ASSET ALLOCATION FUNDS

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1 ASSET ALLOCATION FUNDS ONE-STEP DIVERSIFIED INVESTMENT PLAN Leading investment managers Conservative, moderate, and growth models Allocations to equity, bond, and specialty asset classes

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3 A time-tested approach to investing Professionals who manage pension plans and institutional accounts rely on the time-tested strategies of asset allocation and diversification to help select suitable investments in any environment. PGIM Investments offers you a simple way to follow the investing approach favored by large institutions: PGIM Investments Asset Allocation Funds. Before looking at the Funds in more detail, it s important to see how asset allocation and diversification help experts avoid the mistakes often made by less experienced investors. We all have goals a comfortable retirement, being able to afford good schools for our children, buying a nicer home, or even starting a business. No matter what you have planned for your future, it will probably involve saving and investing your money. The question is: What s the best way to invest for your financial goals? We all have goals a comfortable retirement, being able to afford good schools for our children, buying a nicer home, or even starting a business. 3

4 Emotional investing is a common mistake Everyone wants to buy low and sell high, but most investors do the opposite. 200, ,000 Investors buy when stock prices are highest Lost opportunity of a rising market 2,400 2, ,000 1,600 Dollars in millions 50, ,000 1, S&P 500 Index 100,000 Investors sell when stock prices are lowest ,000 12/96 12/97 12/98 12/99 12/00 12/01 12/02 12/03 12/04 12/05 12/06 12/07 12/08 12/09 12/10 12/11 12/12 12/13 12/14 12/ /16 Equity Cash Flows S&P 500 Index Source: Strategic Insight and Yahoo Finance, as of 12/31/2016. Past performance does not guarantee future results. Quarterly net equity sales measure the amount of net sales into retail equity mutual funds. The S&P 500 Index is an unmanaged, weighted index of 500 U.S. stocks, providing a broad indicator of price movement. Investors cannot invest directly in the Index. Index performance is not representative of the performance of a specific security. 4

5 Trying to time the market can lead to long-term underperformance. Average annual returns January 1995 December 2016 Stock investors averaged almost half the Index returns Bond investors averaged a fraction of the Index returns S&P 500 Index 7.68% Average Stock Fund Investor 4.79% Bloomberg Barclays Aggregate Bond Index 4.96% Average Bond Fund Investor 0.48% Inflation 2.13% Source: DALBAR Quantitative Analysis of Investor Behavior (QAIB), 2016 DALBAR, Inc. DALBAR is an independent, Boston-based financial research firm which is not affiliated with Prudential Financial, Inc. and its affiliates. The average investor refers to the universe of all mutual fund investors whose actions and financial results are restated to represent a single investor. Doing so allows the entire universe of mutual fund investors to be used as the statistical sample. For average investor behavior, QAIB quantitatively measures sales, redemptions, and exchanges provided by the Investment Company Institute (ICI) and describes these measures as investor behaviors. The measurement of investor behavior is the net dollar volume of these activities that occur in a single month during the period being analyzed. Average stock and bond investor performance results represent hypothetical returns based on cash flows in and out of all equity funds that track the S&P 500 Index for the average stock investor, and cash flows in and out of all fixed income funds that track the Bloomberg Barclays Aggregate Bond Index for the average bond investor. The calculations assume a $10,000 initial investment over the specific time period from 1994 through Using monthly fund data supplied by the ICI, QAIB calculates investor returns as the change in assets after excluding sales, redemptions, and exchanges. This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses, and any other costs. After calculating investor returns in dollar terms, two percentages are calculated for the period examined: Total investor return rate and annualized investor return rate. Total return rate is determined by calculating the investor return dollars as a percentage of the net of the sales, redemptions, and exchanges for the period. Past performance is no guarantee of future results. Returns do not include sales charges or the effect of any taxes. If such charges had been included, performance would be lower. Indexes and averages are shown for illustrative purposes and do not represent the performance of any actual investment portfolio. Investments cannot be made directly in an index. See back cover for index definitions. 5

6 A diversified long-term plan can help Stocks have produced the greatest returns over time. Value of $1 invested 1/1/1926 through 12/31/2016 $100,000 10,000 Small Company Stocks $33,212 Large Company Stocks $6,023 1, Long-Term Government Bonds $134 Treasury Bills $21 Inflation $ Keep in mind that with greater returns, there may be greater volatility (risk) involved. Source: Calculated by PGIM Investments using data presented in Morningstar Software products. All rights reserved. Used with permission. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. Past performance is no guarantee of future results. Generally, stock returns are due to capital appreciation and the reinvestment of gains. Bond returns are due mainly to reinvesting interest. Also, stock prices are usually more volatile than bond prices over the long term. Small company stock returns for are those of stocks comprising the fifth quintile of the New York Stock Exchange. Thereafter, returns are those of the Dimensional Fund Advisors (DFA) Small Company Fund. Large company stock returns are based on the S&P Composite Index, a market-weighted, unmanaged index of 500 stocks (currently) in a variety of industries. It is often used as a broad measure of stock market performance. Investments cannot be made directly in an index. Long-term government bond returns are measured using a constant one-bond portfolio with a maturity of roughly 20 years. Treasury bill returns are for a one-month bill. Treasuries are guaranteed by the government as to the timely payment of principal and interest; equities are not. Inflation is measured by the Consumer Price Index (CPI). 6

7 A competitive-performing asset class one year may be a poor performer the next year. Market leadership changes from year to year Global Real Estate 27.83% Small Cap Growth 43.30% Mid Cap Value 14.75% Large Cap Growth 5.67% Small Cap Value 31.74% Mid Cap Value 18.51% Small Caps 38.82% Global Real Estate 14.25% Large Cap 0.92% Small Cap 21.31% Small Cap Value 18.05% Mid Cap Growth 35.74% Large Cap Value 13.45% Global Real Estate 0.87% Mid Cap Value 20.00% Large Cap Value 17.51% Mid Cap 34.76% Large Cap 13.24% Fixed Income 0.55% Large Cap Value 17.34% International 17.32% Small Cap Value 34.52% Mid Cap 13.22% Mid Cap Growth 0.20% Mid Cap 13.80% Mid Cap 17.28% Large Cap Growth 33.48% Large Cap Growth 13.05% International 0.81% Large Cap 12.05% Large Cap 16.42% Mid Cap Value 33.46% Mid Cap Growth 11.90% Small Cap Growth 1.38% Small Cap Growth 11.32% Small Cap 16.35% Large Cap 33.11% Fixed Income 5.97% Mid Cap 2.44% Mid Cap Growth 7.33% Mid Cap Growth 15.81% Large Cap Value 32.53% Small Cap Growth 5.60% Large Cap Value 3.83% Large Cap Growth 7.08% Large Cap Growth 15.26% International 22.78% Small Caps 4.89% Small Caps 4.41% Global Real Estate 4.43% Small Cap Growth 14.59% Global Real Estate 5.01% Small Cap Value 4.22% Mid Cap Value 4.78% Fixed Income 2.65% Fixed Income 4.21% Fixed Income 2.02% International 4.90% Small Cap Value 7.47% International 1.00% 23.62% 45.32% 19.65% 13.14% 30.74% The performance between the best and worst asset classes in a given year can be considerable. By diversifying your portfolio, you may help ensure that a portion of your assets are in the right place at the right time. Source: Calculated by PGIM Investments using data presented in Morningstar Software products. All rights reserved. Used with permission. See back cover for index definitions. 7

8 PGIM Investments Asset Allocation Funds The PGIM Investments Asset Allocation Funds offer you a diversified long-term investment plan, based on your risk tolerance, in one investment. Each Fund offers equity, bond, and specialty funds in a wide range of investment styles. And the managers of the funds are the same PGIM professionals who manage money for major corporations and pension funds around the world. That means you benefit from the same expertise, innovation, and attention to risk demanded by today s most sophisticated investors. Choose a portfolio that s right for you Each PGIM Investments Asset Allocation Fund invests in a mix of stock and bond mutual funds within the PGIM Investments fund family in proportions intended to reflect a given level of risk tolerance. You and your financial professional select the portfolio that best addresses your needs. PRUDENTIAL CONSERVATIVE ALLOCATION FUND This Fund s investment objective is current income and a reasonable level of capital appreciation. Approximate target allocation as of September 2017: 40% stock funds and 60% bond funds. Percent Asset Allocation 24.1% Short-Term Bond 22.0 Intermediate-Term Bond 10.8 High Yield Bond 10.7 Small/Mid-Cap 10.4 International Equity 7.5 Large-Cap Value 5.6 Large-Cap Growth 4.9 Global Real Estate 3.0 Long Short This may be a good choice if you are in or near retirement, or hesitant about putting too much money in the stock market. There is no guarantee that the Fund s objective will be achieved. PRUDENTIAL MODERATE ALLOCATION FUND This Fund s investment objective is capital appreciation and a reasonable level of current income. Approximate target allocation as of September 2017: 65% stock funds and 35% bond funds. Percent Asset Allocation 19.0% Small/Mid-Cap 16.0 International Equity 13.4 Large-Cap Value 13.4 Intermediate-Term Bond 12.3 Short-Term Bond 10.1 Large-Cap Growth 6.1 High Yield Bond 5.0 Global Real Estate 4.0 Long Short Diversification does not assure a profit or protect against loss in declining markets. This may be a good choice if you are investing for goals that may be 10 or more years away, or if you re a retiree and need to add more growth potential to a portfolio that s heavily weighted in fixed income. There is no guarantee that the Fund s objective will be achieved. 8

9 PRUDENTIAL GROWTH ALLOCATION FUND This Fund s investment objective is long-term capital appreciation. Approximate target allocation as of September 2017: 90% stock funds and 10% bond funds. Percent Asset Allocation 25.6% International Equity 25.4 Small/Mid-Cap 18.2 Large-Cap Value 13.3 Large-Cap Growth 5.0 Long Short 4.9 Global Real Estate 3.6 Intermediate-Term Bond 1.6 Short-Term Bond 1.4 High Yield Bond You may wish to consider this Fund if you are an investor with a long time horizon or if you can accept greater risk as you seek higher growth. There is no guarantee that the Fund s objective will be achieved. Allocation strategies managed by QMA PGIM Investments Asset Allocation Funds feature portfolios that are managed by QMA. QMA blends the output of quantitative computer models with the judgment of its experienced investment professionals in seeking to reduce risk and improve performance for clients. It uses the following to build and monitor portfolios for the Funds: Asset class modeling: Develops allocations for each major asset class consistent with portfolio objectives. Portfolio design: Selects PGIM Investments mutual funds to fulfill style combinations required by each asset class. Quarterly review of fund-style consistency: Periodic reviews ensure that investment-style exposures are consistent with intended asset class models. Annual review of asset class modeling: Reviews asset class models to reflect identified long-term trends. Day-to-day management: Reviews the portfolios on a daily basis as well as periodically rebalancing each portfolio to bring them back to their target allocations. QMA is the primary business name for Quantitative Management Associates LLC. Actual percentages for all three funds may fluctuate due to market changes. The manager may also vary the allocation ranges for each underlying fund of a portfolio at any time if the manager believes that doing so will better enable the portfolio to pursue its investment objective. There is no guarantee that the Funds objectives will be achieved. Please see the prospectus for the target asset allocation ranges. 9

10 Keeping your asset allocation on track Once you ve selected your portfolio, QMA oversees your investment on a day-to-day basis to make sure the portfolio is managed efficiently. Since allocations can drift out of balance due to changes in the market, QMA periodically rebalances the three asset class portfolios to bring them back to their original allocations. Why is rebalancing important? Consider this example: If large-cap stocks have a great year and long-term bonds don t, your portfolio s exposure to large-cap stocks would increase, which could increase your risk beyond your comfort level. If, in the next year, large-cap stocks have a poor year and long-term bonds have a great year, your portfolio s exposure to large-cap stocks would decrease, which could reduce your growth potential and limit your ability to reach your long-term goals. In PGIM Investments Asset Allocation Fund portfolios, periodic rebalancing by QMA will correct these imbalances and return your portfolio to its original allocation. Keep in mind that diversification and asset allocation do not assure a profit or protect against loss in declining markets. Why diversification and rebalancing are important Consider the following example: At the end of 2006, you created a portfolio that was 50% stocks and 50% bonds, but did not rebalance periodically. Due to changes in the market, by the end of 2016 your allocation to bonds would exceed your original target and, as a result, could disrupt your investment goals. Hypothetical Portfolio December 31, 2006 Hypothetical Portfolio without Rebalancing December 31, % Bonds 50% Stocks 44% Bonds 56% Stocks Source: Calculated by PGIM Investments using data presented in Morningstar software products. As of 12/31/2016. All rights reserved. Used with permission. The performance shown does not reflect the actual performance of any investment and is for illustrative purposes only. Equity returns reflect performance of the S&P 500 Index, an unmanaged, weighted index of 500 U.S. stocks, providing a broad indicator of price movement. Fixed Income returns reflect performance of the Bloomberg Barclays U.S. Aggregate Bond Index, an unmanaged index composed of securities from the Bloomberg Barclays Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index. Total return comprises price appreciation/depreciation and income as a percentage of the original investment. Past performance is no guarantee of future results. Index performance is not representative of the performance of a specific security. Investors cannot invest directly in an index. 10

11 Four leading asset managers PGIM Investments Asset Allocation Funds invest in a mix of PGIM Investments stock and bond mutual funds. The managers of these funds manage money for major corporations, foundations, and pension funds around the world. When you choose PGIM Investments mutual funds, you benefit from the same processes, research, risk management, and competitive performance demanded by many of today s largest investors. PGIM Investments Featured Asset Managers Jennison Associates The true measure of an investment manager is the ability to deliver long-term competitive performance. Jennison Associates has been meeting that standard since The Jennison approach combines the experience and judgment of its portfolio managers with a consistent and disciplined investment process built on fundamental research and specialized teamwork. PGIM Fixed Income Since 1875, PGIM Fixed Income has been a research-driven manager with a keen eye for managing risk. Its distinctive approach to managing assets gives equal weight to risk management, credit research, and portfolio management to seek competitive returns while managing volatility. PGIM Real Estate PGIM Real Estate is among the largest and most experienced global real estate investors. It has almost 300 investment professionals on the ground in 12 countries, with a more than 40-year track record of managing institutional real estate assets worldwide. QMA QMA has been a leader in the application of advanced portfolio management techniques to meet its clients investment needs since It brings a level of sophistication and experience to individually managed accounts and mutual funds that is ordinarily available only to large institutional investors. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM. 11

12 Funds at a glance Each PGIM Investments Asset Allocation Fund invests in a mix of the following stock and bond mutual funds in proportions appropriate to a given level of risk. With a single investment, you ll receive a complete asset allocation based on your needs. You and your financial professional will decide which portfolio is right for you based on your goals, the time you have to achieve them, and your attitude toward risk. Equity Prudential QMA International Equity Fund (PJIZX) Managed by QMA; seeks to outperform the MSCI EAFE benchmark while quantitatively controlling for risk in a well-diversified portfolio of non-u.s. stocks. Prudential Jennison 20/20 Focus Fund (PJTQX) Managed by Jennison Associates; seeks long-term growth of capital by investing in up to 20 value and 20 growth stocks of mid- to large-cap companies. Prudential Jennison Equity Opportunity Fund (PJGZX) Managed by Jennison Associates; seeks long-term growth of capital by investing in established yet undervalued companies with good growth prospects. Prudential Jennison Growth Fund (PJFZX) Managed by Jennison Associates; seeks long-term growth of capital by investing in growth-oriented stocks of medium and large U.S. companies. Prudential Jennison International Opportunities Fund (PWJQX) Managed by Jennison Associates; seeks long-term growth of capital by investing primarily in companies outside the U.S. Prudential Jennison Mid-Cap Growth Fund, Inc. (PJGQX) Managed by Jennison Associates; seeks long-term capital appreciation by investing in stocks of small and midsize U.S. companies that may offer above-average growth potential. Prudential Jennison Small Company Fund, Inc. (PJSQX) Managed by Jennison Associates; seeks capital growth by investing in the stocks of smaller companies with aboveaverage growth prospects that the managers believe are underpriced by the market. Prudential Jennison Value Fund (PJVQX) Managed by Jennison Associates; seeks capital appreciation by investing in established companies the managers believe to be undervalued. Prudential QMA Large-Cap Core Equity Fund (PTEZX) Managed by QMA; seeks to outperform the S&P 500 benchmark, while helping to quantitatively control for risk in a tax-efficient manner, by investing in a well-diversified portfolio of growth and value stocks. Prudential QMA Mid-Cap Value Fund (PMVQX) Managed by QMA; seeks long-term growth of capital by investing in stocks of mid-cap U.S. companies that the Fund s management considers undervalued. Prudential QMA Small-Cap Value Fund (TSVQX) Managed by QMA; seeks above-average capital appreciation by investing in stocks of small-cap U.S. companies that the Fund s management team considers undervalued. Prudential QMA Strategic Value Fund (SUVZX) Managed by QMA; seeks long-term growth by investing in stocks of large U.S. companies believed by the managers to be undervalued. 12

13 Taxable Fixed Income Prudential Absolute Return Bond Fund (PADQX) Managed by PGIM Fixed Income; seeks positive returns over the long term, regardless of market conditions, by investing in a wide range of fixed income sectors and securities. Prudential Emerging Markets Debt Local Currency Fund (EMDQX) Managed by PGIM Fixed Income; seeks total return through current income and capital appreciation by investing primarily in currencies of, and fixed income instruments denominated in, local currencies of emerging market countries. Prudential Floating Rate Income Fund (PFRIX) Managed by PGIM Fixed Income; seeks to maximize current income and, secondarily, generate capital growth by investing in senior floating rate loans. Prudential Government Income Fund (PGVZX) Managed by PGIM Fixed Income; seeks high current income by investing in U.S. government and U.S. Treasury securities. Prudential High Yield Fund (PHYQX) Managed by PGIM Fixed Income; seeks maximum current income by investing in below-investment-grade bonds commonly known as high yield or junk bonds. Prudential Short Duration Multi-Sector Bond Fund (SDMQX) Managed by PGIM Fixed Income; seeks total return by investing in a diversified portfolio of bonds from multiple fixed income sectors. Prudential Short-Term Corporate Bond Fund, Inc. (PSTQX) Managed by PGIM Fixed Income; seeks high current income by investing in investment-grade corporate debt with maturities of six years or less. Prudential Total Return Bond Fund (PTRQX) Managed by PGIM Fixed Income; seeks current income and capital appreciation by investing in bonds issued by the U.S. government, mortgage- and asset-backed securities, corporate bonds, and foreign securities. Specialty Prudential Global Real Estate Fund (PGRQX) Managed by PGIM Real Estate; seeks to provide capital appreciation and income by investing primarily in domestic and international real estate securities. Prudential QMA Long-Short Fund (PLHZX) Managed by QMA; seeks long-term capital appreciation by investing in both long and short equity positions across the full spectrum of market capitalization. Prudential Jennison Natural Resources Fund, Inc. (PJNQX) Managed by Jennison Associates; seeks long-term growth of capital by investing in the stocks of companies that own, explore, mine, process, or otherwise develop natural resource commodities. As funds of funds, the PGIM Investments Asset Allocation Funds invest in Class Q shares of the Underlying Funds, all of which are other mutual funds in the Prudential Investments fund family. If an Underlying Fund does not offer Class Q shares, then the Funds will invest in Class Z shares of the Underlying Fund. Similar to Class Z shares, Class Q shares carry no load, distribution, or service fees, but they pay lower transfer agency fees than Class Z shares. While there are no duplicative advisory fees, you will pay indirectly for certain expenses of the underlying funds, in addition to the expenses of the PGIM Investments Asset Allocation Fund you own, such as fees for custodian services, directors fees, legal and accounting services, and transfer agency services. We will make every effort to avoid duplicative expenses where possible. Please refer to the prospectus for more information about the fees and expenses associated with the Funds. There is no guarantee that the Funds objectives will be achieved. 13

14 PGIM Investments Asset Allocation Funds Questionnaire PGIM Investments Asset Allocation Funds help simplify your investment decisions because they offer a diversified asset allocation in a single investment. Each Fund corresponds to a specific type of investor, from conservative to growth-oriented. This questionnaire will help you and your financial professional determine your investor profile your time horizon and risk tolerance and select a fund that may be appropriate for you. The hypothetical performance scenarios illustrated within this questionnaire are not meant to be representative of the performance of the PGIM Investments Asset Allocation Funds. This questionnaire has been designed to initiate a discussion on your investment goals and risk tolerance between you and your financial advisor and is not intended to be a substitute for a profile on investment suitability. INVESTOR NAME DATE FINANCIAL PROFESSIONAL ACCOUNT NUMBER This questionnaire measures your ability (time horizon) and willingness (risk tolerance) to accept uncertainties in your investment s performance. The total score indicates which of the three risk profiles is most appropriate for you (see page 18). The results of this document are based on the data and assumptions you provide. Consequently, inaccurate or unreasonable data and/or assumptions may have a considerable impact on the results. Time Horizon As you answer each question, record your points (indicated in parentheses) in the space provided on page What is your age? If this is a joint account, what is the average age of the participants? Less than 31 years [6] years [5] years [4] years [3] years [2] More than 70 years [0] 14

15 2. How long do you plan to invest your money before you begin to make withdrawals? 0 2 years [0] 3 5 years [10] 6 10 years [20] years [23] years [25] Over 20 years [27] 3. Over the next five years, do you expect your financial situation to: Dramatically improve? [9] Improve somewhat? [7] Stay about the same? [5] Worsen? [0] 4. There is a natural trade-off between potential investment performance and the risk of a decline in portfolio value. Usually, the higher the return, the greater the risk. Select the investment below that would be most likely to meet your expectations for returns in average and good years without making you uncomfortable during bad years. The returns depicted below are hypothetical and are being used to determine your risk tolerance. Typical Return Bad Year Average Year Good Year Score Investment A 0% + 4% + 8% [0] Investment B 2% + 6% +14% [6] Investment C 4% + 8% +17% [11] Investment D 6% + 9% + 20% [17] Investment E 10% +10% + 25% [20] The previous question (Question 4) dealt with what might be considered normal market conditions. Now we would like to have you answer a question that deals with periods of unusual market conditions. 5. On rare occasions, unusually large and/or prolonged market declines may occur. As a result, investors may suffer greater-than-normal interim portfolio losses. The table below shows the cumulative losses that might be expected for four hypothetical $100,000 portfolios over large and/or prolonged market declines lasting for 12-, 24-, and 36-month periods. Please select the hypothetical portfolio with the maximum cumulative interim losses you may be able to tolerate. 12 Months 24 Months 36 Months Score Portfolio A $36,000 $47,000 $52,000 [20] Portfolio B $27,000 $36,000 $39,000 [15] Portfolio C $13,000 $16,000 $15,000 [8] Portfolio D $5,000 $2,000 [2] 15

16 6. When investing, you must consider several risks. The risk of a decline in value is the most common definition of risk and the one many people think of avoiding first. However, you cannot reduce this risk without assuming others, such as the risk of inflation. Please indicate in Part A which type of risk concerns you most. In Part B, indicate your next most important concern. (Do not choose the same answer for Part A and Part B.) Part A Part B The possibility that my investment may not grow enough to meet my future needs [14] [7] The risk of a sharp decline in value in a short period of time (one to six months) [0] [0] A decline in portfolio value over the course of one to two years [6] [3] The risk that my portfolio may not grow enough to keep pace with inflation [8] [4] The risk of not earning a rate of return greater than the general stock market [20] [10] The risk that my portfolio will not generate enough current income [2] [1] 7. Which statement most accurately describes your attitude and expectations when investing over a market cycle of five to seven years? It is more important to do well in up markets than it is to limit losses in down markets. [8] I am comfortable with normal returns in both up and down markets. [4] It is more important to limit losses in down markets than it is to do well in up markets. [0] 8. The graph below shows the returns of a hypothetical investment over time. If you owned this investment, given its historical and current returns, what action would you take today (year 18)? I would immediately sell all of the investment and cut my losses. [0] I would sell some of the investment to protect myself from further loss. [2] I would continue to hold the investment with the expectation of higher future returns. [6] I would invest more now since the price is lower. [8] Return 30% 25% 20% 15% 10% 5% 0 5% 10% 15% 20% YEAR 16

17 Scoring Add up your total score and place it in the column to the right. You will need this number as you refer to the grid below. Please remember that all the numerical performance illustrations in this questionnaire are hypothetical and do not represent the past or future performance of any investment. There is no guarantee that your targeted returns and investment objectives will be achieved. Past performance is not a guarantee of future results Total: Determine Which Asset Allocation Fund May Be Right for You Using your total score, select the PGIM Investments Asset Allocation Fund that is appropriate for you. It is recommended that you discuss these results with your financial professional and review the Fund s prospectus before investing. SUMMARY SCORING GRID Total Risk Score 3 40 Prudential Conservative Allocation Fund Prudential Moderate Allocation Fund Prudential Growth Allocation Fund 17

18 The Importance of Professional Guidance The knowledge and experience of a financial professional can be a valuable advantage. Your financial professional can help you determine if a mutual fund is the right choice for you, depending on your goals, investment time horizon, tolerance for risk, and existing investments. He or she can offer the guidance you need to decide if the PGIM Investments Asset Allocation Funds are a suitable choice for you. PRUDENTIAL CONSERVATIVE ALLOCATION FUND PRUDENTIAL MODERATE ALLOCATION FUND PRUDENTIAL GROWTH ALLOCATION FUND SHARE CLASS / NASDAQ A: JDUAX C: JDACX R: JDARX Z: JDAZX SHARE CLASS / NASDAQ A: JDTAX C: JDMCX R: JMARX Z: JDMZX SHARE CLASS / NASDAQ A: JDAAX C: JDGCX R: JGARX Z: JDGZX 18

19 Risk Information Mutual fund investing involves risks. Some funds are riskier than others. The risks associated with investing in these funds include but are not limited to: derivative securities, which may carry market, credit, and liquidity risks (all the funds); short sales, which involve costs and the risk of potentially unlimited losses (PADQX, PHYQX, PJTQX, PJGZX, PJFZX, PLHZX, PJGQX, PJNQX, PJSQX, PJVQX, PMVQX, PSTQX, TASVX, PTRQX); leveraging, which may magnify losses (PADQX, PGVZX, PHYQX, PLHZX, PSTQX, PTRQX); high yield ( junk ) bonds, which are subject to greater market risks (PADQX, EMDQX, FRFZX, PHYQX, PSTQX, PTRQX); small/ mid-cap stocks, which may be subject to more erratic market movements than large-cap stocks (PLHZX, PJGQX, PJSQX, PMVQX, TASVX); foreign securities, which are subject to currency fluctuation and political uncertainty (PADQX, FRFZX, PURZX, PJIZX, PJTQX, PJGZX, PJFZX, PLHZX, PJGQX, PJNQX, PJSQX, PJVQX, PMVQX, TASVX, PTRQX, PWJZX); real estate, which poses certain risks related to overall and specific economic conditions as well as risks related to individual property, credit, and interest rate fluctuations (PURZX); and mortgage-backed securities, which are subject to prepayment and extension risks (PADQX, PGVZX, PSTQX, PTRQX). Sector funds and specialty funds may not be suitable for all investors. Such funds are nondiversified, so a loss resulting from a particular security will have greater impact on the fund s return (PURZX, PJTQX, PJNQX). Investments in emerging markets are subject to greater volatility and price declines (PADQX, EMDQX). Other risks include call and redemption risk, where the issuer may call a bond held by the Fund for redemption before it matures and the Fund may lose income (PADQX, FRFZX); risk of investment in loans, which includes collateral and uncollateralized loans and their possible inability to meet obligations (PADQX, FRFZX); liquidity risk, which exists when particular investments are difficult to sell (PADQX, EMDQX, FRFZX); currency risk, in that the value of a particular currency will change in relation to other currencies (EMDQX); and geographic concentration risk, where the impact of a single country or region can result in more pronounced risks (EMDQX). Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise (PADQX, EMDQX, FRFZX, PGVZX, PHYQX, PSTQX, PTRQX, SDMZX). Diversification does not assure a profit or protect against loss in declining markets (PADQX, EMDQX, FRFZX, PJTQX, PJGQX, PMVQX, PTRQX). The risks associated with each fund are explained more fully in each fund s respective prospectus. There is no guarantee a fund s objectives will be achieved. Class Q and Z shares are available to individual investors through certain retirement and wrap fee programs, and to institutions at an investment minimum of $5,000,000. Performance by share class may vary. In addition to the ones shown above, other classes, which contain either a sales load or a contingent deferred sales charge, are also available. These expenses will generally lower total fund return. Please see the prospectus for additional information about fees, expenses, and investor eligibility requirements. Definitions Consumer Price Index (CPI). Measures the variation in prices paid by typical consumers for retail goods and other items. Bloomberg Barclays Government Index. Composed of the Treasury Bond Index (all public obligations of the U.S. Treasury, excluding flower bonds and foreign-targeted issues) and the Agency Bond Index (all publicly issued debt of U.S. government agencies, quasi-federal corporations, and corporate debt guaranteed by the U.S. government). Bloomberg Barclays Corporate Bond Index. Covers the U.S. investment-grade fixed rate bond market (measuring bonds with maturities of at least one year), with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major sectors are subdivided into more specific indices that are calculated and reported on a regular basis. Bloomberg Barclays Mortgage-Backed Securities Index. A market value-weighted index which covers the mortgage-backed securities component of the Barclays U.S. Aggregate Bond Index. The index is composed of agency mortgage-backed pass-through securities of the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac) with a minimum $150 million par amount outstanding and a weighted-average maturity of at least 1 year. The index includes reinvestment of income. Bloomberg Barclays Asset-Backed Securities Index. The MBS component of the Bloomberg Barclays U.S. Aggregate Index and covers agency mortgagebacked pass-through securities issued by Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC). Large Cap (LC) Russell 1000 Index. Measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index. Large Cap Growth (LCG) Russell 1000 Growth Index. Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. Large Cap Value (LCV) Russell 1000 Value Index. Measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. Global Real Estate (GRE) S&P Developed Property Index. This is a broad market index of more than 400 companies from 21 countries, and is available for a wide range of regions (including ex-u.s.) as well as by country. The Global Property Index is intended to provide a measure of the global property market, reflecting the risk and return characteristics of the broader universe on an ongoing basis. Returns are quoted gross of foreign withholding taxes. Mid Cap (MC) Russell Midcap Index. Measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 30% of the total market capitalization of the Russell 1000 Index. Mid Cap Growth (MCG) Russell Midcap Growth Index. Measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. Mid Cap Value (MCV) Russell Midcap Value Index. Measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value Index. Small Cap (SC) Russell 2000 Index. Measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. Small Cap Growth (SCG) Russell 2000 Growth Index. Measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. Small Cap Value (SCV) Russell 2000 Value Index. Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. International (Intl) Morgan Stanley Capital International Europe, Australasia, Far East Index MSCI EAFE Index. This is a weighted, unmanaged index of performance that reflects stock price movements within Europe, Australasia, and the Far East. Fixed Income (FI) Bloomberg Barclays Aggregate Bond Index. This is a market-value-weighted index that includes U.S. government, corporate, mortgage-backed securities, and asset-backed securities. Source: Lipper Inc., Prudential Financial, Bloomberg, 12/2016. All indexes are unmanaged. An investment cannot be made directly in an index. 19

20 HELPING INVESTORS PARTICIPATE IN GLOBAL MARKET OPPORTUNITIES At PGIM Investments, we consider it a great privilege and responsibility to help investors participate in opportunities across global markets while meeting their toughest investment challenges. We re part of PGIM, the 9th-largest investment manager globally 1 with more than $1 trillion in assets under management. 2 This scale and investment experience allow us to deliver Prudential Funds actively managed investment solutions that meet the needs of investors around the globe. 1 Pensions & Investments Top Money Managers list, 5/29/2017. Represents assets managed by Prudential Financial as of 12/31/ PGIM data as of 12/31/2016. For more information, contact your financial professional or visit our website at pgiminvestments.com. Consider a fund s investment objectives, risks, charges, and expenses carefully before investing. The prospectus and summary prospectus contain this and other information about the fund. Contact your financial professional for a prospectus and summary prospectus. Read them carefully before investing. Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company, member SIPC. Jennison Associates and PGIM, Inc. (PGIM) are registered investment advisors and Prudential Financial companies. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM. PGIM Fixed Income and PGIM Real Estate are units of PGIM Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM Real Estate, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional. Mutual Funds Are not insured by the FDIC or any federal government agency May lose value Are not a deposit of or guaranteed by any bank or any bank affiliate PI151 Expiration: 01/31/2018