AST BlackRock Value Portfolio - Prudential Annuities

This investment strategy looks for common stocks issued by companies that are expected to provide income and have the
potential for capital appreciation. First Trust follows a disciplined investment strategy that invests primarily in the 20 common
stocks from the Dow Jones U.S. Select Dividend Index SM with the best overall ranking on both the change in return on assets over
the last 12 months and price to book ratio. Specifically, this investment strategy consists of the following steps:
Step 1: Rank all 100 stocks contained in the Dow Jones U.S. Select Dividend Index SM on or about the applicable security
selection date (best [1] to worst [100]) by:
— Change in return on assets over the last 12 months. An increase in return on assets generally indicates improving business
fundamentals and would receive a higher ranking than a stock with a negative change in return on assets.
— Price to book. A lower, but positive, price to book ratio is generally used as an indication of value.
Step 2: Select an approximately equally-weighted portfolio of the 20 stocks with the best overall ranking on the two factors.
NASDAQ ® TARGET 15 (AST FIRST TRUST CAPITAL APPRECIATION TARGET PORTFOLIO ONLY).
This investment strategy looks for common stocks issued by companies that are expected to have the potential for capital
appreciation. To select the stocks for this investment strategy, First Trust follows a disciplined investment strategy that invests
primarily in the common stocks of 15 companies selected from a subset of the stocks included in the NASDAQ-100 Index as of
the close of business on or about the applicable security selection date.
Step 1: Begin with the stocks that comprise the NASDAQ-100 Index. Rank each stock on the following factors:
— 12 month price appreciation
— 6 month price appreciation
— Return on assets
— Price to cash flow
Step 2: Select a market-cap weighted Portfolio of the 15 stocks with the best overall ranking on the four factors.
Securities selected by this strategy will be weighted by market capitalization subject to the restriction that no stock will comprise
less than 1% or more than 7.5% of the portfolio on or about the security selection date.
Multi-Cap 80. First Trust selects stocks for the Multi-Cap 80 investment strategy as follows:
Step 1: Establish the universe of stocks from which the securities for this investment sleeve will be selected. The universe is
established by identifying the 3000 largest U.S. stocks and then separating them into large-cap (largest 10%), mid-cap (next
20%), and small-cap (remaining 70%) groups.
Step 2: The stocks in each of these three groups are then divided evenly into growth and value by their price-to-book ratios to
establish six separate asset classes for the selection of securities for this investment sleeve. With respect to the two small-cap
classes, only the 250 largest stocks from each small-cap style with a minimum average daily trading volume of $5,000,000
are included.
Step 3: The stocks of the six asset classes are then ranked using a multi-factor model with half of each stock’s ranking based
on a risk model (using the factors listed below) and the remaining half of each stock’s ranking based on a value model (using
the factors listed below) for the three value classes and a growth model (using the factors listed below) for the three growth
classes.
Models:
Risk: debt to equity, beta, and earnings variability
Value: price to book, price to cash flow, return on assets, and 3-month price appreciation
Growth: price to sales, price to cash flow, change in return on assets, and 6-month price appreciation
Step 4: The best scoring stocks are then selected for this investment sleeve as follows:
Large-Cap: 10 growth stocks & 10 value stocks
Mid-Cap: 10 growth stocks & 10 value stocks
Small-Cap: 20 growth stocks & 20 value stocks
The large-cap growth, large-cap value, mid-cap growth, and mid-cap value groups are each subject to a maximum of two stocks
from any one of the ten major market sectors, as determined by S&P’s Global Industry Classification Standard (“GICS”), while the
small-cap growth and small-cap value groups are subject to a maximum of four stocks from any one of the ten major market
sectors (GICS). All stocks must meet a minimum average daily trading volume of $5,000,000 to be included in this
investment sleeve.
Step 5: The six style classes are approximately equally weighted as shown below. Stocks are approximately equally weighted
within each style.
Large-Cap Growth: 16.67%
Large-Cap Value: 16.67%
Mid-Cap Growth: 16.67%
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