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AST BlackRock Value Portfolio - Prudential Annuities

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the <strong>Portfolio</strong> and other <strong>Portfolio</strong>s (or, for one guaranteed minimum withdrawal benefit program, the insurer’s general account) as<br />

required by certain non-discretionary mathematical formulas. Such pre-determined mathematical formulas may, however, result in<br />

large-scale asset flows into and out of the <strong>Portfolio</strong> and subject the <strong>Portfolio</strong> to certain risks. Such pre-determined mathematical<br />

formulas could adversely affect the <strong>Portfolio</strong>’s investment performance by requiring the subadviser to purchase and sell securities<br />

at inopportune times and by otherwise limiting the subadviser’s ability to fully implement the <strong>Portfolio</strong>’s investment strategies. In<br />

addition, these pre-determined mathematical formulas may result in relatively small asset bases and relatively high operating<br />

expense ratios for the <strong>Portfolio</strong>s compared to other similar funds.<br />

Expense risk. Your actual cost of investing in the <strong>Portfolio</strong> may be higher than the expenses shown above under “Annual <strong>Portfolio</strong><br />

Operating Expenses” for a variety of reasons, including, for example, if the <strong>Portfolio</strong>’s average net assets decrease significantly.<br />

Past Performance. A number of factors, including risk, can affect how the <strong>Portfolio</strong> performs. The bar chart and table provide some<br />

indication of the risks of investing in the <strong>Portfolio</strong> by showing changes in the <strong>Portfolio</strong>’s performance from year to year and by<br />

showing how the <strong>Portfolio</strong>’s average annual returns for 1, 5, and 10 years compare with those of a broad measure of market<br />

performance. Past performance does not mean that the <strong>Portfolio</strong> will achieve similar results in the future.<br />

The annual returns and average annual returns shown in the chart and table are after deduction of expenses and do not include<br />

Contract charges. If Contract charges were included, the returns shown would have been lower than those shown. Consult your<br />

Contract prospectus for information about Contract charges.<br />

Annual Total Returns<br />

30%<br />

20%<br />

16.53<br />

10%<br />

0%<br />

-10%<br />

9.22<br />

5.32 4.96<br />

8.31<br />

7.72<br />

2.50 3.74 3.18<br />

-2.26<br />

-20%<br />

-30%<br />

2002<br />

2003<br />

2004<br />

2005<br />

2006<br />

2007<br />

2008<br />

2009<br />

2010<br />

2011<br />

Best Quarter:<br />

Worst Quarter:<br />

8.30% 2 nd Quarter of 2009 -3.58% 3 rd Quarter of 2008<br />

Average Annual Total Returns (For the periods ended December 31, 2011)<br />

1 year 5 years 10 years<br />

<strong>Portfolio</strong> 3.18% 6.51% 5.82%<br />

Index<br />

Barclays Capital U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) 7.84% 6.50% 5.78%<br />

MANAGEMENT OF THE PORTFOLIO<br />

Investment Managers Subadviser <strong>Portfolio</strong> Manager Title Service Date<br />

<strong>Prudential</strong> Investments LLC<br />

Pacific Investment Management Company<br />

LLC<br />

William H. Gross, CFA Managing Director,<br />

<strong>Portfolio</strong> Manager, and<br />

Chief Investment<br />

Officer<br />

December 1993<br />

<strong>AST</strong> Investment Services, Inc.<br />

TAX INFORMATION<br />

Contract owners should consult their Contract prospectus for information on the federal tax consequences to them. In addition,<br />

Contract owners may wish to consult with their own tax advisors as to the tax consequences of investments in the Contracts and<br />

the <strong>Portfolio</strong>, including the application of state and local taxes. The <strong>Portfolio</strong> currently intends to be treated as a partnership for<br />

federal income tax purposes. As a result, the <strong>Portfolio</strong>’s income, gains, losses, deductions, and credits are “passed through” pro<br />

rata directly to the participating insurance companies and retain the same character for federal income tax purposes.<br />

184

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