Principal Investment Strategies:

The AST JPMorgan International Equity Portfolio (formerly, the AST Strong International Equity Portfolio) will invest, under normal circumstances, at least 80% of the value of its assets in equity securities. The Portfolio seeks to meet its investment objective by investing its total assets in a diversified portfolio of equity securities of companies located or operating in developed non-U.S. countries and emerging markets of the world. The equity securities will ordinarily be traded on a recognized foreign securities exchange or traded in a foreign over-the-counter market in the country where the issuer is principally based, but may also be traded in other countries including the United States. The Sub-advisor intends to focus on companies with an above-average potential for long-term growth and attractive relative valuations. The Sub-advisor selects companies based on five key factors: growth, valuation, management, risk, and sentiment. In addition, the Sub-advisor looks for companies with the following characteristics: (1) a distinguishable franchise on a local, regional or global basis; (2) a history of effective management demonstrated by expanding revenues and earnings growth; (3) prudent financial and accounting policies; and (4) an ability to capitalize on a changing business environment.

The Portfolio will normally allocate assets among a variety of countries, regions and industry sectors, investing in at least five countries outside of the United States. In selecting countries, the Sub-advisor considers such factors as economic growth prospects, monetary and fiscal policies, political stability, currency trends and market liquidity. The Portfolio may invest up to 40% of its total assets in any one country and up to 25% of its total assets in securities of issuers located and operating primarily in emerging market countries.

The AST William Blair International Growth Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in securities of issuers that are economically tied to countries other than the United States. Equity securities include common stocks, preferred stocks, warrants and securities convertible into or exchangeable for common or preferred stocks. The Portfolio has the flexibility to invest on a worldwide basis in companies and organizations of any size, regardless of country of organization or place of principal business activity. The Portfolio normally invests primarily in securities of issuers from at least five different countries, excluding the United States. Although the Portfolio intends to invest 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.

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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.

Principal Investment Strategies:

The AST Small-Cap Growth Portfolio (formerly, the AST State Street Research Small-Cap Growth Portfolio) will invest, under normal circumstances, at least 80% of the value of its assets in small capitalization companies. For purposes of the Portfolio, small-sized companies are those that have market capitalizations similar to the market capitalizations of the companies in the Russell 2000® Growth Index at the time of the Portfolio’s investment. The Sub-advisor expects to focus primarily on those securities whose market capitalizations or annual revenues are less than $1 billion at the time of purchase. The size of the companies in the Russell 2000® Growth Index and those on which the Sub-advisor intends to focus the Portfolio’s investments will change with market conditions. As of December 31, 2004, the average market capitalization of the companies in the Russell 2000® Growth Index was $522 million and the median market capitalization was $1.03 billion. The size of the companies in the Russell 2000® Growth Index will change with market conditions. The Sub-Advisor uses its own fundamental research, computer models and proprietary measures of growth in determining which stocks to select for the Portfolio. The Sub-Advisor’s investment strategy seeks to identify stocks of companies which have strong business momentum, earnings growth, superior management teams as well as stocks of those companies whose earnings growth potential may not be currently recognized by the market and whose stock may be considered to be underpriced using various financial measurements employed by the Sub-advisor, such as price-to-earnings ratios.

The AST DeAM Small-Cap Growth Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in small capitalization companies. The Portfolio pursues its investment objective by primarily investing in the equity securities of small-sized companies included in the Russell 2000® Growth 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® Growth Index, but which outperforms the Russell 2000® Growth Index through active stock selection. The Russell 2000® Growth Index is a market capitalization index that measures the performance of small-sized companies with above average growth prospects. As of December 31, 2004, the average market capitalization of the companies in the Russell 2000® Growth Index was $1.03 billion and the median market capitalization was $522 million. The size of the companies in the Russell 2000® Growth Index will change with market conditions. 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® Growth 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 growth 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 Federated Aggressive Growth Portfolio pursues its investment objective by investing primarily in the stocks of small companies that are traded on national security exchanges, NASDAQ stock exchange and the over-the-counter market. Small companies will be defined as companies with market capitalizations similar to companies in the Russell

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2000® Index (which had a market capitalization range of $26 million to $6.1 billion as of December 31, 2004) or the Standard & Poor’s Small Cap 600 Index (which had a market capitalization range of $68 million to $4.9 billion as of December 31, 2004. Such definition will be applied at the time of investment and the Portfolio will not be required to sell a stock because the company has grown outside the market capitalization range of small capitalization stocks. Up to 25% of the Portfolio’s net assets may be invested in foreign securities, which are typically denominated in foreign currencies.

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 well -positioned businesses that have attractive returns on capital , sustainable earnings and cash flow , and strong company management focused on long-term returns to shareholders as well as attractive valuation opportunities where the intrinsic value is not reflected in the stock price.

Price and Prospects.    All successful investing should thoughtfully weigh two important attributes of a stock:  price and prospects. Since most value managers tend to focus almost exclusively on price, they often underestimate the importance of prospects. The Sub-advisor believes a company’s prospective ability to generate high cash flow and returns on capital will strongly influence investment success.

Uncertainty creates opportunity.    Some stock price declines truly reflect a permanently disadvantaged business model. These stocks are the “value traps” that mire price-oriented investors. Other stock price declines merely reflect near-term market volatility. Through our proprietary research and strong valuation discipline, the Sub-Advisor seeks to purchase well-positioned, cash-generating businesses run by shareholder-oriented managements at a price low enough to provide a healthy margin of safety.

Avoiding “value traps.”    The Sub-Advisor believes the key to successful investing in the small cap value space is to avoid the “losers” or “value traps.”  Academic studies have shown that small cap value has historically outperformed other asset classes, but with higher volatility and less liquidity. By focusing on stock selection within sectors and avoiding the “losers,” we believe we can participate in the long-term performance of small cap value with much less risk than other managers.

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 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 currently manages 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

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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.

Lee Munder currently manages 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 currently manages 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 Russell Mid Cap Growth Index. As of December 31, 2004, the average market capitalization of the companies in the Russell Mid Cap Growth Index was $7.02 billion and the median market capitalization was $3.55 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

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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.

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.

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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 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 AllianceBernstein Large-Cap Growth Portfolio (formerly known as 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 invests primarily in the common stocks of large companies (typically companies that have a market capitalization in the range of $4 billion or more) that are selected for their growth potential. The Portfolio will normally hold a core position of between 35 and 50 common stocks. The Portfolio may hold a limited number of additional common stocks at times when the Portfolio manager is accumulating new positions, phasing out existing positions, or responding to exceptional market conditions.

In selecting investments for the Portfolio the Sub-advisor uses an approach that combines “top-down” macroeconomic analysis with “bottom-up” stock selection.

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Principal Investment Strategies:

The AST Cohen & Steers Realty Portfolio will invest, under normal circumstances, at least 80% of its net assets in securities of real estate related issuers. Under normal circumstances, the Portfolio will invest substantially all of its assets in the equity securities of real estate companies. Such equity securities will consist of common stocks, rights or warrants to purchase common stocks, securities convertible into common stocks where the conversion feature represents, in the Sub-advisor’s view, a significant element of the securities’ value, and preferred stocks.

For purposes of the Portfolio’s investment policies, a “real estate company” is one that derives at least 50% of its revenues from the ownership, construction, financing, management or sale of real estate or that has at least 50% of its assets in real estate. The Portfolio may invest up to 10% of its total assets in securities of foreign real estate companies. Real estate companies may include real estate investment trusts (“REITs”). REITs pool investors’ funds for investment primarily in income producing real estate or real estate related loans or interests.

The AST AllianceBernstein Managed Index 500 Portfolio (formerly known as the AST Sanford Bernstein Managed Index 500 Portfolio) will invest, under normal circumstances, at least 80% of its net assets in securities included in the Standard & Poor’s 500 Composite Stock Price Index (the “S&P 500 â ”). The Portfolio is actively managed and seeks to outperform the S&P 500® through the Sub-advisor’s stock selection resulting in different weightings of common stocks relative to the index. The S&P 500® is an index of 500 common stocks, most of which trade on the New York Stock Exchange Inc. (the “NYSE”).

In seeking to outperform the S&P 500®, the Sub-advisor starts with a portfolio of stocks representative of the holdings of the index. It then uses a set of quantitative criteria that are designed to indicate whether a particular stock will predictably perform better or worse than the S&P 500®. Based on these criteria, the Sub-advisor determines whether the Portfolio 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,

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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 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 a portfolio that provides better returns than its benchmark without taking on significant additional risk.

The AST AllianceBernstein Growth & Income Portfolio (formerly known as 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”) selected by the Investment Manager, 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 exchange traded funds, (ETFs), and derivatives. The Portfolio actively 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 Investment Manager is not, however, responsible for the day-to-day management of the Underlying Portfolios in which the Portfolio invests. The Portfolio is expected to be invested in several Underlying Portfolios at any time. The investment objectives of such Underlying Portfolios will be diversified.

The precise allocation among the Underlying Portfolios, government securities and cash investments will depend on the Investment Manager’s outlook for the markets. Shifts among Underlying Portfolios focused on different asset classes will normally be done gradually and the Investment Manager 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 Investment Manager expects that the underlying portfolios in which it invests will normally have at least three different countries represented in the foreign equity category at any given time. However, the Investment Manager does not control investments by the Underlying Portfolios; therefore, the Portfolio may occasionally be invested in Underlying Portfolios that have fewer than three countries represented in the foreign equity category at a particular time. In addition, the Investment Manager may at any time determine that it does not with for the Portfolio to be invested in Underlying Portfolios that have any assets invested in the foreign equity category.

The Investment Manager may change the allocations of its assets among Underlying Portfolios, government securities and cash at any time if the Investment Manager believes that doing so would better enable the Portfolio to pursue its investment objective. In addition, the Portfolio intends to periodically re-balance specific allocations among Underlying Portfolios in order to maintain current target allocations. These adjustments in targets are made based on the Investment

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Manager’s outlook for the economy, financial markets generally, and the relative market valuation of the asset classes represented by each Underlying Portfolio. Additionally the Portfolio may deviate from its targets or customary investment strategies when, in the Investment Manager’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 Sub-advisor also consults the rankings described above when determining whether to sell a particular security. As a security’s ranking falls, the Sub-advisor will consider many factors in addition to the computer-generated information for the security, including, among other things, a security’s price, whether a security’s risk parameters outweigh its return opportunities, general market conditions, and any other factors deemed relevant by the Sub-advisor.

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. Maturities and duration of the fixed income portion of the portfolio 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.

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.

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Principal Investment Strategies:

The AST T. Rowe Price Global Bond Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in fixed income securities. The Portfolio will invest in all types of bonds including those issued or guaranteed by the U.S. or foreign governments or their agencies and by foreign authorities, provinces and municipalities as well as investment grade corporate bonds, mortgage and asset-backed securities and high-yield bonds of U.S. and foreign issuers. The Portfolio seeks to moderate price fluctuation by actively managing its maturity structure and currency exposure. The Sub-advisor bases its investment decisions on fundamental market factors, currency trends, and credit quality. The Portfolio generally invests in countries where the combination of fixed-income returns and currency exchange rates appears attractive, or, if the currency trend is unfavorable, where the Sub-advisor believes that the currency risk can be minimized through hedging.

Although the Portfolio expects to maintain an intermediate-to-long weighted average maturity, there are no maturity restrictions on the overall portfolio or on individual securities. The Portfolio may and frequently does engage in foreign currency transactions such as forward foreign currency exchange contracts, hedging its foreign currency exposure back to the dollar or against other foreign currencies (“cross-hedging”). The Sub-advisor also attempts to reduce currency risks through diversification among foreign securities and active management of maturities and currency exposures.

The Portfolio may also invest up to 20% of its assets in the aggregate in below investment-grade, high-risk bonds (“junk bonds”) and emerging market bonds. Some emerging market bonds, such as Brady Bonds, may be denominated in U.S. dollars. In addition, the Portfolio may invest up to 30% of its assets in mortgage-related (including mortgage dollar rolls and derivatives, such as collateralized mortgage obligations and stripped mortgage securities) and asset-backed securities.

The AST Goldman Sachs High Yield Portfolio (formerly, the AST Federated High Yield Portfolio) will invest, under normal circumstances, at least 80% of its net assets plus any borrowings for investment purposes (measured at time of purchase) (‘‘Net Assets’’) in high-yield, fixed-income securities that, at the time of purchase, are non-investment grade securities. Non-investment grade securities are securities rated BB, Ba or below by a Moody’s Investors Services, Inc. or Standard & Poor’s Corporation, or, if unrated, determined by the Sub-Adviser to be of comparable quality. The Fund may invest in all types of fixed income securities, including, senior and subordinated corporate debt obligations (such as bonds, debentures, notes and commercial paper), convertible and non-convertible corporate debt obligations, loan participations, custodial receipts, municipal Securities and preferred stock.

To pursue its objective, the AST Lord Abbett Bond-Debenture Portfolio will invest, under normal circumstances, at least 80% of the value of its assets in fixed income securities. To pursue its objective, the Portfolio normally invests primarily in high yield and investment grade debt securities, securities convertible into common stock, and preferred stocks. At least 20% of the Portfolio’s assets must be invested in any combination of investment grade securities, U.S. Government securities and cash equivalents.

The Sub-advisor believes that a high total return (current income and capital growth) may be derived from an actively managed, diversified portfolio of investments. Through portfolio diversification, credit analysis and attention to current developments and trends in interest rates and economic conditions, the Sub-advisor attempts to reduce the Portfolio’s risks. The Sub-advisor seeks unusual values, using fundamental, “bottom-up” research (i.e., research on individual companies rather than the economy as a whole) to identify undervalued securities. The Portfolio may find good value in high yield securities, sometimes called “lower-rated bonds” or “junk bonds,” and frequently may have more than half of its assets invested in those securities. The Portfolio may also make significant investments in mortgage-backed securities. Although the Portfolio expects to maintain a weighted average maturity in the range of seven to nine years, there are no maturity restrictions on the overall portfolio or on individual securities.

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;

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(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

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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 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.