AST BlackRock Value Portfolio - Prudential Annuities

(ii) the Portfolio sells the index put option prior to its expiration at a price that is higher than its cost. The Portfolio purchases index
put options to protect the Portfolio from a significant market decline over a short period of time. However, because the Portfolio
generally purchases index put options that are significantly “out-of-the-money”, the Portfolio will not be fully covered against all
market declines. An index put option is “out-of-the-money” when its exercise price is less than the cash value of the underlying
index. In addition, the Portfolio may not own index put options on the full value of its common stock holdings. As a result, the
Portfolio may be subject to a greater risk of loss with respect to its common stock holdings in the event of a significant market
decline over a short period of time.
Through use of its integrated strategy of selling index call and put options and purchasing index put options (supported by an
underlying equity portfolio), Wellington Management seeks to provide higher risk adjusted returns over a market cycle than simply
owning the underlying equity market index. No assurance can be given that this strategy will be successful or that it will achieve
its intended results. In down markets, Wellington Management expects the put protection would help to mitigate downside risk. In
steady markets, Wellington Management will seek to overcome any associated performance drag from the options premium
through underlying manager performance. In up markets, although Wellington Management will also seek to overcome any
associated performance drag from the options premium through underlying manager performance, there may be situations where
the call options create a drag on performance versus the underlying equity market index (strong rising markets).
Overview of Equity Investment Strategies. As set forth above, the Portfolio combines a select spectrum of Wellington
Management’s equity investment strategies. These strategies have a distinct focus on downside risk management. Individual
portfolio managers for the various equity strategies may employ a variety of processes with a goal of limiting downside risk,
including, but not limited to, use of scenario or probability analysis, a focus on high quality companies, sell discipline, or
opportunistic use of cash. The portfolio management team at the overall Portfolio level is tasked with identifying and combining
these individual equity strategies into a diversified fund. Underlying equity strategies are combined based on a variety of factors,
leveraging the experience of the portfolio management team at the overall Portfolio level in risk management and portfolio
construction. These portfolio construction techniques incorporate a qualitative understanding of each underlying portfolio
manager and their process along with quantitative techniques such as alpha correlation, style analysis, risk profile analysis and
scenario/market environment analysis. Wellington Management structures the overall Portfolio in an attempt to minimize all
systematic biases other than capital protection orientation and seeks to obtain the overall Portfolio’s investment objective by
combining these different equity strategies into a single Portfolio. Each investment approach is focused on total return or growth of
capital and is managed according to a distinct investment process to identify securities for purchase or sale. Wellington
Management expects that the strategies in the aggregate will represent an opportunistic, flexible and diversified fund profile
representing a wide range of investment philosophies, companies, industries and market capitalizations. While the individual
portfolio managers for the various equity investment strategies are given full discretion to manage their portion of the Wellington
Management Portfolio, the overall portfolio management team is responsible for the addition or removal of investment strategies
as well as allocating Portfolio assets among the component investment strategies.
Temporary Defensive Investments. In response to adverse market, economic, or political conditions, the Portfolio may take a
temporary defensive position and invest up to 100% of its assets in money market instruments, including short-term obligations of,
or securities guaranteed by, the U.S. Government, its agencies or instrumentalities or in high-quality obligations of banks and
corporations, repurchase agreements, or hold up to 100% of its assets in cash, cash equivalents or shares of affiliated money
market or short-term bond funds. Investing heavily in these securities limits Wellington Management’s ability to achieve the
Portfolio’s investment objectives, but can help to preserve the Portfolio’s assets. The use of temporary defensive investments is
inconsistent with the Portfolio’s investment objective.
AST WESTERN ASSET CORE PLUS BOND PORTFOLIO
Investment Objective: to maximize total return, consistent with prudent investment management and liquidity needs, by
investing to obtain the average duration specified for the AST Western Asset Core Plus Bond Portfolio.
Principal Investment Policies:
The Portfolio has a non-fundamental policy to invest, under normal circumstances, at least 80% of the value of its assets in debt
and fixed-income securities.
For purposes of these limitations only, net assets include the amount of any borrowing for investment purposes. For purposes of
the non-fundamental investment restriction set forth above, the Portfolio considers an instrument, including a synthetic instrument,
to be a debt or fixed-income security if, in the judgment of the Subadvisers, it has economic characteristics similar to a debt or
fixed-income security. For example, a Portfolio considers an instrument, including a synthetic instrument, to be a fixed-income
security if, in the judgment of the Subadvisers, it has economic characteristics similar to debt or fixed-income securities. Such
360