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

or profits from, emerging market countries or (ii) included (or considered for inclusion) as an emerging market issuer in one or more
broad-based market indices.
Derivative Strategies. The Portfolio may engage in derivative transactions as a substitute for the purchase or sale of securities or
currencies or to attempt to mitigate the adverse effects of foreign currency fluctuations. Such transactions may include foreign
currency exchange contracts, options and equity-linked securities (such as participation notes, equity swaps and zero strike calls and
warrants). A derivative is a financial instrument, the value of which depends upon, or is derived from, the value of an underlying
asset, interest rate, or index. The use of derivatives — such as futures, foreign currency forward contracts, options on futures and
various types of swaps — involves costs and can be volatile. With derivatives, Parametric tries to predict if the underlying investment
— a security, market index, currency, interest rate, or some other benchmark, will go up or down at some future date. Parametric may
use derivatives to try to reduce risk or to increase return consistent with the Portfolio’s overall investment objectives. Parametric will
consider other factors (such as cost) in deciding whether to employ any particular strategy or technique, or use any particular
instrument. Any derivatives Parametric may use may not match or offset the Portfolio’s underlying positions and this could result in
losses to the Portfolio that would not otherwise have occurred. Derivatives that involve leverage could magnify losses.
Other Investments:
The Portfolio may also use the following investments and strategies: exchange-traded funds, initial public offerings, convertible
securities and preferred stock, repurchase agreements, reverse repurchase agreements, dollar rolls, and when-issued and delayeddelivery
securities.In addition to the principal strategies, the Subadviser also may use the following strategies to try to increase returns
or protect its assets if market conditions warrant.
AST PIMCO Limited Maturity Bond Portfolio
Investment Objective: to seek to maximize total return, consistent with preservation of capital and prudent investment
management.
Principal Investment Policies:
The Portfolio will have a non-fundamental policy to invest, under normal circumstances, at least 80% of the value of its net assets in
fixed income investments which may be represented by forwards or derivatives such as options, futures contracts, or swap
agreements. The 80% investment requirement applies at the time the Portfolio invests its net assets.
Portfolio holdings will be concentrated in areas of the bond market (based on quality, sector, interest rate or maturity) that the
Subadviser believes to be relatively undervalued. In selecting fixed income securities, the Subadviser uses economic forecasting,
interest rate anticipation, credit and call risk analysis, foreign currency exchange rate forecasting, and other securities selection
techniques. The proportion of the Portfolio’s assets committed to investment in securities with particular characteristics (such as
maturity, type and coupon rate) will vary based on the Subadviser’s outlook for the U.S. and foreign economies, the financial markets,
and other factors. The management of duration (a measure of a fixed income security’s expected life that incorporates its yield,
coupon interest payments, final maturity and call features into one measure) is one of the fundamental tools used by the Subadviser.
The Portfolio will invest in fixed-income securities of varying maturities. The average portfolio duration of the Portfolio normally
varies within a one- to three-year time frame based on the Subadviser’s forecast for interest rates. The Portfolio may invest up to 10%
of its total assets in fixed income securities that are rated below investment grade (“junk bonds”) but are rated B or higher by Moody’s
Investors Services, Inc. (“Moody’s”) or equivalently by Standard & Poor’s Corporation (“S&P”) or Fitch (or, if unrated, determined by
the Subadviser to be of comparable quality). The Portfolio may also invest up to 10% of its total assets in preferred stocks.
Generally, over the long term, the return obtained by a portfolio investing primarily in fixed income securities such as the Portfolio is
not expected to be as great as that obtained by a portfolio investing in equity securities. At the same time, the risk and price
fluctuation of a fixed income fund is expected to be less than that of an equity portfolio, so that a fixed income portfolio is generally
considered to be a more conservative investment. However, the Portfolio can and routinely does invest in certain complex fixed
income securities (including various types of mortgage-backed and asset-backed securities) and engage in a number of investment
practices (including futures, swaps and dollar rolls) as described below, that many other fixed income funds do not utilize. These
investments and practices are designed to increase the Portfolio’s return or hedge its investments, but may increase the risk to which
the Portfolio is subject.
The following paragraphs describe some specific types of fixed-income investments that the Portfolio may invest in, and some of the
investment practices that the Portfolio will engage in.
U.S. Government Securities. The Portfolio may invest in various types of U.S. Government securities, including those that are
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