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

Hotchkis and Wiley normally focuses on stocks that have a high cash dividend or payout yield relative to the market. Payout yield is
defined as dividend yield plus net share repurchases. The Subadviser also may invest in stocks that don’t pay dividends, but have
growth potential unrecognized by the market or changes in business or management that indicate growth potential.
Eaton Vance normally invests primarily in value stocks of large-cap companies, which are common stocks that, in the Subadviser’s
opinion, are inexpensive or undervalued relative to the overall stock market. Investment decisions are made primarily on the basis of
fundamental research. The portfolio managers utilize information provided by, and the expertise of, the investment adviser’s research
staff in making investment decisions. In selecting stocks, the portfolio managers consider (among other factors) a company’s earnings
or cash flow capabilities, financial strength, growth potential, the strength of the company’s business franchises and management
team, sustainability of a company’s competitiveness, and estimates of the company’s net value. Many of these considerations are
subjective. Eaton Vance intends to manage investment risk by maintaining broad issuer and industry diversification among its
holdings, and by utilizing fundamental analysis of risk/return characteristics in securities selection. The Subadviser may sell a security
when its price objective for the security is reached, the fundamentals of the company deteriorate, a security’s price falls below
acquisition cost or to pursue more attractive investment options.
As an alternative to holding foreign securities directly, the Portfolio may invest in dollar-denominated securities of foreign companies
that trade on U.S. exchanges or in the over-the-counter market (including depositary receipts which evidence ownership in
underlying foreign stocks). Such investments are not subject to the 20% limitation on investing in foreign securities. Depositary
receipts are subject to many of the risks associated with investing directly in foreign securities, including political and economic
risks. The Portfolio may also invest in other equity securities, including, but not limited to, convertible securities, preferred stock and
real estate investment trusts.
On or about January 31, 2010, Hotchkis and Wiley was responsible for managing approximately 25% of the Portfolio’s assets, Eaton
Vance was responsible for managing approximately 75% of the Portfolio’s assets.
AST Lord Abbett Bond-Debenture Portfolio
Investment Objective: to seek high current income and the opportunity for capital appreciation to produce a high total return.
Principal Investment Policies:
The Portfolio has a non-fundamental policy of investing, under normal circumstances, at least 80% of the value of its assets in fixed
income securities. The 80% investment requirement applies at the time the Portfolio invests its assets.
Fixed income securities include:
■ securities issued or guaranteed by the U.S. government, its agencies or government-sponsored enterprises;
■ corporate debt securities of U.S. and non-U.S. issuers, including convertible securities and corporate commercial paper;
■ mortgage and other asset-backed securities;
■ inflation-indexed bonds issued by both governments and corporations;
■ structured notes, including hybrid or “indexed” securities and event-linked bonds;
■ loan participations and assignments;
■ delayed portfolio loans and revolving credit securities;
■ bank certificates of deposit, fixed time deposits and bankers’ acceptances;
■ repurchase agreements and reverse repurchase agreements;
■ debt securities issued by state or local governments and their agencies and government-sponsored enterprises;
■ obligations of foreign governments or their subdivisions, agencies and government-sponsored enterprises; and
■ obligations of international agencies or supranational entities.
The Portfolio allocates its assets principally among fixed income securities in four market sectors: U.S. investment grade securities,
U.S. high yield securities, foreign securities (including emerging market securities) and convertible securities. Under normal
circumstances, the Portfolio invests in each of the four sectors described above. However, the Portfolio may invest substantially all of
its assets in any one sector at any time, subject to the limitation that at least 20% of the Portfolio’s net assets must be invested in any
combination of investment grade debt securities, U.S. Government securities and cash equivalents.
The Subadviser believes that a high total return (current income and capital growth) may be derived from an actively managed,
diversified portfolio of investments. Through portfolio diversification, credit analysis and attention to current developments and trends
in interest rates and economic conditions, the Subadviser attempts to reduce the Portfolio’s risks. The Subadviser seeks unusual
values, using fundamental, “bottom-up” research (i.e., research on individual companies rather than the economy as a whole) to
identify undervalued securities. The Portfolio may find good value in high yield securities, sometimes called “lower-rated bonds” or
“junk bonds,” and frequently may have more than half of its assets invested in those securities. Higher yield on debt securities can
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