Form 497 PRUDENTIAL INVESTMENT
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PGIM QMA Large-Cap Core Equity Fund
Formerly, Prudential QMA Large-Cap Core Equity
Fund
PROSPECTUS — December 27,
2017 (AS REISSUED JUNE 13, 2018)
Objective
Long-term growth of capital
| PGIM QMA LARGE-CAP CORE EQUITY FUND | ||||
| A: PTMAX | B: PTMBX | C: PTMCX | Z: PTEZX | R6: PTMQX |
| As with all mutual funds, the Securities and Exchange Commission 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, a Prudential Financial company, member SIPC. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM, Inc. (PGIM), a Prudential Financial company. © 2018 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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Table of Contents
FUND SUMMARY
INVESTMENT OBJECTIVE
The investment objective of the
Fund is long-term growth of capital.
FUND FEES AND EXPENSES
The tables below describe the sales
charges, fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and an eligible group of related investors purchase, or agree to purchase in the
future, $25,000 or more in shares of the Fund or other funds in the PGIM Funds family. More information about these discounts as well as other waivers or discounts is available from your financial professional and is
explained in Reducing or Waiving Class A's and Class C’s Sales Charges on page 25 of the Fund's Prospectus, Appendix A: Waivers and Discounts Available From Certain Financial Intermediaries on page 47 of the Fund's Prospectus and in Rights of Accumulation on page 55 of the Fund's Statement of Additional Information (SAI).
| Shareholder Fees (fees paid directly from your investment) | |||||
| Class A | Class B | Class C | Class Z | Class R6† | |
| Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.50% | None | None | None | None |
| Maximum deferred sales charge (load)(as a percentage of the lower of original purchase price or net asset value at redemption) | 1.00% | 5.00% | 1.00% | None | None |
| Maximum sales charge (load) imposed on reinvested dividends and other distributions | None | None | None | None | None |
| Redemption fees | None | None | None | None | None |
| Exchange fee | None | None | None | None | None |
| Maximum account fee (direct accounts under $10,000) | $15 | $15 | $15 | None* | None |
* Direct Transfer Agent
Accounts holding under $10,000 of Class Z shares are subject to the $15 fee.
†Formerly known as Class Q.
| Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) | |||||
| Class A | Class B | Class C | Class Z | Class R6(1) | |
| Management fees | 0.35% | 0.35% | 0.35% | 0.35% | 0.35% |
| Distribution and service (12b-1) fees | 0.30% | 1.00% | 1.00% | None | None |
| Other expenses(2) | 0.22% | 1.01% | 0.21% | 0.20% | 0.12% |
| Total annual Fund operating expenses | 0.87% | 2.36% | 1.56% | 0.55% | 0.47% |
| Fee waiver and/or expense reimbursement | (0.13)% | (0.66)% | (0.11)% | (0.09)% | (0.12)% |
| Total annual Fund operating expenses after fee waiver and/or expense reimbursement(3,4) | 0.74% | 1.70% | 1.45% | 0.46% | 0.35% |
(1) Formerly known as Class Q.
(2) Other expenses are based on estimates.
(3) PGIM Investments LLC (PGIM Investments) has contractually agreed through February 28, 2019 to limit net annual Fund operating expenses (exclusive of distribution and service
(12b-1) fees, transfer agency expenses (including sub-transfer agency and networking fees), taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), interest, acquired fund fees and
expenses, brokerage, extraordinary and certain other expenses such as dividend, broker charges and interest expense on short sales) of each class of shares to 0.35% of the Fund’s average daily net assets. 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 February 28, 2019 without the prior approval of the Fund’s Board of
Trustees.
(4) The distributor of the Fund has contractually agreed through February 28, 2019 to limit the Fund’s Class A distribution and service (12b-1) fees to 0.25% of the
Fund’s Class A average daily net assets. This waiver may not be terminated prior to February 28, 2019 without the prior approval of the Fund’s Board of Trustees.
Example. The following hypothetical example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. It assumes that you invest $10,000 in
the Fund for the time periods indicated and then, except as indicated, redeem all your shares at the end of those periods. It assumes a 5% return on your investment each year, that the Fund's operating expenses remain
the same (except that fee waivers or reimbursements, if any, are only reflected in the 1-Year figures) and that all dividends and distributions are reinvested. Your actual costs may be higher or lower.
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| If Shares Are Redeemed | If Shares Are Not Redeemed | |||||||
| Share Class | 1 Year | 3 Years | 5 Years | 10 Years | 1 Year | 3 Years | 5 Years | 10 Years |
| Class A | $621 | $800 | $994 | $1,552 | $621 | $800 | $994 | $1,552 |
| Class B | $673 | $973 | $1,301 | $2,091 | $173 | $673 | $1,201 | $2,091 |
| Class C | $248 | $482 | $840 | $1,847 | $148 | $482 | $840 | $1,847 |
| Class Z | $47 | $167 | $298 | $681 | $47 | $167 | $298 | $681 |
| Class R6† | $36 | $139 | $251 | $580 | $36 | $139 | $251 | $580 |
†Formerly known as Class Q.
Portfolio Turnover. The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher
transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance.
During the Fund's most recent fiscal year, the Fund's portfolio turnover rate was 89% of the average value of its portfolio.
INVESTMENTS, RISKS AND
PERFORMANCE
Principal Investment
Strategies. The Fund’s investment subadviser seeks investments that will appreciate over time. The subadviser normally invests at least 80% of the Fund’s investable assets in equity and
equity-related securities of large capitalization US companies. The term “investable assets” refers to the Fund’s net assets plus any borrowings for investment purposes. The Fund’s investable
assets will be less than its total assets to the extent that it has borrowed money for non-investment purposes, such as to meet anticipated redemptions.
The Fund’s subadviser,
Quantitative Management Associates LLC (QMA) employs a quantitatively driven, bottom-up investment process. The stock selection process utilizes an adaptive model that evaluates stocks differently based on their
growth expectations. QMA constructs portfolios that seek to maximize the Fund’s investment in the most attractive stocks identified by the model, subject to risk constraints.
The Fund’s goal is to
outperform the returns of the S&P 500 Index over the long term.
Principal Risks. All investments have risks to some degree. An investment in the Fund is not guaranteed to achieve its investment objective; is not a deposit with a bank; is not insured, endorsed or
guaranteed by the Federal Deposit Insurance Corporation or any other government agency; and is subject to investment risks, including possible loss of your original investment.
Equity and Equity-Related Securities
Risks. The value of a particular security could go down and you could lose money. 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. The Fund's holdings can vary significantly from broad market indexes and the performance of the Fund can deviate from the performance of these indexes. Different parts of a market can react
differently to adverse issuer, market, regulatory, political and economic developments.
Large Capitalization Company
Risk. Companies with large market capitalizations go in and out of favor based on market and economic conditions. Larger companies tend to be less volatile than companies with smaller market
capitalizations. In exchange for this potentially lower risk, the Fund's value may not rise or fall as much as the value of funds that emphasize companies with smaller market capitalizations.
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.
Model Design and Implementation
Risks. The design of Quantitative Management Associates LLC (QMA)'s underlying models may be flawed or incomplete. These models are based on historical and theoretical underpinnings that QMA
believes are sound, but there is no guarantee that these underpinnings will correlate with security price behavior in the
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manner assumed by the models or that the
quantitative techniques that underlie QMA's portfolio construction processes will fully anticipate important risks. In addition, it is impossible to eliminate completely the risk of error in the implementation of the
models that guide QMA's quantitative investment processes, and it may be difficult to implement model recommendations in volatile and rapidly changing market conditions.
Economic and Market Events
Risk. Events in the US and global financial markets, including actions taken by the US Federal Reserve or foreign central banks to stimulate or stabilize economic growth, may at times result in
unusually high market volatility, which could negatively impact performance. Reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Risk of Increase in Expenses. 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.
Performance. The following bar chart shows the Fund's performance for Class Z shares for each full calendar year of operations or for the last 10 calendar years, whichever is shorter. The
following table shows the average annual returns of each of the Fund’s share classes and also compares the Fund’s performance with the average annual total returns of an index or other benchmark and a
group of similar mutual funds. The bar chart and table demonstrate the risk of investing in the Fund by showing how returns can change from year to year.
Past performance (before and after
taxes) does not mean that the Fund will achieve similar results in the future. Updated Fund performance information is available online at www.pgiminvestments.com.
Effective June 6, 2017, the
Fund’s investment objective and investment strategies were changed. The Fund’s performance prior to June 6, 2017 is based on its former investment objective and strategies.
1 Prior to this year, the annual returns bar chart displayed returns for the Fund’s Class A shares. The Fund now shows annual returns for Class Z shares in light of the
relative growth of assets in this share class. Without the contractual expense limitation, the annual returns would have been lower. The total return for Class Z shares from January 1, 2017 to September 30, 2017 was
14.72%.
| Average Annual Total Returns % (including sales charges) (as of 12-31-16) | ||||
| Return Before Taxes | One Year | Five Years | Ten Years | Since Inception |
| Class A shares | 4.75% | 13.10% | 5.39% | — |
| Class B shares | 4.99% | 13.40% | 5.20% | — |
| Class C shares | 8.98% | 13.52% | 5.21% | — |
| Class R6 shares*† | N/A | N/A | N/A | N/A (12-28-16) |
| Class Z Shares % | ||||
| Return Before Taxes | 11.09% | 14.66% | 6.25% | — |
| Return After Taxes on Distributions | 9.75% | 13.03% | 5.31% | — |
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| Class Z Shares % | ||||
| Return After Taxes on Distributions and Sale of Fund Shares | 7.39% | 11.67% | 4.95% | — |
° After-tax returns
are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may
differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401 (k) plans or individual retirement accounts. After-tax returns
are shown only for the indicated share class. After-tax returns for other classes will vary due to differing sales charges and expenses.
*Average annual total returns are not shown
for Class R6 shares, because Class R6 shares are new. Performance for Class R6 shares will be included after Class R6 shares have been in existence for a full calendar year.
†Formerly known as Class Q shares.
| Index % (reflects no deduction for fees, expenses or taxes) | ||||
| One Year | Five Years | Ten Years | Since Inception | |
| S&P 500 Index | 11.94% | 14.65% | 6.94% | — |
| Lipper Average % (reflects no deduction for sales charges or taxes) | ||||
| Lipper Large-Cap Core Funds Average | 10.04% | 13.14% | 6.14% | — |
MANAGEMENT OF THE FUND
| Investment Manager | Subadviser | Portfolio Managers | Title | Service Date |
| PGIM Investments LLC | Quantitative Management Associates LLC | Peter Xu, PhD | Managing Director | August 2005 |
| Stacie L. Mintz, CFA | Managing Director & Portfolio Manager | December 2007 | ||
| Devang Gambhirwala | Principal & Portfolio Manager | December 2016 |
BUYING AND SELLING FUND
SHARES
| Class A** | Class C** | Class Z** | Class R6† | |
| Minimum initial investment* | $2,500 | $2,500 | Institutions: $5 million Group Retirement Plans: None | Institutions: $5 million Group Retirement Plans: None |
| Minimum subsequent investment* | $100 | $100 | None | None |
* Note: Class B shares are
closed to new purchases except for exchanges from Class B shares of another fund. Please see “How to Buy, Sell and Exchange Fund Shares—Closure of Class B Shares” in the Prospectus for more
information.
** Certain share classes were generally
closed to investments by new group retirement plans effective on or about June 1, 2018. 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.
†Formerly known as Class Q.
For Class A and Class C shares,
the minimum initial investment for retirement accounts and custodial accounts for minors is $1,000 and the minimum subsequent investment is $100. 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 minimum investment
and/or other 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.
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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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MORE ABOUT THE FUND'S PRINCIPAL AND NON-PRINCIPAL
INVESTMENT STRATEGIES, INVESTMENTS AND RISKS
INVESTMENTS AND INVESTMENT
STRATEGIES
The Fund’s investment
objective is long-term growth of capital. This means that the Fund seeks investments that will appreciate over time. The Fund’s goal is to outperform the returns of the S&P 500 Index over
the long term.
In pursuing the Fund’s
objective, the subadviser normally invests at least 80% of the Fund’s investable assets in equity and equity-related securities of large capitalization US companies. Equity and equity-related securities include
common and preferred stock, exchange-traded funds (ETFs), securities convertible into common stock, securities having common stock characteristics, futures contracts, and other derivative instruments whose value is
based on common stock, such as rights, warrants or options to purchase common stock. The Fund considers large capitalization companies to be those with market capitalizations within the market cap range of companies
included in the Russell 1000 Index or the S&P 500 Index.
The Fund’s subadviser, QMA,
employs a quantitatively driven, bottom-up investment process. The stock selection process utilizes an adaptive model that evaluates stocks differently based on their growth expectations. QMA constructs portfolios
that seek to maximize the Fund’s investments in the most attractive stocks identified by the model, subject to risk constraints.
As a result of the Fund’s
investment policies, the Fund may actively and frequently trade its portfolio securities.
The Fund’s investment
objective is not a fundamental policy and may be changed by the Fund’s Board of Trustees without shareholder approval.
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, indexes 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, indexes or currencies. Derivatives may be traded on organized exchanges, or in individually negotiated transactions with other parties (these are known as
“over-the-counter” derivatives). When the Fund uses derivative strategies, the Fund designates certain assets as segregated or otherwise covers its exposure, as required by the rules of the Securities and
Exchange Commission. 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.
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Options on Securities and
Financial Indexes. The Fund may purchase and sell put and call options on securities and financial indexes traded on US or non-US 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 within the Fund’s account at the custodian or in a separate segregation account at the custodian.
Convertible Securities
The Fund may invest in convertible
securities, which include convertible preferred stocks and debt securities of a corporation that may be converted into underlying shares of common stock either because they have warrants attached or otherwise permit
the holder to buy common stock of the corporation at a set price. Convertible securities provide an income stream (usually lower than non-convertible bonds) and give investors opportunities to participate in the
capital appreciation of the underlying common stock. Convertible securities typically offer greater potential for appreciation than nonconvertible debt securities.
Exchange-Traded Funds
The Fund may invest in securities
of exchange-traded funds (ETFs), subject to certain limits on investment in securities of non-affiliated investment companies. Securities of ETFs represent shares of ownership in either management investment companies
or unit investment trusts (UITs) that generally hold a portfolio of common stocks or bonds designed to generally correspond to the price and yield performance of a specific securities index. The underlying portfolio
may have a broad market, sector or international orientation. ETFs give investors the opportunity to buy or sell an entire portfolio of stocks in a single security transaction in a manner similar to buying or selling
a share of stock.
The Fund expects to purchase and
sell shares of ETFs on a national securities exchange through a broker-dealer. Purchases and sales of shares of ETFs are transacted at current market prices, irrespective of the net asset value of ETF shares. ETFs
only directly issue or redeem shares that have been aggregated into large blocks (“Creation Units”) to authorized participants that have entered into agreements with the ETF’s distributor. ETFs
generally issue or redeem Creation Units in return for a designated portfolio of securities (and an amount of cash) that the ETF specifies each day.
Money Market Instruments
The Fund may hold cash and/or
invest in money market instruments, including commercial paper of a US or foreign company, foreign government securities, certificates of deposit, bankers' acceptances, time deposits of domestic and foreign banks, and
obligations issued or guaranteed by the US Government or its agencies or instrumentalities. These obligations may be US dollar-denominated or denominated in a foreign currency. Money market instruments typically have
a maturity of one year or less as measured from the date of purchase.
Foreign Equity Securities
The Fund may invest in foreign equity securities including stocks and other equity-related securities. Foreign equity securities may include securities from emerging markets.
US Government Securities
The Fund may invest in securities
issued or guaranteed by the US Government or by an agency or instrumentality of the US Government. Some US Government securities are backed by the full faith and credit of the United States, which means that payment
of principal and interest is guaranteed but market value is not.
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 assets in money market instruments, including short-term obligations of, or securities guaranteed by, the
US Government, its agencies or instrumentalities, or in high-quality obligations of domestic or foreign banks and corporations, and may hold up to 100% of its assets in cash or cash equivalents. 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.
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Securities Lending
Consistent with applicable
regulatory requirements, the Fund may lend portfolio securities with a value up to 33 1/3% of its total assets to brokers, dealers and other financial organizations to earn additional income. Loans of portfolio
securities will be collateralized by cash. Cash collateral will be invested in an affiliated prime money market fund.
Investments in Affiliated Funds
The Fund may invest its assets in
affiliated short-term bond funds and/or affiliated or unaffiliated money market funds. The affiliated funds are registered investment companies under the Investment Company Act of 1940 (the “1940 Act”).
The Fund can invest its free cash balances in the affiliated 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. As a shareholder in the affiliated funds, the Fund will pay its proportional share of the
expenses of the affiliated funds, but the affiliated 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 are not paying management fees for both the Fund and the affiliated 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.
Funds of Funds Investments
The Fund is an investment option
for other PGIM Investments-advised mutual funds that are managed as “funds of funds.” As a result, from time to time, the Fund may experience relatively large redemptions or investments due to rebalancings
of a fund of funds’ portfolio. In the event of such redemptions or investments, the Fund could be required to sell securities or to invest cash at a time when it is not advantageous to do so. The subadviser may
take such actions as it deems appropriate to minimize any adverse impact, considering the potential benefits of such investments to the Fund and consistent with its obligations to the Fund.
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 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 & Non-Principal Strategies: Investment Limits |
| ■ Equity and equity-related securities of large capitalization US companies: At least 80% of investable assets■ Derivatives: Up to 25% of net assets■ Foreign Securities: Up to 20% of investable assets■ Money market instruments: Up to 100% on a temporary basis■ US Government Securities: Up to 20% of total assets■ Illiquid Securities: Up to 15% of net assets |
RISKS OF INVESTING IN THE
FUND
Equity and Equity-Related Securities
Risks. The value of a particular security could go down and you could lose money. 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. The Fund's holdings can vary significantly from broad market indexes and the performance of the Fund can deviate from the performance of these indexes. Different parts of a market can react
differently to adverse issuer, market, regulatory, political and economic developments.
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Large Capitalization Company
Risk. Companies with large market capitalizations go in and out of favor based on market and economic conditions. Larger companies tend to be less volatile than companies with smaller market
capitalizations. In exchange for this potentially lower risk, the Fund's value may not rise or fall as much as the value of funds that emphasize companies with smaller market capitalizations.
Model Implementation Risk. While QMA strives to mitigate the likelihood of material implementation errors, it is impossible to completely eliminate the risk of error in the implementation of the computer models that
guide QMA's quantitative investment processes. Additionally, it may be difficult to implement model recommendations in volatile and rapidly changing market conditions.
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 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 US Government and foreign
governments are in the process of adopting and implementing regulations governing derivatives markets, including mandatory clearing of certain derivatives, margin and reporting requirements. 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.
Convertible Securities Risk. Investments in convertible securities subject the Fund to the risks associated with both fixed-income securities, including credit risk and interest rate risk, and equity
securities.
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. As with call
provisions, 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. Preferred securities also may be substantially less liquid than many other securities, such as common stock or US Government securities.
Exchange-Traded Funds (ETFs)
Risk. As with other investments, investments in ETFs are subject to market risk and, for non-index strategies, selection risk. There may be certain risks to the extent a particular ETF is
concentrated in a particular sector, and is not as diversified as the market as a whole. Investments in ETFs may entail duplicate management fees. Shares of an ETF are traded on an exchange throughout a trading day,
and bought and sold based on market values and not at the ETF’s net asset value. For this reason, the shares of an ETF could trade at either a premium or discount to the actual net asset value of the ETF. The
Fund will incur brokerage costs for purchases and sales of ETF shares.
Money Market Instruments Risk.
Although money market instruments are generally viewed as low risk investments, money market instruments are nevertheless subject to credit risk, market risk, prepayment risk and interest
rate risk.
Foreign Securities Risk. The Fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the Fund may
invest may have markets that are less liquid, less regulated and more volatile than US markets. The value of the Fund’s investments may decline because of factors affecting the particular issuer as well as
foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities.
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US Government and Agency Securities
Risk. US Government and agency securities are subject to market risk, interest rate risk and credit risk. Not all US Government securities are insured or guaranteed by the full faith and credit
of the US Government; some are only insured or guaranteed by the issuing agency, which must rely on its own resources to repay the debt. Connecticut Avenue Securities issued by Fannie Mae and Structured Agency Credit
Risk issued by Freddie Mac carry no guarantee whatsoever and the risk of default associated with these securities would be borne by the Fund. The maximum potential liability of the issuers of some US Government
securities held by the Fund may greatly exceed their current resources, including their legal right to support from the US Treasury. It is possible that these issuers will not have the funds to meet their payment
obligations in the future. In addition, the value of US Government securities may be affected by changes in the credit rating of the US Government.
Active Trading Risk. The Fund actively and frequently trades its portfolio securities. High portfolio turnover results in higher transaction costs, which can affect the Fund’s performance and have
adverse tax consequences. In addition, high portfolio turnover may also mean that a proportionately greater amount of distributions to shareholders will be taxed as ordinary income rather than long-term capital gains
compared to investment companies with lower portfolio turnover.
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, the 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 longer
the maturity and the lower the credit quality of a bond, the more sensitive it is to credit risk.
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 securities. 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 face a heightened level of interest rate risk since the US Federal Reserve Board has ended its quantitative easing program and may continue to raise rates. The Fund
may lose money if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.
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.
Economic and Market Events
Risk. Events in the US and global financial markets, including actions taken by the US Federal Reserve or foreign central banks to stimulate or stabilize economic growth, may at times result in
unusually high market volatility, which could negatively impact performance. Reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Risk of Increase in Expenses. 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.
Securities Lending Risk. Securities lending involves the risk that the borrower may fail to return the securities in a timely manner or at all. As a result, the Fund may lose money and there may be a delay in
recovering the loaned securities. Additionally, losses could result from the reinvestment of collateral received on loaned securities in investments that decline in value, default, or do not perform as well as
expected. The affiliated prime money market fund in which cash collateral is invested may impose liquidity fees or temporary gates on redemptions if its weekly liquid assets fall below a designated threshold. If this
were to occur, the Fund may lose money on its investment of cash collateral in the
| 12 | PGIM QMA Large-Cap Core Equity Fund |
affiliated prime money market fund, or the Fund
may not be able to redeem its investment of cash collateral in the affiliated prime money market fund, which might cause the Fund to liquidate other holdings in order to return the cash collateral to the borrower upon
termination of a securities loan. These events could trigger adverse tax consequences for the Fund.
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.
| Visit our website at www.pgiminvestments.com | 13 |
PRIOR HISTORICAL PERFORMANCE OF SIMILARLY MANAGED
ACCOUNTS
Effective June 6, 2017, the
Fund’s investment objective and certain investment strategies have changed. The Fund’s new investment objective, investment policies and strategies are substantially similar to the investment objectives,
strategies, and policies of another US equity account managed by the subadviser, Quantitative Management Associates LLC. The performance of that account is summarized below in the subadviser’s US Core Equity
Composite (the “QMA US Core Equity Composite”). The QMA US Core Equity Composite (inception date January 1, 1997) includes all discretionary portfolios (currently solely the account referred to above)
managed by the subadviser (using the same portfolio management team) with substantially similar investment objectives, strategies, and policies to those of the Fund.
The performance of the QMA US Core
Equity Composite is summarized below, and is compared to the performance of the Standard & Poor's 500 Index (S&P 500 Index), which is the performance benchmark of the Fund and the similar account included in
the QMA US Core Equity Composite. The S&P 500 Index is an unmanaged index of over 500 stocks of large US public companies, which gives a broad look at how stock prices in the United States have performed. An
unmanaged index cannot be purchased directly by investors, and reflects no deductions for sales charges, fees, expenses, or taxes. The benchmark returns do not include the effect of any operating expenses of a mutual
fund or taxes payable by investors and would be lower if they included these effects. In addition, the portfolio holdings of the Fund may differ from those of the account included in the QMA US Core Equity
Composite.
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. All Composite and benchmark returns shown below reflect the reinvestment of dividends
and other earnings. Gross returns reflect the deduction of trading expenses but do not reflect the deduction of investment advisory fees. Net of fee performance is presented after deduction of
trading expenses and QMA’s actual advisory fee. Net returns are calculated by deducting the highest tier of the QMA fee schedule in effect for the respective time period from the monthly gross composite
return.
Fees charged to clients may vary
depending on, among other things, the applicable fee schedule and the size of the portfolio. 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 will be higher than the fees imposed on the account included in the QMA US Core Equity Composite, and which will reduce the returns of the Fund. If the net and gross of fee performance for the QMA US Core Equity
Composite were adjusted to reflect fees and expenses payable by the Fund, the returns of the QMA US Core Equity Composite would be lower 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.
| Annualized Returns | |||
| As of December 31, 2016 | Net Return | Gross Return | S&P 500® Index |
| 1 Year | 12.07% | 12.46% | 11.96% |
| 3 Year | 9.55% | 9.93% | 8.87% |
| 5 Year | 15.69% | 16.09% | 14.66% |
| 10 Year | 7.03% | 7.40% | 6.95% |
| Since Inception (1/1/1997) | 8.18% | 8.56% | 7.68% |
| Calendar Year Returns | |||
| Year | Net Return | Gross Return | S&P 500® Index |
| 1997* | 32.99% | 33.51% | 33.38% |
| 1998 | 30.80% | 31.31% | 28.58% |
| 1999 | 20.93% | 21.38% | 21.04% |
| 2000 | -5.79% | -5.46% | -9.11% |
| 2001 | -13.28% | -12.97% | -11.89% |
| 14 | PGIM QMA Large-Cap Core Equity Fund |
| Calendar Year Returns | |||
| Year | Net Return | Gross Return | S&P 500® Index |
| 2002 | -20.88% | -20.60% | -22.10% |
| 2003 | 30.57% | 31.02% | 28.69% |
| 2004 | 12.43% | 12.82% | 10.88% |
| 2005 | 5.27% | 5.64% | 4.91% |
| 2006 | 16.36% | 16.77% | 15.80% |
| 2007 | 5.57% | 5.94% | 5.49% |
| 2008 | -37.09% | -36.86% | -37.00% |
| 2009 | 23.50% | 23.92% | 26.46% |
| 2010 | 14.37% | 14.77% | 15.06% |
| 2011 | 1.44% | 1.80% | 2.11% |
| 2012 | 17.65% | 18.06% | 16.00% |
| 2013 | 34.00% | 34.45% | 32.39% |
| 2014 | 15.62% | 16.02% | 13.69% |
| 2015 | 1.47% | 1.82% | 1.38% |
| 2016 | 12.07% | 12.46% | 11.96% |
*The returns shown are for
the period January 1, 1997 through December 31, 1997.
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. The account that makes up the QMA US Core Equity Composite
is not subject to the same 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 QMA US Core Equity Composite.
Portfolio returns are calculated
using the daily time weighted rate of return methodology. Annual net rates of return are calculated by subtracting 1/12th of the highest fee within the strategy fee schedule from the composite's monthly return and
geometrically linking the monthly returns. Annual gross rates of return are calculated by asset weighting the individual portfolio returns monthly using the beginning of period values and geometrically linking the
monthly composite 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. Unlike the Fund, the similar account included
in the QMA US Core Equity Composite is not a registered fund. Performance for the Composite has been calculated consistent with the requirements of the Global Investment Performance Standards (GIPS®).
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.
| Visit our website at www.pgiminvestments.com | 15 |
HOW THE FUND IS MANAGED
BOARD OF TRUSTEES
The Fund is overseen by a Board of
Trustees (hereafter referred to as Trustees, or the Board). The Board oversees the actions of the Manager, investment 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 investment subadviser. For the fiscal year ended October 31, 2017,
the Fund paid PGIM Investments management fees (net of waivers, as applicable) at the effective rate of 0.27% 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 October 31, 2017, PGIM Investments, a wholly-owned subsidiary of Prudential, served as the investment manager to all of
the Prudential US and offshore open-end investment companies, and as the manager or administrator to closed-end investment companies, with aggregate assets of approximately $279.4 billion.
Subject to the supervision of the
Board, PGIM Investments is responsible for conducting the initial review of prospective investment subadvisers for the Fund. In evaluating a prospective investment 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 investment
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 investment 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 an investment
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
investment 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 Annual Report to shareholders dated October 31.
INVESTMENT SUBADVISER
Quantitative Management Associates
LLC (QMA), a registered investment adviser, is a wholly-owned and independently-operated boutique of PGIM, Inc. Serving investors since 1975, QMA targets superior risk-adjusted returns by combining
research-driven quantitative processes built on economic and behavioral foundations with judgement from experienced market practitioners. As of December 31, 2017, QMA managed approximately $138 billion in quantitative
equity and dynamic asset allocation solutions for a global client base of pension funds,
| 16 | PGIM QMA Large-Cap Core Equity Fund |
endowments, foundations, sovereign wealth funds
and subadvisory accounts for leading financial services companies. With offices in Newark and San Francisco, QMA's primary address is Gateway Center Two, 100 Mulberry Street, Newark, New Jersey 07102.
PORTFOLIO MANAGERS
QMA typically follows a team
approach in the management of its portfolios. The members of QMA's portfolio management team with primary responsibility for Fund management are listed below.
Peter Xu, PhD, is a Managing Director and Co-Head of QMA’s Quantitative Equity Platform with responsibility for research on higher alpha and alternative strategies. For over 20 years, Peter has
played a critical role in the evolution of QMA's quantitative models and investment process that have delivered strong performance across all of our equity strategies. He has published articles in a number of
journals, including The Financial Analysts Journal, The Journal of Portfolio Management, The Journal of Asset Management, The Journal of Investing, Review of Quantitative Finance and
Accounting, and others. Peter earned a BS in Nuclear Physics from Fudan University in Shanghai, an MA in Economics from Rice University, and a PhD in Finance from the University of Houston.
Stacie L. Mintz, MBA, CFA, is a Managing Director and Portfolio Manager for QMA. Stacie is responsible for managing US equity portfolios, including US Core, Long Short, and Market Neutral strategies, and overseeing
the team responsible for implementation. Previously, Stacie was a member of the Dynamic Asset Allocation team, where she was responsible for several retail and institutional portfolios. In addition, during that time,
she was responsible for managing the overall asset allocation for the Prudential Pension Plan. She earned a BA in Economics from Rutgers University, an MBA in Finance from New York University, and holds the Chartered
Financial Analyst (CFA) designation.
Devang Gambhirwala, MBA, is a Principal and Portfolio Manager for QMA. Devang is primarily responsible for overseeing US Core Equity portfolios, including US Core, Long-Short and Market Neutral strategies. He is
also responsible for the management of structured products. Earlier at PGIM, Inc., Devang worked as a Quantitative Research Analyst and an Assistant Portfolio Manager. He earned a BS in Computer and Information
Sciences from the New Jersey Institute of Technology and an MBA from Rutgers University.
Additional information about
portfolio manager compensation, other accounts managed, and portfolio manager ownership of Fund securities may be found in the SAI.
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.pgiminvestments.com.
| Visit our website at www.pgiminvestments.com | 17 |
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.
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 shares of ACME Corp. stock for a total of
$1,000 and more than one year later sold the shares 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 distribution check(s) remains uncashed for more than six months, your check(s) 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 | Annually |
| 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 US 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.
| 18 | PGIM QMA Large-Cap Core Equity Fund |
Dividends from net investment
income paid to a non-corporate US 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 US corporations.
A US 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 US shareholder’s “net investment income,” including Fund distributions and net
gains from the disposition of Fund shares, and (2) the excess of the US 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 US
Treasury a portion of your distributions and sale proceeds, based on the backup withholding rate.
Taxation of Non-US Shareholders
For a discussion regarding the
taxation of non-US 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.pgiminvestments.com | 19 |
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.
| 20 | PGIM QMA Large-Cap Core Equity Fund |
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 B
Shares
The conversion of Class B shares
into Class A shares—which happens automatically approximately seven years after purchase—is not a taxable event for federal income tax purposes. For more information about the automatic conversion of Class
B shares, see Class B Shares Automatically Convert to Class A Shares in How to Buy, Sell and Exchange Fund Shares.
| Visit our website at www.pgiminvestments.com | 21 |
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
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-US 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 a Fund) or suspend or modify a 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, US 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** | Individual investors |
| Class B* | Individual investors |
| Class C** | Individual 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 |
* Note: Class B shares
are closed to all purchase activity except for exchanges from Class B shares of another fund. See “Closure of Class B Shares” below for more information.
** The Fund’s Class A, Class C and
Class Z shares were generally closed to investments by new group retirement plans effective on or about June 1, 2018. Please see “Closure of Certain Share Classes to New Group Retirement Plans” in this
section of the Prospectus for more information.
†Formerly known as Class Q.
†Formerly known as Class Q.
Multiple share classes let you
choose a cost structure that meets your needs:
| ■ | Class A shares purchased in amounts of less than $1 million 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 $1 million 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. |
| 22 | PGIM QMA Large-Cap Core Equity Fund |
| ■ | Class C shares do not require you to pay a sales charge at the time of purchase, but do require you to pay a contingent deferred sales charge (CDSC) 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. |
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 $1 million are generally less advantageous than purchasing Class A shares. Purchase orders for Class C shares above this amount generally will not be accepted. |
| ■ | 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 B* | Class C** | Class Z** | Class R6† | |
| Minimum purchase amount | $2,500 | $2,500 | $2,500 | Institutions: $ 5 million Group Retirement Plans: None | Institutions: $5 million Group Retirement Plans: None |
| Minimum amount for subsequent purchases | $100 | $100 | $100 | None | None |
| Maximum initial sales charge | 5.50% of the public offering price | None | None | None | None |
| Contingent Deferred Sales Charge (CDSC) (as a percentage of the lower of the original purchase price or the net asset value after redemption) | 1.00% on sales of $1 million or more made within 12 months of purchase | 5.00%(Yr.1) 4.00%(Yr.2) 3.00%(Yr.3) 2.00%(Yr.4) 1.00%(Yr.5) 1.00%(Yr.6) 0.00%(Yr.7) | 1.00% on sales made within 12 months of purchase | None | None |
| Visit our website at www.pgiminvestments.com | 23 |
| Class A** | Class B* | Class C** | Class Z** | Class R6† | |
| Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets) | 0.30% (0.25% currently) | 1.00% | 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 investment for Class A and Class C shares for retirement accounts and custodial accounts for minors is $1,000, and the minimum subsequent investment is $100. The minimum initial and subsequent investment for
AIP accounts is $50 (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).
° If the value of your Class A,
Class B, 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 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 $1 million or
more of Class A shares and redeem those shares within 12 months of purchase are subject to a CDSC of 1.00%, but are not subject to an initial sales charge.
° 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, Class B and Class C shares is 0.25%. The distribution fee is limited to 0.30% (including the 0.25% service fee) for Class A shares and 0.75% for Class B and Class C shares.
° The Distributor of the Fund has
contractually agreed through February 28, 2019 to limit the Fund’s Class A distribution and service (12b-1) fees to 0.25% of the Fund’s Class A average daily net assets.
° With respect to Class Z shares
purchased by current and former employees (including their spouses, children and parents), the minimum initial investment is generally $2,500; $1,000 for retirement accounts and custodial accounts for minors. There is
no minimum for payroll deduction for such Class Z purchases. The minimum initial and subsequent investment for AIP accounts for such Class Z purchases is $50 (if 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).
° With respect to Class Z shares
purchased by institutional investors, including corporations, banks, governmental entities, municipalities, hospitals, insurance companies and IRS Section 501 entities, such as foundations and endowments, the minimum
initial investment for such investors generally is $5 million.
° With respect to Class R6 shares
purchased by institutional investors, 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 who meet certain requirements as detailed herein, the minimum initial investment for such investors generally is $5 million.
* Note: Class B shares are closed to all
purchase activity except for exchanges from Class B shares of another fund. See “Closure of Class B Shares” below for more information.
** The Fund’s Class A, Class C and
Class Z shares were generally closed to investments by new group retirement plans effective on or about June 1, 2018. Please see “Closure of Certain Share Classes to New Group Retirement Plans” in this
section of the Prospectus for more information.
†Formerly known as Class Q.
Closure of Class B Shares
Class B shares are closed to all
purchase activity effective June 23, 2014. This means that no new accounts in Class B shares may be established, and no additional Class B shares may be purchased or acquired, except through an exchange from the Class
B shares of another fund or through the reinvestment of dividends and/or capital gains.
Shareholders owning Class B shares
may continue to hold their Class B shares until the shares automatically convert to Class A shares under the conversion schedule, or until the shareholder redeems their Class B shares. Any redemption of Class B shares
will continue to be subject to any applicable contingent deferred sales charge (CDSC). In addition, as noted above, shareholders owning Class B shares will continue to have exchange privileges with the Class B shares
of any other fund that offers Class B shares.
Automatic Investment Plan
(AIP). Shareholders who purchase Class B shares through the Automatic Investment Plan (AIP) are no longer able to purchase Class B shares and are required to select a different share class of the
Fund or another fund in order to continue to make automatic investments. Selection of a different share class will be subject to the eligibility requirements of such share class. If a shareholder does not designate a
different share class for AIP investments, future purchases of Class B shares will be rejected. New AIPs in Class B shares may not be established.
IRAs & Employer-Sponsored
Retirement Plans. Class B shareholders may continue to hold Class B shares in IRA and SIMPLE IRA accounts or in employer-sponsored retirement plans, but contributions must be made in a different share
class.
| 24 | PGIM QMA Large-Cap Core Equity Fund |
Investment Minimums. The minimum initial investment will be waived for existing Class B shareholders who select a new share class in the same fund. The minimum subsequent investment of $100 per fund applies in
the new share class of the same fund.
Closure of Certain Share Classes to
New Group Retirement Plans
Effective on or about 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 of that class of shares. 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 R2 shares, or Class R4 shares of the Fund, as applicable.
In addition, on or about 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 or about 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 new accounts may be established in the
Fund’s Class R shares and 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 or about June 1, 2018, subject to certain exceptions below | |||
| New IRAs | No Change | No Change | No Change | Closed to all new investors on or about 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 or their agents will be permitted to offer such share classes of the Fund after the Effective Date, provided that the plan or its 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 or their agents that combine with, replace, are otherwise affiliated with, or have third party arrangements 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. |
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.
Increase the Amount of Your
Investment. You can reduce Class A's sales charge by increasing the amount of your investment. This table 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 $25,000 | 5.50% | 5.82% | 5.00% |
| $25,000 to $49,999 | 5.00% | 5.26% | 4.50% |
| $50,000 to $99,999 | 4.50% | 4.71% | 4.00% |
| Visit our website at www.pgiminvestments.com | 25 |
| Amount of Purchase | Sales Charge as a % of Offering Price* | Sales Charge as a % of Amount Invested* | Dealer Reallowance*** |
| $100,000 to $249,999 | 3.75% | 3.90% | 3.25% |
| $250,000 to $499,999 | 2.75% | 2.83% | 2.50% |
| $500,000 to $999,999 | 2.00% | 2.04% | 1.75% |
| $1 million to $4,999,999** | None | None | 1.00% |
| $5 million to $9,999,999** | None | None | 0.50% |
| $10 million 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 percentage shown above.
** If you invest $1 million or more, you
can buy only Class A shares, unless you qualify to buy other share classes. If you purchase $1 million 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 purchases by 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 (1) the current value of Class A, Class B and Class C PGIM Fund shares you or the group 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 |
| ■ | 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. |
| 26 | PGIM QMA Large-Cap Core Equity Fund |
The value of shares held by you or
an eligible group of related investors will be determined by the value of your existing Class A shares calculated at current NAV plus maximum sales charge with Class B and Class C shares calculated at current NAV.
Note: Class Z shares and Class R6 shares cannot be aggregated with any other share class for purposes of reducing or waiving Class A's initial sales charge.
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 $1 Million or
More. If you purchase $1 million 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.
Other Types of Investors. Certain other types of investors may purchase Class A shares without paying the initial sales charge, including:
| Visit our website at www.pgiminvestments.com | 27 |
| ■ | Certain directors, 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 investment 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 B Shares Automatically Convert
to Class A Shares
If you bought Class B shares and
hold them for approximately seven years, we will automatically convert them into Class A shares without charge. At that time, we will also convert any Class B shares that you purchased with reinvested dividends and
other distributions. Since the distribution and service (12b-1) fees for Class A shares are lower than for Class B shares, converting to Class A shares lowers your Fund expenses. Class B shares acquired through the
reinvestment of dividends or distributions will be converted to Class A shares according to the procedures utilized by the broker-dealer through which the Class B shares were purchased, if the shares are carried on
the books of that broker-dealer and the broker-dealer provides subaccounting services to the Fund. Otherwise, the procedures utilized by PMFS or its affiliates will be used. The use of different procedures may result
in a timing differential in the conversion of Class B shares acquired through the reinvestment of dividends and distributions.
When we do the conversion, you
will get fewer Class A shares than the number of converted Class B shares if the price of the Class A shares is higher than the price of the Class B shares. The total dollar value will be the same, so you will not
have lost any money by getting fewer Class A shares. Conversions are quarterly for Class B shares.
If you hold Class B share
certificates, the certificates must be received by the Transfer Agent in order for your Class B shares to convert from Class B to Class A shares. Certificate deposited shares will convert during the next quarterly
conversion.
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. The minimum initial investment for such investors generally is $5 million; however, such
| 28 | PGIM QMA Large-Cap Core Equity Fund |
minimum initial investment may be modified for
certain financial firms that submit orders on behalf of their clients. A Fund or the Distributor may lower, waive, or otherwise modify the minimum initial investment for certain categories of investors at their
discretion. 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; 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 a share class offered by the program before selecting a share class.
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 Z 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 Z shares.
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 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. |
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 who meet requirements as detailed below. The minimum initial investment for such investors generally is $5 million; however,
such minimum initial investment may be
| Visit our website at www.pgiminvestments.com | 29 |
modified for certain financial firms that submit
orders on behalf of their clients. The Fund or the Distributor may lower, waive or otherwise modify the minimum initial investment for certain categories of investors at their discretion. 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 (including any program or account sponsored by Prudential or an affiliate that includes the Fund as an available option), 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 provided that the Fund or its affiliates are not required to make or pay any type of administrative, sub-accounting, networking or revenue sharing payments or similar fees paid to intermediaries.
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 Funds directly to the public,
but instead markets and sells the Funds through other broker-dealers, 401(k) providers, retirement plan administrators, and other financial intermediaries. Each 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 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.
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,
| 30 | PGIM QMA Large-Cap Core Equity 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.
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, 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”).
| Visit our website at www.pgiminvestments.com | 31 |
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 has also appointed an Anti-Money Laundering Compliance Officer to oversee 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 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
| 32 | PGIM QMA Large-Cap Core Equity Fund |
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-US 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., 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.pgiminvestments.com (click on “Prices and Yields,” under the “I’m Looking For…” section, and then select a fund).
Additional Shareholder Services
As a Fund shareholder, you can take
advantage of the following services and privileges:
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.
| Visit our website at www.pgiminvestments.com | 33 |
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.
Note: New AIPs in Class B shares
may not be established. Class B shareholders may not make automatic investments in Class B shares through an AIP. A Class B shareholder must designate a different share class of the same fund or another fund for
purchases. Shareholders may select another share class which they are eligible to purchase.
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.
Note: Class B shareholders can
continue to hold Class B shares in IRA and SIMPLE IRA accounts or in employer-sponsored retirement plans, but new contributions must be made in another share class.
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 annual report (along with an updated prospectus) and a semi-annual report, which contain important financial information about the Fund. To reduce Fund
expenses, we may send one annual shareholder report, one semi-annual shareholder report and one annual 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 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.
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:
| 34 | PGIM QMA Large-Cap Core Equity Fund |
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 Securities and Exchange Commission, 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.
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.
| Visit our website at www.pgiminvestments.com | 35 |
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 B shares within
six years of purchase or Class C shares within 12 months of purchase, you will have to pay a CDSC. In addition, if you purchase $1 million 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 purchases by 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), six years for Class B shares, 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), six years for Class B shares, 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 B or Class C shares were held in a money market fund.
Waiver of the CDSC—Class A
Shares
The CDSC will be waived if the
Class A 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.
Waiver of the CDSC—Class B
Shares
The CDSC will be waived if the
Class B 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; |
| ■ | To withdraw excess contributions from a qualified or tax-deferred retirement plan, IRA or Section 403(b) custodial account; and |
| ■ | On certain redemptions effected through a Systematic Withdrawal Plan. |
For more information, see the
SAI.
| 36 | PGIM QMA Large-Cap Core Equity Fund |
Waiver of the CDSC—Class C
Shares
The CDSC will be waived if the
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.
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 B, 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 fund.
In addition, Class R6 shares
cannot be exchanged for Class R6 shares of the Prudential Day One Funds or the PGIM 60/40 Allocation Fund.
| Visit our website at www.pgiminvestments.com | 37 |
After an exchange, at redemption,
any CDSC will be calculated from the date of the initial purchase, excluding any time that Class B or 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.
Note: Class B shares may not be
purchased or acquired by any Class B shareholder except by exchange from Class B shares of another fund or through dividend and/or capital gains reinvestment.
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 B or Class C shares into PGIM Government Money Market Fund, the time you hold the Class B or Class C shares in
the money market fund will not be counted in calculating the required holding period for CDSC liability.
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-US 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
| 38 | PGIM QMA Large-Cap Core Equity Fund |
fund share prices that may be based on closing
prices of non-US 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.
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 are excluded from this policy. In addition, transactions by affiliated PGIM 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.
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 trading activity over $25,000 per account on a daily basis for 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
the aggregate net flows in excess of $1 million. In those cases, the trade detail is reviewed to determine if any of the activity relates to potential offenders. In cases of omnibus orders, 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.
| Visit our website at www.pgiminvestments.com | 39 |
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—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.
| 40 | PGIM QMA Large-Cap Core Equity Fund |
FINANCIAL HIGHLIGHTS
Introduction
The financial highlights will help
you evaluate the Fund's financial performance for the fiscal years ended October 31, 2017, 2016, 2015, 2014, and 2013. Certain information reflects financial results for a single fund 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 were
derived from the financial statements audited by KPMG LLP, an independent registered public accounting firm, whose report on those financial statements was unqualified.
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.
| Class A Shares | ||||||
| Year Ended October 31, | ||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | ||
| Per Share Operating Performance(a): | ||||||
| Net Asset Value, Beginning of Year | $15.49 | $15.92 | $16.55 | $15.23 | $12.70 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss) | .19 | .14 | .14 | .11 | .14 | |
| Net realized and unrealized gain (loss) on investment transactions | 3.51 | .29 | .55 | 2.46 | 3.01 | |
| Total from investment operations | 3.70 | .43 | .69 | 2.57 | 3.15 | |
| Less Dividends and Distributions: | ||||||
| Dividends from net investment income | (.15) | (.14) | (.11) | (.13) | (.13) | |
| Distributions from net realized gains | (.67) | (.72) | (1.21) | (1.12) | (.49) | |
| Total dividends and distributions | (.82) | (.86) | (1.32) | (1.25) | (.62) | |
| Net asset value, end of year | $18.37 | $15.49 | $15.92 | $16.55 | $15.23 | |
| Total Return(b): | 24.73% | 3.02% | 4.20% | 18.09% | 26.00% | |
| Ratios/Supplemental Data: | ||||||
| Net assets, end of year (000) | $113,343 | $89,169 | $88,920 | $88,561 | $81,558 | |
| Average net assets (000) | $101,852 | $88,443 | $90,171 | $86,047 | $76,459 | |
| Ratios to average net assets(c): | ||||||
| Expenses after waivers and/or expense reimbursement | .77% | 1.17% | 1.14% | 1.16% | 1.20% | |
| Expenses before waivers and/or expense reimbursement | .93% | 1.22% | 1.19% | 1.21% | 1.30% | |
| Net investment income (loss) | 1.13% | .91% | .89% | .74% | .99% | |
| Portfolio turnover rate | 89% | 89% | 112% | 91% | 94% | |
(a) Calculated based on
average shares outstanding during the year.
(b) 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 return may reflect adjustments to conform to generally accepted accounting principles.
(c) Does not include the expenses of the
underlying funds in which the Fund invests.
| Visit our website at www.pgiminvestments.com | 41 |
| Class B Shares | |||||
| Year Ended October 31, | |||||
| 2017 | 2016 | 2015 | 2014 | 2013 | |
| Per Share Operating Performance(a): | |||||
| Net Asset Value, Beginning of Year | $14.30 | $14.75 | $15.43 | $14.29 | $11.96 |
| Income (loss) from investment operations: | |||||
| Net investment income (loss) | .06 | .03 | .02 | –(d) | .03 |
| Net realized and unrealized gain (loss) on investment transactions | 3.23 | .27 | .51 | 2.29 | 2.84 |
| Total from investment operations | 3.29 | .30 | .53 | 2.29 | 2.87 |
| Less Dividends and Distributions: | |||||
| Dividends from net investment income | (.05) | (.03) | –(d) | (.03) | (.05) |
| Distributions from net realized gains | (.67) | (.72) | (1.21) | (1.12) | (.49) |
| Total dividends and distributions | (.72) | (.75) | (1.21) | (1.15) | (.54) |
| Net asset value, end of year | $16.87 | $14.30 | $14.75 | $15.43 | $14.29 |
| Total Return(b): | 23.75% | 2.31% | 3.42% | 17.16% | 25.02% |
| Ratios/Supplemental Data: | |||||
| Net assets, end of year (000) | $2,291 | $2,132 | $2,676 | $3,052 | $3,275 |
| Average net assets (000) | $2,311 | $2,348 | $3,018 | $3,150 | $3,085 |
| Ratios to average net assets(c): | |||||
| Expenses after waivers and/or expense reimbursement | 1.52% | 1.92% | 1.89% | 1.91% | 1.95% |
| Expenses before waivers and/or expense reimbursement | 1.63% | 1.92% | 1.89% | 1.91% | 2.00% |
| Net investment income (loss) | .40% | .19% | .15% | –(e) | .25% |
| Portfolio turnover rate | 89% | 89% | 112% | 91% | 94% |
(a) Calculated based on
average shares outstanding during the year.
(b) 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 return may reflect adjustments to conform to generally accepted accounting principles.
(c) Does not include the expenses of the
underlying funds in which the Fund invests.
(d) Less than $.005 per share.
(e) Less than .005%.
| 42 | PGIM QMA Large-Cap Core Equity Fund |
| Class C Shares | |||||
| Year Ended October 31, | |||||
| 2017 | 2016 | 2015 | 2014 | 2013 | |
| Per Share Operating Performance(a): | |||||
| Net Asset Value, Beginning of Year | $14.31 | $14.77 | $15.45 | $14.30 | $11.97 |
| Income (loss) from investment operations: | |||||
| Net investment income (loss) | .06 | .02 | .02 | –(d) | .03 |
| Net realized and unrealized gain (loss) on investment transactions | 3.24 | .27 | .51 | 2.30 | 2.84 |
| Total from investment operations | 3.30 | .29 | .53 | 2.30 | 2.87 |
| Less Dividends and Distributions: | |||||
| Dividends from net investment income | (.05) | (.03) | –(d) | (.03) | (.05) |
| Distributions from net realized gains | (.67) | (.72) | (1.21) | (1.12) | (.49) |
| Total dividends and distributions | (.72) | (.75) | (1.21) | (1.15) | (.54) |
| Net asset value, end of year | $16.89 | $14.31 | $14.77 | $15.45 | $14.30 |
| Total Return(b): | 23.80% | 2.24% | 3.42% | 17.21% | 24.99% |
| Ratios/Supplemental Data: | |||||
| Net assets, end of year (000) | $31,518 | $39,218 | $38,919 | $37,681 | $32,128 |
| Average net assets (000) | $34,697 | $38,344 | $38,738 | $35,817 | $23,702 |
| Ratios to average net assets(c): | |||||
| Expenses after waivers and/or expense reimbursement | 1.53% | 1.92% | 1.89% | 1.91% | 1.95% |
| Expenses before waivers and/or expense reimbursement | 1.64% | 1.92% | 1.89% | 1.91% | 2.00% |
| Net investment income (loss) | .40% | .16% | .14% | (.01)% | .20% |
| Portfolio turnover rate | 89% | 89% | 112% | 91% | 94% |
(a) Calculated based on
average shares outstanding during the year.
(b) 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 return may reflect adjustments to conform to generally accepted accounting principles.
(c) Does not include the expenses of the
underlying funds in which the Fund invests.
(d) Less than $.005 per share.
| Visit our website at www.pgiminvestments.com | 43 |
| Class Z Shares | |||||
| Year Ended October 31, | |||||
| 2017 | 2016 | 2015 | 2014 | 2013 | |
| Per Share Operating Performance(a): | |||||
| Net Asset Value, Beginning of Year | $15.83 | $16.24 | $16.86 | $15.49 | $12.91 |
| Income (loss) from investment operations: | |||||
| Net investment income (loss) | .24 | .18 | .18 | .16 | .17 |
| Net realized and unrealized gain (loss) on investment transactions | 3.57 | .31 | .55 | 2.49 | 3.06 |
| Total from investment operations | 3.81 | .49 | .73 | 2.65 | 3.23 |
| Less Dividends and Distributions: | |||||
| Dividends from net investment income | (.19) | (.18) | (.14) | (.16) | (.16) |
| Distributions from net realized gains | (.67) | (.72) | (1.21) | (1.12) | (.49) |
| Total dividends and distributions | (.86) | (.90) | (1.35) | (1.28) | (.65) |
| Net asset value, end of year | $18.78 | $15.83 | $16.24 | $16.86 | $15.49 |
| Total Return(b): | 24.93% | 3.35% | 4.41% | 18.39% | 26.28% |
| Ratios/Supplemental Data: | |||||
| Net assets, end of year (000) | $56,066 | $71,506 | $80,096 | $42,134 | $34,851 |
| Average net assets (000) | $54,787 | $75,803 | $57,677 | $38,052 | $37,799 |
| Ratios to average net assets(c): | |||||
| Expenses after waivers and/or expense reimbursement | .54% | .92% | .89% | .91% | .95% |
| Expenses before waivers and/or expense reimbursement | .64% | .92% | .89% | .91% | 1.00% |
| Net investment income (loss) | 1.42% | 1.18% | 1.12% | .99% | 1.25% |
| Portfolio turnover rate | 89% | 89% | 112% | 91% | 94% |
(a) Calculated based on
average shares outstanding during the year.
(b) 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 generally
accepted accounting principles.
(c) Does not include the expenses of the
underlying funds in which the Fund invests.
| 44 | PGIM QMA Large-Cap Core Equity Fund |
| Class R6 Shares (formerly, Class Q) | |
| December 28, 2016(a) through October 31, 2017 | |
| Per Share Operating Performance(b): | |
| Net Asset Value, Beginning of Period | $16.06 |
| Income (loss) from investment operations: | |
| Net investment income (loss) | .21 |
| Net realized and unrealized gain (loss) on investment transactions | 2.54 |
| Total from investment operations | 2.75 |
| Net asset value, end of period | $18.81 |
| Total Return(c): | 17.12% |
| Ratios/Supplemental Data: | |
| Net assets, end of period (000) | $58,304 |
| Average net assets (000) | $40,448 |
| Ratios to average net assets(d): | |
| Expenses after waivers and/or expense reimbursement | .35%(e) |
| Expenses before waivers and/or expense reimbursement | .47%(e) |
| Net investment income (loss) | 1.44%(e) |
| Portfolio turnover rate | 89%(f) |
(a) Commencement of
operations.
(b) Calculated based on average shares
outstanding during the period.
(c) Total return is calculated assuming a
purchase of a share on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions, if any. Total return may reflect adjustments to conform to generally
accepted accounting principles. Total returns for periods less than one full year are not annualized.
(d) Does not include the expenses of the
underlying funds in which the Fund invests.
(e) Annualized.
(f) Not annualized.
| Visit our website at www.pgiminvestments.com | 45 |
GLOSSARY
FUND INDEXES
Standard & Poor's 500
Index. The Standard & Poor's 500 Index (S&P 500 Index) is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how stock prices in the United
States have performed. These returns do not include the effect of any sales charges, operating expenses of a mutual fund or taxes. These returns would be lower if they included the effect of these expenses.
Lipper Large-Cap Core Funds
Average. The Lipper Large-Cap Core Funds Average is based on the average return of all mutual funds in the Lipper Large-Cap Core Funds universe. Returns do not include the effect of any sales
charges or taxes. The returns would be lower if they included the effect of sales charges or taxes.
| 46 | PGIM QMA Large-Cap Core Equity 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 (back-end) sales load (CDSC) waivers, 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.
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 or through a 529 Plan, if applicable |
| ■ | Shares purchased through a Merrill Lynch affiliated investment advisory program |
| ■ | 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 in the month of or following the 10-year anniversary of the purchase date |
| ■ | 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 |
| ■ | 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) |
CDSC Waivers on Class A, B 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 due to the shareholder reaching age 70 1⁄2 |
| ■ | 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 (applicable to Class A and C shares only) |
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 will be automatically calculated based on the aggregated holding of fund family assets held by accounts 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 |
| Visit our website at www.pgiminvestments.com | 47 |
| ■ | 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 (if applicable) |
Morgan Stanley Wealth Management
Effective July 1, 2018
shareholders purchasing Fund shares through a Morgan Stanley Wealth Management transactional brokerage account will be 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 or otherwise purchase Fund shares through Ameriprise Financial
Effective June 1, 2018,
shareholders purchasing Fund shares through an Ameriprise Financial platform or account will be 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 an Ameriprise Financial investment advisory program (if an Advisory or similar share class for such investment advisory program is not available). |
| ■ | Shares purchased by third party investment advisors on behalf of their advisory clients through Ameriprise Financial’s platform (if an Advisory or similar share class for such investment advisory program is not available). |
| ■ | 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 10-year anniversary of the purchase date. To the extent that this prospectus elsewhere provides for a waiver with respect to such shares following a shorter holding period, that waiver will apply to exchanges following such shorter period. To the extent that this prospectus elsewhere provides for a waiver with respect to exchanges of Class C shares for load waived shares, that waiver will also apply to such exchanges. |
| ■ | 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, |
| 48 | PGIM QMA Large-Cap Core Equity Fund |
| 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). |
| Visit our website at www.pgiminvestments.com | 49 |
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| 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.pgiminvestments.com | ■ TELEPHONE (800) 225-1852 (973) 367-3529 (from outside the US) |
| ■ E-DELIVERY To receive your mutual fund documents on-line, go to www.pgiminvestments.com/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 Securities and Exchange Commission as follows (the SEC charges a fee to copy documents): | |
| ■ MAIL Securities and Exchange Commission Public Reference Room 100 F Street, NE Washington, DC 20549-1520■ ELECTRONIC REQUEST [email protected] | ■ IN PERSON Public Reference Room located at 100 F Street, NE in Washington, DC For hours of operation, call (202) 551-8090■ VIA THE INTERNET on the EDGAR Database at www.sec.gov |
| PGIM QMA Large-Cap Core Equity Fund | |||||
| Share Class | A | B | C | Z | R6 |
| NASDAQ | PTMAX | PTMBX | PTMCX | PTEZX | PTMQX |
| CUSIP | 74441J100 | 74441J209 | 74441J308 | 74441J407 | 74441J688 |
| MF187STAT | The Fund's Investment Company Act File No. 811-09101 |
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