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

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The Portfolio may make short sales “against the box.” In addition, the Portfolio may invest in the following types of securities and engage in the following investment techniques: Futures, Options and Other Derivative Instruments. The Portfolio may enter into futures contracts on securities, financial indices and foreign currencies and options on such contracts and may invest in options on securities, financial indices and foreign currencies, forward contracts and interest rate swaps and swap-related products (collectively “derivative instruments”). The Portfolio intends to use most derivative instruments primarily to hedge the value of its portfolio against potential adverse movements in securities prices, foreign currency markets or interest rates. To a limited extent, the Portfolio may also use derivative instruments for non-hedging purposes such as seeking to increase income. The Portfolio may also use a variety of currency hedging techniques, including forward currency contracts, to manage exchange rate risk with respect to investments exposed to foreign currency fluctuations. Index/Structured Securities. The Portfolio may invest in indexed/structured securities, which typically are short-to intermediate-term debt securities whose value at maturity or interest rate is linked to currencies, interest rates, equity securities, indices, commodity prices or other financial indicators. Such securities may offer growth potential because of anticipated changes in interest rates, credit standing, currency relationships or other factors This Portfolio is co-managed by William Blair and Marsico. As of January 31, 2010, William Blair is responsible for managing approximately 40% of the Portfolio, and Marsico is responsible for managing approximately 60% of the Portfolio. AST International Value Portfolio Investment Objective: to seek capital growth. Principal Investment Policies: The Portfolio will have a non-fundamental policy to invest, under normal circumstances, at least 80% of the value of its investable assets in equity securities. The 80% requirement applies at the time the Portfolio invests its assets. Equity securities include common stocks, securities convertible into common stocks and securities having common characteristics or other derivative instruments whose value is based on common stocks such as rights, warrants or options to purchase common stock, preferred stock, convertible preferred stock, convertible bonds, convertible debentures, convertible notes, depository receipts, futures contracts and swaps. To achieve the Portfolio’s investment objective, the Portfolio will invest at least 65% of its net assets in the equity securities of foreign companies in at least three different countries, without limit as to the amount of Portfolio assets that may be invested in any single country. A company is considered to be a foreign company if it satisfies at least one of the following criteria: ■ securities are traded principally on stock exchanges in one or more foreign countries; ■ derives 50% or more of its total revenue from goods produced, sales made or services performed in one or more foreign countries; ■ maintains 50% or more of its assets in one or more foreign countries; ■ is organized under the laws of a foreign country; or ■ principal executive office is located in a foreign country. The Portfolio may invest anywhere in the world, including North America, Western Europe, the United Kingdom and the Pacific Basin. The companies in which the Portfolio invests may be of any size. The assets of the Portfolio are independently managed by two Subadvisers under a multi-manager structure. Pursuant to the multimanager structure, the Investment Managers of the Portfolio determine and allocate a portion of the Portfolio’s assets to each of the Subadvisers. The allocations will be reviewed by the Investment Managers periodically and the allocations may be altered or adjusted by the Investment Managers without prior notice. Such adjustments will be reflected in the annual update to this prospectus. Although each Subadviser will follow the Portfolio’s policy of investing, under normal circumstances, at least 80% of the value of its assets in equity securities, each Subadviser expects to utilize different investment strategies to achieve the Portfolio’s investment objective of capital growth. The current asset allocations and principal investment strategies for each of the Subadvisers are summarized below. LSV. LSV uses proprietary quantitative investment models to manage the Portfolio in a bottom-up security selection approach combined with overall portfolio risk management. The primary components of the investment models are: 1) indicators of fundamental undervaluation, such as high dividend yield, low price-to-cash flow ratio or low price-to-earnings ratio, 2) indicators of past negative market sentiment, such as poor past stock price performance, 3) indicators of recent momentum, such as high recent stock price performance, and 4) control of incremental risk relative to the benchmark index. All such indicators are measured relative to the overall universe of non-U.S., developed market equities. This investment strategy can be described as a “contrarian value” 238
approach. The objective of the strategy is to outperform the unhedged U.S. Dollar total return (net of foreign dividend withholding taxes) of the MSCI EAFE Index. The Portfolio may invest in equity securities from any of the countries comprising the MSCI EAFE Index. The Portfolio will typically hold at least 100 stocks and LSV will generally align its portion of the Portfolio’s country weightings with those of the MSCI EAFE Index. LSV intends to keep its portion of the Portfolio’s assets as fully invested in non-U.S. equities as practicable at all times, except as needed to accommodate the Portfolio’s liquidity needs. Thornburg. Thornburg selects securities on a bottom-up basis using traditional fundamental securities analysis. Thornburg intends to invest on an opportunistic basis where it believes current prices represent a discount to intrinsic value. The portfolio includes stocks that can be classified as Basic Value, Consistent Earners and Emerging Franchises (as described below). Thornburg identifies this approach as Comprehensive Value investing. The relative proportions of these different categories of stocks will vary over time. The strategy normally invests in stocks that may be depressed or reflect unfavorable market perceptions of company or industry fundamentals. · Basic Value stocks are financially sound companies with well-established businesses that are selling at low valuations relative to the company’s net assets or potential earning power. · Consistent Earners are companies with steady earnings and dividend growth that are selling at attractive valuations and are priced below historical norms. · Emerging Franchises are value-priced companies in the process of establishing a leading position in a product, service, or market that is expected to grow at an above average rate. Generally, the majority of the portfolio will be invested in Basic Value and Consistent Earners. Debt securities are considered for investment when Thornburg believes them to be more attractive than equity alternatives. Among specific factors considered in identifying undervalued securities for inclusion in the portfolio are: price/earnings ratio, price to book value, price/cash flow ratio, debt/capital ratio, dividend yield, dividend history, security and consistency of revenue stream, undervalued assets, relative earnings growth potential, industry growth potential, industry leadership, dividend growth potential, franchise value and potential for favorable developments. Other Investments: Options, Financial Futures and Other Derivatives. The Portfolio may deal in options on securities and securities indices, which options may be listed for trading on a national securities exchange or traded over-the-counter. Options transactions may be used to pursue the Portfolio’s investment objective and also to hedge against currency and market risks, but are not intended for speculation. The Portfolio may engage in financial futures transactions on commodities exchanges or boards of trade in an attempt to hedge against market risks. In addition to options and financial futures, the Portfolio may invest in a broad array of other “derivative” instruments, including forward currency transactions and swaps in an effort to manage investment risk, to increase or decrease exposure to an asset class or benchmark (as a hedge or to enhance return), or to create an investment position indirectly. The types of derivatives and techniques used by the Portfolio may change over time as new derivatives and strategies are developed or as regulatory changes occur. As of January 31, 2010, LSV was responsible for managing approximately 55% of the Portfolio’s assets, and Thornburg was responsible for managing approximately 45% of the Portfolio’s assets. AST Jennison Large-Cap Value Portfolio Investment Objective: The investment objective of the Portfolio is to seek capital appreciation. AST Jennison Large-Cap Growth Portfolio Investment Objective: The investment objective of the Portfolio is to seek long-term growth of capital. Principal Investment Policies: Under normal market conditions, the Jennison Large-Cap Value Portfolio (“Jennison Value Portfolio”) will invest at least 80% of its investable assets in the equity and equity-related securities of large-capitalization companies. For purposes of this 80% policy, the Jennison Value Portfolio will define large capitalization companies as those companies with market capitalizations, measured at the time of purchase, to be within the market capitalization of the Russell 1000® Index. As of February 28, 2010, the Russell 1000® Index had an average market capitalization of approximately $71 billion, and the largest company by market capitalization was approximately $317 billion. The size of the companies in the Russell 1000® Index will change with market conditions. Securities of 239
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Advanced Series Trust AST Academic
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More detailed information relating
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Information About GSAM Portfolio Ma
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Advanced Series Trust Supplement da
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IV. Secondary Performance Benchmark
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esponsible for managing the remaini
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For both CBOs and CLOs, the cashflo
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The High Yield Portfolio may also m
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ADVANCED SERIES TRUST PROSPECTUS DA
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Weighted median market capitalizati
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ADVANCED SERIES TRUST PROSPECTUS DA
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Investment Company Act of 1940 (the
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PIMCO believes to be relevant. PIMC
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companies located throughout the wo
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until the deal closes. • While mo
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Private Equity. Private equity fund
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II. AST High Yield Portfolio The Bo
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Advanced Series Trust Line 2 Line 3
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SUMMARY: AST ACADEMIC STRATEGIES AS
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Liquidity and valuation risk. From
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SUMMARY: AST ADVANCED STRATEGIES PO
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Short sale risk. The Portfolio’s
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SUMMARY: AST AGGRESSIVE ASSET ALLOC
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and certain bond funds (or, for one
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SUMMARY: AST ALLIANCEBERNSTEIN CORE
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Average Annual Total Returns (For t
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may not produce the desired results
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SUMMARY: AST AMERICAN CENTURY INCOM
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classes; the ability of the Portfol
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FINANCIAL INTERMEDIARY COMPENSATION
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action based upon the relevant fact
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SUMMARY: AST BOND PORTFOLIO 2016 IN
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MANAGEMENT OF THE PORTFOLIO Investm
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government agency. While the Portfo
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Annual Total Returns 0 Best Quarter
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action based upon the relevant fact
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MANAGEMENT OF THE PORTFOLIO Investm
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government agency. While the Portfo
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SUMMARY: AST CAPITAL GROWTH ASSET A
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Past Performance. A number of facto
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Fixed income securities risk. Inves
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SUMMARY: AST CLS MODERATE ASSET ALL
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The annual returns and average annu
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Market and management risk. Markets
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SUMMARY: AST FEDERATED AGGRESSIVE G
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Expense risk. Your actual cost of i
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Strategy Broad Market Duration Stra
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Annual Total Returns 30% 20% 10% 21
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Mid-capitalization company risk. Th
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SUMMARY: AST FIRST TRUST CAPITAL AP
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The table also demonstrates how the
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Foreign investment risk. Investment
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SUMMARY: AST GOLDMAN SACHS CONCENTR
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comparable to those in the U.S, and
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SUMMARY: AST GOLDMAN SACHS SMALL-CA
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Annual Total Returns 60% 45% 33.85
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Asset-backed securities risk. Asset
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SUMMARY: AST HORIZON GROWTH ASSET A
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Derivatives risk. A derivative is a
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SUMMARY: AST HORIZON MODERATE ASSET
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Derivatives risk. A derivative is a
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SUMMARY: AST INTERNATIONAL GROWTH P
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Market and management risk. Markets
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SUMMARY: AST INVESTMENT GRADE BOND
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Past Performance. A number of facto
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epatriating investment proceeds. Ma
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SUMMARY: AST JPMORGAN STRATEGIC OPP
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loans, mortgage-backed securities a
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SUMMARY: AST LARGE-CAP VALUE PORTFO
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in market interest rates and that t
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FINANCIAL INTERMEDIARY COMPENSATION
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established markets; foreign market
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SUMMARY: AST MFS GLOBAL EQUITY PORT
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established markets; foreign market
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SUMMARY: AST MID-CAP VALUE PORTFOLI
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SUMMARY: AST NEUBERGER BERMAN MID-C
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SUMMARY: AST NEUBERGER BERMAN SMALL
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usually differ from those in the U.
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SUMMARY: AST PIMCO LIMITED MATURITY
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Annual Total Returns 11% 10% 9% 8%
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credit risk and liquidity risk. Whe
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SUMMARY: AST PRESERVATION ASSET ALL
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will monitor each contract owner’
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SUMMARY: AST QMA US EQUITY ALPHA PO
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The annual returns and average annu
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which could impact the Portfolio. F
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Blended Index (reflects no deductio
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SUMMARY: AST SMALL CAP VALUE PORTFO
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Annual Total Returns 45% 30% 21.86
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High-yield risk. Investments in fix
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and related services. These payment
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SUMMARY: AST T. ROWE PRICE LARGE CA
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Portfolio 53.37% 3.95% -2.13% Index
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Page 221 and 222: SUMMARY: AST VALUE PORTFOLIO INVEST
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Page 227 and 228: ABOUT THE FUND ABOUT THE FUND AND I
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Page 249 and 250: AST Bond Portfolio 2016 AST Bond Po
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Page 299 and 300: companies. Absolute Return. The Por
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Page 311 and 312: e subject to liquidity risk. Foreig
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Page 315 and 316: INVESTMENT MANAGEMENT FEES Set fort
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Devang Gambhirwala is a Principal a
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T. Rowe Price Segment. T. Rowe Pric
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1991 through 1996. Before joining B
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candidate for the CFA. QMA Ted Lock
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investments in private equity trans
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Andrew Jessop is an Executive Vice
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Portfolio Manager, joined Hotchkis
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AST Neuberger Berman Small-Cap Grow
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MBA from the University of Pennsylv
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Mr. Brennan joined T. Rowe Price in
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Fund and its transfer agent also re
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Short-term debt securities with rem
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PAYMENTS TO AFFILIATES PI and AST a
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AST Academic Strategies Asset Alloc
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AST Aggressive Asset Allocation Por
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AST AllianceBernstein Growth & Inco
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AST Balanced Asset Allocation Portf
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AST Bond Portfolio 2018 January 28,
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AST Capital Growth Asset Allocation
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AST CLS Moderate Asset Allocation P
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AST Federated Aggressive Growth Por
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AST First Trust Balanced Target Por
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AST Global Real Estate Portfolio Ma
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AST Goldman Sachs Small-Cap Value P
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AST Horizon Growth Asset Allocation
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AST International Growth Portfolio
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AST Investment Grade Bond Portfolio
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AST JPMorgan Strategic Opportunitie
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AST Lord Abbett Bond-Debenture Port
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AST MFS Growth Portfolio Year Ended
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AST Neuberger Berman Mid-Cap Growth
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AST PIMCO Limited Maturity Bond Por
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AST Preservation Asset Allocation P
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AST Schroders Multi-Asset World Str
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AST T. Rowe Price Asset Allocation
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AST T. Rowe Price Natural Resources
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AST Western Asset Core Plus Bond Po
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APPENDIX I ASSET ALLOCATIONS FOR GR
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APPENDIX III UNDERLYING PORTFOLIO W
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AST Horizon Growth Asset Allocation
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369
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SP-2: Satisfactory capacity to pay
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GLOSSARY PORTFOLIO INDEXES BofA Mer
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Russell 2000 Growth Index. The Russ
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AST First Trust Capital Appreciatio
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Notes 379
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Notes 381
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INVESTOR INFORMATION SERVICES: Shar
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