Advanced Series Trust AST Academic Strategies Asset ... - Prudential

mutual funds in which in which one of the Dynamic Asset Allocation Portfolios may invest are collectively referred to as the
“Underlying Portfolios.” Consistent with the investment objectives and policies of the Dynamic Asset Allocation Portfolios, other
mutual funds may from time to time be added to, or removed from, the list of Underlying Portfolios that may be used in connection
with the Dynamic Asset Allocation Portfolios. Currently, the only Underlying Portfolios in which the Dynamic Asset Allocation
Portfolios invest are other Portfolios of the Fund and certain money market funds advised by an Investment Manager or one of its
affiliates.
Investment Process. The asset allocation strategy for each Dynamic Asset Allocation Portfolio is determined by PI and QMA. As a
general matter, QMA begins by constructing a neutral allocation for each Dynamic Asset Allocation Portfolio. Each neutral allocation
initially divides the assets for the corresponding Dynamic Asset Allocation Portfolio across three broad-based securities benchmark
indexes. These three benchmark indexes are the Russell 3000 Index, the MSCI EAFE Index, and the Barclays Capital U.S. Aggregate
Bond Index. The Russell 3000 Index measures the performance of the approximately 3000 largest U.S. companies based on total
market capitalization, which represents approximately 98% of the U.S. equity market. The MSCI EAFE Index consists of almost 1,000
stocks in 21 countries outside North and South America, and represents approximately 85% of the total market capitalization in
those countries. The Barclays Capital U.S. Aggregate Bond Index covers the U.S. dollar-denominated, investment-grade, fixed-rate,
taxable bond market of securities that have at least 1-year until final maturity and that are registered with the Securities and Exchange
Commission. This index generally includes U.S. government securities, mortgage-backed securities, asset-backed securities, and
corporate securities but generally excludes municipal bonds, bonds with equity-type features (e.g., warrants, convertibility, etc.),
private placements, floating-rate issues, and inflation-linked bonds. Generally, the neutral allocation for the more aggressive Dynamic
Asset Allocation Portfolios will emphasize investments in the equity asset class while the neutral allocation for the more conservative
Dynamic Asset Allocation Portfolios will emphasize investments in the debt/money market asset class. The selection of specific
combinations of Underlying Portfolios for each Portfolio generally will be determined by PI. PI will employ various quantitative and
qualitative research methods to establish weighted combinations of Underlying Portfolios that are consistent with the neutral
allocation for each Portfolio. QMA will then perform its own forward-looking assessment of macroeconomic, market, financial,
security valuation, and other factors. As a result of this assessment, QMA will further adjust the neutral allocation and the preliminary
Underlying Portfolio weights for each Portfolio based upon its views on certain factors, including, but not limited to, the following:
■ asset class (i.e., increase or decrease allocation to Underlying Portfolios focusing primarily on equity or debt securities);
■ geographic focus (i.e., increase or decrease allocation to Underlying Portfolios focusing primarily on domestic or international
issuers);
■ investment style (i.e., increase or decrease allocation to Underlying Portfolios focusing primarily on securities with value,
growth, or core characteristics);
■ market capitalization (i.e., increase or decrease allocation to Underlying Portfolios focusing primarily on small-cap, mid-cap, or
large-cap issuers); and;
■ “off-benchmark” factors (e.g., add exposure to asset sub-classes or investment categories generally not captured in the neutral
allocation such as real estate, natural resources, global bonds, limited maturity bonds, high-yield bonds (also referred to as “junk
bonds”), or cash.
Generally, PI and QMA currently expect that the assets of the Dynamic Asset Allocation Portfolios will be invested as set forth in the
table below.
Approximate Net Assets Allocated to
AST Agressive Asset Allocation Portfolio
Approximate Net Assets Allocated to
Underlying Portfolios Investing Primarily in
Equity Securities
100%
(Generally range from 92.5%-100%)
Underlying Portfolios Investing Primarily in
Debt Securities and Money Market
Instruments
0%
(Generally range from 0-7.5%)
AST Balanced Asset Allocation Portfolio
AST Capital Growth Asset Allocation Portfolio
Approximate Net Assets Allocated to
Underlying Portfolios Investing Primarily in
Equity Securities
60%
(Generally range from 52.5%-67.5%)
Approximate Net Assets Allocated to
Underlying Portfolios Investing Primarily in
Equity Securities
75%
(Generally range from 67.5%-80%)
Approximate Net Assets Allocated to
Underlying Portfolios Investing Primarily in
Debt Securities and Money Market
Instruments
40%
(Generally range from 32.5%-47.5%)
Approximate Net Assets Allocated to
Underlying Portfolios Investing Primarily in
Debt Securities and Money Market
Instruments
25%
(Generally range from 20.0%-32.5%)
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