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RISK/RETURN SUMMARY

American Skandia Trust (the “Trust”) is comprised of thirty-seven investment portfolios (the “Portfolios”).  The Portfolios are designed to provide a wide range of investment options.  Each Portfolio has its own investment goal and style (and, as a result, its own level of risk).  Some of the Portfolios offer potential for high returns with correspondingly higher risk, while others offer stable returns with relatively less risk.   It is possible to lose money when investing even in the most conservative of the Portfolios.   Investments in the Portfolios are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

It is not possible to provide an exact measure of the risk to which a Portfolio is subject, and a Portfolio’s risk will vary based on the securities that it holds at a given time.  Nonetheless, based on each Portfolio’s investment style and the risks typically associated with that style, it is possible to assess in a general manner the risks to which a Portfolio will be subject.  The following discussion highlights the investment strategies and risks of each Portfolio.  Additional information about each Portfolio’s potential investments and its risks is included in this Prospectus under “Investment Objectives and Policies.”

substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers and it may at times invest all of its assets in fewer than five countries or even a single country.

The Portfolio invests primarily in companies selected for their growth potential.  The Sub-advisor generally takes a “bottom up” approach to choosing investments for the Portfolio.  In other words, the Sub-advisor seeks to identify individual companies with earnings growth potential that may not be recognized by the market at large, regardless of where the companies are organized or where they primarily conduct business.  Although themes may emerge in the Portfolio, securities are generally selected without regard to any defined allocation among countries, geographic regions or industry sectors, or other similar selection procedure.

The AST LSV International Value Portfolio   (formerly, the AST DeAM International Equity Portfolio) will invest, under normal circumstances, at least 80% of the value of its assets in equity securities.  The Portfolio pursues its investment objective by primarily investing in the equity securities of foreign companies that are represented in the MSCI EAFE Index.  The MSCI EAFE Index tracks stocks in Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom.

The Sub-advisor uses proprietary quantitative investment models to manage the Portfolio in a bottom-up security selection approach combined with overall portfolio risk management. The primary components of the investment models are: 1) indicators of fundamental undervaluation, such as high dividend yield, low price-to-cash flow ratio or low price-to-earnings ratio, 2) indicators of past negative market sentiment, such as poor past stock price performance, 3) indicators of recent momentum, such as high recent stock price performance, and 4) control of incremental risk relative to the benchmark index.  All such indicators are measured relative to the overall universe of non-US, developed market equities.  This investment strategy can be described as a “contrarian value” approach.  The objective of the strategy is to outperform the unhedged US Dollar total return (net of foreign dividend withholding taxes) of the MSCI EAFE Index.

The AST MFS Global Equity Portfolio invests, under normal circumstances, at least 80% of the value of its net assets in equity securities.  The Portfolio will invest in the securities of issuers located in the U.S. and foreign countries (including issuers in developing countries).

The Portfolio focuses on companies that the Sub-advisor believes have favorable growth prospects and attractive valuations based on current and expected earnings or cash flow.  The Portfolio generally seeks to purchase securities of companies with relatively large market capitalizations relative to the market in which they are traded.  The Portfolio’s investments may include securities traded in the over-the-counter markets, rather than on securities exchanges.  The Sub-advisor uses a “bottom up,” as opposed to “top down,” investment style in managing the Portfolio.  This means that securities are selected based upon fundamental analysis of individual companies by the Sub-advisor.

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The Sub-advisor’s process for selecting investments is bottom-up and growth-oriented.  There is an emphasis on individual stock selection rather than trying to time the highs and lows of the market or concentrating in certain industries or sectors.  The Sub-advisor assesses individual companies from the perspective of a long-term investor.  The Sub-advisor seeks to purchase stocks of companies that it believes: are profitable and leaders in the industry; have distinct products and services which address substantial markets; can rapidly grow annual earnings over the next three to five years; or have superior proven management and solid balance sheets.

The AST Goldman Sachs Small-Cap Value Portfolio will seek its objective through investments primarily in equity securities of small capitalization companies that are believed to be undervalued in the marketplace.  Typically, in choosing stocks, the Sub-advisor looks for companies using the Sub-advisor’s value investment philosophy.  The Sub-advisor seeks to identify:

(1)  Well-positioned businesses that have:

(2)  Attractive valuation opportunities where:

•                   The intrinsic value of the business is not reflected in the stock price.

The Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in small capitalization companies.  The 80% investment requirement applies at the time the Portfolio invests its assets.  The Portfolio generally defines small capitalization stocks as stocks of companies with a capitalization of $4 billion or less.  The Portfolio may invest up to 25% of its assets in foreign securities.

The stocks in which the Portfolio generally invests are those which, in the Sub-advisor’s judgment, are selling below their intrinsic value and at prices that do not adequately reflect their long-term business potential.  Selected smaller stocks may be undervalued because they are often overlooked by many investors, or because the public is overly pessimistic about a company’s prospects.  Accordingly, their prices can rise either as a result of improved business fundamentals, particularly when earnings grow faster than general expectations, or as more investors come to recognize the company’s underlying potential.  The price of shares in relation to book value, sales, asset value, earnings, dividends and cash flow, both historical and prospective, are key determinants in the security selection process.  These criteria are not rigid, and other stocks may be included in the Portfolio if they are expected to help it attain its objective.

The AST Small-Cap Value Portfolio (formerly, the AST Gabelli Small-Cap Value Portfolio) will invest, under normal circumstances, at least 80% of the value of its assets in small capitalization companies.  The Portfolio generally defines small capitalization companies as companies with a capitalization of $2 billion or less (applies at the time the Portfolio invests its assets).  The assets of the Portfolio are independently managed by three Sub-advisors under a multi-manager structure.  Pursuant to the multi-manager structure, the Investment Managers of the Portfolio determine and allocate a portion of the Portfolio’s assets to each of the Sub-advisors.  The allocations will be reviewed by the Investment Managers periodically, and the allocations may be altered or adjusted by the Investment Managers without prior notice.  Such adjustments will be reflected in the annual update to this prospectus.

Although each Sub-advisor will follow the Portfolio’s policy of investing, under normal circumstances, at least 80% of the Portfolio’s assets in small capitalization companies, each Sub-advisor expects to utilize different investment strategies to achieve the Portfolio’s objective of long-term capital growth.  The current asset allocations and principal investment strategies for each of the Sub-advisors is summarized below:

JP Morgan is responsible for managing approximately 73% of the Portfolio’s assets.  The Sub-advisor follows a three step process. First, a rigorous quantitative model is used to evaluate the prospects of each company in the investable universe and rank each company’s relative attractiveness within its economic sector based on a number of factors including valuation and improving fundamentals. Next, the results of the quantitative model are reviewed and modified based on the fundamental stock and industry insights of the sector specific research and portfolio management teams. Finally, a disciplined, systematic portfolio construction process is employed to overweight the stocks that are the most attractive and underweight those stocks are the least attractive, based on the rankings from the first two steps, while trying to minimize uncompensated risks relative to the benchmark.

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Lee Munder is responsible for managing approximately 15% of the Portfolio’s assets. The Sub-advisor seeks the stocks of companies whose current stock prices do not appear to adequately reflect their underlying value as measured by assets, earnings, cash flow or business franchises. The Sub-advisor’s research team seeks to identify companies that appear to be undervalued by various measures, and may be temporarily out of favor, but have good prospects for capital appreciation. In selecting investments, the Sub-advisor generally looks to the following: (1) Low price/earnings, price/book value or total capitalization/cash flow ratios relative to the company’s peers; (2) Low stock price relative to a company’s underlying asset values; (3) A sound balance sheet and other positive financial characteristics. The Sub-advisor then determines whether there is an emerging catalyst that will focus investor attention on the underlying assets of the company, such as takeover efforts, a change in management, or a plan to improve the business through restructuring or other means.

Integrity is responsible for managing approximately 12% of the Portfolio’s assets.  The Sub-advisor focuses on achieving capital appreciation by maintaining a diversified portfolio of small capitalization stocks that are currently undervalued, yet poised to outperform. To identify these stocks, the Sub-advisor follows a disciplined process seeking two key elements: prudent value and improving sentiment. Prudent value implies that a statistically “cheap” stock, trading below its estimate of intrinsic value, will deliver strong total return over time. The process also identifies catalysts that lead to improving investor sentiment. Risk exposure is continuously evaluated throughout the process to ensure consistent long-term performance versus the Russell 2000® Value Index.

The AST DeAM Small-Cap Value Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in small capitalization companies.  The Portfolio pursues its objective by primarily investing in the equity securities of small-sized companies included in the Russell 2000® Value Index.  Equity securities include common stocks and securities convertible into or exchangeable for common stocks, including warrants and rights.  The Sub-advisor employs an investment strategy that seeks to maintain a portfolio of equity securities which approximates the market risk of those stocks included in the Russell 2000® Value Index, but which outperforms the Russell 2000® Value Index through active stock selection.  The Russell 2000® Value Index is a market capitalization index that measures the performance of small-sized companies trading at discounts to their value.  As December 31, 2004, the average market capitalization of the companies in the Russell 2000® Value Index was $1.07 billion and the median market capitalization was $602 million.  The targeted tracking error of this Portfolio is 4% with a standard deviation of  +/- 4%.  It is possible that the deviation may be higher.  For purposes of this Portfolio, the strategy of attempting to correlate a stock portfolio’s market risk with that of a particular index, in this case the Russell 2000® Value Index, while improving upon the return of the same index through active stock selection, is called a “managed alpha” strategy.

The Sub-advisor considers a number of factors in determining whether to invest in a value stock, including earnings growth rate, analysts’ estimates of future earnings and industry-relative price multiples.  Other factors are net income growth versus cash flow growth as well as earnings and price momentum.  In the selection of investments, long-term capital appreciation will take precedence over short range market fluctuations.  However, the Portfolio may occasionally make investments for short-term capital appreciation. The Sub-advisor generally takes a “bottom up” approach to building the Portfolio, searching for individual companies that demonstrate the best potential for significant return.

The AST Goldman Sachs Mid-Cap Growth Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in medium capitalization companies.  The Fund pursues its objective by investing primarily in equity securities selected for their growth potential.  Equity securities include common stocks, preferred stocks, warrants and securities convertible into or exchangeable for common or preferred stocks.  For purposes of the Portfolio, medium-sized companies are those whose market capitalizations (measured at the time of investment) fall within the range of companies in the Standard & Poor’s MidCap 400® Index.  As of December 31, 2004, the average market capitalization of the companies in the Standard & Poor’s MidCap 400® Index was $2.69 billion and the median market capitalization was $2.36 billion.  The Sub-advisor generally takes a “bottom up” approach to choosing investments for the Portfolio.  In other words, the Sub-advisor seeks to identify individual companies with earnings growth potential that may not be recognized by the market at large.  The Sub-advisor makes this assessment by looking at companies one at a time, regardless of size, country of organization, place of principal business activity, or other similar selection criteria.

The AST Neuberger Berman Mid-Cap Growth Portfolio will invest, under normal circumstances, at least 80% of its net assets in common stocks of mid-capitalization companies.  For purposes of the Portfolio, a mid-capitalization company is defined as a company whose market capitalization is within the range of market capitalizations of companies in the Russell Midcap® Index.  As of December 31, 2004, the average market capitalization of the companies in the Russell Midcap® Index was $7.38 billion and the median market capitalization was $3.68 billion.  The Portfolio seeks to reduce risk by diversifying among many companies, industries and sectors.

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The Sub-advisor employs a disciplined investment strategy when selecting growth stocks.  Using fundamental research and quantitative analysis, the Sub-advisor looks for fast-growing companies with above average sales and competitive returns on equity relative to their peers.  In doing so, the Sub-advisor analyzes such factors as: financial condition (such as debt to equity ratio); market share and competitive leadership of the company’s products; earnings growth relative to competitors; and market valuation in comparison to a stock’s own historical norms and the stocks of other mid-cap companies.

The Sub-advisor follows a disciplined selling strategy and may sell a stock when it fails to perform as expected or when other opportunities appear more attractive.

The AST Neuberger Berman Mid-Cap Value Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in medium capitalization companies.  Companies with equity market capitalizations that fall within the range of the Russell Midcap® Index at the time of investment are considered mid-cap companies for purposes of the Portfolio.  As of December 31, 2004, the average market capitalization of the companies in the Russell MidCap® Index was $7.38 billion and the median market capitalization was $3.68 billion.  Some of the Portfolio’s assets may be invested in the securities of large-cap companies as well as in small-cap companies.  The Portfolio seeks to reduce risk by diversifying among many companies and industries.

Under the Portfolio’s value-oriented investment approach, the Sub-advisor looks for well-managed companies whose stock prices are undervalued and that may rise in price when other investors realize their worth.  Factors that the Sub-advisor may use to identify these companies include strong fundamentals, such as a low price-to-earnings ratio, consistent cash flow, and a sound track record through all phases of the market cycle.  The Sub-advisor may also look for other characteristics in a company, such as a strong position relative to competitors, a high level of stock ownership among management, or a recent sharp decline in stock price that appears to be the result of a short-term market overreaction to negative news.

The Sub-advisor generally considers selling a stock when it reaches a target price, when it fails to perform as expected, or when other opportunities appear more attractive.

The AST Alger All-Cap Growth Portfolio invests primarily in equity securities, such as common or preferred stocks, that are listed on U.S. exchanges or in the over-the-counter market.  The Portfolio may invest in the equity securities of companies of all sizes, and may emphasize either larger or smaller companies at a given time based on the Sub-advisor’s assessment of particular companies and market conditions.

The Portfolio invests primarily in growth stocks.  The Sub-advisor believes that these stocks are those of two types of companies:

•                   High Unit Volume Growth Companies.  These are vital creative companies that offer goods or services to a rapidly expanding marketplace.  They include both established and emerging firms, offering new or improved products, or firms simply fulfilling an increased demand for an existing product line.

•                   Positive Life Cycle Change Companies.  These are companies experiencing a major change that is expected to produce advantageous results.  These changes may be as varied as new management, products or technologies, restructurings or reorganizations, or mergers and acquisitions.

The AST Gabelli All-Cap Value Portfolio will primarily invest in readily marketable equity securities including common stocks, preferred stocks and securities that may be converted at a later time into common stock.  The Portfolio may invest in the securities of companies of all sizes, and may emphasize either larger or smaller companies at a given time based on the Sub-advisor’s assessment of particular companies and market conditions.

In making stock selections, the Portfolio strives to earn a 10% real rate of return but there is no guarantee that this target return will be achieved.  The Portfolio focuses on companies that appear underpriced relative to the value that the Portfolio’s Sub-Advisor believes informed investors would be willing to pay for the company.  The Sub-advisor considers factors such as price, earnings expectations, earnings and price histories, balance sheet characteristics and perceived management skills.  The Sub-advisor also considers changes in economic and political outlooks as well as individual corporate developments.  The Sub-Advisor will sell any Portfolio investments that lose their perceived value relative to other investments.

The AST T. Rowe Price Natural Resources Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in natural resource companies.  The Portfolio also may invest in non-resource companies with the potential for growth.  When selecting stocks, the Sub-advisor looks for companies that have the ability to expand production, maintain

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superior exploration programs and production facilities, and the potential to accumulate new resources.  Natural resource companies in which the Portfolio invests generally own, develop, refine, service or transport resources, including energy sources, precious metals, nonferrous metals, forest products, real estate, diversified resources and other basic commodities that can be produced and marketed profitably when both labor costs and prices are rising.

Although at least 50% of Portfolio assets will be invested in U.S. securities, up to 50% of total assets also may be invested in foreign securities.  The Portfolio may sell securities for a variety of reasons, such as to secure gains, limit losses or re-deploy assets into more promising opportunities.

The AST Alliance Growth Portfolio normally invests at least 80% of its total assets in the equity securities of U.S. companies.  A U.S. company is a company that is organized under United States law, has its principal office in the United States and issues equity securities that are traded principally in the United States.  For purposes of the Portfolio, a non-U.S. company is a company that (i) is organized outside the United States, (ii) has its principal place of business outside the United States, and (iii) issues securities that are traded principally in foreign countries.  Companies that do not fall within this definition are deemed to be U.S. companies.  Normally, about 40-60 companies will be represented in the Portfolio, with the 25 companies most highly regarded by the Sub-advisor usually constituting a minimum of approximately 70% of the Portfolio’s net assets.

The Sub-advisor relies heavily upon the fundamental analysis and research of its internal research staff, which generally follows a primary research universe of more than 500 companies.  The research analysts seek to identify those companies that have strong management, superior industry positions, excellent balance sheets and superior earnings growth prospects.  An emphasis is placed on identifying companies whose above average prospective earnings growth is not fully reflected in current market valuations.

During market declines, while adding to positions in favored stocks, the Portfolio becomes somewhat more aggressive, reducing the number of companies represented in its portfolio.  Conversely, in rising markets, while reducing or eliminating fully valued positions, the Portfolio becomes somewhat more conservative, increasing the number of companies represented in its portfolio.  The Sub-advisor therefore seeks to gain positive returns in good markets while providing some measure of protection in poor markets.

The AST MFS Growth Portfolio invests, under normal circumstances, at least 80% of its net assets in common stocks and related securities, such as preferred stocks, convertible securities and depositary receipts, of companies that the Sub-advisor believes offer better than average prospects for long-term growth.  The Sub-advisor uses a “bottom up,” as opposed to “top down,” investment style in managing the Portfolio.  This means that securities are selected based upon fundamental analysis of individual companies by the Sub-advisor.

The Portfolio may invest up to 35% of its net assets in foreign securities.

The AST Marsico Capital Growth Portfolio will pursue its objective by investing primarily in common stocks.  The Sub-advisor expects that the majority of the Portfolio’s assets will be invested in the common stocks of larger, more established companies.

In selecting investments for the Portfolio, the Sub-advisor uses an approach that combines “top down” economic analysis with “bottom up” stock selection.  The “top-down” approach takes into consideration such macro-economic factors as interest rates, inflation, the regulatory environment, and the global competitive landscape.  In addition, the Sub-advisor also examines such factors as the most attractive global investment opportunities, industry consolidation, and the sustainability of economic trends.  As a result of this “top down” analysis, the Sub-advisor identifies sectors, industries and companies that should benefit from the trends the Sub-advisor has observed.

The Sub-advisor then looks for individual companies with earnings growth potential that may not be recognized by the market at large.  In determining whether a particular company may be a suitable investment by the Portfolio, the Sub-advisor focuses on a number of different attributes, including the company’s specific market expertise or dominance, its franchise durability and pricing power, solid fundamentals ( e.g. , a strong balance sheet, improving returns on equity, and the ability to generate free cash flow , apparent use of conservative accounting standards, and transparent financial disclosure), strong and ethical management, apparent commitment to shareholder interests and reasonable valuations in the context of projected growth rates.  This is called bottom-up stock selection.

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The AST Goldman Sachs Concentrated Growth Portfolio will pursue its objective by investing primarily in equity securities.  Equities securities include common stocks, preferred stocks, warrants and securities convertible into or exchangeable for common or preferred stocks.  Investments will be in companies that the Sub-advisor believes have potential to achieve capital appreciation over the long-term.  The Portfolio seeks to achieve its investment objective by investing, under normal circumstances, in approximately 30-45 companies that are considered by the Sub-adviser to be positioned for long-term growth.

The AST DeAM Large-Cap Value Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in large capitalization companies.  The Portfolio pursues its investment objective by primarily investing in the equity securities of large sized companies included in the Russell 1000® Value Index.  Equity securities include common stocks and securities convertible into or exchangeable for common stocks, including warrants and rights.  The Sub-advisor employs an investment strategy that seeks to maintain a portfolio of equity securities which approximates the market risk of those stocks included in the Russell 1000® Value Index, but which outperforms the Russell 1000® Value Index through active stock selection.  The Russell 1000® Value Index is a market capitalization index that measures the performance of large, established companies trading at discounts to their fair value.  As of December 31, 2004, the average market capitalization of the companies in the Russell 1000® Value Index was approximately $89.88 billion and the median market capitalization was approximately $4.52 billion.  The size of the companies in the Russell 1000® Value Index will change with market conditions.  The targeted tracking error of this Portfolio is 4% with normal a deviation of +/- 1%.  It is possible that the deviation may be higher.  For purposes of this Portfolio, the strategy of attempting to correlate a stock portfolio’s market risk with that of a particular index, in this case the Russell 1000® Value Index, while improving upon the return of the same index through active stock selection, is called a “managed alpha” strategy.

The Sub-advisor considers a number of factors in determining whether to invest in a value stock, including earnings growth rate, analysts’ estimates of future earnings and industry-relative price multiples.  Other factors are net income growth versus cash flow growth as well as earnings and price momentum.  In the selection of investments, long-term capital appreciation will take precedence over short range market fluctuations.  However, the Portfolio may occasionally make investments for short-term capital appreciation. The Sub-advisor generally takes a “bottom up” approach to building the Portfolio, searching for individual companies that demonstrate the best potential for significant return.

The AST Hotchkis & Wiley Large-Cap Value Portfolio seeks to achieve its objective by investing at least 80% of its net assets plus borrowings for investment purposes in common stocks of large cap U.S. companies.  The Sub-advisor considers large cap companies to be those with market capitalizations like those found in the Russell 1000 Index.  Market capitalization range of the Index changes constantly, but as of December 31, 2004, the range was from $385.2 billion to $495 million.  Market capitalization is measured at the time of initial purchase.  Some of these securities may be acquired in IPOs.  Normally, the Portfolio invests at least 80% of its net assets in stocks that have a high cash dividend or payout yield relative to the market.  Payout yield is defined as dividend yield plus net share repurchases.

The AST Alliance/Bernstein Growth + Value Portfolio will invest primarily in common stocks of large U.S. companies included in the Russell 1000® Index (the “Russell 1000®”).  The Russell 1000® is a market capitalization-weighted index that measures the performance of the 1,000 largest U.S. companies.  As of December 31, 2004, the average market capitalization of the companies in the Russell 1000 Index was approximately $82.8 billion.

Normally, about 65-105 companies will be represented in the Portfolio, with 25-35 companies primarily from the Russell 1000 Growth Index (the “Growth Index”) constituting approximately 50% of the Portfolio’s net assets, and 40-70 companies primarily from the Russell 1000® Value Index (the “Value Index”) constituting the remainder of the Portfolio’s net assets.  Daily purchases and reinvested distributions and redemptions and expense items will be divided between the two portfolio segments for purposes of maintaining the targeted allocation between growth and value stocks (the “Target Allocation”).  Normally, while it is not expected that the allocation of assets between portfolio segments will deviate more than 10% from the Target Allocation, it is possible that this deviation may be higher.  Factors such as market fluctuation, economic conditions, corporate transactions and declaration of dividends may result in deviations from the Target Allocation.  In the event the allocation of assets to the portfolio segments differs by more than 10% from the Target Allocation (e.g., 60% of the Portfolio’s net assets invested in growth stocks and 40% of the Portfolio’s net assets invested in value stocks), the Sub-advisors will rebalance each portfolio segment’s assets in order to maintain the Target Allocation.  As a consequence, assets may be allocated from the portfolio segment that has appreciated more or depreciated less to the other.  Rebalancing may entail transaction costs which over time may be significant.

The AST Sanford Bernstein Core Value Portfolio will pursue its objective by investing primarily in common stocks.  The Sub-advisor expects that the majority of the Portfolio’s assets will be invested in the common stocks of large companies that

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appear to be undervalued.  Among other things, the Portfolio seeks to identify compelling buying opportunities created when companies are undervalued on the basis of investor reactions to near-term problems or circumstances even though their long-term prospects remain sound.  The Sub-advisor’s investment approach is value-based and price-driven, and it relies on the intensive fundamental research of its internal research staff to identify these buying opportunities in the marketplace.

Portfolio investments are selected by the Sub-advisor based upon a model portfolio of 125-175 stocks constructed by the Sub-advisor.  In selecting investments for the model portfolio, the Sub-advisor takes a “bottom-up” approach.  In other words, the Sub-advisor seeks to identify individual companies with earnings growth potential that may not be recognized by the market at large.  The Sub-advisor relates present value of each company’s forecasted future cash flow to the current price of its stock.  The Sub-advisor ranks companies from the highest expected return to the lowest, with the companies at the top of the ranking being the most undervalued.

•                   The AST T. Rowe Price Natural Resources Portfolio may invest a up to 50% of its total assets in non-U.S. securities.  Investments in non-U.S. securities involve risks such as fluctuations in currency exchange rates, less liquid and more volatile securities markets, unstable political and economic structures, reduced availability of information, and lack of uniform financial reporting and regulatory practices such as those that apply to U.S. issuers.

•             The AST Goldman Sachs Concentrated Growth Portfolio is a non-diversified fund in that it may hold larger positions in a smaller number of securities.  As a result, a single security’s increase or decrease in value may have a greater impact on the Portfolio’s share price and total return.

should over-weight, under-weight or hold a neutral position in the stock relative to the proportion of the S&P 500® that the stock represents.  In addition, the Sub-advisor may determine based on the quantitative criteria that (1) certain S&P 500® stocks should not be held by the Portfolio in any amount, and (2) certain equity securities that are not included in the S&P 500® should be held by the Portfolio.  The Portfolio may invest up to 15% of its total assets in equity securities not included in the S&P 500®.

While the Portfolio attempts to outperform the S&P 500®, it is not expected that any outperformance will be substantial.  The Portfolio also may underperform the S&P 500® over short or extended periods.

The AST American Century Income & Growth Portfolio’s investment strategy utilizes quantitative management techniques in a two-step process that draws heavily on computer technology.  In the first step, the Sub-advisor ranks stocks, primarily the 1,500 largest publicly traded companies in the United States (measured by the value of the stock), from most attractive to least attractive.  This is determined by using a computer model that combines measures  of at stock’s value as well as measures of its growth potential.  To measure value, the Sub-advisor uses ratios of stock price to book value and stock price to cash flow, among others.  To measure growth, the Sub-advisor uses the rate of growth in a company’s earnings and changes in its earnings estimates, as well as other factors.

In the second step, the Sub-advisor uses a technique called portfolio optimization.  In portfolio optimization, the Sub-advisor uses a compute to build a portfolio of stocks from the ranking described above that it believes will provide the optimal balance between risk and expected return.  The goal is to create a portfolio that provides better returns than its benchmark without taking on significant additional risk.

The AST Alliance Growth and Income Portfolio normally will invest in common stocks (and securities convertible into common stocks).

The Sub-advisor will take a value-oriented approach, in that it will try to keep the Portfolio’s assets invested in securities that are selling at reasonable valuations in relation to their fundamental business prospects.  In doing so, the Portfolio may forgo some opportunities for gains when, in the judgment of the Sub-advisor, they are too risky.

In seeking to achieve its objective, the Portfolio invests primarily in the equity securities of U.S. companies that the Sub-advisor believes are undervalued.  The Sub-advisor believes that, over time, stock prices (of companies in which the Portfolio invests) will come to reflect the companies’ intrinsic economic values.  The Sub-advisor uses a disciplined investment process to evaluate the companies in its extensive research universe.  Through this process, the Sub-advisor seeks to identify the stocks of companies that offer the best combination of value and potential for price appreciation.

The Sub-advisor’s analysts prepare their own earnings estimates and financial models for each company followed.  The Sub-advisor employs these models to identify equity securities whose current market prices do not reflect what it considers to be their intrinsic economic value.  In determining a company’s intrinsic economic value, the Sub-advisor takes into account any factors it believes bear on the ability of the company to perform in the future, including earnings growth, prospective cash flows, dividend growth and growth in book value.  The Sub-advisor then ranks, at least weekly, each of the companies in its research universe in the relative order of disparity between their stock prices and their intrinsic economic values, with companies with the greatest disparities receiving the highest ranking (i.e., being considered the most undervalued).

The AST Global Allocation Portfolio (formerly, AST DeAM Global Allocation Portfolio) seeks to achieve its investment objective by investing in several AST Portfolios (the “Underlying Portfolios”), government securities and cash.  The Trust may, in the future, seek exemptive relief from the provisions of the Investment Company Act of 1940 at which time the Portfolio may invest in other securities including derivatives.  The Portfolio allocates its assets by investing in shares of a diversified group of Underlying Portfolios.  The Portfolio intends its strategy of investing in combinations of Underlying Portfolios to result in investment diversification that an investor could otherwise achieve only by holding numerous investments.  The Portfolio is expected to be invested in at least six Underlying Portfolios at any time.  The investment objectives of such Underlying Portfolios will be diversified.

The precise mix of Underlying Portfolios, government securities and cash investments will depend on the Sub-advisor’s outlook for the markets.  Shifts among Underlying Portfolios focused on different asset classes will normally be done gradually and the Sub-advisor will not attempt to precisely “time” the market.  The Portfolio’s investments in Underlying Portfolios that may invest significant portions of their assets in foreign equity and debt securities are intended to provide additional diversification.  The Sub-advisor will normally have at least three different countries represented in the foreign equity category.

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The Portfolio can change the allocations of its assets among Underlying Portfolios, government securities and cash at any time, if the Sub-advisor believes that doing so would better enable the Portfolio to pursue its investment objective.  From time to time, the Portfolio adjusts its investments within set limits based on the Sub-advisor’s outlook for the economy, financial markets generally and relative market valuation of the asset classes represented by each Underlying Portfolio.  The intention is to re-balance the specific allocations periodically.  Additionally the Portfolio may deviate from set limits when, in the Sub-advisor’s opinion, it is necessary to do so to pursue the Portfolio’s investment objective or for temporary defensive purposes.  Shares of the Underlying Portfolios, may be sold for a variety of reasons, such as to effect a change in asset allocation, to secure gains or limit losses, or to re-deploy assets to more promising opportunities.

The AST American Century Strategic Balanced Portfolio normally maintains approximately 60% of its assets in equity securities and the remainder in bonds and other fixed income securities.  For the equity portion of the Portfolio, the Sub-advisor utilizes quantitative management techniques in a two-step process that draws heavily on computer technology.  In the first step, the Sub-advisor ranks stocks, primarily the 1,500 largest publicly traded companies in the United States (measured by the value of their stock) from most attractive to least attractive.  These rankings are determined by using a computer model that combines measures of a stock’s value as well as measures of its growth potential.  To measure value, the Sub-advisor uses ratios of stock price to book value and stock price to cash flow, among others.  To measure growth, the Sub-advisor uses the rate of growth in a company’s earnings and changes in its earnings estimates, as well as other factors.

In the second step, the Sub-advisor uses a technique called portfolio optimization.  In portfolio optimization, the Sub-advisor uses a computer to build a portfolio of stocks from the ranking described above that it believes will provide the optimal balance between risk and expected return.  The goal is to create an equity portfolio that provides better returns than the S&P 500® Index without taking on significant additional risk.

The fixed-income portion of the Portfolio is invested primarily in a diversified portfolio of high-grade government, corporate, asset-backed and similar securities payable in U.S. currency.  At least 80% of the fixed-income assets will be invested in securities that, at the time of purchase, are rated within the three highest categories by a nationally recognized statistical rating organization.  Up to 20% of the fixed-income portion may be invested in securities rated in the fourth category, and up to 15% may be invested in securities rated in the fifth category.  Under normal market conditions, the weighted average maturity for the fixed income portion of the Portfolio will be in the 3- to 10-year range.

The AST T. Rowe Price Asset Allocation Portfolio normally invests approximately 60% of its total assets in equity securities and 40% in fixed income securities.  This mix may vary over shorter time periods; the equity portion may range between 50-70% and the fixed income portion between 30-50%.

The Sub-advisor concentrates common stock investments in larger, more established companies, but the Portfolio may include small and medium-sized companies with good growth prospects.  The Portfolio’s exposure to smaller companies is not expected to be substantial, and will not constitute more than 30% of the equity portion of the Portfolio.  Up to 35% of the equity portion may be invested in foreign (non-U.S. dollar denominated) equity securities.  When selecting particular stocks to purchase, the Sub-advisor will examine relative values and prospects among growth and value-oriented stocks, domestic and international stocks, and small-to large-cap stocks.  Domestic stocks are drawn from the overall U.S. market while international equities are selected primarily from large companies in developed countries.

The fixed income portion of the Portfolio will be allocated among investment grade securities (50-100% of the fixed income portion); high yield or “junk” bonds (up to 30%); foreign (non-U.S. dollar denominated) high quality debt securities (up to 30%); and cash reserves (up to 20%).  Bond investments are primarily investment grade (top four credit ratings) and are chosen from across the entire government and corporate bond markets.  A significant portion of the Portfolio’s fixed income investments may be in mortgage-related (including mortgage dollar rolls and derivatives such as collateralized mortgage obligations and stripped mortgage-backed securities) and asset-backed securities.  While the weighted average maturities of each component of the fixed income portion ( i.e. , investment grade, high yield, etc.) of the Portfolio will differ, the weighted average maturity of the fixed income portion as a whole (except for the cash reserves component) is expected to be in the range of 7 to 12 years.  Maturities will reflect the sub-advisor’s outlook for interest rates.

The precise mix of equity and fixed income investments will depend on the Sub-advisor’s outlook for the markets. The Portfolio’s investments in foreign equity and debt securities are intended to provide additional diversification, and the Sub-advisor will normally have at least three different countries represented in both the foreign equity and foreign debt portions of the Portfolio.

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The Portfolio may also invest in other securities, including futures and options, in keeping with its objective.  Securities may be sold for a variety of reasons, such as to effect a change in asset allocation, to secure gains or limit losses, or to re-deploy assets to more promising opportunities.

The AST PIMCO Total Return Bond Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in fixed income securities, including:

(1) securities issued or guaranteed by the U.S. Government, its agencies or government-sponsored enterprises;

(2) corporate debt securities of U.S. and non-U.S. issuers, including convertible securities and corporate commercial paper;

(3) mortgage and other asset-backed securities;

(4) inflation-indexed bonds issued by both governments and corporations;

(5) structured notes, including hybrid or “indexed” securities, event-linked bonds and loan participations;

(6) delayed funding loans and revolving credit securities;

(7) bank certificates of deposit, fixed time deposits and bankers’ acceptances;

(8) repurchase agreements and reverse repurchase agreements;

(9) debt securities issued by state or local governments and their agencies and government-sponsored enterprises;

(10) obligations of foreign governments or their subdivisions, agencies and government-sponsored enterprises;

(11) derivative instruments, including swap agreements; and

(12) obligations of international agencies or supranational entities.

Portfolio holdings will be concentrated in areas of the bond market that the Sub-advisor believes to be relatively undervalued.  In selecting fixed income securities, the Sub-advisor uses economic forecasting, interest rate anticipation, credit and call risk analysis, foreign currency exchange rate forecasting, and other securities selection techniques.  The proportion of the Portfolio’s assets committed to investment in securities with particular characteristics (such as maturity, type and coupon rate) will vary based on the Sub-advisor’s outlook for the U.S. and foreign economies, the financial markets, and other factors.  The management of duration is one of the fundamental tools used by the Sub-advisor.

The Portfolio will invest in fixed-income securities of varying maturities.  The average portfolio duration of the Portfolio generally will vary within a three- to six-year time frame based on the Sub-advisor’s forecast for interest rates.  The Portfolio can and routinely does invest in certain complex fixed income securities (including mortgage-backed and asset-backed securities) and engage in a number of investment practices (including futures, swaps and dollar rolls) that many other fixed income funds do not utilize. The Portfolio may invest up to 10% of its assets in fixed income securities that are rated below investment grade (“junk bonds”) (or, if unrated, determined by the Sub-advisor to be of comparable quality).

The AST PIMCO Limited Maturity Bond Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in fixed income securities, including::

(1) securities issued or guaranteed by the U.S. Government, its agencies or government-sponsored enterprises;

(2) corporate debt securities of U.S. and non-U.S. issuers, including convertible securities and corporate commercial paper;

(3) mortgage and other asset-backed securities;

(4) inflation-indexed bonds issued by both governments and corporations;

(5) structured notes, including hybrid or “indexed” securities, event-linked bonds and loan participations;

(6) delayed funding loans and revolving credit securities;

(7) bank certificates of deposit, fixed time deposits and bankers’ acceptances;

(8) repurchase agreements and reverse repurchase agreements;

(9) debt securities issued by state or local governments and their agencies and government-sponsored enterprises;

(10) obligations of foreign governments or their subdivisions, agencies and government-sponsored enterprises; and

(11) obligations of international agencies or supranational entities.

Portfolio holdings will be concentrated in areas of the bond market that the Sub-advisor believes to be relatively undervalued.  In selecting fixed income securities, the Sub-advisor uses economic forecasting, interest rate anticipation, credit and call risk analysis, foreign currency exchange rate forecasting, and other securities selection techniques.  The proportion of the Portfolio’s assets committed to investment in securities with particular characteristics (such as maturity, type and coupon rate) will vary based on the Sub-advisor’s outlook for the U.S. and foreign economies, the financial markets, and other factors.  The management of duration is one of the fundamental tools used by the Sub-advisor.

The Portfolio will invest in fixed-income securities of varying maturities.  The average portfolio duration of the Portfolio generally will vary within a one- to three-year time frame based on the Sub-advisor’s forecast for interest rates.  The Portfolio can and routinely does invest in certain complex fixed income securities (including mortgage-backed and asset-backed securities) and engage in a number of investment practices (including futures, swaps and dollar rolls) that many other fixed

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income funds do not utilize. The Portfolio may invest up to 10% of its assets in fixed income securities that are rated below investment grade (“junk bonds”) (or, if unrated, determined by the Sub-advisor to be of comparable quality).

The AST Money Market Portfolio will invest in high-quality, short-term, U.S. dollar denominated corporate, bank and government obligations.  Under the regulatory requirements applicable to money market funds, the Portfolio must maintain a weighted average portfolio maturity of not more than 90 days and invest in securities that have effective maturities of not more than 397 days.  In addition, the Portfolio will limit its investments to those securities that, in accordance with guidelines adopted by the Trustees of the Trust, present minimal credit risks.  The Portfolio will not purchase any security (other than a United States Government security) unless:

(1) if rated by only one nationally recognized statistical rating organization (such as Moody’s and Standard & Poor’s), such organization has rated it with the highest rating assigned to short-term debt securities;

(2) if rated by more than one nationally recognized statistical rating organization, at least two rating organizations have rated it with the highest rating assigned to short-term debt securities; or

(3) it is not rated, but is determined to be of comparable quality in accordance with the guidelines noted above.

•                   The AST Money Market Portfolio seeks to preserve the value of your investment at $1.00 per share, but it is still possible to lose money by investing in the Portfolio.  For instance, the issuer or guarantor of a portfolio security or the other party to a contract could default on its obligation, and this could cause the Portfolio’s net asset value to fall below $1.00.  An investment in the Portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.  In addition, the income earned by the Portfolio will fluctuate based on market conditions, interest rates and other factors.  In a low interest rate environment, the yield for the Portfolio, after deduction of operating expenses, may be negative even though the yield before deducting such expenses is positive.  A negative yield may also cause the Portfolio’s net asset value per share to fall below $1.00.  The Investment Managers may decide to reimburse certain of these expenses to the Portfolio in order to maintain a positive yield, however they are under no obligation to do so and may cease doing so at any time without prior notice.

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