Asset Allocation Funds

Transcription

1 Strategic Partners SM Asset Allocation Funds Guide and Questionnaire Discover Which Allocation May Be Appropriate For You

2

3 Why Choose Strategic Partners Mutual Funds n Management Talent Investment management talent is not concentrated in any single company; that s why the managers of Strategic Partners Mutual Funds are selected from the entire investment industry. n Research Expertise We follow an in-depth manager research process that s been refined over the last three decades to find mutual fund managers most likely to deliver a long-term performance advantage. n Investment Choice Since your goals are unique and may change over time, Strategic Partners broad array of mutual fund choices can help you address both your current and long-term investment needs.

4 Get Closer to Your Investment Goals with Asset Allocation Funds Investing for your long-term goals starts with a plan one that reflects your particular goals, investment time horizon, and tolerance for risk. The right mix of investments in your plan your asset allocation has a major bearing on your future financial success. Asset allocation funds can help make it a quick and easy process. What is asset allocation? There are many reasons why people invest, including capital growth, current income, and the preservation of wealth. There are just as many ways to reach these goals, like investing in largecompany stock mutual funds or in an international fund. Asset allocation is the process by which you spread your assets among different types of investments according to your objectives. What can asset allocation do for you? Asset allocation can help match the objectives of different investments stocks, bonds, and cash equivalents to your specific needs. It also helps identify an appropriate mix of investments by balancing your desire to obtain a particular return with your goals, tolerance for risk, and time horizon. Does it work? Yes. Over time, an appropriate asset allocation can help boost returns and reduce portfolio volatility. Consider the two long-term strategies illustrated below for investing $200,000 over a 20-year period ( ). As you can see, a diversified asset allocation handily outperformed the follow-the-leader approach to investing. Past performance is no guarantee of future results. Source: Prudential Investments, using Weisenberger hypothetical database system from Thomson Financial. For the purpose of this illustration, the following indexes were used: S&P/BARRA 500, S&P/BARRA 500, Russell 2000, Russell 2000, MSCI EAFE, and Lehman Brothers Aggregate Bond. Investors cannot buy or directly invest in any of these indexes, and indexes do not represent the performance of any mutual fund. Past performance is no guarantee of future results.

5 Why Diversification Is Important As our chart shows, no one investment group stays in the spotlight all the time. By balancing your investments across many groups large- or small-company stocks, foreign companies, fixed income securities, and more you can help protect your portfolio against big swings from one asset class to another. Annual Returns for Key Indexes ( ) Ranked in order of performance (best to worst). Investments cannot be made directly in indexes. Source: Lipper, Inc. and Prudential Financial 01/ % 23.97% 36.53% 42.16% 51.29% 22.83% 14.02% 10.25% 48.54% 23.71% 37.00% 21.99% 34.37% Intl 20.00% 43.09% 19.18% 8.44% Cash 1.61% 46.03% 22.25% 34.93% 21.37% 31.78% 17.86% 28.25% 11.63% Cash 3.48% 9.64% 42.71% Intl 20.25% 33.98% 20.26% 29.98% 14.67% Intl 26.96% Large Cap 6.08% 2.33% 11.43% Intl 38.59% 15.71% 31.04% 17.48% 22.54% 8.69% 12.72% Cash 5.94% 9.23% Intl 15.94% 38.07% 15.48% 25.75% 11.26% 12.95% 5.08% Cash 4.72% 11.75% 11.71% 20.85% 31.79% 14.31% 18.47% Intl 6.05% 9.65% Cash 4.87% 0.11% Intl 14.17% 12.73% 23.59% 25.66% 6.13% Intl 11.21% Cash 5.18% Cash 5.17% 1.23% 0.82% 22.08% 20.15% 27.41% 4.10% 4.34% Cash 5.64% 3.63% Intl 1.78% 6.45% 1.49% 22.43% Intl 21.44% 30.26% Cash 1.03% Cash 1.38% n The index measures the performance of those S&P 500 companies with higher price-to-book ratios and higher forecasted growth values. The S&P 500 Index is a market-value-weighted index of 500 widely held common stocks that are traded on the NYSE, AMEX, and NASDAQ. n The index measures the performance of those S&P 500 companies with lower price-to-book ratios and lower forecasted growth values. The S&P 500 Index is a market-value-weighted index of 500 widely held common stocks that are traded on the NYSE, AMEX, and NASDAQ. n The Russell Midcap Index measures the performance of 800 of the smallest Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Index is a market-value-weighted index of the 1,000 largest U.S. stocks in the broad-market Russell 3000 index that are traded on the NYSE, AMEX, and NASDAQ. n The Russell Midcap Index measures the performance of 800 of the smallest Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 1000 Index is a market-value-weighted index of the 1,000 largest U.S. stocks in the broad-market Russell 3000 Index that are traded on the NYSE, AMEX, and NASDAQ. n The Russell 2000 Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index is a market-value-weighted index of the 2,000 smallest stocks in the broad-market Russell 3000 Index that are traded on the NYSE, AMEX, and NASDAQ. n The Russell 2000 Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index is a market-value-weighted index of the 2,000 smallest stocks in the broad-market Russell 3000 Index that are traded on the NYSE, AMEX, and NASDAQ. n International The Morgan Stanley Capital International Europe, Australasia, Far East (EAFE) Index is an unhedged composite of securities in 21 developed markets, excluding the U.S. and Canada. n The Lehman Brothers Aggregate Bond Index is composed of fixed income securities such as U.S. government bonds, investment-grade corporate bonds, mortgage-backed securities, and asset-backed securities. n Cash U.S. 3-month Treasury Bills are debt obligations with maturities of 90 days that are secured by the full faith and credit of the U.S. government.

6 a one-step asset allocation process Makes it easy Strategic Partners asset allocation Funds simplify your investment decisions and reduce time-consuming tax reporting. each fund corresponds to one type of investor ranging from conservative to aggressive. With a single decision you can achieve a comprehensive asset allocation in a single mutual fund family. Your investment will be managed by some of the industry s most experienced fund managers concentrating on their areas of expertise. strategic partners conservative AllocAtion FunD 40% Equity 60% the Fund s investment objective is current income and a reasonable level of capital appreciation, with an allocation that consists of more bond funds than stock funds. this Fund may be right for you if you are in or near retirement, or hesitant about putting too much money in the stock market. strategic partners MoDerAte AllocAtion FunD 65% Equity 35% this Fund is designed to provide capital appreciation and a reasonable level of current income by investing in more stock funds than bond funds. this may be a good choice if you plan to invest your money for 10 years or more, or if you re a retiree and need to add more growth potential to a portfolio heavily weighted in fi xed income. strategic partners GroWth AllocAtion FunD 100% Equity the Fund s investment objective is long-term capital appreciation. You may want to consider this Fund if you re an investor with a long time horizon, or if you can tolerate greater risk as you seek higher growth. Approximate equity and fi xed income allocations. Actual allocation percentages may vary. 4

7 how strategic partners Builds portfolios Our research team constructs the Strategic Partners asset allocation Funds using a diversifi ed mix of asset classes managed by proven and experienced fund managers. the team follows a unique process to arrive at the portfolio allocations: n it begins with an analysis of long-term risk and return opportunities across asset classes to develop each fund s strategic asset allocation policy. n Based on its short-term economic and market outlook, the team may dynamically adjust allocations to benefi t from changing economic and market changes. n the research team fulfi lls the portfolio allocations by applying its in-depth understanding of manager strategies and conditions in the global economy and capital markets. Asset class FunD MAnAGers Large-Cap Stocks Large-Cap Stocks International Stocks Small-Cap Stocks Small-Cap Stocks Core High Yield Bonds 5

8 how strategic partners evaluates Managers the research team employs both quantitative and qualitative tools from complex computer analytics and database screening software to on-site visits to get a personal feel for how an asset management fi rm operates. at the core of this process is the consistent application of a proprietary model that forms the basis of both manager selection and ongoing evaluation. Our analysts constantly monitor the managers to make sure they maintain the high standards that led to their selection. the team considers performance, how that performance was achieved, and other factors such as risk and consistency of its investment process. if a manager strays from its investment process, changes key team members, or changes ownership, the research team will recommend appropriate action. the manager may be placed on a watch list, or in some cases, even replaced. 6

9 Investor Questionnaire Information Date Investor Name Joint Participant Financial Professional Account Number 1. 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] Score 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] Score 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] Score 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] Score 7

10 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 12-, 24-, and 36-month periods. Please select the hypothetical portfolio with 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] Score 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 that 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.) P part A part B 4 The possibility that my investment may not grow enough to meet my future needs. [14] [7] 4 The risk of a sharp decline in value in a short period of time (1 to 6 months). [0] [0] 4 A decline in portfolio value over the course of 1 to 2 years. [6] [3] 4 The risk that my portfolio may not grow enough to keep pace with inflation. [8] [4] 4 The risk of not earning a rate of return greater than the general stock market. [20] [10] 4 The risk that my portfolio will not generate enough current income. [2] [1] Score 8

11 7. Which statement most accurately describes your attitude and expectations when investing over a market cycle of 5 to 7 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] Score 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] Score 5% 0% 5% 0% 5% 5% 0% 5% 0% Add up your total score and place it in the box to the right. You will need this number as you proceed to the following page. Total Score 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. 9

12 Determine Which strategic partners asset allocation Fund May Be Right for You Using your total score from the previous page, select the Strategic Partners asset allocation Fund that is appropriate for you. it is recommended that you discuss these results with your fi nancial professional and review the Fund s prospectus before investing. total risk score: 3 to 40 The least risky portfolio, designed for investors seeking income and low-to-moderate long-term growth. The Fund will normally invest about 60% of its assets in a broad range of fi xed income securities for regular income while investing about 40% of its assets for long-term growth potential through a diversifi ed mix of equities. strategic partners conservative Allocation Fund Core 46% Large-Cap Stocks 17% Large-Cap Stocks 15% High Yield Bonds 13% Small-Cap Stocks 5% Small-Cap Stocks 4% total risk score: 41 to 92 For investors looking for a balance of capital growth and income. About 65% of the Fund is invested in equities and about 5% in fi xed income securities. The equity portion includes the key domestic stock asset classes as well as international equities to take advantage of potential long-term growth opportunities outside of the United States. strategic partners Moderate Allocation Fund Core 26% Large-Cap Stocks 21% Large-Cap Stocks 19% International Stocks 15% High Yield Bonds 7% Small-Cap Stocks 6% Small-Cap Stocks 6% total risk score: 93 to 128 For investors seeking signifi cant long-term growth who are willing to accept short-term volatility to achieve that potential. The Fund normally invests 00% of its assets in equities, with a current allocation of approximately 55% to large-company stocks, % to small/mid-cap stocks, and 4% to international stocks. strategic partners Allocation Fund Large-Cap Stocks 28% Large-Cap Stocks 27% International Stocks 24% Small-Cap Stocks 11% Small-Cap Stocks 10% allocations as of 9/30/2005 as a percentage of long-term investments. actual allocation percentages may vary. the Funds may not be appropriate for all investors. there is no assurance that the Funds separate objectives will be achieved. investment return and the value of your investment will fl uctuate, so that when you redeem, your shares may be worth more or less than their original cost. the Funds may invest in small/mid-cap stocks, which may have more limited marketability and may be subject to more abrupt or erratic market movements than large-cap stocks. this may result in greater share price volatility. the Funds may also invest in high yield bonds, also known as junk bonds, which are subject to greater credit and market risks and may result in greater share price fl uctuation. the Funds may also invest in foreign securities, which are subject to the risks of currency fl uctuation and the impact of social, political, and economic change. Please consult your tax or legal adviser for tax or legal advice. 0

13 Class A shares Class B, C and Z shares Morningstar Overall Rating out of 252 Conservative Allocation funds, as of 9/30/2005. Morningstar measures risk-adjusted returns. The overall rating is a weighted average based on the Fund s 3-, 5-, and 10-year star rating.* Strategic Partners offers investors leading managers, not just from a single company, but from the entire investment industry. Our team of professional research analysts uses a rigorous process to both evaluate and monitor fund managers. We believe that professional guidance, combined with our management philosophy, can be a winning strategy for your portfolio. LARGE-CAP GROWTH STOCKS + 1 UnitedHealth Group 4.1% 2 Qualcomm 2.8% 3 Genentech 2.8% 4 Chicago Merc Exch Holdings 2.1% 5 Caterpillar 2.1% TOP FIVE OF % SMALL-CAP VALUE STOCKS + 1 Cabot Oil & Gas 2.5% 2 Philadelphia Cons Holdings 2.4% 3 Pharmaceutical Product Dev. 2.1% 4 Meritage Homes 2.1% 5 Cooper 2.1% TOP FIVE OF % + Assets shown as percentage of category. GROWTH OF $10,000 (CLASS A) Dollars (thousands) Strategic Partners Conservative Allocation Fund SEEKS CURRENT INCOME AND A REASONABLE LEVEL OF CAPITAL APPRECIATION. 9/30/ $10,000 LARGE-CAP VALUE STOCKS + 1 ExxonMobil 2.8% 2 Electronic Data Systems 2.6% 3 Computer Associates Int l 2.5% 4 St. Paul Travelers Companies 2.3% 5 Lennar 2.3% TOP FIVE OF % CORE FIXED INCOME BONDS + 1 FNMA Pass Thru Mtg 9/1/ % 2 FNMA Pass Thru Mtg 9/1/ % 3 FIN FUT US 5 YR CBT (12/20/05) 7.2% 4 US Treasury Note (9/15/09) 5.7% 5 FNMA Pass Thru Dwarf (5/1/20) 5.3% TOP FIVE OF % SMALL-CAP GROWTH STOCKS + 1 Scientific Games 2.0% 2 Optimal Group 1.7% 3 McGrath Rent Corp 1.5% 4 PolyMedica 1.5% 5 J2 Global Communications 1.5% TOP FIVE OF % HIGH YIELD BONDS + 1 Quest Services 1.3% 2 Rayac 1.2% 3 WDAC Subsidiary 1.1% 4 Charter Comm Holding 1.1% 5 UGS Corp 1.1% TOP FIVE OF % $15,071 S T Y L E B O X Large Medium Small F U N D F A C T S Blend High Medium Low Short Inter. Long Class NASDAQ CUSIP Assets ($mil) A PCGAX 86276X B PBCFX 86276X C PCCFX 86276X R N/A 86276X822 <1 Z PDCZX 86276X400 5 Total Net Assets 209 F U N D S T A T I S T I C S Average Weighted Market Cap. ($mil) 52,551.7 Beta (3-yr) 0.44 P/E Ratio 22.9 Standard Deviation (3-yr) 5.46 Turnover Ratio (%) 160 P O R T F O L I O M A N A G E M E N T Subadvisers EARNEST Partners, LLC Goldman Sachs Asset Management, L.P. Hotchkis and Wiley Capital Management, LLC JPMorgan Asset Management Marsico Capital Management, LLC Pacific Investment Management Company, LLC (PIMCO) RS Investments Vaughan Nelson Investment Management 0 98 Year CALENDAR YEAR RETURNS NOT INCLUDING SALES CHARGES (%) (CLASS A) Year Fund Past performance is not indicative of future results. Graph does not include the effects of sales charges and reflects reinvestment of all distributions. Holdings and sectors may vary. The Fund may invest in small- and mid-cap stocks, which may be subject to more erratic market movements than large-cap stocks; high yield ( junk ) bonds, which are subject to greater credit and market risks; foreign securities, which are subject to currency fluctuation and political uncertainty; and derivative securities, which may carry market, credit, and liquidity risks. These risks may result in greater share price volatility. There is no assurance the Fund s objective will be achieved. I S T H I S F U N D F O R Y O U? This Fund may be suitable for investors who: Are conservative and seeking income and a reasonable level of long-term growth Are looking for one-step asset allocation in a single mutual fund based on risk profile Want access to a select group of proven, experienced managers subject to a rigorous, in-depth evaluation process www. strategicpartners. com (800)

14 STRATEGIC PARTNERS CONSERVATIVE ALLOCATION FUND 9/30/2005 AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 9/30/2005 WITHOUT SALES CHARGES (TOTAL RETURNS) Share Class YTD 1-Year 3-Year 5-Year SI Inception Date Class A /18/1998 Class B /18/1998 Class C /18/1998 Class R 3.38 N/A N/A N/A /04/2004 Class Z /18/1998 WITH SALES CHARGES (SEC STANDARDIZED RETURN) Class A N/A /18/1998 Class B N/A /18/1998 Class C N/A /18/1998 Class R N/A N/A N/A N/A /04/2004 Class Z N/A /18/1998 Past performance is not indicative of future results, and current performance may be lower or higher than the past performance data quoted. The investment return and principal value will fluctuate, and shares, when sold, may be worth moreorlessthantheoriginalcost.forthemostrecentmonth-endperformance, visitourwebsiteatwww.strategicpartners.com. Maximum sales charge is 5.5%. FUND ALLOCATIONS 17.1% Stocks H&W/JPMorgan 15.3% Stocks Goldman/Marsico 4.6% Stocks EARNEST/V. Nelson 4.1% Stocks RS Investments 46.1% Core Bonds PIMCO 12.8% High Yield Bonds Goldman Sachs Fund Allocations shown as a percentage of long-term investments. Source: Prudential Investment Management, Inc.; EARNEST Partners; Goldman Sachs Asset Management, Hotchkis and Wiley Capital Management, JP Morgan Asset Management, Marsico Capital Management, PIMCO, RS Investments, and Vaughan Nelson Investment Management. The Fund offers five classes of shares. Class A, B, C, R, and Z shares have a common portfolio, although their fees, expenses, sales charges, and inception dates may vary. Class A maximum sales charge is 5.5%. Class B has a contingent deferred sales charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and 1% over a six-year period. Class C has a 12-month CDSC of 1%. Class R and Z shares are only offered to a limited group of investors. Please contact your financial professional for more detailed information. Year-to-date and 1-year returns are cumulative. Total return describes the return to the investor before any sales charges are imposed. SEC standardized return describes the return to the investor after maximum sales charges are imposed. All returns assume share price changes as well as the compounding effect of reinvested dividends and capital gains. All data is unaudited and subject to change. Average weighted market capitalization is the average market capitalization of corporations in a fund weighted by the percentage of the holding in the fund. Beta measures a fund s sensitivity to changes in the overall market over the past 3 years. Price/earnings ratio, or P/E, is the price of a stock divided by its earnings per share. Standard deviation is a statistical measurement that depicts how widely returns varied over the past 3 years. The measurement is generally used to understand the range of returns most likely for a given fund. When a fund has a high standard deviation, the range of performance may be wider, implying greater volatility. Turnover is annual sales divided by the average portfolio value. It tells us the weighted average holding period over a 12-month time frame of the portfolio. Statistics are benchmarked against the S&P 500, an unmanaged index, which is a broad indicator of domestic stock price movements. An investment cannot be made directly in an index. The Fund s total expenses are Class A, 1.44%; Class B, 2.19%; Class C, 2.19%; Class R, 1.69%; and Class Z, 1.19%. Expenses may include waivers and subsidies. For more details on each fund s specific waivers, please refer to the fund s corresponding prospectus. *The Fund s Class A 3- and 5-year ratings are 4 stars out of 252 funds and 3 stars out of 165 funds. The Fund s Class B 3- and 5-year ratings are 5 stars out of 252 funds and 3 stars out of 165 funds. The Fund s Class C 3- and 5-year ratings are 5 stars out of 252 funds and 3 stars out of 165 funds. The Fund s Class Z 3- and 5-year ratings are 5 stars out of 252 funds and 4 stars out of 165 funds. Other share classes may have different performance characteristics. Past performance is not indicative of future results. For each fund with at least a 3-year history, Morningstar calculates a Morningstar rating (based on a Morningstar risk-adjusted return measure that accounts for variation in a fund s monthly performance, including the effects of sales charges), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, and the next 35% receive 3 stars (each share class is rated separately, which may cause slight variations in the distribution percentages). The overall Morningstar rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar rating metrics. The Fund was rated against U.S.-domiciled funds Morningstar, Inc. All rights reserved. The information contained herein (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. This Fund is also offered in the QP(k) and Lin(k) programs, which are available under Strategic Partners Funds, a multimanager fund family distributed by Prudential Investment Management Services LLC. These products are no longer available as of August 1, Plan participants in qualified plans that previously used this product may continue to make contributions. Shares of the Fund are distributed by Prudential Investment Management Services LLC, a Prudential Financial company. Mutual funds are not insured by the FDIC or any federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate. For more information about Strategic Partners Mutual Funds, call your financial professional for a free prospectus. You should consider the Fund s investment objectives, risks, charges and expenses c a r e f u l l y b e f o r e i nve s t i n g. T h e prospectus will contain this and other i n f o r m a t i o n a b o u t t h e i nve s t m e n t company. Please read the prospectus carefully before investing. www. strategicpartners. com (800) MFSP504D2 Ed. 09/30/2005 INST A IFS-A

15 Strategic Partners Moderate Allocation Fund SEEKS CAPITAL APPRECIATION AND A REASONABLE LEVEL OF CURRENT INCOME. 9/30/2005 Class A shares Class Z shares Morningstar Overall Rating out of 693 Moderate Allocation funds, as of 9/30/2005. Morningstar measures risk-adjusted returns. The overall rating is a weighted average based on the Fund s 3-, 5-, and 10-year star rating.* S T Y L E B O X Large Medium Small Blend Short Inter. High Medium Low Long Strategic Partners offers investors leading managers, not just from a single company, but from the entire investment industry. Our team of professional research analysts uses a rigorous process to both evaluate and monitor fund managers. We believe that professional guidance, combined with our management philosophy, can be a winning strategy for your portfolio. LARGE-CAP GROWTH STOCKS + 1 UnitedHealth Group 4.0% 2 Qualcomm 2.6% 3 Genentech 2.6% 4 FedEx 2.1% 5 Lowe s 2.0% TOP FIVE OF % SMALL-CAP VALUE STOCKS + 1 Hovnanian Enterprises 3.1% 2 Cabot Oil & Gas 3.0% 3 Philadelphia Cons Holdings 2.8% 4 Pharmaceutical Product Dev. 2.7% 5 Cooper 2.6% TOP FIVE OF % HIGH YIELD BONDS + 1 CHARTER COMM 144A (5/15/14) 1.0% 2 RAYAC 144A (3/16/15) 1.0% 3 WDAC SUB. 8.5% (12/1/14) 1.0% 4 EL PASO 7.75% (6/1/13) 0.9% 5 MGG 6 (10/01/09) 0.9% TOP FIVE OF % + Assets shown as percentage of category. GROWTH OF $10,000 (CLASS A) Dollars (thousands) Year $10,000 LARGE-CAP VALUE STOCKS + 1 ExxonMobil 2.8% 2 Electronic Data Systems 2.6% 3 Computer Associates Int l 2.6% 4 St. Paul Travelers Companies 2.4% 5 Lennar 2.3% TOP FIVE OF % INTERNATIONAL STOCKS + 1 Rogers Communication 1.9% 2 GlaxoSmithKline 1.7% 3 Korea Fund 1.6% 4 Sanofi-Aventis 1.5% 5 BP PLC 1.5% TOP FIVE OF % SMALL-CAP GROWTH STOCKS + 1 Scientific Games 2.0% 2 Optimal Group 1.7% 3 FirstService 1.5% 4 McGrath Rent Corp 1.5% 5 PolyMedica 1.5% TOP FIVE OF % CORE FIXED INCOME BONDS + 1 FNMA Pass Thru Mtg 9/1/ % 2 FNMA Pass Thru Mtg 4/1/ % 3 US Treasury Note (9/15/09) 8.0% 4 FNMA Pass Thru Mtg 9/1/34 8.0% 5 FNMA Pass Thru Dwarf (6/1/19) 5.0% TOP FIVE OF % $15, CALENDAR YEAR RETURNS NOT INCLUDING SALES CHARGES (%) (CLASS A) Year Fund Past performance is not indicative of future results. Graph does not include the effects of sales charges and reflects reinvestment of all distributions. Holdings and sectors may vary. The Fund may invest in small- and mid-cap stocks, which may be subject to more erratic market movements than large-cap stocks; high yield ( junk ) bonds, which are subject to greater credit and market risks; foreign securities, which are subject to currency fluctuation and political uncertainty; and derivative securities, which may carry market, credit, and liquidity risks. These risks may result in greater share price volatility. There is no assurance the Fund s objective will be achieved. F U N D F A C T S Class NASDAQ CUSIP Assets ($mil) A PAMGX 86276X B DMGBX 86276X C PIMGX 86276X R N/A 86276X780 <1 Z PDMZX 86276X855 9 Total Net Assets 429 F U N D S T A T I S T I C S Average Weighted Market Cap. ($mil) Beta (3-yr) 0.68 P/E Ratio 22.8 Standard Deviation (3-yr) 7.81 Turnover Ratio (%) 100 P O R T F O L I O M A N A G E M E N T Subadvisers EARNEST Partners, LLC Goldman Sachs Asset Management, L.P. Hotchkis and Wiley Capital Management, LLC JPMorgan Asset Management LSV Asset Management Marsico Capital Management, LLC Pacific Investment Management Company, LLC (PIMCO) RS Investments Thornburg Investment Management, Inc. Vaughan Nelson Investment Management I S T H I S F U N D F O R Y O U? This Fund may be suitable for investors who: Are moderate risk investors looking for a balance of capital growth and income Are looking for one-step asset allocation in a single mutual fund based on risk profile Want access to a select group of proven, experienced managers subject to a rigorous, in-depth evaluation process www. strategicpartners. com (800)

16 STRATEGIC PARTNERS MODERATE ALLOCATION FUND 9/30/2005 AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 9/30/2005 WITHOUT SALES CHARGES (TOTAL RETURNS) Share Class YTD 1-Year 3-Year 5-Year SI Inception Date Class A /18/1998 Class B /18/1998 Class C /18/1998 Class R 5.18 N/A N/A N/A /04/2004 Class Z /18/1998 WITH SALES CHARGES (SEC STANDARDIZED RETURN) Class A N/A /18/1998 Class B N/A /18/1998 Class C N/A /18/1998 Class R N/A N/A N/A N/A /04/2004 Class Z N/A /18/1998 Past performance is not indicative of future results, and current performance may be lower or higher than the past performance data quoted. The investment return and principal value will fluctuate, and shares, when sold, may be worth moreorlessthantheoriginalcost.forthemostrecentmonth-endperformance, visitourwebsiteatwww.strategicpartners.com. Maximum sales charge is 5.5%. FUND ALLOCATIONS 20.6% Stocks H&W/JPMorgan 18.8% Stocks Goldman/Marsico 6.1% Stocks EARNEST/V. Nelson 6.2% Stocks RS Investments 14.8% International Stocks LSV/ Thornburg 26.3% Core Bonds PIMCO 7.3% High Yield Bonds Goldman Sachs Fund Allocations shown as a percentage of long-term investments. Source: Prudential Investment Management, Inc.; EARNEST Partners; Goldman Sachs Asset Management; Hotchkis and Wiley CapitalManagement; JPMorganAssetManagement; LSVAssetManagement; MarsicoCapitalManagement; PIMCO; RSInvestments; Thornburg Investment Management and Vaughan Nelson Investment Management. The Fund offers five classes of shares. Class A, B, C, R, and Z shares have a common portfolio, although their fees, expenses, sales charges, and inception dates may vary. Class A maximum sales charge is 5.5%. Class B has a contingent deferred sales charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and 1% over a six-year period. Class C has a 12-month CDSC of 1%. Class R and Z shares are only offered to a limited group of investors. Please contact your financial professional for more detailed information. Year-to-date and 1-year returns are cumulative. Total return describes the return to the investor before any sales charges are imposed. SEC standardized return describes the return to the investor after maximum sales charges are imposed. All returns assume share price changes as well as the compounding effect of reinvested dividends and capital gains. All data is unaudited and subject to change. Average weighted market capitalization is the average market capitalization of corporations in a fund weighted by the percentage of the holding in the fund. Beta measures a fund s sensitivity to changes in the overall market over the past 3 years. Price/earnings ratio, or P/E, is the price of a stock divided by its earnings per share. Standard deviation is a statistical measurement that depicts how widely returns varied over the past 3 years. The measurement is generally used to understand the range of returns most likely for a given fund. When a fund has a high standard deviation, the range of performance may be wider, implying greater volatility. Turnover is annual sales divided by the average portfolio value. It tells us the weighted average holding period over a 12-month time frame of the portfolio. Statistics are benchmarked against the S&P 500, an unmanaged index, which is a broad indicator of domestic stock price movements. An investment cannot be made directly in an index. The Fund s total expenses are Class A, 1.32%; Class B, 2.07%; Class C, 2.07%; Class R, 1.57%; and Class Z, 1.07%. Expenses may include waivers and subsidies. For more details on each fund s specific waivers, please refer to the fund s corresponding prospectus. *The Fund s Class A 3- and 5-year ratings are 4 stars out of 693 funds and 3 stars out of 518 funds. The Fund s Class Z 3- and 5-year ratings are 5 stars out of 693 funds and 4 stars out of 518 funds. Other share classes may have different performance characteristics. Past performance is not indicative of future results. For each fund with at least a 3-year history, Morningstar calculates a Morningstar rating (based on a Morningstar risk-adjusted return measure that accounts for variation in a fund s monthly performance, including the effects of sales charges), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, and the next 35% receive 3 stars (each share class is rated separately, which may cause slight variations in the distribution percentages). The overall Morningstar rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar rating metrics. The Fund was rated against U.S.-domiciled funds Morningstar, Inc. All rights reserved. The information contained herein (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. This Fund is also offered in the QP(k) and Lin(k) programs, which are available under Strategic Partners Funds, a multimanager fund family distributed by Prudential Investment Management Services LLC. These products are no longer available as of August 1, Plan participants in qualified plans that previously used this product may continue to make contributions. Shares of the Fund are distributed by Prudential Investment Management Services LLC, a Prudential Financial company. Mutual funds are not insured by the FDIC or any federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate. For more information about Strategic Partners Mutual Funds, call your financial professional for a free prospectus. You should consider the Fund s investment objectives, risks, charges and expenses c a r e f u l l y b e f o r e i nve s t i n g. T h e prospectus will contain this and other i n f o r m a t i o n a b o u t t h e i nve s t m e n t company. Please read the prospectus carefully before investing. www. strategicpartners. com (800) MFSP504D3 Ed. 09/30/2005 INST A IFS-A

17 Strategic Partners Allocation Fund SEEKS LONG-TERM CAPITAL APPRECIATION. 9/30/2005 S T Y L E B O X Class A, B, C and Z shares Large Morningstar Overall Rating out of 1,227 Large Blend funds, as of 9/30/2005. Medium Morningstar measures risk-adjusted returns. The overall rating is a weighted average based on the Small Fund s 3-, 5-, and 10-year star rating.* Blend Strategic Partners offers investors leading managers, not just from a single company, but from the entire investment industry. Our team of professional research analysts uses a rigorous process to both evaluate and monitor fund managers. We believe that professional guidance, combined with our management philosophy, can be a winning strategy for your portfolio. LARGE-CAP GROWTH STOCKS + 1 UnitedHealth Group 3.8% 2 Qualcomm 2.5% 3 Genentech 2.5% 4 Lowe s 2.1% 5 FedEx 2.0% TOP FIVE OF % SMALL-CAP VALUE STOCKS + 1 Hovnanian Enterprises 3.1% 2 Cabot Oil & Gas 3.1% 3 Philadelphia Cons Holdings 2.8% 4 Pharmaceutical Product Dev. 2.7% 5 Cooper 2.6% TOP FIVE OF % + Assets shown as percentage of category. GROWTH OF $10,000 (CLASS A) Dollars (thousands) Year $10,000 LARGE-CAP VALUE STOCKS + 1 ExxonMobil 2.9% 2 Electronic Data Systems 2.5% 3 Computer Associates Int l 2.4% 4 Citigroup 2.4% 5 St. Paul Travelers Companies 2.2% TOP FIVE OF % INTERNATIONAL STOCKS + 1 Rogers Communication 1.8% 2 GlaxoSmithKline 1.7% 3 Korea Fund 1.6% 4 BP PLC 1.5% 5 Sanofi-Aventis 1.5% TOP FIVE OF % SMALL-CAP GROWTH STOCKS + 1 Scientific Games 2.0% 2 Optimal Group 1.7% 3 McGrath Rent Corp 1.5% 4 PolyMedica 1.5% 5 J2 Global Communications 1.5% TOP FIVE OF % $15, CALENDAR YEAR RETURNS NOT INCLUDING SALES CHARGES (%) (CLASS A) Year Fund Past performance is not indicative of future results. Graph does not include the effects of sales charges and reflects reinvestment of all distributions. Holdings and sectors may vary. The Fund may invest in small- and mid-cap stocks, which may be subject to more erratic market movements than large-cap stocks; foreign securities, which are subject to currency fluctuation and political uncertainty; and derivative securities, which may carry market, credit, and liquidity risks. These risks may result in greater share price volatility. There is no assurance the Fund s objective will be achieved. F U N D F A C T S Class NASDAQ CUSIP Assets ($mil) A PHGAX 86276X B PIHGX 86276X C PHGCX 86276X R N/A 86276X756 <1 Z PDHZX 86276X806 7 Total Net Assets 268 F U N D S T A T I S T I C S Average Weighted Market Cap. ($mil) 48,395.5 Beta (3-yr) 1.02 P/E Ratio 22.8 Standard Deviation (3-yr) Turnover Ratio (%) 79 P O R T F O L I O M A N A G E M E N T Subadvisers EARNEST Partners, LLC Goldman Sachs Asset Management, L.P. Hotchkis and Wiley Capital Management, LLC JPMorgan Asset Management LSV Asset Management Marsico Capital Management, LLC RS Investments Thornburg Investment Management, Inc. Vaughan Nelson Investment Management I S T H I S F U N D F O R Y O U? This Fund may be suitable for investors who: Are looking for significant long-term growth and who are willing to accept equity market volatility to achieve that potential Are looking for one-step asset allocation in a single mutual fund based on risk profile Want access to a select group of proven, experienced managers subject to a rigorous, in-depth evaluation process www. strategicpartners. com (800)

18 STRATEGIC PARTNERS GROWTH ALLOCATION FUND 9/30/2005 AVERAGE ANNUAL TOTAL RETURNS (%) AS OF 9/30/2005 WITHOUT SALES CHARGES (TOTAL RETURNS) Share Class YTD 1-Year 3-Year 5-Year SI Inception Date Class A /18/1998 Class B /18/1998 Class C /18/1998 Class R 7.28 N/A N/A N/A /04/2004 Class Z /18/1998 WITH SALES CHARGES (SEC STANDARDIZED RETURN) Class A N/A /18/1998 Class B N/A /18/1998 Class C N/A /18/1998 Class R N/A N/A N/A N/A /04/2004 Class Z N/A /18/1998 Past performance is not indicative of future results, and current performance may be lower or higher than the past performance data quoted. The investment return and principal value will fluctuate, and shares, when sold, may be worth moreorlessthantheoriginalcost.forthemostrecentmonth-endperformance, visitourwebsiteatwww.strategicpartners.com. Maximum sales charge is 5.5%. FUND ALLOCATIONS 26.8% Stocks H&W/JPMorgan 27.9% Stocks Goldman/Marsico 11.2% Stocks EARNEST/ V. Nelson 10.4% Stocks RS Investments 23.7% International Stocks Fund Allocations shown as a percentage of long-term investments. Source: Prudential Investment Management, Inc.; EARNEST Partners; Goldman Sachs Asset Management; Hotchkis and Wiley Capital Management; JP Morgan Asset Management; LSV Asset Management; Marsico Capital Management; RS Investments; Thornburg Investment Management; and Vaughan Nelson Investment Management. The Fund offers five classes of shares. Class A, B, C, R, and Z shares have a common portfolio, although their fees, expenses, sales charges, and inception dates may vary. Class A maximum sales charge is 5.5%. Class B has a contingent deferred sales charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and 1% over a six-year period. Class C has a 12-month CDSC of 1%. Class R and Z shares are only offered to a limited group of investors. Please contact your financial professional for more detailed information. Year-to-date and 1-year returns are cumulative. Total return describes the return to the investor before any sales charges are imposed. SEC standardized return describes the return to the investor after maximum sales charges are imposed. All returns assume share price changes as well as the compounding effect of reinvested dividends and capital gains. All data is unaudited and subject to change. Average weighted market capitalization is the average market capitalization of corporations in a fund weighted by the percentage of the holding in the fund. Beta measures a fund s sensitivity to changes in the overall market over the past 3 years. Price/earnings ratio, or P/E, is the price of a stock divided by its earnings per share. Standard deviation is a statistical measurement that depicts how widely returns varied over the past 3 years. The measurement is generally used to understand the range of returns most likely for a given fund. When a fund has a high standard deviation, the range of performance may be wider, implying greater volatility. Turnover is annual sales divided by the average portfolio value. It tells us the weighted average holding period over a 12-month time frame of the portfolio. Statistics are benchmarked against the S&P 500, an unmanaged index, which is a broad indicator of domestic stock price movements. An investment cannot be made directly in an index. The Fund s total expenses are Class A, 1.38%; Class B, 2.13%; Class C, 2.13%; Class R, 1.63%; and Class Z, 1.13%. Expenses may include waivers and subsidies. For more details on each fund s specific waivers, please refer to the fund s corresponding prospectus. *The Fund s Class A 3- and 5-year ratings are 4 stars out of 1,227 funds and 4 stars out of 931 funds. The Fund s Class B 3- and 5-year ratings are 5 stars out of 1,227 funds and 4 stars out of 931 funds. The Fund s Class C 3- and 5-year ratings are 5 stars out of 1,227 funds and 4 stars out of 931 funds. The Fund s Class Z 3- and 5-year ratings are 5 stars out of 1,227 funds and 4 stars out of 931 funds. Other share classes may have different performance characteristics. Past performance is not indicative of future results. For each fund with at least a 3-year history, Morningstar calculates a Morningstar rating (based on a Morningstar risk-adjusted return measure that accounts for variation in a fund s monthly performance, including the effects of sales charges), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, and the next 35% receive 3 stars (each share class is rated separately, which may cause slight variations in the distribution percentages). The overall Morningstar rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar rating metrics. The Fund was rated against U.S.-domiciled funds Morningstar, Inc. All rights reserved. The information contained herein (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. This Fund is also offered in the QP(k) and Lin(k) programs, which are available under Strategic Partners Funds, a multimanager fund family distributed by Prudential Investment Management Services LLC. These products are no longer available as of August 1, Plan participants in qualified plans that previously used this product may continue to make contributions. Shares of the Fund are distributed by Prudential Investment Management Services LLC, a Prudential Financial company. Mutual funds are not insured by the FDIC or any federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate. For more information about Strategic Partners Mutual Funds, call your financial professional for a free prospectus. You should consider the Fund s investment objectives, risks, charges and expenses c a r e f u l l y b e f o r e i nve s t i n g. T h e prospectus will contain this and other i n f o r m a t i o n a b o u t t h e i nve s t m e n t company. Please read the prospectus carefully before investing. www. strategicpartners. com (800) MFSP504D4 Ed. 09/30/2005 INST A IFS-A

19 Strategic Partners Mutual Fund Family Overview DOMESTIC EQUITY FUNDS VALUE Blend LARGE-CAP FUNDS SP Core Fund SP Equity Fund SP Fund SP Core Fund SP Capital Fund SP Concentrated Fund SP Managed OTC Fund MID-/ MULTI-CAP SP Mid-Cap Fund (formerly SP Relative Fund) 1 SP Mid-Cap Fund SP New Era Fund FUNDS SMALL-CAP FUNDS SP Fund SP Fund (formerly SP Managed Fund) INTERNATIONAL EQUITY FUNDS VALUE Blend LARGE-CAP FUNDS SP International Fund SP International Fund SECTOR FUNDS HYBRID/ASSET ALLOCATION FUNDS FIXED INCOME/MONEY MARKET FUNDS SP Real Estate Fund SP Technology Fund SP Balanced Fund SP Conservative Allocation Fund SP Moderate Allocation Fund SP Allocation Fund SP High Yield Bond Fund SP Total Return Bond Fund SP Money Market Fund 2 MoneyMart Assets 1 Effective November Closed to new investors.

20 For more information about Strategic Partners Mutual Funds, call your financial professional for a free prospectus or visit our website at You should consider the Funds investment objectives, risks, sales charges, and expenses carefully before investing. The prospectus will contain this and other information about the Funds. Please read the prospectus carefully before investing. Shares of Strategic Partners Mutual Funds are distributed by Prudential Investment Management Services LLC, Newark, NJ, a Prudential Financial company and member SIPC. Strategic Partners is a service mark of The Prudential Insurance Company of America. 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 IFS-A MFSP128 Ed. 11/01/2005 INST A018749