MUTUAL FUNDS OFFERING LEADING MANAGERS FROM ACROSS THE INVESTMENT INDUSTRY

Transcription

1 STRATEGIC PARTNERS SM MUTUAL FUNDS OFFERING LEADING MANAGERS FROM ACROSS THE INVESTMENT INDUSTRY

2 WHY CHOOSE STRATEGIC PARTNERS MUTUAL FUNDS MANAGEMENT TALENT Investment management talent is not concentrated in any single company, that s why the managers of mutual funds are selected from the entire investment industry. 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. 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.

3 MANAGER SELECTION CAN MAKE THE DIFFERENCE The performance of the people managing your money can greatly affect your ability to meet your financial goals. So naturally you want the most talented managers working for you. That is the idea behind mutual funds to offer investors leading managers not just from a single company, but from the entire investment industry. Since there are thousands of managers, finding the best calls for looking beyond the buzz of this week s star performer and focusing on managers with the qualities most likely to help you achieve long-term success. Our research analysts are experts at choosing those managers. They follow a rigorous and objective process to evaluate and monitor managers for funds. We set the bar high and we ll replace managers if changes occur and for some reason they fall below our standards. It s a highly specialized, time-consuming approach dedicated to one specific goal consistent and competitive performance for you. WHO S WATCHING THOSE WHO MANAGE YOUR MONEY? As you can see in the chart below, millions more households own mutual funds today than in The question is, do these investors even know who s managing their money? Our analysts do know, and choosing a mutual fund means that you re able to relax because our research group acts as your watchdog. U.S. HOUSEHOLDS OWNING MUTUAL FUNDS , SELECTED YEARS 1 U.S. Households (Millions) í03 Source: Fundamentals, Investment Company Institute, Vol. 12, No. 4, October Households owning mutual funds in 1980 through 1986 were estimated by dividing the total number of household accounts by the number of accounts per household. Beginning in 1988, mutual fund ownership is estimated through household surveys. Estimates for 1988 through 1992 exclude households owning mutual funds only through employer-sponsored retirement plans; estimates for 1994 through 2003 include households owning mutual funds only through employer-sponsored retirement plans; and estimates for 1998 through 2003 include fund ownership through variable annuities. 1

4 How Evaluates Managers Our team of experienced analysts applies a rigorous and disciplined evaluation process that has evolved over the past 30 years. Our goal is to find the managers most likely to deliver the long-term performance advantage you need to reach your goals. We employ both quantitative and qualitative tools from complex computer analytics and databasescreening software to on-site visits and interviews to get a personal feel for how an asset management firm operates. At the center of the investment manager review process is the consistent application of our proprietary evaluation model, which forms the basis of both manager selection and ongoing monitoring. PROCESS Quality of investment process and implementation Quality of research and judgment PEOPLE Investment team talent, experience, and quality Team stability and motivation to succeed Team experience working together PEOPLE OPERATIONS PROCESS STRATEGIC PARTNERS MANAGER EVALUATION MODEL PERFORMANCE PERFORMANCE Consistent performance Proven trading skills OPERATIONS Sound management and ownership structure Responsive client service CO M PLIANCE COMPLIANCE Demonstrated commitment to ethical practices 2

5 BUILDING YOUR INVESTMENT PROGRAM WITH STRATEGIC PARTNERS Whether you re looking for capital growth, current income, or a combination of the two, funds feature a wide range of choices designed to meet your investment needs. These funds can be especially useful to investors following a longterm asset allocation strategy. Asset allocation helps you match the strategies and objectives of different funds to your specific needs. It can help you identify an appropriate mix of investments by balancing your goals, risk tolerance, and time horizon while taking into account the historical returns of different asset classes. even offers three funds that provide a complete asset allocation in a single investment based on an investor s risk profile. We recommend that you develop a personal asset allocation with the help of a financial professional who knows you, understands your goals and reasons for investing, and the amount of risk you re comfortable assuming. Since your needs may change over time, it s important to periodically review your portfolio with your financial professional. Combining Managers Some of the funds use the complementary styles of more than one manager. This multi-manager approach is often used by pension funds and other large investors to smooth out fluctuations in investment returns without sacrificing the potential for higher returns. 3

6 S TRATEGIC PARTNERS M UTUAL F UND L INEUP mutual funds offer investors leading managers not just from a single company, but from across the entire investment industry. The following investment managers have earned a spot in the family. A SSET A LLOCATION F UNDS Conservative Growth Fund [A, B, C, D, E, F, H] Moderate Growth Fund [A, B, C, D, E, F, H] High Growth Fund [A, B, C, D] EARNEST Partners, LLC and its predecessor firms began managing equities in The managers use a proprietary process to find stocks with strong relative values. EARNEST manages the small-/mid-cap value investments for the Funds. Jennison Associates has more than 30 years of experience managing stock portfolios for customers ranging from individuals to large institutions. Jennison manages both large-cap growth and large-cap value investments for the Funds. Lazard is a division of Lazard Frères and Company. Lazard, which handles international investments for the Moderate Growth and High Growth Funds, evaluates more than 4,500 companies worldwide seeking undervalued stocks of fundamentally sound companies. Pacific Investment Management Company (PIMCO), which handles core fixed income investments for the Conservative Growth and Moderate Growth Funds, was established in It manages assets for clients that include some of the largest U.S. pension funds. Prudential Investment Management is one of the industry s largest high yield investment managers. It handles high yield fixed income investments for the Conservative Growth and Moderate Growth Funds. The team s credit research expertise is key to its process. RS Investments is a San Francisco-based investment management firm focused on equity investments in small to midsize companies. RS manages the small-/mid-cap growth investments for the Funds. L ARGE C APITALIZATION S TOCK F UNDS Capital Growth Fund (formerly ASAF Marsico Capital Growth Fund) [A, B, D, E, I] Marsico Capital Management was founded in 1997 by Tom Marsico. The team believes that what enables it to transform potential opportunities into investments is a strategic process that blends indepth research with concentrated fundamentals. Concentrated Growth Fund (formerly ASAF Goldman Sachs Concentrated Growth Fund) [A, B, D, E, G, I] Goldman Sachs Asset Management, a business unit of the Investment Management Division of Goldman, Sachs & Co., seeks to deliver strong, consistent investment results built on its global resources and relationships, thoughtful analysis and research, as well as effective risk management. [A] Common Stocks. [B] Foreign Securities. [C] Small-/Mid-Cap Stocks. [D] Derivative Strategies. [E] Bonds and Fixed Income Securities. [F] High Yield Securities ( junk bonds). [G] Nondiversified Status. [H] High Portfolio Turnover. [I] Initial Public Offerings. 4 SEE BACK PAGE FOR RISK FACTORS.

7 L ARGE C APITALIZATION S TOCK F UNDS ( CONTD) Core Value Fund (formerly ASAF Sanford Bernstein Core Value Fund) [A, D, E] Ranked among the premier money management firms, Sanford C. Bernstein & Co. was founded in 1967 and is now a unit of Alliance Capital Management. Research is the cornerstone of its reputation, and it is well known for having one of the largest and farthest-reaching investment research forces in the industry. Equity Fund [A, B, D] Jennison Associates has over 30 years of experience managing stock portfolios for customers ranging from individuals to large institutions. The team looks for companies with expected earnings growth rates greater than the market, but with price earnings less than the market. Salomon Brothers Asset Management was established in The manager looks for high-quality companies with good management, an attractive valuation, and a catalyst for stock price appreciation. GE Asset Management is a wholly owned subsidiary of General Electric Company and is one of the largest managers of institutional assets in the United States. Through fundamental, bottom-up analysis, GE seeks to identify the best stocks to hold in each sector, while also identifying catalysts that should lead to outperformance. Equity Income Fund (formerly ASAF Alliance Growth and Income Fund) [A, B, D, E] Alliance Capital Management L.P. is a leading global investment management firm. Known for its research expertise in both growth-style and value-style equities, Alliance emphasizes a consistent bottomup research approach that is designed to perform well over long periods of time in all market cycles. Focused Growth Fund [A, B, C, D, G] Jennison Associates has more than 30 years of experience managing growth stock portfolios. It looks for companies that show superior absolute and relative earnings growth and that are also attractively valued. Alliance Capital Management L.P. is a leading global investment management firm. Known for its research expertise in both growth-style and value-style equities, Alliance emphasizes a consistent bottomup research approach that is designed to perform well over long periods of time in all market cycles. Focused Value Fund [A, B, C, D, G] Davis Advisors was established in Davis looks to buy strong, overlooked companies that are selling at a discount. The Davis team strives for all weather performance in both up and down markets. Salomon Brothers Asset Management was established in It seeks a mix of value stocks and shares of companies with growth-oriented potential that it believes are priced well below their true value. Salomon considers companies of all sizes and from any sector. SEE BACK PAGE FOR RISK FACTORS. 5

8 L ARGE C APITALIZATION S TOCK F UNDS ( CONTD) Growth with Income Fund (formerly ASAF MFS Growth with Income Fund) [A, B, D, E] A global asset manager, MFS was founded in 1924 when it invented America s first mutual fund. In 1932 it created one of the first in-house research departments in the industry. MFS equity portfolios are built around the firm s trademarked MFS Original Research process, a proprietary process that is driven by its analysts bottom-up research on every stock held in the company s equity portfolios. Large Cap Growth Fund [A] Oak Associates was founded in 1985 and currently manages assets for pension plans, endowments, municipalities, and individuals. Oak concentrates in the market sectors believed to have the greatest long-term potential, then focuses on a few key companies in those areas. Columbus Circle, based in Stamford, Connecticut, has managed money for more than 25 years. Columbus looks for stocks that show positive business momentum and earnings surprises, often with earnings higher than their peers. Large Cap Value Fund [A] J. P. Morgan Investment Management Inc. is a wholly owned subsidiary of J.P. Morgan Chase & Co., a bank holding company founded in Its quantitative model provides an objective screening process driven by internal fundamental research. Hotchkis and Wiley specializes in managing assets for corporate, public endowment, and other institutional clients. The firm focuses on stocks with a history of higher-than-average dividend yields, believing that this and increases in book value lead to superior stock performance. Managed Index 500 Fund (formerly ASAF Sanford Bernstein Managed Index 500 Fund) [A, D, E] Ranked among the premier money management firms, Sanford C. Bernstein & Co. was founded in 1967 and is now a unit of Alliance Capital Management. Research is the cornerstone of its reputation, and it is well known for having one of the largest and farthest-reaching investment research forces in the industry. Managed OTC Fund (formerly ASAF ProFund Managed OTC Fund) [A, D, G] Founded in 1997 and based in Bethesda, Maryland, ProFund Advisors offers the largest selection of indexed mutual funds. ProFund pioneered the concept of applying leveraged investment techniques to index funds and managing inverse index funds. These funds are designed to give investors the potential to outperform a specified index. [A] Common Stocks. [B] Foreign Securities. [C] Small-/Mid-Cap Stocks. [D] Derivative Strategies. [E] Bonds and Fixed Income Securities. [F] High Yield Securities ( junk bonds). [G] Nondiversified Status. [H] High Portfolio Turnover. [I] Initial Public Offerings. 6 SEE BACK PAGE FOR RISK FACTORS.

9 M ID C APITALIZATION S TOCK F UNDS Mid Cap Growth Fund (formerly ASAF Goldman Sachs Mid-Cap Growth Fund) [A, B, C, D, E] Goldman Sachs Asset Management, a business unit of the Investment Management Division of Goldman, Sachs & Co., seeks to deliver strong, consistent investment results built on its global resources and relationships, thoughtful analysis and research, as well as effective risk management. Mid Cap Value Fund [A, B, C, D, G] Harris Associates L.P., which also advises the Oakmark family of funds, is a value specialist. It manages portfolios using a value-oriented, long-term investment philosophy and a fundamental, research-driven stock selection process. Mercury Advisors is the third party distribution arm of Merrill Lynch Investment Managers, a pre-eminent global asset management firm. It offers institutional-quality investment products, taking advantage of its size, global reach, and risk management process. New Era Growth Fund [A, B, C, D, E, F, G, H, I] Jennison Associates has more than 30 years of experience managing growth stock portfolios. It looks for companies with solid, visible earnings growth, steady cash flow, and strong balance sheets. CALAMOS INVESTMENTS is a leading money manager that has specialized in security research and money management since It uses proprietary models and processes, focusing on long-term earnings sustainability and return on capital. Relative Value Fund (formerly ASAF Neuberger Berman Mid-Cap Value Fund) [A, B, C, D, E, I] Neuberger Berman has been in the investment business for over 60 years and has worked with one goal: to build and protect the wealth of its clients. Today, as a Lehman Brothers company, Neuberger Berman continues to attract and retain top industry professionals whom it groups into investment teams. Each team pursues its own investment philosophy and style, honed over the years through both bull and bear markets. S MALL C APITALIZATION S TOCK F UNDS Managed Small Cap Growth Fund (formerly ASAF DeAM Small-Cap Growth Fund) [A, B, C, D, E] Deutsche Asset Management was founded in 1870 and is one of the world s largest investment management firms. It provides a wide range of asset management services to corporations, financial institutions, not-for-profit organizations, and public and private pension funds. Deutsche leverages the expertise of more than 400 portfolio managers and analysts in over 60 countries. Small Cap Growth Fund [A, C, H, I] Westcap Investors, located in Los Angeles, is a registered investment adviser that was founded in It employs strong fundamental analysis, style purity, and a risk-aware process. Westcap uses both a topdown and bottom-up approach to investing. RS Investments is a San Francisco-based investment management firm focused on equity investments in small to midsize companies. RS is an independent, privately held money management firm. SEE BACK PAGE FOR RISK FACTORS. 7

10 S MALL C APITALIZATION S TOCK F UNDS ( CONTD) Small Cap Growth Opportunity Fund (formerly ASAF PBHG Small-Cap Growth Fund) [A, B, C, D, I] State Street Research & Management Company, with a history dating back to 1924, is one of the nation s first investment management organizations. The Boston-based firm is a subsidiary of MetLife, one of the world s largest financial services companies. The firm actively manages stock, bond, and balanced portfolios for both institutional and individual investors. Small Cap Value Fund [A, C] NFJ Investment Group, based in Dallas, Texas, was founded in 1989 and is a wholly owned subsidiary of Allianz Dresdner Asset Manager of America L.P. The firm adheres to a disciplined, value-oriented philosophy and investment process implemented by an experienced management team. EARNEST Partners, LLC and its predecessor firms began managing equities in It uses a proprietary process to find stocks with strong relative values and sells those with diminishing relative values. Small Company Fund (formerly ASAF Gabelli Small-Cap Value Fund) [A, B, C, D, E] Established in 1976, Gabelli Asset Management Company was founded to focus on value investing. The firm s approach to investing is research-driven, and its valuation methodology relies on three key elements: free cash flow, earnings per share trends, and private market value or the value that it believes informed investors would willingly pay for a company. S ECTOR S TOCK F UNDS Health Sciences Fund (formerly ASAF INVESCO Health Sciences Fund) [A, B, D] INVESCO has been in the investment management business for more than 70 years. In 1997 INVESCO and AIM Management Group merged to form AMVESCAP, a premier global investment organization. INVESCO uses a bottom-up approach to security selection. Real Estate Securities Fund [A, B, G] Founded in 1928, Wellington Management is one of the largest independent investment management companies in the world. Wellington has a long history of specializing in sector fund management and real estate investment trusts. Technology Fund (formerly ASAF INVESCO Technology Fund) [A, D, E] The Dreyfus Corporation, established in 1951, became a wholly owned subsidiary of Mellon Financial Corp. after its merger in Their analysts use a combination of non-proprietary research and company visits to reach their conclusion on various stocks. [A] Common Stocks. [B] Foreign Securities. [C] Small-/Mid-Cap Stocks. [D] Derivative Strategies. [E] Bonds and Fixed Income Securities. [F] High Yield Securities ( junk bonds). [G] Nondiversified Status. [H] High Portfolio Turnover. [I] Initial Public Offerings. 8 SEE BACK PAGE FOR RISK FACTORS.

11 G LOBAL/INTERNATIONAL S TOCK F UNDS International Growth Fund (formerly ASAF William Blair International Growth Fund) [A, B, D, E, I] William Blair & Company, a Chicago-based firm, was founded in 1935 and is known for its proprietary, indepth research. It has offices in Chicago, Hartford, San Francisco, London, Tokyo, Vaduz, and Zurich. The firm s investment philosophy defines quality growth companies as those that demonstrate consistent and high rates of growth, superior profitability, conservative finances, and ongoing management excellence. International Value Fund [A, B, D, E] Bank of Ireland Asset Management (U.S.) Limited (BIAM) is a subsidiary of the Bank of Ireland Group, which has offices worldwide. BIAM has over 30 years of global investing experience using an international value management and team approach. A BALANCE OF S TOCKS AND B ONDS Balanced Fund (formerly ASAF American Century Strategic Balanced Fund) [A, B, D, E] Established in 1962, American Century Investments is a full-service investment management firm that is a leader in both growth and value equity and balanced management styles. It has over 300 equity research analysts worldwide. Capital Income Fund (formerly ASAF INVESCO Capital Income Fund) [A, B, E] Founded in 1937 by Thomas Rowe Price, Jr., the Baltimore-based asset management firm is one of the nation's leading providers of mutual funds for individual investors and corporate retirement programs. Its investment approach strives to achieve solid performance and always tries to balance the risk against the potential rewards. TAXABLE B OND F UNDS Bond Fund (formerly ASAF PIMCO Total Return Bond Fund) [B, D, E, F, H] Pacific Investment Management Company (PIMCO), established in 1971, manages fixed income investments for clients that include many of the largest U. S. pension funds. PIMCO is known as the fixed income specialist that pioneered the total return approach to investing. The firm uses a conservative investment philosophy with a long-term orientation. High Yield Bond Fund (formerly ASAF Federated High Yield Bond Fund) [A, B, D, E, F] Goldman Sachs Asset Management, a business unit of the Investment Management Division of Goldman, Sachs & Co., seeks to deliver strong, consistent investment results built on its global resources and relationships, thoughtful analysis and research, as well as effective risk management. Total Return Bond Fund [B, D, E, F, H] Pacific Investment Management Company (PIMCO), established in 1971, manages fixed income investments for clients that include many of the largest U. S. pension funds. PIMCO is known as the fixed income specialist that pioneered the total return approach to investing. The firm uses a conservative investment philosophy with a long-term orientation. SEE BACK PAGE FOR RISK FACTORS. 9

12 STRATEGIC PARTNERS RISK/REWARD SPECTRUM By offering investments across a wide range of asset classes, mutual funds are able to offer suitable choices to meet your investment needs. 2 Funds are listed alphabetically within broad risk categories. The funds positions in the spectrum were determined as of January 31, 2004, based on a number of factors, including historic volatility measurements, asset class, and investment style. The spectrum is not indicative of the future volatility or performance of a fund. Relative positions of a fund within the spectrum may change. STRATEGIC PARTNERS FUNDS Bond Fund Total Return Bond Fund Balanced Fund International Value Fund Large Capitalization Value Fund Real Estate Securities Fund LOWER RISK/REWARD Core Value Fund Equity Fund Managed Index 500 Fund 10 SEE BACK PAGE FOR RISK FACTORS.

13 STRATEGIC PARTNERS ASSET ALLOCATION FUNDS High Growth Fund Conservative Growth Fund Moderate Growth Fund LOWER RISK/REWARD HIGHER RISK/REWARD Capital Growth Fund Capital Income Fund Equity Income Fund Focused Value Fund Growth with Income Fund Mid Cap Value Fund Relative Value Fund Small Capitalization Value Fund Large Capitalization Growth Fund Managed Small Cap Growth Fund Mid Cap Growth Fund New Era Growth Fund Small Cap Growth Opportunity Fund Small Capitalization Growth Fund Small Company Fund Concentrated Growth Fund Focused Growth Fund Health Sciences Fund High Yield Bond Fund International Growth Fund Managed OTC Fund Technology Fund HIGHER RISK/REWARD 2 MoneyMart Assets, Inc. is the money market fund that is available for both exchanges and direct purchases. SEE BACK PAGE FOR RISK FACTORS. 11

14 S TRATEGIC PARTNERS M UTUAL F UND S TYLE B OX DOMESTIC EQUITY FUNDS VALUE BLEND GROWTH LARGE CAP FUNDS Capital Income Fund Core Value Fund Equity Income Fund Focused Value Fund Large Cap Value Fund Equity Fund Growth with Income Fund Managed Index 500 Fund Capital Growth Fund Concentrated Growth Fund Focused Growth Fund Large Cap Growth Fund Managed OTC Fund MID/ MULTI CAP FUNDS Mid Cap Value Fund Relative Value Fund High Growth Fund Mid Cap Growth Fund New Era Growth Fund SMALL CAP FUNDS Small Cap Value Fund Small Company Fund Managed Small Cap Growth Fund Small Cap Growth Fund Small Cap Growth Opportunity Fund INTERNATIONAL EQUITY FUNDS VALUE BLEND GROWTH LARGE CAP FUNDS International Value Fund International Growth Fund SECTOR FUNDS A BALANCE OF STOCK AND BOND FUNDS FIXED INCOME FUNDS Health Sciences Fund Real Estate Securities Fund Technology Fund Balanced Fund Conservative Growth Fund Moderate Growth Fund Bond Fund High Yield Bond Fund Total Return Bond Fund 12

15 R ISK FACTORS TO C ONSIDER FOR I NVESTMENTS IN S TRATEGIC PARTNERS M UTUAL F UNDS [A] [B] [C] [D] [E] [F] [G] [H] [I] Common Stocks. Common stocks can lose value. Stock markets and individual stocks are subject to price fluctuation, which may be volatile. Foreign Securities. Foreign markets, economies, or political systems may not be as stable as those of the United States. These securities are also subject to currency fluctuation, which can affect the performance and value of the portfolio. Small-/Mid-Cap Stocks. Stocks of small or midsize companies tend to be more volatile, and may decline more than those of larger companies. Derivative Strategies. Uses derivative strategies, such as futures, options, and foreign currency forward contracts, to try to improve returns or protect its assets. These strategies may not have the intended effect, and may magnify losses or result in missed opportunities. Bonds and Fixed Income Securities. Subject to market risk, credit risk, interest-rate risk, and/or prepayment risk. These risks can result in losses to the portfolio. High Yield Securities ( junk bonds). Subject to higher risks associated with lower-rated, higher-yielding debt securities, including a greater risk of default and potential liquidation. Nondiversified Status. May be more prone to market shifts than a more broadly diversified portfolio because of its exposure to a smaller number of companies. High Portfolio Turnover. Results in higher brokerage commissions and other transaction costs, which may negatively affect the portfolio s performance. Initial Public Offerings. May participate in initial public offerings (IPOs) to seek to increase the portfolio s performance. As the portfolio s assets grow, the impact of IPO investments on returns will likely decline.

16 For more information about mutual funds, call your financial professional for a free prospectus or visit You should consider the funds investment objectives, risks, and sales charges and expenses carefully before investing. The prospectus will contain this and other information about the investment company. Please read the prospectus carefully before investing. Shares of mutual funds are distributed by Prudential Investment Management Services LLC (PIMS). PIMS is a Prudential Financial company and member SIPC. 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 MFSP602 Ed. 09/01/2004