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Pru-DayOneFunds-Attestation

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Intended for Financial Professional and Institutional Plan Sponsor Use

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The Glidepath

Solving for the Right Risks at the Right Time

The Prudential Day One® Funds follow a glidepath specifically designed to address the risks that pose the greatest danger to an individuals retirement: not accumulating enough assets, protecting those assets when they are at the greatest risk, and shielding them from the eroding effects of inflation.

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Preservation Stage

During the Preservation Stage, the Prudential Day One Glidepath is designed to lower equity exposure when you have the most to lose and don't have time to recover losses.

Preservation Stage - Glidepath

Does not represent actual glidepath. For illustrative purposes only

 

Approximate chart for Percentage of glidpath
  Years to Retirement Years after Retirement
Percentage of glidpath in the scale of -10 years before to +10 years after retirement 60% 20%

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Risk: Significant Market Declines

As participants near retirement, there is less time to recover from significant losses.

Even with identical average returns and annual withdrawal rates, two portfolios could result in very different outcomes over 30 years in retirement due to the timing of market downturns.

 

Solution: Reducing Volatility

To mitigate the risk of significant market declines, the Prudential Day One Funds reduce equity exposure and increase fixed income exposure in the 10 years leading up to and 10 years beyond the target date.

Return Sequencing Results (Success or Failure)

Account value of reserved loss returns and early loss returns, which assets completely depleted by year 17 in year of retirement

Source: PGIM Investments. Chart is for illustrative purposes only and does not represent any particular security.

 

  Account Value Years to Retirement
Reserved loss returns (6.3%) $1.0M 1
$1.8M 7.5
$1.6M 14
$3M 22
$3.6M 27
$2M 31
Early loss returns (6.3%) $1.0M 1
$0.6M 5
$0.3M 12
$0.0M 17
Assets completely depleted by year 17

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Investment Vehicles

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Mutual Funds

Explore Mutual Funds

 

Collective Trust Funds

Explore CITs

 

For additional information, please call 1-877-275-9786

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Risks—Mutual fund investing involves risk. Some mutual funds have more risk than others. The investment return and principal value will fluctuate, and investors’ shares, when sold, may be worth more or less than the original cost. Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise. Asset allocation and diversification do not assure a profit or protect against loss in declining markets. There is no guarantee a Fund’s objectives will be achieved. The risks associated with each fund are explained more fully in each fund’s respective prospectus. TIPS may experience greater losses than other fixed income securities with similar durations. Unique risks associated with real estate and commodities may cause these investments to react differently to market conditions than traditional investments. Commodities may be speculative and more volatile than investments in more traditional equity and debt securities.

This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation. Clients seeking information regarding their particular investment needs should contact their financial professional.

The target date is the approximate year in which investors plan to retire. The funds are designed for investors who plan to gradually withdraw assets from the fund over a moderate time period following retirement. Each fund invests in underlying funds that provide exposure to fixed income, equity and non-traditional asset classes. The asset allocation of the target date funds will become more conservative as the target date approaches and for ten years after the target date by lessening the equity exposure and increasing the exposure in fixed income investments.  The principal value of an investment in a target date fund is not guaranteed at any time, including the target date. There is no guarantee that the fund will provide adequate income through retirement.

A target date fund should not be selected solely based on age or retirement date. Before investing, participants should carefully consider the fund’s investment objectives, risks, charges and expenses, as well as their age, anticipated retirement date, risk tolerance, other investments owned, and planned withdrawals.

The stated asset allocation may be subject to change. It is possible to lose money in a target date fund, including losses near and following retirement. These risks may be increased to the extent investors begin to make withdrawals from the fund significantly before the target date. Investments in the funds are not deposits or obligations of any bank and are not insured or guaranteed by any governmental agency or instrumentality. For investors close to or in retirement, the fund’s equity exposure may result in investment volatility that could reduce an investor’s available retirement assets when they are needed. For investors farther from retirement, there is a risk that a fund may invest too much in investments designed to ensure capital conservation and/or current income, which may prevent the investor from meeting his/her retirement goals.

Prudential Day One Funds may be offered as: (i) collective investment trust funds established by Prudential Trust Company, as trustee, a Pennsylvania trust company located in Scranton, PA and a Prudential Financial company, and (ii) registered mutual funds offered through Prudential Investment Management Services LLC (PIMS), Newark, NJ, a Prudential Financial company. Prudential Trust Company is solely responsible for its own contractual obligations and financial condition. Offers of the collective investment trust funds may only be made by sales officers of Prudential Trust Company.

The Day One Funds, as collective investment trusts, are investment vehicles available only to qualified retirement plans, such as 401(k) plans and government plans, and their participants. Unlike mutual funds, The Day One Funds, as collective investment trusts, are exempt from Securities and Exchange Commission registration under both the Securities Act of 1933 and the Investment Company Act of 1940, but are subject to oversight by state banking or insurance regulators, as applicable. Therefore, investors are generally not entitled to the protections of the federal securities laws.

For Mutual Funds: Consider a fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus and summary prospectus contain this and other information about the fund. Contact your financial professional or call (877) 275-9786 for a prospectus and summary prospectus. Read them carefully before investing.

© 2022 Prudential Financial, Inc., and its related entities. Prudential, the Prudential logo, the Rock symbol, Prudential Day One, and Bring Your Challenges are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

For Compliance Use Only: 1014582-00002-00 Ed. 04/2022