PGIM
FLOATING RATE INCOME FUND
PROSPECTUS
— April 29, 2022
Objective
Primary objective
is to maximize current income. Secondary objective is to seek capital
appreciation when consistent with primary objective.
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PGIM
FLOATING RATE INCOME FUND | |||
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A:
FRFAX |
C:
FRFCX |
Z:
FRFZX |
R6:
PFRIX |
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To
enroll in e-delivery, go to
pgim.com/investments/resource/edelivery |
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The
Securities and Exchange Commission (“SEC”)
has not
approved or disapproved the Fund's
shares, nor
has the SEC determined that this
prospectus is
complete or accurate. It is a criminal
offense to
state otherwise.
Mutual
funds are distributed by Prudential Investment
Management
Services LLC (“PIMS”), member SIPC. PGIM Fixed
Income is a
unit of PGIM, Inc. (“PGIM”), a registered investment
adviser.
PIMS and PGIM are Prudential Financial companies.
© 2022
Prudential Financial, Inc. and its related entities. The
Prudential
logo and the Rock symbol are service marks of
Prudential
Financial, Inc. and its related entities, registered in
many
jurisdictions worldwide. |
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Class
A |
Class
C |
Class
Z |
Class
R6 |
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Maximum
sales charge (load) imposed on purchases (as a percentage of offering
price) |
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Maximum
deferred sales charge (load) (as a percentage of the lower of the original
purchase price or the net asset value at
redemption) |
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Maximum
sales charge (load) imposed on reinvested dividends and other
distributions |
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Redemption
fee |
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Exchange
fee |
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Maximum
account fee (accounts under $10,000) |
$ |
$ |
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*Investors who purchase $500,000 or
more of Class A shares and sell these shares within 12 months of purchase are
subject to a contingent deferred sales charge (“CDSC”) of
1.00%, although they are not subject to
an initial sales charge. The CDSC is waived for certain retirement and/or
benefit plans.
**Class C shares are
sold with a CDSC of 1.00% on sales made within 12 months of
purchase.
***Direct Transfer
Agent Accounts holding under $10,000 of Class Z shares are subject to the $15
fee.
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Class
A |
Class
C |
Class
Z |
Class
R6 |
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Management
fee |
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Distribution
and service (12b-1) fees |
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Other
expenses |
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Total
annual Fund operating expenses |
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Fee waiver
and/or expense reimbursement |
( |
( |
( |
( |
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Total
annual Fund operating expenses after fee waiver and/or expense
reimbursement(1) |
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(1) PGIM Investments LLC (“PGIM
Investments”) has contractually agreed, through June 30,
2023 , to limit Total Annual Fund
Operating Expenses after fee waivers and/or expense reimbursements to 0.95% of average
daily net assets for Class A shares, 1.70% of average daily net assets for Class
C shares, 0.70% of average daily net assets for Class Z shares, and 0.65% of
average daily net assets for Class R6 shares. This contractual waiver excludes
interest, brokerage, taxes (such as income and foreign withholding taxes, stamp
duty and deferred tax expenses), acquired fund fees and expenses, extraordinary
expenses, and certain other Fund expenses such as dividend and interest expense
and broker charges on short sales. Where applicable, PGIM Investments agrees to
waive management fees or shared operating expenses on any share class to the
same extent that it waives such expenses on any other share class. In addition,
Total Annual Fund Operating Expenses for Class R6 shares will not exceed Total
Annual Fund Operating Expenses for Class Z shares. Fees and/or expenses waived
and/or reimbursed by PGIM Investments may be recouped by PGIM Investments within
the same fiscal year during which such waiver and/or reimbursement is made if
such recoupment can be realized without exceeding the expense limit in effect at
the time of the recoupment for that fiscal year. This waiver may not be
terminated prior to June 30, 2023 without the prior approval of the Fund’s Board
of Directors.
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3
|
Share
Class |
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
A |
$ |
$ |
$ |
$ |
|
Class
C |
$ |
$ |
$ |
$ |
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Class
Z |
$ |
$ |
$ |
$ |
|
Class
R6 |
$ |
$ |
$ |
$ |
|
Share
Class |
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
A |
$ |
$ |
$ |
$ |
|
Class
C |
$ |
$ |
$ |
$ |
|
Class
Z |
$ |
$ |
$ |
$ |
|
Class
R6 |
$ |
$ |
$ |
$ |
4
PGIM Floating Rate
Income Fund
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at www.pgim.com/investments
5
6
PGIM Floating Rate
Income Fund
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at www.pgim.com/investments
7
8
PGIM Floating Rate
Income Fund
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at www.pgim.com/investments
9
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Return
Before Taxes |
One
Year |
Five
Years |
Ten
Years |
Since
Inception |
Inception
Date |
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Class A
shares |
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- |
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Class C
shares |
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- |
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Class R6
shares |
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Class
Z Shares % (as of 12-31-21) | |||||
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Return
Before Taxes |
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- |
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Return
After Taxes on Distributions |
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- |
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Return
After Taxes on Distributions and Sale of Fund Shares |
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- |
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Index
% (reflects no deduction for fees, expenses or taxes) (as of
12-31-21) | |||||
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Credit
Suisse Leveraged Loan Index |
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- |
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MANAGEMENT
OF THE FUND
The following individuals are
jointly and primarily responsible for the day-to-day management of the
Fund.
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Investment
Manager |
Subadvisers |
Portfolio
Managers |
Title |
Service
Date |
|
PGIM
Investments LLC |
PGIM Fixed
Income
PGIM
Limited |
Robert
Cignarella, CFA |
Managing
Director,
Head of
U.S. High
Yield and
Co-Head of
the Global
High Yield
Strategy |
March
2014 |
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|
|
Brian
Juliano |
Managing
Director
and Head of
U.S.
Leveraged
Loan Team |
March
2011 |
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Parag
Pandya, CFA |
Principal
and Portfolio
Manager |
April
2018 |
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Ian F.
Johnston |
Principal
and Portfolio
Manager |
April
2021 |
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Robert W.
Meyer, CFA |
Principal |
April
2021 |
BUYING
AND SELLING FUND SHARES
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|
Class
A* |
Class
C* |
Class
Z* |
Class
R6 |
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Minimum
initial investment |
$1,000 |
$1,000 |
None |
None |
|
Minimum
subsequent investment |
$100 |
$100 |
None |
None |
10
PGIM Floating Rate
Income Fund
*
Certain share classes are generally closed to investments by new group
retirement plans. Please see “How
to Buy, Sell and Exchange Fund Shares—Closure of Certain Share Classes to
New Group Retirement Plans” in the Prospectus for more
information.
For Class A and
Class C shares, the minimum initial and subsequent investment for Automatic
Investment Plan purchases is $50. Class R6 shares are generally not available
for purchase by individuals. Class Z shares may be purchased by certain
individuals, subject to certain requirements. Please see “How to Buy, Sell and
Exchange Fund Shares—How to Buy Shares—Qualifying for Class Z Shares,” and
“—Qualifying for Class R6 Shares” in the Prospectus for purchase eligibility
requirements.
Your financial
intermediary may impose different investment minimums. You can purchase or
redeem shares on any business day that the Fund is open through the Fund's
transfer agent or through servicing agents, including brokers, dealers and other
financial intermediaries appointed by the distributor to receive purchase and
redemption orders. Current shareholders may also purchase or redeem shares
through the Fund's website or by calling (800) 225-1852.
TAX
INFORMATION
Dividends,
Capital Gains and Taxes. The Fund's
dividends and distributions are taxable and will be taxed as ordinary income or
capital gains, unless you are investing through a tax-deferred arrangement, such
as a 401(k) plan or an individual retirement account. Such tax-deferred
arrangements may be taxed later upon withdrawal of monies from those
arrangements.
PAYMENTS
TO FINANCIAL INTERMEDIaries
If you purchase
Fund shares through a financial intermediary such as a broker-dealer, bank,
retirement recordkeeper or other financial services firm, the Fund or its
affiliates may pay the financial intermediary for the sale of Fund shares and/or
for services to shareholders. This may create a conflict of interest by
influencing the financial intermediary or its representatives to recommend the
Fund over another investment. Ask your financial intermediary or representative
or visit your financial intermediary’s website for more information.
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11
MORE ABOUT THE
FUND'S PRINCIPAL AND NON-PRINCIPAL INVESTMENT STRATEGIES, INVESTMENTS AND
RISKS
INVESTMENT
STRATEGIES AND INVESTMENTS
The Fund's primary
investment objective is to maximize
current income. As a secondary
investment objective, the Fund will seek capital appreciation, but only when
consistent with the Fund's primary investment objective of seeking to maximize
current income.
Under normal market conditions, the
Fund invests at least 80% of its investable assets (net assets plus borrowings
for investment purposes, if any) in floating rate loans and other floating rate
debt securities. Floating rate loans and other floating rate debt obligations
have interest rates which adjust or “float” periodically (normally on a monthly
or quarterly basis) based on a generally recognized base rate such as the London
Inter-Bank Offered Rate (“LIBOR”), the Secured Overnight Financing Rate (“SOFR”)
or the prime rate offered by one or more major U.S. banks. Floating rate loans
(often referred to as “bank loans”) are arranged through private negotiations
between a corporation or other institution that is the borrower and one or more
financial institutions that are the lenders.
In managing the Fund’s assets, the
subadviser uses a combination of top-down economic analysis and bottom-up
research in conjunction with proprietary quantitative models and risk management
systems. In the top-down economic analysis, the subadviser develops views on
economic, policy and market trends by continually evaluating economic data that
affect the movement of markets and securities prices. This top-down
macroeconomic analysis is integrated into the subadviser’s bottom-up research
which informs security selection. In its bottom-up research, the subadviser
develops an internal rating and outlook on issuers. The rating and outlook are
determined based on a thorough review of the financial health and trends of the
issuer, which include a review of the composition of revenue, profitability,
cash flow margin, and leverage.
The subadviser may
also consider investment factors such as expected total return, yield, spread
and potential for price appreciation as well as credit quality, maturity and
risk. The Fund may invest in a security based upon the expected total return
rather than the yield of such security.
The subadviser may
also utilize proprietary quantitative tools to support relative value trading
and asset allocation for portfolio management as well as various risk models to
support risk management.
Most floating rate
loans are senior in rank (“senior loans”) in the event of bankruptcy to most
other securities of the issuer, such as common stock or publicly-issued bonds.
Floating rate loans are often secured by specific collateral of the issuer so
that holders of the loans will have a priority claim on those assets in the
event of default or bankruptcy of the issuer. Floating rate loans are often
structured and administered by a financial institution that acts as agent for
the holders of the loan. Loans can be acquired directly through the agent, by
assignment from another holder of the loan, or as a participation interest in
another holder's portion of the loan. Loan participations and assignments
involve special types of risk, including credit risk and liquidity
risk.
The Fund has no
requirements as to the maturity or quality of the debt instruments it may buy,
or as to market capitalization of the issuers of those instruments. The Fund may
invest primarily in senior loans that are rated below investment grade or
unrated senior loans of comparable quality at the time of purchase as determined
by the subadviser. Instruments rated below investment grade are sometimes
referred to as “junk bonds.” In the event that a security receives different
ratings from different nationally recognized statistical rating organizations
(NRSROs), the Fund will treat the security as being rated in the highest rating
category received from an NRSRO. A description of security ratings is an
appendix to the Fund’s SAI.
The Fund may invest
up to 20% of its total assets in senior loans that are not secured by any
specific collateral.
The Fund may invest
up to 20% of its investable assets in other types of debt securities, equity and
equity-related securities (principally preferred stocks and convertible
securities), and money market instruments.
12
PGIM Floating Rate
Income Fund
The Fund may invest up to 25% of
its total assets in senior loans made to foreign-domiciled borrowers and other
foreign securities, including securities of issuers located in emerging market
countries, which may be denominated in U.S. dollars or currencies other than the
U.S. dollar.
The Fund may invest in derivative
instruments, including futures, forwards, options, swaps, and options on swaps,
to try to enhance return or to try to reduce (“hedge”) investment risks. In
selecting investments for the Fund, the Fund's subadviser will evaluate overall
investment opportunities and risks among the types of investments the Fund may
hold.
The Fund may engage
in a substantial number of portfolio transactions.
The Fund’s
investment objectives are not fundamental policies, and therefore may be changed
by the Board of Directors (“the Board”) without shareholder approval. The Fund’s
80% investment policy may be changed by the Board upon 60 days’ prior notice to
shareholders.
Collateralized
Loan Obligations
The Fund may invest
in collateralized loan obligations (“CLOs”). A CLO is a trust typically
collateralized by a pool of loans, which may include, among others, domestic and
foreign senior secured loans, senior unsecured loans, and subordinated corporate
loans, including loans that may be rated below investment grade or equivalent
unrated loans.
Money
Market Instruments
The Fund may hold cash and/or
invest in money market instruments, including commercial paper of a U.S. or
non-U.S. company, non-U.S. government securities, certificates of deposit,
bankers' acceptances, time deposits of domestic and non-U.S. banks, and
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. These obligations may be U.S. dollar-denominated or
denominated in a non-U.S. currency. Money market instruments typically have a
maturity of one year or less as measured from the date of purchase.
Repurchase
Agreements
The Fund may enter
into repurchase agreements, where a party agrees to sell a security to the Fund
and then repurchases it at an agreed-upon price at a stated time. This creates a
fixed return for the Fund, and is, in effect, a loan by the Fund. Repurchase
agreements are used for cash management purposes only.
Reverse
Repurchase Agreements and Dollar Rolls
The Fund may enter
into reverse repurchase agreements, which involve the sale of a portfolio
security by the Fund coupled with an agreement to repurchase the security, as
well as dollar rolls in which the Fund sells securities for delivery in the
current month and simultaneously agrees to repurchase a substantially similar
security at a future date. Either strategy involves leverage and may magnify
underlying investment gains or losses.
When-Issued
and Delayed-Delivery Securities
The Fund may
purchase securities, including money market obligations, bonds or other
obligations, on a when-issued, delayed-delivery or forward commitment basis.
When the Fund purchases delayed-delivery securities, the price and interest rate
are fixed at the time of purchase. For both when-issued and delayed-delivery
securities, delivery and payment for the obligations take place at a later time.
The Fund does not earn interest income until the date the obligations are
expected to be delivered.
Derivative
Strategies
Derivatives are
financial instruments whose value depends upon, or is derived from, the value of
something else, such as one or more underlying investments, indices or
currencies. The Fund may use various derivative strategies to try to improve the
Fund's returns. The subadviser may also use hedging techniques to try to protect
the Fund's assets. A derivative contract will obligate or entitle the Fund to
deliver or receive an asset or cash payment based on the change in value of one
or more investments, indices or currencies. Derivatives may be traded on
organized exchanges, or in
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13
individually
negotiated transactions with other parties (these are known as
“over-the-counter” derivatives). The Fund may be limited in its use of
derivatives by rules adopted by the SEC governing derivatives transactions.
Although the Fund has the flexibility to make use of derivatives, it may choose
not to for a variety of reasons, even under very volatile market
conditions.
Futures
Contracts and Related Options. The Fund may
purchase and sell financial futures contracts and related options on financial
futures. A futures contract is an agreement to buy or sell a set quantity of an
underlying asset at a future date, or to make or receive a cash payment based on
the value of a securities index, or some other asset, at a stipulated future
date. The terms of futures contracts are standardized. In the case of a
financial futures contract based upon a broad index, there is no delivery of the
securities comprising the underlying index, margin is uniform, a clearing
corporation or an exchange is the counterparty and the Fund makes daily margin
payments based on price movements in the index. An option gives the purchaser
the right to buy or sell securities or currencies, or in the case of an option
on a futures contract, the right to buy or sell a futures contract in exchange
for a premium.
Swap
Transactions. The Fund may enter
into swap transactions. Swap agreements are two-party contracts entered into
primarily by institutional investors for periods typically ranging from a few
weeks to more than one year. In a standard “swap” transaction, two parties agree
to exchange the returns (or differentials in rates of return) earned or realized
on particular predetermined investments or instruments, which may be adjusted
for an interest factor. There are various types of swaps, including but not
limited to credit default swaps, interest rate swaps, total return swaps and
index swaps.
Swap
Options. The Fund may enter
into swap options. A swap option is a contract that gives a counterparty the
right (but not the obligation) to enter into a new swap agreement or to shorten,
extend, cancel or otherwise modify an existing swap agreement, at some
designated future time on specified terms.
Options on
Securities and Financial Indices. The Fund may purchase and sell put
and call options on securities, and financial indices traded on U.S. or non-U.S.
securities exchanges, on NASDAQ or in the over-the-counter market. An option
gives the purchaser the right to buy or sell securities in exchange for a
premium. The Fund will sell only options that are secured either by the Fund's
ownership of the underlying security or by cash or other liquid assets
segregated or earmarked within the Fund’s account at the custodian or in a
separate account at the custodian.
Short
Sales
The Fund may make
short sales of a security. This means that the Fund may sell a security that it
does not own, which it may do, for example, when the subadviser thinks the value
of the security will decline. The Fund generally borrows the security to deliver
to the buyers in a short sale. The Fund must then replace the borrowed security
by purchasing it at the market price at the time of replacement. The Fund may
make short sales “against the box.” In a short sale against the box, at the time
of sale, the Fund owns or has the right to acquire the identical security at no
additional cost through conversion or exchange of other securities it
owns.
Investments
in Affiliated Funds
The Fund may invest its assets in
affiliated funds, including exchange-traded funds, that are registered
investment companies under the Investment Company Act of 1940 (the “1940 Act”).
The Fund can invest its free cash balances in affiliated short-term bond funds
and/or money market funds to obtain income on short-term cash balances while
awaiting attractive investment opportunities, to provide liquidity in
preparation for anticipated redemptions or for defensive purposes. Such an
investment could also allow the Fund to obtain the benefits of a more
diversified portfolio available in the affiliated funds than might otherwise be
available through direct investments in those asset classes, and will subject
the Fund to the risks associated with the particular asset class. To the extent
the Fund serves as an underlying investment for other registered funds, the Fund
may be prohibited from investing in certain registered funds and private
funds.
As a shareholder in the affiliated
funds, the Fund will pay its proportional share of the expenses of the
affiliated funds. The affiliated short-term bond funds and certain money market
funds do not pay a management fee to the investment manager, since the
investment manager only receives reimbursement for its expenses. Thus,
shareholders of the Fund
14
PGIM Floating Rate
Income Fund
are not paying management fees for
both the Fund and the affiliated short-term bond funds and money market funds.
The investment results of the portions of the Fund’s assets invested in the
affiliated funds will be based on the investment results of the affiliated
funds.
Equity
and Equity-Related Securities
From time to time,
the Fund may purchase or hold equity or equity-related securities incidental to
the purchase or ownership of fixed income instruments or in connection with a
reorganization of a borrower. These include common stock, preferred stock or
securities that may be converted into or exchanged for common stock—known as
convertible securities—like rights and warrants.
Temporary
Defensive Investments
In response to adverse market,
economic or political conditions, the Fund may take a temporary defensive
position and invest up to 100% of its total assets in money market instruments,
including short-term obligations of, or securities guaranteed by, the U.S.
Government, its agencies or instrumentalities, or in high-quality obligations of
U.S. or non-U.S. banks and corporations, and may hold up to 100% of its total
assets in cash or cash equivalents. Although the subadviser has the ability to
take defensive positions, it may choose not to do so for a variety of reasons,
even during volatile market conditions. Investing heavily in these securities is
inconsistent with and limits the Fund's ability to achieve its investment
objective, but may help to preserve the Fund's assets.
Other
Investments
In addition to the
strategies and securities discussed above, the Fund may use other strategies or
invest in other types of securities as described in the Statement of Additional
Information (“SAI”). The Fund might not use all of the strategies or invest in
all of the types of securities as described in the Prospectus or in the
SAI.
The table below
summarizes the investment limits applicable to the Fund’s principal investment
strategies and certain non-principal investment strategies.
|
Principal
Strategies: Investment Limits |
|
◾Floating
rate loans and other floating rate debt securities: at least 80% of
investable assets under normal market conditions ◾Senior
loans rated below investment grade: the Fund may invest primarily in such
loans |
|
Certain
Non-Principal Strategies: Investment Limits |
|
◾Senior
loans not secured by specific collateral: Up to 20% of total
assets ◾Foreign
securities, including senior loans to foreign-domiciled borrowers and
securities of issuers located in emerging
market
countries, which may be denominated in U.S. dollars or non-U.S.
currencies: Up to 25% of total assets ◾Derivatives:
Up to 25% of total assets ◾Illiquid
investments: Up to 15% of net assets ◾Money
market instruments: Up to 100% of total assets on a temporary
basis ◾Other
types of debt securities, equity and equity related securities
(principally preferred stocks and convertible securities),
and money
market instruments: Up to 20% of investable
assets |
RISKS
OF INVESTING IN THE FUND
The order of the
below risk factors does not indicate the significance of any particular risk
factor.
Adjustable
and Floating Rate Securities Risk. The value of
adjustable and floating rate securities may lag behind the value of fixed rate
securities when interest rates change. Such securities may be subject to
extended settlement periods (longer than seven days) and in unusual market
conditions, with a high volume of shareholder redemptions, may present a risk of
loss to the Fund or may impair the Fund’s ability satisfy shareholder redemption
requests.
Cash
Management and Defensive Investing Risk. The value of the
investments held by the Fund for cash management or defensive investing purposes
can fluctuate. Like other fixed income securities, they are subject to risk,
including market, interest rate and credit risk. If the Fund holds cash
uninvested, it will be subject to the credit risk of the depository institution
holding the cash. If the Fund holds cash uninvested, the Fund will not earn
income on the cash. If a significant amount of the Fund's assets are used for
cash management or defensive investing purposes, it may not achieve its
investment objective.
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15
Collateralized
Loan Obligations (“CLOs”) Risk. CLOs are subject
to credit, interest rate, valuation, and prepayment and extension risks. These
securities also are subject to risk of default on the underlying asset,
particularly during periods of economic downturn. The market value of CLOs may
be affected by, among other things, changes in the market value of the
underlying assets held by the CLO, changes in the distributions on the
underlying assets, defaults and recoveries on the underlying assets, capital
gains and losses on the underlying assets, prepayments on underlying assets and
the availability, prices and interest rate of underlying assets.
Convertible
Securities Risk. The market value of
a convertible security performs like that of a regular debt security; that is,
if market interest rates rise, the value of a convertible security usually
falls. In addition, convertible securities are subject to the risk that the
issuer will not be able to pay interest or dividends when due, and their market
value may change based on changes in the issuer's credit rating or the market's
perception of the issuer's creditworthiness. Since it derives a portion of its
value from the common stock into which it may be converted, a convertible
security is also subject to the same types of market and issuer risks that apply
to the underlying common stock.
“Covenant-Lite”
Risk. Some of the
loans or debt obligations in which the Fund may invest or get exposure to may be
“covenant-lite”, which means the loans or obligations contain fewer financial
maintenance covenants than other loans or obligations (in some cases, none) and
do not include terms which allow the lender to monitor the borrower’s
performance and declare a default if certain criteria are breached. An
investment by the Fund in a covenant-lite loan may potentially hinder the
ability to reprice credit risk associated with the issuer and reduce the ability
to restructure a problematic loan and mitigate potential loss. The Fund may also
experience difficulty, expenses or delays in enforcing its rights on its
holdings of covenant-lite loans or obligations. As a result of these risks, the
Fund’s exposure to losses may be increased, which could result in an adverse
impact on the Fund’s net income and NAV.
Credit
Risk. This is the risk
that the issuer, the guarantor or the insurer of a fixed income security, or the
counterparty to a contract, may be unable or unwilling to make timely principal
and interest payments, or to otherwise honor its obligations. Additionally,
fixed income securities could lose value due to a loss of confidence in the
ability of the issuer, guarantor, insurer or counterparty to pay back debt. The
lower the credit quality of a bond, the more sensitive it is to credit
risk.
Cyber
Security Risk. Failures or
breaches of the electronic systems of the Fund, the Fund's manager, subadviser,
distributor, and other service providers, or the issuers of securities in which
the Fund invests have the ability to cause disruptions and negatively impact the
Fund's business operations, potentially resulting in financial losses to the
Fund and its shareholders. While the Fund has established business continuity
plans and risk management systems seeking to address system breaches or
failures, there are inherent limitations in such plans and systems. Furthermore,
the Fund cannot control the cyber security plans and systems of the Fund's
service providers or issuers of securities in which the Fund
invests.
Debt Obligations
Risk. Debt obligations
are subject to credit risk, market risk and interest rate risk. The Fund's
holdings, share price, yield and total return may also fluctuate in response to
bond market movements. The value of bonds may decline for issuer-related
reasons, including management performance, financial leverage and reduced demand
for the issuer’s goods and services. Certain types of fixed income obligations
also may be subject to “call and
redemption risk,”
which is the risk that
the issuer may call a bond held by the Fund for redemption before it matures and
the Fund may lose income.
Derivatives
Risk. Derivatives
involve special risks and costs and may result in losses to the Fund. The
successful use of derivatives requires sophisticated management, and, to the
extent that derivatives are used, the Fund will depend on the subadviser’s
ability to analyze and manage derivatives transactions. The prices of
derivatives may move in unexpected ways, especially in abnormal market
conditions. Some derivatives are “leveraged” and therefore may magnify or
otherwise increase investment losses to the Fund. The Fund's use of derivatives
may also increase the amount of taxes payable by shareholders. Other risks arise
from the potential inability to terminate or sell derivatives
16
PGIM Floating Rate
Income Fund
positions. A liquid secondary
market may not always exist for the Fund's derivatives positions. In fact, many
over-the-counter derivative instruments will not have liquidity beyond the
counterparty to the instrument. Over-the-counter derivative instruments also
involve the risk that the other party will not meet its obligations to the
Fund.
The U.S. Government and foreign
governments have adopted (and may adopt further) regulations governing
derivatives markets, including mandatory clearing of certain derivatives, margin
and reporting requirements and risk exposure limitations. The ultimate impact of
the regulations remains unclear. Additional regulation of derivatives may make
derivatives more costly, limit their availability or utility, or otherwise
adversely affect their performance or disrupt markets.
Dollar
Rolls Risk. Dollar rolls
involve the risk that the market value of the securities that the Fund is
committed to buy may decline below the price of the securities the Fund has
sold. If the buyer of securities under a dollar roll files for bankruptcy or
becomes insolvent, the Fund's right to purchase or repurchase securities under a
dollar roll may be restricted. Successful use of dollar rolls depends on the
ability to correctly predict interest rates and prepayments, depending on the
underlying security. These transactions may involve leverage.
Economic and
Market Events Risk.
Events in the U.S. and global financial markets, including actions taken by the
U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic
growth or the functioning of the securities markets, may at times result in
unusually high market volatility, which could negatively impact performance.
Relatively reduced liquidity in credit and fixed income markets could adversely
affect issuers worldwide.
Emerging Markets
Risk. The risks of
foreign investments are greater for investments in or exposed to emerging
markets. Emerging market countries typically have economic and political systems
that are less fully developed, and can be expected to be less stable, than those
of more developed countries. For example, the economies of such countries can be
subject to rapid and unpredictable rates of inflation or deflation. Low trading
volumes may result in a lack of liquidity and price volatility. Emerging market
countries may have policies that restrict investment by non-U.S. investors, or
that prevent non-U.S. investors from withdrawing their money at
will.
The Fund may invest in some
emerging markets that subject it to risks such as those associated with
illiquidity, custody of assets, different settlement and clearance procedures
and asserting legal title under a developing legal and regulatory regime to a
greater degree than in developed markets or even in other emerging
markets.
Equity
and Equity-Related Securities Risk. Equity and
equity-related securities may be subject to changes in value, and their values
may be more volatile than those of other asset classes. In addition to an
individual security losing value, the value of the equity markets or a sector in
which the Fund invests could go down. Different parts of a market can react
differently to adverse issuer, market, regulatory, political and economic
developments.
Exchange-Traded
Funds (“ETFs”) Risk. Investing in
securities issued by ETFs involves risks similar to those of investing directly
in the securities and other assets held by the ETF. Unlike shares of typical
mutual funds, shares of ETFs are generally traded on an exchange throughout a
trading day and bought and sold based on market values and not at net asset
value. For this reason, shares could trade at either a premium or discount to
net asset value, which may be substantial during periods of market stress. The
trading price of an index-based ETF is expected to (but may not) closely track
the net asset value of the ETF, and the Fund will generally gain or lose value
consistent with the performance of the ETF’s portfolio securities. The Fund will
pay brokerage commissions in connection with the purchase and sale of shares of
ETFs. In addition, the Fund will indirectly bear its pro rata share of the fees
and expenses incurred by an ETF (including ETFs managed by the Manager or the
subadviser(s)) in which it invests, including advisory fees (to the extent not
offset by the Manager through waivers). These expenses are in addition to the
advisory and other expenses that the Fund bears directly in connection with its
own operations. An index-based ETF may not replicate exactly the performance of
the benchmark index it seeks to track for a number of reasons, including
transaction costs incurred by the ETF, the temporary unavailability of certain
index securities in the secondary market
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17
or discrepancies
between the ETF and the index with respect to the weighting of securities or the
number of securities held. Investments in ETFs are subject to the risk that the
listing exchange may halt trading of an ETF’s shares, in which case the Fund
would be unable to sell its ETF shares unless and until trading is
resumed.
Floating Rate
and Other Loans Risk.
The Fund's ability to receive payments of principal and interest and other
amounts in connection with loans (whether through participations, assignments or
otherwise) will depend primarily on the financial condition of the borrower. The
failure by the Fund to receive scheduled interest or principal payments on a
loan because of a default, bankruptcy or any other reason would adversely affect
the income of the Fund and would likely reduce the value of its assets. Even
with loans secured by collateral, there is the risk that the value of the
collateral may decline, may be insufficient to meet the obligations of the
borrower, or be difficult to liquidate. In the event of a default, the Fund may
have difficulty collecting on any collateral and would not have the ability to
collect on any collateral for an uncollateralized loan. Further, the Fund's
access to collateral, if any, may be limited by bankruptcy laws. Due to the
nature of the private syndication of senior loans, including, for example, lack
of publicly-available information, some senior loans are not as easily purchased
or sold as publicly-traded securities. In addition, loan participations
generally are subject to restrictions on transfer, and only limited
opportunities may exist to sell loan participations in secondary markets. As a
result, it may be difficult for the Fund to value loans or sell loans at an
acceptable price when it wants to sell them. Loans trade in an over-the-counter
market, and confirmation and settlement, which are effected through standardized
procedures and documentation, may take significantly longer than seven days to
complete. Extended trade settlement periods may, in unusual market conditions
with a high volume of shareholder redemptions, present a risk to shareholders
regarding the Fund's ability to pay redemption proceeds in a timely manner. In
some instances, loans and loan participations are not rated by independent
credit rating agencies; in such instances, a decision by the Fund to invest in a
particular loan or loan participation could depend exclusively on the
subadviser's credit analysis of the borrower, or in the case of a loan
participation, of the intermediary holding the portion of the loan that the Fund
has purchased. To the extent the Fund invests in loans of non-U.S. issuers, the
risks of investing in non-U.S. issuers are applicable. Loans may not be
considered to be “securities” and as a result may not benefit from the
protections of the federal securities laws, including anti-fraud protections and
those with respect to the use of material non-public information, so that
purchasers, such as the Fund, may not have the benefit of these protections. If
the Fund is in possession of material non-public information about a borrower as
a result of its investment in such borrower’s loan, the Fund may not be able to
enter into a transaction with respect to a publicly-traded security of the
borrower when it would otherwise be advantageous to do so.
Foreign
Securities Risk.
Investments in securities of non-U.S. issuers (including those denominated in
U.S. dollars) may involve more risk than investing in securities of U.S.
issuers. Foreign political, economic and legal systems, especially those in
developing and emerging market countries, may be less stable and more volatile
than in the United States. Foreign legal systems generally
have fewer regulatory requirements than the U.S. legal system, particularly
those of emerging markets. In general, less information is publicly available
with respect to non-U.S. companies than U.S. companies. Non-U.S. companies
generally are not subject to the same accounting, auditing, and financial
reporting standards as are U.S. companies. Additionally, the changing value of
foreign currencies and changes in exchange rates could also affect the value of
the assets the Fund holds and the Fund's performance. Certain foreign countries
may impose restrictions on the ability of issuers of foreign securities to make
payment of principal and interest or dividends to investors located outside the
country, due to blockage of foreign currency exchanges or otherwise. Investments
in emerging markets are subject to greater volatility and price
declines.
In addition, the Fund's investments
in non-U.S. securities may be subject to the risks of nationalization or
expropriation of assets, imposition of currency exchange controls or
restrictions on the repatriation of non-U.S. currency, confiscatory taxation and
adverse diplomatic developments. Special U.S. tax considerations may
apply.
Increase
in Expenses Risk. Your actual cost
of investing in the Fund may be higher than the expenses shown in the expense
table for a variety of reasons. For example, expense ratios may be higher than
those shown if average net assets decrease. Net assets are more likely to
decrease and Fund expense ratios are more likely to increase when markets are
volatile. Active and frequent trading of Fund securities can increase
expenses.
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PGIM Floating Rate
Income Fund
Interest
Rate Risk. The value of your
investment may go down when interest rates rise. A rise in rates tends to have a
greater impact on the prices of longer term or duration debt securities. For
example, a fixed income security with a duration of three years is expected to
decrease in value by approximately 3% if interest rates increase by 1%. This is
referred to as “duration
risk.”
When
interest rates fall, the issuers of debt obligations may prepay principal more
quickly than expected, and the Fund may be required to reinvest the proceeds at
a lower interest rate. This is referred to as “prepayment
risk.”
When interest rates rise, debt obligations may be repaid more slowly than
expected, and the value of the Fund's holdings may fall sharply. This is
referred to as “extension
risk.”
The Fund may lose money if short-term or long-term interest rates rise sharply
or in a manner not anticipated by the subadviser.
Junk
Bonds Risk. High-yield,
high-risk bonds have predominantly speculative characteristics, including
particularly high credit risk. Junk bonds tend to have lower market liquidity
than higher-rated securities. The liquidity of particular issuers or industries
within a particular investment category may shrink or disappear suddenly and
without warning. The non-investment grade bond market can experience sudden and
sharp price swings and become illiquid due to a variety of factors, including
changes in economic forecasts, stock market activity, large sustained sales by
major investors, a high profile default or a change in the market's
psychology.
Large
Shareholder and Large Scale Redemption Risk. Certain
individuals, accounts, funds (including funds affiliated with the Manager) or
institutions, including the Manager and its affiliates, may from time to time
own or control a substantial amount of the Fund’s shares. There is no
requirement that these entities maintain their investment in the
Fund.
Certain of these
entities may use predetermined, nondiscretionary mathematical formulas in their
investment process that may result in large-scale asset flows into and out of
the Fund. These shareholders may also pledge or loan Fund shares (to secure
financing or otherwise), which may result in the shares becoming concentrated in
another party. There is a risk that such large shareholders or that the Fund’s
shareholders generally may redeem all or a substantial portion of their
investments in the Fund in a short period of time, which could have a
significant negative impact on the Fund’s NAV, liquidity, and brokerage costs.
Such redemptions may cause the Fund to have to sell securities at inopportune
times or prices. These transactions may adversely affect the Fund’s performance
and increase transaction costs. In addition, large redemption requests may
exceed the cash balance of the Fund and result in credit line borrowing fees
and/or overdraft charges to the Fund until the sales of portfolio securities
necessary to cover the redemption request settle. To the extent a large
shareholder in the Fund is an entity subject to domestic and/or international
regulations governing banking, insurance,
or
other financial institutions, changes in those regulations (e.g., capital
requirements) or in the shareholder’s financial status may cause or require the
shareholder to redeem its investment in the Fund when it otherwise would not
choose to redeem that investment. It is also possible that a significant
redemption could result in an increase in Fund expenses on account of being
spread over a smaller asset base, and therefore make it more difficult for the
Fund to implement its investment strategy. Large redemptions could also result
in tax consequences to shareholders. The Fund’s ability to pursue its investment
objective after one or more large scale redemptions may be impaired and, as a
result, the Fund may invest a larger portion of its assets in cash or cash
equivalents.
LIBOR
Risk.
Many financial instruments use or may use a floating rate based on the London
Interbank Offered Rate, or “LIBOR,” which is the offered rate for short-term
Eurodollar deposits between major international banks. Over the course of the
last several years, global regulators have indicated an intent to phase out the
use of LIBOR and similar interbank offering rates (“IBOR”). There still remains
uncertainty regarding the nature of any replacement rates for LIBOR and the
other IBORs as well as around fallback approaches for instruments extending
beyond the any phase-out of these reference rates. The lack of consensus around
replacement rates and the uncertainty of the phase out of LIBOR and other IBORs
may result in increased volatility in corporate or governmental debt, bank
loans, derivatives and other instruments invested in by the Fund as well as loan
facilities used by the Fund.
The potential
effect of a transition away from LIBOR on the Fund or the financial instruments
in which the Fund invests cannot yet be determined. The elimination of LIBOR or
changes to other reference rates or any other changes or reforms to the
determination or supervision of reference rates could have an adverse impact on
the market for, or value of, any securities or payments linked to those
reference rates, which may adversely affect the Fund’s performance and/or net
asset value. Certain proposed replacement rates to LIBOR, such as the Secured
Overnight Financing Rate (“SOFR”), are materially different from LIBOR, and
changes in the applicable spread for instruments previously linked
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19
to LIBOR will need to be made in
order for instruments to pay similar rates. Uncertainty and risk also remain
regarding the willingness and ability of issuers and lenders to include revised
provisions in new and existing contracts or instruments. Consequently, the
transition away from LIBOR to other reference rates may lead to reduced coupons
on debt held by the Fund, higher rates required to be paid by the Fund on bank
lines of credit due to increases in spreads, increased volatility and
illiquidity in markets that are tied to LIBOR, fluctuations in values of
LIBOR-related investments or investments in issuers that utilize LIBOR,
increased difficulty in borrowing or refinancing and diminished effectiveness of
hedging strategies, adversely affecting the Fund’s performance. Furthermore, the
risks associated with the expected discontinuation of LIBOR and transition may
be exacerbated if the work necessary to effect an orderly transition to an
alternative reference rate is not completed in a timely manner. Because the
usefulness of LIBOR and the other IBORs as benchmarks could deteriorate during
the transition period, these effects could be experienced until the anticipated
discontinuance date in 2023 for the majority of the LIBOR rates.
Liquidity
Risk.
Liquidity risk is the risk that the Fund could not meet requests to redeem
shares issued by the Fund without significant dilution of remaining investors'
interests in the Fund. The Fund may invest in instruments that trade in lower
volumes and are more illiquid than other investments. If the Fund is forced to
sell these investments to pay redemption proceeds or for other reasons, the Fund
may lose money. In addition, when there is no willing buyer and investments
cannot be readily sold at the desired time or price, the Fund may have to accept
a lower price or may not be able to sell the instrument at all. An inability to
sell a portfolio position can adversely affect the Fund's value or prevent the
Fund from being able to take advantage of other investment
opportunities.
Loan Liquidity
and Settlement Risk.
The Fund’s investments in loans may subject it to additional illiquidity risks.
Loans generally are subject to legal or contractual restrictions on resale. The
liquidity of loans, including the volume and frequency of secondary market
trading in such loans, varies significantly over time and among individual
loans. For example, if the credit quality of a loan unexpectedly declines
significantly, secondary market trading in that loan can also decline for a
period of time. During periods of infrequent trading, valuing a loan can be more
difficult and buying and selling a loan at an acceptable price can be more
difficult and delayed. Difficulty in selling a loan can result in a loss.
Certain of the Fund’s assets may be invested in assets that are considerably
less liquid than debt instruments traded on national exchanges. Market
quotations for such assets may be volatile and/or subject to large spreads
between bid and ask prices. Loans trade in an over-the-counter market, and
confirmation and settlement may take significantly longer than seven days to
complete. Extended trade settlement periods may, in unusual market conditions
with a high volume of shareholder redemptions, present a risk to shareholders
regarding the Fund’s ability to pay redemption proceeds within the allowable
time periods stated in this Prospectus. To the extent the extended loan
settlement process gives rise to short-term liquidity needs, such as the need to
satisfy redemption requests, the Fund may hold cash, sell investments or
temporarily borrow from banks or other lenders.
Management
Risk. The value of your
investment may decrease if judgments by the subadviser about the attractiveness,
value or market trends affecting a particular security, industry or sector or
about market movements are incorrect.
Market
Disruption and Geopolitical Risks. Market disruption can be caused by
economic, financial or political events and factors, including but not limited
to, international wars or conflicts (including Russia’s military invasion of
Ukraine), geopolitical developments (including trading and tariff arrangements,
sanctions and cybersecurity attacks), instability in regions such as Asia,
Eastern Europe and the Middle East, terrorism, natural disasters and public
health epidemics (including the outbreak of COVID-19 globally).
The extent and duration of such
events and resulting market disruptions cannot be predicted, but could be
substantial and could magnify the impact of other risks to the Fund. These and
other similar events could adversely affect the U.S. and foreign financial
markets and lead to increased market volatility, reduced liquidity in the
securities markets, significant negative impacts on issuers and the markets for
certain securities and commodities and/or government intervention. They may also
cause short- or long-term economic uncertainties in the United States and
worldwide. As a result, whether or not the Fund invests in securities of issuers
located in or with significant exposure to the countries directly affected, the
value and liquidity of the Fund’s investments may be negatively impacted.
Further, due to closures of certain markets and restrictions on trading certain
securities, the value of certain securities held by the Fund could be
significantly impacted, which could lead to such securities being valued at
zero.
20
PGIM Floating Rate
Income Fund
COVID-19 and the related
governmental and public responses have had and may continue to have an impact on
the Fund’s investments and net asset value and have led and may continue to lead
to increased market volatility and the potential for illiquidity in certain
classes of securities and sectors of the market. They have also had and may
continue to result in periods of business disruption, business closures,
inability to obtain raw materials, supplies and component parts, and reduced or
disrupted operations for the issuers in which the Fund invests. The occurrence,
reoccurrence and pendency of public health epidemics could adversely affect the
economies and financial markets either in specific countries or
worldwide.
Market
Risk.
Securities markets may be volatile and the market prices of the Fund’s
securities may decline. Securities fluctuate in price based on changes in an
issuer’s financial condition and overall market and economic conditions. If the
market prices of the securities owned by the Fund fall, the value of your
investment in the Fund will decline.
Money
Market Instruments Risk. The value of money
market instruments may be affected by changing interest rates and by changes in
the credit ratings of those instruments. If a significant amount of the Fund's
assets are invested in money market instruments, it will be more difficult for
the Fund to achieve its investment objective.
Portfolio
Turnover Risk. The length of time
the Fund has held a particular security is not generally a consideration in
investment decisions. Under certain market conditions, the Fund’s turnover rate
may be higher than that of other mutual funds. Portfolio turnover generally
involves some expense to the Fund, including brokerage commissions or dealer
mark-ups and other transaction costs on the sale of securities and reinvestment
in other securities. These transactions may result in realization of taxable
capital gains. The trading costs and tax effects associated with portfolio
turnover may adversely affect the Fund’s investment performance.
Preferred
Securities Risk.
Preferred stock can experience sharp declines in value over short or extended
periods of time, regardless of the success or failure of a company’s operations.
A redemption by the issuer may negatively impact the return of the security held
by the Fund. Preferred stockholders’ liquidation rights are subordinate to the
company’s debt holders and creditors. If interest rates rise, the fixed dividend
on preferred stocks may be less attractive and the price of preferred stocks may
decline. Preferred stock usually does not require the issuer to pay dividends
and may permit the issuer to defer dividend payments. Deferred dividend payments
could have adverse tax consequences for the Fund and may cause the preferred
security to lose substantial value. Preferred securities also may have
substantially lower trading volumes and less market depth than many other
securities, such as common stock or U.S. Government securities.
Repurchase
Agreements Risk. Repurchase
agreements could involve certain risks in the event of default or insolvency of
the seller, including losses and possible delays or restrictions upon the Fund’s
ability to dispose of the underlying securities. To the extent that, in the
meantime, the value of the securities that the Fund has purchased has decreased,
the Fund could experience a loss.
Reverse
Repurchase Agreements Risk. Reverse repurchase
agreements involve the risk that the other party may fail to return the
securities in a timely manner or at all. The Fund could lose money if it is
unable to recover the securities and the value of the collateral held by the
Fund, including the value of investments made with cash collateral, is less than
the value of the securities. These events could also trigger adverse tax
consequences to the Fund. Reverse repurchase agreements also involve leverage,
which may exaggerate the increase or decrease of the value of the Fund’s assets
during the term of the agreement.
Short Sales
Risk. Short sales
involve costs and risks. The Fund must pay the lender interest on the security
it borrows, and the Fund will lose money to the extent that the price of the
security increases between the time of the short sale and the date when the Fund
replaces the borrowed security. Although the Fund’s gain is limited to the price
at which it sold the securities short, its potential loss is limited only by the
maximum attainable price of the securities, less the price at which the security
was sold and may, theoretically, be unlimited. The Fund may also make short
sales “against the box.” When selling short against the box, the Fund gives up
the opportunity for capital appreciation in the security.
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When-Issued
and Delayed-Delivery Transactions Risk. When-issued and
delayed-delivery securities involve the risk that the security the Fund buys
will lose value prior to its delivery. There also is the risk that the security
will not be issued or that the other party to the transaction will not meet its
obligation. If this occurs, the Fund may lose both the investment opportunity
for the assets it set aside to pay for the security and any gain in the
security’s price.
Please note that,
in addition to the risks discussed above, there are many other factors that may
impact the Fund’s ability to achieve its investment objective and which could
result in a loss of all or a part of your investment.
More information
about the Fund’s investment strategies and risks appears in the SAI.
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PGIM Floating Rate
Income Fund
HOW THE FUND IS
MANAGED
BOARD
OF DIRECTORS
The Fund is
overseen by a Board of Directors (hereafter referred to as “Directors” or the
“Board”). The Board oversees the actions of the Manager, subadviser and
distributor and decides on general policies. The Board also oversees the Fund's
officers, who conduct and supervise the daily business operations of the
Fund.
MANAGER
PGIM
Investments LLC (“PGIM Investments”)
655 Broad Street
Newark, NJ 07102-4410
655 Broad Street
Newark, NJ 07102-4410
Under a management agreement with
the Fund, PGIM Investments manages the Fund's investment operations and
administers its business affairs and is responsible for supervising the Fund's
subadviser. For the fiscal year ended February 28, 2022, the Fund paid PGIM
Investments management fees (net of waivers, as applicable) at the effective
rate of 0.65% of the Fund's average daily net assets for all share
classes.
PGIM Investments and its
predecessors have served as a manager or administrator to investment companies
since 1987. As of March 31, 2022, PGIM Investments, a wholly-owned
subsidiary of Prudential, served as the investment manager to all of the
Prudential U.S. and offshore open-end investment companies, and as the manager
or administrator to closed-end investment companies, with aggregate assets of
approximately $345.3 billion.
Subject to the
supervision of the Board, PGIM Investments is responsible for conducting the
initial review of prospective subadvisers for the Fund. In evaluating a
prospective subadviser, PGIM Investments considers many factors, including the
firm's experience, investment philosophy and historical performance. Subject to
the Board’s oversight, PGIM Investments is also responsible for monitoring the
performance of the Fund's subadviser and recommending its termination and
replacement when deemed appropriate. PGIM Investments may provide a subadviser
with additional investment guidelines consistent with the Fund's investment
objective and restrictions.
PGIM Investments
and the Fund operate under an exemptive order (the “Order”) from the SEC that
generally permits PGIM Investments to enter into or amend agreements with
unaffiliated subadvisers and certain subadvisers that are affiliates of PGIM
Investments without obtaining shareholder approval. This authority is subject to
certain conditions, including the requirement that the Board must approve any
new or amended agreements with a subadviser. Shareholders of the Fund still have
the right to terminate these agreements at any time by a vote of the majority of
the outstanding shares of the Fund. The Fund will notify shareholders of any new
subadvisers engaged or material amendments to subadvisory agreements made
pursuant to the Order. Any new subadvisory agreement or amendment to the Fund’s
management agreement or current subadvisory agreement that directly or
indirectly results in an increase in the aggregate management fee rate payable
by the Fund will be submitted to the Fund’s shareholders for their approval.
PGIM Investments does not currently intend to retain unaffiliated
subadvisers.
A discussion of the
basis for the Board's approvals of the management and subadvisory agreements is
available in the Fund's Semi-Annual Report to shareholders dated August
31.
SUBADVISERS
PGIM, Inc.
(“PGIM”) is an
indirect, wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential”)
that was organized in 1984. Its address is 655 Broad Street, Newark, New Jersey
07102. As of December 31, 2021, PGIM managed approximately $1.7 trillion in
assets.
PGIM Fixed
Income is the primary
public fixed income asset management unit of PGIM, with $957.44 billion in
assets under management as of December 31, 2021 and is the unit of PGIM that
provides investment advisory services to the Fund.*
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PGIM Fixed Income is organized into
groups specializing in different sectors of the fixed income market: U.S. and
non-U.S. government bonds, mortgage-backed and asset-backed securities, U.S. and
non-U.S. investment grade corporate bonds, high-yield bonds, emerging markets
bonds, municipal bonds, and money market securities.
*PGIM Fixed Income’s assets under
management includes PGIM Limited’s assets under management, an operating
division of PGIM Fixed Income.
PGIM Limited
is an indirect
wholly-owned subsidiary of PGIM. PGIM Limited is located at Grand Buildings, 1-3
Strand, Trafalgar Square, London WC2N 5HR. PGIM Limited provides investment
advisory services with respect to securities in certain foreign markets. As of
December 31, 2021, PGIM Limited managed approximately $62.3 billion in
assets.
PORTFOLIO
MANAGERS
The following individuals are
jointly and primarily responsible for the day-to-day management of the
Fund.
Robert
Cignarella, CFA, is a Managing
Director and Head of U.S. High Yield for PGIM Fixed Income. Mr. Cignarella is
also the co-Head of the Global High Yield Strategy. Prior to joining the firm in
2014, Mr. Cignarella was a managing director and co-head of high yield and bank
loans at Goldman Sachs Asset Management. He also held positions as a high yield
portfolio manager and a high yield and investment grade credit analyst. Earlier,
he was a financial analyst in the investment banking division of Salomon
Brothers. Mr. Cignarella received an MBA from the University of Chicago, and a
bachelor’s degree in operations research and industrial engineering from Cornell
University. He holds the Chartered Financial Analyst (CFA)
designation.
Brian
Juliano is a Managing
Director and Head of the U.S. Leveraged Loan Team for PGIM Fixed Income. He is
also the Co-Head of PGIM Fixed Income’s U.S. CLO business and is a portfolio
manager for the Firm's investments in CLO tranches. Before joining the Bank Loan
Team in 2003, Mr. Juliano was a CDO analyst and member of the CDO Business Team
for the Firm and a manager in financial analysis in the Finance Group, where he
was responsible for the finance function of various investment subsidiaries. Mr.
Juliano joined the Firm in 2000. Previously, he was a consultant at Deloitte
& Touche, where he worked on investment strategy and tax compliance of high
net worth individuals. Mr. Juliano received a BS in Finance and an MBA in
Finance and Accounting from New York University.
Parag Pandya,
CFA, is a Principal
and portfolio manager for PGIM Fixed Income’s U.S. Leveraged Loan Team. Prior to
joining the Bank Loan team in October 2015, he was a high-yield credit analyst
for 17 years covering home builders/building materials, gaming, and lodging
industries for the high-yield and bank loan portfolios. Previously, Mr.
Pandya was an internal auditor at Prudential Securities. He joined the Firm in
1992 in the Financial Accounting Department. Mr. Pandya received a BS in
Accounting from Montclair State University and holds the Chartered Financial
Analyst (CFA) designation.
Ian F. Johnston
is a Principal and
portfolio manager for PGIM Fixed Income's U.S. Leveraged Loan Team. Previously,
Mr. Johnston was a credit analyst in the U.S. Bank Loan Credit Research Team
where he covered the cable, telecom, financial services, media, and education
sectors. Mr. Johnston joined the Firm in 2010 from Seven Bridges Management, an
affiliate of Ulysses Management, where he was head trader and principal for the
Special Situations hedge fund. Earlier, Mr. Johnston worked as senior analyst
for Murray Capital Management's Distressed Debt hedge fund. Mr. Johnston began
his career in 1991, first as an analyst and then a Senior Associate in the
Firm's Financial Restructuring Team. Later he was Vice President and portfolio
manager on the Emerging Markets Debt Team. Mr. Johnston received a BS in Applied
Math-Economics from Brown University and an MBA from the University of
Pennsylvania's Wharton School of Business.
Robert W. Meyer,
CFA, is a Principal
for the PGIM Fixed Income's U.S. Leveraged Loan Team. Previously, Mr. Meyer was
a member of the Quantitative Research Rotational Program, spending time on the
CLO Analyst team, Structured Products Research Team, and Liquidity team. He
joined the Firm in 2012. Mr. Meyer received a BS in Economics with
concentrations in Finance and Management along with a minor in Classical Studies
from the Wharton School at the University of Pennsylvania. He holds the
Chartered Financial Analyst (CFA) designation.
24
PGIM Floating Rate
Income Fund
Additional
information about portfolio manager compensation, other accounts managed, and
portfolio manager ownership of Fund securities may be found in the
SAI.
Prior
Historical Performance of Similarly Managed Accounts
The Fund’s investment objective,
investment policies and strategies are substantially similar to the investment
objectives, strategies, and policies of two other accounts (including one mutual
fund) managed by the subadviser. The performance of those accounts is summarized
below in the subadviser’s PGIM Fixed Income US Senior Secured Loans
(Unconstrained) Composite (the “Composite”). The Composite (inception date May
1, 2007) includes all discretionary accounts managed by the subadviser with
substantially similar investment objectives, strategies, and policies to those
of the Fund. The Prudential Bank Loan Fund (the “Bank Loan Fund”) (inception
date May 1, 2007), is included in the Composite and is available for investment
by institutional investors. The Composite includes all accounts whose investment
objective, strategy and policies are substantially similar to those of the
Fund.
The performance of the Composite
and the Bank Loan Fund is compared to the performance of the Credit Suisse
Leveraged Loan Index, which is the performance benchmark of the Fund, and the
Morningstar Bank Loan Fund Category Average. The Credit Suisse Leveraged Loan
Index is an unmanaged index that represents the investable universe of the
U.S.-dollar-denominated leveraged loan market. An unmanaged index cannot be
purchased directly by investors, and reflects no deductions for sales charges,
fees, expenses or taxes. The Morningstar Bank Loan Fund Category
Average represents funds that invest primarily in floating rate bank loans, and
is based on the average return of all mutual funds in the Morningstar Bank Loan
Category. Returns do not include the effect of sales charges or taxes. In
addition, the portfolio holdings of the Fund may differ from those of the
accounts in the Composite. Such differences do not alter the conclusion that the
Fund’s strategy and the strategy represented in the Composite are substantially
similar in all material respects.
All historical returns shown below
reflect the reinvestment of dividends and other earnings. Historical investment
performance is shown net of fees and gross of fees. The net of fee performance
data for the Composite is calculated on a monthly basis and reflects the
deduction of the highest investment advisory fee paid to the subadviser and the
highest level of other expenses paid by any account in the Composite. Gross
returns do not reflect the deduction of investment advisory fees or any other
expenses that may be incurred in the management of the accounts in the
Composite. Similarly, the net of fee performance data for the Bank Loan Fund is
calculated on a monthly basis and reflects the deduction of the Bank Loan Fund's
investment advisory fee paid to the subadviser and other expenses paid by the
Bank Loan Fund. Gross returns for the Bank Loan Fund do not reflect the
deduction of investment advisory fees or any other expenses that may be incurred
in the management of the Bank Loan Fund.
Fees charged to clients may vary
depending on, among other things, the applicable fee schedule and the size of
the account or fund in the Composite or Bank Loan Fund. The net and gross of fee
performance has not been adjusted to reflect any fees or expenses that will be
payable by the Fund, which may be higher or lower than the fees payable by an
account included in the Composite or Bank Loan Fund depending on its fee
structure, and which will reduce the returns of the Fund. If the net and gross
of fee performance for the Composite and the Bank Loan Fund had been adjusted to
reflect fees and expenses payable by the Fund, the returns of the Composite and
the Bank Loan Fund could have been different than those shown.
Investors should
not rely on the historical performance data shown below as an indication of
future performance of the Fund. The historical performance information set forth
below does not represent the performance of the Fund.
|
|
PGIM
Fixed Income US Senior Secured
Loans
(Unconstrained) Composite |
PGIM
Fixed Income Bank Loan Fund |
Credit
Suisse
Leveraged
Loan
Index* |
Morningstar
Bank
Loan
Fund
Category
Average | ||
|
Annualized
Returns as of 2/28/2022 |
Gross |
Net |
Gross |
Net | ||
|
1
Year |
3.02% |
1.28% |
4.06% |
3.44% |
3.24% |
2.19% |
|
3
Year |
4.92% |
3.15% |
4.75% |
4.14% |
4.04% |
2.73% |
|
5
Year |
4.80% |
3.03% |
4.63% |
4.01% |
4.06% |
2.87% |
|
10
Year |
5.06% |
3.29% |
4.98% |
4.36% |
4.54% |
3.54%
|
Visit our website
at www.pgim.com/investments
25
|
|
PGIM
Fixed Income US Senior Secured
Loans
(Unconstrained) Composite |
PGIM
Fixed Income Bank Loan Fund |
Credit
Suisse
Leveraged
Loan
Index* |
Morningstar
Bank
Loan
Fund
Category
Average | ||
|
Annualized
Returns as of 2/28/2022 |
Gross |
Net |
Gross |
Net | ||
|
Since
Inception (5/1/2007) |
4.96% |
3.19% |
5.19% |
4.57% |
4.53% |
3.14% |
|
|
PGIM
Fixed Income US Senior Secured
Loans
(Unconstrained) Composite |
PGIM
Fixed Income Bank Loan Fund |
Credit
Suisse
Leveraged
Loan
Index* |
Morningstar
Bank
Loan
Fund
Category
Average | ||
|
Calendar
Year Returns |
Gross |
Net |
Gross |
Net | ||
|
2021 |
6.64% |
4.85% |
7.12% |
6.49% |
5.40% |
5.40% |
|
2020 |
4.76% |
2.99% |
3.79% |
3.27% |
2.78% |
1.16% |
|
2019 |
8.57% |
6.74% |
8.15% |
7.60% |
8.17% |
7.45% |
|
2018 |
0.75% |
-0.94% |
0.83% |
0.15% |
1.14% |
-0.26% |
|
2017 |
5.34% |
3.56% |
5.35% |
4.75% |
4.25% |
3.48% |
|
2016 |
9.96% |
8.11% |
10.75% |
10.15% |
9.88% |
9.25% |
|
2015 |
1.29% |
-0.42% |
0.98% |
0.42% |
-0.38% |
-1.25% |
|
2014 |
2.01% |
0.29% |
1.81% |
1.25% |
2.06% |
0.60% |
|
2013 |
6.00% |
4.21% |
5.82% |
5.24% |
6.15% |
5.48% |
|
2012 |
9.58% |
7.73% |
9.25% |
8.65% |
9.43% |
9.12% |
|
2011 |
3.73% |
1.98% |
3.59% |
3.02% |
1.82% |
1.74% |
|
2010 |
9.76% |
7.91% |
9.76% |
9.15% |
9.71% |
9.44% |
|
2009 |
38.72% |
36.38% |
38.78% |
38.02% |
53.84% |
41.81% |
|
2008 |
-22.99% |
-24.29% |
-19.92% |
-20.36% |
-29.48% |
-29.72% |
|
2007(5/1/2007
- 12/31/2007) |
0.00% |
-1.13% |
0.14% |
-0.22% |
-0.62% |
-1.50% |
*As
of January 1, 2011, the benchmark for the Composite is the Credit Suisse
Leveraged Loan Index. The Benchmark is unmanaged and represents the investable
universe of the dollar-denominated
leveraged loan market. An investment cannot be made directly in an index. Source
of the benchmark: Credit Suisse. Prior to January 1, 2011 the benchmark for the
Composite was the Barclays US High Yield Loan Index. The index provides broad
and comprehensive total return metrics of the universe of syndicated term loans.
To be included in the index, a bank loan must be dollar denominated, have at
least $150 million funded loan, a minimum term of one year, and a minimum
initial spread of LIBOR+125. Source of the benchmark: Barclays. The change in
benchmark was made to more accurately reflect the strategy of the Composite. The
financial indices referenced herein are provided for informational purposes
only. The subadviser’s holdings and portfolio characteristics may differ from
those of the benchmark(s). Additional factors impacting the performance
displayed herein may include portfolio-rebalancing, the timing of cash flows,
and differences in volatility, none of which impact the performance of the
financial indices. Financial indices reflect the reinvestment of income, if any,
but do not reflect the impact of fees, applicable taxes or trading costs which
may reduce the returns shown. You cannot invest directly in an
index.
The above historical performance
data is provided solely to illustrate the subadviser’s experience in managing
accounts with an investment objective, strategy, and policies substantially
similar to the investment objective, strategy, and policies of the Fund.
Investors should not rely on this information as an indication of actual
performance of any account or future performance of the Fund. Each of the
accounts (except one account that is a mutual fund) that currently make up the
Composite are not subject to the investment limitations, diversification
requirements and other restrictions imposed on the Fund under the Investment
Company Act of 1940 and the Internal Revenue Code, which, if applicable, might
have adversely affected the performance results of the Composite.
Composite gross rates of return are
calculated by asset weighting the individual portfolio returns monthly using the
beginning of period values. Composite member portfolio monthly returns are
calculated using the daily time weighted rate of return methodology. Composite
net rates of return are calculated by geometrically linking 1/12th of the
highest standard expense ratio (including the highest advisory fee and highest
other expenses) in effect for the respective period (currently 1.70%) to the
gross composite. Annual rates of return are calculated by geometrically linking
the monthly returns. The annualized rate of return is equivalent to the annual
rate of return which, if earned in each year of the indicated multi-year period,
would produce the actual cumulative rate of return over the time period.
Performance for the Composite has been calculated in a manner that differs from
the performance calculations the SEC requires for registered funds. The
Composite has been calculated consistent with the requirements of the Global
Investment Performance Standards (GIPS®) and there is no representation that the
above performance is presented in accordance with GIPS.
26
PGIM Floating Rate
Income Fund
The historical
performance information presented is current as of the date indicated, but may
not be current as of the date you are reviewing this information. Performance
results fluctuate, and there can be no assurance that objectives will always be
achieved. Other methods of computing returns may produce different results, and
the results for different periods will vary.
DISTRIBUTOR
Prudential
Investment Management Services LLC (“PIMS” or the “Distributor”) distributes
each class of the Fund's shares under a Distribution Agreement with the Fund.
The Fund has Distribution and Service Plans (the “Plans”) pursuant to Rule 12b-1
under the 1940 Act, applicable to certain of the Fund's shares. Under the Plans
and the Distribution Agreement, the Distributor pays the expenses of
distributing the shares of all share classes of the Fund. The Distributor also
provides certain shareholder support services. Under the Plans, certain classes
of the Fund pay distribution and other fees to the Distributor as compensation
for its services. These fees—known as 12b-1 fees—are set forth in the “Fund Fees
and Expenses” tables.
Because these fees
are paid from the Fund's assets on an ongoing basis, over time these fees will
increase the cost of your investment and may cost you more than paying other
types of sales charges.
DISCLOSURE
OF PORTFOLIO HOLDINGS
The Fund's policies
and procedures with respect to the disclosure of the Fund's portfolio securities
are described in the Fund's SAI and on the Fund's website at www.pgim.com/investments.
Visit our website
at www.pgim.com/investments
27
FUND
DISTRIBUTIONS AND TAX ISSUES
DISTRIBUTIONS
The Fund
distributes dividends
to
shareholders out of any net investment income. For example, if the Fund owns
ACME Corp. stock and the stock pays a dividend, the Fund will pay out a portion
of this dividend to its shareholders, assuming the Fund’s income is more than
its costs and expenses. The dividends you receive from the Fund will be subject
to taxation whether or not they are reinvested in the Fund, unless your shares
are held in a qualified or tax-deferred plan or account.
The Fund also
distributes any net realized capital
gains
to shareholders. Capital gains are generated when the Fund sells its assets for
a profit. For example, if the Fund bought 100 bonds of ACME Corp. for a total of
$1,000 and more than one year later sold the bonds for a total of $1,500, the
Fund has net long-term capital gains of $500, which it will pass on to
shareholders (assuming the Fund's remaining total gains are greater than any
losses it may have).
For your convenience, the Fund’s
distributions of dividends and net capital gains are automatically
reinvested in the Fund
without any sales charge. If you ask us to pay the distributions in cash, we
will send you a check if your account is with Prudential Mutual Fund Services
LLC (“PMFS” or the “Transfer Agent”). Otherwise, if your account is with a
broker, you will receive a credit to your account. Either way, the distributions
may be subject to income taxes, unless your shares are held in a qualified or
tax-deferred plan or account. If your dividend distribution check remains
uncashed for more than six months, your check may be invested in additional
shares of the Fund at the next net asset value (“NAV”) calculated on the day of
the investment. For more information about automatic reinvestment and other
shareholder services, see “Additional Shareholder Services” in the next
section.
The chart below
sets forth the expected frequency of dividend and capital gains distributions to
shareholders. Various factors may impact the frequency of dividend distributions
to shareholders, including but not limited to adverse market conditions or
portfolio holding-specific events.
|
Expected
Distribution Schedule* |
|
|
Dividends |
Monthly |
|
Short-Term
Capital Gains |
Annually |
|
Long-Term
Capital Gains |
Annually |
*Under certain
circumstances, the Fund may make more than one distribution of short-term and/or
long-term capital gains during a fiscal year.
TAX
ISSUES
Investors who buy
Fund shares should be aware of some important tax issues. For example, the Fund
distributes dividends of net investment income and realized net capital gains,
if any, to shareholders. Fund distributions and gain from the sale of Fund
shares are subject to federal income taxes, unless you hold your shares in a
401(k) plan, an Individual Retirement Account (“IRA”) or some other qualified or
tax-deferred plan or account. Dividends and distributions from the Fund also may
be subject to state and local income tax in the state where you
live.
The following
briefly discusses some of the important income tax issues you should be aware
of, but is not meant to be tax advice. For tax advice, please speak with your
tax adviser.
Fund
Distributions
Fund distributions of net capital
gains are taxed differently depending on how long the Fund holds the security.
If the Fund holds a security for more than one year before selling it, any gain
is treated as long-term
capital gain which is
generally taxed at rates of up to 15% or 20% for non-corporate U.S.
shareholders, depending on whether their incomes exceed certain threshold
amounts, which are adjusted annually for inflation. If the Fund holds the
security for one year or less, any gain is treated as short-term
capital gain, which is
taxed at rates applicable to ordinary income, subject to a maximum tax rate of
37%. Different rates apply to corporate shareholders.
28
PGIM Floating Rate
Income Fund
Dividends from net investment
income paid to a non-corporate U.S. shareholder that are reported as qualified
dividend income will generally be taxable to such shareholder at the long-term
capital gain tax rate. Dividends of net investment income that are not reported
as qualified dividend income will be taxable to shareholders at ordinary income
rates. Also, a portion of the dividends paid to corporate shareholders of the
Fund will be eligible for the dividends received deduction to the extent the
Fund’s income is derived from certain dividends received from U.S. corporations.
Between 2018 and 2025, the Fund may report dividends eligible for a 20%
“qualified business income” deduction for non-corporate U.S. shareholders to the
extent the Fund’s income is derived from ordinary REIT dividends, reduced by
allocable Fund expenses.
A U.S. shareholder that is an
individual, estate or certain type of trust is subject to a 3.8% Medicare
contribution tax on the lesser of (1) the U.S. shareholder’s “net investment
income,” including Fund distributions and net gains from the disposition of Fund
shares, and (2) the excess of the U.S. shareholder’s modified adjusted gross
income for the taxable year over $200,000 (or $250,000 for married couples
filing jointly). For this purpose, net investment income includes interest,
dividends, annuities, royalties, capital gain and income from a passive activity
business or a business of trading in financial instruments or
commodities.
Form
1099
For every year the
Fund declares a dividend, you will receive a Form 1099, which reports the amount
of ordinary income distributions and long-term capital gains we distributed to
you during the prior year unless you own shares of the Fund as part of a
qualified or tax-deferred plan or account. If you do own shares of the Fund as
part of a qualified or tax-deferred plan or account, your taxes are deferred, so
you will not receive a Form 1099 annually, but instead you will receive a Form
1099 when you take any distribution from your qualified or tax-deferred plan or
account.
Fund distributions
are generally taxable to you in the calendar year in which they are received,
except when we declare certain dividends and distributions in the fourth
quarter, with a record date in such quarter, and actually pay them in January of
the following year. In such cases, the dividends and distributions are treated
as if they were paid on December 31st of the prior year.
Cost
Basis Reporting
Mutual funds must
report cost basis information to you and the IRS when you sell or exchange
shares acquired on or after January 1, 2012 in your non-retirement accounts. The
cost basis regulations do not affect retirement accounts, money market funds,
and shares acquired before January 1, 2012. The cost basis regulations also
require mutual funds to report whether a gain or loss is short-term (shares held
one year or less) or long-term (shares held more than one year) for all shares
acquired on or after January 1, 2012 that are subsequently sold or exchanged.
The Transfer Agent is not required to report cost basis information on shares
acquired before January 1, 2012. However, in most cases the Transfer Agent will
provide this information to you as a service.
Withholding
Taxes
If federal tax law requires you to
provide the Fund with your taxpayer identification number and certifications as
to your tax status and you fail to do this, or if you are otherwise subject to
backup withholding, we will withhold and pay to the U.S. Treasury a portion of
your distributions and sale proceeds, based on the backup withholding
rate.
Taxation of
Non-U.S. Shareholders
For a discussion regarding the
taxation of non-U.S. shareholders, please see the SAI and contact your tax
adviser.
If
You Purchase on or Before a Record Date
If you buy shares
of the Fund on or before the record date for a distribution (the date that
determines who receives the distribution), we will pay that distribution to you.
As explained above, the distribution may be subject to taxes. You may think
you've done well since you bought shares one day and soon thereafter received a
distribution. That is not so, because when dividends are paid out, the value of
each share of the Fund decreases by the amount of the dividend to reflect the
payout, although this may not be apparent because the value of each share of the
Fund also will be affected by market changes, if any. However, the timing of
your purchase does mean that part of your investment may have come back to you
as taxable income.
Visit our website
at www.pgim.com/investments
29
Qualified
and Tax-Deferred Retirement Plans
Retirement plans
and accounts allow you to defer paying taxes on investment income and capital
gains. Contributions to these plans may also be tax-deductible, although
distributions from these plans generally are taxable. In the case of Roth IRA
accounts, contributions are not tax-deductible, but distributions from the plan
may be tax-free. Please contact your financial adviser for information on a
variety of PGIM Funds that are suitable for retirement plans offered by
Prudential.
IF
YOU SELL OR EXCHANGE YOUR SHARES
If you sell any
shares of the Fund for a profit, you have realized a capital gain, which is
subject to tax unless the shares are held in a qualified or tax-deferred plan or
account. As mentioned above, the maximum capital gains tax rate is up to 15% or
20% for individuals, depending on whether their incomes exceed certain threshold
amounts, which are adjusted annually for inflation.
If you sell shares
of the Fund at a loss, you may have a capital loss, which you may use to offset
capital gains you have, plus, in the case of non-corporate taxpayers, ordinary
income of up to $3,000. If you sell shares and realize a loss, you will not be
permitted to use the loss to the extent you replace the shares (including
pursuant to the reinvestment of a dividend) within a 61-day period (beginning 30
days before and ending 30 days after the sale of the shares). Under certain
circumstances, if you acquire shares of the Fund and sell or exchange your
shares within 90 days, you may not be allowed to include certain charges
incurred in acquiring the shares for purposes of calculating gain or loss
realized upon the sale or exchange of the shares.
If you exchange
your Fund shares for shares of another class of the Fund, this is generally not
a taxable event and should not result in realization of a capital gain or loss
by you. If you exchange your shares of the Fund for shares of another PGIM Fund,
this is considered a sale for tax purposes. In other words, it's a taxable
event. Therefore, if the shares you exchanged have increased in value since you
purchased them, you have capital gains, which are subject to the taxes described
above. Unless you hold your shares in a qualified or tax-deferred plan or
account, you or your financial adviser should keep track of the dates on which
you buy and sell—or exchange—Fund shares, as well as the amount of any gain or
loss on each transaction. For tax advice, please see your tax
adviser.
Automatic
Conversion of Class C Shares
The conversion of
Class C shares into Class A shares—which happens automatically approximately 8
years after purchase—is not a taxable event for federal income tax purposes. For
more information about the automatic conversion of Class C shares, see
Class
C Shares Automatically Convert to Class A Shares in How
to Buy, Sell and Exchange Fund Shares.
30
PGIM Floating Rate
Income Fund
HOW TO BUY, SELL
AND EXCHANGE FUND SHARES
HOW
TO BUY SHARES
In order to buy
Fund shares, simply follow the steps described below.
Opening
an Account
Shares may be
purchased through an account with the Transfer Agent, or through an account with
a financial intermediary that has an agreement with the Distributor to sell Fund
shares. In order to open an account with the Transfer Agent contact PMFS at
(800)
225-1852 or write
to:
Prudential
Mutual Fund Services LLC (“PMFS”)
P.O. Box 9658
Providence, RI 02940
P.O. Box 9658
Providence, RI 02940
PMFS will accept purchases of
shares by check or wire. We do not accept cash, money orders, non-U.S. checks,
credit card checks, payable through checks or travelers checks. To purchase by
wire, call the number above to obtain an application. After PMFS receives your
completed application, you will receive an account number. For additional
information, see the back cover page of this Prospectus. Your purchase order
must be in good order to be accepted and processed, which means that all
necessary processing requirements have been satisfied. We have the right to
reject any purchase order (including an exchange into the Fund) or suspend or
modify the Fund's sales of its shares under certain circumstances. These
circumstances include, but are not limited to, failure by you to provide
additional information requested, such as information required to verify the
source of funds used to purchase shares, your identity or the identity of any
underlying beneficial owners of your shares. Furthermore, we are required by law
to close your account if you do not provide the required identifying
information. This would result in the redemption of shares at the then-current
NAV and the proceeds would be remitted to you via check. We will attempt to
verify your identity within a reasonable time frame (e.g., 60 days), which may
change from time to time. For further information, please contact PMFS (for
shares purchased through the Transfer Agent) or your financial professional (for
shares purchased through a financial intermediary).
With certain limited exceptions,
Fund shares are only available to be sold in the United States, U.S. Virgin
Islands, Puerto Rico and Guam.
Choosing
a Share Class
The Fund offers the
following share classes. Certain classes of shares may have additional specific
eligibility or qualification requirements, which are explained
below.
|
Share
Class |
Eligibility |
|
Class
A* |
Retail
investors |
|
Class
C* |
Retail
investors |
|
Class
Z* |
Certain
group retirement plans, institutional investors and certain other
investors |
|
Class
R6 |
Certain
group retirement plans, institutional investors and certain other
investors |
*
The Fund’s Class A, Class C, and Class Z shares are generally closed to
investments by new group retirement plans. Please see “Closure
of Certain Share Classes to New Group Retirement Plans” in this section of the
Prospectus for more information.
Multiple share
classes let you choose a cost structure that meets your needs:
◾
Class A shares
purchased in amounts of less than $500,000 require you to pay a sales charge at
the time of purchase, but the operating expenses of Class A shares are lower
than the operating expenses of Class C shares. Investors who purchase $500,000
or more of Class A shares and sell these shares within 12 months of purchase are
also subject to a contingent deferred sales charge (“CDSC”) of 1.00%. The CDSC
is waived for certain retirement and/or benefit plans.
◾
Class C shares do
not require you to pay a sales charge at the time of purchase, but do require
you to pay a CDSC of 1.00% if you sell your shares within 12 months of purchase.
The operating expenses of Class C shares are higher than the operating expenses
of Class A shares.
Visit our website
at www.pgim.com/investments
31
When choosing a
share class, you should consider the following factors:
◾
The amount of your
investment and any previous or planned future investments, which may qualify you
for reduced sales charges for Class A shares under Rights of Accumulation or a
Letter of Intent.
◾
The length of time
you expect to hold the shares and the impact of varying distribution fees. Over
time, these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges. For this reason, Class C shares are
generally appropriate only for investors who plan to hold their shares for no
more than 3 years.
◾
The different sales
charges that apply to each share class—Class A's front-end sales charge (and, in
certain instances, CDSC) vs. Class C's CDSC.
◾
Class C shares
purchased in single amounts greater than $500,000 are generally less
advantageous than purchasing Class A shares. Purchase orders for Class C shares
above this amount generally will not be accepted.
◾
If you purchase
Class Z shares through a broker acting solely as an agent on behalf of its
customers pursuant to an agreement with PIMS, the broker may charge you a
commission in an amount determined and separately disclosed to you by the
broker.
◾
Because Class
Z and Class R6 shares have lower operating expenses than Class A or Class C
shares, as applicable, you should consider whether you are eligible to purchase
such share classes.
See “How to Sell
Your Shares” for a description of the impact of CDSCs.
If your shares are
held through a financial intermediary, you should discuss with your intermediary
which share classes of the Fund are available to you and which share class may
best meet your needs. Certain financial intermediaries through which you may
purchase shares of the Fund may impose their own investment minimums, fees,
policies and procedures for purchasing, exchanging and selling Fund shares,
which are not described in this Prospectus or the SAI, and which will depend on
the policies, procedures and trading platforms of the financial intermediary.
Consult your financial intermediary about share class availability and the
intermediary’s policies, procedures and other information. The
availability of certain sales charge waivers and discounts will depend on
whether you purchase your shares directly from the Fund or through a financial
intermediary. See “Appendix A: Waivers and Discounts Available From Certain
Financial Intermediaries” for additional information. The Fund has
advised financial intermediaries of the share class features and guidelines, per
the Prospectus, and it is their responsibility to monitor and enforce these
guidelines with respect to shareholders purchasing shares through financial
intermediaries.
Share
Class Comparison. Use the following
chart to help you compare the different share classes. The discussion following
this chart will tell you whether you are entitled to a reduction or waiver of
any sales charges.
|
|
Class
A* |
Class
C* |
Class
Z* |
Class
R6 |
|
Minimum
purchase amount |
$1,000 |
$1,000 |
None |
None |
|
Minimum
amount for subsequent purchases |
$100 |
$100 |
None |
None |
|
Maximum
initial sales charge |
2.25%
of the public
offering
price |
None |
None |
None |
|
Contingent
Deferred Sales Charge (CDSC) (as a
percentage
of the lower of the original purchase
price
or the net asset value at redemption) |
1.00%
on sales of
$500,000
or more made
within
12 months of
purchase |
1.00%
on sales made
within
12 months of
purchase |
None |
None |
|
Annual
distribution and service (12b-1) fees (shown
as
a percentage of average daily net assets) |
0.25% |
1.00% |
None |
None |
Notes
to Share Class Comparison Table:
°
The minimum initial and subsequent investment requirements do not apply to
employee savings plan accounts, payroll deduction plan accounts, or when
exchanging all shares of an account to an
existing account with the same registration. The minimum initial and subsequent
investment for AIP accounts is $50 monthly (if your shares are held through a
broker or other financial intermediary, the broker or intermediary is
responsible for determining the minimum initial and subsequent investment for
AIP accounts). In addition, the minimum initial and subsequent investment
requirements do not apply with respect to Class A and Class C shares when
offered at NAV on fee-based programs, mutual fund “wrap” or asset allocation
programs, mutual fund “supermarket” programs, and group retirement
plans.
°
If the value of your Class A, Class C or Class Z account with PMFS is less than
$10,000, the Fund will deduct a $15 annual account maintenance fee from your
account. The $15 annual account
maintenance fee will be assessed during the 4th calendar quarter of each year.
Any applicable CDSC on the shares redeemed to pay the $15 account maintenance
fee will be waived. The $15 account maintenance fee will not be charged on: (i)
accounts during the first six months from inception of the account, (ii)
accounts which are authorized for electronic delivery of account statements,
transaction confirmations, prospectuses and fund shareholder reports, (iii)
omnibus accounts or accounts for which a broker or other financial
32
PGIM Floating Rate
Income Fund
intermediary
is responsible for recordkeeping, (iv) institutional accounts, (v) group
retirement plans, (vi) AIP accounts or employee savings plan accounts, (vii)
accounts with the same registration
associated with multiple share classes within the Fund, provided that the
aggregate value of share classes with the same registration within the Fund is
$10,000 or more, or (viii) clients with assets of $50,000 or more across the
PGIM family of mutual funds. For more information, see “Purchase, Redemption and
Pricing of Fund Shares— Account Maintenance Fee” in the SAI.
° For more
information about the CDSC and how it is calculated, see “How to Sell Your
Shares - Contingent Deferred Sales Charge (CDSC).”
° Investors who
purchase $500,000 or more of Class A shares and sell these shares within 12
months of purchase are subject to a CDSC of 1.00%, although they are
not subject to an initial sales charge. The CDSC is waived for certain
retirement and/or benefit plans.
°
Distribution and service (12b-1) fees are paid from the Fund's assets on a
continuous basis. Over time, the fees will increase the cost of your investment
and may cost you more than paying other
types of sales charges. The service fee for Class A and Class C shares is 0.25%.
The distribution fee for Class A shares is limited to 0.25% (including up to
0.25% service fee). Class C shares pay a distribution fee (including the service
fee) of 1.00%.
*
The Fund’s Class A, Class C and Class Z shares are generally closed to
investments by new group retirement plans. Please see “Closure
of Certain Share Classes to New Group Retirement Plans” in this section of the
Prospectus for more information.
Closure
of Certain Share Classes to New Group Retirement Plans
Effective June 1,
2018 (the “Effective Date”), the Fund’s Class A, Class C, Class R and Class Z
shares, as applicable, were closed to investments by new group retirement plans,
except as discussed below. Existing group retirement plans as of the Effective
Date may keep their investments in their current share class and may continue to
make additional purchases or exchanges in the Fund. As of the Effective Date,
all new group retirement plans wishing to add the Fund as a new addition to the
plan generally will be into one of the available Class R6 shares, Class R4
shares, or Class R2 shares of the Fund, as applicable. A short-term investment
in a PGIM affiliated money market fund shall not be deemed a new group
retirement plan investment for purposes of this policy.
In addition, on the
Effective Date, the Class R shares of any fund were closed to all new investors,
except as discussed below. Due to the closing of the Class R shares to new
investors, effective on the Effective Date new IRA investors may only purchase
Class A, Class C, Class Z or Class R6 shares of the Fund, as applicable, subject
to share class eligibility. Following the Effective Date, no Class R shares may
be purchased or acquired by any new Class R shareholder, except as discussed
below.
|
|
Class
A |
Class
C |
Class
Z |
Class
R |
|
Existing
Investors
(Group Retirement Plans,
IRAs,
and all other investors) |
No
Change |
No
Change |
No
Change |
No
Change |
|
New
Group Retirement Plans |
Closed
to group retirement plans wishing to add the share classes as new
additions to plan menus on June 1, 2018,
subject
to certain exceptions below | |||
|
New
IRAs |
No
Change |
No
Change |
No
Change |
Closed
to all new
investors
on June 1, 2018,
subject
to certain
exceptions
below |
|
All
Other New Investors |
No
Change |
No
Change |
No
Change | |
However, the
following new investors may continue to purchase Class A, Class C, Class R and
Class Z shares of the Fund, as applicable:
◾
Eligible group
retirement plans that are exercising their one-time 90-day repurchase privilege
in the Fund will be permitted to purchase such share classes.
◾
Plan participants
in a group retirement plan that offers Class A, Class C, Class R or Class Z
shares of the Fund, as applicable, as of the Effective Date will be permitted to
purchase such share classes of the Fund, even if the plan participant did not
own shares of that class of the Fund as of the Effective
Date.
◾
Certain new group
retirement plans will be permitted to offer such share classes of the Fund after
the Effective Date, provided that the plan or its financial intermediary or
other agent
has or
is actively negotiating a contractual agreement with the Fund’s distributor or
service provider to offer such share classes of the Fund prior to or on the
Effective Date.
◾
New group
retirement plans that combine with, replace or are otherwise affiliated with a
current plan that invests in such share classes prior to or on the Effective
Date will be permitted to purchase such share classes.
◾
The Fund also
reserves the right to refuse any purchase order that might disrupt management of
the Fund or to otherwise modify the closure policy at any time on a case-by-case
basis.
◾
Shareholders owning
Class C shares may continue to hold their Class C shares until the shares
automatically convert to Class A shares under the conversion schedule, or until
the shareholder redeems their Class C shares.
Reducing
or Waiving Class A's and Class C’s Sales Charges
The following
describes the different ways investors can reduce or avoid paying Class A's
sales charge.
Visit our website
at www.pgim.com/investments
33
Increase
the Amount of Your Investment. You can reduce
Class A's sales charge by increasing the amount of your investment. The table
below shows how the sales charge decreases as the amount of your investment
increases:
|
Amount
of Purchase |
Sales
Charge as a % of
Offering
Price* |
Sales
Charge as a % of
Amount
Invested* |
Dealer
Reallowance*** |
|
Less
than $100,000 |
2.25% |
2.30% |
2.00% |
|
$100,000
to $249,999 |
2.00% |
2.04% |
1.75% |
|
$250,000
to $499,999 |
1.25% |
1.27% |
1.25% |
|
$500,000
to $4,999,999** |
None |
None |
1.00% |
|
$5,000,000
to $9,999,999** |
None |
None |
0.50% |
|
$10,000,000
and over** |
None |
None |
0.25% |
* Due to rounding
in the calculation of the offering price and the number of shares purchased, the
actual sales charge you pay may be more or less than the percentages shown
above.
** If you invest $500,000 or more, you can buy only Class A shares, unless you qualify to buy other share classes. If you purchase $500,000 or more of Class A shares and sell these shares within 12 months of purchase, you will be subject to a 1.00% CDSC, although you will not be subject to an initial sales charge. The CDSC is waived for certain retirement and/or benefit plans.
*** The Dealer Reallowance is the amount that is paid by the Fund’s distributor to the financial intermediary responsible for the sale of the Fund’s shares. For more information, please see “How Financial Intermediaries are Compensated for Selling Fund Shares” in this section of the Prospectus.
** If you invest $500,000 or more, you can buy only Class A shares, unless you qualify to buy other share classes. If you purchase $500,000 or more of Class A shares and sell these shares within 12 months of purchase, you will be subject to a 1.00% CDSC, although you will not be subject to an initial sales charge. The CDSC is waived for certain retirement and/or benefit plans.
*** The Dealer Reallowance is the amount that is paid by the Fund’s distributor to the financial intermediary responsible for the sale of the Fund’s shares. For more information, please see “How Financial Intermediaries are Compensated for Selling Fund Shares” in this section of the Prospectus.
To satisfy the
purchase amounts above, you can:
◾
Use your
Rights
of Accumulation, which allow you
or an eligible group of related investors to combine the value of a new purchase
of Class A shares of any PGIM Fund with (1) the current value of Class A and
Class C, and any other PGIM Fund share class (when used in retail brokerage or
advisory programs) you or the eligible group of related investors already own,
(2) the value of money market shares (other than Direct Purchase money market
shares) you or an eligible group of related investors have received for shares
of other PGIM Funds in an exchange transaction, and (3) the value of the shares
you or an eligible group of related investors are purchasing;
or
◾
Sign a Letter
of Intent, stating in
writing that you or an eligible group of related investors will purchase a
certain amount of shares in the Fund and other PGIM Funds within 13
months.
◾
Purchases made
prior to the effective date of the Letter of Intent will be applied toward the
satisfaction of the Letter of Intent to determine the level of sales charge that
will be paid pursuant to the Letter of Intent, but will not result in any
reduction in the amount of any previously paid sales charge.
An “eligible group
of related investors” includes any combination of the following:
◾
All accounts held
in your name (alone or with other account holders) and taxpayer identification
number (“TIN”);
◾
Accounts held in
your spouse's name (alone or with other account holders) and TIN (see definition
of spouse below);
◾
Accounts for your
children or your spouse's children, including children for whom you and/or your
spouse are legal guardian(s) (e.g., UGMAs and UTMAs);
◾
Accounts in the
name and TINs of your parents;
◾
Trusts with you,
your spouse, your children, your spouse's children and/or your parents as the
beneficiaries;
◾
With limited
exclusions, accounts with the same address (exclusions include, but are not
limited to, addresses for brokerage firms and other intermediaries and Post
Office boxes); and
◾
Accounts held in
the name of a company controlled by you (a person, entity or group that holds
25% or more of the outstanding voting securities of a company will be deemed to
control the company, and a partnership will be deemed to be controlled by each
of its general partners), including employee benefit plans of the company where
the accounts are held in the plan's TIN.
A “spouse” is
defined in this Prospectus as follows:
◾
The person to whom
you are legally married. We also consider your spouse to include the
following:
◾
An individual of
the same gender with whom you have been joined in a civil union, or legal
contract similar to marriage;
◾
A domestic partner,
who is an individual (including one of the same gender) with whom you have
shared a primary residence for at least six months, in a relationship as a
couple where you, your domestic partner or both provide for the personal or
financial welfare of the other without a fee, to whom you are not related by
blood; or
34
PGIM Floating Rate
Income Fund
◾
An individual with
whom you have a common law marriage, which is a marriage in a state where such
marriages are recognized between a man and a woman arising from the fact that
the two live together and hold themselves out as being
married.
The value of shares
held by you or an eligible group of related investors will be determined as
follows:
◾
for Class A shares
and any other share class for which a sales charge is paid, the value of
existing shares is determined by the maximum offering price (NAV plus maximum
sales charge); and
◾
for all other share
classes, the value of existing shares is determined by the
NAV.
If your shares are held directly by
the Transfer Agent, and you believe you qualify for a reduction or waiver of
Class A’s or Class C's sales charges, you must notify the Transfer Agent at the
time of the qualifying share purchase in order to receive the applicable
reduction or waiver. If your shares are held through a broker or other financial
intermediary, and you believe you qualify for a reduction or waiver of Class A’s
or Class C's sales charges, you must notify your broker or intermediary at the
time of the qualifying purchase in order to receive the applicable reduction or
waiver. Shares held through a broker or other financial intermediary will not be
systematically aggregated with shares held directly by the Transfer Agent for
purposes of receiving a reduction or waiver of Class A’s or Class C's sales
charges. The reduced or waived sales charge will be granted subject to
confirmation of account holdings.
If your shares are held directly by
the Transfer Agent, you must identify the eligible group of related investors.
Although the Transfer Agent does not require any specific form of documentation
in order to establish your eligibility to receive a waiver or reduction of Class
A’s or Class C's sales charges, you may be required to provide appropriate
documentation if the Transfer Agent is unable to establish your
eligibility.
If your shares are held through a
financial intermediary, the financial intermediary is responsible for
determining the specific documentation, if any, that you may need in order to
establish your eligibility to receive a waiver or reduction of Class A’s or
Class C's sales charges. Your financial intermediary is also responsible for
notifying the Transfer Agent if your share purchase qualifies for a reduction or
waiver of Class A’s or Class C's sales charges.
Purchases
of $500,000 or more. If you purchase
$500,000 or more of Class A shares, you will not be subject to an initial sales
charge, although a CDSC may apply, as previously noted.
Mutual
Fund Programs. The initial sales
charge on Class A shares will be waived for participants in any fee-based
program or trust program sponsored by Prudential or an affiliate that includes
the Fund as an available option. The initial sales charge will also be waived
for clients of financial intermediaries in programs that are sponsored by or
available through financial intermediaries that offer Class A shares without an
initial sales charge, relating to:
◾
Mutual fund “wrap”
or asset allocation programs, where the sponsor places fund trades, links its
clients' accounts to a master account in the sponsor's name and charges its
clients a management, consulting or other fee for its services;
or
◾
Mutual fund
“supermarket” programs, where the sponsor links its clients' accounts to a
master account in the sponsor's name and the sponsor charges a fee for its
services.
Financial
intermediaries sponsoring these mutual fund programs may offer their clients
more than one class of shares in the Fund in connection with different pricing
options for their programs. Investors should consider carefully any separate
transaction and other fees charged by these programs in connection with
investing in each available share class before selecting a share
class.
Group
Retirement Plans.
Class A’s and Class C’s sales charges will be waived for group retirement plans
(including defined contribution plans, defined benefit plans and deferred
compensation plans) available through a retirement plan recordkeeper or third
party administrator. If Prudential Retirement Services is the recordkeeper for
your group retirement plan, you may call Prudential at (800) 353-2847 with any
questions. Otherwise, investors in group retirement plans should contact their
financial intermediary with any questions regarding availability of Class A and
Class C shares at net asset value.
Visit our website
at www.pgim.com/investments
35
Other
Types of Investors. Certain other
types of investors may purchase Class A shares without paying the initial sales
charge, including:
◾
Certain directors
or trustees, officers, current employees (including their spouses, children and
parents) and former employees (including their spouses, children and parents) of
Prudential and its affiliates, the PGIM Funds, and the subadvisers of the PGIM
Funds; former employees must have an existing investment in the
Fund;
◾
Persons who have
retired directly from active service with Prudential or one of its
subsidiaries;
◾
Registered
representatives and employees of broker-dealers (including their spouses,
children and parents) that offer Class A shares;
◾
Investors in IRAs,
provided that: (a) the purchase is made either from a directed rollover to such
IRA or with the proceeds of a tax-free rollover of assets from a Benefit Plan
for which Prudential Retirement (the institutional Benefit Plan recordkeeping
entity of Prudential) provides administrative or recordkeeping services, in each
case provided that such purchase is made within 60 days of receipt of the
Benefit Plan distribution, and
(b)
the IRA is established through Prudential Retirement as part of its “Rollover
IRA” program (regardless of whether or not the purchase consists of proceeds of
a tax-free rollover of assets from a Benefit Plan described above);
and
◾
Clients of
financial intermediaries, who (i) offer Class A shares through a no-load network
or platform, (ii) charge clients an ongoing fee for advisory, investment,
consulting or similar services, or (iii) offer self-directed brokerage accounts
or other similar types of accounts that may or may not charge transaction fees
to customers.
To qualify for a
waiver of the Class A or Class C sales charges at the time of purchase
(including exchange of share classes within the Fund), you must notify the
Transfer Agent, or the Distributor must be notified by the financial
intermediary facilitating the purchase, that the transaction qualifies for a
waiver of the Class A or Class C sales charges. The waiver will be granted
subject to confirmation of your account holdings.
Additional
Information About Reducing or Waiving Class A’s and Class C's Sales
Charges. The Fund also
makes available free of charge, on the Fund's website, in a clear and prominent
format, information relating to the Fund's Class A and Class C sales charges,
and the different ways that investors can reduce or avoid paying the initial
sales charge. The Fund's website includes hyperlinks that facilitate access to
this information.
You may need to
provide your financial intermediary through which you hold Fund shares with the
information necessary to take full advantage of reduced or waived Class A or
Class C sales charges.
The Distributor may
reallow the Class A sales charge to dealers.
Class
C Shares Automatically Convert to Class A Shares
Class C shares will be eligible for
automatic conversion into Class A shares on a monthly basis approximately eight
years after the original date of purchase. Conversion will take place based on
the relative NAV of the two classes, without the imposition of any sales load,
fee or other charge. All such automatic conversions of Class C shares will
constitute tax-free exchanges for federal income tax purposes. See the table
titled “Annual Fund Operating Expenses” in the section of the Fund’s Prospectus
titled “Fund Summary – Fund Fees and Expenses” for the annual fund operating
expenses for Class A and Class C shares.
For shareholders
investing in Class C shares through retirement plans or omnibus accounts, and in
certain other instances, the Fund and its agents may not have transparency into
how long a shareholder has held Class C shares for purposes of determining
whether such Class C shares are eligible for automatic conversion to Class A
shares, and the relevant financial intermediary may not have the ability to
track purchases in order to credit individual shareholders’ holding periods. In
these circumstances, the Fund will not be able to automatically convert Class C
shares to Class A shares as described above. In order to determine eligibility
for conversion in these circumstances, it is the responsibility of the financial
intermediary to notify the Fund that the shareholder is eligible for the
conversion of Class C shares to Class A shares, and the financial intermediary
may be required to maintain and provide the Fund with records that substantiate
the holding period of Class C shares. It is the financial intermediary’s (and
not the Fund’s) responsibility to keep records of transactions made in accounts
it holds and to ensure that the shareholder is credited with the proper holding
period based on such records or those provided to the financial intermediary by
the shareholder. Please consult with your financial intermediary for the
applicability of this conversion feature to your shares.
36
PGIM Floating Rate
Income Fund
A financial
intermediary may sponsor and/or control accounts, programs or platforms that
impose a different conversion schedule or different eligibility requirements for
the exchange of Class C shares for Class A shares (see Appendix
A: Waivers and Discounts Available From Certain Financial
Intermediaries of the
Prospectus). Please consult with your financial intermediary if you have any
questions regarding your shares’ conversion from Class C shares to Class A
shares.
Qualifying
for Class Z Shares
Institutional
Investors. Various
institutional investors may purchase Class Z shares, including corporations,
banks, governmental entities, municipalities, hospitals, insurance companies and
IRS Section 501 entities, such as foundations and endowments. Institutional
investors are responsible for indicating their eligibility to purchase Class Z
shares at the time of purchase. Certain financial intermediaries may require
that investments by their institutional investor clients in Class Z shares be
placed directly with the Fund's Transfer Agent. Please contact the Transfer
Agent at (800) 225-1852 for further details.
Mutual
Fund Programs. Class Z shares can
be purchased by participants in any fee-based program or trust program sponsored
by Prudential or an affiliate that includes the Fund as an available option.
Class Z shares also can be purchased by investors in certain programs sponsored
by financial intermediaries who offer Class Z shares of the Fund, or whose
programs are available through financial intermediaries that offer Class Z
shares of the Fund, for:
◾
Mutual fund “wrap”
or asset allocation programs where the sponsor places fund trades, links its
clients' accounts to a master account in the sponsor's name and charges its
clients a management, consulting or other fee for its
services;
◾
Mutual fund
“supermarket” programs where the sponsor links its clients' accounts to a master
account in the sponsor's name and the sponsor charges a fee for its services;
or
◾
Fee- or
commission-based retail brokerage programs of certain financial intermediaries
that offer Class Z shares through such programs and that have agreements with
PIMS to offer such shares when acting solely on an agency basis for their
customers for the purchase or sale of such shares. If you transact in Class Z
shares of the Fund through one of these programs, you may be required to pay a
commission and/or other forms of compensation to the broker or financial
intermediary for effecting such transaction. Because the Fund is not a party to
any commission arrangement between you and your broker, any transactions in
Class Z shares will be made by the Fund at net asset value (before imposition of
the commission). Any such fee is paid by you, not by the Fund, and the
imposition of any such fee or commission by your broker or financial
intermediary does not impact the net asset value for such Fund shares. Shares of
the Fund are available in other share classes that have different fees and
expenses.
Financial
intermediaries sponsoring these mutual fund programs may offer their clients
more than one class of shares in the Fund in connection with different pricing
options for their programs. Investors should consider carefully any separate
transaction and other fees charged by these programs in connection with
investing in a share class offered by the program before selecting a share
class.
Other
Types of Investors. Class Z shares
also can be purchased by any of the following:
◾
Certain
participants in the MEDLEY Program (group variable annuity contracts) sponsored
by Prudential for whom Class Z shares of the PGIM Funds are an available
option;
◾
Current and former
Directors/Trustees of mutual funds, closed-end funds and ETFs managed by PGIM
Investments or any other affiliate of Prudential;
◾
Current and former
employees (including their spouses, children and parents) of Prudential and its
affiliates; former employees must have an existing investment in the
Fund;
◾
Prudential
(including any program or account sponsored by Prudential or an affiliate that
includes the Fund as an available option);
◾
PGIM Funds,
including PGIM funds-of-funds;
◾
Qualified state
tuition programs (529 plans); and
◾
Investors working
with fee-based consultants for investment selection and allocations.
Visit our website
at www.pgim.com/investments
37
Qualifying
for Class R6 Shares
Group
Retirement Plans. Group retirement
plans (including defined contribution plans, defined benefit plans and deferred
compensation plans) available through a retirement plan recordkeeper or third
party administrator may purchase Class R6 shares. If Prudential Retirement
Services is the recordkeeper for your group retirement plan, you may call
Prudential at (800) 353-2847 with any questions. Otherwise, investors in group
retirement plans should contact their financial intermediary with any questions
regarding availability of Class R6 shares.
Institutional
Investors. Various
institutional investors may purchase Class R6 shares, including, but not limited
to, corporations, governmental entities, municipalities, hospitals, insurance
companies and IRS Section 501 entities, such as foundations and endowments and
other institutional investors. Institutional investors are responsible for
indicating their eligibility to purchase Class R6 shares at the time of
purchase.
Other
Types of Investors. Class R6 shares may
also be purchased by Prudential, certain programs or accounts sponsored by
Prudential, and PGIM Funds, including PGIM funds-of-funds.
Class R6 shares may
only be purchased from financial intermediaries who offer such
shares.
Class R6 shares are
offered to eligible investors as described in this Prospectus. Neither the Fund
nor its affiliates shall make or pay fees associated with or similar to
sub-accounting, networking, revenue sharing, or certain administrative fees with
respect to Class R6 shares.
How
Financial Intermediaries are Compensated for Selling Fund Shares
The PGIM Funds are
distributed by Prudential Investment Management Services LLC (the
“Distributor”), a broker-dealer that is licensed to sell securities. The
Distributor generally does not sell shares of the PGIM Funds directly to the
public, but instead markets and sells the PGIM Funds through other
broker-dealers, 401(k) providers, retirement plan administrators, and other
financial intermediaries. Each PGIM Fund is managed by the Manager.
Only persons
licensed with the Financial Industry Regulatory Authority, Inc. (“FINRA”), as a
registered representative (often referred to as a broker or financial adviser)
and associated with a specific financial services firm may sell shares of a
mutual fund to you, or to a retirement plan in which you
participate.
Rule
12b-1 Fees & Sales Charges. The Distributor
has agreements in place with financial intermediaries defining how much each
firm will be paid for the sale of a particular mutual fund from front-end sales
charges, if any, paid by Fund shareholders and from fees paid to the Distributor
by the Fund pursuant to Rule 12b-1 under the 1940 Act (“Rule 12b-1”). These
financial intermediaries then pay their registered representatives who sold you
the Fund some or all of what they received from the Distributor. The registered
representatives may receive a payment when the sale is made and can, in some
cases, continue to receive ongoing payments while you are invested in the Fund.
The Distributor may change at any time, without prior notice, the amount of Rule
12b-1 fees that it pays (when the sale is made and/or any ongoing payments) to
financial intermediaries and registered representatives so that the Distributor
may retain all or a portion of such fees.
“Revenue
Sharing” Payments. In addition to the
compensation received by financial intermediaries as described above, the
Manager or certain of its affiliates (but not the Distributor) may make
additional payments (which are often referred to as “revenue sharing” payments)
to the financial intermediaries from the Manager's or certain affiliates' own
resources, including from the profits derived from management fees or other fees
received from the Fund, without additional direct or indirect cost to the Fund
or its shareholders, provided that no such additional payments to financial
intermediaries are made with respect to the Fund’s Class R6 shares. Revenue
sharing payments are in addition to the front-end sales charges paid by Fund
shareholders or fees paid pursuant to plans adopted in accordance with Rule
12b-1. The Manager or certain of its affiliates may revise the terms of any
existing revenue sharing arrangement, and may enter into additional revenue
sharing arrangements with other financial intermediaries in the future.
38
PGIM Floating Rate
Income Fund
Revenue sharing
arrangements are intended to foster the sale of Fund shares and/or to compensate
financial intermediaries for assisting in marketing or promotional activities in
connection with the sale of Fund shares. In exchange for revenue sharing
payments, the Fund generally expects to receive the opportunity for the Fund to
be sold through the financial intermediaries' sales force or access to
third-party platforms or other marketing programs, including but not limited to
mutual fund “supermarket” platforms or other sales programs. To the extent that
financial intermediaries receiving revenue sharing payments sell more shares of
the Fund, the Manager and Distributor benefit from the increase in Fund assets
as a result of the management and distribution fees they receive from the Fund,
respectively. Increased sales of Fund shares also may benefit shareholders,
since an increase in Fund assets may allow the Fund to expand its investment
opportunities, and increased Fund assets may result in reduced Fund operating
expenses.
From time to time
the Manager or an affiliate of the Fund (and not the Fund itself) may pay
certain administrative fees in order to make the Fund available to shareholders.
Such fees are not included in, and are paid separate and apart from, any revenue
sharing payments.
Revenue sharing
payments, as well as the other types of payments described above, may provide an
incentive for financial intermediaries and their registered representatives to
recommend or sell shares of the Fund to you and in doing so may create conflicts
of interest between the firms' financial interests and their duties to
customers.
If your Fund shares
are purchased through a retirement plan, the Manager or certain of its
affiliates (but not the Distributor) may also make revenue sharing payments to
the plan's recordkeeper or an affiliate, which generally is not a registered
broker-dealer.
It is likely that
financial intermediaries that execute portfolio transactions for the Fund will
include those firms with which the Manager and/or certain of its affiliates have
entered into revenue sharing arrangements. Neither the Manager nor any
subadviser may consider sales of Fund shares as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund. The Manager and
certain of its affiliates will not use Fund brokerage as any part of revenue
sharing payments to financial intermediaries.
Revenue sharing
payments are usually calculated based on a percentage of Fund sales and/or Fund
assets attributable to a particular financial services firm. Payments may also
be based on other criteria or factors, for example, a fee per each transaction.
Specific payment formulas are negotiated based on a number of factors,
including, but not limited to, reputation in the industry, ability to attract
and retain assets, target markets, customer relationships and scope and quality
of services provided. The Manager and/or certain of its affiliates make such
payments to financial intermediaries in amounts that generally range from 0.02%
up to 0.20% of Fund assets serviced and maintained by the financial
intermediaries or from 0.10% to 0.25% of sales of Fund shares attributable to
the firm. In addition, the Manager and/or certain of its affiliates may pay flat
fees on a one-time or irregular basis for the initial set-up of the Fund on a
financial services intermediary’s systems, participation or attendance at a
financial services firm's meeting, or for other reasons. These amounts are
subject to change. In addition, the costs associated with visiting the financial
intermediaries to make presentations, and/or train and educate the personnel of
the financial intermediaries, may be paid by the Manager and/or certain of its
affiliates, subject to applicable FINRA regulations.
Please contact the
registered representative (or his or her firm) who sold shares of the Fund to
you for details about any payments the financial intermediary may receive from
the Manager and/or certain of its affiliates. You should review your financial
intermediary’s disclosure and/or talk to your financial intermediary to obtain
more information on how this compensation may have influenced your financial
intermediary’s recommendation of the Fund. Additional information regarding
these revenue sharing payments is included in the SAI which is available to you
at no additional charge.
Other
Payments Received by Financial Intermediaries
Administrative,
Sub-Accounting and Networking Fees. In addition to,
rather than in lieu of, the fees that the Fund may pay to financial
intermediaries as described above, and the fees the Fund pays to the Transfer
Agent, the Transfer Agent or its affiliates may enter into additional agreements
on behalf of the Fund with financial intermediaries pursuant to which the Fund
will pay financial intermediaries for certain administrative, sub-accounting and
networking services,
Visit our website
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39
provided that no
such additional payments to financial intermediaries are made with respect to
the Fund’s Class R6 shares. These services include maintenance of shareholder
accounts by the firms, such as recordkeeping and other activities that otherwise
would be performed by the Transfer Agent. Sub-accounting services encompass
activities that reduce the burden of recordkeeping to the Fund. Administrative
fees are paid to a firm that undertakes, for example, shareholder communications
on behalf of the Fund. Networking services are services undertaken to support
the electronic transmission of shareholder purchase and redemption orders
through the National Securities Clearing Corporation (“NSCC”).
These payments, as
discussed above, are paid out of Fund assets and generally based on either (1) a
percentage of the average daily net assets of Fund shareholders serviced by a
financial intermediary or (2) a fixed dollar amount for each account serviced by
a financial services firm. From time to time, the Manager or certain of its
affiliates (but not the Distributor) also may pay a portion of the fees for the
services to the financial intermediaries at their own expense and out of their
own resources.
In addition, the
Fund reimburses the Distributor for NSCC fees that are invoiced to the
Distributor as the party to the Agreement with NSCC for the administrative
services provided by NSCC to the Fund and its shareholders. These administrative
services provided by NSCC to the Fund and its shareholders include transaction
processing and settlement through Fund/SERV, electronic networking services to
support the transmission of shareholder purchase and redemption orders to and
from financial intermediaries, and related recordkeeping provided by NSCC to the
Fund and its shareholders. These payments are generally based on a transaction
fee rate for certain administrative services plus a fee for other administrative
services.
Anti-Money
Laundering
In accordance with
federal law, the Fund has adopted policies designed to deter money laundering.
Under the policies, the Fund will not knowingly engage in financial transactions
that involve proceeds from unlawful activity or support terrorist activities,
and shall file government reports, including those concerning suspicious
activities, as required by applicable law. The Fund will seek to confirm the
identity of potential shareholders to include both individuals and entities
through documentary and non-documentary methods. Non-documentary methods may
include verification of name, address, date of birth and tax identification
number with selected credit bureaus. The Fund's Anti-Money Laundering Compliance
Officer oversees the Fund's anti-money laundering policies.
Understanding
the Price You'll Pay
The price you pay
for each share of the Fund is based on the share value. The share value of a
mutual fund—known as the net
asset value or NAV—is determined by a
simple calculation: it's the total value of the Fund (assets minus liabilities)
divided by the total number of shares outstanding. For example, if the value of
the investments held by Fund XYZ (minus its liabilities) is $1,000 and there are
100 shares of Fund XYZ owned by shareholders, the value of one share of the
Fund—or the NAV—is $10 ($1,000 divided by 100).
Mutual
Fund Shares
The NAV
of mutual fund shares changes every day because the value of a fund's portfolio
changes constantly. For example, if Fund XYZ holds ACME Corp. bonds in its
portfolio and the price of ACME bonds goes up, while the value of the Fund's
other holdings remains the same and expenses don't change, the NAV of Fund XYZ
will increase.
The Fund's NAV will
be determined every day on which the Fund is open as of the close of regular
trading on the New York Stock Exchange (“NYSE”) (generally, 4:00 p.m. Eastern
Time). The Fund's portfolio securities are valued based upon market quotations
or, if market quotations are not readily available, at fair value as determined
in good faith under procedures established by the Board. These procedures
include pricing methodologies for determining the fair value of
40
PGIM Floating Rate
Income Fund
certain types of
securities and other assets held by the Fund that do not have quoted market
prices, and authorize the use of other pricing sources, such as bid prices
supplied by a principal market maker and evaluated prices supplied by pricing
vendors that employ analytic methodologies that take into account the prices of
similar securities and other market factors.
If the Fund determines that a
market quotation for a security is not reliable based on, among other things,
events or market conditions that occur with respect to one or more securities
held by the Fund or the market as a whole, after the quotation is derived or
after the closing of the primary market on which the security is traded, but
before the time that the Fund's NAV is determined, the Fund may use “fair value
pricing,” which is implemented by a valuation committee (“Valuation Committee”)
consisting of representatives of the Manager or by the Board. The subadviser
often provides relevant information for the Valuation Committee meeting. In
addition, the Fund may use fair value pricing determined by the Valuation
Committee or Board if the pricing source does not provide an evaluated price for
a security or provides an evaluated price that, in the judgment of the Manager
(which may be based upon a recommendation from the subadviser), does not
represent fair value. Equity securities that are traded on foreign exchanges are
valued using pricing vendor services that provide fair value model prices. The
models generate an evaluated adjustment factor for each security, which is
applied to the local closing price to adjust it for post-closing market
movements. Utilizing that evaluated adjustment factor, the vendor provides an
evaluated price for each security. Non-U.S. securities markets are open for
trading on weekends and other days when the Fund does not price shares.
Therefore, the value of the Fund’s shares may change on days when you will not
be able to purchase or redeem the Fund’s shares.
Investments in
open-end non-exchange-traded mutual funds will be valued at their NAV as
determined as of the close of the NYSE on the date of valuation, which will
reflect the mutual fund’s fair valuation procedures.
Different valuation
methods may result in differing values for the same security. The fair value of
a portfolio security that the Fund uses to determine its NAV may differ from the
security's quoted or published price. If the Fund needs to implement fair value
pricing after the NAV publishing deadline but before shares of the Fund are
processed, the NAV you receive or pay may differ from the published NAV price.
The prospectuses of any other mutual funds in which the Fund invests will
explain each fund’s procedures and policies with respect to the use of fair
value pricing.
Fair value pricing
procedures are designed to result in prices for the Fund's securities and its
NAV that are reasonable in light of the circumstances which make or have made
market quotations unavailable or unreliable, and may have the effect of reducing
arbitrage opportunities available to short-term traders. There is no assurance,
however, that fair value pricing will more accurately reflect the market value
of a security than the market price of such security on that day or that it will
prevent dilution of the Fund's NAV by short-term traders.
What
Price Will You Pay for Shares of the Fund? For Class A
shares, you'll pay the public offering price, which is the NAV next determined
after we receive your order to purchase, plus an initial sales charge (unless
you're entitled to a waiver). For all other share classes, you will pay the NAV
next determined after we receive your order to purchase (remember, there are no
up-front sales charges for these share classes). Your broker may charge you a
separate or additional fee for purchases of shares. Unless regular trading on
the NYSE closes before 4:00 p.m. Eastern Time, or later than 4:00 p.m. Eastern
Time, your order to purchase must be received by 4:00 p.m. Eastern Time in order
to receive that day's NAV. In the event that regular trading on the NYSE closes
before 4:00 p.m. Eastern Time, you will receive the following day's NAV if your
order to purchase is received after the close of regular trading on the NYSE.
The Fund will not treat an intraday unscheduled disruption in NYSE trading as a
closure of the NYSE and will price its shares as of 4:00 p.m. Eastern Time, if
the particular disruption directly affects only the NYSE. We deem an order
received when it is received by the Transfer Agent at its processing center. If
you submit your order through a broker or other financial intermediary, it may
be deemed received when received by the broker or financial
intermediary.
Each business day, the Fund's
current NAV per share is made available at
www.pgim.com/investments/mutual-funds/prices.
Additional
Shareholder Services
As a Fund
shareholder, you can take advantage of the following services and privileges:
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41
Automatic
Reinvestment. As we explained in
the “Fund Distributions and Tax Issues” section, the Fund pays out—or
distributes—its net investment income and net capital gains to all shareholders.
For your convenience, we will automatically reinvest your distributions in the
Fund at NAV, without any sales charge. If you want your distributions paid in
cash, you can indicate this preference on your application, or by notifying your
broker or the Transfer Agent in writing (at the address below) at least five
business days before the date we determine who receives dividends. For accounts
held at the Transfer Agent (“PMFS”), distributions of $10.00 or less on
non-retirement accounts will not be paid out in cash, but will be automatically
reinvested into your account.
Prudential
Mutual Fund Services LLC
P.O. Box 9658
Providence, RI 02940
P.O. Box 9658
Providence, RI 02940
Automatic
Investment Plan (“AIP”). You can make
regular purchases of the Fund by having a fixed amount of money automatically
withdrawn from your bank or brokerage account at specified intervals. The
minimum for subsequent investments through newly-established AIP accounts must
be at least $50 monthly.
Retirement
Plan Services. Prudential offers
a wide variety of retirement plans for individuals and institutions, including
large and small businesses. For information on IRAs, including Roth IRAs or
SEP-IRAs for a one-person business, please contact your financial adviser. If
you are interested in opening a 401(k) or other company-sponsored retirement
plan (SIMPLE IRAs, SEP plans, Keoghs, 403(b)(7) plans, pension and
profit-sharing plans), your financial adviser will help you determine which
retirement plan best meets your needs. Complete instructions about how to
establish and maintain your plan and how to open accounts for you and your
employees will be included in the retirement plan kit you receive in the
mail.
Systematic
Withdrawal Plan. A Systematic
Withdrawal Plan is available that will provide you with monthly, quarterly,
semi-annual or annual redemption checks. The Systematic Withdrawal Plan is not
available to participants in certain retirement plans. Please contact PMFS at
(800) 225-1852 for more details.
Reports
to Shareholders. Every year we will
send you an updated summary prospectus. We will also send or make available to
you pursuant to Rule 30e-3 under the 1940 Act, an annual report and a
semi-annual report, which contain important financial information about the
Fund. To reduce Fund expenses, we may send or make available one annual
shareholder report, one semi-annual shareholder report and one summary
prospectus per household, unless you instruct us or your financial intermediary
otherwise. If each Fund shareholder in your household would like to receive a
copy of the Fund's summary prospectus and shareholder reports, please call us
toll free at (800) 225-1852. We will begin sending additional copies of these
documents within 30 days of receipt of your request.
HOW
TO SELL YOUR SHARES
You can sell your
Fund shares for cash at any time, subject to certain restrictions. For more
information about these restrictions, see “Restrictions on Sales”
below.
When you sell
shares of the Fund—also known as redeeming your shares—the price you will
receive will be the NAV next determined after the Transfer Agent or your
financial intermediary receives your order to sell (less any applicable
CDSC).
Shares
Held by Financial Intermediaries. If your financial
intermediary holds your shares, your financial intermediary must receive your
order to sell no later than the time regular trading on the NYSE closes—which is
usually 4:00 p.m. Eastern Time—to process the sale on that day. In the event
that regular trading on the NYSE closes before 4:00 p.m. Eastern Time, you will
receive the following day's NAV if your order to sell is received after the
close of regular trading on the NYSE.
42
PGIM Floating Rate
Income Fund
Shares
Held by the Transfer Agent. If the Transfer
Agent holds your shares, PMFS must receive your order to sell no later than the
time regular trading on the NYSE closes—which is usually 4:00 p.m. Eastern
Time—to process the sale on that day. In the event that regular trading on the
NYSE closes before 4:00 p.m. Eastern Time, you will receive the following day's
NAV if your order to sell is received after the close of regular trading on the
NYSE. You may contact the Transfer Agent at:
Prudential
Mutual Fund Services LLC
P.O. Box 9658
Providence, RI 02940
P.O. Box 9658
Providence, RI 02940
Payment
for Shares You Have Sold
Shares
Held by Financial Intermediaries. Typically, if your
order to sell shares is received in good order, payment will be credited to your
account within 1 to 3 business days after the order is received, but in any
event within seven days. Your broker may charge you a separate or additional fee
for sales of shares.
Shares
Held by the Transfer Agent. Typically, if your
order to sell shares is received in good order, we will send payment on the next
business day, but in any event within seven days, regardless of the method of
payment (e.g., payment by check, wire or electronic transfer
(“ACH”)).
Restrictions
on Sales
If you are selling
shares you recently purchased with a check, we may delay sending you the
proceeds until your check clears, which can take up to seven days from the
purchase date.
As a result of
restrictions on withdrawals and transfers imposed by Section 403(b) of the
Internal Revenue Code of 1986, as amended, we may consider a redemption request
to not be in good order until we obtain information from your employer that is
reasonably necessary to ensure that the payment is in compliance with such
restrictions, if applicable. In such an event, the redemption request will not
be in good order and we will not process it until we obtain information from
your employer.
In addition, there
are certain times when you may not be able to sell shares of the Fund or when we
may delay paying you the proceeds from a sale. As permitted by the SEC, the
former may happen only during unusual market conditions or emergencies when the
Fund is unable to determine the value of its assets or sell its holdings. For
more information, see the SAI.
If you hold your
shares directly with the Transfer Agent, you will need to have the signature on
your sell order Medallion signature guaranteed if:
◾
You are selling
more than $100,000 of shares;
◾
You want the
redemption proceeds made payable to someone that is not in the Transfer Agent’s
records;
◾
You want the
redemption proceeds sent to an address that is not in the Transfer Agent’s
records;
◾
You are a business
or a trust; or
◾
You are redeeming
due to the death of the shareholder or on behalf of the
shareholder.
The Medallion
signature guarantee may be obtained from an authorized officer from a bank,
broker, dealer, securities exchange or association, clearing agency, savings
association, or credit union that is participating in one of the recognized
Medallion guarantee programs (STAMP, SEMP, or NYSE MSP), but not from a notary
public. The Medallion signature guarantee must be appropriate for the dollar
amount of the transaction. The Transfer Agent reserves the right to reject sale
transactions where the value of the transaction exceeds the value of the surety
coverage indicated on the Medallion imprint. The Fund may change the signature
guarantee requirements from time to time without prior notice to shareholders.
For more information, see the SAI.
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43
How
the Fund Pays for Shares You Have Sold
Under normal market
conditions, the Fund expects to pay for shares that you have sold primarily by
using cash or cash equivalents in its portfolio or selling portfolio assets to
generate cash. Supplementally, the Fund may also raise cash to pay for sold
shares by short-term borrowing in the form of overdrafts permitted by the Fund’s
custodian bank and/or by short-term borrowing from a group of banks through an
unsecured credit facility, which is intended to provide the Fund with a
temporary additional source of liquidity. In certain circumstances the Fund
reserves the right to pay for sold shares by giving you securities from the
Fund’s portfolio. If you receive securities, you would incur transaction costs
in converting the securities to cash, and you may receive less for the
securities than the price at which they were valued for redemption
purposes.
During stressed
market conditions, it may be impractical or impossible to raise sufficient cash
to pay for sold shares through the primary methods described above. In these
circumstances, the Fund would be more likely to rely more heavily on the credit
facility as a source of liquidity, as described above.
Contingent
Deferred Sales Charge (“CDSC”)
If you sell Class C
shares within 12 months of purchase, you will have to pay a CDSC of 1.00%. In
addition, if you purchase $500,000 or more of Class A shares, although you are
not subject to an initial sales charge, you are subject to a 1.00% CDSC for
shares redeemed within 12 months of purchase. The CDSC is waived for certain
retirement and/or benefit plans. To keep the CDSC as low as possible, we will
sell amounts representing shares in the following order:
◾
Amounts
representing shares you purchased with reinvested dividends and
distributions,
◾
Amounts
representing the increase in NAV above the total amount of payments for shares
made during the past 12 months for Class A shares (in certain cases) and 12
months for Class C shares, and
◾
Amounts
representing the cost of shares held beyond the CDSC period (12 months for Class
A shares (in certain cases) and 12 months for Class C
shares).
Since shares that
fall into any of the categories listed above are not subject to the CDSC,
selling them first helps you to avoid — or at least minimize — the
CDSC.
Having sold the
exempt shares first, if there are any remaining shares that are subject to the
CDSC, we will apply the CDSC to amounts representing the cost of shares held for
the longest period of time within the applicable CDSC period.
The CDSC is
calculated based on the lesser of the original purchase price or the net asset
value at redemption. The rate decreases on the anniversary date of your
purchase.
The holding period
for purposes of determining the applicable CDSC will be calculated from the
anniversary date of the purchase, excluding any time Class C shares were held in
a money market fund.
Waiver
of the CDSC—Class A Shares and Class C Shares
The CDSC will be
waived if the Class A shares and Class C shares are sold:
◾
After a shareholder
is deceased or permanently disabled (or, in the case of a trust account, after
the death or permanent disability of the grantor). This waiver applies to
individual shareholders, as well as shares held in joint tenancy, provided the
shares were purchased before the death or permanent
disability;
◾
To provide for
certain distributions—made without IRS penalty—from a qualified or tax-deferred
retirement plan, benefit plan, IRA or Section 403(b) custodial account;
and
◾
To withdraw excess
contributions from a qualified or tax-deferred retirement plan, IRA or Section
403(b) custodial account.
For more
information, see the SAI.
44
PGIM Floating Rate
Income Fund
Involuntary
Redemption of Small Accounts Held by the Transfer Agent
If the value of
your account with PMFS is less than $500 for any reason, we may sell your shares
(without charging any CDSC) and close your account. We would do this to minimize
the Fund's expenses paid by other shareholders. The involuntary sale provisions
do not apply to Automatic Investment Plan (“AIP”) accounts, employee savings
plan accounts, payroll deduction plan accounts, retirement accounts (such as a
401(k) plan, an IRA or other qualified or tax-deferred plan or account), omnibus
accounts, and accounts for which a broker or other financial intermediary is
responsible for recordkeeping. Prior thereto, if you make a sale that reduces
your account value to less than the threshold, we may sell the rest of your
shares (without charging any CDSC) and close your account; this involuntary sale
does not apply to shareholders who own their shares as part of a retirement
account. For more information, see “Purchase, Redemption and Pricing of Fund
Shares—Involuntary Redemption” in the SAI.
Account
Maintenance Fee for Accounts Held by the Transfer Agent
If the value of
your Class A, Class C or Class Z account with PMFS is less than $10,000, with
certain exclusions, a $15 annual account maintenance fee will be deducted from
your account during the 4th calendar quarter of each year. Any applicable CDSC
on the shares redeemed to pay the account maintenance fee will be waived. For
more information, see “Purchase, Redemption and Pricing of Fund Shares—Account
Maintenance Fee” in the SAI.
90-Day
Repurchase Privilege
After you redeem
your shares, you have a 90-day period during which you may reinvest back into
your account any of the redemption proceeds in shares of the same Fund without
paying an initial sales charge. In order to take advantage of this privilege,
you must notify the Transfer Agent or your broker at the time of the repurchase.
This privilege can only be used once in a 12-month period. For more information,
see the SAI.
The terms of this
privilege may vary by financial intermediary. For more information, see
“Appendix A: Waivers and Discounts Available From Certain Financial
Intermediaries.”
Retirement
Plans
To sell shares and
receive a distribution from your retirement account, call your broker or the
Transfer Agent for a distribution request form. There are special distribution
and income tax withholding requirements for distributions from retirement plans
and you must submit a withholding form with your request to avoid delay. If your
retirement plan account is held for you by your employer or plan trustee, you
must arrange for the distribution request to be signed and sent by the plan
administrator or trustee. For additional information, see the SAI.
HOW
TO EXCHANGE YOUR SHARES
You can generally
exchange your shares of the Fund for shares of the same class in certain other
PGIM Funds—including PGIM Government Money Market Fund—if you satisfy the
minimum investment requirements. For example, you can exchange Class A shares of
the Fund for Class A shares of other funds in the PGIM Funds mutual fund family,
but you can’t exchange Class A shares for a different share class of another
PGIM Fund.
In addition, Class R6 shares may
not be exchanged for Class R6 shares of the Prudential Day One Funds or the PGIM
60/40 Allocation Fund.
After an exchange,
at redemption, any CDSC will be calculated from the date of the initial
purchase, excluding any time that Class C shares were held in PGIM Government
Money Market Fund. We may change the terms of any exchange privilege after
giving you 60 days' notice.
There is no sales
charge for exchanges. However, if you exchange—and then sell—shares within the
applicable CDSC period, you must still pay the applicable CDSC. At the time of
exchange, CDSC liable shares and free shares move proportionally according to
the percentage of total shares you are exchanging. If you have exchanged Class C
shares into PGIM Government Money Market Fund, the time you hold the Class C
shares in the money market fund will not be counted in calculating the required
holding period for CDSC liability.
Visit our website
at www.pgim.com/investments
45
For investors in
certain programs sponsored by financial intermediaries that offer shares of the
Fund, or whose programs are available through financial intermediaries that
offer shares of the Fund for mutual fund “wrap” or asset allocation programs or
mutual fund “supermarket” programs, an exchange may be made from Class A to
Class Z shares of the Fund in certain limited circumstances. Contact your
program sponsor or financial intermediary with any questions.
Exchanging
Shares Held by a Financial Intermediary. If you hold shares through a
financial intermediary, you must exchange shares through your financial
intermediary.
Exchanging
Shares Held by the Transfer Agent. If you hold shares through the
Transfer Agent, contact your financial advisor or PMFS at (800) 225-1852 or
write to PMFS at:
Prudential
Mutual Fund Services LLC
P.O. Box 9658
Providence, RI 02940
P.O. Box 9658
Providence, RI 02940
If you participate
in any fee-based program where the Fund is an available investment option, you
may arrange with the Transfer Agent or your recordkeeper to exchange your Class
A shares, if any, for Class Z shares when you elect to participate in the
fee-based program. When you no longer participate in the program, you may
arrange with the Transfer Agent or your recordkeeper to exchange all of your
Class Z shares, including shares purchased while you were in the program, for
Class A shares.
Remember, as we
explained in the section entitled “Fund Distributions and Tax Issues—If You Sell
or Exchange Your Shares,” exchanging shares is considered a sale for tax
purposes. Therefore, if the shares you exchange are worth more than the amount
that you paid for them, you may have to pay capital gains tax. For additional
information about exchanging shares, see the SAI.
Frequent
Purchases and Redemptions of Fund Shares
The Fund seeks to prevent patterns
of frequent purchases and redemptions of Fund shares by its shareholders.
Frequent purchases and sales of shares of the Fund may adversely affect Fund
performance and the interests of long-term investors. When a shareholder engages
in frequent or short-term trading, the Fund may have to sell portfolio
securities to have the cash necessary to redeem the shareholder's shares. This
can happen when it is not advantageous to sell any securities, so the Fund's
performance may be hurt. When large dollar amounts are involved, frequent
trading can also make it difficult to use long-term investment strategies
because the Fund cannot predict how much cash it will have to invest. In
addition, if the Fund is forced to liquidate investments due to short-term
trading activity, it may incur increased brokerage and tax costs. Similarly, the
Fund may bear increased administrative costs as a result of the asset level and
investment volatility that accompanies patterns of short-term trading. Moreover,
frequent or short-term trading by certain shareholders may cause dilution in the
value of Fund shares held by other shareholders. Funds that invest in non-U.S.
securities may be particularly susceptible to frequent trading because time zone
differences among international stock markets can allow a shareholder engaging
in frequent trading to exploit fund share prices that may be based on closing
prices of non-U.S. securities established some time before the Fund calculates
its own share price. Funds that invest in certain fixed income securities, such
as high-yield bonds or certain asset-backed securities, may also constitute an
effective vehicle for a shareholder's frequent trading strategy.
The Fund does not
knowingly accommodate or permit frequent trading, and the Board has adopted
policies and procedures designed to discourage or prevent frequent trading
activities by Fund shareholders. In an effort to prevent such practices, the
Fund's Transfer Agent monitors trading activity on a daily basis. The Fund has
implemented a trading policy that limits the number of times a shareholder may
purchase Fund shares or exchange into the Fund and then sell those shares within
a specified period of time (a “round-trip transaction”) as established by the
Fund's Chief Compliance Officer (“CCO”). The CCO is authorized to set and modify
the parameters of the trading policy at any time as required to prevent the
adverse impact of frequent trading on Fund shareholders.
46
PGIM Floating Rate
Income Fund
The CCO has defined
frequent trading as one or more round-trip transactions in shares of the Fund
within a 30-day period. If this occurs, the shareholder’s account will be
subject to a 60-day warning period. If a second round-trip occurs before the
conclusion of the 60-day warning period, a trading suspension will be placed on
the account by the Fund’s Transfer Agent that will remain in effect for 90 days.
The trading suspension will relate to purchases and exchange purchases (but not
redemptions) in the Fund in which the frequent trading occurred. Exceptions to
the trading policy will not normally be granted.
Transactions in the
PGIM money market funds, exchange-traded funds and PGIM Short-Term Corporate
Bond Fund are excluded from this trading policy. In addition, transactions by
affiliated PGIM Funds or certain unaffiliated funds, which are structured as
“funds-of-funds,” and invest primarily in other mutual funds within the PGIM
Fund family, are not subject to the limitations of the trading policy and are
not considered frequent or short-term trading.
This trading policy
does not apply to systematic purchases and redemptions (e.g., payroll purchases,
systematic withdrawals and rebalancing transactions or other similar
transactions not initiated by a shareholder or financial professional on
the transaction date). Generally, purchases and redemptions will not be
considered “systematic” unless the transaction is pre-established or scheduled
for a specific date.
The Fund reserves
the right to reject or cancel, without prior notice, all additional purchases or
exchanges into the Fund by a shareholder. Moreover, the Fund may direct a
broker-dealer or other intermediary to block a shareholder account from future
trading in the Fund. The Transfer Agent will monitor daily trading activity
above a certain threshold, which may be changed from time to time, over a
rolling 90-day period. If a purchase into the Fund is rejected or canceled, the
shareholder will receive a return of the purchase amount.
If the Fund is
offered to qualified plans on an omnibus basis or if Fund shares may be
purchased through other omnibus arrangements, such as through a financial
intermediary such as a broker-dealer, a bank, an insurance company separate
account, an investment adviser, or an administrator or trustee of a retirement
plan (“Intermediaries”) that holds your shares in an account under its name,
Intermediaries maintain the individual beneficial owner records and submit to
the Fund only aggregate orders combining the transactions of many beneficial
owners. The Fund itself generally cannot monitor trading by particular
beneficial owners. The Fund has notified Intermediaries in writing that it
expects the Intermediaries to impose restrictions on transfers by beneficial
owners. Intermediaries may impose different or stricter restrictions on
transfers by beneficial owners. Consistent with the restrictions described
above, investments in the Fund through retirement programs administered by
Prudential Retirement will be similarly identified for frequent purchases and
redemptions and appropriately restricted.
The Transfer Agent
also reviews aggregate omnibus net flows above a certain threshold. In cases
where the activity is considered unusual, the Intermediary may be contacted by
the Transfer Agent to obtain additional information. The Transfer Agent has the
authority to cancel all or a portion of the trade if the information reveals
that the activity relates to potential offenders. Where appropriate, the
Transfer Agent may request that the Intermediary block a financial adviser or
client from accessing the Fund. If necessary, the Fund may be removed from a
particular Intermediary’s platform.
Shareholders
seeking to engage in frequent trading activities may use a variety of strategies
to avoid detection and, despite the efforts of the Fund to prevent such trading,
there is no guarantee that the Fund, the Transfer Agent or Intermediaries will
be able to identify these shareholders or curtail their trading practices. The
Fund does not have any arrangements intended to permit trading of its shares in
contravention of the policies described above.
Telephone
Redemptions or Exchanges
You may redeem your
shares of the Fund if the proceeds of the redemption do not exceed $250,000 or
exchange your shares in any amount by calling the Fund at (800) 225-1852 and
communicating your instructions in good order to a customer service
representative before 4:00 p.m. Eastern Time. You will receive a redemption or
exchange amount based on that day's NAV. Certain restrictions apply; please see
the section entitled “How to Sell Your Shares—
Visit our website
at www.pgim.com/investments
47
Restrictions on
Sales” above for additional information. In the event that regular trading on
the NYSE closes before 4:00 p.m. Eastern Time, you will receive the following
day's NAV if your order to sell or exchange is received after the close of
regular trading on the NYSE.
The Transfer Agent
will record your telephone instructions and request specific account information
before redeeming or exchanging shares. The Fund will not be liable for losses
due to unauthorized or fraudulent telephone instructions if it follows
instructions that it reasonably believes are made by the shareholder. If the
Fund does not follow reasonable procedures, it may be liable.
In the event of
drastic economic or market changes, you may have difficulty in redeeming or
exchanging your shares by telephone. If this occurs, you should consider
redeeming or exchanging your shares by mail or through your broker.
The telephone
redemption and exchange procedures may be modified or terminated at any time. If
this occurs, you will receive a written notice from the Fund.
Expedited
Redemption Privilege
If you have
selected the Expedited Redemption Privilege, you may have your redemption
proceeds sent directly to your bank account. Expedited redemption requests may
be made by telephone or letter, must be received by the Transfer Agent prior to
4:00 p.m. Eastern Time to receive a redemption amount based on that day's NAV
and are subject to the terms and conditions regarding the redemption of shares.
In the event that regular trading on the NYSE closes before 4:00 p.m. Eastern
Time, you will receive the following day's NAV if your order to sell is received
after the close of regular trading on the NYSE. For more information, see the
SAI. The Expedited Redemption Privilege may be modified or terminated at any
time without notice.
48
PGIM Floating Rate
Income Fund
FINANCIAL
HIGHLIGHTS
Introduction
The financial highlights will help
you evaluate the Fund's financial performance for the the past five fiscal years
or periods (as applicable) ended February 28, 2022. Certain information reflects
financial results for a single fund class share. The total return in each chart
represents the rate that a shareholder would have earned (or lost) on an
investment in the Fund, assuming investment at the start of the period and
reinvestment of all dividends and other distributions. The information is for
the periods indicated.
These financial highlights for the
fiscal years ended February 28, 2021 and after were derived from the financial
statements audited by PricewaterhouseCoopers LLP, an independent registered
public accounting firm, whose report on those financial statements was
unqualified. The information for the fiscal years or periods (as applicable)
prior to the fiscal year ended February 28, 2021 was audited by another
independent registered public accounting firm.
A copy of the
Fund's annual report, including the Fund's audited financial statements and
report of independent registered public accounting firm, is available upon
request, at no charge, as described on the back cover of this
Prospectus.
Visit our website
at www.pgim.com/investments
49
|
Class
A Shares | |||||
|
|
Year
Ended February 28/29, | ||||
|
|
2022 |
2021 |
2020 |
2019 |
2018 |
|
Per
Share Operating Performance(a): | |||||
|
Net
Asset Value, Beginning of Year |
$9.65 |
$9.38 |
$9.72 |
$9.94 |
$9.95 |
|
Income
(loss) from investment operations: | |||||
|
Net
investment income (loss) |
0.32 |
0.45 |
0.53 |
0.47 |
0.45 |
|
Net
realized and unrealized gain (loss) on investment and foreign currency
transactions |
(0.13) |
0.27(b) |
(0.33) |
(0.22) |
0.01 |
|
Total from
investment operations |
0.19 |
0.72 |
0.20 |
0.25 |
0.46 |
|
Less
Dividends and Distributions: | |||||
|
Dividends
from net investment income |
(0.33) |
(0.45) |
(0.54) |
(0.47) |
(0.46) |
|
Distributions
from net realized gains |
- |
- |
- |
- |
(0.01) |
|
Total
dividends and distributions |
(0.33) |
(0.45) |
(0.54) |
(0.47) |
(0.47) |
|
Net asset
value, end of Year |
$9.51 |
$9.65 |
$9.38 |
$9.72 |
$9.94 |
|
Total
Return(c): |
1.93% |
8.25% |
2.14% |
2.58% |
4.70% |
|
| |||||
|
Ratios/Supplemental
Data: | |||||
|
Net
assets, end of Year
(000) |
$221,472 |
$60,644 |
$61,392 |
$93,851 |
$79,462 |
|
Average
net assets (000) |
$132,395 |
$48,786 |
$79,796 |
$100,319 |
$75,379 |
|
Ratios
to average net assets(d)(e): | |||||
|
Expenses
after waivers and/or expense reimbursement |
0.95% |
0.97%(f) |
0.97% |
0.95% |
0.95% |
|
Expenses
before waivers and/or expense reimbursement |
1.07% |
1.17%(f) |
1.11% |
1.09% |
1.09% |
|
Net
investment income (loss) |
3.29% |
5.04% |
5.53% |
4.74% |
4.53% |
|
Portfolio
turnover rate(g) |
43% |
125% |
66% |
67% |
94% |
|
(a) |
Calculated
based on average shares outstanding during the
year. |
|
(b) |
The per
share amount of realized and unrealized gain (loss) on investments does
not directly correlate to the amounts reported in the Statement of
Operations due to the timing
of
portfolio share transactions in relation to fluctuating market
values. |
|
(c) |
Total
return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of a share on the first day and a sale on
the last day of each year
reported
and includes reinvestment of dividends and distributions, if any. Total
returns may reflect adjustments to conform to
GAAP. |
|
(d) |
Effective
January 1, 2018, class specific expenses include transfer agent fees and
expenses and registration fees, which are charged to their respective
share class. |
|
(e) |
Does not
include expenses of the underlying funds in which the Fund
invests. |
|
(f) |
Includes
interest expense on borrowings from the Syndicated Credit Agreement of
0.02% for the year ended February 28, 2021. |
|
(g) |
The Fund's
portfolio turnover rate is calculated in accordance with regulatory
requirements, without regard to transactions involving short-term
investments, certain derivatives
and
in-kind transactions (if any). If such transactions were included, the
Fund's portfolio turnover rate may be
higher. |
50
PGIM Floating Rate
Income Fund
|
Class
C Shares | |||||
|
|
Year
Ended February 28/29, | ||||
|
|
2022 |
2021 |
2020 |
2019 |
2018 |
|
Per
Share Operating Performance(a): | |||||
|
Net
Asset Value, Beginning of Year |
$9.66 |
$9.38 |
$9.72 |
$9.94 |
$9.95 |
|
Income
(loss) from investment operations: | |||||
|
Net
investment income (loss) |
0.25 |
0.39 |
0.46 |
0.39 |
0.38 |
|
Net
realized and unrealized gain (loss) on investment and foreign currency
transactions |
(0.14) |
0.28(b) |
(0.33) |
(0.21) |
-(c) |
|
Total from
investment operations |
0.11 |
0.67 |
0.13 |
0.18 |
0.38 |
|
Less
Dividends and Distributions: | |||||
|
Dividends
from net investment income |
(0.25) |
(0.39) |
(0.47) |
(0.40) |
(0.38) |
|
Distributions
from net realized gains |
- |
- |
- |
- |
(0.01) |
|
Total
dividends and distributions |
(0.25) |
(0.39) |
(0.47) |
(0.40) |
(0.39) |
|
Net asset
value, end of Year |
$9.52 |
$9.66 |
$9.38 |
$9.72 |
$9.94 |
|
Total
Return(d): |
1.16% |
7.56% |
1.38% |
1.82% |
3.92% |
|
| |||||
|
Ratios/Supplemental
Data: | |||||
|
Net
assets, end of Year
(000) |
$69,648 |
$24,973 |
$32,673 |
$56,098 |
$52,919 |
|
Average
net assets (000) |
$45,432 |
$25,795 |
$44,099 |
$59,266 |
$54,061 |
|
Ratios
to average net assets(e)(f): | |||||
|
Expenses
after waivers and/or expense reimbursement |
1.70% |
1.72%(g) |
1.72% |
1.70% |
1.70% |
|
Expenses
before waivers and/or expense reimbursement |
1.84% |
1.94%(g) |
1.88% |
1.83% |
1.84% |
|
Net
investment income (loss) |
2.54% |
4.31% |
4.78% |
3.99% |
3.79% |
|
Portfolio
turnover rate(h) |
43% |
125% |
66% |
67% |
94% |
|
(a) |
Calculated
based on average shares outstanding during the
year. |
|
(b) |
The per
share amount of realized and unrealized gain (loss) on investments does
not directly correlate to the amounts reported in the Statement of
Operations due to the timing
of
portfolio share transactions in relation to fluctuating market
values. |
|
(c) |
Amount
rounds to zero. |
|
(d) |
Total
return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of a share on the first day and a sale on
the last day of each year
reported
and includes reinvestment of dividends and distributions, if any. Total
returns may reflect adjustments to conform to
GAAP. |
|
(e) |
Effective
January 1, 2018, class specific expenses include transfer agent fees and
expenses and registration fees, which are charged to their respective
share class. |
|
(f) |
Does not
include expenses of the underlying funds in which the Fund
invests. |
|
(g) |
Includes
interest expense on borrowings from the Syndicated Credit Agreement of
0.02% for the year ended February 28, 2021. |
|
(h) |
The Fund's
portfolio turnover rate is calculated in accordance with regulatory
requirements, without regard to transactions involving short-term
investments, certain derivatives
and
in-kind transactions (if any). If such transactions were included, the
Fund's portfolio turnover rate may be
higher. |
Visit our website
at www.pgim.com/investments
51
|
Class
Z Shares | |||||
|
|
Year
Ended February 28/29, | ||||
|
|
2022 |
2021 |
2020 |
2019 |
2018 |
|
Per
Share Operating Performance(a): | |||||
|
Net
Asset Value, Beginning of Year |
$9.66 |
$9.39 |
$9.73 |
$9.94 |
$9.96 |
|
Income
(loss) from investment operations: | |||||
|
Net
investment income (loss) |
0.35 |
0.47 |
0.56 |
0.49 |
0.48 |
|
Net
realized and unrealized gain (loss) on investment and foreign currency
transactions |
(0.14) |
0.28(b) |
(0.33) |
(0.21) |
(0.01) |
|
Total from
investment operations |
0.21 |
0.75 |
0.23 |
0.28 |
0.47 |
|
Less
Dividends and Distributions: | |||||
|
Dividends
from net investment income |
(0.35) |
(0.48) |
(0.57) |
(0.49) |
(0.48) |
|
Distributions
from net realized gains |
- |
- |
- |
- |
(0.01) |
|
Total
dividends and distributions |
(0.35) |
(0.48) |
(0.57) |
(0.49) |
(0.49) |
|
Net asset
value, end of Year |
$9.52 |
$9.66 |
$9.39 |
$9.73 |
$9.94 |
|
Total
Return(c): |
2.18% |
8.51% |
2.40% |
2.94% |
4.86% |
|
| |||||
|
Ratios/Supplemental
Data: | |||||
|
Net
assets, end of Year
(000) |
$3,794,840 |
$564,615 |
$424,819 |
$818,117 |
$400,179 |
|
Average
net assets (000) |
$1,828,765 |
$283,976 |
$584,427 |
$772,275 |
$390,617 |
|
Ratios
to average net assets(d)(e): | |||||
|
Expenses
after waivers and/or expense reimbursement |
0.70% |
0.72%(f) |
0.72% |
0.70% |
0.70% |
|
Expenses
before waivers and/or expense reimbursement |
0.81% |
0.90%(f) |
0.87% |
0.86% |
0.84% |
|
Net
investment income (loss) |
3.55% |
5.18% |
5.78% |
5.04% |
4.79% |
|
Portfolio
turnover rate(g) |
43% |
125% |
66% |
67% |
94% |
|
(a) |
Calculated
based on average shares outstanding during the
year. |
|
(b) |
The per
share amount of realized and unrealized gain (loss) on investments does
not directly correlate to the amounts reported in the Statement of
Operations due to the timing
of
portfolio share transactions in relation to fluctuating market
values. |
|
(c) |
Total
return is calculated assuming a purchase of a share on the first day and a
sale on the last day of each year reported and includes reinvestment of
dividends and
distributions,
if any. Total returns may reflect adjustments to conform to
GAAP. |
|
(d) |
Effective
January 1, 2018, class specific expenses include transfer agent fees and
expenses and registration fees, which are charged to their respective
share class. |
|
(e) |
Does not
include expenses of the underlying funds in which the Fund
invests. |
|
(f) |
Includes
interest expense on borrowings from the Syndicated Credit Agreement of
0.02% for the year ended February 28, 2021. |
|
(g) |
The Fund's
portfolio turnover rate is calculated in accordance with regulatory
requirements, without regard to transactions involving short-term
investments, certain derivatives
and
in-kind transactions (if any). If such transactions were included, the
Fund's portfolio turnover rate may be
higher. |
52
PGIM Floating Rate
Income Fund
|
Class
R6 Shares | |||||
|
|
Year
Ended February 28/29, | ||||
|
|
2022 |
2021 |
2020 |
2019 |
2018 |
|
Per
Share Operating Performance(a): | |||||
|
Net
Asset Value, Beginning of Year |
$9.66 |
$9.39 |
$9.73 |
$9.94 |
$9.96 |
|
Income
(loss) from investment operations: | |||||
|
Net
investment income (loss) |
0.35 |
0.48 |
0.56 |
0.49 |
0.48 |
|
Net
realized and unrealized gain (loss) on investment and foreign currency
transactions |
(0.13) |
0.27(b) |
(0.33) |
(0.20) |
-(c) |
|
Total from
investment operations |
0.22 |
0.75 |
0.23 |
0.29 |
0.48 |
|
Less
Dividends and Distributions: | |||||
|
Dividends
from net investment income |
(0.35) |
(0.48) |
(0.57) |
(0.50) |
(0.49) |
|
Distributions
from net realized gains |
- |
- |
- |
- |
(0.01) |
|
Total
dividends and distributions |
(0.35) |
(0.48) |
(0.57) |
(0.50) |
(0.50) |
|
Net asset
value, end of Year |
$9.53 |
$9.66 |
$9.39 |
$9.73 |
$9.94 |
|
Total
Return(d): |
2.34% |
8.57% |
2.45% |
2.99% |
4.91% |
|
| |||||
|
Ratios/Supplemental
Data: | |||||
|
Net
assets, end of Year
(000) |
$396,487 |
$16,970 |
$14,790 |
$34,545 |
$26,457 |
|
Average
net assets (000) |
$180,674 |
$11,040 |
$25,645 |
$39,870 |
$16,803 |
|
Ratios
to average net assets(e)(f): | |||||
|
Expenses
after waivers and/or expense reimbursement |
0.65% |
0.67%(g) |
0.67% |
0.65% |
0.65% |
|
Expenses
before waivers and/or expense reimbursement |
0.72% |
0.93%(g) |
0.81% |
0.76% |
0.75% |
|
Net
investment income (loss) |
3.62% |
5.31% |
5.84% |
5.02% |
4.83% |
|
Portfolio
turnover rate(h) |
43% |
125% |
66% |
67% |
94% |
|
(a) |
Calculated
based on average shares outstanding during the
year. |
|
(b) |
The per
share amount of realized and unrealized gain (loss) on investments does
not directly correlate to the amounts reported in the Statement of
Operations due to the timing
of
portfolio share transactions in relation to fluctuating market
values. |
|
(c) |
Amount
rounds to zero. |
|
(d) |
Total
return is calculated assuming a purchase of a share on the first day and a
sale on the last day of each year reported and includes reinvestment of
dividends and
distributions,
if any. Total returns may reflect adjustments to conform to
GAAP. |
|
(e) |
Effective
January 1, 2018, class specific expenses include transfer agent fees and
expenses and registration fees, which are charged to their respective
share class. |
|
(f) |
Does not
include expenses of the underlying funds in which the Fund
invests. |
|
(g) |
Includes
interest expense on borrowings from the Syndicated Credit Agreement of
0.02% for the year ended February 28, 2021. |
|
(h) |
The Fund's
portfolio turnover rate is calculated in accordance with regulatory
requirements, without regard to transactions involving short-term
investments, certain derivatives
and
in-kind transactions (if any). If such transactions were included, the
Fund's portfolio turnover rate may be
higher. |
Visit our website
at www.pgim.com/investments
53
GLOSSARY
FUND
Index
Credit
Suisse Leveraged Loan Index. The Credit Suisse
Leveraged Loan Index is an unmanaged index that represents the investable
universe of the US dollar-denominated leveraged loan market. Returns do not
include the effect of any expenses, sales charges or taxes. The returns would be
lower if they included the effect of expenses, sales charges or taxes.
54
PGIM Floating Rate
Income Fund
APPENDIX A:
WAIVERS AND DISCOUNTS AVAILABLE FROM CERTAIN FINANCIAL
INTERMEDIARIES
The availability of
certain sales charge waivers and discounts will depend on whether you purchase
your shares directly from the Fund or through a financial intermediary.
Intermediaries may have different policies and procedures regarding the
availability of front-end sales load waivers or contingent deferred sales charge
(“CDSC”) waivers (i.e., back-end), which are discussed below. In all instances,
it is the purchaser's responsibility to notify the Fund or the purchaser's
financial intermediary at the time of purchase of any relationship or other
facts qualifying the purchaser for sales charge waivers or discounts.
For
waivers and discounts not available through a particular intermediary,
shareholders will have to purchase Fund shares through the applicable
intermediary to receive these waivers or discounts.
Merrill
Lynch
Shareholders
purchasing Fund shares through a Merrill Lynch platform or account are eligible
only for the following load waivers (front-end sales charge waivers and
contingent deferred, or back-end, sales charge waivers) and discounts, as
applicable, which may differ from those disclosed elsewhere in this Fund's
Prospectus or SAI.
Front-end
Sales Load Waivers on Class A Shares available at Merrill Lynch
◾
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including health
savings accounts) and trusts used to fund those plans, provided that the shares
are not held in a commission-based brokerage account and shares are held for the
benefit of the plan
◾
Shares purchased by
a 529 Plan (does not include 529 Plan units or 529-specific share classes or
equivalents)
◾
Shares purchased
through a Merrill Lynch affiliated investment advisory
program
◾
Shares exchanged
due to the holdings moving from a Merrill Lynch affiliated investment advisory
program to a Merrill Lynch brokerage (non-advisory) account pursuant to Merrill
Lynch’s policies relating to sales load discounts and waivers
◾
Shares purchased by
third party investment advisors on behalf of their advisory clients through
Merrill Lynch’s platform
◾
Shares of funds
purchased through the Merrill Edge Self-Directed platform
◾
Shares purchased
through reinvestment of capital gains distributions and dividend reinvestment
when purchasing shares of the same fund (but not any other fund within the fund
family)
◾
Shares exchanged
from Class C (i.e. level-load) shares of the same fund pursuant to Merrill
Lynch’s policies relating to sales load discounts and waivers
◾
Employees and
registered representatives of Merrill Lynch or its affiliates and their family
members
◾
Directors or
Trustees of the Fund, and employees of the Fund’s investment adviser or any of
its affiliates, as described in this Prospectus
◾
Eligible shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same account, and (3) redeemed shares were
subject to a front-end or deferred sales load (known as Rights of
Reinstatement). Automated transactions (i.e. systematic purchases and
withdrawals) and purchases made after shares are automatically sold to pay
Merrill Lynch’s account maintenance fees are not eligible for
reinstatement
CDSC
Waivers on Class A and C Shares available at Merrill Lynch
◾
Death or disability
of the shareholder
◾
Shares sold as part
of a systematic withdrawal plan as described in this
Prospectus
◾
Return of excess
contributions from an IRA Account
◾
Shares sold as part
of a required minimum distribution for IRA and retirement accounts pursuant to
the Internal Revenue Code
◾
Shares sold to pay
Merrill Lynch fees but only if the transaction is initiated by Merrill
Lynch
◾
Shares acquired
through a Right of Reinstatement
◾
Shares held in
retirement brokerage accounts, that are exchanged for a lower cost share class
due to transfer to certain fee based accounts or platforms
Visit our website
at www.pgim.com/investments
55
◾
Shares received
through an exchange due to the holdings moving from a Merrill Lynch affiliated
investment advisory program to a Merrill Lynch brokerage (non-advisory) account
pursuant to Merrill Lynch’s policies relating to sales load discounts and
waivers
Front-end
load Discounts Available at Merrill Lynch: Breakpoints, Rights of Accumulation
& Letters of Intent
◾
Breakpoints as
described in this Prospectus
◾
Rights of
Accumulation (“ROA”) which entitle shareholders to breakpoint discounts as
described in the Fund’s Prospectus will be automatically calculated based on the
aggregated holding of fund family assets held by accounts (including 529 program
holdings, where applicable) within the purchaser’s household at Merrill Lynch.
Eligible fund family assets not held at Merrill Lynch may be included in the ROA
calculation only if the shareholder notifies his or her financial advisor about
such assets
◾
Letters of Intent
(“LOI”) which allow for breakpoint discounts based on anticipated purchases
within a fund family, through Merrill Lynch, over a 13-month period of
time
Morgan
Stanley Wealth Management
Shareholders
purchasing Fund shares through a Morgan Stanley Wealth Management transactional
brokerage account are eligible only for the following front-end sales charge
waivers with respect to Class A shares, which may differ from and be more
limited than those disclosed elsewhere in this Fund's Prospectus or
SAI.
Front-End
Sales Charge Waivers on Class A Shares Available at Morgan Stanley Wealth
Management
◾
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement plans do
not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans
◾
Morgan Stanley
employee and employee-related accounts according to Morgan Stanley’s account
linking rules
◾
Shares purchased
through reinvestment of dividends and capital gains distributions when
purchasing shares of the same fund
◾
Shares purchased
through a Morgan Stanley self-directed brokerage account
◾
Class C (i.e.,
level-load) shares that are no longer subject to a contingent deferred sales
charge and are converted to Class A shares of the same fund pursuant to Morgan
Stanley Wealth Management’s share class conversion program
◾
Shares purchased
from the proceeds of redemptions within the same fund family, provided (i) the
repurchase occurs within 90 days following the redemption, (ii) the redemption
and purchase occur in the same account, and (iii) redeemed shares were subject
to a front-end or deferred sales charge
Ameriprise
Financial
Class
A Shares Front-End Sales Charge Waivers Available at Ameriprise
Financial
The following
information applies to Class A shares purchases if you have an account with or
otherwise purchase Fund shares through Ameriprise Financial.
Shareholders
purchasing Fund shares through an Ameriprise Financial brokerage account are
eligible for the following front-end sales charge waivers and discounts, which
may differ from those disclosed elsewhere in this Fund's Prospectus or
SAI.
◾
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement plans do
not include SEP IRAs, Simple IRAs or SAR-SEPs.
◾
Shares purchased
through reinvestment of capital gains distributions and dividend reinvestment
when purchasing shares of the same fund (but not any other fund within the fund
family).
◾
Shares exchanged
from Class C shares of the same fund in the month of or following the 7-year
anniversary of the purchase date. To the extent that this Prospectus elsewhere
provides for a waiver with respect to exchanges of Class C shares or conversion
of Class C shares following a shorter holding period, that waiver will apply.
56
PGIM Floating Rate
Income Fund
◾
Employees and
registered representatives of Ameriprise Financial or its affiliates and their
immediate family members.
◾
Shares purchased by
or through qualified accounts (including IRAs, Coverdell Education Savings
Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and defined benefit
plans) that are held by a covered family member, defined as an Ameriprise
financial advisor and/or the advisor’s spouse, advisor’s lineal ascendant
(mother, father, grandmother, grandfather, great grandmother, great
grandfather), advisor’s lineal descendant (son, step-son, daughter,
step-daughter, grandson, granddaughter, great grandson, great granddaughter) or
any spouse of a covered family member who is a lineal
descendant.
◾
Shares purchased
from the proceeds of redemptions within the same fund family, provided (1) the
repurchase occurs within 90 days following the redemption, (2) the redemption
and purchase occur in the same account, and (3) redeemed shares were subject to
a front-end or deferred sales load (i.e. Rights of
Reinstatement).
Raymond
James & Associates, Inc., Raymond James Financial Services and each entity’s
affiliates (“Raymond James”)
Shareholders
purchasing fund shares through a Raymond James platform or account, or through
an introducing broker-dealer or independent registered investment adviser for
which Raymond James provides trade execution, clearance, and/or custody
services, will be eligible only for the following load waivers (front-end sales
charge waivers and contingent deferred, or back-end, sales charge waivers) and
discounts, which may differ from those disclosed elsewhere in this Fund’s
Prospectus or SAI.
Front-end
sales load waivers on Class A shares available at Raymond James
◾
Shares purchased in
an investment advisory program.
◾
Shares purchased
within the same fund family through a systematic reinvestment of capital gains
and dividend distributions.
◾
Employees and
registered representatives of Raymond James or its affiliates and their family
members as designated by Raymond James.
◾
Shares purchased
from the proceeds of redemptions within the same fund family, provided (1) the
repurchase occurs within 90 days following the redemption, (2) the redemption
and purchase occur in the same account, and (3) redeemed shares were subject to
a front-end or deferred sales load (known as Rights of
Reinstatement).
◾
A shareholder in
the Fund’s Class C shares will have their shares converted at net asset value to
Class A shares (or the appropriate share class) of the Fund if the shares are no
longer subject to a CDSC and the conversion is in line with the policies and
procedures of Raymond James.
CDSC
Waivers on Classes A and C shares available at Raymond James
◾
Death or disability
of the shareholder.
◾
Shares sold as part
of a systematic withdrawal plan as described in the Fund’s
Prospectus.
◾
Return of excess
contributions from an IRA Account.
◾
Shares sold as part
of a required minimum distribution for IRA and retirement accounts due to the
shareholder reaching the qualified age based on applicable IRS regulations as
described in the Fund’s Prospectus.
◾
Shares sold to pay
Raymond James fees but only if the transaction is initiated by Raymond
James.
◾
Shares acquired
through a right of reinstatement.
Front-end
load discounts available at Raymond James: breakpoints, and/or rights of
accumulation, and/or letters of intent
◾
Breakpoints as
described in this Prospectus.
◾
Rights of
accumulation which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family assets
held by accounts within the purchaser’s household at Raymond James. Eligible
fund family assets not held at Raymond James may be included in the calculation
of rights of accumulation only if the shareholder notifies his or her financial
advisor about such assets.
◾
Letters of intent
which allow for breakpoint discounts based on anticipated purchases within a
fund family, over a 13-month time period. Eligible fund family assets not held
at Raymond James may be included in the calculation of letters of intent only if
the shareholder notifies his or her financial advisor about such
assets.
Edward
D. Jones & Co., L.P. (“Edward Jones”)
Policies Regarding Transactions Through Edward Jones
Policies Regarding Transactions Through Edward Jones
Visit our website
at www.pgim.com/investments
57
◾
Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward
Jones commission and fee-based platforms are eligible only for the following
sales charge discounts (also referred to as “breakpoints”) and waivers, which
can differ from discounts and waivers described elsewhere in this Fund’s
Prospectus or statement of additional information (“SAI”) or through another
broker-dealer. In all instances, it is the shareholder's responsibility to
inform Edward Jones at the time of purchase of any relationship, holdings of the
Fund or other facts qualifying the purchaser for breakpoints, discounts or
waivers. Edward Jones can ask for documentation of such circumstance.
Shareholders should contact Edward Jones if they have questions regarding their
eligibility for these discounts and waivers.
Breakpoints
◾
Breakpoint pricing,
otherwise known as volume pricing, at dollar thresholds as described in this
Fund’s Prospectus.
Rights
of Accumulation (“ROA”)
◾
The applicable
sales charge on a purchase of Class A shares is determined by taking into
account all share classes (except certain money market funds and any assets held
in group retirement plans) of PGIM Funds held by the shareholder or in an
account grouped by Edward Jones with certain other related accounts for the
purpose of providing certain pricing considerations (“pricing groups”). If
grouping assets as a shareholder, this includes all share classes held on the
Edward Jones platform and/or held on another platform. The inclusion of eligible
fund family assets in the ROA calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Money market
funds are included only if such shares were sold with a sales charge at the time
of purchase or acquired in exchange for shares purchased with a sales
charge.
◾
The employer
maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or
change ROA for the IRA accounts associated with the plan to a plan-level
grouping as opposed to including all share classes at a shareholder or pricing
group level.
◾
ROA is determined
by calculating the higher of cost minus redemptions or market value (current
shares x NAV).
Letter
of Intent (“LOI”)
◾
Through a LOI,
shareholders can receive the sales charge and breakpoint discounts for purchases
shareholders intend to make over a 13-month period from the date Edward Jones
receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the
value that the shareholder intends to buy over a 13-month period to calculate
the front-end sales charge and any breakpoint discounts. Each purchase the
shareholder makes during that 13-month period will receive the sales charge and
breakpoint discount that applies to the total amount. The inclusion of eligible
fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made
before the LOI is received by Edward Jones are not adjusted under the LOI and
will not reduce the sales charge previously paid. Sales charges will be adjusted
if LOI is not met.
◾
If the employer
maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or
change ROA for the IRA accounts associated with the plan to a plan-level
grouping. LOIs will also be at the plan-level and may only be established by the
employer.
Sales
Charge Waivers
Sales charges are
waived for the following shareholders and in the following
situations:
◾
Associates of
Edward Jones and its affiliates and their family members who are in the same
pricing group (as determined by Edward Jones under its policies and procedures)
as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in
good-standing pursuant to Edward Jones’ policies and
procedures.
◾
Shares purchased in
an Edward Jones fee-based program.
◾
Shares purchased
through reinvestment of capital gains distributions and dividend
reinvestment.
◾
Shares purchased
from the proceeds of redeemed shares of the same fund family so long as the
following conditions are met: (1) the proceeds are from the sale of shares
within 60 days of the purchase, and (2) the sale and purchase are made in the
same share class and the same account or the purchase is made in an individual
retirement account with proceeds from liquidations in a non-retirement account.
58
PGIM Floating Rate
Income Fund
◾
Shares exchanged
into Class A shares from another share class so long as the exchange is into the
same fund and was initiated at the discretion of Edward Jones. Edward Jones is
responsible for any remaining CDSC due to the fund company, if applicable. Any
future purchases are subject to the applicable sales charge as disclosed in the
Prospectus.
◾
Exchanges from
Class C shares to Class A shares of the same fund, generally, in the 84th month
following the anniversary of the purchase date or earlier at the discretion of
Edward Jones.
Contingent
Deferred Sales Charge (“CDSC”) Waivers
If the shareholder
purchases shares that are subject to a CDSC and those shares are redeemed before
the CDSC is expired, the shareholder is responsible to pay the CDSC except in
the following conditions:
◾
The death or
disability of the shareholder
◾
Systematic
withdrawals with up to 10% per year of the account value
◾
Return of excess
contributions from an Individual Retirement Account (“IRA”)
◾
Shares sold as part
of a required minimum distribution for IRA and retirement accounts if the
redemption is taken in or after the year the shareholder reaches qualified age
based on applicable IRS regulations
◾
Shares sold to pay
Edward Jones fees or costs in such cases where the transaction is initiated by
Edward Jones
◾
Shares exchanged in
an Edward Jones fee-based program
◾
Shares acquired
through NAV reinstatement
◾
Shares redeemed at
the discretion of Edward Jones for Minimum Balances, as described
below.
Other
Important Information Regarding Transactions Through Edward Jones
Minimum
Purchase Amounts (Class A and Class C shares)
◾
Initial purchase
minimum: $250
◾
Subsequent purchase
minimum: none
Minimum
Balances
◾
Edward Jones has
the right to redeem at its discretion fund holdings with a balance of $250 or
less. The following are examples of accounts that are not included in this
policy:
◾
A fee-based account
held on an Edward Jones platform
◾
A 529 account held
on an Edward Jones platform
◾
An account with an
active systematic investment plan or LOI
Exchanging
Share Classes
◾
Edward Jones has
the authority to exchange at NAV a shareholder's holdings in a fund to Class A
shares or such other share class based on Edward Jones’
policy.
Janney
Montgomery Scott LLC (“Janney”)
Shareholders
purchasing Fund shares through a Janney account are eligible only for the
following load waivers (front-end sales charge waivers and contingent deferred,
or back-end, sales charge waivers) and discounts, which may differ from those
disclosed elsewhere in this Fund's Prospectus or SAI.
Front-end
sales charge waivers on Class A shares available at Janney
◾
Shares purchased
through reinvestment of capital gains distributions and dividend reinvestment
when purchasing shares of the same fund (but not any other fund within the fund
family).
◾
Shares purchased by
employees and registered representatives of Janney or its affiliates and their
family members as designated by Janney.
◾
Shares purchased
from the proceeds of redemptions within the same fund family, provided (1) the
repurchase occurs within ninety (90) days following the redemption, (2) the
redemption and purchase occur in the same account, and (3) redeemed shares were
subject to a front-end or deferred sales load (i.e., right of
reinstatement).
◾
Class C shares that
are no longer subject to a contingent deferred sales charge and are converted to
Class A shares of the same fund pursuant to Janney’s policies and procedures.
Visit our website
at www.pgim.com/investments
59
Sales
charge waivers on Class A and C shares available at Janney
◾
Shares sold upon
the death or disability of the shareholder.
◾
Shares sold as part
of a systematic withdrawal plan as described in the Fund’s
Prospectus.
◾
Shares purchased in
connection with a return of excess contributions from an IRA
account.
◾
Shares sold as part
of a required minimum distribution for IRA and other retirement accounts due to
the shareholder reaching the qualified age based on applicable IRS regulations
as described in the Fund’s Prospectus.
◾
Shares sold to pay
Janney fees but only if the transaction is initiated by
Janney.
◾
Shares acquired
through a right of reinstatement.
Front-end
load discounts available at Janney: breakpoints, and/or rights of
accumulation
◾
Breakpoints as
described in the Fund’s Prospectus.
◾
Rights of
accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will
be automatically calculated based on the aggregated holding of Fund family
assets held by accounts within the purchaser’s household at Janney. Eligible
fund family assets not held at Janney may be included in the ROA calculation
only if the shareholder notifies his or her financial advisor about such
assets.
Oppenheimer
& Co. Inc. (“OPCO”)
Shareholders
purchasing Fund shares through an OPCO platform or account will only be eligible
for the following sales charge waivers (front-end sales charge waivers and
contingent deferred sales charge (“CDSC”) waivers (i.e., back-end)) and
discounts, which may differ from those disclosed elsewhere in this Prospectus or
the SAI.
Front-End
Sales Charge Waivers on Class A share available at OPCO
◾
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including health
savings accounts) and trusts used to fund those plans, provided that the shares
are not held in a commission-based brokerage account and shares are held for the
benefit of the plan
◾
Shares purchased by
or through a 529 Plan
◾
Shares purchased
through an OPCO affiliated investment advisory program
◾
Shares purchased
through reinvestment of capital gains distributions and dividend reinvestment
when purchasing shares of the same fund (but not any other fund within the PGIM
fund family)
◾
Shares purchased
from the proceeds of redemptions within the same fund family, provided (1) the
repurchase occurs within 90 days following the redemption, (2) the redemption
and purchase occur in the same account, and (3) redeemed shares were subject to
a front-end or deferred sales load (known as Rights of
Reinstatement)
◾
A shareholder in
the Fund’s Class C shares will have their shares converted at net asset value to
Class A shares (or the appropriate share class) of the Fund if the shares are no
longer subject to a CDSC and the conversion is in line with the policies and
procedures of OPCO
◾
Employees and
registered representatives of OPCO or its affiliates and their family
members
◾
Directors or
Trustees of the Fund, and employees of the Fund’s investment adviser or any of
its affiliates, as described in this Prospectus
Contingent
Deferred Sales Charge (“CDSC”) Waivers available at OPCO
◾
The death or
disability of the shareholder
◾
Shares sold as part
of a systematic withdrawal plan as described in this
Prospectus
◾
Return of excess
contributions from an Individual Retirement Account (“IRA”)
◾
Shares sold as part
of a required minimum distribution for IRA and retirement accounts due to the
shareholder reaching the qualified age based on applicable IRS
regulations
◾
Shares sold to pay
OPCO fees but only if the transaction is initiated by OPCO
◾
Shares acquired
through a Right of Reinstatement
Front-end
load discounts available at OPCO: breakpoints and/or rights of
accumulation
◾
Breakpoints as
described in this Prospectus
60
PGIM Floating Rate
Income Fund
◾
Rights of
accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will
be automatically calculated based on the aggregated holding of Fund family
assets held by accounts within the purchaser’s household at OPCO. Eligible Fund
family assets not held at OPCO may be included in the ROA calculation only if
the shareholder notifies his or her financial advisor about such
assets.
RW
Baird (“Baird”)
Shareholders
purchasing Fund shares through a Baird platform or account will only be eligible
for the following sales charge waivers (front-end sales charge waivers and CDSC
waivers) and discounts, which may differ from those disclosed elsewhere in this
Prospectus or the SAI.
Front-end
sales charge waivers on Class A shares available at Baird
◾
Shares purchased
through reinvestment of capital gains distributions and dividend reinvestment
when purchasing shares of the same fund
◾
Shares purchased by
employees and registered representatives of Baird or its affiliates and their
family members as designated by Baird
◾
Shares purchased
from the proceeds of redemptions from another PGIM Fund, provided (1) the
repurchase occurs within ninety (90) days following the redemption, (2) the
redemption and purchase occur in the same account, and (3) redeemed shares were
subject to a front-end or deferred sales charge (known as Rights of
Reinstatement)
◾
A shareholder in
the Fund's Class C Shares will have their shares converted at net asset value to
Class A shares of the Fund if the shares are no longer subject to CDSC and the
conversion is in line with the policies and procedures of
Baird
◾
Employer-sponsored
retirement plans or charitable accounts in a transactional brokerage account at
Baird, including 401(k) plans, 457 plans, employer-sponsored 403(b) plans,
profit sharing and money purchase pension plans and defined benefit plans. For
purposes of this provision, employer-sponsored retirement plans do not include
SEP IRAs, Simple IRAs or SAR-SEPs
Contingent
Deferred Sales Charge (“CDSC”) waivers on Class A and C shares available at
Baird
◾
Shares sold upon
the death or disability of the shareholder
◾
Shares sold as part
of a systematic withdrawal plan as described in this
Prospectus
◾
Shares purchased in
connection with a return of excess contributions from an IRA
account
◾
Shares sold as part
of a required minimum distribution for IRA and other retirement accounts due to
the shareholder reaching the qualified age based on applicable IRS
regulations
◾
Shares sold to pay
Baird fees but only if the transaction is initiated by Baird
◾
Shares acquired
through a Right of Reinstatement
Front-end
Sales Charge Discounts available at Baird: Breakpoints and/or Rights of
Accumulation
◾
Breakpoints as
described in this Prospectus
◾
Rights of
accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will
be automatically calculated based on the aggregated holding of PGIM Fund assets
held by accounts within the purchaser’s household at Baird. Eligible PGIM Fund
assets not held at Baird may be included in the ROA calculation only if the
shareholder notifies his or her financial advisor about such
assets
◾
Letters of Intent
(“LOI”) which allow for breakpoint discounts based on anticipated purchases of
PGIM Funds through Baird, over a 13-month period of time
STIFEL,
NICOLAUS & COMPANY, INCORPORATED (“STIFEL”)
Shareholders
purchasing Fund shares through a Stifel platform or account, or who own shares
for which Stifel or an affiliate is the broker-dealer of record, are eligible
for the following front-end sales charge waivers with respect to Class A shares,
which may differ from and be more limited than those disclosed elsewhere in this
Fund's Prospectus or SAI. All other waivers in the Fund’s Prospectus or SAI
apply as described.
Front-End
Sales Charge Waivers on Class A Shares
Visit our website
at www.pgim.com/investments
61
◾
Class C (i.e.,
level-load) shares that are no longer subject to a contingent deferred sales
charge and are converted to Class A shares of the same Fund (at net asset value
per share) pursuant to policies and procedures of Stifel.
62
PGIM Floating Rate
Income Fund
|
FOR
MORE INFORMATION
Please read
this Prospectus before you invest in the Fund and keep it for future
reference.
For
information or shareholder questions contact: | |
|
◾MAIL
Prudential
Mutual Fund Services LLC
PO Box
9658
Providence,
RI 02940 ◾WEBSITE
www.pgim.com/investments |
◾TELEPHONE
(800)
225-1852
(973)
367-3529
(from
outside the U.S.) |
|
◾E-DELIVERY
To
receive your mutual fund documents on-line, go to
pgim.com/investments/resource/edelivery and enroll.
Instead
of receiving printed documents by mail, you will receive notification via
email when new materials are
available.
You can cancel your enrollment or change your email address at any time by
visiting the website address
above. |
|
The
Annual and Semi-Annual Reports and the SAI contain additional information
about the Fund. Shareholders may
obtain
free copies of the SAI, Annual Report and Semi-Annual Report as well as
other information about the Fund
and
may make other shareholder inquiries through the telephone number, address
and website listed above. | |
|
◾STATEMENT
OF ADDITIONAL INFORMATION (“SAI”)
(incorporated
by reference into this Prospectus) ◾SEMI-ANNUAL
REPORT |
◾ANNUAL
REPORT
(contains
a discussion of the market conditions and
investment
strategies that significantly affected the
Fund's
performance during the last fiscal
year) |
|
You
can also obtain copies of Fund documents, including the SAI, from the SEC
as follows (the SEC charges a fee to
copy
documents): | |
|
◾ELECTRONIC
REQUEST
|
◾VIA
THE INTERNET
on
the EDGAR Database at
www.sec.gov |
|
PGIM
Floating Rate Income Fund | ||||
|
Share
Class |
A |
C |
Z |
R6 |
|
NASDAQ |
FRFAX |
FRFCX |
FRFZX |
PFRIX |
|
CUSIP |
74439V602 |
74439V701 |
74439V800 |
74439V883 |
MF211STAT
The
Fund's Investment Company Act File No. 811-03712