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

portion of the Portfolio also may include convertible securities, preferred stocks and warrants.
Fixed Income Securities. Bond investments are primarily investment grade (top four credit ratings) and are chosen from across the
entire government and corporate bond markets. Up to 30% of the Portfolio’s fixed income portion may be invested in high yield
bonds. A significant portion of the Portfolio’s fixed income investments may be in mortgage-related (including mortgage dollar rolls
and derivatives such as collateralized mortgage obligations and stripped mortgage-backed securities) and asset-backed securities.
Bank debt and loan participations and assignments may also be purchased. Maturities and duration of the fixed income portion of the
portfolio will reflect the sub-advisor’s outlook for interest rates. The cash reserves component will consist of high quality domestic
and foreign money market instruments, including money market funds managed by the Subadviser.
Other Investments:
Swap Agreements. The Portfolio may enter into interest rate, index, total return, credit default and currency exchange rate swap
agreements for the purposes of attempting to obtain a desired return at a lower cost than if the Portfolio had invested directly in an
instrument that yielded the desired return or for the purpose of hedging a portfolio position.
The Portfolio may enter into stock index, interest rate or currency futures contracts (or options thereon) for hedging purposes or to
provide an efficient means of adjusting the Portfolio’s exposure to the equity markets. The Portfolio may write covered call options
and purchase put and call options on foreign currencies, securities, and financial indices. The Portfolio may invest up to 10% of its
total assets in hybrid instruments, which combine the characteristics of futures, options and securities. To the extent the Portfolio uses
these investments, it will be exposed to additional volatility and potential losses. The Portfolio may enter into forward foreign
currency exchange contracts in connection with its foreign investments.
AST T. Rowe Price Global Bond Portfolio
Investment Objective: to provide high current income and capital growth by investing in high-quality, foreign and U.S. dollardenominated
bonds.
Prinicpal Investment Policies:
The Portfolio will have a non-fundamental policy to invest, 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. To achieve its objectives,
the Portfolio intends to invest primarily in all types of bonds including those issued or guaranteed by the U.S. or foreign governments
or their agencies and by foreign authorities, provinces and municipalities as well as investment grade corporate bonds and mortgagerelated
and asset-backed securities and high yield bonds of U.S. and foreign issuers.
The Portfolio may also invest in convertible securities and corporate commercial paper; inflation-indexed bonds issued by both
governments and corporations; structured notes, including hybrid or “indexed” securities, event-linked bonds and bank debt and
loan participations; 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 federal, 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 seeks to moderate price fluctuation by actively managing its maturity structure and currency exposure. The Subadviser
bases its investment decisions on fundamental market factors, currency trends, and credit quality. The Portfolio generally invests in
countries where the combination of fixed-income returns and currency exchange rates appears attractive, or, if the currency trend is
unfavorable, where the Subadviser believes that the currency risk can be minimized through hedging. The Portfolio’s high-quality
bonds must, at the time of purchase, have received an investment-grade rating from at least one rating agency (or if unrated, must
have a Subadviser equivalent rating) but could be rated below investment-grade by other agencies. Such bonds are called “splitrated”).
Although the Portfolio expects to maintain an intermediate-to-long weighted average maturity, there are no maturity
restrictions on the overall portfolio or on individual securities. The Portfolio may and frequently does engage in foreign currency
transactions such as forward foreign currency exchange contracts, hedging its foreign currency exposure back to the dollar or against
other foreign currencies (“cross-hedging”). The Subadviser also attempts to reduce currency risks through diversification among
foreign securities and active management of currency exposures. The Subadviser may use foreign forward currency contracts
(“forwards”) to hedge the risk to the Portfolio when foreign currency exchange rate movements are expected to be unfavorable to
U.S. investors. The Subadviser may use forwards in an effort to benefit from a currency believed to be appreciating in value versus
other currencies. The Subadviser may also invest in currencies or forwards in cases where the Portfolio does not hold bonds
denominated in that currency, for example, in situations where the Subadviser wants currency exposure to a particular market but
believes that the bonds are unattractive. Under certain circumstances, the Subadviser may commit a substantial portion of the
Portfolio to currencies and forwards If the Subadviser’s forecast of currency movements proves wrong, this investment activity may
cause a loss. Also, for emerging markets, it is often not possible to hedge the currency risk associated with emerging market bonds
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