The Prudential Series Fund
The Prudential Series Fund
The Prudential Series Fund
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demand repayment of the obligation at a set price within a relatively short period of time, in compliance with the rulesapplicable to<br />
money market mutual funds.<br />
<strong>The</strong> Portfolio may also purchase floating rate and variable rate securities. <strong>The</strong>se securities pay interest at rates that change periodically<br />
to reflect changes in market interest rates. Because these securities adjust the interest they pay, they may be beneficial when interest<br />
rates are rising because of the additional return the Portfolio will receive, and they may be detrimental when interest rates are falling<br />
because of the reduction in interest payments to the Portfolio.<br />
<strong>The</strong> securities that we may purchase may change over time as new types of money market instruments are developed. We will<br />
purchase these new instruments, however, only if their characteristics and features follow the rulesgoverning money market mutual<br />
funds.<br />
We may also use alternative investment strategies including derivatives to try to improve the Portfolio’s returns, to protect its assets or<br />
for short-term cash management. <strong>The</strong>re is no guarantee that these strategies will work, that the instruments necessary to implement<br />
these strategies will be available, or that the Portfolio will not lose money.<br />
<strong>The</strong> Portfolio may also pursue the following types of investment strategies and/or invest in the following types of securities:<br />
■ Purchase securities on a when-issued or delayed delivery basis.<br />
■ Repurchase agreements. <strong>The</strong> Portfolio may participate with certain other Portfolios of the <strong>Fund</strong> in a joint repurchase account<br />
under an order obtained from the SEC.<br />
■ Reverse repurchase agreements (the Portfolio may invest up to 10% of its net assets in these instruments).<br />
■ Illiquid securities<br />
<strong>The</strong> Portfolio is managed by <strong>Prudential</strong> Investment Management, Inc (PIM).<br />
An investment in the Portfolio is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation<br />
(FDIC) or any other government agency. Although the Portfolio seeks to preserve the value of an investment at $10 per share, it is<br />
possible to lose money by investing in the Portfolio.<br />
Natural Resources Portfolio<br />
<strong>The</strong> investment objective of this Portfolio is long-term growth of capital. While we make every effort to achieve our objective, we<br />
can’t guarantee success and, it is possible that you could lose money.<br />
We normally invest at least 80% of the Portfolio’s investable assets in common stocks and convertible securities of natural resource<br />
companies and in securities that are related to the market value of some natural resource (asset-indexed securities). <strong>The</strong> Portfolio will<br />
not change this policy unless it provides 60 days prior written notice to contract owners. Natural resource companies are companies<br />
that primarily own, explore, mine, process or otherwise develop natural resources, or supply goods and services to such companies.<br />
Natural resources generally include precious metals, such as gold, silver and platinum, ferrous and nonferrous metals, such as iron,<br />
aluminum and copper, strategic metals such as uranium and titanium, hydrocarbons such as coal and oil, timberland, undeveloped<br />
real property and agricultural commodities.<br />
We seek securities with an attractive combination of valuation versus peers, organic reserve and production growth, and competitive<br />
unit cost structure. We focus on secular, rather than tactical considerations. In selecting securities for the Portfolio, we use a bottomup<br />
approach based on a company’s growth potential. We supplement our fundamental investment process with quantitative analytics<br />
designed to evaluate the Portfolio’s holdings in order to optimize portfolio construction, and to create an enhanced liquidity profile<br />
for the Portfolio while maintaining investment strategy integrity. Generally, we consider selling a security when we believe it no<br />
longer displays the conditions for growth, is no longer undervalued, or it fails to meet expectations. Depending on prevailing trends,<br />
we may shift the Portfolio’s focus from one natural resource to another, however, we will not invest more than 25% of the Portfolio’s<br />
total assets in any single natural resource industry.<br />
<strong>The</strong> Portfolio is a non-diversified mutual fund portfolio. This means that the Portfolio may invest a relatively high percentage of its<br />
assets in a small number of issuers. As a result, the Portfolio’s performance may be more clearly tied to the success or failure of a<br />
smaller group of Portfolio holdings. <strong>The</strong>re are additional risks associated with the Portfolio’s investment in the securities of natural<br />
resource companies. <strong>The</strong> market value of the securities may be affected by numerous factors, including events occurring in nature,<br />
inflationary pressures, and international politics.<br />
When acquiring asset-indexed securities, we usually will invest in obligations rated at least BBB by Moody’s or Baa by S&P (or, if<br />
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