SEEKING A BALANCE OF SAFETY AND TOTAL RETURN PRUDENTIAL SHORT-TERM CORPORATE BOND FUND, INC. MORNINGSTAR OVERALL RATING Class R Class A, Q, and Z Positive performance in the past 26 out of 27 years Portfolio contains at least 80% corporate bonds Competitive returns with less interest rate sensitivity Morningstar Overall Rating among 463 Short-Term Bond funds as of September 30, 2017. Morningstar measures risk-adjusted returns. The overall rating is a weighted average based on a fund s 3-, 5-, and 10-year rating.
Why Bonds If you re like most investors, you need the growth potential of stocks to achieve your long-term goals. However, adding bonds to your portfolio offers several important benefits: Diversification Market factors that have a negative effect on stock market performance often have little or no impact on bonds. Sometimes when the stock market is down, the bond market is up. A mix of stocks and bonds in your portfolio may help reduce the overall risk of your investment strategy. Keep in mind that investment strategies such as diversification do not guarantee a profit or ensure protection against loss in declining markets. Income Bonds are also called fixed income investments because they can offer a source of interest income that can be used for living expenses or reinvested to earn additional interest. It is important to note that most fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise. Stability Bonds can help preserve wealth and provide a smoother ride for your portfolio. Down periods in the bond market tend to be shorter and less severe than those in the stock market. ADDING BONDS TO A STOCK PORTFOLIO HAS HELPED REDUCE RISK WITH A MODEST IMPACT ON RETURNS Portfolio Allocation Standard Deviation* Average Return 100% stocks 14.9% 11.4% 80% stocks/ 20% bonds 12.2% 10.8% Source: Calculated by PGIM Investments using data presented in Morningstar software products. All rights reserved. Used with permission. Performance period 1976 2016. This information is hypothetical, does not represent an actual investment, and is not intended to imply the future performance of any of the investments mentioned. * Standard deviation indicates the volatility of an investment and is often used as a measurement of risk. The higher the standard deviation, the riskier the investment. In this example, the portfolio diversified with fixed income investments has a slightly lower return but significantly lower risk. All rights reserved. Stock returns are based on the S&P 500 Index. Bond returns are measured by the Bloomberg Barclays U.S. Aggregate Bond Index. Return figures for the indexes do not reflect any fees or expenses. An investment cannot be made directly in a specific index. It is important to note that U.S. government bonds and U.S. Treasury bills are backed by the full faith and credit of the U.S. government, are less volatile than equity investments, and provide a guaranteed return of principal at maturity. Like any mutual fund, an investment in a bond mutual fund is not guaranteed and could lose value. 2
The short-term corporate advantage Bonds typically provide investors with two ways to make money interest income and potential capital gains if the bonds increase in value. Generally, longer-term bonds pay higher interest rates but have more sensitivity to interest rate changes, and thus more volatile prices. For example, if interest rates rise dramatically, performance of long-term bonds could suffer more than short-term bonds. Short-term corporate bonds have historically offered returns that are competitive with similarly rated long-term bonds, but generally with less risk. The Prudential Short-Term Corporate Bond Fund is one of the few funds that invests primarily in the corporate bond sector, providing investors the opportunity to gain the full potential of investing in short-term corporates. Short-term corporate bonds have been less sensitive to interest rate changes than other short-term investments, such as government and agency bonds. Keep in mind, there are risks associated with investing in this fund. Corporate bonds are subject to credit risk. Government securities are backed by the full faith and credit of the U.S. government, provide a guaranteed return of principal at maturity, and thus are generally less volatile than other investments. Fixed income investments are subject to interest rate risk, and their value will generally decline as interest rates rise. SHORT-TERM CORPORATE BONDS HAVE GENERATED COMPETITIVE RETURNS AT RELATIVELY LOW RISK 10 Historical Return % 8 6 4 2 Short-Term Corporates T-Bills Government Bonds High Yield Equities 0 2 4 6 8 10 12 14 16 Historical Risk % Source: Bloomberg. Data as of 12/31/2016. Asset classes are represented as follows: T-bills, Bloomberg Barclays Short Treasury Index: 1 3 Months; short-term corporates, Bloomberg Barclays 1 5 Year U.S. Credit Index; government bonds, Bloomberg Barclays U.S. Treasury Index; high yield, Bloomberg Barclays U.S. Corporate High Yield Index; equities, S&P 500 Index. Past performance is no guarantee of future results, and current performance may be lower or higher than the performance data quoted. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost. High yield and other corporate fixed income securities do not have equivalent creditworthiness to government securities and are not backed by the full faith and credit of the U.S. government as to the timely payment of principal and interest. 3
Why the Prudential Short-Term Corporate Bond Fund The Prudential Short-Term Corporate Bond Fund follows a disciplined investment process to seek the best opportunities the short-term corporate bond market has to offer. The Fund s manager, PGIM Fixed Income, boasts a strong, stable, well-resourced investment team with a rigorous research heritage and a comprehensive, firmwide approach to risk management. They integrate broad economic, credit, and quantitative research to build a style-pure but well-diversified portfolio of primarily short-term corporate bonds. Through their unique and disciplined process, the managers seek to outperform the Bloomberg Barclays 1 5 Year U.S. Credit Index with a similar level of risk. The Fund has been able to weather multiple market cycles to provide consistent, positive returns. In fact, in 26 of the last 27 years, the Fund has provided investors with a positive return. The Prudential Short- Term Corporate Bond Fund seeks high current income consistent with the preservation of principal by investing at least 80% of its assets in corporate bonds. SECTOR BREAKDOWN (% OF ASSETS)* n 85.4% Corporates n 8.8 ABS n 3.4 Commercial MBS n 0.9 Emerging Markets n 0.5 Foreign Govt Related n 0.4 Bank Loans n 0.2 U.S. Municipals n 0.4 Cash/Equiv As of September 30, 2017. Sector allocations may change. For the most recent sector breakdown, visit our website at www.pgiminvestments.com. *Sector allocations may not total 100%. PRUDENTIAL SHORT-TERM CORPORATE BOND FUND SHARE CLASS / NASDAQ A: PBSMX B: PSMBX C: PIFCX Q: PSTQX R: JDTRX Z: PIFZX 4
TWO DECADES OF CONSISTENCY: POSITIVE CALENDAR-YEAR PERFORMANCE IN 26 OUT OF 27 YEARS SINCE INCEPTION Return (%) 15 12 9 6 3 0 3 13.31 13.12 13.53 9.40 6.67 7.18 7.65 6.81 6.81 7.40 6.69 5.95 4.32 4.83 4.78 5.23 4.03 2.77 0.89 1.42 2.50 1.72 2.01 0.86 0.77 0.81 1.16 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: PGIM as of 12/31/2016. Past performance does not guarantee future results. Returns do not include sales charges; they do reflect reinvestment of all distributions. If sales charges were included, returns would have been lower. Returns shown for A shares, inception: 9/1/1989. ANNUALIZED RETURNS Performance as of 09/30/2017 YTD 1-Year 3-Year 5-Year 10-Year Total Returns (Class Z without sales charges) 2.36% 1.54% 2.15% 1.90% 3.92% SEC Standardized Returns (Class Z with sales charges) 1.54 2.15 1.90 3.92 Total Returns (Class A without sales charges) 2.17 1.20 1.86 1.64 3.66 SEC Standardized Returns (Class A with sales charges) 2.09 0.75 0.97 3.32 Past performance is no guarantee 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 more or less than the original cost. For the most recent month-end performance update, visit our website at pgiminvestments.com. The Fund s inception date is 2/16/1996 for Class Z and 9/1/1989 for Class A. Maximum sales charge for Class A is 3.25%. Gross operating expenses: Class Z, 0.52% and Class A, 0.77%. Source: PGIM Investments. Total returns describe the return to the investor after net operating expenses but before any sales charges are imposed. SEC standardized returns describes the return to the investor after net operating expenses and maximum sales charges are imposed. Class Z shares may be available to group retirement plans and institutional investors through certain retirement, mutual fund wrap and asset allocation programs and to institutions at an investment minimum of $5,000,000. Please see the current prospectus for more detailed information. All data is unaudited and subject to change. The Fund s Class A Overall, 3-, 5-, and 10-year ratings are 5 stars out of 463 funds, 4 stars out of 463 funds, 4 stars out of 382 funds, and 5 stars out of 259 funds, respectively. The Fund s Class R Overall, 3-, 5-, and 10-year ratings are 4 stars out of 463 funds, 3 stars out of 463 funds, 3 stars out of 382 funds, and 5 stars out of 259 funds, respectively The Fund s Class Q Overall, 3-, 5-, and 10-year ratings are 5 stars out of 463 funds, 4 stars out of 463 funds, 5 stars out of 382 funds, and 5 stars out of 259 funds, respectively. The Fund s Class Z Overall, 3-, 5-, and 10-year ratings are 5 stars out of 463 funds, 4 stars out of 463 funds, 4 stars out of 382 funds, and 5 stars out of 259 funds, respectively. Source: Morningstar. The Morningstar Rating may not be calculated based on its share class adjusted historical returns. If so, this investment s independent Morningstar Rating metric uses the fund s oldest share class to determine its hypothetical rating for certain time periods. The Morningstar Rating for funds, or star rating, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and openended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. 2017 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. 5
Managed by PGIM Fixed Income New Name, Same Commitment Prudential Fixed Income is now PGIM Fixed Income 1 A research leader PGIM Fixed Income has one of the largest and most experienced research groups in the industry. With more than $276 billion 2 in corporate debt under management, PGIM Fixed Income is able to support one of the largest credit research and corporate bond portfolio management teams in the industry. Senior investment professionals average 18 years with PGIM Fixed Income and 28 years of investment experience. Size and experience PGIM Fixed Income has been managing fixed income portfolios since 1875 and today manages $676 billion in assets. This size results in economies of scale that enable it to negotiate large purchases of issues that the managers consider their best ideas at attractive terms. It can then apply them consistently across all appropriate client portfolios. Assets under management and years of experience as of 6/30/2017. Unique four-step process PGIM Fixed Income follows the same basic approach for all its portfolios: QUARTERLY INVESTMENT OUTLOOK PORTFOLIO CONSTRUCTION SECURITY SELECTION RISK ANALYSIS 1 As of January 1, 2017, Prudential Fixed Income is now known as PGIM Fixed Income in all of the markets in which it operates around the world. The name change follows Prudential Investment Management s rebranding to PGIM in January 2016. 2 Includes U.S. and non-u.s. corporate bonds. Establishes firmwide views on the economy, interest rates, sector allocations, and other broad themes. Senior managers use the outlook to develop allocations, duration, and yield curve positioning. Managers and analysts are sector specialists and work together to pick securities based on their relative value. Portfolios are monitored daily to help ensure risk management policies are being effectively implemented. A team approach Three senior portfolio managers share management of the Prudential Short-Term Corporate Bond Fund: Steven Kellner, CFA, is a managing director and head of Credit Portfolio Management for PGIM Fixed Income. He has 31 years of experience. Malcolm Dalrymple is a principal and corporate bond portfolio manager for the Investment-Grade Corporate Bond team. He has 33 years of investment industry experience. David Del Vecchio is a principal and portfolio manager for the Investment-Grade Corporate Bond team. He has 22 years of investment industry experience. 6
Ask your financial professional The knowledge and experience of a financial professional can be a valuable advantage. Your financial professional can help you determine whether an investment is the right choice for you, depending on your goals, investment time horizon, tolerance for risk, and existing investments. He or she will give you the guidance you need to decide if the Prudential Short-Term Corporate Bond Fund is a suitable choice for you. Risk Information The Fund may invest in high yield ( junk ) bonds, which are subject to greater credit and market risks; mortgage-backed securities, which are subject to prepayment and extension risks; short sales, which involve costs and the risk of potentially unlimited losses; leveraging techniques, which may magnify losses; and derivative securities, which may carry market, credit, and liquidity risks. These risks may result in greater share price volatility. There is no guarantee the Fund s objectives will be achieved. Fixed income investments are subject to interest rate risk and their value will decline as interest rates rise. All indexes are unmanaged. Investors cannot invest directly in an index. Index Definitions Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index composed of securities from the Bloomberg Barclays U.S. Treasury Index, Bloomberg Barclays Government/Corporate Bond Index, Bloomberg Barclays Mortgage-Backed Securities Index, and Bloomberg Barclays Asset-Backed Securities Index. Bloomberg Barclays U.S. Corporate High Yield Index is an unmanaged index generally representative of corporate bonds rated below investment grade. Bloomberg Barclays U.S. Treasury Index is an unmanaged index of prices of U.S. Treasury bonds with maturities of one to 30 years. Bloomberg Barclays Short Treasury Index: 1 3 Months is an unmanaged index that includes aged U.S. Treasury bills, notes, and bonds with a remaining maturity from one up to (but not including) three months. Bloomberg Barclays 1 5 Year U.S. Credit Index is an unmanaged index of publicly issued U.S. corporate and specified foreign debentures and secured notes that meet specific maturity (between one and five years), liquidity, and quality requirements. S&P 500 Index is a weighted, unmanaged index composed of 500 large-cap stocks. It provides a broad indicator of stock price movements. All indexes are unmanaged. Investors cannot invest directly into an index. 7
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 12/31/2016. 2 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 (PIMS), member SIPC. PGIM Fixed Income is a unit of PGIM, Inc. (PGIM), a registered investment advisor. PIMS and PGIM are Prudential Financial companies. 2017 Prudential Financial, Inc. and its related entities. 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 0201812-00030-00 PI1613 Expiration: 10/31/2018