audit Committee, the Nominating and Governance Committee, the Compliance Committee and two Investment Committees. Each committee is chaired by, and composed of, Independent Trustees.

Annual Approval of the Fund’s Advisory Agreements

As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with PGIM, Inc. (“PGIM”) on behalf of its PGIM Fixed Income unit (“PGIM Fixed Income”) and PGIM Limited (“PGIML”). In considering the renewal of the agreements, the Board, including all of the Independent Trustees, met on May 26 and June 7-9, 2022 (the “Board Meeting”) and approved the renewal of the agreements through July 31, 2023, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.

In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments and PGIM. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.

In approving the agreements, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadvisers, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Trustees did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the Board Meeting.

 

1PGIM Corporate Bond Fund is a series of The Target Portfolio Trust.

 

PGIM Corporate Bond Fund


Approval of Advisory Agreements (continued)

 

The Trustees determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a management agreement, and between PGIM Investments, PGIML and PGIM, through its PGIM Fixed Income unit, which serve as the Fund’s subadvisers pursuant to the terms of a subadvisory agreement with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Trustees considered relevant in the exercise of their business judgment.

The material factors and conclusions that formed the basis for the Trustees’ reaching their determinations to approve the continuance of the agreements are separately discussed below.

Nature, Quality, and Extent of Services

The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments, PGIM Fixed Income and PGIML. The Board noted that PGIM Fixed Income and PGIML are affiliated with PGIM

Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadvisers for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadvisers, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadvisers. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Trustees of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by PGIM Fixed Income and PGIML, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadvisers, as well as PGIM Investments’ recommendation, based on its review of the subadvisers, to renew the subadvisory agreement.

The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund PGIM Fixed Income and PGIML, and also considered the qualifications, backgrounds and responsibilities of PGIM Fixed Income’s and PGIML’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’, PGIM Fixed Income’s and PGIML’s organizational structure, senior management, investment operations, and other relevant information pertaining to PGIM Investments, PGIM Fixed Income and PGIML.

 

Visit our website at pgim.com/investments


    

 

The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to PGIM Investments, PGIM Fixed Income and PGIML.

The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by PGIM Fixed Income and PGIML, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments, PGIM Fixed Income and PGIML under the management and subadvisory agreements.

Costs of Services and Profits Realized by PGIM Investments

The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.

Economies of Scale

The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale can be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.

The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.

 

PGIM Corporate Bond Fund


Approval of Advisory Agreements (continued)

 

Other Benefits to PGIM Investments, PGIM Fixed Income and PGIML

The Board considered potential ancillary benefits that might be received by PGIM Investments, PGIM Fixed Income, PGIML and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent (which is affiliated with PGIM Investments), as well as benefits to its reputation or other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by PGIM Fixed Income and PGIML included those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits derived by PGIM Investments, PGIM Fixed Income and PGIML were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.

Performance of the Fund / Fees and Expenses

The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one-, three-, five- and ten-year periods ended December 31, 2021.

The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended July 31, 2021. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.

The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider expenses and fees, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information, for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).

The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.

 

Visit our website at pgim.com/investments


    

 

  Net Performance   1 Year   3 Years   5 Years   10 Years
    2nd Quartile   3rd Quartile   3rd Quartile   3rd Quartile
  Actual Management Fees: 1st Quartile
Net Total Expenses: 2nd Quartile

 

 

The Board noted that the Fund outperformed its benchmark index over the one-and three-year periods, and underperformed over the five- and ten-year periods.

 

 

The Board and PGIM Investments agreed to retain the Fund’s existing contractual expense cap, which (exclusive of certain fees and expenses) caps total annual operating expenses at 0.80% for Class A shares, 1.55% for Class C shares, 0.55% for Class R6 shares, 1.05% for Class R shares, and 0.55% for Class Z shares through November 30, 2022.

 

 

In addition, PGIM Investments will waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class, and has agreed that total annual fund operating expenses for Class R6 shares will not exceed total annual fund operating expenses for Class Z shares.

 

 

The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements.

 

 

The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided.

* * *

After full consideration of these factors, the Board concluded that the approval of the agreements was in the best interests of the Fund and its shareholders.

 

PGIM Corporate Bond Fund


   MAIL    TELEPHONE    WEBSITE
      655 Broad Street        (800) 225-1852        pgim.com/investments
      Newark, NJ 07102          

 

PROXY VOTING

 

 

The Board of Trustees has of the Fund has delegated to the Fund’s subadvisers the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website.

 

TRUSTEES

 

 

Ellen S. Alberding Kevin J. Bannon Scott E. Benjamin Linda W. Bynoe Barry H. Evans Keith F. Hartstein Laurie Simon Hodrick Stuart S. Parker Brian K. Reid Grace C. Torres

 

OFFICERS

 

 

Stuart S. Parker, President Scott E. Benjamin, Vice President Christian J. Kelly, Treasurer and Principal Financial and Accounting Officer Claudia DiGiacomo, Chief Legal Officer Isabelle Sajous, Chief Compliance Officer Kelly Florio, Anti-Money Laundering Compliance Officer Andrew R. French, Secretary Melissa Gonzalez, Assistant Secretary Kelly A. Coyne, Assistant Secretary Patrick E. McGuinness, Assistant Secretary Debra Rubano, Assistant Secretary Lana Lomuti, Assistant Treasurer Russ Shupak, Assistant Treasurer Elyse M. McLaughlin, Assistant Treasurer  Deborah Conway, Assistant Treasurer

 

MANAGER    PGIM Investments LLC    655 Broad Street
         

Newark, NJ 07102

 

SUBADVISERS    PGIM Fixed Income    655 Broad Street
      Newark, NJ 07102
   PGIM Limited    Grand Buildings, 1-3 Strand
      Trafalgar Square
      London, WC2N 5HR
         

United Kingdom

 

DISTRIBUTOR   

Prudential Investment

Management Services LLC

  

655 Broad Street

Newark, NJ 07102

 

CUSTODIAN    The Bank of New York    240 Greenwich Street
    

Mellon

 

  

New York, NY 10286

 

TRANSFER AGENT    Prudential Mutual Fund    PO Box 9658
    

Services LLC

 

  

Providence, RI 02940

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

  

PricewaterhouseCoopers

LLP

 

  

300 Madison Avenue

New York, NY 10017

 

FUND COUNSEL    Willkie Farr & Gallagher    787 Seventh Avenue
    

LLP

 

  

New York, NY 10019

 


 

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing.

 

E-DELIVERY
 
To receive your mutual fund documents online, go to pgim.com/investments/resource/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above.

 

SHAREHOLDER COMMUNICATIONS WITH TRUSTEES
 
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, PGIM Corporate Bond Fund, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to that Trustee at the same address. Communications are not screened before being delivered to the addressee.

 

AVAILABILITY OF PORTFOLIO HOLDINGS
 
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov.

 

 
The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 225-1852.

 

 

Mutual Funds:

 

     

ARE NOT INSURED BY THE FDIC OR ANY

FEDERAL GOVERNMENT AGENCY

  MAY LOSE VALUE  

ARE NOT A DEPOSIT OF OR GUARANTEED

BY ANY BANK OR ANY BANK AFFILIATE


LOGO

 

 

 

PGIM CORPORATE BOND FUND

SHARE CLASS

  A   C   R   Z   R6

NASDAQ

  PCWAX   PCWCX   PCWRX   TGMBX   PCWQX

CUSIP

  875921694       875921686       875921660       875921702       875921678    

MF229E


LOGO

 

PGIM QUANT SOLUTIONS SMALL-CAP VALUE FUND

 

    

ANNUAL REPORT

JULY 31, 2022

 

 

LOGO

To enroll in e-delivery, go to pgim.com/investments/resource/edelivery


Table of Contents

 

Letter from the President

         3  

Your Fund’s Performance

         4  

Growth of a $10,000 Investment

         5  

Strategy and Performance Overview

         8  

Fees and Expenses

             11  

Holdings and Financial Statements

             13  

Approval of Advisory Agreements

        

 

 

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

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.

Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company and member SIPC. PGIM Quantitative Solutions is the primary business name of PGIM Quantitative Solutions LLC (formerly known as QMA LLC), a wholly owned subsidiary of PGIM, Inc. (PGIM), a registered investment adviser and Prudential Financial company. © 2022 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

 

2    Visit our website at pgim.com/investments


Letter from the President

 

LOGO  

Dear Shareholder:

 

We hope you find the annual report for the PGIM Quant Solutions Small-Cap Value Fund informative and useful. The report covers performance for the 12-month period that ended July 31, 2022.

 

The attention of the global economy and markets turned during the period from the impact of the COVID-19 pandemic to the challenge of rapidly rising inflation. Prices for a wide range of goods and services rose in response to economic reopenings, supply-chain disruptions, pandemic-related governmental stimulus and Russia’s invasion of Ukraine. As

inflation surged at its fastest rate in more than 40 years, central banks, led by the US Federal Reserve, sought to restrain the trend by aggressively hiking interest rates, prompting concerns of a potential recession.

After rising to record levels during the closing months of 2021, US stocks retreated in 2022 in the face of rising prices, slowing economic growth and uncertainties related to the war in Ukraine. Growth-oriented stocks suffered the sharpest losses as investors turned for protection to traditionally defensive, value-oriented stocks. Large-cap equities ended the period in negative territory but outperformed their small-cap counterparts by a significant margin. International developed markets trailed the US market, while emerging markets lagged further behind.

Rising rates and economic uncertainty drove fixed-income prices broadly lower as well. US and global investment-grade bonds, along with US high yield corporate bonds and emerging market debt, all posted negative returns for the period.

Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

At PGIM Investments, we provide access to active investment strategies across the global markets in the pursuit of consistent outperformance for investors. PGIM is the world’s 11th-largest investment manager with more than $1.5 trillion in assets under management. Our scale and investment expertise allow us to deliver a diversified suite of actively managed solutions across a broad spectrum of asset classes and investment styles.

Thank you for choosing our family of funds.

Sincerely,

 

LOGO

Stuart S. Parker, President

PGIM Quant Solutions Small-Cap Value Fund

September 15, 2022

 

PGIM Quant Solutions Small-Cap Value Fund    3


Your Fund’s Performance (unaudited)

Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at pgim.com/investments or by calling (800) 225-1852.

 

   Average Annual Total Returns as of 7/31/22
   One Year (%)    Five Years (%)    Ten Years (%)    Since Inception (%) 

Class A

           

(with sales charges)

     -2.51    4.69    N/A    6.16 (02/14/2014)

(without sales charges)

     3.17    5.88    N/A    6.87 (02/14/2014)

Class C

           

(with sales charges)

     0.89    4.80    N/A    5.63 (06/19/2015)

(without sales charges)

     1.89    4.80    N/A    5.63 (06/19/2015)

Class R

           

(without sales charges)

     2.93    5.68      9.50   

Class Z

           

(without sales charges)

     3.42    6.26    10.07    

Class R2

           

(without sales charges)

     3.11    N/A    N/A    4.46 (12/28/2017)

Class R4

           

(without sales charges)

     3.29    N/A    N/A    4.71 (12/28/2017)

Class R6

           

(without sales charges)

     3.58    6.35    N/A    7.66 (09/25/2014)

Russell 2000 Value Index

           
     -4.77    6.71    10.18   

Russell 2000 Index

           
      -14.29    7.12    10.60   

 

Average Annual Total Returns as of 7/31/22 Since Inception (%)

    

Class A

(02/14/2014)

  

Class C

(06/19/2015)

  

Class R2, Class R4

(12/28/2017)

  

Class R6

(09/25/2014)  

Russell 2000 Value Index

   7.51    7.72    5.86    8.30

Russell 2000 Index

   7.61    7.34    5.91    8.52

Since Inception returns are provided for any share class with less than 10 fiscal years of returns. Since Inception returns for the Index are measured from the closest month-end to the class’ inception date.

 

4    Visit our website at pgim.com/investments


Growth of a $10,000 Investment (unaudited)

 

LOGO

The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the Russell 2000 Value Index and the Russell 2000 Index by portraying the initial account values at the beginning of the 10-year period (July 31, 2012) and the account values at the end of the current fiscal year (July 31, 2022), as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier and in the following paragraphs, performance for other share classes will vary due to the differing charges and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.

Past performance does not predict future performance. Total returns and the ending account values in the graph include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.

 

PGIM Quant Solutions Small-Cap Value Fund    5


Your Fund’s Performance (continued)

 

   

 

Class A

 

 

Class C

 

  Class R

 

  Class Z 

 

  Class R2 

 

  Class R4 

 

  Class R6  

 

Maximum initial sales charge   5.50% of the public offering price   None   None   None   None   None   None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value at redemption)   1.00% on sales of $1 million or more made within 12 months of purchase   1.00% on sales made within 12 months of purchase   None   None   None   None   None
Annual distribution or distribution and service (12b-1) fees (shown as a percentage of average daily net assets)  

0.30%

(0.25%

currently)

  1.00%   0.75%
(0.50%
currently) 
  None   0.25%   None   None

Shareholder service fees

 

 

None

 

 

None

 

  None

 

  None

 

  0.10%*

 

  0.10%*

 

  None

 

*Shareholder service fee reflects maximum allowable fees under a shareholder services plan.

Benchmark Definitions

Russell 2000 Value Index—The Russell 2000® Value Index is an unmanaged index that contains those securities in the Russell 2000 Index with a below-average growth orientation. Companies in this Index generally have low price-to-book and price-to-earnings ratios, higher dividend yields, and lower forecasted growth rates.

Russell 2000 Index—The Russell 2000® Index is an unmanaged index of the 2,000 smallest US companies included in the Russell 3000® Index. It gives an indication of how stock prices of smaller companies have performed.

Investors cannot invest directly in an index. The returns for the Indexes would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes that may be paid by an investor.

 

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Presentation of Fund Holdings as of 7/31/22

 

 

 

  Ten Largest Holdings

   Line of Business    % of Net Assets  

Blackstone Mortgage Trust, Inc. (Class A Stock)

   Mortgage Real Estate Investment Trusts (REITs)    0.9%

Essent Group Ltd.

   Thrifts & Mortgage Finance    0.8%

Radian Group, Inc.

   Thrifts & Mortgage Finance    0.8%

Goodyear Tire & Rubber Co. (The)

   Auto Components    0.8%

Kite Realty Group Trust

   Equity Real Estate Investment Trusts (REITs)    0.8%

SouthState Corp.

   Banks    0.8%

Sabra Health Care REIT, Inc.

   Equity Real Estate Investment Trusts (REITs)    0.8%

Altra Industrial Motion Corp.

   Machinery    0.8%

Taylor Morrison Home Corp.

   Household Durables    0.7%

Atlas Air Worldwide Holdings, Inc.

   Air Freight & Logistics    0.7%

Holdings reflect only long-term investments and are subject to change.

 

PGIM Quant Solutions Small-Cap Value Fund    7


Strategy and Performance Overview*

(unaudited)

How did the Fund perform?

The PGIM Quant Solutions Small-Cap Value Fund’s Class Z shares returned 3.42% for the 12-month reporting period that ended July 31, 2022, outperforming the –4.77% return of the Russell 2000 Value Index.

What were the market conditions?

From a starting point of low yields, tight spreads, and high equity multiples, the shift in fundamentals—most notably, high inflation—drove a wholesale repricing of markets during the reporting period. Concerns about central bank tightening, hard economic landings, and the war in Ukraine led global credit spreads notably wider, while rate volatility increased as markets first began pricing in more aggressive Federal Open Market Committee (FOMC) policy tightening, and later began to price in a hard economic landing.

 

During the early part of the reporting period, COVID-19 continued to make headlines as new variants emerged, particularly Omicron. However, markets seemed to shrug off most concerns as this highly contagious strain led to less severe impacts and hospitalizations, especially among vaccinated individuals. Companies continued to post strong results, although many also cautioned investors on future 2022 earnings due to ongoing supply-chain disruptions. In early 2022, market risk increased due to mounting inflationary pressures, rising interest rates, supply-chain disruptions, and the Russia-Ukraine war. US inflation reached its highest year-over-year level in over 40 years, leading the Federal Reserve (the Fed) to hike interest rates several times to help fight inflation. Rising costs and supply-chain disruptions continued to weigh on companies’ growth for the remainder of the period and were expected to continue.

 

US small-cap equities underperformed their large-cap and mid-cap counterparts for the reporting period. Small-cap stocks (as measured by the Russell 2000 Index) declined –14.3%, while mid-cap stocks (as measured by the Russell Midcap Index) declined –9.8%, and large-cap stocks (as measured by the Russell 1000 Index) declined –6.9%.

 

Value stocks bested growth stocks within each of the market-cap indices. In the small-cap space, the Russell 2000 Value Index (–4.77%) outperformed the Russell 2000 Growth Index (–23.18%) by more than 18%.

What worked?

PGIM Quantitative Solutions uses a systematic process to select small-cap stocks that trade at a discount to their fundamental value and show positive business prospects. The process focuses on deep-value stocks, which are characterized by high earnings yields, cash flow yields, and book yields.

 

During the reporting period, the emphasis on deep-value stocks drove the Fund’s strong relative performance, as cheaper stocks outperformed their more expensive counterparts within the Index.

 

The Fund outperformed the Index in eight of the eleven economic sectors, especially healthcare, financials, and consumer staples. In healthcare, avoiding most

 

8    Visit our website at pgim.com/investments


 

biotechnology stocks boosted relative returns the most. After their share prices and valuations surged in 2020, many biotech stocks swooned in the second half of 2021 and first half of 2022.

 

Outperformance in financials was driven by the Fund’s overweight positions in inexpensive banks, and by favorable selection among consumer finance and insurance stocks. Numerous financial stocks ranked among the most attractive equities in PGIM Quantitative Solutions’ valuation model and continued to comprise the most overweight sector in the Fund as of the end of the period.

 

Outperformance in consumer staples came predominately from the Fund’s overweight positions in relatively inexpensive food retailers and food distributors, which rallied more than 30% during the reporting period. Many of these companies were able to bolster profits by passing along cost increases to their customers.

 

The Fund also benefited from good stock selection in several industries within the industrials and information technology sectors. Top relative contributors to performance included AMC Entertainment Holdings, Inc. (communication services), Preferred Apartment Communities, Inc. (real estate), Photronics, Inc. (information technology), Antero Resources Corporation (energy), and SpartanNash Company (consumer staples).

What didn’t work?

The Fund modestly underperformed the Index in the real estate and utilities sectors due to unfavorable selection among real estate stocks and many underweight positions among utility stocks. Although investors favored utility stocks for their low sensitivity to an economic downturn late in the period, our valuation model deemed most utility stocks as expensive.

 

Significant detractors from relative performance included Avis Budget Group, Inc. (industrials), Mesa Air Group Inc. (industrials), Big Lots, Inc. (consumer staples), Conn’s, Inc. (consumer staples), and Range Resources Corporation (energy).

Did the Fund hold derivatives?

The Fund did not use derivatives during the period.

Current outlook

Even with the recent large outperformance of value stocks, the spread in earnings yields between the cheapest and most expensive stocks in the market remains extremely wide on an historical basis. Experience shows that when this spread in valuations reverts toward its narrower norm, the relative payoff to value stocks can be significant.

 

The PGIM Quantitative Solutions model continues to identify many attractively valued small-cap stocks. As a result, the Fund remains significantly cheaper than the Index based on various measures of value, such as earnings yield, book yield, and cash flow yield. PGIM Quantitative Solutions believes that the deeply discounted stocks within

 

PGIM Quant Solutions Small-Cap Value Fund    9


Strategy and Performance Overview* (continued)

 

 

the Fund, coupled with even moderate earnings growth, offer the prospect of strong relative returns. PGIM Quantitative Solutions remains committed to its focus on these attractively valued names to capture the value premium.

* This strategy and performance overview, which discusses what strategies or holdings (including derivatives, if applicable) affected the Fund’s performance, is compiled based on how the Fund performed relative to the Fund’s assigned index and is viewed for performance attribution purposes at the aggregate Fund level, which in most instances will not directly correlate to the amounts disclosed in the Statement of Operations which conform to U.S. generally accepted accounting principles.

 

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Fees and Expenses (unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 held through the six-month period ended July 31, 2022. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

Actual Expenses

The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information

 

PGIM Quant Solutions Small-Cap Value Fund    11


Fees and Expenses (continued)

 

provided in the expense table. Additional fees have the effect of reducing investment returns.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

       

PGIM Quant Solutions

Small-Cap Value Fund

  

Beginning

 Account Value  

February 1, 2022

  

Ending

Account Value  

July 31, 2022

  

Annualized

Expense

 Ratio Based on the  

Six-Month Period

  

Expenses Paid

During the

Six-Month Period*

       

Class A

  Actual    $1,000.00    $   970.10    1.10%    $5.37
       
  Hypothetical    $1,000.00    $1,019.34    1.10%    $5.51
       

Class C

  Actual    $1,000.00    $   966.90    1.82%    $8.88
       
  Hypothetical    $1,000.00    $1,015.77    1.82%    $9.10
       

Class R

  Actual    $1,000.00    $   969.20    1.31%    $6.40
       
  Hypothetical    $1,000.00    $1,018.30    1.31%    $6.56
       

Class Z

  Actual    $1,000.00    $   971.40    0.80%    $3.91
       
  Hypothetical    $1,000.00    $1,020.83    0.80%    $4.01
       

Class R2

  Actual    $1,000.00    $   970.00    1.14%    $5.57
       
  Hypothetical    $1,000.00    $1,019.14    1.14%    $5.71
       

Class R4

  Actual    $1,000.00    $   971.00    0.89%    $4.35
       
  Hypothetical    $1,000.00    $1,020.38    0.89%    $4.46
       

Class R6

  Actual    $1,000.00    $   972.40    0.68%    $3.33
       
    Hypothetical    $1,000.00    $1,021.42    0.68%    $3.41

*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended July 31, 2022, and divided by the 365 days in the Fund’s fiscal year ended July 31, 2022 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

12    Visit our website at pgim.com/investments


Schedule of Investments

as of July 31, 2022

 

  Description            Shares                        Value          

LONG-TERM INVESTMENTS    99.3%

     

COMMON STOCKS    99.0%

     

Aerospace & Defense    0.2%

                 

Maxar Technologies, Inc.

     9,700      $ 266,556  

V2X, Inc.*

     17,800                        591,672  
     

 

 

 
        858,228  

Air Freight & Logistics    0.8%

                 

Air Transport Services Group, Inc.*

     15,900        498,306  

Atlas Air Worldwide Holdings, Inc.*(a)

     46,528        3,522,635  
     

 

 

 
        4,020,941  

Airlines    0.6%

                 

SkyWest, Inc.*

     118,068        2,851,342  

Auto Components    1.7%

                 

Dana, Inc.

     138,700        2,324,612  

Goodyear Tire & Rubber Co. (The)*(a)

     310,100        3,808,028  

Modine Manufacturing Co.*

     147,900        1,940,448  

Motorcar Parts of America, Inc.*(a)

     20,200        304,414  
     

 

 

 
        8,377,502  

Banks    21.5%

                 

1st Source Corp.

     6,600        318,252  

Ameris Bancorp

     57,400        2,714,446  

Associated Banc-Corp.(a)

     126,600        2,544,660  

Atlantic Union Bankshares Corp.

     71,800        2,483,562  

Banc of California, Inc.

     7,300        127,823  

BankUnited, Inc.(a)

     71,500        2,777,775  

Banner Corp.

     35,900        2,225,441  

Berkshire Hills Bancorp, Inc.

     36,100        1,016,937  

Brookline Bancorp, Inc.

     41,500        573,945  

Byline Bancorp, Inc.

     37,200        911,028  

Cadence Bank

     41,900        1,093,590  

Camden National Corp.

     4,825        220,502  

Cathay General Bancorp

     36,800        1,534,560  

CNB Financial Corp.

     33,999        877,174  

Columbia Banking System, Inc.(a)

     67,100        2,024,407  

Community Trust Bancorp, Inc.

     49,666        2,152,028  

ConnectOne Bancorp, Inc.

     70,800        1,871,952  

Customers Bancorp, Inc.*

     23,300        889,827  

Dime Community Bancshares, Inc.

     9,700        330,576  

Eagle Bancorp, Inc.

     30,800        1,510,124  

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    13


Schedule of Investments   (continued)

as of July 31, 2022

 

  Description            Shares                        Value          

COMMON STOCKS (Continued)

     

Banks (cont’d.)

                 

Enterprise Financial Services Corp.

     22,200      $ 1,044,066  

Financial Institutions, Inc.

     79,227                        2,100,308  

First Bancorp

     25,400        962,152  

First Busey Corp.

     57,200        1,409,980  

First Commonwealth Financial Corp.

     78,000        1,155,960  

First Financial Bancorp

     115,151        2,572,473  

First Financial Corp.

     31,059        1,451,076  

First Foundation, Inc.

     22,900        476,778  

First Merchants Corp.

     58,600        2,433,658  

Flushing Financial Corp.

     21,300        459,867  

Fulton Financial Corp.(a)

     164,900        2,752,181  

Great Southern Bancorp, Inc.

     10,663        660,466  

Hancock Whitney Corp.(a)

     60,100        2,933,481  

Hanmi Financial Corp.

     44,878        1,134,067  

HarborOne Bancorp, Inc.

     17,200        249,400  

Heartland Financial USA, Inc.

     57,204        2,568,460  

Heritage Financial Corp.

     8,200        213,364  

Hilltop Holdings, Inc.(a)

     71,503        2,062,862  

Home BancShares, Inc.(a)

     43,500        1,026,600  

HomeStreet, Inc.

     7,600        283,404  

Hope Bancorp, Inc.(a)

     176,416        2,653,297  

Horizon Bancorp, Inc.

     38,831        740,507  

Independent Bank Corp.

     2,800        58,744  

Independent Bank Group, Inc.(a)

     22,600        1,598,272  

International Bancshares Corp.

     55,482        2,433,441  

Lakeland Bancorp, Inc.

     106,527        1,695,910  

Midland States Bancorp, Inc.

     30,000        786,000  

MidWestOne Financial Group, Inc.

     4,962        154,864  

NBT Bancorp, Inc.

     19,900        806,746  

Northwest Bancshares, Inc.(a)

     103,200        1,484,016  

OceanFirst Financial Corp.

     31,800        653,808  

OFG Bancorp (Puerto Rico)

     37,000        1,016,390  

Old National Bancorp

     181,043        3,151,959  

Pacific Premier Bancorp, Inc.(a)

     63,400        2,132,776  

Peapack-Gladstone Financial Corp.

     58,879        1,922,988  

Premier Financial Corp.

     62,482        1,779,487  

QCR Holdings, Inc.

     11,000        652,190  

Renasant Corp.

     33,900        1,132,260  

S&T Bancorp, Inc.

     20,863        645,501  

Sandy Spring Bancorp, Inc.

     44,300        1,829,590  

Simmons First National Corp. (Class A Stock)(a)

     104,900        2,491,375  

SouthState Corp.

     44,585        3,779,470  

Texas Capital Bancshares, Inc.*

     13,700        803,094  

Towne Bank

     54,200        1,618,954  

 

See Notes to Financial Statements.

 

14


    

 

  Description            Shares                        Value          

COMMON STOCKS (Continued)

     

Banks (cont’d.)

                 

Trustmark Corp.(a)

     49,000      $ 1,591,030  

United Bankshares, Inc.(a)

     85,800        3,323,892  

United Community Banks, Inc.

     11,900        404,957  

Univest Financial Corp.

     28,800        718,272  

Valley National Bancorp

     290,100        3,391,269  

Veritex Holdings, Inc.

     20,000        618,800  

Washington Federal, Inc.(a)

     50,800        1,733,804  

WesBanco, Inc.(a)

     73,948        2,523,106  
     

 

 

 
                    106,475,981  

Beverages    0.2%

                 

Molson Coors Beverage Co. (Class B Stock)

     19,500        1,165,125  

Biotechnology    2.0%

                 

2seventy bio, Inc.*

     7,800        112,242  

Agios Pharmaceuticals, Inc.*

     19,100        411,987  

Anika Therapeutics, Inc.*

     4,200        98,112  

Emergent BioSolutions, Inc.*(a)

     91,700        3,176,488  

iTeos Therapeutics, Inc.*

     103,900        2,541,394  

REGENXBIO, Inc.*

     38,800        1,217,156  

Sage Therapeutics, Inc.*

     18,900        650,349  

Vanda Pharmaceuticals, Inc.*

     96,600        1,041,348  

Vir Biotechnology, Inc.*

     30,400        845,424  
     

 

 

 
        10,094,500  

Building Products    0.3%

                 

American Woodmark Corp.*

     14,700        738,234  

Resideo Technologies, Inc.*

     31,000        697,810  
     

 

 

 
        1,436,044  

Capital Markets    0.7%

                 

Cowen, Inc. (Class A Stock)(a)

     45,800        1,606,206  

Oppenheimer Holdings, Inc. (Class A Stock)(a)

     50,800        1,706,372  
     

 

 

 
        3,312,578  

Chemicals    1.4%

                 

Intrepid Potash, Inc.*

     24,200        1,103,520  

Koppers Holdings, Inc.

     13,000        306,020  

Mativ, Inc.

     45,600        996,360  

Minerals Technologies, Inc.

     37,000        2,471,970  

Rayonier Advanced Materials, Inc.*

     37,300        132,042  

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    15


Schedule of Investments   (continued)

as of July 31, 2022

 

  Description            Shares                        Value          

COMMON STOCKS (Continued)

     

Chemicals (cont’d.)

                 

Trinseo PLC

     2,700      $ 96,579  

Tronox Holdings PLC (Class A Stock)

     102,100        1,593,781  
     

 

 

 
                    6,700,272  

Commercial Services & Supplies    2.6%

                 

ACCO Brands Corp.

     372,441        2,670,402  

BrightView Holdings, Inc.*(a)

     202,200        2,656,908  

CoreCivic, Inc.*

     197,400        2,125,998  

GEO Group, Inc. (The)*(a)

     388,400        2,547,904  

Harsco Corp.*

     64,400        309,764  

KAR Auction Services, Inc.*(a)

     90,900        1,554,390  

Matthews International Corp. (Class A Stock)

     34,900        975,455  
     

 

 

 
        12,840,821  

Communications Equipment    0.3%

                 

NetScout Systems, Inc.*

     21,900        779,202  

Viasat, Inc.*(a)

     17,000        559,810  
     

 

 

 
        1,339,012  

Construction & Engineering    0.8%

                 

Arcosa, Inc.

     2,000        103,120  

Northwest Pipe Co.*

     31,400        984,390  

Primoris Services Corp.(a)

     108,400        2,532,224  

Tutor Perini Corp.*

     31,500        286,020  
     

 

 

 
        3,905,754  

Consumer Finance    2.9%

                 

Bread Financial Holdings, Inc.(a)

     50,400        1,996,344  

Encore Capital Group, Inc.*(a)

     38,791        2,809,632  

Enova International, Inc.*(a)

     60,200        2,077,502  

Navient Corp.(a)

     184,900        3,045,303  

Nelnet, Inc. (Class A Stock)

     31,453        2,990,866  

PRA Group, Inc.*(a)

     34,100        1,358,544  
     

 

 

 
        14,278,191  

Diversified Consumer Services    2.1%

                 

Adtalem Global Education, Inc.*

     69,500        2,786,950  

Graham Holdings Co. (Class B Stock)

     2,800        1,664,572  

 

See Notes to Financial Statements.

 

16


    

 

  Description            Shares                        Value          

COMMON STOCKS (Continued)

     

Diversified Consumer Services (cont’d.)

                 

Perdoceo Education Corp.*

     214,800      $ 2,942,760  

Strategic Education, Inc.(a)

     39,000                      2,801,370  
     

 

 

 
        10,195,652  

Diversified Financial Services    0.5%

                 

Banco Latinoamericano de Comercio Exterior SA (Panama) (Class E Stock)

     47,600        659,260  

Jackson Financial, Inc. (Class A Stock)(a)

     67,100        1,845,921  
     

 

 

 
        2,505,181  

Diversified Telecommunication Services    1.1%

                 

EchoStar Corp. (Class A Stock)*(a)

     130,300        2,574,728  

Frontier Communications Parent, Inc.*

     8,400        217,644  

Liberty Latin America Ltd. (Chile) (Class A Stock)*

     155,600        1,146,772  

Liberty Latin America Ltd. (Chile) (Class C Stock)*

     201,000        1,475,340  
     

 

 

 
        5,414,484  

Electronic Equipment, Instruments & Components    2.6%

                 

Kimball Electronics, Inc.*

     68,100        1,498,200  

Knowles Corp.*

     162,400        3,207,400  

Sanmina Corp.*

     57,200        2,634,060  

ScanSource, Inc.*

     43,600        1,393,020  

TTM Technologies, Inc.*

     220,500        2,983,365  

Vishay Intertechnology, Inc.

     61,200        1,264,392  
     

 

 

 
        12,980,437  

Energy Equipment & Services    0.4%

                 

Bristow Group, Inc.*

     30,800        794,640  

Helmerich & Payne, Inc.

     4,300        199,090  

National Energy Services Reunited Corp.*

     126,400        891,120  
     

 

 

 
        1,884,850  

Equity Real Estate Investment Trusts (REITs)    9.9%

                 

Acadia Realty Trust

     75,400        1,291,602  

Braemar Hotels & Resorts, Inc.

     85,000        441,150  

Brandywine Realty Trust

     294,900        2,757,315  

Broadstone Net Lease, Inc.(a)

     38,000        861,460  

City Office REIT, Inc.

     66,300        934,830  

Cousins Properties, Inc.

     37,500        1,156,875  

CTO Realty Growth, Inc.(a)

     113,983        2,416,440  

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    17


Schedule of Investments   (continued)

as of July 31, 2022

 

  Description            Shares                        Value          

COMMON STOCKS (Continued)

     

Equity Real Estate Investment Trusts (REITs) (cont’d.)

                 

Diversified Healthcare Trust

     200,900      $ 347,557  

Empire State Realty Trust, Inc. (Class A Stock)(a)

     236,200        2,014,786  

Equity Commonwealth*(a)

     61,500        1,725,075  

Franklin Street Properties Corp.

     555,200        2,104,208  

Global Net Lease, Inc.

     200,500        3,025,545  

Hudson Pacific Properties, Inc.

     81,300        1,222,752  

Industrial Logistics Properties Trust

     141,200        1,416,236  

iStar, Inc.

     68,400        1,142,964  

Kilroy Realty Corp.(a)

     21,300        1,154,034  

Kite Realty Group Trust

     190,600        3,791,034  

Macerich Co. (The)

     251,094        2,664,107  

Necessity Retail REIT, Inc. (The)

     153,600        1,196,544  

Office Properties Income Trust

     131,618        2,735,022  

Paramount Group, Inc.

     367,100        2,881,735  

Piedmont Office Realty Trust, Inc. (Class A Stock)

     213,200        2,933,632  

RLJ Lodging Trust

     37,900        473,371  

RPT Realty

     35,900        390,233  

Sabra Health Care REIT, Inc.

     244,800        3,767,472  

Service Properties Trust

     137,800        901,212  

SL Green Realty Corp.(a)

     24,755        1,229,086  

Summit Hotel Properties, Inc.*

     6,400        50,240  

Veris Residential, Inc.*

     39,300        548,235  

Vornado Realty Trust

     40,500        1,230,795  

Whitestone REIT

     26,200        294,226  
     

 

 

 
                    49,099,773  

Food & Staples Retailing    1.3%

                 

Ingles Markets, Inc. (Class A Stock)

     14,505        1,384,647  

SpartanNash Co.

     23,390        755,263  

United Natural Foods, Inc.*(a)

     68,800        2,924,688  

Village Super Market, Inc. (Class A Stock)

     50,300        1,135,271  
     

 

 

 
        6,199,869  

Food Products    1.4%

                 

Fresh Del Monte Produce, Inc.

     77,900        2,314,409  

Seaboard Corp.

     200        812,128  

Seneca Foods Corp. (Class A Stock)*

     39,100        2,225,572  

TreeHouse Foods, Inc.*(a)

     31,900        1,385,098  
     

 

 

 
        6,737,207  

Health Care Equipment & Supplies    0.7%

                 

Avanos Medical, Inc.*

     81,300        2,306,481  

 

See Notes to Financial Statements.

 

18


    

 

  Description            Shares                        Value          

COMMON STOCKS (Continued)

     

Health Care Equipment & Supplies (cont’d.)

                 

Bioventus, Inc. (Class A Stock)*

     41,900      $ 355,731  

Cue Health, Inc.*(a)

     96,100        324,818  

Enovis Corp.*

     4,466        266,710  
     

 

 

 
                    3,253,740  

Health Care Providers & Services    2.0%

                 

Accolade, Inc.*

     9,600        88,704  

AdaptHealth Corp.*

     142,600        3,152,886  

Fulgent Genetics, Inc.*(a)

     50,700        3,029,325  

National HealthCare Corp.

     26,500        1,882,295  

OPKO Health, Inc.*(a)

     157,800        372,408  

Universal Health Services, Inc. (Class B Stock)(a)

     11,000        1,237,170  
     

 

 

 
        9,762,788  

Health Care Technology    0.8%

                 

Allscripts Healthcare Solutions, Inc.*

     131,100        2,074,002  

Multiplan Corp.*(a)

     367,500        1,859,550  
     

 

 

 
        3,933,552  

Hotels, Restaurants & Leisure    0.3%

                 

Biglari Holdings, Inc. (Class B Stock)*

     8,000        961,680  

El Pollo Loco Holdings, Inc.*

     30,100        292,572  
     

 

 

 
        1,254,252  

Household Durables    3.1%

                 

Beazer Homes USA, Inc.*

     149,000        2,197,750  

Century Communities, Inc.

     33,600        1,719,312  

KB Home(a)

     40,900        1,334,976  

M/I Homes, Inc.*

     14,400        662,544  

MDC Holdings, Inc.(a)

     35,400        1,283,250  

Meritage Homes Corp.*

     19,000        1,677,700  

Taylor Morrison Home Corp.*(a)

     125,200        3,593,240  

Tri Pointe Homes, Inc.*

     164,900        3,053,948  
     

 

 

 
        15,522,720  

Insurance    2.6%

                 

American Equity Investment Life Holding Co.(a)

     70,200        2,636,712  

CNO Financial Group, Inc.

     155,700        2,919,375  

Employers Holdings, Inc.

     41,298        1,639,944  

Genworth Financial, Inc. (Class A Stock)*

     79,900        339,575  

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    19


Schedule of Investments   (continued)

as of July 31, 2022

 

  Description            Shares                        Value          

COMMON STOCKS (Continued)

     

Insurance (cont’d.)

                 

Horace Mann Educators Corp.

     54,900      $ 1,880,325  

National Western Life Group, Inc. (Class A Stock)

     12,200        2,464,400  

Stewart Information Services Corp.

     18,600        1,016,490  

United Fire Group, Inc.

     1,500        49,245  
     

 

 

 
                    12,946,066  

Internet & Direct Marketing Retail    0.0%

                 

Lands’ End, Inc.*

     16,300        207,825  

IT Services    0.1%

                 

Conduent, Inc.*

     153,300        714,378  

Leisure Products    0.2%

                 

Callaway Golf Co.*(a)

     54,200        1,243,890  

Life Sciences Tools & Services    0.1%

                 

NeoGenomics, Inc.*

     27,500        278,300  

Machinery    1.3%

                 

Altra Industrial Motion Corp.

     89,100        3,718,143  

Barnes Group, Inc.

     11,300        382,166  

Gates Industrial Corp. PLC*

     100,100        1,231,230  

Manitowoc Co., Inc. (The)*

     73,000        834,390  

Miller Industries, Inc.

     3,800        91,314  
     

 

 

 
        6,257,243  

Marine    1.8%

                 

Costamare, Inc. (Monaco)

     202,800        2,378,844  

Eagle Bulk Shipping, Inc.

     43,200        2,286,576  

Genco Shipping & Trading Ltd.

     124,200        2,394,576  

Golden Ocean Group Ltd. (Norway)(a)

     158,100        1,726,452  
     

 

 

 
        8,786,448  

Media    1.6%

                 

Advantage Solutions, Inc.*

     124,200        551,448  

DISH Network Corp. (Class A Stock)*(a)

     66,700        1,158,579  

EW Scripps Co. (The) (Class A Stock)*

     173,800        2,478,388  

Gannett Co., Inc.*

     25,700        77,357  

Gray Television, Inc.(a)

     151,100        2,805,927  

 

See Notes to Financial Statements.

 

20


    

 

  Description          Shares           

          Value        

 

COMMON STOCKS (Continued)

     

Media (cont’d.)

                 

Magnite, Inc.*

     12,400      $ 94,736  

Scholastic Corp.

     13,800        649,566  
     

 

 

 
                7,816,001  

Metals & Mining    1.7%

                 

Commercial Metals Co.

     2,300        91,126  

Ryerson Holding Corp.

     5,000        137,000  

Schnitzer Steel Industries, Inc. (Class A Stock)

     61,500        2,186,940  

SSR Mining, Inc. (Canada)

     72,300        1,190,058  

SunCoke Energy, Inc.

     245,000        1,813,000  

TimkenSteel Corp.*(a)

     87,400        1,773,346  

United States Steel Corp.(a)

     62,200        1,471,030  
     

 

 

 
        8,662,500  

Mortgage Real Estate Investment Trusts (REITs)    5.4%

                 

Apollo Commercial Real Estate Finance, Inc.

     234,283        2,994,137  

Arbor Realty Trust, Inc.(a)

     84,800        1,409,376  

Ares Commercial Real Estate Corp.

     78,300        1,072,710  

ARMOUR Residential REIT, Inc.

     138,800        1,092,356  

Blackstone Mortgage Trust, Inc. (Class A Stock)(a)

     139,800        4,329,606  

BrightSpire Capital, Inc.

     24,000        212,160  

Broadmark Realty Capital, Inc.

     143,400        1,088,406  

Chimera Investment Corp.(a)

     245,200        2,567,244  

Dynex Capital, Inc.

     75,735        1,272,348  

Ellington Financial, Inc.(a)

     91,400        1,466,970  

Granite Point Mortgage Trust, Inc.

     116,800        1,239,248  

Invesco Mortgage Capital, Inc.

     37,200        658,440  

KKR Real Estate Finance Trust, Inc.(a)

     84,900        1,654,701  

MFA Financial, Inc.

     63,525        823,284  

Ready Capital Corp.

     118,972        1,654,900  

Redwood Trust, Inc.(a)

     133,300        1,154,378  

TPG RE Finance Trust, Inc.

     42,600        462,210  

Two Harbors Investment Corp.

     244,200        1,313,796  
     

 

 

 
        26,466,270  

Multiline Retail    0.2%

                 

Big Lots, Inc.(a)

     39,100        789,429  

Multi-Utilities    0.1%

                 

NorthWestern Corp.

     12,000        665,400  

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    21


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description          Shares           

          Value        

 

COMMON STOCKS (Continued)

     

Oil, Gas & Consumable Fuels    3.7%

                 

Alto Ingredients, Inc.*

     92,400      $ 397,320  

Berry Corp.

     177,700        1,517,558  

Callon Petroleum Co.*

     16,900        778,076  

Centennial Resource Development, Inc. (Class A Stock)*(a)

     269,300        1,793,538  

Civitas Resources, Inc.(a)

     56,000        3,301,760  

CNX Resources Corp.*

     54,800        946,396  

Dorian LPG Ltd.

     114,800        1,850,576  

DT Midstream, Inc.(a)

     22,400        1,232,672  

Earthstone Energy, Inc. (Class A Stock)*(a)

     37,600        533,544  

HF Sinclair Corp.

     4,700        224,754  

Murphy Oil Corp.

     77,200        2,712,808  

REX American Resources Corp.*

     5,000        477,300  

SFL Corp. Ltd. (Norway)

     71,100        708,867  

World Fuel Services Corp.

     67,000        1,857,240  
     

 

 

 
                18,332,409  

Paper & Forest Products    0.7%

                 

Clearwater Paper Corp.*(a)

     71,400        2,548,980  

Glatfelter Corp.

     158,600        973,804  
     

 

 

 
        3,522,784  

Personal Products    0.6%

                 

Edgewell Personal Care Co.(a)

     71,300        2,836,314  

Pharmaceuticals    0.6%

                 

Amneal Pharmaceuticals, Inc.*

     119,300        422,322  

Atea Pharmaceuticals, Inc.*(a)

     322,900        2,647,780  
     

 

 

 
        3,070,102  

Professional Services    0.5%

                 

Kelly Services, Inc. (Class A Stock)

     109,200        2,367,456  

Real Estate Management & Development    1.2%

                 

Anywhere Real Estate, Inc.*(a)

     257,600        2,557,968  

Forestar Group, Inc.*

     101,700        1,407,528  

RE/MAX Holdings, Inc. (Class A Stock)

     73,000        1,849,820  
     

 

 

 
        5,815,316  

Road & Rail    1.0%

                 

Covenant Logistics Group, Inc.

     83,700        2,801,439  

 

See Notes to Financial Statements.

 

22


    

 

  Description          Shares           

          Value        

 

COMMON STOCKS (Continued)

     

Road & Rail (cont’d.)

                 

Knight-Swift Transportation Holdings, Inc.(a)

     22,800      $ 1,252,860  

Ryder System, Inc.

     13,400        1,049,488  
     

 

 

 
        5,103,787  

Semiconductors & Semiconductor Equipment    0.5%

                 

Alpha & Omega Semiconductor Ltd.*

     19,700        827,597  

Photronics, Inc.*

     67,500        1,607,175  
     

 

 

 
                2,434,772  

Software    0.7%

                 

Ebix, Inc.(a)

     33,400        790,244  

Xperi Holding Corp.

     151,200        2,534,112  
     

 

 

 
        3,324,356  

Specialty Retail    4.4%

                 

Aaron’s Co., Inc. (The)(a)

     131,500        1,712,130  

Abercrombie & Fitch Co. (Class A Stock)*

     39,800        708,838  

Big 5 Sporting Goods Corp.(a)

     117,500        1,511,050  

Cato Corp. (The) (Class A Stock)

     68,300        843,505  

Conn’s, Inc.*(a)

     150,300        1,415,826  

Container Store Group, Inc. (The)*(a)

     213,000        1,588,980  

Foot Locker, Inc.(a)

     104,400        2,961,828  

Genesco, Inc.*(a)

     26,100        1,462,905  

Group 1 Automotive, Inc.(a)

     9,600        1,698,432  

MarineMax, Inc.*

     5,300        216,452  

ODP Corp. (The)*

     79,780        2,896,014  

TravelCenters of America, Inc.*

     48,500        2,023,420  

Urban Outfitters, Inc.*(a)

     143,400        2,936,832  
     

 

 

 
        21,976,212  

Technology Hardware, Storage & Peripherals    0.3%

                 

Xerox Holdings Corp.(a)

     97,300        1,666,749  

Textiles, Apparel & Luxury Goods    0.5%

                 

G-III Apparel Group Ltd.*(a)

     121,300        2,679,517  

Thrifts & Mortgage Finance    4.3%

                 

Enact Holdings, Inc.

     23,200        534,528  

Essent Group Ltd.

     98,500        4,113,360  

Mr. Cooper Group, Inc.*

     24,000        1,081,200  

NMI Holdings, Inc. (Class A Stock)*

     84,500        1,600,430  

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    23


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description          Shares           

          Value        

 

COMMON STOCKS (Continued)

     

Thrifts & Mortgage Finance (cont’d.)

                 

Northfield Bancorp, Inc.

     34,300      $ 504,896  

PennyMac Financial Services, Inc.

     54,915        3,008,793  

Provident Financial Services, Inc.

     128,420        3,128,311  

Radian Group, Inc.

     176,066        3,938,596  

TrustCo Bank Corp.

     12,600        422,856  

Waterstone Financial, Inc.

     14,200        264,830  

WSFS Financial Corp.(a)

     55,700        2,658,004  
     

 

 

 
        21,255,804  

Tobacco    0.4%

                 

Universal Corp.

     40,000        2,236,400  

Trading Companies & Distributors    1.2%

                 

Air Lease Corp.

     31,600        1,172,676  

Textainer Group Holdings Ltd. (China)(a)

     94,400        3,206,768  

Titan Machinery, Inc.*

     29,900        841,087  

Triton International Ltd. (Bermuda)

     9,600        615,168  
     

 

 

 
        5,835,699  

Wireless Telecommunication Services    1.1%

                 

Telephone & Data Systems, Inc.(a)

     185,700        2,935,917  

United States Cellular Corp.*(a)

     83,400        2,442,786  
     

 

 

 
        5,378,703  
     

 

 

 

TOTAL COMMON STOCKS

     

(cost $439,289,071)

                489,070,926  
     

 

 

 

EXCHANGE-TRADED FUND    0.3%

     

iShares Russell 2000 Value ETF(a)

     

(cost $1,386,458)

     9,950        1,485,038  
     

 

 

 

TOTAL LONG-TERM INVESTMENTS

     

(cost $440,675,529)

        490,555,964  
     

 

 

 

SHORT-TERM INVESTMENTS    25.5%

     

AFFILIATED MUTUAL FUND    25.3%

     

PGIM Institutional Money Market Fund

     

(cost $124,969,168; includes $124,804,135 of cash collateral for securities on loan)(b)(wa)

     125,123,135        124,998,012  
     

 

 

 

 

See Notes to Financial Statements.

 

24


    

 

  Description          Shares                        Value          

UNAFFILIATED FUND    0.2%

 

  

Dreyfus Government Cash Management (Institutional Shares)
(cost $1,280,927)

     1,280,927      $ 1,280,927  
     

 

 

 

TOTAL SHORT-TERM INVESTMENTS
(cost $126,250,095)

 

     126,278,939  
     

 

 

 

TOTAL INVESTMENTS    124.8%
(cost $566,925,624)

 

     616,834,903  

Liabilities in excess of other assets    (24.8)%

 

     (122,764,165
     

 

 

 

NET ASSETS    100.0%

      $ 494,070,738  
     

 

 

 

 

 

Below is a list of the abbreviation(s) used in the annual report:

ETF—Exchange-Traded Fund

LIBOR—London Interbank Offered Rate

REITs—Real Estate Investment Trust

 

*

Non-income producing security.

(a)

All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $123,328,611; cash collateral of $124,804,135 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the Fund may reflect a collateral value that is less than the market value of the loaned securities and such shortfall is remedied the following business day.

(b)

Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment.

(wa)

PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund, if applicable.

Fair Value Measurements:

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1—unadjusted quoted prices generally in active markets for identical securities.

Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.

Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

The following is a summary of the inputs used as of July 31, 2022 in valuing such portfolio securities:

 

     Level 1      Level 2      Level 3  

Investments in Securities

                    

Assets

                    

Long-Term Investments

                    

Common Stocks

                    

Aerospace & Defense

   $ 858,228           $—              $—     

Air Freight & Logistics

     4,020,941                            

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    25


Schedule of Investments  (continued)

as of July 31, 2022

 

     Level 1      Level 2      Level 3  

Investments in Securities (continued)

                    

Assets (continued)

                    

Long-Term Investments (continued)

                    

Common Stocks (continued)

                    

Airlines

   $ 2,851,342           $—              $—     

Auto Components

     8,377,502                            

Banks

     106,475,981                            

Beverages

     1,165,125                            

Biotechnology

     10,094,500                            

Building Products

     1,436,044                            

Capital Markets

     3,312,578                            

Chemicals

     6,700,272                            

Commercial Services & Supplies

     12,840,821                            

Communications Equipment

     1,339,012                            

Construction & Engineering

     3,905,754                            

Consumer Finance

     14,278,191                            

Diversified Consumer Services

     10,195,652                            

Diversified Financial Services

     2,505,181                            

Diversified Telecommunication Services

     5,414,484                            

Electronic Equipment, Instruments & Components

     12,980,437                            

Energy Equipment & Services

     1,884,850                            

Equity Real Estate Investment Trusts (REITs)

     49,099,773                            

Food & Staples Retailing

     6,199,869                            

Food Products

     6,737,207                            

Health Care Equipment & Supplies

     3,253,740                            

Health Care Providers & Services

     9,762,788                            

Health Care Technology

     3,933,552                            

Hotels, Restaurants & Leisure

     1,254,252                            

Household Durables

     15,522,720                            

Insurance

     12,946,066                            

Internet & Direct Marketing Retail

     207,825                            

IT Services

     714,378                            

Leisure Products

     1,243,890                            

Life Sciences Tools & Services

     278,300                            

Machinery

     6,257,243                            

Marine

     8,786,448                            

Media

     7,816,001                            

Metals & Mining

     8,662,500                            

Mortgage Real Estate Investment Trusts (REITs)

     26,466,270                            

Multiline Retail

     789,429                            

Multi-Utilities

     665,400                            

Oil, Gas & Consumable Fuels

     18,332,409                            

Paper & Forest Products

     3,522,784                            

Personal Products

     2,836,314                            

Pharmaceuticals

     3,070,102                            

Professional Services

     2,367,456                            

Real Estate Management & Development

     5,815,316                            

Road & Rail

     5,103,787                            

Semiconductors & Semiconductor Equipment

     2,434,772                            

 

See Notes to Financial Statements.

 

26


    

 

     Level 1      Level 2      Level 3  

Investments in Securities (continued)

                    

Assets (continued)

                    

Long-Term Investments (continued)

                    

Common Stocks (continued)

                    

Software

   $ 3,324,356           $—              $—     

Specialty Retail

     21,976,212                            

Technology Hardware, Storage & Peripherals

     1,666,749                            

Textiles, Apparel & Luxury Goods

     2,679,517                            

Thrifts & Mortgage Finance

     21,255,804                            

Tobacco

     2,236,400                            

Trading Companies & Distributors

     5,835,699                            

Wireless Telecommunication Services

     5,378,703                            

Exchange-Traded Fund

     1,485,038                            

Short-Term Investments

                    

Affiliated Mutual Fund

     124,998,012                            

Unaffiliated Fund

     1,280,927                            
  

 

 

       

 

 

          

 

 

    

Total

   $ 616,834,903           $—              $—     
  

 

 

    

 

 

    

 

 

 

Industry Classification:

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of July 31, 2022 were as follows:

 

Affiliated Mutual Fund (25.3% represents investments purchased with collateral from securities on loan)

     25.3

Banks

     21.5  

Equity Real Estate Investment Trusts (REITs)

     9.9  

Mortgage Real Estate Investment Trusts (REITs)

     5.4  

Specialty Retail

     4.4  

Thrifts & Mortgage Finance

     4.3  

Oil, Gas & Consumable Fuels

     3.7  

Household Durables

     3.1  

Consumer Finance

     2.9  

Electronic Equipment, Instruments & Components

     2.6  

Insurance

     2.6  

Commercial Services & Supplies

     2.6  

Diversified Consumer Services

     2.1  

Biotechnology

     2.0  

Health Care Providers & Services

     2.0  

Marine

     1.8  

Metals & Mining

     1.7  

Auto Components

     1.7  

Media

     1.6  

Food Products

     1.4  

Chemicals

     1.4  

Machinery

     1.3

Food & Staples Retailing

     1.3  

Trading Companies & Distributors

     1.2  

Real Estate Management & Development

     1.2  

Diversified Telecommunication Services

     1.1  

Wireless Telecommunication Services

     1.1  

Road & Rail

     1.0  

Air Freight & Logistics

     0.8  

Health Care Technology

     0.8  

Construction & Engineering

     0.8  

Paper & Forest Products

     0.7  

Software

     0.7  

Capital Markets

     0.7  

Health Care Equipment & Supplies

     0.7  

Pharmaceuticals

     0.6  

Airlines

     0.6  

Personal Products

     0.6  

Textiles, Apparel & Luxury Goods

     0.5  

Diversified Financial Services

     0.5  

Semiconductors & Semiconductor Equipment

     0.5  

Professional Services

     0.5  

Tobacco

     0.4  

Energy Equipment & Services

     0.4  
 

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    27


Schedule of Investments  (continued)

as of July 31, 2022

 

Industry Classification (continued):

 

Technology Hardware, Storage & Peripherals

     0.3

Building Products

     0.3  

Communications Equipment

     0.3  

Hotels, Restaurants & Leisure

     0.3  

Exchange-Traded Fund

     0.3  

Leisure Products

     0.2  

Beverages

     0.2  

Aerospace & Defense

     0.2  

Multiline Retail

     0.2  

Unaffiliated Fund

     0.2  

IT Services

     0.1  

Multi-Utilities

     0.1

Life Sciences Tools & Services

     0.1  

Internet & Direct Marketing Retail

     0.0
  

 

 

 
     124.8  

Liabilities in excess of other assets

     (24.8
  

 

 

 
     100.0
  

 

 

 

 

 

 

*

Less than +/- 0.05%

 

 

Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:

The Fund entered into financial instruments/transactions during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for financial instruments/transactions where the legal right to set-off exists is presented in the summary below.

Offsetting of financial instrument/transaction assets and liabilities:

 

Description    Gross Market
Value of
Recognized
Assets/(Liabilities)
   Collateral
Pledged/(Received)(1)
   Net
Amount

Securities on Loan

   $123,328,611   

$(123,328,611)

   $—  

 

(1)

Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions.

 

See Notes to Financial Statements.

 

28


Statement of Assets and Liabilities

as of July 31, 2022

 

Assets

            

Investments at value, including securities on loan of $123,328,611:

    

Unaffiliated investments (cost $441,956,456)

   $ 491,836,891    

Affiliated investments (cost $124,969,168)

     124,998,012    

Receivable for investments sold

     17,180,039    

Receivable for Fund shares sold

     2,203,703    

Dividends receivable

     298,092    

Prepaid expenses

     1,196    
  

 

 

   

Total Assets

     636,517,933    
  

 

 

   

Liabilities

            

Payable to broker for collateral for securities on loan

     124,804,135    

Payable for investments purchased

     16,127,754    

Payable for Fund shares purchased

     678,716    

Accrued expenses and other liabilities

     510,514    

Management fee payable

     232,029    

Distribution fee payable

     71,032    

Affiliated transfer agent fee payable

     21,798    

Trustees’ fees payable

     1,217    
  

 

 

   

Total Liabilities

     142,447,195    
  

 

 

   

Net Assets

   $ 494,070,738    
  

 

 

   
              

Net assets were comprised of:

    

Shares of beneficial interest, at par

   $ 23,506    

Paid-in capital in excess of par

     390,950,039    

Total distributable earnings (loss)

     103,097,193    
  

 

 

   

Net assets, July 31, 2022

   $ 494,070,738    
  

 

 

   

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    29


Statement of Assets and Liabilities

as of July 31, 2022

 

Class A

                

Net asset value, redemption price per share,

    

($117,179,382 ÷ 5,556,645 shares of beneficial interest issued and outstanding)

  $ 21.09     

Maximum sales charge (5.50% of offering price)

    1.23     
 

 

 

    

Maximum offering price to public

  $ 22.32     
 

 

 

    

Class C

                

Net asset value, offering price and redemption price per share,

    

($2,685,317 ÷ 127,891 shares of beneficial interest issued and outstanding)

  $ 21.00     
 

 

 

    

Class R

                

Net asset value, offering price and redemption price per share,

    

($113,962,693 ÷ 5,492,869 shares of beneficial interest issued and outstanding)

  $ 20.75     
 

 

 

    

Class Z

                

Net asset value, offering price and redemption price per share,

    

($136,494,834 ÷ 6,470,747 shares of beneficial interest issued and outstanding)

  $ 21.09     
 

 

 

    

Class R2

                

Net asset value, offering price and redemption price per share,

    

($73,111 ÷ 3,474 shares of beneficial interest issued and outstanding)

  $ 21.05     
 

 

 

    

Class R4

                

Net asset value, offering price and redemption price per share,

    

($13,829 ÷ 655 shares of beneficial interest issued and outstanding)

  $ 21.10     
 

 

 

    

Class R6

                

Net asset value, offering price and redemption price per share,

    

($123,661,572 ÷ 5,853,427 shares of beneficial interest issued and outstanding)

  $ 21.13     
 

 

 

    

Net asset value per share may not recalculate due to rounding.

    

 

See Notes to Financial Statements.

 

30


Statement of Operations

Year Ended July 31, 2022

 

Net Investment Income (Loss)

 

Income

 

Unaffiliated dividend income (net of $4,017 foreign withholding tax)

  $ 13,262,056  

Income from securities lending, net (including affiliated income of $78,030)

    108,632  

Affiliated dividend income

    1,168  
 

 

 

 

Total income

    13,371,856  
 

 

 

 

Expenses

 

Management fee

    3,398,581  

Distribution fee(a)

    1,384,245  

Shareholder servicing fees(a)

    176  

Transfer agent’s fees and expenses (including affiliated expense of $249,745)(a)

    619,417  

Registration fees(a)

    87,621  

Shareholders’ reports

    79,642  

Custodian and accounting fees

    78,819  

Audit fee

    28,000  

Legal fees and expenses

    24,933  

Trustees’ fees

    16,113  

Miscellaneous

    105,326  
 

 

 

 

Total expenses

    5,822,873  

Less: Fee waiver and/or expense reimbursement(a)

    (54,656

Distribution fee waiver(a)

    (389,434
 

 

 

 

Net expenses

    5,378,783  
 

 

 

 

Net investment income (loss)

    7,993,073  
 

 

 

 

Realized And Unrealized Gain (Loss) On Investments

       

Net realized gain (loss) on investment transactions (including affiliated of $(25,945))

    108,566,672  

Net change in unrealized appreciation (depreciation) on investments (including affiliated of $(8,750))

    (96,751,493
 

 

 

 

Net gain (loss) on investment transactions

    11,815,179  
 

 

 

 

Net Increase (Decrease) In Net Assets Resulting From Operations

  $ 19,808,252  
 

 

 

 

 

 

(a)

Class specific expenses and waivers were as follows:

 

   

Class A

   

Class C

   

Class R

   

Class Z

   

Class R2

   

Class R4

   

Class R6

 

Distribution fee

    370,601         30,255        983,003         —         386          —          —     

Shareholder servicing fees

    —         —        —         —         155          21          —     

Transfer agent’s fees and expenses

    215,009         12,534        177,803         210,204         412          102          3,353     

Registration fees

    16,397         8,952        9,519         22,296         6,077          6,077          18,303     

Fee waiver and/or expense reimbursement

    (12,353)        (302)       (13,107)        (16,509)        (6,286)         (6,099)         —     

Distribution fee waiver

    (61,767)        —        (327,667)        —         —          —          —     

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    31


Statements of Changes in Net Assets

 

    

Year Ended

July 31,

 
  

 

 

 
     2022     2021  

Increase (Decrease) in Net Assets

                

Operations

    

Net investment income (loss)

   $ 7,993,073     $ 7,940,948  

Net realized gain (loss) on investment transactions

     108,566,672       81,548,460  

Net change in unrealized appreciation (depreciation) on investments

     (96,751,493     284,731,385  
  

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

     19,808,252       374,220,793  
  

 

 

   

 

 

 

Dividends and Distributions

    

Distributions from distributable earnings

    

Class A

     (1,506,035     (966,537

Class C

     (3,028     (11,867

Class R

     (1,443,320     (1,439,536

Class Z

     (2,904,008     (2,482,289

Class R2

     (1,863     (1,100

Class R4

     (172     (116

Class R6

     (2,089,156     (2,812,197
  

 

 

   

 

 

 
     (7,947,582     (7,713,642
  

 

 

   

 

 

 

Fund share transactions (Net of share conversions)

    

Net proceeds from shares sold

     145,378,381       287,011,046  

Net asset value of shares issued in reinvestment of dividends and distributions

     7,544,333       6,394,370  

Cost of shares purchased

     (337,769,381     (526,508,262
  

 

 

   

 

 

 

Net increase (decrease) in net assets from Fund share transactions

     (184,846,667     (233,102,846
  

 

 

   

 

 

 

Total increase (decrease)

     (172,985,997     133,404,305  

Net Assets:

                

Beginning of year

     667,056,735       533,652,430  
  

 

 

   

 

 

 

End of year

   $ 494,070,738     $ 667,056,735  
  

 

 

   

 

 

 

 

See Notes to Financial Statements.

 

32


Financial Highlights

 

   
Class A Shares                               
      Year Ended July 31,  
      2022     2021     2020     2019     2018  
   

Per Share Operating Performance(a):

                                        

Net Asset Value, Beginning of Year

     $20.70       $11.39       $16.46       $20.95       $21.32  

Income (loss) from investment operations:

                                        

Net investment income (loss)

     0.27       0.16       0.18       0.23       0.26  
Net realized and unrealized gain (loss) on investment and foreign currency transactions      0.38       9.31       (4.35     (3.17     2.04  

Total from investment operations

     0.65       9.47       (4.17     (2.94     2.30  

Less Dividends and Distributions:

                                        

Dividends from net investment income

     (0.26     (0.16     (0.48     (0.28     (0.31

Distributions from net realized gains

     -       -       (0.42     (1.27     (2.36

Total dividends and distributions

     (0.26     (0.16     (0.90     (1.55     (2.67

Net asset value, end of year

     $21.09       $20.70       $11.39       $16.46       $20.95  

Total Return(b):

     3.17     83.49     (27.01 )%      (13.47 )%      11.31
                                          
   
Ratios/Supplemental Data:                                    

Net assets, end of year (000)

     $117,179       $123,223       $71,928       $116,090       $136,533  

Average net assets (000)

     $123,533       $103,593       $92,527       $118,685       $133,270  

Ratios to average net assets(c):

                                        

Expenses after waivers and/or expense reimbursement

     1.09     1.11     1.15     1.07     1.02

Expenses before waivers and/or expense reimbursement

     1.15     1.17     1.21     1.13     1.08

Net investment income (loss)

     1.25     0.95     1.31     1.31     1.27

Portfolio turnover rate(d)

     62     63     53     80     70

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(c)

Does not include expenses of the underlying funds in which the Fund invests.

(d)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    33


Financial Highlights (continued)

 

           
Class C Shares                               
      Year Ended July 31,  
      2022     2021     2020     2019     2018  
   

Per Share Operating Performance(a):

                                        

Net Asset Value, Beginning of Year

     $20.63       $11.39       $16.48       $20.95       $21.32  

Income (loss) from investment operations:

                                        

Net investment income (loss)

     (- )(b)(c)      - (c)      0.05       0.12       0.10  
Net realized and unrealized gain (loss) on investment and foreign currency transactions      0.39       9.27       (4.40     (3.20     2.03  

Total from investment operations

     0.39       9.27       (4.35     (3.08     2.13  

Less Dividends and Distributions:

                                        

Dividends from net investment income

     (0.02     (0.03     (0.32     (0.12     (0.14

Distributions from net realized gains

     -       -       (0.42     (1.27     (2.36

Total dividends and distributions

     (0.02     (0.03     (0.74     (1.39     (2.50

Net asset value, end of year

     $21.00       $20.63       $11.39       $16.48       $20.95  

Total Return(d):

     1.89     81.41     (27.80 )%      (14.22 )%      10.44
                                          
   
Ratios/Supplemental Data:                                    

Net assets, end of year (000)

     $2,685       $3,138       $5,782       $11,269       $36,638  

Average net assets (000)

     $3,025       $6,774       $8,456       $24,635       $38,734  

Ratios to average net assets(e):

                                        

Expenses after waivers and/or expense reimbursement

     2.36     2.19     2.22     1.92     1.81

Expenses before waivers and/or expense reimbursement

     2.37     2.20     2.23     1.93     1.82

Net investment income (loss)

     (0.01 )%      0.01     0.35     0.66     0.49

Portfolio turnover rate(f)

     62     63     53     80     70

 

(a)

Calculated based on average shares outstanding during the year.

(b)

The per share amount of net investment income (loss) does not directly correlate to the amounts reported in the Statement of Operations due to class specific expenses.

(c)

Amount rounds to zero.

(d)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(e)

Does not include expenses of the underlying funds in which the Fund invests.

(f)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

34


    

 

           
Class R Shares                               
      Year Ended July 31,  
      2022     2021     2020     2019     2018  
   

Per Share Operating Performance(a):

                                        

Net Asset Value, Beginning of Year

     $20.37       $11.23       $16.23       $20.66       $21.06  

Income (loss) from investment operations:

                                        

Net investment income (loss)

     0.22       0.14       0.11       0.20       0.21  
Net realized and unrealized gain (loss) on investment and foreign currency transactions      0.38       9.15       (4.24     (3.13     2.01  

Total from investment operations

     0.60       9.29       (4.13     (2.93     2.22  

Less Dividends and Distributions:

                                        

Dividends from net investment income

     (0.22     (0.15     (0.45     (0.23     (0.26

Distributions from net realized gains

     -       -       (0.42     (1.27     (2.36

Total dividends and distributions

     (0.22     (0.15     (0.87     (1.50     (2.62

Net asset value, end of year

     $20.75       $20.37       $11.23       $16.23       $20.66  

Total Return(b):

     2.93     83.14     (27.08 )%      (13.63 )%      11.05
                                          
   
Ratios/Supplemental Data:                                    

Net assets, end of year (000)

     $113,963       $135,981       $110,953       $139,136       $162,502  

Average net assets (000)

     $131,067       $137,399       $116,334       $143,139       $165,270  

Ratios to average net assets(c):

                                        

Expenses after waivers and/or expense reimbursement

     1.29     1.28     1.31     1.27     1.26

Expenses before waivers and/or expense reimbursement

     1.55     1.54     1.57     1.53     1.52

Net investment income (loss)

     1.05     0.88     0.82     1.16     1.04

Portfolio turnover rate(d)

     62     63     53     80     70

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(c)

Does not include expenses of the underlying funds in which the Fund invests.

(d)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    35


Financial Highlights (continued)

 

           
Class Z Shares                               
      Year Ended July 31,  
      2022     2021     2020     2019     2018  
   

Per Share Operating Performance(a):

                                        

Net Asset Value, Beginning of Year

     $20.70       $11.40       $16.46       $20.95       $21.32  

Income (loss) from investment operations:

                                        

Net investment income (loss)

     0.33       0.23       0.29       0.30       0.34  
Net realized and unrealized gain (loss) on investment and foreign currency transactions      0.38       9.29       (4.38     (3.18     2.02  

Total from investment operations

     0.71       9.52       (4.09     (2.88     2.36  

Less Dividends and Distributions:

                                        

Dividends from net investment income

     (0.32     (0.22     (0.55     (0.34     (0.37

Distributions from net realized gains

     -       -       (0.42     (1.27     (2.36

Total dividends and distributions

     (0.32     (0.22     (0.97     (1.61     (2.73

Net asset value, end of year

     $21.09       $20.70       $11.40       $16.46       $20.95  

Total Return(b):

     3.42     84.07     (26.66 )%      (13.11 )%      11.65
                                          
   
Ratios/Supplemental Data:                                    

Net assets, end of year (000)

     $136,495       $177,808       $150,272       $622,093       $824,748  

Average net assets (000)

     $165,086       $199,626       $307,558       $698,954       $862,416  

Ratios to average net assets(c):

                                        

Expenses after waivers and/or expense reimbursement

     0.79     0.77     0.73     0.69     0.69

Expenses before waivers and/or expense reimbursement

     0.80     0.78     0.74     0.70     0.70

Net investment income (loss)

     1.56     1.34     2.05     1.72     1.62

Portfolio turnover rate(d)

     62     63     53     80     70

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(c)

Does not include expenses of the underlying funds in which the Fund invests.

(d)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

36


    

 

   

Class R2 Shares

               
     Year Ended July 31,        

December 28, 2017(a)

through July 31,

      
     2022     2021     2020     2019         2018       
   

Per Share Operating Performance(b):

                                                       

Net Asset Value, Beginning of Period

    $20.65       $11.38       $16.43       $20.91               $20.44              

Income (loss) from investment operations:

                                                       

Net investment income (loss)

    0.28       0.19       0.17       0.23               0.09          
Net realized and unrealized gain (loss) on investment and foreign currency transactions     0.37       9.25       (4.32     (3.18             0.38          

Total from investment operations

    0.65       9.44       (4.15     (2.95             0.47          

Less Dividends and Distributions:

                                                       

Dividends from net investment income

    (0.25     (0.17     (0.48     (0.26             -          

Distributions from net realized gains

    -       -       (0.42     (1.27             -          

Total dividends and distributions

    (0.25     (0.17     (0.90     (1.53             -          

Net asset value, end of period

    $21.05       $20.65       $11.38       $16.43               $20.91          

Total Return(c):

    3.11     83.38     (26.96 )%      (13.54 )%              2.30        
                                                         
   
Ratios/Supplemental Data:                                           

Net assets, end of period (000)

    $73       $157       $292       $375               $18          

Average net assets (000)

    $154       $192       $302       $184               $14          

Ratios to average net assets(d):

                                                       

Expenses after waivers and/or expense reimbursement

    1.14     1.14     1.15     1.14             1.14 %(e)         

Expenses before waivers and/or expense reimbursement

    5.21     5.24     6.28     8.15             187.96 %(e)         

Net investment income (loss)

    1.30     1.21     1.26     1.35             0.72 %(e)         

Portfolio turnover rate(f)

    62     63     53     80             70        

 

(a)

Commencement of offering.

(b)

Calculated based on average shares outstanding during the period.

(c)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. Total returns for periods less than one full year are not annualized.

(d)

Does not include expenses of the underlying funds in which the Fund invests.

(e)

Annualized.

(f)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    37


Financial Highlights (continued)

 

   

Class R4 Shares

               
     Year Ended July 31,         December 28, 2017(a)
through July 31,
      
     2022     2021     2020     2019         2018       
   

Per Share Operating Performance(b):

                                                       

Net Asset Value, Beginning of Period

    $20.71       $11.40       $16.46       $20.94               $20.44          

Income (loss) from investment operations:

                                                       

Net investment income (loss)

    0.37       0.31       0.16       0.27               0.11          
Net realized and unrealized gain (loss) on investment and foreign currency transactions     0.32       9.20       (4.28     (3.18             0.39          

Total from investment operations

    0.69       9.51       (4.12     (2.91             0.50          

Less Dividends and Distributions:

                                                       

Dividends from net investment income

    (0.30     (0.20     (0.52     (0.30             -          

Distributions from net realized gains

    -       -       (0.42     (1.27             -          

Total dividends and distributions

    (0.30     (0.20     (0.94     (1.57             -          

Net asset value, end of period

    $21.10       $20.71       $11.40       $16.46               $20.94          

Total Return(c):

    3.29     83.98     (26.80 )%      (13.31 )%              2.45        
                                                         
   
Ratios/Supplemental Data:                                           

Net assets, end of period (000)

    $14       $245       $927       $9               $10          

Average net assets (000)

    $41       $237       $918       $9               $10          

Ratios to average net assets(d):

                                                       

Expenses after waivers and/or expense reimbursement

    0.89     0.89     0.89     0.89             0.89 %(e)         

Expenses before waivers and/or expense reimbursement

    15.86     4.13     2.60     140.80             270.32 %(e)         

Net investment income (loss)

    1.78     2.21     1.16     1.51             0.95 %(e)         

Portfolio turnover rate(f)

    62     63     53     80             70        

 

(a)

Commencement of offering.

(b)

Calculated based on average shares outstanding during the period.

(c)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP. Total returns for periods less than one full year are not annualized.

(d)

Does not include expenses of the underlying funds in which the Fund invests.

(e)

Annualized.

(f)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

38


    

 

           
Class R6 Shares                               
      Year Ended July 31,  
      2022     2021     2020     2019     2018  
   

Per Share Operating Performance(a):

                                        

Net Asset Value, Beginning of Year

     $20.73       $11.41       $16.47       $20.97       $21.34  

Income (loss) from investment operations:

                                        

Net investment income (loss)

     0.37       0.24       0.25       0.31       0.34  
Net realized and unrealized gain (loss) on investment and foreign currency transactions      0.38       9.31       (4.33     (3.19     2.04  

Total from investment operations

     0.75       9.55       (4.08     (2.88     2.38  

Less Dividends and Distributions:

                                        

Dividends from net investment income

     (0.35     (0.23     (0.56     (0.35     (0.39

Distributions from net realized gains

     -       -       (0.42     (1.27     (2.36

Total dividends and distributions

     (0.35     (0.23     (0.98     (1.62     (2.75

Net asset value, end of year

     $21.13       $20.73       $11.41       $16.47       $20.97  

Total Return(b):

     3.58     84.26     (26.60 )%      (13.09 )%      11.72
                                          
   
Ratios/Supplemental Data:                                    

Net assets, end of year (000)

     $123,662       $226,506       $193,499       $351,429       $414,892  

Average net assets (000)

     $143,522       $209,675       $259,226       $372,557       $361,244  

Ratios to average net assets(c):

                                        

Expenses after waivers and/or expense reimbursement

     0.67     0.66     0.67     0.63     0.63

Expenses before waivers and/or expense reimbursement

     0.67     0.66     0.67     0.63     0.63

Net investment income (loss)

     1.74     1.46     1.83     1.78     1.64

Portfolio turnover rate(d)

     62     63     53     80     70

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(c)

Does not include expenses of the underlying funds in which the Fund invests.

(d)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

PGIM Quant Solutions Small-Cap Value Fund    39


Notes to Financial Statements

 

1.

Organization

The Target Portfolio Trust (the “Registered Investment Company” or “RIC”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The RIC is organized as a Delaware Statutory Trust. These financial statements relate only to the PGIM Quant Solutions Small-Cap Value Fund (the “Fund”), a series of the RIC. The fund is classified as a diversified fund for purposes of the 1940 Act.

The investment objective of the Fund is above average capital appreciation.

 

2.

Accounting Policies

The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to U.S. generally accepted accounting principles (“GAAP”). The Fund consistently follows such policies in the preparation of its financial statements.

Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. As described in further detail below, the Fund’s investments are valued daily based on a number of factors, including the type of investment and whether market quotations are readily available. The RIC’s Board of Trustees (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or the “Manager”). Pursuant to the Board’s delegation, the Manager has established a Valuation Committee responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A record of the Valuation Committee’s actions is subject to the Board’s review at its first quarterly meeting following the quarter in which such actions take place.

For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities

 

40


trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.

Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 - Fair Value Measurement.

Common or preferred stocks, exchange-traded funds and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.

Investments in open-end funds (other than exchange-traded funds) are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.

Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy. Altering one or more unobservable inputs may result in a significant change to a Level 3 security’s fair value measurement.

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the Manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.

Master Netting Arrangements: The RIC, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of all or a portion of the Fund. A master netting arrangement between the Fund and the counterparty permits the

 

PGIM Quant Solutions Small-Cap Value Fund    41


Notes to Financial Statements  (continued)

 

Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law.

Securities Lending: The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. The remaining open loans of the securities lending transactions are considered overnight and continuous. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.

The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto, which are reflected in interest income or unaffiliated dividend income based on the nature of the payment on the Statement of Operations. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed in the Statement of Operations.

Equity and Mortgage Real Estate Investment Trusts (collectively REITs): The Fund invested in REITs, which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from REITs during the period is estimated to be dividend income, capital gain or return of capital and recorded accordingly. When material, these estimates are adjusted periodically when the actual source of distributions is disclosed by the REITs.

 

42


Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Such class specific expenses and waivers include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.

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 and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.

Dividends and Distributions: Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess of par, as appropriate. The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.

 

 Expected Distribution Schedule to Shareholders*

     Frequency    

 Net Investment Income

     Annually    

 Short-Term Capital Gains

     Annually    

 Long-Term Capital Gains

     Annually    

 

*

Under certain circumstances, the Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year.

Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

 

PGIM Quant Solutions Small-Cap Value Fund    43


Notes to Financial Statements  (continued)

 

3.

Agreements

The RIC, on behalf of the Fund, has a management agreement with the Manager. Pursuant to this agreement, the Manager has responsibility for all investment advisory services and supervises the subadviser’s performance of such services.

The Manager has entered into a subadvisory agreement with PGIM Quantitative Solutions LLC (formerly known as QMA LLC) (“PGIM Quantitative Solutions” or the “Subadviser”). The Manager pays for the services of PGIM Quantitative Solutions.

Fees payable under the management agreement are computed daily and paid monthly. For the reporting period ended July 31, 2022, the contractual and effective management fee rates were as follows:

 

   
 Contractual Management Rate    Effective Management Fee, before any waivers
and/or expense reimbursements

 0.60% of average daily net assets up to $2 billion;

       0.60 %

 0.575% of average daily net assets over $2 billion.

          

The Manager has contractually agreed to waive and/or reimburse up to 0.01% of the fees and expenses from the Fund through November 30, 2023, to the extent that the Fund’s net annual operating expenses and acquired fund fees and expenses (exclusive of taxes, interest, distribution and service (12b-1) fees and certain extraordinary expenses) exceed 0.68% of the Fund’s average daily net assets on an annualized basis. Separately, the Manager has contractually agreed, through November 30, 2023, to limit transfer agency, shareholder servicing, sub-transfer agency, and blue sky fees, as applicable. This contractual expense limitation excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales.

Where applicable, the Manager agrees to waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class. In addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The expense limitations attributable to each class are as follows:

 

   
 Class    Expense 
Limitations 

 A

   —%

 

44


   
 Class    Expense 
Limitations 

 C

      

 R

        

 Z

        

 R2

       1.14  

 R4

       0.89  

 R6

        

The RIC, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class R, Class Z, Class R2, Class R4 and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class C, Class R and Class R2 shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate based on average daily net assets per class. PIMS has contractually agreed through November 30, 2023 to reduce such fees of certain classes based on the average daily net assets. The distribution fees are accrued daily and payable monthly.

The Fund has adopted a Shareholder Services Plan with respect to Class R2 and Class R4 shares. Under the terms of the Shareholder Services Plan, Class R2 and Class R4 shares are authorized to compensate Prudential Mutual Fund Services LLC (“PMFS”), its affiliates or third-party service providers for services rendered to the shareholders of such Class R2 or Class R4 shares. The shareholder service fee is accrued daily and paid monthly, as applicable.

The Fund’s annual gross and net distribution and maximum shareholder service fee, where applicable, are as follows:

 

       
 Class    Gross Distribution Fee    Net Distribution Fee    Shareholder Service Fee

 A

   0.30%    0.25%    N/A%

 C

   1.00        1.00        N/A   

 R

   0.75        0.50        N/A   

 Z

   N/A        N/A        N/A   

 R2

   0.25        0.25        0.10    

 R4

   N/A        N/A        0.10    

 R6

   N/A        N/A        N/A   

For the year ended July 31, 2022, PIMS received front-end sales charges (“FESL”) resulting from sales of certain class shares and contingent deferred sales charges (“CDSC”) imposed upon redemptions by certain shareholders. From these fees, PIMS paid such sales charges

 

PGIM Quant Solutions Small-Cap Value Fund    45


Notes to Financial Statements  (continued)

 

to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs. The sales charges are as follows where applicable:

 

     
 Class    FESL      CDSC  

 A

   $ 94,592      $754  

 C

            142  

PGIM Investments, PIMS, PMFS and PGIM Quantitative Solutions are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

 

4.

Other Transactions with Affiliates

PMFS serves as the Fund’s transfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.

The Fund may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a fund of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services to the Core Fund. In addition to the realized and unrealized gains on investments in the Core Fund and Money Market Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively. Effective January 2022, the Fund changed its overnight cash sweep vehicle from the Core Fund to an unaffiliated money market fund.

The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the year ended July 31, 2022, no 17a-7 transactions were entered into by the Fund.

 

46


5.

Portfolio Securities

The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended July 31, 2022, were as follows:

 

   
Cost of Purchases    Proceeds from Sales

$349,902,608

   $534,105,225

A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the year ended July 31, 2022, is presented as follows:

 

               

    Value,    

  Beginning  

    of Year    

  Cost of
Purchases
    Proceeds
from Sales
   

Change in
Unrealized Gain

(Loss)

   

Realized Gain

(Loss)

   

Value,

End of Year

   

Shares,

End

of Year

    Income  

  Short-Term Investments - Affiliated Mutual Funds:

                                 

  PGIM Core Ultra Short Bond Fund(1)(wa)

                                         
  $  2,292,143     $  61,709,254       $  64,001,397       $        —       $          —       $                  —             $  1,168  

  PGIM Institutional Money Market Fund(1)(b)(wa)

 
    63,725,339     701,119,215       639,811,847       (8,750)       (25,945)       124,998,012       125,123,135       78,030 (2) 
  $66,017,482     $762,828,469       $703,813,244       $(8,750)       $(25,945)       $124,998,012               $79,198  

 

(1)

The Fund did not have any capital gain distributions during the reporting period.

(2)

The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations.

(b)

Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment.

(wa)

PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund, if applicable.

6. Distributions and Tax Information

The Fund has a tax year end of October 31st.

Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date.

The tax character of distributions paid during the tax year ended October 31, 2021 was $7,713,642 of ordinary income. The tax character of distributions paid during the tax year ended October 31, 2020 were $29,525,841 of ordinary income and $22,986,122 of long-term capital gains.

As of the latest tax year ended October 31, 2021, the accumulated undistributed earnings on a tax basis was $5,622,294 of ordinary income.

 

PGIM Quant Solutions Small-Cap Value Fund    47


Notes to Financial Statements  (continued)

 

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of July 31, 2022 were as follows:

 

       
   Tax Basis   Gross
Unrealized
Appreciation
  Gross
Unrealized
Depreciation
  Net
Unrealized
Appreciation
 $573,914,641   $83,675,517   $(40,755,255)   $42,920,262

The difference between GAAP and tax basis was primarily attributable to deferred losses on wash sales.

For federal income tax purposes, the Fund had a capital loss carryforward as of October 31, 2021 of approximately $3,463,000 which can be carried forward for an unlimited period. The Fund utilized approximately $127,260,000 of its capital loss carryforward to offset net taxable gains realized in the tax year ended October 31, 2021. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.

The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the four tax years up to the most recent tax year ended October 31, 2020 are subject to such review.

 

7.

Capital and Ownership

The Fund offers Class A, Class C, Class R, Class Z, Class R2, Class R4 and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 5.50%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1%, although they are not subject to an initial sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. 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 CDSC of 1% on sales made within 12 months of purchase. Class C shares will automatically convert to Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class R shares are available to certain retirement plans, clearing and settlement firms. Class R, Class Z, Class R2, Class R4 and Class R6 shares are not subject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.

 

48


The RIC has authorized an unlimited number of shares of beneficial interest of the Fund at $0.001 par value per share.

Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest, below.

As of July 31, 2022, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:

 

     
Class    Number of Shares    Percentage of Outstanding Shares  

A

               999      0.1%  

R

     5,165,478      94.0                               

Z

                 39      0.1                               

R2

               580      16.7                               

R4

               586      89.5                               

At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:

 

     
     Number of Shareholders    Percentage of Outstanding Shares  

Affiliated

  1      21.6%

Unaffiliated

  4    50.4

Transactions in shares of beneficial interest were as follows:

 

     
Share Class    Shares      Amount  

Class A

                 

Year ended July 31, 2022:

                 

Shares sold

     466,481      $ 10,099,471  

Shares issued in reinvestment of dividends and distributions

     68,744        1,481,443  

Shares purchased

     (932,354      (20,009,430

Net increase (decrease) in shares outstanding before conversion

     (397,129      (8,428,516

Shares issued upon conversion from other share class(es)

     33,415        718,133  

Shares purchased upon conversion into other share class(es)

     (33,776      (734,315

Net increase (decrease) in shares outstanding

     (397,490    $ (8,444,698

Year ended July 31, 2021:

                 

Shares sold

     865,484      $ 16,990,636  

Shares issued in reinvestment of dividends and distributions

     59,100        947,377  

Shares purchased

     (1,282,170      (22,233,334

Net increase (decrease) in shares outstanding before conversion

     (357,586      (4,295,321

Shares issued upon conversion from other share class(es)

     30,481        576,013  

Shares purchased upon conversion into other share class(es)

     (31,354      (546,239

Net increase (decrease) in shares outstanding

     (358,459    $ (4,265,547

 

 

PGIM Quant Solutions Small-Cap Value Fund    49


Notes to Financial Statements  (continued)

 

     
Share Class    Shares      Amount  

Class C

                 

Year ended July 31, 2022:

                 

Shares sold

     19,383      $ 420,322  

Shares issued in reinvestment of dividends and distributions

     138        2,988  

Shares purchased

     (31,942      (677,141

Net increase (decrease) in shares outstanding before conversion

     (12,421      (253,831

Shares purchased upon conversion into other share class(es)

     (11,807      (254,336

Net increase (decrease) in shares outstanding

     (24,228    $ (508,167

Year ended July 31, 2021:

                 

Shares sold

     78,503      $ 1,398,729  

Shares issued in reinvestment of dividends and distributions

     736        11,845  

Shares purchased

     (411,384      (8,226,935

Net increase (decrease) in shares outstanding before conversion

     (332,145      (6,816,361

Shares purchased upon conversion into other share class(es)

     (23,302      (428,567

Net increase (decrease) in shares outstanding

     (355,447    $ (7,244,928

Class R

                 

Year ended July 31, 2022:

                 

Shares sold

     302,221      $ 6,307,893  

Shares issued in reinvestment of dividends and distributions

     67,985        1,443,319  

Shares purchased

     (1,553,114      (33,295,586

Net increase (decrease) in shares outstanding

     (1,182,908    $ (25,544,374

Year ended July 31, 2021:

                 

Shares sold

     589,485      $ 9,083,652  

Shares issued in reinvestment of dividends and distributions

     91,168        1,439,536  

Shares purchased

     (3,886,798      (66,117,436

Net increase (decrease) in shares outstanding

     (3,206,145    $ (55,594,248

Class Z

                 

Year ended July 31, 2022:

                 

Shares sold

     3,416,632      $ 74,632,922  

Shares issued in reinvestment of dividends and distributions

     134,437        2,893,080  

Shares purchased

     (5,678,442      (122,050,825

Net increase (decrease) in shares outstanding before conversion

     (2,127,373      (44,524,823

Shares issued upon conversion from other share class(es)

     37,785        816,711  

Shares purchased upon conversion into other share class(es)

     (29,434      (631,173

Net increase (decrease) in shares outstanding

     (2,119,022    $ (44,339,285

 

50


     
Share Class    Shares     Amount  

Year ended July 31, 2021:

                

Shares sold

     9,725,201     $ 176,554,032  

Shares issued in reinvestment of dividends and distributions

     154,462       2,471,389  

Shares purchased

     (12,731,702     (216,045,265

Net increase (decrease) in shares outstanding before conversion

     (2,852,039     (37,019,844

Shares issued upon conversion from other share class(es)

     34,156       597,321  

Shares purchased upon conversion into other share class(es)

     (1,776,286     (37,668,057

Net increase (decrease) in shares outstanding

     (4,594,169   $ (74,090,580

Class R2

                

Year ended July 31, 2022:

                

Shares sold

     1,759     $ 37,354  

Shares issued in reinvestment of dividends and distributions

     87       1,863  

Shares purchased

     (5,951     (127,675

Net increase (decrease) in shares outstanding

     (4,105   $ (88,458

Year ended July 31, 2021:

                

Shares sold

     2,204     $ 35,877  

Shares issued in reinvestment of dividends and distributions

     69       1,100  

Shares purchased

     (20,350     (300,727

Net increase (decrease) in shares outstanding

     (18,077   $ (263,750

Class R4

                

Year ended July 31, 2022:

                

Shares sold

     70     $ 1,495  

Shares issued in reinvestment of dividends and distributions

     8       172  

Shares purchased

     (11,256     (234,125

Net increase (decrease) in shares outstanding

     (11,178   $ (232,458

Year ended July 31, 2021:

                

Shares sold

     12,236     $ 239,111  

Shares issued in reinvestment of dividends and distributions

     7       116  

Shares purchased

     (81,686     (964,404

Net increase (decrease) in shares outstanding

     (69,443   $ (725,177

Class R6

                

Year ended July 31, 2022:

                

Shares sold

     2,498,365     $ 53,878,924  

Shares issued in reinvestment of dividends and distributions

     79,920       1,721,468  

Shares purchased

     (7,653,885     (161,374,599

Net increase (decrease) in shares outstanding before conversion

     (5,075,600     (105,774,207

Shares issued upon conversion from other share class(es)

     8,887       193,335  

Shares purchased upon conversion into other share class(es)

     (5,138     (108,355

Net increase (decrease) in shares outstanding

     (5,071,851   $ (105,689,227

 

PGIM Quant Solutions Small-Cap Value Fund    51


Notes to Financial Statements  (continued)

 

 

Share Class

 

  

Shares

 

   

Amount

 

 

Year ended July 31, 2021:

                

Shares sold

     4,665,355     $ 82,709,009  

Shares issued in reinvestment of dividends and distributions

     95,129       1,523,007  

Shares purchased

     (12,561,522     (212,620,161

Net increase (decrease) in shares outstanding before conversion

     (7,801,038     (128,388,145

Shares issued upon conversion from other share class(es)

     1,766,401       37,512,393  

Shares purchased upon conversion into other share class(es)

     (2,171     (42,864

Net increase (decrease) in shares outstanding

     (6,036,808   $ (90,918,616

 

8.

Borrowings

The RIC, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The table below provides details of the current SCA in effect at the reporting period-end as well as the prior SCA.

 

     Current SCA    Prior SCA

Term of Commitment

   10/1/2021 – 9/29/2022    10/2/2020 – 9/30/2021

Total Commitment

   $ 1,200,000,000    $ 1,200,000,000

Annualized Commitment Fee on the

Unused Portion of the SCA

   0.15%    0.15%

Annualized Interest Rate on Borrowings

   1.20% plus the higher of (1)
the effective federal funds
rate, (2) the one-month
LIBOR rate or (3) zero
percent
   1.30% plus the higher of (1)
the effective federal funds
rate, (2) the one-month
LIBOR rate or (3) zero
percent

Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Participating Funds in the SCA equitably.

The Fund utilized the SCA during the year ended July 31, 2022. The average daily balance for the 50 days that the Fund had loans outstanding during the period was approximately $3,204,620, borrowed at a weighted average interest rate of 1.64%. The maximum loan outstanding amount during the period was $11,105,000. At July 31, 2022, the Fund did not have an outstanding loan amount.

 

52


9.

Risks of Investing in the Fund

The Fund’s risks include, but are not limited to, some or all of the risks discussed below. For further information on the Fund’s risks, please refer to the Fund’s Prospectus and Statement of Additional Information.

Economic and Market Events Risk: Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth or the functioning of the securities markets, may at times result in unusually high market volatility, which could negatively impact performance. Relatively reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.

Equity and Equity-Related Securities Risk: Equity and equity-related securities may be subject to changes in value, and their values may be more volatile than those of other asset classes. In addition to an individual security losing value, the value of the equity markets or a sector in which the Fund invests could go down. Different parts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.

Increase in Expenses Risk: Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table in the Fund’s prospectus for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease. Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.

Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its affiliates, may from time to time own or control a substantial amount of the Fund’s shares. There is no requirement that these entities maintain their investment in the Fund. There is a risk that such large shareholders or that the Fund’s shareholders generally may redeem all or a substantial portion of their investments in the Fund in a short period of time, which could have a significant negative impact on the Fund’s NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Fund’s ability to implement its investment strategy. The Fund’s ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.

Management Risk: The value of your investment may decrease if judgments by the subadviser about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements are incorrect.

Market Disruption and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or conflicts (including Russia’s military invasion of Ukraine), geopolitical developments (including trading and tariff arrangements, sanctions and cybersecurity attacks), instability

 

PGIM Quant Solutions Small-Cap Value Fund    53


Notes to Financial Statements  (continued)

 

in regions such as Asia, Eastern Europe and the Middle East, terrorism, natural disasters and public health epidemics (including the outbreak of COVID-19 globally).

The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long-term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain securities held by the Fund could be significantly impacted, which could lead to such securities being valued at zero.

COVID-19 and the related governmental and public responses have had and may continue to have an impact on the Fund’s investments and net asset value and have led and may continue to lead to increased market volatility and the potential for illiquidity in certain classes of securities and sectors of the market. They have also had and may continue to result in periods of business disruption, business closures, inability to obtain raw materials, supplies and component parts, and reduced or disrupted operations for the issuers in which the Fund invests. The occurrence, reoccurrence and pendency of public health epidemics could adversely affect the economies and financial markets either in specific countries or worldwide.

Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.

Model Design Risk: The subadviser uses certain quantitative models to help guide its investment decisions. The design of the underlying models may be flawed or incomplete. The investment models the subadviser uses are based on historical and theoretical underpinnings that it believes are sound. There can be no guarantee, however, that these underpinnings will correlate with security price behavior in the manner assumed by the subadviser’s models. Additionally, the quantitative techniques that underlie the subadviser’s portfolio construction processes may fail to fully anticipate important risks.

Model Implementation Risk: While the subadviser strives to mitigate the likelihood of material implementation errors, it is impossible to completely eliminate the risk of error in

 

54


the implementation of the computer models that guide the subadviser’s quantitative investment processes. Additionally, it may be difficult to implement model recommendations in volatile and rapidly changing market conditions.

Real Estate Investment Trust (“REIT”) Risk: Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, may not be diversified geographically or by property/mortgage asset type, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs may be more volatile and/or more illiquid than other types of equity securities. REITs (especially mortgage REITs) are subject to interest rate risks. REITs may incur significant amounts of leverage. The Fund will indirectly bear a portion of the expenses, including management fees, paid by each REIT in which it invests, in addition to the expenses of the Fund.

REITs must also meet certain requirements under the Internal Revenue Code of 1986, as amended (the Code) to avoid entity level tax and be eligible to pass-through certain tax attributes of their income to shareholders. REITs are consequently subject to the risk of failing to meet these requirements for favorable tax treatment and of failing to maintain their exemptions from registration under the Investment Company Act of 1940. REITs are subject to the risks of changes in the Code affecting their tax status.

Small Company Risk: Small company stocks present above-average risks in comparison to larger companies. Small companies usually offer a smaller range of products and services than larger companies. Smaller companies may also have limited financial resources and may lack management expertise. As a result, stocks issued by smaller companies may be comparatively less liquid and fluctuate in value more than the stocks of larger, more established companies.

Value Style Risk: Since the Fund follows a value investment style, there is the risk that the value style may be out of favor for long periods of time, that the market will not recognize a security’s intrinsic value for a long time or at all, or that a stock judged to be undervalued may actually be appropriately priced or overvalued. Issuers of value stocks may have experienced adverse business developments or may be subject to special risks that have caused the stock to be out of favor. In addition, the Fund’s value investment style may go out of favor with investors, negatively affecting the Fund’s performance. If the Fund’s assessment of market conditions or a company’s value is inaccurate, the Fund could suffer losses or produce poor performance relative to other funds.

 

PGIM Quant Solutions Small-Cap Value Fund    55


Report of Independent Registered Public Accounting Firm

 

To the Board of Trustees of The Target Portfolio Trust and Shareholders of PGIM Quant Solutions Small-Cap Value Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Quant Solutions Small-Cap Value Fund (one of the funds constituting The Target Portfolio Trust, referred to hereafter as the ”Fund”) as of July 31, 2022, the related statement of operations for the year ended July 31, 2022, the statements of changes in net assets for each of the two years in the period ended July 31, 2022, including the related notes, and the financial highlights for each of the two years in the period ended July 31, 2022 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2022, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period ended July 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Fund as of and for the year ended July 31, 2020 and the financial highlights for each of the periods ended on or prior to July 31, 2020 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated September 16, 2020 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2022 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP

New York, New York

September 16, 2022

We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.

 

56


Liquidity Risk Management Program  (unaudited)

 

Consistent with Rule 22e-4 under the 1940 Act (the “Liquidity Rule”), the Fund has adopted and implemented a liquidity risk management program (the “LRMP”). The Fund’s LRMP seeks to assess and manage the Fund’s liquidity risk, which is defined as the risk that the Fund is unable to meet investor redemption requests without significantly diluting the remaining investors’ interests in the Fund. The Board has approved PGIM Investments LLC (“PGIM Investments”), the Fund’s investment manager, to serve as the administrator of the Fund’s LRMP. As part of its responsibilities as administrator, PGIM Investments has retained a third party to perform certain functions, including providing market data and liquidity classification model information.

The Fund’s LRMP includes a number of processes designed to support the assessment and management of its liquidity risk. In particular, the Fund’s LRMP includes no less than annual assessments of factors that influence the Fund’s liquidity risk; no less than monthly classifications of the Fund’s investments into one of four liquidity classifications provided for in the Liquidity Rule; a 15% of net assets limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); establishment of a minimum percentage of the Fund’s assets to be invested in investments classified as “highly liquid” (as defined under the Liquidity Rule) if the Fund does not invest primarily in highly liquid investments; and regular reporting to the Board.

At a meeting of the Board on March 1-3, 2022, PGIM Investments provided a written report (“LRMP Report”) to the Board addressing the operation, adequacy, and effectiveness of the Fund’s LRMP, including any material changes to the LRMP for the period from January 1, 2021 through December 31, 2021 (“Reporting Period”). The LRMP Report concluded that the Fund’s LRMP was reasonably designed to assess and manage the Fund’s liquidity risk and was adequately and effectively implemented during the Reporting Period. There were no material changes to the LRMP during the Reporting Period. The LRMP Report further concluded that the Fund’s investment strategies continue to be appropriate given the Fund’s status as an open-end fund.

There can be no assurance that the LRMP will achieve its objectives in the future. Additional information regarding risks of investing in the Fund, including liquidity risks presented by the Fund’s investment portfolio, is found in the Fund’s Prospectus and Statement of Additional Information.

 

PGIM Quant Solutions Small-Cap Value Fund


INFORMATION ABOUT BOARD MEMBERS AND OFFICERS (unaudited)

 

Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.

 

    Independent Board Members      
Name
Year of Birth
Position(s)
Portfolios Overseen
   Principal Occupation(s)
During Past Five Years
   Other Directorships
Held During
Past Five Years
   Length of Board Service
       

Ellen S. Alberding

1958

Board Member

Portfolios Overseen: 97

   President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); formerly Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018).    None.    Since September 2013
       

Kevin J. Bannon

1952

Board Member

Portfolios Overseen: 97

   Retired; formerly Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.    Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).    Since July 2008

 

PGIM Quant Solutions Small-Cap Value Fund


    Independent Board Members      
Name
Year of Birth
Position(s)
Portfolios Overseen
   Principal Occupation(s)
During Past Five Years
   Other Directorships
Held During
Past Five Years
   Length of Board Service
       

Linda W. Bynoe

1952

Board Member

Portfolios Overseen: 94

   President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Limited LLC (formerly Telemat Ltd) (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer).    Trustee of Equity Residential (residential real estate) (since December 2009); Director of Northern Trust Corporation (financial services) (since April 2006); formerly Director of Anixter International, Inc. (communication products distributor) (January 2006-June 2020).    Since March 2005
       

Barry H. Evans

1960

Board Member

Portfolios Overseen: 96

   Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer - Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management (asset management).    Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).    Since September 2017
       

Keith F. Hartstein

1956

Board Member & Independent Chair

Portfolios Overseen: 97

   Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); formerly Executive Committee of the IDC Board of Governors (October 2019-December 2021); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).    None.    Since September 2013

 

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    Independent Board Members      
Name
Year of Birth
Position(s)
Portfolios Overseen
   Principal Occupation(s)
During Past Five Years
   Other Directorships
Held During
Past Five Years
   Length of Board Service
       

Laurie Simon Hodrick

1962

Board Member

Portfolios Overseen: 93

   A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly Visiting Professor of Law, Stanford Law School (2015-2021); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008).    Independent Director, Andela (since January 2022) (global talent network); Independent Director, Roku (since December 2020) (communication services); formerly Independent Director, Synnex Corporation (2019-2021) (information technology); formerly Independent Director, Kabbage, Inc. (2018-2020) (financial services); formerly Independent Director, Corporate Capital Trust (2017-2018) (a business development company).    Since September 2017
       

Brian K. Reid

1961

Board Member

Portfolios Overseen: 96

   Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017).    None.    Since March 2018

 

PGIM Quant Solutions Small-Cap Value Fund


    Independent Board Members     
       

Name

Year of Birth

Position(s)

Portfolios Overseen

 

Principal Occupation(s)

During Past Five Years

 

Other Directorships

Held During

Past Five Years

   Length of Board Service
       

Grace C. Torres

1959

Board Member

Portfolios Overseen: 96

  Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.   Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank; formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank.    Since November 2014

 

    Interested Board Members     
       

Name

Year of Birth

Position(s)

Portfolios Overseen

 

Principal Occupation(s)

During Past Five Years

 

Other Directorships

Held During

Past Five Years

   Length of Board Service
       

Stuart S. Parker

1962

Board Member & President

Portfolios Overseen: 96

  President, Chief Executive Officer, Chief Operating Officer and Officer in Charge of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); President and PEO (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011); Investment Company Institute - Board of Governors (since May 2012).   None.    Since January 2012

 

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    Interested Board Members      

Name

Year of Birth

Position(s)

Portfolios Overseen

  

Principal Occupation(s)

During Past Five Years

  

Other Directorships

Held During

Past Five Years

   Length of Board Service
       

Scott E. Benjamin

1973

Board Member & Vice President

Portfolios Overseen: 97

   Executive Vice President (since May 2009) of PGIM Investments LLC; Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006).    None.    Since March 2010

 

    Fund Officers(a)   

Name

Year of Birth

Fund Position

   Principal Occupation(s) During Past Five Years   

Length of

Service as Fund

Officer

     

Claudia DiGiacomo

1974

Chief Legal Officer

   Chief Legal Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Chief Legal Officer, Executive Vice President and Secretary of PGIM Investments LLC (since August 2020); Chief Legal Officer of Prudential Mutual Fund Services LLC (since August 2020); Chief Legal Officer of PIFM Holdco, LLC (since August 2020); Vice President and Corporate Counsel (since January 2005) of Prudential; and Corporate Counsel of AST Investment Services, Inc. (since August 2020); formerly Vice President and Assistant Secretary of PGIM Investments LLC (2005-2020); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004).    Since December 2005

 

PGIM Quant Solutions Small-Cap Value Fund


    Fund Officers(a)   

Name

Year of Birth

Fund Position

   Principal Occupation(s) During Past Five Years   

Length of

Service as Fund

Officer

     

Isabelle Sajous

1976

Chief Compliance Officer

   Chief Compliance Officer (since April 2022) of PGIM Investments LLC, the PGIM Funds, Target Funds, PGIM ETF Trust, PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, Advanced Series Trust, The Prudential Series Fund and Prudential’s Gibraltar Fund, Inc.; Chief Compliance Officer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; Vice President, Compliance of PGIM Investments LLC (since December 2020); formerly Director, Compliance (July 2018-December 2020) of Credit Suisse Asset Management LLC; and Vice President, Associate General Counsel & Deputy Chief Compliance Officer of Cramer Rosenthal McGlynn, LLC (August 2014-July 2018).    Since April 2022
     

Andrew R. French

1962

Secretary

   Vice President (since December 2018) of PGIM Investments LLC; Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President and Corporate Counsel (2010-2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.    Since October 2006
     

Melissa Gonzalez

1980

Assistant Secretary

   Vice President and Corporate Counsel (since September 2018) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director and Corporate Counsel (March 2014-September 2018) of Prudential.    Since March 2020
     

Patrick E. McGuinness

1986

Assistant Secretary

   Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Director and Corporate Counsel (since February 2017) of Prudential; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.    Since June 2020
     

Debra Rubano

1975

Assistant Secretary

   Vice President and Corporate Counsel (since November 2020) of Prudential; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc; formerly Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary of numerous funds in the Allianz fund complex (2015-2020).    Since December 2020
     

Kelly A. Coyne

1968

Assistant Secretary

   Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010); Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.    Since March 2015

 

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    Fund Officers(a)   

Name

Year of Birth

Fund Position

   Principal Occupation(s) During Past Five Years   

Length of

Service as Fund

Officer

     

Christian J. Kelly

1975

Treasurer and Principal Financial and Accounting Officer

   Vice President, Head of Fund Administration of PGIM Investments LLC (since November 2018); Principal Financial Officer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly, Treasurer and Principal Accounting Officer (March 2022- July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007).    Since January 2019
     

Lana Lomuti

1967

Assistant Treasurer

   Vice President (since 2007) and Director (2005-2007), within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.    Since April 2014
     

Russ Shupak

1973

Assistant Treasurer

   Vice President (since 2017) and Director (2013-2017), within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Assistant Treasurer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.    Since October 2019
     

Deborah Conway

1969

Assistant Treasurer

   Vice President (since 2017) and Director (2007-2017), within PGIM Investments Fund Administration.    Since October 2019
     

Elyse M. McLaughlin

1974

Assistant Treasurer

   Vice President (since 2017) and Director (2011-2017), within PGIM Investments Fund Administration; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.    Since October 2019
     

Kelly Florio

1978

Anti-Money Laundering Compliance Officer

   Vice President, Corporate Compliance, Global Compliance Programs and Compliance Risk Management (since December 2021) of Prudential; formerly, Head of Fraud Risk Management (October 2019 to December 2021) at New York Life Insurance Company; formerly, Head of Key Risk Area Operations (November 2018 to October 2019), Director of the US Anti-Money Laundering Compliance Unit (2009-2018) and Bank Loss Prevention Associate (2006 -2009) at MetLife.    Since June 2022

(a) Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.

Explanatory Notes to Tables:

 

Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC.

Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410.

There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75.

 

PGIM Quant Solutions Small-Cap Value Fund


“Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.

“Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Mutual Funds, Target Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM Private Real Estate Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

As used in the Fund Officers table “Prudential” means The Prudential Insurance Company of America.

 

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Approval of Advisory Agreements (unaudited)

 

The Fund’s Board of Trustees

The Board of Trustees (the “Board”) of PGIM Quant Solutions Small-Cap Value Fund (the “Fund”)1 consists of ten individuals, eight of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Trustee. The Board has established five standing committees: the Audit Committee, the Nominating and Governance Committee, the Compliance Committee and two Investment Committees. Each committee is chaired by, and composed of, Independent Trustees.

Annual Approval of the Fund’s Advisory Agreements

As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”) and the Fund’s subadvisory agreement with PGIM Quantitative Solutions LLC (“PGIM Quantitative Solutions”). In considering the renewal of the agreements, the Board, including all of the Independent Trustees, met on May 26 and June 7-9, 2022 (the “Board Meeting”) and approved the renewal of the agreements through July 31, 2023, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.

In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments and PGIM Quantitative Solutions. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.

In approving the agreements, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments and the subadviser, the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Trustees did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the Board Meeting.

 

1PGIM Quant Solutions Small-Cap Value Fund is a series of The Target Portfolio Trust.

 

PGIM Quant Solutions Small-Cap Value Fund


Approval of Advisory Agreements (continued)

 

The Trustees determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a management agreement, and between PGIM Investments and PGIM Quantitative Solutions, which serves as the Fund’s subadviser pursuant to the terms of a subadvisory agreement with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Trustees considered relevant in the exercise of their business judgment.

The material factors and conclusions that formed the basis for the Trustees’ reaching their determinations to approve the continuance of the agreements are separately discussed below.

Nature, Quality and Extent of Services

The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments and PGIM Quantitative Solutions. The Board noted that PGIM Quantitative Solutions is affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadviser, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Trustees of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by PGIM Quantitative Solutions, including investment research and security selection as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadviser, as well as PGIM Investments’ recommendation, based on its review of the subadviser, to renew the subadvisory agreement.

The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund and PGIM Quantitative Solutions, and also considered the qualifications, backgrounds and responsibilities of the PGIM Quantitative Solutions portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’ and PGIM Quantitative Solutions’ organizational structure, senior management, investment operations, and other relevant information pertaining to PGIM Investments and PGIM Quantitative Solutions. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to PGIM Investments and PGIM

Quantitative Solutions.

 

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The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments and the subadvisory services provided to the Fund by PGIM Quantitative Solutions, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments and PGIM Quantitative Solutions under the management and subadvisory agreements.

Costs of Services and Profits Realized by PGIM Investments

The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.

Economies of Scale

The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale can be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.

The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.

Other Benefits to PGIM Investments and PGIM Quantitative Solutions

The Board considered potential ancillary benefits that might be received by PGIM Investments, PGIM Quantitative Solutions and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent

 

PGIM Quant Solutions Small-Cap Value Fund


Approval of Advisory Agreements  (continued)

 

(which is affiliated with PGIM Investments), and benefits to its reputation as well as other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by PGIM Quantitative Solutions included its ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits derived by PGIM Investments and PGIM Quantitative Solutions were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.

Performance of the Fund / Fees and Expenses

The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one-, three-, five- and ten-year periods ended December 31, 2021.

The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended July 31, 2021. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.

The mutual funds included in the Peer Universe, which was used to evaluate performance, and the Peer Group, which was used to evaluate fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).

The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.

 

Net Performance    1 Year    3 Years    5 Years    10 Years
     1st Quartile    3rd Quartile    4th Quartile    3rd Quartile

Actual Management Fees: 1st Quartile

 

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Net Performance    1 Year    3 Years    5 Years    10 Years
     1st Quartile    3rd Quartile    4th Quartile    3rd Quartile

Net Total Expenses: 1st Quartile

 

  ·

The Board noted that the Fund outperformed its benchmark index over the one-year period and underperformed its benchmark index over the three-, five-, and ten-year periods.

 

  ·

The Board considered PGIM Investments’ assertions that the Fund finished 2021 in the top decile of its peer group, and that the Fund’s one-year gross return outperformed the benchmark index for the last four quarters of 2021 and the first quarter of 2022.

 

  ·

The Board and PGIM Investments agreed to retain the Fund’s existing contractual waiver of up to 0.01% to the extent that the Fund’s annual operating expenses and acquired fund fees and expenses (exclusive of certain fees and expenses) exceed 0.68% through November 30, 2022.

 

  ·

The Board and PGIM Investments also agreed to continue the Fund’s existing expense cap, which (exclusive of certain fees and expenses) caps transfer agency, shareholder servicing, sub-transfer agency and blue sky fees to the extent that such fees cause the total annual fund operating expenses to exceed 1.14% for Class R2 shares and 0.89% for Class R4 shares through November 30, 2022.

 

  ·

In addition, PGIM Investments will waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class, and has agreed that total annual fund operating expenses for Class R6 shares will not exceed total annual fund operating expenses for Class Z shares.

 

  ·

The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements.

 

  ·

The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided.

* * *

After full consideration of these factors, the Board concluded that approval of the agreements was in the best interests of the Fund and its shareholders.

 

PGIM Quant Solutions Small-Cap Value Fund


MAIL

 

TELEPHONE

  WEBSITE

655 Broad Street

 

(800) 225-1852

 

pgim.com/investments

Newark, NJ 07102

       

 

PROXY VOTING

 

The Board of Trustees of the Fund has delegated to the Fund’s subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov . Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the
Securities and Exchange Commission’s website.

 

TRUSTEES
Ellen S. Alberding Kevin J. Bannon Scott E. Benjamin Linda W. Bynoe Barry H. Evans Keith F. Hartstein Laurie Simon Hodrick Stuart S. Parker Brian K. Reid Grace C. Torres

 

OFFICERS
Stuart S. Parker, President Scott E. Benjamin, Vice President Christian J. Kelly, Treasurer and Principal Financial and Accounting Officer Claudia DiGiacomo, Chief Legal Officer Isabelle Sajous, Chief Compliance Officer Kelly Florio, Anti-Money Laundering Compliance Officer Andrew R. French, Secretary Melissa Gonzalez, Assistant Secretary Kelly A. Coyne, Assistant Secretary Patrick E. McGuinness, Assistant Secretary Debra Rubano, Assistant Secretary Lana Lomuti, Assistant Treasurer Russ Shupak, Assistant Treasurer Elyse M. McLaughlin, Assistant Treasurer Deborah Conway, Assistant Treasurer

 

MANAGER

   PGIM Investments LLC   

655 Broad Street

Newark, NJ 07102

    

SUBADVISER

   PGIM Quantitative Solutions LLC   

Gateway Center Two

100 Mulberry Street

Newark, NJ 07102

    

DISTRIBUTOR

   Prudential Investment Management Services LLC   

655 Broad Street

Newark, NJ 07102

    

CUSTODIAN

   The Bank of New York Mellon   

240 Greenwich Street

New York, NY 10286

    

TRANSFER AGENT

   Prudential Mutual Fund Services LLC   

PO Box 9658

Providence, RI 02940

    
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    PricewaterhouseCoopers LLP   

300 Madison Avenue

New York, NY 10017

    

FUND COUNSEL

   Willkie Farr & Gallagher LLP   

787 Seventh Avenue

New York, NY 10019

    


An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing.
The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a
prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The
prospectus and summary prospectus should be read carefully before investing.

 

E-DELIVERY
 
To receive your mutual fund documents online, go to pgim.com/investments/resource/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above.

 

SHAREHOLDER COMMUNICATIONS WITH TRUSTEES
 
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, PGIM Quant Solutions Small-Cap Value Fund, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual
Trustee by writing to that Trustee at the same address. Communications are not screened before being delivered to the addressee.

 

AVAILABILITY OF PORTFOLIO HOLDINGS
 
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov.

 

 
The Fund’s Statement of Additional Information contains additional information about the Fund’s
Trustees and is available without charge, upon request, by calling (800) 225-1852.

 

  Mutual Funds:

 

     

ARE NOT INSURED BY THE FDIC OR ANY

FEDERAL GOVERNMENT AGENCY

  

MAY LOSE

VALUE

  

ARE NOT A DEPOSIT OF OR GUARANTEED

BY ANY BANK OR ANY BANK AFFILIATE


LOGO

 

 

 

PGIM QUANT SOLUTIONS SMALL-CAP VALUE FUND

SHARE CLASS    A    C    R    Z    R2    R4    R6

NASDAQ

   TSVAX    TRACX    TSVRX    TASVX    PSVDX    PSVKX    TSVQX

CUSIP

   875921785    875921710    875921843    875921306    875921611    875921595    875921777

MF232E


LOGO

 

 

PGIM CORE BOND FUND

 

 

ANNUAL REPORT

JULY 31, 2022

 

 

LOGO

To enroll in e-delivery, go to pgim.com/investments/resource/edelivery


Table of Contents

 

Letter from the President

    3  

Your Fund’s Performance

    4  

Growth of a $10,000 Investment

    5  

Strategy and Performance Overview

    8  

Fees and Expenses

    11  

Holdings and Financial Statements

    13  

Approval of Advisory Agreements

       

 

 

 

 

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

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.

Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. PGIM Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies. © 2022 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

 

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Letter from the President

 

LOGO       

Dear Shareholder:

 

We hope you find the annual report for the PGIM Core Bond Fund informative and useful. The report covers performance for the 12-month period that ended July 31, 2022.

 

The attention of the global economy and markets turned during the period from the impact of the COVID-19 pandemic to the challenge of rapidly rising inflation. Prices for a wide range of goods and services rose in response to economic reopenings, supply-chain disruptions, pandemic-related governmental stimulus and Russia’s invasion of Ukraine. As inflation surged at its fastest rate in more than 40 years, central banks, led by the US Federal Reserve, sought to restrain the trend by aggressively hiking interest rates, prompting concerns of a potential recession.

After rising to record levels during the closing months of 2021, US stocks retreated in 2022 in the face of rising prices, slowing economic growth and uncertainties related to the war in Ukraine. Growth-oriented stocks suffered the sharpest losses as investors turned for protection to traditionally defensive, value-oriented stocks. Large-cap equities ended the period in negative territory but outperformed their small-cap counterparts by a significant margin. International developed markets trailed the US market, while emerging markets lagged further behind.

Rising rates and economic uncertainty drove fixed-income prices broadly lower as well. US and global investment-grade bonds, along with US high yield corporate bonds and emerging market debt, all posted negative returns for the period.

Regarding your investments with PGIM, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals. Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. However, diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

At PGIM Investments, we provide access to active investment strategies across the global markets in the pursuit of consistent outperformance for investors. PGIM is the world’s 11th-largest investment manager with more than $1.5 trillion in assets under management. Our scale and investment expertise allow us to deliver a diversified suite of actively managed solutions across a broad spectrum of asset classes and investment styles.

Thank you for choosing our family of funds.

Sincerely,

 

LOGO

Stuart S. Parker, President

PGIM Core Bond Fund

September 15, 2022

 

PGIM Core Bond Fund    3


Your Fund’s Performance (unaudited)

 

Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at pgim.com/investments or by calling (800) 225-1852.

 

            Average Annual Total Returns as of 7/31/22
    One Year (%)     Five Years (%)     Ten Years (%)       Since Inception (%)  

Class A

       

(with sales charges)

    -13.71          0.19   N/A     0.88 (02/17/2015 )   

(without sales charges)

    -10.81     0.85   N/A     1.33 (02/17/2015

Class C

       

(with sales charges)

    -12.40     0.09   N/A     0.56 (02/17/2015

(without sales charges)

    -11.52     0.09   N/A     0.56 (02/17/2015

Class R

       

(without sales charges)

    -11.10     0.56   N/A     1.05 (02/17/2015

Class Z

       

(without sales charges)

    -10.53     1.16   1.27      

Class R6

       

(without sales charges)

    -10.52     1.19   N/A     1.64 (02/17/2015

Bloomberg US Aggregate Bond Index

       
      -9.12     1.28   1.65      

 

            Average Annual Total Returns as of 7/31/22 Since Inception (%)
    

Class A, Class C, Class R, Class R6  

(02/17/2015)

Bloomberg US Aggregate Bond Index

   1.50

Since Inception returns are provided for any share class that has less than 10 fiscal years of returns. Since Inception returns for the Index are measured from the closest month-end to the class’ inception date.

 

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Growth of a $10,000 Investment (unaudited)

 

LOGO

The graph compares a $10,000 investment in the Fund’s Class Z shares with a similar investment in the Bloomberg US Aggregate Bond Index by portraying the initial account values at the beginning of the 10-year period (July 31, 2012) and the account values at the end of the current fiscal year (July 31, 2022), as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) all recurring fees (including management fees) were deducted and (b) all dividends and distributions were reinvested. The line graph provides information for Class Z shares only. As indicated in the tables provided earlier, performance for other share classes will vary due to the differing charges and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursements, if any, the returns would have been lower.

Past performance does not predict future performance. Total returns and the ending account values in the graph include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

 

PGIM Core Bond Fund    5


Your Fund’s Performance (continued)

 

The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.

 

         
     Class A     Class C     Class R     Class Z     Class R6  
       
Maximum initial sales charge   3.25% of the public offering price   None   None   None   None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value at redemption)  

1.00% on sales of $500,000 or more made within 12 months of purchase

  1.00% on
sales
made
within 12
months of 
purchase
  None   None   None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)   0.25%   1.00%   0.75%
(0.50%
currently)
  None   None

Benchmark Definitions

Bloomberg US Aggregate Bond Index—The Bloomberg US Aggregate Bond Index is unmanaged and represents securities that are taxable and US dollar denominated. It covers the US investment-grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.

Investors cannot invest directly in an index. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes that may be paid by an investor.

 

  Distributions and Yields as of 7/31/22             
    

Total Distributions

Paid for

12 Months ($)

  SEC 30-Day
Subsidized
Yield* (%)
 

SEC 30-Day

 Unsubsidized 
Yield** (%)

Class A

       0.19       2.86              2.80         

Class C

       0.11       2.03       1.37

Class R

       0.16       2.51       -22.70

Class Z

       0.22       3.12       2.88

Class R6

       0.22       3.14       3.10

 

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*SEC 30-Day Subsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s net expenses (net of any expense waivers or reimbursements). The investor experience is represented by the SEC 30-Day Subsidized Yield.

**SEC 30-Day Unsubsidized Yield (%)—A standardized yield calculation created by the Securities and Exchange Commission, it reflects the income earned during a 30-day period, after the deduction of the Fund’s gross expenses. The investor experience is represented by the SEC 30-Day Subsidized Yield.

 

   Credit Quality expressed as a percentage of total investments as of 7/31/22 (%)       

 AAA

     63.1  

 AA

     6.0  

 A

     12.2  

 BBB

     17.1  

 BB

     0.2  

 Not Rated

     0.9  

 Cash/Cash Equivalents

     0.5  
   
Total      100.0  

Credit ratings reflect the highest rating assigned by a nationally recognized statistical rating organization (NRSRO) such as Moody’s Investors Service, Inc. (Moody’s), S&P Global Ratings (S&P), or Fitch, Inc. (Fitch). Credit ratings reflect the common nomenclature used by both S&P and Fitch. Where applicable, ratings are converted to the comparable S&P/Fitch rating tier nomenclature. These rating agencies are independent and are widely used. The Not Rated category consists of securities that have not been rated by an NRSRO. Credit ratings are subject to change.

 

PGIM Core Bond Fund    7


Strategy and Performance Overview* (unaudited)

 

How did the Fund perform?

The PGIM Core Bond Fund’s Class Z shares returned –10.53% during the 12-month reporting period that ended July 31, 2022, underperforming the –9.12% return of the Bloomberg US Aggregate Bond Index (the Index).

What were the market conditions?

·  

From a starting point of low yields, tight spreads, and high equity multiples, the shift in fundamentals—most notably, high inflation—drove a wholesale repricing of markets during the reporting period. Concerns about central bank tightening, hard economic landings, and the war in Ukraine led global credit spreads notably wider, while rate volatility increased as markets first began pricing in more aggressive Federal Open Market Committee (FOMC) policy tightening, and later began to price in a hard economic landing.

 

·  

Against the backdrop of historic lows in unemployment and generational highs in inflation, central banks signaled an increased willingness to accept more economic and market pain than they had over the last decade of low inflation. A succession of rate hikes over the first half of 2022—including two outsized hikes of 75 basis points (bps) each by the US Federal Reserve (the Fed) in June and July—confirmed to markets that the Fed was fully focused on tackling inflation. (One basis point equals 0.01%.) Following the July 2022 FOMC meeting, the market expected the target rate to be lifted to around 3.25%, not far from Fed officials’ median projection, but the market began pricing in rate cuts beginning in 2023.

 

·  

As a result, enormous volatility continued to be priced into US Treasuries, with sharply higher front-end rates and lower long-dated yields forming a substantially flatter US Treasury yield curve before finally inverting in the last month of the period. From 1.05% on July 31, 2021, the 10-year/2-year Treasury spread declined to -0.23% by the end of the period on July 31, 2022.

 

·  

After rising to nearly 3.5% in June 2022, the US 10-year Treasury yield ended the period on July 31, 2022 at 2.65%. Meanwhile, the yield on the two-year Treasury note ended the period at 2.88%, a rise of 270 bps over 12 months.

 

·  

US investment grade corporate spreads widened significantly as corporates were challenged by elevated inflationary pressures, a slower growth outlook, and higher event and geopolitical risk. Securitized credit spreads widened, with asset-backed securities (ABS), commercial mortgage-backed securities (CMBS), and collateralized loan obligation (CLO) spreads trading well above their recent tights by the end of the period. Meanwhile, agency mortgage-backed securities (MBS) underperformed Treasuries on concerns that the Fed would begin selling MBS if officials needed to step up their inflation fight. However, agency MBS strengthened over the final weeks of the period amid a decline in rate volatility.

 

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What worked?

·  

While overall security selection detracted from the Fund’s performance during the period, selection in emerging markets, high yield, and MBS were modestly positive contributors.

 

·  

While overall sector allocation detracted from performance, an underweight allocation, relative to the Index, to MBS added to performance.

 

·  

Within credit, positioning in upstream energy, finance companies, and gaming/lodging/leisure enhanced performance. In individual security selection, the Fund benefited from an underweight position in Oracle Corporation (technology), along with overweight positions in Cenovus Energy Inc. (upstream energy) and Conoco Phillips (upstream energy), each relative to the Index.

What didn’t work?

·  

Overall security selection detracted from performance during the period, with selections in Treasuries, investment grade corporates, and CMBS detracting the most.

 

·  

Overall sector allocation also detracted, with overweight allocations to CMBS, CLOs, and investment grade corporates, relative to the Index, the largest detractors.

 

·  

Within credit, selections in banking, healthcare & pharmaceuticals, and cable & satellite detracted from performance. In individual security selection, the Fund’s overweight positioning in Viatris Inc. (healthcare & pharmaceuticals), Charter Communications, Inc. (cable & satellite), and Steel Dynamics, Inc. (metals & mining), relative to the Index, detracted from returns.

 

·  

The Fund’s yield curve and duration positioning detracted from performance as US Treasury rates sold off, and the curve flattened.

Did the Fund use derivatives?

The Fund uses derivatives when they facilitate implementation of the overall investment approach. During the reporting period, the Fund used interest-rate futures, options, and swaps to help manage duration positioning and yield curve exposure. In aggregate, these positions detracted from performance.

Current outlook

·  

Tighter financial conditions are expected to continue working their way through the economy with lagged effects in coming quarters. For now, the Fed is focused on currently high monthly inflation readings, vowing to keep up the pressure until those readings show convincing signs they are softening toward the Fed’s target. At some point, though, PGIM Fixed Income expects the Fed will likely pivot back toward a focus on the projected lagged effects of its tightening and, should material signs of softening accumulate, will adopt a more measured pace of policy normalization.

 

PGIM Core Bond Fund    9


Strategy and Performance Overview* (continued)

 

·  

Even though fundamentals and issuer liquidity are arguably well braced for recession, and spread widening has already generated value in a number of sectors, PGIM Fixed Income believes spreads may remain soft until most of the current bad news—e.g., a cutoff of Russian gas supplies, cooling of the housing market, etc.—has largely played out.

 

·  

However, over the intermediate and longer term, the selloff in rates and spreads could turn out to be a positive as the overarching trends of aging demographics, high debt burdens, and other factors that conspired for decades to push equilibrium interest rates down are more likely hibernating than reversing. Once the reopening enthusiasm and supply-chain problems have passed, inflation will likely return to, or below, targets, and bonds will likely be well on their way to an extended period of solid returns. In the meantime, PGIM Fixed Income believes the best course will be to focus on the micro-alpha opportunities within and across sectors.

 

·  

PGIM Fixed Income maintains its positive view of spread sectors over the medium-to-long term, positioning the Fund with overweight allocations, relative to the Index, to structured products (CLOs, CMBS, ABS) and investment grade corporates (as of the end of the period). The Fund holds underweight exposure, relative to the Index, to MBS (as of the end of the period) in favor of more attractive opportunities across spread sectors.

 

·  

In terms of calling the cycle top in long-term rates, given the strength of the economy and level of inflation, PGIM Fixed Income believes it is too early to preclude the possibility of higher highs. Yet, from a long-term perspective, exposure to developed market duration is becoming more compelling after the broad repricing of markets and with the looming moderation in global growth. While acknowledging the immediate trajectory of inflation is going to dictate market volatility and the path of the US Treasury 10-year yield, PGIM Fixed Income’s base case holds that implied volatility will ultimately decline, and the 10-year yield will stay below the terminal rate of this hiking cycle when it is eventually reached.

* This strategy and performance overview, which discusses what strategies or holdings (including derivatives, if applicable) affected the Fund’s performance, is compiled based on how the Fund performed relative to the Fund’s assigned index and is viewed for performance attribution purposes at the aggregate Fund level, which in most instances will not directly correlate to the amounts disclosed in the Statement of Operations which conform to U.S. generally accepted accounting principles.

 

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Fees and Expenses (unaudited)

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 held through the six-month period ended July 31, 2022. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

Actual Expenses

The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of PGIM funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information

 

PGIM Core Bond Fund    11


Fees and Expenses (continued)

 

provided in the expense table. Additional fees have the effect of reducing investment returns.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

       
            PGIM Core Bond Fund  

Beginning

Account Value

February 1, 2022

 

Ending

Account Value

July 31, 2022

 

Annualized

Expense

  Ratio Based on the    

Six-Month Period

 

Expenses Paid

During the
Six-Month Period*

 
       

Class A            

   Actual     $ 1,000.00           $ 924.50           0.62     $ 2.96                   
   Hypothetical     $ 1,000.00           $ 1,021.72           0.62     $ 3.11    
       

Class C

   Actual              $ 1,000.00                           $ 919.80                  1.43                      $ 6.81    
   Hypothetical     $ 1,000.00           $ 1,017.70           1.43 %        $ 7.15    
       

Class R

   Actual     $ 1,000.00           $ 922.00           0.93     $ 4.43    
   Hypothetical     $ 1,000.00           $ 1,020.18           0.93     $ 4.66    
       

Class Z

   Actual     $ 1,000.00           $ 925.90           0.32     $ 1.53    
   Hypothetical     $ 1,000.00           $ 1,023.21           0.32     $ 1.61    
       

Class R6

   Actual     $ 1,000.00           $ 925.90           0.31     $ 1.48    
     Hypothetical           $ 1,000.00                     $ 1,023.26               0.31           $ 1.56          

*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended July 31, 2022, and divided by the 365 days in the Fund’s fiscal year ended July 31, 2022 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

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Schedule of Investments

as of July 31, 2022

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

LONG-TERM INVESTMENTS     101.5%

          

ASSET-BACKED SECURITIES     19.6%

          

Automobiles     5.1%

                          

AmeriCredit Automobile Receivables Trust,

          

Series 2019-01, Class C

   3.360%   02/18/25      395      $ 394,727  

Series 2019-02, Class C

   2.740   04/18/25      700        695,431  

Series 2019-03, Class C

   2.320   07/18/25      1,700        1,675,907  

Series 2020-01, Class B

   1.480   01/21/25      1,400        1,387,496  

Series 2021-02, Class C

   1.010   01/19/27      1,300        1,211,048  

Series 2021-03, Class C

   1.410   08/18/27      1,400        1,315,380  

Avis Budget Rental Car Funding AESOP LLC,

          

Series 2018-01A, Class A, 144A

   3.700   09/20/24      1,100        1,097,211  

Series 2018-02A, Class A, 144A

   4.000   03/20/25      500        497,136  

Series 2019-02A, Class A, 144A

   3.350   09/22/25      1,100        1,082,277  

Series 2019-03A, Class A, 144A

   2.360   03/20/26      1,700        1,628,918  

Series 2020-01A, Class A, 144A

   2.330   08/20/26      1,200        1,150,240  

Series 2021-01A, Class A, 144A

   1.380   08/20/27      3,500        3,146,223  

Series 2021-02A, Class A, 144A

   1.660   02/20/28      3,800        3,459,365  

Series 2022-01A, Class A, 144A

   3.830   08/21/28      4,800        4,788,722  

CarMax Auto Owner Trust,

          

Series 2021-02, Class C

   1.340   02/16/27      1,100        1,026,206  

Series 2021-04, Class C

   1.380   07/15/27      800        734,575  

Series 2022-01, Class C

   2.200   11/15/27      1,300        1,221,773  

Series 2022-01, Class D

   2.470   07/17/28      600        562,717  

Drive Auto Receivables Trust,

          

Series 2020-02, Class B

   1.420   03/17/25      62        62,136  

Series 2021-01, Class B

   0.650   07/15/25      832        827,418  

Ford Credit Auto Owner Trust,

          

Series 2018-01, Class A, 144A

   3.190   07/15/31      1,300        1,286,349  

Series 2019-01, Class A, 144A

   3.520   07/15/30      3,400        3,391,597  

Series 2020-01, Class A, 144A

   2.040   08/15/31      3,300        3,173,450  

Series 2020-02, Class A, 144A

   1.060   04/15/33      1,100        1,012,891  

Series 2021-01, Class B, 144A

   1.610   10/17/33      630        571,820  

Series 2021-02, Class B, 144A

   1.910   05/15/34      600        544,709  

Ford Credit Floorplan Master Owner Trust,

          

Series 2020-02, Class A

   1.060   09/15/27      2,800        2,587,201  

GLS Auto Receivables Issuer Trust,

          

Series 2021-04A, Class B, 144A

   1.530   04/15/26      1,700        1,632,165  

GM Financial Consumer Automobile Receivables Trust,

          

Series 2018-04, Class C

   3.620   06/17/24      200        200,072  

GM Financial Revolving Receivables Trust,

          

Series 2021-01, Class B, 144A

   1.490   06/12/34      200        178,746  

Hertz Vehicle Financing III LP,

          

Series 2021-02A, Class A, 144A

   1.680   12/27/27      1,900        1,718,851  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    13


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

ASSET-BACKED SECURITIES (Continued)

          

Automobiles (cont’d.)

                                  

Hertz Vehicle Financing LLC,

          

Series 2021-01A, Class A, 144A

     1.210%       12/26/25        2,200      $ 2,059,231  

Series 2022-02A, Class A, 144A

     2.330       06/26/28        5,500        5,021,050  

OneMain Direct Auto Receivables Trust,

          

Series 2019-01A, Class A, 144A

     3.630       09/14/27        4,100        4,039,274  

Series 2021-01A, Class B, 144A

     1.260       07/14/28        2,700        2,505,533  

Santander Drive Auto Receivables Trust,

          

Series 2020-02, Class C

     1.460       09/15/25        429        427,154  

Series 2020-03, Class C

     1.120       01/15/26        1,975        1,948,561  

Series 2020-04, Class C

     1.010       01/15/26        1,400        1,381,289  

Series 2021-02, Class C

     0.900       06/15/26        1,100        1,069,710  

Series 2021-02, Class D

     1.350       07/15/27        2,800        2,637,896  

Series 2021-03, Class C

     0.950       09/15/27        2,000        1,927,517  

Series 2021-04, Class C

     1.260       02/16/27        2,800        2,684,964  

Series 2022-01, Class C

     2.560       04/17/28        1,800        1,716,800  

Toyota Auto Loan Extended Note Trust,

          

Series 2020-01A, Class A, 144A

     1.350       05/25/33        1,000        941,323  

World Omni Select Auto Trust,

          

Series 2019-A, Class B

     2.170       12/15/25        1,671        1,663,272  

Series 2019-A, Class C

     2.380       12/15/25        300        297,096  

Series 2021-A, Class C

     1.090       11/15/27        600        557,973  
          

 

 

 
             75,141,400  

Collateralized Loan Obligations     12.4%

                                  

Allegro CLO Ltd. (Cayman Islands),

          

Series 2019-02A, Class A1A, 144A, 3 Month LIBOR + 1.390% (Cap N/A, Floor 1.390%)

     4.128(c)       01/19/33        5,000        4,925,045  

Anchorage Capital CLO Ltd. (Cayman Islands),

          

Series 2021-17A, Class A1, 144A, 3 Month LIBOR + 1.170% (Cap N/A, Floor 1.170%)

     3.682(c)       07/15/34        6,500        6,292,913  

Apres Static CLO Ltd. (Cayman Islands),

          

Series 2019-01A, Class A1R, 144A, 3 Month LIBOR + 1.070% (Cap N/A, Floor 0.000%)

     3.582(c)       10/15/28        3,025        2,999,665  

Atrium (Cayman Islands),

          

Series 12A, Class AR, 144A, 3 Month LIBOR + 0.830% (Cap N/A, Floor 0.000%)

     3.589(c)       04/22/27        2,526        2,473,382  

Bain Capital Credit CLO Ltd. (Cayman Islands),

          

Series 2019-03A, Class AR, 144A, 3 Month LIBOR + 1.160% (Cap N/A, Floor 1.160%)

     3.892(c)       10/21/34        6,500        6,294,542  

Balboa Bay Loan Funding Ltd. (Cayman Islands),

          

Series 2020-01A, Class AR, 144A, 3 Month LIBOR + 1.120% (Cap N/A, Floor 1.120%)

     3.830(c)       01/20/32        5,000        4,894,351  

 

See Notes to Financial Statements.

 

14


    

    

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

ASSET-BACKED SECURITIES (Continued)

       

Collateralized Loan Obligations (cont’d.)

                     

Balboa Bay Loan Funding Ltd. (Cayman Islands), (cont’d.)

       

Series 2021-01A, Class A, 144A, 3 Month LIBOR + 1.200% (Cap N/A, Floor 1.200%)

   3.910%(c)   07/20/34      3,100      $ 3,007,754  

Barings Loan Partners CLO Ltd. (Cayman Islands),

          

Series LP-02A, Class A, 144A, 3 Month LIBOR + 1.100% (Cap N/A, Floor 1.100%)

   1.698(c)   01/20/34      11,750        11,390,161  

Battalion CLO Ltd. (Cayman Islands),

          

Series 2015-08A, Class A1R2, 144A, 3 Month LIBOR + 1.070% (Cap N/A, Floor 1.070%)

   3.810(c)   07/18/30      1,000        984,529  

Series 2016-10A, Class A1R2, 144A, 3 Month LIBOR + 1.170% (Cap N/A, Floor 1.170%)

   3.953(c)   01/25/35      400        386,366  

Series 2017-11A, Class AR, 144A, 3 Month LIBOR + 1.150% (Cap N/A, Floor 1.150%)

   3.933(c)   04/24/34      5,500        5,340,346  

Series 2019-16A, Class AR, 144A, 3 Month LIBOR + 1.120% (Cap N/A, Floor 1.120%)

   3.830(c)   12/19/32      3,250        3,157,039  

Carlyle Global Market Strategies CLO Ltd. (Cayman Islands),

          

Series 2015-05A, Class A1RR, 144A, 3 Month LIBOR + 1.080% (Cap N/A, Floor 1.080%)

   3.790(c)   01/20/32      10,250        10,016,953  

Carlyle US CLO Ltd. (Cayman Islands),

          

Series 2018-01A, Class A1, 144A, 3 Month LIBOR + 1.020% (Cap N/A, Floor 0.000%)

   3.730(c)   04/20/31      1,000        983,018  

Series 2021-05A, Class A1, 144A, 3 Month LIBOR + 1.120% (Cap N/A, Floor 1.120%)

   3.830(c)   07/20/34      7,000        6,780,497  

CBAM Ltd. (Cayman Islands),

          

Series 2020-12A, Class AR, 144A, 3 Month LIBOR + 1.180% (Cap N/A, Floor 1.180%)

   3.890(c)   07/20/34      8,500        8,238,781  

CIFC Funding Ltd. (Cayman Islands),

          

Series 2014-05A, Class A1R2, 144A, 3 Month LIBOR + 1.200% (Cap N/A, Floor 1.200%)

   3.940(c)   10/17/31      1,000        978,061  

Series 2021-05A, Class A, 144A, 3 Month LIBOR + 1.140% (Cap N/A, Floor 1.140%)

   3.652(c)   07/15/34      2,000        1,938,131  

Crown Point CLO Ltd. (Cayman Islands),

          

Series 2021-11A, Class A, 144A, 3 Month LIBOR + 1.120% (Cap N/A, Floor 1.120%)

   3.860(c)   01/17/34      5,500        5,339,750  

Elevation CLO Ltd. (Cayman Islands),

          

Series 2017-06A, Class A1, 144A, 3 Month LIBOR + 1.280% (Cap N/A, Floor 1.280%)

   3.792(c)   07/15/29      218        215,415  

Series 2021-13A, Class A1, 144A, 3 Month LIBOR + 1.190% (Cap N/A, Floor 1.190%)

   3.702(c)   07/15/34      3,500        3,392,472  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    15


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

ASSET-BACKED SECURITIES (Continued)

       

Collateralized Loan Obligations (cont’d.)

                     

Elmwood CLO Ltd. (Cayman Islands),

       

Series 2019-02A, Class AR, 144A, 3 Month LIBOR + 1.150% (Cap N/A, Floor 1.150%)

   3.860%(c)   04/20/34      7,000      $ 6,798,354  

Generate CLO Ltd. (Cayman Islands),

          

Series 02A, Class AR, 144A, 3 Month LIBOR + 1.150% (Cap N/A, Floor 1.150%)

   3.909(c)   01/22/31      500        491,628  

Greywolf CLO Ltd. (Cayman Islands),

          

Series 2018-01A, Class A1, 144A, 3 Month LIBOR + 1.030% (Cap N/A, Floor 0.000%)

   3.796(c)   04/26/31      1,000        980,022  

HPS Loan Management Ltd. (Cayman Islands),

          

Series 10A-16, Class A1RR, 144A, 3 Month LIBOR + 1.140% (Cap N/A, Floor 1.140%)

   3.850(c)   04/20/34      3,250        3,147,563  

Series 2015-06A, Class A1R, 144A, 3 Month LIBOR + 1.000% (Cap N/A, Floor 0.000%)

   2.363(c)   02/05/31      248        243,925  

ICG US CLO Ltd. (Cayman Islands),

          

Series 2015-02RA, Class A1, 144A, 3 Month LIBOR + 1.370% (Cap N/A, Floor 1.370%)

   4.110(c)   01/16/33      1,400        1,355,273  

KKR CLO Ltd. (Cayman Islands),

          

Series 11, Class AR, 144A, 3 Month LIBOR + 1.180% (Cap N/A, Floor 1.180%)

   3.692(c)   01/15/31      500        493,038  

Logan CLO Ltd. (Cayman Islands),

          

Series 2021-01A, Class A, 144A, 3 Month LIBOR + 1.160% (Cap N/A, Floor 1.160%)

   3.870(c)   07/20/34      5,250        5,098,095  

Madison Park Funding Ltd. (Cayman Islands),

          

Series 2015-18A, Class ARR, 144A, 3 Month LIBOR + 0.940% (Cap N/A, Floor 0.940%)

   3.672(c)   10/21/30      11,500        11,280,712  

MidOcean Credit CLO (Cayman Islands),

          

Series 2014-03A, Class A1R, 144A, 3 Month LIBOR + 1.120% (Cap N/A, Floor 1.120%)

   3.852(c)   04/21/31      988        969,578  

Series 2016-05A, Class AR, 144A, 3 Month LIBOR + 1.120% (Cap N/A, Floor 0.000%)

   3.858(c)   07/19/28      624        618,227  

Series 2018-09A, Class A1, 144A, 3 Month LIBOR + 1.150% (Cap N/A, Floor 1.150%)

   3.860(c)   07/20/31      1,250        1,226,500  

Mountain View CLO Ltd. (Cayman Islands),

          

Series 2015-09A, Class A1R, 144A, 3 Month LIBOR + 1.120% (Cap N/A, Floor 0.000%)

   3.632(c)   07/15/31      2,000        1,961,858  

Northwoods Capital Ltd. (Cayman Islands),

          

Series 2017-15A, Class A1R, 144A, 3 Month LIBOR + 1.210% (Cap N/A, Floor 1.210%)

   3.273(c)   06/20/34      9,750        9,395,162  

Series 2019-20A, Class A1R, 144A, 3 Month LIBOR + 1.330% (Cap N/A, Floor 1.330%)

   4.113(c)   01/25/32      2,500        2,454,897  

 

See Notes to Financial Statements.

 

16


    

    

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

ASSET-BACKED SECURITIES (Continued)

          

Collateralized Loan Obligations (cont’d.)

                          

Ocean Trails CLO (Cayman Islands),

       

Series 2014-05A, Class ARR, 144A, 3 Month LIBOR + 1.280% (Cap N/A, Floor 1.280%)

   3.735%(c)   10/13/31      8,355      $ 8,205,187  

OCP CLO Ltd. (Cayman Islands),

          

Series 2015-09A, Class A1R2, 144A, 3 Month SOFR + 1.250% (Cap N/A, Floor 1.250%)

   2.096(c)   01/15/33      3,500        3,383,633  

Octagon Investment Partners 31 LLC (Cayman Islands),

          

Series 2017-01A, Class AR, 144A, 3 Month LIBOR + 1.050% (Cap N/A, Floor 1.050%)

   3.760(c)   07/20/30      3,875        3,806,331  

OZLM Funding Ltd. (Cayman Islands),

          

Series 2013-04A, Class A1R, 144A, 3 Month LIBOR + 1.250% (Cap N/A, Floor 0.000%)

   4.009(c)   10/22/30      981        968,921  

OZLM Ltd. (Cayman Islands),

          

Series 2015-11A, Class A1R, 144A, 3 Month LIBOR + 1.250% (Cap N/A, Floor 0.000%)

   4.032(c)   10/30/30      495        494,836  

Palmer Square CLO Ltd. (Cayman Islands),

          

Series 2014-01A, Class A1R2, 144A, 3 Month LIBOR + 1.130% (Cap N/A, Floor 1.130%)

   3.870(c)   01/17/31      1,000        983,588  

Series 2015-01A, Class A1A4, 144A, 3 Month LIBOR + 1.130% (Cap N/A, Floor 1.130%)

   2.635(c)   05/21/34      7,000        6,732,877  

Regatta Funding Ltd. (Cayman Islands),

          

Series 2016-01A, Class A1R2, 144A, 3 Month LIBOR + 1.150% (Cap N/A, Floor 1.150%)

   3.246(c)   06/20/34      6,500        6,276,739  

Romark CLO Ltd. (Cayman Islands),

          

Series 2018-02A, Class A1, 144A, 3 Month LIBOR + 1.175% (Cap N/A, Floor 1.175%)

   3.958(c)   07/25/31      250        244,696  

Romark WM-R Ltd. (Cayman Islands),

          

Series 2018-01A, Class A1, 144A, 3 Month LIBOR + 1.030% (Cap N/A, Floor 0.000%)

   3.740(c)   04/20/31      990        970,947  

Sixth Street CLO Ltd. (Cayman Islands),

          

Series 2020-16A, Class A1A, 144A, 3 Month LIBOR + 1.320% (Cap N/A, Floor 1.320%)

   4.030(c)   10/20/32      5,000        4,927,788  

Sound Point CLO Ltd. (Cayman Islands),

          

Series 2013-01A, Class A1R, 144A, 3 Month LIBOR + 1.070% (Cap N/A, Floor 1.070%)

   3.836(c)   01/26/31      1,000        978,493  

Telos CLO Ltd. (Cayman Islands),

          

Series 2013-04A, Class AR, 144A, 3 Month LIBOR + 1.240% (Cap N/A, Floor 0.000%)

   3.980(c)   01/17/30      920        910,017  

TICP CLO Ltd. (Cayman Islands),

          

Series 2017-09A, Class A, 144A, 3 Month LIBOR + 1.140% (Cap N/A, Floor 1.140%)

   3.850(c)   01/20/31      1,000        980,710  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    17


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

ASSET-BACKED SECURITIES (Continued)

          

Collateralized Loan Obligations (cont’d.)

                                  

Trimaran Cavu Ltd.,

 

       

Series 2019-01A, Class A1, 144A, 3 Month LIBOR + 1.460% (Cap N/A, Floor 1.460%)

     4.170%(c)       07/20/32        1,250      $ 1,231,263  

Voya CLO Ltd. (Cayman Islands),

          

Series 2013-01A, Class A1AR, 144A, 3 Month LIBOR + 1.210% (Cap N/A, Floor 0.000%)

     3.722(c)       10/15/30        747        735,482  

Series 2015-01A, Class A1R, 144A, 3 Month LIBOR + 0.900% (Cap N/A, Floor 0.900%)

     3.640(c)       01/18/29        693        683,434  

Series 2016-01A, Class A1R, 144A, 3 Month SOFR + 1.332% (Cap N/A, Floor 1.070%)

     3.809(c)       01/20/31        1,000        982,402  

Wellfleet CLO Ltd. (Cayman Islands),

          

Series 2018-01A, Class A, 144A, 3 Month LIBOR + 1.100% (Cap N/A, Floor 1.100%)

     3.840(c)       07/17/31        2,500        2,443,807  

Zais CLO Ltd. (Cayman Islands),

          

Series 2017-02A, Class A, 144A, 3 Month LIBOR + 1.290% (Cap N/A, Floor 0.000%)

     3.802(c)       04/15/30        237        233,772  
          

 

 

 
             182,718,926  

Consumer Loans     0.9%

 

                         

Lendmark Funding Trust,

          

Series 2019-02A, Class A, 144A

     2.780       04/20/28        3,500        3,426,522  

OneMain Financial Issuance Trust,

          

Series 2020-01A, Class A, 144A

     3.840       05/14/32        792        788,005  

Series 2020-02A, Class A, 144A

     1.750       09/14/35        2,600        2,352,213  

Series 2021-01A, Class A2, 144A, 30 Day Average SOFR + 0.760% (Cap N/A, Floor 0.000%)

     2.150(c)       06/16/36        2,800        2,657,761  

Oportun Funding XIV LLC,

          

Series 2021-A, Class A, 144A

     1.210       03/08/28        1,839        1,721,719  

Oportun Issuance Trust,

          

Series 2022-02, Class A, 144A

     5.940       10/09/29        2,600        2,599,308  
          

 

 

 
             13,545,528  

Credit Cards     0.2%

                                  

Citibank Credit Card Issuance Trust,

          

Series 2018-A07, Class A7

     3.960       10/13/30        2,100        2,162,917  

Equipment     0.2%

                                  

MMAF Equipment Finance LLC,

          

Series 2017-B, Class A5, 144A

     2.720       06/15/40        800        786,504  

Series 2018-A, Class A5, 144A

     3.610       03/10/42        200        198,748  

 

See Notes to Financial Statements.

 

18


    

    

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

ASSET-BACKED SECURITIES (Continued)

 

       

Equipment (cont’d.)

 

                         

MMAF Equipment Finance LLC, (cont’d.)

          

Series 2019-A, Class A5, 144A

     3.080%       11/12/41        800      $ 787,569  

Series 2019-B, Class A5, 144A

     2.290       11/12/41        1,200        1,140,686  
          

 

 

 
             2,913,507  

Home Equity Loans     0.0%

                                  

Option One Mortgage Loan Trust,

          

Series 2005-03, Class M2, 1 Month LIBOR + 0.735% (Cap N/A, Floor 0.735%)

     2.994(c)       08/25/35        237        235,716  

Manufactured Housing     0.0%

                                  

Towd Point Mortgage Trust,

          

Series 2019-MH01, Class A1, 144A

     3.000(cc)       11/25/58        389        384,033  

Other     0.1%

                                  

Home Partners of America Trust,

          

Series 2021-03, Class A, 144A

     2.200       01/17/41        1,827        1,659,676  

Student Loans     0.7%

                                  

Commonbond Student Loan Trust,

          

Series 2017-BGS, Class A1, 144A

     2.680       09/25/42        209        200,205  

Series 2018-AGS, Class A1, 144A

     3.210       02/25/44        160        156,887  

Series 2020-AGS, Class A, 144A

     1.980       08/25/50        724        694,122  

ELFI Graduate Loan Program LLC,

          

Series 2020-A, Class A, 144A

     1.730       08/25/45        1,195        1,105,968  

Laurel Road Prime Student Loan Trust,

          

Series 2017-C, Class A2B, 144A

     2.810       11/25/42        48        47,810  

Series 2018-B, Class A2FX, 144A

     3.540       05/26/43        91        90,445  

Series 2019-A, Class A2FX, 144A

     2.730       10/25/48        117        115,817  

Navient Private Education Refi Loan Trust,

          

Series 2018-A, Class A2, 144A

     3.190       02/18/42        125        124,349  

Series 2018-CA, Class A2, 144A

     3.520       06/16/42        117        116,761  

Series 2019-CA, Class A2, 144A

     3.130       02/15/68        362        353,292  

Series 2020-BA, Class A2, 144A

     2.120       01/15/69        649        610,347  

Series 2020-DA, Class A, 144A

     1.690       05/15/69        502        470,723  

Pennsylvania Higher Education Assistance Agency,

          

Series 2021-01A, Class A, 144A, 1 Month LIBOR + 0.530% (Cap N/A, Floor 0.530%)

     2.789(c)       05/25/70        2,212        2,146,927  

SoFi Professional Loan Program LLC,

          

Series 2017-F, Class A2FX, 144A

     2.840       01/25/41        379        372,364  

Series 2019-A, Class A2FX, 144A

     3.690       06/15/48        545        535,628  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    19


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

ASSET-BACKED SECURITIES (Continued)

          

Student Loans (cont’d.)

                                  

SoFi Professional Loan Program LLC, (cont’d.)

          

Series 2019-C, Class A2FX, 144A

     2.370%       11/16/48        635      $ 611,689  

SoFi Professional Loan Program Trust,

          

Series 2018-B, Class A2FX, 144A

     3.340       08/25/47        305        299,751  

Series 2020-A, Class A2FX, 144A

     2.540       05/15/46        1,145        1,110,217  

Series 2020-C, Class AFX, 144A

     1.950       02/15/46        582        554,714  
          

 

 

 
             9,718,016  
          

 

 

 

  TOTAL ASSET-BACKED SECURITIES
     (cost $298,277,825)

             288,479,719  
          

 

 

 

COMMERCIAL MORTGAGE-BACKED SECURITIES     13.4%

          

Arbor Multifamily Mortgage Securities Trust,

          

Series 2020-MF01, Class A4, 144A

     2.495       05/15/53        5,500        4,922,770  

Series 2021-MF02, Class A4, 144A

     2.252       06/15/54        8,900        7,680,557  

Assurant Commercial Mortgage Trust,

          

Series 2016-01A, Class AS, 144A

     3.172       05/15/49        300        290,348  

BANK,

          

Series 2019-BN20, Class A2

     2.758       09/15/62        5,809        5,423,735  

Series 2019-BN23, Class A2

     2.669       12/15/52        2,200        2,044,682  

Series 2020-BN25, Class A4

     2.399       01/15/63        3,800        3,438,722  

Series 2020-BN26, Class A3

     2.155       03/15/63        5,000        4,461,550  

Series 2020-BN27, Class A4

     1.901       04/15/63        4,700        4,088,530  

Series 2020-BN29, Class A3

     1.742       11/15/53        2,600        2,218,817  

Series 2021-BN32, Class A4

     2.349       04/15/54        9,000        8,053,935  

Series 2021-BN34, Class A4

     2.156       06/15/63        7,000        6,144,028  

Series 2021-BN38, Class A4

     2.275       12/15/64        5,700        4,978,443  

Barclays Commercial Mortgage Securities Trust,

          

Series 2016-ETC, Class A, 144A

     2.937       08/14/36        500        462,228  

Series 2018-TALL, Class A, 144A, 1 Month LIBOR + 0.722% (Cap N/A, Floor 0.722%)

     2.721(c)       03/15/37        6,000        5,683,025  

Series 2020-C07, Class A4

     1.786       04/15/53        5,700        4,911,003  

Series 2021-C10, Class ASB

     2.268       07/15/54        5,275        4,841,323  

Benchmark Mortgage Trust,

          

Series 2018-B01, Class A4

     3.402       01/15/51        1,070        1,039,836  

Series 2018-B03, Class A4

     3.761       04/10/51        1,150        1,133,727  

Series 2019-B10, Class A3

     3.455       03/15/62        2,500        2,409,224  

Series 2020-B17, Class A4

     2.042       03/15/53        1,800        1,586,211  

Series 2020-B21, Class A4

     1.704       12/17/53        2,600        2,217,996  

Series 2020-IG03, Class A2, 144A

     2.475       09/15/48        5,500        5,293,658  

Series 2021-B24, Class A3

     2.010       03/15/54        2,600        2,351,167  

Series 2021-B31, Class A4

     2.420       12/15/54        6,400        5,675,489  

 

See Notes to Financial Statements.

 

20


    

    

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued)

       

Cantor Commercial Real Estate Lending,

          

Series 2019-CF03, Class A3

   2.752%   01/15/53      2,900      $ 2,674,375  

CD Mortgage Trust,

          

Series 2016-CD01, Class A3

   2.459   08/10/49      434        409,827  

Series 2019-CD08, Class A3

   2.657   08/15/57      2,700        2,446,523  

CF Mortgage Trust,

          

Series 2020-P01, Class A1, 144A

   2.840(cc)   04/15/25      2,859        2,767,214  

CFCRE Commercial Mortgage Trust,

          

Series 2016-C07, Class A2

   3.585   12/10/54      1,822        1,780,427  

Citigroup Commercial Mortgage Trust,

          

Series 2015-GC27, Class A4

   2.878   02/10/48      1,400        1,359,344  

Series 2016-C03, Class A3

   2.896   11/15/49      900        856,879  

Series 2016-P03, Class A3

   3.063   04/15/49      4,535        4,411,252  

Series 2017-P08, Class A3

   3.203   09/15/50      1,700        1,644,026  

Series 2019-C07, Class A3

   2.860   12/15/72      1,120        1,039,774  

Series 2019-GC41, Class A4

   2.620   08/10/56      3,000        2,760,418  

Commercial Mortgage Trust,

          

Series 2015-DC01, Class A5

   3.350   02/10/48      1,510        1,484,283  

Series 2015-PC01, Class A4

   3.620   07/10/50      1,367        1,347,293  

Series 2016-COR01, Class A3

   2.826   10/10/49      792        753,078  

CSAIL Commercial Mortgage Trust,

          

Series 2017-C08, Class A3

   3.127   06/15/50      1,161        1,105,036  

Series 2021-C20, Class A2

   2.486   03/15/54      5,800        5,245,927  

Deutsche Bank Commercial Mortgage Trust,

          

Series 2016-C03, Class A4

   2.632   08/10/49      650        622,076  

Series 2020-C09, Class A4

   1.644   08/15/53      5,800        5,012,907  

Fannie Mae-Aces,

          

Series 2018-M10, Class A1

   3.364(cc)   07/25/28      173        173,630  

Series 2019-M21, Class 3A1

   2.100   06/25/34      6,147        5,897,042  

Series 2019-M25, Class A1

   2.142   11/25/29      2,093        2,041,803  

FHLMC Multifamily Structured Pass-Through Certificates,

          

Series KW08, Class A2

   3.600   01/25/29      4,500        4,603,515  

GS Mortgage Securities Corp. Trust,

          

Series 2021-RENT, Class A, 144A, 1 Month LIBOR + 0.700% (Cap N/A, Floor 0.700%)

   2.862(c)   11/21/35      1,386        1,351,701  

GS Mortgage Securities Trust,

          

Series 2015-GC30, Class A3

   3.119   05/10/50      942        917,671  

Series 2015-GC34, Class A3

   3.244   10/10/48      4,322        4,219,812  

Series 2021-GSA03, Class A4

   2.369   12/15/54      7,000        6,082,558  

JPMBB Commercial Mortgage Securities Trust,

          

Series 2015-C27, Class A3A1

   2.920   02/15/48      875        844,802  

JPMCC Commercial Mortgage Securities Trust,

          

Series 2017-JP05, Class A4

   3.457   03/15/50      381        377,469  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    21


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued)

       

JPMCC Commercial Mortgage Securities Trust, (cont’d.)

          

Series 2017-JP07, Class ASB

   3.241%   09/15/50      575      $ 564,603  

JPMDB Commercial Mortgage Securities Trust,

          

Series 2017-C05, Class A4

   3.414   03/15/50      1,009        973,168  

JPMorgan Chase Commercial Mortgage Securities Trust,

          

Series 2016-JP02, Class A3

   2.559   08/15/49      896        847,923  

Series 2016-JP03, Class A4

   2.627   08/15/49      700        671,465  

Ladder Capital Commercial Mortgage Securities Trust,

          

Series 2017-LC26, Class A3, 144A

   3.289   07/12/50      1,188        1,139,437  

Morgan Stanley Capital I Trust,

          

Series 2016-BNK02, Class A3

   2.791   11/15/49      900        858,998  

Series 2016-UB11, Class A3

   2.531   08/15/49      1,807        1,707,679  

UBS Commercial Mortgage Trust,

          

Series 2017-C02, Class ASB

   3.264   08/15/50      800        786,256  

Series 2017-C05, Class A4

   3.212   11/15/50      1,800        1,717,541  

Series 2018-C09, Class A3

   3.854   03/15/51      750        739,646  

Series 2018-C14, Class A3

   4.180   12/15/51      1,400        1,383,492  

Series 2019-C18, Class A3

   2.782   12/15/52      4,400        4,033,206  

UBS-Barclays Commercial Mortgage Trust,

          

Series 2013-C06, Class A4

   3.244   04/10/46      101        100,435  

Wells Fargo Commercial Mortgage Trust,

          

Series 2016-BNK01, Class A2

   2.399   08/15/49      1,193        1,122,926  

Series 2016-C35, Class A3

   2.674   07/15/48      1,838        1,750,518  

Series 2016-NXS06, Class A3

   2.642   11/15/49      1,500        1,438,969  

Series 2017-C38, Class A4

   3.190   07/15/50      974        942,621  

Series 2017-RB01, Class A4

   3.374   03/15/50      1,179        1,155,116  

Series 2018-C46, Class A3

   3.888   08/15/51      2,000        1,990,566  

Series 2019-C49, Class A3

   3.749   03/15/52      3,000        2,967,479  

Series 2019-C50, Class A4

   3.466   05/15/52      2,500        2,401,893  

Series 2019-C52, Class A3

   2.631   08/15/52      2,000        1,949,476  

Series 2020-C57, Class A3

   1.864   08/15/53      5,300        4,577,121  

Series 2021-C59, Class A3

   1.958   04/15/54      5,921        5,326,274  
          

 

 

 

TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
     (cost $215,552,226)

             196,728,474  
          

 

 

 

CORPORATE BONDS     30.7%

          

Aerospace & Defense     0.8%

                          

BAE Systems PLC (United Kingdom),

          

Sr. Unsec’d. Notes, 144A

   3.400   04/15/30      335        316,640  

Boeing Co. (The),

          

Sr. Unsec’d. Notes

   2.196   02/04/26      1,530        1,424,818  

Sr. Unsec’d. Notes

   3.625   02/01/31      5,450        5,004,178  

 

See Notes to Financial Statements.

 

22


    

    

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

          

Aerospace & Defense (cont’d.)

                                  

Boeing Co. (The), (cont’d.)

          

Sr. Unsec’d. Notes

     3.750%       02/01/50        830      $ 626,141  

Embraer Netherlands Finance BV (Brazil),

          

Gtd. Notes

     5.050       06/15/25        281        277,979  

Embraer Overseas Ltd. (Brazil),

          

Gtd. Notes, 144A

     5.696       09/16/23        375        379,055  

L3Harris Technologies, Inc.,

          

Sr. Unsec’d. Notes

     3.832       04/27/25        30        29,955  

Raytheon Technologies Corp.,

          

Sr. Unsec’d. Notes

     4.125       11/16/28        450        457,101  

Teledyne Technologies, Inc.,

          

Gtd. Notes

     2.750       04/01/31        3,510        3,011,149  
          

 

 

 
             11,527,016  

Agriculture     0.4%

                                  

Altria Group, Inc.,

          

Gtd. Notes

     3.400       05/06/30        630        554,130  

Gtd. Notes

     3.400       02/04/41        2,010        1,387,055  

BAT Capital Corp. (United Kingdom),

          

Gtd. Notes

     2.726       03/25/31        2,180        1,775,862  

Gtd. Notes

     3.557       08/15/27        455        424,781  

BAT International Finance PLC (United Kingdom),

          

Gtd. Notes, 144A

     3.950       06/15/25        1,510        1,489,248  
          

 

 

 
             5,631,076  

Airlines     0.3%

                                  

American Airlines 2015-1 Class A Pass-Through Trust,

          

Pass-Through Certificates

     3.375       11/01/28        68        60,017  

Delta Air Lines 2020-1 Class AA Pass-Through Trust,

          

Pass-Through Certificates

     2.000       12/10/29        607        542,035  

Southwest Airlines Co.,

          

Sr. Unsec’d. Notes

     5.250       05/04/25        2,589        2,668,428  

United Airlines 2016-2 Class AA Pass-Through Trust,

          

Pass-Through Certificates

     2.875       04/07/30        305        276,915  

United Airlines 2019-2 Class AA Pass-Through Trust,

          

Pass-Through Certificates

     2.700       11/01/33        410        348,001  
          

 

 

 
             3,895,396  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    23


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

 

       

Auto Manufacturers     0.4%

 

                         

BMW US Capital LLC (Germany),

          

Gtd. Notes, 144A

     2.250%       09/15/23        645      $ 638,277  

Ford Motor Co.,

          

Sr. Unsec’d. Notes

     5.291       12/08/46        285        245,133  

Ford Motor Credit Co. LLC,

          

Sr. Unsec’d. Notes

     3.350       11/01/22        1,390        1,389,005  

General Motors Co.,

          

Sr. Unsec’d. Notes

     6.250       10/02/43        900        887,620  

General Motors Financial Co., Inc.,

          

Gtd. Notes

     3.850       01/05/28        490        459,282  

Gtd. Notes

     4.350       01/17/27        180        176,990  

Gtd. Notes

     5.250       03/01/26        375        382,918  

Sr. Unsec’d. Notes

     3.600       06/21/30        2,655        2,362,002  
          

 

 

 
             6,541,227  

Banks     9.1%

                                  

Banco Santander SA (Spain),

          

Sr. Unsec’d. Notes

     1.849       03/25/26        200        182,318  

Bank of America Corp.,

          

Sr. Unsec’d. Notes

     2.687(ff)       04/22/32        9,635        8,378,200  

Sr. Unsec’d. Notes, GMTN

     3.593(ff)       07/21/28        1,595        1,543,221  

Sr. Unsec’d. Notes, MTN

     2.496(ff)       02/13/31        2,705        2,365,349  

Sr. Unsec’d. Notes, MTN

     3.824(ff)       01/20/28        1,720        1,687,243  

Sr. Unsec’d. Notes, MTN

     3.974(ff)       02/07/30        400        387,397  

Sr. Unsec’d. Notes, MTN

     4.083(ff)       03/20/51        1,555        1,410,916  

Sr. Unsec’d. Notes, MTN

     4.271(ff)       07/23/29        320        317,267  

Sr. Unsec’d. Notes, Series N

     1.658(ff)       03/11/27        105        95,890  

Sub. Notes, MTN

     4.000       01/22/25        800        802,699  

Sub. Notes, MTN

     4.450       03/03/26        1,500        1,521,599  

Bank of New York Mellon Corp. (The),

          

Sr. Unsec’d. Notes, MTN

     2.950       01/29/23        450        449,457  

Barclays PLC (United Kingdom),

          

Sr. Unsec’d. Notes

     3.932(ff)       05/07/25        1,780        1,752,725  

Sr. Unsec’d. Notes

     4.375       01/12/26        200        200,305  

Sr. Unsec’d. Notes, MTN

     4.972(ff)       05/16/29        400        395,838  

BNP Paribas SA (France),

          

Sr. Unsec’d. Notes, 144A

     1.323(ff)       01/13/27        3,075        2,748,662  

Sr. Unsec’d. Notes, 144A

     1.675(ff)       06/30/27        1,425        1,271,493  

Sr. Unsec’d. Notes, 144A

     1.904(ff)       09/30/28        1,385        1,196,932  

Sr. Unsec’d. Notes, 144A

     2.219(ff)       06/09/26        395        369,169  

Sr. Unsec’d. Notes, 144A

     2.591(ff)       01/20/28        665        601,932  

Sr. Unsec’d. Notes, 144A, MTN

     3.052(ff)       01/13/31        1,080        948,338  

 

See Notes to Financial Statements.

 

24


    

    

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

       

Banks (cont’d.)

                     

BPCE SA (France),

          

Sr. Unsec’d. Notes, 144A

   2.375%   01/14/25      2,650      $ 2,527,513  

Sr. Unsec’d. Notes, 144A, MTN

   3.250   01/11/28      625        588,678  

Citigroup, Inc.,

          

Sr. Unsec’d. Notes

   1.122(ff)   01/28/27      8,090        7,267,061  

Sr. Unsec’d. Notes

   2.561(ff)   05/01/32      1,415        1,215,489  

Sr. Unsec’d. Notes

   2.666(ff)   01/29/31      1,400        1,237,369  

Sr. Unsec’d. Notes

   3.200   10/21/26      290        283,535  

Sr. Unsec’d. Notes

   3.400   05/01/26      350        345,301  

Sr. Unsec’d. Notes

   3.520(ff)   10/27/28      180        172,333  

Sr. Unsec’d. Notes

   3.668(ff)   07/24/28      490        473,465  

Sr. Unsec’d. Notes

   3.887(ff)   01/10/28      670        656,923  

Sub. Notes

   4.400   06/10/25      4,000        4,041,149  

Sub. Notes

   4.450   09/29/27      840        842,836  

Sub. Notes

   4.600   03/09/26      945        964,553  

Sub. Notes

   4.750   05/18/46      460        432,111  

Credit Agricole SA (France),

          

Sr. Unsec’d. Notes, 144A

   1.247(ff)   01/26/27      1,350        1,205,306  

Sr. Unsec’d. Notes, 144A, MTN

   1.907(ff)   06/16/26      1,045        966,771  

Credit Suisse Group AG (Switzerland),

          

Sr. Unsec’d. Notes, 144A

   2.193(ff)   06/05/26      555        504,456  

Sr. Unsec’d. Notes, 144A

   2.593(ff)   09/11/25      1,730        1,622,584  

Sr. Unsec’d. Notes, 144A

   3.869(ff)   01/12/29      870        786,708  

Sr. Unsec’d. Notes, 144A

   4.282   01/09/28      350        325,625  

Danske Bank A/S (Denmark),

          

Sr. Unsec’d. Notes, 144A

   1.621(ff)   09/11/26      1,710        1,541,155  

Deutsche Bank AG (Germany),

          

Sr. Unsec’d. Notes

   2.129(ff)   11/24/26      1,530        1,368,308  

Discover Bank,

          

Sr. Unsec’d. Notes

   4.200   08/08/23      250        251,216  

Goldman Sachs Group, Inc. (The),

          

Sr. Unsec’d. Notes

   1.431(ff)   03/09/27      3,075        2,779,584  

Sr. Unsec’d. Notes

   1.542(ff)   09/10/27      3,405        3,052,739  

Sr. Unsec’d. Notes

   3.272(ff)   09/29/25      1,160        1,137,421  

Sr. Unsec’d. Notes

   3.500   01/23/25      75        74,938  

Sr. Unsec’d. Notes

   3.500   04/01/25      1,230        1,223,308  

Sr. Unsec’d. Notes

   3.814(ff)   04/23/29      1,585        1,535,308  

Sr. Unsec’d. Notes

   3.850   01/26/27      475        474,869  

Sr. Unsec’d. Notes

   4.223(ff)   05/01/29      125        123,541  

Sub. Notes

   5.150   05/22/45      335        337,889  

ING Groep NV (Netherlands),

          

Sr. Unsec’d. Notes

   3.550   04/09/24      200        198,951  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    25


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
  Maturity      
Date
  Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

      

Banks (cont’d.)

                    

Intesa Sanpaolo SpA (Italy),

         

Sr. Unsec’d. Notes, Series XR, 144A

   4.000%   09/23/29     1,790      $ 1,612,698  

JPMorgan Chase & Co.,

         

Jr. Sub. Notes, Series II

   4.000(ff)   04/01/25(oo)     3,920        3,445,945  

Sr. Unsec’d. Notes

   0.824(ff)   06/01/25     900        846,822  

Sr. Unsec’d. Notes

   1.040(ff)   02/04/27     4,160        3,736,469  

Sr. Unsec’d. Notes

   1.578(ff)   04/22/27     215        195,329  

Sr. Unsec’d. Notes

   2.580(ff)   04/22/32     2,565        2,226,346  

Sr. Unsec’d. Notes

   2.739(ff)   10/15/30     7,000        6,272,392  

Sr. Unsec’d. Notes

   2.947(ff)   02/24/28     215        203,346  

Sr. Unsec’d. Notes

   3.509(ff)   01/23/29     210        200,960  

Sr. Unsec’d. Notes

   3.964(ff)   11/15/48     355        317,264  

Sr. Unsec’d. Notes

   4.005(ff)   04/23/29     3,585        3,509,134  

Sr. Unsec’d. Notes

   4.323(ff)   04/26/28     165        165,489  

Sub. Notes

   2.956(ff)   05/13/31     1,855        1,657,247  

Sub. Notes

   3.875   09/10/24     375        377,270  

Sub. Notes

   4.250   10/01/27     375        381,686  

Morgan Stanley,

         

Sr. Unsec’d. Notes

   1.593(ff)   05/04/27     5,600        5,107,902  

Sr. Unsec’d. Notes, GMTN

   2.239(ff)   07/21/32     960        809,493  

Sr. Unsec’d. Notes, GMTN

   3.750   02/25/23     315        315,723  

Sr. Unsec’d. Notes, GMTN

   3.772(ff)   01/24/29     760        743,832  

Sr. Unsec’d. Notes, GMTN

   3.875   01/27/26     470        473,038  

Sr. Unsec’d. Notes, GMTN

   4.000   07/23/25     455        459,769  

Sr. Unsec’d. Notes, GMTN

   4.431(ff)   01/23/30     1,200        1,202,248  

Sr. Unsec’d. Notes, MTN

   1.928(ff)   04/28/32     4,245        3,499,984  

Sr. Unsec’d. Notes, MTN

   2.720(ff)   07/22/25     1,500        1,461,856  

Sr. Unsec’d. Notes, MTN

   3.591(ff)   07/22/28     310        300,224  

Sr. Unsec’d. Notes, Series F, MTN

   3.875   04/29/24     365        367,902  

Sub. Notes, GMTN

   4.350   09/08/26     3,800        3,832,403  

NatWest Group PLC (United Kingdom),

         

Sr. Unsec’d. Notes

   1.642(ff)   06/14/27     1,830        1,627,186  

Sr. Unsec’d. Notes

   3.875   09/12/23     220        219,644  

Sr. Unsec’d. Notes

   5.076(ff)   01/27/30     720        718,055  

Societe Generale SA (France),

         

Sr. Unsec’d. Notes, 144A

   1.488(ff)   12/14/26     3,800        3,373,135  

Sr. Unsec’d. Notes, 144A, MTN

   1.792(ff)   06/09/27     1,335        1,179,973  

State Bank of India (India),

         

Sr. Unsec’d. Notes, 144A

   4.375   01/24/24     630        633,465  

Sumitomo Mitsui Financial Group, Inc. (Japan),

         

Sr. Unsec’d. Notes

   2.348   01/15/25     2,520        2,426,773  

 

See Notes to Financial Statements.

 

26


    

    

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

 

       

Banks (cont’d.)

 

                         

Texas Capital Bank NA,

          

Sr. Unsec’d. Notes, 144A, 3 Month LIBOR + 4.500%

     6.750%(c)       09/30/24        2,340      $ 2,225,262  

Truist Bank,

          

Sub. Notes

     2.250       03/11/30        2,840        2,440,775  

UBS Group AG (Switzerland),

          

Sr. Unsec’d. Notes, 144A

     2.859(ff)       08/15/23        570        569,886  

Sr. Unsec’d. Notes, 144A

     3.126(ff)       08/13/30        1,180        1,062,431  

Wells Fargo & Co.,

          

Sr. Unsec’d. Notes, MTN

     2.572(ff)       02/11/31        2,740        2,415,954  

Sr. Unsec’d. Notes, MTN

     5.013(ff)       04/04/51        2,300        2,385,268  
          

 

 

 
             134,186,521  

Beverages     0.7%

                                  

Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc. (Belgium),

          

Gtd. Notes

     4.700       02/01/36        180        184,915  

Gtd. Notes

     4.900       02/01/46        650        653,916  

Anheuser-Busch InBev Worldwide, Inc. (Belgium),

          

Gtd. Notes

     5.450       01/23/39        975        1,047,148  

Gtd. Notes

     5.550       01/23/49        900        985,782  

Bacardi Ltd. (Bermuda),

          

Gtd. Notes, 144A

     2.750       07/15/26        2,775        2,591,572  

Constellation Brands, Inc.,

          

Gtd. Notes

     4.650       11/15/28        450        456,609  

Sr. Unsec’d. Notes

     2.250       08/01/31        1,030        875,091  

Diageo Capital PLC (United Kingdom),

          

Gtd. Notes

     2.125       04/29/32        1,665        1,460,254  

Keurig Dr. Pepper, Inc.,

          

Gtd. Notes

     3.200       05/01/30        1,450        1,354,006  
          

 

 

 
             9,609,293  

Biotechnology     0.0%

                                  

Gilead Sciences, Inc.,

          

Sr. Unsec’d. Notes

     2.500       09/01/23        220        218,398  

Building Materials     0.1%

                                  

Martin Marietta Materials, Inc.,

          

Sr. Unsec’d. Notes

     4.250       12/15/47        395        342,375  

Sr. Unsec’d. Notes, Series CB

     2.500       03/15/30        885        766,043  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    27


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

 

       

Building Materials (cont’d.)

 

                         

Owens Corning,

          

Sr. Unsec’d. Notes

     4.400%       01/30/48        825      $ 696,456  
          

 

 

 
             1,804,874  

Chemicals     0.1%

                                  

LYB International Finance BV,

          

Gtd. Notes

     4.000       07/15/23        142        142,176  

LYB International Finance III LLC,

          

Gtd. Notes

     4.200       05/01/50        1,070        898,727  

Nutrien Ltd. (Canada),

          

Sr. Unsec’d. Notes

     4.125       03/15/35        40        38,436  

Sr. Unsec’d. Notes

     5.250       01/15/45        248        255,931  

Sasol Financing USA LLC (South Africa),

          

Gtd. Notes

     5.875       03/27/24        200        199,000  

Gtd. Notes

     6.500       09/27/28        400        381,811  
          

 

 

 
             1,916,081  

Commercial Services     0.4%

                                  

ERAC USA Finance LLC,

          

Gtd. Notes, 144A

     2.700       11/01/23        580        572,009  

Gtd. Notes, 144A

     3.300       10/15/22        750        749,781  

Gtd. Notes, 144A

     4.500       02/15/45        75        68,078  

Experian Finance PLC (United Kingdom),

          

Gtd. Notes, 144A

     2.750       03/08/30        1,735        1,573,246  

Global Payments, Inc.,

          

Sr. Unsec’d. Notes

     2.650       02/15/25        575        554,479  

Massachusetts Institute of Technology,

          

Unsec’d. Notes

     3.885       07/01/2116        700        608,060  

President & Fellows of Harvard College,

          

Unsec’d. Notes

     3.300       07/15/56        160        139,486  

Trustees of Boston College,

          

Unsec’d. Notes

     3.129       07/01/52        637        500,799  

University of Notre Dame du Lac,

          

Unsec’d. Notes, Series 2017

     3.394       02/15/48        365        330,128  

Verisk Analytics, Inc.,

          

Sr. Unsec’d. Notes

     4.125       03/15/29        1,185        1,173,391  
          

 

 

 
             6,269,457  

 

See Notes to Financial Statements.

 

28


    

    

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

 

       

Computers     0.1%

 

                         

Apple, Inc.,

          

Sr. Unsec’d. Notes

     3.850%       08/04/46        525      $ 504,887  

NetApp, Inc.,

          

Sr. Unsec’d. Notes

     1.875       06/22/25        1,470        1,392,529  
          

 

 

 
             1,897,416  

Diversified Financial Services     0.4%

                                  

BOC Aviation USA Corp. (Singapore),

          

Gtd. Notes, 144A, MTN

     1.625       04/29/24        635        607,244  

Cboe Global Markets, Inc.,

          

Sr. Unsec’d. Notes

     1.625       12/15/30        2,900        2,430,244  

Charles Schwab Corp. (The),

          

Sr. Unsec’d. Notes(a)

     1.650       03/11/31        2,970        2,495,116  

Jefferies Group LLC/Jefferies Group Capital Finance, Inc.,

          

Sr. Unsec’d. Notes

     2.625       10/15/31        95        76,628  

Nomura Holdings, Inc. (Japan),

          

Sr. Unsec’d. Notes

     2.608       07/14/31        565        464,579  
          

 

 

 
             6,073,811  

Electric     2.9%

                                  

Abu Dhabi National Energy Co. PJSC (United Arab Emirates),

          

Sr. Unsec’d. Notes, 144A, MTN

     2.000       04/29/28        515        464,562  

AEP Transmission Co. LLC,

          

Sr. Unsec’d. Notes

     4.250       09/15/48        830        776,851  

Alabama Power Co.,

          

Sr. Unsec’d. Notes

     2.800       04/01/25        75        73,684  

Alfa Desarrollo SpA (Chile),

          

Sr. Sec’d. Notes, 144A

     4.550       09/27/51        658        470,628  

Ameren Illinois Co.,

          

First Mortgage

     3.700       12/01/47        625        556,296  

Arizona Public Service Co.,

          

Sr. Unsec’d. Notes

     2.200       12/15/31        2,875        2,413,051  

Sr. Unsec’d. Notes

     3.350       05/15/50        485        368,182  

CenterPoint Energy Houston Electric LLC,

          

General Ref. Mortgage, Series Z

     2.400       09/01/26        190        181,090  

CenterPoint Energy, Inc.,

          

Sr. Unsec’d. Notes

     3.700       09/01/49        495        414,169  

Cleco Corporate Holdings LLC,

          

Sr. Unsec’d. Notes

     3.375       09/15/29        305        277,214  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    29


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

       

Electric (cont’d.)

                     

Comision Federal de Electricidad (Mexico),

          

Gtd. Notes, 144A

   4.688%   05/15/29      1,600      $ 1,475,800  

Commonwealth Edison Co.,

          

First Mortgage

   3.700   03/01/45      40        35,128  

First Mortgage

   4.000   03/01/48      115        108,679  

First Mortgage, Series 123

   3.750   08/15/47      775        700,854  

First Mortgage, Series 130

   3.125   03/15/51      95        76,867  

Consolidated Edison Co. of New York, Inc.,

          

Sr. Unsec’d. Notes, Series 2017

   3.875   06/15/47      805        704,186  

Sr. Unsec’d. Notes, Series C

   4.300   12/01/56      40        36,841  

Consumers Energy Co.,

          

First Mortgage

   3.250   08/15/46      155        129,662  

Delmarva Power & Light Co.,

          

First Mortgage

   4.150   05/15/45      60        55,734  

Dominion Energy, Inc.,

          

Sr. Unsec’d. Notes, Series D

   2.850   08/15/26      55        52,974  

DTE Electric Co.,

          

General Ref. Mortgage, Series A

   4.050   05/15/48      370        353,242  

DTE Energy Co.,

          

Sr. Unsec’d. Notes

   2.850   10/01/26      350        336,463  

Duke Energy Corp.,

          

Sr. Unsec’d. Notes

   2.650   09/01/26      145        138,996  

Sr. Unsec’d. Notes

   3.950   08/15/47      185        158,570  

Duke Energy Florida LLC,

          

First Mortgage

   3.200   01/15/27      600        596,057  

First Mortgage

   3.400   10/01/46      185        153,389  

First Mortgage

   4.200   07/15/48      205        193,314  

Duke Energy Progress LLC,

          

First Mortgage(a)

   2.500   08/15/50      1,860        1,336,212  

First Mortgage

   3.700   10/15/46      75        64,924  

Emera US Finance LP (Canada),

          

Gtd. Notes

   3.550   06/15/26      75        72,816  

Enel Finance International NV (Italy),

          

Gtd. Notes, 144A

   2.650   09/10/24      655        633,564  

Gtd. Notes, 144A

   3.500   04/06/28      475        440,956  

Engie Energia Chile SA (Chile),

          

Sr. Unsec’d. Notes, 144A

   3.400   01/28/30      200        164,000  

Entergy Arkansas LLC,

          

First Mortgage

   2.650   06/15/51      2,220        1,611,592  

Entergy Louisiana LLC,

          

Collateral Trust Bond

   4.000   03/15/33      170        168,681  

 

See Notes to Financial Statements.

 

30


    

    

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

       

Electric (cont’d.)

                     

Entergy Texas, Inc.,

          

First Mortgage

   4.500%   03/30/39      1,000      $ 959,753  

Evergy, Inc.,

          

Sr. Unsec’d. Notes

   2.450   09/15/24      2,135        2,071,820  

Eversource Energy,

          

Sr. Unsec’d. Notes, Series M

   3.300   01/15/28      335        322,854  

Fortis, Inc. (Canada),

          

Sr. Unsec’d. Notes

   3.055   10/04/26      217        207,168  

Georgia Power Co.,

          

Sr. Unsec’d. Notes, Series B

   2.650   09/15/29      1,005        912,260  

IPALCO Enterprises, Inc.,

          

Sr. Sec’d. Notes

   4.250   05/01/30      240        228,535  

Israel Electric Corp. Ltd. (Israel),

          

Sr. Sec’d. Notes, 144A, GMTN

   4.250   08/14/28      235        232,400  

Sr. Sec’d. Notes, 144A, Series 6

   5.000   11/12/24      1,360        1,377,680  

MidAmerican Energy Co.,

          

First Mortgage

   3.950   08/01/47      225        208,365  

First Mortgage

   4.250   07/15/49      350        340,079  

Monongahela Power Co.,

          

First Mortgage, 144A

   4.100   04/15/24      851        851,825  

Narragansett Electric Co. (The),

          

Sr. Unsec’d. Notes, 144A

   3.395   04/09/30      915        880,736  

NRG Energy, Inc.,

          

Sr. Sec’d. Notes, 144A

   2.000   12/02/25      280        256,249  

Sr. Sec’d. Notes, 144A

   2.450   12/02/27      1,215        1,067,952  

Ohio Power Co.,

          

Sr. Unsec’d. Notes

   4.150   04/01/48      250        226,214  

Oncor Electric Delivery Co. LLC,

          

Sr. Sec’d. Notes

   2.950   04/01/25      60        59,386  

PacifiCorp,

          

First Mortgage

   2.700   09/15/30      890        815,676  

PECO Energy Co.,

          

First Mortgage

   3.000   09/15/49      180        143,404  

First Mortgage

   3.050   03/15/51      1,540        1,243,489  

First Ref. Mortgage

   4.800   10/15/43      120        118,807  

Pennsylvania Electric Co.,

          

Sr. Unsec’d. Notes, 144A

   3.600   06/01/29      1,435        1,383,044  

PPL Electric Utilities Corp.,

          

First Mortgage

   3.000   10/01/49      235        185,791  

Public Service Co. of Colorado,

          

First Mortgage

   4.100   06/15/48      235        222,739  

First Mortgage, Series 34

   3.200   03/01/50      720        592,112  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    31


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

 

       

Electric (cont’d.)

 

                         

Public Service Electric & Gas Co.,

          

First Mortgage, MTN

     2.250%       09/15/26        370      $ 353,898  

First Mortgage, MTN

     2.700       05/01/50        390        293,127  

First Mortgage, MTN

     3.200       05/15/29        1,265        1,232,022  

First Mortgage, MTN

     3.600       12/01/47        95        82,797  

First Mortgage, MTN

     3.700       05/01/28        590        593,484  

Public Service Enterprise Group, Inc.,

          

Sr. Unsec’d. Notes

     1.600       08/15/30        1,155        956,265  

Puget Energy, Inc.,

          

Sr. Sec’d. Notes

     2.379       06/15/28        1,132        1,016,904  

San Diego Gas & Electric Co.,

          

First Mortgage

     4.150       05/15/48        420        398,065  

Southern California Edison Co.,

          

First Mortgage

     3.650       02/01/50        290        232,388  

Southwestern Electric Power Co.,

          

Sr. Unsec’d. Notes, Series K

     2.750       10/01/26        675        644,121  

Southwestern Public Service Co.,

          

First Mortgage

     3.700       08/15/47        355        303,935  

SP PowerAssets Ltd. (Singapore),

          

Sr. Unsec’d. Notes, 144A, MTN

     3.000       09/26/27        465        455,207  

State Grid Overseas Investment BVI Ltd. (China),

          

Gtd. Notes, 144A, MTN

     3.500       05/04/27        600        600,558  

Tucson Electric Power Co.,

          

Sr. Unsec’d. Notes

     4.000       06/15/50        1,315        1,148,927  

Union Electric Co.,

          

Sr. Sec’d. Notes

     3.650       04/15/45        50        43,398  

Virginia Electric & Power Co.,

          

Sr. Unsec’d. Notes, Series A

     3.500       03/15/27        185        185,238  

Sr. Unsec’d. Notes, Series A

     3.800       04/01/28        290        291,627  

Vistra Operations Co. LLC,

          

Sr. Sec’d. Notes, 144A

     3.550       07/15/24        1,515        1,467,804  

Wisconsin Power & Light Co.,

          

Sr. Unsec’d. Notes

     3.050       10/15/27        535        520,212  

Xcel Energy, Inc.,

          

Sr. Unsec’d. Notes

     3.350       12/01/26        510        501,393  
          

 

 

 
             42,024,936  

Electronics     0.1%

                                  

Trimble, Inc.,

          

Sr. Unsec’d. Notes

     4.150       06/15/23        770        771,275  

 

See Notes to Financial Statements.

 

32


    

    

 

  Description   

Interest      

Rate

   

Maturity      

Date

    

Principal

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

          

Engineering & Construction     0.1%

                                  

Mexico City Airport Trust (Mexico),

          

Sr. Sec’d. Notes, 144A

     3.875%       04/30/28        600      $ 535,050  

Sr. Sec’d. Notes, 144A

     4.250       10/31/26        200        188,500  

Sr. Sec’d. Notes, 144A

     5.500       07/31/47        600        456,417  
          

 

 

 
             1,179,967  

Entertainment     0.2%

                                  

Magallanes, Inc.,

          

Gtd. Notes, 144A

     5.050       03/15/42        1,570        1,394,054  

Gtd. Notes, 144A

     5.141       03/15/52        625        546,092  

Gtd. Notes, 144A

     5.391       03/15/62        315        276,248  
          

 

 

 
             2,216,394  

Foods     0.3%

                                  

Ahold Finance USA LLC (Netherlands),

          

Gtd. Notes

     6.875       05/01/29        280        318,926  

Campbell Soup Co.,

          

Sr. Unsec’d. Notes

     2.375       04/24/30        2,175        1,901,656  

Cencosud SA (Chile),

          

Gtd. Notes, 144A

     4.375       07/17/27        1,320        1,254,248  

Kraft Heinz Foods Co.,

          

Gtd. Notes

     3.000       06/01/26        102        98,742  

Gtd. Notes

     4.875       10/01/49        900        841,527  

Kroger Co. (The),

          

Sr. Unsec’d. Notes

     3.875       10/15/46        65        56,866  

Mars, Inc.,

          

Gtd. Notes, 144A

     3.950       04/01/49        580        546,126  
          

 

 

 
             5,018,091  

Forest Products & Paper     0.1%

                                  

Celulosa Arauco y Constitucion SA (Chile),

          

Sr. Unsec’d. Notes

     3.875       11/02/27        651        605,349  

Sr. Unsec’d. Notes

     4.500       08/01/24        214        214,513  

Georgia-Pacific LLC,

          

Sr. Unsec’d. Notes, 144A

     3.600       03/01/25        220        219,676  
          

 

 

 
             1,039,538  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    33


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

   

Maturity      

Date

    

Principal

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

          

Gas     0.3%

                                  

Atmos Energy Corp.,

          

Sr. Unsec’d. Notes

     3.375%       09/15/49        1,200      $ 997,434  

CenterPoint Energy Resources Corp.,

          

Sr. Unsec’d. Notes

     4.100       09/01/47        305        280,034  

NiSource, Inc.,

          

Sr. Unsec’d. Notes

     1.700       02/15/31        2,445        1,997,506  

Piedmont Natural Gas Co., Inc.,

          

Sr. Unsec’d. Notes

     3.500       06/01/29        440        421,408  

Southern Co. Gas Capital Corp.,

          

Gtd. Notes

     2.450       10/01/23        555        547,358  
          

 

 

 
             4,243,740  

Healthcare-Products     0.0%

                                  

Medtronic, Inc.,

          

Gtd. Notes

     4.375       03/15/35        235        247,357  

Healthcare-Services     0.9%

                                  

Aetna, Inc.,

          

Sr. Unsec’d. Notes

     3.500       11/15/24        100        99,662  

Sr. Unsec’d. Notes

     4.500       05/15/42        1,000        936,047  

Sr. Unsec’d. Notes

     6.750       12/15/37        170        199,912  

AHS Hospital Corp.,

          

Unsec’d. Notes

     5.024       07/01/45        200        215,125  

Ascension Health,

          

Sr. Unsec’d. Notes, Series B

     3.106       11/15/39        265        224,301  

Kaiser Foundation Hospitals,

          

Unsec’d. Notes, Series 2021

     2.810       06/01/41        2,410        1,916,874  

Laboratory Corp. of America Holdings,

          

Sr. Unsec’d. Notes

     2.950       12/01/29        595        548,191  

Memorial Sloan-Kettering Cancer Center,

          

Sr. Unsec’d. Notes, Series 2015

     4.200       07/01/55        75        72,126  

MidMichigan Health,

          

Sec’d. Notes, Series 2020

     3.409       06/01/50        740        593,890  

Mount Sinai Hospitals Group, Inc.,

          

Sec’d. Notes, Series 2019

     3.737       07/01/49        1,795        1,498,271  

OhioHealth Corp.,

          

Unsec’d. Notes, Series 2020

     3.042       11/15/50        795        632,572  

Piedmont Healthcare, Inc.,

          

Sec’d. Notes, Series 2032

     2.044       01/01/32        2,670        2,228,880  

Providence St. Joseph Health Obligated Group,

          

Unsec’d. Notes, Series 19A

     2.532       10/01/29        420        382,577  

 

See Notes to Financial Statements.

 

34


    

    

 

  Description   

Interest      

Rate

   

Maturity      

Date

    

Principal

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

          

Healthcare-Services (cont’d.)

                                  

Providence St. Joseph Health Obligated Group, (cont’d.)

          

Unsec’d. Notes, Series H

     2.746%       10/01/26        40      $ 38,674  

Quest Diagnostics, Inc.,

          

Sr. Unsec’d. Notes

     2.950       06/30/30        1,910        1,754,120  

Sr. Unsec’d. Notes

     3.500       03/30/25        190        189,041  

RWJ Barnabas Health, Inc.,

          

Sr. Unsec’d. Notes

     3.949       07/01/46        175        160,998  

Stanford Health Care,

          

Unsec’d. Notes, Series 2018

     3.795       11/15/48        450        408,323  

UnitedHealth Group, Inc.,

          

Sr. Unsec’d. Notes

     3.050       05/15/41        1,150        978,906  

Sr. Unsec’d. Notes

     3.750       07/15/25        90        91,699  
          

 

 

 
             13,170,189  

Housewares     0.0%

                                  

Newell Brands, Inc.,

          

Sr. Unsec’d. Notes

     4.450       04/01/26        35        34,574  

Insurance     0.5%

                                  

Arch Capital Finance LLC,

          

Gtd. Notes

     5.031       12/15/46        95        91,379  

Arch Capital Group US, Inc.,

          

Gtd. Notes

     5.144       11/01/43        100        99,395  

Berkshire Hathaway Finance Corp.,

          

Gtd. Notes

     2.850       10/15/50        1,175        895,072  

CNA Financial Corp.,

          

Sr. Unsec’d. Notes

     3.950       05/15/24        1,170        1,173,205  

Liberty Mutual Group, Inc.,

          

Gtd. Notes, 144A

     3.950       05/15/60        185        135,115  

Gtd. Notes, 144A

     3.951       10/15/50        450        356,275  

Lincoln National Corp.,

          

Sr. Unsec’d. Notes

     6.300       10/09/37        115        130,007  

Markel Corp.,

          

Sr. Unsec’d. Notes

     3.350       09/17/29        1,625        1,523,694  

Sr. Unsec’d. Notes

     3.625       03/30/23        400        400,573  

Sr. Unsec’d. Notes

     4.150       09/17/50        1,310        1,118,700  

Sr. Unsec’d. Notes

     5.000       04/05/46        350        338,658  

Principal Financial Group, Inc.,

          

Gtd. Notes

     3.100       11/15/26        105        100,952  

Gtd. Notes

     4.300       11/15/46        140        130,206  

Gtd. Notes

     4.350       05/15/43        20        18,564  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    35


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity      

Date

    

Principal

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

          

Insurance (cont’d.)

                              

Teachers Insurance & Annuity Association of America,

          

Sub. Notes, 144A

   3.300%     05/15/50        930      $ 741,163  

Sub. Notes, 144A

   4.900     09/15/44        120        120,109  

W.R. Berkley Corp.,

          

Sr. Unsec’d. Notes

   4.000     05/12/50        545        472,421  
          

 

 

 
             7,845,488  

Iron/Steel     0.4%

                              

Steel Dynamics, Inc.,

          

Sr. Unsec’d. Notes

   3.450     04/15/30        5,710        5,222,789  

Lodging     0.1%

                              

Las Vegas Sands Corp.,

          

Sr. Unsec’d. Notes

   3.500     08/18/26        1,230        1,152,935  

Marriott International, Inc.,

          

Sr. Unsec’d. Notes, Series R

   3.125     06/15/26        250        241,146  
          

 

 

 
             1,394,081  

Machinery-Construction & Mining     0.1%

                              

Caterpillar, Inc.,

          

Sr. Unsec’d. Notes

   2.600     04/09/30        735        692,918  

Machinery-Diversified     0.0%

                              

Rockwell Automation, Inc.,

          

Sr. Unsec’d. Notes

   2.875     03/01/25        115        113,614  

Media     1.0%

                              

Charter Communications Operating LLC/Charter Communications Operating Capital,

          

Sr. Sec’d. Notes

   2.300     02/01/32        445        355,084  

Sr. Sec’d. Notes

   2.800     04/01/31        2,755        2,327,148  

Sr. Sec’d. Notes

   3.700     04/01/51        360        252,489  

Sr. Sec’d. Notes

   3.900     06/01/52        1,690        1,224,202  

Sr. Sec’d. Notes

   5.375     05/01/47        530        467,272  

Sr. Sec’d. Notes

   6.384     10/23/35        2,480        2,604,508  

Sr. Sec’d. Notes

   6.484     10/23/45        400        404,301  

Comcast Corp.,

          

Gtd. Notes

   4.250     10/15/30        275        282,709  

Cox Communications, Inc.,

          

Sr. Unsec’d. Notes, 144A

   2.600     06/15/31        3,535        3,073,720  

 

See Notes to Financial Statements.

 

36


    

    

 

  Description   

Interest      

Rate

   

Maturity      

Date

   

Principal

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

         

Media (cont’d.)

                                 

Cox Communications, Inc., (cont’d.)

         

Sr. Unsec’d. Notes, 144A

     3.150%       08/15/24       276      $ 270,612  

Sr. Unsec’d. Notes, 144A

     3.500       08/15/27       2,000        1,949,756  

Discovery Communications LLC,

         

Gtd. Notes

     5.200       09/20/47       1,000        886,181  

Time Warner Cable LLC,

         

Sr. Sec’d. Notes

     5.500       09/01/41       150        137,325  
         

 

 

 
            14,235,307  

Mining     0.3%

                                 

Barrick North America Finance LLC (Canada),

         

Gtd. Notes

     5.750       05/01/43       190        202,951  

Freeport Indonesia PT (Indonesia),

         

Sr. Unsec’d. Notes, 144A, MTN

     4.763       04/14/27       225        218,531  

Newmont Corp.,

         

Gtd. Notes

     2.250       10/01/30       845        722,909  

Gtd. Notes

     2.800       10/01/29       1,270        1,147,816  

Yamana Gold, Inc. (Canada),

         

Gtd. Notes

     2.630       08/15/31       3,120        2,550,615  
         

 

 

 
            4,842,822  

Multi-National     0.0%

                                 

Corp. Andina de Fomento (Supranational Bank),

         

Sr. Unsec’d. Notes

     2.750       01/06/23       185        184,746  

Office/Business Equipment     0.2%

                                 

CDW LLC/CDW Finance Corp.,

         

Gtd. Notes

     2.670       12/01/26       3,145        2,875,295  

Oil & Gas     2.1%

                                 

Aker BP ASA (Norway),

         

Gtd. Notes, 144A

     2.000       07/15/26       3,620        3,285,391  

Gtd. Notes, 144A

     3.100       07/15/31       770        665,375  

Sr. Unsec’d. Notes, 144A

     2.875       01/15/26       2,045        1,944,000  

BP Capital Markets America, Inc.,

         

Gtd. Notes

     3.790       02/06/24       855        863,314  

BP Capital Markets PLC (United Kingdom),

         

Gtd. Notes

     4.375(ff)       06/22/25(oo)       2,420        2,387,845  

Canadian Natural Resources Ltd. (Canada),

         

Sr. Unsec’d. Notes(a)

     2.950       01/15/23       1,310        1,307,587  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    37


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

   

Maturity      

Date

    

Principal

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

          

Oil & Gas (cont’d.)

                                  

Canadian Natural Resources Ltd. (Canada), (cont’d.)

          

Sr. Unsec’d. Notes

     6.250%       03/15/38        175      $ 190,200  

Cenovus Energy, Inc. (Canada),

          

Sr. Unsec’d. Notes(a)

     3.750       02/15/52        1,685        1,355,935  

Sr. Unsec’d. Notes

     5.400       06/15/47        384        385,061  

Sr. Unsec’d. Notes

     6.750       11/15/39        350        386,030  

Sr. Unsec’d. Notes

     6.800       09/15/37        200        228,779  

Chevron USA, Inc.,

          

Gtd. Notes

     3.900       11/15/24        425        431,712  

Continental Resources, Inc.,

          

Gtd. Notes

     3.800       06/01/24        2,300        2,277,040  

Gtd. Notes

     4.500       04/15/23        146        146,142  

Gtd. Notes, 144A

     2.268       11/15/26        330        298,628  

Equinor ASA (Norway),

          

Gtd. Notes

     2.375       05/22/30        1,110        1,006,457  

KazMunayGas National Co. JSC (Kazakhstan),

          

Sr. Unsec’d. Notes, 144A

     4.750       04/24/25        200        192,350  

Marathon Petroleum Corp.,

          

Sr. Unsec’d. Notes

     3.800       04/01/28        380        367,283  

Occidental Petroleum Corp.,

          

Sr. Unsec’d. Notes

     7.500       05/01/31        100        116,226  

Sr. Unsec’d. Notes

     7.875       09/15/31        250        290,734  

Ovintiv, Inc.,

          

Gtd. Notes

     6.500       08/15/34        200        214,755  

Petroleos Mexicanos (Mexico),

          

Gtd. Notes

     5.950       01/28/31        398        307,455  

Gtd. Notes

     6.350       02/12/48        154        101,255  

Gtd. Notes

     6.490       01/23/27        1,048        948,309  

Gtd. Notes

     6.500       03/13/27        1,020        921,468  

Gtd. Notes, MTN

     6.750       09/21/47        1,305        885,116  

Gtd. Notes, MTN

     6.875       08/04/26        870        829,023  

Phillips 66 Co.,

          

Gtd. Notes, 144A

     3.150       12/15/29        5,000        4,610,218  

Gtd. Notes, 144A

     3.550       10/01/26        310        304,835  

Qatar Energy (Qatar),

          

Sr. Unsec’d. Notes, 144A

     1.375       09/12/26        2,298        2,125,650  

Sr. Unsec’d. Notes, 144A

     2.250       07/12/31        1,090        975,550  

Sinopec Group Overseas Development 2018 Ltd. (China),

          

Gtd. Notes, 144A

     3.680       08/08/49        585        477,799  
          

 

 

 
             30,827,522  

 

See Notes to Financial Statements.

 

38


    

    

 

  Description    Interest      
Rate
   

Maturity      

Date

    

Principal

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

          

Oil & Gas Services     0.0%

                                  

Schlumberger Holdings Corp.,

          

Sr. Unsec’d. Notes, 144A

     3.900%       05/17/28        487      $ 477,388  

Packaging & Containers     0.5%

                                  

Berry Global, Inc.,

          

Sr. Sec’d. Notes

     1.570       01/15/26        4,740        4,316,813  

Graphic Packaging International LLC,

          

Sr. Sec’d. Notes, 144A

     1.512       04/15/26        3,070        2,802,705  

WRKCo, Inc.,

          

Gtd. Notes

     4.650       03/15/26        560        572,944  
          

 

 

 
             7,692,462  

Pharmaceuticals     1.5%

                                  

AbbVie, Inc.,

          

Sr. Unsec’d. Notes

     3.800       03/15/25        105        105,348  

Sr. Unsec’d. Notes

     4.250       11/21/49        2,000        1,877,273  

Sr. Unsec’d. Notes

     4.500       05/14/35        550        559,958  

Sr. Unsec’d. Notes

     4.550       03/15/35        360        367,305  

Sr. Unsec’d. Notes

     4.700       05/14/45        1,330        1,323,268  

Sr. Unsec’d. Notes

     4.750       03/15/45        1,008        994,563  

AmerisourceBergen Corp.,

          

Sr. Unsec’d. Notes

     3.250       03/01/25        55        54,426  

Bristol-Myers Squibb Co.,

          

Sr. Unsec’d. Notes

     4.125       06/15/39        115        114,836  

Sr. Unsec’d. Notes

     4.350       11/15/47        475        473,470  

Cigna Corp.,

          

Gtd. Notes

     3.250       04/15/25        270        267,867  

Gtd. Notes

     3.400       03/01/27        325        320,846  

Gtd. Notes

     4.375       10/15/28        1,950        1,990,160  

Gtd. Notes

     4.500       02/25/26        700        720,213  

Sr. Unsec’d. Notes

     2.400       03/15/30        6,145        5,502,651  

CVS Health Corp.,

          

Sr. Unsec’d. Notes

     2.700       08/21/40        385        293,945  

Sr. Unsec’d. Notes

     4.780       03/25/38        85        84,783  

Sr. Unsec’d. Notes

     5.125       07/20/45        465        475,195  

Sr. Unsec’d. Notes

     5.300       12/05/43        155        161,174  

Johnson & Johnson,

          

Sr. Unsec’d. Notes

     3.625       03/03/37        3,205        3,207,059  

Mylan, Inc.,

          

Gtd. Notes

     5.200       04/15/48        1,250        1,015,646  

Gtd. Notes

     5.400       11/29/43        860        730,643  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    39


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

   

Maturity      

Date

    

Principal

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

          

Pharmaceuticals (cont’d.)

                                  

Shire Acquisitions Investments Ireland DAC,

          

Gtd. Notes

     2.875%       09/23/23        89      $ 88,173  

Gtd. Notes

     3.200       09/23/26        1,220        1,186,943  

Utah Acquisition Sub, Inc.,

          

Gtd. Notes

     5.250       06/15/46        105        86,375  

Viatris, Inc.,

          

Gtd. Notes

     3.850       06/22/40        545        398,074  

Gtd. Notes

     4.000       06/22/50        375        259,874  
          

 

 

 
             22,660,068  

Pipelines     1.5%

                                  

Boardwalk Pipelines LP,

          

Gtd. Notes

     3.400       02/15/31        1,300        1,147,667  

Colonial Enterprises, Inc.,

          

Gtd. Notes, 144A

     3.250       05/15/30        1,730        1,623,549  

Colorado Interstate Gas Co. LLC/Colorado Interstate Issuing Corp.,

          

Gtd. Notes, 144A

     4.150       08/15/26        555        553,693  

EIG Pearl Holdings Sarl (Saudi Arabia),

          

Sr. Sec’d. Notes, 144A

     3.545       08/31/36        1,674        1,477,305  

Energy Transfer LP,

          

Sr. Unsec’d. Notes

     4.950       06/15/28        430        434,821  

Sr. Unsec’d. Notes

     5.000       05/15/50        565        499,216  

Sr. Unsec’d. Notes

     5.400       10/01/47        1,800        1,650,092  

Sr. Unsec’d. Notes

     6.250       04/15/49        910        918,076  

Enterprise Products Operating LLC,

          

Gtd. Notes

     3.200       02/15/52        570        430,931  

Gtd. Notes

     3.700       01/31/51        445        371,210  

Magellan Midstream Partners LP,

          

Sr. Unsec’d. Notes

     4.200       03/15/45        275        221,928  

MPLX LP,

          

Sr. Unsec’d. Notes

     2.650       08/15/30        2,720        2,361,166  

Sr. Unsec’d. Notes

     4.000       02/15/25        130        129,254  

Sr. Unsec’d. Notes

     4.500       04/15/38        270        249,450  

Sr. Unsec’d. Notes

     4.875       06/01/25        200        203,559  

Sr. Unsec’d. Notes

     5.200       03/01/47        5        4,683  

Sr. Unsec’d. Notes

     5.500       02/15/49        210        204,514  

ONEOK Partners LP,

          

Gtd. Notes

     6.125       02/01/41        300        297,103  

ONEOK, Inc.,

          

Gtd. Notes

     3.100       03/15/30        2,415        2,141,815  

 

See Notes to Financial Statements.

 

40


    

    

 

  Description   

Interest      

Rate

   

Maturity      

Date

    

Principal

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

          

Pipelines (cont’d.)

                                  

ONEOK, Inc., (cont’d.)

          

Gtd. Notes

     4.450%       09/01/49        1,000      $ 819,720  

Gtd. Notes

     4.500       03/15/50        195        161,664  

Gtd. Notes

     4.950       07/13/47        85        75,485  

Plains All American Pipeline LP/PAA Finance Corp.,

          

Sr. Unsec’d. Notes

     3.550       12/15/29        350        316,392  

Sr. Unsec’d. Notes

     4.650       10/15/25        1,000        1,003,141  

Sr. Unsec’d. Notes

     4.700       06/15/44        170        138,394  

Spectra Energy Partners LP,

          

Gtd. Notes

     3.375       10/15/26        140        136,338  

Targa Resources Corp.,

          

Gtd. Notes

     6.250       07/01/52        1,910        2,005,458  

Texas Eastern Transmission LP,

          

Sr. Unsec’d. Notes, 144A

     3.500       01/15/28        300        288,441  

Transcontinental Gas Pipe Line Co. LLC,

          

Sr. Unsec’d. Notes

     3.950       05/15/50        625        542,138  

Sr. Unsec’d. Notes

     4.600       03/15/48        500        463,806  

Western Midstream Operating LP,

          

Sr. Unsec’d. Notes

     5.300       03/01/48        320        283,750  

Williams Cos., Inc. (The),

          

Sr. Unsec’d. Notes

     4.000       09/15/25        350        349,161  

Sr. Unsec’d. Notes

     4.300       03/04/24        325        326,638  

Sr. Unsec’d. Notes

     4.850       03/01/48        55        51,978  

Sr. Unsec’d. Notes

     5.400       03/04/44        400        392,707  
          

 

 

 
             22,275,243  

Real Estate     0.3%

                                  

Ontario Teachers’ Cadillac Fairview Properties Trust (Canada),

          

Sr. Unsec’d. Notes, 144A

     4.125       02/01/29        4,190        4,192,361  

Real Estate Investment Trusts (REITs)     1.4%

                                  

Alexandria Real Estate Equities, Inc.,

          

Gtd. Notes

     2.000       05/18/32        1,645        1,354,692  

Brixmor Operating Partnership LP,

          

Sr. Unsec’d. Notes

     4.050       07/01/30        3,665        3,386,209  

Corporate Office Properties LP,

          

Gtd. Notes

     2.900       12/01/33        1,400        1,099,297  

CubeSmart LP,

          

Gtd. Notes

     2.250       12/15/28        3,360        2,917,209  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    41


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

   

Maturity      

Date

    

Principal

Amount

(000)#

             Value          

CORPORATE BONDS (Continued)

          

Real Estate Investment Trusts (REITs) (cont’d.)

                                  

Healthpeak Properties, Inc.,

          

Sr. Unsec’d. Notes

     2.875%       01/15/31        630      $ 562,107  

Prologis LP,

          

Sr. Unsec’d. Notes

     1.250       10/15/30        2,765        2,300,514  

Realty Income Corp.,

          

Sr. Unsec’d. Notes

     1.800       03/15/33        325        258,450  

Sr. Unsec’d. Notes

     3.250       01/15/31        985        921,170  

Simon Property Group LP,

          

Sr. Unsec’d. Notes

     2.000       09/13/24        2,300        2,229,322  

Sun Communities Operating LP,

          

Gtd. Notes(a)

     2.300       11/01/28        4,585        4,009,786  

Welltower, Inc.,

          

Sr. Unsec’d. Notes

     2.700       02/15/27        775        734,283  

Sr. Unsec’d. Notes

     3.625       03/15/24        1,500        1,498,287  
          

 

 

 
             21,271,326  

Retail     0.4%

                                  

Alimentation Couche-Tard, Inc. (Canada),

          

Gtd. Notes, 144A

     3.550       07/26/27        940        890,338  

AutoZone, Inc.,

          

Sr. Unsec’d. Notes

     1.650       01/15/31        620        507,981  

Dollar Tree, Inc.,

          

Sr. Unsec’d. Notes

     2.650       12/01/31        605        523,715  

Falabella SA (Chile),

          

Sr. Unsec’d. Notes, 144A(a)

     4.375       01/27/25        1,700        1,676,944  

Ross Stores, Inc.,

          

Sr. Unsec’d. Notes(a)

     1.875       04/15/31        3,350        2,787,772  
          

 

 

 
             6,386,750  

Semiconductors     0.7%

                                  

Broadcom, Inc.,

          

Sr. Unsec’d. Notes, 144A

     3.137       11/15/35        1,442        1,161,234  

Sr. Unsec’d. Notes, 144A

     3.187       11/15/36        1,000        800,576  

Sr. Unsec’d. Notes, 144A

     3.419       04/15/33        4,847        4,189,613  

Microchip Technology, Inc.,

          

Sr. Sec’d. Notes

     2.670       09/01/23        4,000        3,945,151  
          

 

 

 
             10,096,574  

 

See Notes to Financial Statements.

 

42


    

    

 

  Description    Interest      
Rate
    Maturity      
Date
     Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

          

Software     0.4%

                                  

Microsoft Corp.,

          

Sr. Unsec’d. Notes

     2.525%       06/01/50        191      $ 148,510  

Sr. Unsec’d. Notes

     3.041       03/17/62        335        278,951  

Roper Technologies, Inc.,

          

Sr. Unsec’d. Notes

     1.400       09/15/27        1,390        1,226,691  

ServiceNow, Inc.,

          

Sr. Unsec’d. Notes

     1.400       09/01/30        1,655        1,348,937  

Workday, Inc.,

          

Sr. Unsec’d. Notes(a)

     3.800       04/01/32        2,435        2,322,928  
          

 

 

 
             5,326,017  

Telecommunications     1.3%

                                  

AT&T, Inc.,

          

Sr. Unsec’d. Notes

     2.550       12/01/33        123        104,141  

Sr. Unsec’d. Notes

     3.500       09/15/53        3,114        2,457,715  

Sr. Unsec’d. Notes

     3.650       09/15/59        1,717        1,339,903  

Sr. Unsec’d. Notes

     3.800       12/01/57        1,128        914,026  

Sr. Unsec’d. Notes

     4.300       02/15/30        170        170,466  

Sr. Unsec’d. Notes

     4.500       05/15/35        150        148,863  

Level 3 Financing, Inc.,

          

Sr. Sec’d. Notes, 144A

     3.400       03/01/27        3,000        2,711,128  

T-Mobile USA, Inc.,

          

Sr. Sec’d. Notes

     2.550       02/15/31        1,635        1,425,981  

Sr. Sec’d. Notes

     3.000       02/15/41        640        497,596  

Sr. Sec’d. Notes

     3.875       04/15/30        4,780        4,596,943  

Sr. Sec’d. Notes

     4.375       04/15/40        380        353,887  

Sr. Sec’d. Notes

     4.500       04/15/50        505        464,519  

Verizon Communications, Inc.,

          

Sr. Unsec’d. Notes

     2.550       03/21/31        4,065        3,614,267  
          

 

 

 
             18,799,435  

Transportation     0.1%

                                  

Burlington Northern Santa Fe LLC,

          

Sr. Unsec’d. Notes

     3.050       02/15/51        910        742,722  

Kansas City Southern,

          

Gtd. Notes

     3.500       05/01/50        1,585        1,310,554  
          

 

 

 
             2,053,276  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    43


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

CORPORATE BONDS (Continued)

          

Water     0.2%

                          

American Water Capital Corp.,

          

Sr. Unsec’d. Notes

   2.800%   05/01/30      1,580      $ 1,462,985  

Sr. Unsec’d. Notes

   3.750   09/01/47      25        21,885  

Sr. Unsec’d. Notes

   4.000   12/01/46      145        130,055  

Essential Utilities, Inc.,

          

Sr. Unsec’d. Notes

   2.704   04/15/30      1,380        1,230,143  
          

 

 

 
             2,845,068  
          

 

 

 

TOTAL CORPORATE BONDS
     (cost $503,644,407)

             451,827,177  
          

 

 

 

MUNICIPAL BONDS     0.5%

          

Alabama     0.0%

                          

Alabama Economic Settlement Authority,

          

Taxable, Revenue Bonds, Series B

   4.263   09/15/32      40        40,414  

California     0.1%

                          

Bay Area Toll Authority,

          

Taxable, Revenue Bonds

   2.574   04/01/31      1,405        1,303,092  

City of Los Angeles Department of Airports,

          

Taxable, Revenue Bonds, BABs

   6.582   05/15/39      285        334,881  

University of California,

          

Taxable, Revenue Bonds, Series AP

   3.931   05/15/45      30        29,382  

Taxable, Revenue Bonds, Series J

   4.131   05/15/45      30        28,624  
          

 

 

 
             1,695,979  

Illinois     0.1%

                          

State of Illinois,

          

General Obligation Unlimited, Series A

   5.000   10/01/22      110        110,614  

General Obligation Unlimited, Series D

   5.000   11/01/22      895        902,198  
          

 

 

 
             1,012,812  

New Jersey     0.0%

                          

New Jersey Turnpike Authority,

          

Taxable, Revenue Bonds, BABs, Series A

   7.102   01/01/41      250        329,621  

North Carolina     0.0%

                          

North Carolina State Education Assistance Authority,

          

Taxable, Revenue Bonds, Series 2011-02, Class A3, 3 Month LIBOR + 0.800% (Cap N/A, Floor 0.000%)

   3.583(c)   07/25/36      599        592,337  

 

See Notes to Financial Statements.

 

44


    

    

 

  Description    Interest      
Rate
 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

MUNICIPAL BONDS (Continued)

          

Pennsylvania     0.1%

                          

Pennsylvania State University (The),

          

Taxable, Revenue Bonds, Series D

   2.840%   09/01/50      745      $ 594,882  

Pennsylvania Turnpike Commission,

          

Revenue Bonds, BABs

   6.105   12/01/39      70        81,335  

Revenue Bonds, BABs, Series B

   5.511   12/01/45      150        169,433  
          

 

 

 
             845,650  

Texas     0.2%

                          

City of San Antonio Electric & Gas Systems Revenue,

          

Revenue Bonds, BABs

   5.985   02/01/39      775        927,443  

Grand Parkway Transportation Corp.,

          

Taxable, Revenue Bonds, Series E

   5.184   10/01/42      775        877,570  

Permanent University Fund - University of Texas System,

          

Taxable, Revenue Bonds, Series A

   3.376   07/01/47      555        472,337  

Texas Private Activity Bond Surface Transportation Corp.,

          

Taxable, Revenue Bonds, Series B

   3.922   12/31/49      340        298,305  
          

 

 

 
             2,575,655  

Virginia     0.0%

                          

University of Virginia,

          

Taxable, Revenue Bonds, Series C

   4.179   09/01/2117      130        119,151  
          

 

 

 

TOTAL MUNICIPAL BONDS
(cost $7,830,683)

             7,211,619  
          

 

 

 

RESIDENTIAL MORTGAGE-BACKED SECURITIES     5.1%

          

Alternative Loan Trust,

          

Series 2003-J03, Class 2A1

   6.250   12/25/33      2        1,939  

BCAP LLC Trust,

          

Series 2011-RR04, Class 7A1, 144A

   5.250   04/26/37      117        86,487  

Bellemeade Re Ltd. (Bermuda),

          

Series 2019-03A, Class M1B, 144A, 1 Month LIBOR + 1.600% (Cap N/A, Floor 1.600%)

   3.859(c)   07/25/29      157        156,173  

Series 2021-01A, Class M1A, 144A, 30 Day Average SOFR + 1.750% (Cap N/A, Floor 1.750%)

   3.264(c)   03/25/31      968        962,929  

Series 2021-03A, Class A2, 144A, 30 Day Average SOFR + 1.000% (Cap N/A, Floor 1.000%)

   2.514(c)   09/25/31      2,200        2,113,837  

Series 2021-03A, Class M1A, 144A, 30 Day Average SOFR + 1.000% (Cap N/A, Floor 1.000%)

   2.514(c)   09/25/31      1,600        1,572,586  

Series 2022-01, Class M1A, 144A, 30 Day Average SOFR + 1.750% (Cap N/A, Floor 1.750%)

   3.264(c)   01/26/32      3,810        3,771,099  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    45


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

RESIDENTIAL MORTGAGE-BACKED SECURITIES (Continued)

       

Central Park Funding Trust,

          

Series 2021-01, Class PT, 144A, 1 Month LIBOR + 2.750% (Cap N/A, Floor 2.750%)

   5.050%(c)   08/29/22      2,900      $ 2,873,241  

Connecticut Avenue Securities Trust,

          

Series 2022-R01, Class 1M2, 144A, 30 Day Average SOFR + 1.900% (Cap N/A, Floor 0.000%)

   3.414(c)   12/25/41      2,120        1,960,997  

Credit Suisse First Boston Mortgage Securities Corp. (Switzerland),

          

Series 2003-08, Class 5A1

   6.500   04/25/33      1        1,110  

Credit Suisse Mortgage Trust,

          

Series 2020-RPL06, Class A1, 144A

   2.688(cc)   03/25/59      1,042        1,003,769  

Eagle Re Ltd. (Bermuda),

          

Series 2019-01, Class M1B, 144A, 1 Month LIBOR + 1.800% (Cap N/A, Floor 0.000%)

   4.059(c)   04/25/29      90        89,298  

Series 2021-01, Class M1A, 144A, 30 Day Average SOFR + 1.700% (Cap N/A, Floor 1.700%)

   3.214(c)   10/25/33      961        960,787  

Series 2021-02, Class M1A, 144A, 30 Day Average SOFR + 1.550% (Cap N/A, Floor 1.550%)

   3.064(c)   04/25/34      5,660        5,607,514  

Fannie Mae REMIC,

          

Series 2012-134, Class ZC

   2.500   12/25/42      2,682        2,385,187  

Series 2014-11, Class VB

   4.500   04/25/42      500        516,505  

Series 2021-03, Class JI, IO

   2.500   02/25/51      3,310        443,270  

FHLMC Structured Agency Credit Risk REMIC Trust,

          

Series 2021-DNA03, Class M2, 144A, 30 Day Average SOFR + 2.100% (Cap N/A, Floor 0.000%)

   3.614(c)   10/25/33      2,885        2,747,030  

Series 2021-DNA05, Class M2, 144A, 30 Day Average SOFR + 1.650% (Cap N/A, Floor 0.000%)

   3.164(c)   01/25/34      284        278,582  

Series 2021-HQA03, Class M1, 144A, 30 Day Average SOFR + 0.850% (Cap N/A, Floor 0.000%)

   2.364(c)   09/25/41      6,891        6,593,783  

Series 2022-DNA01, Class M1A, 144A, 30 Day Average SOFR + 1.000% (Cap N/A, Floor 0.000%)

   2.514(c)   01/25/42      2,087        2,034,535  

FHLMC Structured Pass-Through Certificates,

          

Series T-59, Class 1A2

   7.000   10/25/43      72        78,829  

Freddie Mac REMIC,

          

Series 4249, Class GW

   3.500   10/15/41      962        967,923  

Series 4661, Class BV

   3.500   12/15/36      723        712,123  

Series 4710, Class KZ

   3.500   08/15/47      1,130        1,120,824  

Series 4739, Class Z

   3.500   11/15/47      744        741,075  

Series 5019, Class IP, IO

   3.000   10/25/50      933        146,167  

Series 5023, Class IO, IO

   2.000   10/25/50      958        113,322  

Series 5185, Class LI, IO

   3.000   01/25/52      1,861        282,783  

Freddie Mac Strips,

          

Series 365, Class C28, IO

   3.000   12/15/46      931        135,555  

 

See Notes to Financial Statements.

 

46


    

    

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

RESIDENTIAL MORTGAGE-BACKED SECURITIES (Continued)

       

Government National Mortgage Assoc.,

          

Series 2013-99, Class AX

   3.000%   07/20/43      664      $ 656,994  

Series 2015-124, Class VZ

   3.500   09/20/45      5,079        5,150,815  

Series 2016-46, Class JE

   2.500   11/20/45      170        164,934  

Series 2018-07, Class GA

   3.000   02/20/47      228        224,919  

GSR Mortgage Loan Trust,

          

Series 2005-AR06, Class 2A1

   2.992(cc)   09/25/35      17        16,742  

Home Re Ltd. (Bermuda),

          

Series 2019-01, Class M1, 144A, 1 Month LIBOR + 1.650% (Cap N/A, Floor 0.000%)

   3.909(c)   05/25/29      61        60,478  

Series 2021-02, Class M1A, 144A, 30 Day Average SOFR + 1.250% (Cap N/A, Floor 0.000%)

   2.764(c)   01/25/34      1,137        1,128,218  

Legacy Mortgage Asset Trust,

          

Series 2019-GS06, Class A1, 144A

   3.000   06/25/59      189        188,576  

Series 2019-PR01, Class A1, 144A

   3.858   09/25/59      2,092        2,082,054  

Series 2020-GS01, Class A1, 144A

   2.882   10/25/59      784        779,507  

Series 2021-GS01, Class A1, 144A

   1.892   10/25/66      320        310,577  

Mello Warehouse Securitization Trust,

          

Series 2021-01, Class A, 144A, 1 Month LIBOR + 0.700% (Cap N/A, Floor 0.700%)

   2.324(c)   02/25/55      2,100        2,041,060  

MFA Trust,

          

Series 2021-RPL01, Class A1, 144A

   1.131(cc)   07/25/60      2,852        2,616,895  

Mill City Mortgage Loan Trust,

          

Series 2017-03, Class A1, 144A

   2.750(cc)   01/25/61      119        117,773  

Series 2018-01, Class A1, 144A

   3.250(cc)   05/25/62      198        194,853  

Mortgage Repurchase Agreement Financing Trust,

          

Series 2021-S01, Class A1, 144A, 1 Month LIBOR + 0.500% (Cap N/A, Floor 0.500%)

   2.372(c)   09/10/22      2,000        1,999,924  

New Residential Mortgage Loan Trust,

          

Series 2018-04A, Class A1S, 144A, 1 Month LIBOR + 0.750% (Cap N/A, Floor 0.750%)

   3.009(c)   01/25/48      81        78,882  

Oaktown Re III Ltd. (Bermuda),

          

Series 2019-01A, Class M1A, 144A, 1 Month LIBOR + 1.400% (Cap N/A, Floor 1.400%)

   3.659(c)   07/25/29      19        18,644  

Oaktown Re VII Ltd. (Bermuda),

          

Series 2021-02, Class M1A, 144A, 30 Day Average SOFR + 1.600% (Cap N/A, Floor 1.600%)

   3.114(c)   04/25/34      4,100        3,993,809  

OBX Trust,

          

Series 2018-01, Class A2, 144A, 1 Month LIBOR + 0.650% (Cap N/A, Floor 0.000%)

   2.909(c)   06/25/57      167        162,668  

PMT Credit Risk Transfer Trust,

          

Series 2020-02R, Class A, 144A, 1 Month LIBOR + 3.815% (Cap N/A, Floor 3.815%)

   6.115(c)   12/25/22      1,473        1,462,466  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    47


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

RESIDENTIAL MORTGAGE-BACKED SECURITIES (Continued)

       

PMT Credit Risk Transfer Trust, (cont’d.)

          

Series 2021-01R, Class A, 144A, 1 Month LIBOR + 2.900% (Cap N/A, Floor 2.900%)

   5.159%(c)   02/27/24      2,512      $ 2,451,677  

Radnor Re Ltd. (Bermuda),

          

Series 2018-01, Class M1, 144A, 1 Month LIBOR + 1.400% (Cap N/A, Floor 0.000%)

   3.659(c)   03/25/28      17        17,269  

Series 2020-01, Class M1A, 144A, 1 Month LIBOR + 0.950% (Cap N/A, Floor 0.950%)

   3.209(c)   01/25/30      164        162,945  

Seasoned Credit Risk Transfer Trust,

          

Series 2019-02, Class MA

   3.500   08/25/58      740        736,596  

Sequoia Mortgage Trust 10,

          

Series 10, Class 2A1, 1 Month LIBOR + 0.760% (Cap 11.750%, Floor 0.760%)

   2.886(c)   10/20/27      16        15,085  

Structured Asset Mortgage Investments II Trust,

          

Series 2005-AR05, Class A1, 1 Month LIBOR + 0.500% (Cap 11.000%, Floor 0.500%)

   2.620(c)   07/19/35      18        16,669  

Towd Point Mortgage Trust,

          

Series 2017-05, Class A1, 144A, 1 Month LIBOR + 0.600% (Cap N/A, Floor 0.000%)

   2.859(c)   02/25/57      185        183,267  

Series 2018-01, Class A1, 144A

   3.000(cc)   01/25/58      302        296,072  

Series 2019-HY03, Class A1A, 144A, 1 Month LIBOR + 1.000% (Cap N/A, Floor 1.000%)

   3.259(c)   10/25/59      192        190,255  

Series 2020-04, Class A1, 144A

   1.750   10/25/60      767        707,759  

Series 2021-SJ01, Class A1, 144A

   2.250(cc)   07/25/68      2,572        2,464,086  

Series 2021-SJ02, Class A1A, 144A

   2.250(cc)   12/25/61      4,327        4,112,535  

Washington Mutual Mortgage Pass-Through Certificates Trust,

          

Series 2002-AR06, Class A, Federal Reserve US 12 Month Cumulative Avg 1 Year CMT + 1.400% (Cap N/A, Floor 1.400%)

   2.043(c)   06/25/42      24        22,293  

Series 2002-AR09, Class 1A, Federal Reserve US 12 Month Cumulative Avg 1 Year CMT + 1.400% (Cap N/A, Floor 1.400%)

   2.043(c)   08/25/42      2        2,125  

Series 2005-AR13, Class A1A1, 1 Month LIBOR + 0.580% (Cap 10.500%, Floor 0.580%)

   2.839(c)   10/25/45      215        204,786  
          

 

 

 

TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES
    
 (cost $78,551,913)

             75,493,466  
          

 

 

 

SOVEREIGN BONDS     0.6%

          

Abu Dhabi Government International Bond (United Arab Emirates),

          

Sr. Unsec’d. Notes, 144A

   3.125   10/11/27      840        840,683  

Bermuda Government International Bond (Bermuda),

          

Sr. Unsec’d. Notes, 144A

   2.375   08/20/30      555        482,260  

 

See Notes to Financial Statements.

 

48


    

    

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

SOVEREIGN BONDS (Continued)

          

Bermuda Government International Bond (Bermuda), (cont’d.)

       

Sr. Unsec’d. Notes, 144A

   3.375%   08/20/50      450      $ 344,334  

Export-Import Bank of India (India),

          

Sr. Unsec’d. Notes, 144A

   3.875   02/01/28      290        283,722  

Indonesia Government International Bond (Indonesia),

       

Sr. Unsec’d. Notes

   3.500   01/11/28      1,420        1,396,747  

Japan Finance Organization for Municipalities (Japan),

       

Sr. Unsec’d. Notes, 144A, MTN

   1.750   09/05/24      200        194,408  

Sr. Unsec’d. Notes, 144A, MTN

   2.125   10/25/23      200        197,853  

Sr. Unsec’d. Notes, 144A, MTN

   3.000   03/12/24      400        399,464  

Mexico Government International Bond (Mexico),

       

Sr. Unsec’d. Notes

   3.500   02/12/34      970        840,505  

Panama Government International Bond (Panama),

       

Sr. Unsec’d. Notes

   4.500   04/16/50      200        164,913  

Peruvian Government International Bond (Peru),

       

Sr. Unsec’d. Notes

   2.783   01/23/31      701        617,669  

Province of Alberta (Canada),

          

Sr. Unsec’d. Notes

   1.300   07/22/30      185        160,140  

Sr. Unsec’d. Notes

   3.300   03/15/28      110        110,824  

Province of Manitoba (Canada),

          

Sr. Unsec’d. Notes

   2.125   06/22/26      100        96,098  

Province of Quebec (Canada),

          

Unsec’d. Notes, Series A, MTN

   7.140   02/27/26      45        50,638  

Qatar Government International Bond (Qatar),

       

Sr. Unsec’d. Notes, 144A

   3.875   04/23/23      335        335,838  

Sr. Unsec’d. Notes, 144A

   5.103   04/23/48      370        410,700  

Saudi Government International Bond (Saudi Arabia),

       

Sr. Unsec’d. Notes, 144A, MTN

   2.875   03/04/23      460        458,850  

Tokyo Metropolitan Government (Japan),

          

Sr. Unsec’d. Notes, 144A

   3.250   06/01/23      200        200,449  

Uruguay Government International Bond (Uruguay),

       

Sr. Unsec’d. Notes

   4.975   04/20/55      540        563,726  

Sr. Unsec’d. Notes

   5.100   06/18/50      60        63,911  
          

 

 

 

TOTAL SOVEREIGN BONDS
     (cost $8,854,417)

             8,213,732  
          

 

 

 

U.S. GOVERNMENT AGENCY OBLIGATIONS     23.6%

       

Federal Home Loan Mortgage Corp.

   1.500   11/01/50      1,954        1,684,698  

Federal Home Loan Mortgage Corp.

   2.000   01/01/32      365        353,318  

Federal Home Loan Mortgage Corp.

   2.000   02/01/36      980        932,740  

Federal Home Loan Mortgage Corp.

   2.000   10/01/40      428        396,736  

Federal Home Loan Mortgage Corp.

   2.000   09/01/50      13,518        12,189,782  

Federal Home Loan Mortgage Corp.

   2.000   12/01/50      2,075        1,871,290  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    49


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued)

          

Federal Home Loan Mortgage Corp.

   2.000%   03/01/51      832      $ 750,517  

Federal Home Loan Mortgage Corp.

   2.000   05/01/51      973        876,856  

Federal Home Loan Mortgage Corp.

   2.000   09/01/51      497        448,918  

Federal Home Loan Mortgage Corp.

   2.500   01/01/29      211        208,332  

Federal Home Loan Mortgage Corp.

   2.500   07/01/31      359        354,186  

Federal Home Loan Mortgage Corp.

   2.500   01/01/32      195        192,248  

Federal Home Loan Mortgage Corp.

   2.500   10/01/32      439        433,024  

Federal Home Loan Mortgage Corp.

   2.500   12/01/32      781        770,422  

Federal Home Loan Mortgage Corp.

   2.500   09/01/46      171        160,483  

Federal Home Loan Mortgage Corp.

   2.500   11/01/46      532        503,428  

Federal Home Loan Mortgage Corp.

   2.500   11/01/49      894        838,961  

Federal Home Loan Mortgage Corp.

   2.500   03/01/51      1,139        1,071,963  

Federal Home Loan Mortgage Corp.

   2.500   04/01/51      11,909        11,128,684  

Federal Home Loan Mortgage Corp.

   2.500   07/01/51      502        469,079  

Federal Home Loan Mortgage Corp.

   2.500   08/01/51      1,001        935,330  

Federal Home Loan Mortgage Corp.

   2.500   09/01/51      6,157        5,750,751  

Federal Home Loan Mortgage Corp.

   2.500   10/01/51      391        366,876  

Federal Home Loan Mortgage Corp.

   2.500   12/01/51      3,461        3,231,258  

Federal Home Loan Mortgage Corp.

   3.000   02/01/32      737        738,758  

Federal Home Loan Mortgage Corp.

   3.000   01/01/37      158        157,910  

Federal Home Loan Mortgage Corp.

   3.000   12/01/37      64        63,356  

Federal Home Loan Mortgage Corp.

   3.000   06/01/43      1,556        1,532,441  

Federal Home Loan Mortgage Corp.

   3.000   07/01/43      268        263,699  

Federal Home Loan Mortgage Corp.

   3.000   06/01/46      440        430,708  

Federal Home Loan Mortgage Corp.

   3.000   12/01/46      405        396,395  

Federal Home Loan Mortgage Corp.

   3.000   01/01/47      455        444,692  

Federal Home Loan Mortgage Corp.

   3.000   02/01/50      2,703        2,617,597  

Federal Home Loan Mortgage Corp.

   3.000   06/01/50      639        618,460  

Federal Home Loan Mortgage Corp.

   3.000   04/01/52      4,448        4,285,298  

Federal Home Loan Mortgage Corp.

   3.000   06/01/52      17,340        16,712,843  

Federal Home Loan Mortgage Corp.

   3.500   11/01/37      143        145,063  

Federal Home Loan Mortgage Corp.

   3.500   06/01/42      195        197,087  

Federal Home Loan Mortgage Corp.

   3.500   06/01/42      216        218,129  

Federal Home Loan Mortgage Corp.

   3.500   07/01/42      206        207,937  

Federal Home Loan Mortgage Corp.

   3.500   09/01/42      248        250,990  

Federal Home Loan Mortgage Corp.

   3.500   10/01/42      313        315,486  

Federal Home Loan Mortgage Corp.

   3.500   06/01/43      128        128,913  

Federal Home Loan Mortgage Corp.

   3.500   05/01/45      170        170,722  

Federal Home Loan Mortgage Corp.

   3.500   01/01/47      126        126,942  

Federal Home Loan Mortgage Corp.

   3.500   02/01/47      281        284,576  

Federal Home Loan Mortgage Corp.

   3.500   11/01/47      190        190,702  

Federal Home Loan Mortgage Corp.

   3.500   08/01/48      76        76,557  

Federal Home Loan Mortgage Corp.

   3.500   10/01/48      294        293,685  

Federal Home Loan Mortgage Corp.

   3.500   01/01/52      177        175,688  

Federal Home Loan Mortgage Corp.

   3.500   04/01/52      46        45,810  

 

See Notes to Financial Statements.

 

50


    

    

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
            Value          

U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued)

         

Federal Home Loan Mortgage Corp.

   3.500%   04/01/52      899     $ 890,117  

Federal Home Loan Mortgage Corp.

   3.500   04/01/52      1,054       1,043,599  

Federal Home Loan Mortgage Corp.

   3.500   06/01/52      11,874       11,754,246  

Federal Home Loan Mortgage Corp.

   4.000   12/01/40      62       63,893  

Federal Home Loan Mortgage Corp.

   4.000   01/01/41      231       237,261  

Federal Home Loan Mortgage Corp.

   4.000   04/01/42      215       221,491  

Federal Home Loan Mortgage Corp.

   4.000   10/01/45      110       112,393  

Federal Home Loan Mortgage Corp.

   4.000   02/01/46      1,623       1,671,268  

Federal Home Loan Mortgage Corp.

   4.000   05/01/46      100       103,007  

Federal Home Loan Mortgage Corp.

   4.000   08/01/46      138       141,451  

Federal Home Loan Mortgage Corp.

   4.000   11/01/47      99       101,065  

Federal Home Loan Mortgage Corp.

   4.000   04/01/48      155       158,319  

Federal Home Loan Mortgage Corp.

   4.000   05/01/48      160       162,543  

Federal Home Loan Mortgage Corp.

   4.000   07/01/48      302       308,338  

Federal Home Loan Mortgage Corp.

   4.000   04/01/52      1,973       2,005,940  

Federal Home Loan Mortgage Corp.

   4.500   06/01/42      72       74,481  

Federal Home Loan Mortgage Corp.

   4.500   09/01/44      87       91,135  

Federal Home Loan Mortgage Corp.

   4.500   07/01/45      234       243,611  

Federal Home Loan Mortgage Corp.

   4.500   04/01/47      878       908,153  

Federal Home Loan Mortgage Corp.

   4.500   07/01/47      93       95,995  

Federal Home Loan Mortgage Corp.

   4.500   07/01/47      211       218,327  

Federal Home Loan Mortgage Corp.

   4.500   11/01/47      388       400,613  

Federal Home Loan Mortgage Corp.

   4.500   02/01/48      114       117,379  

Federal Home Loan Mortgage Corp.

   4.500   07/01/48      248       254,862  

Federal Home Loan Mortgage Corp.

   5.000   08/01/40      191       203,377  

Federal Home Loan Mortgage Corp.

   5.000   12/01/47      156       160,723  

Federal Home Loan Mortgage Corp.

   5.000   02/01/48      263       273,488  

Federal National Mortgage Assoc.,

         

Enterprise 11th District COFI Institutional Replacement Index + 1.254% (Cap 12.743%, Floor 5.724%)

   5.723(c)   12/01/30      —(r     332  

Enterprise 11th District COFI Institutional Replacement Index + 2.000% (Cap 9.375%, Floor 2.000%)

   2.250(c)   08/01/24      3       2,963  

Federal National Mortgage Assoc.

   0.875   08/05/30      1,735       1,479,931  

Federal National Mortgage Assoc.

   1.500   02/01/42      491       436,968  

Federal National Mortgage Assoc.

   1.500   10/01/50      409       352,773  

Federal National Mortgage Assoc.

   1.500   11/01/50      1,153       994,624  

Federal National Mortgage Assoc.

   1.500   12/01/50      8,737       7,537,508  

Federal National Mortgage Assoc.

   1.500   01/01/51      885       764,550  

Federal National Mortgage Assoc.

   1.625   01/07/25      1,040       1,008,893  

Federal National Mortgage Assoc.

   2.000   08/01/40      2,187       2,026,734  

Federal National Mortgage Assoc.

   2.000   02/01/41      2,079       1,923,091  

Federal National Mortgage Assoc.

   2.000   05/01/41      4,106       3,798,129  

Federal National Mortgage Assoc.

   2.000   10/01/50      13,025       11,776,050  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    51


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued)

          

Federal National Mortgage Assoc.

   2.000%   11/01/50      407      $ 366,879  

Federal National Mortgage Assoc.

   2.000   01/01/51      3,396        3,077,875  

Federal National Mortgage Assoc.

   2.000   02/01/51      4,108        3,704,548  

Federal National Mortgage Assoc.

   2.000   03/01/51      474        427,318  

Federal National Mortgage Assoc.

   2.000   05/01/51      3,860        3,475,117  

Federal National Mortgage Assoc.

   2.000   08/01/51      516        464,946  

Federal National Mortgage Assoc.

   2.000   09/01/51      1,513        1,363,994  

Federal National Mortgage Assoc.

   2.000   10/01/51      1,526        1,375,600  

Federal National Mortgage Assoc.

   2.000   11/01/51      2,826        2,546,512  

Federal National Mortgage Assoc.

   2.375   01/19/23      180        179,464  

Federal National Mortgage Assoc.

   2.500   TBA      38,500        35,871,556  

Federal National Mortgage Assoc.(k)

   2.500   02/05/24      425        422,285  

Federal National Mortgage Assoc.

   2.500   05/01/30      246        242,257  

Federal National Mortgage Assoc.

   2.500   04/01/31      720        710,383  

Federal National Mortgage Assoc.

   2.500   11/01/31      186        183,633  

Federal National Mortgage Assoc.

   2.500   02/01/43      75        70,754  

Federal National Mortgage Assoc.

   2.500   06/01/46      378        353,236  

Federal National Mortgage Assoc.

   2.500   09/01/46      178        167,321  

Federal National Mortgage Assoc.

   2.500   10/01/46      113        106,186  

Federal National Mortgage Assoc.

   2.500   10/01/46      197        184,739  

Federal National Mortgage Assoc.

   2.500   03/01/50      717        671,293  

Federal National Mortgage Assoc.

   2.500   08/01/50      4,647        4,344,856  

Federal National Mortgage Assoc.

   2.500   11/01/50      3,501        3,297,865  

Federal National Mortgage Assoc.

   2.500   12/01/50      327        307,086  

Federal National Mortgage Assoc.

   2.500   01/01/51      760        716,039  

Federal National Mortgage Assoc.

   2.500   04/01/51      5,929        5,541,212  

Federal National Mortgage Assoc.

   2.500   08/01/51      3,499        3,269,116  

Federal National Mortgage Assoc.

   2.500   12/01/51      1,001        934,879  

Federal National Mortgage Assoc.

   2.500   02/01/52      991        927,636  

Federal National Mortgage Assoc.

   2.500   03/01/52      997        929,882  

Federal National Mortgage Assoc.

   2.500   03/01/52      2,046        1,909,623  

Federal National Mortgage Assoc.

   3.000   06/01/30      136        136,483  

Federal National Mortgage Assoc.

   3.000   05/01/31      52        52,489  

Federal National Mortgage Assoc.

   3.000   12/01/31      145        145,516  

Federal National Mortgage Assoc.

   3.000   05/01/32      160        160,223  

Federal National Mortgage Assoc.

   3.000   09/01/32      63        63,174  

Federal National Mortgage Assoc.

   3.000   11/01/36      114        113,153  

Federal National Mortgage Assoc.

   3.000   10/01/42      148        145,755  

Federal National Mortgage Assoc.

   3.000   10/01/42      217        213,605  

Federal National Mortgage Assoc.

   3.000   02/01/43      209        205,457  

Federal National Mortgage Assoc.

   3.000   04/01/43      266        261,439  

Federal National Mortgage Assoc.

   3.000   06/01/43      323        318,011  

Federal National Mortgage Assoc.

   3.000   12/01/45      481        473,246  

Federal National Mortgage Assoc.

   3.000   05/01/46      592        578,850  

Federal National Mortgage Assoc.

   3.000   09/01/46      601        591,626  

 

See Notes to Financial Statements.

 

52


    

    

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued)

          

Federal National Mortgage Assoc.

   3.000%   10/01/46      1,844      $ 1,802,483  

Federal National Mortgage Assoc.

   3.000   11/01/46      677        661,716  

Federal National Mortgage Assoc.

   3.000   11/01/46      1,436        1,403,454  

Federal National Mortgage Assoc.

   3.000   03/01/47      491        480,064  

Federal National Mortgage Assoc.

   3.000   04/01/47      1,041        1,015,602  

Federal National Mortgage Assoc.

   3.000   12/01/49      2,513        2,430,815  

Federal National Mortgage Assoc.

   3.000   01/01/50      994        961,980  

Federal National Mortgage Assoc.

   3.000   02/01/50      951        922,179  

Federal National Mortgage Assoc.

   3.000   02/01/50      1,872        1,812,921  

Federal National Mortgage Assoc.

   3.000   03/01/50      447        431,982  

Federal National Mortgage Assoc.

   3.000   06/01/50      941        910,945  

Federal National Mortgage Assoc.

   3.000   01/01/52      2,784        2,697,676  

Federal National Mortgage Assoc.

   3.000   02/01/52      498        480,367  

Federal National Mortgage Assoc.

   3.000   02/01/52      1,999        1,927,960  

Federal National Mortgage Assoc.

   3.000   03/01/52      3,926        3,794,328  

Federal National Mortgage Assoc.

   3.000   04/01/52      1,971        1,902,114  

Federal National Mortgage Assoc.

   3.000   05/01/52      10,437        10,066,699  

Federal National Mortgage Assoc.

   3.000   06/01/52      4,125        3,975,806  

Federal National Mortgage Assoc.

   3.000   07/01/52      498        480,048  

Federal National Mortgage Assoc.

   3.500   TBA      11,500        11,347,945  

Federal National Mortgage Assoc.

   3.500   12/01/29      80        80,844  

Federal National Mortgage Assoc.

   3.500   12/01/30      72        73,891  

Federal National Mortgage Assoc.

   3.500   07/01/31      396        401,292  

Federal National Mortgage Assoc.

   3.500   08/01/31      302        308,034  

Federal National Mortgage Assoc.

   3.500   02/01/33      131        134,005  

Federal National Mortgage Assoc.

   3.500   05/01/33      53        54,184  

Federal National Mortgage Assoc.

   3.500   10/01/41      78        78,917  

Federal National Mortgage Assoc.

   3.500   04/01/42      178        179,098  

Federal National Mortgage Assoc.

   3.500   05/01/42      178        179,592  

Federal National Mortgage Assoc.

   3.500   05/01/42      1,129        1,137,499  

Federal National Mortgage Assoc.

   3.500   06/01/42      464        468,732  

Federal National Mortgage Assoc.

   3.500   10/01/42      267        269,862  

Federal National Mortgage Assoc.

   3.500   10/01/42      305        307,931  

Federal National Mortgage Assoc.

   3.500   10/01/42      567        572,349  

Federal National Mortgage Assoc.

   3.500   06/01/43      152        153,822  

Federal National Mortgage Assoc.

   3.500   06/01/45      173        173,850  

Federal National Mortgage Assoc.

   3.500   06/01/45      272        273,652  

Federal National Mortgage Assoc.

   3.500   09/01/45      247        248,439  

Federal National Mortgage Assoc.

   3.500   10/01/45      267        267,595  

Federal National Mortgage Assoc.

   3.500   01/01/46      85        85,304  

Federal National Mortgage Assoc.

   3.500   01/01/46      221        221,510  

Federal National Mortgage Assoc.

   3.500   04/01/46      2,336        2,344,180  

Federal National Mortgage Assoc.

   3.500   11/01/46      112        112,409  

Federal National Mortgage Assoc.

   3.500   06/01/47      383        384,041  

Federal National Mortgage Assoc.

   3.500   07/01/47      246        246,657  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    53


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued)

          

Federal National Mortgage Assoc.

   3.500%   07/01/47      1,145      $ 1,156,726  

Federal National Mortgage Assoc.

   3.500   08/01/47      183        183,628  

Federal National Mortgage Assoc.

   3.500   09/01/47      302        303,505  

Federal National Mortgage Assoc.

   3.500   10/01/47      1,066        1,066,693  

Federal National Mortgage Assoc.

   3.500   11/01/47      985        986,007  

Federal National Mortgage Assoc.

   3.500   01/01/48      178        178,187  

Federal National Mortgage Assoc.

   3.500   01/01/48      263        263,428  

Federal National Mortgage Assoc.

   3.500   01/01/48      3,616        3,624,541  

Federal National Mortgage Assoc.

   3.500   04/01/48      492        494,751  

Federal National Mortgage Assoc.

   3.500   06/01/48      740        741,719  

Federal National Mortgage Assoc.

   3.500   08/01/48      384        384,139  

Federal National Mortgage Assoc.

   3.500   10/01/48      266        266,892  

Federal National Mortgage Assoc.

   3.500   11/01/48      194        195,239  

Federal National Mortgage Assoc.

   3.500   03/01/49      879        879,833  

Federal National Mortgage Assoc.

   3.500   06/01/49      360        361,111  

Federal National Mortgage Assoc.

   3.500   08/01/51      51        50,181  

Federal National Mortgage Assoc.

   3.500   04/01/52      997        987,794  

Federal National Mortgage Assoc.

   3.500   04/01/52      2,721        2,695,418  

Federal National Mortgage Assoc.

   3.500   05/01/52      1,409        1,395,830  

Federal National Mortgage Assoc.

   3.500   05/01/52      4,971        4,922,421  

Federal National Mortgage Assoc.

   4.000   TBA      2,500        2,508,487  

Federal National Mortgage Assoc.

   4.000   09/01/40      138        141,833  

Federal National Mortgage Assoc.

   4.000   11/01/40      576        592,662  

Federal National Mortgage Assoc.

   4.000   02/01/41      230        236,891  

Federal National Mortgage Assoc.

   4.000   02/01/41      366        377,074  

Federal National Mortgage Assoc.

   4.000   12/01/41      250        257,857  

Federal National Mortgage Assoc.

   4.000   10/01/43      190        197,427  

Federal National Mortgage Assoc.

   4.000   09/01/44      102        105,126  

Federal National Mortgage Assoc.

   4.000   10/01/44      254        260,926  

Federal National Mortgage Assoc.

   4.000   12/01/45      86        87,920  

Federal National Mortgage Assoc.

   4.000   04/01/46      83        85,304  

Federal National Mortgage Assoc.

   4.000   08/01/46      127        129,905  

Federal National Mortgage Assoc.

   4.000   09/01/46      979        1,010,606  

Federal National Mortgage Assoc.

   4.000   02/01/47      393        400,086  

Federal National Mortgage Assoc.

   4.000   03/01/47      520        526,021  

Federal National Mortgage Assoc.

   4.000   06/01/47      306        312,463  

Federal National Mortgage Assoc.

   4.000   10/01/47      97        99,468  

Federal National Mortgage Assoc.

   4.000   11/01/47      191        194,861  

Federal National Mortgage Assoc.

   4.000   12/01/47      198        202,620  

Federal National Mortgage Assoc.

   4.000   02/01/48      187        190,784  

Federal National Mortgage Assoc.

   4.000   09/01/48      1,470        1,497,856  

Federal National Mortgage Assoc.

   4.000   10/01/48      286        292,087  

Federal National Mortgage Assoc.

   4.000   03/01/49      744        758,074  

Federal National Mortgage Assoc.

   4.000   03/01/49      1,165        1,186,936  

Federal National Mortgage Assoc.

   4.000   07/01/49      246        249,196  

 

See Notes to Financial Statements.

 

54


    

    

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued)

          

Federal National Mortgage Assoc.

   4.000%   05/01/52      1,520      $ 1,528,134  

Federal National Mortgage Assoc.

   4.500   08/01/40      68        70,410  

Federal National Mortgage Assoc.

   4.500   04/01/41      79        82,454  

Federal National Mortgage Assoc.

   4.500   06/01/41      181        188,203  

Federal National Mortgage Assoc.

   4.500   08/01/41      94        98,226  

Federal National Mortgage Assoc.

   4.500   08/01/41      278        289,770  

Federal National Mortgage Assoc.

   4.500   08/01/44      216        224,604  

Federal National Mortgage Assoc.

   4.500   01/01/45      122        126,679  

Federal National Mortgage Assoc.

   4.500   11/01/47      135        139,408  

Federal National Mortgage Assoc.

   4.500   06/01/48      199        204,323  

Federal National Mortgage Assoc.

   4.500   07/01/48      1,683        1,723,348  

Federal National Mortgage Assoc.

   4.500   12/01/48      162        166,446  

Federal National Mortgage Assoc.

   4.500   02/01/49      53        54,160  

Federal National Mortgage Assoc.

   5.000   09/01/30      16        16,782  

Federal National Mortgage Assoc.

   5.000   10/01/40      122        129,208  

Federal National Mortgage Assoc.

   5.000   03/01/42      229        241,649  

Federal National Mortgage Assoc.

   5.000   10/01/47      190        198,058  

Federal National Mortgage Assoc.

   5.000   01/01/48      46        48,089  

Federal National Mortgage Assoc.

   5.500   01/01/40      103        109,941  

Federal National Mortgage Assoc.

   6.000   10/01/36      61        66,249  

Federal National Mortgage Assoc.

   6.000   07/01/41      68        72,645  

Federal National Mortgage Assoc.(k)

   6.625   11/15/30      485        614,030  

Federal National Mortgage Assoc.(k)

   7.125   01/15/30      80        102,510  

Government National Mortgage Assoc.

   2.000   03/20/51      1,229        1,134,656  

Government National Mortgage Assoc.

   2.000   07/20/51      496        457,406  

Government National Mortgage Assoc.

   2.500   12/20/46      284        269,031  

Government National Mortgage Assoc.

   2.500   05/20/51      1,256        1,195,312  

Government National Mortgage Assoc.

   2.500   08/20/51      1,095        1,041,277  

Government National Mortgage Assoc.

   2.500   11/20/51      475        451,800  

Government National Mortgage Assoc.

   3.000   07/20/42      433        428,682  

Government National Mortgage Assoc.

   3.000   03/20/43      286        282,596  

Government National Mortgage Assoc.

   3.000   08/20/43      54        53,474  

Government National Mortgage Assoc.

   3.000   09/20/43      106        104,867  

Government National Mortgage Assoc.

   3.000   01/20/44      100        98,620  

Government National Mortgage Assoc.

   3.000   05/20/45      102        101,142  

Government National Mortgage Assoc.

   3.000   08/15/45      117        114,517  

Government National Mortgage Assoc.

   3.000   05/20/46      631        624,455  

Government National Mortgage Assoc.

   3.000   07/20/46      1,005        994,616  

Government National Mortgage Assoc.

   3.000   08/20/46      55        54,104  

Government National Mortgage Assoc.

   3.000   10/20/46      314        310,916  

Government National Mortgage Assoc.

   3.000   03/20/47      652        644,835  

Government National Mortgage Assoc.

   3.000   01/20/48      83        81,116  

Government National Mortgage Assoc.

   3.000   08/20/48      1,385        1,361,398  

Government National Mortgage Assoc.

   3.000   07/20/49      476        465,911  

Government National Mortgage Assoc.

   3.000   09/20/49      585        572,083  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    55


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description   

Interest      

Rate

 

Maturity      

Date

   Principal
Amount
(000)#
             Value          

U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued)

          

Government National Mortgage Assoc.

   3.000%   12/20/49      642      $ 627,305  

Government National Mortgage Assoc.

   3.000   01/20/50      2,968        2,900,625  

Government National Mortgage Assoc.

   3.000   02/20/50      132        129,141  

Government National Mortgage Assoc.

   3.000   09/20/50      387        377,829  

Government National Mortgage Assoc.

   3.000   11/20/51      975        950,990  

Government National Mortgage Assoc.

   3.000   04/20/52      994        968,989  

Government National Mortgage Assoc.

   3.000   05/20/52      1,490        1,451,914  

Government National Mortgage Assoc.

   3.500   01/15/42      72        73,126  

Government National Mortgage Assoc.

   3.500   12/20/42      205        207,956  

Government National Mortgage Assoc.

   3.500   01/20/43      306        310,403  

Government National Mortgage Assoc.

   3.500   02/20/43      137        138,751  

Government National Mortgage Assoc.

   3.500   08/20/43      491        498,507  

Government National Mortgage Assoc.

   3.500   10/20/43      649        659,054  

Government National Mortgage Assoc.

   3.500   03/20/45      68        68,341  

Government National Mortgage Assoc.

   3.500   04/20/45      380        385,438  

Government National Mortgage Assoc.

   3.500   04/20/46      726        732,448  

Government National Mortgage Assoc.

   3.500   07/20/46      448        452,374  

Government National Mortgage Assoc.

   3.500   10/20/46      873        879,947  

Government National Mortgage Assoc.

   3.500   12/20/46      864        872,142  

Government National Mortgage Assoc.

   3.500   05/20/47      486        490,754  

Government National Mortgage Assoc.

   3.500   10/20/47      168        169,460  

Government National Mortgage Assoc.

   3.500   11/20/47      868        873,930  

Government National Mortgage Assoc.

   3.500   01/20/48      236        237,630  

Government National Mortgage Assoc.

   3.500   10/20/48      142        142,921  

Government National Mortgage Assoc.

   3.500   11/20/48      281        282,033  

Government National Mortgage Assoc.

   3.500   12/20/48      102        102,924  

Government National Mortgage Assoc.

   3.500   02/20/49      238        239,192  

Government National Mortgage Assoc.

   3.500   05/20/49      380        380,861  

Government National Mortgage Assoc.

   3.500   06/20/49      330        328,418  

Government National Mortgage Assoc.

   4.000   12/20/40      159        163,660  

Government National Mortgage Assoc.

   4.000   06/20/41      65        67,499  

Government National Mortgage Assoc.

   4.000   11/15/41      94        97,431  

Government National Mortgage Assoc.

   4.000   12/20/42      161        165,775  

Government National Mortgage Assoc.

   4.000   04/20/43      110        113,294  

Government National Mortgage Assoc.

   4.000   10/20/43      93        94,619  

Government National Mortgage Assoc.

   4.000   12/20/43      206        210,200  

Government National Mortgage Assoc.

   4.000   09/20/44      119        121,151  

Government National Mortgage Assoc.

   4.000   08/20/45      198        202,200  

Government National Mortgage Assoc.

   4.000   10/20/45      92        94,142  

Government National Mortgage Assoc.

   4.000   03/20/46      182        184,069  

Government National Mortgage Assoc.

   4.000   11/20/46      133        135,892  

Government National Mortgage Assoc.

   4.000   03/20/47      118        120,613  

Government National Mortgage Assoc.

   4.000   05/20/47      186        190,478  

Government National Mortgage Assoc.

   4.000   07/20/47      745        761,454  

Government National Mortgage Assoc.

   4.000   11/20/47      502        513,229  

 

See Notes to Financial Statements.

 

56


    

    

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued)

          

Government National Mortgage Assoc.

   4.000%   12/20/47      117      $ 119,655  

Government National Mortgage Assoc.

   4.000   06/20/48      1,628        1,660,316  

Government National Mortgage Assoc.

   4.000   07/20/48      226        230,521  

Government National Mortgage Assoc.

   4.000   08/20/48      80        81,092  

Government National Mortgage Assoc.

   4.000   09/20/48      200        203,883  

Government National Mortgage Assoc.

   4.000   11/20/48      83        84,856  

Government National Mortgage Assoc.

   4.000   01/20/49      102        102,914  

Government National Mortgage Assoc.

   4.000   02/20/49      207        211,737  

Government National Mortgage Assoc.

   4.000   03/20/49      129        130,646  

Government National Mortgage Assoc.

   4.500   12/20/41      339        359,207  

Government National Mortgage Assoc.

   4.500   10/20/43      50        52,904  

Government National Mortgage Assoc.

   4.500   01/20/44      67        71,102  

Government National Mortgage Assoc.

   4.500   04/20/44      225        238,055  

Government National Mortgage Assoc.

   4.500   03/20/45      55        57,676  

Government National Mortgage Assoc.

   4.500   07/20/46      110        115,619  

Government National Mortgage Assoc.

   4.500   08/20/46      98        103,564  

Government National Mortgage Assoc.

   4.500   11/20/46      85        89,389  

Government National Mortgage Assoc.

   4.500   01/20/47      564        591,777  

Government National Mortgage Assoc.

   4.500   01/20/48      73        75,706  

Government National Mortgage Assoc.

   4.500   02/20/48      464        480,836  

Government National Mortgage Assoc.

   4.500   03/20/48      49        50,330  

Government National Mortgage Assoc.

   4.500   07/20/48      78        80,783  

Government National Mortgage Assoc.

   4.500   08/20/48      30        30,854  

Government National Mortgage Assoc.

   4.500   12/20/48      148        153,050  

Government National Mortgage Assoc.

   5.000   10/20/37      6        6,651  

Government National Mortgage Assoc.

   5.000   09/20/40      65        68,601  

Government National Mortgage Assoc.

   5.000   04/20/45      36        38,736  

Government National Mortgage Assoc.

   5.000   08/20/45      131        138,329  

Government National Mortgage Assoc.

   6.000   12/15/39      92        101,224  

Tennessee Valley Authority, Sr. Unsec’d. Notes

   1.500   09/15/31      645        556,966  
          

 

 

 

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
    (cost $357,272,969)

             346,832,576  
          

 

 

 

U.S. TREASURY OBLIGATIONS     8.0%

          

U.S. Treasury Bonds(h)

   1.375   11/15/40      4,345        3,206,474  

U.S. Treasury Bonds

   1.750   08/15/41      11,990        9,359,694  

U.S. Treasury Bonds

   2.000   11/15/41      20,295        16,562,623  

U.S. Treasury Bonds(k)

   2.250   05/15/41      31,330        26,796,941  

U.S. Treasury Bonds

   2.375   02/15/42      31,225        27,170,629  

U.S. Treasury Bonds

   3.125   08/15/44      2,740        2,651,806  

U.S. Treasury Notes(k)

   0.125   01/15/24      155        148,752  

U.S. Treasury Strips Coupon

   1.750(s)   08/15/42      415        205,603  

U.S. Treasury Strips Coupon

   2.014(s)   11/15/41      1,195        615,985  

U.S. Treasury Strips Coupon(k)

   2.062(s)   05/15/41      34,830        18,578,268  

 

See Notes to Financial Statements.

PGIM Core Bond Fund    57


Schedule of Investments  (continued)

as of July 31, 2022

 

  Description    Interest      
Rate
  Maturity      
Date
   Principal
Amount
(000)#
             Value          

U.S. TREASURY OBLIGATIONS (Continued)

          

U.S. Treasury Strips Coupon

   2.324%(s)   05/15/42      1,195      $ 600,721  

U.S. Treasury Strips Coupon

   2.335(s)   08/15/44      1,620        742,795  

U.S. Treasury Strips Coupon

   2.340(s)   02/15/43      3,590        1,750,546  

U.S. Treasury Strips Coupon

   2.394(s)   11/15/43      2,087        984,640  

U.S. Treasury Strips Coupon(k)

   2.434(s)   11/15/42      16,395        8,041,235  

U.S. Treasury Strips Coupon

   2.434(s)   11/15/45      575        253,988  

U.S. Treasury Strips Coupon(k)

   2.436(s)   02/15/46      415        182,308  
          

 

 

 

TOTAL U.S. TREASURY OBLIGATIONS
      
(cost $140,325,336)

             117,853,008  
          

 

 

 

TOTAL LONG-TERM INVESTMENTS
    
  (cost $1,610,309,776)

             1,492,639,771  
          

 

 

 
             

Shares

        

SHORT-TERM INVESTMENTS     1.7%

          

AFFILIATED MUTUAL FUND     0.8%

          

PGIM Institutional Money Market Fund
     (cost $12,033,182; includes $12,013,496 of cash collateral for securities on loan)(b)(wa)

       12,048,761        12,036,712  
          

 

 

 

UNAFFILIATED FUND     0.9%

          

Dreyfus Government Cash Management (Institutional Shares)
      (cost $13,038,979)

          13,038,979        13,038,979  
          

 

 

 

OPTIONS PURCHASED*~     0.0%

          

      (cost $128,977)

             65,491  
          

 

 

 

TOTAL SHORT-TERM INVESTMENTS
    
  (cost $25,201,138)

             25,141,182  
          

 

 

 

TOTAL INVESTMENTS, BEFORE OPTIONS WRITTEN     103.2%
      (cost $1,635,510,914)

             1,517,780,953  
          

 

 

 

OPTIONS WRITTEN*~     (0.0)%

          
       (premiums received $127,687)              (84,472
          

 

 

 

TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN     103.2%
      
(cost $1,635,383,227)

             1,517,696,481  

Liabilities in excess of other assets(z)     (3.2)%

             (46,686,231
          

 

 

 

NET ASSETS     100.0%

           $   1,471,010,250  
          

 

 

 

 

See Notes to Financial Statements.

 

58


    

    

 

 

Below is a list of the abbreviation(s) used in the annual report:

USD—US Dollar

144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and, pursuant to the requirements of Rule 144A, may not be resold except to qualified institutional buyers.

Aces—Alternative Credit Enhancements Securities

BABs—Build America Bonds

CBOE—Chicago Board Options Exchange

CDX—Credit Derivative Index

CLO—Collateralized Loan Obligation

CMT—Constant Maturity Treasury

COFI—Cost of Funds Index

FHLMC—Federal Home Loan Mortgage Corporation

GMTN—Global Medium Term Note

IO—Interest Only (Principal amount represents notional)

LIBOR—London Interbank Offered Rate

LP—Limited Partnership

M—Monthly payment frequency for swaps

MTN—Medium Term Note

OTC—Over-the-counter

PJSC—Public Joint-Stock Company

Q—Quarterly payment frequency for swaps

REITs—Real Estate Investment Trust

REMIC—Real Estate Mortgage Investment Conduit

SOFR—Secured Overnight Financing Rate

STRIPs—Separate Trading of Registered Interest and Principal of Securities

TBA—To Be Announced

*

Non-income producing security.

#

Principal or notional amount is shown in U.S. dollars unless otherwise stated.

~

See tables subsequent to the Schedule of Investments for options detail.

^

Indicates a Level 3 instrument. The aggregate value of Level 3 instruments is $5,764 and 0.0% of net assets.

(a)

All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $11,860,815; cash collateral of $12,013,496 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the Fund may reflect a collateral value that is less than the market value of the loaned securities and such shortfall is remedied the following business day.

(b)

Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment.

(c)

Variable rate instrument. The interest rate shown reflects the rate in effect at July 31, 2022.

(cc)

Variable rate instrument. The rate shown is based on the latest available information as of July 31, 2022. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description.

(ff)

Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end.

(h)

Represents security, or a portion thereof, segregated as collateral for OTC derivatives.

(k)

Represents security, or a portion thereof, segregated as collateral for centrally cleared/exchange-traded derivatives.

(oo)

Perpetual security. Maturity date represents next call date.

(r)

Principal or notional amount is less than $500 par.

(s)

Represents zero coupon bond or principal only security. Rate represents yield to maturity at purchase date.

(tt)

All or partial principal amount represents “TBA” mortgage dollar rolls. The aggregate mortgage dollar roll principal amount of (23,500,000) is (1.6)% of net assets.

 

See Notes to Financial Statements.

PGIM Core Bond Fund    59


Schedule of Investments  (continued)

as of July 31, 2022

 

(wa)

PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund, if applicable.

(z)

Includes net unrealized appreciation/(depreciation) and/or market value of the below holdings which are excluded from the Schedule of Investments:

Forward Commitment Contracts

U.S. Government Agency Obligations

           Interest        
Rate
   Maturity
Date
     Settlement
Date
     Principal
Amount
(000)#
    Value  

Federal National Mortgage Assoc.

   3.000%      TBA        08/11/22        (13,000   $ (12,518,212

Federal National Mortgage Assoc.

   3.000%      TBA        09/14/22        (12,000     (11,542,284

Federal National Mortgage Assoc.(tt)

   3.500%      TBA        08/11/22        (23,500     (23,254,902

Government National Mortgage Assoc.

   2.500%      TBA        08/18/22        (500     (473,521
             

 

 

 

TOTAL FORWARD COMMITMENT CONTRACTS

             

  (proceeds receivable $46,881,406)

              $ (47,788,919
             

 

 

 

Options Purchased:

OTC Swaptions

Description

  Call/
Put
  Counterparty   Expiration
Date
  Strike   Receive     Pay     Notional
Amount
(000)#
    Value  

CDX.NA.IG.38.V1, 06/20/27

  Call   Barclays Bank PLC   08/17/22   0.35%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       5,860     $  

CDX.NA.IG.38.V1, 06/20/27

  Call   Deutsche Bank AG   08/17/22   0.35%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       3,610        

CDX.NA.IG.38.V1, 06/20/27

  Call   JPMorgan Chase
Bank, N.A.
  08/17/22   0.35%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       3,610        

CDX.NA.IG.38.V1, 06/20/27

  Call   Barclays Bank PLC   09/21/22   0.35%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       4,620       4  

CDX.NA.IG.38.V1, 06/20/27

  Call   Barclays Bank PLC   09/21/22   0.35%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       4,620       4  

CDX.NA.IG.38.V1, 06/20/27

  Call   Goldman Sachs
International
  09/21/22   0.35%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       4,620       4  

CDX.NA.IG.38.V1, 06/20/27

  Call   Barclays Bank PLC   10/19/22   0.35%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       4,010       8  

CDX.NA.IG.38.V1, 06/20/27

  Call   JPMorgan Chase
Bank, N.A.
  10/19/22   0.35%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       4,010       8  

CDX.NA.IG.38.V1, 06/20/27

  Put   Barclays Bank PLC   08/17/22   0.78%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       5,860       14,268  

CDX.NA.IG.38.V1, 06/20/27

  Put   JPMorgan Chase
Bank, N.A.
  08/17/22   0.88%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       3,610       2,737  

CDX.NA.IG.38.V1, 06/20/27

  Put   Deutsche Bank AG   08/17/22   0.90%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       3,610       2,066  

CDX.NA.IG.38.V1, 06/20/27

  Put   Barclays Bank PLC   09/21/22   0.90%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       4,620       8,851  

CDX.NA.IG.38.V1, 06/20/27

  Put   Goldman Sachs
International
  09/21/22   0.90%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       4,620       8,852  

 

See Notes to Financial Statements.

 

60


    

    

 

Options Purchased (continued):

OTC Swaptions

Description

  Call/
Put
  Counterparty     Expiration
Date
  Strike   Receive                     Pay                      Notional
Amount
(000)#
    Value  

CDX.NA.IG.38.V1, 06/20/27

  Put     Barclays Bank PLC     09/21/22   0.93%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       4,620     $ 7,749  

CDX.NA.IG.38.V1, 06/20/27

  Put     Barclays Bank PLC     10/19/22   0.93%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       4,010       10,470  

CDX.NA.IG.38.V1, 06/20/27

  Put    
JPMorgan Chase
Bank, N.A.
 
 
  10/19/22   0.93%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       4,010       10,470  
               

 

 

 

Total Options Purchased (cost $128,977)

              $ 65,491  
               

 

 

 

Options Written:

OTC Swaptions

Description

  Call/
Put
  Counterparty   Expiration
Date
  Strike   Receive     Pay     Notional
Amount
(000)#
    Value  

CDX.NA.IG.38.V1, 06/20/27

  Call   Barclays Bank
PLC
  08/17/22   0.70%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       5,860     $ (466

CDX.NA.IG.38.V1, 06/20/27

  Call   JPMorgan Chase
Bank, N.A.
  08/17/22   0.75%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       3,610       (1,353

CDX.NA.IG.38.V1, 06/20/27

  Call   Deutsche Bank
AG
  08/17/22   0.80%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       3,610       (4,391

CDX.NA.IG.38.V1, 06/20/27

  Call   Barclays Bank
PLC
  09/21/22   0.80%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       4,620       (9,182

CDX.NA.IG.38.V1, 06/20/27

  Call   Barclays Bank
PLC
  09/21/22   0.83%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       4,620       (12,248

CDX.NA.IG.38.V1, 06/20/27

  Call   Goldman Sachs
International
  09/21/22   0.83%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       4,620       (12,248

CDX.NA.IG.38.V1, 06/20/27

  Call   Barclays Bank
PLC
  10/19/22   0.83%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       4,010       (12,124

CDX.NA.IG.38.V1, 06/20/27

  Call   JPMorgan Chase
Bank, N.A.
  10/19/22   0.83%     CDX.NA.IG.38.V1(Q)       1.00%(Q)       4,010       (12,124

CDX.NA.IG.38.V1, 06/20/27

  Put   Barclays Bank
PLC
  08/17/22   1.03%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       5,860       (1,202

CDX.NA.IG.38.V1, 06/20/27

  Put   JPMorgan Chase
Bank, N.A.
  08/17/22   1.13%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       3,610       (505

CDX.NA.IG.38.V1, 06/20/27

  Put   Deutsche Bank
AG
  08/17/22   1.15%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       3,610       (473

CDX.NA.IG.38.V1, 06/20/27

  Put   Barclays Bank
PLC
  09/21/22   1.10%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       4,620       (3,501

CDX.NA.IG.38.V1, 06/20/27

  Put   Goldman Sachs
International
  09/21/22   1.13%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       4,620       (3,186

CDX.NA.IG.38.V1, 06/20/27

  Put   Barclays Bank
PLC
  09/21/22   1.18%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       4,620       (2,674

 

See Notes to Financial Statements.

PGIM Core Bond Fund    61


Schedule of Investments  (continued)

as of July 31, 2022

 

Options Written (continued):

OTC Swaptions

 

Description

  Call/
Put
  Counterparty   Expiration
Date
  Strike              Receive                Pay     Notional
Amount
(000)#
    Value  

CDX.NA.IG.38.V1, 06/20/27

  Put   Barclays Bank
PLC
  10/19/22   1.20%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       4,010     $ (4,235

CDX.NA.IG.38.V1, 06/20/27

  Put   JPMorgan Chase
Bank, N.A.
  10/19/22   1.23%     1.00%(Q)       CDX.NA.IG.38.V1(Q)       4,010       (3,954

GS_21-PJ2A^

  Put   Goldman Sachs
International
  11/15/24   0.50%     0.50%(M)       GS_21-PJ2A(M)       7,150       (221

GS_21-PJA^

  Put   Goldman Sachs
International
  06/17/24   0.25%     0.25%(M)       GS_21-PJA(M)       13,790       (385
               

 

 

 

Total Options Written (premiums received $ 127,687)

          $ (84,472
               

 

 

 

Futures contracts outstanding at July 31, 2022:

Number
of
Contracts

  

Type

   Expiration
Date
   Current
Notional
Amount
   Value /
Unrealized
Appreciation
(Depreciation)
Long Positions:               

630

   2 Year U.S. Treasury Notes        Sep. 2022      $ 132,590,391      $ (230,630 )

1,160

   5 Year U.S. Treasury Notes        Sep. 2022        131,922,810        1,631,544

656

   10 Year U.S. Treasury Notes        Sep. 2022        79,468,253        2,176,745

502

   30 Year U.S. Ultra Treasury Bonds        Sep. 2022        79,472,875        1,016,246
                 

 

 

 
                    4,593,905
                 

 

 

 

Short Positions:

              

515

   10 Year U.S. Ultra Treasury Notes        Sep. 2022        67,593,750        (1,476,434 )

529

   20 Year U.S. Treasury Bonds        Sep. 2022        76,176,000        (2,603,201 )  
                 

 

 

 
                    (4,079,635 )
                 

 

 

 
                  $ 514,270
                 

 

 

 

 

See Notes to Financial Statements.

 

62


    

    

 

Credit default swap agreement outstanding at July 31, 2022:

 

Reference
Entity/

Obligation

   Termination
Date
   Fixed
Rate
   Notional
Amount
(000)#(3)
   Implied
Credit
Spread at
July 31,
2022(4)
   Fair
Value
   Upfront
Premiums
Paid
(Received)
  Unrealized
Appreciation
(Depreciation)
  

Counterparty

                                        

OTC Credit Default Swap Agreements on asset-backed and/or mortgage-backed securities - Sell Protection(2)^:

 

GS_21-PJ2A

       08/14/22        0.500%(M)          3,768        0.500%      $ 3,243      $ (366 )     $ 3,609       

Goldman
Sachs
International


GS_21-PJA

       08/14/22        0.250%(M)          7,266        *        3,127        (353 )       3,480       

Goldman
Sachs
International


                        

 

 

      

 

 

     

 

 

      
                         $ 6,370      $ (719 )     $ 7,089     
                        

 

 

      

 

 

     

 

 

      

 

Reference

Entity/

Obligation

   Termination
Date
   Fixed
Rate
   Notional
Amount
(000)#(3)
     Value at
Trade Date
    Value at
July 31,
2022
    Unrealized
Appreciation
(Depreciation)
 
                                                   

Centrally Cleared Credit Default Swap Agreement on credit indices - Buy Protection(1):

 

       

CDX.NA.IG.38.V1

   06/20/27    1.000%(Q)      44,195      $ (525,020   $ (439,807                   $ 85,213                  
           

 

 

   

 

 

      

 

 

    

The Fund entered into credit default swaps (“CDS”) to provide a measure of protection against defaults or to take an active long or short position with respect to the likelihood of a particular issuer’s default or the reference entity’s credit soundness. CDS contracts generally trade based on a spread which represents the cost a protection buyer has to pay the protection seller. The protection buyer is said to be short the credit as the value of the contract rises the more the credit deteriorates. The value of the CDS contract increases for the protection buyer if the spread increases.

 

(1)

If the Fund is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and make delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

 

(2)

If the Fund is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

 

(3)

Notional amount represents the maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

 

(4)

Implied credit spreads, represented in absolute terms, utilized in determining the fair value of credit default swap

 

See Notes to Financial Statements.

PGIM Core Bond Fund    63


Schedule of Investments  (continued)

as of July 31, 2022

 

  agreements where the Fund is the seller of protection as of the reporting date serve as an indicator of the current status of the payment/ performance risk and represent the likelihood of risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include up-front payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

 

*

When an implied credit spread is not available, reference the fair value of credit default swap agreements on credit indices and asset-backed securities. Where the Fund is the seller of protection, it serves as an indicator of the current status of the payment/performance risk and represents the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the reporting date. Increasing fair value in absolute terms, when compared to the notional amount of the swap, represents a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

Balances Reported in the Statement of Assets and Liabilities for OTC Swap Agreements:

 

      Premiums Paid    Premiums Received   Unrealized
Appreciation
     Unrealized
Depreciation
 

OTC Swap Agreement

   $—    $(719)     $7,089        $—  

 

Summary of Collateral for Centrally Cleared/Exchange-traded Derivatives:

    

Cash and securities segregated as collateral, including pending settlement for closed positions, to cover requirements for centrally cleared/exchange-traded derivatives are listed by broker as follows:

 

Broker

      Cash and/or Foreign Currency                Securities Market Value        

Citigroup Global Markets, Inc.

    $      $ 5,645,054
   

 

 

      

 

 

 

Fair Value Measurements:

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

Level 1—unadjusted quoted prices generally in active markets for identical securities.

Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.

Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

 

See Notes to Financial Statements.

 

64


    

    

 

The following is a summary of the inputs used as of July 31, 2022 in valuing such portfolio securities:

 

     Level 1           Level 2    

Level 3

 

Investments in Securities

            

Assets

            

Long-Term Investments

            

Asset-Backed Securities

            

Automobiles

   $       $ 75,141,400         $     —    

Collateralized Loan Obligations

             182,718,926            

Consumer Loans

             13,545,528            

Credit Cards

             2,162,917            

Equipment

             2,913,507            

Home Equity Loans

             235,716            

Manufactured Housing

             384,033            

Other

             1,659,676            

Student Loans

             9,718,016            

Commercial Mortgage-Backed Securities

             196,728,474            

Corporate Bonds

             451,827,177            

Municipal Bonds

             7,211,619            

Residential Mortgage-Backed Securities

             75,493,466            

Sovereign Bonds

             8,213,732            

U.S. Government Agency Obligations

             346,832,576            

U.S. Treasury Obligations

             117,853,008            

Short-Term Investments

            

Affiliated Mutual Fund

     12,036,712                    

Unaffiliated Fund

     13,038,979                    

Options Purchased

             65,491                —    
  

 

 

     

 

 

       

Total

   $ 25,075,691       $ 1,492,705,262         $     —    
  

 

 

     

 

 

     

 

 

   

Liabilities

            

Options Written

   $       $ (83,866       $  (606  
  

 

 

     

 

 

     

 

 

   

Other Financial Instruments*

            

Assets

            

Futures Contracts

   $ 4,824,535       $         $     —    

Centrally Cleared Credit Default Swap Agreement

             85,213            

OTC Credit Default Swap Agreements

                       6,370    
  

 

 

     

 

 

       

Total

   $ 4,824,535       $ 85,213         $6,370    
  

 

 

     

 

 

     

 

 

   

Liabilities

            

Forward Commitment Contracts

   $       $ (47,788,919       $     —    

Futures Contracts

     (4,310,265                      —    
  

 

 

     

 

 

       

Total

   $ (4,310,265     $ (47,788,919       $     —    
  

 

 

     

 

 

     

 

 

   

 

 

*

Other financial instruments are derivative instruments, with the exception of forward commitment contracts, and are not reflected in the Schedule of Investments. Futures, forwards and centrally cleared swap contracts are recorded at net unrealized appreciation (depreciation) and OTC swap contracts are recorded at fair value. Forward commitment contracts are recorded at market value.

 

See Notes to Financial Statements.

PGIM Core Bond Fund    65


Schedule of Investments  (continued)

as of July 31, 2022

 

Industry Classification:

The industry classification of investments and other assets in excess of liabilities shown as a percentage of net assets as of July 31, 2022 were as follows:

 

U.S. Government Agency Obligations

     23.6

Commercial Mortgage-Backed Securities

     13.4  

Collateralized Loan Obligations

     12.4  

Banks

     9.1  

U.S. Treasury Obligations

     8.0  

Residential Mortgage-Backed Securities

     5.1  

Automobiles

     5.1  

Electric

     2.9  

Oil & Gas

     2.1  

Pharmaceuticals

     1.5  

Pipelines

     1.5  

Real Estate Investment Trusts (REITs)

     1.4  

Telecommunications

     1.3  

Media

     1.0  

Consumer Loans

     0.9  

Healthcare-Services

     0.9  

Unaffiliated Fund

     0.9  

Affiliated Mutual Fund (0.8% represents investments purchased with collateral from securities on loan)

     0.8  

Aerospace & Defense

     0.8  

Semiconductors

     0.7  

Student Loans

     0.7  

Beverages

     0.7  

Sovereign Bonds

     0.6  

Insurance

     0.5  

Packaging & Containers

     0.5  

Municipal Bonds

     0.5  

Auto Manufacturers

     0.4  

Retail

     0.4  

Commercial Services

     0.4  

Diversified Financial Services

     0.4  

Agriculture

     0.4  

Software

     0.4  

Iron/Steel

     0.4  

Foods

     0.3  

Mining

     0.3  

Gas

     0.3

Real Estate

     0.3  

Airlines

     0.3  

Equipment

     0.2  

Office/Business Equipment

     0.2  

Water

     0.2  

Entertainment

     0.2  

Credit Cards

     0.2  

Transportation

     0.1  

Chemicals

     0.1  

Computers

     0.1  

Building Materials

     0.1  

Other

     0.1  

Lodging

     0.1  

Engineering & Construction

     0.1  

Forest Products & Paper

     0.1  

Electronics

     0.1  

Machinery-Construction & Mining

     0.1  

Oil & Gas Services

     0.0

Manufactured Housing

     0.0

Healthcare-Products

     0.0

Home Equity Loans

     0.0

Biotechnology

     0.0

Multi-National

     0.0

Machinery-Diversified

     0.0

Options Purchased

     0.0

Housewares

     0.0
  

 

 

 
     103.2  

Options Written

     (0.0 )* 

Liabilities in excess of other assets

     (3.2
  

 

 

 
     100.0
  

 

 

 

 

 

*

Less than +/- 0.05%

 

 

Effects of Derivative Instruments on the Financial Statements and Primary Underlying Risk Exposure:

The Fund invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are credit contracts risk and interest rate contracts risk. See the Notes to Financial Statements for

 

See Notes to Financial Statements.

 

66


    

    

 

additional detail regarding these derivative instruments and their risks. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

Fair values of derivative instruments as of July 31, 2022 as presented in the Statement of Assets and Liabilities:

 

   

Asset Derivatives

   

Liability Derivatives

 

Derivatives not accounted for

as hedging instruments,

carried at fair value                

 

Statement of

Assets and

Liabilities Location

   Fair
Value
   

Statement of

Assets and

Liabilities Location

   Fair
Value
 

Credit contracts

  Due from/to broker-variation margin swaps    $ 85,213      $  

Credit contracts

           Premiums received for OTC swap agreements      719  

Credit contracts

  Unaffiliated investments      65,491     Options written outstanding, at value      84,472  

Credit contracts

  Unrealized appreciation on OTC swap agreements      7,089           

Interest rate contracts

  Due from/to broker-variation margin futures      4,824,535   Due from/to broker-variation margin futures      4,310,265
    

 

 

      

 

 

 
     $ 4,982,328        $ 4,395,456  
    

 

 

      

 

 

 

 

*

Includes cumulative appreciation (depreciation) as reported in the schedule of open futures and centrally cleared swap contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities.

The effects of derivative instruments on the Statement of Operations for the year ended July 31, 2022 are as follows:

 

Amount of Realized Gain (Loss) on Derivatives Recognized in Income

 

Derivatives not accounted for as hedging

instruments, carried at fair value

   Options
Purchased(1)
     Options
Written
     Futures     Swaps  

Credit contracts

      $ (324,715      $ 304,729      $     $ 451,937  

Interest rate contracts

                        (22,217,492     (3,090,473
     

 

 

      

 

 

    

 

 

   

 

 

 

Total

      $ (324,715      $ 304,729      $ (22,217,492   $ (2,638,536
     

 

 

      

 

 

    

 

 

   

 

 

 

 

(1)

Included in net realized gain (loss) on investment transactions in the Statement of Operations.

 

Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income

 

Derivatives not accounted for

as hedging instruments,

carried at fair value

  Options
Purchased(2)
    Options
Written
    Futures     Swaps  

Credit contracts

           $ (63,486            $ 45,471     $     $ 93,550  

Interest rate contracts

                    (2,414,792     1,717,390  
   

 

 

     

 

 

   

 

 

   

 

 

 

Total

    $ (63,486     $ 45,471     $ (2,414,792   $ 1,810,940  
   

 

 

     

 

 

   

 

 

   

 

 

 

 

See Notes to Financial Statements.

PGIM Core Bond Fund    67


Schedule of Investments  (continued)

as of July 31, 2022

 

(2)

Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

For the year ended July 31, 2022, the Fund’s average volume of derivative activities is as follows:

 

 Derivative Contract Type    Average Volume of Derivative Activities*

 Options Purchased (1)

     $          95,981              

 Options Written (2)

     81,428,000  

 Futures Contracts - Long Positions (2)

     384,128,544  

 Futures Contracts - Short Positions (2)

     107,028,342  

 Credit Default Swap Agreements - Buy Protection (2)

     12,354,000  

 Credit Default Swap Agreements - Sell Protection (2)

     17,655,641  

 Inflation Swap Agreements (2)

     21,060,000  

 

*

Average volume is based on average quarter end balances as noted for the year ended July 31, 2022.

(1)

Cost.

(2)

Notional Amount in USD.

Financial Instruments/Transactions—Summary of Offsetting and Netting Arrangements:

The Fund invested in OTC derivatives and entered into financial instruments/transactions during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for OTC derivatives and financial instruments/transactions where the legal right to set-off exists is presented in the summary below.

Offsetting of financial instrument/transaction assets and liabilities:

 

       
Description   

Gross Market

Value of

Recognized

Assets/(Liabilities)

  

Collateral

Pledged/(Received)(2)

 

Net

Amount

Securities on Loan

   $11,860,815    $(11,860,815)   $—

Offsetting of OTC derivative assets and liabilities:

 

Counterparty

 

Gross Amounts of

Recognized

        Assets(1)         

 

Gross Amounts of

Recognized

    Liabilities(1)    

 

Net Amounts of

Recognized

Assets/(Liabilities)

 

Collateral

Pledged/(Received)(2)

 

Net Amount

 

Barclays Bank PLC

    $ 41,354         $ (45,632       $ (4,278       $                         $ (4,278             

Deutsche Bank AG

               2,066                     (4,864                   (2,798                                     (2,798  

Goldman Sachs International

      15,945           (16,759         (814         814              

JPMorgan Chase Bank, N.A.

      13,215           (17,936         (4,721                   (4,721  
   

 

 

       

 

 

       

 

 

       

 

 

       

 

 

   
    $ 72,580         $ (85,191       $ (12,611       $ 814         $ (11,797  
   

 

 

       

 

 

       

 

 

       

 

 

       

 

 

   

 

(1)

Includes unrealized appreciation/(depreciation) on swaps and forwards, premiums paid/(received) on swap agreements and market value of purchased and written options, as represented on the Statement of Assets and Liabilities.

 

See Notes to Financial Statements.

 

68


    

    

 

(2)

Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions and the Fund’s OTC derivative exposure by counterparty.

 

See Notes to Financial Statements.

PGIM Core Bond Fund    69


Statement of Assets and Liabilities

as of July 31, 2022

 

Assets

        

Investments at value, including securities on loan of $11,860,815:

  

Unaffiliated investments (cost $1,623,477,732)

   $ 1,505,744,241  

Affiliated investments (cost $12,033,182)

     12,036,712  

Receivable for investments sold

     79,327,165  

Receivable for Fund shares sold

     13,123,548  

Dividends and interest receivable

     6,919,725  

Due from broker—variation margin futures

     167,042  

Unrealized appreciation on OTC swap agreements

     7,089  

Prepaid expenses

     109  
  

 

 

 

Total Assets

     1,617,325,631  
  

 

 

 

Liabilities

        

Payable for investments purchased

     82,302,930  

Forward commitment contracts, at value (proceeds receivable $46,881,406)

     47,788,919  

Payable to broker for collateral for securities on loan

     12,013,496  

Payable for Fund shares purchased

     3,217,287  

Accrued expenses and other liabilities

     558,779  

Management fee payable

     287,057  

Options written outstanding, at value (premiums received $127,687)

     84,472  

Distribution fee payable

     35,975  

Due to broker—variation margin swaps

     19,508  

Affiliated transfer agent fee payable

     2,730  

Trustees’ fees payable

     1,974  

Dividends payable

     1,535  

Premiums received for OTC swap agreements

     719  
  

 

 

 

Total Liabilities

     146,315,381  
  

 

 

 

Net Assets

   $ 1,471,010,250  
  

 

 

 
          

Net assets were comprised of:

  

Shares of beneficial interest, at par

   $ 159,749  

Paid-in capital in excess of par

     1,634,681,323  

Total distributable earnings (loss)

     (163,830,822
  

 

 

 

Net assets, July 31, 2022

   $ 1,471,010,250  
  

 

 

 

 

See Notes to Financial Statements.

 

70


    

    

 

Class A

                 

Net asset value and redemption price per share,

($148,963,130 ÷ 16,180,149 shares of beneficial interest issued and outstanding)

   $ 9.21     

Maximum sales charge (3.25% of offering price)

     0.31     
  

 

 

    

Maximum offering price to public

   $ 9.52     
  

 

 

    

Class C

                 

Net asset value, offering price and redemption price per share,

($5,692,372 ÷ 617,953 shares of beneficial interest issued and outstanding)

   $ 9.21     
  

 

 

    

Class R

                 

Net asset value, offering price and redemption price per share,

($17,578 ÷ 1,910 shares of beneficial interest issued and outstanding)

   $ 9.20     
  

 

 

    

Class Z

                 

Net asset value, offering price and redemption price per share,

($291,666,242 ÷ 31,675,803 shares of beneficial interest issued and outstanding)

   $ 9.21     
  

 

 

    

Class R6

                 

Net asset value, offering price and redemption price per share,

($1,024,670,928 ÷ 111,273,146 shares of beneficial interest issued and outstanding)

   $ 9.21     
  

 

 

    

 

See Notes to Financial Statements.

PGIM Core Bond Fund    71


Statement of Operations

Year Ended July 31, 2022

 

Net Investment Income (Loss)

        

Income

  

Interest income

   $ 34,621,298  

Unaffiliated dividend income

     122,480  

Affiliated dividend income

     39,306  

Income from securities lending, net (including affiliated income of $12,887)

     14,628  
  

 

 

 

Total income

     34,797,712  
  

 

 

 

Expenses

  

Management fee

     4,836,763  

Distribution fee(a)

     515,509  

Transfer agent’s fees and expenses (including affiliated expense of $19,152)(a)

     400,678  

Registration fees(a)

     150,361  

Custodian and accounting fees

     126,324  

Shareholders’ reports

     121,275  

Audit fee

     65,000  

Legal fees and expenses

     27,640  

Trustees’ fees

     27,363  

SEC registration fees

     26,600  

Miscellaneous

     39,002  
  

 

 

 

Total expenses

     6,336,515  

Less: Fee waiver and/or expense reimbursement(a)

     (806,808

 Distribution fee waiver(a)

     (49
  

 

 

 

Net expenses

     5,529,658  
  

 

 

 

Net investment income (loss)

     29,268,054  
  

 

 

 

Realized And Unrealized Gain (Loss) On Investments

        

Net realized gain (loss) on:

  

Investment transactions (including affiliated of $(1,617))

     (6,906,055

Futures transactions

     (22,217,492

Options written transactions

     304,729  

Swap agreement transactions

     (2,638,536
  

 

 

 
     (31,457,354
  

 

 

 

Net change in unrealized appreciation (depreciation) on:

  

Investments (including affiliated of $(3,124))

     (168,153,122

Futures

     (2,414,792

Options written

     45,471  

Swap agreements

     1,810,940  
  

 

 

 
     (168,711,503
  

 

 

 

Net gain (loss) on investment transactions

     (200,168,857
  

 

 

 

Net Increase (Decrease) In Net Assets Resulting From Operations

   $ (170,900,803
  

 

 

 

 

See Notes to Financial Statements.

 

72


    

    

 

 

(a)   Class specific expenses and waivers were as follows:

 

     Class A   Class C   Class R   Class Z     Class R6

Distribution fee

     450,172       65,192       145              

Transfer agent’s fees and expenses

     116,934       7,491       94       262,266       13,893  

Registration fees

     22,764       11,676       7,094       74,554       34,273  

Fee waiver and/or expense reimbursement

     (51,081     (12,636     (7,165     (391,164     (344,762

Distribution fee waiver

                 (49            

 

See Notes to Financial Statements.

PGIM Core Bond Fund    73


Statements of Changes in Net Assets

 

    

Year Ended
                    July 31,                     

 
     2022     2021  

Increase (Decrease) in Net Assets

                

Operations

    

Net investment income (loss)

   $ 29,268,054     $ 22,651,488  

Net realized gain (loss) on investment transactions

     (31,457,354     (80,222

Net change in unrealized appreciation (depreciation) on investments

     (168,711,503     (15,521,962
  

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

     (170,900,803     7,049,304  
  

 

 

   

 

 

 

Dividends and Distributions

    

Distributions from distributable earnings

    

Class A

     (3,450,956     (5,023,890

Class C

     (73,660     (146,985

Class R

     (315     (400

Class Z

     (6,349,977     (8,050,921

Class R6

     (23,674,479     (23,683,618
  

 

 

   

 

 

 
     (33,549,387     (36,905,814
  

 

 

   

 

 

 

Fund share transactions (Net of share conversions)

    

Net proceeds from shares sold

     743,729,983       599,342,272  

Net asset value of shares issued in reinvestment of dividends and distributions

     33,431,934       36,373,088  

Cost of shares purchased

     (547,126,234     (349,563,334
  

 

 

   

 

 

 

Net increase (decrease) in net assets from Fund share transactions

     230,035,683       286,152,026  
  

 

 

   

 

 

 

Total increase (decrease)

     25,585,493       256,295,516  

Net Assets:

                

Beginning of year

     1,445,424,757       1,189,129,241  
  

 

 

   

 

 

 

End of year

   $ 1,471,010,250     $ 1,445,424,757  
  

 

 

   

 

 

 

 

See Notes to Financial Statements.

 

74


Financial Highlights

 

 

Class A Shares

 

  Year Ended July 31,
   
  2022 2021 2020 2019 2018
   

Per Share Operating Performance(a):

Net Asset Value, Beginning of Year

  $10.53   $10.78   $10.09   $9.63   $9.99

Income (loss) from investment operations:

Net investment income (loss)

  0.16   0.15   0.21   0.26   0.22

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (1.29 )   (0.13 )   0.74   0.49   (0.33 )

Total from investment operations

  (1.13 )   0.02   0.95   0.75   (0.11 )

Less Dividends and Distributions:

Dividends from net investment income

  (0.19 )   (0.20 )   (0.26 )   (0.29 )   (0.25 )

Distributions from net realized gains

  -   (0.07 )   (- )(b)   -   -

Total dividends and distributions

  (0.19 )   (0.27 )   (0.26 )   (0.29 )   (0.25 )

Net asset value, end of year

  $9.21   $10.53   $10.78   $10.09   $9.63

Total Return(c):

  (10.81 )%   0.17 %   9.50 %   7.90 %   (1.14 )%

    

Ratios/Supplemental Data:

Net assets, end of year (000)

  $148,963   $216,235   $181,510   $75,923   $53,967

Average net assets (000)

  $180,069   $202,963   $119,286   $59,735   $48,790

Ratios to average net assets(d):

Expenses after waivers and/or expense reimbursement

  0.65 %   0.66 %   0.70 %   0.70 %   0.70 %

Expenses before waivers and/or expense reimbursement

  0.68 %   0.69 %   0.75 %   0.82 %   0.84 %

Net investment income (loss)

  1.62 %   1.42 %   2.01 %   2.66 %   2.23 %

Portfolio turnover rate(e)(f)

  141 %   117 %   90 %   69 %   172 %

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Amount rounds to zero.

(c)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(d)

Does not include expenses of the investment companies in which the Fund invests.

(e)

The Fund accounts for mortgage dollar roll transactions, when applicable, as purchases and sales which, as a result, can increase its portfolio turnover rate.

(f)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

PGIM Core Bond Fund    75


Financial Highlights (continued)

 

 

Class C Shares

 

  Year Ended July 31,
   
  2022 2021 2020 2019 2018
   

Per Share Operating Performance(a):

Net Asset Value, Beginning of Year

  $10.53   $10.79   $10.10   $9.64   $9.99

Income (loss) from investment operations:

Net investment income (loss)

  0.08   0.07   0.13   0.19   0.14

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (1.29 )   (0.15 )   0.74   0.48   (0.32 )

Total from investment operations

  (1.21 )   (0.08 )   0.87   0.67   (0.18 )

Less Dividends and Distributions:

Dividends from net investment income

  (0.11 )   (0.11 )   (0.18 )   (0.21 )   (0.17 )

Distributions from net realized gains

  -   (0.07 )   (- )(b)   -   -

Total dividends and distributions

  (0.11 )   (0.18 )   (0.18 )   (0.21 )   (0.17 )

Net asset value, end of year

  $9.21   $10.53   $10.79   $10.10   $9.64

Total Return(c):

  (11.52 )%   (0.71 )%   8.68 %   7.09 %   (1.78 )%

    

Ratios/Supplemental Data:

Net assets, end of year (000)

  $5,692   $7,664   $8,596   $4,042   $3,530

Average net assets (000)

  $6,519   $8,268   $6,244   $3,593   $3,635

Ratios to average net assets(d):

Expenses after waivers and/or expense reimbursement

  1.45 %   1.45 %   1.45 %   1.45 %   1.45 %

Expenses before waivers and/or expense reimbursement

  1.64 %   1.60 %   1.78 %   1.95 %   1.99 %

Net investment income (loss)

  0.84 %   0.64 %   1.25 %   1.91 %   1.47 %

Portfolio turnover rate(e)(f)

  141 %   117 %   90 %   69 %   172 %

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Amount rounds to zero.

(c)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(d)

Does not include expenses of the investment companies in which the Fund invests.

(e)

The Fund accounts for mortgage dollar roll transactions, when applicable, as purchases and sales which, as a result, can increase its portfolio turnover rate.

(f)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

76


    

    

 

 

Class R Shares

 

  Year Ended July 31,
   
  2022 2021 2020 2019 2018
   

Per Share Operating Performance(a):

Net Asset Value, Beginning of Year

  $10.52   $10.78   $10.09   $9.63   $9.99

Income (loss) from investment operations:

Net investment income (loss)

  0.13   0.12   0.19   0.23   0.20

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (1.29 )   (0.14 )   0.73   0.49   (0.34 )

Total from investment operations

  (1.16 )   (0.02 )   0.92   0.72   (0.14 )

Less Dividends and Distributions:

Dividends from net investment income

  (0.16 )   (0.17 )   (0.23 )   (0.26 )   (0.22 )

Distributions from net realized gains

  -   (0.07 )   (- )(b)   -   -

Total dividends and distributions

  (0.16 )   (0.24 )   (0.23 )   (0.26 )   (0.22 )

Net asset value, end of year

  $9.20   $10.52   $10.78   $10.09   $9.63

Total Return(c):

  (11.10 )%   (0.22 )%   9.23 %   7.63 %   (1.39 )%

    

Ratios/Supplemental Data:

Net assets, end of year (000)

  $18   $21   $18   $16   $15

Average net assets (000)

  $19   $18   $17   $15   $13

Ratios to average net assets(d):

Expenses after waivers and/or expense reimbursement

  0.95 %   0.95 %   0.95 %   0.95 %   0.95 %

Expenses before waivers and/or expense reimbursement

  38.21 %   55.36 %   102.99 %   89.73 %   113.11 %

Net investment income (loss)

  1.34 %   1.13 %   1.80 %   2.41 %   1.99 %

Portfolio turnover rate(e)(f)

  141 %   117 %   90 %   69 %   172 %

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Amount rounds to zero.

(c)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(d)

Does not include expenses of the investment companies in which the Fund invests.

(e)

The Fund accounts for mortgage dollar roll transactions, when applicable, as purchases and sales which, as a result, can increase its portfolio turnover rate.

(f)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

PGIM Core Bond Fund    77


Financial Highlights (continued)

 

 

Class Z Shares

 

  Year Ended July 31,
   
  2022 2021 2020 2019 2018
   

Per Share Operating Performance(a):

Net Asset Value, Beginning of Year

  $10.53   $10.78   $10.09   $9.63   $9.99

Income (loss) from investment operations:

Net investment income (loss)

  0.20   0.19   0.25   0.28   0.24

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (1.30 )   (0.14 )   0.73   0.49   (0.33 )

Total from investment operations

  (1.10 )   0.05   0.98   0.77   (0.09 )

Less Dividends and Distributions:

Dividends from net investment income

  (0.22 )   (0.23 )   (0.29 )   (0.31 )   (0.27 )

Distributions from net realized gains

  -   (0.07 )   (- )(b)   -   -

Total dividends and distributions

  (0.22 )   (0.30 )   (0.29 )   (0.31 )   (0.27 )

Net asset value, end of year

  $9.21   $10.53   $10.78   $10.09   $9.63

Total Return(c):

  (10.53 )%   0.41 %   9.98 %   8.17 %   (0.90 )%

    

Ratios/Supplemental Data:

Net assets, end of year (000)

  $291,666   $276,537   $282,256   $162,803   $101,369

Average net assets (000)

  $279,332   $285,073   $220,426   $115,704   $84,455

Ratios to average net assets(d):

Expenses after waivers and/or expense reimbursement

  0.33 %   0.33 %   0.35 %   0.44 %   0.45 %

Expenses before waivers and/or expense reimbursement

  0.47 %   0.46 %   0.49 %   0.53 %   0.52 %

Net investment income (loss)

  1.99 %   1.76 %   2.38 %   2.92 %   2.48 %

Portfolio turnover rate(e)(f)

  141 %   117 %   90 %   69 %   172 %

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Amount rounds to zero.

(c)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(d)

Does not include expenses of the investment companies in which the Fund invests.

(e)

The Fund accounts for mortgage dollar roll transactions, when applicable, as purchases and sales which, as a result, can increase its portfolio turnover rate.

(f)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

78


    

    

 

 

Class R6 Shares

 

  Year Ended July 31,
   
  2022 2021 2020 2019 2018
   

Per Share Operating Performance(a):

Net Asset Value, Beginning of Year

  $10.53   $10.79   $10.10   $9.64   $9.99

Income (loss) from investment operations:

Net investment income (loss)

  0.20   0.19   0.25   0.29   0.25
Net realized and unrealized gain (loss) on investment and foreign currency transactions   (1.30 )   (0.15 )   0.73   0.49   (0.32 )

Total from investment operations

  (1.10 )   0.04   0.98   0.78   (0.07 )

Less Dividends and Distributions:

Dividends from net investment income

  (0.22 )   (0.23 )   (0.29 )   (0.32 )   (0.28 )

Distributions from net realized gains

  -   (0.07 )   (- )(b)   -   -

Total dividends and distributions

  (0.22 )   (0.30 )   (0.29 )   (0.32 )   (0.28 )

Net asset value, end of year

  $9.21   $10.53   $10.79   $10.10   $9.64

Total Return(c):

  (10.52 )%   0.42 %   10.00 %   8.12 %   (0.74 )%

    

Ratios/Supplemental Data:

Net assets, end of year (000)

  $1,024,671   $944,968   $716,750   $367,985   $290,530

Average net assets (000)

  $1,045,549   $836,649   $595,755   $309,110   $254,525

Ratios to average net assets(d):

Expenses after waivers and/or expense reimbursement

  0.32 %   0.32 %   0.33 %   0.39 %   0.40 %

Expenses before waivers and/or expense reimbursement

  0.35 %   0.36 %   0.38 %   0.44 %   0.45 %

Net investment income (loss)

  1.98 %   1.76 %   2.39 %   2.97 %   2.54 %

Portfolio turnover rate(e)(f)

  141 %   117 %   90 %   69 %   172 %

 

(a)

Calculated based on average shares outstanding during the year.

(b)

Amount rounds to zero.

(c)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to GAAP.

(d)

Does not include expenses of the investment companies in which the Fund invests.

(e)

The Fund accounts for mortgage dollar roll transactions, when applicable, as purchases and sales which, as a result, can increase its portfolio turnover rate.

(f)

The Fund’s portfolio turnover rate is calculated in accordance with regulatory requirements, without regard to transactions involving short-term investments, certain derivatives and in-kind transactions (if any). If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

PGIM Core Bond Fund    79


Notes to Financial Statements

 

1.

Organization

The Target Portfolio Trust (the “Registered Investment Company” or “RIC”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The RIC is organized as a Delaware Statutory Trust. These financial statements relate only to the PGIM Core Bond Fund (the “Fund”), a series of the RIC. The fund is classified as a diversified fund for purposes of the 1940 Act.

The investment objective of the Fund is total return.

 

2.

Accounting Policies

The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services — Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to U.S. generally accepted accounting principles (“GAAP”). The Fund consistently follows such policies in the preparation of its financial statements.

Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (“NYSE”) is open for trading. As described in further detail below, the Fund’s investments are valued daily based on a number of factors, including the type of investment and whether market quotations are readily available. The RIC’s Board of Trustees (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (“PGIM Investments” or the “Manager”). Pursuant to the Board’s delegation, the Manager has established a Valuation Committee responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A record of the Valuation Committee’s actions is subject to the Board’s review at its first quarterly meeting following the quarter in which such actions take place.

For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and holidays). Because such foreign securities

 

80


trade in markets that are open on weekends and U.S. holidays, the values of some of the Fund’s foreign investments may change on days when investors cannot purchase or redeem Fund shares.

Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 - Fair Value Measurement.

Common or preferred stocks, exchange-traded funds and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy. In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.

Investments in open-end funds (other than exchange-traded funds) are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.

Fixed income securities traded in the OTC market are generally classified as Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors’ valuation techniques used to derive the evaluated bid price are based on evaluating observable inputs, including but not limited to, yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations and reported trades. Certain Level 3 securities are also valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.

OTC and centrally cleared derivative instruments are generally classified as Level 2 in the fair value hierarchy. Such derivative instruments are typically valued using the market approach and/or income approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market approach when quoted prices in broker-dealer markets are available but also includes consideration of alternative valuation approaches, including the income approach. In the absence of reliable market quotations, the income approach is typically utilized for purposes of valuing

 

PGIM Core Bond Fund    81


Notes to Financial Statements (continued)

 

derivatives such as interest rate swaps based on a discounted cash flow analysis whereby the value of the instrument is equal to the present value of its future cash inflows or outflows. Such analysis includes projecting future cash flows and determining the discount rate (including the present value factors that affect the discount rate) used to discount the future cash flows. In addition, the third-party vendors’ valuation techniques used to derive the evaluated derivative price is based on evaluating observable inputs, including but not limited to, underlying asset prices, indices, spreads, interest rates and exchange rates. Certain derivatives may be classified as Level 3 when valued using the market approach by obtaining a single broker quote or when utilizing unobservable inputs in the income approach. During the reporting period, there were no changes to report with respect to the valuation approach and/or valuation techniques discussed above.

Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy. Altering one or more unobservable inputs may result in a significant change to a Level 3 security’s fair value measurement.

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the Manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other unaffiliated mutual funds to calculate their net asset values.

Foreign Currency Translation: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis:

(i) market value of investment securities, other assets and liabilities — at the exchange rate as of the valuation date;

(ii) purchases and sales of investment securities, income and expenses — at the rates of exchange prevailing on the respective dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not generally isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the

 

82


fluctuations arising from changes in the market prices of long-term portfolio securities held at the end of the period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the period. Accordingly, holding period unrealized and realized foreign currency gains (losses) are included in the reported net change in unrealized appreciation (depreciation) on investments and net realized gains (losses) on investment transactions on the Statements of Operations. Notwithstanding the above, the Fund does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon the sale or maturity of foreign currency denominated debt obligations; such amounts are included in net realized gains (losses) on foreign currency transactions.

Additionally, net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the disposition of holdings of foreign currencies, currency gains (losses) realized between the trade and settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) arise from valuing foreign currency denominated assets and liabilities (other than investments) at period end exchange rates.

Options: The Fund purchased and/or wrote options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailing interest rates, value of equities or foreign currency exchange rates with respect to securities or financial instruments which the Fund currently owns or intends to purchase. The Fund may also use options to gain additional market exposure. The Fund’s principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Fund purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Fund writes an option, it receives a premium and an amount equal to that premium is recorded as a liability. The asset or liability is adjusted daily to reflect the current market value of the option. If an option expires unexercised, the Fund realizes a gain (loss) to the extent of the premium received or paid. If an option is exercised, the premium received or paid is recorded as an adjustment to the proceeds from the sale or the cost of the purchase in determining whether the Fund has realized a gain (loss). The difference between the premium and the amount received or paid at the closing of a purchase or sale transaction is also treated as a realized gain (loss). Gain (loss) on purchased options is included in net realized gain (loss) on investment transactions. Gain (loss) on written options is presented separately as net realized gain (loss) on options written transactions.

The Fund, as writer of an option, may have no control over whether the underlying securities or financial instruments may be sold (called) or purchased (put). As a result, the Fund bears the market risk of an unfavorable change in the price of the security or financial instrument underlying the written option. The Fund, as purchaser of an OTC option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts. With

 

PGIM Core Bond Fund    83


Notes to Financial Statements (continued)

 

exchange-traded options contracts, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded options and guarantees the options contracts against default.

When the Fund writes an option on a swap, an amount equal to any premium received by the Fund is recorded as a liability and is subsequently adjusted to the current market value of the written option on the swap. If a call option on a swap is exercised, the Fund becomes obligated to pay a fixed interest rate (noted as the strike price) and receive a variable interest rate on a notional amount. If a put option on a swap is exercised, the Fund becomes obligated to pay a variable interest rate and receive a fixed interest rate (noted as the strike price) on a notional amount. Premiums received from writing options on swaps that expire or are exercised are treated as realized gains upon the expiration or exercise of such options on swaps. The risk associated with writing put and call options on swaps is that the Fund will be obligated to be party to a swap agreement if an option on a swap is exercised.

Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin.” Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on futures transactions.

The Fund invested in financial futures contracts in order to hedge its existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates. Should interest rates move unexpectedly, the Fund 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. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.

Swap Agreements: The Fund entered into certain types of swap agreements detailed in the disclosures below. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. Swap agreements are negotiated in the OTC market and may be executed either directly with a counterparty (“OTC-traded”) or through a central clearing facility, such as a registered exchange. Swap

 

84


agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation or depreciation on swap agreements. Centrally cleared swaps pay or receive an amount known as “variation margin”, based on daily changes in the valuation of the swap contract. For OTC-traded, upfront premiums paid and received are shown as swap premiums paid and swap premiums received in the Statement of Assets and Liabilities. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed on the Schedule of Investments.

Inflation Swaps: The Fund entered into inflation swap agreements to protect against fluctuations in inflation rates. Inflation swaps are characterized by one party paying a fixed rate in exchange for a floating rate that is derived from an inflation index, such as the Consumer Price Index or UK Retail Price Index. Inflation swaps subject the Fund to interest rate risk.

Credit Default Swaps (“CDS”): CDS involve one party (the protection buyer) making a stream of payments to another party (the protection seller) in exchange for the right to receive a specified payment in the event of a default or as a result of a default (collectively a “credit event”) for the referenced entity (typically corporate issues or sovereign issues of an emerging country) on its obligation; or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index.

The Fund is subject to credit risk in the normal course of pursuing its investment objectives, and as such, has entered into CDS contracts to provide a measure of protection against defaults or to take an active long or short position with respect to the likelihood of a particular issuer’s default or the reference entity’s credit soundness. CDS contracts generally trade based on a spread which represents the cost a protection buyer has to pay the protection seller. The protection buyer is said to be short the credit as the value of the contract rises the more the credit deteriorates. The value of the CDS contract increases for the protection buyer if the spread increases. The Fund’s maximum risk of loss from counterparty credit risk for purchased CDS is the inability of the counterparty to honor the contract up to the notional value due to a credit event.

As a seller of protection on credit default swap agreements, the Fund generally receives an agreed upon payment from the buyer of protection throughout the term of the swap, provided no credit event occurs. As the seller, the Fund effectively increases its investment risk because, in addition to its total net assets, the Fund may be subject to investment exposure on the notional amount of the swap.

The maximum amount of the payment that the Fund, as a seller of protection, could be required to make under a credit default swap agreement would be equal to the notional amount of the underlying security or index contract as a result of a credit event. This potential amount will be partially offset by any recovery values of the respective referenced obligations, or net amounts received from the settlement of buy protection credit default swap agreements which the Fund entered into for the same referenced entity or index. As a

 

PGIM Core Bond Fund    85


Notes to Financial Statements (continued)

 

buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.

Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements where the Fund is the seller of protection as of period end are disclosed in the footnotes to the Schedule of Investments, if applicable. These spreads serve as indicators of the current status of the payment/performance risk and represent the likelihood of default risk for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. Wider credit spreads and increased market value in absolute terms, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

Mortgage-Backed and Asset-Backed Securities: Mortgage-backed securities are pass-through securities, meaning that principal and interest payments made by the borrower on the underlying mortgages are passed through to the Fund. Asset-backed securities directly or indirectly represent a participation interest in, or are secured by and payable from, a stream of payments generated by particular assets such as motor vehicle or credit card receivables. Asset-backed securities may be classified as pass-through certificates or collateralized obligations, such as collateralized bond obligations, collateralized loan obligations and other similarly structured securities. The value of mortgage-backed and asset-backed securities varies with changes in interest rates and may be affected by changes in credit quality or value of the mortgage loans or other assets that support the securities.

Stripped mortgage-backed securities are usually structured with two classes that receive different proportions of the interest (“IO”) and principal (“PO”) distributions on a pool of mortgage assets. Payments received for IOs are included in interest income on the Statements of Operations. Because no principal will be received at the maturity of an IO, adjustments are made to the cost of the security on a monthly basis until maturity. These adjustments are included in interest income on the Statements of Operations. Payments received for POs are treated as reductions to the cost and par value of the securities.

Master Netting Arrangements: The RIC, on behalf of the Fund, is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of all or a portion of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Fund to cover the

 

86


Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law.

The RIC, on behalf of the Fund, is a party to International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the Fund is held in a segregated account by the Fund’s custodian and with respect to those amounts which can be sold or re-pledged, is presented in the Schedule of Investments. Collateral pledged by the Fund is segregated by the Fund’s custodian and identified in the Schedule of Investments. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the Fund and the applicable counterparty. Collateral requirements are determined based on the Fund’s net position with each counterparty. Termination events applicable to the Fund may occur upon a decline in the Fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the Fund’s counterparties to elect early termination could impact the Fund’s future derivative activity.

In addition to each instrument’s primary underlying risk exposure (e.g. interest rate, credit, equity or foreign exchange, etc.), swap agreements involve, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that no liquid market for these agreements will exist, the counterparty to the agreement may default on its obligation to perform or disagree on the contractual terms of the agreement, and changes in net interest rates will be unfavorable. In connection with these agreements, securities in the portfolio may be identified or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and to serve as recourse in the event of default or bankruptcy/insolvency of either party. Such OTC derivative agreements include conditions which, when materialized, give the counterparty the right to cause an early termination of the transactions under those agreements. Any election by the counterparty for early termination of the contract(s) may impact the amounts reported on financial statements.

Short sales and OTC contracts, including forward foreign currency exchange contracts, swaps, forward rate agreements and written options involve elements of both market and

 

PGIM Core Bond Fund    87


Notes to Financial Statements (continued)

 

credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities, if applicable. Such risks may be mitigated by engaging in master netting arrangements.

Delayed-Delivery Transactions: The Fund purchased or sold securities on a when-issued or delayed-delivery and forward commitment basis. These transactions involve a commitment by the Fund to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. When delayed-delivery purchases are outstanding, the Fund will set aside and maintain an amount of liquid assets sufficient to meet the purchase price in a segregated account until the settlement date. When purchasing a security on a delayed-delivery basis, the Fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations, and takes such fluctuations into account when determining its net asset value. The Fund may dispose of or renegotiate a delayed-delivery transaction subsequent to establishment, and may sell when-issued securities before they are delivered, which may result in a realized gain (loss). When selling a security on a delayed-delivery basis, the Fund forfeits its eligibility to realize future gains (losses) with respect to the security.

Securities Lending: The Fund lends its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in an affiliated money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. In the event of significant appreciation in value of securities on loan on the last business day of the reporting period, the financial statements may reflect a collateral value that is less than the market value of the loaned securities. Such shortfall is remedied as described above. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. The remaining open loans of the securities lending transactions are considered overnight and continuous. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.

The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividends from the securities loaned and such payments are passed back to the lender in amounts equivalent thereto, which are reflected in interest income or unaffiliated dividend income based on the nature of the payment on the Statement of Operations. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned and on the change in the value of the collateral invested that may occur during the term of the loan. In addition, realized gain (loss) is recognized on changes in the value of the collateral invested upon

 

88


liquidation of the collateral. Net earnings from securities lending are disclosed in the Statement of Operations.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain foreign securities, when the Fund becomes aware of such dividends. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual. Net investment income or loss (other than class specific expenses and waivers, which are allocated as noted below) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day. Class specific expenses and waivers, where applicable, are charged to the respective share classes. Such class specific expenses and waivers include distribution fees and distribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.

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 and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.

Dividends and Distributions: Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess of par, as appropriate. The chart below sets forth the expected frequency of dividend and capital gains distributions to shareholders. Various factors may impact the frequency of dividend distributions to shareholders, including but not limited to adverse market conditions or portfolio holding-specific events.

 

   
  Expected Distribution Schedule to Shareholders*    Frequency 

Net Investment Income

   Monthly

Short-Term Capital Gains

   Annually

Long-Term Capital Gains

   Annually

 

*

Under certain circumstances, the Fund may make more than one distribution of short-term and/or long-term capital gains during a fiscal year.

Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

 

PGIM Core Bond Fund    89


Notes to Financial Statements (continued)

 

3.

Agreements

The RIC, on behalf of the Fund, has a management agreement with the Manager. Pursuant to this agreement, the Manager has responsibility for all investment advisory services and supervises each subadviser’s performance of such services.

The Manager has entered into a subadvisory agreement with PGIM, Inc., which provides subadvisory services to the Fund through its business unit PGIM Fixed Income, and PGIM Limited (collectively, the “subadviser”). The Manager pays for the services of the subadviser.

Fees payable under the management agreement are computed daily and paid monthly. For the reporting period ended July 31, 2022, the contractual and effective management fee rates were as follows:

 

   
  Contractual Management Rate   

Effective Management Fee, before any waivers

and/or expense reimbursements

 

0.32% of average daily net assets up to $10 billion;

     0.32%  

0.31% of average daily net assets over $10 billion.

        

The Manager has contractually agreed, through November 30, 2023, to limit total annual fund operating expenses, after fee waivers and/or expense reimbursements. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), acquired fund fees and expenses, extraordinary expenses, and certain other Fund expenses such as dividend and interest expense and broker charges on short sales.

Where applicable, the Manager agrees to waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class. In addition, total annual operating expenses for Class R6 shares will not exceed total annual operating expenses for Class Z shares. Fees and/or expenses waived and/or reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver and/or reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. The expense limitations attributable to each class are as follows:

 

   
  Class   

Expense 

Limitations 

A

     0.70 %  

C

     1.45  

R

     0.95  

Z

     0.33  

R6

     0.32  

 

90


The RIC, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class R, Class Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class C and Class R shares, pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.

Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate based on average daily net assets per class. PIMS has contractually agreed through November 30, 2023 to limit such fees on certain classes based on daily net assets. The distribution fees are accrued daily and payable monthly.

The Fund’s annual gross and net distribution rate, where applicable, are as follows:

 

     
  Class    Gross Distribution Fee   Net Distribution Fee 

A

   0.25%     0.25 %     

C

   1.00       1.00  

R

   0.75       0.50  

Z

   N/A       N/A  

R6

   N/A       N/A  

For the year ended July 31, 2022, PIMS received front-end sales charges (“FESL”) resulting from sales of certain class shares and contingent deferred sales charges (“CDSC”) imposed upon redemptions by certain shareholders. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs. The sales charges are as follows where applicable:

 

     
  Class    FESL    CDSC   

A

   $ 134,693         $ 9,319    

C

           183    

PGIM Investments, PGIM, Inc., PGIM Limited and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

 

4.

Other Transactions with Affiliates

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PGIM Investments and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.

The Fund may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund (the “Core Fund”), and its securities lending cash collateral in the PGIM Institutional Money Market Fund (the “Money Market Fund”), each a fund of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees or reimbursed for providing their services to the Core Fund and the Money Market Fund. In addition to the realized and unrealized gains on investments

 

PGIM Core Bond Fund    91


Notes to Financial Statements (continued)

 

in the Core Fund and Money Market Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively. Effective January 2022, the Fund changed its overnight cash sweep vehicle from the Core Fund to an unaffiliated money market fund.

The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that subject to certain conditions, permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the year ended July 31, 2022, no 17a-7 transactions were entered into by the Fund.

 

5.

Portfolio Securities

The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended July 31, 2022, were as follows:

 

     
Cost of Purchases                                                        Proceeds from Sales                                 

$2,059,516,597

       $1,934,632,319                                 

A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the year ended July 31, 2022, is presented as follows:

 

                           

Value,

Beginning

of Year

          

Cost of

Purchases

          

Proceeds

from Sales

          

Change in

Unrealized

Gain

(Loss)

          

Realized

Gain

(Loss)

          

Value,

End of Year

   

Shares,

End

of Year

           Income  
 

Short-Term Investments - Affiliated Mutual Funds:

 
 

PGIM Core Ultra Short Bond Fund(1)(wa)

 
  $37,204,247               $418,862,575               $456,066,822               $        —               $        —               $              —                     $39,306  
 

PGIM Institutional Money Market Fund(1)(b)(wa)

 
  11,307,424               121,789,409               121,055,380               (3,124)               (1,617)               12,036,712       12,048,761               12,887 (2) 
  $48,511,671               $540,651,984               $577,122,202               $(3,124)               $(1,617)               $12,036,712                       $52,193  

 

(1)

The Fund did not have any capital gain distributions during the reporting period.

(2)

The amount, or a portion thereof, represents the affiliated securities lending income shown on the Statement of Operations.

(b)

Represents security, or portion thereof, purchased with cash collateral received for securities on loan and includes dividend reinvestment.

(wa)

PGIM Investments LLC, the manager of the Fund, also serves as manager of the PGIM Core Ultra Short Bond Fund and PGIM Institutional Money Market Fund, if applicable.

 

92


6.

Distributions and Tax Information

Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on the ex-date.

For the year ended July 31, 2022, the tax character of dividends paid by the Fund was $33,549,387 of ordinary income. For the year ended July 31, 2021, the tax character of dividends paid by the Fund were $31,712,116 of ordinary income $5,193,698 of long-term capital gains.

As of July 31, 2022, the accumulated undistributed earnings on a tax basis was $58,206 of ordinary income.

The United States federal income tax basis of the Fund’s investments and the net unrealized depreciation as of July 31, 2022 were as follows:

 

             
Tax Basis       

Gross

Unrealized

Appreciation

      

Gross

Unrealized

Depreciation

      

Net

Unrealized

Depreciation

$1,594,659,814

      $4,446,149       $(128,592,548)       $(124,146,399)

The differences between GAAP and tax basis were primarily attributable to deferred losses on wash sales, amortization of premiums, futures and other cost basis differences between GAAP and tax accounting.

For federal income tax purposes, the Fund had a capital loss carryforward as of July 31, 2022 of approximately $39,741,000 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.

The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended July 31, 2022 are subject to such review.

 

7.

Capital and Ownership

The Fund offers Class A, Class C, Class R, Class Z and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 3.25%. Investors who purchase $500,000 or more of Class A shares and sell those shares within 12 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of 1.00% on sales although these purchases are not subject to a front-end sales charge. The Class A CDSC is waived for certain retirement and/or benefit plans. 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 CDSC of 1% on sales made within 12 months of purchase. Class C shares will automatically

 

PGIM Core Bond Fund    93


Notes to Financial Statements (continued)

 

convert to Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class R shares are available to certain retirement plans, clearing and settlement firms. Class R, Class Z and Class R6 shares are not subject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.

Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest, below.

The RIC has authorized an unlimited number of shares of beneficial interest of the Fund at $0.001 par value per share.

As of July 31, 2022, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:

 

     
  Class    Number of Shares    Percentage of Outstanding Shares 

R

   1,175    61.5%

At the reporting period end, the number of shareholders holding greater than 5% of the Fund are as follows:

 

     
      Number of Shareholders    Percentage of Outstanding Shares 

Affiliated

      —%

Unaffiliated

   4    87.0     

Transactions in shares of beneficial interest were as follows:

 

     
  Share Class    Shares     Amount  

  Class A

                

  Year ended July 31, 2022:

                

Shares sold

     3,864,332     $ 38,395,260  

Shares issued in reinvestment of dividends and distributions

     350,869       3,446,859  

Shares purchased

     (8,561,190 )          (85,692,504

Net increase (decrease) in shares outstanding before conversion

     (4,345,989     (43,850,385

Shares issued upon conversion from other share class(es)

     206,275       2,027,543  

Shares purchased upon conversion into other share class(es)

     (223,925     (2,223,098

Net increase (decrease) in shares outstanding

     (4,363,639   $  (44,045,940

 

94


     
  Share Class    Shares     Amount  

Year ended July 31, 2021:

                

Shares sold

     8,926,376     $ 94,433,452  

Shares issued in reinvestment of dividends and distributions

     474,951       5,018,631  

Shares purchased

     (5,511,907     (58,456,810

Net increase (decrease) in shares outstanding before conversion

     3,889,420       40,995,273  

Shares issued upon conversion from other share class(es)

     139,306       1,473,392  

Shares purchased upon conversion into other share class(es)

     (317,962     (3,358,209

Net increase (decrease) in shares outstanding

     3,710,764     $ 39,110,456  

Class C

                

Year ended July 31, 2022:

                

Shares sold

     227,080     $ 2,115,961  

Shares issued in reinvestment of dividends and distributions

     7,530       73,559  

Shares purchased

     (323,314     (3,092,271

Net increase (decrease) in shares outstanding before conversion

     (88,704 )          (902,751

Shares purchased upon conversion into other share class(es)

     (20,988     (214,098

Net increase (decrease) in shares outstanding

     (109,692   $ (1,116,849

Year ended July 31, 2021:

                

Shares sold

     252,640     $ 2,685,467  

Shares issued in reinvestment of dividends and distributions

     13,847       146,838  

Shares purchased

     (266,933     (2,820,952

Net increase (decrease) in shares outstanding before conversion

     (446     11,353  

Shares purchased upon conversion into other share class(es)

     (68,504     (724,499

Net increase (decrease) in shares outstanding

     (68,950   $ (713,146

Class R

                

Year ended July 31, 2022:

                

Shares sold

     29     $ 288  

Shares issued in reinvestment of dividends and distributions

     32       315  

Shares purchased

     (101     (905

Net increase (decrease) in shares outstanding

     (40   $ (302

Year ended July 31, 2021:

                

Shares sold

     250     $ 2,600  

Shares issued in reinvestment of dividends and distributions

     38       400  

Shares purchased

     (1     (13

Net increase (decrease) in shares outstanding

     287     $ 2,987  

 

PGIM Core Bond Fund    95


Notes to Financial Statements (continued)

 

     
  Share Class    Shares     Amount  

Class Z

                

Year ended July 31, 2022:

                

Shares sold

     29,602,702     $ 276,525,681  

Shares issued in reinvestment of dividends and distributions

     641,544       6,243,194  

Shares purchased

     (24,819,410 )          (232,333,545

Net increase (decrease) in shares outstanding before conversion

     5,424,836       50,435,330  

Shares issued upon conversion from other share class(es)

     260,697       2,639,490  

Shares purchased upon conversion into other share class(es)

     (277,673     (2,775,804

Net increase (decrease) in shares outstanding

     5,407,860     $ 50,299,016  

Year ended July 31, 2021:

                

Shares sold

     14,015,709     $ 148,099,618  

Shares issued in reinvestment of dividends and distributions

     712,925       7,534,049  

Shares purchased

     (14,007,668     (147,779,761

Net increase (decrease) in shares outstanding before conversion

     720,966       7,853,906  

Shares issued upon conversion from other share class(es)

     307,551       3,255,441  

Shares purchased upon conversion into other share class(es)

     (932,129     (9,665,079

Net increase (decrease) in shares outstanding

     96,388     $ 1,444,268  

Class R6

    

Year ended July 31, 2022:

                

Shares sold

     42,297,535     $ 426,692,793  

Shares issued in reinvestment of dividends and distributions

     2,425,563       23,668,007  

Shares purchased

     (23,260,300     (226,007,009

Net increase (decrease) in shares outstanding before conversion

     21,462,798       224,353,791  

Shares issued upon conversion from other share class(es)

     187,376       1,902,077  

Shares purchased upon conversion into other share class(es)

     (131,812     (1,356,110

Net increase (decrease) in shares outstanding

     21,518,362     $ 224,899,758  

Year ended July 31, 2021:

                

Shares sold

     33,556,714     $ 354,121,135  

Shares issued in reinvestment of dividends and distributions

     2,241,425       23,673,170  

Shares purchased

     (13,368,148     (140,505,798

Net increase (decrease) in shares outstanding before conversion

     22,429,991       237,288,507  

Shares issued upon conversion from other share class(es)

     934,590       9,683,316  

Shares purchased upon conversion into other share class(es)

     (62,796     (664,362

Net increase (decrease) in shares outstanding

     23,301,785     $ 246,307,461  

 

8.

Borrowings    

The RIC, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a

 

96


group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The table below provides details of the current SCA in effect at the reporting period-end as well as the prior SCA.

 

       
      Current SCA         Prior SCA

Term of Commitment

   10/1/2021 – 9/29/2022        10/2/2020 – 9/30/2021

Total Commitment

    $ 1,200,000,000        $ 1,200,000,000

Annualized Commitment Fee on the

Unused Portion of the SCA

   0.15%        0.15%

Annualized Interest Rate on

Borrowings

   1.20% plus the higher of (1)
the effective federal funds
rate, (2) the one-month
LIBOR rate or (3) zero
percent
       1.30% plus the higher of (1)
the effective federal funds
rate, (2) the one-month
LIBOR rate or (3) zero
percent

Certain affiliated registered investment companies that are parties to the SCA include portfolios that are subject to a predetermined mathematical formula used to manage certain benefit guarantees offered under variable annuity contracts. The formula may result in large scale asset flows into and out of these portfolios. Consequently, these portfolios may be more likely to utilize the SCA for purposes of funding redemptions. It may be possible for those portfolios to fully exhaust the committed amount of the SCA, thereby requiring the Manager to allocate available funding per a Board-approved methodology designed to treat the Participating Funds in the SCA equitably.

The Fund utilized the SCA during the year ended July 31, 2022. The average daily balance for the 1 days that the Fund had loans outstanding during the period was approximately $1,625,000, borrowed at a weighted average interest rate of 3.36%. The maximum loan outstanding amount during the period was $1,625,000. At July 31, 2022, the Fund did not have an outstanding loan amount.

 

9.

Risks of Investing in the Fund

The Fund’s risks include, but are not limited to, some or all of the risks discussed below. For further information on the Fund’s risks, please refer to the Fund’s Prospectus and Statement of Additional Information.

Active Trading Risk: The Fund actively and frequently trades its portfolio securities. High portfolio turnover results in higher transaction costs, which can affect the Fund’s performance and have adverse tax consequences. In addition, high portfolio turnover may also mean that a proportionately greater amount of distributions to shareholders will be taxed as ordinary income rather than long-term capital gains compared to investment companies with lower portfolio turnover.

Credit Risk: This is the risk that the issuer, the guarantor or the insurer of a fixed income security, or the counterparty to a contract, may be unable or unwilling to make timely principal and interest payments, or to otherwise honor its obligations. Additionally, fixed income securities could lose value due to a loss of confidence in the ability of the issuer,

 

PGIM Core Bond Fund    97


Notes to Financial Statements (continued)

 

guarantor, insurer or counterparty to pay back debt. The lower the credit quality of a bond, the more sensitive it is to credit risk.

Debt Obligations Risk: Debt obligations are subject to credit risk, market risk and interest rate risk. The Fund’s holdings, share price, yield and total return may fluctuate in response to bond market movements. The value of bonds may decline for issuer-related reasons, including management performance, financial leverage and reduced demand for the issuer’s goods and services. Certain types of fixed income obligations also may be subject to “call and redemption risk,” which is the risk that the issuer may call a bond held by the Fund for redemption before it matures and the Fund may lose income.

Economic and Market Events Risk: Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth or the functioning of the securities markets, may at times result in unusually high market volatility, which could negatively impact performance. Relatively reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.

Foreign Securities Risk: Investments in securities of non-U.S. issuers (including those denominated in U.S. dollars) may involve more risk than investing in securities of U.S. issuers. Foreign political, economic and legal systems, especially those in developing and emerging market countries, may be less stable and more volatile than in the United States. Foreign legal systems generally have fewer regulatory requirements than the U.S. legal system, particularly those of emerging markets. In general, less information is publicly available with respect to non-U.S. companies than U.S. companies. Non-U.S. companies generally are not subject to the same accounting, auditing, and financial reporting standards as are U.S. companies. Additionally, the changing value of foreign currencies and changes in exchange rates could also affect the value of the assets the Fund holds and the Fund’s performance. Certain foreign countries may impose restrictions on the ability of issuers of foreign securities to make payment of principal and interest or dividends to investors located outside the country, due to blockage of foreign currency exchanges or otherwise. Investments in emerging markets are subject to greater volatility and price declines.

In addition, the Fund’s investments in non-U.S. securities may be subject to the risks of nationalization or expropriation of assets, imposition of currency exchange controls or restrictions on the repatriation of non-U.S. currency, confiscatory taxation and adverse diplomatic developments. Special U.S. tax considerations may apply.

Increase in Expenses Risk: Your actual cost of investing in the Fund may be higher than the expenses shown in the expense table in the Fund’s prospectus for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease.

 

98


Net assets are more likely to decrease and Fund expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Fund securities can increase expenses.

Interest Rate Risk: The value of your investment may go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration debt securities. For example, a fixed income security with a duration of three years is expected to decrease in value by approximately 3% if interest rates increase by 1%. This is referred to as “duration risk.” When interest rates fall, the issuers of debt obligations may prepay principal more quickly than expected, and the Fund may be required to reinvest the proceeds at a lower interest rate. This is referred to as “prepayment risk.” When interest rates rise, debt obligations may be repaid more slowly than expected, and the value of the Fund’s holdings may fall sharply. This is referred to as “extension risk.” The Fund may lose money if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.

Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, including the Manager and its affiliates, may from time to time own or control a substantial amount of the Fund’s shares. There is no requirement that these entities maintain their investment in the Fund. There is a risk that such large shareholders or that the Fund’s shareholders generally may redeem all or a substantial portion of their investments in the Fund in a short period of time, which could have a significant negative impact on the Fund’s NAV, liquidity, and brokerage costs. Large redemptions could also result in tax consequences to shareholders and impact the Fund’s ability to implement its investment strategy. The Fund’s ability to pursue its investment objective after one or more large scale redemptions may be impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.

LIBOR Risk: Many financial instruments use or may use a floating rate based on the London Interbank Offered Rate, or “LIBOR,” which is the offered rate for short-term Eurodollar deposits between major international banks. Over the course of the last several years, global regulators have indicated an intent to phase out the use of LIBOR and similar interbank offering rates (“IBOR”). There still remains uncertainty regarding the nature of any replacement rates for LIBOR and the other IBORs as well as around fallback approaches for instruments extending beyond the any phase-out of these reference rates. The lack of consensus around replacement rates and the uncertainty of the phase out of LIBOR and other IBORs may result in increased volatility in corporate or governmental debt, floating rate and other loans, derivatives and other instruments invested in by the Fund as well as loan facilities used by the Fund.

The potential effect of a transition away from LIBOR on the Fund or the financial instruments in which the Fund invests cannot yet be determined. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect the Fund’s

 

PGIM Core Bond Fund    99


Notes to Financial Statements (continued)

 

performance and/or net asset value. Certain proposed replacement rates to LIBOR, such as the Secured Overnight Financing Rate (“SOFR”), are materially different from LIBOR, and changes in the applicable spread for instruments previously linked to LIBOR will need to be made in order for instruments to pay similar rates. Uncertainty and risk also remain regarding the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently, the transition away from LIBOR to other reference rates may lead to reduced coupons on debt held by the Fund, higher rates required to be paid by the Fund on bank lines of credit due to increases in spreads, increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, adversely affecting the Fund’s performance. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Because the usefulness of LIBOR and the other IBORs as benchmarks could deteriorate during the transition period, these effects could be experienced until the anticipated discontinuance date in 2023 for the majority of the LIBOR rates.

Management Risk: The value of your investment may decrease if judgments by the subadviser about the attractiveness, value or market trends affecting a particular security, industry or sector or about market movements are incorrect.

Market Disruption and Geopolitical Risks: Market disruption can be caused by economic, financial or political events and factors, including but not limited to, international wars or conflicts (including Russia’s military invasion of Ukraine), geopolitical developments (including trading and tariff arrangements, sanctions and cybersecurity attacks), instability in regions such as Asia, Eastern Europe and the Middle East, terrorism, natural disasters and public health epidemics (including the outbreak of COVID-19 globally).

The extent and duration of such events and resulting market disruptions cannot be predicted, but could be substantial and could magnify the impact of other risks to the Fund. These and other similar events could adversely affect the U.S. and foreign financial markets and lead to increased market volatility, reduced liquidity in the securities markets, significant negative impacts on issuers and the markets for certain securities and commodities and/or government intervention. They may also cause short- or long-term economic uncertainties in the United States and worldwide. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Fund’s investments may be negatively impacted. Further, due to closures of certain markets and restrictions on trading certain securities, the value of certain securities held by the Fund could be significantly impacted, which could lead to such securities being valued at zero.

 

100


COVID-19 and the related governmental and public responses have had and may continue to have an impact on the Fund’s investments and net asset value and have led and may continue to lead to increased market volatility and the potential for illiquidity in certain classes of securities and sectors of the market. They have also had and may continue to result in periods of business disruption, business closures, inability to obtain raw materials, supplies and component parts, and reduced or disrupted operations for the issuers in which the Fund invests. The occurrence, reoccurrence and pendency of public health epidemics could adversely affect the economies and financial markets either in specific countries or worldwide.

Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.

Mortgage-Backed and Asset-Backed Securities Risk: Mortgage-backed and asset-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to similar risk of decline in market value during periods of rising interest rates. The values of mortgage-backed and asset-backed securities become more volatile as interest rates rise. In a period of declining interest rates, the Fund may be required to reinvest more frequent prepayments on mortgage-backed and asset-backed securities in lower-yielding investments.

U.S. Government and Agency Securities Risk: U.S. Government and agency securities are subject to market risk, interest rate risk and credit risk. Not all U.S. Government securities are insured or guaranteed by the full faith and credit of the U.S. Government; some are only insured or guaranteed by the issuing agency, which must rely on its own resources to repay the debt. Some agency securities carry no guarantee whatsoever and the risk of default associated with these securities would be borne by the Fund. The maximum potential liability of the issuers of some U.S. Government securities held by the Fund may greatly exceed their current resources, including their legal right to support from the U.S. Treasury. No assurance can be given that the U.S. government would provide financial support to any such issuers if it is not obligated to do so by law. It is possible that these issuers will not have the funds to meet their payment obligations in the future. In addition, the value of U.S. Government securities may be affected by changes in the credit rating of the U.S. Government.

 

10.

Recent Accounting Pronouncement and Regulatory Developments

In March 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-04, which provides optional guidance for applying GAAP to contract modifications, hedging relationships and other transactions affected by the reference rate reform if certain criteria are met. ASU 2020-04 is elective and is effective on March 12, 2020 through December 31, 2022. Management does not expect ASU 2020-04 to have a material impact on the financial statements.

 

PGIM Core Bond Fund    101


Report of Independent Registered Public Accounting Firm

 

To the Board of Trustees of The Target Portfolio Trust and Shareholders of PGIM Core Bond Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of PGIM Core Bond Fund (one of the funds constituting The Target Portfolio Trust, referred to hereafter as the “Fund”) as of July 31, 2022, the related statement of operations for the year ended July 31, 2022, the statements of changes in net assets for each of the two years in the period ended July 31, 2022, including the related notes, and the financial highlights for each of the two years in the period ended July 31, 2022 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of July 31, 2022, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period ended July 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Fund as of and for the year ended July 31, 2020 and the financial highlights for each of the periods ended on or prior to July 31, 2020 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated September 18, 2020 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2022 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP

New York, New York

September 19, 2022

We have served as the auditor of one or more investment companies in the PGIM Retail Funds complex since 2020.

 

102


Tax Information (unaudited)

 

For the tax year ended July 31, 2022, the Fund reports 84.07% as interest-related dividends in accordance with Sections 871(k)(1) and 881(e)(1) of the Internal Revenue Code.

In January 2023, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV, as to the Federal tax status of the distributions received by you in calendar year 2022.

We are required by Massachusetts, Missouri and Oregon to inform you that dividends which have been derived from interest on federal obligations are not taxable to shareholders provided the Fund meets certain requirements mandated by the respective state’s taxing authorities. We are pleased to report that 7.17% of the dividends paid by the Fund qualify for such deduction.

For more detailed information regarding your state and local taxes, you should contact your tax adviser or the state/local taxing authorities.

 

PGIM Core Bond Fund    103


Liquidity Risk Management Program (unaudited)

 

Consistent with Rule 22e-4 under the 1940 Act (the “Liquidity Rule”), the Fund has adopted and implemented a liquidity risk management program (the “LRMP”). The Fund’s LRMP seeks to assess and manage the Fund’s liquidity risk, which is defined as the risk that the Fund is unable to meet investor redemption requests without significantly diluting the remaining investors’ interests in the Fund. The Board has approved PGIM Investments LLC (“PGIM Investments”), the Fund’s investment manager, to serve as the administrator of the Fund’s LRMP. As part of its responsibilities as administrator, PGIM Investments has retained a third party to perform certain functions, including providing market data and liquidity classification model information.

The Fund’s LRMP includes a number of processes designed to support the assessment and management of its liquidity risk. In particular, the Fund’s LRMP includes no less than annual assessments of factors that influence the Fund’s liquidity risk; no less than monthly classifications of the Fund’s investments into one of four liquidity classifications provided for in the Liquidity Rule; a 15% of net assets limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); establishment of a minimum percentage of the Fund’s assets to be invested in investments classified as “highly liquid” (as defined under the Liquidity Rule) if the Fund does not invest primarily in highly liquid investments; and regular reporting to the Board.

At a meeting of the Board on March 1-3, 2022, PGIM Investments provided a written report (“LRMP Report”) to the Board addressing the operation, adequacy, and effectiveness of the Fund’s LRMP, including any material changes to the LRMP for the period from January 1, 2021 through December 31, 2021 (“Reporting Period”). The LRMP Report concluded that the Fund’s LRMP was reasonably designed to assess and manage the Fund’s liquidity risk and was adequately and effectively implemented during the Reporting Period. There were no material changes to the LRMP during the Reporting Period. The LRMP Report further concluded that the Fund’s investment strategies continue to be appropriate given the Fund’s status as an open-end fund.

There can be no assurance that the LRMP will achieve its objectives in the future. Additional information regarding risks of investing in the Fund, including liquidity risks presented by the Fund’s investment portfolio, is found in the Fund’s Prospectus and Statement of Additional Information.

 

Visit our website at pgim.com/investments


INFORMATION ABOUT BOARD MEMBERS AND OFFICERS (unaudited)

 

Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.

 

 
Independent Board Members
       

Name

Year of Birth

Position(s)

Portfolios Overseen

  

Principal Occupation(s)

During Past Five Years

  

Other Directorships

Held During

Past Five Years

 

Length of

Board Service

       

Ellen S. Alberding

1958

Board Member

Portfolios Overseen: 97

  

President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); formerly Vice Chair, City Colleges of Chicago (community college system) (2011-2015); Trustee, National Park Foundation (charitable foundation for national park system) (2009-2018); Trustee, Economic Club of Chicago (2009-2016); Trustee, Loyola University (since 2018).

  

None.

  Since September 2013
       

Kevin J. Bannon

1952

Board Member

Portfolios Overseen: 97

   Retired; formerly Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.   

Director of Urstadt Biddle Properties (equity real estate investment trust) (since September 2008).

  Since July 2008

 

PGIM Core Bond Fund


 
Independent Board Members
       
Name
Year of Birth
Position(s)
Portfolios Overseen
  

Principal Occupation(s)

During Past Five Years

  

Other Directorships

Held During

Past Five Years

  

Length of

Board Service

       

Linda W. Bynoe

1952

Board Member

Portfolios Overseen: 94

   President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Limited LLC (formerly Telemat Ltd) (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer).    Trustee of Equity Residential (residential real estate) (since December 2009); Director of Northern Trust Corporation (financial services) (since April 2006); formerly Director of Anixter International, Inc. (communication products distributor) (January 2006-June 2020).    Since March 2005
       

Barry H. Evans

1960

Board Member

Portfolios Overseen: 96

   Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer - Global Head of Fixed Income (1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management (asset management).    Formerly Director, Manulife Trust Company (2011-2018); formerly Director, Manulife Asset Management Limited (2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).    Since September 2017
       

Keith F. Hartstein

1956

Board Member &

Independent Chair

Portfolios Overseen: 97

   Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (IDC) (organization of independent mutual fund directors); formerly Executive Committee of the IDC Board of Governors (October 2019-December 2021); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).    None.    Since September 2013

 

Visit our website at pgim.com/investments


 

 
Independent Board Members
       
Name
Year of Birth
Position(s)
Portfolios Overseen
  

Principal Occupation(s)

During Past Five Years

  

Other Directorships

Held During

Past Five Years

  

Length of

Board Service

       

Laurie Simon Hodrick

1962

Board Member

Portfolios Overseen: 93

   A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly Visiting Professor of Law, Stanford Law School (2015-2021); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008).    Independent Director, Andela (since January 2022) (global talent network); Independent Director, Roku (since December 2020) (communication services); formerly Independent Director, Synnex Corporation (2019-2021) (information technology); formerly Independent Director, Kabbage, Inc. (2018-2020) (financial services); formerly Independent Director, Corporate Capital Trust (2017-2018) (a business development company).    Since September 2017
       

Brian K. Reid

1961

Board Member

Portfolios Overseen: 96

   Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company (2012-2017).    None.    Since March 2018

 

PGIM Core Bond Fund


 
Independent Board Members
       
Name
Year of Birth
Position(s)
Portfolios Overseen
  

Principal Occupation(s)

During Past Five Years

  

Other Directorships

Held During

Past Five Years

  

Length of

Board Service

       

Grace C. Torres

1959

Board Member

Portfolios Overseen: 96

  

Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President (June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.

   Director (since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank; formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank.    Since November 2014

 

 
Interested Board Members
       
Name
Year of Birth
Position(s)
Portfolios Overseen
  

Principal Occupation(s)

During Past Five Years

  

Other Directorships

Held During

Past Five Years

  

Length of

Board Service

       

Stuart S. Parker

1962

Board Member &

President

Portfolios Overseen: 96

   President, Chief Executive Officer, Chief Operating Officer and Officer in Charge of PGIM Investments LLC (formerly known as Prudential Investments LLC) (since January 2012); President and PEO (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011); Investment Company Institute - Board of Governors (since May 2012).    None.    Since January 2012

 

Visit our website at pgim.com/investments


 

 
Interested Board Members
       
Name
Year of Birth
Position(s)
Portfolios Overseen
  

Principal Occupation(s)

During Past Five Years

  

Other Directorships

Held During

Past Five Years

  

Length of

Board Service

       

Scott E. Benjamin

1973

Board Member & Vice

President

Portfolios Overseen: 97

   Executive Vice President (since May 2009) of PGIM Investments LLC; Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President of Product Development and Product Management, PGIM Investments LLC (2003-2006).    None.    Since March 2010

 

 
Fund Officers(a)
     
Name
Year of Birth
Fund Position
   Principal Occupation(s) During Past Five Years   

Length of

Service as Fund

Officer

     

Claudia DiGiacomo

1974

Chief Legal Officer

   Chief Legal Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; Chief Legal Officer, Executive Vice President and Secretary of PGIM Investments LLC (since August 2020); Chief Legal Officer of Prudential Mutual Fund Services LLC (since August 2020); Chief Legal Officer of PIFM Holdco, LLC (since August 2020); Vice President and Corporate Counsel (since January 2005) of Prudential; and Corporate Counsel of AST Investment Services, Inc. (since August 2020); formerly Vice President and Assistant Secretary of PGIM Investments LLC (2005-2020); formerly Associate at Sidley Austin Brown & Wood LLP (1999-2004).    Since December 2005

 

PGIM Core Bond Fund


 
Fund Officers(a)
     
Name
Year of Birth
Fund Position
   Principal Occupation(s) During Past Five Years   

Length of

Service as Fund

Officer

     

Isabelle Sajous

1976

Chief Compliance Officer

   Chief Compliance Officer (since April 2022) of PGIM Investments LLC, the PGIM Funds, Target Funds, PGIM ETF Trust, PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, Advanced Series Trust, The Prudential Series Fund and Prudential’s Gibraltar Fund, Inc.; Chief Compliance Officer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; Vice President, Compliance of PGIM Investments LLC (since December 2020); formerly Director, Compliance (July 2018-December 2020) of Credit Suisse Asset Management LLC; and Vice President, Associate General Counsel & Deputy Chief Compliance Officer of Cramer Rosenthal McGlynn, LLC (August 2014-July 2018).    Since April 2022
     

Andrew R. French

1962

Secretary

   Vice President (since December 2018) of PGIM Investments LLC; Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Vice President and Corporate Counsel (2010-2018) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.    Since October 2006
     

Melissa Gonzalez

1980

Assistant Secretary

   Vice President and Corporate Counsel (since September 2018) of Prudential; Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director and Corporate Counsel (March 2014-September 2018) of Prudential.    Since March 2020
     

Patrick E. McGuinness

1986

Assistant Secretary

   Vice President and Assistant Secretary (since August 2020) of PGIM Investments LLC; Director and Corporate Counsel (since February 2017) of Prudential; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.    Since June 2020
     

Debra Rubano

1975

Assistant Secretary

   Vice President and Corporate Counsel (since November 2020) of Prudential; Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc; formerly Director and Senior Counsel of Allianz Global Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary of numerous funds in the Allianz fund complex (2015-2020).    Since December 2020
     

Kelly A. Coyne

1968

Assistant Secretary

   Director, Investment Operations of Prudential Mutual Fund Services LLC (since 2010); Assistant Secretary (since March 2022) of the PGIM Private Real Estate Fund, Inc.    Since March 2015

 

Visit our website at pgim.com/investments


 

 
Fund Officers(a)
     
Name
Year of Birth
Fund Position
   Principal Occupation(s) During Past Five Years   

Length of

Service as Fund

Officer

     

Christian J. Kelly

1975

Treasurer and Principal

Financial

and Accounting Officer

   Vice President, Head of Fund Administration of PGIM Investments LLC (since November 2018); Principal Financial Officer (since March 2022) of the PGIM Private Real Estate Fund, Inc.; formerly, Treasurer and Principal Accounting Officer (March 2022- July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Director of Fund Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of Deloitte & Touche LLP (1998-2007).    Since January 2019
     

Lana Lomuti

1967

Assistant Treasurer

   Vice President (since 2007) and Director (2005-2007), within PGIM Investments Fund Administration; formerly Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.    Since April 2014
     

Russ Shupak

1973

Assistant Treasurer

   Vice President (since 2017) and Director (2013-2017), within PGIM Investments Fund Administration; Treasurer and Principal Accounting Officer (since July 2022) of the PGIM Private Real Estate Fund, Inc.; formerly Assistant Treasurer (March 2022 – July 2022) of the PGIM Private Real Estate Fund, Inc.    Since October 2019
     

Deborah Conway

1969

Assistant Treasurer

   Vice President (since 2017) and Director (2007-2017), within PGIM Investments Fund Administration.    Since October 2019
     

Elyse M. McLaughlin

1974

Assistant Treasurer

   Vice President (since 2017) and Director (2011-2017), within PGIM Investments Fund Administration; Assistant Treasurer (since March 2022) of the PGIM Private Real Estate Fund, Inc.    Since October 2019
     

Kelly Florio

1978

Anti-Money Laundering

Compliance Officer

   Vice President, Corporate Compliance, Global Compliance Programs and Compliance Risk Management (since December 2021) of Prudential; formerly, Head of Fraud Risk Management (October 2019 to December 2021) at New York Life Insurance Company; formerly, Head of Key Risk Area Operations (November 2018 to October 2019), Director of the US Anti-Money Laundering Compliance Unit (2009-2018) and Bank Loss Prevention Associate (2006 -2009) at MetLife.    Since June 2022

(a) Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.

Explanatory Notes to Tables:

 

 

Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of PGIM Investments LLC.

 

Unless otherwise noted, the address of all Board Members and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4410.

 

There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75.

 

PGIM Core Bond Fund


 

“Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.

 

“Portfolios Overseen” includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves as manager include the PGIM Mutual Funds, Target Funds, The Prudential Variable Contract Accounts, PGIM ETF Trust, PGIM Private Real Estate Fund, Inc., PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM Short Duration High Yield Opportunities Fund, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

 

As used in the Fund Officers table “Prudential” means The Prudential Insurance Company of America.

 

Visit our website at pgim.com/investments


Approval of Advisory Agreements (unaudited)

 

The Fund’s Board of Trustees

The Board of Trustees (the “Board”) of PGIM Core Bond Fund (the “Fund”)1 consists of ten individuals, eight of whom are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”). The Board is responsible for the oversight of the Fund and its operations, and performs the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Trustee. The Board has established five standing committees: the Audit Committee, the Nominating and Governance Committee, the Compliance Committee and two Investment Committees. Each committee is chaired by, and composed of, Independent Trustees.

Annual Approval of the Fund’s Advisory Agreements

As required under the 1940 Act, the Board determines annually whether to renew the Fund’s management agreement with PGIM Investments LLC (“PGIM Investments”), the Fund’s subadvisory agreement with PGIM, Inc. (“PGIM”) on behalf of its PGIM Fixed Income unit, and PGIM Limited (“PGIML”). In considering the renewal of the agreements, the Board, including all the Independent Trustees, met on May 26 and June 7-9, 2022 (the “Board Meeting”) and approved the renewal of the agreements through July 31, 2023, after concluding that the renewal of the agreements was in the best interests of the Fund and its shareholders.

In advance of the meetings, the Board requested and received materials relating to the agreements, and had the opportunity to ask questions and request further information in connection with its consideration. Among other things, the Board considered comparative fee information from PGIM Investments, PGIM, and, where appropriate, affiliates of PGIM. Also, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups, as is further discussed below.

In approving the agreements, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors it deemed relevant, including the nature, quality and extent of services provided by PGIM Investments, the subadviser and, as relevant, its affiliates the performance of the Fund, the profitability of PGIM Investments and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Trustees did not identify any single factor which alone was responsible for the Board’s decision to approve the agreements with respect to the Fund. In connection with its deliberations, the Board considered information provided by PGIM Investments throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the Board Meeting.

 

1PGIM Core Bond Fund is a series of The Target Portfolio Trust

 

PGIM Core Bond Fund


Approval of Advisory Agreements (continued)

 

The Trustees determined that the overall arrangements between the Fund and PGIM Investments, which serves as the Fund’s investment manager pursuant to a management agreement, and between PGIM Investments and each of PGIML and PGIM, through its PGIM Fixed Income unit, which serve as the Fund’s subadvisers pursuant to the terms of a subadvisory agreement with PGIM Investments, are in the best interests of the Fund and its shareholders in light of the services performed, fees charged and such other matters as the Trustees considered relevant in the exercise of their business judgment.

The material factors and conclusions that formed the basis for the Trustees’ reaching their determinations to approve the continuance of the agreements are separately discussed below.

Nature, Quality, and Extent of Services

The Board received and considered information regarding the nature, quality and extent of services provided to the Fund by PGIM Investments, PGIM Fixed Income, and PGIML. The Board noted that PGIM Fixed Income and PGIML are affiliated with PGIM Investments. The Board considered the services provided by PGIM Investments, including but not limited to the oversight of the subadviser for the Fund, as well as the provision of fund recordkeeping, compliance and other services to the Fund, and PGIM Investments’ role as administrator for the Fund’s liquidity risk management program. With respect to PGIM Investments’ oversight of the subadviser and, the Board noted that PGIM Investments’ Strategic Investment Research Group (“SIRG”), which is a business unit of PGIM Investments, is responsible for monitoring and reporting to PGIM Investments’ senior management on the performance and operations of the subadviser. The Board also considered that PGIM Investments pays the salaries of all of the officers and interested Trustees of the Fund who are part of Fund management. The Board also considered the investment subadvisory services provided by PGIM Fixed Income and PGIML, including investment research and security selection, as well as adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures. The Board considered PGIM Investments’ evaluation of the subadviser, as well as PGIM Investments’ recommendation, based on its review of the subadviser, to renew the subadvisory agreement.

The Board considered the qualifications, backgrounds and responsibilities of PGIM Investments’ senior management responsible for the oversight of the Fund, PGIM Fixed Income, and PGIML, and also considered the qualifications, backgrounds and responsibilities of PGIM Fixed Income’s portfolio managers who are responsible for the day-to-day management of the Fund’s portfolio. The Board was provided with information pertaining to PGIM Investments’, PGIM Fixed Income’s, and PGIML’s organizational structure, senior management, investment operations, and other relevant information pertaining to PGIM Investments, PGIM Fixed Income, and PGIML. The Board also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (“CCO”) as to PGIM Investments, PGIM Fixed Income, and PGIML.

 

Visit our website at pgim.com/investments


    

 

The Board concluded that it was satisfied with the nature, extent and quality of the investment management services provided by PGIM Investments, the subadvisory services provided to the Fund by PGIM Fixed Income and PGIML, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by PGIM Investments, PGIM Fixed Income, and PGIML under the management and subadvisory agreements.

Costs of Services and Profits Realized by PGIM Investments

The Board was provided with information on the profitability of PGIM Investments and its affiliates in serving as the Fund’s investment manager. The Board discussed with PGIM Investments the methodology utilized in assembling the information regarding profitability and considered its reasonableness. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. Taking these factors into account, the Board concluded that the profitability of PGIM Investments and its affiliates in relation to the services rendered was not unreasonable.

Economies of Scale

The Board received and discussed information concerning economies of scale that PGIM Investments may realize as the Fund’s assets grow beyond current levels. The Board noted that the management fee schedule for the Fund includes breakpoints, which have the effect of decreasing the fee rate as assets increase. During the course of time, the Board has considered information regarding the launch date of the Fund, the management fees of the Fund compared to those of similarly managed funds and PGIM Investments’ investment in the Fund over time. The Board noted that economies of scale can be shared with the Fund in other ways, including low management fees from inception, additional technological and personnel investments to enhance shareholder services, and maintaining existing expense structures in the face of a rising cost environment. The Board also considered PGIM Investments’ assertion that it continually evaluates the management fee schedule of the Fund and the potential to share economies of scale through breakpoints or fee waivers as asset levels increase.

The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of PGIM Investments’ costs are not specific to individual funds, but rather are incurred across a variety of products and services.

Other Benefits to PGIM Investments, PGIM Fixed Income, and PGIML

The Board considered potential ancillary benefits that might be received by PGIM Investments, PGIM Fixed Income, PGIML and their affiliates as a result of their relationship with the Fund. The Board concluded that potential benefits to be derived by PGIM Investments included transfer agency fees received by the Fund’s transfer agent

 

PGIM Core Bond Fund


Approval of Advisory Agreements (continued)

 

(which is affiliated with PGIM Investments), as well as benefits to its reputation or other intangible benefits resulting from PGIM Investments’ association with the Fund. The Board concluded that the potential benefits to be derived by PGIM Fixed Income and PGIML included the ability to use soft dollar credits, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to their reputations. The Board concluded that the benefits derived by PGIM Investments, PGIM Fixed Income, and PGIML were consistent with the types of benefits generally derived by investment managers and subadvisers to mutual funds.

Performance of the Fund / Fees and Expenses

The Board considered certain additional factors and made related conclusions relating to the historical performance of the Fund for the one-, three-, five- and ten-year periods ended December 31, 2021.

The Board also considered the Fund’s actual management fee, as well as the Fund’s net total expense ratio, for the fiscal year ended July 31, 2021. The Board considered the management fee for the Fund as compared to the management fee charged by PGIM Investments to other funds and the fee charged by other advisers to comparable mutual funds in a Peer Group. The actual management fee represents the fee rate actually paid by Fund shareholders and includes any fee waivers or reimbursements. The net total expense ratio for the Fund represents the actual expense ratio incurred by Fund shareholders.

The mutual funds included in the Peer Universe, which was used to consider performance, and the Peer Group, which was used to consider fees and expenses, were objectively determined by Broadridge, an independent provider of mutual fund data. In certain circumstances, PGIM Investments also provided supplemental Peer Universe or Peer Group information, for reasons addressed with the Board. The comparisons placed the Fund in various quartiles over various periods, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).

The section below summarizes key factors considered by the Board and the Board’s conclusions regarding the Fund’s performance, fees and overall expenses. The table sets forth net performance comparisons (which reflect the impact on performance of fund expenses, or any subsidies, expense caps or waivers that may be applicable) with the Peer Universe, actual management fees with the Peer Group (which reflect the impact of any subsidies or fee waivers), and net total expenses with the Peer Group, each of which were key factors considered by the Board.

 

Net Performance   1 Year    3 Years    5 Years    10 Years
  3rd Quartile    2nd Quartile    2nd Quartile    3rd Quartile
Actual Management Fees: 1st Quartile

 

Visit our website at pgim.com/investments


    

 

Net Performance   1 Year    3 Years    5 Years    10 Years
  3rd Quartile    2nd Quartile    2nd Quartile    3rd Quartile
Net Total Expenses: 1st Quartile

 

  ·  

The Board noted that the Fund outperformed its benchmark index over the three-and five-year periods, and underperformed over the one- and ten-year periods.

 

  ·  

The Board and PGIM Investments agreed to retain the Fund’s existing contractual expense cap, which (exclusive of certain fees and expenses) caps total annual operating expenses at 0.70% for Class A shares, 1.45% for Class C shares, 0.95% for Class R shares, 0.33% for Class Z shares, and 0.32% for Class R6 shares through November 30, 2022.

 

  ·  

In addition, PGIM Investments will waive management fees or shared operating expenses on any share class to the same extent that it waives such expenses on any other share class, and has agreed that total annual fund operating expenses for Class R6 shares will not exceed total annual fund operating expenses for Class Z shares.

 

  ·  

The Board concluded that, in light of the above, it would be in the best interests of the Fund and its shareholders to renew the agreements.

 

  ·  

The Board concluded that the management fees (including subadvisory fees) and total expenses were reasonable in light of the services provided.

*   *  *

After full consideration of these factors, the Board concluded that the approval of the agreements was in the best interests of the Fund and its shareholders.

 

PGIM Core Bond Fund


   MAIL

 

    655 Broad Street

 

    Newark, NJ 07102

  

   TELEPHONE

 

    (800) 225-1852

  

   WEBSITE

 

    pgim.com/investments

 

PROXY VOTING

 

The Board of Trustees of the Fund has delegated to the Fund’s subadvisers the responsibility for voting any proxies and maintaining proxy
recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling
(800) 225-1852 or by visiting the Securities and Exchange Commission’s website at sec.gov. Information regarding how the Fund voted proxies relating
to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange
Commission’s website.

 

TRUSTEES

 

Ellen S. Alberding · Kevin J. Bannon · Scott E. Benjamin · Linda W. Bynoe · Barry H. Evans · Keith F. Hartstein · Laurie Simon Hodrick · Stuart S. Parker · Brian K. Reid · Grace C. Torres

 

OFFICERS

 

Stuart S. Parker, President · Scott E. Benjamin, Vice President · Christian J. Kelly, Treasurer and Principal Financial and Accounting Officer · Claudia DiGiacomo, Chief Legal Officer · Isabelle Sajous, Chief Compliance Officer · Kelly Florio, Anti-Money Laundering Compliance Officer · Andrew R. French, Secretary · Melissa Gonzalez, Assistant Secretary · Kelly A. Coyne, Assistant Secretary · Patrick E. McGuinness, Assistant Secretary · Debra Rubano, Assistant Secretary · Lana Lomuti, Assistant Treasurer · Russ Shupak, Assistant Treasurer · Elyse M. McLaughlin, Assistant Treasurer · Deborah Conway, Assistant Treasurer

 

MANAGER

   PGIM Investments LLC   

655 Broad Street

Newark, NJ 07102

SUBADVISERS

   PGIM Fixed Income   

655 Broad Street

Newark, NJ 07102

  

 

PGIM Limited

  

 

Grand Buildings, 1-3 Strand

Trafalgar Square

London, WC2N 5HR

United Kingdom

DISTRIBUTOR

  

Prudential Investment

Management Services LLC

  

655 Broad Street

Newark, NJ 07102

CUSTODIAN

  

The Bank of New York

Mellon

  

240 Greenwich Street

New York, NY 10286

TRANSFER AGENT

  

Prudential Mutual Fund

Services LLC

  

PO Box 9658

Providence, RI 02940

INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

  

PricewaterhouseCoopers

LLP

  

300 Madison Avenue

New York, NY 10017

FUND COUNSEL

  

Willkie Farr & Gallagher

LLP

  

787 Seventh Avenue

New York, NY 10019


An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing.

 

E-DELIVERY

 

To receive your mutual fund documents online, go to pgim.com/investments/resource/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above.

 

SHAREHOLDER COMMUNICATIONS WITH TRUSTEES

 

Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, PGIM Core Bond Fund, PGIM Investments, Attn: Board of Trustees, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to that Trustee at the same address. Communications to the Board or the individual Trustees are not screened before being delivered to the addressee.

 

AVAILABILITY OF PORTFOLIO HOLDINGS

 

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov. The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 225-1852.

Mutual Funds:

 

     

ARE NOT INSURED BY THE FDIC OR ANY

FEDERAL GOVERNMENT AGENCY

 

   MAY LOSE VALUE   

ARE NOT A DEPOSIT OF OR GUARANTEED

BY ANY BANK OR ANY BANK AFFILIATE

 


LOGO

PGIM CORE BOND FUND

 

  SHARE CLASS

     A        C        R        Z        R6     

  NASDAQ

     TPCAX        TPCCX        TPCRX        TAIBX        TPCQX     

  CUSIP

     875921769        875921751        875921736        875921801        875921744     
MF226 E                  


Item 2 – Code of Ethics — See Exhibit (a)

As of the end of the period covered by this report, the registrant has adopted a code of ethics (the “Section 406 Standards for Investment Companies – Ethical Standards for Principal Executive and Financial Officers”) that applies to the registrant’s Principal Executive Officer and Principal Financial Officer; the registrant’s Principal Financial Officer also serves as the Principal Accounting Officer.

The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant 800-225-1852, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.

Item 3 – Audit Committee Financial Expert –

The registrant’s Board has determined that Ms. Grace C. Torres, member of the Board’s Audit Committee is an “audit committee financial expert,” and that she is “independent,” for purposes of this item.

Item 4 – Principal Accountant Fees and Services –

(a)  Audit Fees

For the fiscal years ended July 31, 2022 and July 31, 2021, PricewaterhouseCoopers LLP (“PwC”), the Registrant’s principal accountant, billed the Registrant $133,000 and $133,000, respectively, for professional services rendered for the audit of the Registrant’s annual financial statements or services that are normally provided in connection with statutory and regulatory filings.

(b) Audit-Related Fees

For the fiscal years ended July 31, 2022 and July 31, 2021, PwC did not bill the Registrant for audit-related services.

For the fiscal years ended July 31, 2022 and July 31, 2021, fees of $0 and $6,315 were billed to the Registrant for services rendered by KPMG LLP (the Registrant’s prior principal accountant) in connection with the auditor transition.

(c) Tax Fees

For the fiscal years ended July 31, 2022 and July 31, 2021: none.

(d) All Other Fees

For the fiscal years ended July 31, 2022 and July 31, 2021: none.

(e) (1) Audit Committee Pre-Approval Policies and Procedures

THE PGIM MUTUAL FUNDS


AUDIT COMMITTEE POLICY

on

Pre-Approval of Services Provided by the Independent

Accountants

The Audit Committee of each PGIM Mutual Fund is charged with the responsibility to monitor the independence of the Fund’s independent accountants. As part of this responsibility, the Audit Committee must pre-approve the independent accounting firm’s engagement to render audit and/or permissible non-audit services, as required by law. In evaluating a proposed engagement of the independent accountants, the Audit Committee will assess the effect that the engagement might reasonably be expected to have on the accountant’s independence. The Committee’s evaluation will be based on:

 

   

a review of the nature of the professional services expected to be provided,

 

   

a review of the safeguards put into place by the accounting firm to safeguard independence, and

 

   

periodic meetings with the accounting firm.

Policy for Audit and Non-Audit Services Provided to the Funds

On an annual basis, the scope of audits for each Fund, audit fees and expenses, and audit-related and non-audit services (and fees proposed in respect thereof) proposed to be performed by the Fund’s independent accountants will be presented by the Treasurer and the independent accountants to the Audit Committee for review and, as appropriate, approval prior to the initiation of such services.

Such presentation shall be accompanied by confirmation by both the Treasurer and the independent accountants that the proposed

non-audit services will not adversely affect the independence of the independent accountants. Such proposed non-audit services shall be described in sufficient detail to enable the Audit Committee to assess the appropriateness of such services and fees, and the compatibility of the provision of such services with the auditor’s independence. The Committee shall receive periodic reports on the progress of the audit and other services which are approved by the Committee or by the Committee Chair pursuant to authority delegated in this Policy.

The categories of services enumerated under “Audit Services”, “Audit-related Services”, and “Tax Services” are intended to provide guidance to the Treasurer and the independent accountants as to those categories of services which the Committee believes are generally consistent with the independence of the independent accountants and which the Committee (or the Committee Chair) would expect upon the presentation of specific proposals to pre-approve. The enumerated categories are not intended as an exclusive list of audit, audit-related or tax services, which the Committee (or the Committee Chair) would consider for pre-approval.

Audit Services

The following categories of audit services are considered to be consistent with the role of the Fund’s independent accountants:

 

   

Annual Fund financial statement audits

 

   

Seed audits (related to new product filings, as required)

 

   

SEC and regulatory filings and consents

Audit-related Services

The following categories of audit-related services are considered to be consistent with the role of the Fund’s independent accountants:

 

   

Accounting consultations

 

   

Fund merger support services

 

   

Agreed Upon Procedure Reports

 

   

Attestation Reports

 

   

Other Internal Control Reports

Individual audit-related services that fall within one of these categories (except for fund merger support services) and are not presented to the Audit Committee as part of the annual pre-approval process are subject to an authorized pre-approval by the


Audit Committee so long as the estimated fee for those services does not exceed $30,000. Any services provided under such pre-approval will be reported to the Audit Committee at its next regular meeting. Should the amount of such services exceed $30,000 any additional fees will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated). Fees related to fund merger support services are subject to a separate authorized pre-approval by the Audit Committee with fees determined on a per occurrence and merger complexity basis.

Tax Services

The following categories of tax services are considered to be consistent with the role of the Fund’s independent accountants:

 

   

Tax compliance services related to the filing or amendment of the following:

 

   

Federal, state and local income tax compliance; and,

 

   

Sales and use tax compliance

 

   

Timely RIC qualification reviews

 

   

Tax distribution analysis and planning

 

   

Tax authority examination services

 

   

Tax appeals support services

 

   

Accounting methods studies

 

   

Fund merger support services

 

   

Tax consulting services and related projects

Individual tax services that fall within one of these categories and are not presented to the Audit Committee as part of the annual pre-approval process are subject to an authorized pre-approval by the Audit Committee so long as the estimated fee for those services does not exceed $30,000. Any services provided under such pre-approval will be reported to the Audit Committee at its next regular meeting. Should the amount of such services exceed $30,000 any additional fees will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated).

Other Non-Audit Services

Certain non-audit services that the independent accountants are legally permitted to render will be subject to pre-approval by the Committee or by one or more Committee members to whom the Committee has delegated this authority and who will report to the full Committee any pre-approval decisions made pursuant to this Policy. Non-audit services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.

Proscribed Services

The Fund’s independent accountants will not render services in the following categories of non-audit services:

 

   

Bookkeeping or other services related to the accounting records or financial statements of the Fund

 

   

Financial information systems design and implementation

 

   

Appraisal or valuation services, fairness opinions, or contribution-in-kind reports

 

   

Actuarial services

 

   

Internal audit outsourcing services

 

   

Management functions or human resources

 

   

Broker or dealer, investment adviser, or investment banking services

 

   

Legal services and expert services unrelated to the audit

 

   

Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

Pre-approval of Non-Audit Services Provided to Other Entities Within the PGIM Fund Complex


Certain non-audit services provided to PGIM Investments LLC or any of its affiliates that also provide ongoing services to the PGIM Mutual Funds will be subject to pre-approval by the Audit Committee. The only non-audit services provided to these entities that will require pre-approval are those related directly to the operations and financial reporting of the Funds. Individual projects that are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $30,000. Services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.

Although the Audit Committee will not pre-approve all services provided to PGIM Investments LLC and its affiliates, the Committee will receive an annual report from the Fund’s independent accounting firm showing the aggregate fees for all services provided to PGIM Investments and its affiliates.

(e) (2) Percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X

 

      Fiscal Year Ended July 31, 2022    Fiscal Year Ended July 31, 2021   
   4(b)    Not applicable.    0%   
   4(c)    Not applicable.    Not applicable.   
   4(d)    Not applicable.    Not applicable.   

(f) Percentage of hours expended attributable to work performed by other than full time employees of principal accountant if greater than 50%.

The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.

(g) Non-Audit Fees

The aggregate non-audit fees billed by the Registrant’s principal accountant for services rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant for the fiscal years ended July 31, 2022 and July 31, 2021 was $0 and $0, respectively.

(h) Principal Accountant’s Independence

Not applicable as the Registrant’s principal accountant has not provided non-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X.

(i) Not applicable.

(j) Not applicable.

Item 5 – Audit Committee of Listed Registrants – Not applicable.

Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.


Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.

Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not applicable.

 

Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable.

Item 10 – Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.

Item 11 – Controls and Procedures

 

  (a)

It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

 

  (b)

There has been no significant change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12 – Controls and Procedures - Disclosure of Securities Lending Activities for Closed-End Management Investment Companies – Not applicable.

Item 13 – Exhibits

 

  (a)

(1) Code of Ethics – Attached hereto as Exhibit EX-99.CODE-ETH.

 

      

(2) Certifications pursuant to Section  302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT.

 

      

(3) Any written solicitation to purchase securities under Rule 23c-1 – Not applicable.

 

  (b)

Certifications pursuant to Section  906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Registrant:    The Target Portfolio Trust
By:    /s/ Andrew R. French
   Andrew R. French
   Secretary
Date:    September 19, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:    /s/ Stuart S. Parker
   Stuart S. Parker
   President and Principal Executive Officer
Date:    September 19, 2022
By:    /s/ Christian J. Kelly
   Christian J. Kelly
   Treasurer and Principal Financial and Accounting Officer
Date:    September 19, 2022

ATTACHMENTS / EXHIBITS

ATTACHMENTS / EXHIBITS

CODE OF ETHICS

CERTIFICATIONS PURSUANT TO SECTION 302

CERTIFICATIONS PURSUANT TO SECTION 906