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PRUDENTIAL INVESTMENT PORTFOLIOS 9

Date Filed : Jun 25, 2021

N-CSRS1d129990dncsrs.htmPRUDENTIAL INVESTMENT PORTFOLIOS 9Prudential Investment Portfolios 9

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:  811-09101
Exact name of registrant as specified in charter:  Prudential Investment Portfolios 9
Address of principal executive offices:  655 Broad Street, 17th Floor
  Newark, New Jersey 07102
Name and address of agent for service:  Andrew R. French
  655 Broad Street, 17th Floor
  Newark, New Jersey 07102
Registrant’s telephone number, including area code:  800-225-1852
Date of fiscal year end:  10/31/2021
Date of reporting period:  4/30/2021

 


Item 1 –

Reports to Stockholders

 


LOGO

 

PGIM ABSOLUTE RETURN BOND FUND

 

 

SEMIANNUAL REPORT

APRIL 30, 2021

 

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 

Fees and Expenses

   7 

Holdings and Financial Statements

   9 

 

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

 

The information about the Fund’s portfolio holdings is for the period covered by this report and is subject to change thereafter.

 

The accompanying financial statements as of April 30, 2021 were not audited and,accordingly, no auditor’s opinion is expressed on them.

 

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 PrudentialFinancial companies. © 2021 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and itsrelated entities, registered in many jurisdictions worldwide.

 

2 

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Letter from the President

 

LOGO

 

Dear Shareholder,

 

We hope you find the semiannual report for the PGIM Absolute Return Bond Fundinformative and useful. The report covers performance for the six-month period ended April 30, 2021.

 

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 personalinvestor 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 consider it a great privilege and responsibility to helpinvestors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allowsus to deliver actively managed funds and strategies to meet the needs of investors around the globe.

 

Thank you for choosing our family of funds.

 

Sincerely,

 

LOGO

 

Stuart S. Parker, President

PGIM Absolute Return Bond Fund

June 15, 2021

 

PGIM Absolute Return Bond Fund

  3 


Your Fund’s Performance

 

Performance data quoted represents past performance. Past performance does notguarantee 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 higherthan 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.

 

  (without sales charges) Average Annual Total Returns as of 4/30/21
(with sales charges)
  Six Months* (%) One Year (%) Five Years (%) Ten Years (%)
Class A 4.70 10.06 2.97 2.28
Class C 4.40 11.85 2.87 1.85
Class Z 4.81 13.98 3.91 2.86
Class R6 4.99 14.12 3.96 2.91
ICE BofA US Dollar 3-Month Deposit Offered Rate Constant Maturity Index
 0.11   0.34 1.48 0.90
Bloomberg Barclays US Aggregate Bond Index
  –1.52   –0.27 3.19 3.39

 

*Not annualized

 

 

4 

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The returns in the tables do not reflectthe 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 tablebelow.

 

     
   Class A Class C Class Z Class R6
Maximum initial sales charge 3.25% of the public offering price None None None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchaseprice 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
Annual distribution and service
(12b-1) fees (shown as a percentage of average dailynet assets)
 0.25%
 1.00% None None

 

Benchmark Definitions

 

ICE BofA US Dollar 3-Month Deposit Offered Rate Constant MaturityIndex—The ICE BofA US Dollar 3-Month Deposit Offered Rate Constant Maturity Index is an unmanaged index which tracks the performance of a synthetic asset paying LIBOR to a stated maturity. The Indexis based on the assumed purchase at par of a synthetic instrument having exactly its stated maturity and with a coupon equal to that day’s fixing rate. That issue is assumed to be sold the following business day (priced at a yield equal to thecurrent day fixing rate) and rolled into a new instrument.

 

BloombergBarclays US Aggregate Bond Index—The Bloomberg Barclays US Aggregate Bond Index is unmanaged and represents securities that are taxable and dollar denominated. It covers the US investment-grade fixed rate bond market, with index componentsfor 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.

 

PGIM Absolute Return Bond Fund

  5 


Your Fund’s Performance(continued)

 

Distributions and Yields as of 4/30/21      
 Total Distributions
Paid for
Six Months ($)
  SEC 30-Day
Subsidized
Yield* (%)
  SEC 30-Day
Unsubsidized
Yield** (%)
Class A 0.12  2.43  2.43
Class C 0.08  1.74  1.74
Class Z 0.13  2.77  2.73
Class R6 0.13  2.82  2.82

 

*SEC 30-Day Subsidized Yield (%)—A standardizedyield 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 isrepresented by the SEC 30-Day Subsidized Yield.

**SEC 30-Day Unsubsidized Yield (%)—A standardized yield calculation created by the Securities andExchange 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 4/30/21 (%)   
AAA  18.9 
AA  7.9 
A  5.9 
BBB  16.2 
BB  13.0 
B  8.1 
CCC  4.6 
CC  0.4 
C  0.1 
Not Rated  7.8 
Cash/Cash Equivalents  17.1 
Total Investments  100.0 

 

Credit ratings reflect the highest rating assigned bya 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 bothS&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 bya NRSRO. Credit ratings are subject to change.

 

6 

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Fees and Expenses

 

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 helpyou 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 April 30, 2021. The example is for illustrative purposes only; you shouldconsult the Fund’s 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 informationabout 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 onthe 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 balanceor 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 shareholderreports of the other funds.

 

The Fund’s transfer agent may chargeadditional 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-monthperiod 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 $25fiduciary 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 yourFund account over the six-month period when you estimate the total ongoing expenses paid over the period

 

PGIM Absolute Return Bond Fund

  7 


Fees and Expenses(continued)

 

and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table.Additional fees have the effect of reducing investment returns.

 

Please notethat 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 ongoingcosts 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 Absolute
Return Bond Fund
 Beginning Account
Value
November 1, 2020
  Ending Account
Value
April 30, 2021
  Annualized
Expense Ratio
Based onthe
Six-Month Period
  Expenses Paid
During the
Six-Month Period*
 
Class A Actual $1,000.00  $1,047.00   0.99 $5.02 
 Hypothetical $1,000.00  $1,019.89   0.99 $4.96 
Class C Actual $1,000.00  $1,044.00   1.76 $8.92 
 Hypothetical $1,000.00  $1,016.07   1.76 $8.80 
Class Z Actual $1,000.00  $1,048.10   0.73 $3.71 
 Hypothetical $1,000.00  $1,021.17   0.73 $3.66 
Class R6 Actual $1,000.00  $1,049.90   0.65 $3.30 
  Hypothetical $1,000.00  $1,021.57   0.65 $3.26 

 

*Fund expenses (net of fee waivers or subsidies, ifany) 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 thesix-month period ended April 30, 2021, and divided by the 365 days in the Fund’s fiscal year ending October 31, 2021 (to reflect the six-month period).Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

8 

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Schedule of Investments(unaudited)

as of April 30, 2021

 

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

LONG-TERM INVESTMENTS    83.9%

    

ASSET-BACKED SECURITIES    28.8%

    

Automobiles    0.2%

              

OneMain Direct Auto Receivables Trust,

    

Series 2019-01A, Class B, 144A

 3.950%  11/14/28   1,700  $        1,857,381 

Collateralized Loan Obligations    18.9%

              

Anchorage Credit Opportunities CLO Ltd. (Cayman Islands),

    

Series 2019-01A, Class A1, 144A, 3 Month LIBOR + 1.950% (Cap N/A, Floor1.950%)

 2.138(c)  01/20/32   15,000   15,112,164 

Ares European CLO BV (Netherlands),

    

Series 2013-06A, Class B1RR, 144A, 3 Month EURIBOR + 1.250% (Cap N/A, Floor1.250%)

 1.250(c)  04/15/30   EUR    2,500   3,003,464 

ArrowMark Colorado Holdings (Cayman Islands),

    

Series 2017-06A, Class A1, 144A, 3 Month LIBOR + 1.280% (Cap N/A, Floor0.000%)

 1.464(c)  07/15/29   2,500   2,501,842 

Brookside Mill CLO Ltd. (Cayman Islands),

    

Series 2013-01A, Class BR, 144A, 3 Month LIBOR + 1.350% (Cap N/A, Floor0.000%)

 1.540(c)  01/17/28   4,000   4,003,437 

Carlyle Euro CLO Ltd. (Ireland),

    

Series 2019-01A, Class A1R, 144A, 3 Month EURIBOR + 0.750% (Cap N/A, Floor0.750%)

 0.750(c)  03/15/32   EUR    1,750   2,096,028 

Series 2019-01A, Class A2RB, 144A

 2.100  03/15/32   EUR    6,500   7,817,157 

Elevation CLO Ltd. (Cayman Islands),

    

Series 2017-07A, Class A, 144A, 3 Month LIBOR + 1.220% (Cap N/A, Floor0.000%)

 1.404(c)  07/15/30   4,000   4,000,205 

Ellington CLO Ltd. (Cayman Islands),

    

Series 2017-02A, Class A, 144A, 3 Month LIBOR + 1.700% (Cap N/A, Floor1.700%)

 1.894(c)  02/15/29   18,783   18,758,363 

KKR CLO Ltd. (Cayman Islands),

    

Series 11, Class AR, 144A, 3 Month LIBOR + 1.180% (Cap N/A, Floor 0.000%)

 1.364(c)  01/15/31   8,000   8,001,881 

Series 32A, Class A1, 144A, 3 Month LIBOR + 1.320% (Cap N/A, Floor 1.320%)

 1.504(c)  01/15/32   5,000   5,010,842 

MidOcean Credit CLO (Cayman Islands),

    

Series 2014-03A, Class A1R, 144A, 3 Month LIBOR + 1.120% (Cap N/A, Floor1.120%)

 1.306(c)  04/21/31   7,411   7,411,400 

Series 2014-03A, Class BR, 144A, 3 Month LIBOR + 1.800% (Cap N/A, Floor1.800%)

 1.986(c)  04/21/31   18,000   18,014,107 

Mountain View CLO Ltd. (Cayman Islands),

    

Series 2019-01A, Class B, 144A, 3 Month LIBOR + 1.849% (Cap N/A, Floor2.000%)

 2.027(c)  04/15/29   3,750   3,753,892 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  9 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

ASSET-BACKED SECURITIES (Continued)

    

Collateralized Loan Obligations (cont’d.)

                

OZLM Ltd. (Cayman Islands),

    

Series 2014-06A, Class A2AS, 144A, 3 Month LIBOR + 1.750% (Cap N/A, Floor0.000%)

  1.940%(c)   04/17/31   4,000  $3,969,535 

Palmer Square CLO Ltd. (Cayman Islands),

    

Series 2014-01A, Class A1R2, 144A, 3 Month LIBOR + 1.130% (Cap N/A, Floor1.130%)

  1.320(c)   01/17/31   5,000           4,996,900 

Penta CLO DAC (Ireland),

    

Series 2018-05A, Class B1R, 144A, 3 Month EURIBOR + 1.550% (Cap N/A, Floor1.550%)

  1.550(c)   04/20/35   EUR    10,000   12,042,914 

Romark CLO Ltd. (Cayman Islands),

    

Series 2018-02A, Class A1, 144A, 3 Month LIBOR + 1.175% (Cap N/A, Floor1.175%)

  1.351(c)   07/25/31   5,000   5,000,014 

Romark WM-R Ltd. (Cayman Islands),

    

Series 2018-01A, Class A1, 144A, 3 Month LIBOR + 1.030% (Cap N/A, Floor0.000%)

  1.218(c)   04/20/31   1,484   1,482,949 

Strata CLO Ltd. (Cayman Islands),

    

Series 2018-01A, Class A, 144A, 3 Month LIBOR + 1.590% (Cap N/A, Floor1.590%)

  1.774(c)   01/15/31   19,000   18,983,540 

Trinitas CLO Ltd. (Cayman Islands),

    

Series 2017-07A, Class A, 144A, 3 Month LIBOR + 1.210% (Cap N/A, Floor0.000%)

  1.386(c)   01/25/31   4,500   4,500,673 

Venture CLO Ltd. (Cayman Islands),

    

Series 2015-21A, Class AR, 144A, 3 Month LIBOR + 0.880% (Cap N/A, Floor0.000%)

  1.064(c)   07/15/27   3,472   3,471,245 

Voya CLO Ltd. (Cayman Islands),

    

Series 2013-01A, Class A1AR, 144A, 3 Month LIBOR + 1.210% (Cap N/A, Floor0.000%)

  1.394(c)   10/15/30   2,739   2,738,697 

Wellfleet CLO Ltd. (Cayman Islands),

    

Series 2017-03A, Class A1, 144A, 3 Month LIBOR + 1.150% (Cap N/A, Floor1.150%)

  1.340(c)   01/17/31   10,500   10,504,069 

York CLO Ltd. (Cayman Islands),

    

Series 2015-01A, Class AR, 144A, 3 Month LIBOR + 1.150% (Cap N/A, Floor0.000%)

  1.334(c)   01/22/31   3,000   3,003,628 

Zais CLO Ltd. (Cayman Islands),

    

Series 2015-03A, Class A2R, 144A, 3 Month LIBOR + 2.190% (Cap N/A, Floor0.000%)

  2.374(c)   07/15/31   11,300   11,309,249 

Series 2017-02A, Class A, 144A, 3 Month LIBOR + 1.290% (Cap N/A, Floor0.000%)

  1.474(c)   04/15/30   4,642   4,643,720 
    

 

 

 
     186,131,915 

 

See Notes to Financial Statements.

 

10 


 

 

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

ASSET-BACKED SECURITIES (Continued)

    

Consumer Loans    2.2%

              

OneMain Financial Issuance Trust,

    

Series 2017-01A, Class A2, 144A, 1 Month LIBOR + 0.800% (Cap N/A, Floor0.000%)

 0.912%(c)  09/14/32   222  $222,030 

Series 2017-01A, Class C, 144A

 3.350  09/14/32   700   701,559 

Oportun Funding X LLC,

    

Series 2018-C, Class A, 144A

 4.100  10/08/24   3,200           3,245,845 

Series 2018-C, Class B, 144A

 4.590  10/08/24   1,300   1,312,032 

Series 2018-C, Class C, 144A

 5.520  10/08/24   2,000   2,014,948 

Oportun Funding XII LLC,

    

Series 2018-D, Class A, 144A

 4.150  12/09/24   2,300   2,321,824 

Series 2018-D, Class B, 144A

 4.830  12/09/24   1,200   1,210,883 

Oportun Funding XIII LLC,

    

Series 2019-A, Class B, 144A

 3.870  08/08/25   4,860   4,979,643 

PNMAC GMSR Issuer Trust,

    

Series 2018-GT01, Class A, 144A, 1 Month LIBOR + 2.850% (Cap N/A, Floor 2.850%)

 2.956(c)  02/25/23   1,650   1,648,111 

Series 2018-GT02, Class A, 144A, 1 Month LIBOR + 2.650% (Cap N/A, Floor 0.000%)

 2.756(c)  08/25/25   3,400   3,383,653 
    

 

 

 
     21,040,528 

Home Equity Loans    1.5%

              

Accredited Mortgage Loan Trust,

    

Series 2004-03, Class 2A2, 1 Month LIBOR + 1.200% (Cap 13.000%, Floor1.200%)

 1.306(c)  10/25/34   1,494   1,494,781 

Asset-Backed Securities Corp. Home Equity Loan Trust,

    

Series 2003-HE06, Class A2, 1 Month LIBOR + 0.680% (Cap N/A, Floor 0.680%)

 0.786(c)  11/25/33   1,758   1,723,382 

Series 2003-HE06, Class A3B, 1 Month LIBOR + 0.960% (Cap N/A, Floor 0.960%)

 1.066(c)  11/25/33   3,546   3,404,644 

Bear Stearns Asset-Backed Securities I Trust,

    

Series 2004-HE11, Class M2, 1 Month LIBOR + 1.575% (Cap N/A, Floor 1.575%)

 1.681(c)  12/25/34   762   764,525 

Bear Stearns Asset-Backed Securities Trust,

    

Series 2002-02, Class A1, 1 Month LIBOR + 0.660% (Cap 11.000%, Floor0.660%)

 0.766(c)  10/25/32   562   558,971 

Series 2003-03, Class A2, 1 Month LIBOR + 1.180% (Cap 11.000%, Floor1.180%)

 1.286(c)  06/25/43   88   87,666 

Series 2003-HE01, Class M1, 1 Month LIBOR + 1.095% (Cap N/A, Floor 1.095%)

 1.201(c)  01/25/34   2,418   2,419,410 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  11 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

ASSET-BACKED SECURITIES (Continued)

    

Home Equity Loans (cont’d.)

              

Home Equity Asset Trust,

    

Series 2004-07, Class A2, 1 Month LIBOR + 0.840% (Cap N/A, Floor0.840%)

 0.946%(c)  01/25/35   1,050  $        1,028,925 

MASTR Asset-Backed Securities Trust,

    

Series 2003-WMC02, Class M2, 1 Month LIBOR + 2.475% (Cap N/A, Floor 2.475%)

 2.581(c)  08/25/33   831   838,309 

Morgan Stanley ABS Capital I, Inc. Trust,

    

Series 2003-HE03, Class M1, 1 Month LIBOR + 1.020% (Cap N/A, Floor 1.020%)

 1.126(c)  10/25/33   1,489   1,487,413 

Series 2003-NC08, Class M1, 1 Month LIBOR + 1.050% (Cap N/A, Floor 1.050%)

 1.156(c)  09/25/33   375   375,564 

Series 2003-NC10, Class M1, 1 Month LIBOR + 1.020% (Cap N/A, Floor 1.020%)

 1.126(c)  10/25/33   401   400,706 
    

 

 

 
     14,584,296 

Other    0.3%

              

PNMAC FMSR Issuer Trust,

    

Series 2018-FT01, Class A, 144A, 1 Month LIBOR + 2.350% (Cap N/A, Floor 0.000%)

 2.456(c)  04/25/23   3,200   3,180,426 

Residential Mortgage-Backed Securities    2.5%

              

Chase Funding Trust,

    

Series 2002-03, Class 2A1, 1 Month LIBOR + 0.640% (Cap N/A, Floor0.640%)

 0.746(c)  08/25/32   245   235,804 

Series 2003-04, Class 1A5

 5.069  05/25/33   461   473,770 

Citigroup Mortgage Loan Trust, Inc.,

    

Series 2005-OPT01, Class M1, 1 Month LIBOR + 0.630% (Cap N/A, Floor 0.630%)

 0.736(c)  02/25/35   224   219,048 

Series 2005-WF01, Class A5

 5.010(cc)  11/25/34   1   1,399 

Countrywide Asset-Backed Certificates,

    

Series 2003-BC04, Class M1, 1 Month LIBOR + 1.050% (Cap N/A, Floor 1.050%)

 1.156(c)  07/25/33   548   549,232 

Series 2004-01, Class M1, 1 Month LIBOR + 0.750% (Cap N/A, Floor0.750%)

 0.856(c)  03/25/34   35   34,869 

Series 2004-BC04, Class M1, 1 Month LIBOR + 1.050% (Cap N/A, Floor 1.050%)

 1.156(c)  11/25/34   294   294,899 

Credit-Based Asset Servicing & Securitization LLC,

    

Series 2003-CB03, Class AF1

 3.379  12/25/32   100   100,342 

Series 2003-CB05, Class M1, 1 Month LIBOR + 1.020% (Cap N/A, Floor 1.020%)

 1.126(c)  11/25/33   526   520,813 

 

See Notes to Financial Statements.

 

12 


 

 

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

ASSET-BACKED SECURITIES (Continued)

    

Residential Mortgage-Backed Securities (cont’d.)

              

Finance America Mortgage Loan Trust,

    

Series 2003-01, Class M1, 1 Month LIBOR + 1.050% (Cap N/A, Floor1.050%)

 1.156%(c)  09/25/33   1,319  $1,313,940 

First Franklin Mortgage Loan Trust,

    

Series 2004-FF05, Class A2, 1 Month LIBOR + 0.760% (Cap N/A, Floor 0.760%)

 0.866(c)  08/25/34   646   647,406 

Fremont Home Loan Trust,

    

Series 2004-04, Class M1, 1 Month LIBOR + 0.795% (Cap N/A, Floor0.795%)

 0.901(c)  03/25/35   2,069   2,040,764 

GSAMP Trust,

    

Series 2003-HE02, Class A1A, 144A, 1 Month LIBOR + 0.600% (Cap N/A, Floor 0.600%)

 0.706(c)  08/25/33   440   429,410 

Series 2004-AR01, Class A2B, 1 Month LIBOR + 1.200% (Cap N/A, Floor 1.200%)

 1.306(c)  06/25/34   243   246,585 

Series 2004-NC02, Class A1B, 1 Month LIBOR + 0.900% (Cap N/A, Floor 0.900%)

 1.006(c)  10/25/34   1,633           1,622,457 

Long Beach Mortgage Loan Trust,

    

Series 2004-02, Class A1, 1 Month LIBOR + 0.440% (Cap N/A, Floor0.440%)

 0.546(c)  06/25/34   745   726,308 

Morgan Stanley ABS Capital I, Inc. Trust,

    

Series 2004-NC05, Class M1, 1 Month LIBOR + 0.900% (Cap N/A, Floor 0.900%)

 1.006(c)  05/25/34   203   200,833 

Specialty Underwriting & Residential Finance Trust,

    

Series 2003-BC04, Class M1, 1 Month LIBOR + 0.900% (Cap N/A, Floor 0.900%)

 1.006(c)  11/25/34   632   628,940 

Series 2004-BC02, Class M1, 1 Month LIBOR + 0.825% (Cap N/A, Floor 0.825%)

 0.931(c)  05/25/35   1,261   1,253,132 

Structured Asset Investment Loan Trust,

    

Series 2004-BNC01, Class A2, 1 Month LIBOR + 1.000% (Cap N/A, Floor 1.000%)

 1.106(c)  09/25/34   2,282   2,277,841 

Series 2005-03, Class M2, 1 Month LIBOR + 0.660% (Cap N/A, Floor0.660%)

 0.766(c)  04/25/35   13   13,119 

TFS (Spain),

    

Series 2018-03, Class A1, 1 Month EURIBOR + 2.900%

 3.000(c)  04/16/23   EUR    10,262   11,103,201 
    

 

 

 
     24,934,112 

Student Loans    3.2%

              

Laurel Road Prime Student Loan Trust,

    

Series 2018-D, Class A, 144A

 0.000(cc)  11/25/43   5,073   5,257,863 

Series 2019-A, Class R, IO, 144A

 0.000  10/25/48   3,915   505,041 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  13 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

ASSET-BACKED SECURITIES (Continued)

    

Student Loans (cont’d.)

                

SoFi Alternative Trust,

    

Series 2019-B, Class PT, 144A

    0.000%(cc)   12/15/45   5,971  $6,178,420 

Series 2019-D, Class 1PT, 144A

    2.707(cc)   01/16/46   6,426   6,652,090 

Series 2019-F, Class PT1, 144A

    3.932(cc)   02/15/45   7,422   7,603,979 

SoFi RR Funding II Trust,

    

Series 2019-01, Class A, 144A, 1 Month LIBOR + 1.250% (Cap N/A, Floor1.250%)

    1.356(c)   11/29/24   5,621           5,578,678 
    

 

 

 
     31,776,071 
    

 

 

 

TOTAL ASSET-BACKED SECURITIES
(cost $282,308,082)

     283,504,729 
    

 

 

 

BANK LOANS    1.7%

    

Airlines    0.0%

                

United Airlines, Inc.,

    

Term Loan

  —  (p)   04/21/28   250   252,857 

Internet    0.3%

                

Speedster Bidco GmbH (Germany),

    

Second Lien Term Loan, 6 Month EURIBOR + 6.250% (Cap N/A, Floor 0.000%)

    6.250(c)   03/31/28   EUR    2,400   2,890,810 

Media    0.0%

                

Diamond Sports Group LLC,

    

Term Loan, 1 Month LIBOR + 3.250%

    3.370(c)   08/24/26   380   269,800 

Oil & Gas    0.2%

                

Ascent Resources Utica Holdings LLC,

    

Second Lien Term Loan, 3 Month LIBOR + 9.000%

  10.000(c)   11/01/25   1,858   2,051,929 

Retail    0.9%

                

EG America LLC (United Kingdom),

    

Term Loan

  —  (p)   04/20/26   621   614,912 

 

See Notes to Financial Statements.

 

14 


 

 

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

BANK LOANS (Continued)

    

Retail (cont’d.)

                

EG Finco Ltd. (United Kingdom),

    

Second Lien Term Loan, 1 Month EURIBOR + 7.750%

  8.750%(c)   04/20/26   EUR       421  $499,637 

Stonegate Pub Co. Ltd.,

    

First Lien Initial Term B Loan, 3 Month LIBOR + 8.500%

  8.550(c)   03/06/28   5,900           7,621,471 
    

 

 

 
     8,736,020 

Telecommunications    0.3%

                

West Corp.,

    

Initial Term B Loan, 1 - 3 Month LIBOR + 4.000%

  5.000(c)   10/10/24   2,701   2,634,740 
    

 

 

 

TOTAL BANK LOANS
(cost $15,685,826)

     16,836,156 
    

 

 

 

COMMERCIAL MORTGAGE-BACKED SECURITIES    7.9%

 

   

20 Times Square Trust,

    

Series 2018-20TS, Class G, 144A

  3.203(cc)   05/15/35   2,700   2,475,227 

Series 2018-20TS, Class H, 144A

  3.203(cc)   05/15/35   2,700   2,399,794 

Barclays Commercial Mortgage Securities Trust,

    

Series 2018-TALL, Class D, 144A, 1 Month LIBOR + 1.449% (Cap N/A, Floor 1.449%)

  1.563(c)   03/15/37   11,875   11,517,704 

BX Commercial Mortgage Trust,

    

Series 2019-XL, Class J, 144A, 1 Month LIBOR + 2.650% (Cap N/A, Floor2.650%)

  2.765(c)   10/15/36   6,254   6,254,391 

Series 2020-BXLP, Class G, 144A, 1 Month LIBOR + 2.500% (Cap N/A, Floor 2.500%)

  2.615(c)   12/15/36   3,992   3,989,512 

Commercial Mortgage Trust,

    

Series 2012-CR01, Class XA, IO

  2.039(cc)   05/15/45   9,414   104,424 

Series 2015-LC19, Class XB, IO, 144A

  0.339(cc)   02/10/48   123,049   1,146,263 

DBWF Mortgage Trust,

    

Series 2016-85T, Class E, 144A

  3.935(cc)   12/10/36   15,500   15,093,406 

FHLMC Multifamily Structured Pass-Through Certificates,

    

Series K018, Class X1, IO

  1.367(cc)   01/25/22   12,091   52,720 

Series K020, Class X1, IO

  1.473(cc)   05/25/22   18,056   193,816 

Series K021, Class X1, IO

  1.530(cc)   06/25/22   3,825   38,658 

Series K025, Class X1, IO

  0.917(cc)   10/25/22   83,672   734,147 

Series K055, Class X1, IO

  1.494(cc)   03/25/26   22,555   1,304,438 

Series KC02, Class X1, IO

  0.504(cc)   03/25/24   141,563   1,376,742 

GS Mortgage Securities Corp.,

    

Series 2013-GC10, Class XB, IO, 144A

  0.634(cc)   02/10/46   103,126   933,228 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  15 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued)

            

GS Mortgage Securities Trust,

    

Series 2014-GC20, Class XB, IO

 0.594%(cc)  04/10/47   28,307  $352,215 

Independence Plaza Trust,

    

Series 2018-INDP, Class E, 144A

 4.996  07/10/35   5,200           5,116,783 

JPMBB Commercial Mortgage Securities Trust,

    

Series 2014-C21, Class XB, IO

 0.469(cc)  08/15/47   45,056   521,451 

Series 2015-C27, Class XB, IO

 0.546(cc)  02/15/48   52,766   787,401 

JPMorgan Chase Commercial Mortgage Securities Corp.,

    

Series 2018-AON, Class E, 144A

 4.767(cc)  07/05/31   7,950   8,244,915 

JPMorgan Chase Commercial Mortgage Securities Trust,

    

Series 2013-LC11, Class XB, IO

 0.650(cc)  04/15/46   34,956   349,370 

Morgan Stanley Bank of America Merrill Lynch Trust,

    

Series 2012-C05, Class XB, IO, 144A

 0.376(cc)  08/15/45   65,968   201,301 

Series 2013-C08, Class XB, IO, 144A

 0.497(cc)  12/15/48   68,276   496,790 

Salus European Loan Conduit DAC (United Kingdom),

    

Series 33A, Class A, 144A, 3 Month GBP LIBOR + 1.500% (Cap 6.500%, Floor 1.500%)

 1.589(c)  01/23/29   GBP        9,500   13,097,683 

UBS-Barclays Commercial Mortgage Trust,

    

Series 2013-C06, Class XB, IO, 144A

 0.469(cc)  04/10/46   140,883   1,005,412 
    

 

 

 

TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(cost $75,953,458)

    77,787,791 
    

 

 

 

CONVERTIBLE BOND    0.0%

    

Telecommunications

              

Digicel Group Holdings Ltd. (Jamaica),

    

Sub. Notes, 144A, Cash coupon 7.000% or PIK N/A

    

(cost $2,883)

 7.000  05/17/21(oo)   41   30,012 
    

 

 

 

CORPORATE BONDS    31.4%

    

Advertising    0.1%

              

National CineMedia LLC,

    

Sr. Unsec’d. Notes

 5.750  08/15/26   1,175   1,034,149 

Airlines    0.5%

              

American Airlines 2013-1 Class A Pass-Through Trust,

    

Pass-Through Certificates

 4.000  01/15/27   1,890   1,752,818 

 

See Notes to Financial Statements.

 

16 


 

 

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

CORPORATE BONDS (Continued)

    

Airlines (cont’d.)

              

Continental Airlines 2007-1 Class A Pass-ThroughTrust,

    

Pass-Through Certificates

 5.983%  10/19/23   438  $450,267 

Continental Airlines 2012-2 Class A Pass-ThroughTrust,

    

Pass-Through Certificates

 4.000  04/29/26   78   82,565 

Delta Air Lines 2007-1 Class A Pass-Through Trust,

    

Pass-Through Certificates

 6.821  02/10/24   485   509,974 

United Airlines 2013-1 Class A Pass-Through Trust,

    

Pass-Through Certificates

 4.300  02/15/27   1,661           1,728,390 

United Airlines, Inc.,

    

Sr. Sec’d. Notes, 144A

 4.375  04/15/26   645   669,206 

Sr. Sec’d. Notes, 144A

 4.625  04/15/29   170   176,565 
    

 

 

 
     5,369,785 

Auto Manufacturers    0.2%

              

General Motors Co.,

    

Sr. Unsec’d. Notes

 6.250  10/02/43   1,555   2,046,610 

Auto Parts & Equipment    0.8%

              

Adient Global Holdings Ltd.,

    

Gtd. Notes, 144A

 4.875  08/15/26   1,900   1,947,656 

American Axle & Manufacturing, Inc.,

    

Gtd. Notes(a)

 6.250  03/15/26   2,200   2,260,951 

Cooper-Standard Automotive, Inc.,

    

Gtd. Notes, 144A

 5.625  11/15/26   1,800   1,567,335 

Nemak SAB de CV (Mexico),

    

Sr. Unsec’d. Notes

 4.750  01/23/25   1,800   1,859,076 
    

 

 

 
     7,635,018 

Banks    6.9%

              

Banco de Credito del Peru (Peru),

    

Sub. Notes, 144A

 3.250(ff)  09/30/31   1,055   1,037,575 

Bank of America Corp.,

    

Jr. Sub. Notes, Series AA

 6.100(ff)  03/17/25(oo)   4,220   4,759,279 

Jr. Sub. Notes, Series JJ

 5.125(ff)  06/20/24(oo)   6,850   7,374,471 

Jr. Sub. Notes, Series MM

 4.300(ff)  01/28/25(oo)   5,545   5,697,986 

Sr. Unsec’d. Notes, MTN

 4.271(ff)  07/23/29   1,450   1,646,075 

Citigroup, Inc.,

    

Jr. Sub. Notes, Series Q, 3 Month LIBOR +

    

4.095%

 4.289(c)  05/17/21(oo)   4,685   4,686,934 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  17 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

CORPORATE BONDS (Continued)

    

Banks (cont’d.)

              

Citigroup, Inc., (cont’d.)

    

Sr. Unsec’d. Notes

 2.976%(ff)  11/05/30   870  $907,033 

Sr. Unsec’d. Notes

 3.200  10/21/26   1,145           1,241,407 

Sr. Unsec’d. Notes

 3.887(ff)  01/10/28   980   1,091,135 

Sr. Unsec’d. Notes

 8.125  07/15/39   620   1,036,005 

Sub. Notes

 4.400  06/10/25   405   452,830 

Credit Suisse Group AG (Switzerland),

    

Sr. Unsec’d. Notes

 3.750  03/26/25   1,200   1,300,979 

Danske Bank A/S (Denmark),

    

Sr. Unsec’d. Notes, 144A

 3.001(ff)  09/20/22   5,460   5,505,035 

Development Bank of the Republic of Belarus JSC (Belarus),

    

Sr. Unsec’d. Notes, 144A

 6.750  05/02/24   1,505   1,471,520 

Goldman Sachs Group, Inc. (The),

    

Sr. Unsec’d. Notes

 3.814(ff)  04/23/29   35   38,678 

Sr. Unsec’d. Notes

 3.850  01/26/27   3,940   4,360,647 

Sr. Unsec’d. Notes

 4.223(ff)  05/01/29   135   152,809 

Grupo Aval Ltd. (Colombia),

    

Gtd. Notes, 144A

 4.375  02/04/30   2,170   2,176,788 

JPMorgan Chase & Co.,

    

Jr. Sub. Notes, Series FF

 5.000(ff)  08/01/24(oo)   1,500   1,574,651 

Jr. Sub. Notes, Series HH

 4.600(ff)  02/01/25(oo)   15,325   15,791,280 

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

 3.656(c)  07/30/21(oo)   64   64,274 

Mizrahi Tefahot Bank Ltd. (Israel),

    

Sub. Notes, 144A

 3.077(ff)  04/07/31   1,555   1,581,436 

Morgan Stanley,

    

Sr. Unsec’d. Notes

 4.375  01/22/47   1,260   1,516,325 

Sr. Unsec’d. Notes, GMTN

 3.772(ff)  01/24/29   1,750   1,933,412 

Sr. Unsec’d. Notes, GMTN

 3.875  01/27/26   605   674,661 

People’s United Bank NA,

    

Sub. Notes

 4.000  07/15/24   325   348,648 
    

 

 

 
     68,421,873 

Beverages    0.0%

              

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

    

Gtd. Notes

 8.200  01/15/39   250   400,489 

 

See Notes to Financial Statements.

 

18 


 

 

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

CORPORATE BONDS (Continued)

    

Building Materials    0.3%

              

Cemex SAB de CV (Mexico),

    

Sr. Sec’d. Notes, 144A

   5.450%  11/19/29   1,180  $1,294,561 

U.S. Concrete, Inc.,

    

Gtd. Notes

   6.375  06/01/24   1,573           1,604,230 
    

 

 

 
     2,898,791 

Chemicals    2.3%

              

Ashland LLC,

    

Gtd. Notes

   6.875  05/15/43   4,100   5,156,285 

Braskem Netherlands Finance BV (Brazil),

    

Gtd. Notes, 144A

   4.500  01/10/28   1,630   1,696,168 

Gtd. Notes, 144A

   5.875  01/31/50   400   417,305 

Diamond BC BV,

    

Gtd. Notes

   5.625  08/15/25   EUR    6,085   7,480,796 

LYB International Finance BV,

    

Gtd. Notes

   5.250  07/15/43   175   217,667 

Nutrien Ltd. (Canada),

    

Sr. Unsec’d. Notes

   4.900  06/01/43   1,350   1,639,717 

Sr. Unsec’d. Notes

   6.125  01/15/41   170   233,785 

Sasol Financing International Ltd. (South Africa),

    

Gtd. Notes(a)

   4.500  11/14/22   3,415   3,496,899 

Sasol Financing USA LLC (South Africa),

    

Gtd. Notes

   4.375  09/18/26   350   356,958 

TPC Group, Inc.,

    

Sr. Sec’d. Notes, 144A

 10.500  08/01/24   1,700   1,588,793 

Sr. Sec’d. Notes, 144A

 10.875  08/01/24   419   444,888 
    

 

 

 
     22,729,261 

Commercial Services    0.4%

              

ERAC USA Finance LLC,

    

Gtd. Notes, 144A

   6.700  06/01/34   110   151,689 

Gtd. Notes, 144A(h)

   7.000  10/15/37   1,725   2,534,496 

United Rentals North America, Inc.,

    

Gtd. Notes

   5.250  01/15/30   1,200   1,311,977 
    

 

 

 
     3,998,162 

Computers    0.3%

              

Everi Payments, Inc.,

    

Gtd. Notes, 144A

   7.500  12/15/25   2,769   2,876,471 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  19 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

CORPORATE BONDS (Continued)

    

Diversified Financial Services    0.2%

              

Jefferies Group LLC,

    

Sr. Unsec’d. Notes

 6.500%  01/20/43   175  $236,553 

Power Finance Corp. Ltd. (India),

    

Sr. Unsec’d. Notes, EMTN

 5.250  08/10/28   1,100   1,220,777 
    

 

 

 
             1,457,330 

Electric    1.3%

              

AES Panama Generation Holdings SRL (Panama),

    

Sr. Sec’d. Notes, 144A

 4.375  05/31/30   1,065   1,103,806 

Calpine Corp.,

    

Sr. Unsec’d. Notes, 144A

 4.625  02/01/29   1,500   1,479,674 

Sr. Unsec’d. Notes, 144A

 5.000  02/01/31   2,275   2,239,642 

Clean Renewable Power Mauritius Pte Ltd. (India),

    

Sr. Sec’d. Notes, 144A

 4.250  03/25/27   475   478,656 

Duke Energy Carolinas LLC,

    

First Ref. Mortgage

 4.000  09/30/42   50   57,126 

Eskom Holdings SOC Ltd. (South Africa),

    

Sr. Unsec’d. Notes, 144A

 7.125  02/11/25   2,145   2,250,644 

Sr. Unsec’d. Notes, 144A, MTN

 6.750  08/06/23   200   209,004 

Evergy Kansas Central, Inc.,

    

First Mortgage(h)

 4.100  04/01/43   325   370,812 

FEL Energy VI Sarl (Mexico),

    

Sr. Sec’d. Notes, 144A

 5.750  12/01/40   1,875   1,949,582 

Instituto Costarricense de Electricidad (Costa Rica),

    

Sr. Unsec’d. Notes, 144A

 6.950  11/10/21   500   506,364 

Mong Duong Finance Holdings BV (Vietnam),

    

Sr. Sec’d. Notes

 5.125  05/07/29   1,995   2,010,392 
    

 

 

 
     12,655,702 

Electronics    0.0%

              

Jabil, Inc.,

    

Sr. Unsec’d. Notes

 4.700  09/15/22   80   84,378 

Energy-Alternate Sources    0.2%

              

Greenko Dutch BV (India),

    

Gtd. Notes, 144A

 3.850  03/29/26   1,830   1,858,098 

Engineering & Construction    0.2%

              

Mexico City Airport Trust (Mexico),

    

Sr. Sec’d. Notes, 144A(a)

 3.875  04/30/28   2,000   2,081,507 

 

See Notes to Financial Statements.

 

20 


 

 

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

CORPORATE BONDS (Continued)

    

Entertainment    0.7%

              

AMC Entertainment Holdings, Inc.,

    

Sec’d. Notes, 144A, Cash coupon 10.000% / PIK 12.000% or Cash coupon 5.000% and PIK 6.000%

 12.000%  06/15/26   740  $634,054 

Caesars Resort Collection LLC/CRC Finco, Inc.,

    

Gtd. Notes, 144A(a)

   5.250  10/15/25   1,725   1,739,939 

Codere Finance 2 Luxembourg SA (Spain),

    

Sr. Sec’d. Notes, Cash coupon 4.500% and PIK 6.250%(a)

 10.750  11/01/23   EUR    2,320   1,937,981 

Sr. Sec’d. Notes, 144A

 10.750  09/30/23   EUR    1,216   1,553,405 

Sr. Sec’d. Notes, 144A

 10.750  09/30/23   EUR       246   314,238 

Scientific Games International, Inc.,

    

Gtd. Notes, 144A

   8.250  03/15/26   450   486,206 
    

 

 

 
             6,665,823 

Foods    0.4%

              

Kraft Heinz Foods Co.,

    

Gtd. Notes

   4.625  10/01/39   440   490,284 

Gtd. Notes

   4.875  10/01/49   2,980   3,419,547 
    

 

 

 
     3,909,831 

Forest Products & Paper    0.2%

              

Georgia-Pacific LLC,

    

Sr. Unsec’d. Notes(h)

   7.375  12/01/25   400   508,364 

Suzano Austria GmbH (Brazil),

    

Gtd. Notes

   6.000  01/15/29   1,000   1,171,670 
    

 

 

 
     1,680,034 

Gas    0.6%

              

AmeriGas Partners LP/AmeriGas Finance Corp.,

    

Sr. Unsec’d. Notes

   5.500  05/20/25   2,900   3,219,533 

CenterPoint Energy Resources Corp.,

    

Sr. Unsec’d. Notes

   5.850  01/15/41   700   907,742 

Eastern Energy Gas Holdings LLC,

    

Sr. Unsec’d. Notes

   4.600  12/15/44   125   144,069 

Southern Co. Gas Capital Corp.,

    

Gtd. Notes

   4.400  06/01/43   1,375   1,564,943 
    

 

 

 
     5,836,287 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  21 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

CORPORATE BONDS (Continued)

    

Healthcare-Products    0.4%

              

Medtronic Global Holdings SCA,

    

Gtd. Notes

 1.625%  03/07/31   EUR       500  $660,468 

Gtd. Notes

 2.250  03/07/39   EUR       705   981,785 

Thermo Fisher Scientific, Inc.,

    

Sr. Unsec’d. Notes, EMTN(a)

 1.500  10/01/39   EUR    1,250   1,513,551 

Sr. Unsec’d. Notes, EMTN

 1.875  10/01/49   EUR       825   1,024,207 
    

 

 

 
             4,180,011 

Healthcare-Services    0.3%

              

Aetna, Inc.,

    

Sr. Unsec’d. Notes

 2.750  11/15/22   450   463,077 

Sr. Unsec’d. Notes

 4.500  05/15/42   530   616,910 

Anthem, Inc.,

    

Sr. Unsec’d. Notes

 4.101  03/01/28   700   790,426 

Sr. Unsec’d. Notes

 4.650  01/15/43   120   144,125 

Sr. Unsec’d. Notes

 5.100  01/15/44   515   652,778 

Memorial Sloan-Kettering Cancer Center,

    

Sr. Unsec’d. Notes

 4.125  07/01/52   75   90,757 

Tenet Healthcare Corp.,

    

Sec’d. Notes, 144A

 6.250  02/01/27   25   26,213 
    

 

 

 
     2,784,286 

Home Builders    0.7%

              

Beazer Homes USA, Inc.,

    

Gtd. Notes

 7.250  10/15/29   3,625   4,044,080 

Taylor Morrison Communities, Inc.,

    

Gtd. Notes, 144A

 5.875  06/15/27   2,560   2,905,068 
    

 

 

 
     6,949,148 

Insurance    1.2%

              

Hartford Financial Services Group, Inc. (The),

    

Sr. Unsec’d. Notes

 5.950  10/15/36   215   286,406 

Sr. Unsec’d. Notes

 6.100  10/01/41   280   389,917 

Liberty Mutual Group, Inc.,

    

Gtd. Notes, 144A

 4.250  06/15/23   436   469,453 

Gtd. Notes, 144A

 4.569  02/01/29   1,614   1,872,702 

Lincoln National Corp.,

    

Sr. Unsec’d. Notes

 7.000  06/15/40   695   1,026,504 

Markel Corp.,

    

Sr. Unsec’d. Notes

 5.000  03/30/43   3,125   3,685,151 

 

See Notes to Financial Statements.

 

22 


 

 

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

CORPORATE BONDS (Continued)

    

Insurance (cont’d.)

              

Principal Financial Group, Inc.,

    

Gtd. Notes

 4.350%  05/15/43   975  $1,124,291 

Teachers Insurance & Annuity Association of America,

    

Sub. Notes, 144A(h)

 4.900  09/15/44   1,950           2,431,647 

Sub. Notes, 144A

 6.850  12/16/39   54   78,813 
    

 

 

 
     11,364,884 

Iron/Steel    0.0%

              

Metinvest BV (Ukraine),

    

Sr. Unsec’d. Notes, 144A

 7.650  10/01/27   320   342,685 

Lodging    0.4%

              

Gohl Capital Ltd. (Malaysia),

    

Gtd. Notes

 4.250  01/24/27   1,510   1,595,729 

Marriott International, Inc.,

    

Sr. Unsec’d. Notes

 3.250  09/15/22   75   76,862 

MGM China Holdings Ltd. (Macau),

    

Sr. Unsec’d. Notes, 144A

 4.750  02/01/27   700   723,660 

Sands China Ltd. (Macau),

    

Sr. Unsec’d. Notes

 5.125  08/08/25   1,000   1,116,307 
    

 

 

 
     3,512,558 

Machinery-Diversified    0.0%

              

Xylem, Inc.,

    

Sr. Unsec’d. Notes

 4.875  10/01/21   50   50,885 

Media    0.9%

              

CCO Holdings LLC/CCO Holdings Capital Corp.,

    

Sr. Unsec’d. Notes, 144A

 4.750  03/01/30   1,300   1,356,463 

Sr. Unsec’d. Notes, 144A

 5.875  05/01/27   1,407   1,453,704 

Charter Communications Operating LLC/Charter Communications Operating Capital,

    

Sr. Sec’d. Notes

 6.384  10/23/35   2,640   3,439,117 

Sr. Sec’d. Notes

 6.484  10/23/45   585   774,073 

Diamond Sports Group LLC/Diamond Sports Finance Co.,

    

Gtd. Notes, 144A

 6.625  08/15/27   2,785   1,503,974 
    

 

 

 
     8,527,331 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  23 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

CORPORATE BONDS (Continued)

    

Mining    0.2%

              

Indonesia Asahan Aluminium Persero PT (Indonesia),

    

Sr. Unsec’d. Notes

 6.530%  11/15/28   1,650  $2,000,594 

Miscellaneous Manufacturing    1.1%

              

Bombardier, Inc. (Canada),

    

Sr. Unsec’d. Notes, 144A

 7.500  12/01/24   5,325           5,404,429 

Sr. Unsec’d. Notes, 144A

 7.875  04/15/27   5,675   5,662,380 
    

 

 

 
     11,066,809 

Oil & Gas    3.4%

              

Antero Resources Corp.,

    

Gtd. Notes

 5.625  06/01/23   3,500   3,511,550 

Ascent Resources Utica Holdings LLC/ARU Finance Corp.,

    

Gtd. Notes, 144A

 7.000  11/01/26   1,225   1,239,860 

Gtd. Notes, 144A

 9.000  11/01/27   974   1,266,208 

Cenovus Energy, Inc. (Canada),

    

Sr. Unsec’d. Notes

 5.400  06/15/47   1,835   2,092,984 

Citgo Holding, Inc.,

    

Sr. Sec’d. Notes, 144A

 9.250  08/01/24   500   514,990 

CNX Resources Corp.,

    

Gtd. Notes, 144A

 7.250  03/14/27   2,125   2,294,748 

ConocoPhillips,

    

Gtd. Notes, 144A(h)

 4.875  10/01/47   275   343,307 

Endeavor Energy Resources LP/EER Finance, Inc.,

    

Sr. Unsec’d. Notes, 144A

 5.500  01/30/26   2,700   2,795,479 

Energean Israel Finance Ltd. (Israel),

    

Sr. Sec’d. Notes, 144A

 4.875  03/30/26   450   464,835 

Sr. Sec’d. Notes, 144A

 5.375  03/30/28   720   744,036 

Gazprom PJSC Via Gaz Capital SA (Russia),

    

Sr. Unsec’d. Notes, 144A

 4.950  07/19/22   730   762,662 

Hilcorp Energy I LP/Hilcorp Finance Co.,

    

Sr. Unsec’d. Notes, 144A

 6.250  11/01/28   700   727,845 

HPCL-Mittal Energy Ltd. (India),

    

Sr. Unsec’d. Notes(a)

 5.250  04/28/27   978   1,006,177 

Leviathan Bond Ltd. (Israel),

    

Sr. Sec’d. Notes, 144A(a)

 6.750  06/30/30   2,020   2,261,625 

Petrobras Global Finance BV (Brazil),

    

Gtd. Notes

 5.375  10/01/29   GBP       800   1,196,310 

Gtd. Notes

 6.625  01/16/34   GBP       725   1,130,627 

 

See Notes to Financial Statements.

 

24 


 

 

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

CORPORATE BONDS (Continued)

    

Oil & Gas (cont’d.)

              

Petroleos Mexicanos (Mexico),

    

Gtd. Notes

 4.750%  02/26/29   EUR       295  $351,994 

Gtd. Notes

 6.350  02/12/48   2,238   1,908,835 

Gtd. Notes

 6.500  03/13/27   260   274,752 

Gtd. Notes

 6.840  01/23/30   405   415,490 

Gtd. Notes, EMTN

 4.875  02/21/28   EUR       250   303,932 

Range Resources Corp.,

    

Gtd. Notes

 9.250  02/01/26   2,850   3,127,985 

Transocean, Inc.,

    

Gtd. Notes, 144A

 7.250  11/01/25   5,100           3,876,138 

Gtd. Notes, 144A

 8.000  02/01/27   1,500   1,053,493 
    

 

 

 
     33,665,862 

Oil & Gas Services    0.0%

              

Cameron International Corp.,

    

Gtd. Notes

 5.950  06/01/41   100   123,260 

Packaging & Containers    0.5%

              

ARD Finance SA (Luxembourg),

    

Sr. Sec’d. Notes, 144A, Cash coupon 5.000% or PIK 5.750%

 5.000  06/30/27   EUR    3,000   3,688,848 

WestRock RKT LLC,

    

Gtd. Notes

 4.900  03/01/22   1,190   1,232,788 
    

 

 

 
     4,921,636 

Pharmaceuticals    2.2%

              

AbbVie, Inc.,

    

Sr. Unsec’d. Notes

 4.050  11/21/39   2,500   2,794,867 

Sr. Unsec’d. Notes

 4.550  03/15/35   4,155   4,913,851 

Bausch Health Cos., Inc.,

    

Gtd. Notes, 144A

 5.000  01/30/28   400   405,904 

Gtd. Notes, 144A

 6.250  02/15/29   1,200   1,269,320 

Bristol-Myers Squibb Co.,

    

Sr. Unsec’d. Notes(h)

 4.125  06/15/39   615   719,989 

Sr. Unsec’d. Notes(h)

 5.000  08/15/45   1,146   1,484,264 

Cigna Corp.,

    

Gtd. Notes(h)

 4.375  10/15/28   3,990   4,568,349 

CVS Health Corp.,

    

Sr. Unsec’d. Notes

 5.050  03/25/48   690   849,167 

Sr. Unsec’d. Notes

 5.125  07/20/45   1,315   1,637,744 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  25 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

CORPORATE BONDS (Continued)

    

Pharmaceuticals (cont’d.)

              

CVS Health Corp., (cont’d.)

    

Sr. Unsec’d. Notes

 5.300%  12/05/43   485  $614,466 

Utah Acquisition Sub, Inc.,

    

Gtd. Notes

 5.250  06/15/46   520   606,713 

Viatris, Inc.,

    

Gtd. Notes, 144A

 4.000  06/22/50   2,190           2,179,538 
    

 

 

 
     22,044,172 

Pipelines    1.7%

              

Energy Transfer LP,

    

Jr. Sub. Notes, Series G

 7.125(ff)  05/15/30(oo)   3,360   3,417,594 

Sr. Unsec’d. Notes

 5.150  03/15/45   55   58,276 

Sr. Unsec’d. Notes

 5.300  04/15/47   125   133,624 

Sr. Unsec’d. Notes

 5.400  10/01/47   60   65,153 

Sr. Unsec’d. Notes

 6.250  04/15/49   75   89,716 

Enterprise Products Operating LLC,

    

Gtd. Notes

 4.950  10/15/54   2,700   3,199,767 

Magellan Midstream Partners LP,

    

Sr. Unsec’d. Notes

 4.200  12/01/42   125   127,748 

Sr. Unsec’d. Notes(h)

 5.150  10/15/43   1,350   1,595,991 

MPLX LP,

    

Sr. Unsec’d. Notes

 5.200  03/01/47   145   170,414 

NGPL PipeCo LLC,

    

Sr. Unsec’d. Notes, 144A

 4.375  08/15/22   150   155,367 

Sr. Unsec’d. Notes, 144A(a)

 4.875  08/15/27   500   562,377 

ONEOK, Inc.,

    

Gtd. Notes

 4.950  07/13/47   1,060   1,165,297 

Rockies Express Pipeline LLC,

    

Sr. Unsec’d. Notes, 144A

 3.600  05/15/25   775   771,358 

Sr. Unsec’d. Notes, 144A

 6.875  04/15/40   1,850   1,993,092 

Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp.,

    

Gtd. Notes, 144A

 5.500  01/15/28   1,750   1,736,284 

Gtd. Notes, 144A

 7.500  10/01/25   125   136,411 

Western Midstream Operating LP,

    

Sr. Unsec’d. Notes

 5.300  03/01/48   910   936,690 
    

 

 

 
     16,315,159 

 

See Notes to Financial Statements.

 

26 


 

 

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

CORPORATE BONDS (Continued)

    

Real Estate    0.5%

              

Arabian Centres Sukuk Ltd. (Saudi Arabia),

    

Gtd. Notes, 144A

   5.375%  11/26/24   995  $1,027,588 

Greystar Real Estate Partners LLC,

    

Sr. Sec’d. Notes, 144A

   5.750  12/01/25   3,575           3,688,548 
    

 

 

 
     4,716,136 

Retail    0.9%

              

Brinker International, Inc.,

    

Gtd. Notes, 144A

   5.000  10/01/24   1,000   1,047,240 

eG Global Finance PLC (United Kingdom),

    

Sr. Sec’d. Notes

   6.250  10/30/25   EUR       250   306,198 

Sr. Sec’d. Notes, 144A

   4.375  02/07/25   EUR    4,700   5,481,058 

JSM Global Sarl (Brazil),

    

Gtd. Notes, 144A(a)

   4.750  10/20/30   1,800   1,822,347 

Macy’s Retail Holdings LLC,

    

Gtd. Notes

   4.300  02/15/43   705   552,072 
    

 

 

 
     9,208,915 

Savings & Loans    0.0%

              

People’s United Financial, Inc.,

    

Sr. Unsec’d. Notes

   3.650  12/06/22   325   338,651 

Telecommunications    1.3%

              

AT&T, Inc.,

    

Sr. Unsec’d. Notes, 144A

   2.550  12/01/33   1,542   1,469,266 

Sr. Unsec’d. Notes, 144A

   3.500  09/15/53   929   857,313 

Sr. Unsec’d. Notes, 144A

   3.650  09/15/59   318   293,663 

Digicel Group Holdings Ltd. (Jamaica),

    

Sr. Sec’d. Notes, Cash coupon 8.000% and PIK 2.000% or PIK 10.000%

 10.000  04/01/24   801   783,099 

Sr. Unsec’d. Notes, 144A, Cash coupon 5.000% and PIK 3.000% or PIK 8.000%

   8.000  04/01/25   248   207,410 

Digicel International Finance Ltd./Digicel International Holdings Ltd. (Jamaica),

    

Gtd. Notes, 144A

   8.000  12/31/26   454   441,895 

Gtd. Notes, 144A, Cash coupon 6.000% and PIK 7.000%

 13.000  12/31/25   603   610,016 

Sr. Sec’d. Notes, 144A

   8.750  05/25/24   1,138   1,187,091 

Digicel Ltd. (Jamaica),

    

Gtd. Notes, 144A

   6.750  03/01/23   2,050   1,934,595 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  27 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

CORPORATE BONDS (Continued)

    

Telecommunications (cont’d.)

                

Intelsat Jackson Holdings SA (Luxembourg),

    

Gtd. Notes

  5.500%   08/01/23(d)   2,000  $1,226,638 

Level 3 Financing, Inc.,

    

Sr. Sec’d. Notes, 144A

  3.400   03/01/27   465   495,359 

Lumen Technologies, Inc.,

    

Sr. Unsec’d. Notes, Series P

  7.600   09/15/39   825   947,552 

Millicom International Cellular SA (Colombia),

    

Sr. Unsec’d. Notes, 144A

  4.500   04/27/31   515   547,705 

Verizon Communications, Inc.,

    

Sr. Unsec’d. Notes

  3.400   03/22/41   1,575           1,612,221 
    

 

 

 
     12,613,823 

Textiles    0.0%

                

Mohawk Industries, Inc.,

    

Sr. Unsec’d. Notes

  3.850   02/01/23   104   109,076 

Water    0.1%

                

Aegea Finance Sarl (Brazil),

    

Gtd. Notes, 144A

  5.750   10/10/24   795   827,081 
    

 

 

 

TOTAL CORPORATE BONDS
(cost $293,556,080)

     309,302,561 
    

 

 

 

MUNICIPAL BONDS    2.1%

    

California    0.7%

                

Bay Area Toll Authority,

    

Revenue Bonds, BABs, Series F2

  6.263   04/01/49   550   867,729 

Los Angeles Department of Water,

    

Taxable, Revenue Bonds, BABs, Series C

  6.008   07/01/39   3,610   4,708,920 

University of California,

    

Taxable, Revenue Bonds, Series AP

  3.931   05/15/45   625   706,838 

Taxable, Revenue Bonds, Series J

  4.131   05/15/45   675   793,064 
    

 

 

 
     7,076,551 

Colorado    0.2%

                

Regional Transportation District Sales Tax Revenue,

    

Revenue Bonds, BABs, Series B

  5.844   11/01/50   1,190   1,831,374 

 

See Notes to Financial Statements.

 

28 


 

 

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

MUNICIPAL BONDS (Continued)

    

Illinois    0.1%

                

Chicago O’Hare International Airport,

    

Revenue Bonds, BABs, Series B

  6.395%   01/01/40   360  $528,113 

State of Illinois,

    

General Obligation Unlimited, Taxable

  5.100   06/01/33   865   982,354 
    

 

 

 
     1,510,467 

New Jersey    0.4%

                

New Jersey Turnpike Authority,

    

Taxable, Revenue Bonds, BABs, Series F

  7.414   01/01/40   2,000           3,216,320 

Rutgers The State University of New Jersey,

    

Taxable, Revenue Bonds, BABs, Series H

  5.665   05/01/40   200   268,706 
    

 

 

 
     3,485,026 

Ohio    0.0%

                

Ohio State University (The),

    

Taxable, Revenue Bonds, Series A

  4.800   06/01/2111   180   234,776 

Puerto Rico    0.7%

                

Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue,

    

Revenue Bonds, Restructured, Series A-1

  4.750   07/01/53   5,846   6,490,054 

Texas    0.0%

                

City of San Antonio TX Electric & Gas Systems Revenue,

    

Taxable, Revenue Bonds

  4.427   02/01/42   120   146,657 
    

 

 

 

TOTAL MUNICIPAL BONDS
(cost $18,153,538)

     20,774,905 
    

 

 

 

RESIDENTIAL MORTGAGE-BACKED SECURITIES    3.8%

 

   

Banc of America Funding Corp.,

    

Series 2015-R03, Class 1A1, 144A, 1 Month LIBOR + 0.190%

  0.296(c)   03/27/36   3,253   3,232,014 

Banc of America Funding Trust,

    

Series 2014-R02, Class 2A1, 144A, 1 Month LIBOR + 0.210% (Cap N/A, Floor0.210%)

  0.321(c)   05/26/37   265   263,853 

Series 2014-R05, Class 1A1, 144A, 6 Month LIBOR + 1.500% (Cap 11.000%, Floor1.500%)

  1.705(c)   09/26/45   898   909,111 

Bellemeade Re Ltd. (Bermuda),

    

Series 2018-01A, Class M1B, 144A, 1 Month LIBOR + 1.600% (Cap N/A, Floor0.000%)

  1.706(c)   04/25/28   802   802,133 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  29 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

RESIDENTIAL MORTGAGE-BACKED SECURITIES (Continued)

   

Bellemeade Re Ltd. (Bermuda), (cont’d.)

    

Series 2018-02A, Class M1C, 144A, 1 Month LIBOR + 1.600% (Cap N/A, Floor0.000%)

 1.706%(c)  08/25/28   260  $260,229 

Series 2018-03A, Class M1B, 144A, 1 Month LIBOR + 1.850% (Cap N/A, Floor1.850%)

 1.956(c)  10/25/28   1,795           1,800,151 

Series 2021-01A, Class M1C, 144A, 30 Day Average SOFR + 2.950% (Cap N/A,Floor 2.950%)

 2.960(c)  03/25/31   960   973,207 

BVRT Financing Trust,

    

Series 2019-01, Class F, 144A^

 2.261(cc)  09/15/21   8,976   8,944,382 

Chase Mortgage Finance Trust,

    

Series 2007-A01, Class 1A3

 2.646(cc)  02/25/37   59   60,294 

Connecticut Avenue Securities Trust,

    

Series 2020-R01, Class 1M2, 144A, 1 Month LIBOR + 2.050% (Cap N/A, Floor2.050%)

 2.156(c)  01/25/40   189   190,647 

Eagle Re Ltd. (Bermuda),

    

Series 2018-01, Class M1, 144A, 1 Month LIBOR + 1.700% (Cap N/A, Floor1.700%)

 1.806(c)  11/25/28   1,893   1,901,533 

FHLMC Structured Agency Credit Risk Debt Notes,

    

Series 2021-DNA02, Class B1, 144A, 30 Day Average SOFR + 3.400% (Cap N/A, Floor 0.000%)

 3.410(c)  08/25/33   3,260   3,281,969 

FHLMC Structured Agency Credit Risk Trust,

    

Series 2019-DNA01, Class M2, 144A, 1 Month LIBOR + 2.650% (Cap N/A, Floor 0.000%)

 2.756(c)  01/25/49   700   714,998 

GSMSC Resecuritization Trust,

    

Series 2015-03R, Class 1A2, 144A, 1 Month LIBOR + 0.140% (Cap N/A, Floor0.140%)

 0.246(c)  01/26/37   1,082   1,073,649 

Series 2015-03R, Class 2A1, 144A, 1 Month LIBOR + 0.140% (Cap N/A, Floor0.140%)

 0.246(c)  10/26/36   857   851,255 

Series 2015-03R, Class 2A2, 144A, 1 Month LIBOR + 0.140% (Cap N/A, Floor0.140%)

 0.246(c)  10/26/36   1,400   1,355,617 

Home Re Ltd. (Bermuda),

    

Series 2018-01, Class M1, 144A, 1 Month LIBOR + 1.600% (Cap N/A, Floor0.000%)

 1.706(c)  10/25/28   550   551,799 

JPMorgan Mortgage Trust,

    

Series 2007-A01, Class 4A1

 2.964(cc)  07/25/35   51   50,761 

New Residential Mortgage Loan Trust,

    

Series 2018-04A, Class A1S, 144A, 1 Month LIBOR + 0.750% (Cap N/A, Floor0.750%)

 0.856(c)  01/25/48   2,517   2,524,361 

Oaktown Re II Ltd. (Bermuda),

    

Series 2018-01A, Class M1, 144A, 1 Month LIBOR + 1.550% (Cap N/A, Floor0.000%)

 1.656(c)  07/25/28   310   309,928 

 

See Notes to Financial Statements.

 

30 


 

 

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

RESIDENTIAL MORTGAGE-BACKED SECURITIES (Continued)

 

   

Radnor Re Ltd. (Bermuda),

    

Series 2018-01, Class M1, 144A, 1 Month LIBOR + 1.400% (Cap N/A, Floor0.000%)

  1.506%(c)   03/25/28   92  $92,262 

Series 2018-01, Class M2, 144A, 1 Month LIBOR + 2.700% (Cap N/A, Floor0.000%)

  2.806(c)   03/25/28   1,240   1,239,999 

Series 2020-02, Class M1A, 144A, 1 Month LIBOR + 3.150% (Cap N/A, Floor3.150%)

  3.256(c)   10/25/30   1,135   1,134,796 

Series 2020-02, Class M1B, 144A, 1 Month LIBOR + 4.000% (Cap N/A, Floor4.000%)

  4.106(c)   10/25/30   1,315   1,324,323 

Series 2020-02, Class M1C, 144A, 1 Month LIBOR + 4.600% (Cap N/A, Floor4.600%)

  4.706(c)   10/25/30   1,025           1,043,648 

Retiro Mortgage Securities DAC (Ireland),

    

Series 01A, Class A1, 144A, 3 Month EURIBOR + 2.000% (Cap 5.000%, Floor 0.000%)

  1.464(c)   07/30/75   EUR    1,965   2,344,731 

Structured Asset Securities Corp.,

    

Series 2003-37A, Class 3A7

  2.368(cc)   12/25/33   338   342,244 
    

 

 

 

TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES
(cost $36,890,721)

     37,573,894 
    

 

 

 

SOVEREIGN BONDS    4.2%

    

Argentine Republic Government International Bond (Argentina),

    

Sr. Unsec’d. Notes

  0.125(cc)   07/09/30   1,155   412,018 

Bermuda Government International Bond (Bermuda),

    

Sr. Unsec’d. Notes, 144A

  2.375   08/20/30   685   675,537 

Brazil Loan Trust 1 (Brazil),

    

Gov’t. Gtd. Notes

  5.477   07/24/23   374   389,950 

Brazil Minas SPE via State of Minas Gerais (Brazil),

    

Gov’t. Gtd. Notes

  5.333   02/15/28   2,303   2,494,789 

Dominican Republic International Bond (Dominican Republic),

    

Sr. Unsec’d. Notes, 144A

  5.875   01/30/60   1,570   1,564,546 

Ghana Government International Bond (Ghana),

    

Sr. Unsec’d. Notes, 144A

  6.375   02/11/27   505   502,995 

Hellenic Republic Government International Bond (Greece),

    

Sr. Unsec’d. Notes

  5.200   07/17/34   EUR    5,485   9,345,105 

Sr. Unsec’d. Notes

  6.140   04/14/28   EUR    2,000   3,222,736 

Indonesia Government International Bond (Indonesia),

    

Sr. Unsec’d. Notes

  1.100   03/12/33   EUR       410   481,475 

Sr. Unsec’d. Notes

  1.450   09/18/26   EUR       805   1,007,824 

Sr. Unsec’d. Notes

  3.375   07/30/25   EUR    2,655   3,573,246 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  31 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

SOVEREIGN BONDS (Continued)

    

Ivory Coast Government International Bond (Ivory Coast),

    

Sr. Unsec’d. Notes

  5.125%   06/15/25   EUR         500  $674,763 

Sr. Unsec’d. Notes, 144A

  5.125   06/15/25   EUR      1,650   2,226,717 

Provincia de Buenos Aires (Argentina),

    

Sr. Unsec’d. Notes, 144A

  6.500   02/15/23(d)   600   249,497 

Sr. Unsec’d. Notes, 144A(a)

  9.950   06/09/21(d)   1,500   663,687 

Romanian Government International Bond (Romania),

    

Sr. Unsec’d. Notes, EMTN

  4.125   03/11/39   EUR      1,759   2,477,307 

Serbia International Bond (Serbia),

    

Sr. Unsec’d. Notes, 144A

  1.500   06/26/29   EUR      1,660   1,978,681 

Ukraine Government International Bond (Ukraine),

    

Sr. Unsec’d. Notes

  0.000(cc)   05/31/40   950   1,001,089 

Sr. Unsec’d. Notes

  7.750   09/01/21   350   353,504 

Sr. Unsec’d. Notes

  7.750   09/01/22   1,000   1,045,028 

Sr. Unsec’d. Notes

  8.994   02/01/24   350   384,807 

Sr. Unsec’d. Notes, 144A

  4.375   01/27/30   EUR      1,465   1,614,701 

Sr. Unsec’d. Notes, 144A

  7.750   09/01/22   1,960   2,048,254 

Sr. Unsec’d. Notes, 144A

  8.994   02/01/24   800   879,560 

Sr. Unsec’d. Notes, 144A

  9.750   11/01/28   1,800           2,086,789 
    

 

 

 

TOTAL SOVEREIGN BONDS
(cost $36,497,021)

     41,354,605 
    

 

 

 

U.S. TREASURY OBLIGATIONS    2.4%

    

U.S. Treasury Bonds(h)(k)

  1.375   11/15/40   15,930   13,883,991 

U.S. Treasury Bonds(h)(k)

  2.500   02/15/45   3,505   3,659,439 

U.S. Treasury Bonds(k)

  3.625   08/15/43   1,855   2,322,228 

U.S. Treasury Notes(k)

  2.250   11/15/24   1,705   1,811,030 

U.S. Treasury Notes(k)

  2.250   11/15/27   150   159,797 

U.S. Treasury Strips Coupon(h)

  3.042(s)   11/15/35   2,255   1,652,492 
    

 

 

 

TOTAL U.S. TREASURY OBLIGATIONS
(cost $23,306,738)

     23,488,977 
    

 

 

 
        

Shares

    

COMMON STOCKS    1.6%

    

Gas Utilities    0.4%

                

Ferrellgas Partners LP (Class B Stock)*^

    17,034   3,440,868 

Oil, Gas & Consumable Fuels    1.2%

                

Chesapeake Energy Corp.*

    252,027   11,484,870 

 

See Notes to Financial Statements.

 

32 


 

 

  Description Shares  Value 

COMMON STOCKS (Continued)

  

Oil, Gas & Consumable Fuels (cont’d.)

        

Chesapeake Energy Corp. Backstop Commitment*

  1,449  $64,181 

Frontera Energy Corp. (Colombia)*(a)

  132,434   622,440 
  

 

 

 
   12,171,491 
  

 

 

 

TOTAL COMMON STOCKS
(cost $11,802,062)

   15,612,359 
  

 

 

 

TOTAL LONG-TERM INVESTMENTS
(cost $794,156,409)

   826,265,989 
  

 

 

 

SHORT-TERM INVESTMENTS    15.1%

  

AFFILIATED MUTUAL FUNDS    13.7%

  

PGIM Core Ultra Short Bond Fund(wa)

  126,278,092   126,278,092 

PGIM Institutional Money Market Fund

  

(cost $9,363,723; includes $9,362,511 of cash collateral for securities on loan)(b)(wa)

  9,382,295           9,377,604 
  

 

 

 

TOTAL AFFILIATED MUTUAL FUNDS
(cost $135,641,815)

   135,655,696 
  

 

 

 

OPTIONS PURCHASED*~    1.4%

  

(cost $37,942,223)

   13,501,215 
  

 

 

 

TOTAL SHORT-TERM INVESTMENTS
(cost $173,584,038)

   149,156,911 
  

 

 

 

TOTAL INVESTMENTS, BEFORE OPTIONS WRITTEN    99.0%
(cost$967,740,447)

   975,422,900 
  

 

 

 

OPTIONS WRITTEN*~    (1.3)%

  

(premiums received $38,124,263)

   (12,939,984
  

 

 

 

TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN    97.7%
(cost$929,616,184)

   962,482,916 

Other assets in excess of liabilities(z)    2.3%

   22,947,344 
  

 

 

 

NET ASSETS    100.0%

  $985,430,260 
  

 

 

 

 

See the Glossary for alist of the abbreviation(s) used in the semiannual report:

AUD—Australian Dollar

BRL—Brazilian Real

CAD—Canadian Dollar

CLP—Chilean Peso

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  33 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

CNH—Chinese Renminbi

COP—Colombian Peso

CZK—Czech Koruna

EUR—Euro

GBP—British Pound

HUF—Hungarian Forint

IDR—Indonesian Rupiah

ILS—Israeli Shekel

INR—Indian Rupee

JPY—Japanese Yen

KRW—South Korean Won

MXN—Mexican Peso

NZD—New Zealand Dollar

PEN—Peruvian NuevoSol

PHP—Philippine Peso

PLN—PolishZloty

RUB—Russian Ruble

SEK—SwedishKrona

SGD—Singapore Dollar

THB—ThaiBaht

TRY—Turkish Lira

TWD—New TaiwaneseDollar

USD—US Dollar

ZAR—SouthAfrican Rand

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.

A—Annual payment frequency for swaps

ABS—Asset-Backed Security

BABs—Build AmericaBonds

BBR—New Zealand Bank Bill Rate

BBSW—Australian Bank Bill Swap Reference Rate

BROIS—Brazil Overnight Index Swap

BUBOR—Budapest Interbank Offered Rate

CDX—Credit Derivative Index

CLO—Collateralized Loan Obligation

CLOIS—Sinacofi Chile Interbank Rate Average

CMBX—Commercial Mortgage-Backed Index

COOIS—Colombia Overnight Interbank Reference Rate

EMTN—Euro Medium Term Note

EURIBOR—EuroInterbank Offered Rate

FHLMC—Federal Home Loan Mortgage Corporation

GMTN—Global Medium Term Note

IO—InterestOnly (Principal amount represents notional)

JIBAR—Johannesburg Interbank Agreed Rate

LIBOR—London Interbank Offered Rate

LP—Limited Partnership

M—Monthly paymentfrequency for swaps

MASTR—Morgan Stanley Structured Asset Security

MTN—Medium Term Note

OTC—Over-the-counter

PIK—Payment-in-Kind

PJSC—Public Joint-Stock Company

 

See Notes to Financial Statements.

 

34 


 

 

Q—Quarterly payment frequency for swaps

S—Semiannual payment frequency for swaps

SOFR—Secured Overnight Financing Rate

SONIA—Sterling Overnight Index Average

Strips—Separate Trading of Registered Interest and Principal of Securities

T—Swap payment upon termination

USOIS—UnitedStates Overnight Index Swap

WIBOR—Warsaw Interbank Offered Rate

*

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 $20,006,783 and 2.0% of netassets.

(a)

All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pendingsettlement, is $9,092,873; cash collateral of $9,362,511 (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 lastbusiness 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 includesdividend reinvestment.

(c)

Variable rate instrument. The interest rate shown reflects the rate in effect at April 30, 2021.

(cc)

Variable rate instrument. The rate shown is based on the latest available information as of April 30, 2021. Certainvariable 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.

(d)

Represents issuer in default on interest payments and/or principal repayment.Non-income producing security. Such securities may be post-maturity.

(ff)

Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specifieddate. 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.

(p)

Represents a security with a delayed settlement and therefore the interest rate is not available until settlement which isafter the period end.

(s)

Represents zero coupon bond or principal only security. Rate represents yield to maturity at purchase date.

(wa)

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

(z)

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

Options Purchased:

OTCTraded

 

Description

 Call/
Put
 

Counterparty

 Expiration
Date
 Strike  Contracts Notional
Amount
(000)#
  Value 

Currency Option AUD vs JPY

 Call Deutsche Bank AG 05/26/21  70.00    AUD   66,900  $  8,701,489 

Currency Option EUR vs USD

 Call Citibank, N.A. 05/07/21  1.35    EUR   19,688    

Currency Option EUR vs USD

 Call Deutsche Bank AG 11/18/21  1.21    EUR   6,563   126,633 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  35 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Options Purchased (continued):

OTC Traded

 

Description

 Call/
Put
 

Counterparty

 Expiration
Date
 Strike  Contracts Notional
Amount
(000)#
  Value 

Currency Option EUR vs USD

 Call Bank of America, N.A. 11/18/21  1.31    EUR   26,250  $39,032 

Currency Option USD vs BRL

 Call Citibank, N.A. 05/04/21  8.00     30,000    

Currency Option USD vs BRL

 Call Morgan Stanley & Co. International PLC 06/11/21  7.80     30,000   586 

Currency Option USD vs BRL

 Call Morgan Stanley & Co. International PLC 09/28/22  6.20     30,000     1,776,741 

Currency Option USD vs CNH

 Call Deutsche Bank AG 07/13/21  7.60     20,000   402 

Currency Option USD vs CNH

 Call JPMorgan Chase Bank, N.A. 09/28/22  6.90     10,000   159,853 

Currency Option USD vs ILS

 Call Bank of America, N.A. 06/28/21  3.60     38,250   7,292 

Currency Option USD vs ILS

 Call Citibank, N.A. 06/28/21  3.95     38,250   805 

Currency Option USD vs ILS

 Call JPMorgan Chase Bank, N.A. 07/26/21  3.80     10,000   1,400 

Currency Option USD vs INR

 Call Deutsche Bank AG 05/04/21  92.00     20,600    

Currency Option USD vs INR

 Call Morgan Stanley & Co. International PLC 07/02/21  84.00     20,600   2,671 

Currency Option USD vs INR

 Call Goldman Sachs International 09/28/21  88.00     35,500   20,963 

Currency Option USD vs JPY

 Call Barclays Bank PLC 10/27/23  115.00     39,000   617,199 

Currency Option USD vs KRW

 Call Deutsche Bank AG 05/06/21  1,350.00     15,750    

Currency Option USD vs KRW

 Call Deutsche Bank AG 07/02/21  1,350.00     15,750   362 

Currency Option USD vs MXN

 Call Citibank, N.A. 05/07/21  28.00     21,000    

Currency Option USD vs MXN

 Call Goldman Sachs International 02/23/22  26.00     34,500   265,469 

Currency Option USD vs MXN

 Call Barclays Bank PLC 02/23/22  31.50     69,000   150,189 

Currency Option USD vs MXN

 Call Goldman Sachs International 02/23/22  36.00     28,000   29,212 

Currency Option USD vs RUB

 Call JPMorgan Chase Bank, N.A. 05/04/21  115.00     20,500    

Currency Option USD vs ZAR

 Call JPMorgan Chase Bank, N.A. 05/14/21  21.00     24,000   15 

 

See Notes to Financial Statements.

 

36 


 

 

Options Purchased (continued):

OTC Traded

 

Description

 Call/
Put
 

Counterparty

 Expiration
Date
 Strike  Contracts Notional
Amount
(000)#
  Value 

Currency Option USD vs ZAR

 Call JPMorgan Chase Bank, N.A. 05/27/22  16.20     24,000  $  1,056,755 

Currency Option AUD vs JPY

 Put Deutsche Bank AG 05/17/21  65.00    AUD   27,000   1 

Currency Option AUD vs JPY

 Put Citibank, N.A. 05/26/21  62.00    AUD   216,000   19 

Currency Option AUD vs JPY

 Put Morgan Stanley & Co. International PLC 05/26/21  62.00    AUD   216,000   19 

Currency Option AUD vs JPY

 Put Deutsche Bank AG 05/26/21  70.00    AUD   216,000   460 

Currency Option AUD vs JPY

 Put BNP Paribas S.A. 01/26/22  55.00    AUD   144,000   66,735 

Currency Option AUD vs JPY

 Put Deutsche Bank AG 01/26/22  63.00    AUD   72,000   90,090 

Currency Option GBP vs USD

 Put JPMorgan Chase Bank, N.A. 05/26/21  1.14    GBP   74,000   5 

Currency Option GBP vs USD

 Put Bank of America, N.A. 05/26/21  1.22    GBP   37,000   64 

Currency Option USD vs BRL

 Put Deutsche Bank AG 09/28/21  3.85     39,000   2,337 

Currency Option USD vs JPY

 Put Deutsche Bank AG 05/14/21  94.00     16,000    

Currency Option USD vs JPY

 Put Deutsche Bank AG 05/27/22  103.00     16,000   177,582 

Currency Option USD vs TWD

 Put Deutsche Bank AG 12/21/21  24.30     60,000   68,714 

Currency Option USD vs TWD

 Put JPMorgan Chase Bank, N.A. 12/21/21  25.80     20,000   84,519 
        

 

 

 

Total OTC Traded (cost $37,889,573)

   $13,447,613 
        

 

 

 

OTC Swaptions

 

Description

 Call/
Put
 Counterparty Expiration
Date
 Strike  Receive  Pay  Notional
Amount
(000)#
  Value 

CDX.NA.IG.36.V1, 06/20/26

 Call Bank of America, N.A. 07/21/21  0.40  1.00%(Q)   CDX.NA.IG.36.V1(Q)   27,710  $ 2,612 

CDX.NA.IG.36.V1, 06/20/26

 Put Bank of America, N.A. 07/21/21  0.55  CDX.NA.IG.36.V1(Q)   1.00%(Q)   27,710   50,990 
        

 

 

 

Total OTC Swaptions (cost $52,650)

     $ 53,602 
        

 

 

 

Total Options Purchased (cost $37,942,223)

     $13,501,215 
        

 

 

 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  37 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Options Written:

OTC Traded

 

Description

 Call/
Put
 

Counterparty

 Expiration
Date
 Strike  Contracts Notional
Amount
(000)#
  Value 

Currency Option AUD vs JPY

 Call Citibank, N.A. 05/26/21  70.00    AUD   66,900  $  (8,701,489

Currency Option EUR vs USD

 Call Bank of America, N.A. 11/18/21  1.21    EUR   6,563   (126,633

Currency Option EUR vs USD

 Call Deutsche Bank AG 11/18/21  1.31    EUR   26,250   (39,032

Currency Option USD vs BRL

 Call Morgan Stanley & Co. International PLC 09/28/22  7.50     60,000   (1,280,223

Currency Option USD vs CNH

 Call JPMorgan Chase Bank, N.A. 09/28/22  7.60     30,000   (123,973

Currency Option USD vs ILS

 Call Citibank, N.A. 06/28/21  3.60     38,250   (7,292

Currency Option USD vs ILS

 Call Bank of America, N.A. 06/28/21  3.95     38,250   (805

Currency Option USD vs ILS

 Call BNP Paribas S.A. 08/27/21  3.40     10,000   (35,673

Currency Option USD vs INR

 Call Bank of America, N.A. 09/28/21  88.00     35,500   (20,963

Currency Option USD vs INR

 Call JPMorgan Chase Bank, N.A. 02/23/22  84.00     20,600   (123,706

Currency Option USD vs JPY

 Call Bank of America, N.A. 10/27/23  115.00     39,000   (617,199

Currency Option USD vs KRW

 Call JPMorgan Chase Bank, N.A. 10/27/21  1,225.00     15,750   (48,096

Currency Option USD vs MXN

 Call Barclays Bank PLC 02/23/22  26.00     34,500   (265,469

Currency Option USD vs MXN

 Call Goldman Sachs International 02/23/22  31.50     69,000   (150,189

Currency Option USD vs MXN

 Call Citibank, N.A. 02/23/22  36.00     28,000   (29,212

Currency Option USD vs ZAR

 Call JPMorgan Chase Bank, N.A. 05/27/22  18.80     48,000   (844,455

Currency Option AUD vs JPY

 Put Deutsche Bank AG 05/26/21  62.00    AUD   432,000   (37

Currency Option AUD vs JPY

 Put Citibank, N.A. 05/26/21  70.00    AUD   108,000   (230

Currency Option AUD vs JPY

 Put Morgan Stanley & Co. International PLC 05/26/21  70.00    AUD   108,000   (230

Currency Option AUD vs JPY

 Put Deutsche Bank AG 01/26/22  55.00    AUD   144,000   (66,735

Currency Option AUD vs JPY

 Put BNP Paribas S.A. 01/26/22  63.00    AUD   72,000   (90,090

Currency Option GBP vs USD

 Put Bank of America, N.A. 05/26/21  1.14    GBP   74,000   (5

 

See Notes to Financial Statements.

 

38 


 

 

Options Written (continued):

OTC Traded

 

Description

 Call/
Put
 Counterparty Expiration
Date
 Strike  Contracts  Notional
Amount
(000)#
  Value 

Currency Option GBP vs USD

 Put JPMorgan Chase Bank, N.A. 05/26/21  1.22      GBP   37,000  $(64

Currency Option USD vs BRL

 Put Bank of America, N.A. 09/28/21  3.85       39,000   (2,337

Currency Option USD vs JPY

 Put Deutsche Bank AG 05/27/22  97.50       32,000   (158,703

Currency Option USD vs TWD

 Put JPMorgan Chase Bank, N.A. 12/21/21  24.30       60,000   (68,714

Currency Option USD vs TWD

 Put Deutsche Bank AG 12/21/21  25.80       20,000   (84,519
        

 

 

 

Total OTC Traded (premiums received $38,069,536)

     $(12,886,073
        

 

 

 

OTC Swaptions

 

Description

 Call/
Put
 Counterparty Expiration
Date
 Strike  Receive  Pay  Notional
Amount
(000)#
  Value 

CDX.NA.IG.36.V1, 06/20/26

 Call Bank of America, N.A. 07/21/21  0.50%   CDX.NA.IG.36.V1(Q)   1.00%(Q)   27,710  $(36,613

CDX.NA.IG.36.V1, 06/20/26

 Put Bank of America, N.A. 07/21/21  0.75%   1.00%(Q)   CDX.NA.IG.36.V1(Q)   27,710   (17,298
        

 

 

 

Total OTC Swaptions (premiums received $54,727)

 

  $(53,911
        

 

 

 

Total Options Written (premiums received $38,124,263)

 

  $(12,939,984
        

 

 

 

Futures contracts outstanding at April 30, 2021:

 

Number
of
Contracts

 

Type

 Expiration
Date
 Current
Notional
Amount
 Value /
Unrealized
Appreciation
(Depreciation)
Long Positions:      
543 

5 Year U.S. Treasury Notes

   Jun. 2021  $ 67,298,063  $ 98,219
57 

10 Year U.S. Ultra Treasury Notes

   Jun. 2021   8,296,172   (182,934)
       

 

 

 
        (84,715)
       

 

 

 
Short Positions:      
10 

30 Day Federal Funds

   Apr. 2022   3,995,600   6,584
58 

30 Day Federal Funds

   May 2022   23,173,320   40,504
48 

30 Day Federal Funds

   Jun. 2022   19,175,040   35,441
14 

30 Day Federal Funds

   Jul. 2022   5,592,160   11,177
3,551 

2 Year U.S. Treasury Notes

   Jun. 2021   783,910,990   631,983
284 

5 Year Euro-Bobl

   Jun. 2021   46,002,076   19,880
245 

10 Year Euro-Bund

   Jun. 2021   50,073,713       454,672

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  39 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Futures contracts outstanding at April 30, 2021 (continued):

 

Number
of
Contracts

 

Type

 Expiration
Date
 Current
Notional
Amount
 Value /
Unrealized
Appreciation
(Depreciation)

Short Positions (cont’d):

      
367 

10 Year U.S. Treasury Notes

   Jun. 2021  $  48,455,469  $ 817,394
366 

20 Year U.S. Treasury Bonds

   Jun. 2021   57,553,500   (340,472)
21 

30 Year U.S. Ultra Treasury Bonds

   Jun. 2021   3,904,031   (58,439)
242 

Euro Schatz Index

   Jun. 2021   32,609,060   4,110
       

 

 

 
        1,622,834
       

 

 

 
       $1,538,119
       

 

 

 

Forward foreign currency exchange contracts outstanding at April 30, 2021:

 

Purchase
Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

OTC Forward Foreign Currency Exchange Contracts:

 

Australian Dollar,

      

Expiring 05/28/21

 HSBC Bank PLC  AUD   9,489  $    6,279,171  $    7,310,474  $    1,031,303  $ 

Expiring 05/28/21

 JPMorgan Chase Bank, N.A.  AUD   6,597   4,538,898   5,082,315   543,417    

Expiring 06/30/21

 Bank of America, N.A.  AUD   223   170,000   171,732   1,732    

Expiring 06/30/21

 Citibank, N.A.  AUD   489   377,000   376,763      (237

Expiring 07/20/21

 Barclays Bank PLC  AUD   1,090   844,635   840,075      (4,560

Expiring 07/20/21

 Goldman Sachs International  AUD   770   600,000   593,090          (6,910

Expiring 07/20/21

 JPMorgan Chase Bank, N.A.  AUD   785   606,836   604,938      (1,898

Expiring 07/20/21

 Morgan Stanley & Co. International PLC  AUD   769   600,000   592,578      (7,422

Expiring 07/30/21

 HSBC Bank PLC  AUD   2,134   1,412,921   1,644,562   231,641    

Expiring 01/28/22

 Citibank, N.A.  AUD   1,415   929,273   1,091,146   161,873    

Expiring 01/28/22

 Morgan Stanley & Co. International PLC  AUD   5,569   4,204,659   4,294,418   89,759    

Expiring 10/31/23

 JPMorgan Chase Bank, N.A.  AUD   3,180   2,208,097   2,453,733   245,636    

Brazilian Real,

       

Expiring 05/04/21

 Barclays Bank PLC  BRL   1,429   254,000   263,022   9,022    

Expiring 05/04/21

 Citibank, N.A.  BRL   2,978   530,000   548,093   18,093    

Expiring 05/04/21

 Credit Suisse International  BRL   1,760   319,000   323,917   4,917    

Expiring 05/04/21

 Goldman Sachs International  BRL   8,048   1,414,000   1,481,137   67,137    

Expiring 05/04/21

 JPMorgan Chase Bank, N.A.  BRL   12,474   2,315,913   2,295,565      (20,348

 

See Notes to Financial Statements.

 

40 


Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Purchase
Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

Brazilian Real (cont’d.),

      

Expiring 05/04/21

 JPMorgan Chase Bank, N.A.  BRL   1,822  $319,000  $335,285  $16,285  $ 

Expiring 05/28/21

 Deutsche Bank AG  BRL   17,496   3,297,000   3,212,396      (84,604

Expiring 06/30/21

 Citibank, N.A.  BRL   2,753   498,383   504,123   5,740    

Expiring 06/30/21

 Citibank, N.A.  BRL   1,910   349,000   349,703   703    

Expiring 06/30/21

 Goldman Sachs International  BRL   2,214   390,000   405,345   15,345    

Expiring 06/30/21

 Goldman Sachs International  BRL   1,808   320,000   331,091   11,091    

Expiring 06/30/21

 JPMorgan Chase Bank, N.A.  BRL   2,128   384,000   389,540   5,540    

Expiring 07/02/21

 Deutsche Bank AG  BRL   16,998   3,071,040   3,111,720   40,680    

Expiring 09/30/21

 Bank of America, N.A.  BRL   66,197     14,993,000     12,007,338      (2,985,662

Expiring 09/30/21

 Bank of America, N.A.  BRL   38,490   9,030,000   6,981,680      (2,048,320

Expiring 09/30/21

 Deutsche Bank AG  BRL   17,668   3,883,000   3,204,694      (678,306

Expiring 09/30/21

 Morgan Stanley & Co. International PLC  BRL   4,795   901,592   869,775      (31,817

Expiring 01/28/22

 Citibank, N.A.  BRL   2,966   560,000   530,063      (29,937

Expiring 01/28/22

 Deutsche Bank AG  BRL   25,948   4,434,000   4,636,706   202,706    

Expiring 01/28/22

 JPMorgan Chase Bank, N.A.  BRL   15,244   2,727,534   2,724,042      (3,492

Expiring 01/28/22

 Morgan Stanley & Co. International PLC  BRL   19,492   3,580,779   3,483,095      (97,684

British Pound,

       

Expiring 05/28/21

 Morgan Stanley & Co. International PLC  GBP   1,632   2,169,516   2,254,007   84,491    

Expiring 07/19/21

 HSBC Bank PLC  GBP   2,444   3,370,214   3,376,025   5,811    

Expiring 01/28/22

 Morgan Stanley & Co. International PLC  GBP   625   862,819   864,084   1,265    

Canadian Dollar,

       

Expiring 07/20/21

 Citibank, N.A.  CAD   3,514   2,804,282   2,858,996   54,714    

Chilean Peso,

       

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  CLP   426,884   600,000   600,460   460    

Expiring 10/29/21

 Deutsche Bank AG  CLP   1,903,558   2,405,000   2,676,603   271,603    

Chinese Renminbi,

       

Expiring 05/14/21

 Citibank, N.A.  CNH   43,724   6,265,983   6,747,648   481,665    

Expiring 05/18/21

 Goldman Sachs International  CNH   3,489   534,000   538,362   4,362    

Expiring 05/18/21

 Goldman Sachs International  CNH   3,109   476,000   479,734   3,734    

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  41 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Purchase
Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

Chinese Renminbi (cont’d.),

      

Expiring 05/18/21

 Goldman Sachs International  CNH   3,103  $475,000  $478,792  $ 3,792  $ 

Expiring 05/18/21

 HSBC Bank PLC  CNH   9,426   1,458,000     1,454,320      (3,680

Expiring 05/18/21

 HSBC Bank PLC  CNH   5,128   787,000   791,170   4,170    

Expiring 05/18/21

 HSBC Bank PLC  CNH   3,130   479,000   482,868   3,868    

Expiring 05/18/21

 HSBC Bank PLC  CNH   3,083   472,000   475,673   3,673    

Expiring 05/18/21

 JPMorgan Chase Bank, N.A.  CNH   18,068   2,776,010     2,787,549   11,539    

Expiring 05/18/21

 JPMorgan Chase Bank, N.A.  CNH   1,654   256,000   255,213      (787

Expiring 05/18/21

 Morgan Stanley & Co. International PLC  CNH   8,287   1,274,000   1,278,470   4,470    

Expiring 05/18/21

 UBS AG  CNH   2,510   386,000   387,205   1,205    

Expiring 06/30/21

 BNP Paribas S.A.  CNH   2,582   396,000   397,183   1,183    

Expiring 06/30/21

 Goldman Sachs International  CNH   2,412   366,000   370,936   4,936    

Expiring 06/30/21

 Goldman Sachs International  CNH   2,219   340,000   341,260   1,260    

Expiring 06/30/21

 JPMorgan Chase Bank, N.A.  CNH   1,755   248,000   269,927   21,927    

Expiring 06/30/21

 Morgan Stanley & Co. International PLC  CNH   3,448   523,255   530,346   7,091    

Expiring 07/30/21

 Deutsche Bank AG  CNH   4,095   602,000   628,383   26,383    

Expiring 07/30/21

 Morgan Stanley & Co. International PLC  CNH   4,612   698,515   707,730   9,215    

Expiring 01/28/22

 JPMorgan Chase Bank, N.A.  CNH   3,291   497,363   498,569   1,206    

Colombian Peso,

       

Expiring 06/16/21

 BNP Paribas S.A.  COP   6,576,386   1,806,000   1,748,046      (57,954

Expiring 06/16/21

 BNP Paribas S.A.  COP   2,222,444   606,000   590,740      (15,260

Expiring 06/16/21

 Goldman Sachs International  COP   4,379,858   1,208,000   1,164,194      (43,806

Expiring 06/16/21

 Goldman Sachs International  COP   4,337,739   1,180,000   1,152,999      (27,001

Expiring 06/16/21

 Goldman Sachs International  COP   1,746,580   467,000   464,252      (2,748

Expiring 06/16/21

 Goldman Sachs International  COP   1,739,881   487,000   462,471      (24,529

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  COP   2,204,596   605,000   585,996      (19,004

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  COP   1,200,563   330,000   319,117      (10,883

 

See Notes to Financial Statements.

 

42 


Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Purchase
Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

Czech Koruna,

       

Expiring 07/19/21

 JPMorgan Chase Bank, N.A.  CZK   41,593  $  1,917,071  $  1,933,745  $16,674  $ 

Expiring 07/19/21

 Morgan Stanley & Co. International PLC  CZK   39,962   1,827,614   1,857,912   30,298    

Euro,

       

Expiring 07/19/21

 Bank of America, N.A.  EUR   1,689   2,049,937   2,033,665      (16,272

Expiring 07/19/21

 Citibank, N.A.  EUR   1,012   1,211,000   1,218,591   7,591    

Expiring 07/19/21

 Citibank, N.A.  EUR   249   301,567   299,859      (1,708

Expiring 07/19/21

 Citibank, N.A.  EUR   249   301,563   299,859      (1,704

Expiring 07/19/21

 JPMorgan Chase Bank, N.A.  EUR   494   600,000   594,472      (5,528

Expiring 07/19/21

 The Toronto-Dominion Bank  EUR   504   604,000   606,523   2,523    

Expiring 08/31/21

 HSBC Bank PLC  EUR   3,462   4,141,923   4,173,345   31,422    

Expiring 08/31/21

 Morgan Stanley & Co. International PLC  EUR   863   1,027,639   1,040,189   12,550    

Expiring 11/22/21

 Bank of America, N.A.  EUR   952   1,122,313   1,149,606   27,293    

Expiring 11/22/21

 Deutsche Bank AG  EUR   417   496,797   503,556   6,759    

Hungarian Forint,

       

Expiring 07/19/21

 Barclays Bank PLC  HUF   83,250   277,000   277,691   691    

Expiring 07/19/21

 Barclays Bank PLC  HUF   78,370   263,000   261,415      (1,585

Indian Rupee,

       

Expiring 06/16/21

 HSBC Bank PLC  INR   48,466   642,000   648,692   6,692    

Expiring 06/16/21

 HSBC Bank PLC  INR   47,574   630,000   636,748   6,748    

Expiring 06/16/21

 HSBC Bank PLC  INR   45,938   606,000   614,855   8,855    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  INR   470,296   6,337,365   6,294,674      (42,691

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  INR   458,327   6,164,926   6,134,470      (30,456

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  INR   129,336   1,755,976   1,731,094      (24,882

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  INR   48,895   644,000   654,431   10,431    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  INR   29,667   393,000   397,083   4,083    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  INR   341,744   4,627,066   4,574,078      (52,988

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  INR   47,702   630,000   638,462   8,462    

Expiring 06/30/21

 Citibank, N.A.  INR   23,853   316,000   318,545   2,545    

Expiring 06/30/21

 Morgan Stanley & Co. International PLC  INR   40,581   539,000   541,937   2,937    

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  43 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Purchase

Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

OTC Forward Foreign Currency Exchange Contracts (cont’d.):

 

Indian Rupee (cont’d.),

      

Expiring 06/30/21

 Morgan Stanley & Co. International PLC  INR   31,603  $416,561  $422,035  $5,474  $ 

Expiring 06/30/21

 Morgan Stanley & Co. International PLC  INR   31,365   417,000   418,854   1,854    

Expiring 09/30/21

 Goldman Sachs International  INR   242,481   3,183,000   3,197,823   14,823    

Expiring 09/30/21

 HSBC Bank PLC  INR   181,781   2,268,006   2,397,312   129,306    

Indonesian Rupiah,

       

Expiring 06/16/21

 Goldman Sachs International  IDR   5,728,688   392,000   393,670   1,670    

Expiring 06/16/21

 Goldman Sachs International  IDR   3,891,360   264,000   267,411   3,411    

Expiring 06/16/21

 HSBC Bank PLC  IDR   5,564,544   384,000   382,390      (1,610

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  IDR   65,739,291   4,502,383   4,517,544   15,161    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  IDR   8,821,191   603,000   606,184   3,184    

Expiring 06/16/21

 UBS AG  IDR   5,626,000   388,000   386,614      (1,386

Israeli Shekel,

       

Expiring 06/16/21

 Bank of America, N.A.  ILS   1,266   386,000   389,931   3,931    

Expiring 06/16/21

 Barclays Bank PLC  ILS   9,006   2,717,754   2,773,860   56,106    

Expiring 06/16/21

 Citibank, N.A.  ILS   9,006   2,725,985   2,773,860   47,875    

Expiring 06/16/21

 Citibank, N.A.  ILS   1,989   606,000   612,570   6,570    

Expiring 06/16/21

 Citibank, N.A.  ILS   1,967   604,000   605,935   1,935    

Expiring 06/16/21

 Citibank, N.A.  ILS   1,320   402,000   406,427   4,427    

Expiring 06/30/21

 Bank of America, N.A.  ILS   27,438   7,937,000   8,453,060   516,060    

Expiring 06/30/21

 BNP Paribas S.A.  ILS   1,003   306,000   308,934   2,934    

Expiring 06/30/21

 Citibank, N.A.  ILS   1,310   405,000   403,625      (1,375

Expiring 06/30/21

 Citibank, N.A.  ILS   1,075   330,000   331,311   1,311    

Expiring 06/30/21

 Goldman Sachs International  ILS   301   91,000   92,664   1,664    

Expiring 06/30/21

 JPMorgan Chase Bank, N.A.  ILS   1,050   319,000   323,427   4,427    

Japanese Yen,

       

Expiring 05/28/21

 Citibank, N.A.  JPY   645,078   6,035,197   5,903,651      (131,546

Expiring 05/28/21

 Citibank, N.A.  JPY   611,997   5,924,174   5,600,897      (323,277

Expiring 05/28/21

 Citibank, N.A.  JPY   271,341   2,586,541   2,483,270      (103,271

Expiring 05/28/21

 Deutsche Bank AG  JPY   173,618   1,594,000   1,588,929      (5,071

Expiring 07/19/21

 BNP Paribas S.A.  JPY   120,962   1,111,434   1,107,573      (3,861

Expiring 01/28/22

 Citibank, N.A.  JPY   538,981   5,262,454   4,948,107      (314,347

Expiring 01/28/22

 Deutsche Bank AG  JPY   406,777   3,862,000   3,734,411      (127,589

Expiring 01/28/22

 Deutsche Bank AG  JPY   153,253   1,470,000   1,406,935      (63,065

 

See Notes to Financial Statements.

 

44 


Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Purchase
Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

Japanese Yen (cont’d.),

      

Expiring 01/28/22

 Deutsche Bank AG  JPY   102,273  $944,000  $938,916  $  $(5,084

Expiring 05/31/22

 Citibank, N.A.  JPY   92,578   849,426   851,549   2,123    

Expiring 05/31/22

 Deutsche Bank AG  JPY   662,163   6,130,000   6,090,687      (39,313

Expiring 10/31/23

 Barclays Bank PLC  JPY   487,838   5,118,000   4,546,018      (571,982

Expiring 10/31/23

 Deutsche Bank AG  JPY   498,249   5,219,999   4,643,039      (576,960

Expiring 10/31/23

 Goldman Sachs International  JPY   874,045   8,971,000   8,144,971      (826,029

Expiring 10/31/23

 Morgan Stanley & Co. International PLC  JPY   855,296   8,262,958   7,970,259      (292,699

Mexican Peso,

      

Expiring 06/16/21

 Goldman Sachs International  MXN   12,053   600,000   591,860      (8,140

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  MXN   12,898   619,000   633,359   14,359    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  MXN   10,519   490,000   516,550   26,550    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  MXN   9,880   474,000   485,132   11,132    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  MXN   9,754   467,000   478,972   11,972    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  MXN   62,922   3,011,119   3,089,712   78,593    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  MXN   62,922   3,003,918   3,089,712   85,794    

Expiring 06/30/21

 Goldman Sachs International  MXN   45,400   2,182,295   2,225,623   43,328    

Expiring 06/30/21

 Goldman Sachs International  MXN   8,041   393,000   394,206   1,206    

Expiring 06/30/21

 Goldman Sachs International  MXN   1,296   64,000   63,519      (481

Expiring 02/25/22

 Bank of America, N.A.  MXN   47,307   2,005,107   2,253,918   248,811    

Expiring 04/28/23

 JPMorgan Chase Bank, N.A.  MXN   72,679   3,006,698   3,262,590   255,892    

Expiring 04/28/23

 Morgan Stanley & Co. International PLC  MXN   231,058   9,739,000   10,372,220   633,220    

New Taiwanese Dollar,

      

Expiring 06/16/21

 Goldman Sachs International  TWD   164,736   5,995,427   5,923,438      (71,989

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  TWD   10,723   384,000   385,561   1,561    

Expiring 06/30/21

 Citibank, N.A.  TWD   99,075   3,647,274   3,567,940      (79,334

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  45 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Purchase

Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

New Taiwanese Dollar (cont’d.),

      

Expiring 06/30/21

 JPMorgan Chase Bank, N.A.  TWD   110,463  $3,861,000  $3,978,076  $117,076  $ 

Expiring 06/30/21

 Morgan Stanley & Co. International PLC  TWD   21,908   778,108   788,952   10,844    

Expiring 09/30/21

 JPMorgan Chase Bank, N.A.  TWD   164,717   6,058,000   5,994,200      (63,800

Expiring 12/23/21

 Deutsche Bank AG  TWD   18,134   651,000   665,841   14,841    

New Zealand Dollar,

      

Expiring 07/19/21

 JPMorgan Chase Bank, N.A.  NZD   829   600,000   592,954      (7,046

Expiring 07/20/21

 Morgan Stanley & Co. International PLC  NZD   603   429,248   431,685   2,437    

Peruvian Nuevo Sol,

      

Expiring 06/16/21

 BNP Paribas S.A.  PEN   2,605   723,000   688,633      (34,367

Expiring 06/16/21

 Citibank, N.A.  PEN   1,034   271,000   273,418   2,418    

Expiring 06/16/21

 Goldman Sachs International  PEN   1,740   470,000   459,904      (10,096

Expiring 06/16/21

 Goldman Sachs International  PEN   1,422   396,000   375,821      (20,179

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  PEN   1,553   420,000   410,545      (9,455

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  PEN   2,796   757,000   739,148      (17,852

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  PEN   1,809   490,000   478,183      (11,817

Philippine Peso,

      

Expiring 06/16/21

 Citibank, N.A.  PHP   53,999   1,102,000   1,110,849   8,849    

Expiring 06/16/21

 Citibank, N.A.  PHP   22,491   459,000   462,676   3,676    

Expiring 06/16/21

 Citibank, N.A.  PHP   19,810   404,000   407,528   3,528    

Expiring 06/16/21

 Citibank, N.A.  PHP   18,902   386,000   388,853   2,853    

Expiring 06/16/21

 Goldman Sachs International  PHP   19,572   400,000   402,628   2,628    

Expiring 06/16/21

 Goldman Sachs International  PHP   18,138   371,000   373,132   2,132    

Expiring 06/16/21

 HSBC Bank PLC  PHP   46,974   959,000   966,326   7,326    

Expiring 06/16/21

 HSBC Bank PLC  PHP   44,952   918,000   924,739   6,739    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  PHP   46,818   951,000   963,122   12,122    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  PHP   38,850   790,000   799,204   9,204    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  PHP   24,566   506,999   505,355      (1,644

 

See Notes to Financial Statements.

 

46 


Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Purchase

Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

OTC Forward Foreign Currency Exchange Contracts (cont’d.):

 

Philippine Peso (cont’d.),

      

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  PHP   23,697  $485,000  $487,488  $2,488  $ 

Expiring 06/16/21

 Standard Chartered  PHP   22,825   466,000   469,541   3,541    

Polish Zloty,

       

Expiring 07/19/21

 Barclays Bank PLC  PLN   1,039   274,000   274,226   226    

Expiring 07/19/21

 Barclays Bank PLC  PLN   995   264,000   262,619      (1,381

Expiring 07/19/21

 JPMorgan Chase Bank, N.A.  PLN   978   259,000   258,066      (934

Expiring 07/19/21

 UBS AG  PLN   985   260,000   259,885      (115

Russian Ruble,

       

Expiring 06/16/21

 Barclays Bank PLC  RUB   182,075   2,444,305   2,406,289      (38,016

Expiring 06/16/21

 Barclays Bank PLC  RUB   55,092   751,000   728,087      (22,913

Expiring 06/16/21

 Barclays Bank PLC  RUB   34,503   445,000   455,984   10,984    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  RUB   182,075   2,440,684   2,406,288      (34,396

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  RUB   114,995   1,538,288   1,519,761      (18,527

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  RUB   47,251   634,000   624,466      (9,534

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  RUB   30,386   391,000   401,573   10,573    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  RUB   19,756   257,000   261,095   4,095    

Expiring 06/30/21

 Goldman Sachs International  RUB   610,097   7,653,000   8,046,121   393,121    

Expiring 06/30/21

 Goldman Sachs International  RUB   29,253   383,000   385,801   2,801    

Expiring 06/30/21

 Morgan Stanley & Co. International PLC  RUB   34,439   459,278   454,193      (5,085

Expiring 11/22/21

 Deutsche Bank AG  RUB   153,565   1,982,000   1,981,564      (436

Expiring 11/22/21

 Morgan Stanley & Co. International PLC  RUB   176,513   2,206,000   2,277,675   71,675    

Singapore Dollar,

       

Expiring 06/16/21

 BNP Paribas S.A.  SGD   843   627,000   633,309   6,309    

Expiring 06/16/21

 Credit Suisse International  SGD   633   472,000   475,351   3,351    

Expiring 06/16/21

 HSBC Bank PLC  SGD   645   480,000   484,797   4,797    

Expiring 06/16/21

 UBS AG  SGD   634   471,000   476,670   5,670    

South African Rand,

       

Expiring 05/28/21

 Morgan Stanley & Co. International PLC  ZAR   6,738   450,682   462,793   12,111    

Expiring 06/17/21

 BNP Paribas S.A.  ZAR   4,465   302,000   305,782   3,782    

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  47 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Purchase

Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

OTC Forward Foreign Currency Exchange Contracts (cont’d.):

 

South African Rand (cont’d.),

      

Expiring 06/17/21

 Goldman Sachs International  ZAR   20,394  $1,335,000  $1,396,758  $61,758  $ 

Expiring 06/17/21

 JPMorgan Chase Bank, N.A.  ZAR   6,906   458,000   472,962   14,962    

Expiring 06/17/21

 JPMorgan Chase Bank, N.A.  ZAR   5,746   393,000   393,509   509    

Expiring 06/17/21

 JPMorgan Chase Bank, N.A.  ZAR   3,748   256,000   256,678   678    

Expiring 06/30/21

 BNP Paribas S.A.  ZAR   5,831   389,801   398,591   8,790    

Expiring 06/30/21

 Citibank, N.A.  ZAR   4,367   295,000   298,506   3,506    

Expiring 06/30/21

 Goldman Sachs International  ZAR   3,886   264,000   265,651   1,651    

Expiring 06/30/21

 Goldman Sachs International  ZAR   3,789   263,000   259,007      (3,993

Expiring 09/30/21

 JPMorgan Chase Bank, N.A.  ZAR   259,809   15,802,000   17,559,411   1,757,411    

Expiring 12/23/21

 Goldman Sachs International  ZAR   73,237   3,878,000   4,898,937   1,020,937    

Expiring 05/31/22

 Morgan Stanley & Co. International PLC  ZAR   10,977   706,260   719,733   13,473    

South Korean Won,

       

Expiring 06/16/21

 BNP Paribas S.A.  KRW   416,529   373,000   372,589      (411

Expiring 06/16/21

 Citibank, N.A.  KRW   899,623   796,000   804,721   8,721    

Expiring 06/16/21

 Citibank, N.A.  KRW   664,319   600,000   594,238      (5,762

Expiring 06/16/21

 Citibank, N.A.  KRW   435,719   389,000   389,755   755    

Expiring 06/16/21

 Credit Suisse International  KRW   543,162   479,000   485,864   6,864    

Expiring 06/16/21

 Credit Suisse International  KRW   462,706   407,000   413,895   6,895    

Expiring 06/16/21

 HSBC Bank PLC  KRW   1,351,355   1,211,000   1,208,800      (2,200

Expiring 06/16/21

 HSBC Bank PLC  KRW   553,259   489,000   494,896   5,896    

Expiring 06/16/21

 HSBC Bank PLC  KRW   537,452   476,000   480,755   4,755    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  KRW   538,204   476,000   481,428   5,428    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  KRW   672,880   604,000   601,898      (2,102

Expiring 06/16/21

 Standard Chartered  KRW   726,654   643,000   649,999   6,999    

Expiring 06/16/21

 Standard Chartered  KRW   702,967   624,000   628,811   4,811    

Expiring 06/30/21

 Barclays Bank PLC  KRW   411,130   368,000   367,765      (235

Expiring 06/30/21

 Citibank, N.A.  KRW   2,613,637   2,390,813   2,337,957      (52,856

Expiring 06/30/21

 JPMorgan Chase Bank, N.A.  KRW   3,455,065   3,012,000   3,090,633   78,633    

 

See Notes to Financial Statements.

 

48 


Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Purchase
Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

OTC Forward Foreign Currency Exchange Contracts (cont’d.):

 

South Korean Won (cont’d.),

 

    

Expiring 06/30/21

 JPMorgan Chase Bank, N.A.  KRW   1,347,514  $1,144,901  $1,205,382  $60,481  $ 

Expiring 06/30/21

 JPMorgan Chase Bank, N.A.  KRW   565,427   503,000   505,787   2,787    

Expiring 06/30/21

 JPMorgan Chase Bank, N.A.  KRW   392,610   352,000   351,199      (801

Expiring 07/30/21

 HSBC Bank PLC  KRW   7,848,810   6,660,000   7,021,525   361,525    

Expiring 10/29/21

 Citibank, N.A.  KRW   2,376,006   2,173,283   2,125,802      (47,481

Swedish Krona,

       

Expiring 07/19/21

 Barclays Bank PLC  SEK   2,908   343,049   343,712   663    

Thai Baht,

       

Expiring 06/16/21

 Citibank, N.A.  THB   24,671   788,000   792,088   4,088    

Expiring 06/16/21

 Citibank, N.A.  THB   16,398   520,000   526,471   6,471    

Expiring 06/16/21

 Citibank, N.A.  THB   12,406   397,000   398,301   1,301    

Expiring 06/16/21

 Goldman Sachs International  THB   54,623   1,768,570   1,753,747      (14,823

Expiring 06/16/21

 Goldman Sachs International  THB   18,755   600,000   602,169   2,169    

Expiring 06/16/21

 HSBC Bank PLC  THB   74,319   2,440,693   2,386,122      (54,571

Expiring 06/16/21

 HSBC Bank PLC  THB   35,101   1,118,000   1,126,970   8,970    

Expiring 06/16/21

 HSBC Bank PLC  THB   24,569   781,000   788,821   7,821    

Expiring 06/16/21

 HSBC Bank PLC  THB   12,257   389,000   393,519   4,519    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  THB   24,272   775,000   779,282   4,282    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  THB   12,483   395,000   400,791   5,791    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  THB   18,835   603,000   604,715   1,715    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC  THB   16,294   521,000   523,151   2,151    

Turkish Lira,

       

Expiring 05/28/21

 BNP Paribas S.A.  TRY   6,981   897,000   831,611      (65,389

Expiring 05/28/21

 Goldman Sachs International  TRY   2,447   353,510   291,460      (62,050

Expiring 06/16/21

 Barclays Bank PLC  TRY   14,149   1,814,794   1,668,084      (146,710

Expiring 06/16/21

 Barclays Bank PLC  TRY   11,956   1,571,122   1,409,474      (161,648

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  TRY   15,628   2,052,297   1,842,448      (209,849
    

 

 

  

 

 

  

 

 

  

 

 

 
    $398,936,840  $398,235,518   10,370,224   (11,071,546
    

 

 

  

 

 

  

 

 

  

 

 

 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  49 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Sale

Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts:

 

 

Australian Dollar,

 

   

Expiring 05/28/21

 Barclays Bank PLC AUD14,233  $    9,253,474  $    10,965,919  $  $    (1,712,445

Expiring 05/28/21

 Citibank, N.A. AUD7,064   4,440,631   5,442,176      (1,001,545

Expiring 05/28/21

 Citibank, N.A. AUD1,540   1,012,706   1,186,764      (174,058

Expiring 05/31/22

 Morgan Stanley & Co. International PLC AUD 1,263   953,616   974,029      (20,413

Brazilian Real,

 

   

Expiring 05/04/21

 Citibank, N.A. BRL1,896   323,000   348,952      (25,952

Expiring 05/04/21

 Citibank, N.A. BRL1,883   328,000   346,477      (18,477

Expiring 05/04/21

 Deutsche Bank AG BRL16,998   3,085,002   3,128,153      (43,151

Expiring 05/04/21

 JPMorgan Chase Bank, N.A. BRL 4,202   755,000   773,288      (18,288

Expiring 05/04/21

 JPMorgan Chase Bank, N.A. BRL 3,533   629,000   650,149      (21,149

Expiring 05/28/21

 BNP Paribas S.A. BRL5,489   1,110,000   1,007,839   102,161    

Expiring 05/28/21

 JPMorgan Chase Bank, N.A. BRL 12,007   2,178,064   2,204,556      (26,492

Expiring 06/30/21

 HSBC Bank PLC BRL1,893   324,000   346,531      (22,531

Expiring 06/30/21

 Morgan Stanley & Co. International PLC BRL 1,904   331,000   348,654      (17,654

Expiring 07/02/21

 Credit Suisse International BRL 2,137   396,000   391,187   4,813    

Expiring 09/30/21

 Bank of America, N.A. BRL47,736   11,027,000   8,658,702   2,368,298    

Expiring 09/30/21

 Deutsche Bank AG BRL79,414   17,683,000   14,404,786   3,278,214    

Expiring 01/28/22

 Citibank, N.A. BRL24,184   4,311,000   4,321,450      (10,450

Expiring 01/28/22

 Citibank, N.A. BRL2,181   414,751   389,696   25,055    

Expiring 01/28/22

 Deutsche Bank AG BRL37,286   8,109,155   6,662,759       1,446,396    

British Pound,

 

   

Expiring 05/28/21

 Bank of America, N.A. GBP 670   844,589   925,358      (80,769

Expiring 05/28/21

 JPMorgan Chase Bank, N.A. GBP 962   1,256,266   1,328,648      (72,382

Expiring 07/19/21

 Morgan Stanley & Co. International PLC GBP 25,690   35,335,503   35,486,898      (151,395

Expiring 08/31/21

 Morgan Stanley & Co. International PLC GBP 832   1,147,705   1,149,466      (1,761

Expiring 01/28/22

 JPMorgan Chase Bank, N.A. GBP 625   817,100   864,084      (46,984

Chilean Peso,

 

   

Expiring 06/16/21

 Citibank, N.A. CLP 420,843   604,000   591,962   12,038    

Expiring 06/16/21

 HSBC Bank PLC CLP458,670   626,000   645,170      (19,170

Expiring 06/16/21

 Morgan Stanley & Co. International PLC CLP    1,498,137   2,025,878   2,107,295      (81,417

 

See Notes to Financial Statements.

 

50 


 

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Sale
Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

 

Chilean Peso (cont’d.),

 

   

Expiring 06/16/21

 Morgan Stanley & Co. International PLC CLP 461,160  $630,000  $648,673  $  $(18,673

Expiring 10/29/21

 Bank of America, N.A. CLP1,989,417       2,524,000       2,797,331          (273,331

Chinese Renminbi,

 

   

Expiring 05/14/21

 JPMorgan Chase Bank, N.A. CNH 43,724   6,276,147   6,747,649      (471,502

Expiring 05/18/21

 Citibank, N.A. CNH6,181   936,000   953,566      (17,566

Expiring 05/18/21

 Goldman Sachs International CNH 5,117   791,074   789,493   1,581    

Expiring 05/18/21

 Goldman Sachs International CNH 3,384   520,000   522,153      (2,153

Expiring 05/18/21

 Goldman Sachs International CNH 2,930   447,000   452,048      (5,048

Expiring 05/18/21

 HSBC Bank PLC CNH6,360   963,000   981,244      (18,244

Expiring 05/18/21

 HSBC Bank PLC CNH4,344   661,000   670,193      (9,193

Expiring 05/18/21

 HSBC Bank PLC CNH4,004   611,000   617,801      (6,801

Expiring 05/18/21

 HSBC Bank PLC CNH3,778   578,000   582,810      (4,810

Expiring 05/18/21

 JPMorgan Chase Bank, N.A. CNH 16,723   2,540,000   2,580,079      (40,079

Expiring 05/18/21

 Morgan Stanley & Co. International PLC CNH 3,189   485,000   492,014      (7,014

Expiring 05/18/21

 Morgan Stanley & Co. International PLC CNH 3,109   475,000   479,598      (4,598

Expiring 05/18/21

 UBS AG CNH3,024   467,872   466,491   1,381    

Expiring 06/30/21

 JPMorgan Chase Bank, N.A. CNH 7,134   1,091,000   1,097,411      (6,411

Expiring 06/30/21

 JPMorgan Chase Bank, N.A. CNH 2,683   372,000   412,672      (40,672

Expiring 07/30/21

 JPMorgan Chase Bank, N.A. CNH 8,706   1,228,000   1,336,113      (108,113

Expiring 01/28/22

 Deutsche Bank AG CNH3,291   478,000   498,568      (20,568

Colombian Peso,

 

   

Expiring 06/16/21

 BNP Paribas S.A. COP8,896,777   2,413,517   2,364,821   48,696    

Expiring 06/16/21

 BNP Paribas S.A. COP6,575,879   1,800,969   1,747,911       53,058    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC COP    1,438,025   395,000   382,236   12,764    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC COP 990,189   274,000   263,199   10,801    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC COP 967,867   265,000   257,265   7,735    

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  51 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Sale

Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

 

Czech Koruna,

 

   

Expiring 07/19/21

 Morgan Stanley & Co. International PLC CZK 5,452  $253,000  $253,455  $  $(455

Euro,

 

   

Expiring 06/30/21

 BNP Paribas S.A. EUR288   338,720   346,948      (8,228

Expiring 06/30/21

 Morgan Stanley & Co. International PLC EUR 206   244,898   247,917      (3,019

Expiring 07/19/21

 BNP Paribas S.A. EUR29,000       34,777,467       34,923,284          (145,817

Expiring 07/19/21

 HSBC Bank PLC EUR43,583   52,234,192   52,485,459      (251,267

Expiring 07/19/21

 Morgan Stanley & Co. International PLC EUR 1,401   1,681,715   1,687,202      (5,487

Expiring 07/19/21

 Morgan Stanley & Co. International PLC EUR 335   405,077   403,425   1,652    

Expiring 11/22/21

 Morgan Stanley & Co. International PLC EUR 860   1,025,453   1,038,053      (12,600

Hungarian Forint,

 

   

Expiring 07/19/21

 Barclays Bank PLC HUF    443,856   1,466,540   1,480,546      (14,006

Indian Rupee,

 

   

Expiring 06/16/21

 BNP Paribas S.A. INR59,412   788,000   795,200      (7,200

Expiring 06/16/21

 BNP Paribas S.A. INR33,200   441,000   444,369      (3,369

Expiring 06/16/21

 Citibank, N.A. INR82,894   1,127,000   1,109,498   17,502    

Expiring 06/16/21

 Citibank, N.A. INR44,885   609,000   600,767   8,233    

Expiring 06/16/21

 Credit Suisse     
 International INR 56,626   770,000   757,908   12,092    

Expiring 06/16/21

 HSBC Bank PLC INR56,890   769,000   761,445   7,555    

Expiring 06/16/21

 HSBC Bank PLC INR48,003   652,000   642,496   9,504    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. INR 52,752   711,000   706,063   4,937    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. INR 47,441   632,000   634,975      (2,975

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. INR 37,676   512,000   504,268   7,732    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. INR 30,447   402,000   407,524      (5,524

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. INR 24,166   318,000   323,455      (5,455

Expiring 06/16/21

 Morgan Stanley & Co. International PLC INR 97,881   1,329,000   1,310,086       18,914    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC INR 60,583   810,000   810,875      (875

Expiring 06/16/21

 Morgan Stanley & Co. International PLC INR 53,741   720,000   719,295   705    

 

See Notes to Financial Statements.

 

52 


 

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Sale

Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

 

Indian Rupee (cont’d.),

 

   

Expiring 06/30/21

 JPMorgan Chase Bank, N.A. INR 41,143  $540,000  $549,432  $  $(9,432

Expiring 09/30/21

 Bank of America, N.A. INR424,262       5,480,000       5,595,135          (115,135

Expiring 02/25/22

 JPMorgan Chase Bank, N.A. INR 179,467   2,319,000   2,323,593      (4,593

Expiring 02/25/22

 Morgan Stanley & Co. International PLC INR 164,184   2,095,000   2,125,718      (30,718

Indonesian Rupiah,

 

   

Expiring 06/16/21

 Goldman Sachs International IDR    4,786,950   329,000   328,955   45    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. IDR 5,684,782   388,000   390,653      (2,653

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. IDR 4,612,494   316,000   316,966      (966

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. IDR 4,556,292   312,000   313,104      (1,104

Expiring 06/16/21

 Morgan Stanley & Co. International PLC IDR 4,337,091   297,000   298,041      (1,041

Israeli Shekel,

 

   

Expiring 06/16/21

 Bank of America, N.A. ILS1,561   470,000   480,872      (10,872

Expiring 06/16/21

 Citibank, N.A. ILS1,641   494,000   505,473      (11,473

Expiring 06/16/21

 Citibank, N.A. ILS1,625   487,000   500,550      (13,550

Expiring 06/30/21

 Bank of America, N.A. ILS1,141   343,000   351,446      (8,446

Expiring 06/30/21

 Barclays Bank PLC ILS7,933   2,357,060   2,443,879      (86,819

Expiring 06/30/21

 Citibank, N.A. ILS19,506   5,794,000   6,009,181      (215,181

Expiring 08/31/21

 BNP Paribas S.A. ILS8,160   2,500,000   2,516,604      (16,604

Japanese Yen,

 

   

Expiring 05/28/21

 Deutsche Bank AG JPY444,960   4,249,000   4,072,198   176,802    

Expiring 05/28/21

 Morgan Stanley & Co. International PLC JPY 941,743   8,721,029   8,618,677       102,352    

Expiring 06/30/21

 Citibank, N.A. JPY40,372   370,000   369,599   401    

Expiring 06/30/21

 Citibank, N.A. JPY17,501   162,000   160,216   1,784    

Expiring 06/30/21

 Goldman Sachs International JPY 22,740   208,000   208,181      (181

Expiring 07/19/21

 JPMorgan Chase Bank, N.A. JPY 130,543   1,209,000   1,195,302   13,698    

Expiring 07/19/21

 JPMorgan Chase Bank, N.A. JPY 65,728   604,609   601,834   2,775    

Expiring 07/20/21

 JPMorgan Chase Bank, N.A. JPY 65,275   600,000   597,685   2,315    

Expiring 07/30/21

 Morgan Stanley & Co. International PLC JPY 179,224   1,664,236   1,641,211   23,025    

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  53 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Sale

Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

 

Japanese Yen (cont’d.),

 

   

Expiring 01/28/22

 Citibank, N.A. JPY634,903  $ 5,972,189  $5,828,726  $143,463  $ 

Expiring 01/28/22

 Citibank, N.A. JPY601,760   5,760,948   5,524,452   236,496    

Expiring 01/28/22

 Citibank, N.A. JPY410,350   3,967,301   3,767,214   200,087    

Expiring 01/28/22

 Citibank, N.A. JPY93,027   852,053   854,035      (1,982

Expiring 05/31/22

 Citibank, N.A. JPY293,864   2,846,550   2,703,008       143,542    

Expiring 05/31/22

 Deutsche Bank AG JPY349,393   3,323,000   3,213,773   109,227    

Expiring 10/31/23

 Bank of America, N.A. JPY    1,325,555       12,988,000       12,352,470   635,530    

Expiring 10/31/23

 Bank of America, N.A. JPY1,168,753   11,585,000   10,891,272   693,728    

Expiring 10/31/23

 Citibank, N.A. JPY399,802   4,148,827   3,725,638   423,189    

Expiring 10/31/23

 Citibank, N.A. JPY46,713   447,401   435,306   12,095    

Mexican Peso,

 

   

Expiring 06/16/21

 BNP Paribas S.A. MXN14,087   674,000   691,739      (17,739

Expiring 06/16/21

 BNP Paribas S.A. MXN13,144   647,000   645,405   1,595    

Expiring 06/16/21

 BNP Paribas S.A. MXN10,061   497,000   494,045   2,955    

Expiring 06/16/21

 BNP Paribas S.A. MXN7,809   385,000   383,441   1,559    

Expiring 06/16/21

 BNP Paribas S.A. MXN6,940   337,000   340,774      (3,774

Expiring 06/16/21

 BNP Paribas S.A. MXN6,113   291,000   300,169      (9,169

Expiring 06/16/21

 Citibank, N.A. MXN10,248   493,000   503,200      (10,200

Expiring 06/16/21

 Goldman Sachs International MXN 5,749   274,000   282,302      (8,302

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. MXN 8,083   404,000   396,889   7,111    

Expiring 06/30/21

 Morgan Stanley & Co. International PLC MXN 26,685   1,307,000   1,308,173      (1,173

Expiring 02/25/22

 Barclays Bank PLC MXN45,503   1,924,000   2,167,945          (243,945

Expiring 02/25/22

 Deutsche Bank AG MXN16,101   750,000   767,105      (17,105

Expiring 02/25/22

 Goldman Sachs International MXN 14,604   589,000   695,782      (106,782

Expiring 04/28/23

 Morgan Stanley & Co. International PLC MXN 303,737   13,188,761   13,634,810      (446,049

New Taiwanese Dollar,

 

   

Expiring 06/16/21

 Citibank, N.A. TWD21,355   762,000   767,865      (5,865

Expiring 06/16/21

 Credit Suisse International TWD 18,280   651,000   657,310      (6,310

Expiring 06/16/21

 Credit Suisse International TWD 17,558   622,000   631,328      (9,328

Expiring 06/16/21

 Credit Suisse International TWD 15,044   538,000   540,922      (2,922

Expiring 06/16/21

 HSBC Bank PLC TWD17,923   634,000   644,442      (10,442

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. TWD 10,493   370,000   377,285      (7,285

 

See Notes to Financial Statements.

 

54 


 

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Sale
Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

 

New Taiwanese Dollar (cont’d.),

 

   

Expiring 06/16/21

 Morgan Stanley & Co. International PLC TWD 11,039  $390,000  $396,928  $  $(6,928

Expiring 06/16/21

 UBS AG TWD13,538   482,000   486,774      (4,774

Expiring 06/30/21

 JPMorgan Chase Bank, N.A. TWD    209,538       7,639,000       7,546,016   92,984    

Expiring 09/30/21

 JPMorgan Chase Bank, N.A. TWD    164,717   6,185,393   5,994,199   191,194    

Expiring 12/23/21

 JPMorgan Chase Bank, N.A. TWD 39,747   1,509,000   1,459,405   49,595    

Peruvian Nuevo Sol,

 

   

Expiring 06/16/21

 Citibank, N.A. PEN8,351   2,254,673   2,207,732   46,941    

Expiring 06/16/21

 Citibank, N.A. PEN2,312   616,000   611,110   4,890    

Expiring 06/16/21

 Citibank, N.A. PEN788   217,000   208,214   8,786    

Expiring 06/16/21

 Goldman Sachs International PEN 4,497   1,213,825   1,188,778   25,047    

Expiring 06/16/21

 Goldman Sachs International PEN 3,181   871,569   841,004   30,565    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC PEN 3,245   885,821   857,824   27,997    

Philippine Peso,

 

   

Expiring 06/16/21

 Citibank, N.A. PHP31,226   642,000   642,361      (361

Expiring 06/16/21

 Citibank, N.A. PHP25,672   527,000   528,109      (1,109

Expiring 06/16/21

 Goldman Sachs International PHP 31,489   647,000   647,790      (790

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. PHP 39,746   813,462   817,634      (4,172

Expiring 06/16/21

 Morgan Stanley & Co. International PLC PHP 21,020   433,000   432,415   585    

Expiring 06/16/21

 Standard Chartered PHP37,682   776,000   775,175   825    

Expiring 06/16/21

 Standard Chartered PHP32,400   667,000   666,511   489    

Polish Zloty,

 

   

Expiring 07/19/21

 Citibank, N.A. PLN7,842   2,061,037   2,068,852      (7,815

Russian Ruble,

 

   

Expiring 06/16/21

 Barclays Bank PLC RUB30,350   402,001   401,104   897    

Expiring 06/16/21

 Deutsche Bank AG RUB20,201   271,000   266,972   4,028    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. RUB 66,503   867,000   878,901          (11,901

Expiring 06/16/21

 Morgan Stanley & Co. International PLC RUB 93,749   1,253,000   1,238,974       14,026    

Expiring 06/16/21

 Morgan Stanley & Co. International PLC RUB 33,584   446,000   443,841   2,159    

Expiring 06/30/21

 Barclays Bank PLC RUB213,895   2,873,098   2,820,903   52,195    

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  55 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Sale
Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

 

Russian Ruble (cont’d.),

 

   

Expiring 06/30/21

 Barclays Bank PLC RUB76,448  $    1,007,286  $    1,008,216  $  $(930

Expiring 06/30/21

 Citibank, N.A. RUB51,302   666,000   676,584      (10,584

Expiring 06/30/21

 Goldman Sachs International RUB 319,754   4,385,000   4,217,002       167,998    

Expiring 06/30/21

 Goldman Sachs International RUB 31,807   407,000   419,482      (12,482

Expiring 06/30/21

 Morgan Stanley & Co. International PLC RUB 22,058   282,000   290,907      (8,907

Expiring 11/22/21

 Deutsche Bank AG RUB    273,335   3,606,000   3,527,034   78,966    

Expiring 11/22/21

 Deutsche Bank AG RUB14,383   190,000   185,594   4,406    

Singapore Dollar,

 

   

Expiring 06/16/21

 Citibank, N.A. SGD637   478,000   478,399      (399

Expiring 06/16/21

 Goldman Sachs International SGD 870   651,000   653,617      (2,617

Expiring 06/16/21

 Goldman Sachs International SGD 549   410,000   412,429      (2,429

Expiring 06/16/21

 Goldman Sachs International SGD 528   397,000   397,027      (27

Expiring 06/16/21

 Goldman Sachs International SGD 525   392,000   394,730      (2,730

Expiring 06/16/21

 Goldman Sachs International SGD 496   374,000   372,601   1,399    

Expiring 06/16/21

 HSBC Bank PLC SGD700   522,000   525,971      (3,971

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. SGD 2,270   1,705,007   1,705,603      (596

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. SGD 881   656,000   661,555      (5,555

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. SGD 515   387,000   386,610   390    

Expiring 06/16/21

 UBS AG SGD1,028   770,000   772,193      (2,193

South African Rand,

 

   

Expiring 05/28/21

 Morgan Stanley & Co. International PLC ZAR 6,738   392,000   462,793      (70,793

Expiring 06/17/21

 Bank of America, N.A. ZAR7,524   481,000   515,333      (34,333

Expiring 06/17/21

 Barclays Bank PLC ZAR45,433   2,977,242   3,111,615      (134,373

Expiring 06/17/21

 BNP Paribas S.A. ZAR7,453   480,000   510,431      (30,431

Expiring 06/17/21

 Deutsche Bank AG ZAR54,086   3,515,980   3,704,303          (188,323

Expiring 06/17/21

 HSBC Bank PLC ZAR7,990   508,000   547,230      (39,230

Expiring 06/17/21

 JPMorgan Chase Bank, N.A. ZAR 116,826   7,643,959   8,001,295      (357,336

Expiring 06/17/21

 Morgan Stanley & Co. International PLC ZAR 9,728   634,000   666,265      (32,265

 

See Notes to Financial Statements.

 

56 


 

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Sale
Contracts

 

Counterparty

 Notional
Amount
(000)
  Value at
Settlement
Date
  Current
Value
  Unrealized
Appreciation
  Unrealized
Depreciation
 

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

 

South African Rand (cont’d.),

 

   

Expiring 09/30/21

 Morgan Stanley & Co. International PLC ZAR 244,993  $    14,076,000  $    16,558,071  $  $    (2,482,071

Expiring 09/30/21

 Morgan Stanley & Co. International PLC ZAR 14,816   977,425   1,001,341      (23,916

Expiring 12/23/21

 Barclays Bank PLC ZAR44,623   2,407,116   2,984,917      (577,801

Expiring 12/23/21

 Goldman Sachs International ZAR 7,752   489,000   518,526      (29,526

Expiring 12/23/21

 Morgan Stanley & Co. International PLC ZAR 20,862   1,363,884   1,395,493      (31,609

Expiring 05/31/22

 JPMorgan Chase Bank, N.A. ZAR 10,977   652,000   719,733      (67,733

Expiring 05/31/22

 JPMorgan Chase Bank, N.A. ZAR 7,904   507,000   518,201      (11,201

South Korean Won,

 

   

Expiring 06/16/21

 Citibank, N.A. KRW281,938   252,000   252,196      (196

Expiring 06/16/21

 Credit Suisse International KRW 431,195   387,000   385,709   1,291    

Expiring 06/16/21

 HSBC Bank PLC KRW7,313,336   6,401,506   6,541,848      (140,342

Expiring 06/16/21

 Morgan Stanley & Co. International PLC KRW 565,201   508,000   505,577   2,423    

Expiring 06/16/21

 UBS AG KRW599,745   526,000   536,478      (10,478

Expiring 06/30/21

 JPMorgan Chase Bank, N.A. KRW    7,416,216   6,205,000   6,633,971      (428,971

Expiring 06/30/21

 Morgan Stanley & Co. International PLC KRW 863,142   762,707   772,100      (9,393

Expiring 07/30/21

 Deutsche Bank AG KRW7,666,728   6,536,000   6,858,635      (322,635

Expiring 10/29/21

 JPMorgan Chase Bank, N.A. KRW 4,699,094   4,099,000   4,204,256      (105,256

Thai Baht,

 

   

Expiring 06/16/21

 Citibank, N.A. THB14,791   480,000   474,900       5,100    

Expiring 06/16/21

 Citibank, N.A. THB14,753   478,000   473,672   4,328    

Expiring 06/16/21

 Goldman Sachs International THB 19,590   638,000   628,958   9,042    

Expiring 06/16/21

 Goldman Sachs International THB 10,563   340,000   339,155   845    

Expiring 06/16/21

 Goldman Sachs International THB 9,775   317,000   313,856   3,144    

Expiring 06/16/21

 HSBC Bank PLC THB38,540   1,234,000   1,237,372      (3,372

Expiring 06/16/21

 HSBC Bank PLC THB19,579   632,000   628,615   3,385    

Expiring 06/16/21

 JPMorgan Chase Bank, N.A. THB 19,627   637,000   630,161   6,839    

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  57 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

Sale
Contracts

 

Counterparty

 Notional
Amount
(000)
 Value at
Settlement
Date
 Current
Value
 Unrealized
Appreciation
 Unrealized
Depreciation

 

OTC Forward ForeignCurrency Exchange Contracts (cont’d.):

 

  

Thai Baht (cont’d.),

 

      

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  THB    14,939  $ 485,000  $479,629  $5,371  $

Turkish Lira,

 

      

Expiring 05/28/21

 Goldman Sachs International  TRY 9,428   1,264,000   1,123,071   140,929   

Expiring 06/16/21

 Barclays Bank PLC  TRY2,366   300,000   278,938   21,062   

Expiring 06/16/21

 Citibank, N.A.  TRY8,414   953,017   991,889      (38,872)

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.  TRY 30,954   3,571,875   3,649,179      (77,304)
     

 

 

   

 

 

   

 

 

   

 

 

 
     $    485,438,928  $    485,896,922   11,405,712   (11,863,706)
     

 

 

   

 

 

   

 

 

   

 

 

 
         $    21,775,936  $    (22,935,252)
         

 

 

   

 

 

 

Cross currency exchange contracts outstanding at April 30, 2021:

 

    Settlement    

 Type Notional
Amount
(000)
  In Exchange
For (000)
  Unrealized
Appreciation
  Unrealized
Depreciation
  

Counterparty

OTC Cross Currency Exchange Contracts:

 

 
05/28/21 Buy  AUD   3,758   JPY   274,221  $ 385,717  $  Deutsche Bank AG
05/28/21 Buy  AUD   35,699   JPY    2,280,809   6,630,650     Citibank, N.A.
05/28/21 Buy  JPY   389,110   AUD   5,610      (761,149 Morgan Stanley & Co. International PLC
05/28/21 Buy  JPY    1,850,589   AUD   27,095      (3,939,019 Deutsche Bank AG
06/30/21 Buy  JPY   50,869   AUD   604   269     BNP Paribas S.A.
07/19/21 Buy  EUR   502   JPY   65,677   3,173     JPMorgan Chase Bank, N.A.
07/20/21 Buy  AUD   771   JPY   64,884   38     JPMorgan Chase Bank, N.A.
07/30/21 Buy  AUD   7,614   JPY   525,556   1,055,025     Morgan Stanley & Co. International PLC
07/30/21 Buy  JPY   704,780   AUD   9,748      (1,058,376 Morgan Stanley & Co. International PLC
08/31/21 Buy  EUR   1,636   GBP   1,472      (61,668 Bank of America, N.A.
08/31/21 Buy  GBP   2,304   EUR   2,499   170,945     Bank of America, N.A.
01/28/22 Buy  JPY   95,923   AUD   1,415      (210,527 Deutsche Bank AG

 

See Notes to Financial Statements.

 

58 


 

 

Cross currency exchange contracts outstanding at April 30, 2021 (continued):

 

    Settlement    

 Type  Notional
Amount
(000)
  In Exchange
For (000)
  Unrealized
Appreciation
  Unrealized
Depreciation
  

Counterparty

OTC Cross Currency Exchange Contracts (cont’d.):

 

 
01/28/22  Buy   JPY   162,036   AUD   2,167  $  $(183,460 Deutsche Bank AG
01/28/22  Buy   JPY   274,921   AUD   3,510      (182,750 BNP Paribas S.A.
05/31/22  Buy   AUD   4,921   JPY    375,226   343,692     Deutsche Bank AG
05/31/22  Buy   JPY   263,742   AUD   3,658      (395,116 Goldman Sachs International
10/31/23  Buy   AUD   6,309   JPY   422,703   929,064     Deutsche Bank AG
10/31/23  Buy   JPY    648,099   AUD   9,489      (1,282,398 Morgan Stanley & Co. International PLC
      

 

 

  

 

 

  
      $9,518,573  $(8,074,463 
      

 

 

  

 

 

  

Credit default swap agreements outstanding at April 30, 2021:

 

Reference

Entity/

Obligation

 Termination
Date
 Fixed
Rate
  Notional
Amount
(000)#(3)
  Implied
Credit
Spread at
April 30,
2021(4)
  Fair
Value
  Upfront
Premiums
Paid
(Received)
  Unrealized
Appreciation
(Depreciation)
  

Counterparty

OTC Packaged Credit Default Swap Agreements on corporate and/or sovereign issues - SellProtection(2)**:

Federation of Malaysia

 06/20/23  1.000%(Q)   3,750   0.187 $69,921  $(1,808 $71,729  

Barclays Bank PLC

People’s Republic of China

 06/20/23  1.000%(Q)   13,750   0.127  274,371   (6,629  281,000  

Barclays Bank PLC

Republic of Brazil

 06/20/23  1.000%(Q)   18,750   0.991  24,553   (9,039  33,592  

Barclays Bank PLC

Republic of Chile

 06/20/23  1.000%(Q)   3,750   0.170  71,328   (1,808  73,136  

Barclays Bank PLC

Republic of Colombia

 06/20/23  1.000%(Q)   5,000   0.592  49,301   (2,410  51,711  

Barclays Bank PLC

Republic of Indonesia

 06/20/23  1.000%(Q)   5,000   0.299  81,015   (2,410  83,425  

Barclays Bank PLC

Republic of Panama

 06/20/23  1.000%(Q)   3,750   0.297  61,005   (1,808  62,813  

Barclays Bank PLC

Republic of Peru

 06/20/23  1.000%(Q)   3,750   0.383  53,931   (1,808  55,739  

Barclays Bank PLC

Republic of Philippines

 06/20/23  1.000%(Q)   3,750   0.182  70,286   (1,808  72,094  

Barclays Bank PLC

Republic of South Africa

 06/20/23  1.000%(Q)   11,250   1.045  1,575   (5,424  6,999  

Barclays Bank PLC

Republic of Turkey

 06/20/23  1.000%(Q)   17,500   3.953  (1,039,412  (8,437  (1,030,975 

Barclays Bank PLC

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  59 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Credit default swap agreements outstanding at April 30, 2021 (continued):

 

Reference

Entity/

Obligation

 Termination
Date
  Fixed
Rate
  Notional
Amount
(000)#(3)
  Implied
Credit
Spread at
April 30,
2021(4)
  Fair
Value
  Upfront
Premiums
Paid
(Received)
  Unrealized
Appreciation
(Depreciation)
  

Counterparty

OTC Packaged Credit Default Swap Agreements on corporate and/or sovereign issues - SellProtection(2)**(cont’d.):

Russian Federation

  06/20/23   1.000%(Q)   11,250   0.512 $130,559  $(5,424 $135,983  

Barclays Bank PLC

United Mexican States

  06/20/23   1.000%(Q)   16,250   0.350  245,636   (7,834  253,470  

Barclays Bank PLC

     

 

 

  

 

 

  

 

 

  
     $94,069  $(56,647 $150,716  
     

 

 

  

 

 

  

 

 

  

 

Reference

Entity/

Obligation

 Termination
Date
 Fixed
Rate
  Notional
Amount
(000)#(3)
  Fair
Value
  Upfront
Premiums
Paid
(Received)
  Unrealized
Appreciation
(Depreciation)
  

Counterparty

OTC Packaged Credit Default Swap Agreement on credit indices—BuyProtection(1)**:

CDX.EM.29.V1

 06/20/23  1.000%(Q)   117,500  $(101,704 $(16,129 $(85,575 Barclays Bank PLC
    

 

 

  

 

 

  

 

 

  

 

**

The Fund entered into multiple credit default swap agreements in a packaged trade consisting of two parts. The Fundbought/sold protection on an Emerging Market CDX Index and bought/sold protection on the countries which comprise the index. The upfront premium is attached to the index of the trade for the Emerging Markets CDX package(s). Each swap is pricedindividually. If any of the component swaps are closed out early, the Index exposure will be reduced by an amount proportionate to the terminated swap(s).

 

Reference

Entity/

Obligation

 Termination
Date
 Fixed
Rate
  Notional
Amount
(000)#(3)
  Implied
Credit
Spread at
April 30,
2021(4)
 Fair
Value
  Upfront
Premiums
Paid
(Received)
  Unrealized
Appreciation
(Depreciation)
  

Counterparty

OTC Credit Default Swap Agreements on asset-backed securities - SellProtection(2)^:

Credit Suisse Mortgage Trust

 05/28/21  0.500%(Q)   230  * $3  $  $3  

Goldman Sachs International

Credit Suisse Mortgage Trust

 05/28/21  1.000%(Q)   132  *  4      4  

Goldman Sachs International

Delta Home Equity

 05/28/21  1.250%(Q)   626  *  22      22  

Goldman Sachs International

GS Mortgage Backed Securities

 05/28/21  1.250%(Q)   148  *  5      5  

Goldman Sachs International

 

See Notes to Financial Statements.

 

60 


 

 

Credit default swap agreements outstanding at April 30, 2021 (continued):

 

Reference

Entity/

Obligation

 Termination
Date
  Fixed
Rate
  Notional
Amount
(000)#(3)
  Implied
Credit
Spread at
April 30,
2021(4)
  Fair
Value
  Upfront
Premiums
Paid
(Received)
  Unrealized
Appreciation
(Depreciation)
  

Counterparty

OTC Credit Default Swap Agreements on asset-backed securities - Sell Protection(2)^(cont’d.):

GS Mortgage Backed Securities

  05/28/21   1.250%(Q)   140   *  $5  $  $5  

Goldman Sachs International

GS Mortgage Backed Securities

  05/28/21   1.250%(Q)   97   *   3      3  

Goldman Sachs International

GSAMP Home Equity

  05/28/21   1.250%(Q)   223   *   8      8  

Goldman Sachs International

GSRPM Mortgage Loan Trust

  05/28/21   1.250%(Q)   74   *   3      3  

Goldman Sachs International

MFRA Trust

  05/28/21   0.500%(Q)   63   *   1      1  

Goldman Sachs International

RCKT Mortgage Trust

  05/28/21   1.250%(Q)   128   *   4      4  

Goldman Sachs International

Verus Securitization Trust

  05/28/21   0.500%(Q)   287   *   4      4  

Goldman Sachs International

     

 

 

  

 

 

  

 

 

  
     $62  $  $62  
     

 

 

  

 

 

  

 

 

  

 

Reference

Entity/

Obligation

 Termination
Date
  Fixed
Rate
  Notional
Amount
(000)#(3)
  Fair
Value
  Upfront
Premiums
Paid
(Received)
  Unrealized
Appreciation
(Depreciation)
  

Counterparty

OTC Credit Default Swap Agreements on corporate and/or sovereign issues - BuyProtection(1):

United Mexican States

  06/20/23   1.000%(Q)   1,400  $(21,162 $3,806  $(24,968 Citibank, N.A.

United Mexican States

  06/20/23   1.000%(Q)   1,385   (20,936  9,343   (30,279 Citibank, N.A.

United Mexican States

  06/20/23   1.000%(Q)   460   (6,953  3,481   (10,434 Citibank, N.A.

United Mexican States

  06/20/23   1.000%(Q)   460   (6,953  3,191   (10,144 Citibank, N.A.

United Mexican States

  06/20/23   1.000%(Q)   455   (6,878  1,150   (8,028 Citibank, N.A.

United Mexican States

  06/20/23   1.000%(Q)   240   (3,628  652   (4,280 Citibank, N.A.

United Mexican States

  12/20/24   1.000%(Q)   1,000   (15,278  (8,665  (6,613 Barclays Bank PLC

United Mexican States

  12/20/24   1.000%(Q)   440   (6,697  2,257   (8,954 Citibank, N.A.
    

 

 

  

 

 

  

 

 

  
    $(88,485 $15,215  $(103,700 
    

 

 

  

 

 

  

 

 

  

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  61 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Credit default swap agreements outstanding at April 30, 2021 (continued):

 

Reference

Entity/

Obligation

 Termination
Date
  Fixed
Rate
  Notional
Amount
(000)#(3)
  Implied
Credit
Spread at
April 30,
2021(4)
  Fair
Value
  Upfront
Premiums
Paid
(Received)
  Unrealized
Appreciation
(Depreciation)
  

Counterparty

OTC Credit Default Swap Agreements on corporate and/or sovereign issues - SellProtection(2):

Boeing Co.

  12/20/21   1.000%(Q)   5,300   0.425 $25,944  $18,401  $7,543  

Bank of America, N.A.

Petroleos Mexicanos

  06/20/23   1.000%(Q)   9,450   2.414  (270,198  (607,359  337,161  

BNP Paribas S.A.

Petroleos Mexicanos

  06/20/23   1.000%(Q)   1,165   2.414  (33,310  (31,936  (1,374 

Citibank, N.A.

Petroleos Mexicanos

  06/20/23   1.000%(Q)   1,155   2.414  (33,024  (38,007  4,983  

Citibank, N.A.

Petroleos Mexicanos

  06/20/23   1.000%(Q)   385   2.414  (11,008  (12,983  1,975  

Citibank, N.A.

Petroleos Mexicanos

  06/20/23   1.000%(Q)   385   2.414  (11,008  (12,748  1,740  

Citibank, N.A.

Petroleos Mexicanos

  06/20/23   1.000%(Q)   380   2.414  (10,865  (10,466  (399 

Citibank, N.A.

Petroleos Mexicanos

  06/20/23   1.000%(Q)   195   2.414  (5,576  (5,343  (233 

Citibank, N.A.

Petroleos Mexicanos

  12/20/24   1.000%(Q)   1,000   3.234  (75,707  (38,019  (37,688 

Barclays Bank PLC

Petroleos Mexicanos

  12/20/24   1.000%(Q)   440   3.234  (33,336  (30,228  (3,108 

Citibank, N.A.

Republic of Panama

  06/20/21   1.000%(Q)   1,675   0.141  3,991   1,989   2,002  

Citibank, N.A.

Republic of Serbia

  06/20/21   1.000%(Q)   5,000   0.339  10,231   4,407   5,824  

BNP Paribas S.A.

     

 

 

  

 

 

  

 

 

  
     $(443,866 $(762,292 $318,426  
     

 

 

  

 

 

  

 

 

  

 

Reference

Entity/

Obligation

 Termination
Date
 Fixed
Rate
  Notional
Amount
(000)#(3)
  Value at
Trade
Date
  Value at
April 30,
2021
  Unrealized
Appreciation
(Depreciation)
 

Centrally Cleared Credit Default Swap Agreement on credit indices - BuyProtection(1):

 

CDX.NA.IG.36.V1

 06/20/26  1.000%(Q)   292,930  $(6,351,423 $(7,602,839 $(1,251,416
    

 

 

  

 

 

  

 

 

 

 

See Notes to Financial Statements.

 

62 


 

 

Credit default swap agreements outstanding at April 30, 2021 (continued):

 

Reference

Entity/

Obligation

 Termination
Date
  Fixed
Rate
  Notional
Amount
(000)#(3)
  Fair
Value
  Upfront
Premiums
Paid
(Received)
  Unrealized
Appreciation
(Depreciation)
  

Counterparty

OTC Credit Default Swap Agreements on credit indices - BuyProtection(1):

CMBX.NA.13.AAA

  12/16/72   0.500%(M)   25,000  $(135,256 $704,326  $(839,582 Morgan Stanley &Co. International PLC

CMBX.NA.13.AAA

  12/16/72   0.500%(M)   22,500   (121,730  236,547   (358,277 Citigroup Global Markets, Inc.

CMBX.NA.13.AAA

  12/16/72   0.500%(M)   10,000   (53,963  202,148   (256,111 Goldman Sachs International

CMBX.NA.13.AAA

  12/16/72   0.500%(M)   7,000   (38,747  33,761   (72,508 Morgan Stanley &Co. International PLC
    

 

 

  

 

 

  

 

 

  
    $(349,696 $1,176,782  $(1,526,478 
    

 

 

  

 

 

  

 

 

  

The Fund entered into credit default swaps (“CDS”) to provide a measure of protection against defaults or to take an activelong 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 theprotection 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 ofthat 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 referencedindex 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 termsof 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 referencedindex 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 protectionor 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 Absolute Return Bond Fund  63 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

 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 creditderivative. 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. Widercredit 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 creditindices 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 creditderivative 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 referencedentity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

Inflation swap agreements outstanding at April 30, 2021:

 

Notional

Amount

(000)#

  Termination
Date
  Fixed
    Rate    
  

Floating

          Rate          

 Value at
Trade Date
  Value at
April 30,
2021
  Unrealized
Appreciation
(Depreciation)
 

Centrally Cleared Inflation Swap Agreements:

 

  3,095   01/12/26   2.185%(T)  U.S. CPI Urban Consumers NSA Index(2)(T) $  $(90,276 $(90,276
  800   01/13/31   2.229%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     (29,910  (29,910
  2,650   01/13/31   2.230%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     (98,794  (98,794
  3,710   04/07/31   2.469%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     (35,068  (35,068
  1,050   04/09/31   2.435%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     (13,639  (13,639
  2,110   04/09/31   2.448%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     (24,560  (24,560
  2,170   04/13/31   2.445%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     (25,530  (25,530
  1,330   04/13/31   2.450%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     (14,929  (14,929
  1,355   04/14/31   2.450%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     (15,034  (15,034
  1,120   04/15/31   2.460%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     (11,155  (11,155
  2,165   04/15/31   2.465%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     (20,392  (20,392
     

 

 

  

 

 

  

 

 

 
     $  $(379,287 $(379,287
     

 

 

  

 

 

  

 

 

 

 

(1)

The Fund pays the fixed rate and receives the floating rate.

(2)

The Fund pays the floating rate and receives the fixed rate.

 

See Notes to Financial Statements.

 

64 


 

 

Interest rate swap agreements outstanding at April 30, 2021:

 

Notional
Amount
(000)#

  Termination
Date
 Fixed
    Rate    
 

Floating

          Rate          

 Value at
Trade Date
  Value at
April 30,
2021
  Unrealized
Appreciation
(Depreciation)
 

Centrally Cleared Interest Rate Swap Agreements:

 

AUD

  16,900  02/13/30 1.210%(S) 6 Month BBSW(2)(S) $(68 $(405,231 $(405,163

BRL

  66,745  01/02/25 5.903%(T) 1 Day BROIS(2)(T)     (194,082  (194,082

BRL

  24,233  01/02/25 6.343%(T) 1 Day BROIS(2)(T)     (142,917  (142,917

BRL

  25,971  01/02/25 6.343%(T) 1 Day BROIS(2)(T)     (154,769  (154,769

BRL

  41,334  01/02/25 6.359%(T) 1 Day BROIS(2)(T)     (242,932  (242,932

BRL

  18,614  01/02/25 6.640%(T) 1 Day BROIS(2)(T)     83,417   83,417 

BRL

  21,128  01/02/25 6.670%(T) 1 Day BROIS(2)(T)     101,861   101,861 

BRL

  13,418  01/04/27 6.845%(T) 1 Day BROIS(2)(T)     (139,041  (139,041

BRL

  8,342  01/04/27 6.890%(T) 1 Day BROIS(2)(T)     (82,928  (82,928

BRL

  14,674  01/04/27 6.890%(T) 1 Day BROIS(2)(T)     (146,860  (146,860

BRL

  17,000  01/04/27 6.912%(T) 1 Day BROIS(2)(T)     (20,354  (20,354

CAD

  14,720  01/14/26 0.875%(S) 3 Month Canadian Banker’s Acceptance(2)(S)  (128  (241,218  (241,090

CAD

  13,100  01/19/26 0.865%(S) 3 Month Canadian Banker’s Acceptance(2)(S)  (112  (222,315  (222,203

CLP

   14,295,000  01/25/26 1.634%(S) 1 Day CLOIS(2)(S)     (748,426  (748,426

CNH

  51,840  06/14/24 2.900%(Q) 7 Day China Fixing Repo Rates(2)(Q)  114   70,617   70,503 

CNH

  147,000  06/28/24 2.901%(Q) 7 Day China Fixing Repo Rates(2)(Q)     193,850   193,850 

CNH

  43,300  09/19/24 2.940%(Q) 7 Day China Fixing Repo Rates(2)(Q)  (28  66,159   66,187 

CNH

  37,800  10/10/24 2.860%(Q) 7 Day China Fixing Repo Rates(2)(Q)  (17  39,511   39,528 

COP

  11,070,000  02/18/25 4.505%(Q) 1 Day COOIS(2)(Q)     56,086   56,086 

COP

  12,642,920  02/21/25 4.565%(Q) 1 Day COOIS(2)(Q)     70,979   70,979 

COP

  7,380,000  01/20/26 3.085%(Q) 1 Day COOIS(2)(Q)     (110,340  (110,340

COP

  11,208,000  02/03/26 3.080%(Q) 1 Day COOIS(2)(Q)     (171,437  (171,437

COP

  7,821,000  02/18/30 5.072%(Q) 1 Day COOIS(2)(Q)     (44,564  (44,564

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  65 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

Interest rate swap agreements outstanding at April 30, 2021 (continued):

 

Notional

Amount

(000)#

  Termination
Date
 Fixed
    Rate    
 

Floating

          Rate          

 Value at
Trade Date
  Value at
April 30,
2021
  Unrealized
Appreciation
(Depreciation)
 

Centrally Cleared Interest Rate Swap Agreements (cont’d.):

 

COP

  5,472,000  02/18/30 5.081%(Q) 1 Day COOIS(2)(Q) $  $(30,195 $(30,195

COP

  7,813,000  02/24/30 5.078%(Q) 1 Day COOIS(2)(Q)     (44,037  (44,037

GBP

  4,050  05/08/24 0.950%(A) 1 Day SONIA(1)(A)  (128,381  (163,474  (35,093

GBP

  1,425  05/08/29 1.100%(A) 1 Day SONIA(1)(A)  (111,179  (79,085  32,094 

GBP

  1,100  05/08/34 1.200%(A) 1 Day SONIA(1)(A)  (61,374  (70,815  (9,441

HUF

   4,370,000  02/14/30 1.605%(A) 6 Month BUBOR(2)(S)     (961,950  (961,950

HUF

  1,234,000  02/18/30 1.803%(A) 6 Month BUBOR(2)(S)     (205,471  (205,471

MXN

  81,700  01/12/28 5.020%(M) 28 Day Mexican Interbank Rate(2)(M)  (62  (317,851  (317,789

MXN

  11,550  01/03/31 5.550%(M) 28 Day Mexican Interbank Rate(2)(M)  (52  (55,646  (55,594

MXN

  32,290  01/13/31 5.460%(M) 28 Day Mexican Interbank Rate(2)(M)  (44  (167,480  (167,436

MXN

  112,300  01/15/31 5.450%(M) 28 Day Mexican Interbank Rate(2)(M)  (151  (587,518  (587,367

MXN

  28,860  01/03/33 5.715%(M) 28 Day Mexican Interbank Rate(2)(M)  (49  (163,797  (163,748

MXN

  8,665  12/28/35 6.000%(M) 28 Day Mexican Interbank Rate(2)(M)  (55  (54,053  (53,998

NZD

  6,000  02/14/30 1.523%(S) 3 Month BBR(2)(Q)     (49,385  (49,385

NZD

  1,600  01/19/31 1.090%(S) 3 Month BBR(2)(Q)     (71,127  (71,127

NZD

  5,740  01/19/31 1.096%(S) 3 Month BBR(2)(Q)  2,588   (252,842  (255,430

NZD

  2,100  01/26/31 1.098%(S) 3 Month BBR(2)(Q)     (92,909  (92,909

PLN

  7,000  01/19/31 1.200%(A) 6 Month WIBOR(2)(S)  2,686   (119,889  (122,575

PLN

  26,290  01/21/31 1.170%(A) 6 Month WIBOR(2)(S)  (23,156  (470,405  (447,249
  8,520  01/19/26 0.380%(A) 1 Day USOIS(1)(A)     122,144   122,144 
  10,075  01/21/26 0.374%(A) 1 Day USOIS(1)(A)     148,430   148,430 

 

See Notes to Financial Statements.

 

66 


 

 

Interest rate swap agreements outstanding at April 30, 2021 (continued):

 

Notional

Amount

(000)#

   Termination
Date
   Fixed
    Rate    
  

Floating

          Rate          

  Value at
Trade Date
  Value at
April 30,
2021
  Unrealized
Appreciation
(Depreciation)
 

Centrally Cleared Interest Rate Swap Agreements (cont’d.):

 

  8,700    02/14/30    1.382%(A)  1 Day USOIS(1)(A)  $  $(71,698 $(71,698
  685    01/19/31    0.931%(A)  1 Day USOIS(1)(A)      28,604   28,604 
  1,880    01/20/31    0.915%(A)  1 Day USOIS(1)(A)      81,357   81,357 

ZAR

   126,900    07/07/25    5.160%(Q)  3 Month JIBAR(1)(Q)   (5,173  92,585   97,758 

ZAR

  61,800    12/17/25    4.855%(Q)  3 Month JIBAR(1)(Q)   (683  139,782   140,465 

ZAR

  76,100    02/11/30    7.481%(Q)  3 Month JIBAR(2)(Q)   (3,095  108,182   111,277 

ZAR

  99,200    02/28/30    7.500%(Q)  3 Month JIBAR(2)(Q)   (27,234  132,529   159,763 

ZAR

  54,300    03/12/30    7.840%(Q)  3 Month JIBAR(2)(Q)   (455  152,887   153,342 

ZAR

  36,000    03/12/30    7.900%(Q)  3 Month JIBAR(2)(Q)   (314  111,566   111,880 

ZAR

  100,000    03/18/30    10.650%(Q)  3 Month JIBAR(2)(Q)      257,660   257,660 

ZAR

  10,700    03/27/30    9.150%(Q)  3 Month JIBAR(2)(Q)   (204  94,431   94,635 

ZAR

  45,000    04/03/30    9.300%(Q)  3 Month JIBAR(2)(Q)   (845  425,032   425,877 

ZAR

  114,100    07/07/30    7.040%(Q)  3 Month JIBAR(2)(Q)   (2,966  (177,022  (174,056

ZAR

  7,000    08/03/30    7.030%(Q)  3 Month JIBAR(2)(Q)   (103  (9,077  (8,974

ZAR

  3,800    01/15/31    6.765%(Q)  3 Month JIBAR(2)(Q)   (83  (13,804  (13,721
        

 

 

  

 

 

  

 

 

 
        $(360,623 $(4,719,275 $(4,358,652
        

 

 

  

 

 

  

 

 

 

 

(1)

The Fund pays the fixed rate and receives the floating rate.

(2)

The Fund pays the floating rate and receives the fixed rate.

Total return swap agreements outstanding at April 30, 2021:

 

Reference
Entity

 Financing
Rate
 Counterparty Termination
Date
 Long
(Short)
Notional
Amount
(000)#(1)
  Fair
Value
  Upfront
Premiums
Paid
(Received)
  Unrealized
Appreciation

(Depreciation)(2)
 

OTC Total Return Swap Agreement:

 

IOS. FN30.450.10 Index(M)

 1 Month LIBOR(M) Credit Suisse International 1/12/41  2,378  $(5,820 $(5,611 $(209
     

 

 

  

 

 

  

 

 

 

 

(1)

On a long total return swap, the Fund receives payments for any positive return on the reference entity (makes payments

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  67 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

 for any negative return) and pays the financing rate. On a short total return swap, the Fund makes payments for any positive return on the reference entity (receives payments for any negative return) and receives thefinancing rate.
(2)

Upfront/recurring fees or commissions, as applicable, are included in the net unrealized appreciation (depreciation).

Balances Reported in the Statement of Assets and Liabilities for OTC Swap Agreements:

 

   Premiums Paid Premiums Received Unrealized
Appreciation
 Unrealized
Depreciation

OTC Swap Agreements

 $1,225,459 $(874,141) $1,542,981 $(2,789,739)

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 derivativesare listed by broker as follows:

 

Broker

     Cash and/or Foreign Currency         Securities Market Value    

Citigroup Global Markets, Inc.

  $12,950,000  $4,910,879
  

 

 

   

 

 

 

Fair Value Measurements:

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

Level1—unadjusted quoted prices generally in active markets for identical securities.

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

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

The following is a summary of the inputs used as of April 30, 2021 in valuingsuch portfolio securities:

 

    Level 1      Level 2      Level 3   

Investments in Securities

   

Assets

   

Asset-Backed Securities

   

Automobiles

 $        —  $1,857,381  $ 

Collateralized Loan Obligations

     186,131,915    

Consumer Loans

     21,040,528    

Home Equity Loans

     14,584,296    

Other

     3,180,426    

Residential Mortgage-Backed Securities

     24,934,112    

Student Loans

     31,776,071    

Bank Loans

     9,214,685   7,621,471 

Commercial Mortgage-Backed Securities

     77,787,791    

Convertible Bond

     30,012    

Corporate Bonds

     309,302,561    

Municipal Bonds

     20,774,905    

Residential Mortgage-Backed Securities

     28,629,512   8,944,382 

 

See Notes to Financial Statements.

 

68 


 

 

  Level 1  Level 2  Level 3 

Investments in Securities (continued)

   

Sovereign Bonds

 $  $41,354,605  $ 

U.S. Treasury Obligations

     23,488,977    

Common Stocks

  12,107,310   64,181   3,440,868 

Affiliated Mutual Funds

  135,655,696       

Options Purchased

     13,501,215    
 

 

 

  

 

 

  

 

 

 

Total

 $147,763,006  $807,653,173  $20,006,721 
 

 

 

  

 

 

  

 

 

 

Liabilities

   

Options Written

 $  $(12,939,984 $ 
 

 

 

  

 

 

  

 

 

 

Other Financial Instruments*

   

Assets

   

Futures Contracts

 $2,119,964  $  $ 

OTC Forward Foreign Currency Exchange Contracts

     21,775,936    

OTC Cross Currency Exchange Contracts

     9,518,573    

OTC Packaged Credit Default Swap Agreements

     1,133,481    

OTC Credit Default Swap Agreements

     40,166   62 

Centrally Cleared Interest Rate Swap Agreements

     2,647,697    
 

 

 

  

 

 

  

 

 

 

Total

 $2,119,964  $35,115,853  $62 
 

 

 

  

 

 

  

 

 

 

Liabilities

   

Futures Contracts

 $(581,845 $  $ 

OTC Forward Foreign Currency Exchange Contracts

     (22,935,252   

OTC Cross Currency Exchange Contracts

     (8,074,463   

OTC Packaged Credit Default Swap Agreements

     (1,141,116   

Centrally Cleared Credit Default Swap Agreement

     (1,251,416   

OTC Credit Default Swap Agreements

     (922,213   

Centrally Cleared Inflation Swap Agreements

     (379,287   

Centrally Cleared Interest Rate Swap Agreements

     (7,006,349   

OTC Total Return Swap Agreement

     (5,820   
 

 

 

  

 

 

  

 

 

 

Total

 $(581,845 $(41,715,916 $ 
 

 

 

  

 

 

  

 

 

 

 

 

*

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.

The following is a reconciliation of assets in which unobservable inputs (Level 3) were used in determining fair value:

 

  Bank
Loans
 Residential
Mortgage-Backed
Securities
 Common
Stocks
 OTC Credit Default
Swap Agreements

Balance as of 10/31/20

  $12,449,038  $17,302,975  $  $(476)

Realized gain (loss)

   728,983              (202     21,815

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  69 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

  Bank
Loans
  Residential
Mortgage-Backed
Securities
  Common
Stocks
  OTC Credit Default
Swap Agreements
 

Change in unrealized appreciation (depreciation)

 $1,604,749  $113,401  $(1,236,930 $62 

Purchases/Exchanges/Issuances

        4,678,000    

Sales/Paydowns

  (6,715,068  (8,471,994     (21,339

Accrued discount/premium

            

Transfers into Level 3

            

Transfers out of Level 3

  (446,231         
 

 

 

  

 

 

  

 

 

  

 

 

 

Balance as of 04/30/21

 $7,621,471  $8,944,382  $3,440,868  $62 
 

 

 

  

 

 

  

 

 

  

 

 

 

Change in unrealized appreciation (depreciation) relating to securities still held at reporting periodend

 $1,604,749  $113,401  $(1,236,930 $62 
 

 

 

  

 

 

  

 

 

  

 

 

 

Level 3 securities as presented in the table above are being fair valued using pricing methodologies approved by the Board, whichcontain unobservable inputs as follows:

 

Level 3 Securities

 

Fair Value as of
April 30, 2021

 

Valuation

Methodology

 

Unobservable Inputs

Bank Loans

  $7,621,471 Market Approach Discounted Yield Curve Spread

Residential Mortgage-Backed Securities

   8,944,382 Market Approach Single Broker Indicative Quote

Common Stocks

   3,440,868 Market Approach Estimated EBITDA

OTC Credit Default Swap Agreements

   62 Market Approach Single Broker Indicative Quote
  

 

 

   
  $20,006,783  
  

 

 

   

It is the Fund’s policy to recognize transfers in and transfers out at the fair value as of the beginning of period. Securitiestransferred levels are as follows:

 

Investments in Securities

 

Amount Transferred

 Level Transfer Logic

Bank Loans

 $446,231 L3 to L2 Single Broker Indicative Quote
to Multiple Broker Quotes

Industry Classification:

The industryclassification of investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2021 were as follows:

 

Collateralized Loan Obligations

  18.9

Affiliated Mutual Funds (1.0% represents investments purchased with collateral from securities onloan)

  13.7 

Commercial Mortgage-Backed Securities

  7.9 

Banks

  6.9 

Residential Mortgage-Backed Securities

  6.3 

Sovereign Bonds

  4.2

Oil & Gas

  3.6 

Student Loans

  3.2 

U.S. Treasury Obligations

  2.4 

Chemicals

  2.3 

Pharmaceuticals

  2.2 

Consumer Loans

  2.2 
 

 

See Notes to Financial Statements.

 

70 


 

 

Industry Classification (continued):

 

Municipal Bonds

  2.1

Retail

  1.8 

Pipelines

  1.7 

Telecommunications

  1.6 

Home Equity Loans

  1.5 

Options Purchased

  1.4 

Electric

  1.3 

Oil, Gas & Consumable Fuels

  1.2 

Insurance

  1.2 

Miscellaneous Manufacturing

  1.1 

Media

  0.9 

Auto Parts & Equipment

  0.8 

Home Builders

  0.7 

Entertainment

  0.7 

Gas

  0.6 

Airlines

  0.5 

Packaging & Containers

  0.5 

Real Estate

  0.5 

Healthcare-Products

  0.4 

Commercial Services

  0.4 

Foods

  0.4 

Lodging

  0.4 

Gas Utilities

  0.4 

Other

  0.3 

Building Materials

  0.3 

Internet

  0.3 

Computers

  0.3 

Healthcare-Services

  0.3

Engineering & Construction

  0.2 

Auto Manufacturers

  0.2 

Mining

  0.2 

Energy-Alternate Sources

  0.2 

Automobiles

  0.2 

Forest Products & Paper

  0.2 

Diversified Financial Services

  0.2 

Advertising

  0.1 

Water

  0.1 

Beverages

  0.0

Iron/Steel

  0.0

Savings & Loans

  0.0

Oil & Gas Services

  0.0

Textiles

  0.0

Electronics

  0.0

Machinery-Diversified

  0.0
 

 

 

 
  99.0 

Options Written

  (1.3

Other assets in excess of liabilities

  2.3 
 

 

 

 
  100.0
 

 

 

 

 

 

*

Less than +/- 0.05%

 

 

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

The Fund invested in derivative instruments during the reporting period. The primary types ofrisk associated with these derivative instruments are credit contracts risk, foreign exchange contracts risk and interest rate contracts risk. See the Notes to Financial Statements for additional detail regarding these derivative instruments andtheir 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 April 30, 2021 as presented in the Statement of Assets and Liabilities:

 

    

Asset Derivatives

   

Liability Derivatives

 

Derivatives not accounted
for as hedging instruments,
carried at fairvalue

  

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  $1,251,416

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  71 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

    

Asset Derivatives

  

Liability Derivatives

 

Derivatives not accounted
for as hedging instruments,
carried at fairvalue

  

Statement of
Assets and
Liabilities Location

  Fair
Value
  

Statement of
Assets and
Liabilities Location

  Fair Value 
Credit contracts  Premiums paid for OTC swap agreements  $1,225,459  Premiums received for OTC swap agreements  $868,530 
Credit contracts  Unaffiliated investments   53,602  Options written outstanding, at value   53,911 
Credit contracts  Unrealized appreciation on OTC swap agreements   1,542,981  Unrealized depreciation on OTC swap agreements   2,789,530 
Foreign exchange contracts  Unaffiliated investments   13,447,613  Options written outstanding, at value   12,886,073 
Foreign exchange contracts  Unrealized appreciation on OTC cross currency exchange contracts   9,518,573  Unrealized depreciation on OTC cross currency exchange contracts   8,074,463 
Foreign exchange contracts  Unrealized appreciation on OTC forward foreign currency exchange contracts   21,775,936  Unrealized depreciation on OTC forward foreign currency exchange contracts   22,935,252 
Interest rate contracts  Due from/to broker-variation margin futures   2,119,964 Due from/to broker-variation margin futures   581,845
Interest rate contracts  Due from/to broker-variation margin swaps   2,647,697 Due from/to broker-variation margin swaps   7,385,636
Interest rate contracts       Premiums received for OTC swap agreements   5,611 
Interest rate contracts       Unrealized depreciation on OTC swap agreements   209 
    

 

 

    

 

 

 
    $52,331,825    $56,832,476 
    

 

 

    

 

 

 

 

*

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

The effects ofderivative instruments on the Statement of Operations for the six months ended April 30, 2021 are as follows:

 

Amount of Realized Gain (Loss) on Derivatives Recognized inIncome

 

Derivatives not accounted for as hedging
instruments, carried at fairvalue

 Options
Purchased(1)
  Options
Written
  Futures  Forward
& Cross
Currency
Exchange
Contracts
  Swaps 

Credit contracts

 $  $  $  $  $1,789,697 

Foreign exchange contracts

  (87,872,633  85,431,004      (1,992,781   

Interest rate contracts

  3,166,857      (483,850     1,216,344 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

 $(84,705,776 $85,431,004  $(483,850 $(1,992,781 $3,006,041 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

See Notes to Financial Statements.

 

72 


 

 

(1)

Included in net realized gain (loss) on investment transactions in the Statement of Operations.

 

Change in Unrealized Appreciation (Depreciation) onDerivatives Recognized in Income

 

Derivatives not accounted for
as hedging instruments,
carried at fairvalue

 Options
Purchased(2)
  Options
Written
  Futures  Forward
& Cross
Currency
Exchange
Contracts
  Swaps 

Credit contracts

 $952  $816  $  $  $(5,781,422

Foreign exchange contracts

  (18,066,686  19,539,578      (2,964,901   

Interest rate contracts

  (3,364,556     4,390,357      (8,422,296
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

 $(21,430,290 $19,540,394  $4,390,357  $(2,964,901 $(14,203,718
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

(2)

Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

For the six months ended April 30, 2021, the Fund’s average volume of derivative activities is as follows:

 

Options
Purchased(1)

 

Options

Written(2)

 

Futures
Contracts—
Long
Positions(2)

 

Futures

Contracts—

Short

Positions(2)

 

Forward Foreign
CurrencyExchange
Contracts—Purchased(3)

$74,883,961

 $2,892,530,368 $65,463,078 $1,417,452,989 $549,105,649

 

Forward Foreign

Currency Exchange
Contracts—Sold(3)

 

Cross

Currency

Exchange

Contracts(4)

 

Interest Rate

Swap

Agreements(2)

 

Credit Default
Swap Agreements—

Buy Protection(2)

$683,531,536

 $92,992,082 $290,036,560 $479,825,000

 

Credit Default

Swap Agreements—

Sell Protection(2)

 

Total Return

Swap

Agreements(2)

 

Inflation Swap

Agreements(2)

$201,343,756

 $1,670,668 $9,366,667

 

(1)

Cost.

(2)

Notional Amount in USD.

(3)

Value at Settlement Date.

(4)

Value at Trade Date.

Average volume is based on average quarter end balances as noted for the six months ended April 30, 2021.

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 currentrequirements 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 wherethe legal right to set-off exists is presented in the summary below.

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  73 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

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

  $9,092,873 $(9,092,873) $—
  

 

 

 

 

 

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

Bank of America, N.A.

  $4,792,262  $(6,456,661)  $(1,664,399)  $1,664,399  $

Barclays Bank PLC

   2,100,925   (5,265,129)   (3,164,204)   3,164,204   

BNP Paribas S.A.

   647,418   (1,335,445)   (688,027)   688,027   

Citibank, N.A.

   8,805,304   (11,640,605)   (2,835,301)   2,835,301   

Citigroup Global Markets, Inc.

   236,547   (358,277)   (121,730)      (121,730)

Credit Suisse International

   40,223   (24,380)   15,843      15,843

Deutsche Bank AG

   16,487,554   (6,854,242)   9,633,312   (9,633,312)   

Goldman Sachs International

   2,563,405   (2,097,257)   466,148   (466,148)   

HSBC Bank PLC

   1,896,281   (591,434)   1,304,847   (1,095,176)   209,671

JPMorgan Chase Bank, N.A.

   4,983,527   (3,666,630)   1,316,897   (1,316,897)   

Morgan Stanley & Co. International PLC

   4,983,274   (9,304,573)   (4,321,299)   4,321,299   

Standard Chartered

   16,665      16,665      16,665

The Toronto-Dominion Bank

   2,523      2,523      2,523

UBS AG

   8,256   (18,946)   (10,690)      (10,690)
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $47,564,164  $(47,613,579)  $(49,415)  $161,697  $112,282
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Includes unrealized appreciation/(depreciation) on swaps and forwards, premiums paid/(received) on swap agreements andmarket value of purchased and written options, as represented on the Statement of Assets and Liabilities.

(2)

Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions and theFund’s OTC derivative exposure by counterparty.

 

See Notes to Financial Statements.

 

74 


Statement of Assets and Liabilities (unaudited)

as ofApril 30, 2021

 

Assets

     

Investments at value, including securities on loan of $9,092,873:

  

Unaffiliated investments (cost $832,098,632)

  $ 839,767,204 

Affiliated investments (cost $135,641,815)

   135,655,696 

Foreign currency, at value (cost $973,023)

   970,664 

Cash segregated for counterparty - OTC

   590,000 

Unrealized appreciation on OTC forward foreign currency exchange contracts

   21,775,936 

Receivable for investments sold

   13,204,303 

Deposit with broker for centrally cleared/exchange-traded derivatives

   12,950,000 

Unrealized appreciation on OTC cross currency exchange contracts

   9,518,573 

Dividends and interest receivable

   6,868,153 

Receivable for Fund shares sold

   1,737,154 

Unrealized appreciation on OTC swap agreements

   1,542,981 

Premiums paid for OTC swap agreements

   1,225,459 

Prepaid expenses and other assets

   351,138 
  

 

 

 

Total Assets

   1,046,157,261 
  

 

 

 

Liabilities

     

Unrealized depreciation on OTC forward foreign currency exchange contracts

   22,935,252 

Options written outstanding, at value (premiums received $38,124,263)

   12,939,984 

Payable to broker for collateral for securities on loan

   9,362,511 

Unrealized depreciation on OTC cross currency exchange contracts

   8,074,463 

Unrealized depreciation on OTC swap agreements

   2,789,739 

Payable for Fund shares purchased

   1,803,348 

Premiums received for OTC swap agreements

   874,141 

Accrued expenses and other liabilities

   492,187 

Management fee payable

   455,915 

Payable for investments purchased

   340,499 

Dividends payable

   307,798 

Due to broker—variation margin swaps

   218,786 

Due to broker—variation margin futures

   64,492 

Distribution fee payable

   62,103 

Affiliated transfer agent fee payable

   4,460 

Trustees’ fees payable

   1,323 
  

 

 

 

Total Liabilities

   60,727,001 
  

 

 

 

Net Assets

  $ 985,430,260 
  

 

 

 
         

Net assets were comprised of:

  

Shares of beneficial interest, at par

  $ 106,250 

Paid-in capital in excess of par

   1,230,568,982 

Total distributable earnings (loss)

   (245,244,972
  

 

 

 

Net assets, April 30, 2021

  $ 985,430,260 
  

 

 

 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  75 


Statement of Assets and Liabilities (unaudited)

as ofApril 30, 2021

 

Class A

    

Net asset value and redemption price per share,
($ 94,069,828 ÷ 10,177,790 shares of beneficial interest issued andoutstanding)

 $9.24 

Maximum sales charge (3.25% of offering price)

  0.31 
 

 

 

 

Maximum offering price to public

 $9.55 
 

 

 

 

Class C

    

Net asset value, offering price and redemption price per share,
($ 50,917,462 ÷ 5,491,972 shares of beneficialinterest issued and outstanding)

 $9.27 
 

 

 

 

Class Z

    

Net asset value, offering price and redemption price per share,
($ 735,757,390 ÷ 79,248,419 shares of beneficialinterest issued and outstanding)

 $9.28 
 

 

 

 

Class R6

    

Net asset value, offering price and redemption price per share,
($ 104,685,580 ÷ 11,331,995 shares of beneficialinterest issued and outstanding)

 $9.24 
 

 

 

 

 

See Notes to Financial Statements.

 

76 


Statement of Operations(unaudited)

Six Months Ended April 30, 2021

 

Net Investment Income (Loss)

     

Income

  

Interest income

  $ 21,723,797 

Affiliated dividend income

   68,886 

Income from securities lending, net (including affiliated income of $10,875)

   24,267 
  

 

 

 

Total income

   21,816,950 
  

 

 

 

Expenses

  

Management fee

   3,510,877 

Distribution fee(a)

   410,982 

Transfer agent’s fees and expenses (including affiliated expense of $11,118)(a)

   595,941 

Custodian and accounting fees

   140,266 

Registration fees(a)

   51,104 

Audit fee

   34,326 

Shareholders’ reports

   32,675 

Trustees’ fees

   13,986 

Legal fees and expenses

   12,113 

Miscellaneous

   29,158 
  

 

 

 

Total expenses

   4,831,428 

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

   (112,978
  

 

 

 

Net expenses

   4,718,450 
  

 

 

 

Net investment income (loss)

   17,098,500 
  

 

 

 

Realized And Unrealized Gain (Loss) On Investment And ForeignCurrency Transactions

     

Net realized gain (loss) on:

  

Investment transactions (including affiliated of $23,996)

   (62,082,778

Futures transactions

   (483,850

Forward and cross currency contract transactions

   (1,992,781

Options written transactions

   85,431,004 

Swap agreement transactions

   3,006,041 

Foreign currency transactions

   8,998,264 
  

 

 

 
   32,875,900 
  

 

 

 

Net change in unrealized appreciation (depreciation) on:

  

Investments (including affiliated of $(32,600))

   7,463,431 

Futures

   4,390,357 

Forward and cross currency contracts

   (2,964,901

Options written

   19,540,394 

Swap agreements

   (14,203,718

Foreign currencies

   (233,718
  

 

 

 
   13,991,845 
  

 

 

 

Net gain (loss) on investment and foreign currency transactions

   46,867,745 
  

 

 

 

Net Increase (Decrease) In Net Assets Resulting From Operations

  $ 63,966,245 
  

 

 

 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  77 


Statement of Operations(unaudited)

Six Months Ended April 30, 2021

 

 

(a)

Class specific expenses and waivers were as follows:

 

   Class A  Class C  Class Z  Class R6 

Distribution fee

  115,593   295,389       

Transfer agent’s fees and expenses

  35,452   27,613   529,855   3,021 

Registration fees

  11,853   9,685   21,038   8,528 

Fee waiver and/or expense reimbursement

        (112,978   

 

See Notes to Financial Statements.

 

78 


Statements of Changes in Net Assets (unaudited)

 

    

 

   Six Months Ended
April 30, 2021
   Year Ended
October 31, 2020
 

Increase (Decrease) in Net Assets

          

Operations

    

Net investment income (loss)

  $ 17,098,500   $ 62,708,667 

Net realized gain (loss) on investment and foreign currency transactions

   32,875,900    (311,138,134

Net change in unrealized appreciation (depreciation) on investments and foreign currencies

   13,991,845    162,610,301 
  

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

   63,966,245    (85,819,166
  

 

 

   

 

 

 

Dividends and Distributions

    

Distributions from distributable earnings

    

Class A

   (1,208,297   (7,578,227

Class C

   (548,695   (5,063,142

Class Z

   (13,261,050   (109,217,140

Class R6

   (1,835,695   (6,149,143
  

 

 

   

 

 

 
   (16,853,737   (128,007,652
  

 

 

   

 

 

 

Tax return of capital distributions

    

Class A

       (456,184

Class C

       (304,784

Class Z

       (6,574,503

Class R6

       (370,157
  

 

 

   

 

 

 
       (7,705,628
  

 

 

   

 

 

 

Fund share transactions (Net of share conversions)

    

Net proceeds from shares sold

   173,574,148    611,310,436 

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

   14,668,104    115,714,362 

Cost of shares purchased

   (608,905,910   (1,516,009,999
  

 

 

   

 

 

 

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

   (420,663,658   (788,985,201
  

 

 

   

 

 

 

Total increase (decrease)

   (373,551,150   (1,010,517,647

Net Assets:

          

Beginning of period

   1,358,981,410    2,369,499,057 
  

 

 

   

 

 

 

End of period

  $ 985,430,260   $ 1,358,981,410 
  

 

 

   

 

 

 

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  79 


Notes to Financial Statements (unaudited)

 

1. Organization

Prudential Investment Portfolios 9 (the “Trust”) isregistered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust currently consists of five series: PGIM Absolute Return BondFund, PGIM QMA Large-Cap Core Equity Fund and PGIM Select Real Estate Fund, each of which are diversified funds for purposes of the 1940 Act and PGIM International Bond Fund and PGIM Real Estate Income Fund,each of which are non-diversified funds for purposes of the 1940 Act, and therefore, may invest a greater percentage of their assets in the securities of a single company or other issuer than a diversifiedfund. These financial statements relate only to the PGIM Absolute Return Bond Fund (the “Fund”).

The investment objective of the Fund is to seek positivereturns over the long term, regardless of market conditions.

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 Easterntime) 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 quotationsare readily available. The Trust’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 (“PGIMInvestments” 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. Thevaluation 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 theBoard’s review at its first quarterly meeting following the quarter in which such actions take place.

 

80 


For the fiscal reporting period-end, securities and other assets and liabilitieswere 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 trade in markets that are open on weekends andU.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 inputsdetermine 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” inaccordance with FASB ASC Topic 820 - Fair Value Measurements and Disclosures.

Common or preferred stocks, exchange-traded funds and derivative instruments, ifapplicable, 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 NASDAQofficial 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 onvaluation 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 valuehierarchy.

Investments in open-end funds (other than exchange-traded funds) are valued at their net asset values as of theclose 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 valuedusing 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 comparableinstruments 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 utilizingtransaction 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.

Bank loans are generally valued at prices provided by approved independent pricing vendors. The pricing vendors utilize broker/dealer quotations and provide prices basedon the average of such quotations. Bank loans valued using such vendor prices are generally classified as Level 2 in the fair value hierarchy. Bank loans valued based on a single broker

 

PGIM Absolute Return Bond Fund  81 


Notes to Financial Statements (unaudited) (continued)

 

quote or at the original transaction price in excess of five business days are classified as Level 3 in the fair value hierarchy.

OTC and centrally cleared derivative instruments are generally classified as Level 2 in the fair value hierarchy. Such derivative instruments are typically valuedusing 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 alsoincludes 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 derivatives such as interest rate swaps basedon 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 presentvalue 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, includingbut 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 utilizingunobservable 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 eventthat 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 3security’s fair value measurement.

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of anyrestrictions 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 thecapitalization 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 orthe 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 theirnet asset values.

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

 

82 


(i) market value of investment securities, other assets and liabilities — at the current rates of exchange;

(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 thatportion 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 Funddoes 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 realized foreign currency gains(losses) are included in the reported net realized gains (losses) on investment transactions. Notwithstanding the above, the Fund does isolate the effect of fluctuations in foreign currency exchange rates when determining the gain (loss) upon thesale 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 foreigncurrencies, 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 theU.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.

Forward and Cross Currency Contracts: A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forwardrate. The Fund enters into forward currency contracts, as defined in the prospectus, in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings or on specific receivables and payables denominatedin a foreign currency and to gain exposure to certain currencies. The contracts are valued daily at current forward exchange rates and any unrealized gain (loss) is included in net unrealized appreciation or depreciation on forward and crosscurrency contracts. Gain (loss) is realized on the settlement date of the contract equal to the difference between the settlement value of the original and negotiated forward contracts. This gain (loss), if any, is included in net realized gain(loss) on forward and cross currency contract transactions. Risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts. Forward currency contracts involve risks fromcurrency exchange rate and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Fund’s maximum risk of loss from counterparty credit risk is the net value of the cash flows to be received from thecounterparty at the end of the contract’s life. A cross

 

PGIM Absolute Return Bond Fund  83 


Notes to Financial Statements (unaudited) (continued)

 

currency contract is a forward contract where a specified amount of one foreign currency will be exchanged for a specified amount of another foreign currency.

Options: The Fund purchased and/or wrote options in order to hedge against adverse market movements or fluctuations in value caused by changes in prevailinginterest 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. TheFund’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 equalto 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 theoption. 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 costof 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) onpurchased 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 aresult, 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 thecounterparties to meet the terms of their contracts. With 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 andguarantees 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 aliability 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 variableinterest 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 writingoptions 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 aswap agreement if an option on a swap is exercised.

 

84 


Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) anagreed 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 thecontract 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 underlyingsecurity. 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 netrealized gain (loss) on futures transactions.

The Fund invested in financial futures contracts in order to hedge its existing portfolio securities, or securitiesthe 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 realizea 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 minimalcounterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.

Bank Loans: The Fund invested in bank loans. Bank loans include fixed and floating rate loans that are privately negotiated between a corporate borrower and oneor more financial institutions, including, but not limited to, term loans, revolvers, and other instruments issued in the bank loan market. The Fund acquires interests in loans directly (by way of assignment from the selling institution) and/orindirectly (by way of the purchase of a participation interest from the selling institution). Under a bank loan assignment, the Fund generally will succeed to all the rights and obligations of an assigning lending institution and becomes a lenderunder the loan agreement with the relevant borrower in connection with that loan. Under a bank loan participation, the Fund generally will have a contractual relationship only with the lender, not with the relevant borrower. As a result, the Fundgenerally will have the right to receive payments of principal, interest, and any fees to which it is entitled only from the lender selling the participation and only upon receipt by the lender of the payments from the relevant borrower. The Fundmay not directly benefit from the collateral supporting the debt obligation in which it has purchased the participation. As a result, the Fund will assume the credit risk of both the borrower and the institution selling the participation to theFund.

Swap Agreements: The Fund entered into certain types of swap agreements detailed in the disclosures below. A swap agreement is an agreement to exchangethe 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 agreements are valued daily at current market value and any change in value is included in the netunrealized appreciation or depreciation on swap agreements. Centrally cleared swaps pay or receive an amount known as “variation margin”, based on daily changes in the

 

PGIM Absolute Return Bond Fund  85 


Notes to Financial Statements (unaudited) (continued)

 

valuation of the swap contract. For OTC-traded, upfront premiums paid and received are shown as swap premiums paid and swappremiums 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.

Interest Rate Swaps: Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates,applied to a notional principal amount for a specified period. The Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objective. The Fund used interest rate swaps to maintain its ability to generate steadycash flow by receiving a stream of fixed rate payments or to increase exposure to prevailing market rates by receiving floating rate payments. The Fund’s maximum risk of loss from counterparty credit risk is the discounted net present value ofthe cash flows to be received from the counterparty over the contract’s remaining life.

Inflation Swaps: The Fund entered into inflation swap agreementsto 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 PriceIndex. Inflation swaps subject the Fund to interest rate risk.

Credit Default Swaps (“CDS”): CDS involve one party (the protection buyer) making astream 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 (typicallycorporate 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 ofprotection 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 whichrepresents 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 theprotection 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.

 

86 


As a seller of protection on credit default swap agreements, the Fund generally receives an agreed upon payment from thebuyer 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 onthe 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 swapagreement 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 netamounts 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 buyer of protection, the Fund generally receives an amount up to the notional value ofthe swap if a credit event occurs.

Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreementswhere 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 thelikelihood 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 creditspreads 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 eventoccurring as defined under the terms of the agreement.

Total Return Swaps: In a total return swap, one party receives payments based on the market value ofthe security or the commodity involved, or total return of a specific referenced asset, such as an equity, index or bond, and in return pays a defined amount. The Fund is subject to risk exposures associated with the referenced asset in the normalcourse of pursuing its investment objectives. The Fund entered into total return swaps to manage its exposure to a security or an index. The Fund’s maximum risk of loss from counterparty credit risk is the change in the value of the security,in the Fund’s favor, from the point of entering into the contract.

Master Netting Arrangements: The Trust, on behalf of the Fund, is subject to variousMaster 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 thecounterparty 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 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 theparties owes the other

 

PGIM Absolute Return Bond Fund  87 


Notes to Financial Statements (unaudited) (continued)

 

determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, thereporting party intends to set-off and the right of set-off is enforceable by law.

The Trust, on behalf of the Fund, is a party to International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements with certain counterpartiesthat 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, collateralrequirements, 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 withrespect 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 Scheduleof 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 onthe 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 tocounterparties 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 derivativeand 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 toelect 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, thecounterparty 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 maybe 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 eitherparty. 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 ofthe contract(s) may impact the amounts reported on financial statements.

 

88 


Short sales and OTC contracts, including forward foreign currency exchange contracts, swaps, forward rate agreements andwritten options involve elements of both market and 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.

Payment-In-Kind: The Fund invested in the open market or received pursuant to debtrestructuring, securities that pay-in-kind (PIK) the interest due on such debt instruments. The PIK interest, computed at the contractual rate specified, is added to theexisting principal balance of the debt when issued bonds have same terms as the bond or recorded as a separate bond when terms are different from the existing debt, and is recorded as interest income.

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 ofthe 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 theloaned 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 loanedsecurities. 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 maturities 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 thecollateral.

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 theinvestment 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 orunaffiliated 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 thecollateral 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 disclosedin 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 becomesaware 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 certainestimates by management that may

 

PGIM Absolute Return Bond Fund  89 


Notes to Financial Statements (unaudited) (continued)

 

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 shareclasses. 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, asapplicable.

Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investmentcompanies 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: The Fund expects to declare dividends of itsnet investment income daily and pay such dividends monthly. Distributions of net realized capital and currency gains, if any, are declared and paid at least annually. Dividends and distributions to shareholders, which are determined in accordancewith 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 distributableearnings (loss) and paid-in capital in excess of par, as appropriate.

Estimates: The preparation of financialstatements 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 Trust, on behalf of the Fund, has a management agreementwith the Manager. Pursuant to this agreement, the Manager has responsibility for all investment advisory services and supervises the subadvisers’ 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, andPGIM Limited (each a “subadviser” and collectively the “subadvisers”). The Manager pays for the services of the subadvisers.

The management feepaid to the Manager is accrued daily and payable monthly at an annual rate of 0.59% of the Fund’s average daily net assets up to and including $2.5 billion,

 

90 


0.565% of the next $2.5 billion and 0.54% of the average daily net assets in excess of $5 billion. The effective management fee rate before any waivers and/or expense reimbursements was0.59% for the reporting period ended April 30, 2021.

The Manager has contractually agreed, through February 28, 2022, to limit total annual operatingexpenses after fee waivers and/or expense reimbursements to 0.73% of average daily net assets for Class Z shares and 0.70% of average daily net assets for Class R6 shares. This contractual waiver excludes interest, brokerage, taxes (suchas income and foreign withholdings 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 anyother 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 theManager 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 Trust, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor ofthe Class A, Class C, Class Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A and Class C 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 distributionrelated activities at an annual rate of up to 0.25% and 1% of the average daily net assets of the Class A and Class C shares, respectively. The distribution fees are accrued daily and payable monthly. No distribution or service fees arepaid to PIMS as distributor of the Class Z or Class R6 shares of the Fund.

For the reporting period ended April 30, 2021, PIMS received $12,573 in front-end sales charges resulting from sales of Class A shares. Additionally, for the reporting period ended April 30, 2021, PIMS received $2,675 and $728 in contingent deferred sales charges imposed uponredemptions by certain Class A and Class C shareholders, respectively. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs.

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

 

PGIM Absolute Return Bond Fund  91 


Notes to Financial Statements (unaudited) (continued)

 

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 PGIMInstitutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees orreimbursed for providing their services to the Core Fund and the Money Market 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 Statementof Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.

The Fund may enter into certainsecurities 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 certainconditions, 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, commondirectors/trustees, and/or common officers. For the reporting period ended April 30, 2021, no 17a-7 transactions were entered into by the Fund.

5. Portfolio Securities

The aggregate cost of purchases and proceeds fromsales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended April 30, 2021, were $228,822,829 and $730,896,375, respectively.

A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the reporting period ended April 30, 2021, is presented asfollows:

 

Value,
Beginning
of
Period

 Cost of
Purchases
 Proceeds
from Sales
 Change in
Unrealized
Gain
(Loss)
 Realized
Gain
(Loss)
 Value,
End of
Period
 Shares,
End
of
Period
 Income
  

Short-Term Investments - Affiliated Mutual Funds:

    
  

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

    
 $55,453,161  $371,781,879  $300,956,948  $  $  $126,278,092   126,278,092  $68,886
  

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

  67,705,814   32,188,994   90,508,600   (32,600)   23,996   9,377,604   9,382,295   10,875(2) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

 

92 


Value,
Beginning
of
Period

  Cost of
Purchases
  Proceeds
from Sales
  Change in
Unrealized
Gain
(Loss)
  Realized
Gain
(Loss)
  Value,
End of
Period
  Shares,
End
of
Period
  Income 
$123,158,975  $403,970,873  $391,465,548  $(32,600 $23,996  $135,655,696   $79,761 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

 

(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 ofOperations.

 

(b) 

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

 

(wa) 

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

6. Tax Information

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of April 30, 2021 were as follows:

 

Tax Basis

  $948,214,974 
  

 

 

 

Gross Unrealized Appreciation

   104,920,967 

Gross Unrealized Depreciation

   (95,714,907
  

 

 

 

Net Unrealized Appreciation

  $9,206,060 
  

 

 

 

The GAAP basis may differ from tax basis due to certain tax-related adjustments.

For federal income tax purposes, the Fund had a capital loss carryforward as of October 31, 2020 of approximately $286,903,000 which can be carried forward for anunlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.

The Managerhas 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 reportingperiod. 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 October 31, 2020 are subject to such review.

7. Capital and Ownership

The Fund offers Class A, Class C,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 within12 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 iswaived for certain retirement

 

PGIM Absolute Return Bond Fund  93 


Notes to Financial Statements (unaudited) (continued)

 

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 Cshares 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) afterpurchase. 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 oftransactions in shares of beneficial interest, below.

The Trust has authorized an unlimited number of shares of beneficial interest of the Fund at $0.001 par valueper share, currently divided into four classes, designated Class A, Class C, Class Z and Class R6.

As of April 30, 2021, Prudential,through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:

 

   Number of Shares       Percentage of    
Outstanding Shares      

Class A

        1,215   0.1%

Class R6

 5,886,576 51.9%

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

 

Affiliated Unaffiliated

Number of

Shareholders

 Percentage of
Outstanding Shares
 

Number of

Shareholders

 Percentage of
Outstanding Shares

1

 5.5% 8 77.9%

 

94 


Transactions in shares of beneficial interest were as follows:

 

Class A

    Shares   Amount 

Six months ended April 30, 2021:

      

Shares sold

     570,819   $5,261,000 

Shares issued in reinvestment of dividends and distributions

     108,357    998,772 

Shares purchased

     (1,897,735   (17,491,675
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     (1,218,559   (11,231,903

Shares issued upon conversion from other share class(es)

     1,418,455    13,112,110 

Shares purchased upon conversion into other share class(es)

     (493,693   (4,541,459
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     (293,797  $(2,661,252
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     2,243,953   $21,064,704 

Shares issued in reinvestment of dividends and distributions

     702,042    6,493,794 

Shares purchased

     (8,361,282   (75,010,614
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     (5,415,287   (47,452,116

Shares issued upon conversion from other share class(es)

     1,958,960    17,647,740 

Shares purchased upon conversion into other share class(es)

     (758,117   (6,884,424
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     (4,214,444  $(36,688,800
    

 

 

   

 

 

 

Class C

          

Six months ended April 30, 2021:

      

Shares sold

     275,541   $2,553,556 

Shares issued in reinvestment of dividends and distributions

     54,544    504,346 

Shares purchased

     (968,065   (8,940,587
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     (637,980   (5,882,685

Shares purchased upon conversion into other share class(es)

     (1,275,997   (11,829,779
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     (1,913,977  $(17,712,464
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     1,044,937   $9,891,988 

Shares issued in reinvestment of dividends and distributions

     484,618    4,503,808 

Shares purchased

     (3,370,027   (30,048,689
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     (1,840,472   (15,652,893

Shares purchased upon conversion into other share class(es)

     (1,323,308   (11,991,854
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     (3,163,780  $(27,644,747
    

 

 

   

 

 

 

Class Z

          

Six months ended April 30, 2021:

      

Shares sold

     17,539,510   $162,491,706 

Shares issued in reinvestment of dividends and distributions

     1,223,987    11,332,185 

Shares purchased

     (59,168,509   (549,941,601
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     (40,405,012   (376,117,710

Shares issued upon conversion from other share class(es)

     744,374    6,885,379 

Shares purchased upon conversion into other share class(es)

     (391,278   (3,626,251
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     (40,051,916  $(372,858,582
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     55,818,116   $514,284,414 

Shares issued in reinvestment of dividends and distributions

     10,545,887    98,207,067 

Shares purchased

     (156,061,496   (1,385,774,048
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     (89,697,493   (773,282,567

Shares issued upon conversion from other share class(es)

     1,109,004    10,112,512 

Shares purchased upon conversion into other share class(es)

     (993,497   (8,975,234
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     (89,581,986  $(772,145,289
    

 

 

   

 

 

 

 

PGIM Absolute Return Bond Fund  95 


Notes to Financial Statements (unaudited) (continued)

 

Class R6

    Shares   Amount 

Six months ended April 30, 2021:

      

Shares sold

     359,998   $3,267,886 

Shares issued in reinvestment of dividends and distributions

     198,951    1,832,801 

Shares purchased

     (3,540,764   (32,532,047
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     (2,981,815  $(27,431,360
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     7,945,717   $66,069,330 

Shares issued in reinvestment of dividends and distributions

     714,105    6,509,693 

Shares purchased

     (2,844,041   (25,176,648
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     5,815,781    47,402,375 

Shares issued upon conversion from other share class(es)

     10,839    92,181 

Shares purchased upon conversion into other share class(es)

     (110   (921
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

         5,826,510   $    47,493,635 
    

 

 

   

 

 

 

8.    Borrowings

TheTrust, 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 toprovide an alternative source of temporary funding for capital share redemptions. The table below provides details of the SCA.

 

  SCA

Term of Commitment

 10/2/2020 – 9/30/2021

Total Commitment

 $1,200,000,000

Annualized Commitment Fee on
the Unused Portion of theSCA

 0.15%

Annualized Interest Rate on
Borrowings

 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 predeterminedmathematical 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 utilizethe 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 theParticipating Funds in the SCA equitably.

The Fund utilized the SCA during the reporting period ended April 30, 2021. The average daily balance for the 2 daysthat the Fund had loans outstanding during the period was

 

96 


approximately $7,803,500, borrowed at a weighted average interest rate of 1.41%. The maximum loan outstanding amount duringthe period was $11,280,000. At April 30, 2021, 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 referto the Fund’s Prospectus and Statement of Additional Information.

Bond Obligations Risk: As with credit risk, market risk and interest rate risk, theFund’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 theissuer’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 Fundmay 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 orcounterparty to pay back debt. The longer the maturity and the lower the credit quality of a bond, the more sensitive it is to credit risk.

Derivatives Risk:Derivatives involve special risks and costs and may result in losses to the Fund. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Fund will depend on the subadviser’sability to analyze and manage derivative transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” and therefore may magnify or otherwise increaseinvestment losses to the Fund. The Fund’s use of derivatives may also increase the amount of taxes payable by shareholders. Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market maynot always exist for the Fund’s derivatives positions. In fact, many OTC derivative instruments lack liquidity beyond the counterparty to the instrument. OTC derivative instruments also involve the risk that the other party will not meet itsobligations to the Fund.

Foreign Securities Risk: The Fund’s investments in securities of foreign issuers or issuers with significant exposure toforeign markets involve additional risk. The securities of such issuers may trade in markets that are less liquid, less regulated and more volatile than US markets. The value of the Fund’s investments may decline because of factors affectingthe particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities.

 

PGIM Absolute Return Bond Fund  97 


Notes to Financial Statements (unaudited) (continued)

 

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 termor 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 interestrates 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 ratesrise, 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 risesharply or in a manner not anticipated by the subadviser.

Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (includingfunds 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 investmentin 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 negativeimpact 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 itsinvestment 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 ratefor 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). OnNovember 30, 2020, the administrator of LIBOR announced a delay in the phase out of a majority of the U.S. dollar LIBOR publications until June 30, 2023, with the remainder of LIBOR publications to still end at the end of 2021. There stillremains 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 referencerates. 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, bank loans, derivatives and other instruments invested in by aFund as well as loan facilities used by a Fund. As such, the potential impact of a transition away from LIBOR on a Fund or the financial instruments in which a Fund invests cannot yet be determined. The elimination of LIBOR or changes to otherreference 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

 

98 


those reference rates, which may adversely affect a Fund’s performance and/or net asset value. Furthermore, the risksassociated 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 andthe other IBORs as benchmarks could deteriorate during the transition period, these effects could begin to be experienced by the end of 2021 and beyond until the anticipated discontinuance date in 2023 for the majority of the LIBOR rates.

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 remaininginvestors’ 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, theFund 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 aportfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities.

MarketDisruption and Geopolitical Risks: International wars or conflicts and geopolitical developments in foreign countries, along with instability in regions such as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the UnitedStates or around the world, public health epidemics such as the outbreak of infectious diseases like the recent outbreak of coronavirus globally or the 2014–2016 outbreak in West Africa of the Ebola virus, and other similar events couldadversely affect the U.S. and foreign financial markets, including increases in market volatility, reduced liquidity in the securities markets and government intervention, and may cause further long-term economic uncertainties in the United Statesand worldwide generally. The coronavirus pandemic 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 increasedmarket volatility and the potential for illiquidity in certain classes of securities and sectors of the market. Preventative or protective actions that governments may take in respect of pandemic or epidemic diseases may result in periods ofbusiness 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. Government intervention in markets may impact interest rates,market volatility and security pricing. The occurrence, reoccurrence and pendency of such diseases could adversely affect the economies (including through changes in business activity and increased unemployment) and financial markets either inspecific countries or worldwide.

Market Risk: Securities markets may be volatile and the market prices of the Fund’s securities may decline. Securitiesfluctuate 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.

 

PGIM Absolute Return Bond Fund  99 


Notes to Financial Statements (unaudited) (continued)

 

Mortgage-Backed and Asset-Backed Securities Risk: Mortgage-backed and asset-backed securities tend to increase in value less than other debt securities wheninterest 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 ofdeclining interest rates, the Fund may be required to reinvest more frequent prepayments on mortgage-backed and asset-backed securities in lower-yielding investments.

10.  Recent Accounting Pronouncement and Regulatory Developments

InMarch 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-04, which provides optional guidance for applying GAAP to contract modifications, hedging relationships and othertransactions 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. At this time, management isevaluating the implications of certain provisions of the ASU and any impact on the financial statement disclosures has not yet been determined.

On December 3,2020, the SEC announced that it voted to adopt a new rule that establishes an updated regulatory framework for fund valuation practices (the “Rule”). The Rule, in part, provides (i) a framework for determining fair value in good faithand (ii) provides for a fund Board’s assignment of its responsibility for the execution of valuation-related activities to a fund’s investment adviser. Further, the SEC is rescinding previously issued guidance on related issues. TheRule took effect on March 8, 2021, with a compliance date of September 8, 2022. Management is currently evaluating the Rule and its impact to the Fund.

 

100 


Financial Highlights(unaudited)

 

    

 

Class A Shares                            
   Six Months
Ended
April 30,
2021
     Year Ended October 31, 
      2020  2019  2018  2017  2016 
Per Share Operating Performance(a):                            
Net Asset Value, Beginning of Period  $8.94       $9.73   $9.82   $9.93   $9.59   $9.48 
Income (loss) from investment operations:                            
Net investment income (loss)  0.12       0.30   0.31   0.27   0.23   0.25 
Net realized and unrealized gain (loss) on investment and foreign currency transactions  0.30       (0.49  0.13   (0.05  0.33   0.06 
Total from investment operations  0.42       (0.19  0.44   0.22   0.56   0.31 
Less Dividends and Distributions:                            
Dividends from net investment income  (0.12      (0.26  (0.53  (0.33  (0.22  (0.15
Tax return of capital distributions  -       (0.04  -   -   -   (0.05
Distributions from net realized gains  -       (0.30  -   -   -   - 
Total dividends and distributions  (0.12      (0.60  (0.53  (0.33  (0.22  (0.20
Net asset value, end of period  $9.24       $8.94   $9.73   $9.82   $9.93   $9.59 
Total Return(b):  4.70      (1.96)%   4.71  2.21  5.95  3.36
        
Ratios/Supplemental Data:        
Net assets, end of period (000)  $94,070       $93,597   $142,879   $148,609   $119,969   $197,713 
Average net assets (000)  $93,241       $114,656   $147,612   $142,613   $145,290   $246,082 
Ratios to average net assets(c)(d):                            
Expenses after waivers and/or expense reimbursement  0.99%(e)       0.97  1.02  1.03  1.15  1.15
Expenses before waivers and/or expense reimbursement  0.99%(e)       0.97  1.02  1.04  1.22  1.24
Net investment income (loss)  2.65%(e)       3.27  3.24  2.72  2.31  2.67
Portfolio turnover rate(f)   24      20  50  52  72  38

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share onthe 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 notannualized.

(c)

Effective August 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(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 totransactions involving short-term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  101 


Financial Highlights(unaudited) (continued)

 

    

 

Class C Shares                            
   Six Months
Ended
April 30,
2021
     Year Ended October 31, 
      2020  2019  2018  2017  2016 
Per Share Operating Performance(a):                            
Net Asset Value, Beginning of Period  $8.97       $9.76   $9.85   $9.96   $9.62   $9.51 
Income (loss) from investment operations:                            
Net investment income (loss)  0.09       0.23   0.24   0.19   0.15   0.18 
Net realized and unrealized gain (loss) on investment and foreign currency transactions  0.29       (0.48  0.13   (0.05  0.34   0.06 
Total from investment operations  0.38       (0.25  0.37   0.14   0.49   0.24 
Less Dividends and Distributions:                            
Dividends from net investment income  (0.08      (0.20  (0.46  (0.25  (0.15  (0.10
Tax return of capital distributions  -       (0.04  -   -   -   (0.03
Distributions from net realized gains  -       (0.30  -   -   -   - 
Total dividends and distributions  (0.08      (0.54  (0.46  (0.25  (0.15  (0.13
Net asset value, end of period  $9.27       $8.97   $9.76   $9.85   $9.96   $9.62 
Total Return(b):  4.40      (2.70)%   3.80  1.43  5.16  2.59
        
Ratios/Supplemental Data:        
Net assets, end of period (000)  $50,917       $66,396   $103,133   $106,734   $98,789   $118,092 
Average net assets (000)  $59,567       $86,229   $107,605   $102,866   $106,174   $135,510 
Ratios to average net assets(c)(d):                            
Expenses after waivers and/or expense reimbursement  1.76%(e)       1.73  1.78  1.79  1.90  1.90
Expenses before waivers and/or expense reimbursement  1.76%(e)       1.73  1.78  1.80  1.97  1.99
Net investment income (loss)  1.89%(e)       2.51  2.46  1.93  1.58  1.91
Portfolio turnover rate(f)   24      20  50  52  72  38

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share onthe 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 notannualized.

(c)

Effective August 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(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 totransactions involving short-term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

102 


Class Z Shares                            
   Six Months
Ended
April 30,
2021
     Year Ended October 31, 
      2020  2019  2018  2017  2016 
Per Share Operating Performance(a):                            
Net Asset Value, Beginning of Period  $8.98       $9.77   $9.86   $9.97   $9.64   $9.52 
Income (loss) from investment operations:                            
Net investment income (loss)  0.13       0.32   0.34   0.30   0.25   0.27 
Net realized and unrealized gain (loss) on investment and foreign currency transactions  0.30       (0.48  0.13   (0.06  0.33   0.08 
Total from investment operations  0.43       (0.16  0.47   0.24   0.58   0.35 
Less Dividends and Distributions:                            
Dividends from net investment income  (0.13      (0.29  (0.56  (0.35  (0.25  (0.17
Tax return of capital distributions  -       (0.04  -   -   -   (0.06
Distributions from net realized gains  -       (0.30  -   -   -   - 
Total dividends and distributions  (0.13      (0.63  (0.56  (0.35  (0.25  (0.23
Net asset value, end of period  $9.28       $8.98   $9.77   $9.86   $9.97   $9.64 
Total Return(b):  4.81      (1.70)%   5.00  2.48  6.08  3.71
        
Ratios/Supplemental Data:        
Net assets, end of period (000)  $735,757       $1,071,124   $2,040,949   $2,159,518   $1,277,401   $1,019,254 
Average net assets (000)  $922,337       $1,499,872   $2,155,699   $1,679,461   $1,121,943   $1,396,060 
Ratios to average net assets(c)(d):                            
Expenses after waivers and/or expense reimbursement  0.73%(e)       0.73  0.73  0.75  0.90  0.90
Expenses before waivers and/or expense reimbursement  0.75%(e)       0.74  0.79  0.81  0.96  0.99
Net investment income (loss)  2.94%(e)       3.53  3.51  3.01  2.59  2.91
Portfolio turnover rate(f)   24      20  50  52  72  38

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each periodreported 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.

(c)

Effective August 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(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 totransactions involving short-term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

PGIM Absolute Return Bond Fund  103 


Financial Highlights(unaudited) (continued)

 

    

 

Class R6 Shares                            
   Six Months
Ended
April 30,
2021
     Year Ended October 31, 
      2020  2019  2018  2017  2016 
Per Share Operating Performance(a):                            
Net Asset Value, Beginning of Period  $8.93       $9.72   $9.82   $9.94   $9.61   $9.49 
Income (loss) from investment operations:                            
Net investment income (loss)  0.14       0.32   0.35   0.29   0.26   0.28 
Net realized and unrealized gain (loss) on investment and foreign currency transactions  0.30       (0.48  0.12   (0.05  0.32   0.07 
Total from investment operations  0.44       (0.16  0.47   0.24   0.58   0.35 
Less Dividends and Distributions:                            
Dividends from net investment income  (0.13      (0.29  (0.57  (0.36  (0.25  (0.17
Tax return of capital distributions  -       (0.04  -   -   -   (0.06
Distributions from net realized gains  -       (0.30  -   -   -   - 
Total dividends and distributions  (0.13      (0.63  (0.57  (0.36  (0.25  (0.23
Net asset value, end of period  $9.24       $8.93   $9.72   $9.82   $9.94   $9.61 
Total Return(b):  4.99      (1.66)%   4.94  2.42  6.15  3.81
        
Ratios/Supplemental Data:        
Net assets, end of period (000)  $104,686       $127,864   $82,538   $203,372   $346,253   $175,887 
Average net assets (000)  $124,845       $109,540   $88,570   $329,668   $270,229   $158,967 
Ratios to average net assets(c)(d):                            
Expenses after waivers and/or expense reimbursement  0.65%(e)       0.65  0.70  0.74  0.90  0.84
Expenses before waivers and/or expense reimbursement  0.65%(e)       0.65  0.71  0.75  0.90  0.84
Net investment income (loss)  3.01%(e)       3.54  3.59  2.95  2.64  2.97
Portfolio turnover rate(f)   24      20  50  52  72  38

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each periodreported 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.

(c)

Effective August 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(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 totransactions involving short-term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

104 


Fund 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 Trust’s Board of Trustees (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 ofits 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. Inparticular, 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 classificationsprovided 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 investmentsclassified 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 2-5, 2021, PGIM Investments provided a written report (“LRMP Report”) to the Boardaddressing the operation, adequacy, and effectiveness of the Fund’s LRMP, including any material changes to the LRMP for the period from January 1, 2020 through December 31, 2020 (“Reporting Period”). The LRMP Report concludedthat 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 includingliquidity risks presented by the Fund’s investment portfolio, is found in the Fund’s Prospectus and Statement of Additional Information.

 

PGIM Absolute Return Bond Fund

  105 


 MAIL  TELEPHONE  WEBSITE

655 Broad Street
Newark, NJ 07102

 

(800) 225-1852

 

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. Adescription 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 theFund 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 ClaudiaDiGiacomo, Chief Legal Officer Dino Capasso, Chief Compliance Officer Jonathan Corbett,Anti-Money Laundering Compliance Officer Andrew R. French, Secretary MelissaGonzalez, Assistant Secretary Diana N. Huffman, Assistant Secretary Kelly A. Coyne,Assistant Secretary Patrick McGuinness, Assistant Secretary Debra Rubano, AssistantSecretary Lana Lomuti, Assistant Treasurer Russ Shupak, Assistant Treasurer Elyse 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, NJ07102

 PGIM Limited 

Grand Buildings, 1-3 Strand

TrafalgarSquare

London, WC2N 5HR

UnitedKingdom

 

DISTRIBUTOR Prudential Investment
Management Services LLC
 655 Broad Street
Newark, NJ 07102

 

CUSTODIAN The Bank of New York Mellon 

240 Greenwich Street

New York, NY10286

 

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 otherinformation about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectusand 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 receivenotification 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 Absolute Return Bond Fund, PGIM Investments, Attn: Board of Trustees, 655 BroadStreet, 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 onForm N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov.

 

 

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 ABSOLUTE RETURN BOND FUND

 

SHARE CLASS A C Z R6
NASDAQ PADAX PADCX PADZX PADQX
CUSIP 74441J852 74441J845 74441J829 74441J837

 

MF213E2    


LOGO

 

PGIM QMA LARGE-CAP CORE EQUITY FUND

 

 

SEMIANNUAL REPORT

APRIL 30, 2021

 

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 

Fees and Expenses

   7 

Holdings and Financial Statements

   9 

 

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

 

The information about the Fund’s portfolio holdings is for the period covered by this report and is subject to change thereafter.

 

The accompanying financial statements as of April 30, 2021 were not audited and,accordingly, no auditor’s opinion is expressed on them.

 

Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company, member SIPC. QMA is the primary business name of QMA LLC, a wholly owned subsidiary of PGIM, Inc.(PGIM), a Prudential Financial company. © 2021 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of PrudentialFinancial, Inc. and its related entities, registered in many jurisdictions worldwide.

 

2 

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Letter from the President

 

LOGO

 

Dear Shareholder,

 

We hope you find the semiannual report for the PGIM QMA Large-Cap Core Equity Fundinformative and useful. The report covers performance for the six-month period ended April 30, 2021.

 

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 adiversified 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 protectagainst loss in declining markets.

 

At PGIM Investments, we consider it agreat privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets undermanagement. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.

 

Thank you for choosing our family of funds.

 

Sincerely,

 

LOGO

 

Stuart S. Parker, President

PGIM QMA Large-Cap Core Equity Fund

June 15, 2021

 

PGIM QMA Large-Cap Core Equity Fund

  3 


Your Fund’s Performance

 

Performance data quoted represents past performance. Past performance does notguarantee 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 higherthan 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.

 

  (without sales charges) Average Annual Total Returns as of 4/30/21
(with sales charges)
  Six Months* (%) One Year (%) Five Years (%) Ten Years (%) Since Inception (%)
Class A 30.37 37.52 13.96 12.29 
Class C 29.89 43.47 14.40 12.09 
Class Z 30.48 45.83 15.52 13.19 
Class R6 30.64 46.08 N/A N/A 15.68 (12/28/16)
S&P 500 Index   
  28.85 45.96 17.41 14.16 

 

Average Annual Total Returns as of 4/30/21 Since Inception (%)
  Class R6 (12/28/16)
S&P 500 Index 17.72

 

*Not annualized

 

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

 

4 

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The returns in the tables do not reflectthe 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 tablebelow.

 

     
   Class A Class C Class Z Class R6
Maximum initial sales charge 5.50% of the public offering price None None None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase priceor 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
Annual distribution and service (12b-1) fees (shown as apercentage of average daily net assets) 

0.30%

(0.25% currently)

 1.00% None None

 

Benchmark Definitions

 

S&P 500 Index*—The S&P 500 Index is an unmanagedindex of over 500 stocks of large US public companies. It gives a broad look at how stock prices in the United States have performed.

 

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 mutualfund, or taxes that may be paid by an investor.

 

*TheS&P 500 Index (“Index”) is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by PGIM, Inc. and/or its affiliates. Copyright© 2021 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part areprohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spdji.com.S&P® is a registered trademark of S&P Global and Dow Jones® is a registeredtrademark of Dow Jones Trademark Holdings LLC.

 

PGIM QMA Large-Cap Core Equity Fund

  5 


Your Fund’s Performance(continued)

 

Presentation of Fund Holdings as of 4/30/21

 

Ten Largest Holdings

  

Line of Business

 

% of Net Assets

Microsoft Corp.

  

Software

 5.7%

Apple, Inc.

  

Technology Hardware, Storage & Peripherals

 4.7%

Amazon.com, Inc.

  

Internet & Direct Marketing Retail

 3.6%

Facebook, Inc. (Class A Stock)

  

Interactive Media & Services

 2.7%

Alphabet, Inc. (Class A Stock)

  

Interactive Media & Services

 2.2%

Alphabet, Inc. (Class C Stock)

  

Interactive Media & Services

 2.1%

JPMorgan Chase & Co.

  

Banks

 1.7%

UnitedHealth Group, Inc.

  

Health Care Providers & Services

 1.5%

Procter & Gamble Co. (The)

  

Household Products

 1.4%

Johnson & Johnson

  

Pharmaceuticals

 1.3%

 

Holdings reflect only long-term investments and aresubject to change.

 

6 

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Fees and Expenses

 

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 intendedto 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 endedApril 30, 2021. The example is for illustrative purposes only; you should consult the Fund’s Prospectus for information on initial and subsequent minimum investment requirements.

 

Actual Expenses

The first linefor 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 paidover 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-MonthPeriod” 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 thefollowing 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 doso, 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 followingpage. 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 annualmaintenance 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 thenumber 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

 

PGIM QMA Large-Cap Core Equity Fund

  7 


Fees and Expenses(continued)

 

and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table.Additional fees have the effect of reducing investment returns.

 

Please notethat 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 ongoingcosts 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 QMA Large-Cap Core
Equity Fund
 Beginning Account
Value
November 1, 2020
  Ending Account
Value
April 30, 2021
  Annualized
Expense Ratio
Based onthe
Six-Month Period
  Expenses Paid
During the
Six-Month Period*
 
Class A Actual $1,000.00  $1,303.70   0.72 $4.11 
 Hypothetical $1,000.00  $1,021.22   0.72 $3.61 
Class C Actual $1,000.00  $1,298.90   1.44 $8.21 
 Hypothetical $1,000.00  $1,017.65   1.44 $7.20 
Class Z Actual $1,000.00  $1,304.80   0.46 $2.63 
 Hypothetical $1,000.00  $1,022.51   0.46 $2.31 
Class R6 Actual $1,000.00  $1,306.40   0.35 $2.00 
  Hypothetical $1,000.00  $1,023.06   0.35 $1.76 

 

* 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 endedApril 30, 2021, and divided by the 365 days in the Fund's fiscal year ending October 31, 2021 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund mayinvest.

 

8 

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Schedule of Investments  (unaudited)

as of April 30, 2021

 

  Description  Shares               Value         

LONG-TERM INVESTMENTS     97.7%

    

COMMON STOCKS

    

Aerospace & Defense    2.0%

          

Curtiss-Wright Corp.

   2,400   $306,960 

General Dynamics Corp.

   12,800    2,434,944 

Huntington Ingalls Industries, Inc.

   4,600    976,672 

Lockheed Martin Corp.

   16,033    6,101,518 

Northrop Grumman Corp.

   704    249,526 

Raytheon Technologies Corp.

   74,150        6,172,246 
    

 

 

 
     16,241,866 

Automobiles     1.7%

          

Ford Motor Co.*

   404,900    4,672,546 

General Motors Co.*

   96,700    5,533,174 

Tesla, Inc.*

   4,500    3,192,480 
    

 

 

 
     13,398,200 

Banks     3.9%

          

Citigroup, Inc.

   109,678    7,813,461 

JPMorgan Chase & Co.

   88,081    13,547,738 

Wells Fargo & Co.

   222,100    10,005,605 
    

 

 

 
     31,366,804 

Beverages     1.5%

          

Coca-Cola Co. (The)

   120,800    6,520,784 

Monster Beverage Corp.*

   40,100    3,891,705 

PepsiCo, Inc.

   10,100    1,456,016 
    

 

 

 
     11,868,505 

Biotechnology     1.9%

          

AbbVie, Inc.

   58,851    6,561,886 

Biogen, Inc.*

   2,566    685,969 

Gilead Sciences, Inc.

   80,072    5,082,170 

Regeneron Pharmaceuticals, Inc.*

   6,100    2,935,930 
    

 

 

 
     15,265,955 

Building Products     0.8%

          

Masco Corp.

   61,500    3,928,620 

UFP Industries, Inc.

   31,633    2,658,437 
    

 

 

 
     6,587,057 

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      9


Schedule of Investments (unaudited) (continued)

as ofApril 30, 2021

 

  Description  Shares               Value         

COMMON STOCKS (Continued)

    

Capital Markets     2.7%

          

Ameriprise Financial, Inc.

   13,459   $3,477,805 

Charles Schwab Corp. (The)

   3,900    274,560 

Federated Hermes, Inc.

   32,100    924,480 

Goldman Sachs Group, Inc. (The)

   22,477    7,832,111 

Morgan Stanley

   81,000    6,686,550 

Raymond James Financial, Inc.

   17,100    2,236,338 
    

 

 

 
     21,431,844 

Chemicals     2.5%

          

Celanese Corp.

   15,000    2,349,750 

Corteva, Inc.

   82,300    4,012,948 

Dow, Inc.

   40,000    2,500,000 

Huntsman Corp.

   36,200    1,037,854 

Mosaic Co. (The)

   68,000    2,392,240 

RPM International, Inc.(a)

   9,100    863,044 

Sherwin-Williams Co. (The)

   20,271    5,551,619 

Trinseo SA

   4,000    247,640 

Westlake Chemical Corp.

   9,700    910,733 
    

 

 

 
     19,865,828 

Commercial Services & Supplies    0.2%

          

ABM Industries, Inc.

   6,600    339,306 

Herman Miller, Inc.

   26,800    1,112,200 
    

 

 

 
     1,451,506 

Communications Equipment    1.4%

          

Cisco Systems, Inc.

   170,182    8,663,966 

Plantronics, Inc.*

   28,000    1,119,720 

Ubiquiti, Inc.

   4,600    1,312,518 
    

 

 

 
     11,096,204 

Construction & Engineering    0.4%

          

EMCOR Group, Inc.

   10,377    1,243,165 

Quanta Services, Inc.

   24,500    2,367,680 
    

 

 

 
     3,610,845 

Consumer Finance     1.4%

          

American Express Co.

   2,500    383,375 

Capital One Financial Corp.

   41,600    6,201,728 

 

See Notes to Financial Statements.

 

10


    

    

 

  Description  Shares               Value         

COMMON STOCKS (Continued)

    

Consumer Finance (cont’d.)

          

OneMain Holdings, Inc.

   7,512   $427,207 

Synchrony Financial

   98,500    4,308,390 
    

 

 

 
     11,320,700 

Containers & Packaging    0.1%

          

Avery Dennison Corp.

   3,000    642,510 

Distributors     0.2%

          

Genuine Parts Co.

   9,800    1,224,706 

Diversified Financial Services    0.7%

          

Berkshire Hathaway, Inc. (Class B Stock)*

   18,974    5,216,901 

Cannae Holdings, Inc.*

   11,500    456,550 
    

 

 

 
     5,673,451 

Diversified Telecommunication Services    2.0%

          

AT&T, Inc.

   239,035    7,508,089 

Verizon Communications, Inc.

   141,750    8,191,733 
    

 

 

 
     15,699,822 

Electric Utilities     0.9%

          

Exelon Corp.

   104,345    4,689,264 

NRG Energy, Inc.

   65,208    2,335,751 
    

 

 

 
     7,025,015 

Electrical Equipment     1.3%

          

Acuity Brands, Inc.

   20,000    3,710,400 

Atkore, Inc.*

   14,921    1,168,016 

Eaton Corp. PLC

   4,400    628,892 

Emerson Electric Co.

   51,700    4,678,333 
    

 

 

 
     10,185,641 

Electronic Equipment, Instruments &Components     0.4%

          

Jabil, Inc.

   18,900    990,738 

SYNNEX Corp.

   4,800    581,760 

Zebra Technologies Corp. (Class A Stock)*

   3,500    1,707,090 
    

 

 

 
     3,279,588 

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      11


Schedule of Investments (unaudited) (continued)

as ofApril 30, 2021

 

  Description  Shares               Value         

COMMON STOCKS (Continued)

    

Energy Equipment & Services    0.1%

          

Halliburton Co.

   44,800   $876,288 

Entertainment     1.7%

          

Activision Blizzard, Inc.

   59,300    5,407,567 

Electronic Arts, Inc.

   34,800    4,944,384 

Netflix, Inc.*

   5,600    2,875,432 

Playtika Holding Corp.*

   12,600    350,028 
    

 

 

 
     13,577,411 

Equity Real Estate Investment Trusts(REITs)     1.7%

          

Apple Hospitality REIT, Inc.

   16,101    255,362 

Crown Castle International Corp.

   2,200    415,932 

Gaming & Leisure Properties, Inc.

   49,043    2,280,009 

Omega Healthcare Investors, Inc.

   30,100    1,143,800 

PotlatchDeltic Corp.

   29,300    1,739,248 

Prologis, Inc.

   25,700    2,994,821 

Weyerhaeuser Co.

   126,700    4,912,159 
    

 

 

 
     13,741,331 

Food & Staples Retailing    1.7%

          

Costco Wholesale Corp.

   2,200    818,598 

Kroger Co. (The)

   110,500    4,037,670 

Sprouts Farmers Market, Inc.*

   26,100    668,421 

Walmart, Inc.

   57,693    8,071,828 
    

 

 

 
     13,596,517 

Food Products     0.3%

          

Mondelez International, Inc. (Class A Stock)

   5,800    352,698 

Tyson Foods, Inc. (Class A Stock)

   24,500    1,897,525 
    

 

 

 
     2,250,223 

Gas Utilities     0.1%

          

UGI Corp.

   14,052    614,213 

Health Care Equipment &Supplies     3.3%

          

Abbott Laboratories

   71,400    8,573,712 

Align Technology, Inc.*

   8,000    4,764,240 

Becton, Dickinson & Co.

   21,900    5,448,939 

 

See Notes to Financial Statements.

 

12


    

    

 

  Description  Shares               Value         

COMMON STOCKS (Continued)

    

Health Care Equipment & Supplies(cont’d.)

          

Danaher Corp.

   25,000   $6,348,500 

ResMed, Inc.

   6,500    1,221,805 
    

 

 

 
     26,357,196 

Health Care Providers &Services     2.7%

          

Anthem, Inc.

   16,200    6,146,118 

HCA Healthcare, Inc.

   15,000    3,015,900 

UnitedHealth Group, Inc.

   30,800    12,283,040 
    

 

 

 
     21,445,058 

Hotels, Restaurants & Leisure    1.4%

          

Darden Restaurants, Inc.

   15,800    2,318,176 

Jack in the Box, Inc.

   6,900    832,485 

McDonald’s Corp.

   24,700    5,831,176 

Papa John’s International, Inc.

   3,100    299,832 

Starbucks Corp.

   16,200    1,854,738 
    

 

 

 
     11,136,407 

Household Durables     0.5%

          

D.R. Horton, Inc.

   7,500    737,175 

Lennar Corp. (Class A Stock)

   13,100    1,357,160 

PulteGroup, Inc.

   28,600    1,690,832 

Skyline Champion Corp.*

   6,000    266,580 
    

 

 

 
     4,051,747 

Household Products     1.4%

          

Procter & Gamble Co. (The)

   82,386    10,991,940 

Independent Power & Renewable ElectricityProducers     0.5%

          

AES Corp. (The)

   130,100    3,619,382 

Industrial Conglomerates 1.3%

          

3M Co.

   32,100    6,328,194 

Honeywell International, Inc.

   19,000    4,237,760 
    

 

 

 
     10,565,954 

Insurance     1.7%

          

Allstate Corp. (The)

   37,399    4,742,193 

Chubb Ltd.

   20,600    3,534,754 

MetLife, Inc.

   46,440    2,954,977 

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      13


Schedule of Investments (unaudited) (continued)

as ofApril 30, 2021

 

  Description  Shares               Value         

COMMON STOCKS (Continued)

    

Insurance (cont’d.)

          

Old Republic International Corp.

   99,300   $2,444,766 

Progressive Corp. (The)

   3,000    302,220 
    

 

 

 
     13,978,910 

Interactive Media & Services    7.0%

          

Alphabet, Inc. (Class A Stock)*

   7,494    17,637,129 

Alphabet, Inc. (Class C Stock)*

   6,868    16,552,704 

Facebook, Inc. (Class A Stock)*

   66,080    21,481,286 
    

 

 

 
     55,671,119 

Internet & Direct MarketingRetail     4.1%

          

Amazon.com, Inc.*

   8,302    28,786,521 

eBay, Inc.

   79,400    4,429,726 
    

 

 

 
     33,216,247 

IT Services     4.4%

          

Accenture PLC (Class A Stock)

   31,359    9,093,169 

Amdocs Ltd.

   27,700    2,125,698 

Automatic Data Processing, Inc.

   29,800    5,572,302 

Cognizant Technology Solutions Corp. (Class A Stock)

   64,700    5,201,880 

EPAM Systems, Inc.*

   6,200    2,838,050 

International Business Machines Corp.

   9,630    1,366,305 

MAXIMUS, Inc.

   7,100    650,644 

PayPal Holdings, Inc.*

   20,100    5,272,029 

Visa, Inc. (Class A Stock)

   14,425    3,369,103 
    

 

 

 
     35,489,180 

Leisure Products     0.7%

          

American Outdoor Brands, Inc.*

   12,825    331,526 

Brunswick Corp.

   34,900    3,738,837 

Smith & Wesson Brands, Inc.

   72,800    1,266,720 
    

 

 

 
     5,337,083 

Life Sciences Tools & Services    1.3%

          

Agilent Technologies, Inc.

   5,200    694,928 

Illumina, Inc.*

   2,100    824,964 

PerkinElmer, Inc.

   6,600    855,558 

Thermo Fisher Scientific, Inc.

   16,814    7,906,447 
    

 

 

 
     10,281,897 

 

See Notes to Financial Statements.

 

14


    

    

 

  Description  Shares               Value         

COMMON STOCKS (Continued)

    

Machinery     1.5%

          

AGCO Corp.

   26,200   $3,823,104 

Cummins, Inc.

   17,700    4,461,108 

Deere & Co.

   2,800    1,038,380 

Dover Corp.

   6,800    1,014,492 

Illinois Tool Works, Inc.

   2,000    460,920 

Pentair PLC

   3,600    232,236 

Snap-on, Inc.

   2,800    665,280 

Timken Co. (The)

   4,400    369,028 
    

 

 

 
     12,064,548 

Marine     0.1%

          

Matson, Inc.

   9,000    587,970 

Media     1.0%

          

Comcast Corp. (Class A Stock)

   50,200    2,818,730 

News Corp. (Class A Stock)

   126,400    3,311,048 

News Corp. (Class B Stock)

   9,600    233,376 

Nexstar Media Group, Inc. (Class A Stock)

   13,900    2,048,999 
    

 

 

 
     8,412,153 

Metals & Mining    0.7%

          

Freeport-McMoRan, Inc.

   134,200    5,060,682 

Reliance Steel & Aluminum Co.

   5,100    817,581 
    

 

 

 
     5,878,263 

Multiline Retail     0.6%

          

Dollar Tree, Inc.*(a)

   15,900    1,826,910 

Target Corp.

   16,100    3,336,886 
    

 

 

 
     5,163,796 

Multi-Utilities     1.1%

          

MDU Resources Group, Inc.

   70,400    2,355,584 

Public Service Enterprise Group, Inc.

   20,300    1,282,148 

Sempra Energy

   35,800    4,925,006 
    

 

 

 
     8,562,738 

Oil, Gas & Consumable Fuels    1.8%

          

Cimarex Energy Co.

   8,000    529,600 

ConocoPhillips

   106,000    5,420,840 

EOG Resources, Inc.

   13,800    1,016,232 

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      15


Schedule of Investments (unaudited) (continued)

as ofApril 30, 2021

 

  Description  Shares               Value         

COMMON STOCKS (Continued)

    

Oil, Gas & Consumable Fuels(cont’d.)

          

Exxon Mobil Corp.

   61,200   $3,503,088 

Pioneer Natural Resources Co.

   20,900    3,215,047 

Targa Resources Corp.

   10,200    353,838 
    

 

 

 
     14,038,645 

Personal Products     0.2%

          

Medifast, Inc.

   3,700    840,233 

Nu Skin Enterprises, Inc. (Class A Stock)

   13,900    734,754 
    

 

 

 
     1,574,987 

Pharmaceuticals     4.0%

          

Bristol-Myers Squibb Co.

   110,400    6,891,168 

Johnson & Johnson

   65,958    10,733,345 

Merck & Co., Inc.

   85,327    6,356,862 

Pfizer, Inc.

   212,500    8,213,125 
    

 

 

 
     32,194,500 

Professional Services     0.0%

          

Korn Ferry

   4,000    271,560 

Road & Rail     0.3%

          

Werner Enterprises, Inc.

   55,700    2,575,011 

Semiconductors & SemiconductorEquipment     5.9%

          

Applied Materials, Inc.

   62,500    8,294,375 

Broadcom, Inc.

   5,300    2,417,860 

Cirrus Logic, Inc.*

   6,600    491,106 

Intel Corp.

   160,041    9,207,159 

KLA Corp.

   1,700    536,095 

Lam Research Corp.

   8,300    5,149,735 

Micron Technology, Inc.*

   19,300    1,661,151 

MKS Instruments, Inc.

   10,300    1,844,833 

Qorvo, Inc.*

   10,700    2,013,419 

QUALCOMM, Inc.

   51,500    7,148,200 

Skyworks Solutions, Inc.

   25,000    4,533,250 

Texas Instruments, Inc.

   21,900    3,953,169 
    

 

 

 
     47,250,352 

Software     9.0%

          

Adobe, Inc.*

   18,483    9,395,648 

Autodesk, Inc.*

   16,200    4,728,942 

 

See Notes to Financial Statements.

 

16


    

    

 

  Description  Shares               Value         

COMMON STOCKS (Continued)

    

Software (cont’d.)

          

Cadence Design Systems, Inc.*

   10,500   $1,383,585 

Intuit, Inc.

   1,902    783,928 

Manhattan Associates, Inc.*

   1,900    260,756 

Microsoft Corp.

   182,384    45,993,598 

Oracle Corp.

   93,879    7,115,090 

Paycom Software, Inc.*

   600    230,646 

Synopsys, Inc.*

   9,200    2,272,952 
    

 

 

 
     72,165,145 

Specialty Retail     2.1%

          

AutoNation, Inc.*

   9,600    983,808 

Home Depot, Inc. (The)

   13,300    4,304,811 

L Brands, Inc.*

   50,500    3,327,950 

Lowe’s Cos., Inc.

   36,000    7,065,000 

MarineMax, Inc.*

   7,400    420,320 

Williams-Sonoma, Inc.

   4,400    751,300 
    

 

 

 
     16,853,189 

Technology Hardware, Storage &Peripherals     5.4%

          

Apple, Inc.

   286,880    37,713,245 

HP, Inc.

   147,000    5,014,170 

NetApp, Inc.

   3,200    239,008 
    

 

 

 
     42,966,423 

Textiles, Apparel & LuxuryGoods     1.2%

          

Crocs, Inc.*

   43,900    4,395,268 

Deckers Outdoor Corp.*

   9,600    3,246,720 

Tapestry, Inc.*

   46,000    2,201,100 
    

 

 

 
     9,843,088 

Tobacco     0.7%

          

Altria Group, Inc.

   117,941    5,631,683 

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      17


Schedule of Investments (unaudited) (continued)

as ofApril 30, 2021

 

  Description  Shares               Value         

COMMON STOCKS (Continued)

                               

Trading Companies &Distributors     0.2%

          

Boise Cascade Co.

   13,500   $900,720 

GMS, Inc.*

   15,400    673,134 
    

 

 

 
     1,573,854 
    

 

 

 

TOTAL LONG-TERM INVESTMENTS
  
(cost $552,083,525)

     781,642,055 
    

 

 

 

SHORT-TERM INVESTMENTS     2.8%

    

AFFILIATED MUTUAL FUNDS     2.5%

    

PGIM Core Ultra Short Bond Fund(wa)

   18,119,043    18,119,043 

PGIM Institutional Money Market Fund
  (cost $2,411,732; includes $2,411,399 of cash collateralfor securities on loan)(b)(wa)

   2,412,938    2,411,732 
    

 

 

 

TOTAL AFFILIATED MUTUAL FUNDS
  
(cost $20,530,775)

     20,530,775 
    

 

 

 

 

   Interest
Rate
   Maturity
Date
   Principal
Amount
(000)#
     

U.S. TREASURY OBLIGATIONS(k)(n)     0.3%

        

U.S. Treasury Bills

   0.026%    06/17/21    500    499,995 

U.S. Treasury Bills

   0.031       09/16/21    1,750    1,749,934 
        

 

 

 

TOTAL U.S. TREASURY OBLIGATIONS
  
(cost $2,249,774)

                             2,249,929 
        

 

 

 

TOTAL SHORT-TERM INVESTMENTS
  
(cost $22,780,549)

         22,780,704 
        

 

 

 

TOTAL INVESTMENTS     100.5%
  
(cost $574,864,074)

         804,422,759 

Liabilities in excess of other assets(z)     (0.5)%

         (4,205,620
        

 

 

 

NET ASSETS     100.0%

        $     800,217,139 
        

 

 

 

 

 

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

USD—US Dollar

LIBOR—London InterbankOffered Rate

OTC—Over-the-counter

REITs—Real Estate Investment Trust

 

See Notes to Financial Statements.

 

18


    

    

 

S&P—Standard & Poor’s

*

Non-income producing security.

#

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

(a)

All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pendingsettlement, is $2,358,750; cash collateral of $2,411,399 (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 lastbusiness 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 includesdividend reinvestment.

(k)

Represents security, or a portion thereof, segregated as collateral for centrally cleared/exchange-traded derivatives.

(n)

Rate shown reflects yield to maturity at purchased date.

(wa)

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

(z)

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

Futures contracts outstanding at April 30, 2021:

 

Number

    of

Contracts

 

Type

  

Expiration

     Date     

  

Current
Notional
     Amount     

  Value /
Unrealized
Appreciation
(Depreciation)
Long Position:        

88    

 S&P 500 E-Mini Index  Jun. 2021   $18,367,360   $1,066,849
         

 

 

 

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 derivativesare listed by broker as follows:

 

Broker

          Cash and/or Foreign Currency                  Securities Market Value        

Goldman Sachs & Co. LLC

    $—    $2,249,929
   

 

 

    

 

 

 

Fair Value Measurements:

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

Level1—unadjusted quoted prices generally in active markets for identical securities.

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

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

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      19


Schedule of Investments (unaudited) (continued)

as ofApril 30, 2021

 

The following is a summary of the inputs used as of April 30, 2021 in valuing such portfolio securities:

 

   Level 1   Level 2   Level 3 

Investments in Securities

      

Assets

      

Common Stocks

      

Aerospace & Defense

  $16,241,866   $            —    $—   

Automobiles

   13,398,200         

Banks

   31,366,804         

Beverages

   11,868,505         

Biotechnology

   15,265,955         

Building Products

   6,587,057         

Capital Markets

   21,431,844         

Chemicals

   19,865,828         

Commercial Services & Supplies

   1,451,506         

Communications Equipment

   11,096,204         

Construction & Engineering

   3,610,845         

Consumer Finance

   11,320,700         

Containers & Packaging

   642,510         

Distributors

   1,224,706         

Diversified Financial Services

   5,673,451         

Diversified Telecommunication Services

   15,699,822         

Electric Utilities

   7,025,015         

Electrical Equipment

   10,185,641         

Electronic Equipment, Instruments & Components

   3,279,588         

Energy Equipment & Services

   876,288         

Entertainment

   13,577,411         

Equity Real Estate Investment Trusts (REITs)

   13,741,331         

Food & Staples Retailing

   13,596,517         

Food Products

   2,250,223         

Gas Utilities

   614,213         

Health Care Equipment & Supplies

   26,357,196         

Health Care Providers & Services

   21,445,058         

Hotels, Restaurants & Leisure

   11,136,407         

Household Durables

   4,051,747         

Household Products

   10,991,940         

Independent Power & Renewable Electricity Producers

   3,619,382         

Industrial Conglomerates

   10,565,954         

Insurance

   13,978,910         

Interactive Media & Services

   55,671,119         

Internet & Direct Marketing Retail

   33,216,247         

IT Services

   35,489,180         

Leisure Products

   5,337,083         

Life Sciences Tools & Services

   10,281,897         

Machinery

   12,064,548         

Marine

   587,970         

Media

   8,412,153         

Metals & Mining

   5,878,263         

Multiline Retail

   5,163,796         

Multi-Utilities

   8,562,738         

Oil, Gas & Consumable Fuels

   14,038,645         

 

See Notes to Financial Statements.

 

20


    

    

 

   Level 1   Level 2   Level 3 

Investments in Securities (continued)

      

Assets (continued)

      

Common Stocks (continued)

      

Personal Products

  $1,574,987   $    $— 

Pharmaceuticals

   32,194,500         

Professional Services

   271,560         

Road & Rail

   2,575,011         

Semiconductors & Semiconductor Equipment

   47,250,352         

Software

   72,165,145         

Specialty Retail

   16,853,189         

Technology Hardware, Storage & Peripherals

   42,966,423         

Textiles, Apparel & Luxury Goods

   9,843,088         

Tobacco

   5,631,683         

Trading Companies & Distributors

   1,573,854         

Affiliated Mutual Funds

   20,530,775         

U.S. Treasury Obligations

       2,249,929     
  

 

 

   

 

 

   

 

 

 

Total

  $802,172,830   $2,249,929    $—   
  

 

 

   

 

 

   

 

 

 

Other Financial Instruments*

      

Assets

      

Futures Contracts

  $1,066,849   $    $— 
  

 

 

   

 

 

   

 

 

 

 

 

* 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.

IndustryClassification:

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as ofApril 30, 2021 were as follows:

 

Software

   9.0

Interactive Media & Services

   7.0 

Semiconductors & Semiconductor Equipment

   5.9 

Technology Hardware, Storage & Peripherals

   5.4 

IT Services

   4.4 

Internet & Direct Marketing Retail

   4.1 

Pharmaceuticals

   4.0 

Banks

   3.9 

Health Care Equipment & Supplies

   3.3 

Health Care Providers & Services

   2.7 

Capital Markets

   2.7 

Affiliated Mutual Funds (0.3% represents investments purchased with collateral from securities onloan)

   2.5 

Chemicals

   2.5 

Specialty Retail

   2.1

Aerospace & Defense

   2.0 

Diversified Telecommunication Services

   2.0 

Biotechnology

   1.9 

Oil, Gas & Consumable Fuels

   1.8 

Insurance

   1.7 

Equity Real Estate Investment Trusts (REITs)

   1.7 

Food & Staples Retailing

   1.7 

Entertainment

   1.7 

Automobiles

   1.7 

Machinery

   1.5 

Beverages

   1.5 

Consumer Finance

   1.4 

Hotels, Restaurants & Leisure

   1.4 

Communications Equipment

   1.4 
 

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      21


Schedule of Investments (unaudited) (continued)

as ofApril 30, 2021

 

Industry Classification (continued):

 

Household Products

   1.4

Industrial Conglomerates

   1.3 

Life Sciences Tools & Services

   1.3 

Electrical Equipment

   1.3 

Textiles, Apparel & Luxury Goods

   1.2 

Multi-Utilities

   1.1 

Media

   1.0 

Electric Utilities

   0.9 

Building Products

   0.8 

Metals & Mining

   0.7 

Diversified Financial Services

   0.7 

Tobacco

   0.7 

Leisure Products

   0.7 

Multiline Retail

   0.6 

Household Durables

   0.5 

Independent Power & Renewable Electricity Producers

   0.5 

Construction & Engineering

   0.4 

Electronic Equipment, Instruments & Components

   0.4 

Road & Rail

   0.3 

Food Products

   0.3

U.S. Treasury Obligations

   0.3 

Personal Products

   0.2 

Trading Companies & Distributors

   0.2 

Commercial Services & Supplies

   0.2 

Distributors

   0.2 

Energy Equipment & Services

   0.1 

Containers & Packaging

   0.1 

Gas Utilities

   0.1 

Marine

   0.1 

Professional Services

   0.0
  

 

 

 
   100.5 

Liabilities in excess of other assets

   (0.5
  

 

 

 
   100.0
  

 

 

 

 

 

 

*

Less than +/- 0.05%

 

 

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

The Fund invested in derivative instruments during the reporting period. The primary type of riskassociated with these derivative instruments is equity 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’sfinancial 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 April 30, 2021 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

Equity contracts

  Due from/to
broker-variation margin
futures
   $1,066,849*       $—
    

 

 

     

 

 

*

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

 

See Notes to Financial Statements.

 

22


    

    

 

The effects of derivative instruments on the Statement of Operations for the six months ended April 30, 2021 are asfollows:

 

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

Derivatives not accounted for as hedging

instruments, carried at fair value

  Futures

Equity contracts

  $2,124,155

 

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

Derivatives not accounted for

as hedginginstruments,

carried at fair value

  Futures 

Equity contracts

   $1,229,492 
  

 

 

 

For the six months ended April 30, 2021, the Fund’s average volume of derivative activities is as follows:

 

Futures
Contracts—
Long
Positions(1)

$13,237,885

 

 

 

(1)

Notional Amount in USD.

Average volume is based on average quarter end balances as noted for the six months ended April 30, 2021.

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 toenforceable 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 toset-off exists is presented in the summary below.

Offsetting of financial instrument/transaction assets and liabilities:

 

Description                                

 Gross Market
Valueof
Recognized
        Assets/(Liabilities)        
 Collateral
Pledged/(Received)(1)
 Net
Amount

Securities on Loan

   $2,358,750   $(2,358,750)    $—

 

 

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

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      23


Statement of Assets and Liabilities  (unaudited)

as of April 30,2021

 

Assets

     

Investments at value, including securities on loan of $2,358,750:

  

Unaffiliated investments (cost $554,333,299)

  $783,891,984 

Affiliated investments (cost $20,530,775)

   20,530,775 

Dividends and interest receivable

   796,377 

Receivable for Fund shares sold

   591,294 

Prepaid expenses

   2,356 
  

 

 

 

Total Assets

   805,812,786 
  

 

 

 

Liabilities

     

Payable for Fund shares purchased

   2,613,086 

Payable to broker for collateral for securities on loan

   2,411,399 

Management fee payable

   204,450 

Due to broker—variation margin futures

   127,600 

Distribution fee payable

   119,575 

Affiliated transfer agent fee payable

   70,150 

Accrued expenses and other liabilities

   49,087 

Trustees’ fees payable

   300 
  

 

 

 

Total Liabilities

   5,595,647 
  

 

 

 

Net Assets

  $800,217,139 
  

 

 

 
      

Net assets were comprised of:

  

Shares of beneficial interest, at par

  $41,082 

Paid-in capital in excess of par

   540,533,203 

Total distributable earnings (loss)

   259,642,854 
  

 

 

 

Net assets, April 30, 2021

  $800,217,139 
  

 

 

 

 

See Notes to Financial Statements.

 

24


Class A

     

Net asset value and redemption price per share,

($498,872,932 ÷ 25,811,272 shares of beneficial interest issued and outstanding)

  $19.33 

Maximum sales charge (5.50% of offering price)

   1.13 
  

 

 

 

Maximum offering price to public

  $20.46 
  

 

 

 

Class C

     

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

($22,344,606 ÷ 1,311,866 shares of beneficial interest issued and outstanding)

  $17.03 
  

 

 

 

Class Z

     

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

($89,497,520 ÷ 4,482,869 shares of beneficial interest issued and outstanding)

  $19.96 
  

 

 

 

Class R6

     

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

($189,502,081 ÷ 9,475,680 shares of beneficial interest issued and outstanding)

  $20.00 
  

 

 

 

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      25


Statement of Operations  (unaudited)

Six Months EndedApril 30, 2021

 

Net Investment Income (Loss)

     

Income

  

Unaffiliated dividend income (net of $1,236 foreign withholding tax)

  $5,849,979 

Affiliated dividend income

   12,872 

Income from securities lending, net (including affiliated income of $957)

   1,242 

Interest income

   392 
  

 

 

 

Total income

   5,864,485 
  

 

 

 

Expenses

  

Management fee

   1,208,416 

Distribution fee(a)

   769,453 

Transfer agent’s fees and expenses (including affiliated expense of $137,015)(a)

   326,681 

Custodian and accounting fees

   38,899 

Registration fees(a)

   28,188 

Shareholders’ reports

   12,906 

Audit fee

   12,681 

Legal fees and expenses

   10,400 

Trustees’ fees

   9,083 

SEC registration fees

   2,359 

Miscellaneous

   13,891 
  

 

 

 

Total expenses

   2,432,957 

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

   (143,858

Distribution fee waiver(a)

   (109,592
  

 

 

 

Net expenses

   2,179,507 
  

 

 

 

Net investment income (loss)

   3,684,978 
  

 

 

 

Realized And Unrealized Gain (Loss) On Investments

     

Net realized gain (loss) on:

  

Investment transactions (including affiliated of $6,625)

   47,979,151 

Futures transactions

   2,124,155 
  

 

 

 
   50,103,306 
  

 

 

 

Net change in unrealized appreciation (depreciation) on:

  

Investments (including affiliated of $(7,761))

   125,053,104 

Futures

   1,229,492 
  

 

 

 
   126,282,596 
  

 

 

 

Net gain (loss) on investment transactions

   176,385,902 
  

 

 

 

Net Increase (Decrease) In Net Assets Resulting From Operations

  $180,070,880 
  

 

 

 

 

See Notes to Financial Statements.

 

26


 

(a)

Class specific expenses and waivers were as follows:

 

   Class A  Class C  Class Z  Class R6 

Distribution fee

   657,549   111,904       

Transfer agent’s fees and expenses

   272,551   17,404   36,111   615 

Registration fees

   8,181   6,209   8,501   5,297 

Fee waiver and/or expense reimbursement

   (80,494  (16,762  (18,126  (28,476

Distribution fee waiver

   (109,592         

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund     27


Statements of Changes in Net Assets  (unaudited)

 

 

   Six Months Ended
    April 30, 2021
          Year Ended
    October 31, 2020    
 

Increase (Decrease) in Net Assets

         

Operations

   

Net investment income (loss)

  $3,684,978  $7,732,239 

Net realized gain (loss) on investment transactions

   50,103,306   7,851,246 

Net change in unrealized appreciation (depreciation) on investments

   126,282,596   11,587,045 
  

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

   180,070,880   27,170,530 
  

 

 

  

 

 

 

Dividends and Distributions

   

Distributions from distributable earnings

   

Class A

   (9,498,862  (16,111,961

Class B

      (283,506

Class C

   (464,608  (1,067,236

Class Z

   (1,395,424  (2,719,310

Class R6

   (3,717,913  (3,898,963
  

 

 

  

 

 

 
   (15,076,807  (24,080,976
  

 

 

  

 

 

 

Fund share transactions (Net of share conversions)

   

Net proceeds from shares sold

   106,081,088   140,184,209 

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

   14,909,423   23,767,624 

Cost of shares purchased

   (69,155,215  (177,202,460
  

 

 

  

 

 

 

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

   51,835,296   (13,250,627
  

 

 

  

 

 

 

Total increase (decrease)

   216,829,369   (10,161,073

Net Assets:

         

Beginning of period

   583,387,770   593,548,843 
  

 

 

  

 

 

 

End of period

  $800,217,139  $583,387,770 
  

 

 

  

 

 

 

 

See Notes to Financial Statements.

 

28


Notes to Financial Statements  (unaudited)

1.    Organization

Prudential Investment Portfolios 9 (the“Trust”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust currently consists of five series: PGIMAbsolute Return Bond Fund, PGIM QMA Large-Cap Core Equity Fund and PGIM Select Real Estate Fund, each of which are diversified funds for purposes of the 1940 Act and PGIM International Bond Fund and PGIM RealEstate Income Fund, each of which are non-diversified funds for purposes of the 1940 Act, and therefore, may invest a greater percentage of their assets in the securities of a single company or other issuerthan a diversified fund. These financial statements relate only to the PGIM QMA Large-Cap Core Equity Fund (the “Fund”).

The investment objective of the Fund is to seek long-term growth of capital.

2.    Accounting Policies

The Fund follows the investmentcompany 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 summaryof 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 thepreparation of its financial statements.

Securities Valuation: The Fund holds securities and other assets and liabilities that are fair valued as of theclose 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 thetype of investment and whether market quotations are readily available. The Trust’s Board of Trustees (the “Board”) has adopted valuation procedures for security valuation under which fair valuation responsibilities have beendelegated 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 portfoliosecurities 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 readilyavailable 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 theValuation Committee’s actions is subject to the Board’s review at its first quarterly meeting following the quarter in which such actions take place.

 

PGIM QMA Large-Cap Core EquityFund    29


Notes to Financial Statements  (unaudited)

(continued)

 

For the fiscal reporting period-end, securities and otherassets 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 trade in markets that areopen 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 theSchedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 - Fair Value Measurements and Disclosures.

Common or preferred stocks, exchange-traded funds and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the lastsale 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 orNASDAQ 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 reportedbid 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.

Foreignequities traded on foreign securities exchanges are generally valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices,currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy. The models generate an evaluated adjustment factor for each security, whichis applied to the local closing price to adjust it for post closing market movements up to the time the Fund is valued. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does notprovide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.

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 valuehierarchy 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 themethods 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

 

30


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 anyrecent 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.

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 fordelivery 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 forfinancial 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 invalue 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 therisk of imperfect correlation in movements in the price of futures contracts and the underlying hedged assets. Since futures contracts are exchange-traded, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouseacts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.

Master Netting Arrangements: The Trust, on behalfof 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 nettingarrangement 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 theFund’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 allthe 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

 

PGIM QMA Large-Cap Core EquityFund    31


Notes to Financial Statements  (unaudited)

(continued)

 

amount owed by the other party, the reporting party intends toset-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 marketfund 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 lastbusiness 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 optionof 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 maturities 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 Fundrecognizes 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 thesecurities 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 alsocontinues 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 onchanges 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 distributionsannually. 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 estimatesare adjusted periodically when the actual source of distributions is disclosed by the REITs.

Securities Transactions and Net Investment Income: Securitiestransactions 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

 

32


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 shareclasses. 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, asapplicable.

Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investmentcompanies 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: The Fund expects to pay dividends from netinvestment income and distributions from net realized capital gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recordedon the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital inexcess of par, as appropriate.

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

3.    Agreements

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

The Manager has entered into a subadvisory agreement with QMA LLC (“QMA”). TheManager pays for the services of QMA.

The management fee paid to the Manager is accrued daily and payable monthly at an annual rate of 0.35% of the Fund’saverage daily net assets up to and including $5 billion and 0.34% of the Fund’s average daily net assets in excess of $5 billion. The effective management fee rate before any waivers and/or expense reimbursements was 0.35% for thereporting period ended April 30, 2021.

The Manager has contractually agreed through February 28, 2022, to limit net annual Fund operating expenses,exclusive of distribution and service (12b-1) fees, shareholder servicing fee and transfer agency expenses (including sub-transfer agency and networking fees), of

 

PGIM QMA Large-Cap Core EquityFund    33


Notes to Financial Statements  (unaudited)

(continued)

 

each class of shares to 0.35% of the Fund’s average daily net assets. Separately, the Managerhas contractually agreed, through February 28, 2022, to limit total annual operating expenses after fee waivers and/or expense reimbursements to 0.72% of average daily net assets for Class A shares and 1.44% of average daily net assets forClass C shares. This contractual waiver exclude 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 Fundexpenses such as dividend and interest expense and broker charges on short sales.

Where applicable, the Manager agrees to waive management fees or shared operatingexpenses 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. Feesand/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 effectat the time of the recoupment for that fiscal year.

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

Pursuant to the DistributionPlans, the Fund compensates PIMS for distribution related activities at an annual rate of up to 0.30% and 1% of the average daily net assets of the Class A and Class C shares, respectively. PIMS has contractually agreed throughFebruary 28, 2022 to limit such fees to 0.25% of the average daily net assets of the Class A shares. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of theClass Z and Class R6 shares of the Fund.

For the reporting period ended April 30, 2021, PIMS received $118,616 infront-end sales charges resulting from sales of Class A shares. Additionally, for the reporting period ended April 30, 2021, PIMS received $1,000 and $527 in contingent deferred sales charges imposedupon redemptions by certain Class A and Class C shareholders, respectively. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs.

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

 

34


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’stransfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid tonon-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 series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed byPGIM 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 in the Core Fund and MoneyMarket Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income” and “Affiliated income from securities lending, net”, respectively.

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 isaffiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the reporting period ended April 30, 2021, no 17a-7 transactionswere 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 periodended April 30, 2021, were $330,648,630 and $293,803,254, respectively.

A summary of the cost of purchases and proceeds from sales of shares of affiliatedmutual funds for the reporting period ended April 30, 2021, is presented as follows:

 

Value,
Beginning

of

Period

   

Cost of
Purchases

   

Proceeds

from Sales

   

Changein
Unrealized
Gain
    (Loss)    

  

Realized
Gain
    (Loss)    

   

Value,
Endof
    Period    

   

Shares,
End
of
  Period  

   

Income

 
 

Short-Term Investments - Affiliated Mutual Funds:

 
 PGIM Core Ultra Short Bond Fund (1)(wa)  
$ 8,552,288           $63,650,447           $54,083,692           $          $     $18,119,043            18,119,043           $12,872 
 PGIM Institutional Money Market Fund (1)(b)(wa)                     
 13,754,517      25,124,914      36,466,563      (7,761    6,625      2,411,732      2,412,938      957(2)  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

         

 

 

 
$22,306,805     $88,775,361     $90,550,255     $(7,761   $6,625     $20,530,775         $13,829 

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

         

 

 

 

 

(1)

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

 

PGIM QMA Large-Cap Core EquityFund    35


Notes to Financial Statements  (unaudited)

(continued)

 

(2)

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

(b)

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

(wa)

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

6.    Tax Information

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of April 30, 2021 were as follows:

 

Tax Basis        

     $598,546,534 

Gross UnrealizedAppreciation        

       234,017,183 

Gross UnrealizedDepreciation        

        (27,074,109

Net UnrealizedAppreciation        

     $206,943,074 

The GAAP basis may differ from tax basis due to certain tax-related adjustments.

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 provisionfor 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 yearsup to the most recent fiscal year ended October 31, 2020 are subject to such review.

7.    Capital and Ownership

The Fund offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximumfront-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 topurchase Class A shares at net asset value. Effective June 26, 2020, all of the issued and outstanding Class B shares of the Fund converted into Class A shares. Class C shares are sold with a CDSC of 1% on sales made within12 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 Z and Class R6 shares are notsubject to any sales or redemption charges and are available exclusively for sale to a limited group of investors.

 

36


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

The Trust has authorized an unlimited number of shares ofbeneficial interest of the Fund at $0.001 par value per share, currently divided into four classes, designated Class A, Class C, Class Z and Class R6.

As of April 30, 2021, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:

 

      Number of Shares        Percentage of
      Outstanding Shares      

Class A

         1,951  0.1%

Class C

                3  0.1%

Class R6

  9,364,393  98.8%

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

 

Affiliated  Unaffiliated
Number of
Shareholders
  Percentage of
Outstanding Shares
  Number of
Shareholders
  Percentage of
Outstanding Shares

1

  5.1%  2  30.7%

Transactions in shares of beneficial interest were as follows:

 

Class A

    Shares      Amount   

Six months ended April 30, 2021:

   

Shares sold

   1,730,601  $31,207,399 

Shares issued in reinvestment of dividends and distributions

   566,431   9,351,778 

Shares purchased

   (1,810,105  (31,583,028
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding before conversion

   486,927   8,976,149 

Shares issued upon conversion from other share class(es)

   206,587   3,701,440 

Shares purchased upon conversion into other share class(es)

   (76,168  (1,328,073
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding

   617,346  $11,349,516 
  

 

 

  

 

 

 

Year ended October 31, 2020:

   

Shares sold

   1,056,005  $15,252,702 

Shares issued in reinvestment of dividends and distributions

   1,034,820   15,853,443 

Shares purchased

   (3,820,412  (56,302,552
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding before conversion

   (1,729,587  (25,196,407

Shares issued upon conversion from other share class(es)

   614,387   8,880,281 

Shares purchased upon conversion into other share class(es)

   (106,717  (1,594,324
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding

   (1,221,917 $(17,910,450
  

 

 

  

 

 

 

 

PGIM QMA Large-Cap Core EquityFund    37


Notes to Financial Statements (unaudited)

(continued)

 

Class B

  Shares  Amount 

Period ended June 26, 2020*:

   

Shares sold

   39  $733 

Shares issued in reinvestment of dividends and distributions

   20,811   282,819 

Shares purchased

   (39,382  (516,184
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding before conversion

   (18,532  (232,632

Shares purchased upon conversion into other share class(es)

   (552,420  (7,017,536
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding

   (570,952 $(7,250,168
  

 

 

  

 

 

 

Class C

       

Six months ended April 30, 2021:

   

Shares sold

   46,043  $722,523 

Shares issued in reinvestment of dividends and distributions

   31,819   464,240 

Shares purchased

   (101,862  (1,570,159
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding before conversion

   (24,000  (383,396

Shares purchased upon conversion into other share class(es)

   (237,053  (3,746,984
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding

   (261,053 $(4,130,380
  

 

 

  

 

 

 

Year ended October 31, 2020:

   

Shares sold

   193,697  $2,503,431 

Shares issued in reinvestment of dividends and distributions

   77,367   1,052,190 

Shares purchased

   (477,763  (6,055,470
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding before conversion

   (206,699  (2,499,849

Shares purchased upon conversion into other share class(es)

   (251,439  (3,300,159
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding

   (458,138 $(5,800,008
  

 

 

  

 

 

 

Class Z

       

Six months ended April 30, 2021:

   

Shares sold

   1,700,150  $30,940,653 

Shares issued in reinvestment of dividends and distributions

   80,721   1,375,492 

Shares purchased

   (419,828  (7,642,680
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding before conversion

   1,361,043   24,673,465 

Shares issued upon conversion from other share class(es)

   75,769   1,365,011 

Shares purchased upon conversion into other share class(es)

   (343  (6,095
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding

   1,436,469  $26,032,381 
  

 

 

  

 

 

 

Year ended October 31, 2020:

   

Shares sold

   2,132,508  $31,936,340 

Shares issued in reinvestment of dividends and distributions

   169,741   2,680,209 

Shares purchased

   (3,734,913  (59,942,110
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding before conversion

   (1,432,664  (25,325,561

Shares issued upon conversion from other share class(es)

   190,651   2,932,932 

Shares purchased upon conversion into other share class(es)

   (6,248  (94,422
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding

   (1,248,261 $(22,487,051
  

 

 

  

 

 

 

 

38


Class R6

  Shares  Amount 

Six months ended April 30, 2021:

   

Shares sold

   2,374,408  $43,210,513 

Shares issued in reinvestment of dividends and distributions

   217,932   3,717,913 

Shares purchased

   (1,551,630  (28,359,348
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding before conversion

   1,040,710   18,569,078 

Shares issued upon conversion from other share class(es)

   834   14,701 
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding

   1,041,544  $18,583,779 
  

 

 

  

 

 

 

Year ended October 31, 2020:

   

Shares sold

   6,113,252  $90,491,003 

Shares issued in reinvestment of dividends and distributions

   246,614   3,898,963 

Shares purchased

   (3,724,806  (54,386,144
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding before conversion

   2,635,060   40,003,822 

Shares issued upon conversion from other share class(es)

   12,349   193,228 
  

 

 

  

 

 

 

Net increase (decrease) in shares outstanding

   2,647,409  $40,197,050 
  

 

 

  

 

 

 

 

*

Effective June 26, 2020, all of the issued and outstanding Class B shares of the Fund converted intoClass A shares.

8.    Borrowings

The Trust, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated CreditAgreement (“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 SCA.

 

    SCA

Term of Commitment

  10/2/2020 – 9/30/2021

Total Commitment

  $ 1,200,000,000
Annualized Commitment Fee on the Unused Portion of the SCA  0.15%

Annualized Interest Rate on Borrowings

  

1.30% plus the higher of (1)

the effective federalfunds

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 predeterminedmathematical 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 utilizethe 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 theParticipating Funds in the SCA equitably.

The Fund did not utilize the SCA during the reporting period ended April 30, 2021.

 

PGIM QMA Large-Cap Core EquityFund    39


Notes to Financial Statements  (unaudited)

(continued)

 

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 theFund’s Prospectus and Statement of Additional Information.

Derivatives Risk: Derivatives involve special risks and costs and may result in losses to theFund. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Fund will depend on the subadviser’s ability to analyze and manage derivative transactions. The prices of derivativesmay move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” and therefore may magnify or otherwise increase investment losses to the Fund. The Fund’s use of derivatives may also increase theamount of taxes payable by shareholders. Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market may not always exist for the Fund’s derivatives positions. In fact, many OTCderivative instruments lack liquidity beyond the counterparty to the instrument. OTC derivative instruments also involve the risk that the other party will not meet its obligations to the Fund.

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 thanthose 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.

Large Capitalization Company Risk: Companies with large market capitalizations go in and out of favor basedon market and economic conditions. Larger companies tend to be less volatile than companies with smaller market capitalizations. In exchange for this potentially lower risk, the Fund’s value may not rise or fall as much as the value of fundsthat emphasize companies with smaller market capitalizations.

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 theirinvestment 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 significantnegative 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 topursue 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.

 

40


Market Disruption and Geopolitical Risks: International wars or conflicts and geopolitical developments in foreigncountries, along with instability in regions such as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the United States or around the world, public health epidemics such as the outbreak of infectious diseases like the recentoutbreak of coronavirus globally or the 2014–2016 outbreak in West Africa of the Ebola virus, and other similar events could adversely affect the U.S. and foreign financial markets, including increases in market volatility, reduced liquidity inthe securities markets and government intervention, and may cause further long-term economic uncertainties in the United States and worldwide generally. The coronavirus pandemic and the related governmental and public responses have had and maycontinue 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.Preventative or protective actions that governments may take in respect of pandemic or epidemic diseases may result in periods of business disruption, business closures, inability to obtain raw materials, supplies and component parts, and reduced ordisrupted operations for the issuers in which the Fund invests. Government intervention in markets may impact interest rates, market volatility and security pricing. The occurrence, reoccurrence and pendency of such diseases could adversely affectthe economies (including through changes in business activity and increased unemployment) and financial markets either in specific countries or worldwide.

MarketRisk: 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 themarket prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.

10.    Recent RegulatoryDevelopments

On December 3, 2020, the SEC announced that it voted to adopt a new rule that establishes an updated regulatory framework for fund valuationpractices (the “Rule”). The Rule, in part, provides (i) a framework for determining fair value in good faith and (ii) provides for a fund Board’s assignment of its responsibility for the execution of valuation-relatedactivities to a fund’s investment adviser. Further, the SEC is rescinding previously issued guidance on related issues. The Rule took effect on March 8, 2021, with a compliance date of September 8, 2022. Management is currentlyevaluating the Rule and its impact to the Fund.

 

PGIM QMA Large-Cap Core EquityFund    41


FinancialHighlights(unaudited)

 

Class A Shares

        
    Six Months
Ended
April 30,

2021
  Year Ended October 31, 
   2020  2019  2018  2017  2016 

Per ShareOperating Performance(a):

                         

Net AssetValue, Beginning of Period

   $15.17   $15.17   $16.76   $18.37   $15.49   $15.92 

Income(loss) from investment operations:

                         

Net investmentincome (loss)

   0.09   0.19   0.18   0.20   0.19   0.14 

Net realized and unrealized gain(loss) on investment transactions

   4.45   0.43   1.19   0.80   3.51   0.29 

Total frominvestment operations

   4.54   0.62   1.37   1.00   3.70   0.43 

LessDividends and Distributions:

                         

Dividends fromnet investment income

   (0.19  (0.19  (0.22  (0.18  (0.15  (0.14

Distributionsfrom net realized gains

   (0.19  (0.43  (2.74  (2.43  (0.67  (0.72

Totaldividends and distributions

   (0.38  (0.62  (2.96  (2.61  (0.82  (0.86

Net assetvalue, end of period

   $19.33   $15.17   $15.17   $16.76   $18.37   $15.49 

TotalReturn(b):

   30.37  4.02  10.61  5.67  24.73  3.02
         

Ratios/Supplemental Data:

        

Net assets,end of period (000)

   $498,873   $382,165   $400,634   $105,855   $113,343   $89,169 

Average netassets (000)

   $441,999   $389,009   $302,864   $112,391   $101,852   $88,443 

Ratios toaverage net assets(c)(d):

                         

Expenses afterwaivers and/or expense reimbursement

   0.72%(e)    0.72  0.74  0.72  0.77  1.17

Expensesbefore waivers and/or expense reimbursement

   0.81%(e)    0.83  0.87  0.86  0.93  1.22

Net investmentincome (loss)

   0.98%(e)    1.26  1.27  1.14  1.13  0.91

Portfolioturnover rate(f)(g)

   44  92  88  95  89  89

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share onthe 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 notannualized.

(c)

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

(d)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(e)

Annualized.

(f)

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

(g)

Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions (if any).

 

See Notes to Financial Statements.

 

42


Class C Shares

        
    Six Months
Ended
April 30,

2021
  Year Ended October 31, 
   2020  2019  2018  2017  2016 

Per ShareOperating Performance(a):

                         

Net AssetValue, Beginning of Period

   $13.38   $13.46   $15.20   $16.89   $14.31   $14.77 

Income(loss) from investment operations:

                         

Net investmentincome (loss)

   0.02   0.07   0.08   0.07   0.06   0.02 

Net realized and unrealized gain(loss) on investment transactions

   3.93   0.38   1.03   0.73   3.24   0.27 

Total frominvestment operations

   3.95   0.45   1.11   0.80   3.30   0.29 

LessDividends and Distributions:

                         

Dividends fromnet investment income

   (0.11  (0.10  (0.11  (0.06  (0.05  (0.03

Distributionsfrom net realized gains

   (0.19  (0.43  (2.74  (2.43  (0.67  (0.72

Totaldividends and distributions

   (0.30  (0.53  (2.85  (2.49  (0.72  (0.75

Net assetvalue, end of period

   $17.03   $13.38   $13.46   $15.20   $16.89   $14.31 

TotalReturn(b):

   29.89  3.27  9.77  4.91  23.80  2.24
         

Ratios/Supplemental Data:

        

Net assets,end of period (000)

   $22,345   $21,047   $27,333   $29,930   $31,518   $39,218 

Average netassets (000)

   $22,566   $24,287   $36,812   $31,783   $34,697   $38,344 

Ratios toaverage net assets(c)(d):

                         

Expenses afterwaivers and/or expense reimbursement

   1.44%(e)   1.44  1.47  1.44  1.53  1.92

Expensesbefore waivers and/or expense reimbursement

   1.59%(e)   1.59  1.54  1.55  1.64  1.92

Net investmentincome (loss)

   0.28%(e)   0.56  0.59  0.43  0.40  0.16

Portfolioturnover rate(f)(g)

   44  92  88  95  89  89

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share onthe 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 notannualized.

(c)

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

(d)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(e)

Annualized.

(f)

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

(g)

Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions (if any).

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      43


FinancialHighlights(unaudited) (continued)

 

Class Z Shares

        
    Six Months
Ended
April 30,

2021
  Year Ended October 31, 
   2020  2019  2018  2017  2016 

Per ShareOperating Performance(a):

                         

Net AssetValue, Beginning of Period

   $15.67   $15.65   $17.20   $18.78   $15.83   $16.24 

Income(loss) from investment operations:

                         

Net investmentincome (loss)

   0.11   0.23   0.24   0.25   0.24   0.18 

Net realizedand unrealized gain (loss) on investment transactions

   4.59   0.44   1.21   0.82   3.57   0.31 

Total frominvestment operations

   4.70   0.67   1.45   1.07   3.81   0.49 

LessDividends and Distributions:

                         

Dividends fromnet investment income

   (0.22  (0.22  (0.26  (0.22  (0.19  (0.18

Distributionsfrom net realized gains

   (0.19  (0.43  (2.74  (2.43  (0.67  (0.72

Totaldividends and distributions

   (0.41  (0.65  (3.00  (2.65  (0.86  (0.90

Net assetvalue, end of period

   $19.96   $15.67   $15.65   $17.20   $18.78   $15.83 

TotalReturn(b):

   30.48  4.27  10.91  5.98  24.93  3.35
         

Ratios/Supplemental Data:

        

Net assets,end of period (000)

   $89,498   $47,730   $67,192   $61,857   $56,066   $71,506 

Average netassets (000)

   $68,190   $64,099   $65,923   $62,456   $54,787   $75,803 

Ratios toaverage net assets(c)(d):

                         

Expenses afterwaivers and/or expense reimbursement

   0.46%(e)   0.48  0.48  0.46  0.54  0.92

Expensesbefore waivers and/or expense reimbursement

   0.51%(e)   0.55  0.54  0.55  0.64  0.92

Net investmentincome (loss)

   1.22%(e)   1.54  1.59  1.40  1.42  1.18

Portfolioturnover rate(f)(g)

   44  92  88  95  89  89

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each periodreported 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.

(c)

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

(d)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(e)

Annualized.

(f)

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

(g)

Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions (if any).

 

See Notes to Financial Statements.

 

44


 

Class R6 Shares

            
    Six Months
Ended
April 30,

2021
 Year Ended October 31, December 28, 2016(a)
throughOctober 31,

2017
   2020 2019 2018

Per ShareOperating Performance(b):

                          

Net AssetValue, Beginning of Period

    $15.70   $15.68   $17.23   $18.81   $16.06

Income(loss) from investment operations:

                          

Net investmentincome (loss)

    0.12   0.25   0.26   0.27   0.21

Net realized and unrealized gain(loss) on investment transactions

    4.61   0.44   1.21   0.82   2.54

Total frominvestment operations

    4.73   0.69   1.47   1.09   2.75

LessDividends and Distributions:

                          

Dividends fromnet investment income

    (0.24)   (0.24)   (0.28)   (0.24)   -

Distributionsfrom net realized gains

    (0.19)   (0.43)   (2.74)   (2.43)   -

Totaldividends and distributions

    (0.43)   (0.67)   (3.02)   (2.67)   -

Net assetvalue, end of period

    $20.00   $15.70   $15.68   $17.23   $18.81

TotalReturn(c):

    30.64%   4.39%   11.05%   6.10%   17.12%
             

Ratios/Supplemental Data:

            

Net assets,end of period (000)

    $189,502   $132,446   $90,722   $76,551   $58,304

Average netassets (000)

    $163,491   $105,498   $86,249   $71,390   $40,448

Ratios toaverage net assets(d)(e):

                          

Expenses after waivers and/orexpense reimbursement

    0.35%(f)    0.35%   0.35%   0.35%   0.35%(f)

Expenses before waivers and/orexpense reimbursement

    0.39%(f)    0.40%   0.41%   0.44%   0.47%(f)

Net investmentincome (loss)

    1.34%(f)    1.60%   1.72%   1.51%   1.44%(f)

Portfolioturnover rate(g)(h)

    44%   92%   88%   95%   89%

 

(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 periodreported 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)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(f)

Annualized.

(g)

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

(h)

Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions (if any).

 

See Notes to Financial Statements.

PGIM QMA Large-Cap Core Equity Fund      45


Fund 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 Trust’s Board of Trustees (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 ofits 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. Inparticular, 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 classificationsprovided 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 investmentsclassified 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 2-5, 2021, PGIM Investments provided a written report (“LRMP Report”) to the Boardaddressing the operation, adequacy, and effectiveness of the Fund’s LRMP, including any material changes to the LRMP for the period from January 1, 2020 through December 31, 2020 (“Reporting Period”). The LRMP Report concluded thatthe 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. TheLRMP 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 includingliquidity risks presented by the Fund’s investment portfolio, is found in the Fund’s Prospectus and Statement of Additional Information.

 

46 


 MAIL  TELEPHONE  WEBSITE

655 Broad Street

Newark, NJ 07102

 

(800) 225-1852

 

pgim.com/investments

 

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. Adescription 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 theFund 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, ChiefLegal Officer  Dino Capasso, Chief Compliance Officer Jonathan Corbett, Anti-MoneyLaundering Compliance Officer  Andrew R. French, Secretary Melissa Gonzalez,Assistant Secretary Diana N. Huffman, Assistant Secretary  Kelly A. Coyne,Assistant Secretary Patrick McGuinness, Assistant Secretary  Debra Rubano,Assistant Secretary  Lana Lomuti, Assistant Treasurer Russ Shupak, AssistantTreasurer  Elyse McLaughlin, Assistant Treasurer Deborah Conway, AssistantTreasurer

 

MANAGER PGIM Investments LLC 

655 Broad Street

Newark, NJ07102

 

SUBADVISER QMA LLC Gateway Center Two
100 Mulberry Street
Newark, NJ 07102

 

DISTRIBUTOR Prudential Investment
Management Services LLC
 

655 Broad Street

Newark, NJ07102

 

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 otherinformation about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectusand 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 receivenotification 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 QMA Large-Cap Core Equity Fund, PGIM Investments, Attn: Board of Trustees, 655Broad 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 onForm N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov.

 

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 QMA LARGE-CAP CORE EQUITY FUND

 

SHARE CLASS A C Z R6
NASDAQ PTMAX PTMCX PTEZX PTMQX
CUSIP 74441J100 74441J308 74441J407 74441J688

 

MF187E2


LOGO

 

PGIM SELECT REAL ESTATE FUND

 

 

SEMIANNUAL REPORT

APRIL 30, 2021

 

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 

Fees and Expenses

   6 

Holdings and Financial Statements

   9 

 

 

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

 

The information about the Fund’s portfolio holdings is for the period covered bythis report and is subject to change thereafter.

 

The accompanyingfinancial statements as of April 30, 2021 were not audited and, accordingly, no auditor’s opinion is expressed on them.

 

Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. PGIM Real Estate is a unit of PGIM, Inc.(PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies. © 2021 Prudential Financial, Inc. and its related entities. PGIM RealEstate, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

 

2 

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Letter from the President

 

LOGO

 

Dear Shareholder,

 

We hope you find the semiannual report for the PGIM Select Real Estate Fundinformative and useful. The report covers performance for the six-month period ended April 30, 2021.

 

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 adiversified 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 protectagainst loss in declining markets.

 

At PGIM Investments, we consider it agreat privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets undermanagement. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.

 

Thank you for choosing our family of funds.

 

Sincerely,

 

LOGO

 

Stuart S. Parker, President

PGIM Select Real Estate Fund

June 15, 2021

 

PGIM Select Real Estate Fund

  3 


Your Fund’s Performance

 

Performance data quoted represents past performance. Past performance does notguarantee 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 higherthan 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.

 

  

(without sales charges)

 Average Annual Total Returns as of 4/30/21
(with sales charges)
  Six Months* (%) One Year (%) Five Years (%) Since Inception (%)
Class A 23.88 27.26   9.47   8.10 (8/1/14)
Class C 23.50 32.67   9.87   8.18 (8/1/14)
Class Z 24.09 34.93 10.96   9.27 (8/1/14)
Class R6 24.14 35.04 10.99   9.27 (8/1/14)
FTSE EPRA/NAREIT Developed Index
 31.91 33.84   5.18   4.86             
S&P 500 Index    
  28.85 45.96 17.41 14.38            

 

*Not annualized

Since Inception returns areprovided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Indexes are measured from the closest month-end to the Fund’s inception date.

 

The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following theredemption 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 Z Class R6
Maximum initial sales charge 5.50% of the public offering price None None None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase priceor 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
Annual distribution and service (12b-1) fees (shown as a percentage of average daily netassets) 0.30% (0.25% currently) 1.00% None None

 

4 

Visit our website at pgim.com/investments


 

Benchmark Definitions

 

FTSE EPRA/NAREIT Developed Index—The Financial Times StockExchange European Public Real Estate Association/National Association of Real Estate Investment Trusts (FTSE EPRA/NAREIT) Developed Index reflects the stock performance of companies engaged in specific aspects of the major real estatemarkets/regions of the world.

 

S&P 500 Index*—The S&P500 Index is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how stock prices in the United States 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 amutual fund, or taxes that may be paid by an investor.

 

*The S&P 500 Index (“Index”) is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use byPGIM, Inc. and/or its affiliates. Copyright © 2021 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved.Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spdji.com. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of DowJones Trademark Holdings LLC.

 

Presentation of FundHoldings as of 4/30/21

 

Ten Largest Holdings

  

Real Estate Sectors

 

% of Net Assets

Equity Residential

  

Residential REITs

 3.9%

Prologis, Inc.

  

Industrial REITs

 3.7%

Wharf Real Estate Investment Co. Ltd. (Hong Kong)

  

Real Estate Operating Companies

 3.5%

New Senior Investment Group, Inc.

  

Health Care REITs

 3.4%

National Retail Properties, Inc.

  

Retail REITs

 3.4%

Welltower, Inc.

  

Health Care REITs

 3.3%

Life Storage, Inc.

  

Specialized REITs

 3.3%

Essex Property Trust, Inc.

  

Residential REITs

 3.2%

Japan Hotel REIT Investment Corp. (Japan)

  

Hotel & Resort REITs

 2.9%

Sun Hung Kai Properties Ltd. (Hong Kong)

  

Diversified Real Estate Activities

 2.7%

 

Holdings reflect only long-term investments and aresubject to change.

 

PGIM Select Real Estate Fund

  5 


Fees and Expenses

 

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 intendedto 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 endedApril 30, 2021. The example is for illustrative purposes only; you should consult the Fund’s Prospectus for information on initial and subsequent minimum investment requirements.

 

Actual Expenses

The first linefor 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 paidover 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-MonthPeriod” 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 thefollowing 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 doso, 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 followingpage. 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 annualmaintenance 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 orthe 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

 

6 

Visit our website at pgim.com/investments


 

and the impact of these fees on yourending account value, as these additional expenses are not reflected in the information 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 transactionalcosts 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 thesetransactional costs were included, your costs would have been higher.

 

    
PGIM Select
Real Estate Fund
 Beginning Account
Value
November 1, 2020
  Ending Account
Value
April 30, 2021
  Annualized
Expense Ratio
Based on the
Six-Month Period
  Expenses Paid
Duringthe
Six-Month Period*
 
Class A Actual $1,000.00  $1,238.80   1.30 $7.22 
 Hypothetical $1,000.00  $1,018.35   1.30 $6.51 
Class C Actual $1,000.00  $1,235.00   2.05 $11.36 
 Hypothetical $1,000.00  $1,014.63   2.05 $10.24 
Class Z Actual $1,000.00  $1,240.90   1.02 $5.67 
 Hypothetical $1,000.00  $1,019.74   1.02 $5.11 
Class R6 Actual $1,000.00  $1,241.40   0.99 $5.50 
  Hypothetical $1,000.00  $1,019.89   0.99 $4.96 

 

*Fund expenses (net of fee waivers or subsidies, ifany) 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 April 30, 2021, anddivided by the 365 days in the Fund's fiscal year ending October 31, 2021 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

PGIM Select Real Estate Fund

  7 


Schedule of Investments(unaudited)

as of April 30, 2021

 

 

  Description

 

  

Shares

 

   

Value

 

 

LONG-TERM INVESTMENTS    98.5%

    

COMMON STOCKS

    

Diversified Real EstateActivities    6.4%

          

ESR Cayman Ltd. (China)*

   698,464   $2,389,169 

Sumitomo Realty & Development Co. Ltd. (Japan)

   142,936    4,757,320 

Sun Hung Kai Properties Ltd. (Hong Kong)

   341,230    5,148,289 
    

 

 

 
     12,294,778 

Diversified REITs    4.3%

          

Essential Properties Realty Trust, Inc.

   170,657    4,469,507 

Stockland (Australia)

   1,081,786    3,903,416 
    

 

 

 
     8,372,923 

Health Care REITs    9.8%

          

Aedifica SA (Belgium)

   18,906    2,311,350 

Global Medical REIT, Inc.

   251,112    3,605,968 

New Senior Investment Group, Inc.

   997,693    6,604,728 

Welltower, Inc.

   85,187    6,391,581 
    

 

 

 
     18,913,627 

Hotel & ResortREITs    13.8%

          

Invincible Investment Corp. (Japan)

   11,697    4,187,200 

Japan Hotel REIT Investment Corp. (Japan)

   9,767    5,585,286 

MGM Growth Properties LLC (Class A Stock)

   63,856    2,300,093 

Park Hotels & Resorts, Inc.*

   133,186    2,971,380 

Pebblebrook Hotel Trust

   179,910    4,296,251 

RLJ Lodging Trust

   221,728    3,578,690 

Xenia Hotels & Resorts, Inc.*

   188,348    3,659,601 
    

 

 

 
     26,578,501 

Hotels, Resorts & CruiseLines    2.5%

          

Pandox AB (Sweden)*

   274,317    4,808,622 

Industrial REITs    10.9%

          

Duke Realty Corp.

   68,483    3,185,829 

Nippon Prologis REIT, Inc. (Japan)

   574    1,839,839 

Prologis, Inc.

   61,048    7,113,924 

Rexford Industrial Realty, Inc.

   45,395    2,521,692 

Segro PLC (United Kingdom)

   305,892    4,244,164 

Summit Industrial Income REIT (Canada)

   160,687    2,040,698 
    

 

 

 
         20,946,146 

 

See Notes to Financial Statements.

 

PGIM Select Real Estate Fund  9 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

 

  Description

 

 

Shares

 

  

Value

 

 

COMMON STOCKS (Continued)

  

Internet Services &Infrastructure    0.4%

        

GDS Holdings Ltd. (China) (Class A Stock)*

  78,820  $817,543 

Office REITs    6.3%

        

Hudson Pacific Properties, Inc.

  93,599   2,631,068 

Kilroy Realty Corp.

  50,625   3,469,837 

Nippon Building Fund, Inc. (Japan)

  370   2,430,870 

SL Green Realty Corp.

  50,303   3,722,925 
  

 

 

 
   12,254,700 

Railroads    2.1%

        

Seibu Holdings, Inc. (Japan)*

  374,670   4,029,698 

Real Estate OperatingCompanies    9.5%

        

Aroundtown SA (Germany)

  510,248   3,929,057 

VGP NV (Belgium)

  17,102   2,998,339 

Vonovia SE (Germany)

  72,053   4,739,305 

Wharf Real Estate Investment Co. Ltd. (Hong Kong)

  1,162,909   6,682,710 
  

 

 

 
   18,349,411 

Residential REITs    11.7%

        

Equity Residential

  101,185   7,510,963 

Essex Property Trust, Inc.

  21,012   6,104,406 

Ingenia Communities Group (Australia)

  675,153   2,754,038 

InterRent Real Estate Investment Trust (Canada)

  240,454   3,002,863 

Sun Communities, Inc.

  18,754   3,128,730 
  

 

 

 
   22,501,000 

Retail REITs    15.1%

        

Acadia Realty Trust

  150,976   3,153,889 

British Land Co. PLC (The) (United Kingdom)

  596,915   4,263,638 

Capital & Counties Properties PLC (United Kingdom)*

  1,840,224   4,634,006 

National Retail Properties, Inc.

  140,746   6,533,429 

Simon Property Group, Inc.

  40,328   4,909,531 

Unibail-Rodamco-Westfield (France)*

  30,013   2,462,455 

Urban Edge Properties

  164,887   3,108,120 
  

 

 

 
   29,065,068 

 

See Notes to Financial Statements.

 

10 


 

  Description

 

  

Shares

 

   

Value

 

 

COMMON STOCKS (Continued)

    

Specialized REITs    5.7%

          

Life Storage, Inc.

   65,825   $6,323,150 

QTS Realty Trust, Inc. (Class A Stock)

   69,588    4,626,906 
    

 

 

 
     10,950,056 
    

 

 

 

TOTAL LONG-TERM INVESTMENTS
(cost $173,118,848)

     189,882,073 
    

 

 

 

SHORT-TERM INVESTMENT    1.3%

    

AFFILIATED MUTUAL FUND

    

PGIM Core Ultra Short Bond Fund
(cost $2,571,331)(wa)

   2,571,331    2,571,331 
    

 

 

 

TOTAL INVESTMENTS    99.8%
(cost $175,690,179)

     192,453,404 

Other assets in excess of liabilities    0.2%

     358,186 
    

 

 

 

NET ASSETS    100.0%

    $      192,811,590 
    

 

 

 

 

 

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

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 resoldexcept to qualified institutional buyers.

LIBOR—London Interbank Offered Rate

REITs—Real Estate Investment Trust

 

*

Non-income producing security.

(wa)

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

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

 

See Notes to Financial Statements.

 

PGIM Select Real Estate Fund  11 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

The following is a summary of the inputs used as of April 30, 2021 in valuing such portfolio securities:

 

    Level 1      Level 2      Level 3   

Investments in Securities

   

Assets

   
Common Stocks   

Australia

 $  $6,657,454   $—     

Belgium

     5,309,689   —     

Canada

  5,043,561      —     

China

     3,206,712   —     

France

     2,462,455   —     

Germany

     8,668,362   —     

Hong Kong

     11,830,999   —     

Japan

     22,830,213   —     

Sweden

     4,808,622   —     

United Kingdom

     13,141,808   —     

United States

  105,922,198      —     

Affiliated Mutual Fund

  2,571,331      —     
 

 

 

  

 

 

  

 

 

 

Total

 $113,537,090  $78,916,314   $—     
 

 

 

  

 

 

  

 

 

 

Sector Classification:

The sectorclassification of investments and other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2021 were as follows:

 

Retail REITs

  15.1

Hotel & Resort REITs

  13.8 

Residential REITs

  11.7 

Industrial REITs

  10.9 

Health Care REITs

  9.8 

Real Estate Operating Companies

  9.5 

Diversified Real Estate Activities

  6.4 

Office REITs

  6.3 

Specialized REITs

  5.7 

Diversified REITs

  4.3 

Hotels, Resorts & Cruise Lines

  2.5

Railroads

  2.1 

Affiliated Mutual Fund

  1.3 

Internet Services & Infrastructure

  0.4 
 

 

 

 
  99.8 

Other assets in excess of liabilities

  0.2 
 

 

 

 
  100.0
 

 

 

 
 

 

See Notes to Financial Statements.

 

12 


Statement of Assets and Liabilities (unaudited)

as ofApril 30, 2021

 

Assets

    

Investments at value:

 

Unaffiliated investments (cost $173,118,848)

 $189,882,073 

Affiliated investments (cost $2,571,331)

  2,571,331 

Foreign currency, at value (cost $23,530)

  23,356 

Receivable for Fund shares sold

  1,356,393 

Dividends receivable

  365,630 

Tax reclaim receivable

  25,836 

Prepaid expenses

  1,320 
 

 

 

 

Total Assets

  194,225,939 
 

 

 

 

Liabilities

    

Payable for investments purchased

  849,580 

Payable for Fund shares purchased

  413,085 

Management fee payable

  115,801 

Accrued expenses and other liabilities

  32,247 

Distribution fee payable

  1,619 

Affiliated transfer agent fee payable

  1,356 

Trustees’ fees payable

  661 
 

 

 

 

Total Liabilities

  1,414,349 
 

 

 

 

Net Assets

 $192,811,590 
 

 

 

 
     

Net assets were comprised of:

 

Shares of beneficial interest, at par

 $13,787 

Paid-in capital in excess of par

  174,753,409 

Total distributable earnings (loss)

  18,044,394 
 

 

 

 

Net assets, April 30, 2021

 $192,811,590 
 

 

 

 

 

See Notes to Financial Statements.

 

PGIM Select Real Estate Fund  13 


Statement of Assets and Liabilities (unaudited)

as ofApril 30, 2021

 

Class A

     

Net asset value and redemption price per share,
($4,674,290 ÷ 333,133 shares of beneficial interest issued andoutstanding)

  $14.03 

Maximum sales charge (5.50% of offering price)

   0.82 
  

 

 

 

Maximum offering price to public

  $14.85 
  

 

 

 

Class C

     

Net asset value, offering price and redemption price per share,
($1,042,226 ÷ 75,179 shares of beneficial interestissued and outstanding)

  $13.86 
  

 

 

 

Class Z

     

Net asset value, offering price and redemption price per share,
($130,245,497 ÷ 9,267,113 shares of beneficialinterest issued and outstanding)

  $14.05 
  

 

 

 

Class R6

     

Net asset value, offering price and redemption price per share,
($56,849,577 ÷ 4,111,505 shares of beneficialinterest issued and outstanding)

  $13.83 
  

 

 

 

 

See Notes to Financial Statements.

 

14


Statement of Operations(unaudited)

Six Months Ended April 30, 2021

 

Net Investment Income (Loss)

     

Income

  

Unaffiliated dividend income (net of $45,583 foreign withholding tax)

  $1,394,000 

Affiliated dividend income

   2,524 

Affiliated income from securities lending, net

   8 
  

 

 

 

Total income

   1,396,532 
  

 

 

 

Expenses

  

Management fee

   451,727 

Distribution fee(a)

   9,498 

Custodian and accounting fees

   37,019 

Registration fees(a)

   31,977 

Transfer agent’s fees and expenses (including affiliated expense of $3,167)(a)

   20,684 

Audit fee

   16,469 

Legal fees and expenses

   8,777 

Trustees’ fees

   5,651 

Shareholders’ reports

   4,959 

Miscellaneous

   10,247 
  

 

 

 

Total expenses

   597,008 

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

   (16,399

Distribution fee waiver(a)

   (1,031
  

 

 

 

Net expenses

   579,578 
  

 

 

 

Net investment income (loss)

   816,954 
  

 

 

 

Realized And Unrealized Gain (Loss) On Investment And ForeignCurrency Transactions

     

Net realized gain (loss) on:

  

Investment transactions

   5,475,898 

Foreign currency transactions

   (27,809
  

 

 

 
   5,448,089 
  

 

 

 

Net change in unrealized appreciation (depreciation) on:

  

Investments

   14,868,376 

Foreign currencies

   (3,341
  

 

 

 
   14,865,035 
  

 

 

 

Net gain (loss) on investment and foreign currency transactions

   20,313,124 
  

 

 

 

Net Increase (Decrease) In Net Assets Resulting From Operations

  $21,130,078 
  

 

 

 

 

(a)

Class specific expenses and waivers were as follows:

 

   Class A  Class C  Class Z  Class R6 

Distribution fee

  6,187   3,311       

Registration fees

  7,483   7,482   9,530   7,482 

Transfer agent’s fees and expenses

  3,032   426   17,136   90 

Fee waiver and/or expense reimbursement

  (8,782  (7,617      

Distribution fee waiver

  (1,031         

 

See Notes to Financial Statements.

 

PGIM Select Real Estate Fund  15 


Statements of Changes in Net Assets (unaudited)

 

  Six Months Ended
April 30, 2021
  Year Ended
October 31, 2020
 

Increase (Decrease) in Net Assets

        

Operations

  

Net investment income (loss)

 $816,954  $509,865 

Net realized gain (loss) on investment and foreign currency transactions

  5,448,089   (3,157,913

Net change in unrealized appreciation (depreciation) on investments and foreign currencies

  14,865,035   (896,188
 

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

  21,130,078   (3,544,236
 

 

 

  

 

 

 

Dividends and Distributions

  

Distributions from distributable earnings

  

Class A

  (54,000  (249,514

Class C

  (5,579  (22,861

Class Z

  (834,256  (568,118

Class R6

  (511,309  (959,853
 

 

 

  

 

 

 
  (1,405,144  (1,800,346
 

 

 

  

 

 

 

Fund share transactions (Net of share conversions)

  

Net proceeds from shares sold

  130,842,887   41,530,766 

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

  1,403,761   1,798,710 

Cost of shares purchased

  (8,385,169  (17,061,180
 

 

 

  

 

 

 

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

  123,861,479   26,268,296 
 

 

 

  

 

 

 

Total increase (decrease)

  143,586,413   20,923,714 

Net Assets:

        

Beginning of period

  49,225,177   28,301,463 
 

 

 

  

 

 

 

End of period

 $192,811,590  $49,225,177 
 

 

 

  

 

 

 

 

See Notes to Financial Statements.

 

16


Notes to Financial Statements (unaudited)

 

1.    Organization

Prudential Investment Portfolios 9 (the“Trust”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust currently consists of five series: PGIMAbsolute Return Bond Fund, PGIM QMA Large-Cap Core Equity Fund and PGIM Select Real Estate Fund, each of which are diversified funds for purposes of the 1940 Act and PGIM International Bond Fund and PGIM RealEstate Income Fund, each of which are non-diversified funds for purposes of the 1940 Act, and therefore, may invest a greater percentage of their assets in the securities of a single company or other issuerthan a diversified fund. These financial statements relate only to the PGIM Select Real Estate Fund (the “Fund”).

The investment objective of the Fund isto seek income and 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 Easterntime) 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 quotationsare readily available. The Trust’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 (“PGIMInvestments” 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. Thevaluation 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 theBoard’s review at its first quarterly meeting following the quarter in which such actions take place.

 

PGIM Select Real Estate Fund 17


Notes to Financial Statements (unaudited) (continued)

 

For the fiscalreporting period-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 (includingweekends and holidays). Because such foreign securities 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 inthe Schedule of Investments and referred to herein as the “fair value hierarchy” in accordance with FASB ASC Topic 820 - Fair Value Measurements and Disclosures.

Common or preferred stocks, exchange-traded funds and derivative instruments, if applicable, that are traded on a national securities exchange are valued at the lastsale 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 orNASDAQ 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 reportedbid 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.

Foreignequities traded on foreign securities exchanges are generally valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices,currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy. The models generate an evaluated adjustment factor for each security, whichis applied to the local closing price to adjust it for post closing market movements up to the time the Fund is valued. Utilizing that evaluated adjustment factor, the vendor provides an evaluated price for each security. If the vendor does notprovide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.

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 valuehierarchy 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 themethods 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

 

18 


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 anyrecent 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 thefollowing basis:

(i) market value of investment securities, other assets and liabilities — at the current rates of exchange;

(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 thatportion 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 Funddoes 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 realized foreign currency gains(losses) are included in the reported net realized gains (losses) on investment transactions.

Net realized gains (losses) on foreign currency transactions representnet 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.

Master Netting Arrangements: The Trust, on behalf of the Fund, is subject to various MasterAgreements, 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 thecounterparty permits the

 

PGIM Select Real Estate Fund  19 


Notes to Financial Statements (unaudited) (continued)

 

Fund to offsetamounts 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 suchmitigating 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 determinableamounts, 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. Theloans 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 marketvalue, 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 acollateral 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 willreturn to the Fund securities identical to the loaned securities. The remaining maturities of the securities lending transactions are considered overnight and continuous. Should the borrower of the securities fail financially, the Fund has the rightto repurchase the securities in the open market using the collateral.

The Fund recognizes income, net of any rebate and securities lending agent fees, for lendingits 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 equivalentthereto, 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 securitiesloaned 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. Netearnings from securities lending are disclosed in the Statement of Operations.

Equity and Mortgage Real Estate Investment Trusts (collectively REITs): TheFund 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, capitalgain 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.

 

20


Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realizedgains (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 Fundbecomes 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 specificexpenses 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 andexpenses, registration fees and fee waivers and/or expense reimbursements, as applicable.

Taxes: It is the Fund’s policy to continue to meet therequirements 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.

Taxreform legislation commonly referred to as the Tax Cuts and Jobs Act permits a direct REIT shareholder to claim a 20% “qualified business income” deduction for ordinary REIT dividends. The tax legislation did not expressly permit regulatedinvestment companies (“RICs”) paying dividends attributable to such income to pass through this special treatment to its shareholders. On January 18, 2019, the Internal Revenue Service issued final regulations that permit RICs to passthrough “qualified REIT dividends” to their shareholders.

Dividends and Distributions: The Fund expects to pay dividends from net investment incomequarterly. Distributions from net realized capital and currency gains, if any, are declared and paid annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differfrom GAAP, are recorded on the ex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) andpaid-in capital in excess of par, as appropriate.

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

 

PGIM Select Real Estate Fund  21 


Notes to Financial Statements (unaudited) (continued)

 

3.    Agreements

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

The Manager has entered into a subadvisoryagreement with PGIM, Inc., which provides subadvisory services to the Fund through its business unit, PGIM Real Estate and PGIM Real Estate (UK) Limited, an indirect wholly-owned subsidiary of PGIM, Inc. (each a “subadviser” andcollectively the “subadvisers”). The Manager pays for the services of subadvisers.

The management fee paid to the Manager is accrued daily and payablemonthly at an annual rate of 0.80% of the Fund’s average daily net assets up to and including $1 billion, 0.78% of the next $2 billion, 0.76% of the next $2 billion, 0.75% of the next $5 billion and 0.74% of the Fund’saverage daily net assets in excess of $10 billion. The effective management fee rate before any waivers and/or expense reimbursements was 0.80% for the reporting period ended April 30, 2021.

The Manager has contractually agreed, through February 28, 2022, to limit total annual operating expenses after fee waivers and/or expense reimbursements to 1.30%of average daily net assets for Class A shares, 2.05% of average daily net assets for Class C shares, 1.05% of average daily net assets for Class Z shares and 1.05% of average daily net assets for Class R6 shares. Thiscontractual 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 dividendand interest expense and broker charges on short sales.

Where applicable, the Manager agrees to waive management fees or shared operating expenses on any shareclass 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 expenseswaived and/or reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of therecoupment for that fiscal year.

The Trust, 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 Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A and Class C shares,pursuant to the plans of distribution (the “Distribution Plans”), regardless of expenses actually incurred by PIMS.

 

22


Pursuant to the Distribution Plans, the Fund compensates PIMS for distribution related activities at an annual rate of up to0.30% and 1% of the average daily net assets of the Class A and Class C shares, respectively.PIMS has contractually agreed through February 28, 2022 to limit such fees to 0.25% of the average daily net assets of the Class Ashares. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z or Class R6 shares of the Fund.

For the reporting period ended April 30, 2021, PIMS received $6,564 in front-end sales charges resulting from sales ofClass A shares. Additionally, for the reporting period ended April 30, 2021, PIMS received $18 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders. From these fees, PIMS paid such salescharges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs.

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

4.     Other Transactionswith 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 series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed byPGIM 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 in the Core Fund and MoneyMarket Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.

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 isaffiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the reporting period ended April 30, 2021, no 17a-7 transactionswere entered into by the Fund.

 

PGIM Select Real Estate Fund  23 


Notes to Financial Statements (unaudited) (continued)

 

5.     Portfolio Securities

The aggregate cost of purchasesand proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended April 30, 2021, were $262,399,072 and $141,175,454, respectively.

A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the reporting period ended April 30, 2021, is presented asfollows:

 

Value,

Beginning

of

Period

  Cost of
Purchases
  Proceeds
from Sales
  Change in
Unrealized
Gain
(Loss)
  Realized
Gain
(Loss)
   Value,
End of
Period
   Shares,
End
of
Period
   Income 
 

Short-Term Investments - Affiliated Mutual Funds:

 
 

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

 
$1,636,468  $74,751,974  $73,817,111  $  $   $2,571,331    2,571,331   $2,524 
 

PGIM Institutional Money Market Fund (1)(wa)

 
    1,565,313   1,565,313                  8(2)  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

     

 

 

 
$1,636,468  $76,317,287  $75,382,424  $  $   $2,571,331     $2,532 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

     

 

 

 

 

(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 ofOperations.

(wa)

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

6.     Tax Information

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of April 30, 2021 were as follows:

 

                                 Tax Basis

  $176,467,879 
  

 

 

 

Gross Unrealized Appreciation

   17,595,292 

Gross Unrealized Depreciation

   (1,609,767
  

 

 

 

    Net Unrealized Appreciation

  $15,985,525 
  

 

 

 

The GAAP basis may differ from tax basis due to certain tax-related adjustments.

For federal income tax purposes, the Fund had a capital loss carryforward as of October 31, 2020 of approximately $3,114,000 which can be carried forward for anunlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.

The Managerhas 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

 

See Notes to Financial Statements.

 

24 


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 taxreturns for each of the four fiscal years up to the most recent fiscal year ended October 31, 2020 are subject to such review.

7.    Capital and Ownership

The Fund offers Class A, Class C, Class Z 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 topurchase 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 eightyears (ten years prior to January 22, 2021) after purchase. 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 oftransactions in shares of beneficial interest, below.

The Trust has authorized an unlimited number of shares of beneficial interest of the Fund at $0.001 par valueper share, currently divided into four classes, designated Class A, Class C, Class Z and Class R6.

As of April 30, 2021, Prudential,through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:

 

   Number of Shares           Percentage of         
Outstanding Shares         

Class A

   183,829         55.2%    

Class C

     1,226         1.6%    

Class R6

 1,450,217         35.3%    

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

 

  
Affiliated              

Unaffiliated

    

Number of

    Shareholders    

  

Percentage of

    Outstanding Shares    

  

Number of    

Shareholders    

  

Percentage of

    Outstanding Shares    

  —%  3  76.0%

 

PGIM Select Real Estate Fund  25 


Notes to Financial Statements (unaudited) (continued)

 

Transactions in shares of beneficial interest were as follows:

 

Class A

    Shares   Amount 

Six months ended April 30, 2021:

      

Shares sold

     53,816   $711,415 

Shares issued in reinvestment of dividends and distributions

     4,210    53,333 

Shares purchased

     (61,385   (784,624
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     (3,359   (19,876

Shares purchased upon conversion into other share class(es)

     (1,427   (18,104
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     (4,786  $(37,980
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     196,557   $2,367,915 

Shares issued in reinvestment of dividends and distributions

     20,428    248,038 

Shares purchased

     (216,412   (2,521,929
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     573    94,024 

Shares purchased upon conversion into other share class(es)

     (86   (1,034
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     487   $92,990 
    

 

 

   

 

 

 

Class C

          

Six months ended April 30, 2021:

      

Shares sold

     36,919   $495,483 

Shares issued in reinvestment of dividends and distributions

     421    5,216 

Shares purchased

     (10,481   (134,070
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     26,859    366,629 

Shares purchased upon conversion into other share class(es)

     (4,977   (63,158
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     21,882   $303,471 
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     34,038   $412,624 

Shares issued in reinvestment of dividends and distributions

     1,883    22,791 

Shares purchased

     (9,292   (106,072
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     26,629    329,343 

Shares purchased upon conversion into other share class(es)

     (255   (2,886
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     26,374   $326,457 
    

 

 

   

 

 

 

Class Z

          

Six months ended April 30, 2021:

      

Shares sold

     7,103,608   $93,444,565 

Shares issued in reinvestment of dividends and distributions

     64,601    833,903 

Shares purchased

     (435,820   (5,776,009
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     6,732,389    88,502,459 

Shares issued upon conversion from other share class(es)

     6,949    89,525 
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     6,739,338   $88,591,984 
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     2,983,690   $35,135,075 

Shares issued in reinvestment of dividends and distributions

     47,282    568,028 

Shares purchased

     (985,863   (10,853,079
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     2,045,109    24,850,024 

Shares issued upon conversion from other share class(es)

     337    3,920 
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     2,045,446   $24,853,944 
    

 

 

   

 

 

 

 

26 


Class R6

    Shares   Amount 

Six months ended April 30, 2021:

      

Shares sold

     2,814,752   $36,191,424 

Shares issued in reinvestment of dividends and distributions

     40,536    511,309 

Shares purchased

     (129,956   (1,690,466
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding before conversion

     2,725,332    35,012,267 

Shares purchased upon conversion into other share class(es)

     (631   (8,263
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     2,724,701   $35,004,004 
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     329,001   $3,615,152 

Shares issued in reinvestment of dividends and distributions

     80,324    959,853 

Shares purchased

     (341,140   (3,580,100
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     68,185   $994,905 
    

 

 

   

 

 

 

8.    Borrowings

TheTrust, 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 toprovide an alternative source of temporary funding for capital share redemptions. The table below provides details of the SCA.

 

  

  SCA
Term of Commitment  10/2/2020 – 9/30/2021
Total Commitment  $ 1,200,000,000
Annualized Commitment Fee on the Unused Portion of the SCA  0.15%
Annualized Interest Rate on Borrowings  

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 predeterminedmathematical 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 utilizethe 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 theParticipating Funds in the SCA equitably.

The Fund did not utilize the SCA during the reporting period ended April 30, 2021.

9.    Risks of Investing in the Fund

The Fund’s risksinclude, 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.

 

PGIM Select Real Estate Fund  27 


Notes to Financial Statements (unaudited) (continued)

 

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 thanthose 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.

Foreign Securities Risk: The Fund’s investments in securities of foreign issuers or issuers withsignificant exposure to foreign markets involve additional risk. The securities of such issuers may trade in markets that are less liquid, less regulated and more volatile than US markets. The value of the Fund’s investments may decline becauseof factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities.

Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliated with the Manager) or institutions, includingthe 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 orthat 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 maybe impaired and, as a result, the Fund may invest a larger portion of its assets in cash or cash equivalents.

Market Disruption and Geopolitical Risks:International wars or conflicts and geopolitical developments in foreign countries, along with instability in regions such as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the United States or around the world, publichealth epidemics such as the outbreak of infectious diseases like the recent outbreak of coronavirus globally or the 2014–2016 outbreak in West Africa of the Ebola virus, and other similar events could adversely affect the U.S. and foreignfinancial markets, including increases in market volatility, reduced liquidity in the securities markets and government intervention, and may cause further long-term economic uncertainties in the United States and worldwide generally. Thecoronavirus pandemic 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 thepotential for illiquidity in certain classes of securities and sectors of the market. Preventative or protective actions that governments may take in respect of pandemic or epidemic diseases may result in periods of business disruption, businessclosures, inability to obtain raw materials, supplies and component parts, and reduced or

 

28 


disrupted operations for the issuers in which the Fund invests. Government intervention in markets may impact interestrates, market volatility and security pricing. The occurrence, reoccurrence and pendency of such diseases could adversely affect the economies (including through changes in business activity and increased unemployment) and financial markets eitherin 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.

Real Estate Related Securities Risk: An investment in the Fund will be closely linked to the performance of the real estate markets. Real estate securitiesare subject to the same risks as direct investments in real estate and mortgages, and their value will depend on the value of the underlying properties or the underlying loans or interests. The underlying loans may be subject to the risks of defaultor of prepayments that occur earlier or later than expected, and such loans may also include so-called “subprime” mortgages. The value of these securities will rise and fall in response to manyfactors, including economic conditions, the demand for rental property and interest rates. In particular, the value of these securities may decline when interest rates rise and will also be affected by the real estate market and by the management ofthe underlying properties.

Real Estate Investment Trust (REIT) Risk: Investing in REITs involves certain unique risks in addition to those risks associatedwith 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 uponmanagement 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 typesof 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 inwhich 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 maintaintheir 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.

Because the Fund invests in real estate securities, including REITs, the Fund is subject to the risks of investing in the real estate industry, such as changes ingeneral and local economic conditions, the supply and demand for real estate and changes in zoning and tax laws. Since the Fund concentrates in the real estate industry, its holdings can vary

 

PGIM Select Real Estate Fund  29 


Notes to Financial Statements (unaudited) (continued)

 

significantly frombroad market indexes. As a result, the Fund’s performance can deviate from the performance of such indexes. Because the Fund invests in stocks, there is the risk that the price of a particular stock owned by the Fund could go down or paylower-than-expected or no dividends. In addition to an individual stock losing value, the value of the equity markets or of companies comprising the real estate industry could go down.

10.  Recent Regulatory Developments

On December 3, 2020, theSEC announced that it voted to adopt a new rule that establishes an updated regulatory framework for fund valuation practices (the “Rule”). The Rule, in part, provides (i) a framework for determining fair value in good faith and(ii) provides for a fund Board’s assignment of its responsibility for the execution of valuation-related activities to a fund’s investment adviser. Further, the SEC is rescinding previously issued guidance on related issues. The Ruletook effect on March 8, 2021, with a compliance date of September 8, 2022. Management is currently evaluating the Rule and its impact to the Fund.

 

30 


Financial Highlights(unaudited)

 

Class A Shares                     
   

Six Months

Ended

April 30,

2021

 

     
   Year Ended October 31,
     

2020

 

 

2019

 

 

2018

 

 

2017

 

 

2016

 

Per Share Operating Performance(a):                                
Net Asset Value, Beginning of Period   $11.48     $13.18   $10.33   $10.54   $10.00   $10.71
Income (loss) from investment operations:                                
Net investment income (loss)   0.07     0.15   0.16   0.12   0.12   0.17
Net realized and unrealized gain (loss) on investment and foreign currency transactions   2.65     (1.16)   3.10   (0.08)   0.76   (0.18)
Total from investment operations   2.72     (1.01)   3.26   0.04   0.88   (0.01)
Less Dividends and Distributions:                                
Dividends from net investment income   (0.17)     (0.43)   (0.21)   (0.25)   (0.11)   (0.28)
Distributions from net realized gains   -     (0.26)   (0.20)   -   (0.23)   (0.42)
Total dividends and distributions   (0.17)     (0.69)   (0.41)   (0.25)   (0.34)   (0.70)
Net asset value, end of period   $14.03     $11.48   $13.18   $10.33   $10.54   $10.00
Total Return(b):   23.88%     (7.90)%   32.64%   0.37%   9.08%   0.01%
                                 
Ratios/Supplemental Data:               
Net assets, end of period (000)   $4,674     $3,878   $4,447   $2,612   $256   $185
Average net assets (000)   $4,158     $4,534   $3,205   $1,645   $242   $119
Ratios to average net assets(c)(d):                                
Expenses after waivers and/or expense reimbursement   1.30%(e)     1.30%   1.30%   1.30%   1.30%   1.33%
Expenses before waivers and/or expense reimbursement   1.78%(e)     2.11%   3.04%   4.02%   4.63%   4.81%
Net investment income (loss)   1.12%(e)     1.26%   1.36%   1.14%   1.15%   1.70%
Portfolio turnover rate(f)    126%     313%   242%   202%   142%   158%

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share onthe 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 notannualized.

(c)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(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 totransactions involving short-term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

PGIM Select Real Estate Fund  31 


Financial Highlights(unaudited) (continued)

 

Class C Shares                     
   

Six Months

Ended

April 30,

2021

 

     
   Year Ended October 31,
     

2020

 

 

2019

 

 

2018

 

 

2017

 

 

2016

 

Per Share Operating Performance(a):                                
Net Asset Value, Beginning of Period   $11.35     $13.03   $10.23   $10.44   $9.94   $10.60
Income (loss) from investment operations:                                
Net investment income (loss)   0.02     0.06   0.06   0.09   0.04   0.11
Net realized and unrealized gain (loss) on investment and foreign currency transactions   2.62     (1.13)   3.08   (0.12)   0.75   (0.18)
Total from investment operations   2.64     (1.07)   3.14   (0.03)   0.79   (0.07)
Less Dividends and Distributions:                                
Dividends from net investment income   (0.13)     (0.35)   (0.14)   (0.18)   (0.06)   (0.17)
Distributions from net realized gains   -     (0.26)   (0.20)   -   (0.23)   (0.42)
Total dividends and distributions   (0.13)     (0.61)   (0.34)   (0.18)   (0.29)   (0.59)
Net asset value, end of period   $13.86     $11.35   $13.03   $10.23   $10.44   $9.94
Total Return(b):   23.50%     (8.60)%   31.59%   (0.34)%   8.11%   (0.63)%
                                 
Ratios/Supplemental Data:               
Net assets, end of period (000)   $1,042     $605   $351   $56   $69   $59
Average net assets (000)   $668     $532   $148   $64   $70   $48
Ratios to average net assets(c)(d):                                
Expenses after waivers and/or expense reimbursement   2.05%(e)     2.05%   2.05%   2.05%   2.05%   2.08%
Expenses before waivers and/or expense reimbursement   4.35%(e)     5.31%   11.73%   29.08%   5.33%   5.64%
Net investment income (loss)   0.34%(e)     0.55%   0.54%   0.91%   0.36%   1.08%
Portfolio turnover rate(f)    126%     313%   242%   202%   142%   158%

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share onthe 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 notannualized.

(c)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(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 totransactions involving short-term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

32 


Class Z Shares                     
   

Six Months

Ended

April 30,

2021

 

     
   Year Ended October 31,
     

2020

 

 

2019

 

 

2018

 

 

2017

 

 

2016

 

Per Share Operating Performance(a):                                
Net Asset Value, Beginning of Period   $11.49     $13.20   $10.34   $10.56   $10.02   $10.74
Income (loss) from investment operations:                                
Net investment income (loss)   0.10     0.16   0.19   0.22   0.15   0.21
Net realized and unrealized gain (loss) on investment and foreign currency transactions   2.65     (1.15)   3.11   (0.16)   0.76   (0.18)
Total from investment operations   2.75     (0.99)   3.30   0.06   0.91   0.03
Less Dividends and Distributions:                                
Dividends from net investment income   (0.19)     (0.46)   (0.24)   (0.28)   (0.14)   (0.33)
Distributions from net realized gains   -     (0.26)   (0.20)   -   (0.23)   (0.42)
Total dividends and distributions   (0.19)     (0.72)   (0.44)   (0.28)   (0.37)   (0.75)
Net asset value, end of period   $14.05     $11.49   $13.20   $10.34   $10.56   $10.02
Total Return(b):   24.09%     (7.73)%   33.02%   0.51%   9.32%   0.36%
                                 
Ratios/Supplemental Data:               
Net assets, end of period (000)   $130,245     $29,056   $6,366   $65   $154   $138
Average net assets (000)   $71,232     $14,227   $1,621   $145   $148   $139
Ratios to average net assets(c)(d):                                
Expenses after waivers and/or expense reimbursement   1.02%(e)     1.05%   1.05%   1.05%   1.05%   1.08%
Expenses before waivers and/or expense reimbursement   1.02%(e)     1.61%   2.85%   14.17%   4.35%   4.82%
Net investment income (loss)   1.45%(e)     1.40%   1.48%   2.07%   1.43%   2.09%
Portfolio turnover rate(f)    126%     313%   242%   202%   142%   158%

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each periodreported 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.

(c)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(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 totransactions involving short-term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

PGIM Select Real Estate Fund  33 


Financial Highlights(unaudited) (continued)

 

Class R6 Shares                     
   

Six Months

Ended

April 30,

2021

 

     
   Year Ended October 31,
     

2020

 

 

2019

 

 

2018

 

 

2017

 

 

2016

 

Per Share Operating Performance(a):                                
Net Asset Value, Beginning of Period   $11.31     $13.00   $10.19   $10.40   $9.88   $10.63
Income (loss) from investment operations:                                
Net investment income (loss)   0.10     0.18   0.18   0.20   0.14   0.22
Net realized and unrealized gain (loss) on investment                                
and foreign currency transactions   2.61     (1.15)   3.07   (0.13)   0.75   (0.20)
Total from investment operations   2.71     (0.97)   3.25   0.07   0.89   0.02
Less Dividends and Distributions:                                
Dividends from net investment income   (0.19)     (0.46)   (0.24)   (0.28)   (0.14)   (0.35)
Distributions from net realized gains   -     (0.26)   (0.20)   -   (0.23)   (0.42)
Total dividends and distributions   (0.19)     (0.72)   (0.44)   (0.28)   (0.37)   (0.77)
Net asset value, end of period   $13.83     $11.31   $13.00   $10.19   $10.40   $9.88
Total Return(b):   24.14%     (7.70)%   33.02%   0.62%   9.25%   0.30%
                                 
Ratios/Supplemental Data:               
Net assets, end of period (000)   $56,850     $15,686   $17,138   $5,970   $5,932   $5,441
Average net assets (000)   $37,810     $16,060   $8,739   $6,039   $5,687   $5,413
Ratios to average net assets(c)(d):                                
Expenses after waivers and/or expense reimbursement   0.99%(e)     1.05%   1.05%   1.05%   1.05%   1.08%
Expenses before waivers and/or expense reimbursement   0.99%(e)     1.42%   2.25%   3.07%   4.02%   4.40%
Net investment income (loss)   1.49%(e)     1.56%   1.56%   1.89%   1.42%   2.18%
Portfolio turnover rate(f)    126%     313%   242%   202%   142%   158%

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each periodreported 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.

(c)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(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 totransactions involving short-term investments and certain derivatives. If such transactions were included, the Fund’s portfolio turnover rate may be higher.

 

See Notes to Financial Statements.

 

34


Fund 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 Trust’s Board of Trustees (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 ofits 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. Inparticular, 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 classificationsprovided 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 investmentsclassified 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 2-5, 2021, PGIM Investments provided a written report (“LRMP Report”) to the Boardaddressing the operation, adequacy, and effectiveness of the Fund’s LRMP, including any material changes to the LRMP for the period from January 1, 2020 through December 31, 2020 (“Reporting Period”). The LRMP Report concludedthat 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 includingliquidity risks presented by the Fund’s investment portfolio, is found in the Fund’s Prospectus and Statement of Additional Information.

 

PGIM Select Real Estate Fund

  35 


 MAIL  TELEPHONE  WEBSITE

655 Broad Street
Newark, NJ 07102

 

(800) 225-1852

 

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. Adescription 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 Fundvoted 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, ChiefLegal Officer Dino Capasso, Chief Compliance Officer Jonathan Corbett, Anti-Money LaunderingCompliance Officer Andrew R. French, Secretary Melissa Gonzalez, Assistant Secretary • Diana N. Huffman, Assistant Secretary Kelly A. Coyne, Assistant Secretary • Patrick McGuinness, Assistant Secretary Debra Rubano, Assistant Secretary • Lana Lomuti, Assistant Treasurer Russ Shupak, Assistant Treasurer • Elyse McLaughlin, Assistant Treasurer Deborah Conway, Assistant Treasurer

 

MANAGER PGIM Investments LLC 655 Broad Street
Newark, NJ 07102

 

SUBADVISERS 

PGIM Real Estate

 

 

PGIM Real Estate (UK) Limited

 

7 Giralda Farms
Madison, NJ 07940

 

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 andother information about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. Theprospectus 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 receivenotification 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 Select Real Estate Fund, PGIM Investments, Attn: Board of Trustees, 655 BroadStreet, 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 theCommission’s website at sec.gov.

 

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 SELECT REAL ESTATE FUND

 

SHARE CLASS A C Z R6
NASDAQ SREAX SRECX SREZX SREQX
CUSIP 74441J811 74441J795 74441J779 74441J787

 

MF223E2    


LOGO

 

PGIM INTERNATIONAL BOND FUND

 

 

SEMIANNUAL REPORT

APRIL 30, 2021

 

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 

Fees and Expenses

   7 

Holdings and Financial Statements

   9 

 

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

 

The information about the Fund’s portfolio holdings is for the period covered by this report and is subject to change thereafter.

 

The accompanying financial statements as of April 30, 2021 were not audited and,accordingly, no auditor’s opinion is expressed on them.

 

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 PrudentialFinancial companies. © 2021 Prudential Financial, Inc. and its related entities. PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and itsrelated entities, registered in many jurisdictions worldwide.

 

2 

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Letter from the President

 

LOGO

 

Dear Shareholder,

 

We hope you find the semiannual report for the PGIM International Bond Fundinformative and useful. The report covers performance for the six-month period ended April 30, 2021.

 

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 adiversified 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 protectagainst loss in declining markets.

 

At PGIM Investments, we consider it agreat privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets undermanagement. This investment expertise allows us to deliver actively managed funds and strategies to meet the needs of investors around the globe.

 

Thank you for choosing our family of funds.

 

Sincerely,

 

LOGO

 

Stuart S. Parker, President

PGIM International Bond Fund

June 15, 2021

 

PGIM International Bond Fund

  3 


Your Fund’s Performance

 

Performance data quoted represents past performance. Past performance does notguarantee 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 higherthan 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.

 

  

(without sales charges)

 

Average Annual Total Returns as of 4/30/21

(with sales charges)

  Six Months* (%) One Year (%) Since Inception (%)
Class A –1.53   0.96 4.54 (12/14/16)
Class C –1.90   2.57 4.54 (12/14/16)
Class Z –1.36   4.72 5.63 (12/14/16)
Class R6 –1.33   4.77 5.65 (12/14/16)
Bloomberg Barclays Global Aggregate ex-USD (USD Hedged) Index
  –1.38 –0.07 3.47                  

 

*Not annualized

Since Inception returns are provided since the Fund has less than 10 fiscal years of returns. Since Inception returns for the Index are measured fromthe closest month-end to the Fund’s inception date.

 

4 

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The returns in the tables do not reflectthe 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 tablebelow.

 

     
   Class A Class C Class Z Class R6
Maximum initial sales charge 3.25% of the public offering price None None None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchase priceor 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
Annual distribution and service (12b-1) fees (shown as a percentage of average daily netassets) 0.25%
 1.00% None None

 

Benchmark Definitions

 

Bloomberg Barclays Global Aggregate ex-USD (USD Hedged)Index—The Bloomberg Barclays Global Aggregate ex-USD (USD Hedged) Index provides a broad-based measure of the global investment-grade fixed income markets, with index components for the Pan-European Aggregate and the Asian-Pacific Aggregateexcluding US Dollar-denominated components.

 

Investors cannot investdirectly 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.

 

PGIM International Bond Fund

  5 


Your Fund’s Performance(continued)

 

Distributions and Yields as of 4/30/21        
 Total Distributions
Paid for
Six Months ($)
  SEC 30-Day
Subsidized
Yield* (%)
  SEC 30-Day
Unsubsidized
Yield** (%)
Class A 0.15  0.81  –1.65
Class C 0.11  0.09  –1.84
Class Z 0.17  1.19    0.38
Class R6 0.17  1.24    0.78

 

*SEC 30-Day Subsidized Yield (%)—A standardizedyield 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 isrepresented by the SEC 30-Day Subsidized Yield.

**SEC 30-Day Unsubsidized Yield (%)—A standardized yield calculation created by the Securities andExchange 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 4/30/21 (%)   
AAA  5.7 
AA  4.7 
A  17.1 
BBB  39.8 
BB  13.2 
B  10.4 
CCC  1.2 
Not Rated  5.9 
Cash/Cash Equivalents  2.0 
Total Investments  100.0 

 

Credit ratings reflect the highest rating assignedby 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 bothS&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 byan NRSRO. Credit ratings are subject to change.

 

6 

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Fees and Expenses

 

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 tohelp 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 endedApril 30, 2021. The example is for illustrative purposes only; you should consult the Fund’s Prospectus for information on initial and subsequent minimum investment requirements.

 

Actual Expenses

The first linefor 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 paidover 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-MonthPeriod” 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 thefollowing 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 doso, 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 followingpage. 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 annualmaintenance 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 thenumber 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

 

PGIM International Bond Fund

  7 


Fees and Expenses(continued)

 

and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table.Additional fees have the effect of reducing investment returns.

 

Please notethat 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 ongoingcosts 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 International
Bond Fund
 Beginning Account
Value
November 1, 2020
  Ending Account
Value
April 30, 2021
  Annualized
Expense Ratio
Based onthe
Six-Month Period
  Expenses Paid
During the
Six-Month Period*
 
Class A Actual $1,000.00  $984.70   1.00 $4.92 
 Hypothetical $1,000.00  $1,019.84   1.00 $5.01 
Class C Actual $1,000.00  $981.00   1.75 $8.60 
 Hypothetical $1,000.00  $1,016.12   1.75 $8.75 
Class Z Actual $1,000.00  $986.40   0.64 $3.15 
 Hypothetical $1,000.00  $1,021.62   0.64 $3.21 
Class R6 Actual $1,000.00  $986.70   0.59 $2.91 
  Hypothetical $1,000.00  $1,021.87   0.59 $2.96 

 

*Fund expenses (net of fee waivers or subsidies, ifany) 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 April 30, 2021,and divided by the 365 days in the Fund’s fiscal year ending October 31, 2021 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

8 

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Schedule of Investments  (unaudited)

as of April 30, 2021

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

LONG-TERM INVESTMENTS    94.4%

        

ASSET-BACKED SECURITIES    5.9%

        

Cayman Islands    3.2%

                 

Anchorage Capital CLO Ltd.,
Series 2019-11A, Class A, 144A, 3 Month LIBOR + 1.390% (Cap N/A, Floor1.390%)

   1.612%(c)   07/22/32  250  $250,233 

BlueMountain CLO Ltd.,
Series 2016-02A, Class A1R, 144A, 3 Month LIBOR + 1.310% (Cap N/A, Floor1.310%)

   1.492(c)   08/20/32  250   250,201 

HPS Loan Management Ltd.,
Series 15A-19, Class A1, 144A, 3 Month LIBOR + 1.320% (Cap N/A, Floor1.320%)

   1.504(c)   07/22/32  250   250,219 

OZLM Ltd.,
Series 2019-24A, Class A1A, 144A, 3 Month LIBOR + 1.390% (Cap N/A, Floor 0.000%)

   1.578(c)   07/20/32  250   250,067 

Silver Creek CLO Ltd.,
Series 2014-01A, Class AR, 144A, 3 Month LIBOR + 1.240% (Cap N/A, Floor0.000%)

   1.428(c)   07/20/30  250   250,045 
        

 

 

 
         1,250,765 

Ireland    1.5%

                 

St Paul’s CLO DAC,
Series 07A, Class B2R, 144A

   2.400   04/30/30   EUR 500   604,195 

United States    1.2%

                 

Oportun Funding XIII LLC,
Series 2019-A, Class B, 144A

   3.870   08/08/25  100   102,462 

PNMAC GMSR Issuer Trust,
Series 2018-GT02, Class A, 144A, 1 Month LIBOR + 2.650% (Cap N/A, Floor0.000%)

   2.756(c)   08/25/25  100   99,519 

SoFi Alternative Trust,
Series 2019-D, Class 1PT, 144A

   2.707(cc)   01/16/46  106   109,952 

TH MSR Issuer Trust,
Series 2019-FT01, Class A, 144A, 1 Month LIBOR + 2.800% (Cap N/A, Floor2.800%)

   2.906(c)   06/25/24  150   148,747 
        

 

 

 
         460,680 
        

 

 

 

TOTAL ASSET-BACKED SECURITIES
(cost $2,294,215)

         2,315,640 
        

 

 

 

 

See Notes to Financial Statements.

PGIM International Bond Fund     9


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

  Description  

Interest        

Rate

 

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           
       

COMMERCIAL MORTGAGE-BACKED SECURITIES    6.1%

   

Canada    0.1%

         

Real Estate Asset Liquidity Trust,
Series 2020-01A, Class A1, 144A

  2.381%(cc) 02/12/55   CAD 24  $ 19,872 
       

 

 

 

UnitedKingdom    0.7%

         

Salus European Loan Conduit DAC,
Series 33A, Class A, 144A, 3 Month GBP LIBOR + 1.500% (Cap 6.500%, Floor1.500%)

  1.589(c) 01/23/29   GBP 200   275,740 
       

 

 

 

United States    5.3%

         

BX Commercial Mortgage Trust,
Series 2019-XL, Class J, 144A, 1 Month LIBOR + 2.650% (Cap N/A, Floor2.650%)

  2.765(c) 10/15/36  282   282,153 

Series 2020-BXLP, Class G, 144A, 1 Month LIBOR + 2.500% (Cap N/A, Floor 2.500%)

  2.615(c) 12/15/36  399   398,951 

Cold Storage Trust,
Series 2020-ICE05, Class E, 144A, 1 Month LIBOR + 2.766% (Cap N/A, Floor2.833%)

  2.880(c) 11/15/37  98   98,607 

Credit Suisse Mortgage Capital Certificates,
Series 2019-ICE04, Class F, 144A, 1 Month LIBOR + 2.650% (CapN/A, Floor 2.650%)

  2.765(c) 05/15/36  200   199,880 

FHLMC Multifamily Structured Pass-Through Certificates,

       

Series K111, Class X1, IO

  1.681(cc) 05/25/30  400   48,857 

Series K113, Class X1, IO

  1.490(cc) 06/25/30  1,155   125,889 

Series KG03, Class X1, IO

  1.483(cc) 06/25/30  1,290   137,266 

MKT Mortgage Trust,
Series 2020-525M, Class F, 144A

  3.039(cc) 02/12/40  250   225,069 

Morgan Stanley Capital I Trust,
Series 2019-MEAD, Class E, 144A

  3.283(cc) 11/10/36  300   287,410 

One New York Plaza Trust,
Series 2020-01NYP, Class C, 144A, 1 Month LIBOR + 2.200% (Cap N/A, Floor2.200%)

  2.315(c) 01/15/26  100   100,881 

Series 2020-01NYP, Class D, 144A, 1 Month LIBOR + 2.750% (Cap N/A, Floor 2.750%)

  2.865(c) 01/15/26  100   101,121 

Wells Fargo Commercial Mortgage Trust,

       

Series 2021-FCMT, Class C, 144A

     —  (p) 05/15/31  100   100,000 
       

 

 

 
     2,106,084 
       

 

 

 

TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(cost $2,373,759)

    2,401,696 
       

 

 

 

 

See Notes to Financial Statements.

 

10


    

    

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           
        

CORPORATE BONDS    30.3%

        

Australia    0.3%

                 

Transurban Finance Co. Pty Ltd.,

        

Sr. Sec’d. Notes, EMTN

   2.000%   08/28/25   EUR 100  $129,545 

Brazil    0.4%

                 

Petrobras Global Finance BV,

        

Gtd. Notes

   5.375   10/01/29 GBP 100   149,539 

China    0.3%

                 

Aircraft Finance Co. Ltd.,

        

Sr. Sec’d. Notes, Series B

   4.100   03/29/26  128   132,482 

France    1.9%

                 

Altice France SA,

        

Sr. Sec’d. Notes

   3.375   01/15/28 EUR 100   118,572 

Sr. Sec’d. Notes, 144A

   2.500   01/15/25 EUR 100   118,572 

Sr. Sec’d. Notes, 144A

   3.375   01/15/28 EUR 100   118,572 

La Poste SA,

        

Sr. Unsec’d. Notes, EMTN

   1.375   04/21/32 EUR 100   129,391 

Loxam SAS,

        

Sr. Sub. Notes

   5.750   07/15/27 EUR 150   179,886 

SNCF Reseau,

        

Sr. Unsec’d. Notes, Series MPLE

   4.700   06/01/35 CAD 100   98,086 
        

 

 

 
         763,079 

Germany    2.9%

                 

Allianz SE,

        

Jr. Sub. Notes

   3.375(ff)   09/18/24(oo) EUR 200   262,853 

Techem Verwaltungsgesellschaft 674 mbH,

        

Sr. Sec’d. Notes

   6.000   07/30/26 EUR 100   124,567 

thyssenkrupp AG,

        

Sr. Unsec’d. Notes

   1.375   03/03/22 EUR 150   180,519 

TK Elevator Midco GmbH,

        

Sr. Sec’d. Notes, 144A

   4.375   07/15/27 EUR 100   126,355 

Vertical Holdco GmbH,

        

Sr. Unsec’d. Notes, 144A

   6.625   07/15/28 EUR 100   129,114 

Volkswagen International Finance NV,

        

Gtd. Notes

   2.700(ff)   12/14/22(oo) EUR 100   124,012 

Gtd. Notes

   4.625(ff)   03/24/26(oo) EUR 150   204,454 
        

 

 

 
         1,151,874 

 

See Notes to Financial Statements.

PGIM International Bond Fund     11


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

CORPORATE BONDS (Continued)

        

Hong Kong    0.3%

                 

HKT Capital No. 3 Ltd.,

        

Gtd. Notes

   1.650%   04/10/27   EUR 100  $125,413 

Hungary    0.3%

                 

MFB Magyar Fejlesztesi Bank Zrt,

        

Gov’t. Gtd. Notes

   1.375   06/24/25 EUR 100   125,683 

Iceland    0.3%

                 

Landsvirkjun,

        

Gov’t. Gtd. Notes, EMTN

   0.000(cc)   07/24/26 EUR 100   118,552 

India    0.3%

                 

NTPC Ltd.,

        

Sr. Unsec’d. Notes, EMTN

   2.750   02/01/27 EUR 100   127,614 

Indonesia    0.3%

                 

Perusahaan Listrik Negara PT,

        

Sr. Unsec’d. Notes, 144A

   1.875   11/05/31 EUR 100   118,422 

Italy    0.4%

                 

Assicurazioni Generali SpA,

        

Sub. Notes, EMTN

   5.500(ff)   10/27/47 EUR 100   147,572 

Kazakhstan    0.4%

                 

Kazakhstan Temir Zholy National Co. JSC,

        

Gtd. Notes

   3.250   12/05/23 CHF 50   58,475 

Gtd. Notes

   3.638   06/20/22 CHF 100   113,403 
        

 

 

 
         171,878 

Luxembourg    1.2%

                 

ARD Finance SA,

        

Sr. Sec’d. Notes, Cash coupon 5.000% or PIK 5.750%

   5.000   06/30/27 EUR 100   122,962 

Sr. Sec’d. Notes, 144A, Cash coupon 5.000% or PIK 5.750%

   5.000   06/30/27 EUR 100   122,961 

Matterhorn Telecom SA,

        

Sr. Sec’d. Notes

   3.125   09/15/26 EUR 200   240,137 
        

 

 

 
         486,060 

 

See Notes to Financial Statements.

 

12


    

    

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

CORPORATE BONDS (Continued)

        

Mexico    1.2%

                 

Petroleos Mexicanos,

        

Gtd. Notes

   3.625%   11/24/25   EUR 200  $240,225 

Gtd. Notes, EMTN

   4.875   02/21/28 EUR 200   243,145 
        

 

 

 
         483,370 

Netherlands    1.9%

                 

Cooperatieve Rabobank UA,

        

Sr. Unsec’d. Notes, GMTN

   3.500   12/14/26 AUD 100   81,048 

OCI NV,

        

Sr. Sec’d. Notes

   3.625   10/15/25 EUR 150   188,427 

United Group BV,

        

Sr. Sec’d. Notes, 144A

   3.125   02/15/26 EUR 200   232,335 

Ziggo Bond Co. BV,

        

Gtd. Notes, 144A

   3.375   02/28/30 EUR 200   237,745 
        

 

 

 
         739,555 

Peru    0.4%

                 

Peru Enhanced Pass-Through Finance Ltd.,

        

Pass-Through Certificates

   1.963(s)   06/02/25  140   133,588 

Poland    0.8%

                 

Bank Gospodarstwa Krajowego,

        

Gov’t. Gtd. Notes

   1.625   04/30/28 EUR 250   329,349 

Russia    0.9%

                 

Gazprom PJSC Via Gaz Capital SA,

        

Sr. Unsec’d. Notes

   2.500   03/21/26 EUR 200   249,273 

Russian Railways Via RZD Capital PLC,

        

Sr. Unsec’d. Notes

   0.898   10/03/25 CHF 100   109,132 
        

 

 

 
         358,405 

Spain    1.1%

                 

Amadeus IT Group SA,

        

Sr. Unsec’d. Notes, EMTN

   1.875   09/24/28 EUR 200   255,518 

Cellnex Finance Co. SA,

        

Gtd. Notes, EMTN

   2.000   02/15/33 EUR 100   117,865 

Codere Finance 2 Luxembourg SA,

        

Sr. Sec’d. Notes, 144A

   10.750   09/30/23 EUR 35   44,712 
        

 

 

 
         418,095 

 

See Notes to Financial Statements.

PGIM International Bond Fund     13


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

CORPORATE BONDS (Continued)

        

Supranational Bank    0.4%

                 

European Bank for Reconstruction & Development,
Sr. Unsec’d. Notes, GMTN

   6.450%   12/13/22 IDR  408,000  $28,845 

European Investment Bank,
Sr. Unsec’d. Notes, 144A, EMTN

   5.400   01/05/45   CAD 100   114,405 
        

 

 

 
         143,250 

United Arab Emirates    1.0%

                 

Abu Dhabi National Energy Co. PJSC,

        

Sr. Unsec’d. Notes, GMTN

   2.750   05/02/24 EUR 100   127,769 

DP World PLC,

        

Sr. Unsec’d. Notes

   4.250   09/25/30 GBP 100   156,443 

Emirates NBD Bank PJSC,

        

Sr. Unsec’d. Notes, MTN

   4.750   02/09/28 AUD 100   86,394 
        

 

 

 
         370,606 

United Kingdom    4.8%

                 

Barclays PLC,

        

Sub. Notes, EMTN

   2.000(ff)   02/07/28 EUR 100   123,715 

Bellis Acquisition Co. PLC,

        

Sr. Sec’d. Notes, 144A

   3.250   02/16/26 GBP 200   277,032 

Bellis Finco PLC,

        

Sr. Unsec’d. Notes, 144A

   4.000   02/16/27 GBP 100   138,541 

Co-Operative Group Ltd.,

        

Sr. Unsec’d. Notes

   5.125   05/17/24 GBP 100   148,323 

eG Global Finance PLC,

        

Sr. Sec’d. Notes

   6.250   10/30/25 EUR 100   122,479 

Sr. Sec’d. Notes, 144A

   6.250   10/30/25 EUR 100   122,479 

HSBC Holdings PLC,

        

Sr. Unsec’d. Notes, EMTN

   3.350(ff)   02/16/24 AUD 200   160,414 

InterContinental Hotels Group PLC,

        

Gtd. Notes, EMTN

   1.625   10/08/24 EUR 200   250,654 

Natwest Group PLC,

        

Sr. Unsec’d. Notes, EMTN

   2.000(ff)   03/08/23 EUR 100   122,388 

Pinewood Finance Co. Ltd.,

        

Sr. Sec’d. Notes, 144A

   3.250   09/30/25 GBP 100   140,567 

Tesco PLC,

        

Sr. Unsec’d. Notes, EMTN

   5.000   03/24/23 GBP 80   119,444 

Virgin Media Secured Finance PLC,

        

Sr. Sec’d. Notes

   5.000   04/15/27 GBP 100   144,320 
        

 

 

 
         1,870,356 

 

See Notes to Financial Statements.

 

14


    

    

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

CORPORATE BONDS (Continued)

        

United States    8.5%

                 

Adient Global Holdings Ltd.,

        

Gtd. Notes

   3.500%   08/15/24   EUR 100  $123,993 

American International Group, Inc.,

        

Sr. Unsec’d. Notes

   1.875   06/21/27   EUR 100   129,793 

Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc.,

        

Sr. Sec’d. Notes

   2.125   08/15/26   EUR 150   180,586 

Avantor Funding, Inc.,

        

Sr. Sec’d. Notes

   2.625   11/01/25   EUR 150   184,931 

Banff Merger Sub, Inc.,

        

Sr. Unsec’d. Notes

   8.375   09/01/26   EUR 100   126,739 

Broadcom, Inc.,

        

Gtd. Notes, 144A

   3.500   02/15/41  30   28,947 

Citigroup, Inc.,

        

Sr. Unsec’d. Notes, GMTN

   2.210   08/23/22   HKD 1,000   131,059 

DH Europe Finance II Sarl,

        

Gtd. Notes

   0.200   03/18/26   EUR 200   241,595 

Diamond BC BV,

        

Gtd. Notes

   5.625   08/15/25   EUR 125   153,673 

Energizer Gamma Acquisition BV,

        

Gtd. Notes

   4.625   07/15/26   EUR 300   370,310 

Fidelity National Information Services, Inc.,

        

Sr. Unsec’d. Notes

   1.500   05/21/27   EUR 100   127,667 

Goldman Sachs Group, Inc. (The),

        

Sr. Unsec’d. Notes, EMTN

   0.000(cc)   08/12/25   EUR 100   118,403 

Honeywell International, Inc.,

        

Sr. Unsec’d. Notes

   0.750   03/10/32   EUR 100   122,291 

JPMorgan Chase Bank, NA,

        

Sr. Unsec’d. Notes

   4.762(s)   03/17/48   ITL(jj) 100,000   16,228 

Medtronic Global Holdings SCA,

        

Gtd. Notes

   0.750   10/15/32   EUR 100   120,257 

Morgan Guaranty Trust Co.,

        

Sr. Unsec’d. Notes

   1.388(s)   01/21/27   ITL(jj) 50,000   29,501 

Morgan Stanley,

        

Sr. Unsec’d. Notes

   0.406(ff)   10/29/27   EUR 100   120,321 

Sr. Unsec’d. Notes

   0.497(ff)   02/07/31   EUR 250   293,893 

MPT Operating Partnership LP/MPT Finance Corp.,

        

Gtd. Notes

   3.375   04/24/30   GBP 150   210,814 

Spectrum Brands, Inc.,

        

Gtd. Notes

   4.000   10/01/26   EUR 100   123,118 

Stryker Corp.,

        

Sr. Unsec’d. Notes

   2.625   11/30/30   EUR 100   141,615 

 

See Notes to Financial Statements.

PGIM International Bond Fund     15


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

CORPORATE BONDS (Continued)

        

United States (cont’d.)

                 

VEREIT Operating Partnership LP,

        

Gtd. Notes

   2.200%   06/15/28  5  $5,036 

Gtd. Notes

   2.850   12/15/32  5   5,153 

Verizon Communications, Inc.,

        

Sr. Unsec’d. Notes

   1.250   04/08/30   EUR 100   127,201 

Zimmer Biomet Holdings, Inc.,

        

Sr. Unsec’d. Notes

   2.425   12/13/26 EUR 100   133,060 
        

 

 

 
         3,366,184 
        

 

 

 

TOTAL CORPORATE BONDS
(cost $11,131,668)

         11,960,471 
        

 

 

 

RESIDENTIAL MORTGAGE-BACKED SECURITIES   1.6%

 

      

Bermuda    0.5%

                 

Bellemeade Re Ltd.,

        

Series 2018-01A, Class M1B, 144A, 1 Month LIBOR + 1.600% (Cap N/A, Floor 0.000%)

   1.706(c)   04/25/28  62   62,392 

Series 2021-01A, Class M1A, 144A, 30 Day

        

Average SOFR + 1.750% (Cap N/A, Floor 1.750%)

   1.760(c)   03/25/31  150   150,370 
        

 

 

 
         212,762 

Ireland    0.3%

                 

Retiro Mortgage Securities DAC,

        

Series 01A, Class A1, 144A, 3 Month EURIBOR + 2.000% (Cap 5.000%, Floor 0.000%)

   1.464(c)   07/30/75 EUR 100   119,325 

United States    0.8%

                 

FHLMC Structured Agency Credit Risk Debt Notes,

        

Series 2020-HQA05, Class B1, 144A, 30 Day Average SOFR + 4.000% (Cap N/A, Floor 0.000%)

   4.010(c)   11/25/50  10   10,400 

Series 2020-HQA05, Class M2, 144A, 30 Day Average SOFR + 2.600% (Cap N/A, Floor 0.000%)

   2.610(c)   11/25/50  60   61,148 

 

See Notes to Financial Statements.

 

16


    

    

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

RESIDENTIAL MORTGAGE-BACKED SECURITIES (Continued)

    

United States (cont’d.)

                 

Legacy Mortgage Asset Trust,

        

Series 2020-GS01, Class A1, 144A

   2.882%   10/25/59  90  $91,173 

PMT Credit Risk Transfer Trust,

        

Series 2020-02R, Class A, 144A, 1 Month LIBOR + 3.815% (Cap N/A, Floor 3.815%)

   3.921(c)   12/25/22  162   162,460 
        

 

 

 
         325,181 
        

 

 

 

TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES
(cost $652,484)

         657,268 
        

 

 

 

SOVEREIGN BONDS    50.5%

        

Belgium   0.3%

                 

Kingdom of Belgium Government Bond,

        

Sr. Unsec’d. Notes, Series 88, 144A

   1.700   06/22/50   EUR 90   129,954 

Brazil    1.4%

                 

Brazil Loan Trust 1,

        

Gov’t. Gtd. Notes

   5.477   07/24/23  56   58,786 

Brazil Minas SPE via State of Minas Gerais,

        

Gov’t. Gtd. Notes

   5.333   02/15/28  455   492,892 
        

 

 

 
         551,678 

Bulgaria    0.4%

                 

Bulgaria Government International Bond,

        

Sr. Unsec’d. Notes, GMTN

   3.125   03/26/35 EUR 115   175,760 

Canada    0.6%

                 

City of Toronto,

        

Sr. Unsec’d. Notes

   3.500   06/02/36 CAD 100   89,170 

Province of Nova Scotia,

        

Unsec’d. Notes

   3.450   06/01/45 CAD 100   89,521 

Province of Saskatchewan,

        

Unsec’d. Notes

   2.750   12/02/46 CAD 100   79,737 
        

 

 

 
         258,428 

 

See Notes to Financial Statements.

PGIM International Bond Fund     17


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

SOVEREIGN BONDS (Continued)

        

China    2.9%

                 

China Government Bond,

        

Sr. Unsec’d. Notes

   3.900%   07/04/36   CNH 1,000  $168,739 

Export-Import Bank of China (The),

        

Sr. Unsec’d. Notes

   4.400   05/14/24 CNH 6,000   971,289 
        

 

 

 
         1,140,028 

Colombia    2.1%

                 

Colombia Government International Bond,

        

Sr. Unsec’d. Notes, EMTN

   3.875   03/22/26 EUR 600   812,961 

Croatia    0.7%

                 

Croatia Government International Bond,

        

Sr. Unsec’d. Notes

   2.700   06/15/28 EUR 200   276,526 

Cyprus    3.2%

                 

Cyprus Government International Bond,

        

Notes, EMTN

   1.500   04/16/27 EUR 200   259,607 

Sr. Unsec’d. Notes, EMTN

   2.375   09/25/28 EUR 200   278,363 

Sr. Unsec’d. Notes, EMTN

   2.750   02/26/34 EUR 200   297,786 

Sr. Unsec’d. Notes, EMTN

   4.250   11/04/25 EUR 300   430,292 
        

 

 

 
         1,266,048 

France    0.2%

                 

Caisse Francaise de Financement Local,

        

Covered Bonds, EMTN

   4.680   03/09/29 CAD 100   96,147 

Greece    4.9%

                 

Hellenic Republic Government Bond,

        

Bonds

   4.200   01/30/42 EUR 190   334,490 

Bonds

   4.300   02/24/24 EUR 75   100,591 

Bonds

   4.300   02/24/25 EUR 85   117,414 

Bonds

   4.300   02/24/26 EUR 85   120,731 

Bonds

   4.300   02/24/27 EUR 195   282,821 

Bonds

   4.300   02/24/28 EUR 177   261,224 

Bonds

   4.300   02/24/29 EUR 50   74,664 

Bonds

   4.300   02/24/30 EUR 200   302,593 

Bonds

   4.300   02/24/31 EUR 140   215,569 

Bonds

   4.300   02/24/42 EUR 5   8,571 

 

See Notes to Financial Statements.

 

18


    

    

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

SOVEREIGN BONDS (Continued)

        

Greece (cont’d.)

                 

Hellenic Republic Government International Bond,

        

Sr. Unsec’d. Notes

   5.200%   07/17/34 EUR 60  $102,225 
        

 

 

 
         1,920,893 

Hungary    0.4%

                 

Hungary Government International Bond,

        

Sr. Unsec’d. Notes

   1.750   06/05/35   EUR 100   127,610 

Sr. Unsec’d. Notes

   4.300   12/19/21 CNH 200   31,053 
        

 

 

 
         158,663 

Indonesia    3.4%

                 

Indonesia Government International Bond,

        

Sr. Unsec’d. Notes

   0.900   02/14/27 EUR 100   121,494 

Sr. Unsec’d. Notes

   1.400   10/30/31 EUR 100   121,928 

Sr. Unsec’d. Notes

   1.450   09/18/26 EUR 300   375,587 

Sr. Unsec’d. Notes

   1.750   04/24/25 EUR 200   252,156 

Sr. Unsec’d. Notes, EMTN

   2.150   07/18/24 EUR 140   178,370 

Sr. Unsec’d. Notes, EMTN

   3.750   06/14/28 EUR 200   286,135 
        

 

 

 
         1,335,670 

Israel    1.2%

                 

Israel Government International Bond,

        

Sr. Unsec’d. Notes

   2.750   07/03/30  200   210,882 

Sr. Unsec’d. Notes, EMTN

   1.500   01/16/29 EUR 200   262,959 
        

 

 

 
         473,841 

Italy    8.5%

                 

Italy Buoni Poliennali Del Tesoro,

        

Bonds, 144A

   2.800   03/01/67 EUR 150   210,678 

Sr. Unsec’d. Notes, 144A

   1.450   03/01/36 EUR 145   178,120 

Sr. Unsec’d. Notes, 144A

   3.350   03/01/35 EUR 690   1,052,763 

Repubic of Italy Government International Bond Coupon Strips,

        

Sr. Unsec’d. Notes

   1.737(s)   02/20/31 EUR 35   37,647 

Republic of Italy Government International Bond,

        

Sr. Unsec’d. Notes

   2.875   10/17/29  200   203,676 

Sr. Unsec’d. Notes, EMTN

   5.345   01/27/48 EUR 50   99,588 

 

See Notes to Financial Statements.

PGIM International Bond Fund     19


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

SOVEREIGN BONDS (Continued)

        

Italy (cont’d.)

                 

Republic of Italy Government International Bond, (cont’d.)

        

Sr. Unsec’d. Notes, EMTN

   6.000%   08/04/28   GBP 205  $364,954 

Sr. Unsec’d. Notes, MTN

   5.125   07/31/24 EUR 875   1,223,076 
        

 

 

 
         3,370,502 

Kazakhstan    0.4%

                 

Kazakhstan Government International Bond,

        

Sr. Unsec’d. Notes, EMTN

   2.375   11/09/28 EUR 115   154,668 

Mexico    1.8%

                 

Mexico Government International Bond,

        

Sr. Unsec’d. Notes

   2.875   04/08/39 EUR 100   122,510 

Sr. Unsec’d. Notes, EMTN

   1.750   04/17/28 EUR 300   373,778 

Sr. Unsec’d. Notes, GMTN

   1.625   03/06/24 EUR 185   232,154 
        

 

 

 
         728,442 

New Zealand    0.2%

                 

New Zealand Local Government Funding Agency Bond,

        

Local Gov’t. Gtd. Notes

   2.000   04/15/37 NZD 100   64,449 

Peru    1.5%

                 

Peruvian Government International Bond,

        

Sr. Unsec’d. Notes

   2.750   01/30/26 EUR 100   131,633 

Sr. Unsec’d. Notes

   3.750   03/01/30 EUR 300   428,450 

Sr. Unsec’d. Notes

   6.900   08/12/37 PEN 100   28,506 
        

 

 

 
         588,589 

Philippines    1.2%

                 

Philippine Government International Bond,

        

Sr. Unsec’d. Notes

   0.700   02/03/29 EUR 300   358,950 

Sr. Unsec’d. Notes, EMTN

   0.875   05/17/27 EUR 100   122,040 
        

 

 

 
         480,990 

Portugal    3.6%

                 

Portugal Government International Bond,

        

Sr. Unsec’d. Notes

   4.090   06/03/22 CNH 600   93,291 

Portugal Obrigacoes do Tesouro OT,

        

Sr. Unsec’d. Notes, 144A

   4.100   04/15/37 EUR 515   919,763 

 

See Notes to Financial Statements.

 

20


    

    

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

SOVEREIGN BONDS (Continued)

        

Portugal (cont’d.)

                 

Portugal Obrigacoes do Tesouro OT, (cont’d.)

        

Sr. Unsec’d. Notes, 144A

   4.100%   02/15/45 EUR 150  $289,046 

Unsec’d. Notes, 144A

   1.000   04/12/52   EUR 105   113,547 
        

 

 

 
         1,415,647 

Romania    1.0%

                 

Romanian Government International Bond,

        

Sr. Unsec’d. Notes, 144A, MTN

   2.500   02/08/30 EUR 100   128,190 

Sr. Unsec’d. Notes, EMTN

   3.500   04/03/34 EUR 50   68,152 

Sr. Unsec’d. Notes, EMTN

   3.875   10/29/35 EUR 100   139,461 

Unsec’d. Notes, 144A, MTN

   2.124   07/16/31 EUR 40   49,294 
        

 

 

 
         385,097 

Russia    0.7%

                 

Russian Foreign Bond - Eurobond,

        

Sr. Unsec’d. Notes

   2.875   12/04/25 EUR 200   262,635 

Saudi Arabia    0.4%

                 

Saudi Government International Bond,

        

Sr. Unsec’d. Notes, 144A

   2.000   07/09/39 EUR 125   158,032 

Serbia    0.8%

                 

Serbia International Bond,

        

Sr. Unsec’d. Notes

   3.125   05/15/27 EUR 250   330,646 

Spain    6.3%

                 

Instituto de Credito Oficial,

        

Gov’t. Gtd. Notes, GMTN

   0.963   09/22/22 SEK 1,000   119,632 

Spain Government Bond,

        

Bonds, 144A

   5.150   10/31/28(k) EUR 185   305,416 

Sr. Unsec’d. Notes, 144A

   0.500   04/30/30 EUR 25   30,472 

Sr. Unsec’d. Notes, 144A

   1.000   10/31/50(k) EUR 310   334,473 

Sr. Unsec’d. Notes, 144A

   1.400   04/30/28(k) EUR 70   91,873 

Sr. Unsec’d. Notes, 144A

   1.850   07/30/35(k) EUR 325   444,866 

Sr. Unsec’d. Notes, 144A

   3.450   07/30/66 EUR 50   92,175 

Spain Government International Bond,

        

Sr. Unsec’d. Notes, EMTN

   5.250   04/06/29 GBP 615   1,062,789 
        

 

 

 
         2,481,696 

 

See Notes to Financial Statements.

PGIM International Bond Fund     21


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

  Description  

Interest        

Rate

   

Maturity

Date

   Principal    
Amount    
(000)#    
            Value           

SOVEREIGN BONDS (Continued)

        

Ukraine    1.9%

                 

Ukraine Government International Bond,

        

Sr. Unsec’d. Notes

   6.750%   06/20/26   EUR 500  $642,656 

Sr. Unsec’d. Notes, 144A

   4.375   01/27/30 EUR 100   110,219 
        

 

 

 
         752,875 

United Kingdom    0.5%

                 

Transport for London,

        

Sr. Unsec’d. Notes, EMTN

   3.875   07/23/42 GBP 100   180,666 
        

 

 

 

TOTAL SOVEREIGN BONDS
(cost $17,928,155)

         19,951,531 
        

 

 

 

U.S. GOVERNMENT AGENCY OBLIGATION    0.0%

        

Indonesia Government AID Bond

        

Gov’t. Gtd. Notes

        

(cost $2,508)

   8.900   06/01/21  3   2,515 
        

 

 

 

TOTAL LONG-TERM INVESTMENTS
(cost $34,382,789)

         37,289,121 
        

 

 

 
           

Shares

    

SHORT-TERM INVESTMENTS    0.3%

        

AFFILIATED MUTUAL FUND    0.3%

        

PGIM Core Ultra Short Bond Fund
(cost $107,777)(wb)

      107,777   107,777 
        

 

 

 

OPTION PURCHASED*~    0.0%
(cost $2,048)

         588 
        

 

 

 

TOTAL SHORT-TERM INVESTMENTS
(cost $109,825)

         108,365 
        

 

 

 

 

See Notes to Financial Statements.

 

22


    

    

 

Description            Value           

TOTAL INVESTMENTS, BEFORE OPTION WRITTEN    94.7%
(cost$34,492,614)

  $37,397,486 
  

 

 

 

OPTION WRITTEN*~    (0.0)%
(premiums received $2,400)

   (590
  

 

 

 

TOTAL INVESTMENTS, NET OF OPTION WRITTEN    94.7%
(cost$34,490,214)

   37,396,896 

Other assets in excess of liabilities(z)    5.3%

   2,074,046 
  

 

 

 

NET ASSETS    100.0%

  $39,470,942 
  

 

 

 

 

Below is a list of theabbreviation(s) used in the semiannual report:

AUD—Australian Dollar

BRL—Brazilian Real

CAD—Canadian Dollar

CHF—Swiss Franc

CLP—Chilean Peso

CNH—Chinese Renminbi

COP—Colombian Peso

CZK—Czech Koruna

EUR—Euro

GBP—British Pound

HKD—Hong Kong Dollar

HUF—Hungarian Forint

IDR—Indonesian Rupiah

ILS—Israeli Shekel

ITL—Italian Lira

JPY—Japanese Yen

KRW—South Korean Won

MXN—Mexican Peso

MYR—Malaysian Ringgit

NOK—Norwegian Krone

NZD—New ZealandDollar

PEN—Peruvian Nuevo Sol

PLN—Polish Zloty

RUB—Russian Ruble

SEK—Swedish Krona

SGD—Singapore Dollar

THB—Thai Baht

USD—US Dollar

ZAR—South African Rand

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.

A—Annual payment frequency for swaps

AID—Agency for International Development

BBR—New Zealand Bank Bill Rate

BBSW—Australian Bank Bill Swap Reference

RateBIBOR—Bangkok Interbank Offered Rate

BROIS—Brazil Overnight Index Swap

 

See Notes to Financial Statements.

PGIM International Bond Fund     23


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

BUBOR—Budapest Interbank Offered Rate

CDOR—Canadian Dollar Offered Rate

CDX—CreditDerivative Index

CLO—Collateralized Loan Obligation

CLOIS—Sinacofi Chile Interbank Rate Average

CME—Chicago Mercantile Exchange

COOIS—Colombia Overnight Interbank Reference Rate

CPI—Consumer Price Index

EMTN—Euro MediumTerm Note

EONIA—Euro Overnight Index Average

EURIBOR—Euro Interbank Offered Rate

FHLMC—Federal Home Loan Mortgage Corporation

GMTN—Global Medium Term Note

HICP—HarmonisedIndex of Consumer Prices

IO—Interest Only (Principal amount represents notional)

JIBAR—Johannesburg Interbank Agreed Rate

KLIBOR—Kuala Lumpur Interbank Offered Rate

KWCDC—Korean Won Certificate of Deposit

LIBOR—London Interbank Offered Rate

LP—Limited Partnership

M—Monthly paymentfrequency for swaps

MosPRIME—Moscow Prime Offered Rate

MPLE—Maple Bonds

MTN—Medium Term Note

NIBOR—Norwegian Interbank Offered Rate

NSA—Non-Seasonally Adjusted

OTC—Over-the-counter

PIK—Payment-in-Kind

PJSC—Public Joint-Stock Company

PRIBOR—Prague Interbank Offered Rate

Q—Quarterly payment frequency for swaps

REITs—Real Estate Investment Trust

S—Semiannual payment frequency for swaps

SIBOR—Singapore Interbank Offered Rate

SOFR—Secured Overnight Financing Rate

SONIA—Sterling Overnight Index Average

STIBOR—Stockholm Interbank Offered Rate

Strips—Separate Trading of Registered Interest and Principal of Securities

T—Swap payment upon termination

TELBOR—TelAviv Interbank Offered Rate

USOIS—United States Overnight Index Swap

WIBOR—Warsaw Interbank Offered Rate

 

*

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 $1 and 0.0% of net assets.

(c)

Variable rate instrument. The interest rate shown reflects the rate in effect at April 30, 2021.

(cc)

Variable rate instrument. The rate shown is based on the latest available information as of April 30, 2021. Certainvariable 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.

 

See Notes to Financial Statements.

 

24


    

    

 

(ff)

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

(jj)

Represents original contract currency denomination, settlement to occur in Euro currency.

(k)

Represents security, or a portion thereof, segregated as collateral for centrally cleared/exchange-traded derivatives.

(p)

Represents a security with a delayed settlement and therefore the interest rate is not available until settlement which isafter the period end.

(oo)

Perpetual security. Maturity date represents next call date.

(s)

Represents zero coupon bond or principal only security. Rate represents yield to maturity at purchase date.

(wb)

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

(z)

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

Options Purchased:

OTCSwaptions

                Notional    
  Call/   Expiration         Amount    

Description

 

 Put 

 

  Counterparty  

 Date  

Strike

 

Receive

 Pay  (000)#  Value 

CDX.NA.IG.35.V1, 12/20/25

 Put BNP Paribas S.A.  07/21/21  0.50% CDX.NA.IG.35.V1(Q)  1.00%(Q)   400   $588 

(cost $2,048)

        

Options Written:

OTC Swaptions

                Notional    
  Call/   Expiration         Amount    

Description

   Put     Counterparty   Date  Strike  

Receive

 

Pay

 (000)#  Value 

CDX.NA.HY.35.V1, 12/20/25

 Put BNP Paribas S.A.  07/21/21  $99.00  5.00%(Q) 

CDX.NA.HY

.35.V1(Q)

  400   $(590) 

(premiums received $2,400)

      

Futures contracts outstanding at April 30, 2021:

 

             Value /
Number        Current   Unrealized
of     Expiration  Notional   Appreciation

Contracts

  

Type

  Date  Amount   (Depreciation)
Long Positions:    

25

  5 Year U.S. Treasury Notes  Jun. 2021  $ 3,098,437      $      1,261 

3

  10 Year Australian Treasury Bonds  Jun. 2021   322,138    3,353 

1

  10 Year Canadian Government Bonds  Jun. 2021   113,379    (3,158

3

  10 Year U.K. Gilt  Jun. 2021   528,956    (5,099

13

  10 Year U.S. Treasury Notes  Jun. 2021   1,716,406    (9,507

1

  10 Year U.S. Ultra Treasury Notes  Jun. 2021   145,547    (3,195

19

  20 Year U.S. Treasury Bonds  Jun. 2021   2,987,750    (26,451

3

  30 Year Euro Buxl  Jun. 2021   728,203    (27,703

8

  30 Year U.S. Ultra Treasury Bonds  Jun. 2021   1,487,250           (3,834
              (74,333)   

 

See Notes to Financial Statements.

PGIM International Bond Fund     25


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

Futures contracts outstanding at April 30, 2021 (continued):

 

            Value /
Number        Current  Unrealized
of     Expiration  Notional  Appreciation

Contracts

  

Type

  Date  Amount  (Depreciation)

Short Positions:

         

3

  3 Month CME SOFR    Jun. 2022   $749,437   $707

60

  2 Year U.S. Treasury Notes    Jun. 2021    13,245,469    10,861

46

  5 Year Euro-Bobl    Jun. 2021    7,451,041    4,707

28

  10 Year Euro-Bund    Jun. 2021    5,722,710    46,692

163

  Euro Currency    Jun. 2021    24,516,219    (305,878)

45

  Euro Schatz Index    Jun. 2021    6,063,668    831
           

 

 

 
            (242,080)
           

 

 

 
           $(316,413)
           

 

 

 

Forward foreign currency exchange contracts outstanding at April 30, 2021:

 

    Notional Value at    
Purchase   Amount Settlement Current Unrealized Unrealized

Contracts

 

Counterparty

 (000) Date Value Appreciation Depreciation

OTC Forward Foreign Currency Exchange Contracts:

          

Brazilian Real,

           

Expiring 05/04/21

 Barclays Bank PLC   BRL   133  $24,158  $24,431  $273  $

Expiring 05/04/21

 Barclays Bank PLC   BRL   122   21,528   22,501   973   

Expiring 05/04/21

 Citibank, N.A.   BRL   113   20,359   20,865   506   

Expiring 05/04/21

 Citibank, N.A.   BRL   58   10,548   10,663   115   

Expiring 05/04/21

 Goldman Sachs International   BRL   257   44,626   47,356   2,730   

Expiring 05/04/21

 JPMorgan Chase Bank, N.A.   BRL   274   49,693   50,437   744   

British Pound,

           

Expiring 05/05/21

 BNP Paribas S.A.   GBP   2,386   3,313,271   3,295,827      (17,444)

Expiring 05/05/21

 HSBC Bank PLC   GBP   99   136,466   136,705   239   

Expiring 05/05/21

 UBS AG   GBP   110   152,689   152,257      (432)

Chilean Peso,

           

Expiring 06/16/21

 Citibank, N.A.   CLP   22,465   31,432   31,600   168   

Chinese Renminbi,

           

Expiring 05/14/21

 Citibank, N.A.   CNH   961   137,666   148,248   10,582   

Expiring 05/18/21

 Barclays Bank PLC   CNH   1,068   164,163   164,750   587   

Colombian Peso,

           

Expiring 06/16/21

 Barclays Bank PLC   COP   143,939   39,133   38,260      (873)

Euro,

           

Expiring 05/05/21

 HSBC Bank PLC   EUR   1,782   2,153,444   2,142,511      (10,933)

Expiring 05/05/21

 HSBC Bank PLC   EUR   35   42,499   42,509   10   

Expiring 05/05/21

 Morgan Stanley & Co. International PLC   EUR   893   1,069,348   1,073,695   4,347   

Expiring 05/05/21

 UBS AG   EUR   40   47,137   48,094   957   

Expiring 05/18/21

 HSBC Bank PLC   EUR   25   30,000   29,663      (337)

Expiring 06/02/21

 Goldman Sachs International   EUR   74   90,060   89,609      (451)

 

See Notes to Financial Statements.

 

26


    

    

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

    Notional Value at    
Purchase   Amount Settlement Current Unrealized Unrealized

Contracts

 

Counterparty

 (000) Date Value Appreciation Depreciation

OTC Forward Foreign Currency Exchange Contracts (cont’d.):

            

Euro (cont’d.),

             

Expiring 06/02/21

 HSBC Bank PLC   EUR   186  $226,021  $224,271  $  $(1,750)

Expiring 06/02/21

 The Toronto-Dominion Bank   EUR   170   206,142   204,516      (1,626)

Expiring 07/19/21

 Goldman Sachs International   EUR   43   51,849   51,786      (63)

Israeli Shekel,

             

Expiring 06/16/21

 Barclays Bank PLC   ILS   65   20,211   20,142      (69)

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.   ILS   132   40,133   40,754   621   

Japanese Yen,

             

Expiring 05/07/21

 Morgan Stanley & Co. International PLC   JPY   6,927   63,727   63,389      (338)

Expiring 05/07/21

 UBS AG   JPY   40,424   374,284   369,896      (4,388)

Mexican Peso,

             

Expiring 06/16/21

 UBS AG   MXN   495   23,997   24,292   295   

Norwegian Krone,

             

Expiring 07/19/21

 Citibank, N.A.   NOK   217   25,791   26,123   332   

Polish Zloty,

             

Expiring 07/19/21

 Goldman Sachs International   PLN   83   22,038   22,019      (19)

South African Rand,

             

Expiring 06/17/21

 Goldman Sachs International   ZAR   408   26,162   27,959   1,797   

South Korean Won,

             

Expiring 06/16/21

 Barclays Bank PLC   KRW   37,643   33,385   33,671   286   
       

 

 

   

 

 

   

 

 

   

 

 

 
       $8,691,960  $8,678,799   25,562   (38,723)
       

 

 

   

 

 

   

 

 

   

 

 

 

 

    Notional Value at    
Sale   Amount Settlement Current Unrealized Unrealized

Contracts

 

Counterparty

 (000) Date Value Appreciation Depreciation

OTC Forward Foreign Currency Exchange Contracts:

          

Australian Dollar,

             

Expiring 07/20/21

 Barclays Bank PLC   AUD   534  $413,359  $411,127  $2,232  $

Brazilian Real,

             

Expiring 05/04/21

 Citibank, N.A.   BRL   154   26,793   28,291      (1,498)

Expiring 05/04/21

 JPMorgan Chase Bank, N.A.   BRL   804   149,273   147,961   1,312   

Expiring 07/02/21

 Barclays Bank PLC   BRL   181   33,152   33,125   27   

Expiring 07/02/21

 Citibank, N.A.   BRL   58   10,501   10,606      (105)

British Pound,

             

Expiring 05/05/21

 Morgan Stanley & Co. International PLC   GBP   2,596   3,558,670   3,584,788      (26,118)

Expiring 06/02/21

 BNP Paribas S.A.   GBP   2,386   3,313,542   3,296,033   17,509   

Expiring 06/02/21

 Morgan Stanley & Co. International PLC   GBP   153   212,775   211,234   1,541   

 

See Notes to Financial Statements.

PGIM International Bond Fund     27


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

    Notional Value at    
Sale   Amount Settlement Current Unrealized Unrealized

Contracts

 

Counterparty

 (000) Date Value Appreciation Depreciation

OTC Forward Foreign Currency Exchange Contracts (cont’d.):

            

Canadian Dollar,

             

Expiring 07/20/21

 Citibank, N.A.   CAD   801  $639,572  $652,051  $  $  (12,479)

Chilean Peso,

             

Expiring 06/16/21

 Morgan Stanley & Co. International PLC   CLP   19,730   26,680   27,752      (1,072)

Chinese Renminbi,

             

Expiring 05/14/21

 JPMorgan Chase Bank, N.A.   CNH   961   137,889   148,248      (10,359)

Expiring 05/18/21

 Morgan Stanley & Co. International PLC   CNH   9,071   1,393,723   1,399,419      (5,696)

Colombian Peso,

             

Expiring 06/16/21

 BNP Paribas S.A.   COP   155,383   42,152   41,302   850   

Expiring 06/16/21

 BNP Paribas S.A.   COP   114,849   31,454   30,527   927   

Euro,

             

Expiring 05/05/21

 Citibank, N.A.   EUR   2,538   2,999,016   3,051,426      (52,410)

Expiring 05/05/21

 Citibank, N.A.   EUR   140   166,872   167,930      (1,058)

Expiring 05/05/21

 Morgan Stanley & Co. International PLC   EUR   73   87,448   87,455      (7)

Expiring 05/18/21

 Deutsche Bank AG   EUR   97   115,948   116,160      (212)

Expiring 06/02/21

 HSBC Bank PLC   EUR   1,782   2,154,691   2,143,706   10,985   

Expiring 06/02/21

 The Toronto-Dominion Bank   EUR   40   47,934   47,730   204   

Hong Kong Dollar,

             

Expiring 05/18/21

 Citibank, N.A.   HKD   1,026   132,421   132,141   280   

Hungarian Forint,

             

Expiring 07/19/21

 Barclays Bank PLC   HUF   14,298   47,243   47,694      (451)

Indonesian Rupiah,

             

Expiring 06/16/21

 Citibank, N.A.   IDR   2,724,990   186,222   187,259      (1,037)

Israeli Shekel,

             

Expiring 06/16/21

 Goldman Sachs International   ILS   263   79,490   81,089      (1,599)

Japanese Yen,

             

Expiring 05/07/21

 Citibank, N.A.   JPY   47,351   434,245   433,285   960   

Expiring 06/02/21

 UBS AG   JPY   40,424   374,367   369,969   4,398   

Malaysian Ringgit,

             

Expiring 06/16/21

 Goldman Sachs International   MYR   94   22,779   22,935      (156)

Mexican Peso,

             

Expiring 06/16/21

 Barclays Bank PLC   MXN   860   41,204   42,235      (1,031)

New Zealand Dollar,

             

Expiring 07/20/21

 Morgan Stanley & Co. International PLC   NZD   179   127,059   127,780      (721)

 

See Notes to Financial Statements.

 

28


    

    

 

Forward foreign currency exchange contracts outstanding at April 30, 2021 (continued):

 

    Notional Value at    
Sale   Amount Settlement Current Unrealized Unrealized

Contracts

 

Counterparty

 (000) Date Value Appreciation Depreciation

OTC Forward Foreign Currency Exchange Contracts (cont’d.):

            

Peruvian Nuevo Sol,

             

Expiring 06/16/21

 Citibank, N.A.   PEN   56  $14,992  $14,680  $312  $

Expiring 06/16/21

 Goldman Sachs International   PEN   18   5,037   4,860   177   

Expiring 06/16/21

 Morgan Stanley & Co. International PLC   PEN   19   5,119   4,957   162   

Polish Zloty,

             

Expiring 07/19/21

 Citibank, N.A.   PLN   238   62,467   62,704      (237)

Singapore Dollar,

             

Expiring 06/16/21

 JPMorgan Chase Bank, N.A.   SGD   30   22,543   22,551      (8)

South African Rand,

             

Expiring 06/17/21

 Barclays Bank PLC   ZAR   214   14,006   14,638      (632)

Expiring 06/17/21

 Deutsche Bank AG   ZAR   254   16,540   17,426      (886)

Expiring 06/17/21

 JPMorgan Chase Bank, N.A.   ZAR   550   35,960   37,641      (1,681)

South Korean Won,

             

Expiring 06/16/21

 HSBC Bank PLC   KRW   44,140   38,636   39,483      (847)

Swedish Krona,

             

Expiring 07/19/21

 Barclays Bank PLC   SEK   1,538   181,493   181,844      (351)

Swiss Franc,

             

Expiring 07/19/21

 Barclays Bank PLC   CHF   316   343,522   346,760      (3,238)
       

 

 

   

 

 

   

 

 

   

 

 

 
       $17,746,789  $17,828,802   41,876   (123,889)  
       

 

 

   

 

 

   

 

 

   

 

 

 
           $67,438  $(162,612)
           

 

 

   

 

 

 

Credit default swap agreements outstanding at April 30, 2021:

 

             Implied         
             Credit    Upfront    
Reference        Notional   Spread at    Premiums Unrealized  
Entity/  Termination  Fixed  Amount   April 30,  Fair Paid Appreciation  

Obligation

  Date  

Rate

  (000)#(3)   2021(4)  Value (Received) (Depreciation) 

Counterparty

OTC Packaged Credit Default Swap Agreements on corporate and/or sovereign issues - SellProtection(2)**:

Federal Republic of Brazil

  12/20/22  1.000%(Q)   600    0.896 $    1,698     $    (339)    $    2,037    Citibank, N.A.

Government of Malaysia

  12/20/22  1.000%(Q)   120    0.164  1,795   (68  1,863  Citibank, N.A.

People’s Republic of China

  12/20/22  1.000%(Q)   400    0.112  6,331   (226  6,557  Citibank, N.A.

Republic of Chile

  12/20/22  1.000%(Q)   120    0.154  1,815   (68  1,883  Citibank, N.A.

 

See Notes to Financial Statements.

PGIM International Bond Fund     29


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

Credit default swap agreements outstanding at April 30, 2021 (continued):

 

              Implied         
              Credit    Upfront    
Reference         Notional   Spread at    Premiums Unrealized  
Entity/  Termination   Fixed  Amount   April 30,  Fair Paid Appreciation  

Obligation

  Date   

Rate

  (000)#(3)   2021(4)  Value (Received) (Depreciation) 

Counterparty

OTC Packaged Credit Default Swap Agreements on corporate and/or sovereign issues - SellProtection(2)**(cont’d.):

Republic of Colombia

   12/20/22   1.000%(Q)   160    0.536    $  1,404   $     (90  $    1,494  Citibank, N.A.

Republic of Indonesia

   12/20/22   1.000%(Q)   160    0.268  2,115   (90  2,205  Citibank, N.A.

Republic of Panama

   12/20/22   1.000%(Q)   120    0.265  1,593   (68  1,661  Citibank, N.A.

Republic of Peru

   12/20/22   1.000%(Q)   120    0.345  1,433   (68  1,501  Citibank, N.A.

Republic of Philippines

   12/20/22   1.000%(Q)   120    0.158  1,806   (68  1,874  Citibank, N.A.

Republic of South Africa

   12/20/22   1.000%(Q)   360    0.896  1,015   (203  1,218  Citibank, N.A.

Republic of Turkey

   12/20/22   1.000%(Q)   600    3.887  (26,957)     (339)    (26,618)    Citibank, N.A.

Russian Federation

   12/20/22   1.000%(Q)   360    0.476  3,517   (203  3,720  Citibank, N.A.

United Mexican States

   12/20/22   1.000%(Q)   520    0.316      6,466        (293        6,759  Citibank, N.A.
            $  4,031      $(2,123)    $    6,154   

 

              Upfront      
Reference        Notional    Premiums  Unrealized   
Entity/  Termination  Fixed  Amount  Fair Paid  Appreciation   

Obligation

  Date  Rate  (000)#(3)  Value (Received)  (Depreciation)  

Counterparty

OTC Packaged Credit Default Swap Agreement on credit indices—BuyProtection(1)**:

CDX.EM.28.V3

  12/20/22  1.000%(Q)  3,760  $(2,946) $(583)  $(2,363)  Citibank, N.A.

 

**

The Fund entered into multiple credit default swap agreements in a packaged trade consisting of two parts. The Fundbought/sold protection on an Emerging Market CDX Index and bought/sold protection on the countries which comprise the index. The upfront premium is attached to the index of the trade for the Emerging Markets CDX package(s). Each swap is pricedindividually. If any of the component swaps are closed out early, the Index exposure will be reduced by an amount proportionate to the terminated swap(s).

 

See Notes to Financial Statements.

 

30


    

    

 

Credit default swap agreements outstanding at April 30, 2021 (continued):

 

        Implied         
        Credit    Upfront    
Reference     Notional Spread at    Premiums Unrealized  
Entity/ Termination Fixed Amount April 30,  Fair Paid Appreciation  

Obligation

 Date 

Rate

 (000)#(3) 2021(4)  Value (Received) (Depreciation) 

Counterparty

OTC Credit Default Swap Agreements on asset-backed securities - SellProtection(2)^:

 

 

Credit Suisse Mortgage Trust

 05/28/21 0.500%(M)  14   *   $—   $—   $—  Goldman Sachs International

Credit Suisse Mortgage Trust

 05/28/21 1.000%(M)  8   *           Goldman Sachs International

Delta Home Equity

 05/28/21 1.250%(M)  38   *   1      1  Goldman Sachs International

GS Mortgage-Backed Securities Trust

 05/28/21 1.250%(M)  9   *           Goldman Sachs International

GS Mortgage-Backed Securities Trust

 05/28/21 1.250%(M)  8   *           Goldman Sachs International

GS Mortgage-Backed Securities Trust

 05/28/21 1.250%(M)  6   *           Goldman Sachs International

GSAMP Home Equity Trust

 05/28/21 1.250%(M)  13   *           Goldman Sachs International

GSRPM Mortgage Loan Trust

 05/28/21 1.250%(M)  4   *           Goldman Sachs International

MFRA Trust

 05/28/21 0.500%(M)  4   *           Goldman Sachs International

RCKT Mortgage Trust

 05/28/21 1.250%(M)  8   *                 Goldman Sachs International

Verus Securitization Trust

 05/28/21 0.500%(M)  17   *     —     —     —  Goldman Sachs International
      $  1   $—   $  1  

 

See Notes to Financial Statements.

PGIM International Bond Fund     31


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

Credit default swap agreements outstanding at April 30, 2021 (continued):

 

Reference

Entity/

Obligation

  Termination
Date
  Fixed
Rate
   Notional
Amount
(000)#(3)
   Implied Credit
Spread at
April 30,
2021(4)
 Value at
Trade Date
  Value at
April 30,
2021
  Unrealized
Appreciation
(Depreciation)

Centrally Cleared Credit Default Swap Agreement on corporate and/or sovereign issues - SellProtection(2):

Teck Resources Ltd.

  06/20/26   5.000%(Q)    100   1.267% $18,413  $18,994  $581

 

               Upfront      
Reference        Notional     Premiums  Unrealized   
Entity/  Termination  Fixed  Amount  Fair  Paid  Appreciation   

Obligation

  

Date

  

Rate

  (000)#(3)  Value  (Received)  (Depreciation)  

Counterparty

OTC Credit Default Swap Agreement on corporate and/or sovereign issues - BuyProtection(1):

Republic of Italy

  06/20/28  1.000%(Q)   EUR    105     $(2,184)     $4,672     $(6,856)   Barclays Bank PLC
          

 

 

    

 

 

    

 

 

   

 

     Implied    
     Credit   Upfront    
Reference   Notional Spread at   Premiums Unrealized  
Entity/ Termination Fixed Amount April 30, Fair Paid Appreciation  

Obligation

 Date 

Rate

 (000)#(3) 2021(4) Value (Received) (Depreciation) 

Counterparty

OTC Credit Default Swap Agreements on corporate and/or sovereign issues - SellProtection(2):

Boeing Co.

 12/20/21 1.000%(Q)  100   0.425 $489  $ 347   $     142  Bank of America, N.A.

DP World PLC

 12/20/24 1.000%(Q)  100   0.783  896   342   554  Barclays Bank PLC

Generalitat de Cataluna

 12/20/22 1.000%(Q)  110   0.813  460   (5,177  5,637  Citibank, N.A.

Hellenic Republic

 12/20/27 1.000%(Q)  140   0.999  173   612   (439 Barclays Bank PLC

Republic of Hungary

 06/20/22 1.000%(Q)  450   0.181  4,748   (635  5,383  Citibank, N.A.

Republic of Indonesia

 06/20/23 1.000%(Q)  220   0.299  3,565   (605  4,170  Citibank, N.A.

Republic of Ireland

 06/20/27 1.000%(Q)  100   0.184  5,043   1,544   3,499  Morgan Stanley & Co. International PLC

Republic of Italy

 06/20/23 1.000%(Q)  350    0.402  4,891    (8,397)     13,288  Bank of America, N.A.

Republic of Kazakhstan

 06/20/23 1.000%(Q)  115   0.266%    1,947      1,947  Citibank, N.A.

Republic of Panama

 06/20/21 1.000%(Q)  55   0.141  131   65   66  Citibank, N.A.

Republic of Panama

 06/20/22 1.000%(Q)  100   0.206  1,025   202   823    Citibank, N.A.

Republic of Portugal

 12/20/23 1.000%(Q)  100   0.154  2,361   (29  2,390  Morgan Stanley & Co. International PLC

 

See Notes to Financial Statements.

 

32


    

    

 

Credit default swap agreements outstanding at April 30, 2021 (continued):

 

     Implied    
     Credit   Upfront    
Reference   Notional Spread at   Premiums Unrealized  
Entity/ Termination Fixed Amount April 30, Fair Paid Appreciation  

Obligation

 Date 

Rate

 (000)#(3) 2021(4) Value (Received) (Depreciation) 

Counterparty

OTC Credit Default Swap Agreements on corporate and/or sovereign issues - SellProtection(2)(cont’d.):

 

 

Republic of South Africa

 12/20/23 1.000%(Q)  400   1.289  $ (2,585  $(11,365  $  8,780  Bank of America, N.A.

Republic of Ukraine

 12/20/23 5.000%(Q)  100   3.934  3,224   3,778   (554 Deutsche Bank AG

Republic of Ukraine

 06/20/25 5.000%(Q)  30   4.259  1,004   (278  1,282  Barclays Bank PLC

Republic of Ukraine

 12/20/25 5.000%(Q)  85   4.341  2,798   (1,646  4,444  Barclays Bank PLC

Russian Federation

 12/20/22 1.000%(Q)  50   0.476  489   (43  532  Citibank, N.A.

Russian Federation

 06/20/23 1.000%(Q)  200   0.512  2,321   (1,645  3,966  Morgan Stanley & Co. International PLC

Russian Federation

 06/20/23 1.000%(Q)  150   0.512  1,741   (1,034  2,775  Morgan Stanley & Co. International PLC

Russian Federation

 06/20/23 1.000%(Q)  60   0.512  696   (486  1,182  BNP Paribas S.A.

Russian Federation

 12/20/26 1.000%(Q)  100   1.101  (436)     (6,325)     5,889  Barclays Bank PLC

State of Illinois

 12/20/22 1.000%(Q)  100   1.115  (75  (1,302  1,227  Citibank, N.A.

State of Illinois

 12/20/24 1.000%(Q)  100   1.355     (1,106      (3,615      2,509    Goldman Sachs International
      $33,800   $(35,692  $69,492  

The Fund entered into credit default swaps (“CDS”) to provide a measure of protection against defaults or to take an activelong 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 theprotection 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 ofthat 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 referencedindex 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 termsof 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 referencedindex 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.

 

See Notes to Financial Statements.

PGIM International Bond Fund     33


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

(3)

Notional amount represents the maximum potential amount the Fund could be required to pay as a seller of credit protectionor 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 swapagreements 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 creditspread 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’scredit 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 creditindices 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 creditderivative 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 referencedentity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

Currency swap agreement outstanding at April 30, 2021:

 

                   Upfront    
Notional   Notional              Premiums  Unrealized 
Amount Fund Amount  Fund     Termination  Fair  Paid  Appreciation 

      (000)#      

   Receives   (000)#  Pays  Counterparty  Date  Value  (Received)  (Depreciation) 

OTC Currency Swap Agreement:

 

     
IDR  2,000,000 8.22%(S)  138   6 Month LIBOR(S)   Citibank, N.A.   11/29/23   $15,124   $—   $15,124 

Inflation swap agreements outstanding at April 30, 2021:

Notional              Value at Unrealized
Amount  Termination   Fixed  Floating  Value at April 30, Appreciation

 (000)# 

  Date   

Rate

  

Rate

  Trade Date 2021 (Depreciation)

Centrally Cleared Inflation Swap Agreements:

    
EUR  200   05/15/23   1.485%(T)  France CPI ex Tobacco Household(1)(T)   $ —  $  (6,159  $  (6,159
EUR  200   05/15/23   1.510%(T)  Eurostat Eurozone HICP ex Tobacco(2)(T)      4,225   4,225 
100   01/13/31   2.230%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)      (3,728  (3,728
110   04/07/31   2.469%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)      (1,040  (1,040
40   04/09/31   2.435%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)        (520)     (520)   
80   04/09/31   2.448%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)      (931  (931

 

See Notes to Financial Statements.

 

34


    

    

 

Inflation swap agreements outstanding at April 30, 2021 (continued):

 

Notional              Value at Unrealized
Amount  Termination   Fixed  Floating  Value at April 30, Appreciation

 (000)# 

  Date   

Rate

  

Rate

  Trade Date 2021 (Depreciation)

Centrally Cleared Inflation Swap Agreements (cont’d):

 

  
70   04/13/31   2.450%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)   $—   $     (786  $      (786
70   04/14/31   2.450%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)        (777)     (777)   
160   04/15/31   2.465%(T)  U.S. CPI Urban Consumers NSA Index(2)(T)     —       (1,507       (1,507
         $—   $(11,223  $(11,223

 

(1)

The Fund pays the fixed rate and receives the floating rate.

(2)

The Fund pays the floating rate and receives the fixed rate.

Interest rate swap agreements outstanding at April 30, 2021:

 

Notional            Value at Unrealized
Amount  Termination Fixed  Floating  Value at April 30, Appreciation

(000)#

  

Date

 

Rate

  

Rate

  Trade Date 2021 (Depreciation)

Centrally Cleared Interest Rate Swap Agreements:

 

  
AUD 560  09/25/22 2.958%(S)              6 Month BBSW(2)(S)                       $        —   $  18,407   $  18,407 
AUD 380  11/27/28 2.847%(S)  6 Month BBSW(2)(S)   (4  34,321   34,325 
AUD 350  12/03/29 2.700%(S)  6 Month BBSW(2)(S)   29,433   27,874   (1,559
AUD 150  05/09/32 3.140%(S)  6 Month BBSW(2)(S)   (3  16,790   16,793 
AUD 165  07/19/32 3.130%(S)  6 Month BBSW(2)(S)   (4  17,591   17,595 
BRL 6,910  01/02/24 4.920%(T)  1 Day BROIS(2)(T)      (47,870  (47,870
BRL 287  01/02/25 6.540%(T)  1 Day BROIS(2)(T)      981   981 
BRL 1,710  01/02/25 6.670%(T)  1 Day BROIS(2)(T)      8,157   8,157 
BRL 657  01/02/25 9.475%(T)  1 Day BROIS(2)(T)      31,652   31,652 
BRL 724  01/02/25 9.943%(T)  1 Day BROIS(2)(T)      43,033   43,033 
BRL 305  01/02/25 11.080%(T)  1 Day BROIS(2)(T)      21,805   21,805 
BRL 98  01/02/25 12.090%(T)  1 Day BROIS(2)(T)      8,324   8,324 
BRL 1,008  01/04/27 6.490%(T)  1 Day BROIS(2)(T)      (7,722  (7,722)   
BRL 1,027  01/04/27 6.493%(T)  1 Day BROIS(2)(T)      (7,386  (7,386
BRL 991  01/04/27 6.820%(T)  1 Day BROIS(2)(T)      (7,757  (7,757
BRL 1,091  01/02/29 7.250%(T)  1 Day BROIS(2)(T)      (8,325  (8,325
CAD 620  04/05/22 1.445%(S)  3 Month CDOR(2)(S)   (5,909  5,008   10,917 
CAD 500  09/03/25 0.733%(S)  3 Month CDOR(2)(S)   (2  (9,085  (9,083
CAD 200  12/03/28 2.600%(S)  3 Month CDOR(2)(S)   1,514   11,369   9,855 
CAD 320  05/30/37 2.240%(S)  3 Month CDOR(2)(S)   (14,316  (2,103  12,213 
CAD 50  01/09/38 2.720%(S)  3 Month CDOR(2)(S)   (1  2,331   2,332 
CAD 160  12/03/40 2.800%(S)  3 Month CDOR(1)(S)   (26,736  (8,753  17,983 
CAD 150  05/30/47 2.240%(S)  3 Month CDOR(2)(S)   (7,472  (5,583  1,889 
CHF 210  04/03/28 0.410%(A)  6 Month CHF LIBOR(2)(S)   1,385   10,036   8,651 
CHF 140  01/31/29 0.260%(A)  6 Month CHF LIBOR(2)(S)      4,981   4,981 

 

See Notes to Financial Statements.

PGIM International Bond Fund     35


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

Interest rate swap agreements outstanding at April 30, 2021 (continued):

 

Notional            Value at Unrealized
Amount Termination  Fixed  Floating  Value at April 30, Appreciation

    (000)#    

 Date  

Rate

  

Rate

  Trade Date 2021 (Depreciation)

Centrally Cleared Interest Rate Swap Agreements (cont’d.):

 

  
CHF 80  04/03/33  0.687%(A)  6 Month CHF LIBOR(2)(S)   $    2,871   $    5,680   $    2,809 
CLP 47,300  07/12/29  3.135%(S)              1 Day CLOIS(2)(S)                          (759  (759
CLP 91,000  11/22/29  3.203%(S)  1 Day CLOIS(2)(S)      (892  (892
CLP 100,000  02/10/30  3.010%(S)  1 Day CLOIS(2)(S)      (5,380  (5,380
CLP 164,000  11/17/30  2.420%(S)  1 Day CLOIS(2)(S)      (21,011  (21,011
CNH 800  08/15/23  3.115%(Q)  7 Day China Fixing Repo Rates(2)(Q)   (6  1,756   1,762 
CNH 800  03/13/24  2.945%(Q)  7 Day China Fixing Repo Rates(2)(Q)   (1  1,251   1,252 
CNH 1,400  04/01/24  2.923%(Q)  7 Day China Fixing Repo Rates(2)(Q)      1,974   1,974 
CNH 2,440  06/20/24  2.900%(Q)  7 Day China Fixing Repo Rates(2)(Q)   2   3,275   3,273 
CNH 2,300  09/03/24  2.860%(Q)  7 Day China Fixing Repo Rates(2)(Q)   (3  2,649   2,652 
CNH 2,600  10/10/24  2.860%(Q)  7 Day China Fixing Repo Rates(2)(Q)   (1  2,718   2,719 
CNH 1,780  11/01/24  3.120%(Q)  7 Day China Fixing Repo Rates(2)(Q)   (6  4,706   4,712 
CNH 2,500  02/04/25  2.600%(Q)  7 Day China Fixing Repo Rates(2)(Q)      (998  (998
CNH 3,900  03/06/25  2.425%(Q)  7 Day China Fixing Repo Rates(2)(Q)   (11  (5,718  (5,707
CNH 6,000  03/12/25  2.400%(Q)  7 Day China Fixing Repo Rates(2)(Q)   (2  (9,800  (9,798
CNH 2,880  06/01/25  1.973%(Q)  7 Day China Fixing Repo Rates(2)(Q)   2   (12,872  (12,874
CNH 5,039  08/06/25  2.555%(Q)  7 Day China Fixing Repo Rates(2)(Q)   (8  (4,468  (4,460
CNH 11,480  11/02/25  2.588%(Q)  7 Day China Fixing Repo Rates(2)(Q)   30   (9,487  (9,517)   
CNH 1,270  04/12/26  2.810%(Q)  7 Day China Fixing Repo Rates(2)(Q)   (5  612   617 
COP 690,000  04/20/26  4.190%(Q)  1 Day COOIS(2)(Q)      (2,240  (2,240
COP 907,840  07/27/28  6.200%(Q)  1 Day COOIS(2)(Q)   8,572   16,018   7,446 
CZK 6,000  11/17/22  1.505%(A)  6 Month PRIBOR(2)(S)   (8  4,131   4,139 
CZK 6,700  01/31/24  1.930%(A)  6 Month PRIBOR(1)(S)      (6,341  (6,341
CZK 2,200  06/29/27  1.175%(A)  6 Month PRIBOR(1)(S)   5,359   2,836   (2,523
CZK 5,145  03/31/30  0.710%(A)  6 Month PRIBOR(2)(S)      (23,014  (23,014
EUR 620  05/11/22  (0.250)%(A)  1 Day EONIA(2)(A)   2,189   3,214   1,025 
EUR 225  04/27/30  (0.016)%(A)  6 Month EURIBOR(2)(S)      (1,921  (1,921
EUR 130  05/11/31  0.750%(A)  1 Day EONIA(1)(A)   (12,515  (13,064  (549

 

See Notes to Financial Statements.

 

36


    

    

 

Interest rate swap agreements outstanding at April 30, 2021 (continued):

 

Notional            Value at Unrealized
Amount  Termination Fixed  Floating  Value at April 30, Appreciation

    (000)#    

  

Date

 

Rate

  

Rate

  Trade Date 2021 (Depreciation)

Centrally Cleared Interest Rate Swap Agreements (cont’d.):

 

  
EUR 1,335  06/28/32 0.785%(A)              6 Month EURIBOR(2)(S)   $(75,889  $117,173   $193,062 
EUR 35  05/05/39 0.044%(A)  6 Month EURIBOR(2)(S)      (3,284  (3,284
EUR 60  05/11/49 1.450%(A)  6 Month EURIBOR(2)(S)   1,619   18,616   16,997 
GBP 50  05/08/29 1.100%(A)  1 Day SONIA(2)(A)                       2,408   2,331   (77
GBP 190  05/08/31 1.150%(A)  1 Day SONIA(2)(A)   10,066   11,249   1,183 
GBP 100  09/30/40 0.262%(A)  1 Day SONIA(2)(A)   (4,179  (17,578  (13,399
GBP 525  05/08/46 1.250%(A)  1 Day SONIA(2)(A)   128,312   52,104   (76,208
GBP 80  09/03/50 0.328%(A)  1 Day SONIA(2)(A)   (1  (17,756  (17,755
HUF 95,000  01/12/27 4.150%(A)  6 Month BUBOR(2)(S)      27,982   27,982 
HUF 99,345  06/12/28 3.750%(A)  6 Month BUBOR(2)(S)      16,167   16,167 
HUF 26,000  07/15/29 1.650%(A)  6 Month BUBOR(2)(S)      (3,922  (3,922
HUF 57,000  09/03/30 1.705%(A)  6 Month BUBOR(2)(S)      (10,933  (10,933
JPY 301,250  12/20/24 0.126%(S)  6 Month JPY LIBOR(2)(S)   (3,999  16,235   20,234 
JPY 46,500  07/04/28 0.282%(S)  6 Month JPY LIBOR(2)(S)   3,127   7,420   4,293 
JPY 100,000  11/12/28 0.011%(S)  6 Month JPY LIBOR(2)(S)      (3,300  (3,300)   
JPY 57,765  12/03/28 0.200%(S)  6 Month JPY LIBOR(2)(S)   4,097   6,004   1,907 
JPY 70,000  12/22/36 0.641%(S)  6 Month JPY LIBOR(2)(S)      35,608   35,608 
JPY 18,500  02/28/37 0.681%(S)  6 Month JPY LIBOR(2)(S)      10,232   10,232 
JPY 95,000  07/26/37 0.676%(S)  6 Month JPY LIBOR(2)(S)      52,846   52,846 
JPY 9,150  01/04/38 0.757%(S)  6 Month JPY LIBOR(2)(S)      6,227   6,227 
JPY 8,000  12/03/38 0.600%(S)  6 Month JPY LIBOR(2)(S)   2,352   3,379   1,027 
JPY 20,000  10/04/39 0.203%(S)  6 Month JPY LIBOR(2)(S)      (5,545  (5,545
JPY 30,000  12/03/39 0.650%(S)  6 Month JPY LIBOR(2)(S)   18,526   14,687   (3,839
JPY 35,000  02/06/40 0.223%(S)  6 Month JPY LIBOR(2)(S)      (8,973  (8,973
JPY 45,000  12/22/41 0.731%(S)  6 Month JPY LIBOR(2)(S)      27,351   27,351 
JPY 6,200  04/07/42 0.803%(S)  6 Month JPY LIBOR(2)(S)      4,446   4,446 
JPY 7,400  07/04/43 0.763%(S)  6 Month JPY LIBOR(2)(S)      4,820   4,820 

 

See Notes to Financial Statements.

PGIM International Bond Fund     37


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

Interest rate swap agreements outstanding at April 30, 2021 (continued):

 

Notional            Value at Unrealized
Amount  Termination Fixed  Floating  Value at April 30, Appreciation

    (000)#    

  

Date

 

Rate

  

Rate

  Trade Date 2021 (Depreciation)

Centrally Cleared Interest Rate Swap Agreements (cont’d.):

 

  
JPY 90,000  11/24/47 0.888%(S)  6 Month JPY LIBOR(2)(S)   $  52,579   $  84,672   $  32,093 
KRW 75,700  04/17/29 1.740%(Q)              3 Month KWCDC(2)(Q)                          507   507 
KRW 184,000  04/27/30 1.065%(Q)  3 Month KRW LIBOR(2)(Q)      (9,131  (9,131
MXN 6,545  03/19/26 6.050%(M)  28 Day Mexican Interbank Rate(2)(M)   (15  446   461 
MXN 2,080  06/11/27 7.210%(M)  28 Day Mexican Interbank Rate(2)(M)   238   4,924   4,686 
MXN 4,020  02/27/29 8.260%(M)  28 Day Mexican Interbank Rate(2)(M)   780   21,251   20,471 
NOK 1,500  12/11/28 2.177%(A)  6 Month NIBOR(2)(S)      8,388   8,388 
NOK 500  02/07/29 2.083%(A)  6 Month NIBOR(2)(S)   714   2,166   1,452 
NOK 3,360  01/19/31 1.346%(A)  6 Month NIBOR(2)(S)      (14,691  (14,691
NZD 470  01/10/27 3.420%(S)  3 Month BBR(2)(Q)      44,933   44,933 
NZD 70  11/28/28 2.950%(S)  3 Month BBR(2)(Q)   1,492   5,799   4,307 
NZD 90  07/22/29 1.768%(S)  3 Month BBR(2)(Q)      1,072   1,072 
NZD 80  11/05/29 1.393%(S)  3 Month BBR(2)(Q)      (870  (870)   
NZD 220  03/01/31 2.098%(S)  3 Month BBR(2)(Q)   2,467   4,618   2,151 
PLN 1,120  08/24/23 2.390%(A)  6 Month WIBOR(2)(S)      16,051   16,051 
PLN 935  11/13/23 2.570%(A)  6 Month WIBOR(2)(S)      13,738   13,738 
PLN 500  04/11/24 2.020%(A)  6 Month WIBOR(2)(S)      4,401   4,401 
PLN 1,300  06/21/24 1.750%(A)  6 Month WIBOR(2)(S)      13,316   13,316 
PLN 1,000  01/10/27 3.030%(A)  6 Month WIBOR(2)(S)      23,825   23,825 
PLN 515  04/27/31 1.788%(A)  6 Month WIBOR(2)(S)      (2,237  (2,237
SEK 2,500  12/30/26 1.106%(A)  3 Month STIBOR(2)(Q)      12,416   12,416 
SEK 300  07/11/28 1.141%(A)  3 Month STIBOR(2)(Q)   409   1,732   1,323 
SEK 990  11/28/28 1.188%(A)  3 Month STIBOR(2)(Q)      5,563   5,563 
SEK 1,000  06/20/29 0.550%(A)  3 Month STIBOR(2)(Q)      (612  (612
SEK 1,500  01/24/30 0.605%(A)  3 Month STIBOR(2)(Q)      (1,518  (1,518
SGD 135  03/19/24 2.025%(S)  6 Month SIBOR(2)(S)      4,259   4,259 
SGD 200  05/21/28 2.436%(S)  6 Month SIBOR(2)(S)      12,449   12,449 
SGD 90  02/14/29 2.285%(S)  6 Month SIBOR(2)(S)      4,513   4,513 
THB 4,200  07/03/30 1.028%(S)  6 Month BIBOR(2)(S)      (5,437  (5,437
 1,162  06/09/21 0.395%(A)  1 Day USOIS(1)(A)      (3,685  (3,685
 1,700  09/12/21 0.260%(A)  1 Day USOIS(1)(A)      (3,068  (3,068
 1,155  03/10/22 0.330%(A)  1 Day USOIS(1)(A)      (2,837  (2,837
 1,160  05/29/22 0.014%(A)  1 Day USOIS(1)(A)      1,790   1,790 
 680  11/09/22 0.050%(A)  1 Day USOIS(1)(A)      742   742 
 4,000  11/09/22 0.061%(A)  1 Year SOFR(1)(A)      519   519 
 2,220  10/30/23 0.072%(A)  1 Day USOIS(1)(A)      8,292   8,292 
 3,165  11/02/23 0.070%(A)  1 Day USOIS(1)(A)      12,208   12,208 
 2,754  11/06/23 0.063%(A)  1 Day USOIS(1)(A)      11,337   11,337 

 

See Notes to Financial Statements.

 

38


    

    

 

Interest rate swap agreements outstanding at April 30, 2021 (continued):

 

Notional            Value at Unrealized
Amount  Termination Fixed  Floating  Value at April 30, Appreciation

    (000)#    

  

Date

 

Rate

  

Rate

  Trade Date 2021 (Depreciation)

Centrally Cleared Interest Rate Swap Agreements (cont’d.):

 

  
 1,950  11/09/23 0.064%(A)  1 Day USOIS(1)(A)   $        —   $    8,059   $    8,059 
ZAR 9,480  03/13/24 7.500%(Q)              3 Month JIBAR(1)(Q)                       10   (50,567  (50,577)   
ZAR 2,035  06/30/27 8.015%(Q)  3 Month JIBAR(2)(Q)   (11  12,150   12,161 
ZAR 1,700  11/07/27 8.360%(Q)  3 Month JIBAR(2)(Q)   (27  12,670   12,697 
ZAR 3,500  07/16/28 8.170%(Q)  3 Month JIBAR(2)(Q)   6   19,514   19,508 
ZAR 2,820  03/13/29 8.055%(Q)  3 Month JIBAR(2)(Q)   (8  13,465   13,473 
ZAR 2,000  10/03/29 7.580%(Q)  3 Month JIBAR(2)(Q)      3,834   3,834 
ZAR 11,910  09/15/30 6.940%(Q)  3 Month JIBAR(2)(Q)          (133     (25,496     (25,363
         $129,284   $729,987   $600,703 

 

Notional

Amount

    (000)#    

  Termination
Date
   

Fixed

Rate

  

Floating

Rate

  Fair
Value
  Upfront
Premiums
Paid(Received)
 Unrealized
Appreciation
(Depreciation)
 

Counterparty

OTC Interest Rate Swap Agreements:

 

   
CLP  85,000   11/15/27   4.130%(S)  1 Day CLOIS(2)(S)  $  9,974   $—   $  9,974  Morgan Stanley & Co. International PLC
CLP  55,000   12/20/27   4.260%(S)  1 Day CLOIS(2)(S)   6,482      6,482  Morgan Stanley & Co. International PLC
CLP  19,100   01/23/28   4.245%(S)  1 Day CLOIS(2)(S)   2,185      2,185  Morgan Stanley & Co. International PLC
CLP  33,000   01/26/28   4.210%(S)  1 Day CLOIS(2)(S)   3,713      3,713  Morgan Stanley & Co. International PLC
CLP  23,000   05/17/28   4.270%(S)  1 Day CLOIS(2)(S)   2,920      2,920  Citibank, N.A.
CNH  500   04/02/26   3.120%(Q)  7 Day China Fixing Repo Rates(2)(Q)   1,378   (1)     1,379  Citibank, N.A.
COP  123,000   01/23/28   6.035%(Q)  1 Day COOIS(2)(Q)   1,933      1,933  Morgan Stanley & Co. International PLC
COP  336,000   01/26/28   6.000%(Q)  1 Day COOIS(2)(Q)   4,996      4,996  Morgan Stanley & Co. International PLC
COP  263,000   02/01/28   6.020%(Q)  1 Day COOIS(2)(Q)   4,748      4,748  Morgan Stanley & Co. International PLC
COP  118,000   07/12/29   5.165%(Q)  1 Day COOIS(2)(Q)   (216     (216)   Morgan Stanley & Co. International PLC

 

See Notes to Financial Statements.

PGIM International Bond Fund     39


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

Interest rate swap agreements outstanding at April 30, 2021 (continued):

 

Notional

Amount

    (000)#    

  Termination
Date
   

Fixed

Rate

  

Floating

Rate

  Fair
Value
 Upfront
Premiums
Paid(Received)
 Unrealized
Appreciation
(Depreciation)
 

Counterparty

OTC Interest Rate Swap Agreements (cont’d.):

ILS

  1,150   01/12/27   1.975%(A)  3 Month TELBOR(2)(Q)   $  26,581   $—   $  26,581  Citibank, N.A.

ILS

  200   09/07/27   0.488%(A)  3 Month TELBOR(2)(Q)   (1,202     (1,202 Morgan Stanley & Co. International PLC

ILS

  390   07/16/28   2.045%(A)  3 Month TELBOR(2)(Q)   10,943      10,943  JPMorgan Chase Bank, N.A.

ILS

  115   02/07/29   1.965%(A)  3 Month TELBOR(2)(Q)   2,575      2,575  JPMorgan Chase Bank, N.A.

ILS

  450   04/24/30   0.710%(A)  3 Month TELBOR(2)(Q)   (5,953)(4)    (5,949 Goldman Sachs International

ILS

  800   05/07/30   0.810%(A)  3 Month TELBOR(2)(Q)   (6,697     (6,697 Goldman Sachs International

KRW

  850,000   01/06/27   1.800%(Q)  3 Month KWCDC(2)(Q)   11,492(12)    11,504  Citibank, N.A.

MYR

  1,000   11/27/23   3.900%(Q)  3 Month KLIBOR(2)(Q)   10,498(2)    10,500  Citibank, N.A.

MYR

  200   11/19/29   3.245%(Q)  3 Month KLIBOR(2)(Q)   1,030      1,030  Morgan Stanley & Co. International PLC

MYR

  200   02/04/30   3.060%(Q)  3 Month KLIBOR(2)(Q)   254      254  Morgan Stanley & Co. International PLC

RUB

  19,000   01/12/26   6.360%(A)  3 Month MosPRIME(2)(Q)   (5,705     (5,705 Morgan Stanley & Co. International PLC

RUB

  20,000   02/27/26   6.680%(A)  3 Month MosPRIME(2)(Q)   (3,929     (3,929 Morgan Stanley & Co. International PLC

THB

  5,000   05/07/25   0.795%(S)  6 Month BIBOR(2)(S)   (262  1   (263)    HSBC Bank PLC

THB

  3,500   02/14/29   2.180%(S)  6 Month THBFIX(2)(S)   7,336      7,336  Citibank, N.A.

ZAR

  3,300   09/22/42   8.020%(Q)  3 Month JIBAR(2)(Q)   (13,973  (24)     (13,949 Citibank, N.A.

ZAR

  3,100   09/22/47   7.890%(Q)  3 Month JIBAR(1)(Q)     19,509      20     19,489  Citibank, N.A.
     $90,610   $(22  $90,632  

 

(1)

The Fund pays the fixed rate and receives the floating rate.

(2)

The Fund pays the floating rate and receives the fixed rate.

 

See Notes to Financial Statements.

 

40


    

    

 

Balances Reported in the Statement of Assets and Liabilities for OTC Swap Agreements:

 

        Unrealized  Unrealized
    Premiums Paid  Premiums Received   Appreciation    Depreciation

OTC Swap Agreements

   $11,583   $(45,331)  $246,924   $(74,740)

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 derivativesare listed by broker as follows:

 

Broker                                                            

     Cash and/or Foreign Currency                Securities Market Value        

Citigroup Global Markets, Inc.

  $120,000     $950,050

J.P. Morgan Securities LLC

   1,020,000      
  

 

 

      

 

 

 

Total

  $1,140,000     $950,050
  

 

 

      

 

 

 

Fair Value Measurements:

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

Level1—unadjusted quoted prices generally in active markets for identical securities.

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

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

The following is a summary of the inputs used as of April 30, 2021 in valuingsuch portfolio securities:

 

   Level 1   Level 2   Level 3

Investments in Securities

      

Assets

      

Asset-Backed Securities

      

Cayman Islands

  $   $1,250,765      $— 

Ireland

       604,195     

United States

       460,680     

Commercial Mortgage-Backed Securities

      

Canada

       19,872     

United Kingdom

       275,740     

United States

       2,106,084     

Corporate Bonds

      

Australia

       129,545     

Brazil

       149,539     

China

       132,482     

France

       763,079     

Germany

       1,151,874     

Hong Kong

       125,413     

Hungary

       125,683     

Iceland

       118,552     

India

       127,614     

Indonesia

       118,422     

Italy

       147,572       

 

See Notes to Financial Statements.

PGIM International Bond Fund     41


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

   Level 1     Level 2     Level 3

Investments in Securities (continued)

          

Assets (continued)

          

Corporate Bonds (continued)

          

Kazakhstan

  $     $171,878      $— 

Luxembourg

         486,060       

Mexico

         483,370       

Netherlands

         739,555       

Peru

         133,588       

Poland

         329,349       

Russia

         358,405       

Spain

         418,095       

Supranational Bank

         143,250       

United Arab Emirates

         370,606       

United Kingdom

         1,870,356       

United States

         3,366,184       

Residential Mortgage-Backed Securities

          

Bermuda

         212,762       

Ireland

         119,325       

United States

         325,181       

Sovereign Bonds

          

Belgium

         129,954       

Brazil

         551,678       

Bulgaria

         175,760       

Canada

         258,428       

China

         1,140,028       

Colombia

         812,961       

Croatia

         276,526       

Cyprus

         1,266,048       

France

         96,147       

Greece

         1,920,893       

Hungary

         158,663       

Indonesia

         1,335,670       

Israel

         473,841       

Italy

         3,370,502       

Kazakhstan

         154,668       

Mexico

         728,442       

New Zealand

         64,449       

Peru

         588,589       

Philippines

         480,990       

Portugal

         1,415,647       

Romania

         385,097       

Russia

         262,635       

Saudi Arabia

         158,032       

Serbia

         330,646       

Spain

         2,481,696       

Ukraine

         752,875       

United Kingdom

         180,666       

U.S. Government Agency Obligation

         2,515       

Affiliated Mutual Fund

   107,777             

Option Purchased

         588        — 
  

 

 

     

 

 

     

Total

  $107,777     $37,289,709      $— 
  

 

 

     

 

 

     

 

 

 

Liabilities

          

Option Written

  $     $(590     $— 
  

 

 

     

 

 

     

 

 

 

Other Financial Instruments*

          

Assets

          

Futures Contracts

  $68,412     $        $—   

 

See Notes to Financial Statements.

 

42


    

    

 

   Level 1     Level 2     Level 3

Other Financial Instruments* (continued)

          

Assets (continued)

          

OTC Forward Foreign Currency Exchange Contracts

  $     $67,438      $— 

OTC Packaged Credit Default Swap Agreements

         30,988       

Centrally Cleared Credit Default Swap Agreement

         581       

OTC Credit Default Swap Agreements

         38,002      1 

OTC Currency Swap Agreement

         15,124       

Centrally Cleared Inflation Swap Agreement

         4,225       

Centrally Cleared Interest Rate Swap Agreements

         1,065,650       

OTC Interest Rate Swap Agreements

         128,547       — 
  

 

 

     

 

 

     

Total

  $68,412     $1,350,555      $1 
  

 

 

     

 

 

     

 

 

 

Liabilities

          

Futures Contracts

  $(384,825    $      $— 

OTC Forward Foreign Currency Exchange Contracts

         (162,612      

OTC Packaged Credit Default Swap Agreements

         (29,903      

OTC Credit Default Swap Agreements

         (6,386      

Centrally Cleared Inflation Swap Agreements

         (15,448      

Centrally Cleared Interest Rate Swap Agreements

         (464,947      

OTC Interest Rate Swap Agreements

         (37,937       — 
  

 

 

     

 

 

     

Total

  $(384,825    $(717,233     $—   
  

 

 

     

 

 

     

 

 

 

 

 

 

*

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 investmentsand other assets in excess of liabilities shown as a percentage of net assets as of April 30, 2021 were as follows:

 

Sovereign Bonds

   50.5

Commercial Mortgage-Backed Securities

   6.1 

Collateralized Loan Obligations

   4.7 

Banks

   4.4 

Oil & Gas

   2.2 

Commercial Services

   2.2 

Telecommunications

   2.1 

Healthcare-Products

   2.1 

Foods

   1.8 

Residential Mortgage-Backed Securities

   1.6 

Insurance

   1.4 

Electric

   1.3 

Transportation

   1.2 

Packaging & Containers

   1.1 

Media

   1.0 

Electrical Components & Equipment

   0.9 

Chemicals

   0.9 

Auto Manufacturers

   0.8

Diversified Financial Services

   0.7 

Machinery-Diversified

   0.6 

Lodging

   0.6 

Retail

   0.6 

Internet

   0.6 

Real Estate Investment Trusts (REITs)

   0.5 

Consumer Loans

   0.5 

Entertainment

   0.5 

Iron/Steel

   0.5 

Other

   0.4 

Multi-National

   0.4 

Software

   0.3 

Computers

   0.3 

Auto Parts & Equipment

   0.3 

Household Products/Wares

   0.3 

Electronics

   0.3 
 

 

See Notes to Financial Statements.

PGIM International Bond Fund     43


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

Industry Classification (continued):

  

Engineering & Construction

   0.3

Student Loan

   0.3 

Affiliated Mutual Fund

   0.3 

Semiconductors

   0.1 

U.S. Government Agency Obligation

   0.0

Option Purchased

   0.0
  

 

 

 
   94.7 

Option Written

   (0.0)* 

Other assets in excess of liabilities

   5.3 
  

 

 

 
   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 contractsrisk, foreign exchange contracts risk and 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’sfinancial 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 April 30, 2021 as presented in the Statement of Assets and Liabilities:

 

     

Asset Derivatives

   

Liability Derivatives

 
Derivatives not accounted for    Statement of     Statement of   
as hedging instruments,    Assets and Fair   Assets and Fair 

carried at fairvalue                    

    

Liabilities Location

 Value   

Liabilities Location

 Value 

Credit contracts

    Due from/to broker-variation margin swaps $581   $ 

Credit contracts

    Premiums paid for OTC swap agreements  11,562   Premiums received for OTC swap agreements  45,288 

Credit contracts

    Unaffiliated investments  588   Options written outstanding, at value  590 

Credit contracts

    Unrealized appreciation on OTC swap agreements  103,258   Unrealized depreciation on OTC swap agreements  36,830 

Foreign exchange contracts

         Due from/to broker-variation margin futures  305,878

Foreign exchange contracts

    Unrealized appreciation on OTC forward foreign currency exchange contracts  67,438   Unrealized depreciation on OTC forward foreign currency exchange contracts  162,612 

 

See Notes to Financial Statements.

 

44


    

    

 

     

Asset Derivatives

   

Liability Derivatives

 
Derivatives not accounted for    Statement of     Statement of   
as hedging instruments,    Assets and Fair   Assets and Fair 

carried at fairvalue                    

    

Liabilities Location

 Value   

Liabilities Location

 Value 

Interest rate contracts

    Due from/to broker-variation margin futures $68,412  Due from/to broker-variation margin futures $78,947

Interest rate contracts

    Due from/to broker-variation margin swaps  1,069,875  Due from/to broker-variation margin swaps  480,395

Interest rate contracts

    Premiums paid for OTC swap agreements  21   Premiums received for OTC swap agreements  43 

Interest rate contracts

    Unrealized appreciation on OTC swap agreements  143,666   Unrealized depreciation on OTC swap agreements  37,910 
     

 

 

    

 

 

 
     $1,465,401    $1,148,493 
     

 

 

    

 

 

 

 

*

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

The effects ofderivative instruments on the Statement of Operations for the six months ended April 30, 2021 are as follows:

 

Amount of Realized Gain (Loss) on DerivativesRecognized in Income

           Forward     
           & Cross     
           Currency     
Derivatives not accounted for as hedging  Options  Options    Exchange     

instruments, carried at fair value

  Purchased(1)  Written  Futures Contracts    Swaps

Credit contracts

    $   —    $     —    $               —   $            —      $224,205

Foreign exchange contracts

    934    6,416    (143,976)   (612,491)      

Interest rate contracts

        —           —         (936,571                —        217,659

Total

    $934     $6,416     $(1,080,547   $(612,491      $441,864 

 

(1)

Included in net realized gain (loss) on investment transactions in the Statement of Operations.

 

Change in Unrealized Appreciation (Depreciation) onDerivatives Recognized in Income

         Forward  
         & Cross  
Derivatives not accounted for        Currency  
as hedging instruments,  Options Options   Exchange  

carried at fair value

  Purchased(2) Written Futures Contracts Swaps

Credit contracts

    $(1,460   $1,810    $            —    $          —    $140,998 

Foreign exchange contracts

    38    (835   (517,943   (54,824    

Interest rate contracts

             —         —        319,647               —     (1,027,918

Total

    $(1,422   $975    $(198,296   $(54,824   $  (886,920

 

(2)

Included in net change in unrealized appreciation (depreciation) on investments in the Statement of Operations.

 

See Notes to Financial Statements.

PGIM International Bond Fund     45


Schedule of Investments  (unaudited) (continued)

as ofApril 30, 2021

 

For the six months ended April 30, 2021, the Fund’s average volume of derivative activities is as follows:

 

          Futures    Futures     
          Contracts—               Contracts—    Forward Foreign
Options               Options    Long    Short               Currency Exchange

Purchased(1)

    

Written(2)

               

Positions(2)

    

Positions(2)

    

Contracts— Purchased(3)

$697

   $244,567   $10,864,344   $67,538,788   $8,729,325

 

     Cross         
Forward Foreign    Currency   Interest Rate    Credit Default
Currency Exchange    Exchange              Swap               Swap Agreements—

Contracts—Sold(3)

               

Contracts(4)

   

Agreements(2)

    

Buy Protection(2)

$21,287,073

   $10,212  $58,261,198   $4,506,115

 

Credit Default    Currency      
Swap Agreements—                                                               Swap     Inflation Swap

Sell Protection(2)

    

Agreements(2)

     

Agreements(2)

$11,365,463

   $138,169    $720,727

 

 

 

(1)

Cost.

(2)

Notional Amount in USD.

(3)

Value at Settlement Date.

(4)

Value at Trade Date.

Average volume is based on average quarter end balances as noted for the six months ended April 30, 2021.

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

The Fund invested in OTC derivatives during the reporting period that are either offset in accordance with current requirements or are subject to enforceable masternetting arrangements or similar agreements that permit offsetting. The information about offsetting and related netting arrangements for OTC derivatives where the legal right to set-off exists is presented in the summary below.

Offsetting of OTC derivative assets and liabilities:

 

   Gross Amounts of  Gross Amounts of Net Amounts of     
   Recognized  Recognized Recognized Collateral   

Counterparty

  Assets(1)  Liabilities(1) 

Assets/(Liabilities)

 Pledged/(Received)(2)  

Net Amount

Bank of America, N.A.

   $22,557   $(19,762)  $2,795  $   $2,795

Barclays Bank PLC

    22,173    (22,189)   (16)       (16)

BNP Paribas S.A.

    21,056    (18,520)   2,536       2,536

Citibank, N.A.

    160,932    (122,261)   38,671       38,671

Deutsche Bank AG

    3,778    (1,652)   2,126       2,126

Goldman Sachs International

    7,214    (18,553)   (11,339)       (11,339)

HSBC Bank PLC

    11,235    (14,130)   (2,895)       (2,895)

 

See Notes to Financial Statements.

 

46


    

    

 

   Gross Amounts of  Gross Amounts of Net Amounts of     
   Recognized  Recognized Recognized Collateral   

Counterparty

  Assets(1)  Liabilities(1) 

Assets/(Liabilities)

 

Pledged/(Received)(2)

  

Net Amount

JPMorgan Chase Bank, N.A.

   $16,195   $(12,048)  $4,147  $   $4,147

Morgan Stanley & Co. International PLC

    55,539    (47,712)   7,827       7,827

The Toronto-Dominion Bank

    204    (1,626)   (1,422)       (1,422)

UBS AG

    5,650    (4,820)   830       830
   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 
   $326,533   $(283,273)  $43,260  $   $43,260
   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

(1)

Includes unrealized appreciation/(depreciation) on swaps and forwards, premiums paid/(received) on swap agreements andmarket value of purchased and written options, as represented on the Statement of Assets and Liabilities.

(2)

Collateral amount disclosed by the Fund is limited to the market value of financial instruments/transactions and theFund’s OTC derivative exposure by counterparty.

 

See Notes to Financial Statements.

PGIM International Bond Fund     47


Statement of Assets and Liabilities  (unaudited)

as of April 30,2021

 

Assets

       

Investments at value:

   

Unaffiliated investments (cost $34,384,837)

  $37,289,709  

Affiliated investments (cost $107,777)

   107,777  

Foreign currency, at value (cost $312,008)

   309,767  

Deposit with broker for centrally cleared/exchange-traded derivatives

   1,140,000  

Dividends and interest receivable

   353,598  

Unrealized appreciation on OTC swap agreements

   246,924  

Due from broker—variation margin futures

   207,888  

Receivable for investments sold

   158,809  

Unrealized appreciation on OTC forward foreign currency exchange contracts

   67,438  

Receivable for Fund shares sold

   52,861  

Premiums paid for OTC swap agreements

   11,583  

Due from Manager

   1,835  

Prepaid expenses

   1,166  
  

 

 

 

 

Total Assets

   39,949,355  
  

 

 

 

 

Liabilities

       

Unrealized depreciation on OTC forward foreign currency exchange contracts

   162,612  

Payable for investments purchased

   100,991  

Unrealized depreciation on OTC swap agreements

   74,740  

Premiums received for OTC swap agreements

   45,331  

Accrued expenses and other liabilities

   39,797  

Custodian and accounting fees payable

   34,806  

Due to broker—variation margin swaps

   15,555  

Payable for Fund shares purchased

   2,462  

Trustees’ fees payable

   1,049  

Options written outstanding, at value (premiums received $2,400)

   590  

Distribution fee payable

   322  

Affiliated transfer agent fee payable

   158  
  

 

 

 

 

Total Liabilities

   478,413  
  

 

 

 

 

Net Assets

  $39,470,942  
  

 

 

 

 
        

Net assets were comprised of:

   

Shares of beneficial interest, at par

  $4,015  

Paid-in capital in excess of par

   38,594,683  

Total distributable earnings (loss)

   872,244  
  

 

 

 

 

Net assets, April 30, 2021

  $39,470,942   
  

 

 

 

 

 

See Notes to Financial Statements.

 

48


    

    

 

Class A

 

     

Net asset value and redemption price per share,

($ 341,855 ÷ 34,779 shares of beneficial interest issued and outstanding)

  $9.83   

Maximum sales charge (3.25% of offering price)

   0.33   
  

 

 

   

Maximum offering price to public

  $10.16   
  

 

 

   

Class C

          

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

($ 304,550 ÷ 30,993 shares of beneficial interest issued and outstanding)

  $9.83   
  

 

 

   

Class Z

          

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

($ 6,986,355 ÷ 710,671 shares of beneficial interest issued and outstanding)

  $9.83   
  

 

 

   

Class R6

          

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

($ 31,838,182 ÷ 3,238,861 shares of beneficial interest issued and outstanding)

  $9.83   
  

 

 

   

 

See Notes to Financial Statements.

PGIM International Bond Fund     49


Statement of Operations  (unaudited)

Six Months EndedApril 30, 2021

 

Net Investment Income (Loss)

       

Income

   

Interest income (net of $72 foreign withholding tax)

  $485,586  

Affiliated dividend income

   582  
  

 

 

  

Total income

   486,168  
  

 

 

  

Expenses

   

Management fee

   104,320  

Distribution fee(a)

   2,140  

Custodian and accounting fees

   48,164  

Audit fee

   25,643  

Registration fees(a)

   19,380  

Transfer agent’s fees and expenses (including affiliated expense of $384)(a)

   11,108  

Legal fees and expenses

   9,051  

Shareholders’ reports

   6,104  

Trustees’ fees

   5,445  

Miscellaneous

   13,119  
  

 

 

  

Total expenses

   244,474  

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

   (117,237 
  

 

 

  

Net expenses

   127,237  
  

 

 

  

Net investment income (loss)

   358,931  
  

 

 

  

Realized And Unrealized Gain (Loss) On Investment And ForeignCurrency Transactions

       

Net realized gain (loss) on:

   

Investment transactions

   882,794  

Futures transactions

   (1,080,547 

Forward and cross currency contract transactions

   (612,491 

Options written transactions

   6,416  

Swap agreement transactions

   441,864  

Foreign currency transactions

   1,010,116  
  

 

 

  
   648,152  
  

 

 

  

Net change in unrealized appreciation (depreciation) on:

   

Investments

   (241,969 

Futures

   (198,296 

Forward and cross currency contracts

   (54,824 

Options written

   975  

Swap agreements

   (886,920 

Foreign currencies

   (9,779 
  

 

 

  
   (1,390,813 
  

 

 

  

Net gain (loss) on investment and foreign currency transactions

   (742,661 
  

 

 

  

Net Increase (Decrease) In Net Assets Resulting From Operations

  $(383,730  
  

 

 

  

 

See Notes to Financial Statements.

 

50


    

    

 

 

(a)

Class specific expenses and waivers were as follows:

 

   Class A Class C Class Z Class R6

Distribution fee

    588   1,552      

Registration fees

    4,701   4,271   5,851   4,557

Transfer agent’s fees and expenses

    613   186   10,248   61

Fee waiver and/or expense reimbursement

    (5,961)   (4,875)   (32,383)   (74,018)

 

See Notes to Financial Statements.

PGIM International Bond Fund     51


Statements of Changes in Net Assets (unaudited)

 

   Six Months Ended Year Ended
   April 30, 2021   October 31, 2020  

Increase (Decrease) in Net Assets

           

Operations

     

Net investment income (loss)

   $358,931  $774,803

Net realized gain (loss) on investment and foreign currency transactions

    648,152   (2,408,363)

Net change in unrealized appreciation (depreciation) on investments and foreign currencies

    (1,390,813)   2,560,740
   

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (383,730)   927,180
   

 

 

   

 

 

 

Dividends and Distributions

     

Distributions from distributable earnings

     

Class A

    (6,998)   (20,297)

Class C

    (3,404)   (6,132)

Class Z

    (143,131)   (433,454)

Class R6

    (541,412)   (2,110,870)
   

 

 

   

 

 

 
    (694,945)   (2,570,753)
   

 

 

   

 

 

 

Tax return of capital distributions

     

Class A

       (7,942)

Class C

       (2,400)

Class Z

       (169,614)

Class R6

       (825,998)
   

 

 

   

 

 

 
       (1,005,954)
   

 

 

   

 

 

 

Fund share transactions

     

Net proceeds from shares sold

    2,095,441   22,469,556

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

    694,839   3,575,887

Cost of shares purchased

    (11,456,543)   (9,379,252)
   

 

 

   

 

 

 

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

    (8,666,263)   16,666,191
   

 

 

   

 

 

 

Total increase (decrease)

    (9,744,938)   14,016,664

Net Assets:

           

Beginning of period

    49,215,880   35,199,216
   

 

 

   

 

 

 

End of period

   $39,470,942  $49,215,880
   

 

 

   

 

 

 

 

See Notes to Financial Statements.

 

52


Notes to Financial Statements  (unaudited)

1.   Organization

Prudential Investment Portfolios 9 (the“Trust”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust currently consists of five series: PGIMAbsolute Return Bond Fund, PGIM QMA Large-Cap Core Equity Fund and PGIM Select Real Estate Fund, each of which are diversified funds for purposes of the 1940 Act and PGIM International Bond Fund and PGIM RealEstate Income Fund, each of which are non-diversified funds for purposes of the 1940 Act, and therefore, may invest a greater percentage of their assets in the securities of a single company or other issuerthan a diversified fund. These financial statements relate only to the PGIM International Bond Fund (the “Fund”).

The investment objective of the Fund isto seek total return, made up of current income and 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 Easterntime) 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 quotationsare readily available. The Trust’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 (“PGIMInvestments” 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. Thevaluation 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 theBoard’s review at its first quarterly meeting following the quarter in which such actions take place.

 

PGIM International BondFund     53


Notes to Financial Statements  (unaudited) (continued)

 

For the fiscal reporting period-end, securities and other assets and liabilitieswere 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 trade in markets that are open on weekends andU.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 inputsdetermine 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” inaccordance with FASB ASC Topic 820 - Fair Value Measurements and Disclosures.

Common or preferred stocks, exchange-traded funds and derivative instruments, ifapplicable, 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 NASDAQofficial 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 onvaluation 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 valuehierarchy.

Investments in open-end funds (other than exchange-traded funds) are valued at their net asset values as of theclose 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 valuedusing 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 comparableinstruments 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 utilizingtransaction 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.

 

54


OTC and centrally cleared derivative instruments are generally classified as Level 2 in the fair value hierarchy. Suchderivative 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 inbroker-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 valuingderivatives 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 anddetermining 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 priceis 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 byobtaining 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 eventthat 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 3security’s fair value measurement.

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of anyrestrictions 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 thecapitalization 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 orthe 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 theirnet asset values.

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

(i) market value of investment securities, other assets and liabilities — at the current rates of exchange;

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

 

PGIM International BondFund     55


Notes to Financial Statements  (unaudited) (continued)

 

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of theperiod, 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 heldat 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 realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions. Notwithstanding the above, the Fund does isolate the effect of fluctuations in foreign currency exchangerates 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 foreigncurrencies, 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 theU.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.

Forward and Cross Currency Contracts: A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forwardrate. The Fund enters into forward currency contracts, as defined in the prospectus, in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings or on specific receivables and payables denominatedin a foreign currency and to gain exposure to certain currencies. The contracts are valued daily at current forward exchange rates and any unrealized gain (loss) is included in net unrealized appreciation or depreciation on forward and crosscurrency contracts. Gain (loss) is realized on the settlement date of the contract equal to the difference between the settlement value of the original and negotiated forward contracts. This gain (loss), if any, is included in net realized gain(loss) on forward and cross currency contract transactions. Risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts. Forward currency contracts involve risks fromcurrency exchange rate and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Fund’s maximum risk of loss from counterparty credit risk is the net value of the cash flows to be received from thecounterparty at the end of the contract’s life. A cross currency contract is a forward contract where a specified amount of one foreign currency will be exchanged for a specified amount of another foreign currency.

 

56


Options: The Fund purchased and/or wrote options in order to hedge against adverse market movements or fluctuationsin 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 togain 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, itpays 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 thecurrent 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 proceedsfrom 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 realizedgain (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 aresult, 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 thecounterparties to meet the terms of their contracts. With 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 andguarantees 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 aliability 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 variableinterest 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 writingoptions 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 aswap 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 ofthe 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

 

PGIM International BondFund     57


Notes to Financial Statements  (unaudited) (continued)

 

the value of the underlying security. Such variation margin is recorded for financial statement purposes on a dailybasis 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 invalue 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 therisk 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 theexchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.

Swap Agreements: TheFund 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 negotiatedin 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 agreements are valued daily atcurrent 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 thevaluation 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 exceedamounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed on the Schedule of Investments.

Interest Rate Swaps: Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates,applied to a notional principal amount for a specified period. The Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objective. The Fund used interest rate swaps to maintain its ability to generate steadycash flow by receiving a stream of fixed rate payments or to increase exposure to prevailing market rates by receiving floating rate payments. The Fund’s maximum risk of loss from counterparty credit risk is the discounted net present value ofthe cash flows to be received from the counterparty over the contract’s remaining life.

Inflation Swaps: The Fund entered into inflation swap agreementsto protect against fluctuations in inflation rates. Inflation swaps are characterized by one party paying a fixed

 

58


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) inexchange 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 ofprotection 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 whichrepresents 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 theprotection 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 theswap, 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 thenotional 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 settlementof buy protection credit default swap agreements which the Fund entered into for the same referenced entity or index. As a 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 ofprotection 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 thecredit 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 inabsolute terms, when compared to the notional amount of the swap,

 

PGIM International BondFund     59


Notes to Financial Statements  (unaudited) (continued)

 

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.

Currency Swaps: The Fund entered into currency swap agreements primarily to gain yield exposure on foreign bonds. Currency swap agreements involve twoparties exchanging two different currencies with an agreement to reverse the exchange at a later date at specified exchange rates.

Master Netting Arrangements:The Trust, 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 theFund. 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 theFund 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-offexists 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 Trust, on behalf of the Fund, is a party to International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements with certain counterpartiesthat 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, collateralrequirements, 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 withrespect 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 Scheduleof 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 onthe 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 tocounterparties 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 derivativeand foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably

 

60


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, tovarying 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 onthe 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 theterms 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, givethe 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 marketand 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.

Payment-In-Kind: The Fund invested in the open market or received pursuant to debtrestructuring, securities that pay-in-kind (PIK) the interest due on such debt instruments. The PIK interest, computed at the contractual rate specified, is added to theexisting principal balance of the debt when issued bonds have same terms as the bond or recorded as a separate bond when terms are different from the existing debt, and is recorded as interest income.

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) from investment and currencytransactions 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 differfrom 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 proportionof 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 anddistribution fee waivers, shareholder servicing fees, transfer agent’s fees and expenses, registration fees and fee waivers and/or expense reimbursements, as applicable.

 

PGIM International BondFund     61


Notes to Financial Statements  (unaudited) (continued)

 

Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicableto 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 andcapital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned.

Dividends and Distributions: The Fund expects todeclare dividends of its net investment income daily and pay such dividends monthly. Distributions of net realized capital and currency gains, if any, are declared and paid at least annually. Dividends and distributions to shareholders, which aredetermined 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 reclassifiedbetween total distributable earnings (loss) and paid-in capital in excess of par, as appropriate.

Estimates: Thepreparation 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 Trust, on behalf of the Fund, has a managementagreement 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, Inc., which provides subadvisory services to the Fund through its business unit PGIM Fixed Income, andPGIM Limited (each a “subadviser” and collectively the “subadvisers”). The Manager pays for the services of the subadvisers.

The management feepaid to the Manager is accrued daily and payable monthly at an annual rate of 0.50% of the Fund’s average daily net assets up to $2 billion and 0.485% of such assets in excess of $2 billion. The effective management fee rate beforeany waivers and/or expense reimbursements was 0.50% for the reporting period ended April 30, 2021.

The Manager has contractually agreed, throughFebruary 28, 2022, to limit total annual operating expenses after fee waivers and/or expense reimbursements to 0.99% of average daily net assets for Class A shares, 1.74% of average daily net assets for Class C shares, 0.63% ofaverage daily net assets for Class Z shares and 0.58% of average daily net assets for Class R6 shares. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred taxexpenses), acquired

 

62


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 anyother 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 theManager 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 the fiscal year.

The Trust, on behalf of the Fund, has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor ofthe Class A, Class C, Class Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A and Class C 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 distributionrelated activities at an annual rate of up to 0.25% and 1% of the average daily net assets of the Class A and Class C shares, respectively. The distribution fees are accrued daily and payable monthly. No distribution or service fees arepaid to PIMS as distributor of the Class Z or Class R6 shares of the Fund.

For the reporting period ended April 30, 2021, PIMS received $440 in front-end sales charges resulting from sales of Class A shares. Additionally, for the reporting period ended April 30, 2021, PIMS did not receive any contingent deferred sales charges imposed uponredemptions by certain Class A and Class C shareholders, respectively. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs.

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

4.   Other Transactions with Affiliates

Prudential Mutual FundServices 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 includecertain 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 series 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

 

PGIM International BondFund     63


Notes to Financial Statements  (unaudited) (continued)

 

unrealized gains on investments in the Core Fund, earnings from such investments are disclosed on the Statement of Operations as “Affiliated dividend income”.

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 isaffiliated solely by reason of having a common (or affiliated) investment adviser, common directors/trustees, and/or common officers. For the reporting period ended April 30, 2021, no 17a-7 transactionswere entered into by the Fund.

5.   Portfolio Securities

Theaggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended April 30, 2021, were $6,862,976 and $16,368,883, respectively.

A summary of the cost of purchases and proceeds from sales of shares of an affiliated mutual fund for the reporting period ended April 30, 2021, is presented asfollows:

 

Value,

Beginning

of

Period

  

Cost of
Purchases

  

Proceeds

from Sales

  

Change in

Unrealized
Gain

    (Loss)    

   

Realized

Gain

  (Loss)  

   

Value,

End of

 Period 

   

Shares,

End

of

 Period 

   

Income

 

Short-Term Investments - Affiliated Mutual Fund:

       

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

          
$2,608,423  $7,393,652  $9,894,298   $—    $—    $107,777    107,777    $582 

 

(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.   Tax Information

The United Statesfederal income tax basis of the Fund’s investments and the net unrealized appreciation as of April 30, 2021 were as follows:

 

Tax Basis

   $35,595,844 
   

 

 

 

Gross Unrealized Appreciation

    4,436,746 

Gross Unrealized Depreciation

    (2,318,784
   

 

 

 

Net Unrealized Appreciation

   $2,117,962 
   

 

 

 

The GAAP basis may differ from tax basis due to certain tax-related adjustments.

 

64


For federal income tax purposes, the Fund had a capital loss carryforward as of October 31, 2020 of approximately$1,580,000 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 provisionfor 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 yearsup to the most recent fiscal year ended October 31, 2020 are subject to such review.

7.   Capital and Ownership

The Fund offers Class A, Class C, Class Z and Class R6 shares. Class A shares are sold with a maximumfront-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 exchangeprivilege 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 convertto Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class Z and Class R6 shares are not subject to any sales or redemption charges and are available exclusively forsale 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 shareclasses of the Fund as presented in the table of transactions in shares of beneficial interest, below.

The Trust has authorized an unlimited number of shares ofbeneficial interest of the Fund at

$0.001 par value per share, currently divided into four classes, designated Class A, Class C, Class Z andClass R6.

As of April 30, 2021, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund asfollows:

 

        Percentage of
        Number of Shares          Outstanding Shares    

Class C

         1,235    4.0%

Class R6

  3,234,115  99.9%

 

PGIM International BondFund     65


Notes to Financial Statements  (unaudited) (continued)

 

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

 

Affiliated                 Unaffiliated            
Number of Percentage of Number of Percentage of
Shareholders Outstanding Shares Shareholders Outstanding Shares

1

 80.5% 1 11.4%

Transactions in shares of beneficial interest were as follows:

 

Class A

  Shares     Amount 

Six months ended April 30, 2021:

      

Shares sold

   20,496     $211,645 

Shares issued in reinvestment of dividends and distributions

   676      6,869 

Shares purchased

   (38,048     (388,892
  

 

 

     

 

 

 

Net increase (decrease) in shares outstanding

   (16,876    $(170,378
  

 

 

     

 

 

 

Year ended October 31, 2020:

      

Shares sold

   65,742     $672,165 

Shares issued in reinvestment of dividends and distributions

   2,691      27,494 

Shares purchased

   (41,452     (410,400
  

 

 

     

 

 

 

Net increase (decrease) in shares outstanding

   26,981     $289,259 
  

 

 

     

 

 

 
Class C          

Six months ended April 30, 2021:

      

Shares issued in reinvestment of dividends and distributions

   335     $3,389 

Shares purchased

   (5     (51
  

 

 

     

 

 

 

Net increase (decrease) in shares outstanding

   330     $3,338 
  

 

 

     

 

 

 

Year ended October 31, 2020:

      

Shares sold

   26,752     $271,956 

Shares issued in reinvestment of dividends and distributions

   843      8,536 

Shares purchased

   (1,108     (10,959
  

 

 

     

 

 

 

Net increase (decrease) in shares outstanding

   26,487     $269,533 
  

 

 

     

 

 

 
Class Z          

Six months ended April 30, 2021:

      

Shares sold

   183,754     $1,883,551 

Shares issued in reinvestment of dividends and distributions

   14,167      143,772 

Shares purchased

   (1,076,831     (11,062,804
  

 

 

     

 

 

 

Net increase (decrease) in shares outstanding

   (878,910    $(9,035,481
  

 

 

     

 

 

 

Year ended October 31, 2020:

      

Shares sold

   2,113,296     $21,478,375 

Shares issued in reinvestment of dividends and distributions

   59,329      602,980 

Shares purchased

   (902,952     (8,900,228
  

 

 

     

 

 

 

Net increase (decrease) in shares outstanding

   1,269,673     $13,181,127 
  

 

 

     

 

 

 

 

66


Class R6

  Shares     Amount 

Six months ended April 30, 2021:

      

Shares sold

   24     $245 

Shares issued in reinvestment of dividends and distributions

   53,470      540,809 

Shares purchased

   (487     (4,796
  

 

 

     

 

 

 

Net increase (decrease) in shares outstanding

   53,007     $536,258 
  

 

 

     

 

 

 

Year ended October 31, 2020:

      

Shares sold

   4,643     $47,060 

Shares issued in reinvestment of dividends and distributions

   286,988      2,936,877 

Shares purchased

   (5,688     (57,665
  

 

 

     

 

 

 

Net increase (decrease) in shares outstanding

       285,943     $  2,926,272 
  

 

 

     

 

 

 

8.   Borrowings

The Trust, on behalfof 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 alternativesource of temporary funding for capital share redemptions. The table below provides details of the SCA.

 

    SCA
  
Term of Commitment  10/2/2020 – 9/30/2021
  
Total Commitment  $ 1,200,000,000
  
Annualized Commitment Fee on the Unused Portion of the SCA  0.15%
  
Annualized Interest Rate on Borrowings  

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 predeterminedmathematical 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 utilizethe 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 theParticipating Funds in the SCA equitably.

The Fund utilized the SCA during the reporting period ended April 30, 2021. The average daily balance for the 8 daysthat the Fund had loans outstanding during the period was approximately $4,073,625, borrowed at a weighted average interest rate of 1.45%. The maximum loan outstanding amount during the period was $7,013,000. At April 30, 2021, the Fund did nothave an outstanding loan amount.

 

PGIM International BondFund     67


Notes to Financial Statements  (unaudited) (continued)

 

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 theFund’s Prospectus and Statement of Additional Information.

Bond Obligations Risk: As with credit risk, market risk and interest rate risk, theFund’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 theissuer’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 Fundmay 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 orcounterparty to pay back debt. The longer the maturity and the lower the credit quality of a bond, the more sensitive it is to credit risk.

Derivatives Risk:Derivatives involve special risks and costs and may result in losses to the Fund. The successful use of derivatives requires sophisticated management, and, to the extent that derivatives are used, the Fund will depend on the subadviser’sability to analyze and manage derivative transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market conditions. Some derivatives are “leveraged” and therefore may magnify or otherwise increaseinvestment losses to the Fund. The Fund’s use of derivatives may also increase the amount of taxes payable by shareholders. Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary market maynot always exist for the Fund’s derivatives positions. In fact, many OTC derivative instruments lack liquidity beyond the counterparty to the instrument. OTC derivative instruments also involve the risk that the other party will not meet itsobligations to the Fund.

Foreign Securities Risk: The Fund’s investments in securities of foreign issuers or issuers with significant exposure toforeign markets involve additional risk. The securities of such issuers may trade in markets that are less liquid, less regulated and more volatile than US markets. The value of the Fund’s investments may decline because of factors affectingthe particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities.

 

68


Interest Rate Risk: The value of your investment may go down when interest rates rise. A rise in rates tends to havea 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 toas “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 moneyif 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 norequirement 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 shortperiod 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 itsinvestment 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 ratefor 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). OnNovember 30, 2020, the administrator of LIBOR announced a delay in the phase out of a majority of the U.S. dollar LIBOR publications until June 30, 2023, with the remainder of LIBOR publications to still end at the end of 2021. There stillremains 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 referencerates. 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, bank loans, derivatives and other instruments invested in by aFund as well as loan facilities used by a Fund. As such, the potential impact of a transition away from LIBOR on a Fund or the financial instruments in which a Fund invests cannot yet be determined. The elimination of LIBOR or changes to otherreference 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 adverselyaffect a Fund’s performance and/or net asset value. 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 referencerate is not completed in a timely manner. Because the usefulness of

 

PGIM International BondFund     69


Notes to Financial Statements  (unaudited) (continued)

 

LIBOR and the other IBORs as benchmarks could deteriorate during the transition period, these effects could begin to beexperienced by the end of 2021 and beyond until the anticipated discontinuance date in 2023 for the majority of the LIBOR rates.

Liquidity Risk: Liquidityrisk 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 moreilliquid 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 thedesired 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 takeadvantage of other investment opportunities.

Market Disruption and Geopolitical Risks: International wars or conflicts and geopolitical developments inforeign countries, along with instability in regions such as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the United States or around the world, public health epidemics such as the outbreak of infectious diseases like therecent outbreak of coronavirus globally or the 2014–2016 outbreak in West Africa of the Ebola virus, and other similar events could adversely affect the U.S. and foreign financial markets, including increases in market volatility, reducedliquidity in the securities markets and government intervention, and may cause further long-term economic uncertainties in the United States and worldwide generally. The coronavirus pandemic and the related governmental and public responses have hadand 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.Preventative or protective actions that governments may take in respect of pandemic or epidemic diseases may result in periods of business disruption, business closures, inability to obtain raw materials, supplies and component parts, and reduced ordisrupted operations for the issuers in which the Fund invests. Government intervention in markets may impact interest rates, market volatility and security pricing. The occurrence, reoccurrence and pendency of such diseases could adversely affectthe economies (including through changes in business activity and increased unemployment) and financial markets either in specific countries or worldwide.

MarketRisk: 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 themarket prices of the securities owned by the Fund fall, the value of your investment in the Fund will decline.

 

70


Mortgage-Backed and Asset-Backed Securities Risk: Mortgage-backed and asset-backed securities tend to increase invalue 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 asinterest 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.

Non-diversification Risk: The Fund is non-diversified for purposes of the 1940Act. This means that the Fund may invest a greater percentage of its assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greaterrisk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund.

10.   Recent Accounting Pronouncement and Regulatory Developments

InMarch 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-04, which provides optional guidance for applying GAAP to contract modifications, hedging relationships and othertransactions 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. At this time, management isevaluating the implications of certain provisions of the ASU and any impact on the financial statement disclosures has not yet been determined.

On December 3,2020, the SEC announced that it voted to adopt a new rule that establishes an updated regulatory framework for fund valuation practices (the “Rule”). The Rule, in part, provides (i) a framework for determining fair value in good faithand (ii) provides for a fund Board’s assignment of its responsibility for the execution of valuation-related activities to a fund’s investment adviser. Further, the SEC is rescinding previously issued guidance on related issues. TheRule took effect on March 8, 2021, with a compliance date of September 8, 2022. Management is currently evaluating the Rule and its impact to the Fund.

 

PGIM International BondFund     71


Financial Highlights (unaudited)

 

Class AShares

                                 
   Six Months              
   Ended          December 14, 2016(a)   
   April 30,    Year Ended October 31, through October 31,       
   2021    2020 2019 2018 2017   

Per Share OperatingPerformance(b):

               

Net Asset Value, Beginning of Period

   $10.13      $10.83   $10.22   $10.44   $10.00     

Income (loss) from investment operations:

                                 

Net investment income (loss)

   0.07      0.14   0.14   0.12   0.07     
Net realized and unrealized gain (loss) on investment and foreign currency transactions   (0.22)      0.10   1.43   (0.08)   0.57     

Total from investment operations

   (0.15)      0.24   1.57   0.04   0.64     

Less Dividends and Distributions:

                                 

Dividends from net investment income

   (0.15)      (0.53)   (0.96)   (0.26)   -     

Tax return of capital distributions

   -      (0.24)   -   -   (0.20)     

Distributions from net realized gains

   -      (0.17)   -   -   -     

Total dividends and distributions

   (0.15)      (0.94)   (0.96)   (0.26)   (0.20)     

Net asset value, end of period

   $9.83      $10.13   $10.83   $10.22   $10.44     

Total Return(c):

   (1.53)%      2.30%   16.52%   0.40%   6.42%     
                                  

Ratios/SupplementalData:

                                 

Net assets, end ofperiod (000)

   $342      $523   $267   $103   $91     

Average net assets (000)

   $474      $383   $163   $99   $38     

Ratios to average net assets(d)(e):

                                 

Expenses after waivers and/or expense reimbursement

   1.00%(f)      0.99%   0.99%   0.99%   0.99%(f)     

Expenses before waivers and/or expense reimbursement

   3.53%(f)      4.24%   9.63%   17.44%   3.39%(f)     

Net investment income (loss)

   1.35%(f)      1.42%   1.35%   1.14%   0.85%(f)     

Portfolio turnover rate(g)

   18%      16%   49%   35%   66%     

 

(a)

Commencement of operations.

(b)

Calculated based on average shares outstanding during the period.

(c)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share onthe 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 notannualized.

(d)

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

(e)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(f)

Annualized.

(g)

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

 

See Notes to Financial Statements.

 

72


    

    

 

Class CShares

                                 
   Six Months              
   Ended          December 14, 2016(a)   
   April 30,    Year Ended October 31, through October 31,   
   2021    2020 2019 2018 2017       

Per Share OperatingPerformance(b):

               

Net Asset Value, Beginning of Period

   $10.13      $10.83   $10.22   $10.44   $10.00     

Income (loss) from investment operations:

                                 

Net investment income (loss)

   0.03      0.06   0.03   0.04   -     
Net realized and unrealized gain (loss) on investment and foreign currency transactions   (0.22)      0.10   1.46   (0.07)   0.57     

Total from investment operations

   (0.19)      0.16   1.49   (0.03)   0.57     

Less Dividends and Distributions:

                                 

Dividends from net investment income

   (0.11)      (0.45)   (0.88)   (0.19)   -     

Tax return of capital distributions

   -      (0.24)   -   -   (0.13)     

Distributions from net realized gains

   -      (0.17)   -   -   -     

Total dividends and distributions

   (0.11)      (0.86)   (0.88)   (0.19)   (0.13)     

Net asset value, end of period

   $9.83      $10.13   $10.83   $10.22   $10.44     

Total Return(c):

   (1.90)%      1.61%   15.65%   (0.34)%   5.73%     
                                  

Ratios/SupplementalData:

                                 

Net assets, end ofperiod (000)

   $305      $311   $45   $16   $11     

Average net assets (000)

   $313      $222   $31   $13   $10     

Ratios to average net assets(d)(e):

                                 

Expenses after waivers and/or expense reimbursement

   1.75%(f)      1.74%   1.74%   1.74%   1.74%(f)     

Expenses before waivers and/or expense reimbursement

   4.89%(f)      6.58%   43.49%   124.78%   3.26%(f)     

Net investment income (loss)

   0.58%(f)      0.63%   0.33%   0.41%   0.06%(f)     

Portfolio turnover rate(g)

   18%      16%   49%   35%   66%     

 

(a)

Commencement of operations.

(b)

Calculated based on average shares outstanding during the period.

(c)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share onthe 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 notannualized.

(d)

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

(e)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(f)

Annualized.

(g)

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

 

See Notes to Financial Statements.

PGIM International Bond Fund     73


Financial Highlights  (unaudited) (continued)

 

Class ZShares

                                 
   Six Months              
   Ended          December 14, 2016(a)   
   April 30,    Year Ended October 31, through October 31,   
   2021    2020 2019 2018 2017       

Per Share OperatingPerformance(b):

               

Net Asset Value, Beginning of Period

   $10.13      $10.83   $10.23   $10.44   $10.00     

Income (loss) from investment operations:

                                 

Net investment income (loss)

   0.09      0.18   0.14   0.15   0.09     
Net realized and unrealized gain (loss) on investment and foreign currency transactions   (0.22)      0.09   1.45   (0.07)   0.57     

Total from investment operations

   (0.13)      0.27   1.59   0.08   0.66     

Less Dividends and Distributions:

                                 

Dividends from net investment income

   (0.17)      (0.56)   (0.99)   (0.29)   -     

Tax return of capital distributions

   -      (0.24)   -   -   (0.22)     

Distributions from net realized gains

   -      (0.17)   -   -   -     

Total dividends and distributions

   (0.17)      (0.97)   (0.99)   (0.29)   (0.22)     

Net asset value, end of period

   $9.83      $10.13   $10.83   $10.23   $10.44     

Total Return(c):

   (1.36)%      2.66%   16.80%   0.75%   6.67%     
                                  

Ratios/SupplementalData:

                                 

Net assets, end ofperiod (000)

   $6,986      $16,104   $3,466   $160   $11     

Average net assets (000)

   $8,681      $10,840   $1,763   $140   $10     

Ratios to average net assets(d)(e):

                                 

Expenses after waivers and/or expense reimbursement

   0.64%(f)      0.63%   0.74%   0.74%   0.74%(f)     

Expenses before waivers and/or expense reimbursement

   1.39%(f)      1.31%   2.16%   12.47%   2.24%(f)     

Net investment income (loss)

   1.70%(f)      1.74%   1.28%   1.43%   1.09%(f)     

Portfolio turnover rate(g)

   18%      16%   49%   35%   66%     

 

(a)

Commencement of operations.

(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 periodreported 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)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(f)

Annualized.

(g)

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

 

See Notes to Financial Statements.

 

74


    

    

 

Class R6Shares

                                    
   Six Months              
   Ended          December 14, 2016(a)       
   April 30,    Year Ended October 31, through October 31,   
   2021    2020 2019 2018 2017   

Per Share OperatingPerformance(b):

                

Net Asset Value, Beginning of Period

   $10.13         $10.84   $10.23   $10.44   $10.00     

Income (loss) from investment operations:

                                    

Net investment income (loss)

   0.09         0.19   0.18   0.14   0.09     
Net realized and unrealized gain (loss) on investment and foreign currency transactions   (0.22)         0.08   1.42   (0.06)   0.57     

Total from investment operations

   (0.13)         0.27   1.60   0.08   0.66     

Less Dividends and Distributions:

                                    

Dividends from net investment income

   (0.17)         (0.57)   (0.99)   (0.29)   -     

Tax return of capital distributions

   -         (0.24)   -   -   (0.22)     

Distributions from net realized gains

   -         (0.17)   -   -   -     

Total dividends and distributions

   (0.17)         (0.98)   (0.99)   (0.29)   (0.22)     

Net asset value, end of period

   $9.83         $10.13   $10.84   $10.23   $10.44     

Total Return(c):

   (1.33)%         2.71%   16.81%   0.75%   6.65%     
                                     

Ratios/SupplementalData:

                                    

Net assets, end ofperiod (000)

   $31,838         $32,278   $31,421   $26,850   $26,654     

Average net assets (000)

   $32,606         $31,522   $29,104   $26,854   $25,767     

Ratios to average net assets(d)(e):

                                    

Expenses after waivers and/or expense reimbursement

   0.59%(f)         0.59%   0.74%   0.74%   0.74%(f)     

Expenses before waivers and/or expense reimbursement

   1.05%(f)         1.13%   1.40%   1.55%   1.99%(f)     

Net investment income (loss)

   1.74%(f)         1.84%   1.75%   1.39%   1.07%(f)     

Portfolio turnover rate(g)

   18%         16%   49%   35%   66%     

 

(a)

Commencement of operations.

(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 periodreported 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)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(f)

Annualized.

(g)

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

 

See Notes to Financial Statements.

PGIM International Bond Fund     75


Fund 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 Trust’s Board of Trustees (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 ofits 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. Inparticular, 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 classificationsprovided 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 investmentsclassified 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 2-5, 2021, PGIM Investments provided a written report (“LRMP Report”) to the Boardaddressing the operation, adequacy, and effectiveness of the Fund’s LRMP, including any material changes to the LRMP for the period from January 1, 2020 through December 31, 2020 (“Reporting Period”). The LRMP Report concludedthat 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 includingliquidity risks presented by the Fund’s investment portfolio, is found in the Fund’s Prospectus and Statement of Additional Information.

 

76 


 MAIL  TELEPHONE  WEBSITE

655 Broad Street
Newark, NJ 07102

 

(800) 225-1852

 

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. Adescription 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 theFund 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, ChiefLegal Officer Dino Capasso, Chief Compliance Officer Jonathan Corbett, Anti-Money LaunderingCompliance Officer Andrew R. French, Secretary Melissa Gonzalez, Assistant Secretary Diana N. Huffman, Assistant Secretary Kelly A. Coyne, Assistant Secretary Patrick McGuinness, Assistant Secretary Debra Rubano, Assistant Secretary • Lana Lomuti, Assistant Treasurer Russ Shupak, Assistant Treasurer • Elyse McLaughlin, Assistant Treasurer Deborah Conway, Assistant Treasurer

 

MANAGER PGIM Investments LLC 655 Broad Street
Newark, NJ 07102

 

SUBADVISERS 

PGIM Fixed Income

 

 

PGIM Limited

 

655 Broad Street

Newark, NJ07102

 

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 otherinformation about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectusand 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 receivenotification 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 International Bond Fund, PGIM Investments, Attn: Board of Trustees, 655 BroadStreet, 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 onForm N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov.

 

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 INTERNATIONAL BOND FUND

 

SHARE CLASS A C Z R6
NASDAQ PXBAX PXBCX PXBZX PXBQX
CUSIP 74441J738 74441J720 74441J696 74441J712

 

MF234E2


LOGO

 

PGIM REAL ESTATE INCOME FUND

 

 

SEMIANNUAL REPORT

APRIL 30, 2021

 

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 

Fees and Expenses

   7 

Holdings and Financial Statements

   9 

 

 

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

 

The information about the Fund’s portfolio holdings is for the period covered bythis report and is subject to change thereafter.

 

The accompanyingfinancial statements as of April 30, 2021 were not audited and, accordingly, no auditor’s opinion is expressed on them.

 

Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS), member SIPC. PGIM Real Estate is a unit of PGIM, Inc.(PGIM), a registered investment adviser. PIMS and PGIM are Prudential Financial companies. © 2021 Prudential Financial, Inc. and its related entities. PGIM Real Estate,PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide

 

2 

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Letter from the President

 

LOGO

 

Dear Shareholder,

 

We hope you find the semiannual report for the PGIM Real Estate Income Fundinformative and useful. The report covers performance for the six-month period ended April 30, 2021.

 

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 personalinvestor 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 consider it a great privilege and responsibility to helpinvestors participate in opportunities across global markets while meeting their toughest investment challenges. PGIM is a top-10 global investment manager with more than $1 trillion in assets under management. This investment expertise allowsus to deliver actively managed funds and strategies to meet the needs of investors around the globe.

 

Thank you for choosing our family of funds.

 

Sincerely,

 

LOGO

 

Stuart S. Parker, President

PGIM Real Estate Income Fund

June 15, 2021

 

PGIM Real Estate Income Fund

  3 


Your Fund’s Performance

 

Performance data quoted represents past performance. Past performance does notguarantee 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 higherthan 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.

 

  

(without sales charges)

 

Average Annual Total Returns as of 4/30/21

(with sales charges)

 
  Six Months* (%) One Year (%) Five Years (%)  Since Inception (%) 
Class A 31.52 32.21  5.71   4.60 (6/3/15)     
Class C 31.06 37.72  6.12   4.83 (6/3/15)     
Class Z 31.72 40.07  7.23   5.91 (6/3/15)     
Class R6 31.63 40.18  N/A   7.59 (12/28/16) 
Custom Blend Index

 

  25.91 29.49  5.46    
    
Average Annual Total Returns as of 4/30/21 Since Inception (%) 
      Class A, C, Z (6/3/15)  Class R6 (12/28/16) 
Custom Blend Index      5.40   6.64 

 

*Not annualized

 

Since Inception returns are provided since the Fund has less than 10 fiscal years ofreturns. Since Inception returns for the Index are measured from the closest month-end to each class’ inception date.

 

4 

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The returns in the tables do not reflectthe 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 tablebelow.

 

     
   Class A Class C Class Z Class R6
Maximum initial sales charge 5.50% of the public offering price None None None
Contingent deferred sales charge (CDSC) (as a percentage of the lower of the original purchaseprice 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
Annual distribution and service (12b-1) fees (shown as a percentage of average dailynet assets) 0.30% (0.25% currently) 1.00% None None

 

Benchmark Definitions

 

Custom Blend Index—The Custom Blend Index is a modelportfolio consisting of the FTSE EPRA/NAREIT Developed Index (80%), which is an unmanaged index and reflects the stock performance of companies engaged in specific aspects of the major real estate markets/regions of the world; and the BofA MerrillLynch 7% Constrained REIT Preferred Securities Index (20%), which is an unmanaged index that is a subset of the BofA Merrill Lynch Fixed Rate Preferred Securities Index including all REIT-issued preferred securities.

 

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

 

PGIM Real Estate Income Fund

  5 


Your Fund’s Performance(continued)

 

Presentation of Fund Holdings as of 4/30/21

 

Ten Largest Holdings  Real Estate Sectors % of Net Assets
Global Medical REIT, Inc.  Health Care REITs 5.8%
SL Green Realty Corp.  Office REITs 4.7%
MGM Growth Properties LLC (Class A Stock)  Hotel & Resort REITs 4.7%
Essential Properties Realty Trust, Inc.  Diversified REITs 4.6%
Postal Realty Trust, Inc. (Class A Stock)  Office REITs 4.6%
New World Development Co. Ltd. (Hong Kong)  Diversified Real Estate Activities 4.0%
NETSTREIT Corp.  Retail REITs 3.9%
Simon Property Group, Inc.  Retail REITs 3.7%
Highwoods Properties, Inc.  Office REITs 3.7%
National Retail Properties, Inc.  Retail REITs 3.7%

 

Holdings reflect only long-term investments and aresubject to change.

 

6 

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Fees and Expenses

 

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 tohelp 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 endedApril 30, 2021. The example is for illustrative purposes only; you should consult the Fund’s Prospectus for information on initial and subsequent minimum investment requirements.

 

Actual Expenses

The first linefor 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 paidover 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-MonthPeriod” 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 thefollowing 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 doso, 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 followingpage. 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 annualmaintenance 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 thenumber 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

 

PGIM Real Estate Income Fund

  7 


Fees and Expenses(continued)

 

and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table.Additional fees have the effect of reducing investment returns.

 

Please notethat 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 ongoingcosts 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 Real Estate
Income Fund
 Beginning Account
Value
November 1, 2020
  Ending Account
Value
April 30, 2021
  Annualized
Expense Ratio
Based onthe
Six-Month Period
  Expenses Paid
During the
Six-Month Period*
 
Class A Actual $1,000.00  $1,315.20   1.35 $7.75 
 Hypothetical $1,000.00  $1,018.10   1.35 $6.76 
Class C Actual $1,000.00  $1,310.60   2.10 $12.03 
 Hypothetical $1,000.00  $1,014.38   2.10 $10.49 
Class Z Actual $1,000.00  $1,317.20   1.10 $6.32 
 Hypothetical $1,000.00  $1,019.34   1.10 $5.51 
Class R6 Actual $1,000.00  $1,316.30   1.10 $6.32 
  Hypothetical $1,000.00  $1,019.34   1.10 $5.51 

 

*Fund expenses (net of fee waivers or subsidies, if any) for each share class areequal 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 April 30, 2021, and divided by the 365 days inthe Fund’s fiscal year ending October 31, 2021 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

8 

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Schedule of Investments(unaudited)

as of April 30, 2021

 

  Description  Shares   Value 

LONG-TERM INVESTMENTS    99.4%

    

COMMON STOCKS    83.3%

    

Diversified Real EstateActivities    8.9%

          

Hang Lung Properties Ltd. (Hong Kong)

   517,823   $1,414,096 

New World Development Co. Ltd. (Hong Kong)

   456,986    2,419,165 

Sun Hung Kai Properties Ltd. (Hong Kong)

   98,519    1,486,400 
    

 

 

 
    

 

 

 

5,319,661

 

 

Diversified REITs    7.1%

          

Activia Properties, Inc. (Japan)

   117    538,482 

Essential Properties Realty Trust, Inc.

   104,507    2,737,038 

Stockland (Australia)

   266,047    959,979 
    

 

 

 
    

 

 

 

4,235,499

 

 

Health Care REITs    17.2%

          

CareTrust REIT, Inc.

   84,235    2,036,802 

Community Healthcare Trust, Inc.

   20,487    1,043,198 

Global Medical REIT, Inc.

   240,266    3,450,221 

New Senior Investment Group, Inc.

   251,933    1,667,796 

Primary Health Properties PLC (United Kingdom)

   198,571    414,722 

Welltower, Inc.

   21,484    1,611,945 
    

 

 

 
    

 

 

 

10,224,684

 

 

Hotel & ResortREITs    4.7%

          

MGM Growth Properties LLC (Class A Stock)

   77,684    2,798,178 

Industrial REITs    1.9%

          

Mapletree Logistics Trust (Singapore)

   772,578    1,153,711 

Office REITs    17.8%

          

alstria office REIT-AG (Germany)

   84,278    1,507,360 

Highwoods Properties, Inc.

   49,136    2,200,802 

Hudson Pacific Properties, Inc.

   48,417    1,361,002 

Postal Realty Trust, Inc. (Class A Stock)

   139,205    2,713,106 

SL Green Realty Corp.

   38,238    2,829,994 
    

 

 

 
    

 

 

 

10,612,264

 

 

Residential REITs    2.3%

          

Equity Residential

   11,165    828,778 

UDR, Inc.

   11,651    541,189 
    

 

 

 
    

 

 

 

1,369,967

 

 

 

See Notes to Financial Statements.

 

PGIM Real Estate Income Fund  9 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

  Description  Shares   Value 

COMMON STOCKS (Continued)

    

Retail REITs    20.9%

          

Agree Realty Corp.

   22,773   $1,602,308 

Japan Metropolitan Fund Investment Corp. (Japan)

   1,272    1,251,822 

National Retail Properties, Inc.

   46,930    2,178,491 

NETSTREIT Corp.

   110,401    2,299,653 

Regency Centers Corp.

   22,213    1,414,080 

Simon Property Group, Inc.

   18,214    2,217,372 

Supermarket Income REIT PLC (United Kingdom)

   354,600    556,404 

Urban Edge Properties

   48,339    911,190 
    

 

 

 
    

 

 

 

12,431,320

 

 

Specialized REITs    2.5%

          

Life Storage, Inc.

   9,999    960,504 

QTS Realty Trust, Inc. (Class A Stock)

   7,790    517,957 
    

 

 

 
    

 

 

 

1,478,461

 

 

    

 

 

 

TOTAL COMMON STOCKS
(cost $43,802,746)

     49,623,745 
    

 

 

 

PREFERRED STOCKS    16.1%

    

Diversified REITs    4.6%

          

Armada Hoffler Properties, Inc., Series A, 6.750%, Maturing 06/18/24(oo)

   35,000    943,250 

Gladstone Commercial Corp., Series E, 6.625%, Maturing 10/31/24(oo)

   39,559    1,039,611 

PS Business Parks, Inc., Series W, 5.200%, Maturing 10/20/21(oo)

   30,048    774,637 
    

 

 

 
    

 

 

 

2,757,498

 

 

Industrial REITs    3.0%

          

Monmouth Real Estate Investment Corp., Series C, 6.125%, Maturing 09/15/21(oo)

   34,020    869,211 

Rexford Industrial Realty, Inc., Series A, 5.875%, Maturing 08/16/21(oo)

   35,770    907,127 
    

 

 

 
    

 

 

 

1,776,338

 

 

Office REITs    1.4%

          

Office Properties Income Trust, 5.875%, Maturing 05/01/46

   33,192    834,779 

 

See Notes to Financial Statements.

 

10 


   Description  Shares   Value 

PREFERRED STOCKS (Continued)

    

Residential REITs    5.0%

          

American Homes 4 Rent, Series G, 5.875%, Maturing 07/17/22(oo)

   49,549   $1,308,589 

Centerspace, Series C, 6.625%, Maturing 10/02/22(oo)

   34,771    911,132 

UMH Properties, Inc., Series C, 6.750%, Maturing 07/26/22(oo)

   28,516    741,416 
    

 

 

 
     2,961,137 

Specialized REITs    2.1%

          

EPR Properties, Series G, 5.750%, Maturing 11/30/22(oo)

   49,632    1,257,675 
    

 

 

 

TOTAL PREFERRED STOCKS
(cost $9,205,930)

     9,587,427 
    

 

 

 

TOTAL LONG-TERM INVESTMENTS
(cost $53,008,676)

     59,211,172 
    

 

 

 

SHORT-TERM INVESTMENT    0.6%

    

AFFILIATED MUTUAL FUND

    

PGIM Core Ultra Short Bond Fund
(cost $379,424)(wa)

   379,424    379,424 
    

 

 

 

TOTAL INVESTMENTS    100.0%
(cost $53,388,100)

     59,590,596 

Liabilities in excess of other assets    (0.0)%

     (2,368
    

 

 

 

NET ASSETS    100.0%

    $        59,588,228 
    

 

 

 

 

 

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

LIBOR—London Interbank Offered Rate

REITs—Real Estate Investment Trust

(oo)

Perpetual security. Maturity date represents next call date.

(wa)

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

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

 

See Notes to Financial Statements.

 

PGIM Real Estate Income Fund  11 


Schedule of Investments(unaudited) (continued)

as of April 30, 2021

 

The following is a summary of the inputs used as of April 30, 2021 in valuing such portfolio securities:

 

    Level 1      Level 2      Level 3   

Investments in Securities

   

Assets

   

Common Stocks

   

Diversified Real Estate Activities

 $  $5,319,661   $— 

Diversified REITs

  2,737,038   1,498,461    

Health Care REITs

  9,809,962   414,722    

Hotel & Resort REITs

  2,798,178       

Industrial REITs

     1,153,711    

Office REITs

  9,104,904   1,507,360    

Residential REITs

  1,369,967       

Retail REITs

  10,623,094   1,808,226    

Specialized REITs

  1,478,461       

Preferred Stocks

   

Diversified REITs

  2,757,498       

Industrial REITs

  1,776,338       

Office REITs

  834,779       

Residential REITs

  2,961,137       

Specialized REITs

  1,257,675       

Affiliated Mutual Fund

  379,424       
 

 

 

  

 

 

  

 

 

 

Total

 $47,888,455  $11,702,141   $— 
 

 

 

  

 

 

  

 

 

 

Sector Classification:

The sectorclassification of investments and liabilities in excess of other assets shown as a percentage of net assets as of April 30, 2021 were as follows:

 

Retail REITs

  20.9

Office REITs

  19.2 

Health Care REITs

  17.2 

Diversified REITs

  11.7 

Diversified Real Estate Activities

  8.9 

Residential REITs

  7.3 

Industrial REITs

  4.9 

Hotel & Resort REITs

  4.7 

Specialized REITs

  4.6 

Affiliated Mutual Fund

  0.6
 

 

 

 
  100.0 

Liabilities in excess of other assets

  (0.0)* 
 

 

 

 
  100.0
 

 

 

 

 

*

Less than +/- 0.05%

 

 

See Notes to Financial Statements.

 

12 


Statement of Assets and Liabilities (unaudited)

as ofApril 30, 2021

 

Assets

     

Investments at value:

  

Unaffiliated investments (cost $53,008,676)

  $59,211,172 

Affiliated investments (cost $379,424)

   379,424 

Dividends receivable

   84,047 

Receivable for Fund shares sold

   5,640 

Tax reclaim receivable

   3,692 

Prepaid expenses

   1,385 
  

 

 

 

Total Assets

   59,685,360 
  

 

 

 

Liabilities

     

Management fee payable

   30,010 

Registration fees payable

   16,648 

Custodian and accounting fees payable

   16,566 

Audit fee payable

   14,625 

Legal fees and expenses payable

   5,511 

Payable for Fund shares purchased

   5,142 

Shareholders’ reports payable

   5,104 

Accrued expenses and other liabilities

   1,608 

Trustees’ fees payable

   1,032 

Distribution fee payable

   587 

Affiliated transfer agent fee payable

   297 

Payable to custodian

   2 
  

 

 

 

Total Liabilities

   97,132 
  

 

 

 

Net Assets

  $59,588,228 
  

 

 

 
      

Net assets were comprised of:

  

Shares of beneficial interest, at par

  $         6,002 

Paid-in capital in excess of par

   51,682,657 

Total distributable earnings (loss)

   7,899,569 
  

 

 

 

Net assets, April 30, 2021

  $59,588,228 
  

 

 

 

 

See Notes to Financial Statements.

 

PGIM Real Estate Income Fund  13 


Statement of Assets and Liabilities (unaudited)

as ofApril 30, 2021

 

Class A

     

Net asset value and redemption price per share,
($1,562,143 ÷ 157,560 shares of beneficial interest issued andoutstanding)

  $9.91 

Maximum sales charge (5.50% of offering price)

   0.58 
  

 

 

 

Maximum offering price to public

  $10.49 
  

 

 

 

Class C

     

Net asset value, offering price and redemption price per share,
($347,032 ÷ 35,011 shares of beneficial interestissued and outstanding)

  $9.91 
  

 

 

 

Class Z

     

Net asset value, offering price and redemption price per share,
($13,371,832 ÷ 1,344,537 shares of beneficialinterest issued and outstanding)

  $9.95 
  

 

 

 

Class R6

     

Net asset value, offering price and redemption price per share,
($44,307,221 ÷ 4,464,887 shares of beneficialinterest issued and outstanding)

  $9.92 
  

 

 

 

 

See Notes to Financial Statements.

 

14 


Statement of Operations(unaudited)

Six Months Ended April 30, 2021

 

Net Investment Income (Loss)

     

Income

  

Unaffiliated dividend income (net of $12,927 foreign withholding tax)

  $938,872 

Affiliated dividend income

   496 

Income from securities lending, net

   5 
  

 

 

 

Total income

   939,373 
  

 

 

 

Expenses

  

Management fee

   176,422 

Distribution fee(a)

   3,287 

Registration fees(a)

   29,988 

Custodian and accounting fees

   28,722 

Audit fee

   16,429 

Legal fees and expenses

   8,322 

Transfer agent’s fees and expenses (including affiliated expense of $759)(a)

   7,830 

Trustees’ fees

   5,402 

Shareholders’ reports

   4,711 

Miscellaneous

   10,116 
  

 

 

 

Total expenses

   291,229 

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

   (45,338

  Distribution fee waiver(a)

   (290
  

 

 

 

Net expenses

   245,601 
  

 

 

 

Net investment income (loss)

   693,772 
  

 

 

 

Realized And Unrealized Gain (Loss) On Investment And ForeignCurrency Transactions

     

Net realized gain (loss) on:

  

Investment transactions

   3,253,134 

Foreign currency transactions

   1,791 
  

 

 

 
   3,254,925 
  

 

 

 

Net change in unrealized appreciation (depreciation) on:

  

Investments

   7,599,409 

Foreign currencies

   (863
  

 

 

 
   7,598,546 
  

 

 

 

Net gain (loss) on investment and foreign currency transactions

   10,853,471 
  

 

 

 

Net Increase (Decrease) In Net Assets Resulting From Operations

  $11,547,243 
  

 

 

 

 

(a)

Class specific expenses and waivers were as follows:

 

   Class A  Class C  Class Z  Class R6 

Distribution fee

  1,739   1,548       

Registration fees

  7,389   7,389   7,389   7,821 

Transfer agent’s fees and expenses

  1,029   279   6,469   53 

Fee waiver and/or expense reimbursement

  (8,603  (7,730  (15,751  (13,254

Distribution fee waiver

  (290         

 

See Notes to Financial Statements.

 

PGIM Real Estate Income Fund  15 


Statements of Changes in Net Assets (unaudited)

 

  Six Months Ended
April 30, 2021
  Year Ended
October 31, 2020
 

Increase (Decrease) in Net Assets

        

Operations

  

Net investment income (loss)

 $693,772  $419,247 

Net realized gain (loss) on investment and foreign currency transactions

  3,254,925   (870,363

Net change in unrealized appreciation (depreciation) on investments and foreign currencies

  7,598,546   (2,992,877
 

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

  11,547,243   (3,443,993
 

 

 

  

 

 

 

Dividends and Distributions

  

Distributions from distributable earnings

  

Class A

  (22,268  (63,029

Class C

  (4,578  (42,882

Class Z

  (211,327  (975,513

Class R6

  (649,669  (18,654
 

 

 

  

 

 

 
  (887,842  (1,100,078
 

 

 

  

 

 

 

Tax return of capital distributions

  

Class A

     (10,694

Class C

     (7,275

Class Z

     (165,505

Class R6

     (3,165
 

 

 

  

 

 

 
     (186,639
 

 

 

  

 

 

 

Fund share transactions

  

Net proceeds from shares sold

  18,844,558   28,004,160 

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

  886,386   1,279,740 

Cost of shares purchased

  (2,949,284  (10,568,326
 

 

 

  

 

 

 

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

  16,781,660   18,715,574 
 

 

 

  

 

 

 

Total increase (decrease)

  27,441,061   13,984,864 

Net Assets:

        

Beginning of period

  32,147,167   18,162,303 
 

 

 

  

 

 

 

End of period

 $59,588,228  $  32,147,167 
 

 

 

  

 

 

 

 

See Notes to Financial Statements.

 

16 


Notes to Financial Statements (unaudited)

 

1.    Organization

Prudential Investment Portfolios 9 (the“Trust”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust currently consists of five series: PGIMAbsolute Return Bond Fund, PGIM QMA Large-Cap Core Equity Fund and PGIM Select Real Estate Fund, each of which are diversified funds for purposes of the 1940 Act and PGIM International Bond Fund and PGIM RealEstate Income Fund, each of which are non-diversified funds for purposes of the 1940 Act, and therefore, may invest a greater percentage of their assets in the securities of a single company or other issuerthan a diversified fund. These financial statements relate only to the PGIM Real Estate Income Fund (the “Fund”).

The investment objective of the Fund isto seek income and 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 Easterntime) 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 quotationsare readily available. The Trust’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 (“PGIMInvestments” 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. Thevaluation 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 theBoard’s review at its first quarterly meeting following the quarter in which such actions take place.

 

 

PGIM Real Estate Income Fund  17 


Notes to Financial Statements (unaudited) (continued)

 

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

Various inputs determine how the Fund’s investmentsare 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 ASCTopic 820 - Fair Value Measurements and Disclosures.

Common or preferred stocks, exchange-traded funds and derivative instruments, if applicable, that are traded ona 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 extentthese 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 aregenerally 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.

Foreign equities traded on foreign securities exchanges are generally valued using pricing vendor services that provide model prices derived using adjustment factorsbased on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair valuehierarchy. The models generate an evaluated adjustment factor for each security, which is applied to the local closing price to adjust it for post closing market movements up to the time the Fund is valued. Utilizing that evaluated adjustmentfactor, the vendor provides an evaluated price for each security. If the vendor does not provide an evaluated price, securities are valued in accordance with exchange-traded common and preferred stock valuation policies discussed above.

Investments in open-end funds (other than exchange-traded funds) are valued at their net asset values as of the close of the NYSEon 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 eventthat unobservable inputs are used when determining such valuations, the securities will be

 

18 


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

When determining the fair value of securities, some of the factors influencing the valuationinclude: 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 ofthe 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 Managerregarding 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 mutualfunds to calculate their net asset values.

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

(i) market value of investment securities, other assets and liabilities — at the current ratesof exchange;

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

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 notgenerally 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 realizedforeign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions.

Net realized gains (losses) on foreign currencytransactions 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 theamounts 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 denominatedassets and liabilities (other than investments) at period end exchange rates.

Master Netting Arrangements: The Trust, on behalf of the Fund, is subject tovarious 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 andthe counterparty permits the

 

 

PGIM Real Estate Income Fund  19 


Notes to Financial Statements (unaudited) (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 toset-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-offis enforceable by law.

Rights: The Fund held rights acquired either through a direct purchase or pursuant to corporate actions. Rights entitle the holder tobuy a proportionate amount of common stock, or such other security that the issuer may specify, at a specific price and time through the expiration dates. Such rights are held as long positions by the Fund until exercised, sold or expired. Rightsare valued at fair value in accordance with the Board approved fair valuation procedures.

Securities Lending: The Fund lends its portfolio securities tobanks 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 theprevious 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, thefinancial 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. Upontermination of the loan, the borrower will return to the Fund securities identical to the loaned securities. The remaining maturities of the securities lending transactions are considered overnight and continuous. Should the borrower of thesecurities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral.

The Fund recognizes income, net of anyrebate 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 paymentsare 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 anyunrealized 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 thecollateral invested upon liquidation of the collateral. Net earnings from securities lending are disclosed in the Statement of Operations.

 

20 


Equity and Mortgage Real Estate Investment Trusts (collectively REITs): The Fund invested in REITs, which reportinformation 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 andrecorded accordingly. When material, these estimates are adjusted periodically when the actual source of distributions is disclosed by the REITs.

SecuritiesTransactions 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 recordedon 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 thatmay 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 relativeproportion 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 feesand 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 todistribute 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, netof reclaimable amounts, at the time the related income is earned.

Tax reform legislation commonly referred to as the Tax Cuts and Jobs Act permits a direct REITshareholder to claim a 20% “qualified business income” deduction for ordinary REIT dividends. The tax legislation did not expressly permit regulated investment companies (“RICs”) paying dividends attributable to such income topass through this special treatment to its shareholders. On January 18, 2019, the Internal Revenue Service issued final regulations that permit RICs to pass through “qualified REIT dividends” to their shareholders.

Dividends and Distributions: The Fund expects to pay dividends from net investment income quarterly. Distributions from net realized capital and currency gains,if any, are declared and paid annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from GAAP, are recorded on theex-date. Permanent book/tax differences relating to income and gain (loss) are reclassified between total distributable earnings (loss) and paid-in capital in excess ofpar, as appropriate.

 

PGIM Real Estate Income Fund  21 


Notes to Financial Statements (unaudited) (continued)

 

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

3.    Agreements

The Trust, on behalf of the Fund, has amanagement 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, Inc., which provides subadvisory services to the Fund through its business unit, PGIM Real Estate andPGIM Real Estate (UK) Limited, an indirect wholly-owned subsidiary of PGIM, Inc. (each a “subadviser” and collectively the “subadvisers”). The Manager pays for the services of the Subadvisors.

The management fee paid to the Manager is accrued daily and payable monthly at an annual rate of 0.80% of the Fund’s average daily net assets up to and including$1 billion, 0.78% of the next $2 billion, 0.76% of the next $2 billion, 0.75% of the next $5 billion and 0.74% of the Fund’s average daily net assets in excess of $10 billion. The effective management fee rate beforeany waivers and/or expense reimbursements was 0.80% for the reporting period ended April 30, 2021.

The Manager has contractually agreed, throughFebruary 28, 2022, to limit total annual operating expenses after fee waivers and/or expense reimbursements to 1.35% of average daily net assets for Class A shares, 2.10% of average daily net assets for Class C shares, 1.10% ofaverage daily net assets for Class Z shares and 1.10% of average daily net assets for Class R6 shares. This contractual waiver excludes interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred taxexpenses), 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 anyother 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 theManager within the same fiscal year during which such waiver/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.

 

22 


The Trust, 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 Z and Class R6 shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A and Class C 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 of up to 0.30% and 1% of the average daily net assets of the Class A and Class C shares, respectively.PIMS has contractually agreed through February 28,2022 to limit such fees to 0.25% of the average daily net assets of Class A shares. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z orClass R6 shares of the Fund.

For the reporting period ended April 30, 2021, PIMS received $13,460 in front-endsales charges resulting from sales of Class A shares. Additionally, for the reporting period ended April 30, 2021, PIMS did not receive any contingent deferred sales charges imposed upon redemptions by certain Class A and Class Cshareholders. From these fees, PIMS paid such sales charges to broker-dealers, who in turn paid commissions to salespersons and incurred other distribution costs.

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

4.    Other Transactions with Affiliates

Prudential MutualFund 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 includecertain 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 PGIMInstitutional Money Market Fund (the “Money Market Fund”), each a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. PGIM Investments and/or its affiliates are paid fees orreimbursed for providing their services to the Core Fund and the Money Market 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 Statementof Operations as “Affiliated dividend income” and “Income from securities lending, net”, respectively.

The Fund may enter into certainsecurities 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 certainconditions, 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

 

PGIM Real Estate Income Fund  23 


Notes to Financial Statements (unaudited) (continued)

 

directors/trustees, and/or common officers. For the reporting period ended April 30, 2021, no 17a-7 transactions were enteredinto by the Fund.

5.    Portfolio Securities

Theaggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the reporting period ended April 30, 2021, were $53,496,745 and $37,041,325, respectively.

A summary of the cost of purchases and proceeds from sales of shares of affiliated mutual funds for the reporting period ended April 30, 2021, is presented asfollows:

 

Value,

Beginning

of
Period

 Cost of
Purchases
  Proceeds
from Sales
  Change in
Unrealized
Gain
(Loss)
  Realized
Gain
(Loss)
  Value,
End of
Period
  Shares,
End
of
Period
  Income 

Short-Term Investments – Affiliated Mutual Funds:

     

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

     
$  36,440 $20,225,792  $19,882,808  $  $  $379,424   379,424  $496 

PGIM Institutional Money Market Fund (1)(wa)

     
        —          26,480           26,480     —     —            —         — 

 

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 
$  36,440 $20,252,272  $19,909,288  $  $  $379,424   $496 

 

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

 

 

(1)

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

(wa)

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

6.    Tax Information

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of April 30, 2021 were as follows:

 

                                 Tax Basis

  $53,434,397 
  

 

 

 

Gross Unrealized Appreciation

   6,230,063 

Gross Unrealized Depreciation

   (73,864
  

 

 

 

    Net Unrealized Appreciation

  $6,156,199 
  

 

 

 

The GAAP basis may differ from tax basis due to certain tax-related adjustments.

For federal income tax purposes, the Fund had a capital loss carryforward as of October 31, 2020 of approximately $1,286,000 which can be carried forward for anunlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses.

 

24 


The Manager has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open taxyears 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 taxreturns for each of the four fiscal years up to the most recent fiscal year ended October 31, 2020 are subject to such review.

7.    Capital and Ownership

The Fund offers Class A,Class C, Class Z 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 sellthese 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 benefitplans. 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 shareswill automatically convert to Class A shares on a monthly basis approximately eight years (ten years prior to January 22, 2021) after purchase. Class Z and Class R6 shares are not subject to any sales or redemption charges andare 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 toone or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest, below.

The Trust has authorized an unlimitednumber of shares of beneficial interest of the Fund at $0.001 par value per share, currently divided into four classes, designated Class A, Class C, Class Z and Class R6.

As of April 30, 2021, Prudential, through its affiliated entities, including affiliated funds (if applicable), owned shares of the Fund as follows:

 

   Number of Shares            Percentage of         
Outstanding Shares         

Class Z

  706,133                  52.5%    

Class R6

  4,464,601                  99.9%    

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

 

Affiliated  Unaffiliated
    

Number of

Shareholders

  Percentage of
Outstanding Shares
  

Number of

Shareholders

  Percentage of
Outstanding Shares

2

  86.1%  1  11.9%

 

 

PGIM Real Estate Income Fund  25 


Notes to Financial Statements (unaudited) (continued)

 

Transactions in shares of beneficial interest were as follows:

 

Class A

    Shares   Amount 

Six months ended April 30, 2021:

      

Shares sold

     61,404   $560,606 

Shares issued in reinvestment of dividends and distributions

     2,321    21,632 

Shares purchased

     (19,065   (172,331
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     44,660   $409,907 
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     73,503   $633,458 

Shares issued in reinvestment of dividends and distributions

     7,918    70,705 

Shares purchased

     (54,331   (478,284
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     27,090   $225,879 
    

 

 

   

 

 

 

Class C

          

Six months ended April 30, 2021:

      

Shares sold

     765   $7,123 

Shares issued in reinvestment of dividends and distributions

     496    4,578 

Shares purchased

     (1,160   (10,288
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     101   $1,413 
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     16,306   $169,704 

Shares issued in reinvestment of dividends and distributions

     5,405    50,157 

Shares purchased

     (46,711   (387,442
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     (25,000  $(167,581
    

 

 

   

 

 

 

Class Z

          

Six months ended April 30, 2021:

      

Shares sold

     400,818   $3,559,513 

Shares issued in reinvestment of dividends and distributions

     22,647    210,507 

Shares purchased

     (92,162   (813,283
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     331,303   $2,956,737 
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     317,921   $2,882,817 

Shares issued in reinvestment of dividends and distributions

     122,355    1,137,059 

Shares purchased

     (966,399   (9,534,838
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     (526,123  $(5,514,962
    

 

 

   

 

 

 

Class R6

          

Six months ended April 30, 2021:

      

Shares sold

     1,590,714   $14,717,316 

Shares issued in reinvestment of dividends and distributions

     70,098    649,669 

Shares purchased

     (219,532   (1,953,382
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     1,441,280   $13,413,603 
    

 

 

   

 

 

 

Year ended October 31, 2020:

      

Shares sold

     3,027,301   $24,318,181 

Shares issued in reinvestment of dividends and distributions

     2,578    21,819 

Shares purchased

     (21,124   (167,762
    

 

 

   

 

 

 

Net increase (decrease) in shares outstanding

     3,008,755   $24,172,238 
    

 

 

   

 

 

 

 

26 


8.    Borrowings

The Trust, on behalf of the Fund, along with other affiliated registered investment companies (the “Participating Funds”), is a party to a Syndicated CreditAgreement (“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 SCA.

 

   SCA

Term of Commitment

 10/2/2020 – 9/30/2021

Total Commitment

 $ 1,200,000,000

Annualized Commitment Fee on

the Unused Portion of the SCA

 0.15%

Annualized Interest Rate on

Borrowings

 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 predeterminedmathematical 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 utilizethe 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 theParticipating Funds in the SCA equitably.

The Fund utilized the SCA during the reporting period ended April 30, 2021. The average daily balance for the 4 daysthat the Fund had loans outstanding during the period was approximately $149,250, borrowed at a weighted average interest rate of 1.42%. The maximum loan outstanding amount during the period was $291,000. At April 30, 2021, the Fund did nothave 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 theFund’s Prospectus and Statement of Additional Information.

Equity and Equity-Related Securities Risk: Equity and equity-related securities may besubject 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. Differentparts of a market can react differently to adverse issuer, market, regulatory, political and economic developments.

Foreign Securities Risk: The Fund’sinvestments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. The securities of such issuers may trade in markets that are less liquid, less regulated and more volatile than US

 

PGIM Real Estate Income Fund  27 


Notes to Financial Statements (unaudited) (continued)

 

markets. The value ofthe Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may alsoaffect the value of these securities.

Large Shareholder and Large Scale Redemption Risk: Certain individuals, accounts, funds (including funds affiliatedwith 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 theFund’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 investmentobjective 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.

Market Disruption and Geopolitical Risks: International wars or conflicts and geopolitical developments in foreign countries, along with instability in regionssuch as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the United States or around the world, public health epidemics such as the outbreak of infectious diseases like the recent outbreak of coronavirus globally or the2014–2016 outbreak in West Africa of the Ebola virus, and other similar events could adversely affect the U.S. and foreign financial markets, including increases in market volatility, reduced liquidity in the securities markets and governmentintervention, and may cause further long-term economic uncertainties in the United States and worldwide generally. The coronavirus pandemic and the related governmental and public responses have had and may continue to have an impact on theFund’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. Preventative or protective actions thatgovernments may take in respect of pandemic or epidemic diseases may 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 inwhich the Fund invests. Government intervention in markets may impact interest rates, market volatility and security pricing. The occurrence, reoccurrence and pendency of such diseases could adversely affect the economies (including through changesin business activity and increased unemployment) and financial markets either in specific countries or worldwide.

Market Risk: Securities markets may bevolatile and the market prices of the Fund’s securities may decline. Securities fluctuate in price based on changes in an issuer’s

 

28 


financial condition and overall market and economic conditions. If the market prices of the securities owned by the Fundfall, the value of your investment in the Fund will decline.

Non-diversification Risk: The Fund is non-diversified for purposes of the 1940 Act. This means that the Fund may invest a greater percentage of its assets in the securities of a single company or other issuer than a diversified fund. Investing in a non-diversified fund involves greater risk than investing in a diversified fund because a loss resulting from the decline in value of any one security may represent a greater portion of the total assets of a non-diversified fund.

Real Estate Related Securities Risk: An investment in the Fund will be closely linked to theperformance of the real estate markets. Real estate securities are subject to the same risks as direct investments in real estate and mortgages, and their value will depend on the value of the underlying properties or the underlying loans orinterests. The underlying loans may be subject to the risks of default or of prepayments that occur earlier or later than expected, and such loans may also include so-called “subprime” mortgages. Thevalue of these securities will rise and fall in response to many factors, including economic conditions, the demand for rental property and interest rates. In particular, the value of these securities may decline when interest rates rise and willalso be affected by the real estate market and by the management of the underlying properties.

Real Estate Investment Trust (REIT) Risk: Investing in REITsinvolves 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 beaffected 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 andself-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 indirectlybear 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 meetcertain 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 offailing 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.

Because the Fund invests in real estate securities, including REITs, the Fund is subject to the risks of investing in the real estate industry, such as changes ingeneral and local economic conditions, the supply and demand for real estate and changes in zoning and tax laws. Since the Fund concentrates in the real estate industry, its holdings can vary significantly from broad market indexes. As a result, theFund’s performance can deviate

 

PGIM Real Estate Income Fund  29 


Notes to Financial Statements (unaudited) (continued)

 

from the performanceof such indexes. Because the Fund invests in stocks, there is the risk that the price of a particular stock owned by the Fund could go down or pay lower-than-expected or no dividends. In addition to an individual stock losing value, the value of theequity markets or of companies comprising the real estate industry could go down.

10.    Recent Regulatory Developments

On December 3, 2020, the SEC announced that it voted to adopt a new rule that establishes an updated regulatory framework for fund valuation practices (the“Rule”). The Rule, in part, provides (i) a framework for determining fair value in good faith and (ii) provides for a fund Board’s assignment of its responsibility for the execution of valuation-related activities to afund’s investment adviser. Further, the SEC is rescinding previously issued guidance on related issues. The Rule took effect on March 8, 2021, with a compliance date of September 8, 2022. Management is currently evaluating the Ruleand its impact to the Fund.

 

30 


Financial Highlights(unaudited)

 

Class A Shares                                
      

Six Months

Ended

April 30,

2021

     

Year Ended October 31,

 
      2020  2019  2018  2017  2016 
Per Share Operating Performance(a):                                
Net Asset Value, Beginning of Period      $7.67       $10.66   $8.76   $9.62   $9.66   $9.59 
Income (loss) from investment operations:                                
Net investment income (loss)      0.13       0.27   0.28   0.34   0.39   0.24 
Net realized and unrealized gain (loss) on investment and foreign currency transactions      2.27       (2.43  1.97   (0.63  0.05   0.39 
Total from investment operations      2.40       (2.16  2.25   (0.29  0.44   0.63 
Less Dividends and Distributions:                                
Dividends from net investment income      (0.16      (0.63  (0.35  (0.50  (0.48  (0.56
Tax return of capital distributions      -       (0.14  -   (0.07  -   - 
Distributions from net realized gains      -       (0.06  -   -   -   - 
Total dividends and distributions      (0.16      (0.83  (0.35  (0.57  (0.48  (0.56
Net asset value, end of period      $9.91       $7.67   $10.66   $8.76   $9.62   $9.66 
Total Return(b):      31.52      (21.25)%   26.26  (3.15)%   4.60  6.92
                                 
Ratios/Supplemental Data:                        
Net assets, end of period (000)      $1,562       $866   $915   $621   $914   $637 
Average net assets (000)      $1,169       $796   $677   $878   $744   $186 
Ratios to average net assets(c)(d):                                
Expenses after waivers and/or expense reimbursement      1.35%(e)       1.36  1.35  1.36  1.35  1.35
Expenses before waivers and/or expense reimbursement      2.88%(e)       4.78  4.65  4.85  3.30  3.37
Net investment income (loss)      2.95%(e)       3.18  2.91  3.73  4.00  2.45
Portfolio turnover rate(f)(g)       84      235  257  153  137  113

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share onthe 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 notannualized.

(c)

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

(d)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(e)

Annualized.

(f)

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

(g)

Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions (if any).

 

See Notes to Financial Statements.

 

PGIM Real Estate Income Fund  31 


Financial Highlights(unaudited) (continued)

 

Class C Shares                               
     

Six Months

Ended

April 30,

2021

     Year Ended October 31, 
        2020  2019  2018  2017  2016 
Per Share Operating Performance(a):                              
Net Asset Value, Beginning of Period    $7.67       $10.66   $8.76   $9.62   $9.66   $9.58 
Income (loss) from investment operations:                              
Net investment income (loss)    0.10       0.23   0.21   0.27   0.32   0.19 
Net realized and unrealized gain (loss) on investment and foreign currency transactions    2.27       (2.45  1.97   (0.63  0.05   0.38 
Total from investment operations    2.37       (2.22  2.18   (0.36  0.37   0.57 
Less Dividends and Distributions:                              
Dividends from net investment income    (0.13      (0.57  (0.28  (0.44  (0.41  (0.49
Tax return of capital distributions    -       (0.14  -   (0.06  -   - 
Distributions from net realized gains    -       (0.06  -   -   -   - 
Total dividends and distributions    (0.13      (0.77  (0.28  (0.50  (0.41  (0.49
Net asset value, end of period    $9.91       $7.67   $10.66   $8.76   $9.62   $9.66 
Total Return(b):    31.06      (21.86)%   25.34  (3.85)%   3.83  6.22
                               
Ratios/Supplemental Data:                       
Net assets, end of period (000)    $347       $268   $639   $336   $293   $321 
Average net assets (000)    $312       $500   $510   $314   $309   $151 
Ratios to average net assets(c)(d):                              
Expenses after waivers and/or expense reimbursement    2.10%(e)       2.11  2.10  2.11  2.10  2.10
Expenses before waivers and/or expense reimbursement    7.09%(e)       6.45  5.86  8.85  4.00  4.78
Net investment income (loss)    2.29%(e)       2.62  2.21  2.98  3.29  1.98
Portfolio turnover rate(f)(g)     84      235  257  153  137  113

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share onthe 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 notannualized.

(c)

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

(d)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(e)

Annualized.

(f)

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

(g)

Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions (if any).

 

See Notes to Financial Statements.

 

32 


Class Z Shares                                
      

Six Months
Ended
April 30,

2021

     Year Ended October 31, 
   2020  2019  2018  2017  2016 
Per Share Operating Performance(a):                                
Net Asset Value, Beginning of Period      $7.69       $10.69   $8.78   $9.62   $9.66   $9.59 
Income (loss) from investment operations:                                
Net investment income (loss)      0.14       0.34   0.31   0.39   0.40   0.38 
Net realized and unrealized gain (loss) on investment and foreign currency transactions      2.30       (2.49  1.98   (0.64  0.06   0.28 
Total from investment operations      2.44       (2.15  2.29   (0.25  0.46   0.66 
Less Dividends and Distributions:                                
Dividends from net investment income      (0.18      (0.65  (0.38  (0.52  (0.50  (0.59
Tax return of capital distributions      -       (0.14  -   (0.07  -   - 
Distributions from net realized gains      -       (0.06  -   -   -   - 
Total dividends and distributions      (0.18      (0.85  (0.38  (0.59  (0.50  (0.59
Net asset value, end of period      $9.95       $7.69   $10.69   $8.78   $9.62   $9.66 
Total Return(b):      31.72      (21.08)%   26.62  (2.70)%   4.85  7.19
                                 
Ratios/Supplemental Data:                        
Net assets, end of period (000)      $13,372       $7,797   $16,451   $6,951   $10,681   $5,512 
Average net assets (000)      $10,753       $9,743   $12,060   $8,632   $8,961   $5,008 
Ratios to average net assets(c)(d):                                
Expenses after waivers and/or expense reimbursement      1.10%(e)       1.11  1.10  0.98  1.10  1.10
Expenses before waivers and/or expense reimbursement      1.40%(e)       2.54  2.31  2.81  2.96  4.85
Net investment income (loss)      3.20%(e)       3.81  3.17  4.25  4.17  3.98
Portfolio turnover rate(f)(g)       84      235  257  153  137  113

 

(a)

Calculated based on average shares outstanding during the period.

(b)

Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each periodreported 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.

(c)

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

(d)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(e)

Annualized.

(f)

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

(g)

Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions (if any).

 

See Notes to Financial Statements.

 

PGIM Real Estate Income Fund  33 


Financial Highlights(unaudited) (continued)

 

Class R6 Shares                               
     

Six Months

Ended

April 30,

2021

     Year Ended October 31,     

December 28, 2016(a)
through October 31,

2017

 
     2020  2019  2018 
Per Share Operating Performance(b):                              
Net Asset Value, Beginning of Period    $7.68       $10.67   $8.76   $9.62       $9.33 
Income (loss) from investment operations:                              
Net investment income (loss)    0.14       0.12   0.31   0.25       0.31 
Net realized and unrealized gain (loss) on investment and foreign currency transactions    2.28       (2.26  1.98   (0.52      0.38 
Total from investment operations    2.42       (2.14  2.29   (0.27      0.69 
Less Dividends and Distributions:                              
Dividends from net investment income    (0.18      (0.65  (0.38  (0.50      (0.40
Tax return of capital distributions    -       (0.14  -   (0.09      - 
Distributions from net realized gains    -       (0.06  -   -       - 
Total dividends and distributions    (0.18      (0.85  (0.38  (0.59      (0.40
Net asset value, end of period    $9.92       $7.68   $10.67   $8.76       $9.62 
Total Return(c):    31.63      (21.03)%   26.54  (2.92)%       7.43
                               
Ratios/Supplemental Data:                       
Net assets, end of period (000)    $44,307       $23,216   $158   $70       $11 
Average net assets (000)    $32,237       $675   $115   $17       $11 
Ratios to average net assets(d)(e):                              
Expenses after waivers and/or expense reimbursement    1.10%(f)       1.10  1.10  1.10      1.10%(f) 
Expenses before waivers and/or expense reimbursement    1.18%(f)       3.80  8.55  91.97      2.79%(f) 
Net investment income (loss)    3.14%(f)       1.36  3.15  2.70      3.78%(f) 
Portfolio turnover rate(g)(h)     84      235  257  153      137

 

(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 periodreported 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)

Effective November 1, 2017, class specific expenses include transfer agent fees and expenses and registration fees,which are charged to their respective share class.

(f)

Annualized.

(g)

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

(h)

Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions (if any).

 

See Notes to Financial Statements.

 

34 


Fund 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 Trust’s Board of Trustees (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 ofits 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. Inparticular, 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 classificationsprovided 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 investmentsclassified 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 2-5, 2021, PGIM Investments provided a written report (“LRMP Report”) to the Boardaddressing the operation, adequacy, and effectiveness of the Fund’s LRMP, including any material changes to the LRMP for the period from January 1, 2020 through December 31, 2020 (“Reporting Period”). The LRMP Report concludedthat 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 includingliquidity risks presented by the Fund’s investment portfolio, is found in the Fund’s Prospectus and Statement of Additional Information.

 

PGIM Real Estate Income Fund

  35 


 MAIL  TELEPHONE  WEBSITE

655 Broad Street

Newark, NJ 07102

 

(800) 225-1852

 

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. Adescription 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 Fundvoted 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, ChiefLegal Officer Dino Capasso, Chief Compliance Officer Jonathan Corbett, Anti-Money LaunderingCompliance Officer Andrew R. French, Secretary Melissa Gonzalez, Assistant Secretary • Diana N. Huffman, Assistant Secretary Kelly A. Coyne, Assistant Secretary • Patrick McGuinness, Assistant Secretary Debra Rubano, Assistant Secretary • Lana Lomuti, Assistant Treasurer Russ Shupak, Assistant Treasurer • Elyse McLaughlin, Assistant Treasurer Deborah Conway, AssistantTreasurer

 

MANAGER PGIM Investments LLC
 655 Broad Street
Newark, NJ 07102

 

SUBADVISERS 

PGIM Real Estate

 

 

PGIM Real Estate (UK) Limited

 

7 Giralda Farms
Madison, NJ 07940

 

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 otherinformation about the Fund. An investor may obtain the prospectus and summary prospectus by visiting our website at pgim.com/investments or by calling (800) 225-1852. The prospectusand 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 receivenotification 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 Real Estate Income Fund, PGIM Investments, Attn: Board of Trustees, 655 BroadStreet, 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 onForm N-PORT. The Fund’s Form N-PORT filings are available on the Commission’s website at sec.gov.

 

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 REAL ESTATE INCOME FUND

 

SHARE CLASS A C Z R6
NASDAQ PRKAX PRKCX PRKZX PRKQX
CUSIP 74441J761 74441J753 74441J746 74441J670

 

MF228E2


Item 2 –

Code of Ethics – Not required, as this is not an annual filing.

 

Item 3 –

Audit Committee Financial Expert – Not required, as this is not an annual filing.

 

Item 4 –

Principal Accountant Fees and Services – Not required, as this is not an annual filing.

 

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 Item1 of this Form.

 

Item 7 –

Disclosure of Proxy Voting Policies and Procedures for Closed-EndManagement 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 InvestmentCompany and Affiliated Purchasers – Not applicable.

 

Item 10 –

Submission of Matters to a Vote of Security Holders – There have been no material changes to theseprocedures.

 

Item 11 –

Controls and Procedures

 

 (a)

It is the conclusion of the registrant’s principal executive officer and principal financial officer thatthe 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 informationrequired 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 beenaccumulated 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 thatoccurred during the period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12 –

Controls and Procedures - Disclosure of Securities Lending Activities forClosed-End    

Management Investment Companies – Notapplicable.

 

Item 13 –

Exhibits

 

 (a)  (1)

Code of Ethics – Not required, as this is not an annual filing.

 

  (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 causedthis report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Registrant:  Prudential Investment Portfolios 9
By:  /s/ Andrew R. French
  Andrew R. French
  Secretary
Date:  June 18, 2021

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:  June 18, 2021
By:  /s/ Christian J. Kelly
  Christian J. Kelly
  Treasurer and Principal Financial and Accounting Officer
Date:  June 18, 2021
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