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