Prudential Financial, Inc. · NYSE:PRU

Prudential Financial — Investor Presentation (April 2005)

30 slides from Prudential Financial's investor presentation, April 2005

1. Slide 1: Invest Like the Professionals: Asset Allocation and Diversification Are Key

   Invest Like the Professionals… Asset Allocation and Diversification Are Key JennisonDryden is a registered trademark of The Prudential Insurance Company of America. IFS-A103119 Ed. 4/2005 IFS-Axxxx Ed. 02/2005

2. Slide 2: Smart Investing Begins With An Investment Plan

   Smart Investing Begins With An Investment Plan  One that reflects your unique needs and goals  The time you have to achieve them  Your attitude toward risk. Step One: Review your current portfolio Step Two: Determine your future needs. Step Three: Make a plan and stick to your plan.

3. Slide 3: Invest Like the Professionals: Time-tested strategies

   Invest Like the Professionals Time-tested strategies  Asset allocation  Diversification

4. Slide 4: Asset Allocation Is the Primary Determinant of Total Portfolio Volatility

   Asset Allocation Is the Primary Determinant of Total Portfolio Volatility Market Security Timing Selection Other 1.8% 2.1% 4.6% Asset Allocation 91.5% Source: Brinson, Singer, and Beebower (1991)

5. Slide 5: Which Asset Allocation Model Is Accurate?

   Which Asset Allocation Model Is Accurate? A. Conservative? B. Moderate? C. Aggressive? Blue – Bonds Purple – Stocks

6. Slide 6: Answer: They Are All Correct!

   Answer: They Are All Correct! Your personal answer is based on your individual risk/reward profile Expected Return 20.0 15.0 12.0 Stocks 9.0 Growth Moderate 6.0 Conservative 3.0 Cash 0.0 0.0 3.0 6.0 9.0 12.0 15.0 18.0 21.0 24.0 27.0 30.0 Blue – Bonds Standard Deviation (Risk) Purple – Stocks Standar

7. Slide 7: Emotional Investing Is a Common Mistake

   Emotional Investing Is a Common Mistake Everyone wants to “buy low and sell high,” but most investors do the opposite Source: Investment Company Institute and Bloomberg, 12/31/2004. Net equity sales measure the amount of net sales into retail equity mutual funds on an annual basis. The S&P 500 Index

8. Slide 8: So How Do You Build An Asset Allocation Strategy

   So How Do You Build An Asset Allocation Strategy • You need the right mix of stocks and bonds. • Regular Monitoring and adjusting is necessary to maintain your desired allocation. • Periodic Rebalancing

9. Slide 9: Trying to Time the Market Can Lead to Long-Term Underperformance

   Trying to Time the Market Can Lead to Long-Term Underperformance Average Annual Returns 13.0% January 1984 – December 2003 11.2% 3.5% 3.8% 3.1% S&P 500 Average Inflation Stock Fund Long-Term Gov’t Average Bond Bond Index Fund Investor Investor Source: Index Performance of the S&P 500 and Lehman Brot

10. Slide 10: A Diversified Long-Term Plan Can Help

    A Diversified Long-Term Plan Can Help $120,000 $110,850 $100,000 $88,221 $80,000 $63,843 $60,000 $40,000 $20,000 $0 Growth Allocation Moderate Allocation Conservative Allocation Graph does not reflect the performance of JennisonDryden Asset Allocation Funds. Hypothetical Growth, Moderate, and Conser

11. Slide 11: Market Leadership Changes from Year to Year

    Market leadership Changes from Year to Year Benefits of Asset Allocation 1995 – 2004 Source: Ibbotson Associates, Chicago. Government bonds and Treasury Bills are guaranteed by the U.S. Diversified Portfolio Government and, if held to maturity, offer a fixed rate of return and fixed principal value.

12. Slide 12: Market Leadership Changes Year to Year: Disclosure

    Market Leadership Changes Year to Year Disclosure Large Cap Growth and Large Cap Value are represented by S&P/BARRA Growth and S&P/BARRA Value Indexes that measure the performance of the growth and value styles of investing in large-cap U.S. stocks. The Indexes are constructed by dividing the stocks

13. Slide 13: Benefits of Diversification

    Benefits of Diversification Benefits of Asset Allocation 1995– 2004 Source: Ibbotson Associates, Chicago. Government bonds and Treasury Bills are guaranteed by the Diversified Portfolio U.S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value. Stocks 15% Large

14. Slide 14: Introducing JennisonDryden Asset Allocation Funds

    Introducing JennisonDryden Asset Allocation Funds One step to a diversified long-term investment plan  Diversified allocation strategies designed in consultation with Ibbotson Associates  Covers key asset classes  Multiple style funds  Leading asset managers  Day-to day management and portfolio

15. Slide 15: Allocation Strategies Designed by Ibbotson Associates

    Allocation Strategies Designed by Ibbotson Associates  Asset class modeling  Portfolio design  Quarterly review of fund style consistency  Annual review of asset class modeling

16. Slide 16: Allocation Strategies Designed by Ibbotson Associates

    Allocation Strategies Designed by Ibbotson Associates Founded in 1977, Ibbotson is well known throughout the investment industry as an experienced and objective provider of asset allocation products. Source: Ibbotson Associates

17. Slide 17: Choose a Portfolio That's Right for You

    Choose a Portfolio That’s Right for You Return JennisonDryden Growth Allocation Fund JennisonDryden Moderate Allocation Fund 10% JennisonDryden 35% 90% Conservative 65% Stocks Allocation Fund 40% 60% Bonds Risk The Efficient Frontier Strategy works by using a mathematical formula, which takes the hi

18. Slide 18: Conservative Allocation Fund

    Stocks Conservative Allocation Fund Growth Moderate Conservative Cash 60% bond funds/40% stock funds Underlying Fund Large-C ap C ore 5% U.S. Large-C ap Equity Ultra Short Bond Growth Dryden Large-Cap Core 5% 20% 8% Jennison 20/20 4% U.S. Large-C ap Value Jennison Equity Opportunity 6% 11% Jennison

19. Slide 19: Moderate Allocation Fund

    Stocks Moderate Allocation Fund Growth Moderate Conservative Cash 65% stock funds/35% bond funds Underlying Fund Ultra Short Bond Large- Cap Core Equity 5% 7% U.S. Large- Cap Dryden Large-Cap Core 7% ST Bond 10% Growth Dryden Small-Cap Core 3% 8% Jennison 20/20 8% Jennison Equity Opportunity 8% Inte

20. Slide 20: Growth Allocation Fund

    Stocks Growth Allocation Fund Growth Moderate Conservative Cash 90% stock funds/10% bond funds Underlying Funds I ntermediate Govt Bond Equity Large-C ap C ore 8% 9% Dryden Large-Cap Core 9% High Yield 2% Dryden Small-Cap Core 9% U.S. Large-C ap Growth Jennison 20/20 9% I nternational 16% Jennison E

21. Slide 21: Fund Disclosures

    Fund Disclosures Investors should keep in mind that the Funds will not be diversified for the purposes of the Investment Company Act of 1940. Investment in a nondiversified fund involves greater risks than a diversified investment because a loss resulting from a particular security will have a great

22. Slide 22: Three Leading Asset Managers

    Three Leading Asset Managers JennisonDryden Mutual Funds JennisonDryden is Prudential Financial’s mutual fund and managed accounts family. We offer a broad spectrum of investments—from core portfolio building blocks to strong sector funds. The managers of our funds are known and respected by major c

23. Slide 23: Investment Teams

    Investment Teams ASSET MANAGERS AT A GLANCE JENNISON DRYDEN Quantitative Jennison Management Prudential Fixed Associates Associates Income Year Founded 1969 1975 1875 1 Assets Under Management (Retail/Institutional as of 12/31/2004 $64.3 billion $41 billion $144 billion Investment Professionals (Por

24. Slide 24: The Need for Rebalancing

    The Need for Rebalancing Asset Mix Drift – 1/1/1984 Through 12/31/2004 What happens over time to a portfolio that starts off 50% equity and 50% fixed income? If no rebalancing takes place, market fluctuations may have a significant impact on portfolio holdings. After 20 years the portfolio is almost

25. Slide 25: Why Diversification and Rebalancing Are Important

    Why Diversification and Rebalancing Are Important Consider the following two long-term strategies for investing $200,000 over a 20-year period (1984–2004) Strategy 1 into top- Invests $10,000 $660,000.00 performing market $610,000.00 segment at the end of $560,000.00 each year. $510,000.00 $460,000.

26. Slide 26: Keeping Your Asset Allocation on Track

    Keeping Your Asset Allocation on Track JennisonDryden Asset Allocation Funds Automatic Rebalancing- we do the work for you.  Quantitative Management Associates periodically rebalances the three asset class portfolios to bring them back to their original allocations

27. Slide 27: What JennisonDryden Asset Allocation Funds Offer You

    What JennisonDryden Asset Allocation Funds Offer You  Immediate and consistent diversification  Asset management expertise of the JennisonDryden fund family  Three funds for differing risk profiles  Automatic portfolio rebalancing  Simplicity—one investment, one NAV  Accessibility—investment m

28. Slide 28: JennisonDryden Asset Allocation Funds: We Can Help

    You Have Needs  Secure retirement  College education for children or grandchildren  New home  Growing/protecting your nest egg We can help JennisonDryden Asset Allocation Funds

29. Slide 29: How Do You Get Started

    How Do You Get Started  Fill out an Asset Allocation Questionnaire  Based on your answers, a Financial Professional can help identify an asset allocation model that is appropriate for your investment objectives, risk tolerance, and time horizon

30. Slide 30: Disclosures

    Disclosures For more information about the JennisonDryden Asset Allocation Funds, call your financial professional for a free prospectus. You should consider the Funds’ investment objectives, risks, and charges and expenses carefully before investing. The prospectus will contain this and other infor

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