Bonds rated BBB or above are considered investment grade. Credit ratings BB and below are lower-rated securities junk bonds. High-yielding, non investment grade bonds junk bonds involve higher risks than investment grade bonds. Adverse conditions may affect the issuer's ability to pay interest and principal on these securities. A portion of the portfolio's securities may not be rated. Ratings may be subject to change. To contact your representative, enter your zip code and select your channel below. Performance is shown for each quarter and each calendar year.
Past performance is no guarantee of future results. To view definitions for the above Portfolio Details, Click here. Average Loan Size - Represents the weighted average of the overall asset size of the original loan issued. Aggregate holdings are updated monthly, 30 days after month end. Aggregate holdings are presented to illustrate examples of the securities that the Fund has bought and the diversity of the areas in which the Fund may invest, and may not be representative of the Fund's current or future investments.
The figures presented are as of the date shown and may change at any time. Lord Abbett does not provide tax advice. It is strongly recommended that you discuss the impact of dividends and distributions with your tax advisor. Please inform the fund company or your financial intermediary at the time of your purchase of fund shares if you believe you qualify for a reduced front-end sales charge.
To receive a reduced front-end sales charge, you must let the fund or your financial intermediary know at the time of your purchase of fund shares that you believe you qualify for a discount. If you or a related party have holdings of eligible funds as defined below in other accounts with your financial intermediary or with other financial intermediaries that may be combined with your current purchases in determining the sales charge as described below, you must inform a fund or your financial intermediary.
You may be asked to provide supporting account statements or other information to allow us or your financial intermediary to verify your eligibility for a discount. If you or your financial intermediary do not notify a fund or provide the requested information, you may not receive the reduced sales charge for which you otherwise qualify. Class A shares may be purchased at a discount if you qualify under either of the following conditions: Class I, R2, and R3 share holdings may not be combined for these purposes. To the extent that your financial intermediary is able to do so, the value of Class A, B, C, F, and P shares of eligible funds determined for the purpose of reducing the sales charge of a new purchase under the Rights of Accumulation will be calculated at the higher of: You should retain any information and account records necessary to substantiate the historical amounts you and any related purchasers have invested in eligible funds.
If you do not do so, you may not receive all sales charge reductions for which you are eligible. An individual may include under item 1 his or her holdings in eligible funds as described above in IRAs, as a sole participant of a retirement and benefit plan sponsored by the individual's business, and as a participant in a b plan to which only pretax salary deferrals are made. An individual and his or her spouse may include under item 2 their holdings in IRAs, and as the sole participants in retirement and benefit plans sponsored by a business owned by either or both of them.
A retirement and benefit plan under item 3 includes all qualified retirement and benefit plans of a single employer and its consolidated subsidiaries, and all qualified retirement and benefit plans of multiple employers registered in the name of a single bank trustee. Front-end Sales Charge Waivers Class A shares may be purchased without a front-end sales charge under any of the following conditions: To order literature visit full website.
You may add to your cart by selecting quantities in each row below. The Morningstar Bank Loan portfolios primarily invest in floating-rate loans instead of bonds. In exchange for their credit risk, these loans offer high interest payments that typically float above a common short-term benchmark such as the London Interbank Offered Rate or LIBOR. Minimum initial investment varies depending on the class of shares you buy and the type of account. Please see Fund prospectuses for additional information. Dividend Yield is a financial ratio that shows how much a mutual fund pays out in dividends each year relative to value with maximum sales charges and without sales charges.
The Day Standardized Yield represents net investment income earned by a fund over a day period. It is expressed as an annual percentage rate using a method of calculation adopted by the Securities and Exchange Commission SEC. A Note about Risk: The Fund is subject to the general risks associated with investing in debt securities, including market, credit, liquidity, and interest rate risk. The value of investments in debt securities will fluctuate in response to market movements. When interest rates rise, the prices of debt securities are likely to decline, and when interest rates fall, the prices of debt securities tend to rise.
The Fund may invest substantially in high yield, lower-rated securities. These securities carry increased risks of price volatility, illiquidity, and the possibility of default in the timely payment of interest and principal. Moreover, the specific collateral used to secure a loan may decline in value or become illiquid, which would adversely affect the loan's value. The Fund may invest in foreign or emerging market securities, which may be adversely affected by economic, political, or regulatory factors and subject to currency volatility and greater liquidity risk.
The Fund may invest in derivatives, which are subject to greater liquidity, leverage, and counterparty risk. Certain of the Fund's derivative transactions may give rise to leverage risk. Leverage, including borrowing for investment purposes, may increase volatility in the Fund by magnifying the effect of changes in the value of the Fund's holdings.
The use of leverage may cause investors in the Fund to lose more money in adverse environments than would have been the case in the absence of leverage. These factors may affect Fund performance. Performance data quoted is historical. Past performance is not indicative of future results.
Current performance may be higher or lower than the performance quoted. The investment return and principal value of an investment in the Fund will fluctuate so that shares, on any given day or when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent quarter-end, go to quarter ending performance on our Website or call Lord Abbett at There are also ongoing 12b-1 service fees and, in certain cases, distribution fees.
The CDSC is not reflected in the performance with maximum sales charge. With Sales Charge - Returns with sales charges reflect applicable fees and expenses and include all distributions reinvested. Without Sales Charge - Returns shown are without sales charges and have all distributions reinvested. If a sales charge had been deducted, the results would have been lower.
Returns shown at less than a year reflect aggregate total returns. Double-Digit Returns - instances of high double-digit returns were achieved primarily during favorable market conditions and may not be sustainable over time. The CS Leveraged Loan Index, which includes reinvested dividends, has been taken from published sources. Indexes reflect total return , unless otherwise specified, with all dividends reinvested. Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.
The Overall Morningstar RatingTM is derived from a weighted average of the performance figures associated with a fund's three-, five-, and year as applicable Morningstar RatingTM metrics. All rights reserved. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Morningstar proprietary ratings reflect historical risk-adjusted performance.
For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar risk-adjusted return measure that accounts for variation in a fund's monthly performance including the effects of sales charges, loads and redemption fees , placing more emphasis on downward variations and rewarding consistent performance. Load-waived ratings do not include any front-end sales charges which are only available for certain defined contribution plans and certain mutual fund advisory programs and should only be considered by investors who are not subject to sales loads.
Not all funds with a load-waived rating may waive their front-end load. An investor should check with their advisor to determine if they are eligible to purchase the load-waived Class A share. Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.
The Overall Morningstar rating is a weighted average of funds' three-, five-, and year as applicable ratings. Morningstar Rating is for the Class A share only; other classes may have different performance characteristics. Lipper Category Average - Peer group averages are based on universes of funds with the same investment objectives. The average return for the peer group is based on the returns of each individual fund within the group for the period shown. This average assumes reinvestment of dividends. Fund Expense Ratio Detail: Reflects expenses for the Fund's fiscal year-end and is subject to change.
Fund expenses may fluctuate with market volatility. A substantial reduction in Fund assets since its most recently completed fiscal year , whether caused by market conditions or significant redemptions or both, will likely cause total operating expenses as a percentage of Fund assets to become higher than those shown. The portfolio data is for information only. It does not constitute a recommendation or an offer for a particular security or fund, nor should it be taken as a solicitation or recommendation to buy or sell securities or other investments. Dividends and Capital Gains: The information presented in this section is intended for general information and is not intended to be relied upon and should not be relied upon, as financial, legal or tax advice for any particular investor.
We strongly recommend that you contact your financial, legal or tax advisor regarding your particular tax situation. The information presented in this section is not written or intended to be used, and cannot be used, for the purpose of avoiding any tax liabilities or penalties. Please review the address information below and make any necessary changes. All literature orders will be shipped to the address that you enter below. This information can be edited at any time.
You have 0 funds on your mutual fund watch list. Begin by selecting funds to create a personalized watch list. View All Tracked Funds. Quick Links. Follow Us. Pending Orders. You have 0 items in your cart. Check Out Go Literature Center. LOG IN. Financial Professional. COM back. Financial Professionals. Privately issued mortgage-related securities are issued by private corporations rather than government agencies or government sponsored enterprises. Privately issued mortgage-related securities are not guaranteed by U. Mortgage-related securities are usually pass-through instruments that pay investors a share of all interest and principal payments from an underlying pool of fixed or adjustable rate mortgages.
Mortgage pass-through securities include collateralized mortgage obligations, real estate mortgage investment conduits, multi-class pass-through securities, stripped mortgage-backed securities and balloon payment mortgage-backed securities. A collateralized mortgage obligation CMO is a security backed by an underlying portfolio of mortgages or mortgage-backed securities that may be issued or guaranteed by a bank or by U. CMOs rely on assumptions about the timing of cash flows on the underlying mortgages, including expected prepayment rates.
Government agency or private issuer and secured by real property. REMICs consist of classes of regular interest, some of which may be adjustable rate, and a single class of residual interests. The Portfolio does not intend to invest in residual interests. A multi-class pass-through security is an equity interest in a trust composed of underlying mortgage assets. Payments of principal of and interest on the mortgage assets and any reinvestment income thereon provide funds to pay debt service on the CMO or to make scheduled distributions on the multi-class pass-through security.
A stripped mortgage-backed security MBS strip may be issued by U. MBS strips take the pieces of a debt security principal and interest and break them apart. The resulting securities may be sold separately and may perform differently. The Portfolio may also invest in balloon payment mortgage-backed securities, which are amortizing mortgage securities offering payments of principal and interest, the last payment of which is predominantly principal.
Mortgage-related securities, asset-backed securities, and CMOs are subject to credit risk, interest rate risk, liquidity risk, valuation risk, prepayment risk, and extension risk. The risks associated with investments in mortgage-related securities, particularly credit risk and liquidity risk, are heightened for investments in sub-prime mortgage-related securities.
Although the Portfolio does not currently intend to invest in sub-prime mortgage-related securities, the Portfolio may invest a portion of its assets in such securities in the future depending upon then-current market, financial, and economic conditions. Government Securities. Government securities include debt obligations issued by the U. Treasury the Treasury. Treasury securities are all backed by the full faith and credit of the U.
Government, which means that payment of interest and principal is guaranteed, but yield and market value are not. The Portfolio may also acquire U. Government securities in the form of custodial receipts that show ownership of future interest payments, principal payments or both on certain Treasury notes or bonds. Such notes or bonds are held in custody by a bank on behalf of the owners.
These custodial receipts are commonly referred to as Treasury strips. Government securities also include debt obligations issued by federal government agencies and government sponsored enterprises, which may include mortgage-backed securities. Securities issued by government sponsored enterprises are not backed by the full faith and credit of the U. Government and for more information about this risk, as well as other risks associated with U. Government and Government-Related Entities. Obligations of the Federal National Mortgage.
The yield and market value of these securities are not guaranteed by the U. Most mortgage-backed securities are issued by federal government agencies such as Ginnie Mae, or by government sponsored enterprises such as Freddie Mac or Fannie Mae. Principal and interest payments on mortgage-backed securities issued by the federal government and some Federal government agencies, such as Ginnie Mae, are guaranteed by the Federal government and backed by the full faith and credit of the United States.
Mortgage-backed securities issued by other government agencies or government sponsored enterprises, such as Freddie Mac or Fannie Mae, are backed only by the credit of the government agency or enterprise and are not backed by the full faith and credit of the United States. Fannie Mae and Freddie Mac are authorized to borrow from the U. Treasury to meet their obligations. Although the U. Yankee Obligations. Certain asset-backed securities may also be subject to the risk of prepayment. In a period of declining interest rates, borrowers may pay what they owe on the underlying assets more quickly than anticipated, which may require the Portfolio to reinvest the repayment proceeds in securities that pay lower interest rates.
Asset-backed securities may also be subject to extension risk, which is the risk that, in a period of rising interest rates, prepayments may occur at a slower rate than expected, which may prevent the Portfolio from reinvesting repayment proceeds in securities that pay higher interest rates.
The more the Portfolio invests in longer-term securities, the more likely it will be affected by changes in interest rates. Asset Transfer Programs Risks. The transfers are based on mathematical formulas which generally focus on the amounts guaranteed at specific future dates or the present value of the estimated lifetime payments to be made.
As an example of how these asset transfer programs will operate under certain market environments, a downturn in the equity markets i. In general terms, such transfers are designed to ensure that an appropriate percentage of the projected guaranteed amounts are offset by assets in investments like the Portfolio. Any amount invested in the Portfolio will, however, affect your ability to participate in a subsequent market recovery within the permitted sub-accounts.
Such asset transfers may, however, result in large-scale asset flows into and out of the Portfolio. These asset transfers may result in a higher turnover rate for the Portfolio compared to similar mutual funds. In addition, these asset transfers may result in relatively small asset bases and relatively high operating expense ratios for the Portfolio compared to other similar funds. A derivative is a financial contract, the value of which depends upon, or is derived from, the value of an underlying asset, reference rate, or index, and may relate to stocks, bonds, interest rates, currencies, or currency exchange rates, and related indexes.
Derivatives in which the Portfolio may invest include exchange-traded instruments as well as privately negotiated instruments, also called over-the-counter instruments. Examples of derivatives include options, futures, forward agreements, interest rate swap agreements, credit default swap agreements, and credit-linked securities. The Portfolio may, but is not required to, use derivatives to earn income or enhance returns, manage or adjust its risk profile, replace more traditional direct investments, or obtain exposure to certain markets.
The use of derivatives to seek to earn income or enhance returns may be considered speculative. Counterparty Credit Rrisk. There is a risk that the counterparty the party on the other side of the transaction on a derivative transaction will be unable to honor its financial obligation to the Portfolio.
This risk is especially important in the context of privately negotiated instruments. For example, the Portfolio would be exposed to counterparty credit risk to the extent it enters into a credit default swap, that is, it purchases protection against a default by a debt issuer, and the swap counterparty does not maintain adequate reserves to cover such a default.
Leverage Risk. Certain derivatives and related trading strategies create debt obligations similar to borrowings, and therefore create, leverage. Leverage can result in losses to the Portfolio that exceed the amount the Portfolio originally invested. To mitigate leverage risk, the Portfolio will segregate liquid assets or otherwise cover the transactions that may give rise to such risk. The use of leverage may cause the Portfolio to liquidate Portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation or coverage requirements.
Liquidity and Valuation Risk. Certain exchange-traded derivatives may be difficult or impossible to buy or sell at the time that the seller would like, or at the price that the seller believes the derivative is currently worth. Privately negotiated derivatives may be difficult to terminate, and from time to time, the Portfolio may find it difficult to enter into a transaction that would offset the losses incurred by another derivative that it holds.
Derivatives, and especially privately negotiated derivatives, also involve the risk of incorrect valuation that is, the value assigned to the derivative may not always reflect its risks or potential rewards. Hedging Risk. Hedging is a strategy in which the Portfolio uses a derivative to offset the risks associated with its other holdings.
While hedging can reduce losses, it can also reduce or eliminate gains or cause losses if the market moves in a manner different from that anticipated by the Portfolio. Hedging also involves the risk that changes in the value of the derivative will not match the value of the holdings being hedged as expected by the Portfolio, in which case any losses on the holdings being hedged may not be reduced and in fact may be increased. No assurance can be given that any hedging strategy will reduce risk or that hedging transactions will be either available or cost effective.
The Portfolio is not required to use hedging and may choose not to do so. Commodity Risk. A commodity-linked derivative instrument is a financial instrument, the value of which is determined by the value of one or more commodities, such as precious metals and agricultural products, or an index of various commodities. The prices of these instruments historically have been affected by, among other things, overall market movements and changes in interest and exchange rates and may be volatile than the prices of investments in traditional equity and debt securities.
Investments in fixed income securities involve a variety of risks, including credit risk, liquidity risk and interest rate risk. Credit risk. Credit risk is the risk that an issuer or guarantor of a security will be unable to pay principal and interest when due, or that the value of the security will suffer because investors believe the issuer is less able to make required principal and interest payments.
Credit ratings are intended to provide a measure of credit risk.
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However, ratings are only the opinions of the agencies issuing them and are not guarantees as to quality. The lower the rating of a debt security held by the Portfolio, the greater the degree of credit risk that is perceived to exist by the rating agency with respect to that security. Some but not all U. Although credit risk may be lower for U. Liquidity risk. Liquidity risk is the risk that the Portfolio may not be able to sell some or all of the securities it holds, either at the price it values the security or at any price.
Liquidity risk also includes the risk that there may be delays in selling a security, if it can be sold at all. Interest rate risk. Interest rate risk is the risk that the rates of interest income generated by the fixed income investments of the Portfolio may decline due to a decrease in market interest rates and that the market prices of the fixed income investments of the Portfolio may decline due to an increase in market interest rates. Generally, the longer the maturity of a fixed income security, the greater is the decline in its value when rates increase. As a result, funds with longer durations and longer weighted average maturities generally have more volatile share prices than funds with shorter durations and shorter weighted.
The prices of fixed income securities generally move in the opposite direction to that of market interest rates. Certain securities acquired by the Portfolio may pay interest at a variable rate or the principal amount of the security periodically adjusts according to the rate of inflation or other measure. In either case, the interest rate at issuance is generally lower than the fixed interest rate of bonds of similar seniority from the same issuer; however, variable interest rate securities generally are subject to a lower risk that their value will decrease during periods of increasing interest rates and increasing inflation.
Market Risk and Management Risk. Market risk is the risk that the markets in which the Portfolio invests will experience market volatility and go down in value, including the possibility that a market will go down sharply and unpredictably. All markets go through cycles, and market risk involves being on the wrong side of a cycle.
Factors affecting market risk include political events, broad economic and social changes, and the mood of the investing public. If investor sentiment turns gloomy, the price of all securities may decline. All decisions by an adviser require judgment and are based on imperfect information. Mortgage-Backed Securities Risks. Currently, Freddie Mac and Fannie Mae are in government conservatorship. Private issuer mortgage-backed securities may include loans on commercial or residential properties. PIM generally does not consider the length of time the Portfolio has held a particular security in making investment decisions.
The ongoing domestic and international financial and debt crises have caused significant declines in the value and liquidity of many securities. In response to these crises, the U. The Portfolio and its Investment Managers are continuing to analyze the effect of these rules changes on the Portfolio. The values of the securities of foreign corporations and governments are subject to economic and political developments in the countries and regions where the issuers operate or are.
These risks are heightened in all respects with respect to Yankee obligations issued by foreign corporations and governments located in developing countries. PIM will actively manage the Portfolio by applying investment techniques and risk analyses in making investment decisions. Selection risk is the risk that the securities, derivatives, and other instruments selected by PIM will underperform the market, the relevant indices or other funds with similar investment objectives and investment strategies, or that securities sold short will experience positive price performance.
In addition, the yield and market value of these securities are not guaranteed by the U. Government has provided financial support to Fannie Mae and Freddie Mac and authorized them to borrow from the Treasury to meet their obligations, no assurance can be given that it will support these or other government-sponsored enterprises in the future. To the extent the Portfolio sells a security at a price lower than the price it has been using to value the security, its net asset value will be adversely affected. In addition, if there is wide variation in the fair value estimates produced by the market participants with respect to investments held by the Portfolio, such variations may make it harder for the Portfolio to sell that investment i.
Bank Loans. The Portfolio may invest in bank loans. Bank loans include fixed and floating rate loans that are privately negotiated between a corporate borrower and one or more financial institutions, including, but not limited to, term loans, revolvers, delayed draw loans, synthetic letters of credit, and other instruments issued in the bank loan market.
The Portfolio may acquire interests in loans directly by way of assignment from the selling institution or indirectly by way of the purchase of a participation interest from the selling institution. Under a bank loan assignment, the Portfolio generally will succeed to all the rights and obligations of an assigning lending institution and becomes a lender under the loan agreement with the relevant borrower in connection with that loan.
Under a bank loan participation, the Portfolio generally will have a contractual relationship only with the lender, not with the relevant borrower. As a result, the Portfolio generally will have the right to receive payments of principal, interest, and any fees to which it is entitled only from the lender selling the participation and only upon receipt by the lender of the payments from the relevant borrower. Convertible Securities and Preferred Stock.
The Portfolio may invest in convertible securities, which include preferred stocks and debt securities of a corporation that may be converted into underlying shares of common stock either because they have warrants attached or otherwise permit the holder to buy common stock of the corporation at a set price. Convertible securities provide an income stream usually lower than non-convertible bonds and give investors opportunities to participate in the capital appreciation of the underlying common stock.
Convertible securities typically offer greater potential for appreciation than nonconvertible debt securities. The Portfolio will sell common stock received upon conversion. Dollar Rolls. The Portfolio may enter into dollar rolls in which the Portfolio sells securities to be delivered in the current month and repurchases substantially similar same type and coupon securities to be delivered on a specified future date by the same party. The Portfolio is paid the difference between the current sales price and the forward price for the future purchase as well as the interest earned on the cash proceeds of the initial sale.
Junk Bonds. If the rating of a debt obligation is downgraded after the Portfolio purchases it or if the debt obligation is no longer rated , the Portfolio will not be required to sell that security, but will take this fact into consideration in deciding whether the Portfolio should continue to hold the security. As set forth above, all references in this Prospectus to the ratings categories for determining what constitutes a non-investment grade bond are without regard to gradations within those categories.
Money Market Instruments. The Portfolio may invest in money market instruments, including commercial paper of a U. These obligations may be U. Money market instruments typically have a maturity of one year or less as measured from the date of purchase. The Portfolio also may invest in shares of affiliated money market funds or short-term bond funds. Repurchase Agreements. The Portfolio may use repurchase agreements, where a party agrees to sell a security to the Portfolio and then repurchases it at an agreed-upon price at a stated time.
This creates a fixed return for the Portfolio, and is, in effect, a loan by the Portfolio. Reverse Repurchase Agreements. The Portfolio may use reverse repurchase agreements, where the Portfolio sells a security with an obligation to repurchase it at an agreed-upon price and time. Reverse repurchase agreements that involve borrowing to take advantage of investment opportunities, a practice known as leverage, could magnify losses. In addition, interest costs and investment fees relating to leverage may exceed potential investment gains. Short Sales. The Portfolio may make short sales of a security.
This means that the Portfolio may sell a security that it does not own, which it may do, for example, when PIM thinks the value of the security will decline. The Portfolio must then replace the borrowed security by purchasing it at the market price at the time of replacement. Short sales involve costs and risk. The Portfolio must pay the lender any dividends or interest that accrues on the security it borrows, and the Portfolio will lose money if the price of the security increases between the time of the short sale and the date when the Portfolio replaces the borrowed security.
When selling short against the box, the Portfolio gives up the opportunity for capital appreciation of the security. When-Issued and Delayed-Delivery Securities. The Portfolio may purchase securities, including money market obligations or other obligations on a when-issued or delayed-delivery basis.
When the Portfolio makes this type of purchase, the price and interest rate are fixed at the time of purchase, but delivery and payment for the obligations take place at a later time. The Portfolio will not earn interest income until the date the obligations are delivered. The Portfolio may invest in zero coupon bonds, pay-in-kind PIK or deferred payment securities.
Zero coupon bonds do not pay interest during the life of the security. An investor purchases the security at a price that is less than the amount the investor will receive when the borrower repays the amount borrowed face value. PIK securities pay interest in the form of additional securities.
Deferred payment securities pay regular interest after a predetermined date. The Portfolio will record the amount these securities rise in price each year phantom income for accounting and federal income tax purposes, but does not receive income currently. Because the Portfolio generally distributes income to its shareholders each year, in certain circumstances, the Portfolio may have to dispose of its portfolio securities under disadvantageous conditions or borrow to generate enough cash to distribute phantom income and the value of the paid-in-kind interest.
Additional Strategies. The Portfolio is subject to certain other investment restrictions that are fundamental policies, which means they cannot be changed without shareholder approval. For more information about these restrictions, please see the SAI. Additional Risks of Investing in the Portfolio. Set forth below is a description of certain other non-principal risks associated with an investment in the Portfolio.
In addition, the market for lower-rated bonds may be thinner and less active than the market for higher-rated bonds, and the prices of lower-rated bonds may fluctuate more than the prices of higher-rated bonds, particularly in times of market stress. Short Sale Risk.
If the Portfolio sells a security short, it in effect borrows and then sells the security with the expectation that it will later repurchase the security at a lower price and then return the amount borrowed with interest. In contrast, when the Portfolio buys a security long, it purchases the security with cash with the expectation that it later will sell the security at a higher price. Certain transactions may give rise to a form of leverage. Such transactions may include, among others, reverse repurchase agreements, loans of securities, and the use of when-issued, delayed delivery or forward commitment contracts.
The use of derivatives may also create leveraging risks. To mitigate leveraging risk, the subadviser can segregate liquid assets or otherwise cover the transactions that may give rise to such risk. The use of leverage may cause the Portfolio to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. Leverage, including borrowing, may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged.
Board of Trustees. The Board oversees the actions of the Investment Managers and the subadvisers and decides on general policies. Investment Managers. The Investment Managers must also provide, or obtain and supervise, the executive, administrative, accounting, custody, transfer agent and shareholder servicing services that are deemed advisable by the Board.
The Investment Managers have engaged PIM to conduct the investment programs of the Portfolio, including the purchase, retention and sale of portfolio securities and other financial instruments. The Investment Managers are responsible for monitoring the activities of PIM and reporting on such activities to the Board.
The Trust has obtained an exemption from the Commission that permits the Investment Managers, subject to approval by the Board, to change subadvisers for the Portfolio by: This exemption which is similar to exemptions granted to other investment companies that are organized in a manner similar to the Trust is intended to facilitate the efficient supervision and management of the subadvisers by the Investment Managers and the Board.
If at any point there is more than one subadviser for the Portfolio, the Investment Managers will determine the division of the assets for the Portfolio among the applicable subadvisers under normal conditions. All daily cash inflows that is, purchases and reinvested distributions and outflows that is, redemptions and expense items will be divided among such subadvisers as the Investment Managers deem appropriate. The Investment Managers may change the target allocation of assets among subadvisers, transfer assets between subadvisers, or change the allocation of cash inflows or cash outflows among subadvisers for any reason and at any time without notice.
As a consequence, the Investment Managers may allocate assets or cash flows from a portfolio segment that has appreciated more to another portfolio segment. Investment Subadviser. Prudential Investment Management, Inc. Portfolio Managers. Information about the portfolio managers responsible for the day-to-day management of the Portfolio is set forth below. Piccirillo has specialized in mortgage-backed securities since joining Prudential Financial in Piccirillo also specializes in structured products and is a portfolio manager for multi-sector fixed income accounts.
Before joining Prudential Financial, Mr. Piccirillo started his career as an analyst at Smith Barney, assisting in overseeing the fixed income trading desks for the planning and analysis department. Malcolm Dalrymple is Principal and corporate bond portfolio manager for the Investment Grade Corporate Team and is responsible for intermediate and short corporate strategies as well as corporate security selection in intermediate multi-sector, Core, and Core Plus portfolios.
He has specialized in corporate bonds since From to , Mr. Dalrymple was a money markets portfolio. He joined Prudential Financial in as a securities lending trader and a bank analyst. Schiller is senior portfolio manager for the Relative Value Hedge Strategy, a market-neutral hedge strategy focusing on the liquid sectors of the U. In this role, which he has held since , he develops portfolio strategy, performs quantitative analysis, and designs and implements trades for this Strategy.
Schiller also manages the U. Formerly, Mr. Liquidity Sector Team. Previously, he worked as an operations associate in the mortgage-backed securities group. Schiller joined Prudential Financial in Prior to his current role, Mr. Del Vecchio was a taxable money markets portfolio manager for the Money Markets Group, responsible for managing proprietary fixed income accounts, as well as the securities lending portfolios. Del Vecchio joined Prudential Financial in Fees and Expenses.
Investment Management Fees. The contractual investment management fee for the Portfolio is set forth below. Such fee would be computed as follows. For purposes of calculating the investment management fee payable to the Investment Managers, the combined average daily net assets of the Bond Portfolios will also include the assets of future portfolios of the Trust that are managed by the Investment Managers pursuant to similar target maturity or constant duration investment strategies and that are used in connection with non-discretionary asset transfers under certain living benefit programs. The investment management fees for the Portfolio are accrued daily for the purposes of determining the sale and redemption price of Portfolio shares.
The Investment Managers pay PIM a portion of such investment management fee for the performance of the subadvisory services at no additional cost to the Portfolio. Other Expenses. The Portfolio also will pay the Participating Insurance Companies an administrative services fee of 0. Such administrative fees will compensate the Participating Insurance Companies for providing certain services to the beneficial shareholders of the Portfolio in lieu of the Trust, including the printing and mailing of portfolio prospectuses and shareholder reports.
Contractual Expense Cap. Purchasing and Redeeming Shares of the Portfolio. The way to invest in the Portfolio is through certain variable life insurance and variable annuity contracts. Together with this Prospectus, you should have received a prospectus for such a Contract. You should refer to that prospectus for further information on investing in the Portfolio.
Portfolio shares are redeemed for cash within seven days of receipt of a proper notice of redemption or sooner if required by law. There is no redemption charge in connection with the redemption of Portfolio shares. Redemption in Kind.chainaid.co.uk/finding-the-right-woman-for-you.php
AST Bond Portfolio
The Portfolio may pay the redemption price to shareholders of record generally, the insurance company separate accounts holding Trust shares in whole or in part by a distribution in-kind of securities from the relevant investment portfolio of the Trust, in lieu of cash, in conformity with applicable rules of the Commission and procedures adopted by the Board.
Securities will be readily marketable and will be valued in the same manner as in a regular redemption. If shares are redeemed in kind, the recipient will incur transaction costs in converting such assets into cash. These procedures govern the redemption by the shareholder of record, generally an insurance company separate account. The procedures do not affect payments by an insurance company to a contract owner under a variable contract. Frequent Purchases or Redemptions of Portfolio Shares. The Trust is part of the group of investment companies advised by PI that seeks to prevent patterns of frequent purchases and redemptions of shares by its investors the PI funds.
Frequent purchases and redemptions may adversely affect the investment performance and interests of long-term investors in the Portfolio. When an investor engages in frequent or short-term trading, the PI funds may have to sell Portfolio securities to have the cash necessary to pay the redemption amounts. This may cause the PI funds to sell securities at inopportune times, hurting their investment performance. When large dollar amounts are involved, frequent trading can also make it difficult for the PI funds to use long-term investment strategies because they cannot predict how much cash they will have to invest.
In addition, if a PI fund is forced to liquidate investments due to short-term trading activity, it may incur increased transaction and tax costs. However, because Contract owners cannot select the Portfolio for investment, the risk of frequent purchases and redemptions of shares by investors is minimized with respect to the Portfolio. Similarly, the PI funds may bear increased administrative costs as a result of the asset level and investment volatility that accompanies patterns of short-term trading.
Moreover, frequent or short-term trading by certain investors may cause dilution in the value of PI fund shares held by other investors. PI funds that invest in foreign securities may be particularly susceptible to frequent trading, because time zone differences among international stock markets can allow an investor engaging in short-term trading to exploit fund share prices that may be based on closing prices of foreign securities established some time before the fund calculates its own share price.
The policies and procedures for the Trust are limited, however, because the Trust does not directly sell its shares directly to the public. Therefore, the Participating Insurance Companies, not the Trust, maintain the individual Contract owner account records.
Therefore, the Trust and its transfer agent do not monitor trading by individual Contract owners. Therefore, the Portfolio is not subject to frequent trading by Contract owners. The Trust receives reports on the trading restrictions imposed by the Participating Insurance Companies on Contract owners investing in the Portfolio. In addition, the Trust has entered shareholder information agreements with the Participating Insurance Companies as required by Rule 22c-2 under the Act. Under these agreements, the Participating Insurance Companies have agreed to: The Trust and its transfer agent also reserve the right to reject all or a portion of a purchase order from the Participating Insurance Companies.
If a purchase order is rejected, the purchase amount will be returned to the relevant Participating Insurance Company. The Trust also employs fair value pricing procedures to deter frequent trading. In order for the the Participating Insurance Companies to manage the guarantees offered in connection with these benefit programs, the insurance companies generally: These mathematical formulas will generally focus on the amounts guaranteed at specific future dates or the present value of the estimated lifetime payments to be made, as applicable.
The above-referenced asset transfer programs are an important part of the guarantees offered in connection with the applicable living benefit programs. In addition, these asset transfers may result in relatively small asset bases and relatively high transaction costs and operating expense ratios for the Portfolio compared to other similar funds. Investors seeking to engage in frequent trading activities may use a variety of strategies to avoid detection and, despite the efforts of the Trust and the Participating Insurance Companies to prevent such trading, there is no guarantee that the Trust or the Participating Insurance Companies will be able to identify these investors or curtail their trading practices.
Therefore, some Trust investors may be able to engage in frequent trading, and, if they do, the other Trust investors would bear any harm caused by that frequent trading. The Trust does not have any arrangements intended to permit trading in contravention of the policies described above. For information about the trading limitations applicable to you, please see the prospectus for your Contract or contact your insurance company.
Net Asset Value. Any purchase or sale of Portfolio shares is made at the net asset value, or NAV, of such shares. The price at which a purchase or redemption is made is based on the next calculation of the NAV after the order is received in good order. New York time. Conversely, the Trust will ordinarily price Portfolio shares, and shareholders may purchase and redeem shares, on days that the NYSE is open but foreign securities markets are closed.
The securities held by the Portfolio are valued based upon market quotations or, if not readily available, at fair value as determined in good faith under procedures established by the Board.
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The Trust may use fair value pricing for the Portfolio if it determines that a market quotation is not reliable based, among other things, on market conditions that occur after the quotation is derived or after the closing of the primary market on which the security is traded, but before the time that the NAV is determined. This use of fair value pricing most commonly occurs with securities that are primarily traded outside of the U.
In addition, fair value pricing is used for securities where the pricing agent or principal market maker does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Managers or PIM does not represent fair value. Different valuation methods may result in differing values for the same security. If the Portfolio needs to implement fair value pricing after the NAV publishing deadline but before shares of the Portfolio are processed, the NAV you receive or pay may differ from the published NAV price.
The NAV for the Portfolio is determined by a simple calculation. Equity Securities for which the primary market is on an exchange whether domestic or foreign shall be valued at the last sale price on such exchange or market on the day of valuation or, if there was no sale on such day, at the mean between the last bid and asked prices on such day or at the last bid price on such day in the absence of an asked price. Securities included within the NASDAQ market for which there is no NOCP and no last sale price on the day of valuation shall be valued at the mean between the last bid and asked prices on such day or at the last bid price on such day in the absence of an asked price.
Equity securities that are not sold on an exchange or NASDAQ are generally valued by an independent pricing agent or principal market maker. The Portfolio may own securities that are primarily listed on foreign exchanges that trade on weekends or other days when the Portfolio does not price its shares. Short-term debt securities with remaining maturities of 60 days or less are valued at cost with interest accrued or discount amortized to the date of maturity, unless such valuation, in the judgment of PI or PIM, does not represent fair value.
Convertible debt securities that are traded in the over-the-counter market, including listed convertible debt securities for which the primary market is believed by PI or PIM to be over-the-counter, are valued at the mean between the last bid and asked prices provided by a principal market maker if available, otherwise a primary market dealer.
Options on stock and stock indexes that are traded on a national securities exchange are valued at the last sale price on such exchange on the day of valuation or, if there was no such sale on such day, at the mean between the most recently quoted bid and asked prices on such exchange. Futures contracts and options on futures contracts are valued at the last sale price at the close of the commodities exchange or board of trade on which they are traded. If there has been no sale that day, the securities will be valued at the mean between the most recently quoted bid and asked prices on that exchange or board of trade.
Forward currency exchange contracts are valued at the cost of covering or offsetting such contracts calculated on the day of valuation. Securities which are valued in accordance herewith in a currency other than U. Over-the-counter OTC options are valued at the mean between bid and asked prices provided by a dealer which may be the counterparty. A subadviser will monitor the market prices of the securities underlying the OTC options with a view to determining the necessity of obtaining additional bid and ask quotations from other dealers to assess the validity of the prices received from the primary pricing dealer.
The Trust currently sells its shares only to insurance company separate accounts to fund variable annuity and variable life insurance contracts. The Trust has no principal underwriter or distributor. Federal Income Taxes. The Portfolio intends to be treated as a partnership for federal income tax purposes. Distributions may be made to the various separate accounts of the Participating Insurance Companies in the form of additional shares not in cash. Holders of variable annuity contracts or variable life insurance policies should consult the prospectuses of their respective contracts or policies for information on the federal income tax consequences to such holders.
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In addition, variable contract holders may wish to consult with their own tax advisors as to the tax consequences of investments in the Trust, including the application of state and local taxes. Monitoring for Possible Conflicts. The Trust sells its shares to fund variable life insurance contracts and variable annuity contracts and is authorized to offer its shares to qualified retirement plans. Because of differences in tax treatment and other considerations, it is possible that the interest of variable life insurance contract holders, variable annuity contract holders and participants in qualified retirement plans could conflict.
The Trust will monitor the situation and in the event that a material conflict did develop, the Trust would determine what action, if any, to take in response. Disclosure of Portfolio Holdings. The Trust will provide a full list of the securities held by the Portfolio at www. The Trust will also file a list of securities held by the Portfolio with the Commission as of the end of each quarter.
Legal Proceedings. Commencing in , Prudential Financial, Inc. In connection with these investigations, with the approval of Skandia, an offer was made by American Skandia to the Commission and NYAG, to settle these matters by paying restitution and a civil penalty. ASISI , reached a resolution of these previously disclosed investigations by the Commission and the NYAG into market timing related misconduct involving certain variable annuities. The settlements relate to conduct that generally occurred between January and September Subsequent to the acquisition, the Company implemented controls, procedures and measures designed to protect customers from the types of activities involved in these investigations.
These settlements resolve the investigations by the above named authorities into these matters, subject to the settlement terms. Pursuant to the settlements, ASISI has retained, at its ongoing cost and expense, the services of an Independent Distribution consultant acceptable to the Commission Staff to develop a proposed plan for the distribution of Fair Fund amounts according to a methodology developed in consultation with and acceptable to the Commission Staff.
In addition, ASISI has agreed, among other things, to continue to cooperate with the Commission and NYAG in any litigation, ongoing investigations or other proceedings relating to or arising from their investigations into these matters. Payments to Affiliates. These services may include, but are not limited to: These payments or reimbursements may not be offered by all advisers, subadvisers, or distributors and the.
With respect to variable annuity contracts, the amounts paid under these arrangements to affiliated insurers are set forth in the prospectuses for the variable annuity contracts which offer the Portfolio as an investment option. Because the Portfolio has not commenced operations as of the date of this Prospectus, no financial highlights data is provided. Long-Term Issue Credit Ratings. An obligation rated AA differs from the highest rated obligations only in small degree. An obligation rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories.
An obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. An obligation rated BB is less vulnerable to nonpayment than other speculative issues. An obligation rated B is more vulnerable to nonpayment than obligations rated BB, but the obligor currently has the capacity to meet its financial commitment on the obligation.
An obligation rated CCC is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
An obligation rated CC is currently highly vulnerable to nonpayment. The C rating may be used to cover a situation where a bankruptcy petition has been filed or similar action has been taken, but payments on this obligation are being continued. The ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. Commercial Paper Ratings. This designation indicates that the degree of safety regarding timely payment is strong. Capacity for timely payment on issues with this designation is satisfactory. However, the relative degree of safety is not as high as for issues designated A Notes Ratings.
Notes due in three years or less will likely receive a notes rating. Notes maturing beyond three years will most likely receive a long-term debt rating. The following criteria will be used in making that assessment. Note rating symbols are as follows: Strong capacity to pay principal and interest. Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes. Debt Ratings. Bonds which are rated Aaa are judged to be of the best quality. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than the Aaa securities. Bonds which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. Bonds which are rated Baa are considered as medium-grade obligations, i. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.
Floating Rate Fund
Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.
Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.
Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. Bonds which are rated C are the lowest-rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. The modifier 1 indicates that the issuer is in the higher end of its letter rating category; the modifier 2 indicates a mid-range ranking; the modifier 3 indicates that the issuer is in the lower end of the letter ranking category.
Short-Term Ratings. Such obligations generally have an original maturity not exceeding one year, unless explicitly noted. Issuers rated Prime-1 or supporting institutions have a superior ability for repayment of senior short-term debt obligations. Prime-1 repayment ability will often be evidenced by many of the following characteristics: Issuers rated Prime-2 or supporting institutions have a strong ability for repayment of senior short-term debt obligations.
This normally will be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. MIG 1: This designation denotes best quality.
There is strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing. MIG 2: This designation denotes high quality. Margins of protection are ample although not so large as in the proceeding group. International Long-Term Credit Ratings. Highest Credit Quality. AAA ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
Very High Credit Quality. AA ratings denote a very low expectation of credit risk.
They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. High Credit Quality. A ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings.
Good Credit Quality. BBB ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category. BB ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met.
Securities rated in this category are not investment grade. Highly Speculative. B ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment. High Default Risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments.
A CC rating indicates that default of some kind appears probable. C ratings signal imminent default. Mailing Address. Advanced Series Trust. One Corporate Drive. Shelton, CT Prudential Investments LLC. Gateway Center Three, Mulberry Street. Gateway Center Two. One Wall Street. New York, NY Transfer and Shareholder Servicing Agent. PFPC Inc. Wilmington, DE Legal Counsel.
Counsel to the Independent. Chicago, IL Independent Registered Public Accounting Firm. This page left blank intentionally. Additional information about the Portfolio is included in a Statement of Additional Information relating to the AST Bond Portfolio , dated [ November 13 ], , which is incorporated by reference into this Prospectus. The SAI and additional copies of annual and semi-annual reports are available without charge by calling the above number. Delivery of Prospectus and Other Documents to Households. If you have previously consented to have any of these documents delivered to multiple investors at a shared address, as required by law, and you wish to revoke this consent or would otherwise prefer to continue to receive your own copy, you should call the number above, or write to the Trust at the above address.
The Trust will begin sending individual copies to you within thirty days of revocation. Copies of this information may be obtained, upon payment of duplicating fees, by electronic request to publicinfo sec. Information on the operation of the Public Reference Room may be obtained by calling the Commission at Investment Company File Act No. The information in this Statement of Additional Information is not complete and may be changed. This Statement of Additional Information is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PA RT I. This SAI sets forth information about the Portfolio. Part I provides additional information about the Board of Trustees of the Trust the Board , certain investments restrictions that apply to the Portfolio, the advisory services provided to and the management fees paid by the Portfolio, and information about other fees paid by and services provided to the Portfolio. Part II provides additional information about certain investments and investment strategies that may be used by the Portfolio and explanations of various investments and strategies which may be used by the Portfolio and explanations of these investments and strategies, and should be read in conjunction with Part I.
Set forth below are certain restrictions applicable to the Portfolio. Fundamental restrictions may not be changed without a majority vote of shareholders as required by the Investment Company Act of the Act. Non-fundamental restrictions may be changed by the Board without shareholder approval. Under its fundamental investment restrictions, the Portfolio may not: Securities and Exchange Commission the Commission release, no-action letter or similar relief or interpretations.
For purposes of this restriction, the purchase or sale of securities on a when-issued or delayed delivery basis, reverse repurchase agreements, dollar rolls, short sales, derivative and hedging transactions such as interest rate swap transactions, and collateral arrangements with respect thereto, and transactions similar to any of the foregoing and collateral arrangements with respect thereto, and obligations of the Portfolio to Trustees pursuant to any deferred compensation arrangements are not deemed to be a pledge of assets or the issuance of a senior security.
Underwrite securities issued by other persons, except to the extent that the Portfolio may be deemed to be an underwriter within the meaning of the Securities Act of the Act in connection with the purchase and sale of portfolio securities. Purchase or sell real estate unless acquired as a result of the ownership of securities or other instruments; provided that this restriction shall not prohibit the Portfolio from investing in securities or other instruments backed by real estate or in securities of companies engaged in the real estate business.
Government or any of its agencies or instrumentalities or to municipal securities or repurchase agreements with respect thereto. For purposes of this limitation, investments in other investment companies shall not be considered an investment in any particular industry. The Trust is an open-end management investment company commonly known as a mutual fund that is intended to provide a range of investment alternatives through its separate portfolios, each of which is, for investment purposes, in effect a separate fund.