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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and high return on invested capital. ClearBridge also uses quantitative methods to identify catalysts and trends that might influence<br />
the Portfolio’s industry or sector focus, or the Subadviser’s individual security selection.<br />
Other Investments:<br />
Although the Portfolio will invest primarily in U.S. common stocks, it may also purchase other types of securities, for example,<br />
preferred stocks, convertible securities, warrants and bonds when considered consistent with the Portfolio’s investment objective and<br />
policies. The Portfolio may purchase preferred stock for capital appreciation where the issuer has omitted, or is in danger of omitting,<br />
payment of the dividend on the stock. Debt securities would be purchased in companies that meet the investment criteria for the<br />
Portfolio.<br />
The Portfolio may invest up to 20% of its total assets in foreign securities, including American Depositary Receipts and securities of<br />
companies in developing countries, and may enter into forward foreign currency exchange contracts (the Portfolio may invest in<br />
foreign cash items in excess of this 20% limit). The Portfolio may enter into stock index or currency futures contracts (or options<br />
thereon) for hedging purposes or to provide an efficient means of regulating the Portfolio’s exposure to the equity markets. The<br />
Portfolio may also write (sell) call and put options and purchase put and call options on securities, financial indices, and currencies.<br />
The Portfolio may invest up to 10% of its total assets in hybrid instruments, which combine the characteristics of futures, options and<br />
securities.<br />
As of January 31, 2010, J.P. Morgan was responsible for managing approximately 42% of the Portfolio’s assets, LMCG was<br />
responsible for managing approximately 28% of the Portfolio’s assets, and Clearbridge was responsible for managing approximately<br />
30% of the Portfolio’s assets.<br />
<strong>AST</strong> T. Rowe Price <strong>Asset</strong> Allocation Portfolio<br />
Investment Objective: to seek a high level of total return by investing primarily in a diversified portfolio of equity and fixed-income<br />
securities.<br />
Principal Investment Policies:<br />
The Portfolio will invest, under normal circumstances, approximately 60% of its total assets in equity securities and 40% in fixed<br />
income securities. This mix may vary over shorter time periods; the equity portion may range between 50-70% and the fixed income<br />
portion between 30-50%.<br />
The Subadviser concentrates common stock investments in larger, more established companies, but the Portfolio may include small<br />
and medium-sized companies with good growth prospects. The Portfolio’s exposure to smaller companies is not expected to be<br />
substantial, and will not constitute more than 30% of the equity portion of the Portfolio. Up to 35% of the equity portion may be<br />
invested in foreign (non-U.S. dollar denominated) equity securities. The fixed income portion of the Portfolio will be allocated among<br />
investment grade securities (50-100% of the fixed income portion); high yield or “junk” bonds (up to 30% of the fixed-income<br />
portion); foreign (non-U.S. dollar denominated) high quality debt securities and emerging market securities (up to 30% of the fixedincome<br />
portion); and cash reserves (up to 40% of the fixed-income portion). Cash reserves may consist of U.S.-dollar and non U.S.-<br />
dollar currencies.<br />
The precise mix of equity and fixed income investments will depend on the Subadviser’s outlook for the markets. When deciding<br />
upon asset allocations, the Subadviser may favor fixed income securities if the economy is expected to slow sufficiently to hurt<br />
corporate profit growth. The opposite may be true when strong economic growth is expected. The Portfolio’s investments in foreign<br />
equity and debt securities are intended to provide additional diversification, and the Subadviser will normally have at least three<br />
different countries represented in both the foreign equity and foreign debt portions of the Portfolio.<br />
Securities may be sold for a variety of reasons, such as to effect a change in asset allocation, to secure gains or limit losses, or to redeploy<br />
assets into more promising opportunities.<br />
As a fund that invests both in equity and fixed income securities, the Portfolio risk of loss and share price fluctuation (and potential<br />
for gain) will tend to be less than funds investing primarily in equity securities and more than funds investing primarily in fixed<br />
income securities. Of course, both equity and fixed income securities may decline in value.<br />
Equity Securities. When selecting particular stocks to purchase, the Subadviser will examine relative values and prospects among<br />
growth and value-oriented stocks, domestic and international stocks, and small-to large-cap stocks. Domestic stocks are drawn from<br />
the overall U.S. market while international equities are selected primarily from large companies in developed countries. Investments<br />
in non-U.S. dollar denominated stocks may be made solely for capital appreciation or solely for income or any combination of both<br />
for the purpose of achieving a higher overall return. Stocks of companies in developing countries may also be included. The equity<br />
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