P RUC HOICE MUTUAL FUND INVESTMENT PROGRAM
A STRUCTURED, PROFESSIONAL APPROACH Mutual funds offer many benefits to individual investors, including professional management, diversification, convenience, and liquidity. But with thousands of funds to choose from, it can be hard to sort through the competing claims and make informed decisions about what s right for you. PRUCHOICE is a comprehensive mutual fund investment program that combines the power of professional research with the advantage of professional guidance. We can help you narrow the field to a more manageable and focused group of options. We offer access to hundreds of mutual funds from over 90 well-known, highly regarded investment managers, including no-load fund families and institutional share classes. Each has been researched by a team of experienced analysts, and nearly every major asset class and investment style is represented. 1 With the guidance of your financial professional, PRUCHOICE can help you develop an asset allocation strategy customized to your personal goals, and our research enables you to choose appropriate funds with confidence. Whatever your long-term financial goals may be, the structured and disciplined approach of PRUCHOICE is designed to help make investing easier and more effective. 1 12b-1 fees may apply.
A LONG-TERM INVESTMENT RELATIONSHIP A relationship with an experienced financial professional is the key to structured investment management. Your financial professional will serve as your guide and coach in implementing your investment plan. Your financial professional will begin with a comprehensive fact-finding session to develop an understanding of your reasons for investing, the length of time you have to reach these goals, and the level of risk you re willing to assume. He or she will help you develop a customized asset allocation strategy, track your progress, keep you informed of important developments, and help you determine when you need to modify your portfolio. You ll receive an in-depth Quarterly Account Monitor that will provide a basis for ongoing discussion. A distinct advantage of this relationship is the alignment of your financial professional s interests with your own. Because your financial professional earns a fee based on the assets in your portfolio, he or she has a vested interest in helping your assets grow.
PUTTING YOU IN POSITION TO SUCCEED Where you position your resources is critical to your success. Studies have shown that asset allocation is a major factor determining long-term portfolio performance as well as portfolio risk. Yet asset allocation is not intended to outperform today s market leaders. In fact, it s not about beating the market at all. It is meeting your goals, managing risk, and helping to put you in a position to succeed, based on the risk/return relationships of various asset classes. Your financial professional will suggest an asset allocation approach that is consistent with your priorities, and this will serve as the road map to selecting appropriate mutual funds. The precision of our broad yet highly selective menu of funds is specifically designed to facilitate asset allocation. Asset Class Categories Large-Cap Growth Large-Cap Value Small/Mid-Cap Value Small/Mid-Cap Growth Longer-Term Bond Intermediate-Term Bond International Equity International Bond Each mutual fund we offer has been researched by a team of professional analysts, and nearly every major asset class and investment style is represented. Funds are assigned by our team of analysts to one of several asset class categories, according to actual portfolio makeup rather than simply by prospectus objective. This can help you obtain a more accurate allocation, reduce portfolio overlap, and improve diversification.
A fund that does not maintain a consistent investment style or market capitalization focus can undermine your asset allocation strategy. That s why our analysts evaluate each fund s actual holdings for style and market-cap consistency. If you choose a mutual fund for the large-cap growth asset class, for example, you can expect it to be invested accordingly. A fund that strays too far may be reclassified into a more appropriate category. Over time, your investments are likely to perform at different rates. This can cause your allocation to drift out of balance and may increase risk. A periodic review and rebalancing with your financial professional can help make sure your asset allocation remains targeted to your goals. A select group of quality mutual funds, accurate classification within asset class categories, monitoring and consistency ratings, and rebalancing. These advantages can help you obtain a higher-quality asset allocation strategy one designed to deliver consistent returns, lower volatility, and a greater chance of achieving your financial objectives.t TO SUCCEED 3
AN EXPERIENCED PROFESSIONAL RESEARCH TEAM Prudential employs a team of highly trained, specialized professional analysts with access to the most advanced technology. They visit with over 200 investment management firms each year, and use nearly every major analytical tool to evaluate the quality and integrity of a firm. The research process is the result of over 20 years of development, application, evolution, and the lessons of experience. Among the criteria are risk-adjusted performance, consistent investment style, reputation, stability of management, and compliance procedures. Our research enables you to select mutual funds with confidence, and we continue to monitor the funds to ensure that they adhere to our stringent requirements. If there are personnel changes or other important developments at an investment management firm, our analysts will review the situation and inform your financial professional of their findings. Prudential s Mutual Fund Evaluation Model Screening -Quantitative attributes -Qualitative attributes -Threshold screens Quantitative Fund Review -Customized -In-depth performance ranking -Style consistency -Market-cap consistency Qualitative Fund Review -Investigation of investment process and people -Analyst assessment Fund Evaluation Committee Decision -Analyst report -Recommendation and open debate Ongoing Monitoring -Quarterly review of portfolio performance and style consistency -Questionnaire -Event analysis
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ENHANCED OVERSIGHT AND SIMPLIFIED SELECTION Once you and your financial professional have developed an asset allocation, you may prefer to simplify the remainder of the process by choosing from a short list of thoroughly researched funds. The PRUCHOICE Select List and Model Portfolios are designed to help you do so. The Select List generally contains no more than six funds for a particular asset class. Funds on the list will have shown particular excellence in regard to several of the evaluation criteria noted on the preceding page. Keep in mind that the Select List is a service to simplify your fund selection process; you are free to invest in any fund we offer. You can also benefit from the knowledge and experience of our research team through the simplicity of Model Portfolios. These specifically designed combinations of funds are constructed by our research team with a particular focus, such as tax management, or according to other factors, such as risk profile. Simply choose the focus that suits your needs. Select List and Model Portfolios Universe of Mutual Funds PRUCHOICE Universe PRUCHOICE Select List PRUCHOICE Model Portfolios
KEEP TRACK OF YOUR PROGRESS A structured investment program is an ongoing process, and it may be necessary to make periodic adjustments to your strategy. Our comprehensive Quarterly Account Monitor provides detailed information about your investments, and helps you understand performance data in relation to your specific goals. You and your financial professional will use the Monitor to fine-tune your investment strategy as your goals evolve and the markets change. Consolidating your investments Many of today s most popular funds are available through PRUCHOICE, which may enable you to consolidate all your mutual fund investments within a single program. You and your financial professional will then have a complete and easy-to-monitor view of your financial picture. Quarterly Account Monitor Keep up with market developments Measure progress toward your goals Evaluate your asset allocation Monitor performance of investments Review activity in your account Gauge and monitor tax implications 7
SOME OF THE FEATURES OF P RUCHOICE A structured and disciplined investment program A long-term relationship with a financial professional Access to a broad range of quality mutual funds Ongoing review of funds by a team of professional analysts The ability to consolidate all of your mutual fund investments Online account information Comprehensive quarterly performance results and year-end summaries Periodic review of your goals and progress by a financial professional Convenient mutual fund benefits like dollar cost averaging 2, automatic investing, and systematic withdrawal Periodic rebalancing to maintain optimal portfolio allocation One annual fee for account services 3 T AKE A PROFESSIONAL APPROACH Discuss with your financial professional how the structured, professional approach of PRUCHOICE can help make your investment goals a reality. 2 There is no guarantee that dollar cost averaging will ensure a profit or protect against a loss in declining markets. Since such a plan includes continuous investment, clients should consider their financial ability to continue purchases through periods of low price levels. 3 Mutual funds are available at net asset value, but are subject to an annual effective program fee of up to 1.25% (annual fund operating expense fees will apply). Investors should consult with their financial professional to determine the specific funds available through the PRUCHOICE program. For more complete information about a fund, call your financial professional for a free prospectus. Read the prospectus carefully before you invest or send money.
Professional money management may not be suitable for all investors. Funds in the PRUCHOICE program are sold by prospectus. For information and a free prospectus that describes in detail the fund s investment objectives, sales charges, expenses, management fees, and other matters of interest, please contact your financial professional. Please read the prospectus carefully before you invest or send money. A wrap-fee program is one in which an investor pays one advisory fee based on assets in the program instead of typical transaction fees based on buying or selling the investment in the program. The wrap fee covers the transaction fees and the investment advisory services provided by the sponsor. PRUCHOICE is offered through Prudential Securities, a division of Wachovia Securities, LLC, member NYSE and member SIPC. PRUCHOICE: IS NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE IS NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE Prudential, Pru, and Rock logo marks are owned by The Prudential Insurance Company of America and are used herein under license. IFS-A080869 PC103W Ed. 06/01/2003