As filed with the Securities and Exchange Commission on December 15, 2021
Securities Act Registration No. 033-24962
Investment Company Act Registration No. 811-05186
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 184 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 186 (X)
Check appropriate box or boxes
ADVANCED SERIES TRUST
Exact name of registrant as specified in charter
655 Broad Street, 17th Floor
Newark, New Jersey 07102
Address of Principal Executive Offices including Zip Code
1-800-225-1852
Registrant’s Telephone Number, Including Area Code
Andrew R. French
655 Broad Street, 17th Floor
Newark, New Jersey 07102
Name and Address of Agent for Service
It is proposed that this filing will become effective:
X immediately upon filing pursuant to paragraph (b)
__ on (date) pursuant to paragraph (b)
__ 60 days after filing pursuant to paragraph (a)(1)
__ on (date) pursuant to paragraph (a)(1)
__ 75 days after filing pursuant to paragraph (a)(2)
__ on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
__ this post-effective amendment designates a new effective date for a previously filed post-effective amendment.
Explanatory Note
This Post-Effective Amendment No. 184 to the Registrant’s Registration Statement under the Securities Act of 1933 and Amendment No. 186 to the Registrant’s Registration Statement under the Investment Company Act of 1940 (the Amendment) relates solely to the AST Bond Portfolio 2033.
The Amendment is not intended to amend the current prospectuses and statements of additional information for the other series of the Registrant, dated April 26, 2021, and as supplemented to date.

 
ADVANCED SERIES TRUST
PROSPECTUS • January 3, 2022
The Advanced Series Trust (the Trust and each series thereof, a Portfolio) is an investment vehicle for life insurance companies (the Participating Insurance Companies) writing variable annuity contracts and variable life insurance policies (each, a Contract and together, the Contracts). Shares of the Trust may also be sold directly to certain tax-deferred retirement plans. Each Contract involves fees and expenses not described in this prospectus (the Prospectus). Please read the prospectus of your Contract for information regarding the Contract, including its fees and expenses. The Portfolio offered in this Prospectus is set forth on this cover (the Portfolio).
These securities have not been approved or disapproved by the Securities and Exchange Commission (the Commission or the SEC) or the Commodity Futures Trading Commission (the CFTC) nor has the Commission or the CFTC passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.
Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
AST Bond Portfolio 2033
 
SUMMARY: AST BOND PORTFOLIO 2033
INVESTMENT OBJECTIVE
The investment objective of the Portfolio is to seek the highest total return for a specific period of time, consistent with the preservation of capital and liquidity needs. Total return is comprised of current income and capital appreciation.
PORTFOLIO FEES AND EXPENSES
The table below shows the fees and expenses that you may pay if you invest in shares of the Portfolio. The table does not include Contract charges. Because Contract charges are not included, the total fees and expenses that you will incur will be higher than the fees and expenses set forth in the table. See your Contract prospectus for more information about Contract charges. 
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)(1)
Management Fees
0.47%
+ Distribution and/or Service Fees (12b-1 Fees)
0.25%
+ Other Expenses(2)
0.08%
= Total Annual Portfolio Operating Expenses
0.80%
(1) The Portfolio will commence operations on or about January 3, 2022.
(2) Other expenses (which include expenses for accounting and valuation services, custodian fees, audit fees, legal fees, transfer agency fees, fees paid to Independent Trustees, and certain other miscellaneous items) are estimated. Estimates are based in part on assumed average daily net assets of $200 million for the Portfolio for the fiscal year ending December 31, 2022.
Example.  The following example is intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The table does not include Contract charges. Because Contract charges are not included, the total fees and expenses that you will incur will be higher than the fees and expenses set forth in the example. See your Contract prospectus for more information about Contract charges.
The example assumes that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Portfolio’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: 
 
1 Year
3 Years
AST Bond Portfolio 2033
$82
$255
Portfolio Turnover.  The Portfolio pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs. These costs, which are not reflected in annual portfolio operating expenses or in the example, affect the Portfolio's performance. No portfolio turnover rate is presented for the Portfolio because it is new.
INVESTMENTS, RISKS AND PERFORMANCE
Principal Investment Strategies.  In pursuing its investment objective, the Portfolio normally invests at least 80% of its assets (net assets plus any borrowings made for investment purposes) in bonds. For purposes of this 80% policy, bonds include: (i) all debt securities and all fixed income securities, excluding preferred stock, issued by both government and non-government issuers, and (ii) all derivatives and synthetic instruments that have economic characteristics that are similar to such debt securities and such fixed income securities.
In managing the Portfolio’s assets, the subadviser, PGIM Fixed Income, uses a combination of top-down economic analysis and bottom-up research in conjunction with proprietary quantitative models and risk management systems. In the top-down economic analysis, the subadviser develops views on economic, policy and market trends. In its bottom-up research, the subadviser develops an internal rating and outlook on issuers. The rating and outlook is determined based on a thorough review of the financial health and trends of the issuer. 
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The subadviser may also consider investment factors such as expected total return, yield, spread and potential for price appreciation as well as credit quality, maturity and risk. The Portfolio may invest in a security based upon the expected total return rather than the yield of such security. 
Further, the Portfolio may invest in other pooled investment vehicles, including other portfolios of the Trust, other open-end or closed-end investment companies, exchange-traded funds, unit investment trusts, and domestic or foreign private investment pools (collectively referred to as Underlying Portfolios). The subadviser may use derivative instruments for any reason, including to manage or adjust the Portfolio’s risk profile when asset flows are volatile. 
Contract owners cannot select the Portfolio for investment. Instead, if a Contract owner selected certain benefits under their Contract, the Contract owner’s account value may be allocated to and from the Portfolio in accordance with a mathematical formula under the Contract. The Contracts using the Portfolio are issued by Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, Prudential Annuities Life Assurance Corporation (which is in the process of being sold and may, at a future date, go by a different name) and Allstate Life Insurance Company. For more information, Contract owners should see their Contract prospectus or contact the relevant Participating Insurance Company or their financial professional. 
The Portfolio is managed to mature on or about the end of the year identified in its name in order to match the related liability under certain living benefit programs. In addition, the Portfolio’s duration and weighted average maturity will decline over time as the maturity date approaches. To that end, the subadviser expects to maintain the duration of the Portfolio within +/– 0.50 years of the secondary benchmark index for the Portfolio. The secondary benchmark index for the Portfolio is the Bloomberg Barclays Fixed Maturity (2033) Zero Coupon Swaps Index. The primary benchmark index for the Portfolio is the Bloomberg Barclays US Government/Credit Index. 
On or about the Portfolio’s maturity date, all of the securities held by the Portfolio will be sold and all of the outstanding shares of beneficial interest of the Portfolio will be redeemed. Proceeds from that redemption will be reallocated in accordance with the procedures applicable to the Contract owner’s variable Contract. The subadviser currently intends to maintain an overall weighted average credit quality rating of A- or better for the Portfolio. This target overall credit quality for the Portfolio will be based on ratings as of the date of purchase. In the event the overall credit quality drops below A- due to downgrades of individual portfolio securities, the subadviser will take appropriate action based upon the relevant facts and circumstances. 
Principal Risks of Investing in the Portfolio. The risks summarized below are the principal risks of investing in the Portfolio. All investments have risks to some degree and it is possible that you could lose money by investing in the Portfolio. An investment in the Portfolio is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. While the Portfolio makes every effort to achieve its objective, the Portfolio cannot guarantee success. The order of the below risk factors does not indicate the significance of any particular risk factor.
Asset-Backed and/or Mortgage-Backed Securities Risk. Asset-backed and mortgage-backed securities are fixed income securities that represent an interest in an underlying pool of assets, such as credit card receivables or, in the case of mortgage-backed securities, mortgage loans. Like fixed income securities, asset-backed and mortgage-backed securities are subject to interest rate risk, liquidity risk, and credit risk, which may be heightened in connection with investments in loans to “subprime” borrowers. Certain asset-backed and mortgage-backed securities are subject to the risk that those obligations will be repaid sooner than expected or later than expected, either of which may result in lower than expected returns. Mortgage-backed securities, because they are backed by mortgage loans, are also subject to risks related to real estate, and securities backed by private-issued mortgages may experience higher rates of default on the underlying mortgages than securities backed by government-issued mortgages.
Asset Transfer Program Risk. Predetermined, nondiscretionary mathematical formulas used by the Participating Insurance Companies to manage the guarantees offered in connection with certain benefit programs under the Contracts may result in systematic transfers of assets among the investment options under the Contracts, including the Portfolio. The formulas may result in transfers between your selected portfolios and this Portfolio and/or transfers
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between this Portfolio and a bond portfolio with a different maturity date. These formulas may result in large-scale asset flows into and out of the Portfolio, which could adversely affect the Portfolio, including its risk profile, expenses and performance. For example, the asset flows may adversely affect performance by requiring the Portfolio to purchase or sell securities at inopportune times, by otherwise limiting the subadviser’s ability to fully implement the Portfolio’s investment strategies, or by requiring the Portfolio to hold a larger portion of its assets in highly liquid securities than it otherwise would hold. The asset flows may also result in high turnover, low asset levels and high operating expense ratios for the Portfolio. The asset flows could remove all or substantially all of the assets of the Portfolio. The efficient operation of the asset flows depends on active and liquid markets. If market liquidity is strained, the asset flows may not operate as intended which in turn could adversely affect performance.
Derivatives Risk. A derivative is a financial contract, the value of which depends upon, or is derived from, the value of one or more underlying investments, such as an asset, reference rate, or index. The use of derivatives is a highly specialized activity that involves a variety of risks in addition to and greater than those associated with investing directly in securities, including the risk that: the party on the other side of a derivative transaction will be unable to honor its financial obligation; leverage created by investing in derivatives may result in losses to the Portfolio; derivatives may be difficult or impossible for the Portfolio to buy or sell at an opportune time or price, and may be difficult to terminate or otherwise offset; derivatives used for hedging may reduce or magnify losses but also may reduce or eliminate gains; and the price of commodity-linked derivatives may be more volatile than the prices of traditional equity and debt securities.
Economic and Market Events Risk. Events in the US and global financial markets, including actions taken by the US Federal Reserve or foreign central banks to stimulate or stabilize economic growth, may at times result in periods of unusually high volatility in a market or a segment of a market, which could negatively impact performance. Reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Expense Risk. The actual cost of investing in the Portfolio may be higher than the expenses shown in the “Annual Portfolio Operating Expenses” table above for a variety of reasons, including, for example, if the Portfolio’s average net assets decrease.
Fixed Income Securities Risk. Investment in fixed income securities involves a variety of risks, including that: an issuer or guarantor of a security will be unable or unwilling to pay obligations when due; due to decreases in liquidity, the Portfolio may be unable to sell its securities holdings within a reasonable time at the price it values the security or at any price; and the Portfolio’s investment may decrease in value when interest rates rise. Volatility in interest rates and in fixed income markets may increase the risk that the Portfolio’s investment in fixed income securities will go down in value. Risks associated with changing interest rates are currently heightened because any increase or decrease may be sudden and significant, with unpredictable effects on the markets and the Portfolio’s investments. Changes in interest rates may also affect the liquidity of the Portfolio’s investments in fixed income securities.
Fund of Funds Risk. In addition to the risks associated with the investment in the Underlying Portfolios, the Portfolio is exposed to the investment objectives, investment risks, and investment performance of the Underlying Portfolios. The Portfolio is also subject to a potential conflict of interest between the Portfolio and its investment manager(s) and subadviser(s), which could impact the Portfolio. Moreover, the Portfolio will incur its pro rata share of the Underlying Portfolios’ expenses, which will reduce the Portfolio’s performance.
High Yield Risk. Investments in fixed income securities rated below investment grade and unrated securities of similar credit quality (i.e., high yield securities or junk bonds) may be more sensitive to interest rate, credit, call and liquidity risks than investments in investment grade securities, and have predominantly speculative characteristics.
Liquidity and Valuation Risk. The Portfolio may hold one or more securities for which there are no or few buyers and sellers or the securities are subject to limitations on transfer. The Portfolio may be unable to sell those portfolio holdings at the desired time or price, and may have difficulty determining the value of such securities for the purpose of determining the Portfolio’s net asset value. In such cases, investments owned by the Portfolio may be valued at fair
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value pursuant to guidelines established by the Trust’s Board of Trustees. No assurance can be given that the fair value prices accurately reflect the value of the security. The Portfolio is subject to a liquidity risk management program, which limits the ability of the Portfolio to invest in illiquid investments.
Market and Management Risk. Markets in which the Portfolio invests may experience volatility and go down in value, and possibly sharply and unpredictably. Investment techniques, risk analyses and investment strategies, which may include quantitative models or methods, used by a subadviser in making investment decisions for the Portfolio are subject to human error and may not produce the intended or desired results. The value of the Portfolio’s investments may be negatively affected by the occurrence of domestic or global events, including war, terrorism, environmental disasters, natural disasters or events, political or civil instability, and public health emergencies (such as the spread of infectious diseases, pandemics, or epidemics), among others. Such events may reduce consumer demand or economic output, result in market closures, travel restrictions or quarantines, and significantly adversely impact the economy. There is no guarantee that the investment objective of the Portfolio will be achieved.
Regulatory Risk. The Portfolio is subject to a variety of laws and regulations which govern its operations. The Portfolio is subject to regulation by the SEC. Similarly, the businesses and other issuers of the securities and other instruments in which the Portfolio invests are also subject to considerable regulation. Changes in laws and regulations may materially impact the Portfolio, a security, business, sector or market.
Sovereign Debt Securities Risk. Investing in foreign sovereign debt securities exposes the Portfolio to direct or indirect consequences of political, social or economic changes in the countries that issue the securities. The consequences include the risk that the issuer or governmental authority that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or pay interest when it becomes due, that the foreign government may default on its debt securities, and that there may be no bankruptcy proceeding by which the defaulted sovereign debt may be collected.
US Government Securities Risk. US Government securities may be adversely affected by changes in interest rates, a default by, or decline in the credit quality of, the US Government, and may not be backed by the full faith and credit of the US Government.
Past Performance. No performance history is presented for this Portfolio, because it does not yet have a full calendar year of performance.
MANAGEMENT OF THE PORTFOLIO 
Investment Manager
Subadviser
Portfolio Managers
Title
Service Date
PGIM Investments LLC
PGIM Fixed Income;
PGIM Limited
Richard Piccirillo
Managing Director
and Senior Portfolio
Manager
January 2022
 
 
David Del Vecchio
Managing Director
and Portfolio Manager
January 2022
 
 
Gregory Peters
Managing Director
and Head of
Multi-Sector and
Strategy
January 2022
 
 
Scott Donnelly, CFA
Vice President and
Portfolio Manager
January 2022
 
 
Lindsay Rosner, CFA
Vice President
January 2022
TAX INFORMATION
Contract owners should consult their Contract prospectus for information on the federal tax consequences to them. In addition, Contract owners may wish to consult with their own tax advisors as to the tax consequences of investments in the Contracts and the Portfolio, including the application of state and local taxes. The Portfolio currently intends to
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be treated as a partnership for federal income tax purposes. As a result, the Portfolio's income, gains, losses, deductions, and credits are “passed through” pro rata directly to the Participating Insurance Companies and retain the same character for federal income tax purposes.
FINANCIAL INTERMEDIARY COMPENSATION
If you purchase your Contract through a broker-dealer or other financial intermediary (such as a bank), the Participating Insurance Company, the Portfolio or their related companies may pay the intermediary for the sale of the Contract, the selection of the Portfolio and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Contract over another investment or insurance product, or to recommend the Portfolio over another investment option under the Contract. Ask your salesperson or visit your financial intermediary's website for more information.
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ABOUT THE TRUST
About the TRUST and THE Portfolio
This Prospectus provides information about the Trust and the Portfolio. The Portfolio is a diversified investment company as defined by the Investment Company Act of 1940 (the 1940 Act).
PGIM Investments LLC (PGIM Investments or the Manager), a wholly-owned subsidiary of Prudential Financial, Inc. (Prudential Financial), serves as the sole investment manager for the Portfolio. Prudential Financial, which is incorporated in the United States, has its principal place of business in the United States. Neither Prudential Financial nor any of its subsidiaries are affiliated in any manner with Prudential plc, a company incorporated in the United Kingdom. The Manager has retained PGIM Fixed Income, a business unit of PGIM, Inc. and PGIM Limited (collectively, the Subadviser) to manage the day-to-day investment of the assets of the Portfolio in a multi-manager structure. More information about the Manager, the Subadvisers and the multi-manager structure is included under “How the Trust is Managed” later in this Prospectus.
The Trust offers one class of shares in the Portfolio. Shares of the Portfolio are sold only to separate accounts of The Prudential Insurance Company of America, Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, Pramerica of Bermuda Life Assurance Company, Ltd. (collectively, Prudential), Prudential Annuities Life Assurance Corporation (which is in the process of being sold and may, at a future date, go by a different name), Prudential Retirement Insurance and Annuity Company (which is in the process of being sold and may, at a future date, go by a different name), Kemper Investors Life Insurance Company, Allstate Life Insurance Company and Allstate Life Insurance Company of New York (collectively, the Participating Insurance Companies) as investment options under variable life insurance and variable annuity contracts. Shares of the Portfolio may be sold directly to certain qualified retirement plans.
Additional information about the Portfolio is set forth in the following sections, and is also provided in the Statement of Additional Information (the SAI).
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MORE DETAILED INFORMATION ON HOW THE PORTFOLIO INVESTS
Introduction
We describe the Portfolio's investment objective and policies on the following pages. We describe certain investment instruments that appear below in the section entitled “More Detailed Information About Other Investments and Strategies Used by the Portfolio.”
Although we make every effort to achieve the Portfolio's objective, we can't guarantee success and it is possible that you could lose money. The Portfolio’s investment objective is a non-fundamental investment policy and, therefore, may be changed by the Board of Trustees of the Trust (the Board) without shareholder approval.
An investment in the Portfolio is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The Portfolio has investment strategies and policies that include percentage estimates and limitations. Those percentages are generally applied at the time the Portfolio makes an investment.
The Portfolio has a policy to normally invest at least 80% of its assets in a particular category of investments based on the name of the Portfolio. This 80% policy relates to the Portfolio’s net assets plus borrowings, if any, for investment purposes. The 80% requirement is applied at the time the Portfolio makes an investment. The 80% policy is non-fundamental and may be changed by the Board without shareholder approval. The Portfolio, however, will provide 60 days' prior written notice to shareholders of any change in the 80% policy based on the Portfolio's name if required by applicable rules.
A change in the securities held by the Portfolio is known as “portfolio turnover.” The Portfolio may engage in active and frequent trading to try to achieve its investment objective and may have a portfolio turnover rate of over 100% annually. Increased portfolio turnover may result in higher brokerage fees or other transaction costs, which can reduce performance. If the Portfolio realizes capital gains when it sells investments, it generally must pay those gains to shareholders, increasing its taxable distributions.
In response to adverse market conditions or when restructuring the Portfolio, we may temporarily invest up to 100% of the Portfolio’s total assets in money market instruments. Investing heavily in money market securities limits our ability to achieve the Portfolio’s investment objective, but can help to preserve the value of the Portfolio’s assets when markets are unstable.
AST BOND PORTFOLIO 2033
Investment Objective: The highest total return for a specific period of time, consistent with the preservation of capital and liquidity needs. Total return is comprised of current income and capital appreciation.
Principal Investment Policies: In pursuing its investment objective, the Portfolio normally invests at least 80% of its assets (net assets plus any borrowings made for investment purposes) in bonds. For purposes of this 80% policy, bonds include: (i) all debt securities and all fixed income securities, excluding preferred stock, issued by both government and non-government issuers, and (ii) all derivatives and synthetic instruments that have economic characteristics that are similar to such debt securities and such fixed income securities.
In managing the Portfolio’s assets, the Subadviser uses a combination of top-down economic analysis and bottom-up research in conjunction with proprietary quantitative models and risk management systems. In the top-down economic analysis, the Subadviser develops views on economic, policy and market trends by continually evaluating economic data that affect the movement of markets and security selection. This top-down macroeconomics analysis is integrated in the Subadviser’s bottom-up approach research which informs security selection. In its bottom-up
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research, the Subadviser develops an internal rating and outlook on issuers. The rating and outlook is determined based on a thorough review of the financial health and trends of the issuer, which includes a review of the composition of revenue, profitability, cash flow margin, and leverage.
The Subadviser may also consider investment factors such as expected total return, yield, spread and potential for price appreciation as well as credit quality, maturity and risk. The Portfolio may invest in a security based upon the expected total return rather than the yield of such security.
Further, the Portfolio may invest in other pooled investment vehicles, including other portfolios of the Trust, other open-end and closed-end investment companies, ETFs, unit investment trusts, and domestic or foreign private investment pools (collectively referred to as Underlying Portfolios). The Subadviser may use derivative instruments for any reason, including to manage or adjust the Portfolio’s risk profile when asset flows are volatile.
The Subadviser may also utilize proprietary quantitative tools to support relative value trading and asset allocation for portfolio management as well as various risk models to support risk management.
The Portfolio is managed to mature on or about the end of the year identified in its name in order to match the related liability under certain living benefit programs. In addition, the Portfolio's duration and weighted average maturity will decline over time as the maturity date approaches. To that end, the Subadviser expects to maintain the duration of the Portfolio within +/– 0.50 years of the secondary benchmark index for the Portfolio. The secondary benchmark index for the Portfolio is the Bloomberg Barclays Fixed Maturity (2033) Zero Coupon Swaps Index. The primary benchmark index for the Portfolio is the Bloomberg Barclays US Government/Credit Index.
On or about the Portfolio's maturity date, all of the securities held by the Portfolio will be sold and all of the outstanding shares of beneficial interest of the Portfolio will be redeemed. Proceeds from that redemption will be reallocated in accordance with the procedures applicable to the contract owner's variable Contract. The Subadviser currently intends to maintain an overall weighted average credit quality rating of A- or better for the Portfolio. This target overall credit quality for the Portfolio will be based on ratings as of the date of purchase. In the event the Portfolio's overall credit quality drops below A- due to downgrades of individual portfolio securities, the Subadviser will take appropriate action based upon the relevant facts and circumstances.
Principal Investments of the Portfolio
General. The Subadviser has a team of fixed income professionals, including credit analysts and traders, with experience in many sectors of the US and foreign fixed income securities markets. The Subadviser will use qualitative and quantitative analysis to evaluate each bond issue considered for the Portfolio. In selecting portfolio securities for the Portfolio, the Subadviser will consider economic conditions and interest rate fundamentals. The Subadviser will also evaluate individual issues within each bond sector based upon their relative investment merit and will consider factors such as yield and potential for price appreciation as well as credit quality, maturity and risk.
The Portfolio seeks to achieve its investment objective by investing in a diversified portfolio of high-quality bonds and other securities and instruments. To that end, the Portfolio emphasizes investments in several different types of securities and financial instruments, including, without limitation: (i) US Government securities; (ii) certain debt obligations issued or guaranteed by the US Government and government-related entities, including mortgage-related securities; (iii) privately-issued mortgage-related and asset-backed securities; (iv) debt obligations of US corporate issuers; and (v) derivatives and synthetic instruments that have economic characteristics that are similar to these types of securities and obligations. The Portfolio also may invest up to 50% of its total assets in US dollar-denominated debt securities issued in the United States by certain foreign issuers (referred to herein as Yankee obligations).
US Government Securities. US Government securities include debt obligations issued by the US Treasury. Treasury securities are all backed by the full faith and credit of the US Government, which means that payment of interest and principal is guaranteed, but yield and market value are not. The Portfolio may also acquire US Government securities
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in the form of custodial receipts that show ownership of future interest payments, principal payments or both on certain US Treasury notes or bonds. Such notes or bonds are held in custody by a bank on behalf of the owners. These custodial receipts are commonly referred to as Treasury strips.
Other Debt Obligations Issued or Guaranteed by the US Government and Government Related Entities. Securities issued by agencies of the US Government or instrumentalities of the US Government, including those which are guaranteed by Federal agencies or instrumentalities, may or may not be backed by the full faith and credit of the United States. Obligations of Government National Mortgage Association (Ginnie Mae), the Farmers Home Administration, the Export-Import Bank, and the Small Business Administration are backed by the full faith and credit of the United States. Obligations of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), the Federal Home Loan Bank, the Tennessee Valley Authority and the United States Postal Service are not backed by the full faith and credit of the US Government. In the case of securities not backed by the full faith and credit of the United States, the Portfolio generally must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment and may not be able to assert a claim against the United States if the agency or instrumentality does not meet its commitments. The yield and market value of these securities are not guaranteed by the US government or the relevant government sponsored enterprise.
Most mortgage-backed securities are issued by federal government agencies such as Ginnie Mae, or by government sponsored enterprises such as Freddie Mac or Fannie Mae. Principal and interest payments on mortgage-backed securities issued by the federal government and some Federal government agencies, such as Ginnie Mae, are guaranteed by the Federal government and backed by the full faith and credit of the United States. Mortgage-backed securities issued by other government agencies or government sponsored enterprises, such as Freddie Mac or Fannie Mae, are backed only by the credit of the government agency or enterprise and are not backed by the full faith and credit of the United States. Fannie Mae and Freddie Mac are authorized to borrow from the US Treasury to meet their obligations. Although the US government has provided financial support to Fannie Mae and Freddie Mac, there can be no assurance that it will support these or other government-sponsored enterprises in the future.
Privately-Issued Mortgage Related Securities. The Portfolio may also invest in privately issued mortgage-related securities. Privately issued mortgage-related securities are issued by private corporations rather than government agencies or government-sponsored enterprises. Privately issued mortgage-related securities are not guaranteed by US governmental entities and generally have one or more types of credit enhancement to ensure timely receipt of payments and to protect against default.
Mortgage-related securities are usually pass-through instruments that pay investors a share of all interest and principal payments from an underlying pool of fixed or adjustable rate mortgages. Mortgage pass-through securities include collateralized mortgage obligations (CMO), real estate mortgage investment conduits (REMIC), multi-class pass-through securities, stripped mortgage-backed securities and balloon payment mortgage-backed securities. A CMO is a security backed by an underlying portfolio of mortgages or mortgage-backed securities (MBS) that may be issued or guaranteed by a bank or by US governmental entities. CMOs rely on assumptions about the timing of cash flows on the underlying mortgages, including expected prepayment rates. The primary risk of a CMO is that these assumptions are wrong, which would either shorten or lengthen the bond's maturity. A REMIC is a security issued by a US Government agency or private issuer and secured by real property. REMICs consist of classes of regular interest, some of which may be adjustable rate, and a class of non-economical residual interests. The Portfolio does not intend to invest in non-economic residual interests. A multi-class pass-through security is an equity interest in a trust composed of underlying mortgage assets. Payments of principal of and interest on the mortgage assets and any reinvestment income thereon provide funds to pay debt service on the CMO or to make scheduled distributions on the multi-class pass-through security. An MBS strip may be issued by US governmental entities or by private institutions. MBS strips take the pieces of a debt security (principal and interest) and break them apart. The resulting securities may be sold separately and may perform differently. The Portfolio may also invest in balloon payment mortgage-backed securities, which are amortizing mortgage securities offering payments of principal and interest, the last payment of which is predominantly principal.
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Asset-Backed Securities. Asset-backed securities directly or indirectly represent a participation interest in, or are secured by and payable from, a stream of payments generated by particular assets such as motor vehicle or credit card receivables. Payments of principal and interest may be guaranteed up to certain amounts and for a certain time period by a letter of credit issued by a financial institution unaffiliated with the entities issuing the securities. Asset-backed securities may be classified as pass-through certificates or collateralized obligations.
Pass-through certificates are asset-backed securities that represent an undivided fractional ownership interest in an underlying pool of assets. Pass-through certificates usually provide for payments of principal and interest to be passed through to their holders, usually after deduction for certain costs and expenses incurred in administering the pool. Because pass-through certificates represent an ownership interest in the underlying assets, the holders thereof bear directly the risk of any defaults by the obligors on the underlying assets not covered by any credit support.
Asset-backed securities issued in the form of debt instruments are generally issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. Such assets are most often trade, credit card or automobile receivables. The assets collateralizing such asset-backed securities are pledged to a trustee or custodian for the benefit of the holders thereof. Such issuers generally hold no assets other than those underlying the asset-backed securities and any credit support provided. As a result, although payments on such asset-backed securities are obligations of the issuers, in the event of defaults on the underlying assets not covered by any credit support, the issuing entities are unlikely to have sufficient assets to satisfy their obligations on the related asset-backed securities.
Corporate Debt Obligations. The Portfolio also may invest in the bonds of corporations. For purposes of this policy, the term “corporations” includes all non-government issuers. Corporate bonds are subject to the risk of the issuer's inability to meet principal and interest payments on the obligation and may also be subject to price volatility due to such factors as interest rate sensitivity, market perception of the creditworthiness of the issuer, and general market liquidity. When interest rates rise, the value of corporate bonds can be expected to decline. Debt securities with longer maturities tend to be more sensitive to interest rate movements than those with shorter maturities.
Derivative Strategies. The Subadviser may use various derivative strategies to try to improve the Portfolio's investment returns. The Subadviser may also use hedging techniques to try to protect the Portfolio's assets.
Junk Bonds. The Portfolio may invest up to 10% of its net assets in debt obligations rated below investment grade (also referred to herein as high-yield debt securities or junk bonds) by a nationally recognized statistical rating organization (NRSRO), or which are considered by the subadviser to be of comparable quality. In the event that a security receives different ratings from different NRSROs, the Portfolio will treat the security as being rated in the highest rating category received from an NRSRO.
Yankee Obligations. The Portfolio may invest up to 50% of its total assets in Yankee obligations. Yankee obligations are US dollar-denominated debt securities of foreign corporations issued in the United States and US dollar-denominated debt securities issued or guaranteed as to payment of principal and interest by governments, quasi-governmental entities, government agencies, and other governmental entities of foreign countries and supranational entities, which securities are issued in the United States. Debt securities of quasi-governmental entities are issued by entities owned by either a national, state, or equivalent government or are obligations of a political unit that is not backed by the national government's full faith and credit and general taxing powers.
Other Investments and Strategies of the Portfolio
In addition to the principal strategies, the Subadviser also may use the following investments and strategies to try to increase the Portfolio's returns or protect its assets if market conditions warrant:
Zero Coupon Bonds, Pay-In-Kind (PIK) and Deferred Payment Securities. The Portfolio may invest in zero coupon bonds, PIK or deferred payment securities. Zero coupon bonds do not pay interest during the life of the security. An investor purchases the security at a price that is less than the amount the investor will receive when the borrower
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repays the amount borrowed (face value). PIK securities pay interest in the form of additional securities. Deferred payment securities pay regular interest after a predetermined date. The Portfolio will record the amount these securities rise in price each year (phantom income) for accounting and federal income tax purposes, but does not receive income currently. Because the Portfolio generally distributes income to its shareholders each year, in certain circumstances, the Portfolio may have to dispose of its portfolio securities under disadvantageous conditions or borrow to generate enough cash to distribute phantom income and the value of the PIK interest.
Short Sales. The Portfolio may make short sales of a security. The Portfolio also may make short sales “against the box.”
Convertible Securities and Preferred Stock. The Portfolio may invest in convertible securities, which include preferred stocks and debt securities of a corporation that may be converted into underlying shares of common stock either because they have warrants attached or otherwise permit the holder to buy common stock of the corporation at a set price. Convertible securities provide an income stream (usually lower than non-convertible bonds) and give investors opportunities to participate in the capital appreciation of the underlying common stock. Convertible securities typically offer greater potential for appreciation than nonconvertible debt securities. The Portfolio will sell common stock received upon conversion.
Repurchase Agreements. The Portfolio may use repurchase agreements, where a party agrees to sell a security to the Portfolio and then repurchases it at an agreed-upon price at a stated time.
Reverse Repurchase Agreements. The Portfolio may use reverse repurchase agreements, where the Portfolio sells a security with an obligation to repurchase it at an agreed-upon price and time, which constitutes a borrowing.
Dollar Rolls. The Portfolio may enter into dollar rolls. In a dollar roll, the Portfolio takes the risk that: (i) the market price of the mortgage-backed securities will drop below their future repurchase price; (ii) the securities that it repurchases at a later date will have less favorable market characteristics; (iii) the other party to the agreement will not be able to perform; (iv) the roll adds leverage to the Portfolio; and (v) it increases the Portfolio's sensitivity to interest rate changes. In addition, investment in dollar rolls may increase the portfolio turnover rate of the Portfolio.
Bank Loans. The Portfolio may invest in bank loans. Bank loans include fixed and floating rate loans that are privately negotiated between a corporate borrower and one or more financial institutions, including, but not limited to, term loans, revolvers, delayed draw loans, synthetic letters of credit, and other instruments issued in the bank loan market. The Portfolio may acquire interests in loans directly (by way of assignment from the selling institution) or indirectly (by way of the purchase of a participation interest from the selling institution). Under a bank loan assignment, the Portfolio generally will succeed to all the rights and obligations of an assigning lending institution and becomes a lender under the loan agreement with the relevant borrower in connection with that loan. Under a bank loan participation, the Portfolio generally will have a contractual relationship only with the lender, not with the relevant borrower. As a result, the Portfolio generally will have the right to receive payments of principal, interest, and any fees to which it is entitled only from the lender selling the participation and only upon receipt by the lender of the payments from the relevant borrower.
When-Issued and Delayed-Delivery Securities. The Portfolio may purchase securities, including money market obligations or other obligations on a when-issued or delayed-delivery basis.
Money Market Instruments. The Portfolio may invest in money market instruments, including commercial paper of a US or foreign company, foreign government securities, certificates of deposit, bankers' acceptances, time deposits of domestic and foreign banks, and obligations issued or guaranteed by the US government or its agencies. These obligations may be US dollar-denominated or denominated in a foreign currency.
Additional Strategies The Portfolio follows certain policies when it borrows money (the Portfolio can borrow up to 33 1∕3% of the value of its total assets); lends its securities to others (the Portfolio can lend up to 33 1∕3% of the value of its total assets); and holds illiquid investments (the Portfolio may invest up to 15% of its net assets in illiquid
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investments, including securities with legal or contractual restrictions on resale, those without a readily available market and repurchase agreements with maturities longer than seven days). The Subadviser seeks to maintain an adequate level of portfolio liquidity for the Portfolio, based on all relevant facts and circumstances, with consideration given to the Portfolio's exposure to illiquid investments in the event the market value of such securities exceeds 15% of the Portfolio's net assets due to an increase in the aggregate value of its illiquid investments and/or a decline in the aggregate value of its other portfolio securities. The Portfolio is subject to certain other investment restrictions that are fundamental policies, which means they cannot be changed without shareholder approval. For more information about these restrictions, please see the SAI.
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MORE DETAILED INFORMATION ABOUT OTHER INVESTMENTS & STRATEGIES USED BY THE PORTFOLIO
Additional Investments & Strategies
As indicated above, a Portfolio may invest in the following types of securities and/or use the following investment strategies to increase returns or protect Portfolio assets if market conditions warrant.
American Depositary Receipts (ADRs)—Certificates representing the right to receive foreign securities that have been deposited with a US bank or a foreign branch of a US bank.
Asset-Backed Securities—An asset-backed security is a type of pass-through instrument that pays interest based upon the cash flow of an underlying pool of assets, such as automobile loans or credit card receivables. Asset-backed securities may also be collateralized by a portfolio of corporate bonds, including junk bonds, or other securities.
Collateralized Debt Obligations (CDOs)—A CDO is a security backed by an underlying portfolio of debt obligations, typically including one or more of the following types of investments: high yield securities, investment grade securities, bank loans, futures or swaps. A CDO provides a single security that has the economic characteristics of a diversified portfolio. The cash flows generated by the collateral are used to pay interest and principal to investors.
Collateralized Loan Obligations (CLOs)—A CLO is a trust typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, as well as loans rated below investment grade or equivalent unrated loans. The risks of an investment in a CLO depend largely on the quality of the underlying loans and may be classified by the Portfolio as illiquid investments.
Convertible Debt and Convertible Preferred Stock—A convertible security is a security—for example, a bond or preferred stock—that may be converted into common stock, the cash value of common stock or some other security of the same or different issuer. The convertible security sets the price, quantity of shares and time period in which it may be so converted. Convertible stock is senior to a company's common stock but is usually subordinated to debt obligations of the company. Convertible securities provide a steady stream of income which is generally at a higher rate than the income on the company's common stock but lower than the rate on the company's debt obligations. At the same time, convertible securities offer—through their conversion mechanism—the chance to participate in the capital appreciation of the underlying common stock. The price of a convertible security tends to increase and decrease with the market value of the underlying common stock.
Credit Default Swaps—In a credit default swap, a Portfolio and another party agree to exchange payment of the par (or other agreed-upon) value of a referenced debt obligation in the event of a default on that debt obligation in return for a periodic stream of payments over the term of the contract provided no event of default has occurred. See also “Swaps” defined below.
Credit-Linked Securities—Credit linked securities are securities that are collateralized by one or more credit default swaps on corporate credits. A Portfolio has the right to receive periodic interest payments from the issuer of the credit-linked security at an agreed-upon interest rate, and a return of principal at the maturity date. See also “Credit Default Swaps” defined above.
Depositary Receipts—A Portfolio may invest in the securities of foreign issuers in the form of Depositary Receipts or other securities convertible into securities of foreign issuers. Depositary Receipts may not necessarily be denominated in the same currency as the underlying securities into which they may be converted. American Depositary Receipts (ADRs) and American Depositary Shares (ADSs) are receipts or shares typically issued by an American bank or trust company that evidence ownership of underlying securities issued by a foreign corporation. European Depositary Receipts (EDRs) are receipts issued in Europe that evidence a similar ownership arrangement. Global Depositary Receipts (GDRs) are receipts issued throughout the world that evidence a similar arrangement. Generally, ADRs and ADSs, in registered form, are designed for use in the US securities markets, and EDRs, in bearer
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form, are designed for use in European securities markets. GDRs are tradable both in the United States and in Europe and are designed for use throughout the world. A Portfolio may invest in unsponsored Depositary Receipts. The issuers of unsponsored Depositary Receipts are not obligated to disclose material information in the United States, and, therefore, there may be less information available regarding such issuers and there may not be a correlation between such information and the market value of the Depositary Receipts. Depositary Receipts are generally subject to the same risks as the foreign securities that they evidence or into or for which they may be converted or exchanged.
Derivatives—A derivative is an instrument that derives its price, performance, value, or cash flow from one or more underlying securities or other interests. Derivatives involve costs and can be volatile. With derivatives, the investment adviser tries to predict whether the underlying interest—a security, market index, currency, interest rate or some other benchmark—will go up or down at some future date. A Portfolio may use derivatives to try to reduce risk or to increase return consistent with the Portfolio's overall investment objective. The adviser will consider other factors (such as cost) in deciding whether to employ any particular strategy, or use any particular instrument. Any derivatives used may not fully offset a Portfolio's underlying positions and this could result in losses to the Portfolio that would not otherwise have occurred.
Dollar Rolls—Dollar rolls involve the sale by a Portfolio of a security for delivery in the current month with a promise to repurchase from the buyer a substantially similar—but not necessarily the same—security at a set price and date in the future. During the “roll period,” the Portfolio does not receive any principal or interest on the security. Instead, it is compensated by the difference between the current sales price and the price of the future purchase, as well as any interest earned on the cash proceeds from the original sale. In a dollar roll, the Portfolio takes the risk that: (i) the market price of the mortgage-backed securities will drop below their future repurchase price; (ii) the securities that it repurchases at a later date will have less favorable market characteristics; (iii) the other party to the agreement will not be able to perform; (iv) the roll adds leverage to the Portfolio; and (v) it increases the Portfolio's sensitivity to interest rate changes. In addition, investments in dollar rolls may increase the portfolio turnover rate of the Portfolio.
Energy Companies—Companies that are involved in oil or gas exploration, production, refining or marketing, or any combination of the above are greatly affected by the prices and supplies of raw materials such as oil or gas. The earnings and dividends of energy companies can fluctuate significantly as a result of international economics, politics and regulation.
Equity Swaps—In an equity swap, a Portfolio and another party agree to exchange cash flow payments that are based on the performance of equities or an equity index. See also “Swaps” defined below.
Event-Linked Bonds—Event-linked bonds are fixed income securities for which the return of principal and payment of interest is contingent on the non-occurrence of a specific “trigger” event, such as a hurricane, earthquake, or other physical or weather-related phenomenon. If a trigger event occurs, a Portfolio may lose a portion or all of its principal invested in the bond. Event-linked bonds often provide for an extension of maturity to process and audit loss claims where a trigger event has, or possibly has, occurred. An extension of maturity may increase volatility. Event-linked bonds may also expose a Portfolio to certain unanticipated risks including credit risk, adverse regulatory or jurisdictional interpretations, and adverse tax consequences. Event-linked bonds may also be subject to liquidity risk.
Exchange-Traded Funds (ETFs)— Each Portfolio may temporarily invest up to 10% of its assets in ETFs during stressed and/or volatile market conditions. An investment in an ETF generally presents the same primary risks as an investment in a conventional mutual fund (i.e., one that is not exchange-traded) that has the same investment objective, strategies and policies. The price of an ETF can fluctuate up or down, and a Portfolio could lose money investing in an ETF if the prices of the securities owned by the ETF go down. In addition, ETFs may be subject to the following risks that do not apply to conventional mutual funds: (i) the market price of an ETF's shares may trade above or below their net asset value; (ii) an active trading market for an ETF's shares may not develop or be maintained; or (iii) trading of an ETF's shares may be halted if the listing exchange's officials deem such action appropriate, the shares are delisted from the exchange or the activation of market-wide “circuit breakers'' (which are tied to large decreases in stock prices) halts stock trading generally.
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Financial Services Companies—Financial services companies are subject to extensive government regulation that may affect their profitability in many ways, including by limiting the amount and types of loans and other commitments they can make, and the interest rates and fees they can charge. A financial services company’s profitability, and therefore its stock prices, is especially sensitive to interest rate changes as well as the ability of borrowers to repay their loans. Changing regulations, continuing consolidations, and development of new products and structures all are likely to have a significant impact on financial services companies.
Foreign Currency Forward Contracts—A foreign currency forward contract is an obligation to buy or sell a given currency on a future date at a set price. When a Portfolio enters into a contract for the purchase or sale of a security denominated in a foreign currency, or when a Portfolio anticipates the receipt in a foreign currency of dividends or interest payments on a security which it holds, the Portfolio may desire to ”lock-in“ the US dollar price of the security or the US dollar equivalent of such dividend or interest payment, as the case may be. By entering into a forward contract for a fixed amount of dollars, for the purchase or sale of the amount of foreign currency involved in the underlying transactions, the Portfolio will be able to protect itself against a possible loss resulting from an adverse change in the relationship between the US dollar and the foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is declared, and the date on which such payments are made or received. At the maturity of a forward contract, a Portfolio may either sell the security and make delivery of the foreign currency or it may retain the security and terminate its contractual obligation to deliver the foreign currency by purchasing an ”offsetting“ contract with the same currency trader obligating it to purchase, on the same maturity date, the same amount of the foreign currency.
Futures Contracts—A futures contract is an agreement to buy or sell a set quantity of an underlying product at a future date, or to make or receive a cash payment based on the value of a securities index. When a futures contract is entered into, each party deposits with a futures commission merchant (or in a segregated account) approximately 5% of the contract amount. This is known as the ”initial margin.“ Every day during the futures contract, either the buyer or the seller will make payments of ”variation margin.“ In other words, if the value of the underlying security, index or interest rate increases, then the seller will have to add to the margin account so that the account balance equals approximately 5% of the value of the contract on that day. The next day, the value of the underlying security, index or interest rate may decrease, in which case the seller would receive money from the account equal to the amount by which the account balance exceeds 5% of the value of the contract on that day. A stock index futures contract is an agreement between the buyer and the seller of the contract to transfer an amount of cash equal to the daily variation margin of the contract. No physical delivery of the underlying stocks in the index is made.
Global Depositary Receipts (GDRs)—GDRs are receipts issued by a non-US financial institution evidencing ownership of underlying foreign securities and are usually denominated in foreign currencies. They may not be denominated in the same currency as the securities they represent. Generally, GDRs are designed for use in the foreign securities markets. Investments in GDRs involve certain risks unique to foreign investments. These risks are set forth in the section entitled “Foreign Investment Risk” in the Principal Risks section below.
Healthcare Technology Companies—These companies will be affected by government regulatory requirements, regulatory approval for new drugs and medical products, patent considerations, product liability, and similar matters. In addition, this industry is characterized by competition and rapid technological developments that may make a company’s products or services obsolete in a short period of time.
Illiquid Investments—An “illiquid investment” is an investment that a Portfolio reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Each Portfolio (other than the PSF PGIM Government Money Market Portfolio) may not acquire any “illiquid investment” if, immediately after the acquisition, the Portfolio would have invested more than 15% of its net assets in illiquid investments that are assets. The PSF PGIM Government Money Market Portfolio may invest up to 5% of its net assets in illiquid investments. Each Portfolio may purchase certain restricted securities that can be resold to institutional investors and which may be determined to be liquid pursuant to procedures adopted by the Trust on behalf of the Portfolios. Those securities are not subject to the 15% and 5% limits. The 15% and 5% limits are applied as of the date the Portfolio purchases an illiquid investment. In the event
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the market value of a Portfolio's (other than the PSF PGIM Government Money Market Portfolio) illiquid investments exceeds the 15% limit due to an increase in the aggregate value of its illiquid investments and/or a decline in the aggregate value of its other investments, the Portfolio must take steps to bring its illiquid investments that are assets to or below 15% of its net assets within a reasonable period of time. If the PSF PGIM Government Money Market Portfolio were to exceed the 5% limit, the subadviser(s) would take prompt action to reduce the Portfolio’s holdings in illiquid investments to no more than 5% of its net assets, as required by applicable law.
Inflation-Indexed Securities—Inflation-indexed securities have a tendency to react to changes in real interest rates. Real interest rates represent nominal (stated) interest rates lowered by the anticipated effect of inflation. In general, the price of an inflation-indexed security can decrease when real interest rates increase, and can increase when real interest rates decrease. Interest payments on inflation indexed securities will fluctuate as the principal and/or interest is adjusted for inflation and can be unpredictable. Any increase in the principal amount of an inflation-protected debt security will be considered taxable ordinary income, even though investors, such as a Portfolio, do not receive their principal until maturity.
Interest Rate Swaps—In an interest rate swap, a Portfolio and another party agree to exchange interest payments. For example, the Portfolio may wish to exchange a floating rate of interest for a fixed rate. See also “Swaps” defined below.
Investments in Affiliated Funds—A Portfolio may invest its assets in affiliated short-term bond funds and/or money market funds. Such underlying affiliated funds are registered investment companies under the 1940 Act. A Portfolio can invest its free cash balances in the underlying affiliated funds to obtain income on short-term cash balances while awaiting attractive investment opportunities, to provide liquidity in preparation for anticipated redemptions, or for defensive purposes. Such an investment could also allow a Portfolio to obtain the benefits of a more diversified portfolio available in the affiliated funds than might otherwise be available through direct investments in those asset classes, and will subject the Portfolio to the risks associated with the particular asset class. As a shareholder in underlying affiliated funds, a Portfolio will pay its proportional share of the expenses of such underlying affiliated funds. Management fees of either a Portfolio or an affiliated fund in which it invests, as applicable, will be waived, so that shareholders of the Portfolio are not paying management fees of both the Portfolio and the underlying affiliated fund. The investment results of the portions of a Portfolio’s assets invested in underlying affiliated funds will be based on the investment results of such underlying affiliated funds.
Joint Repurchase Account—In a joint repurchase transaction, uninvested cash balances of various Portfolios are added together and invested in one or more repurchase agreements. Each of the participating Portfolios receives a portion of the income earned in the joint account based on the percentage of its investment.
Loans and Assignments—Loans are privately negotiated between a corporate borrower and one or more financial institutions. A Portfolio acquires interests in loans directly (by way of assignment from the selling institution) or indirectly (by way of the purchase of a participation interest from the selling institution. Purchasers of loans depend primarily upon the creditworthiness of the borrower for payment of interest and repayment of principal. If scheduled interest or principal payments are not made, the value of the instrument may be adversely affected. Interests in loans are also subject to additional liquidity risks. Loans are not generally traded in organized exchange markets but are traded by banks and other institutional investors engaged in loan syndications. Consequently, the liquidity of a loan will depend on the liquidity of these trading markets at the time that a Portfolio sells the loan.
In assignments, a Portfolio will have no recourse against the selling institution, and the selling institution generally makes no representations about the underlying loan, the borrowers, the documentation or the collateral. In addition, the rights against the borrower that are acquired by the Portfolio may be more limited than those held by the assigning lender.
Master Limited Partnerships (MLPs)—MLP investments may include, but are not limited to: MLPs structured as LPs or LLCs; MLPs that are taxed as “C” corporations; I-Units issued by MLP affiliates; parent companies of MLPs; shares of companies owning MLP general partnership interests and other securities representing indirect beneficial ownership
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interests in MLP common units; “C” corporations that hold significant interests in MLPs; and other equity and fixed income securities and derivative instruments, including pooled investment vehicles and ETPs, that provide exposure to MLP investments. MLPs generally own and operate assets that are used in the energy sector, including assets used in exploring, developing, producing, generating, transporting (including marine), transmitting, terminal operation, storing, gathering, processing, refining, distributing, mining or marketing of natural gas, natural gas liquids, crude oil, refined products, coal or electricity, or that provide energy related equipment or services. A Portfolio’s MLP investments may be of any capitalization size.
Mortgage-Related Securities—Mortgage-related securities are usually pass-through instruments that pay investors a share of all interest and principal payments from an underlying pool of fixed or adjustable rate mortgages. The Portfolios may invest in mortgage-related securities issued and guaranteed by the US Government or its agencies and mortgage-backed securities issued by government sponsored enterprises (GSEs) such as Fannie Mae, Ginnie Mae and Freddie Mac. GSE debt may not be backed by the full faith and credit of the United States. The Portfolios may also invest in private mortgage-related securities that are not guaranteed by US Governmental entities generally have one or more types of credit enhancement to ensure timely receipt of payments and to protect against default. The Portfolios may invest in mortgage-related securities that are backed by a pool or pools of loans that are originated and/or serviced by an entity affiliated with the investment manager or subadviser(s).
Mortgage-related securities include collateralized mortgage obligations, multi-class pass through securities and stripped mortgage-backed securities. A collateralized mortgage-backed obligation (CMO) is a security backed by an underlying portfolio of mortgages or mortgage-backed securities that may be issued or guaranteed by entities such as banks, US Governmental entities or broker-dealers. A multi-class pass-through security is an equity interest in a trust composed of underlying mortgage assets.
Payments of principal and interest on the mortgage assets and any reinvestment income provide the money to pay debt service on the CMO or to make scheduled distributions on the multi-class pass-through security. A stripped mortgage-backed security (MBS strip) may be issued by US Governmental entities or by private institutions. MBS strips take the pieces of a debt security (principal and interest) and break them apart. The resulting securities may be sold separately and may perform differently. MBS strips are highly sensitive to changes in prepayment and interest rates.
Non-Voting Depositary Receipts (NVDRs)—NVDRs are listed securities on the Stock Exchange of Thailand through which investors receive the same financial benefits as those who invest directly in a company’s ordinary shares; however, unlike ordinary shareholders, NVDR holders cannot be involved in company decision-making. NVDRs are designed for use in the Thailand securities market. Investments in NVDRs involve certain risks unique to foreign investments. These risks are set forth in the section entitled “Foreign Investment Risk” in the Principal Risks section below.
Options—A call option on stock is a short-term contract that gives the option purchaser or “holder” the right to acquire a particular equity security for a specified price at any time during a specified period. For this right, the option purchaser pays the option seller a certain amount of money or “premium” which is set before the option contract is entered into. The seller or “writer” of the option is obligated to deliver the particular security if the option purchaser exercises the option. A put option on stock is a similar contract. In a put option, the option purchaser has the right to sell a particular security to the option seller for a specified price at any time during a specified period. In exchange for this right, the option purchaser pays the option seller a premium. Options on debt securities are similar to stock options except that the option holder has the right to acquire or sell a debt security rather than an equity security. Options on stock indexes are similar to options on stocks, except that instead of giving the option holder the right to receive or sell a stock, it gives the holder the right to receive an amount of cash if the closing level of the stock index is greater than (in the case of a call) or less than (in the case of a put) the exercise price of the option. The amount of cash the holder will receive is determined by multiplying the difference between the index's closing price and the option's exercise price, expressed in dollars, by a specified “multiplier.” Unlike stock options, stock index options are always settled in cash, and gain or loss depends on price movements in the stock market generally (or a particular market segment, depending on the index) rather than the price movement of an individual stock.
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Participation Notes (P-Notes)—P-Notes are a type of equity-linked derivative which generally are traded over-the-counter. Even though a P-Note is intended to reflect the performance of the underlying equity securities, the performance of a P-Note will not replicate exactly the performance of the issuers or markets that the P-Note seeks to replicate due to transaction costs and other expenses. Investments in P-Notes involve risks normally associated with a direct investment in the underlying securities. In addition, P-Notes are subject to counterparty risk, which is the risk that the broker-dealer or bank that issues the P-Notes will not fulfill its contractual obligation to complete the transaction with a Portfolio.
Prepayment—Debt securities are subject to prepayment risk when the issuer can “call” the security, or repay principal, in whole or in part, prior to the security’s maturity. When a Portfolio reinvests the prepayments of principal it receives, it may receive a rate of interest that is lower than the rate on the existing security, potentially lowering the Portfolio’s income, yield and its distributions to shareholders. Securities subject to prepayment may offer less potential for gains during a declining interest rate environment and have greater price volatility. Prepayment risk is greater in periods of falling interest rates.
Private Investments in Public Equity (PIPEs)—A PIPE is an equity security in a private placement that are issued by issuers who have outstanding, publicly-traded equity securities of the same class. Shares in PIPEs generally are not registered with the SEC until after a certain time period from the date the private sale is completed. This restricted period can last many months. Until the public registration process is completed, PIPEs are restricted as to resale and a Portfolio cannot freely trade the securities. Generally, such restrictions and other relevant market, trading and investment-specific considerations cause the PIPEs to be classified as illiquid investments during this time. PIPEs may contain provisions that the issuer will pay specified financial penalties to the holder if the issuer does not publicly register the restricted equity securities within a specified period of time, but there is no assurance that the restricted equity securities will be publicly registered, or that the registration will remain in effect.
Real Estate Investment Trusts (REITs)—A REIT is a company that manages a portfolio of real estate to earn profits for its shareholders. Some REITs acquire equity interests in real estate and then receive income from rents and capital gains when the buildings are sold. Other REITs lend money to real estate developers and receive interest income from the mortgages. Some REITs invest in both types of interests.
Repurchase Agreements—In a repurchase transaction, a Portfolio agrees to purchase certain securities and the seller agrees to repurchase the same securities at an agreed upon price on a specified date. This creates a fixed return for the Portfolio.
Reverse Repurchase Agreements—In a reverse repurchase transaction, a Portfolio sells a security it owns and agrees to buy it back at a set price and date. During the period the security is held by the other party, the Portfolio may continue to receive principal and interest payments on the security.
Short Sales—In a short sale, a Portfolio sells a security it does not own to take advantage of an anticipated decline in the stock's price. A Portfolio borrows the stock for delivery and if it can buy the stock later at a lower price, a profit results. A Portfolio that sells a security short in effect borrows and then sells the security with the expectation that it will later repurchase the security at a lower price and then return the amount borrowed with interest. In contrast, when a Portfolio buys a security long, it purchases the security with cash with the expectation that it later will sell the security at a higher price. A Portfolio that enters into short sales exposes the Portfolio to the risk that it will be required to buy the security sold short (also known as “covering” the short position) at a time when the security has appreciated in value, thus resulting in a loss to the Portfolio. Theoretically, the amount of these losses can be unlimited. Although a Portfolio may try to reduce risk by holding both long and short positions at the same time, it is possible that the Portfolio's securities held long will decline in value at the same time that the value of the Portfolio's securities sold short increases, thereby increasing the potential for loss.
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Short Sales Against-the-Box—A short sale against the box involves selling a security that a Portfolio owns, or has the right to obtain without additional costs, for delivery at a specified date in the future. A Portfolio may make a short sale against the box to hedge against anticipated declines in the market price of a portfolio security. If the value of the security sold short increases instead, the Portfolio loses the opportunity to participate in the gain.
Swap Options—A swap option is a contract that gives a counterparty the right (but not the obligation) to enter into a swap agreement or to shorten, extend cancel or otherwise modify an existing swap agreement at some designated future time on specified terms. See also “Options” defined above.
Swaps—Swap agreements are two party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which may be adjusted for an interest factor. Credit Default Swaps, Equity Swaps, Interest Rate Swaps and Total Return Swaps are four types of swap agreements.
Temporary Defensive Investments—In response to adverse or unstable market, economic, political or other conditions or to satisfy redemptions, a Portfolio may take a temporary defensive position and invest up to 100% of its assets in money market instruments, including short-term obligations of, or securities guaranteed by, the US Government, its agencies or instrumentalities or in high-quality obligations of banks and corporations, repurchase agreements, or hold up to 100% of the Portfolio's assets in cash, cash equivalents or shares of money market or short-term bond funds. Investing heavily in these securities may limit a Portfolio’s ability to pursue or achieve its investment objective and could reduce the benefit to the Portfolio from any upswing in the market, but can help to preserve the value of the Portfolio’s assets when markets are unstable. The use of temporary defensive investments may be inconsistent with a Portfolio’s investment objective.
Total Return Swaps—In a total return swap, payment (or receipt) of an index's total return is exchanged for the receipt (or payment) of a floating interest rate. See also “Swaps” defined above.
Unrated Debt Securities—Unrated debt securities may be determined by the Manager to be of comparable quality to rated securities which a Portfolio may purchase. In making ratings determinations, the Manager may take into account different factors than those taken into account by rating agencies, and the Manager’s rating of a security may differ from the rating that a rating agency may have given the same security. Unrated debt securities may pay a higher interest rate than such rated debt securities and be subject to a greater risk of decreased liquidity or price changes. Less public information is typically available about unrated securities or issuers.
Utilities Industry—Utility company equity securities, which are generally purchased for their dividend yield, historically have been sensitive to interest rate movements: when interest rates have risen, the stock prices of these companies have tended to fall. In some states, utility companies and their rates are regulated; other states have moved to deregulate such companies thereby causing non-regulated companies’ returns to generally be more volatile and more sensitive to changes in revenue and earnings. Certain utilities companies face risks associated with the operation of nuclear facilities for electric generation, including, among other considerations, litigation, the problems associated with the use of radioactive materials and the effects of natural or man-made disasters. In general, all utility companies may face additional regulation and litigation regarding their power plant operations; increased costs from new or greater regulation of these operations; the need to purchase expensive emissions control equipment or new operations due to regulations, and the availability and cost of fuel, all of which may lower their earnings.
When-Issued and Delayed Delivery Securities—With when-issued or delayed delivery securities, the delivery and payment can take place a month or more after the date of the transaction. A Portfolio will make commitments for when-issued transactions only with the intention of actually acquiring the securities. A Portfolio's custodian will maintain in a segregated account, liquid assets having a value equal to or greater than such commitments. If a Portfolio chooses to dispose of the right to acquire a when-issued security prior to its acquisition, it could, as with the disposition of any other security, incur a gain or loss.
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PRINCIPAL RISKS
An investment or type of security specifically identified in this Prospectus generally reflects a principal investment. The Portfolio also may invest in or use certain other types of investments and investing techniques that are described in the SAI. An investment or type of security only identified in the SAI typically is treated as a non-principal investment. The risks identified below are the principal risks of investing in the Portfolio. The Summary lists the principal risks applicable to the Portfolio. This section provides more detailed information about each risk. The Portfolio may be subject to additional risks other than those identified and described below because the types of investments made by the Portfolio can change over time. The order of the below risk factors does not indicate the significance of any particular risk factor.
All investments have risks to some degree and it is possible that you could lose money by investing in the Portfolio. An investment in the Portfolio is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. While the Portfolio makes every effort to achieve its objective, the Portfolio cannot guarantee success.
In addition, the Portfolio reserves the right to discontinue offering shares at any time, to merge or reorganize itself, or to cease operations and liquidate at any time.
Asset-Backed and/or Mortgage-Backed Securities Risk. Asset-backed and mortgage-backed securities are fixed income securities that represent an interest in an underlying pool of assets, such as credit card receivables or, in the case of mortgage-backed securities, mortgage loans on residential and/or commercial real estate. Asset-backed and mortgage-backed securities are subject to interest rate risk, credit risk and liquidity risk, which are further described under Fixed Income Securities Risk.
Asset-backed and mortgage-backed securities may also be subject to prepayment and extension risks. In a period of declining interest rates, borrowers may repay principal on mortgages or other loan obligations underlying a security more quickly than anticipated, which may require a Portfolio to reinvest the repayment proceeds in securities that pay lower interest rates (prepayment risk). In a period of rising interest rates, prepayments may occur at a slower rate than expected, which may prevent a Portfolio from reinvesting repayment proceeds in securities that pay higher interest rates (extension risk). The more a Portfolio invests in longer-term securities, the more likely it will be affected by changes in interest rates, which may result in lower than anticipated yield-to-maturity and expected returns as well as reduced market value of such securities.
The risks associated with investments in asset-backed and mortgage-backed securities, particularly credit risk, are heightened in connection with investments in loans to “subprime” borrowers or borrowers with blemished credit histories. Some mortgage-backed securities receive government or private support, but there is no assurance that such support will remain in place.
Mortgage-backed securities are a specific type of asset-backed security—one backed by mortgage loans on residential and/or commercial real estate. Therefore, they also have risks related to real estate, including significant sensitivity to changes in real estate prices and interest rates and, in the case of commercial mortgages, office and factory occupancy rates. Moreover, securities backed by mortgages issued by private, non-government issuers may experience higher rates of default on the underlying mortgages than government issued mortgages because private issuer mortgage loans often do not meet the underwriting standards of government-issued mortgages. Private issuer mortgage-backed securities may include loans on commercial or residential properties.
A Portfolio may invest in securities issued or guaranteed by the US government or its agencies and instrumentalities, such as the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae), or the Federal Home Loan Mortgage Corporation (Freddie Mac). Unlike Ginnie Mae securities, securities issued or guaranteed by US government-related organizations such as Fannie Mae or Freddie Mac are not backed by the full faith and credit of the US government, and no assurance can be given that the US government would provide financial support to such securities.
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Asset Transfer Program Risk. The Portfolios may be used in connection with certain benefit programs under the Contracts. In order for the Participating Insurance Companies to manage the guarantees offered in connection with these benefit programs, the Participating Insurance Companies generally require Contract owners to participate in certain specialized algorithmic asset transfer programs under which the Participating Insurance Companies will monitor each Contract owner’s account value and, if necessary, will systematically transfer amounts among investment options. The transfers are based on pre-determined, non-discretionary mathematical formulas which generally focus on the amounts guaranteed at specific future dates or the present value of the estimated lifetime payments to be made.
As an example of how the asset transfer formulas operate under certain market environments, a downturn in the equity markets (i.e., a reduction in a Contract owner’s account value within the selected investment options) and certain market return scenarios involving “flat” returns over a period of time may cause the Participating Insurance Companies to transfer some or all of such Contract owner’s account value to a fixed income investment option. In general terms, such transfers are designed to ensure that an appropriate percentage of the projected guaranteed amounts are supported by fixed income investments. The formulas may also trigger transfers from a fixed income investment option back to selected equity and asset allocation options. Under some benefit programs using bond investment options with specific maturities, the transfer formulas may transfer account value among bond investment options with differing maturities based on guarantee calculations, not necessarily market movements. For more information on the benefit programs and asset transfer formulas, please see your Contract prospectus.
These formulas may result in large-scale asset flows into and out of the Portfolios, which, in certain instances, could adversely affect the Portfolios, including their risk profiles, expenses and performance. For example, the asset flows may adversely affect performance by requiring a Portfolio to purchase or sell securities at inopportune times, by otherwise limiting a Subadviser’s ability to fully implement a Portfolio’s investment strategies, or by requiring a Portfolio to hold a larger portion of its assets in highly liquid securities than it otherwise would hold. The asset flows may cause high turnover, which can result in increased transaction costs. The asset flows may also result in low asset levels and high operating expense ratios for a Portfolio. The asset flows could remove all or substantially all of the assets of the Portfolio. The efficient operation of the asset flows depends on active and liquid markets. If market liquidity is strained, the assets flows may not operate as intended. For example, it is possible that illiquid markets or other market stress could cause delays in the transfer of cash from one Portfolio to another Portfolio, which in turn could adversely affect performance.
Derivatives Risk. A derivative is a financial contract, the value of which depends upon, or is derived from, the value of one or more underlying investments, such as an asset, reference rate, or index, and may relate to stocks, bonds, interest rates, currencies, and currency exchange rates. Derivatives in which the Portfolios may invest include exchange-traded instruments, as well as privately-negotiated instruments, also called over-the-counter instruments. Examples of derivatives include options, futures, forward agreements, interest rate swap agreements, credit default swap agreements, and credit-linked securities. A Portfolio may, but is not required to, use derivatives to seek to earn income or enhance returns, manage or adjust its risk profile, replace more traditional direct investments, or obtain exposure to certain markets. The use of derivatives to seek to earn income or enhance returns may be considered speculative.
The use of derivatives is a highly specialized activity that involves a variety of risks and costs that are different from, or possibly greater than, investing directly in traditional equity and debt securities, including:
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Counterparty credit risk. There is a risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable to honor its financial obligation to a Portfolio. This risk is especially important in the context of privately negotiated instruments. For example, a Portfolio would be exposed to counterparty credit risk to the extent it enters into a credit default swap, that is, it purchases protection against a default by a debt issuer, and the swap counterparty does not maintain adequate reserves to cover such a default.
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Leverage risk. Certain derivatives and related trading strategies create debt obligations similar to borrowings, and therefore create, leverage. Leverage can result in losses to a Portfolio that exceed the amount the Portfolio originally invested. To mitigate leverage risk, a Portfolio will segregate liquid assets or otherwise cover the
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transactions that may give rise to such risk. The use of leverage may cause a Portfolio to liquidate Portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation or coverage requirements.
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Liquidity and valuation risk. Certain exchange-traded derivatives may be difficult or impossible to buy or sell at the time that the seller would like, or at the price that the seller believes the derivative is currently worth. Privately-negotiated instruments may be difficult to terminate, and from time to time, a Portfolio may find it difficult to enter into a transaction that would offset the losses incurred by another derivative that it holds. Derivatives, and especially privately-negotiated instruments, also involve the risk of incorrect valuation (that is, the value assigned to the derivative may not always reflect its risks or potential rewards).
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Hedging risk. Hedging is a strategy in which a Portfolio uses a derivative to offset the risks associated with its other portfolio holdings. While hedging can reduce losses, it can also reduce or eliminate gains or magnify losses if the market moves in a manner different from that anticipated by the Portfolio. Hedging also involves the risk that changes in the value of the derivative will not match the value of the holdings being hedged, to the extent expected by the Portfolio, in which case any losses on the holdings being hedged may not be reduced and in fact, may be increased. No assurance can be given that any hedging strategy will reduce risk or that hedging transactions will be either available or cost effective. A Portfolio is not required to use hedging and may choose not to do so.
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Futures and Forward Contracts risk. The primary risks associated with the use of futures or forward contracts are: (a) the imperfect correlation between the change in market value of the instruments held by a Portfolio and the price of the futures or forward contract; (b) possible lack of a liquid secondary market for a futures or forward contract and the resulting inability to close a futures or forward contract when desired; (c) losses caused by unanticipated market movements, which are potentially unlimited; (d) the failure to predict correctly the direction of securities or commodities prices, interest rates, currency exchange rates and other economic factors; and (e) the possibility that the counterparty to the futures or forward contract will default in the performance of its obligations. Additionally, not all forward contracts require a counterparty to post collateral, which may expose a Portfolio to greater losses in the event of a default by a counterparty.
Economic and Market Events Risk. Events in the US and global financial markets, including actions taken by the US Federal Reserve or foreign central banks to stimulate or stabilize economic growth, may at times result in periods of unusually high volatility in a market or a segment of a market, which could negatively impact performance. Reduced liquidity in credit and fixed income markets could adversely affect issuers worldwide.
Expense Risk. Your actual cost of investing in a Portfolio may be higher than the expenses shown in “Annual Portfolio Operating Expenses” for a variety of reasons. For example, Portfolio operating expense ratios may be higher than those shown if a Portfolio’s average net assets decrease, fee waivers or expense limitations change, or the Portfolio incurs more expenses than expected. Net assets are more likely to decrease and Portfolio expense ratios are more likely to increase when markets are volatile. Active and frequent trading of Portfolio securities can increase expenses.
Fixed Income Securities Risk. Investment in fixed income securities involves a variety of risks, including credit risk, liquidity risk and interest rate risk.
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Credit risk. Credit risk is the risk that an issuer or guarantor of a security will be unable or unwilling to pay principal and interest when due, or that the value of the security will suffer because investors believe the issuer is less able or willing to make required principal and interest payments. The downgrade of the credit of a security held by a Portfolio may decrease its value. Credit ratings are intended to provide a measure of credit risk. However, credit ratings are only the opinions of the credit rating agency issuing the ratings and are not guarantees as to quality. The lower the rating of a debt security held by a Portfolio, the greater the degree of credit risk that is perceived to exist by the credit rating agency with respect to that security. Increasing the amount of Portfolio assets allocated to lower-rated securities generally will increase the credit risk to which a Portfolio is subject. Information on the ratings issued to debt securities by certain credit rating agencies is included in Appendix I to the Statement of Additional Information (SAI). Not all securities are rated. In the event that the relevant credit rating agencies assign different ratings to the same security, a Portfolio’s Subadviser may determine which rating it believes best reflects the security’s quality and risk at that time. A Portfolio will not necessarily sell a security when its rating is reduced below its rating at the time of purchase. Some, but not all,
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US government securities are insured or guaranteed by the US government, while others are only insured or guaranteed by the issuing agency, which must rely on its own resources to repay the debt. Although credit risk may be lower for US government securities than for other investment-grade securities, the return may be lower.
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Liquidity risk. Liquidity risk is the risk that a Portfolio may not be able to sell some or all of the securities it holds, either at the price it values the security or at any price. Liquidity risk also includes the risk that there may be delays in selling a security, if it can be sold at all, which could prevent a Portfolio from taking advantage of other investment opportunities. In addition, liquidity risk refers to the risk that a Portfolio may not be able to pay redemption proceeds within the allowable time period or without significant dilution to remaining investors’ interests because of unusual market conditions, an unusually high volume of redemption requests, redemption requests by certain large shareholders such as institutional investors, or other reasons. Meeting such redemption requests may cause a Portfolio to have to liquidate portfolio securities at disadvantageous prices or times and/or unfavorable conditions and, thus, could reduce the returns of a Portfolio and dilute remaining investors’ interests. The reduction in dealer market-making capacity in fixed income markets that has occurred in recent years also has the potential to decrease liquidity.
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Interest rate risk. Interest rate risk is the risk that the value of an investment may go down in value when interest rates rise. The prices of fixed income securities generally move in the opposite direction to that of market interest rates. Changes in interest rates may also affect the liquidity of a Portfolio’s investments in fixed income securities. The risks associated with changing interest rates are heightened, given that interest rates in the US may increase, possibly suddenly and significantly, with unpredictable effects on the markets and a Portfolio’s investments. Volatility in interest rates and in fixed income markets may increase the risk that a Portfolio’s investment in fixed income securities will go down in value. A wide variety of factors can cause interest rates to rise, including central bank monetary policies and inflation rates. Generally, the longer the maturity of a fixed income security, the greater is the decline in its value when rates increase. As a result, portfolios with longer durations and longer weighted average maturities generally have more volatile share prices than portfolios with shorter durations and shorter weighted average maturities. Certain securities acquired by a Portfolio may pay interest at a variable rate or the principal amount of the security periodically adjusts according to the rate of inflation or other measure. In either case, the interest rate at issuance is generally lower than the fixed interest rate of bonds of similar seniority from the same issuer; however, variable interest rate securities generally are subject to a lower risk that their value will decrease during periods of increasing interest rates and increasing inflation. Decreases in interest rates create the potential for a decrease in income earned by a Portfolio. During periods of very low or negative interest rates, a Portfolio may be unable to maintain positive returns. Certain countries have recently experienced negative interest rates on certain fixed-income instruments. Very low or negative interest rates may magnify interest rate risk. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Portfolio performance to the extent the Portfolio is exposed to such interest rates.
Fund of Funds Risk. A Portfolio that is structured as a “fund of funds” invests primarily in a combination of underlying investment companies which we refer to as “Underlying Portfolios.” In addition to the risks associated with the investment in the Underlying Portfolios, these Portfolios are subject to the following risks:
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To the extent that a Portfolio concentrates its assets among Underlying Portfolios that invest principally in one or several asset classes, a Portfolio may from time to time underperform mutual funds exposed primarily to other asset classes. For example, a Portfolio may be overweighed in the equity asset class when the stock market is falling and the fixed income market is rising. Likewise, a Portfolio may be overweighted in the fixed income asset class when the fixed income market is falling and the stock market is rising.
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The ability of a Portfolio to achieve its investment objective depends on the ability of the selected Underlying Portfolios to achieve their investment objectives. There is a risk that the selected Underlying Portfolios will underperform relevant markets, relevant indices, or other portfolios with similar investment objectives and strategies.
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A Portfolio will incur its pro rata share of the expenses of an Underlying Portfolio in which the Portfolio invests, such as investment advisory and other management expenses, and shareholders incur the operating expenses of these Underlying Portfolios.
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The performance of a Portfolio may be affected by large purchases and redemptions of Underlying Portfolio shares. For example, large purchases and redemptions may cause an Underlying Portfolio to hold a greater percentage of its assets in cash than other portfolios pursuing similar strategies, and large redemptions may cause an Underlying Portfolio to sell assets at inopportune times. Underlying Portfolios that have experienced
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significant redemptions may, as a result, have higher expense ratios than other portfolios pursuing similar strategies. The Manager and a Portfolio’s Subadviser(s) seek to minimize the impact of large purchases and redemptions of Underlying Portfolio shares, but their abilities to do so may be limited.
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There is a potential conflict of interest between a Portfolio and its Manager and a Portfolio’s Subadviser(s). Because the amount of the investment management fees to be retained by the Manager and their affiliates may differ depending upon which Underlying Portfolios are used in connection with a Portfolio, there is a potential conflict of interest for the Manager and a Portfolio’s Subadviser(s) in selecting the Underlying Portfolios. In addition, the Manager and a Portfolio’s Subadviser(s) may have an incentive to take into account the effect on an Underlying Portfolio in which the Portfolio may invest in determining whether, and under what circumstances, to purchase or sell shares in that Underlying Portfolio. Although the Manager and a Portfolio’s Subadviser(s) take steps to address the potential conflicts of interest, it is possible that the potential conflicts could impact the Portfolios.
High-Yield Risk. Investments in high-yield securities and unrated securities of similar credit quality (commonly known as “high-yield securities” or “junk bonds”) may be subject to greater levels of interest rate, credit, call and liquidity risk than investments in investment grade securities. High-yield securities are considered predominantly speculative with respect to the issuer’s continuing ability to make principal and interest payments, and may be more volatile than other types of securities. An economic downturn or period of rising interest rates could adversely affect the market for high-yield securities and reduce a Portfolio’s ability to sell its high-yield securities at an advantageous time or price. In addition, the market for lower-rated bonds may be thinner and less active than the market for higher-rated bonds, and the prices of lower-rated bonds may fluctuate more than the prices of higher-rated bonds, particularly in times of market stress. High-yield securities frequently have redemption features that permit an issuer to repurchase the security from a Portfolio prior to maturity, which may result in the Portfolio having to reinvest the proceeds in other high-yield securities or similar instruments that may pay lower interest rates.
Liquidity and Valuation Risk. From time to time, a Portfolio may hold one or more securities for which there are no or few buyers and sellers, or where the securities are subject to limitations on transfer. In those cases, a Portfolio may have difficulty determining the values of those securities for the purpose of determining a Portfolio’s net asset value. A Portfolio also may have difficulty disposing of those securities at an advantageous time or at the values determined by the Portfolio for the purpose of determining the Portfolio’s net asset value, especially during periods of significant net redemptions of Portfolio shares. As a result, a Portfolio may be unable to achieve its desired level of exposure to certain issuers, asset classes or sectors. Private equity investments and private real estate-related investments are generally classified as illiquid investments and generally cannot be readily sold. As a result, private real estate-related investments owned by a Portfolio may be valued at fair value pursuant to guidelines established by the Board. Fair value determinations are inherently subjective and reflect good faith judgments based on available information. Accordingly, no assurance can be given that the fair value prices accurately reflect the price a Portfolio would receive upon the sale of the investment. A Portfolio’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers.
Portfolios with principal investment strategies that involve foreign securities, private placement investments, derivatives or securities with substantial market and/or credit risk tend to have the greatest exposure to liquidity and valuation risk.
Market and Management Risk. Market risk is the risk that the markets in which a Portfolio invests will experience market volatility and go down in value, including the possibility that a market will go down sharply and unpredictably. All markets go through cycles, and market risk involves being on the wrong side of a cycle. Factors affecting market risk include political events, broad economic and social changes, and the mood of the investing public. If investor sentiment turns negative, the price of all securities may decline. Market risk also includes the risk that geopolitical and other events will disrupt the economy on a national or global level. For instance, war, terrorism, market manipulation, government defaults, government shutdowns, political changes or diplomatic developments, public health emergencies (such as the spread of infectious diseases, pandemics, or epidemics) and natural/environmental disasters can all negatively impact the securities markets, which could cause a Portfolio to lose value. Such events may reduce consumer demand or economic output, result in market closures, travel restrictions or
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quarantines, and significantly adversely impact the economy. In addition, economies and financial markets throughout the world are becoming increasingly interconnected, which increases the likelihood that events or conditions in one country or region will adversely impact markets or issuers in other countries or regions. Exchanges and securities markets may close early, close late or issue trading halts on specific securities, which may result in, among other things, a Portfolio being unable to buy or sell certain securities at an advantageous time or accurately price its portfolio investments. In addition, a Portfolio may rely on various third-party sources to calculate its net asset value. As a result, a Portfolio is subject to certain operational risks associated with reliance on service providers and service providers’ data sources. In particular, errors or systems failures and other technological issues may adversely impact the Portfolio’s calculations of its net asset value. Such net asset value calculation issues may result in inaccurately calculated net asset values, delays in net asset value calculations and/or the inability to calculate net asset values over extended periods. A Portfolio may be unable to recover any losses associated with such failures.
Management risk is the risk that the investment strategy or the Manager or a subadviser will not work as intended. All decisions by the Manager or a subadviser require judgment and are based on imperfect information. In addition, if a Portfolio is managed using a quantitative investment model, it is subject to the risk that the model may not perform as expected. Similarly, there can be no assurance that quantitative models or methods utilized by the Manager or a subadviser, or related data sources, will always be available, and the loss of access to any such model(s) or data sources could have an adverse impact on a Portfolio's ability to realize its investment objective. Moreover, regulatory restrictions, actual or potential conflicts of interest or other considerations may cause the Manager or a subadviser to restrict or prohibit participation in certain investments. There is no guarantee that the investment objective of a Portfolio will be achieved.
Regulatory Risk. Each Portfolio is subject to a variety of laws and regulations which govern its operations. Each Portfolio is subject to regulation by the SEC. Similarly, the businesses and other issuers of the securities and other instruments in which a Portfolio invests are also subject to considerable regulation. These laws and regulations are subject to change. Changes in laws and regulations may materially impact a Portfolio, a security, business, sector or market. For example, changes in laws or regulations made by the government or a regulatory body may impact the ability of a Portfolio to achieve its investment objective, or may impact a Portfolio’s investment policies and/or strategies, or may reduce the attractiveness of an investment.
Sovereign Debt Securities Risk. Investing in sovereign debt securities exposes a Portfolio to the direct or indirect consequences of political, social or economic changes in the countries that issue the securities. Periods of economic and political uncertainty may result in the illiquidity and increased price volatility of sovereign debt securities held by a Portfolio. The issuer or governmental authority that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or pay interest when it becomes due, due to factors such as debt service burden, political constraints, cash flow problems and other national economic factors. In addition, foreign governments may default on their debt securities, which may require holders of such securities to participate in debt rescheduling or additional lending to defaulting governments. Moreover, there is no bankruptcy proceeding by which defaulted sovereign debt may be collected in whole or in part.
US Government Securities Risk. US Treasury obligations are backed by the “full faith and credit” of the US Government. Securities issued or guaranteed by federal agencies or authorities and US Government-sponsored instrumentalities or enterprises may or may not be backed by the full faith and credit of the US Government. For example, securities issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association and the Federal Home Loan Banks are neither insured nor guaranteed by the US Government. These securities may be supported by the ability to borrow from the US Treasury or only by the credit of the issuing agency, authority, instrumentality or enterprise and, as a result, are subject to greater credit risk than securities issued or guaranteed by the US Treasury. Further, the US Government and its agencies, authorities, instrumentalities and enterprises do not guarantee the market value of their securities; consequently, the value of such securities will fluctuate. This may be the case especially when there is any controversy or ongoing uncertainty regarding the status of negotiations in the US Congress to increase the statutory debt ceiling. If the US Congress is unable to negotiate an adjustment to the statutory debt ceiling, there is also the risk that the US Government may default on payments on
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certain US Government securities, including those held by a Portfolio (including the PSF PGIM Government Money Market Portfolio), which could have a negative impact on the Portfolio. An increase in demand for US Government securities resulting from an increase in demand for government money market funds may lead to lower yields on such securities.
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HOW THE TRUST IS MANAGED
Board of Trustees
The Board oversees the actions of the investment manager and the Subadvisers, and decides on general policies. The Board also oversees the Trust's officers who conduct and supervise the daily business operations of the Trust.
Investment Manager
PGIM Investments 655 Broad Street, Newark, New Jersey, 07102, serves as the investment manager (the Manager) of the Portfolio. PGIM Investments and AST Investment Services, Inc. (ASTIS) One Corporate Drive, Shelton, Connecticut, serve as co-investment managers for each of the other portfolios of the Trust not covered by this Prospectus, except for the following portfolios, for which PGIM Investments serves as the sole investment manager:
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AST American Funds Growth Allocation Portfolio
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AST BlackRock 60/40 Target Allocation ETF Portfolio
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AST BlackRock 80/20 Target Allocation ETF Portfolio
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AST BlackRock Corporate Bond Portfolio
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AST Bond Portfolio 2026
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AST Bond Portfolio 2027
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AST Bond Portfolio 2028
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AST Bond Portfolio 2029
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AST Bond Portfolio 2030
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AST Bond Portfolio 2031
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AST Bond Portfolio 2032
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AST Global Bond Portfolio (formerly, AST Wellington Management Global Bond Portfolio)
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AST Franklin 85/15 Diversified Allocation Portfolio (formerly, AST Legg Mason Diversified Growth Portfolio)
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AST PIMCO Corporate Bond Portfolio
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AST Prudential Corporate Bond Portfolio
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AST Prudential Flexible Multi-Strategy Portfolio
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AST QMA International Core Equity Portfolio
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AST T. Rowe Price Corporate Bond Portfolio
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AST T. Rowe Price Diversified Real Growth Portfolio
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AST Western Asset Corporate Bond Portfolio
PGIM Investments has been in the business of providing advisory services since 1996. ASTIS has been in the business of providing advisory services since 1992.
The Trust's Investment Management Agreement with the Manager on behalf of the Portfolio (the Management Agreement) provides that the Manager will furnish the Portfolio with investment advice and administrative services subject to the supervision of the Board and in conformity with the stated policies of the applicable Portfolio. The Manager must also provide, or obtain and supervise, the executive, administrative, accounting, custody, transfer agent and shareholder servicing services that are deemed advisable by the Board.
The Manager has engaged the Subadvisers to conduct the day-to-day investment programs of the Portfolio, including the purchase, retention and sale of portfolio securities and other financial instruments. The Manager is responsible for monitoring the activities of the Subadvisers and reporting on such activities to the Board. The Trust has obtained an exemptive order from the SEC that permits the Manager, subject to approval by the Board, to hire or change subadvisers for the Portfolio by entering into new subadvisory agreements with affiliated and non-affiliated subadvisers, without obtaining shareholder approval of such changes. The exemptive order (which is similar to exemptive orders granted to other investment companies that are organized in a manner similar to the Trust) is intended to facilitate the efficient supervision and management of the Subadvisers by the Manager and the Board. The Manager also participates in the day-to-day management of the Portfolio, as noted in the Summary section for the Portfolio earlier in this Prospectus.
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Once available, a discussion regarding the basis for the Board's initial approval of the Management Agreement and subadvisory agreement will be available in the Trust's annual report for the period ending December 30, 2021.
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Investment Subadviser
The Portfolio’s Subadviser provides the day-to-day investment management of the Portfolio. PGIM Investments also participates in the day-to-day management of the Portfolio, as noted in the “Portfolio Managers” section later in this Prospectus. The Manager pays the Subadviser a subadvisory fee out of the fee that the Manager receives from the Portfolio. The Subadviser for the Portfolio of the Trust is described below:
PGIM, Inc. (PGIM) is an indirect, wholly-owned subsidiary of Prudential Financial, Inc. PGIM was formed in June 1984 and was registered with the SEC as an investment adviser in December 1984. The Fixed Income unit of PGIM (PGIM Fixed Income) is the principal public fixed income asset management unit of PGIM. As of September 30, 2021, PGIM had approximately $1.51 trillion in assets under management. PGIM's address is 655 Broad Street, Newark, New Jersey 07102.
PGIM Fixed Income is the primary public fixed-income asset management unit of PGIM, with $964 billion in assets under management as of September 30, 2021, and is the unit of PGIM that provides investment advisory services.*
PGIM Fixed Income is organized into groups specializing in different sectors of the fixed income market: US and non-US government bonds, mortgages and asset-backed securities, US and non-US investment grade corporate bonds, high-yield bonds, emerging markets bonds, municipal bonds, and money market securities.
PGIM Limited is an indirect, wholly-owned subsidiary of PGIM. PGIM Limited is located at Grand Buildings, 1-3 Strand, Trafalgar Square, London WC2N 5HR. PGIM Limited provides investment advisory services with respect to securities in certain foreign markets. As of September 30, 2021, PGIM Limited managed approximately $58.1 billion in assets.
* PGIM Fixed Income’s assets under management includes PGIM Limited’s assets under management listed above.
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Portfolio Managers
Information about the portfolio managers responsible for the day-to-day management of the Portfolio is set forth below.
In addition to the information set forth below, the SAI provides additional information about each portfolio manager's compensation, other accounts managed by each portfolio manager, and each portfolio manager's ownership of shares of the Trust's Portfolio.
AST Bond Portfolio 2033
Richard Piccirillo, David Del Vecchio, Gregory Peters, Scott Donnelly, CFA and Lindsay Rosner, CFA are jointly and primarily responsible for the day-to-day management of the Portfolio.
Richard Piccirillo is a Managing Director and Senior Portfolio Manager for PGIM Fixed Income’s Core, Long Government/Credit, Core Plus, Absolute Return, and other multi-sector Fixed Income strategies. Mr. Piccirillo specialized in mortgage-and asset- backed securities since joining Prudential Financial in 1993. Before joining Prudential Financial, Mr. Piccirillo was a fixed income analyst with Fischer Francis Trees & Watts. Mr. Piccirillo started his career as a financial analyst at Smith Barney. He received a BBA in Finance from George Washington University and an MBA in Finance and International Business from New York University. Named Morningstar’s 2017 Fixed Income Manager of The Year for PGIM Total Return Bond Fund and a 2018 winner of the Pension and Investment Provider Award for Global Multi-Asset Credit.
David Del Vecchio is a Managing Director and portfolio manager for PGIM Fixed Income’s US Investment Grade Corporate Bond Team.Mr. Del Vecchio’s responsibilities include intermediate and short corporate strategies as well as corporate security selection in intermediate and short multi-sector strategies. Prior to his current role, Mr. Del Vecchio was a taxable money markets portfolio manager for the Money Markets Group, responsible for managing proprietary fixed income accounts, as well as the securities lending portfolios. Prior to joining the Money Markets Group in 2000, he was responsible for the lending/repurchase agreements of US government, agency, and STRIP securities in PGIM Fixed Income’s Securities Lending Group. Mr. Del Vecchio joined Prudential Financial in 1995. He received a BS in Business Administration with a specialization in Finance from The College of New Jersey, and an MBA in Finance from New York University.
Gregory Peters is a Managing Director and Head of PGIM Fixed Income’s Multi-Sector and Strategy. Mr. Peters is a senior portfolio manager for Core, Long Government/Credit, Core Plus, Absolute Return, and other multi-sector Fixed Income strategies, in addition to having oversight of the firm’s investment strategy function. Prior to joining PGIM Fixed Income in 2014, Mr. Peters was the Chief Global Cross Asset Strategist at Morgan Stanley, responsible for Morgan Stanley’s macro research and asset allocation strategy. In addition, he was Morgan Stanley’s Global Director of Fixed Income & Economic Research and served on the Firm Risk, Investment, Asset Allocation, Global Credit, and Global Fixed Income Operating Committees. Earlier, he worked at Salomon Smith Barney and the Department of U.S. Treasury. Mr. Peters has been recognized by Institutional Investor magazine for his efforts in macro, fixed income, high yield and investment grade strategies. He was also recently recognized as Business Insider’s Top Analysts and Top Analyst’s to Watch by CEO World. Mr. Peters earned a BA in Finance from The College of New Jersey and an MBA from Fordham University. He is a member of the Fixed Income Analyst Society and the Bond Market Association. Mr. Peters was named Morningstar’s 2017 Fixed Income Manager of The Year for the PGIM Total Return Bond Fund, and is a 2018 winner of the Pension and Investment Provider Award for Global Multi-Asset Credit.
Scott Donnelly, CFA, is a Vice President and a U.S. government portfolio manager for PGIM Fixed Income's Multi-Sector and Liquidity Team. Prior to his current role, Mr. Donnelly was a Sr. Investment Vice President for the Firm’s Global Portfolio Management unit, overseeing the portfolio management activities within its Asia ex-Japan and
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European insurance operations. Mr. Donnelly started his career with the Firm in 2007 in the Institutional Investment Products group. Previously, he held portfolio management and actuarial roles at MetLife. Scott received a BS in Finance from St. Joseph's University and MBA from New York University. He holds the Chartered Financial Analyst (CFA) designation.
Lindsay Rosner, CFA, is Vice President on the Multi-Sector Portfolio Management Team for PGIM Fixed Income. Her primary responsibilities are supporting our efforts in managing multi-sector portfolios across several mandates, including Core, Core Plus, and Core Conservative, both intermediate and long duration. Prior to joining the Firm in 2012, Ms. Rosner worked for Barclays Capital (and prior to that, Lehman Brothers) in New York City where she was a convertible bond trader, working with both hedge fund and traditional money management clients. Ms. Rosner is a graduate of Princeton University. She received a BA from the Woodrow Wilson School of Public and International Affairs. Ms. Rosner holds the Chartered Financial Analyst (CFA) designation.
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HOW TO BUY AND SELL SHARES OF THE PORTFOLIO
Purchasing and Redeeming PORTFOLIO Shares
Investments in a Portfolio are made through certain variable life insurance and variable annuity contracts. Together with this Prospectus, you should have received a prospectus for such a Contract. You should refer to that prospectus for further information on investing in the Portfolios. The Trust does not provide investment advice. You should contact your financial advisor for advice regarding selection of Portfolios.
Each Portfolio typically expects to pay redemption proceeds within three days after receipt of a proper notice of the redemption request. However, it may take a Portfolio up to seven days to pay redemption proceeds. There is no redemption charge. We may suspend the right to redeem shares or receive payment when the New York Stock Exchange (NYSE) is closed (other than weekends or holidays), when trading on the NYSE is restricted, or as permitted by the SEC.
Under normal circumstances, each Portfolio typically expects to meet redemption requests by using cash or cash equivalents or proceeds from the sale of portfolio securities (or a combination of these methods). Each Portfolio reserves the right to use borrowing arrangements that may be available from time to time. The use of borrowings in order to meet redemption requests is typically expected to be used only during stressed or abnormal market conditions, when an increased portion of a Portfolio’s holdings may be comprised of less liquid investments, or during emergency or temporary circumstances. The Portfolios’ use of redemptions in-kind is discussed below.
Redemption in Kind
The Trust may pay the redemption price to shareholders of record (generally, the Participating Insurance Company separate accounts holding Trust shares) in whole or in part by a distribution in-kind of securities from the relevant investment portfolio of the Trust, in lieu of cash, in conformity with applicable rules of the SEC and procedures adopted by the Board. Securities will be readily marketable and will be valued in the same manner as in a regular redemption.
If shares are redeemed in kind, the recipient will incur transaction costs in converting such assets into cash. These procedures govern the redemption by the shareholder of record, generally a Participating Insurance Company separate account. The procedures do not affect payments by a Participating Insurance Company to a contract owner under a variable contract.
Frequent Purchases or Redemptions of Portfolio Shares
The Trust is part of the group of investment companies advised by PGIM Investments that seeks to prevent patterns of frequent purchases and redemptions of shares by its investors (the PGIM Investment funds). Frequent purchases and redemptions may adversely affect the investment performance and interests of long-term investors in the Portfolios. When an investor engages in frequent or short-term trading, the PGIM Investment funds may have to sell portfolio securities to have the cash necessary to pay the redemption amounts. This may cause the PGIM Investment funds to sell Portfolio securities at inopportune times, hurting their investment performance. When large dollar amounts are involved, frequent trading can also make it difficult for the PGIM Investment funds to use long-term investment strategies because they cannot predict how much cash they will have to invest. In addition, if a PGIM Investment fund is forced to liquidate investments due to short-term trading activity, it may incur increased transaction and tax costs.
Similarly, the PGIM Investment funds may bear increased administrative costs as a result of the asset level and investment volatility that accompanies patterns of short-term trading. Moreover, frequent or short-term trading by certain investors may cause dilution in the value of PGIM Investment fund shares held by other investors. To the extent a Portfolio invests in foreign securities, a Portfolio may be particularly susceptible to frequent trading, because time zone differences among international stock markets can allow an investor engaging in short-term trading to exploit fund share prices that may be based on closing prices of foreign securities established some time before the
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fund calculates its own share price. To the extent a Portfolio invests in certain fixed income securities, such as high-yield bonds or certain asset-backed securities, a Portfolio may also constitute an effective vehicle for an investor’s frequent trading strategies.
The Boards of Directors/Trustees of the PGIM Investment funds, including the Trust, have adopted policies and procedures designed to discourage or prevent frequent trading by investors. The policies and procedures for the Trust are limited, however, because the Trust does not sell its shares directly to the public. Instead, Portfolio shares are sold only to Participating Insurance Company separate accounts that fund variable annuity contracts and variable life insurance policies. Therefore, Participating Insurance Companies, not the Trust, maintain the individual contract owner account records. Each Participating Insurance Company submits to the Trust's transfer agent daily aggregate orders combining the transactions of many contract owners. Therefore, the Trust and its transfer agent do not monitor trading by individual contract owners.
Under the Trust's policies and procedures, the Trust has notified each Participating Insurance Company that the Trust expects the Participating Insurance Company to impose restrictions on transfers by contract owners. The current Participating Insurance Companies are Prudential and three insurance companies not affiliated with Prudential. The Trust may add additional Participating Insurance Companies in the future. The Trust receives reports on the trading restrictions imposed by Prudential on variable contract owners investing in the Portfolios, and the Trust monitors the aggregate cash flows received from unaffiliated insurance companies. In addition, the Trust has entered shareholder information agreements with Participating Insurance Companies as required by Rule 22c-2 under the 1940 Act. Under these agreements, the Participating Insurance Companies have agreed to: (i) provide certain information regarding contract owners who engage in transactions involving Portfolio shares; and (ii) execute any instructions from the Trust to restrict or prohibit further purchases or exchanges of Portfolio shares by contract owners who have been identified by the Trust as having engaged in transactions in Portfolio shares that violate the Trust's frequent trading policies and procedures. The Trust and its transfer agent each reserve the right, in its sole discretion, to reject all or a portion of a purchase order from a Participating Insurance Company for any reason or no reason. If a purchase order is rejected, the purchase amount will be returned to the Participating Insurance Company.
The Trust also employs fair value pricing procedures to deter frequent trading. Those procedures are described in more detail under “Net Asset Value,” below.
The Portfolio is structured as a fund-of-funds (the Fund of Funds) and invests in other portfolios of the Trust that are not operated as Funds of Funds. These portfolios in which the Funds of Funds invest are referred to as Underlying Fund Portfolios. The policies that have been implemented by the Participating Insurance Companies to discourage frequent trading apply to transactions in Funds of Funds shares. Transactions by the Funds of Funds in Underlying Fund Portfolio shares, however, are not subject to any limitations and are not considered frequent or short-term trading. For example, the Funds of Funds may engage in significant transactions in Underlying Fund Portfolio shares in order to: (i) change their investment focus, (ii) rebalance their investments to match the then-current asset allocation mix, (iii) respond to significant purchases or redemptions of Fund of Funds shares, or (iv) respond to changes required by the underlying contracts. These transactions by the Funds of Funds in Underlying Fund Portfolio shares may be disruptive to the management of an Underlying Fund Portfolio because such transactions may: (i) cause the Underlying Fund Portfolio to sell portfolio securities at inopportune times to have the cash necessary to pay redemption requests, hurting their investment performance, (ii) make it difficult for the subadvisers for the Underlying Fund Portfolios to fully implement their investment strategies, and (iii) lead to increased transaction and tax costs.
The Portfolio may be used in connection with certain living benefit programs, including, without limitation, certain “guaranteed minimum accumulation benefit” programs and certain “guaranteed minimum withdrawal benefit” programs. In order for the Participating Insurance Companies to manage the guarantees offered in connection with these benefit programs, the Participating Insurance Companies generally: (i) limit the number and types of variable sub-accounts in which contract holders may allocate their account values (referred to in this Prospectus as the Permitted Sub-Accounts) and (ii) require contract holders to participate in certain specialized asset transfer programs. Under these asset transfer programs, the Participating Insurance Companies will monitor each contract owner's
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account value from time to time and, if necessary, will systematically transfer amounts among the Permitted Sub-Accounts as dictated by certain non-discretionary mathematical formulas. These mathematical formulas will generally focus on the amounts guaranteed at specific future dates or the present value of the estimated lifetime payments to be made, as applicable.
As an example of how these asset transfer programs might operate under certain market environments, a downturn in the equity markets (i.e., a reduction in a contract holder's account value within the Permitted Sub-Accounts) and certain market return scenarios involving “flat” returns over a period of time may cause Participating Insurance Companies to transfer some or all of such contract owner's account value to the Portfolio. In general terms, such transfers are designed to ensure that an appropriate percentage of the projected guaranteed amounts are offset by assets in investments like the Portfolio.
The above-referenced asset transfer programs are an important part of the guarantees offered in connection with the applicable living benefit programs. Such asset transfers may, however, result in large-scale asset flows into and out of the Portfolio. Such asset transfers could adversely affect the Portfolio’s investment performance by requiring the Manager or Subadvisers to purchase and sell securities at inopportune times and by otherwise limiting the ability of the Manager or Subadvisers to fully implement the Portfolio’s investment strategies. In addition, these asset transfers may result in relatively small asset bases and relatively high transaction costs and operating expense ratios for the Portfolio compared to other similar funds.
Investors seeking to engage in frequent trading activities may use a variety of strategies to avoid detection and, despite the efforts of the Trust and the Participating Insurance Companies to prevent such trading, there is no guarantee that the Trust or the Participating Insurance Companies will be able to identify these investors or curtail their trading practices. Therefore, some Trust investors may be able to engage in frequent trading, and, if they do, the other Trust investors would bear any harm caused by that frequent trading. The Trust does not have any arrangements intended to permit trading in contravention of the policies described above.
For information about the trading limitations applicable to you, please see the prospectus for your contract or contact your insurance company.
Net Asset Value
Any purchase or sale of Portfolio shares is made at the net asset value, or NAV, of such shares. The price at which a purchase or redemption is made is typically based on the next calculation of the NAV after the order is received in good order. The NAV of each Portfolio is typically determined on each day the NYSE is open for trading as of the close of the exchange's regular trading session (which is generally 4:00 p.m. Eastern time). The Trust will not treat an intraday unscheduled disruption in NYSE trading as a closure of the NYSE and will price its shares as of 4:00 p.m. if the particular disruption directly affects only the NYSE. The NYSE is closed on most national holidays and Good Friday. The Trust does not price, and shareholders will not be able to purchase or redeem, the Trust's shares on days when the NYSE is closed but the primary markets for the Trust's foreign securities are open, even though the value of these securities may have changed. Conversely, the Trust will ordinarily price its shares, and shareholders may purchase and redeem shares, on days that the NYSE is open but foreign securities markets are closed.
The securities held by each of the Trust's portfolios are valued based upon market quotations or, if not readily available, at fair value as determined in good faith under procedures established by the Board. The Trust may use fair value pricing if it determines that a market quotation is not reliable based, among other things, on market conditions that occur after the quotation is derived or after the closing of the primary market on which the security is traded, but before the time that the NAV is determined. This use of fair value pricing commonly occurs with securities that are primarily traded outside of the US, because such securities present time-zone arbitrage opportunities when events or conditions affecting the prices of specific securities or the prices of securities traded in such markets generally occur after the close of the foreign markets but prior to the time that a Portfolio determines its NAV.
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The Trust may also use fair value pricing with respect to US traded securities if, for example, trading in a particular security is halted and does not resume before a Portfolio calculates its NAV or the exchange on which a security is traded closes early. In addition, fair value pricing is used for securities where the pricing agent or principal market maker does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of PGIM Investments (or a Subadviser) does not represent fair value. Different valuation methods may result in differing values for the same security. The fair value of a portfolio security that a Portfolio uses to determine its NAV may differ from the security's published or quoted price. If a Portfolio needs to implement fair value pricing after the NAV publishing deadline but before shares of the Portfolio are processed, the NAV you receive or pay may differ from the published NAV price. For purposes of computing the Trust's NAV, we will value the Trust's futures contracts 15 minutes after the close of regular trading on the NYSE. Except when we fair value securities, we normally value each foreign security held by the Trust as of the close of the security's primary market.
Fair value pricing procedures are designed to result in prices for a Portfolio's securities and its NAV that are reasonable in light of the circumstances that make or have made market quotations unavailable or unreliable, and to reduce arbitrage opportunities available to short-term traders. There is no assurance, however, that fair value pricing will more accurately reflect the market value of a security than the market price of such security on that day or that it will prevent dilution of a Portfolio's NAV by short-term traders.
The NAV for each of the Portfolios is determined by a simple calculation. It's the total value of a Portfolio (assets minus liabilities) divided by the total number of shares outstanding. Each business day, each Portfolio’s current NAV per share is transmitted electronically to Participating Insurance Companies that use the Portfolios as underlying investment options for Contracts.
To determine a Portfolio's NAV, its holdings are valued as follows:
Equity Securities for which the primary market is on an exchange (whether domestic or foreign) shall be valued at the last sale price on such exchange or market on the day of valuation or, if there was no sale on such day, at the mean between the last bid and asked prices on such day or at the last bid price on such day in the absence of an asked price. Securities included within the NASDAQ market shall be valued at the NASDAQ official closing price (NOCP) on the day of valuation, or if there was no NOCP issued, at the last sale price on such day. Securities included within the NASDAQ market for which there is no NOCP and no last sale price on the day of valuation shall be valued at the mean between the last bid and asked prices on such day or at the last bid price on such day in the absence of an asked price. Equity securities that are not sold on an exchange or NASDAQ are generally valued by an independent pricing agent or principal market maker.
A Portfolio may own securities that are primarily listed on foreign exchanges that trade on weekends or other days when the Portfolios do not price their shares. Therefore, the value of a Portfolio's assets may change on days when shareholders cannot purchase or redeem Portfolio shares.
Convertible debt securities that are traded in the over-the-counter market, including listed convertible debt securities for which the primary market is believed by PGIM Investments or a Subadviser, as available, to be over-the-counter, shall be valued on the day of valuation at an evaluated bid price provided by an independent pricing agent or, in the absence of a valuation provided by an independent pricing agent, at the bid price provided by a principal market maker or primary market dealer.
Other debt securities—those that are not valued on an amortized cost basis—are valued using an independent pricing service.
Options on stock and stock indexes that are traded on a national securities exchange are valued at the last sale price on such exchange on the day of valuation or, if there was no such sale on such day, at the mean between the most recently quoted bid and asked prices on such exchange.
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Futures contracts and options on futures contracts are valued at the last sale price at the close of the commodities exchange or board of trade on which they are traded. If there has been no sale that day, the securities will be valued at the mean between the most recently quoted bid and asked prices on that exchange or board of trade.
Forward currency exchange contracts are valued at the cost of covering or offsetting such contracts calculated on the day of valuation. Securities that are valued in accordance herewith in a currency other than US dollars shall be converted to US dollar equivalents at a rate obtained from a recognized bank, dealer or independent service on the day of valuation.
Over-the-counter (OTC) options are valued at the mean between bid and asked prices provided by a dealer (which may be the counterparty). A subadviser will monitor the market prices of the securities underlying the OTC options with a view to determining the necessity of obtaining additional bid and ask quotations from other dealers to assess the validity of the prices received from the primary pricing dealer.
All short-term debt securities held by the Portfolios, including bonds, notes, debentures and other debt securities, and money market instruments such as certificates of deposit, commercial paper, bankers' acceptances and obligations of domestic and foreign banks for which market quotations are readily available, are valued by an independent pricing agent or principal market maker (if available, otherwise a primary market dealer).
Distributor & DISTRIBUTION ARRANGEMENTS
The Trust offers a single class of shares on behalf of the Portfolio. Prudential Annuities Distributors, Inc. (PAD) serves as the distributor for the shares of the Portfolio. Each class of shares is offered and redeemed at its net asset value without any sales load. PAD is an affiliate of PGIM Investments and ASTIS. PAD is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, and is a member of the Financial Industry Regulatory Authority (FINRA).
The Trust has adopted a Shareholder Services and Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the 12b-1 Plan) for the shares of the Portfolio. Under the 12b-1Plan, shares of the Portfolio are charged an annual fee to compensate PAD and its affiliates for providing various administrative and distribution services to the Portfolio. The maximum annual shareholder services and distribution (12b-1) fee for the Portfolio’s shares is 0.25% of the average daily net assets of the Portfolio. Because these fees are paid out of the Portfolio’s assets on an ongoing basis, over time, the fees will increase your cost of investing and may cost you more than other types of charges.
PAD has contractually agreed to reduce its 12b-1 fees for the Portfolio, so that the effective distribution and service fee rate paid by the Portfolio is reduced based on the average daily net assets of the Portfolio. The contractual waiver does not include an expiration or termination date as it is contractually guaranteed by PAD on a permanent basis, and the Manager and PAD cannot terminate or otherwise modify the waiver. The contractual waiver is calculated as follows for the Portfolio: 
Average Daily Net Assets of Portfolio
Distribution and Service Fee Rate Including Waiver
Up to and including $300 million
0.25% (no waiver)
Over $300 million up to and including $500 million
0.23%
Over $500 million up to and including $750 million
0.22%
Over $750 million
0.21%
PAD may receive payments from the Subadvisers or their affiliates to help defray expenses for sales meetings or seminar sponsorships that may relate to the Contracts and/or the Portfolio. These sales meetings or seminar sponsorships may provide the Subadvisers with increased access to persons involved in the distribution of the Contracts. PAD also may receive marketing support from the Subadvisers in connection with the distribution of the Contracts.
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OTHER INFORMATION
Federal Income Taxes
Each Portfolio currently intends to be treated as a partnership for federal income tax purposes. As a result, each Portfolio's income, gains, losses, deductions, and credits are “passed through” pro rata directly to the Participating Insurance Companies and retain the same character for federal income tax purposes. Distributions may be made to the various separate accounts of the Participating Insurance Companies in the form of additional shares (not in cash).
Owners of variable annuity contracts or variable life insurance policies should consult the prospectuses of their respective contracts or policies for information on the federal income tax consequences to such holders. In addition, variable contract owners may wish to consult with their own tax advisors as to the tax consequences of investments in the Trust, including the application of state and local taxes.
Monitoring for Possible Conflicts
The Trust sells its shares to fund variable life insurance contracts and variable annuity contracts and is authorized to offer its shares to qualified retirement plans. Because of differences in tax treatment and other considerations, it is possible that the interest of variable life insurance contract owners, variable annuity contract owners and participants in qualified retirement plans could conflict. The Trust will monitor the situation and, in the event that a material conflict does develop, the Trust would determine what action, if any, to take in response.
Disclosure of Portfolio Holdings
A description of the Trust's policies and procedures with respect to the disclosure of each Portfolio's portfolio securities is included in the SAI and on the Trust's website at www.prudential.com/variableinsuranceportfolios.
Payments to Affiliates
PGIM Investments and ASTIS and their affiliates, including a subadviser or PAD, may compensate affiliates of PGIM Investments and ASTIS, including the insurance companies issuing variable annuity or variable life contracts by providing reimbursement, defraying the costs of, or paying directly for, among other things, marketing and/or administrative services and/or other services they provide in connection with the variable annuity and/or variable life contracts that offer the Portfolios as investment options. These services may include, but are not limited to: sponsoring or co-sponsoring various promotional, educational or marketing meetings and seminars attended by distributors, wholesalers, and/or broker dealer firms' registered representatives, and creating marketing materials that discuss the contracts, available options, and the Portfolios.
The amounts paid depend on the nature of the meetings, the number of meetings attended by PGIM Investments or ASTIS, the Subadviser, or PAD, the number of participants and attendees at the meetings, the costs expected to be incurred, and the level of PGIM Investments’, ASTIS’, the Subadviser's or PAD’s participation. These payments or reimbursements may not be offered by PGIM Investments, ASTIS, Subadvisers, or PAD and the amounts of such payments may vary between and among PGIM Investments, ASTIS, the Subadviser and PAD, depending on their respective participation.
With respect to variable annuity contracts, the amounts paid under these arrangements to Prudential-affiliated insurers are set forth in the prospectuses for the variable annuity contracts which offer the Portfolios as investment options.
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FINANCIAL HIGHLIGHTS
Introduction
The Portfolio is expected to commence operations on or around the date of this Prospectus, thus no financial highlights data is provided.
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INVESTOR INFORMATION SERVICES:
Shareholder inquiries should be made by calling (800) 778-2255 or by writing to Advanced Series Trust at 655 Broad Street, Newark, New Jersey 07102. Additional information about the Portfolios is included in the SAI, which is incorporated by reference into this Prospectus. Additional information about the Portfolio’s investments is available in the Portfolio's annual and semi-annual report to shareholders. In the annual report, you will find a discussion of the market conditions and investment strategies that significantly affected the Portfolio's performance during its last fiscal year. The SAI and additional copies of the annual and semi-annual report are available without charge by calling the above number. The SAI and the annual and semi-annual report are also available without charge on the Trust’s website at www.prudential.com/variableinsuranceportfolios.
Delivery of Prospectus and Other Documents to Households. To lower costs and eliminate duplicate documents sent to your address, the Trust, in accordance with applicable laws and regulations, may begin mailing only one copy of the Trust's prospectus, prospectus supplements, annual and semi-annual reports, proxy statements and information statements, or any other required documents to your address even if more than one shareholder lives there. If you have previously consented to have any of these documents delivered to multiple investors at a shared address, as required by law, and you wish to revoke this consent or would otherwise prefer to continue to receive your own copy, you should call the number above, or write to the Trust at the above address. The Trust will begin sending individual copies to you within thirty days of revocation.
The information in the Trust's filings with the Securities and Exchange Commission (including the SAI) is available from the SEC. Copies of this information may be obtained, upon payment of duplicating fees, by electronic request to publicinfo@sec.gov or by writing the Public Reference Section of the SEC, Washington, DC 20549-0102. Finally, information about the Trust is available on the EDGAR database on the SEC's internet site at www.sec.gov.
Investment Company File Act No. 811-05186
880PROS


 
 
Advanced Series Trust
STATEMENT OF ADDITIONAL INFORMATION • JANUARY 3, 2022
This Statement of Additional Information (SAI) of Advanced Series Trust (the Trust, and each series thereof, a Portfolio) is not a prospectus and should be read in conjunction with the Prospectus of the Trust dated January 3, 2022, which can be obtained, without charge, by calling (800) 778-2255 or by writing to the Trust at 655 Broad Street, Newark, New Jersey 07102. This SAI has been incorporated by reference into the Trust's Prospectus. The Portfolio of the Trust which is discussed in this SAI is noted on this front cover (the Portfolio).
AST Bond Portfolio 2033
 
Table of Contents 
PART I
INTRODUCTION
This SAI sets forth information about the Trust and the Portfolio covered by the SAI. Part I provides additional information about the Trust’s Board of Trustees, certain investment restrictions that apply to the Portfolio, the advisory services provided to and the management fees paid by the Trust, and information about other fees paid by and services provided to the Trust. Part II provides additional information and explanations about certain investments and investment strategies which may be used by the Portfolio, and should be read in conjunction with Part I.
Before reading the SAI, you should consult the Glossary below, which defines certain of the terms used in the SAI: 
Glossary
 
Term
Definition
1933 Act
Securities Act of 1933, as amended
1934 Act
Securities Exchange Act of 1934, as amended
1940 Act
Investment Company Act of 1940, as amended
ADR
American Depositary Receipt
ADS
American Depositary Share
ASTIS
AST Investment Services, Inc.
Board
Trust’s Board of Directors or Trustees
Board Member
A trustee or director of the Trust’s Board
CFTC
Commodity Futures Trading Commission
Code
Internal Revenue Code of 1986, as amended
EDR
European Depositary Receipt
ETF
Exchange-Traded Fund
Fannie Mae
Federal National Mortgage Association
Fitch
Fitch, Inc.
Freddie Mac
The Federal Home Loan Mortgage Corporation
Global Depositary Receipt
GDR
Ginnie Mae
Government National Mortgage Association
IPO
Initial Public Offering
IRS
Internal Revenue Service
LIBOR
London Interbank Offered Rate
Moody’s
Moody’s Investor Services, Inc.
NASDAQ
National Association of Securities Dealers Automated Quotations System
NAV
Net Asset Value
NYSE
New York Stock Exchange
OTC
Over-the-Counter
PGIM Investments or the Manager
PGIM Investments LLC
PMFS
Prudential Mutual Fund Services LLC
REIT
Real Estate Investment Trust
RIC
Regulated Investment Company, as the term is used in the Internal Revenue Code of 1986, as amended
S&P
S&P Global Ratings
SEC
US Securities & Exchange Commission
World Bank
International Bank for Reconstruction and Development
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Trust PORTFOLIOS, INVESTMENT POLICIES & STRATEGIES
The Trust is an open-end management investment company (commonly known as a mutual fund) that is intended to provide a range of investment alternatives through its separate portfolios, each of which is, for investment purposes, in effect a separate fund. The Portfolio offered by the Trust which is discussed in this SAI is set forth below:
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AST Bond Portfolio 2033
References to “a Portfolio” or the “the Portfolio” relate to the AST Bond Portfolio 2033 unless the context requires otherwise.
The Trust offers one class of shares in the Portfolio. Shares of the Portfolio are sold only to separate accounts of The Prudential Insurance Company of America, Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, Pramerica of Bermuda Life Assurance Company, Ltd. (collectively, Prudential), Prudential Annuities Life Assurance Corporation (which is in the process of being sold and may, at a future date, go by a different name), Prudential Retirement Insurance and Annuity Company (which is in the process of being sold and may, at a future date, go by a different name), Kemper Investors Life Insurance Company, Allstate Life Insurance Company and Allstate Life Insurance Company of New York as investment options under variable life insurance and variable annuity contracts (the Contracts). (A separate account keeps the assets supporting certain insurance contracts separate from the general assets and liabilities of the insurance company.)
In order to sell shares to both Prudential and non-Prudential insurance companies, the Trust has obtained an exemptive order (the Order) from the SEC. The Trust and its Portfolios are managed in compliance with the terms and conditions of that Order.
PGIM Investments LLC (PGIM Investments or the Manager or the Investment Manager), a wholly-owned subsidiary of Prudential Financial, Inc. (Prudential Financial), serves as overall investment manager of the Portfolio. As discussed in the Prospectus, the Portfolio may invest in money market instruments and comparable securities. The investment objective of the Portfolio is discussed in the Prospectus.
The Portfolio, which operates as a fund-of-funds, as described in the Prospectus, may engage in all of the investments and investment strategies discussed in Part II of this SAI, either by the Portfolio's investments in an underlying fund or by investing the Portfolio's assets in the investments or strategies.
The Prospectus and SAI do not purport to create any contractual obligations between the Trust or the Portfolio and its shareholders. In addition, shareholders are not intended third-party beneficiaries of any contracts entered into by (or on behalf of) the Portfolio, including contracts with the Manager or other parties who provide services to the Portfolio.
FUNDAMENTAL INVESTMENT RESTRICTIONS
Set forth below are certain investment restrictions applicable to the Portfolio. Fundamental restrictions may not be changed without a majority vote of shareholders as required by the 1940 Act. Non-fundamental restrictions may be changed by the Board of Trustees without shareholder approval.
The investment restrictions set forth below are “fundamental” policies. These fundamental policies may not be changed without the approval of the lesser of (i) 67% or more of the shares of the Portfolio present at a meeting, if the holders of more than 50% of the outstanding shares of the Portfolio are present or represented by proxy, or (ii) more than 50% of the shares of the Portfolio.
FUNDAMENTAL INVESTMENT RESTRICTIONS:
Under its fundamental investment restrictions, the Portfolio may not:
1. Issue senior securities or borrow money or pledge its assets, except as permitted by the 1940 Act and rules thereunder, exemptive order, SEC release, no-action letter or similar relief or interpretations. For purposes of this restriction, the purchase or sale of securities on a when-issued or delayed delivery basis, reverse repurchase agreements, dollar rolls, short sales, derivative and hedging transactions such as interest rate swap transactions, and collateral arrangements with respect thereto, and transactions similar to any of the foregoing and collateral arrangements with respect thereto, and obligations of the Portfolio to Trustees pursuant to any deferred compensation arrangements are not deemed to be a pledge of assets or the issuance of a senior security.
2. Underwrite securities issued by other persons, except to the extent that the Portfolio may be deemed to be an underwriter (within the meaning of the 1933 Act) in connection with the purchase and sale of portfolio securities.
3. Purchase or sell real estate unless acquired as a result of the ownership of securities or other instruments; provided that this restriction shall not prohibit the Portfolio from investing in securities or other instruments backed by real estate or in securities of companies engaged in the real estate business.
 4
4. Purchase or sell physical commodities unless acquired as a result of the ownership of securities or instruments; provided that this restriction shall not prohibit the Portfolio from (i) engaging in permissible options and futures transactions and forward foreign currency contracts in accordance with the Portfolio's investment policies, or (ii) investing in securities of any kind.
5. Make loans, except that the Portfolio may (i) lend portfolio securities in accordance with the Portfolio's investment policies in amounts up to 33 1∕3% of the total assets of the Portfolio taken at market value, (ii) purchase money market securities and enter into repurchase agreements, (iii) acquire publicly distributed or privately placed debt securities, and (iv) make loans of money to other investment companies to the extent permitted by the 1940 Act or any exemption there from that may be granted by the SEC or any SEC releases, no-action letters or similar relief or interpretive guidance.
6. Purchase any security if, as a result, more than 25% of the value of the Portfolio's assets would be invested in the securities of issuers having their principal business activities in the same industry; provided that this restriction does not apply to investments in obligations issued or guaranteed by the US Government or any of its agencies or instrumentalities or to municipal securities (or repurchase agreements with respect thereto). For purposes of this limitation, investments in other investment companies shall not be considered an investment in any particular industry.
7. With respect to 75% of the value of its total assets, purchase the securities of any issuer (other than securities issued or guaranteed by the US Government or any of its agencies or instrumentalities) if, as a result, (i) more than 5% of the value of the Portfolio's total assets would be invested in the securities of such issuer, or (ii) more than 10% of the outstanding voting securities of such issuer would be held by the Portfolio.
If a restriction of the Portfolio's investments is adhered to at the time an investment is made, a subsequent change in the percentage of the Portfolio assets invested in certain securities or other instruments, or change in average duration of the Portfolio's investment portfolio, resulting from changes in the value of the Portfolio's total assets, will not be considered a violation of the restriction; provided, however, that the asset coverage requirement applicable to borrowings shall be maintained in the manner contemplated by applicable law.
With respect to investment restriction (5), the restriction on making loans is not considered to limit Portfolio's investments in loan participations and assignments.
With respect to investment restriction (6), the Portfolio will not consider a bank-issued guaranty or financial guaranty insurance as a separate security for purposes of determining the percentage of the Portfolio's assets invested in the securities of issuers in a particular industry.
With respect to investment restrictions (1) and (5), the Portfolio will not borrow or lend to any other fund unless it applies for and receives an exemptive order from the SEC, if so required, or the SEC issues rules permitting such transactions.
INFORMATION ABOUT TRUSTEES AND OFFICERS
Information about the Trustees and the officers of the Trust is set forth below. Trustees who are not deemed to be “interested persons” of the Trust, as defined in the 1940 Act, are referred to as “Independent Trustees.” Trustees who are deemed to be “interested persons” of the Trust are referred to as “Interested Trustees.” The Trustees oversee the operations of the Trust and appoint officers who are responsible for day-to-day business decisions based on policies set by the Board. 
Independent Trustees
 
 
 
Name
Year of Birth
No. of Portfolios
Overseen
Principal Occupation(s) During Past Five
Years
Other Directorships Held
Length of Board Service
Susan Davenport Austin
1967
No. of Portfolios
Overseen: 90
Chief Financial Officer of Grace Church School
(Since September 2019); President, Candide
Business Advisors, Inc. (Since 2011); formerly
Senior Managing Director of Brock Capital
(2014-2019); formerly Vice Chairman (2013
-2017), Senior Vice President and Chief
Financial Officer (2007-2012) and Vice
President of Strategic Planning and Treasurer
(2002-2007) of Sheridan Broadcasting
Corporation; formerly President of Sheridan
Gospel Network (2004-2014).
Director of NextEra Energy Partners, LP (NYSE:
NEP) (Since February 2015); Member of the
Board of Directors, Hubbard Radio, LLC (Since
2011); formerly Chairman (2011-2014),
formerly Presiding Director (2014-2017) and
currently a Member (2007-present) of the Board
of Directors, Broadcast Music, Inc.; formerly
Member of the Board of Directors, The
MacDowell Colony (2010 - 2021).
Since February 2011
5
Independent Trustees
 
 
 
Name
Year of Birth
No. of Portfolios
Overseen
Principal Occupation(s) During Past Five
Years
Other Directorships Held
Length of Board Service
Sherry S. Barrat
1949
No. of Portfolios
Overseen: 90
Formerly Vice Chairman of Northern Trust
Corporation (financial services and banking
institution) (2011–June 2012); formerly
President, Personal Financial Services, Northern
Trust Corporation (2006-2010); formerly
Chairman & CEO, Western US Region, Northern
Trust Corporation (1999-2005); formerly
President & CEO, Palm Beach/Martin County
Region, Northern Trust.
Lead Director of NextEra Energy, Inc. (NYSE:
NEE) (since May 2020); Director of NextEra
Energy, Inc. (since 1998); Director of Arthur J.
Gallagher & Company (Since July 2013).
Since January 2013
Jessica M. Bibliowicz
1959
No. of Portfolios
Overseen: 90
Chairman of the Board of Fellows of Weill
Cornell Medicine (since 2014); Formerly Chief
Executive Officer (1999-2013) of National
Financial Partners (independent distributor of
financial services products).
Formerly Director (2006-2019) of The Asia
Pacific Fund, Inc.; Formerly Director of Sotheby’s
(2014-2019) (auction house and art-related
finance).
Since September 2014
Kay Ryan Booth
1950
No. of Portfolios
Overseen: 90
Advisory Partner, Trinity Private Equity Group
(Since September 2014); formerly, Managing
Director of Cappello Waterfield & Co. LLC
(2011-2014); formerly Vice Chair, Global
Research, J.P. Morgan (financial services and
investment banking institution) (June 2008 –
January 2009); formerly Global Director of Equity
Research, Bear Stearns & Co., Inc. (financial
services and investment banking institution)
(1995-2008); formerly Associate Director of
Equity Research, Bear Stearns & Co., Inc.
(1987-1995).
None.
Since January 2013
Stephen M. Chipman
1961
No. of Portfolios
Overseen: 90
Formerly Group Managing Director, International
Expansion and Regional Managing Director,
Americas of Vistra (June 2018 – June 2019);
formerly Chief Executive Officer and Director of
Radius (2016-2018); formerly Senior Vice
Chairman (January 2015-October 2015) and
Chief Executive Officer (January 2010-December
2014) of Grant Thornton LLP.
Non-Executive Director of Auxadi Holdco, S.L
(Since November 2020); Non-Executive Director
of Stout (Since January 2020); Formerly
Non-Executive Director of Clyde & Co. (January
2020 – June 2021); Formerly Non-Executive
Chairman (September 2019 – January 2021) of
Litera Microsystems.
Since January 2018
Robert F. Gunia
1946
No. of Portfolios
Overseen: 90
Director of ICI Mutual Insurance Company (June
2020 - present; June 2016-June 2019; June
2012-June 2015); formerly Chief Administrative
Officer (September 1999-September 2009) and
Executive Vice President (December
1996-September 2009) of PGIM Investments
LLC; formerly Executive Vice President (March
1999-September 2009) and Treasurer (May
2000-September 2009) of Prudential Mutual
Fund Services LLC; formerly President (April
1999-December 2008) and Executive Vice
President and Chief Operating Officer
(December 2008-December 2009) of Prudential
Investment Management Services LLC; formerly
Chief Administrative Officer, Executive Vice
President and Director (May 2003-September
2009) of AST Investment Services, Inc.
Formerly Director (1989-2019) of The Asia
Pacific Fund, Inc.
Since July 2003
 6
Independent Trustees
 
 
 
Name
Year of Birth
No. of Portfolios
Overseen
Principal Occupation(s) During Past Five
Years
Other Directorships Held
Length of Board Service
Thomas T. Mooney
1941
No. of Portfolios
Overseen: 90
Formerly Chief Executive Officer, Excell Partners,
Inc. (2005-2007); founding partner of High
Technology of Rochester and the Lennox
Technology Center; formerly President of the
Greater Rochester Metro Chamber of Commerce
(1976-2004); formerly Rochester City Manager
(1973); formerly Deputy Monroe County
Executive (1974-1976); Former President of The
First Financial Fund and High Yield Plus Fund
(1988-2005); Former Vice Chairman Monroe
County Water Authority (1980-2002).
Former Director of Executive Service Corps of
Rochester (1988-1990); Former Director of
Rural/Metro Medical Services (1985-1990);
Former Trustee of Center for Governmental
Research (1977-1995); Former Director of
Excellus BlueCross BlueShield (1980-1998).
Since July 2003
Thomas M. O'Brien
1950
No. of Portfolios
Overseen: 90
Chairman, Chief Executive Officer and President
of Sterling Bancorp (Since June 2020); Formerly
Vice Chairman of Emigrant Bank and President
of its Naples Commercial Finance Division
(October 2018–March 2020); formerly Director,
President and CEO Sun Bancorp, Inc. N.A.
(NASDAQ: SNBC) and Sun National Bank (July
2014-February 2018); formerly Consultant,
Valley National Bancorp, Inc. and Valley
National Bank (January 2012-June 2012);
formerly President and COO (November
2006-April 2017) and CEO (April
2007-December 2011) of State Bancorp, Inc.
and State Bank; formerly Vice Chairman
(January 1997-April 2000) of North Fork Bank;
formerly President and Chief Executive Officer
(December 1984-December 1996) of North Side
Savings Bank; formerly President and Chief
Executive Officer (May 2000-June 2006) Atlantic
Bank of New York.
Formerly Director, Sun Bancorp, Inc. N.A.
(NASDAQ: SNBC) and Sun National Bank (July
2014-February 2018); formerly Director,
BankUnited, Inc. and BankUnited N.A. (NYSE:
BKU) (May 2012-April 2014); formerly Director
(April 2008-January 2012) of Federal Home Loan
Bank of New York; formerly Director (December
1996-May 2000) of North Fork Bancorporation,
Inc.; formerly Director (May 2000-April 2006) of
Atlantic Bank of New York; Director (November
2006 – January 2012) of State Bancorp, Inc.
(NASDAQ: STBC) and State Bank of Long Island.
Since July 2003
 
Interested Trustee
 
 
 
Timothy S. Cronin
1965
Number of Portfolios
Overseen: 90
Vice President of Prudential Annuities (Since
May 2003); Senior Vice President of PGIM
Investments LLC (Since May 2009); Chief
Investment Officer and Strategist of Prudential
Annuities (Since January 2004); Director of
Investment & Research Strategy (Since February
1998); President of AST Investment Services,
Inc. (Since March 2006).
None.
Since October 2009
(1) The year that each Trustee joined the Board is as follows: Susan Davenport Austin, 2011; Sherry S. Barrat, 2013; Jessica M. Bibliowicz, 2014; Kay Ryan Booth, 2013; Stephen M. Chipman, 2018; Timothy S. Cronin, 2009; Robert F. Gunia, 2003; Thomas T. Mooney, 2003; Thomas M. O'Brien, 1992. 
Trust Officers(a)
 
 
Name
Year of Birth
Position with the Trust
Principal Occupation(s) During the Past Five Years
Length of Service as Trust Officer
Ken Allen
1969
Vice President
Vice President of Investment Management (since December
2009).
Since June 2019
7
Trust Officers(a)
 
 
Name
Year of Birth
Position with the Trust
Principal Occupation(s) During the Past Five Years
Length of Service as Trust Officer
Claudia DiGiacomo
1974
Chief Legal Officer and Assistant Secretary
Chief Legal Officer, Executive Vice President and Secretary of
PGIM Investments LLC (since August 2020); Chief Legal Officer of
Prudential Mutual Fund Services LLC (since August 2020); Chief
Legal Officer of PIFM Holdco, LLC (since August 2020); Vice
President and Corporate Counsel (since January 2005) of
Prudential; and Corporate Counsel of AST Investment Services,
Inc. (since August 2020); formerly Vice President and Assistant
Secretary of PGIM Investments LLC (2005-2020); formerly
Associate at Sidley Austin Brown & Wood LLP (1999-2004).
Since December 2005
Andrew R. French
1962
Secretary
Vice President (since December 2018 - present) of PGIM
Investments LLC; formerly, Vice President and Corporate Counsel
(2010-2018) of Prudential; formerly Director and Corporate
Counsel (2006-2010) of Prudential; Vice President and Assistant
Secretary (since January 2007) of PGIM Investments LLC; Vice
President and Assistant Secretary (since January 2007)
of Prudential Mutual Fund Services LLC.
Since October 2006
Melissa Gonzalez
1980
Assistant Secretary
Vice President and Corporate Counsel (since September 2018) of
Prudential; Vice President and Assistant Secretary (since August
2020) of PGIM Investments LLC; formerly Director and Corporate
Counsel (March 2014-September 2018) of Prudential.
Since March 2019
Patrick E. McGuinness
1986
Assistant Secretary
Vice President and Assistant Secretary (since August 2020) of
PGIM Investments LLC; Director and Corporate Counsel (since
February 2017) of Prudential; and Corporate Counsel (2012 –
2017) of IIL, Inc.
Since June 2020
Debra Rubano
1975
Assistant Secretary
Vice President and Corporate Counsel (since November 2020) of
Prudential; formerly Director and Senior Counsel of Allianz Global
Investors U.S. Holdings LLC (2010-2020) and Assistant Secretary
of numerous funds in the Allianz fund complex (2015-2020).
Since March 2021
Dino Capasso
1974
Chief Compliance Officer
Chief Compliance Officer (July 2019-Present) of PGIM
Investments LLC; Chief Compliance Officer (July 2019-Present) of
the PGIM Funds, Target Funds, Advanced Series Trust, The
Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., PGIM
Global High Yield Fund, Inc., and PGIM High Yield Bond Fund,
Inc.; Vice President and Deputy Chief Compliance Officer (June
2017-2019) of PGIM Investments LLC; formerly, Senior Vice
President and Senior Counsel (January 2016-June 2017), and
Vice President and Counsel (February 2012-December 2015) of
Pacific Investment Management Company LLC.
Since March 2018
Jonathan Corbett
1983
Anti-Money Laundering Compliance
Officer       
Vice President, Corporate Compliance, Global Compliance
Programs and Compliance Risk Management (since August
2019) of Prudential; formerly, Vice President and Head of Key
Risk Areas Compliance (March 2016 to July 2019), Chief Privacy
Officer (March 2016 to July 2019) and head of Global Financial
Crimes Unit (April 2014 to March 2016) at MetLife.
Since April 2021
Christian J. Kelly
1975
Treasurer and Principal Financial
and Accounting Officer
Vice President, Head of Fund Administration of PGIM Investments
LLC (since November 2018); formerly, Director of Fund
Administration of Lord Abbett & Co. LLC (2009-2018), Treasurer
and Principal Accounting Officer of the Lord Abbett Family of
Funds (2017-2018); Director of Accounting, Avenue Capital
Group (2008-2009); Senior Manager, Investment Management
Practice of Deloitte & Touche LLP (1998-2007). 
Since January 2019
Lana Lomuti
1967
Assistant Treasurer
Vice President (since 2007) and Director (2005-2007), within
PGIM Investments Fund Administration; formerly Assistant
Treasurer (December 2007-February 2014) of The Greater China
Fund, Inc.
Since April 2014
Russ Shupak
1973
Assistant Treasurer
Vice President (since 2017) and Director (2013-2017), within
PGIM Investments Fund Administration.
Since October 2019
 8
Trust Officers(a)
 
 
Name
Year of Birth
Position with the Trust
Principal Occupation(s) During the Past Five Years
Length of Service as Trust Officer
Deborah Conway
1969
Assistant Treasurer
Vice President (since 2017) and Director (2007-2017), within
PGIM Investments Fund Administration.
Since October 2019
Elyse M. McLaughlin
1974
Assistant Treasurer
Vice President (since 2017) and Director (2011-2017), within
PGIM Investments Fund Administration.
Since October 2019
Alina Srodecka, CPA
1966
Assistant Treasurer
Vice President of Tax at Prudential Financial, Inc. (Since August
2007); formerly Director of Tax at MetLife (January 2003 – May
2006); formerly Tax Manager at Deloitte & Touché (October 1997
– January 2003); formerly Staff Accountant at Marsh &
McLennan (May 1994 – May 1997).
Since June 2017
(a) Excludes Mr. Cronin, an Interested Trustee who also serves as President and Principal Executive Officer.
(1) The year in which each individual became an Officer is as follows: Ken Allen, 2019; Andrew R. French, 2006; Claudia DiGiacomo, 2005; Melissa Gonzalez, 2019; Patrick E. McGuinness, 2020; Debra Rubano, 2021; Dino Capasso, 2018; Jonathan Corbett, 2021; Christian J. Kelly, 2019; Lana Lomuti, 2014; Russ Shupak, 2019; Deborah Conway, 2019; Elyse M. McLaughlin, 2019; Alina Srodecka, CPA, 2017.
Explanatory Notes to Tables:
Trustees are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with PGIM Investments and/or an affiliate of PGIM Investments. Timothy S. Cronin is an Interested Trustee because he is employed by an affiliate of the Manager.
Unless otherwise noted, the address of all Trustees and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102.
There is no set term of office for Trustees or Officers. The Independent Trustees have adopted a retirement policy, which calls for the retirement of Trustees on December 31 of the year in which they reach the age of 78, provided that the Board may extend the retirement age on a year-by-year basis for a Trustee.
As used in the Officer’s table, “Prudential” means The Prudential Insurance Company of America
“Other Directorships Held” includes all directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.
“No. of Portfolios Overseen” includes all investment companies managed by PGIM Investments and/or ASTIS that are overseen by the Trustee. The investment companies for which PGIM Investments and/or ASTIS serves as Manager include The Prudential Variable Contract Accounts, The Prudential Series Fund, Advanced Series Trust, Prudential's Gibraltar Fund, Inc., the PGIM Funds, the PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc. and PGIM Short Duration High Yield Opportunities Fund.
COMPENSATION OF TRUSTEES AND OFFICERS. Pursuant to a Management Agreement with the Trust, the Investment Manager pays all compensation of Trustees, officers and employees of the Trust, other than the fees and expenses of Trustees who are not affiliated persons of the Investment Manager or any subadviser. The Trust pays each of its Independent Trustees annual compensation in addition to certain out-of-pocket expenses. Trustees who serve on Board Committees may receive additional compensation.
Independent Trustees may defer receipt of their compensation pursuant to a deferred fee agreement with the Trust. Under the terms of the agreement, the Trust accrues deferred Trustees' compensation daily which, in turn, accrue interest at a rate equivalent to the prevailing rate to 90-day US Treasury Bills at the beginning of each calendar quarter or, at the daily rate of return of one or more funds managed by PGIM Investments chosen by the Trustee. Payment of the interest so accrued is also deferred and becomes payable at the option of the Trustee. The Trust's obligation to make payments of deferred Trustees' compensation, together with interest thereon, is a general obligation of the Trust. The Trust does not have a retirement or pension plan for its Trustees.
The following table sets forth the aggregate compensation paid by the Trust for the Trust’s most recently completed fiscal year to the Independent Trustees for service on the Trust's Board, and the Board of any other investment company in the Fund Complex for the most recently completed calendar year. Trustees and officers who are “interested persons” of the Trust (as defined in the 1940 Act) do not receive compensation from the Fund Complex. 
Name
Aggregate Fiscal Year
Compensation from the Trust(1)
Pension or Retirement Benefits
Accrued as Part of Fund Expenses
Estimated Annual Benefits
Upon Retirement
Total Compensation from Trust
and Fund Complex* for Most
Recent Calendar Year
Compensation Received by Independent Board Members
Susan Davenport Austin
$363,530
None
None
$425,000 (3/95)**
Sherry S. Barrat
$363,530
None
None
$425,000 (3/95)**
Jessica M. Bibliowicz
$363,530
None
None
$425,000 (3/95)**
Kay Ryan Booth
$363,530
None
None
$425,000 (3/95)**
Stephen M. Chipman***
$341,860
None
None
$400,000 (3/95)**
9
Compensation Received by Independent Board Members
Robert F. Gunia***
$363,530
None
None
$425,000 (3/95)**
Thomas T. Mooney***
$472,120
None
None
$550,000 (3/95)**
Thomas M. O'Brien
$385,490
None
None
$450,000 (3/95)**
Explanatory Notes to Compensation Table
(1) Compensation relates to portfolios that were in existence and having investment operations during 2020.
* “Fund Complex” includes Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., the PGIM Funds, and any other funds that are managed by PGIM Investments LLC and /or ASTIS.
** Number of funds and portfolios represent those in existence as of December 31, 2020, and excludes funds that have merged or liquidated during the year. Additionally, the number of funds and portfolios includes those which are approved as of December 31, 2020, however may commence operations after that date. No compensation is paid out from such funds/portfolios.
*** Under the deferred fee agreement for the PGIM Investments-managed funds, certain Board Members have elected to defer all or part of their total compensation. The amount of compensation deferred during the calendar year ended December 31, 2020, amounted to $400,000, $100,000, and $120,000 for Messrs. Chipman, Gunia, and Mooney, respectively. Under the deferred fee arrangement, these amounts are deposited into a trust held for the benefit of participating Board Members and are not continuing obligations of the Fund.
BOARD COMMITTEES. The Board has established four standing committees in connection with governance of the Trust—Audit, Compliance, Governance, and Investment Review and Risk. Information on the membership of each standing committee and its functions is set forth below.
Audit Committee. The Board has determined that each member of the Audit Committee is not an “interested person” as defined in the 1940 Act. The responsibilities of the Audit Committee are to assist the Board in overseeing the Trust's independent registered public accounting firm, accounting policies and procedures, and other areas relating to the Trust's auditing processes. The Audit Committee is responsible for pre-approving all audit services and any permitted non-audit services to be provided by the independent registered public accounting firm directly to the Trust. The Audit Committee is also responsible for pre-approving permitted non-audit services to be provided by the independent registered public accounting firm to (1) the Investment Manager and (2) any entity in a control relationship with the Investment Manager that provides ongoing services to the Trust, provided that the engagement of the independent registered public accounting firm relates directly to the operation and financial reporting of the Trust. The scope of the Audit Committee's responsibilities is oversight. It is management's responsibility to maintain appropriate systems for accounting and internal control and the independent registered public accounting firm's responsibility to plan and carry out an audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). The Audit Committee Charter is available at www.prudential.com/variableinsuranceportfolios. The number of Audit Committee meetings held during the Trust's most recently completed fiscal year is set forth in the table below.
The membership of the Audit Committee is set forth below:
Thomas M. O’Brien (Chair)
Susan Davenport Austin
Stephen M. Chipman
Robert F. Gunia
Thomas T. Mooney (ex-officio)
Compliance Committee. The Compliance Committee serves as a liaison between the Board and the Trust’s Chief Compliance Officer (CCO). The Compliance Committee is responsible for considering, in consultation with the Board's Chair and outside counsel, any material compliance matters that are identified and reported by the CCO to the Compliance Committee between Board meetings. The Compliance Committee is also responsible for considering, when requested by the CCO, the CCO's recommendations regarding the materiality of compliance matters to be reported to the Board. The Compliance Committee reviews compliance matters that it determines warrant review between Board meetings. Further, when the CCO wishes to engage an independent third party to perform compliance-related work at the Trust’s expense, the Compliance Committee will evaluate with the CCO which third party to recommend to the Board as well as the appropriate scope of the work. The number of Compliance Committee meetings held during the Trust's most recently completed fiscal year is set forth in the table below. The Compliance Committee Charter is available on the Trust's website at www.prudential.com/variableinsuranceportfolios.
The membership of the Compliance Committee is set forth below:
Robert F. Gunia (Chair)
Sherry S. Barrat
Jessica M. Bibliowicz
Kay Ryan Booth
Thomas M. O’Brien
Thomas T. Mooney (ex-officio)
 10
Governance Committee. The Governance Committee of the Board is responsible for nominating Trustees and making recommendations to the Board concerning Board composition, committee structure and governance, director compensation and expenses, director education, and governance practices. The Board has determined that each member of the Governance Committee is not an “interested person” as defined in the 1940 Act. The number of Governance Committee meetings held during the Trust's most recently completed fiscal year is set forth in the table below. The Governance Committee Charter is available on the Trust's website at www.prudential.com/variableinsuranceportfolios.
The membership of the Governance Committee is set forth below:
Susan Davenport Austin (Chair)
Sherry S. Barrat
Jessica M. Bibliowicz
Kay Ryan Booth
Stephen M. Chipman
Thomas T. Mooney (ex-officio)
Investment Review and Risk Committee (IRRC). The IRRC consists of all members of the Board and is chaired by Ms. Bibliowicz. Ms. Barrat and Ms. Booth serve as Vice Chairs of the IRRC. The Board created the IRRC to help the Board in reviewing certain types of risk, especially those risks related to portfolio investments, the subadvisers for the Portfolio and other related risks. The responsibilities of the IRRC include, but are not limited to: reviewing written materials and reports pertaining to Portfolio performance, investments and risk from subadvisers, the Strategic Investment Review Group (SIRG) of PGIM Investments and others; considering presentations from subadvisers, the Investment Manager, SIRG or other service providers on matters relating to Portfolio performance, investments and risk; and periodically reviewing management’s evaluation of various types of risks to the Portfolio. The number of Investment Review and Risk Committee meetings held during the Trust’s most recently completed fiscal year is set forth in the table below.
LEADERSHIP STRUCTURE AND QUALIFICATIONS OF BOARD OF TRUSTEES. The Board is responsible for oversight of the Trust. The Trust has engaged the Investment Manager to manage the Trust on a day-to-day basis. The Board oversees the Investment Manager and certain other principal service providers in the operations of the Trust. The Board is currently composed of nine members, eight of whom are Independent Trustees. Under normal circumstances, the Board meets in-person at regularly scheduled meetings twelve times throughout the year. In addition, the Board Members may meet in-person or by telephone at special meetings. As described above, the Board has established four standing committees—Audit, Compliance, Governance, and Investment Review and Risk—and may establish ad hoc committees or working groups from time to time, to assist the Board in fulfilling its oversight responsibilities. The Independent Trustees have also engaged independent legal counsel to assist them in fulfilling their responsibilities.
The Board is chaired by an Independent Trustee. As Chair, this Independent Trustee leads the Board in its activities. Also, the Chair acts as a member or an ex-officio member of each standing committee and any ad hoc committee of the Board. The Trustees have determined that the Board's leadership and committee structure is appropriate because the Board believes it sets the proper tone to the relationships between the Trust, on the one hand, and the Investment Manager, the subadviser(s) and certain other principal service providers, on the other, and facilitates the exercise of the Board's independent judgment in evaluating and managing the relationships. In addition, the structure efficiently allocates responsibility among committees.
The Board has concluded that, based on each Trustee's experience, qualifications, attributes or skills on an individual basis and in combination with those of the other Trustees, each Trustee should serve as a Trustee. Among other attributes common to all Trustees are their ability to review critically, evaluate, question and discuss information provided to them, to interact effectively with the various service providers to the Trust, and to exercise reasonable business judgment in the performance of their duties as Trustees. In addition, the Board has taken into account the actual service and commitment of the Trustees during their tenure in concluding that each should continue to serve. A Trustee's ability to perform his or her duties effectively may have been attained through a Trustee's educational background or professional training; business, consulting, public service or academic positions; experience from service as a Trustee of the Trust, other funds in the Fund Complex, public companies, or non-profit entities or other organizations; or other experiences. Set forth below is a brief discussion of the specific experience qualifications, attributes or skills of each Trustee that led the Board to conclude that he or she should serve as a Trustee.
Susan Davenport Austin. Ms. Austin currently serves as Chief Financial Officer of Grace Church School. In addition to her experience in senior leadership positions with private companies, Ms. Austin has more than 10 years of experience in the investment banking industry, and has experience serving on boards of other public companies, private companies and non-profit entities.
Sherry S. Barrat. Ms. Barrat has more than 35 years of experience in senior leadership positions in the financial services and banking industries. In addition, Ms. Barrat has over 10 years of experience serving on boards of other public companies and non-profit entities.
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Jessica M. Bibliowicz. Ms. Bibliowicz has more than 25 years of experience in senior leadership positions in the financial services and investment management industries. In addition, Ms. Bibliowicz also has experience in serving on the boards of other public companies, investment companies, and non-profit organizations.
Kay Ryan Booth. Ms. Booth has more than 35 years of experience in senior leadership positions in the investment management and investment banking industries. Ms. Booth is currently an Advisory Partner of Trinity Private Equity Group. In addition to her experience in senior leadership positions with private companies, Ms. Booth has experience serving on the boards of other entities.
Stephen M. Chipman. Mr. Chipman has more than 34 years of experience with a public accounting firm, serving in various senior leadership positions in Europe, North America and Asia. Mr. Chipman also has experience serving on boards of other entities.
Robert F. Gunia. Mr. Gunia has served for more than 10 years as a Trustee of mutual funds advised by the Investment Manager or its predecessors. In addition, Mr. Gunia served in senior leadership positions for more than 28 years with the Investment Manager and its affiliates and predecessors.
Thomas T. Mooney. Mr. Mooney has served for more than 10 years as a Trustee of mutual funds advised by the Investment Manager or its predecessors, including some or all of the following funds: Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., and/or other mutual funds advised by the Investment Manager or its predecessors. Mr. Mooney has more than 30 years of experience in senior leadership positions with municipal organizations and other companies and has experience serving on the boards of other entities.
Thomas M. O’Brien. Mr. O’Brien has served for more than 10 years as a Trustee of mutual funds advised by the Investment Manager or its predecessors, including some or all of the following funds: Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., and/or other mutual funds advised by the Investment Manager or its predecessors. Mr. O’Brien has more than 25 years of experience in senior leadership positions in the banking industry, and has experience serving on the boards of other entities.
Timothy S. Cronin. Mr. Cronin, an Interested Trustee of the Trust and other funds advised by the Investment Manager since 2009, served as Vice President of the Trust and other funds advised by the Investment Manager from 2009-2015, as President of the Trust and other funds advised by the Investment Manager since 2015, and has held senior positions with Prudential Financial (and American Skandia, which was purchased by Prudential Financial) since 1998.
Specific details about each Trustee's professional experience is set forth in the professional biography tables, above.
Risk Oversight. Investing in general and the operation of a mutual fund involve a variety of risks, such as investment risk, liquidity risk, compliance risk, and operational risk, among others. The Board oversees risk as part of its oversight of the Trust. Risk oversight is addressed as part of various regular Board and committee activities. The Board, directly or through its committees, reviews reports from among others, the Investment Manager, the administrator to the Trust’s Liquidity Risk Management Program, sub-advisers, the Trust's Chief Compliance Officer, the Trust's independent registered public accounting firm, counsel, and internal auditors of the Investment Manager or its affiliates, as appropriate, regarding risks faced by the Trust and the risk management programs of the Investment Manager and certain service providers. The actual day-to-day risk management with respect to the Trust resides with the Investment Manager and other service providers to the Trust, including pursuant to the Board-approved Liquidity Risk Management Program for the Trust. Although the risk management policies of the Investment Manager and the service providers are designed to be effective, those policies and their implementation vary among service providers and over time, and there is no guarantee that they will be effective. Not all risks that may affect the Trust can be identified or processes and controls developed to eliminate or mitigate their occurrence or effects, and some risks are simply beyond any control of the Trust or the Investment Manager, its affiliates or other service providers.
Selection of Trustee Nominees. The Governance Committee is responsible for considering Trustee nominees for Trustees at such times as it considers electing new members to the Board. The Governance Committee may consider recommendations by business and personal contacts of current Board members, and by executive search firms which the Committee may engage from time to time and will also consider shareholder recommendations. The Governance Committee has not established specific, minimum qualifications that it believes must be met by a nominee. In evaluating nominees, the Governance Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an “interested person” as defined in the 1940 Act; and whether the individual would be deemed an “audit committee financial expert” within the meaning of applicable SEC rules. The Governance Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the diversity of the Board. There are no differences in the manner in which the Governance Committee evaluates nominees for the Board based on whether the nominee is recommended by a shareholder.
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A shareholder who wishes to recommend a director for nomination should submit his or her recommendation in writing to the Chair of the Board (Thomas T. Mooney) or the Chair of the Governance Committee (Susan Davenport Austin), in either case in care of the Trust, at 655 Broad Street, 17th Floor, Newark, New Jersey 07102. At a minimum, the recommendation should include: the name, address, and business, educational, and/or other pertinent background of the person being recommended; a statement concerning whether the person is an “interested person” as defined in the 1940 Act; any other information that the Trust would be required to include in a proxy statement concerning the person if he or she was nominated; and the name and address of the person submitting the recommendation, together with the number of shares held by such person and the period for which the shares have been held. The recommendation also can include any additional information which the person submitting it believes would assist the Governance Committee in evaluating the recommendation.
Shareholders should note that a person who owns securities issued by Prudential Financial, Inc. (the parent company of the Trust's Investment Manager) would be deemed an “interested person” under the 1940 Act. In addition, certain other relationships with Prudential Financial, Inc. or its subsidiaries, with registered broker-dealers, or with the Trust's outside legal counsel may cause a person to be deemed an “interested person.” Before the Governance Committee decides to nominate an individual to the Board, Committee members and other Board members customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving on the board of a registered investment company.
Shareholder Communications with the Board of Trustees. Shareholders of the Trust can communicate directly with the Board by writing to the Chair of the Board, c/o the Trust, 1 Corporate Drive, Shelton, Connecticut 06484. Shareholders can communicate directly with an individual Trustee by writing to that Trustee, c/o the Trust, 1 Corporate Drive, Shelton, Connecticut 06484. Such communications to the Board or individual Trustees are not screened before being delivered to the addressee. 
Board Committee Meetings (for most recently completed fiscal year)
Audit Committee
Governance Committee
Compliance Committee
Investment Review and Risk Committee
X
X
X
X
Share Ownership. Information relating to each Trustee's share ownership in the Trust, other funds that are overseen by the respective Trustee as well as any other funds that are managed by the Manager as of the most recently completed calendar year is set forth in the chart below. 
Name
Dollar Range of Equity
Securities in the Trust
Aggregate Dollar Range of
Equity Securities Owned
by Trustee in All
Registered Investment
Companies in Fund Complex*
Trustee Share Ownership
 
 
Susan Davenport Austin
None
Over $100,000
Sherry S. Barrat
None
Over $100,000
Jessica M. Bibliowicz
None
Over $100,000
Kay Ryan Booth
None
Over $100,000
Stephen M. Chipman
None
Over $100,000
Timothy S. Cronin
None
Over $100,000
Robert F. Gunia
None
Over $100,000
Thomas T. Mooney
None
Over $100,000
Thomas M. O'Brien
None
Over $100,000
* “Fund Complex” includes Advanced Series Trust, The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc., the PGIM Funds, and any other funds that are managed by PGIM Investments and/or ASTIS. The above share ownership information relates to Portfolios and other registered investment companies in the Fund Complex that were in existence during 2020.
Because the Portfolios of the Trust serve as investment options under variable annuity and life insurance contracts, federal tax law prohibits the sale of Portfolio shares directly to individuals, including the Trustees.  Individuals, including a Trustee, may, however, have an interest in a Portfolio if he or she purchases a variable contract and selects the Portfolio as an investment option.
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Other than as set forth in the following paragraph, none of the Independent Trustees, or any member of his/her immediate family, owned beneficially or of record any securities in an investment adviser or principal underwriter of the Trust or a person (other than a registered investment company) directly or indirectly controlling, controlled by, or under common control with an investment adviser or principal underwriter of a Portfolio as of the most recently completed calendar year.
MANAGEMENT AND ADVISORY ARRANGEMENTS
TRUST MANAGEMENT. PGIM Investments, 655 Broad Street, Newark, New Jersey 07102-0477, serves as the investment manager of the Portfolio covered by this SAI.
As of September 30, 2021, PGIM Investments served as the investment manager to all of the Prudential US and offshore open-end investment companies, and as administrator to closed-end investment companies, with aggregate assets of approximately $370.3 billion. PGIM Investments is a wholly-owned subsidiary of PIFM Holdco, LLC, which is a wholly-owned subsidiary of PGIM Holding Company LLC, which is a wholly-owned subsidiary of Prudential Financial. PGIM Investments has been in the business of providing investment advisory services since 1996.
Services Provided by the Manager. Pursuant to a Management Agreement with the Trust (the Management Agreement), the Manager, subject to the oversight of the Trust's Board and in conformity with the stated policies of the Portfolios, manages both the investment operations and composition of each Portfolio, including the purchase, retention, disposition and loan of securities and other assets. In connection therewith, the Manager is obligated to keep certain books and records of the Portfolios. The Manager is authorized to enter into subadvisory agreements for investment advisory services in connection with the management of the Portfolios. The Manager continues to have the ultimate responsibility for all investment advisory services performed pursuant to any such subadvisory agreements.
The Manager is specifically responsible for supervising and managing the Portfolios and the subadvisers. In this capacity, the Manager reviews the performance of the Portfolios and the subadvisers and makes recommendations to the Board with respect to the retention of investment subadvisers, the renewal of contracts, the reorganization and merger of Portfolios, and other legal and compliance matters. The Manager takes on the entrepreneurial and other risks associated with the launch of each new Portfolio and its ongoing operations. The Manager utilizes the Strategic Investment Research Group (SIRG), a unit of PGIM Investments, to assist it in regularly evaluating and supervising the Portfolios and the subadvisers, including with respect to investment performance. SIRG is a centralized research department of PGIM Investments that is comprised of a group of highly experienced analysts. SIRG utilizes proprietary processes to analyze large quantities of industry data, both on a qualitative and quantitative level, in order to effectively manage the Portfolios and the subadvisers. The Manager utilizes this data in directly supervising the Portfolios and the subadvisers. SIRG provides reports to the Board and presents to the Board at special and regularly scheduled Board meetings. The Manager bears the cost of the oversight program maintained by SIRG.
In addition, the Manager provides or supervises all of the administrative functions necessary for the organization, operation and management of the Trust and its Portfolios. The Manager administers the Trust's corporate affairs and, in connection therewith, furnishes the Trust with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by, the Trust's custodian (the Custodian), and the Trust's transfer agent. The Manager is also responsible for the staffing and management of dedicated groups of legal, marketing, compliance and related personnel necessary for the operation of the Trust. The legal, marketing, compliance and related personnel are also responsible for the management and oversight of the various service providers to the Trust, including, but not limited to, the custodian, transfer agent, and accounting agent. The management services of the Manager to the Trust are not exclusive under the terms of the Management Agreement and the Manager is free to, and does, render management services to others.
The primary administrative services furnished by the Manager are more specifically detailed below:
■
furnishing of office facilities;
■
paying salaries of all officers and other employees of the Manager who are responsible for managing the Trust and the Portfolios;
■
monitoring financial and shareholder accounting services provided by the Trust’s custodian and transfer agent;
■
providing assistance to the service providers of the Trust and the Portfolios, including, but not limited to, the custodian, transfer agent, and accounting agent;
■
monitoring, together with each subadviser, each Portfolio’s compliance with its investment policies, restrictions, and with federal and state laws and regulations, including federal and state securities laws, the Internal Revenue Code and other relevant federal and state laws and regulations;
■
preparing and filing all required federal, state and local tax returns for the Trust and the Portfolios;
■
preparing and filing with the SEC on Form N-CSR the Trust’s annual and semi-annual reports to shareholders, including supervising financial printers who provide related support services;
■
preparing and filing with the SEC required monthly reports of portfolio holdings on Form N-PORT;
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■
preparing and filing the Trust’s registration statement with the SEC on Form N-1A, as well as preparing and filing with the SEC supplements and other documents, as applicable;
■
preparing compliance, operations and other reports required to be received by the Trust’s Board and/or its committees in support of the Board’s oversight of the Trust; and
■
organizing the regular and any special meetings of the Board of the Trust, including the preparing Board materials and agendas, preparing minutes, and related functions.
Expenses Borne by the Manager. In connection with its management of the corporate affairs of the Trust, the Manager bears certain expenses, including, but not limited to:
■
the salaries and expenses of all of their and the Trust's personnel except the fees and expenses of Trustees who are not affiliated persons of the Manager or any subadviser;
■
all expenses incurred by the Manager or the Trust in connection with managing the ordinary course of a Trust's business, other than those assumed by the Trust as described below;
■
the fees, costs and expenses payable to any investment subadvisers pursuant to Subadvisory Agreements between the Manager and such investment subadvisers; and
■
with respect to the compliance services provided by the Manager, the cost of the Trust’s Chief Compliance Officer, the Trust’s Deputy Chief Compliance Officer, and all personnel who provide compliance services for the Trust, and all of the other costs associated with the Trust’s compliance program, which includes the management and operation of the compliance program responsible for compliance oversight of the Portfolios and the subadvisers.
Expenses Borne by the Trust. Under the terms of the Management Agreement, the Trust is responsible for the payment of Trust expenses not paid by the Manager, including:
■
the fees and expenses incurred by the Trust in connection with the management of the investment and reinvestment of the Trust's assets payable to the Manager;
■
the fees and expenses of Trustees who are not affiliated persons of the Manager or any subadviser;
■
the fees and certain expenses of the custodian and transfer and dividend disbursing agent, including the cost of providing records to the Manager in connection with their obligation of maintaining required records of the Trust and of pricing the Trust's shares;
■
the charges and expenses of the Trust's legal counsel and independent auditors;
■
brokerage commissions and any issue or transfer taxes chargeable to the Trust in connection with its securities (and futures, if applicable) transactions;
■
all taxes and corporate fees payable by the Trust to governmental agencies;
■
the fees of any trade associations of which the Trust may be a member;
■
the cost of share certificates representing and/or non-negotiable share deposit receipts evidencing shares of the Trust;
■
the cost of fidelity, directors and officers and errors and omissions insurance;
■
the fees and expenses involved in registering and maintaining registration of the Trust and of its shares with the SEC and paying notice filing fees under state securities laws, including the preparation and printing of the Trust's registration statements and prospectuses for such purposes;
■
allocable communications expenses with respect to investor services and all expenses of shareholders' and Trustees' meetings and of preparing, printing and mailing reports and notices to shareholders; and
■
litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Trust's business and distribution and service (12b-1) fees.
Terms of the Management Agreement. The Management Agreement provides that the Manager will not be liable for any error of judgment by PGIM Investments or for any loss suffered by the Trust in connection with the matters to which the Management Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or loss resulting from willful misfeasance, bad faith or gross negligence or reckless disregard of duties. The Management Agreement provides that it will terminate automatically, if assigned (as defined in the 1940 Act), and that it may be terminated without penalty by either the Manager or the Trust by the Board or vote of a majority of the outstanding voting securities of the Trust, (as defined in the 1940 Act) upon not more than 60 days nor less than 30 days written notice. The Management Agreement will continue in effect for a period of more than two years from the date of execution only so long as such continuance is specifically approved at least annually in accordance with the requirements of the 1940 Act.
Fees payable under the Management Agreement are computed daily and paid monthly. The Manager may from time to time waive all or a portion of its management fee and subsidize all or a portion of the operating expenses of a Portfolio. Management fee waivers and subsidies will increase a Portfolio's total return. These voluntary waivers may be terminated at any time without notice.
SEC Manager-of-Managers Order. The manager-of-managers structure operates under exemptive orders issued by the SEC. The orders permit the Manager to hire subadvisers or amend subadvisory agreements, without shareholder approval.
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The most recent order imposes the following conditions:
1. Before a Portfolio may rely on the order requested in the application, the operation of the Portfolio in the manner described in the application, including the hiring of wholly-owned subadvisers, will be, or has been, approved by a majority of the Portfolio’s outstanding voting securities as defined in the 1940 Act, which in the case of a master fund will include voting instructions provided by shareholders of the feeder funds investing in such master fund or other voting arrangements that comply with section 12(d)(1)(E)(iii)(aa) of the 1940 Act (or, in the case of an insurance-related Portfolio, pursuant to the voting instructions provided by contract owners with assets allocated to any registered separate account for which the Portfolio serves as a funding medium), or, in the case of a new Portfolio whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the sole initial shareholder before offering the Portfolio’s shares to the public.
2. The prospectus for each Portfolio, and in the case of a master fund relying on the requested relief, the prospectus for each feeder fund investing in such master fund, will disclose the existence, substance and effect of any order granted pursuant to the application. Each Portfolio (and any such feeder fund) will hold itself out to the public as employing the Multi-Manager Structure described in the application. Each prospectus will prominently disclose that the Manager has the ultimate responsibility, subject to oversight by the Board, to oversee the subadvisers and recommend their hiring, termination, and replacement.
3. The Manager will provide general management services to a Portfolio, including overall supervisory responsibility for the general management and investment of the Portfolio’s assets. Subject to review and approval of the Board, the Manager will (a) set a Portfolio’s overall investment strategies, (b) evaluate, select, and recommend subadvisers to manage all or a portion of a Portfolio’s assets, and (c) implement procedures reasonably designed to ensure that subadvisers comply with a Portfolio’s investment objective, policies and restrictions. Subject to review by the Board, the Manager will (a) when appropriate, allocate and reallocate a Portfolio’s assets among subadvisers; and (b) monitor and evaluate the performance of subadvisers.
4. A Portfolio will not make any ineligible subadviser changes without the approval of the shareholders of the applicable Portfolio, which in the case of a master fund will include voting instructions provided by shareholders of the feeder fund investing in such master fund or other voting arrangements that comply with section 12(d)(1)(E)(iii)(aa) of the 1940 Act.
5. A Portfolio will inform shareholders, and if the Portfolio is a master fund, shareholders of any feeder funds, of the hiring of a new subadviser within 90 days after the hiring of the new subadviser pursuant to the Modified Notice and Access Procedures.
6. At all times, at least a majority of the Board will be Independent Trustees, and the selection and nomination of new or additional Independent Trustees will be placed within the discretion of the then-existing Independent Trustees.
7. Independent legal counsel, as defined in rule 0-1(a)(6) under the 1940 Act, will be engaged to represent the Independent Trustees. The selection of such counsel will be within the discretion of the then-existing Independent Trustees.
8. The Manager will provide the Board, no less frequently than quarterly, with information about the profitability of the Manager on a per Portfolio basis. The information will reflect the impact on profitability of the hiring or termination of any subadviser during the applicable quarter.
9. Whenever a subadviser is hired or terminated, the Manager will provide the Board with information showing the expected impact on the profitability of the Manager.
10. Whenever a subadviser change is proposed for a Portfolio with an affiliated subadviser or a wholly-owned subadviser, the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that such change is in the best interests of the Portfolio and its shareholders, and if the Portfolio is a master fund, the best interests of any applicable feeder funds and their respective shareholders, and does not involve a conflict of interest from which the Manager or the affiliated subadviser or wholly-owned subadviser derives an inappropriate advantage.
11. No Board member or officer of a Prudential investment company, a Portfolio, or a feeder fund that invests in a Portfolio that is a master fund, or director, manager or officer of the Manager, will own directly or indirectly (other than through a pooled investment vehicle that is not controlled by such person) any interest in a subadviser except for (a) ownership of interests in the Manager or any entity, other than a wholly-owned subadviser, that controls, is controlled by, or is under common control with the Manager, or (b) ownership of less than 1% of the outstanding securities of any class of equity or debt of any publicly traded company that is either a subadviser or an entity that controls, is controlled by, or is under common control with, a subadviser.
12. Each Portfolio and any feeder fund that invests in a Portfolio that is a master fund will disclose an aggregate fee disclosure in its registration statement.
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13. In the event the SEC adopts a rule under the 1940 Act providing substantially similar relief to that requested in the application, the requested order will expire on the effective date of that rule.
14. Any new Subadvisory Agreement or any amendment to a Portfolio’s existing Investment Management Agreement or Subadvisory Agreement that directly or indirectly results in an increase in the aggregate advisory fee rate payable by the Portfolio will be submitted to the Portfolio’s shareholders for approval.
Potential Conflicts. Under the manager-of-managers structure, the Manager recommends the hiring and firing of subadvisers, determines the allocation of Portfolio assets among subadvisers for Portfolios with more than one subadviser, and reports to the Board regarding subadviser performance. The Manager also directly manages the assets for certain Portfolio sleeves or segments.
The Manager may face potential conflicts inherent in serving as a manager-of-managers including, but not limited to: (i) an incentive to recommend that a Portfolio retain an affiliated subadviser; (ii) an incentive to recommend that a Portfolio retain a subadviser because the subadviser may provide distribution support or other services that benefit the Manager or its affiliates or because of other relationships between the subadviser or its affiliates and the Manager or its affiliates; (iii) an incentive to recommend that the Manager provide direct management of assets for certain sleeves or segments; and (iv) an incentive to allocate assets among subadvisers of a single Portfolio based on profitability or other benefit to the Manager or its affiliates.
To mitigate potential conflicts presented by these issues, the Manager utilizes the services of SIRG, a unit of PGIM Investments, which provides investment manager oversight, analysis and recommendations. SIRG provides its input to both the Manager and the Board. SIRG representatives meet with the Board in connection with its quarterly meetings and any special meetings at which subadviser recommendations are made, and the Board makes the decision as to the retention of any subadviser. For recommendations involving a new subadviser or a replacement subadviser for a single asset class Portfolio or sleeve, SIRG conducts a search of qualified subadvisers and provides a recommendation. SIRG reviews with the Board the search process, finalists and the reasons for the recommendation. SIRG’s investment analysis process is applied in the same manner to both affiliated and unaffiliated subadvisers. The Board makes the final decision with respect to the retention of a new or replacement subadviser. For some Portfolios, the Manager makes a recommendation for a subadviser based on the design of a Portfolio, such as a Portfolio designed in consultation with a specific subadviser. In those cases, SIRG reviews the proposed subadviser and reports to the Board regarding its assessment of the subadviser.
To the extent a subadviser’s affiliation or other business relationship with Prudential is a factor in any subadviser recommendation, the Manager discusses the relevant factors with the Board, which makes the final decision on any new or replacement subadviser. SIRG personnel are not involved in subadvisory fee negotiations.
Management Fees. The tables below set forth the applicable contractual management fee rate for the Portfolio and the management fees paid by the Manager for the Portfolio for the indicated fiscal years. 
Management Fee Rates (effective January 3, 2022 and thereafter)
 
Portfolio
Contractual Fee Rate
AST Bond Portfolio 2033*
0.4925% of average daily net assets to $500 million;
0.4725% on next $4.5 billion of average daily net assets;
0.4625% on next $5 billion of average daily net assets;
0.4525% over $10 billion of average daily net assets
*The current contractual investment management fee for each of the AST Bond Portfolio 2022, AST Bond Portfolio 2023, AST Bond Portfolio 2024, AST Bond Portfolio 2025, AST Bond Portfolio 2026, AST Bond Portfolio 2027, AST Bond Portfolio 2028, AST Bond Portfolio 2029, AST Bond Portfolio 2030, AST Bond Portfolio 2031, AST Bond Portfolio 2032, AST Bond Portfolio 2033 and AST Investment Grade Bond Portfolio is subject to certain breakpoints. The assets of each of these Portfolios will be aggregated for purposes of determining the fee rate applicable to each Portfolio. 
Management Fees Paid by the Portfolio
 
 
 
Portfolio
2020
2019
2018
AST Bond Portfolio 2033
N/A
N/A
N/A
FEE WAIVERS/SUBSIDIES. PGIM Investments may from time to time waive all or a portion of its management fee and/or subsidize all or a portion of the operating expenses of the Portfolio. Fee waivers and subsidies will increase the Portfolio's return.
PGIM Investments has agreed to waive a portion of its management fee and/or limit total expenses (expressed as an annual percentage of average daily net assets) for certain Portfolios of the Trust, as set forth in the table below. 
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Fee Waivers & Expense Limitations
 
Portfolio
Fee Waiver and/or Expense Limitation
AST Bond Portfolio 2033
The Manager has contractually agreed to waive a portion of its investment
management fee and/or reimburse certain expenses of the Portfolio so that the
Portfolio’s investment management fee plus other expenses (exclusive, in all cases, of
brokerage, taxes (such as income and foreign withholding taxes, including stamp duty
and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses,
and certain other Portfolio expenses such as dividend and interest expense and broker
charges on short sales) do not exceed 0.93% of the Portfolio’s average daily net
assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be
recouped by the Manager within the same fiscal year during which such
waiver/reimbursement is made if such recoupment can be realized without exceeding
the expense limit in effect at the time of the recoupment for that fiscal year. This
arrangement may not be terminated or modified without the prior approval of the
Trust’s Board of Trustees.
SUBADVISER. The Manager has entered into a subadvisory agreement with the subadviser named in the table appearing below. The subadvisory agreement provides that the subadviser will furnish investment advisory services in connection with the management of the Portfolio. In connection therewith, the subadviser is obligated to keep certain books and records of the Trust. Under the subadvisory agreement, the subadviser, subject to the supervision of the Manager, is responsible for managing the assets of the Portfolio in accordance with the Portfolio's investment objectives, investment program and policies. The subadviser determines what securities and other instruments are purchased and sold for the Portfolio and are responsible for obtaining and evaluating financial data relevant to the Portfolio. The Manager continues to have the ultimate responsibility for all investment advisory services pursuant to the Management Agreement and supervise the subadviser’s performance of such services.
Pursuant to the subadvisory agreement, the Manager pays the subadviser a fee. The tables below set forth the current fee rates and fees paid by the Manager to the subadviser for the three most recent fiscal years. The fee rates represent the fees as a percentage of average daily net assets.
As discussed in the Prospectus, the Manager employs the subadviser under a “manager of managers” structure that allows the Manager to replace the subadviser or amend a subadvisory agreement without seeking shareholder approval. The Manager is authorized to select (with approval of the Board's independent trustees) one or more subadvisers to handle the actual day-to-day investment management of the Portfolio. The Manager monitors the subadviser's performance through quantitative and qualitative analysis and periodically reports to the Board as to whether the subadviser's agreement should be renewed, terminated or modified. It is possible that the Manager will continue to be satisfied with the performance record of the existing subadvisers and not recommend any additional subadvisers. The Manager is also responsible for allocating assets among the subadvisers if the Portfolio has more than one subadviser. In those circumstances, the allocation for each subadviser can range from 0% to 100% of the Portfolio's assets, and the Manager can change the allocations without Board or shareholder approval. The Manager will review the allocations periodically and may adjust them without prior notice. The annual update to the Trust's prospectus will reflect these adjustments. Shareholders will be notified of any new subadvisers or materially amended subadvisory agreements. 
Portfolio Subadviser and Fee Rates
 
 
Portfolio
Subadviser
Fee Rate*
AST Bond Portfolio 2033
PGIM Fixed Income; PGIM Limited*,**
0.15% of average daily net assets to $500 million;
0.14% on next $1.5 billion of average daily net assets;
0.12% over $2 billion of average daily net assets
* The combined average daily net assets of the AST Bond Portfolio 2022, AST Bond Portfolio 2023, AST Bond Portfolio 2024, AST Bond Portfolio 2025, AST Bond Portfolio 2026, AST Bond Portfolio 2027, AST Bond Portfolio 2028, AST Bond Portfolio 2029, AST Bond Portfolio 2030, AST Bond Portfolio 2031, AST Bond Portfolio 2032, AST Bond Portfolio 2033 and the AST Investment Grade Bond Portfolio will include the assets of future portfolios of the Trust that are subadvised by PGIM Fixed Income pursuant to target maturity or constant duration investment strategies that are used in connection with non-discretionary asset transfers under certain living benefit programs.
** The Manager will pay PGIM, Inc. a subadvisory fee to cover the subadvisory services provided to the Portfolio by both PGIM Fixed Income and PGIM Limited, and PGIM, Inc. will appropriately allocate such fees among the subadvisers. 
Subadvisory Fees Paid by PGIM Investments
 
 
 
 
Portfolio
Subadviser
2020
2019
2018
AST Bond Portfolio 2033
PGIM Fixed Income; PGIM Limited
N/A
N/A
N/A
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PORTFOLIO MANAGERS: OTHER ACCOUNTS
ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGERS—Other Accounts and Portfolio Ownership. The following table sets forth information about the Portfolio and accounts other than the Portfolio for which the Portfolio's portfolio managers (the Portfolio Managers) are primarily responsible for day-to-day portfolio management as of the Trust's most recently completed fiscal year, unless otherwise noted. The table shows, for each portfolio manager, the number of accounts managed and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts whose fees are based on performance is indicated in italics typeface. The tables also set forth the dollar range of equity securities of the Portfolio of the Trust beneficially owned by the Portfolio Managers as of the Trust's most recently completed fiscal year, unless otherwise noted.
 
AST Bond Portfolio 2033
Subadviser
Portfolio Managers
Registered Investment
Companies*
Other Pooled Investment
Vehicles*
Other Accounts*
Ownership of Fund
Securities*
PGIM Fixed Income;
PGIM Limited
Richard Piccirillo
37/$94,909,518,433
15/$29,069,250,320
1/$872,361,514
98/$62,726,402,847
4/$1,334,660,628
None
 
David Del Vecchio
41/$41,036,583,990
22/$12,768,752,072
1/$256,041,709
138/$66,486,898,301
8/$3,816,558,914
None
 
Gregory Peters
38/$94,054,804,130
19/$42,511,016,810
1/$872,361,514
110/$71,157,766,861
4/$1,334,660,628
None
 
Scott Donnelly, CFA
28/$10,264,736,629
17/$10,125,026,001
5/$2,748,078,736
114/$21,268,289,529
5/$430,722,315
None
 
Lindsay Rosner, CFA
37/$94,909,518,433
15/$29,069,250,320
1/$872,361,514
98/$62,726,402,847
4/$1,334,660,628
None
*Information is as of September 30, 2021.
PORTFOLIO MANAGERS: COMPENSATION & CONFLICTS POLICIES
ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGERS—COMPENSATION AND CONFLICTS OF INTEREST. Set forth below, for each portfolio manager, is an explanation of the structure of and method(s) used by each subadviser to determine, portfolio manager compensation. Also set forth below, for each portfolio manager, is an explanation of any material conflicts of interest that may arise between a portfolio manager's management of the Portfolio's investments and investments in other accounts.
PGIM Investments LLC (PGIM Investments)
PORTFOLIO MANAGER COMPENSATION. Prudential provides compensation opportunities to eligible employees to motivate and reward the achievement of outstanding results by providing market-based programs that:
■
Attract and reward highly qualified employees
■
Align with critical business goals and objectives
■
Link to the performance results relevant to the business segment and Prudential
■
Retain top performers
■
Pay for results and differentiate levels of performance
■
Foster behaviors and contributions that promote Prudential's success
The components of compensation for a Vice President in PGIM Investments consists of base salary, annual incentive compensation and long term incentive compensation.
Base Pay Overview: The Prudential compensation structure is organized in grades, each with its own minimum and maximum base pay (i.e., salary). The grades reflect pay patterns in the market. Each job in the plan—from CEO through an entry-level job—is included in one of the grades. The main determinant of placement in the base pay structure is market data. On an annual basis, Corporate Compensation collects and analyzes market data to determine if any change to the placement of job in the structure is necessary to maintain market competitiveness. If necessary, structural compensation changes (e.g., increases to base pay minimum and maximums) will be effective on the plan's effective date for base pay increases.
Annual Incentive Compensation Overview: The plan provides an opportunity for all participants to share in the annual results of Prudential, as well as the results of their division or profit center. Results are reviewed and incentive payments are made as early as practicable after the close of the plan year. Incentive payments are awarded based on organizational performance—which determines the available dollar amounts—and individual performance. Individual performance will be evaluated on the basis of contributions relative to others in the organization. Incentive payments are granted from a budgeted amount of money that is made available by the Company. Initial budgets are developed by determining the competitive market rates for incentives as compared to our comparator
19
companies. Each organization's budget pool may be increased or decreased based on organizational performance. Organizational performance is determined by a review of performance relative to our comparator group, as well as key measures indicated in our business plan, such as Return on Required Equity (RORE), earnings and revenue growth.
Long Term Incentive Compensation Overview: In addition, executives at the Vice President level and above are eligible to participate in a long term incentive program to provide an ownership stake in Prudential Financial. Long-Term incentives currently consist of restricted stock and stock options. The stock options vest  1∕3 per year over 3 years and the restricted stock vests 100% at the end of 3 years.
CONFLICTS OF INTEREST. PGIM Investments follows Prudential Financial's policies on business ethics, personal securities trading by investment personnel, and information barriers and has adopted a code of ethics, allocation policies, supervisory procedures and conflicts of interest policies, among other policies and procedures, which are designed to ensure that clients are not harmed by these potential or actual conflicts of interests; however, there is no guarantee that such policies and procedures will detect and ensure avoidance, disclosure or mitigation of each and every situation in which a conflict may arise.
PGIM, Inc. (PGIM)
COMPENSATION. The base salary of an investment professional in the PGIM Fixed Income unit of PGIM is primarily based on market data relative to similar positions as well as the past performance, years of experience and scope of responsibility of the individual. Incentive compensation, including the annual cash bonus, the long-term equity grant and grants under PGIM Fixed Income’s long-term incentive plans, is primarily based on such person’s contribution to PGIM Fixed Income’s goal of providing investment performance to clients consistent with portfolio objectives, guidelines, risk parameters and its compliance risk management and other policies, as well as market-based data such as compensation trends and levels of overall compensation for similar positions in the asset management industry. In addition, an investment professional’s qualitative contributions to the organization and its commercial success are considered in determining incentive compensation. Incentive compensation is not solely based on the performance of, or value of assets in, any single account or group of client accounts.
An investment professional’s annual cash bonus is paid from an annual incentive pool. The pool is developed as a percentage of PGIM Fixed Income’s operating income and the percentage used to calculate the pool may be refined by factors such as:
1.
business initiatives;
2.
the number of investment professionals receiving a bonus and related peer group compensation;
3.
financial metrics of the business relative to those of appropriate peer groups; and
4.
investment performance of portfolios: (i) relative to appropriate peer groups; and/or (ii) as measured against relevant investment indices.
Long-term compensation consists of Prudential Financial, Inc. restricted stock and grants under the long-term incentive plan and targeted long-term incentive plan. The long-term incentive plan is intended to more closely align compensation with investment performance. The targeted long-term incentive plan is intended to align the interests of certain PGIM Fixed Income’s investment professionals with the performance of a particular long/short composite or commingled investment vehicle. Grants under the long-term incentive plan and targeted long-term incentive plan are participation interests in notional accounts with a beginning value of a specified dollar amount. For the long-term incentive plan, the value attributed to these notional accounts increases or decreases over a defined period of time based, in whole or in part (depending on the date of the grant), on the performance of investment composites representing a number of PGIM Fixed Income’s investment strategies. With respect to targeted long-term incentive awards, the value attributed to the notional accounts increases or decreases over a defined period of time based on the performance of either (i) a long/short investment composite or (ii) a commingled investment vehicle. An investment composite is an aggregation of accounts with similar investment strategies. The chief investment officer/head of PGIM Fixed Income also receives performance shares which represent the right to receive shares of Prudential Financial, Inc. common stock conditioned upon, and subject to, the achievement of specified financial performance goals by Prudential Financial, Inc. Each of the restricted stock, grants under the long-term incentive plans, and performance shares is subject to vesting requirements.
POTENTIAL CONFLICTS OF INTEREST. Like other investment advisers, PGIM Fixed Income is subject to various conflicts of interest in the ordinary course of its business. PGIM Fixed Income strives to identify potential risks, including conflicts of interest, that are inherent in its business, and PGIM Fixed Income conducts annual conflict of interest reviews. However, it is not possible to identify every potential conflict that can arise. When actual or potential conflicts of interest are identified, PGIM Fixed Income seeks to address such conflicts through one or more of the following methods:
■
elimination of the conflict;
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■
disclosure of the conflict; or
■
management of the conflict through the adoption of appropriate policies, procedures or other mitigants.
PGIM Fixed Income follows the policies of Prudential Financial, Inc. on business ethics, personal securities trading, and information barriers. PGIM Fixed Income has adopted a code of ethics, allocation policies and conflicts of interest policies, among others, and has adopted supervisory procedures to monitor compliance with its policies. PGIM Fixed Income cannot guarantee, however, that its policies and procedures will detect and prevent, or result in the disclosure of, each and every situation in which a conflict arises or could potentially arise.
Side-by-Side Management of Accounts and Related Conflicts of Interest. PGIM Fixed Income’s side-by-side management of multiple accounts can create conflicts of interest. Examples are detailed below, followed by a discussion of how PGIM Fixed Income addresses these conflicts.
■
Performance Fees - PGIM Fixed Income manages accounts with asset-based fees alongside accounts with performance-based fees. This side-by-side management creates an incentive for PGIM Fixed Income and its investment professionals to favor one account over another. Specifically, PGIM Fixed Income or its affiliates have an incentive to favor accounts for which PGIM Fixed Income or an affiliate receives performance fees, and possibly take greater investment risks in those accounts, in order to bolster performance and increase its fees.
■
Affiliated accounts - PGIM Fixed Income manages accounts on behalf of its affiliates as well as unaffiliated accounts. PGIM Fixed Income have an incentive to favor accounts of affiliates over others. Additionally, at times, PGIM Fixed Income’s affiliates provide initial funding or otherwise invest in vehicles managed by it; for example, by providing “seed capital” for a fund or account. Managing “seeded” accounts alongside “non-seeded” accounts creates an incentive to favor the “seeded” accounts to establish a track record for a new strategy or product. Additionally, PGIM Fixed Income’s affiliated investment advisers from time to time allocate their asset allocation clients’ assets to PGIM Fixed Income. PGIM Fixed Income has an incentive to favor accounts used by its affiliates for their asset allocation clients to receive more assets from its affiliates.
■
Larger accounts/higher fee strategies - Large accounts and clients typically generate more revenue than do smaller accounts or clients and certain of PGIM Fixed Income’s strategies have higher fees than others. As a result, a portfolio manager could have an incentive when allocating scarce investment opportunities to favor accounts that pay a higher fee or generate more income for PGIM Fixed Income (or which it believes would generate more revenue in the future).
■
Long only and long/short accounts - PGIM Fixed Income manages accounts that only allow it to hold securities long as well as accounts that permit short selling. As a result, there are times when PGIM Fixed Income sells, a security short in some client accounts while holding the same security long in other client accounts. These short sales could reduce the value of the securities held in the long only accounts. Conversely, purchases for long only accounts could have a negative impact on the short positions in long/short accounts. As a result, PGIM Fixed Income has conflicts of interest in determining the timing and direction of investments.
■
Securities of the same kind or class - PGIM Fixed Income sometimes buys or sells, or direct or recommend that a client buy or sell, securities of the same kind or class that are purchased or sold for another client at prices that may be different. Although such pricing differences could appear as preferences for one client over another, PGIM Fixed Income’s trade execution in each case is driven by its consideration of a variety of factors consistent with its duty to seek best execution. There are times when PGIM Fixed Income executes trades of securities of the same kind or class in one direction for an account and in the opposite direction for another account, or determine not to trade such securities in one or more accounts while trading for others. While such trades (or a decision not to trade) could appear inconsistent in how PGIM Fixed Income views or treats a security for one client versus another, they generally result from differences in investment strategy, portfolio composition or client direction.
■
Investment at different levels of an issuer’s capital structure – There are times when PGIM Fixed Income invests, client assets in the same issuer, but at different levels in the issuer’s capital structure. This could occur, for instance, when a client holds private securities or loans of an issuer and other clients hold publicly traded securities of the same issuer. In addition, there are times when, PGIM Fixed Income invests, client assets in a class or tranche of securities of a securitized finance vehicle (such as a collateralized loan obligation, asset-backed security or mortgage-backed security) and also, at the same or different time, invests the assets of another client (including affiliated clients) in a different class or tranche of securities of the same vehicle. These different securities can have different voting rights, dividend or repayment priorities, rights in bankruptcy or other features that conflict with one another. For some of these securities (particularly private securitized product investments for which clients own all or a significant portion of the outstanding securities or obligations), PGIM Fixed Income has had, input regarding the characteristics and the relative rights and priorities of the various classes or tranches.
■
When PGIM Fixed Income invests client assets in different levels of an issuer’s capital structure, it is permitted to take actions with respect to the assets held by one client (including affiliated clients) that are potentially adverse to other clients, for example, by foreclosing on loans or by putting an issuer into default. In negotiating the terms and conditions of any such investments, or any subsequent amendments or waivers, PGIM Fixed Income could find that the interests of a client and the interests of one or more other clients (including affiliated clients) could conflict. In these situations, decisions over proxy voting, corporate reorganizations, how to exit an investment, bankruptcy matters (including, for example, whether to trigger an event of default or the terms of any workout) or other actions or inactions can result in conflicts of interest. Similarly, if an issuer in which a client and one or more other clients directly or indirectly hold different classes of securities encounters financial problems, decisions over the terms of any workout will raise conflicts of interest (including potential conflicts over proposed waivers and amendments to debt covenants). For example, a senior bond holder or lender might prefer a liquidation of the issuer in which it could be paid in full, whereas an equity
21
or junior bond holder might prefer a reorganization that holds the potential to create value for the equity holders or junior bond holders. There will be times where PGIM Fixed Income refrains from taking certain actions (including participating in workouts and restructurings) or making investments on behalf of certain clients or where PGIM Fixed Income determine to sell, investments for certain clients, in each case in order to mitigate conflicts of interest or legal, regulatory or other risks to PGIM Fixed Income. This could potentially disadvantage the clients on whose behalf the actions are not taken, investments are not made, or investments are sold. Conversely, in other cases, PGIM Fixed Income will not refrain from taking such actions or making investments on behalf of some clients (including affiliated clients), which could potentially disadvantage other clients. Any of the foregoing conflicts of interest will be resolved on a case-by-case basis. Any such resolution will take into consideration the interests of the relevant clients, the circumstances giving rise to the conflict and applicable laws.
■
Financial interests of investment professionals - PGIM Fixed Income investment professionals from time to time invest in certain investment vehicles that it manages, including exchanged-traded funds (“ETFs”), mutual funds and (through a retirement plan) collective investment trusts. Also, certain of these investment vehicles are options under the 401(k) and deferred compensation plans offered by Prudential Financial, Inc. In addition, the value of grants under PGIM Fixed Income’s long-term incentive plan and targeted long-term incentive plan is affected by the performance of certain client accounts. As a result, PGIM Fixed Income investment professionals have financial interests in accounts managed by PGIM Fixed Income and/or that are related to the performance of certain client accounts.
■
Non-discretionary/limited discretion accounts - PGIM Fixed Income provides non-discretionary and limited discretion investment advice to some clients and manages others on a fully discretionary basis. Trades in non-discretionary accounts or accounts where discretion is limited could occur before, in concert with, or after PGIM Fixed Income executes similar trades in its discretionary accounts. The non-discretionary/limited discretion clients may be disadvantaged if PGIM Fixed Income delivers investment advice to them after it initiates trading for the discretionary clients, or vice versa.
How PGIM Fixed Income Addresses These Conflicts of Interest. PGIM Fixed Income has developed policies and procedures reasonably designed to address the conflicts of interest with respect to its different types of side-by-side management described above.
■
Each quarter, the chief investment officer/head of PGIM Fixed Income holds a series of meetings with the senior portfolio manager and team responsible for the management of each of PGIM Fixed Income’s investment strategies. At each of these quarterly investment strategy review meetings, the chief investment officer/head of PGIM Fixed Income and the strategy’s portfolio management team review and discuss the investment performance and performance attribution for each client account managed in the strategy. These meetings generally are also attended by the head of the investment risk management group or his designee and a member of the compliance group, among others.
■
In keeping with PGIM Fixed Income’s fiduciary obligations, its policy with respect to trade aggregation and allocation is to treat all of its client accounts fairly and equitably over time. PGIM Fixed Income’s trade management oversight committee, which generally meets quarterly, is responsible for providing oversight with respect to trade aggregation and allocation. Its compliance group periodically reviews a sampling of new issue allocations and related documentation to confirm compliance with the trade aggregation and allocation procedures. In addition, the compliance and investment risk management groups review forensic reports regarding new issue and secondary trade activity on a quarterly basis. This forensic analysis includes such data as the: (i) number of new issues allocated in the strategy; (ii) size of new issue allocations to each portfolio in the strategy; (iii) profitability of new issue transactions; (iv) portfolio turnover; and (v) metrics related to large and block trade activity. The results of these analyses are reviewed and discussed at PGIM Fixed Income’s trade management oversight committee meetings. The procedures above are designed to detect patterns and anomalies in PGIM Fixed Income’s side-by-side management and trading so that it may assess and improve its processes.
■
PGIM Fixed Income has procedures that specifically address its side-by-side management of certain long/short and long only portfolios. These procedures address potential conflicts that could arise from differing positions between long/short and long only portfolios. In addition, lending opportunities with respect to securities for which the market is demanding a slight premium rate over normal market rates are allocated to long only accounts prior to allocating the opportunities to long/short accounts.
Conflicts Related to PGIM Fixed Income’s Affiliations. As a business unit of PGIM Inc., an indirect wholly-owned subsidiary of Prudential Financial, Inc., PGIM Fixed Income is part of a diversified, global financial services organization. PGIM Fixed Income is affiliated with many types of U.S. and non-U.S. financial service providers, including insurance companies, broker-dealers, commodity trading advisors, commodity pool operators and other investment advisers. Some of its employees are officers of and/or provide services to some of these affiliates.
■
Conflicts Related to Investment of Client Assets in Affiliated Funds. PGIM Fixed Income invests, client assets in funds that it manages or subadvises for one or more affiliates. PGIM Fixed Income also invests cash collateral from securities lending transactions in some of these funds. These investments benefit both PGIM Fixed Income and its affiliate through increasing assets under management and fees.
■
Conflicts Related to Referral Fees to Affiliates. From time to time, PGIM Fixed Income has arrangements where PGIM Fixed Income compensates affiliated parties for client referrals. PGIM Fixed Income currently has arrangements with an affiliated entity which provide for payments to an affiliate if certain investments by others are made in certain of PGIM Fixed Income’s products or if PGIM Fixed Income establishes certain other advisory relationships. These investments benefit both PGIM Fixed Income and its affiliates through increasing assets under management and fees.
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■
Conflicts Related to Co-investment by Affiliates PGIM Fixed Income affiliates provide, initial funding to or otherwise invest in certain vehicles it manages. When certain of its affiliates provide “seed capital” or other capital for a fund, they generally do so with the intention of redeeming all or part of their interest at a future point in time or when they deem that sufficient additional capital has been invested in that fund.
■
The timing of a redemption by an affiliate could benefit the affiliate. For example, the fund may be more liquid at the time of the affiliate’s redemption than it is at times when other investors may wish to withdraw all or part of their interests.
■
In addition, a consequence of any withdrawal of a significant amount, including by an affiliate, is that investors remaining in the fund will bear a proportionately higher share of fund expenses following the redemption.
■
PGIM Fixed Income could also face a conflict if the interests of an affiliated investor in a fund it manages diverge from those of the fund or other investors. For example, PGIM Fixed Income affiliates, from time to time, hedge some or all of the risks associated with their investments in certain funds PGIM Fixed Income manages. PGIM Fixed Income may provide assistance in connection with this hedging activity.
■
Insurance Affiliate General Accounts. Because of the substantial size of the general accounts of PGIM Fixed Income’s affiliated insurance companies (the “Insurance Affiliates”), trading by these general accounts, including PGIM Fixed Income’s trades on behalf of the accounts, may affect the market prices or limit the availability of the securities or instruments transacted. Although PGIM Fixed Income does not expect that the general accounts of affiliated insurers will execute transactions that will move a market frequently, and generally only in response to unusual market or issuer events, the execution of these transactions could have an adverse effect on transactions for or positions held by other clients.
PGIM Fixed Income believes that the conflicts related to its affiliations described above are mitigated by its allocation policies and procedures, its supervisory review of accounts and its procedures with respect to side-by-side management, including of long only and long/short accounts.
Conflicts Related to Financial Interests and the Financial Interests of Affiliates.
Prudential Financial, the general accounts of the Insurance Affiliates, PGIM Fixed Income and other affiliates of PGIM at times have financial interests in, or relationships with, companies whose securities or related instruments PGIM Fixed Income holds, purchases or sells in its client accounts. Certain of these interests and relationships are material to PGIM Fixed Income or to the Prudential enterprise. At any time, these interests and relationships could be inconsistent or in potential or actual conflict with positions held or actions taken by PGIM Fixed Income on behalf of PGIM Fixed Income’s client accounts. For example:
■
PGIM Fixed Income invests in the securities of one or more clients for the accounts of other clients.
■
PGIM Fixed Income’s affiliates sell various products and/or services to certain companies whose securities PGIM Fixed Income purchases and sells for PGIM Fixed Income clients.
■
PGIM Fixed Income invests in the debt securities of companies whose equity is held by its affiliates.
■
PGIM Fixed Income’s affiliates hold public and private debt and equity securities of a large number of issuers. PGIM Fixed Income invests in some of the same issuers for other client accounts but at different levels in the capital structure. For example:
■
Affiliated accounts have held and can in the future hold the senior debt of an issuer whose subordinated debt is held by PGIM Fixed Income’s clients or hold secured debt of an issuer whose public unsecured debt is held in client accounts. See “Investment at different levels of an issuer’s capital structure” above for additional information regarding conflicts of interest resulting from investment at different levels of an issuer’s capital structure.
■
To the extent permitted by applicable law, PGIM Fixed Income can also invest client assets in offerings of securities, the proceeds of which are used to repay debt obligations held in affiliated accounts or other client accounts. PGIM Fixed Income’s interest in having the debt repaid creates a conflict of interest. PGIM Fixed Income has adopted a refinancing policy to address this conflict.
■
Certain of PGIM Fixed Income’s affiliates, directors or officers are directors, or officers of issuers in which PGIM Fixed Income invests from time to time. These issuers could also be service providers to PGIM Fixed Income or its affiliates.
■
In addition, PGIM Fixed Income can invest client assets in securities backed by commercial mortgage loans that were originated or are serviced by an affiliate.
In general, conflicts related to the financial interests described above are addressed by the fact that PGIM Fixed Income makes investment decisions for each client independently considering the best economic interests of such client, under the circumstances.
Conflicts Arising Out of Legal and Regulatory Restrictions.
At times, PGIM Fixed Income is, restricted by law, regulation, executive order, contract or other constraints as to how much, if any, of a particular security it can purchase or sell on behalf of a client, and as to the timing of such purchase or sale. Sometimes these restrictions apply as a result of its relationship with Prudential Financial and other affiliates. For example, PGIM Fixed Income does not purchase securities issued by Prudential Financial or other affiliates for client accounts.
■
In certain instances, PGIM Fixed Income’s ability to buy or sell or transact will be constrained as a result of its receipt of material, non-public information, various insider trading laws and related legal requirements. For example, PGIM Fixed Income would generally be unable to (i) invest in, (ii) divest securities of or (iii) share investment analysis regarding companies for which it
23
possesses material, non-public information, and such inability (which could last for an uncertain period of time until the information is no longer deemed material or non-public) can result in it being unable buy, sell or transact for one or more client accounts or to take other actions that would otherwise be to the benefit of one or more clients).
■
PGIM Fixed Income faces conflicts of interest in determining whether to accept material, non-public information. For example, PGIM Fixed Income has sought, with respect to the management of investments in certain loans for clients, to retain the ability to purchase and sell other securities in the borrower’s capital structure by remaining “public” on the loan. In such cases, PGIM Fixed Income will seek to avoid receiving material, non-public information about the borrowers to which an account can or expects to lend or has lent (through assignments, participations or otherwise), which could place an account at an information disadvantage relative to other accounts and lenders. Conversely, PGIM Fixed Income has chosen to receive material, non-public information about certain borrowers for its clients that invest in bank loans, which has restricted its ability to trade in other securities of the borrowers for its clients that invest in corporate bonds.
■
PGIM Fixed Income’s holdings of a security on behalf of its clients are required, under certain regulations, to be aggregated with the holdings of that security by other Prudential Financial affiliates. These holdings could, on an aggregate basis, exceed certain reporting or ownership thresholds. These aggregated holdings are centrally tracked and PGIM Fixed Income or Prudential Financial can choose to restrict purchases, sell existing positions, or otherwise restrict, forgo, or limit the exercise of rights to avoid crossing such thresholds because of the potential consequences to PGIM Fixed Income or Prudential Financial if such thresholds are exceeded.
Conflicts Related to Investment Consultants
Many of PGIM Fixed Income’s clients and prospective clients retain investment consultants (including discretionary investment managers and OCIO providers) to advise them on the selection and review of investment managers (including with respect to the selection of investment funds). PGIM Fixed Income has dealings with these investment consultants in their roles as discretionary managers or non-discretionary advisers to their clients. PGIM Fixed Income also has independent business relationships with investment consultants.
PGIM Fixed Income provides investment consultants with information about accounts that it manages for the consultant’s clients (and similarly, PGIM Fixed Income provides information about funds in which such clients are invested), in each case pursuant to authorization from the clients. PGIM Fixed Income also provides information regarding its investment strategies to investment consultants, who use that information in connection with searches that they conduct for their clients. PGIM Fixed Income often responds to requests for proposals in connection with those searches.
Other interactions PGIM Fixed Income has with investment consultants include the following:
■
it provides advisory services to the proprietary accounts of investment consultants and/or their affiliates, and advisory services to funds offered by investment consultants and/or their affiliates;
■
it invites investment consultants to events or other entertainment hosted by PGIM Fixed Income;
■
it purchases software applications, market data, access to databases, technology services and other products or services from certain investment consultants; and
■
it sometimes pays for the opportunity to participate in conferences organized by investment consultants.
PGIM Fixed Income will provide clients with information about its relationship with the client’s investment consultant upon request. In general, PGIM Fixed Income relies on the investment consultant to make the appropriate disclosure to its clients of any conflict that the investment consultant believes to exist due to its business relationships with PGIM Fixed Income.
A client’s relationship with an investment consultant could result in restrictions in the eligible securities or trading counterparties for the client’s account. For example, accounts of certain clients (including clients that are subject to ERISA)can be restricted from investing in securities issued by the client’s consultant or its affiliates and from trading with, or participating in transactions involving, counterparties that are affiliated with the investment consultant. In some cases, these restrictions could have a material impact on account performance.
Conflicts Related to Service Providers. PGIM Fixed Income retains third party advisors and other service providers to provide various services for PGIM Fixed Income as well as for funds that PGIM Fixed Income manages or subadvises. Some service providers provide services to PGIM Fixed Income or one of PGIM Fixed Income’s funds while also providing services to other PGIM units, other PGIM-advised funds, or affiliates of PGIM, and negotiate rates in the context of the overall relationship. PGIM Fixed Income can benefit from negotiated fee rates offered to its funds and vice versa. There is no assurance, however, that PGIM Fixed Income will be able to obtain advantageous fee rates from a given service provider negotiated by its affiliates based on their relationship with the service provider, or that PGIM Fixed Income will know of such negotiated fee rates.
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Conflicts Related to Valuation and Fees. When client accounts hold illiquid or difficult to value investments, PGIM Fixed Income faces a conflict of interest when making recommendations regarding the value of such investments since its fees are generally based on the value of assets under management. PGIM Fixed Income could be viewed as having an incentive to value investments at higher valuations. PGIM Fixed Income believes that its valuation policies and procedures mitigate this conflict effectively and enable it to value client assets fairly and in a manner that is consistent with the client’s best interests. In addition, separately managed account clients often calculate fees based on the valuation of assets provided by their custodian or administrator.
Conflicts Related to Securities Lending and Reverse Repurchase Fees. When PGIM Fixed Income manages a client account and also serves as securities lending agent or engages in reverse repurchase transactions for the account, PGIM Fixed Income is compensated for its securities lending and reverse repurchase services by receiving a portion of the proceeds generated from the securities lending and reverse repurchase activities of the account. PGIM Fixed Income could, therefore, be considered to have an incentive to invest in securities that would generate higher securities lending and reverse repurchase returns, even if these investments were not otherwise in the best interest of the client account. In addition, if PGIM Fixed Income is acting as lending agent and providing reverse repurchase services, PGIM Fixed Income may be incented to select the less costly alternative to increase its revenues.
Conflicts Related to Long-Term Compensation. As a result of the long-term incentive plan and targeted long-term incentive plan, PGIM Fixed Income’s portfolio managers from time to time have financial interests related to the investment performance of some, but not all, of the accounts they manage. For example, the performance of some client accounts is not reflected in the calculation of changes in the value of participation interests under PGIM Fixed Income’s long-term incentive plan. This may be because the composite representing the strategy in which the account is managed is not one of the composites included in the calculation or because the account is excluded from a specified composite due to guideline restrictions or other factors. In addition, the performance of only a small number of its investment strategies is covered under PGIM Fixed Income’s targeted long-term incentive plan. To address potential conflicts related to these financial interests, PGIM Fixed Income has procedures, including trade allocation and supervisory review procedures, designed to confirm that each of its client accounts is managed in a manner that is consistent with PGIM Fixed Income’s fiduciary obligations, as well as with the account’s investment objectives, investment strategies and restrictions. For example, PGIM Fixed Income’s chief investment officer/head reviews performance among similarly managed accounts on a quarterly basis during a series of meetings with the senior portfolio manager and team responsible for the management of each investment strategy. These quarterly investment strategy review meetings generally are also attended by the head of the investment risk management group or his designee and a member of the compliance group, among others.
Conflicts Related to the Offer and Sale of Securities. Certain of PGIM Fixed Income’s employees offer and sell securities of, and interests in, commingled funds that it manages or subadvises. Employees offer and sell securities in connection with their roles as registered representatives of an affiliated broker-dealer, officers of an affiliated trust company, agents of the Insurance Affiliates, approved persons of an affiliated investment adviser or other roles related to such commingled funds. There is an incentive for PGIM Fixed Income’s employees to offer these securities to investors regardless of whether the investment is appropriate for such investor since increased assets in these vehicles will result in increased advisory fees to it. In addition, such sales could result in increased compensation to the employee.
Conflicts Related to Trading – Personal Trading by Employees. Personal trading by PGIM Fixed Income employees creates a conflict when they are trading the same securities or types of securities as PGIM Fixed Income trades on behalf of its clients. This conflict is mitigated by PGIM Fixed Income’s personal trading standards and procedures.
Conflicts Related to Outside Business Activity. From time to time, certain of PGIM Fixed Income employees or officers engage in outside business activity, including outside directorships. Any outside business activity is subject to prior approval pursuant to PGIM Fixed Income’s personal conflicts of interest and outside business activities policy. Actual and potential conflicts of interest are analyzed during such approval process. PGIM Fixed Income could be restricted in trading the securities of certain issuers in client portfolios in the unlikely event that an employee or officer, as a result of outside business activity, obtains material, non-public information regarding an issuer.
OTHER SERVICE PROVIDERS
CUSTODIAN. The Bank of New York Mellon Corp., 240 Greenwich Street, New York, New York 10286, serves as Custodian for the Trust's portfolio securities and cash, and in that capacity, maintains certain financial accounting books and records pursuant to an agreement with the Trust. Subcustodians provide custodial services for any foreign assets held outside the United States.
TRANSFER AGENT AND SHAREHOLDER SERVICING AGENT. Prudential Mutual Fund Services LLC (PMFS), 655 Broad Street, Newark, New Jersey 07102, serves as the transfer and dividend disbursing agent of the Trust. PMFS is an affiliate of PGIM Investments. PMFS provides customary transfer agency services to the Trust, including the handling of shareholder communications, the processing of shareholder transactions, the maintenance of shareholder account records, the payment of dividends and distributions, and related
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functions. For these services, PMFS receives compensation from the Trust and is reimbursed for its transfer agent expenses which include an annual fee per shareholder account, a monthly inactive account fee per shareholder account and its out-of-pocket expenses; including but not limited to postage, stationery, printing, allocable communication expenses and other costs.
BNY Mellon Asset Servicing (US) Inc. (BNYAS) serves as sub-transfer agent to the Trust. PMFS has contracted with BNYAS, 301 Bellevue Parkway, Wilmington, Delaware 19809, to provide certain administrative functions to the Transfer Agent. PMFS will compensate BNYAS for such services.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, New York 10017-6204, served as the Trust's independent registered public accounting firm for the fiscal year’s ended December 31, 2020 and December 31, 2021, and in that capacity will audit the annual financial statements for the Trust’s next fiscal year. KPMG LLP, 345 Park Avenue, New York, New York 10154, served as the Trust’s independent registered public accounting firm for the fiscal year fiscal year’s ended December 31, 2019.
DISTRIBUTOR. The Trust has distribution arrangements with PAD, pursuant to which PAD serves as the distributor for the shares of the Portfolio. PAD is an affiliate of the Manager.
The Trust’s distribution agreement with respect to the Trust and the Portfolio (Distribution Agreement) has been approved by the Board, including a majority of the Independent Trustees, with respect to the Portfolio. The Distribution Agreement will remain in effect from year to year provided that the Distribution Agreement’s continuance is approved annually by (i) a majority of the Independent Trustees who are not parties to the agreement and, if applicable, who have no direct or indirect financial interest in the operation of the Shareholder Services and Distribution Plan (the 12b-1Plan) or any such related agreement, by a vote cast in person at a meeting called for the purpose of voting on such Agreements and (ii) either by a vote of a majority of the Trustees or a majority of the outstanding voting securities (as defined in the 1940 Act) of the Trust, as applicable.
The Trust has adopted the 12b-1Plan in the manner prescribed under Rule 12b-1 under the 1940 Act. Under the 12b-1Plan, the Portfolio is authorized to pay PAD an annual shareholder services and distribution fee of 0.25% of the Portfolio’s average daily net assets.
The shareholder services and distribution fee paid by the Portfolio to PAD is intended to compensate PAD and its affiliates for various administrative services, including but not limited to the filing, printing and delivery of the Trust’s prospectus and statement of additional information, annual and semi-annual shareholder reports, and other required regulatory documents, responding to shareholder questions and inquiries relating to the Portfolio, and related functions and services. In addition, pursuant to the 12b-1Plan, the fee is intended to compensate PAD and its affiliates for various services rendered and expenses incurred in connection with activities intended to result in the sale or servicing of the shares of the Portfolio. These activities include, but are not limited to, the following:
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printing and mailing of prospectuses, statements of additional information, supplements, proxy statement materials, and annual and semi-annual reports for current owners of variable life or variable annuity contracts indirectly investing in the shares (the Contracts);
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reconciling and balancing separate account investments in the Portfolio;
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reconciling and providing notice to the Trust of net cash flow and cash requirements for net redemption orders;
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confirming transactions;
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providing Contract owner services related to investments in the Portfolio, including assisting the Trust with proxy solicitations, including providing solicitation and tabulation services, and investigating and responding to inquiries from Contract owners that relate to the Portfolio;
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providing periodic reports to the Trust and regarding the Portfolio to third-party reporting services;
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paying compensation to and expenses, including overhead, of employees of PAD and other broker-dealers and financial intermediaries that engage in the distribution of the shares including, but not limited to, commissions, service fees and marketing fees;
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printing and mailing of prospectuses, statements of additional information, supplements and annual and semi-annual reports for prospective Contract owners;
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paying expenses relating to the development, preparation, printing and mailing of advertisements, sales literature, and other promotional materials describing and/or relating to the Portfolio;
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paying expenses of holding seminars and sales meetings designed to promote the distribution of the shares;
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paying expenses of obtaining information and providing explanations to Contract owners regarding investment objectives, policies, performance and other information about the Trust and the Portfolio;
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paying expenses of training sales personnel regarding the Portfolio; and
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providing other services and bearing other expenses for the benefit of the Portfolio, including activities primarily intended to result in the sale of shares of the Trust.
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The 12b-1Plan is of a type known as a “compensation” plan because payments are made for services rendered to the covered portfolios of the Trust regardless of the level of actual expenditures by PAD. However, as part of their oversight of the operations of the Trust and the 12b-1Plan, the Trustees consider and examine all payments made to PAD and all expenditures by PAD for purposes of reviewing operations under the 12b-1Plan. As required under Rule 12b-1, the 12b-1Plan provides that PAD and any other person(s) authorized to direct the disposition of monies paid or payable by the Portfolio pursuant to the 12b-1Plan or any related agreement will provide to the Board, and the Trustees shall review, at least quarterly, a written report of the amounts so expended and the purposes for which such expenditures were made. Fees payable to PAD under the 12b-1Plan are accrued daily and paid bi-weekly.
The 12b-1Plan and any related agreement will continue in effect, with respect to the Portfolio, for a period of more than one year only so long as such continuance is specifically approved at least annually by a vote of (a) the Board and (b) the Trust’s Independent Trustees, cast in person at a meeting called for the purpose of voting on the 12b-1Plan or such agreement, as applicable. In addition, the 12b-1Plan and any related agreement may be terminated at any time with respect to the Portfolio by vote of a majority of the Independent Trustees or by vote of a majority of the outstanding voting securities representing the shares of the Portfolio. The 12b-1Plan may not be amended to increase materially the amount of distribution and shareholder service fees permissible with respect to the Portfolio until it has been approved by the Board and by a vote of at least a majority of the outstanding voting securities representing the shares of the Portfolio.
Because the Portfolio is new, it has not paid PAD any amounts pursuant to the 12b-1 Plan.
SECURITIES LENDING AGENT. Goldman Sachs Bank USA, doing business as Goldman Sachs Agency Lending (GSAL), serves as the securities lending agent for the Trust, and in that role administers the Portfolio’s securities lending program pursuant to the terms of a securities lending agency agreement entered into between the Trust on behalf of the Portfolio and GSAL.
As securities lending agent, GSAL is responsible for marketing to approved borrowers available securities from the Portfolio’s portfolio. GSAL is responsible for the administration and management of the Portfolio’s securities lending program, including the preparation and execution of a participant agreement with each borrower governing the terms and conditions of any securities loan, ensuring that securities loans are properly coordinated and documented with the Portfolio’s custodian, ensuring that loaned securities are daily valued and that the corresponding required cash collateral is delivered by the borrower(s), and arranging for the investment of cash collateral received from borrowers in accordance with the Portfolio’s investment guidelines.
GSAL receives as compensation for its services a portion of the amount earned by the Portfolio for lending securities.
Because the Portfolio is new, it has not paid GSAL any amount as securities lending agent for the Portfolio, and GSAL has not provided any securities lending service to the Portfolio.
PORTFOLIO TRANSACTIONS & BROKERAGE
The Trust has adopted a policy pursuant to which the Trust and its Manager, subadvisers, and principal underwriter are prohibited from directly or indirectly compensating a broker-dealer for promoting or selling Trust shares by directing brokerage transactions to that broker. The Trust has adopted procedures for the purpose of deterring and detecting any violations of the policy. The policy permits the Trust, the Manager, and the subadvisers to use selling brokers to execute transactions in portfolio securities so long as the selection of such selling brokers is the result of a decision that executing such transactions is in the best interest of the Trust and is not influenced by considerations about the sale of Portfolio shares.
The Manager is responsible for decisions to buy and sell securities, futures contracts and options on such securities and futures for the Trust, the selection of brokers, dealers and futures commission merchants to effect the transactions and the negotiation of brokerage commissions, if any. On a national securities exchange, broker-dealers may receive negotiated brokerage commissions on Trust portfolio transactions, including options, futures, and options on futures transactions and the purchase and sale of underlying securities upon the exercise of options. On a foreign securities exchange, commissions may be fixed. For purposes of this section, the term “Manager” includes the investment subadvisers. Orders may be directed to any broker or futures commission merchant including, to the extent and in the manner permitted by applicable laws, affiliates of the Manager and/or subadvisers (an affiliated broker). Brokerage commissions on US securities, options and futures exchanges or boards of trade are subject to negotiation between the Manager and the broker or futures commission merchant.
In the over-the-counter market, securities are generally traded on a “net” basis with dealers acting as principal for their own accounts without a stated commission, although the price of the security usually includes a profit to the dealer. In underwritten offerings, securities are purchased at a fixed price which includes an amount of compensation to the underwriter, generally referred to as the
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underwriter's concession or discount. On occasion, certain money market instruments and US government agency securities may be purchased directly from the issuer, in which case no commissions or discounts are paid. The Trust will not deal with an affiliated broker in any transaction in which an affiliated broker acts as principal except in accordance with the rules of the SEC.
In placing orders for portfolio securities of the Trust, the Manager's overriding objective is to obtain the best possible combination of favorable price and efficient execution. The Manager seeks to effect such transaction at a price and commission that provides the most favorable total cost of proceeds reasonably attainable in the circumstances. The factors that the Manager may consider in selecting a particular broker, dealer or futures commission merchant (firms) are the Manager's knowledge of negotiated commission rates currently available and other current transaction costs; the nature of the portfolio transaction; the size of the transaction; the desired timing of the trade; the activity existing and expected in the market for the particular transaction; confidentiality; the execution, clearance and settlement capabilities of the firms; the availability of research and research related services provided through such firms; the Manager's knowledge of the financial stability of the firms; the Manager's knowledge of actual or apparent operational problems of firms; and the amount of capital, if any, that would be contributed by firms executing the transaction. Given these factors, the Trust may pay transaction costs in excess of that which another firm might have charged for effecting the same transaction.
Unless prohibited by applicable law, such as the European Union’s Market in Financial Instruments Directive (“MiFID II”), when the Manager selects a firm that executes orders or is a party to portfolio transactions, relevant factors taken into consideration are whether that firm has furnished research and research-related products and/or services, such as research reports, research compilations, statistical and economic data, computer data bases, quotation equipment and services, research-oriented computer software, hardware and services, reports concerning the performance of accounts, valuations of securities, investment related periodicals, investment seminars and other economic services and consultations. Such services are used in connection with some or all of the Manager's investment activities; some of such services, obtained in connection with the execution of transactions for one investment account, may be used in managing other accounts, and not all of these services may be used in connection with the Trust. The Manager maintains an internal allocation procedure to identify those firms who have provided it with research and research-related products and/or services, and the amount that was provided, and to endeavor to direct sufficient commissions to them to ensure the continued receipt of those services that the Manager believes provide a benefit to the Trust and its other clients. The Manager makes a good faith determination that the research and/or service is reasonable in light of the type of service provided and the price and execution of the related portfolio transactions.
Under MiFID II, which became effective January 3, 2018, investment managers that are regulated under MiFID II, including certain investment managers, are no longer able to use soft dollars to pay for research from brokers. Investment managers that are regulated under MiFID II are required to either pay for research out of their own resources or agree with clients to have research costs paid by clients through “research payment accounts” that are funded out of execution commissions or by a specific client research charge, provided that the payments for research are unbundled from the payments for execution. MiFID II limits the ability of certain investment managers to pay for research using soft dollars in various circumstances. MiFID II’s research requirements present various compliance and operational considerations for investment managers and broker-dealers serving clients in both the United States and the European Union, and the Manager have adopted a variety of approaches to complying with the MiFID II requirements.
When the Manager deems the purchase or sale of equities to be in the best interests of the Trust or its other clients, including Prudential, the Manager may, but is under no obligation to, aggregate the transactions in order to obtain the most favorable price or lower brokerage commissions and efficient execution. In such event, allocation of the transactions, as well as the expenses incurred in the transaction, will be made by the Manager in the manner it considers to be most equitable and consistent with its fiduciary obligations to its clients. The allocation of orders among firms and the commission rates paid are reviewed periodically by the Trust's Board. Portfolio securities may not be purchased from any underwriting or selling syndicate of which any affiliated broker, during the existence of the syndicate, is a principal underwriter (as defined in the 1940 Act), except in accordance with rules of the SEC. This limitation, in the opinion of the Trust, will not significantly affect the Trust's ability to pursue its present investment objective. However, in the future in other circumstances, the Trust may be at a disadvantage because of this limitation in comparison to other funds with similar objectives but not subject to such limitations.
Subject to the above considerations, an affiliated broker may act as a broker or futures commission merchant for the Trust. In order for an affiliated broker to effect any portfolio transactions for the Trust, the commissions, fees or other remuneration received by the affiliated broker must be reasonable and fair compared to the commissions, fees or other remuneration paid to other firms in connection with comparable transactions involving similar securities or futures being purchased or sold on an exchange or board of trade during a comparable period of time. This standard would allow the affiliated broker to receive no more than the remuneration which would be expected to be received by an unaffiliated firm in a commensurate arm's-length transaction. Furthermore, the Trustees of the Trust, including a majority of the non-interested Trustees, have adopted procedures which are reasonably designed to provide that any commissions, fees or other remuneration paid to the affiliated broker (or any affiliate) are consistent with the foregoing standard. In accordance with Section 11(a) of the 1934 Act, an affiliated broker may not retain compensation for effecting
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transactions on a national securities exchange for the Trust unless the Trust has expressly authorized the retention of such compensation. The affiliated broker must furnish to the Trust at least annually a statement setting forth the total amount of all compensation retained by it from transactions effected for the Trust during the applicable period. Brokerage transactions with an affiliated broker are also subject to such fiduciary standards as may be imposed upon the broker by applicable law. Transactions in options by the Trust will be subject to limitations established by each of the exchanges governing the maximum number of options which may be written or held by a single investor or group of investors acting in concert, regardless of whether the options are written or held on the same or different exchanges or are written or held in one or more accounts or through one or more brokers. Thus, the number of options which the Trust may write or hold may be affected by options written or held by the Manager and other investment advisory clients of the Manager. An exchange may order the liquidation of positions found to be in excess of these limits, and it may impose certain other sanctions.
The Portfolio participates in a voluntary commission recapture program available through Capital Institutional Services, Inc. (CAPIS). Subadvisers that choose to participate in the program retains the responsibility to seek best execution and are under no obligation to place any specific trades with a broker available through the program (each, a designated broker). A portion of commissions on trades executed through designated brokers is rebated to a Portfolio as a credit that can be used by the Portfolio to pay expenses of the Portfolio. Because the Portfolio had not commenced operations prior to the date of this SAI, no information concerning the brokerage commission paid by the Portfolio is included herein.
ADDITIONAL INFORMATION
TRUST HISTORY. The Trust is a managed, open-end investment company organized as a Massachusetts business trust, the separate Portfolios of which are diversified, unless otherwise indicated. Formerly, the Trust was known as the Henderson International Growth Fund, which consisted of only one Portfolio (The Henderson International Growth Fund is currently known as the AST J.P. Morgan International Equity Portfolio (formerly known as the AST Strong International Equity Portfolio, the AST AIM International Equity Portfolio, the AST Putnam International Equity Portfolio and the Seligman Henderson International Equity Portfolio)).The investment manager was Henderson International, Inc. Shareholders of what was, at the time, the Henderson International Growth Fund, approved certain changes at a meeting held April 17, 1992. These changes included engagement of a new investment manager, engagement of a subadviser and election of new trustees. Subsequent to that meeting, the new trustees adopted a number of resolutions, including, but not limited to, resolutions renaming the Trust. Since that time the Trustees have adopted a number of resolutions, including, but not limited to, making new Portfolios available and adopting forms of investment management agreements and subadvisory agreements between the investment managers and the Trust and the investment managers and each subadviser, respectively.
Effective as of May 1, 2007, the Trust changed its name from American Skandia Trust to Advanced Series Trust.
If approved by the Trustees, the Trust may add more Portfolios and may cease to offer any existing Portfolios in the future.
DESCRIPTION OF SHARES AND ORGANIZATION. As of the date of this SAI, the beneficial interest in the Trust is divided into 72 separate Portfolios, each offering one class of shares.
The Trust's Second Amended and Restated Declaration of Trust, dated December 1, 2005, which governs certain Trust matters, permits the Trust's Board to issue multiple classes of shares, and within each class, an unlimited number of shares of beneficial interest with a par value of $.001 per share. Each share entitles the holder to one vote for the election of Trustees and on all other matters that are not specific to one class of shares, and to participate equally in dividends, distributions of capital gains and net assets of each applicable Portfolio. Only shareholders of shares of a specific Portfolio may vote on matters specific to that Portfolio. Shares of one class may not bear the same economic relationship to the Trust as shares of another class. In the event of dissolution or liquidation, holders of shares of a Portfolio will receive pro rata, subject to the rights of creditors, the proceeds of the sale of the assets held in such Portfolio less the liabilities attributable to such Portfolio. Shareholders of a Portfolio will not be liable for the expenses, obligations or debts of another Portfolio.
No preemptive or conversion rights apply to any of the Trust's shares. The Trust's shares, when issued, will be fully paid, non-assessable and transferable. The Trustees may at any time create additional series of shares without shareholder approval.
Generally, there will not be annual meetings of shareholders of any Portfolio of the Trust. A Trustee may, in accordance with certain rules of the SEC, be removed from office when the holders of record of not less than two-thirds of the outstanding shares either present a written declaration to the Trust's custodian or vote in person or by proxy at a meeting called for this purpose. In addition, the
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Trustees will promptly call a meeting of shareholders to remove a Trustee(s) when requested to do so in writing by record holders of not less than 10% of the outstanding shares. Finally, the Trustees shall, in certain circumstances, give such shareholders access to a list of the names and addresses of all other shareholders or inform them of the number of shareholders and the cost of mailing their request.
Under Massachusetts law, shareholders could, under certain circumstances, be held liable for the obligations of the Trust. However, the Declaration of Trust disclaims shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Trust or the Trustees to all parties, and each party thereto must expressly waive all rights of action directly against shareholders. The Declaration of Trust provides for indemnification out of the Trust's property for all loss and expense of any shareholder of the Trust held liable on account of being or having been a shareholder. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Trust would be unable to meet its obligations wherein the complaining party was held not to be bound by the disclaimer.
The Declaration of Trust further provides that the Trustees will have no personal liability to any person in connection with the Trust property or affairs of the Trust except for that arising from his bad faith, willful misfeasance, gross negligence or reckless disregard of his duty to that person. All persons must look solely to the Trust property for satisfaction of claims of any nature arising in connection with the Trust's affairs. In general, the Declaration of Trust provides for indemnification by the Trust of the Trustees and officers of the Trust except with respect to any matter as to which the Trustee or officer acted in bad faith, or with willful misfeasance, gross negligence or reckless disregard of his duties.
From time to time, Prudential Financial, Inc. and/or its insurance company affiliates have purchased shares of the Trust to provide initial capital and to enable the Portfolios to avoid unrealistically poor investment performance that might otherwise result because the amounts available for investment are too small. Prudential will not redeem any of its shares until a Portfolio is large enough so that redemption will not have an adverse effect upon investment performance. Prudential will vote its shares in the same manner and in the same proportion as the shares held by the separate accounts that invest in the Trust, which in turn, are generally voted in accordance with instructions from Contract owners.
PRINCIPAL SHAREHOLDERS
To the knowledge of the Trust, the following persons/entities owned beneficially or of record 5% or more of the Portfolio of the Trust as of December 15, 2021. As of December 15, 2021, the Trustees and Officers of the Trust, as a group owned less than 1% of the outstanding shares of beneficial interest of the Trust.
As of December 15, 2021, there were no outstanding shares of the Portfolio. As a result, as of the date of this SAI, no person owned beneficially more than 5% of any class of the Portfolio’s outstanding shares.
The Participating Insurance Companies are not obligated to continue to invest in shares of the Portfolio under all circumstances. Variable annuity and variable life insurance policy holders should refer to the prospectuses for such products for a description of the circumstances in which such a change might occur.
FINANCIAL STATEMENTS
Because the Portfolio has not yet commenced operations, no financial information is available. When available, the Trust’s Annual and Semi-Annual Reports will be available upon request and without charge.
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PART II
INVESTMENT RISKS & CONSIDERATIONS
Set forth below are descriptions of some of the types of investments and investment strategies that the Portfolio may use, and the risks and considerations associated with those investments and investment strategies. The Portfolio may invest in the types of investments and investment strategies that are consistent with its investment objective, policies and any limitations described in the prospectus and in the SAI.
ASSET-BACKED SECURITIES. Certain Portfolios may invest in asset-backed securities. Asset-backed securities directly or indirectly represent a participation interest in, or are secured by and payable from, a stream of payments generated by particular assets such as motor vehicle or credit card receivables. Payments of principal and interest may be guaranteed up to certain amounts and for a certain time period by a letter of credit issued by a financial institution unaffiliated with the entities issuing the securities. Asset-backed securities may be classified as pass-through certificates or collateralized obligations.
Pass-through certificates are asset-backed securities which represent an undivided fractional ownership interest in an underlying pool of assets. Pass-through certificates usually provide for payments of principal and interest received to be passed through to their holders, usually after deduction for certain costs and expenses incurred in administering the pool. Because pass-through certificates represent an ownership interest in the underlying assets, the holders thereof bear directly the risk of any defaults by the obligors on the underlying assets not covered by any credit support.
Asset-backed securities issued in the form of debt instruments, also known as collateralized obligations, are generally issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. Such assets are most often trade, credit card or automobile receivables. The assets collateralizing such asset-backed securities are pledged to a trustee or custodian for the benefit of the holders thereof. Such issuers generally hold no assets other than those underlying the asset-backed securities and any credit support provided. As a result, although payments on such asset-backed securities are obligations of the issuers, in the event of defaults on the underlying assets not covered by any credit support, the issuing entities are unlikely to have sufficient assets to satisfy their obligations on the related asset-backed securities.
Credit-Related Asset-Backed Securities. This type of asset-backed security is collateralized by a basket of underlying corporate bonds or other securities, including junk bonds. Unlike the traditional asset-backed securities described above, these asset-backed securities often do have the benefit of a security interest or ownership interest in the related collateral. With a credit-related asset-backed security, the underlying bonds have the risk of being prepaid prior to maturity. Although generally not pre-payable at any time, some of the underlying bonds may have call options, while others may have maturity dates that are earlier than the asset-backed security itself. As with traditional asset-backed securities described above, the Portfolio bears the risk of loss of the resulting increase or decrease in yield to maturity after a prepayment of an underlying bond. However, the primary risk associated with credit-related asset-backed securities is the potential loss of principal associated with losses on the underlying bonds.
Collateralized Loan Obligations (CLOs). This type of asset-backed security is a trust typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, as well as loans rated below investment grade or equivalent unrated loans. The risks of an investment in a CLO depend largely on the quality of the underlying loans and may be classified by the Portfolio as illiquid investments.
For credit-related asset-backed securities and CLOs, the cash flows from the trust are split into two or more portions, called tranches, varying in risk and yield. The riskiest portion is the “equity” tranche which bears the bulk of defaults from the bonds or loans in the trust and serves to protect the other, more senior tranches from default in all but the most severe circumstances. Since it is partially protected from defaults, a senior tranche from a trust typically has higher ratings and lower yields than their underlying securities, and can be rated investment grade. Despite the protection from the equity tranche, other tranches can experience substantial losses due to actual defaults, increased sensitivity to defaults due to collateral default and disappearance of protecting tranches, market anticipation of defaults, as well as aversion to particular underlying assets as a class.
Government Money Market Portfolio: AST Government Money Market Portfolio (the Government Money Market Portfolio) may choose to invest in certain government-supported asset-backed notes in reliance on no-action relief issued by the SEC that such securities may be considered government securities for purposes of compliance with the diversification requirements under Rule 2a-7.
BORROWING AND LEVERAGE. A Portfolio may borrow up to 33 1∕3% of the value of its total assets (calculated at the time of the borrowing). The Portfolio may pledge up to 33 1∕3% of its total assets to secure these borrowings. If a Portfolio's asset coverage for borrowings falls below 300%, the Portfolio will take prompt action to reduce its borrowings. If a Portfolio borrows to invest in securities, any investment gains made on the securities in excess of interest paid on the borrowing will cause the net asset value of the
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shares to rise faster than would otherwise be the case. On the other hand, if the investment performance of the additional securities purchased fails to cover their cost (including any interest paid on the money borrowed) to the Portfolio, the net asset value of the Portfolio's shares will decrease faster than would otherwise be the case. This is the speculative factor known as “leverage.”
A Portfolio may borrow from time to time, at the investment subadviser's discretion, to take advantage of investment opportunities, when yields on available investments exceed interest rates and other expenses of related borrowing, or when, in the subadviser's opinion, unusual market conditions otherwise make it advantageous for the Portfolio to increase its investment capacity. A Portfolio will only borrow when there is an expectation that it will benefit a Portfolio after taking into account considerations such as interest income and possible losses upon liquidation. Borrowing by a Portfolio creates an opportunity for increased net income but, at the same time, creates risks, including the risks associated with leveraging such as the risks that leverage may exaggerate changes in the net asset value of Portfolio shares and the yield on a Portfolio. A Portfolio may borrow through forward rolls, dollar rolls or reverse repurchase agreements, although no Portfolio currently has any intention of doing so, except for portfolios managed by PIMCO.
CONVERTIBLE SECURITIES. Convertible securities entitle the holder to receive interest payments paid on corporate debt securities or the dividend preference on a preferred stock until such time as the convertible security matures or is redeemed or until the holder elects to exercise the conversion privilege. The characteristics of convertible securities make them appropriate investments for an investment company seeking a high total return from capital appreciation and investment income. These characteristics include the potential for capital appreciation as the value of the underlying common stock increases, the relatively high yield received from dividend or interest payments as compared to common stock dividends and decreased risks of decline in value relative to the underlying common stock due to their fixed income nature. As a result of the conversion feature, however, the interest rate or dividend preference on a convertible security is generally less than would be the case if the securities were issued in nonconvertible form.
In analyzing convertible securities, the subadviser(s) will consider both the yield on the convertible security relative to its credit quality and the potential capital appreciation that is offered by the underlying common stock, among other things.
Convertible securities are issued and traded in a number of securities markets. Even in cases where a substantial portion of the convertible securities held by a Portfolio are denominated in US dollars, the underlying equity securities may be quoted in the currency of the country where the issuer is domiciled. With respect to convertible securities denominated in a currency different from that of the underlying equity securities, the conversion price may be based on a fixed exchange rate established at the time the security is issued. As a result, fluctuations in the exchange rate between the currency in which the debt security is denominated and the currency in which the share price is quoted will affect the value of the convertible security. As described below, a Portfolio is authorized to enter into foreign currency hedging transactions in which it may seek to reduce the effect of such fluctuations.
Apart from currency considerations, the value of convertible securities is influenced by both the yield of nonconvertible securities of comparable issuers and by the value of the underlying common stock. The value of a convertible security viewed without regard to its conversion feature (i.e., strictly on the basis of its yield) is sometimes referred to as its “investment value.” To the extent interest rates change, the investment value of the convertible security typically will fluctuate. However, at the same time, the value of the convertible security will be influenced by its “conversion value,” which is the market value of the underlying common stock that would be obtained if the convertible security were converted. Conversion value fluctuates directly with the price of the underlying common stock. If, because of a low price of the common stock the conversion value is substantially below the investment value of the convertible security, the price of the convertible security is governed principally by its investment value.
To the extent the conversion value of a convertible security increases to a point that approximates or exceeds its investment value, the price of the convertible security will be influenced principally by its conversion value. A convertible security will sell at a premium over the conversion value to the extent investors place value on the right to acquire the underlying common stock while holding a fixed income security. The yield and conversion premium of convertible securities issued in Japan and the Euromarket are frequently determined at levels that cause the conversion value to affect their market value more than the securities' investment value.
Holders of convertible securities generally have a claim on the assets of the issuer prior to the common stockholders but may be subordinated to other debt securities of the same issuer. A convertible security may be subject to redemption at the option of the issuer at a price established in the charter provision, indenture or other governing instrument pursuant to which the convertible security was issued. If a convertible security held by a Portfolio is called for redemption, the Portfolio will be required to redeem the security, convert it into the underlying common stock or sell it to a third party. Certain convertible debt securities may provide a put option to the holder, which entitles the holder to cause the security to be redeemed by the issuer at a premium over the stated principal amount of the debt security under certain circumstances.
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Synthetic convertible securities may be either (i) a debt security or preferred stock that may be convertible only under certain contingent circumstances or that may pay the holder a cash amount based on the value of shares of underlying common stock partly or wholly in lieu of a conversion right (a Cash-Settled Convertible), (ii) a combination of separate securities chosen by the subadviser(s) in order to create the economic characteristics of a convertible security, i.e., a fixed income security paired with a security with equity conversion features, such as an option or warrant (a Manufactured Convertible) or (iii) a synthetic security manufactured by another party.
Synthetic convertible securities may include either Cash-Settled Convertibles or Manufactured Convertibles. Cash-Settled Convertibles are instruments that are created by the issuer and have the economic characteristics of traditional convertible securities but may not actually permit conversion into the underlying equity securities in all circumstances. As an example, a private company may issue a Cash-Settled Convertible that is convertible into common stock only if the company successfully completes a public offering of its common stock prior to maturity and otherwise pays a cash amount to reflect any equity appreciation. Manufactured Convertibles are created by the subadviser(s) by combining separate securities that possess one of the two principal characteristics of a convertible security, i.e., fixed income (fixed income component) or a right to acquire equity securities (convertibility component). The fixed income component is achieved by investing in nonconvertible fixed income securities, such as nonconvertible bonds, preferred stocks and money market instruments. The convertibility component is achieved by investing in call options, warrants, or other securities with equity conversion features (equity features) granting the holder the right to purchase a specified quantity of the underlying stocks within a specified period of time at a specified price or, in the case of a stock index option, the right to receive a cash payment based on the value of the underlying stock index.
A Manufactured Convertible differs from traditional convertible securities in several respects. Unlike a traditional convertible security, which is a single security having a unitary market value, a Manufactured Convertible is comprised of two or more separate securities, each with its own market value. Therefore, the total “market value” of such a Manufactured Convertible is the sum of the values of its fixed income component and its convertibility component.
More flexibility is possible in the creation of a Manufactured Convertible than in the purchase of a traditional convertible security. Because many corporations have not issued convertible securities, the subadviser(s) may combine a fixed income instrument and an equity feature with respect to the stock of the issuer of the fixed income instrument to create a synthetic convertible security otherwise unavailable in the market. The subadviser(s) may also combine a fixed income instrument of an issuer with an equity feature with respect to the stock of a different issuer when the subadviser(s) believe such a Manufactured Convertible would better promote a Portfolio's objective than alternate investments. For example, the subadviser(s) may combine an equity feature with respect to an issuer's stock with a fixed income security of a different issuer in the same industry to diversify the Portfolio's credit exposure, or with a US Treasury instrument to create a Manufactured Convertible with a higher credit profile than a traditional convertible security issued by that issuer. A Manufactured Convertible also is a more flexible investment in that its two components may be purchased separately and, upon purchasing the separate securities, “combined” to create a Manufactured Convertible. For example, a Portfolio may purchase a warrant for eventual inclusion in a Manufactured Convertible while postponing the purchase of a suitable bond to pair with the warrant pending development of more favorable market conditions.
The value of a Manufactured Convertible may respond differently to certain market fluctuations than would a traditional convertible security with similar characteristics. For example, in the event a Portfolio created a Manufactured Convertible by combining a short-term US Treasury instrument and a call option on a stock, the Manufactured Convertible would likely outperform a traditional convertible of similar maturity that is convertible into that stock during periods when Treasury instruments outperform corporate fixed income securities and underperform during periods when corporate fixed income securities outperform Treasury instruments.
CORPORATE LOANS. Commercial banks and other financial institutions make corporate loans to companies that need capital to grow or restructure. Borrowers generally pay interest on corporate loans at rates that change in response to changes in market interest rates such as the London Interbank Offered Rate (LIBOR) or the prime rate of US banks. As a result, the value of corporate loan investments is generally less responsive to shifts in market interest rates. Because the trading market for corporate loans is less developed than the secondary market for bonds and notes, a Portfolio may experience difficulties from time to time in selling its corporate loans. Borrowers frequently provide collateral to secure repayment of these obligations. Leading financial institutions often act as agent for a broader group of lenders, generally referred to as a “syndicate.” The syndicate's agent arranges the corporate loans, holds collateral and accepts payments of principal and interest. If the agent develops financial problems, a Portfolio may not recover its investment, or there might be a delay in the Portfolio's recovery. By investing in a corporate loan, a Portfolio becomes a member of the syndicate.
As in the case of junk bonds, the corporate loans in which a Portfolio may invest can be expected to provide higher yields than higher-rated fixed income securities but may be subject to greater risk of loss of principal and income. There are, however, some significant differences between corporate loans and junk bonds. Corporate loans are frequently secured by pledges of liens and
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security interests in the assets of the borrower, and the holders of corporate loans are frequently the beneficiaries of debt service subordination provisions imposed on the borrower's bondholders. These arrangements are designed to give corporate loan investors preferential treatment over junk bond investors in the event of a deterioration in the credit quality of the issuer. Even when these arrangements exist, however, there can be no assurance that the principal and interest owed on the corporate loans will be repaid in full. Corporate loans generally bear interest at rates set at a margin above a generally recognized base lending rate that may fluctuate on a day-to-day basis, in the case of the Prime Rate of a US bank, or that may be adjusted on set dates, typically 30 days but generally not more than one year, in the case of LIBOR. Consequently, the value of corporate loans held by a Portfolio may be expected to fluctuate significantly less than the value of fixed rate junk bond instruments as a result of changes in the interest rate environment. On the other hand, the secondary dealer market for corporate loans is not as well developed as the secondary dealer market for junk bonds, and therefore presents increased market risk relating to liquidity and pricing concerns.
A Portfolio may acquire interests in corporate loans by means of a novation, assignment or participation. In a novation, a Portfolio would succeed to all the rights and obligations of the assigning institution and become a contracting party under the credit agreement with respect to the debt obligation. As an alternative, a Portfolio may purchase an assignment, in which case the Portfolio may be required to rely on the assigning institution to demand payment and enforce its rights against the borrower but would otherwise typically be entitled to all of such assigning institution's rights under the credit agreement. Participation interests in a portion of a debt obligation typically result in a contractual relationship only with the institution selling the participation interest and not with the borrower. In purchasing a loan participation, a Portfolio generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of set-off against the borrower, and the Portfolio may not directly benefit from the collateral supporting the debt obligation in which it has purchased the participation. As a result, a Portfolio will assume the credit risk of both the borrower and the institution selling the participation to the Portfolio.
CYBER SECURITY AND OPERATIONAL RISK. With the increasing use of technology and computer systems in general and, in particular, the Internet to conduct necessary business functions, each Portfolio and its service providers is susceptible to operational, information security and related risks. These risks, which are often collectively referred to as “cyber security” risks, may include deliberate or malicious attacks, as well as unintentional events and occurrences. Cyber security is generally defined as the technology, operations and related protocol surrounding and protecting a user’s computer hardware, network, systems and applications and the data transmitted and stored therewith. These measures ensure the reliability of a user’s systems, as well as the security, availability, integrity, and confidentiality of data assets.
Deliberate cyber attacks can include, but are not limited to, gaining unauthorized access to computer systems in order to misappropriate and/or disclose sensitive or confidential information; deleting, corrupting or modifying data; and causing operational disruptions. Cyber attacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on websites (in order to prevent access to computer networks). In addition to deliberate breaches engineered by external actors, cyber security risks can also result from the conduct of malicious, exploited or careless insiders, whose actions may result in the destruction, release or disclosure of confidential or proprietary information stored on an organization’s systems.
Cyber security failures or breaches, whether deliberate or unintentional, arising from a Portfolios’ third-party service providers (e.g., custodians, financial intermediaries, transfer agents), subadvisers, shareholder usage of unsecure systems to access personal accounts, as well as breaches suffered by the issuers of securities in which the Portfolios invests, may cause significant disruptions in the business operations of the Portfolios. Potential impacts may include, but are not limited to, potential financial losses for the Portfolios and the issuers’ securities, the inability of shareholders to conduct transactions with the Portfolios, an inability of the Portfolios to calculate net asset value (NAV), and disclosures of personal or confidential shareholder information.
In addition to direct impacts on Portfolio shareholders, cyber security failures by a Portfolio and/or its service providers and others may result in regulatory inquiries, regulatory proceedings, regulatory and/or legal and litigation costs to the Portfolios, and reputational damage. The Portfolios may incur reimbursement and other expenses, including the costs of litigation and litigation settlements and additional compliance costs. The Portfolios may also incur considerable expenses in enhancing and upgrading computer systems and systems security following a cyber security failure.
The rapid proliferation of technologies, as well as the increased sophistication and activities of organized crime, hackers, terrorists, and others continue to pose new and significant cyber security threats. Although the Portfolios and its service providers and subadvisers may have established business continuity plans and risk management systems to mitigate cyber security risks, there can be no guarantee or assurance that such plans or systems will be effective, or that all risks that exist, or may develop in the future, have been completely anticipated and identified or can be protected against. Furthermore, the Portfolios cannot control or assure the efficacy of the cyber security plans and systems implemented by third-party service providers, the subadvisers, and the issuers in which a Portfolios invests.
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A Portfolio’s investments or its service providers may be negatively impacted due to operational risks arising from factors such as processing errors and human errors, inadequate or failed internal or external processes, failures in systems and technology, changes in personnel, and errors caused by third-party service providers or trading counterparties. In particular, these errors or failures as well as other technological issues may adversely affect the Portfolios’ ability to calculate their NAVs in a timely manner, including over a potentially extended period. Although the Portfolios attempt to minimize such failures through controls and oversight, it is not possible to identify all of the operational risks that may affect a Portfolio or to develop processes and controls that completely eliminate or mitigate the occurrence of such failures. A Portfolio and its shareholders could be negatively impacted as a result.
DEBT SECURITIES. Debt securities, such as bonds, involve credit risk. This is the risk that the issuer will not make timely payments of principal and interest. The degree of credit risk depends on the issuer's financial condition and on the terms of the bonds. Changes in an issuer's credit rating or the market's perception of an issuer's creditworthiness may also affect the value of a Portfolio's investment in that issuer. Credit risk is reduced to the extent a Portfolio limits its debt investments to US Government securities. All debt securities, however, are subject to interest rate risk. This is the risk that the value of the security may fall when interest rates rise. In general, the market price of debt securities with longer maturities will go up or down more in response to changes in interest rates than the market price of shorter-term securities.
DEPOSITARY RECEIPTS. A Portfolio may invest in the securities of foreign issuers in the form of Depositary Receipts or other securities convertible into securities of foreign issuers. Depositary Receipts may not necessarily be denominated in the same currency as the underlying securities into which they may be converted. American Depositary Receipts (ADRs) and American Depositary Shares (ADSs) are receipts or shares typically issued by an American bank or trust company that evidence ownership of underlying securities issued by a foreign corporation. European Depositary Receipts (EDRs) are receipts issued in Europe that evidence a similar ownership arrangement. Global Depositary Receipts (GDRs) are receipts issued throughout the world that evidence a similar arrangement. Generally, ADRs and ADSs, in registered form, are designed for use in the US securities markets, and EDRs, in bearer form, are designed for use in European securities markets. GDRs are tradable both in the United States and in Europe and are designed for use throughout the world. A Portfolio may invest in unsponsored Depositary Receipts. The issuers of unsponsored Depositary Receipts are not obligated to disclose material information in the United States, and, therefore, there may be less information available regarding such issuers and there may not be a correlation between such information and the market value of the Depositary Receipts. Depositary Receipts are generally subject to the same risks as the foreign securities that they evidence or into or for which they may be converted or exchanged, as well as the risks associated with foreign investments.
DERIVATIVES. A Portfolio may use instruments referred to as derivatives. Derivatives are financial instruments the value of which is derived from another security, a commodity (such as gold or oil), a currency or an index (a measure of value or rates, such as the S&P 500 Index or the prime lending rate). Derivatives allow a Portfolio to increase or decrease the level of risk to which the Portfolio is exposed more quickly and efficiently than transactions in other types of instruments. Each Portfolio may use derivatives for hedging purposes. A Portfolio may also use derivatives to seek to enhance returns. The use of a derivative is speculative if the Portfolio is primarily seeking to achieve gains, rather than offset the risk of other positions. When the Portfolio invests in a derivative for speculative purposes, the Portfolio will be fully exposed to the risks of loss of that derivative, which may sometimes be greater than the derivative's cost. No Portfolio may use any derivative to gain exposure to an asset or class of assets that it would be prohibited by its investment restrictions from purchasing directly.
The use of derivative instruments involves risks different from, and/or possibly greater than, the risks associated with investing directly in the underlying assets or references. The use of derivative instruments is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the portfolio manager is incorrect in the forecasts of security or market values, interest rates or currency exchange rates, as applicable, the investment performance of a Portfolio would be less favorable than it would have been if derivative instruments were not used. Potential losses from certain derivative instruments are unlimited. Derivative instruments can be highly volatile, illiquid, subject to counterparty risk and difficult to value. There is also the risk that changes in the value of a derivative instrument held by a Portfolio for hedging purposes may not correlate with the Portfolio’s investments which are intended to be hedged, which could impact Portfolio performance. A Portfolio may choose not to invest in derivative instruments because of their cost, limited availability or other reasons.
In October 2020, the SEC voted to adopt Rule 18f-4 under the 1940 Act (the Derivatives Rule), which will govern the use of derivatives by registered investment companies. Once implemented, the Derivatives Rule will impose limits on the amount of derivatives exposure a fund may take on and replace the asset segregation framework previously used by funds to comply with Section 18 of the 1940 Act, among other requirements. The extent and impact of the Derivatives Rule on the Portfolios are not yet known. The Derivatives Rule may make the use of derivatives by the Portfolios more costly, may limit the availability of certain types of derivatives, and may otherwise adversely affect the value or performance of the Portfolios' derivative investments.
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EXCHANGE-TRADED FUNDS. A Portfolio may invest in Exchange-Traded Funds (ETFs). ETFs, which may be unit investment trusts or mutual funds, typically hold portfolios of securities designed to track the performance of various broad securities indexes or sectors of such indexes. ETFs provide another means, in addition to futures and options on indexes, of including stock index exposure in these Portfolios' investment strategies. A Portfolio will indirectly bear its proportionate share of any management fees and other expenses paid by such ETF. In addition, an investment in an ETF generally presents the same primary risks as an investment in a conventional fund (i.e., one that is not exchange-traded) that has the same investment objectives, strategies, and policies.
Moreover, to the extent an ETF holds securities traded in markets that close at a different time from the ETF’s listing exchange, liquidity in such securities may be reduced after the applicable closing times. In addition, during the time when the ETF’s listing exchange is open but after the applicable market closing, fixing or settlement times, bid/ask spreads and the resulting premium or discount to the ETF’s shares’ NAV may widen.
FUND OF FUNDS.  A Portfolio that is structured as a “fund of funds” invests primarily in a combination of underlying investment companies which we refer to as “Underlying Portfolios.” In addition to the risks associated with the investment in the Underlying Portfolios, these Portfolios are subject to the following risks:
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To the extent that a Portfolio concentrates its assets among Underlying Portfolios that invest principally in one or several asset classes, a Portfolio may from time to time underperform mutual funds exposed primarily to other asset classes. For example, a Portfolio may be overweighted in the equity asset class when the stock market is falling and the fixed income market is rising. Likewise, a Portfolio may be overweighted in the fixed income asset class when the fixed income market is falling and the stock market is rising.
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The ability of a Portfolio to achieve its investment objective depends on the ability of the selected Underlying Portfolios to achieve their investment objectives. There is a risk that the selected Underlying Portfolios will underperform relevant markets, relevant indices, or other portfolios with similar investment objectives and strategies.
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A Portfolio may incur its pro rata share of the expenses of an Underlying Portfolio in which the Portfolio invests, such as investment advisory and other management expenses, and shareholders incur the operating expenses of these Underlying Portfolios.
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The performance of a Portfolio may be affected by large purchases and redemptions of Underlying Portfolio shares. For example, large purchases and redemptions may cause an Underlying Portfolio to hold a greater percentage of its assets in cash than other portfolios pursuing similar strategies, and large redemptions may cause an Underlying Portfolio to sell assets at inopportune times. Underlying Portfolios that have experienced significant redemptions may, as a result, have higher expense ratios than other portfolios pursuing similar strategies. The Manager and a Portfolio’s subadviser(s) seek to minimize the impact of large purchases and redemptions of Underlying Portfolio shares, but their abilities to do so may be limited.
There is a potential conflict of interest between a Portfolio and its Manager and a Portfolio’s subadviser(s). Because the amount of the investment management fees to be retained by the Manager and their affiliates may differ depending upon which Underlying Portfolios are used in connection with a Portfolio, there is a potential conflict of interest for the Manager and a Portfolio’s subadviser(s) in selecting the Underlying Portfolios. In addition, the Manager and a Portfolio’s subadviser(s) may have an incentive to take into account the effect on an Underlying Portfolio in which the Portfolio may invest in determining whether, and under what circumstances, to purchase or sell shares in that Underlying Portfolio. Although the Manager and a Portfolio’s subadviser(s) take steps to address the potential conflicts of interest, it is possible that the potential conflicts could impact the Portfolios.
In October 2020, the SEC adopted a new regulatory framework, including new Rule 12d1-4 under the 1940 Act, for fund-of-funds arrangements. Rule 12d1-4, which became effective on January 19, 2021, permits a registered investment company to acquire the securities of any other registered investment company or BDC in excess of the limits of the 1940 Act. In connection with new Rule 12d1-4, the SEC also rescinded Rule 12d1-2 and certain exemptive orders permitting fund-of-funds arrangements. These regulatory changes may adversely impact the Portfolios' investment strategies and operations.
HEDGING. Hedging is a strategy in which a derivative or security is used to offset the risks associated with other Portfolio holdings. Losses on the other investment may be substantially reduced by gains on a derivative that reacts in an opposite manner to market movements. While hedging can reduce losses, it can also reduce or eliminate gains or cause losses if the market moves in a different manner than anticipated by a Portfolio or if the cost of the derivative outweighs the benefit of the hedge. Hedging also involves the risk that changes in the value of the derivative will not match those of the holdings being hedged as expected by a Portfolio, in which case any losses on the holdings being hedged may not be reduced or may be increased. The inability to close options and futures positions also could have an adverse impact on a Portfolio's ability to hedge effectively its portfolio. There is also a risk of loss by the Portfolio of margin deposits or collateral in the event of bankruptcy of a broker with whom the Portfolio has an open position in an option, a futures contract or a related option. There can be no assurance that a Portfolio's hedging strategies will be effective or that hedging transactions will be available to a Portfolio. No Portfolio is required to engage in hedging transactions and each Portfolio may choose not to do so.
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INDEXED AND INVERSE SECURITIES. A Portfolio may invest in securities the potential return of which is based on an index or interest rate. As an illustration, a Portfolio may invest in a security whose value is based on changes in a specific index or that pays interest based on the current value of an interest rate index, such as the prime rate. A Portfolio may also invest in a debt security that returns principal at maturity based on the level of a securities index or a basket of securities, or based on the relative changes of two indices. In addition, certain Portfolios may invest in securities the potential return of which is based inversely on the change in an index or interest rate (that is, a security the value of which will move in the opposite direction of changes to an index or interest rate). For example, a Portfolio may invest in securities that pay a higher rate of interest when a particular index decreases and pay a lower rate of interest (or do not fully return principal) when the value of the index increases. If a Portfolio invests in such securities, it may be subject to reduced or eliminated interest payments or loss of principal in the event of an adverse movement in the relevant interest rate, index or indices. Indexed and inverse securities may involve credit risk, and certain indexed and inverse securities may involve leverage risk, liquidity risk and currency risk. A Portfolio may invest in indexed and inverse securities for hedging purposes or to seek to increase returns. When used for hedging purposes, indexed and inverse securities involve correlation risk. (Furthermore, where such a security includes a contingent liability, in the event of such an adverse movement, a Portfolio may be required to pay substantial additional margin to maintain the position.)
INFLATION-PROTECTED SECURITIES. Inflation-protected debt securities tend to react to changes in real interest rates. Real interest rates can be described as nominal interest rates minus the expected impact of inflation. In general, the price of an inflation-protected debt security falls when real interest rates rise, and rises when real interest rates fall. Interest payments on inflation-protected debt securities will vary as the principal and/or interest is adjusted for inflation and may be more volatile than interest paid on ordinary bonds. In periods of deflation, a Portfolio may have no income at all from such investments. Income earned by a shareholder depends on the amount of principal invested.
INITIAL PUBLIC OFFERINGS. Each Portfolio may invest in initial public offerings (IPOs). An IPO is the first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market. The volume of IPOs and the levels at which the newly issued stocks trade in the secondary market are affected by the performance of the stock market overall. If IPOs are brought to the market, availability may be limited and a Portfolio may not be able to buy any shares at the offering price, or if it is able to buy shares, it may not be able to buy as many shares at the offering price as it would like.
Investing in IPOs entails risks. Importantly, the prices of securities involved in IPOs are often subject to greater and more unpredictable price changes than more established stocks. It is difficult to predict what the stock will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, and they are therefore subject to additional uncertainty regarding their future value.
PARTICIPATION NOTES. Participation Notes (P-Notes) are a type of equity-linked derivative which generally are traded over-the-counter. Even though a P-Note is intended to reflect the performance of the underlying equity securities, the performance of a P-Note will not replicate exactly the performance of the issuers or markets that the P-Note seeks to replicate due to transaction costs and other expenses. Investments in P-Notes involve risks normally associated with a direct investment in the underlying securities. In addition, P-Notes are subject to counterparty risk, which is the risk that the broker-dealer or bank that issues the P-Notes will not fulfill its contractual obligation to complete the transaction with a Portfolio.
SWAP AGREEMENTS. Certain Portfolios may enter into swap transactions, including but not limited to, interest rate, index, credit default, total return and, to the extent that it may invest in foreign currency-denominated securities, currency exchange rate swap agreements. In addition, certain portfolios may enter into options on swap agreements (swap options). These swap transactions are entered into in an attempt to obtain a particular return when it is considered desirable to do so, possibly at a lower cost to the Portfolio than if a Portfolio had invested directly in an instrument that yielded that desired return.
Swap agreements are two party contracts entered into primarily by institutional investors for periods typically ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on or calculated with respect to particular predetermined investments or instruments, which may be adjusted for an interest factor. The gross returns to be exchanged or “swapped” between the parties are generally calculated with respect to a “notional amount,” that is, the return on or increase in value of a particular dollar amount invested at a particular interest rate or in a “basket” of securities representing a particular index or other investments or instruments.
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Most swap agreements entered into by a Portfolio would calculate the obligations of the parties to the agreement on a “net basis.” Consequently a Portfolio's current obligations (or rights) under a swap agreement will generally be equal only to the net amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the net amount). The Portfolio's current obligations under a swap agreement will be accrued daily (offset against any amounts owed to the Portfolio) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the segregation of liquid assets.
To the extent that a Portfolio enters into swaps on other than a net basis, the amount maintained in a segregated account will be the full amount of the Portfolio's obligations, if any, with respect to such swaps, accrued on a daily basis. Inasmuch as segregated accounts are established for these hedging transactions, the investment adviser and the Portfolio believe such obligations do not constitute senior securities and, accordingly, will not treat them as being subject to its borrowing restrictions. If there is a default by the other party to such a transaction, the Portfolio will have contractual remedies pursuant to the agreement related to the transaction. Since swaps are individually negotiated, the Portfolio expects to achieve an acceptable degree of correlation between its rights to receive a return on its portfolio securities and its rights and obligations to receive and pay a return pursuant to swaps. The Portfolio will enter into swaps only with parties meeting creditworthiness standards of the investment subadviser. The investment subadviser will monitor the creditworthiness of such parties.
Certain standardized swap transactions are subject to mandatory central clearing and exchange trading. Although central clearing and exchange trading is expected to decrease counterparty risk and increase liquidity compared to bilaterally negotiated swaps, central clearing and exchange trading does not eliminate counterparty risk or illiquidity risk entirely. Depending on the size of a Portfolio and other factors, the margin required under the rules of a clearinghouse and by a clearing member may be in excess of the collateral required to be posted by the Portfolio to support its obligations under a similar bilateral, uncleared swap. However, certain applicable regulators have adopted rules imposing certain margin requirements, including minimums, on uncleared swaps, which may result in the Portfolio and its counterparties posting higher amounts for uncleared swaps.
CREDIT DEFAULT SWAP AGREEMENTS AND SIMILAR INSTRUMENTS. Certain Portfolios may enter into credit default swap agreements and similar agreements, and may also buy credit-linked securities. The credit default swap agreement or similar instrument may have as reference obligations one or more securities that are not currently held by a Portfolio. The protection “buyer” in a credit default contract may be obligated to pay the protection “seller” an up front or a periodic stream of payments over the term of the contract provided generally that no credit event on a reference obligation has occurred. If a credit event occurs, the seller generally must pay the buyer the “par value” (full notional value) of the swap in exchange for an equal face amount of deliverable obligations of the reference entity described in the swap, or the seller may be required to deliver the related net cash amount, if the swap is cash settled. A Portfolio may be either the buyer or seller in the transaction. If a Portfolio is a buyer and no credit event occurs, the Portfolio recovers nothing if the swap is held through its termination date. However, if a credit event occurs, the buyer may elect to receive the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity that may have little or no value. As a seller, a Portfolio generally receives an up front payment or a fixed rate of income throughout the term of the swap, provided that there is no credit event. If a credit event occurs, generally the seller must pay the buyer the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity that may have little or no value.
Credit default swaps and similar instruments involve greater risks than if a Portfolio had invested in the reference obligation directly, since, in addition to general market risks, they are subject to illiquidity risk, counterparty risk and credit risks. A Portfolio will enter into credit default swap agreements and similar instruments only with counterparties who are rated investment grade quality by at least one nationally recognized statistical rating organization at the time of entering into such transaction or whose creditworthiness is believed by the subadviser(s) to be equivalent to such rating. A buyer also will lose its investment and recover nothing should no credit event occur and the swap is held to its termination date. If a credit event were to occur, the value of any deliverable obligation received by the seller, coupled with the up front or periodic payments previously received, may be less than the full notional value it pays to the buyer, resulting in a loss of value to the Portfolio. When a Portfolio acts as a seller of a credit default swap or a similar instrument, it is exposed to many of the same risks of leverage since, if a credit event occurs, the seller may be required to pay the buyer the full notional value of the contract net of any amounts owed by the buyer related to its delivery of deliverable obligations.
CREDIT LINKED SECURITIES. Among the income producing securities in which a Portfolio may invest are credit linked securities, which are issued by a limited purpose trust or other vehicle that, in turn, invests in a derivative instrument or basket of derivative instruments, such a credit default swaps, interest rate swaps and other securities, in order to provide exposure to certain fixed income markets. For instance, a Portfolio may invest in credit linked securities as a cash management tool in order to gain exposure to a certain market and/or to remain fully invested when more traditional income producing securities are not available.
Like an investment in a bond, investments in these credit linked securities represent the right to receive periodic income payments (in the form of distributions) and payment of principal at the end of the term of the security. However, these payments are conditioned on the issuer's receipt of payments from, and the issuer's potential obligations to, the counterparties to the derivative instruments and
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other securities in which the issuer invests. For instance, the issuer may sell one or more credit default swaps, under which the issuer would receive a stream of payments over the term of the swap agreements provided that no event of default has occurred with respect to the referenced debt obligation upon which the swap is based. If a default occurs, the stream of payments may stop and the issuer would be obligated to pay the counterparty the par (or other agreed upon value) of the referenced debt obligation. This, in turn, would reduce the amount of income and principal that a Portfolio would receive. A Portfolio's investments in these instruments are indirectly subject to the risks associated with derivative instruments, including, among others, credit risk, default or similar event risk, counterparty risk, interest rate risk, leverage risk and management risk. It is also expected that the securities will be exempt from registration under the 1933 Act. Accordingly, there may be no established trading market for the securities and they may be classified as illiquid investments.
TOTAL RETURN SWAP AGREEMENTS. Certain Portfolios may enter into total return swap agreements. Total return swap agreements are contracts in which one party agrees to make periodic payments based on the change in market value of the underlying assets, which may include a specified security, basket of securities or securities indices during the specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. Total return swap agreements may be used to obtain exposure to a security or market without owning or taking physical custody of such security or market. Total return swap agreements may effectively add leverage to the Portfolio’s portfolio because, in addition to its total net assets, the Portfolio would be subject to investment exposure on the notional amount of the swap. Total return swap agreements entail the risk that a party will default on its payment obligations to a Portfolio thereunder. Swap agreements also bear the risk that the Portfolio will not be able to meet its obligation to the counterparty. Generally, the Portfolio will enter into total return swaps on a net basis (i.e., the two payment streams are netted out with a Portfolio receiving or paying, as the case may be, only the net amount of the two payments). The net amount of the excess, if any, of a Portfolio's obligations over its entitlements with respect to each total return swap will be accrued on a daily basis, and an amount of cash or liquid instruments having an aggregate net asset value at least equal to the accrued excess will be segregated by a Portfolio. If the total return swap transaction is entered into on other than a net basis, the full amount of a Portfolio's obligations will be accrued on a daily basis, and the full amount of the Portfolio's obligations will be segregated by a Portfolio in an amount equal to or greater than the market value of the liabilities under the total return swap agreement or the amount it would have cost the Portfolio initially to make an equivalent direct investment, plus or minus any amount a Portfolio is obligated to pay or is to receive under the total return swap agreement.
Unless otherwise noted, a Portfolio's net obligations in respect of all swap agreements (i.e., the aggregate net amount owed by the Portfolio) is limited to 15% of its net assets. This limitation does not apply to the AST Bond Portfolios (2021-2032), AST Western Asset Core Plus Bond Portfolio and AST Investment Grade Bond Portfolio.
NON-STANDARD WARRANTS. From time to time, a Portfolio may use synthetic foreign equity securities derivatives in the form non-standard warrants, often referred to as low exercise price warrants or participatory notes or low exercise price options (LEPOs), to gain indirect exposure to issuers in certain countries, such as India. These securities are issued by banks and other financial institutions. The buyer of a low exercise price warrant effectively pays the full value of the underlying common stock at the outset. LEPOs are different from standard warrants in that they do not give their holders the right to receive a security of the issuer upon exercise. Rather, LEPOs pay the holder the difference in price of the underlying security between the date the LEPO was purchased and the date it is sold. LEPOs entail the same risks as other over-the counter derivatives. These include the risk that the counterparty or issuer of the LEPO may not be able to fulfill its obligations, that the holder and counterparty or issuer may disagree as to the meaning or application of contractual terms, or that the instrument may not perform as expected. Additionally, while LEPOs may be listed on an exchange, there is no guaranty that a liquid market will exist or that the counterparty or issuer of a LEPO will be willing to repurchase the LEPO when a Portfolio wishes to sell it. A discussion of the risk factors relating to derivatives is set out in the sub-section entitled “Risk Factors in Derivatives”.
OPTIONS ON SECURITIES AND SECURITIES INDEXES. A Portfolio may invest in options on individual securities, baskets of securities or particular measurements of value or rate (an index), such as an index of the price of treasury securities or an index representative of short term interest rates.
Such investments may be made on exchanges and in the over-the-counter (OTC) markets. In general, exchange-traded options have standardized exercise prices and expiration dates and require the parties to post margin against their obligations, and the performance of the parties' obligations in connection with such options is guaranteed by the exchange or a related clearing corporation. OTC options have more flexible terms negotiated between the buyer and the seller, but generally do not require the parties to post margin and are subject to greater credit risk. OTC options also involve greater liquidity risk. See “Additional Risk Factors of OTC Transactions; Limitations on the Use of OTC Derivatives” below.
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A Portfolio will write only “covered” options. A written option is covered if, so long as a Portfolio is obligated the option, it (1) owns an offsetting position in the underlying security or currency or (2) segregates cash or other liquid assets, in an amount equal to or greater than its obligation under the option.
CALL OPTIONS. A Portfolio may purchase call options on any of the types of securities or instruments in which it may invest. A call option gives a Portfolio the right to buy, and obligates the seller to sell, the underlying security at the exercise price at any time during the option period. A Portfolio also may purchase and sell call options on indices. Index options are similar to options on securities except that, rather than taking or making delivery of securities underlying the option at a specified price upon exercise, an index option gives the holder the right to receive cash upon exercise of the option if the level of the index upon which the option is based is greater than the exercise price of the option.
Each Portfolio may only write (i.e., sell) covered call options on the securities or instruments in which it may invest and to enter into closing purchase transactions with respect to certain of such options. A covered call option is an option in which a Portfolio either owns an offsetting position in the underlying security or currency, or the Portfolio segregates cash or other liquid assets in an amount equal to or greater than its obligation under the option. The principal reason for writing call options is the attempt to realize, through the receipt of premiums, a greater return than would be realized on the securities alone. By writing covered call options, a Portfolio gives up the opportunity, while the option is in effect, to profit from any price increase in the underlying security above the option exercise price. In addition, a Portfolio's ability to sell the underlying security will be limited while the option is in effect unless the Portfolio enters into a closing purchase transaction. A closing purchase transaction cancels out a Portfolio's position as the writer of an option by means of an offsetting purchase of an identical option prior to the expiration of the option it has written. Covered call options also serve as a partial hedge to the extent of the premium received against the price of the underlying security declining.
PUT OPTIONS. A Portfolio may purchase put options to seek to hedge against a decline in the value of its securities or to enhance its return. By buying a put option, a Portfolio acquires a right to sell such underlying securities or instruments at the exercise price, thus limiting the Portfolio's risk of loss through a decline in the market value of the securities or instruments until the put option expires. The amount of any appreciation in the value of the underlying securities or instruments will be partially offset by the amount of the premium paid for the put option and any related transaction costs. Prior to its expiration, a put option may be sold in a closing sale transaction and profit or loss from the sale will depend on whether the amount received is more or less than the premium paid for the put option plus the related transaction costs. A closing sale transaction cancels out a Portfolio's position as the purchaser of an option by means of an offsetting sale of an identical option prior to the expiration of the option it has purchased. A Portfolio also may purchase uncovered put options.
Each Portfolio may write (i.e., sell) put options on the types of securities or instruments that may be held by the Portfolio, provided that such put options are covered, meaning that such options are secured by segregated, liquid instruments. A Portfolio will receive a premium for writing a put option, which increases the Portfolio's return. A Portfolio will not sell puts if, as a result, more than 25% of the Portfolio's net assets would be required to cover its potential obligations under its hedging and other investment transactions.
FUTURES. A Portfolio may engage in transactions in futures and options thereon. Futures are standardized, exchange-traded contracts which obligate a purchaser to take delivery, and a seller to make delivery, of a specific amount of an asset at a specified future date at a specified price. No price is paid upon entering into a futures contract. Rather, upon purchasing or selling a futures contract a Portfolio is required to deposit collateral (margin) equal to a percentage (generally less than 10%) of the contract value. Each day thereafter until the futures position is closed, the Portfolio will pay additional margin representing any loss experienced as a result of the futures position the prior day or be entitled to a payment representing any profit experienced as a result of the futures position the prior day. Futures involve substantial leverage risk.
The sale of a futures contract limits a Portfolio's risk of loss through a decline in the market value of portfolio holdings correlated with the futures contract prior to the futures contract's expiration date. In the event the market value of the portfolio holdings correlated with the futures contract increases rather than decreases, however, a Portfolio will realize a loss on the futures position and a lower return on the portfolio holdings than would have been realized without the purchase of the futures contract.
The purchase of a futures contract may protect a Portfolio from having to pay more for securities as a consequence of increases in the market value for such securities during a period when the Portfolio was attempting to identify specific securities in which to invest in a market the Portfolio believes to be attractive. In the event that such securities decline in value or a Portfolio determines not to complete an anticipatory hedge transaction relating to a futures contract, however, the Portfolio may realize a loss relating to the futures position.
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A Portfolio is also authorized to purchase or sell call and put options on futures contracts including financial futures and stock indices in connection with its hedging activities. Generally, these strategies would be used under the same market and market sector conditions (i.e., conditions relating to specific types of investments) in which the Portfolio entered into futures transactions. A Portfolio may purchase put options or write (i.e., sell) call options on futures contracts and stock indices rather than selling the underlying futures contract in anticipation of a decrease in the market value of its securities. Similarly, a Portfolio can purchase call options, or write put options on futures contracts and stock indices, as a substitute for the purchase of such futures to hedge against the increased cost resulting from an increase in the market value of securities which the Portfolio intends to purchase.
A Portfolio may only write “covered” put and call options on futures contracts. A Portfolio will be considered “covered” with respect to a call option it writes on a futures contract if the Portfolio owns the assets that are deliverable under the futures contract or an option to purchase that futures contract having a strike price equal to or less than the strike price of the “covered” option and having an expiration date not earlier than the expiration date of the “covered” option, or if it segregates for the term of the option cash or other liquid assets equal to the fluctuating value of the optioned future. A Portfolio will be considered “covered” with respect to a put option it writes on a futures contract if it owns an option to sell that futures contract having a strike price equal to or greater than the strike price of the “covered” option, or if it segregates for the term of the option cash or other liquid assets at all times equal in value to the exercise price of the put (less any initial margin deposited by the Portfolio with its custodian with respect to such option). There is no limitation on the amount of a Portfolio's assets that can be segregated.
With respect to futures contracts that are not legally required to “cash settle,” a Portfolio may cover the open position by setting aside or earmarking liquid assets in an amount equal to the market value of the futures contact. With respect to futures that are required to “cash settle,” however, a Portfolio is permitted to set aside or earmark liquid assets in an amount equal to the Portfolio's daily marked to market (net) obligation, if any, (in other words, the Portfolio's daily net liability, if any) rather than the market value of the futures contract. By setting aside assets equal to only its net obligation under cash-settled futures, a Portfolio will have the ability to employ leverage to a greater extent than if the Portfolio were required to segregate assets equal to the full market value of the futures contract.
Each Portfolio has filed a notice of exemption from regulation as a “commodity pool,” and the Manager has filed a notice of exemption from registration as a “commodity pool operator” with respect to each Portfolio, under applicable rules issued by the CFTC under the Commodity Exchange Act (the CEA). In order to continue to claim the “commodity pool” exemption, a Portfolio is limited in its ability to use futures, options and swaps subject to regulation under the CEA for purposes other than bona fide hedging, which is narrowly defined. With respect to transactions other than for bona fide hedging purposes, either: (1) the aggregate initial margin and premiums required to establish a Portfolio’s positions in such investments may not exceed 5% of the liquidation value of the Portfolio’s assets, or (2) the aggregate net notional value of such instruments may not exceed 100% of the liquidation value of the Portfolio’s assets. In addition to meeting one of the foregoing trading limitations, a Portfolio may not market itself as a commodity pool or otherwise as a vehicle for trading in the futures, options or swaps markets.
FOREIGN EXCHANGE TRANSACTIONS. A Portfolio may engage in spot and forward foreign exchange transactions and currency swaps, purchase and sell options on currencies and purchase and sell currency futures and related options thereon (collectively, Currency Instruments) for purposes of hedging against the decline in the value of currencies in which its portfolio holdings are denominated against the US dollar or, with respect to certain Portfolios, to seek to enhance returns. Such transactions could be effected with respect to hedges on non-US dollar denominated securities owned by a Portfolio, sold by a Portfolio but not yet delivered, or committed or anticipated to be purchased by a Portfolio. As an illustration, a Portfolio may use such techniques to hedge the stated value in US dollars of an investment in a yen-denominated security. In such circumstances, for example, the Portfolio may purchase a foreign currency put option enabling it to sell a specified amount of yen for dollars at a specified price by a future date. To the extent the hedge is successful, a loss in the value of the yen relative to the dollar will tend to be offset by an increase in the value of the put option. To offset, in whole or in part, the cost of acquiring such a put option, the Portfolio may also sell a call option which, if exercised, requires it to sell a specified amount of yen for dollars at a specified price by a future date (a technique called a straddle). By selling such a call option in this illustration, the Portfolio gives up the opportunity to profit without limit from increases in the relative value of the yen to the dollar. “Straddles” of the type that may be used by a Portfolio are considered to constitute hedging transactions and are consistent with the policies described above.
FORWARD FOREIGN EXCHANGE TRANSACTIONS. Forward foreign exchange transactions are OTC contracts to purchase or sell a specified amount of a specified currency or multinational currency unit at a price and future date set at the time of the contract. Spot foreign exchange transactions are similar but require current, rather than future, settlements Portfolio will enter into foreign exchange transactions for purposes of hedging either a specific transaction or a portfolio position, or, with respect to certain Portfolios, to seek to enhance returns. A Portfolio may enter into a foreign exchange transaction for purposes of hedging a specific transaction by, for example, purchasing a currency needed to settle a security transaction or selling a currency in which the Portfolio has received or anticipates receiving a dividend or distribution. A Portfolio may enter into a foreign exchange transaction for purposes of hedging a portfolio position by selling forward a currency in which a portfolio position of the Portfolio is denominated or by purchasing a
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currency in which the Portfolio anticipates acquiring a portfolio position in the near future. A Portfolio may also hedge portfolio positions through currency swaps, which are transactions in which one currency is simultaneously bought for a second currency on a spot basis and sold for the second currency on a forward basis. Forward foreign exchange transactions involve substantial currency risk, and also involve credit and liquidity risk.
CURRENCY FUTURES. A Portfolio may also seek to enhance returns or hedge against the decline in the value of a currency against the US dollar through use of currency futures or options thereon. Currency futures are similar to forward foreign exchange transactions except that futures are standardized, exchange-traded contracts. See “Futures” above. Currency futures involve substantial currency risk, and also involve leverage risk.
CURRENCY OPTIONS. A Portfolio may also seek to enhance returns or hedge against the decline in the value of a currency against the US dollar through the use of currency options. Currency options are similar to options on securities, but in consideration for an option premium the writer of a currency option is obligated to sell (in the case of a call option) or purchase (in the case of a put option) a specified amount of a specified currency on or before the expiration date for a specified amount of another currency. A Portfolio may engage in transactions in options on currencies either on exchanges or OTC markets. See “Types of Options” above and “Additional Risk Factors of OTC Transactions; Limitations on the Use of OTC Derivatives” below. Currency options involve substantial currency risk, and may also involve credit, leverage or liquidity risk.
LIMITATIONS ON CURRENCY HEDGING. Most Portfolios will not speculate in Currency Instruments although certain Portfolios may use such instruments to seek to enhance returns. Accordingly, except for portfolios managed by PIMCO and PGIM, a Portfolio will not hedge a currency in excess of the aggregate market value of the securities that it owns (including receivables for unsettled securities sales), or has committed to or anticipates purchasing, which are denominated in such currency. A Portfolio may, however, hedge a currency by entering into a transaction in a Currency Instrument denominated in a currency other than the currency being hedged (a “cross-hedge”). A Portfolio will only enter into a cross-hedge if the Manager believes that (i) there is a demonstrable high correlation between the currency in which the cross-hedge is denominated and the currency being hedged, and (ii) executing a cross-hedge through the currency in which the cross-hedge is denominated will be significantly more cost-effective or provide substantially greater liquidity than executing a similar hedging transaction by means of the currency being hedged.
RISK FACTORS IN HEDGING FOREIGN CURRENCY RISKS. Hedging transactions involving Currency Instruments involve substantial risks, including correlation risk. While a Portfolio's use of Currency Instruments to effect hedging strategies is intended to reduce the volatility of the net asset value of the Portfolio's shares, the net asset value of the Portfolio's shares will fluctuate. Moreover, although Currency Instruments will be used with the intention of hedging against adverse currency movements, transactions in Currency Instruments involve the risk that anticipated currency movements will not be accurately predicted and that the Portfolio's hedging strategies will be ineffective. To the extent that a Portfolio hedges against anticipated currency movements that do not occur, the Portfolio may realize losses and decrease its total return as the result of its hedging transactions. Furthermore, a Portfolio may only engage in hedging activities from time to time and may not be engaging in hedging activities when movements in currency exchange rates occur.
In connection with its trading in forward foreign currency contracts, a Portfolio will contract with a foreign or domestic bank, or foreign or domestic securities dealer, to make or take future delivery of a specified amount of a particular currency. There are no limitations on daily price moves in such forward contracts, and banks and dealers are not required to continue to make markets in such contracts. There have been periods during which certain banks or dealers have refused to quote prices for such forward contracts or have quoted prices with an unusually wide spread between the price at which the bank or dealer is prepared to buy and that at which it is prepared to sell. Governmental imposition of credit controls might limit any such forward contract trading. With respect to its trading of forward contracts, if any, a Portfolio will be subject to the risk of bank or dealer failure and the inability of, or refusal by, a bank or dealer to perform with respect to such contracts. Any such default would deprive the Portfolio of any profit potential or force the Portfolio to cover its commitments for resale, if any, at the current market price and could result in a loss to the Portfolio.
It may not be possible for a Portfolio to hedge against currency exchange rate movements, even if correctly anticipated, in the event that (i) the currency exchange rate movement is so generally anticipated that the Portfolio is not able to enter into a hedging transaction at an effective price, or (ii) the currency exchange rate movement relates to a market with respect to which Currency Instruments are not available and it is not possible to engage in effective foreign currency hedging. The cost to a Portfolio of engaging in foreign currency transactions varies with such factors as the currencies involved, the length of the contract period and prevailing market conditions. Since foreign currency exchange transactions usually are conducted on a principal basis, no fees or commissions are involved.
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RISK FACTORS IN DERIVATIVES. Derivatives are volatile and involve significant risks. In addition to the risks described in the Prospectus, the use of derivatives for hedging purposes involves correlation risk. If the value of the derivative moves more or less than the value of the hedged instruments, a Portfolio will experience a gain or loss that will not be completely offset by movements in the value of the hedged instruments.
A Portfolio intends to enter into transactions involving derivatives only if there appears to be a liquid secondary market for such instruments or, in the case of illiquid instruments traded in OTC transactions, such instruments satisfy the criteria set forth below under “Additional Risk Factors of OTC Transactions; Limitations on the Use of OTC Derivatives.” However, there can be no assurance that, at any specific time, either a liquid secondary market will exist for a derivative or the Portfolio will otherwise be able to sell such instrument at an acceptable price. It may therefore not be possible to close a position in a derivative without incurring substantial losses, if at all.
FOREIGN INVESTMENT RISKS. Certain Portfolios may invest in foreign equity and/or debt securities. Foreign debt securities include certain foreign bank obligations and US dollar or foreign currency-denominated obligations of foreign governments or their subdivisions, agencies and instrumentalities, international agencies and supranational entities.
Foreign Market Risk. Portfolios that may invest in foreign securities offer the potential for more diversification than Portfolios that invest only in the United States because securities traded on foreign markets have often (though not always) performed differently than securities in the United States. However, such investments involve special risks not present in US investments that can increase the chances that a Portfolio will lose money. In particular, a Portfolio is subject to the risk that, because there are generally fewer investors on foreign exchanges and a smaller number of shares traded each day, it may be difficult for the Portfolio to buy and sell securities on those exchanges. In addition, prices of foreign securities may fluctuate more than prices of securities traded in the United States.
Foreign Economy Risk. The economies of certain foreign markets often do not compare favorably with that of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources, and balance of payments position. Certain foreign economies may rely heavily on particular industries or foreign capital and are more vulnerable to diplomatic developments, the imposition of economic sanctions against a particular country or countries, changes in international trading patterns, trade barriers, and other protectionist or retaliatory measures. Investments in foreign markets may also be adversely affected by governmental actions such as the imposition of capital controls, nationalization of companies or industries, expropriation of assets, or the imposition of punitive taxes. In addition, the governments of certain countries may prohibit or impose substantial restrictions on foreign investing in their capital markets or in certain industries. Any of these actions could severely affect securities prices and impair a Portfolio's ability to purchase or sell foreign securities, transfer a Portfolio's assets or income back into the United States, or otherwise adversely affect a Portfolio's operations. Other foreign market risks include foreign exchange controls, difficulties in pricing securities, defaults on foreign government securities, difficulties in enforcing favorable legal judgments in foreign courts, and political and social instability. Legal remedies available to investors in certain foreign countries may be less extensive than those available to investors in the United States or other foreign countries.
Foreign Market Disruption and Geopolitical Risks. International wars or conflicts and geopolitical developments in foreign countries, along with instability in regions such as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the United States or around the world, public health epidemics such as the outbreak of infectious diseases like the recent global outbreak of the novel coronavirus disease (“COVID-19”) or the 2014–2016 outbreak in West Africa of the Ebola virus, and other similar events could adversely affect the U.S. and foreign financial markets and may cause further long-term economic uncertainties in the United States and worldwide generally.
Currency Risk and Exchange Risk. Securities in which a Portfolio invests may be denominated or quoted in currencies other than the US dollar. Changes in foreign currency exchange rates will affect the value of a Portfolio's portfolio. Generally, when the US dollar rises in value against a foreign currency, a security denominated in that currency loses value because the currency is worth fewer US dollars. Conversely, when the US dollar decreases in value against a foreign currency, a security denominated in that currency gains value because the currency is worth more US dollars. This risk, generally known as “currency risk,” means that a stronger US dollar will reduce returns for US investors, while a weak US dollar will increase those returns.
Governmental Supervision and Regulation/Accounting Standards. Many foreign governments supervise and regulate stock exchanges, brokers and the sale of securities less than does the United States. Some countries may not have laws to protect investors comparable to the US securities laws. For example, some foreign countries may have no laws or rules against insider trading. Insider trading occurs when a person buys or sells a company's securities based on nonpublic information about that company. Accounting standards in other countries are not necessarily the same as in the United States. If the accounting standards in another country do not require as much detail as US accounting standards, it may be harder for Portfolio management to completely and accurately determine a company's financial condition.
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Certain Risks of Holding Portfolio Assets Outside the United States. A Portfolio generally holds its foreign securities and cash in foreign banks and securities depositories. Some foreign banks and securities depositories may be recently organized or new to the foreign custody business. In addition, there may be limited or no regulatory oversight over their operations. Also, the laws of certain countries may put limits on a Portfolio's ability to recover its assets if a foreign bank or depository or issuer of a security or any of their agents goes bankrupt. In addition, it is often more expensive for a Portfolio to buy, sell and hold securities in certain foreign markets than in the United States. The increased expense of investing in foreign markets reduces the amount a Portfolio can earn on its investments and typically results in a higher operating expense ratio for the Portfolio as compared to investment companies that invest only in the United States.
Settlement Risk. Settlement and clearance procedures in certain foreign markets differ significantly from those in the United States. Foreign settlement procedures and trade regulations also may involve certain risks (such as delays in payment for or delivery of securities) not typically generated by the settlement of US investments. Communications between the United States and emerging market countries may be unreliable, increasing the risk of delayed settlements or losses of security certificates. Settlements in certain foreign countries at times have not kept pace with the number of securities transactions; these problems may make it difficult for a Portfolio to carry out transactions. If a Portfolio cannot settle or is delayed in settling a purchase of securities, it may miss attractive investment opportunities and certain of its assets may be uninvested with no return earned thereon for some period. If a Portfolio cannot settle or is delayed in settling a sale of securities, it may lose money if the value of the security then declines or, if it has contracted to sell the security to another party, the Portfolio could be liable to that party for any losses incurred.
Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to foreign withholding taxes, thereby reducing the amount available for distribution to shareholders.
Certain transactions in derivatives (such as futures transactions or sales of put options) involve substantial leverage risk and may expose a Portfolio to potential losses, which exceed the amount originally invested by the Portfolio. When a Portfolio engages in such a transaction, the Portfolio will deposit in a segregated account at its custodian liquid securities with a value at least equal to the Portfolio's exposure, on a mark-to-market basis, to the transaction (as calculated pursuant to requirements of the SEC). Such segregation will ensure that a Portfolio has assets available to satisfy its obligations with respect to the transaction, but will not limit the Portfolio's exposure to loss.
Additional Risk Factors of OTC Transactions; Limitations on the Use of OTC Derivatives. Certain derivatives traded in OTC markets, including indexed securities, swaps and OTC options, involve substantial liquidity risk. The absence of liquidity may make it difficult or impossible for a Portfolio to sell such instruments promptly at an acceptable price. The absence of liquidity may also make it more difficult for a Portfolio to ascertain a market value for such instruments. A Portfolio will, therefore, acquire illiquid OTC instruments (i) if the agreement pursuant to which the instrument is purchased contains a formula price at which the instrument may be terminated or sold, or (ii) for which the Manager anticipates the Portfolio can receive on each business day at least two independent bids or offers, unless a quotation from only one dealer is available, in which case that dealer's quotation may be used.
Because derivatives traded in OTC markets are not guaranteed by an exchange or clearing corporation and generally do not require payment of margin, to the extent that a Portfolio has unrealized gains in such instruments or has deposited collateral with its counterparty the Portfolio is at risk that its counterparty will become bankrupt or otherwise fail to honor its obligations. A Portfolio will attempt to minimize the risk that a counterparty will become bankrupt or otherwise fail to honor its obligations by engaging in transactions in derivatives traded in OTC markets only with financial institutions that appear to have substantial capital or that have provided the Portfolio with a third-party guaranty or other credit enhancement.
RECENT EVENTS IN EUROPEAN COUNTRIES. A number of countries in Europe have experienced severe economic and financial difficulties. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts; many other issuers have faced difficulties obtaining credit or refinancing existing obligations; financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit; and financial markets in Europe and elsewhere have experienced extreme volatility and declines in asset values and liquidity. These difficulties may continue, worsen or spread within and beyond Europe. Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world.
The United Kingdom formally left the European Union (“EU”) on January 31, 2020 (a measure commonly referred to as “Brexit”). In December 2020, the United Kingdom and the EU entered into a new trading relationship. The agreement allows for continued trading free of tariffs, but institutes other new requirements for trading between the United Kingdom and the EU.
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Since the citizens of the United Kingdom voted via referendum to leave the EU in June 2016, global financial markets have experienced significant volatility due to the uncertainty around Brexit. Even with a new trading relationship having been established, there will likely continue to be considerable uncertainty about the potential impact of these developments on United Kingdom, European and global economies and markets. There is also the possibility of withdrawal movements within other EU countries and the possibility of additional political, economic and market uncertainty and instability. Brexit and any similar developments may have negative effects on economies and markets, such as increased volatility and illiquidity and potentially lower economic growth in the United Kingdom, EU and globally, which may adversely affect the value of a Portfolio’s investments. Whether or not a Portfolio invests in securities of issuers located in Europe or with significant exposure to European issuers or countries, these events could result in losses to the Portfolio, as there may be negative effects on the value and liquidity of the Portfolio’s investments and/or the Portfolio's ability to enter into certain transactions.
LIBOR AND OTHER REFERENCE RATES. A Portfolio’s investments, payment obligations and financing terms may be based on floating rates, such as LIBOR, European Interbank Offer Rate (EURIBOR), Sterling Overnight Interbank Average Rate (SONIA), and other similar types of reference rates (Reference Rates). The elimination of a Reference Rate or any other changes or reforms to the determination or supervision of a Reference Rate could have an adverse impact on the market for, or value of, any securities or payments linked to those Reference Rates. In addition, any substitute Reference Rate and any pricing adjustments imposed by a regulator or by counterparties or otherwise may adversely affect the Portfolio’s performance and/or NAV.
In 2017, the head of the United Kingdom’s Financial Conduct Authority announced a desire to phase out the use of LIBOR by the end of 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement Reference Rate. As such, the potential effect of a transition away from LIBOR on the Portfolio or the financial instruments in which the Portfolio invests cannot yet be determined.
The Alternative Reference Rates Committee, a group of large US banks working with the Federal Reserve, announced its selection of the Secured Overnight Financing Rate (SOFR), which is intended to be a broad measure of secured overnight US Treasury repurchase agreement rates, as an appropriate replacement for LIBOR. The Federal Reserve Bank of New York began publishing the SOFR in 2018 with the expectation that it could be used on a voluntary basis in new instruments and transactions. Bank working groups and regulators in other countries have suggested other alternatives for their markets, including the SONIA in England.
Markets are slowly developing in response to these new rates and transition planning is at a relatively early stage. It is expected that industry trade associations and market participants will focus on how the Reference Rates and spreads (if any) in existing contracts or instruments may be amended, whether through market-wide protocols, fallback contractual provisions, bespoke negotiations, amendments or otherwise. The transition process might lead to increased volatility and illiquidity in markets that currently rely on LIBOR to determine interest rates. It could also lead to a reduction in the value of some LIBOR-based investments and reduce the effectiveness of new hedges placed against existing LIBOR-based instruments. Because the usefulness of LIBOR as a Reference Rate may deteriorate during the transition period, these effects could materialize prior to the end of 2021.Nonetheless, the termination of Reference Rates, such as LIBOR, presents significant financial risks to the Portfolios.
DISTRESSED SECURITIES. A Portfolio may invest in securities, including corporate loans purchased in the secondary market, which are the subject of bankruptcy proceedings or otherwise in default as to the repayment of principal and/or interest at the time of acquisition by the Portfolio or are rated in the lower rating categories (Ca or lower by Moody's and CC or lower by S&P or Fitch) or which, if unrated, are in the judgment of the Manager of equivalent quality (Distressed Securities). Investment in Distressed Securities is speculative and involves significant risks. Distressed Securities frequently do not produce income while they are outstanding and may require a Portfolio to bear certain extraordinary expenses in order to protect and recover its investment.
A Portfolio will generally make such investments only when the Manager believes it is reasonably likely that the issuer of the Distressed Securities will make an exchange offer or will be the subject of a plan of reorganization pursuant to which the Portfolio will receive, purchase, or make commitments to purchase, new securities or levered loans. However, there can be no assurance that such an exchange offer will be made or that such a plan of reorganization will be adopted. In addition, a significant period of time may pass between the time at which a Portfolio makes its investment in Distressed Securities and the time that any such exchange offer or plan of reorganization is completed. During this period, it is unlikely that a Portfolio will receive any interest payments on the Distressed Securities, the Portfolio will be subject to significant uncertainty as to whether or not the exchange offer or plan of reorganization will be completed and the Portfolio may be required to bear certain extraordinary expenses to protect and recover its investment. Even if an exchange offer is made or plan of reorganization is adopted with respect to Distressed Securities held by a Portfolio, there can be no assurance that the securities or other assets received by a Portfolio in connection with such exchange offer or plan of reorganization will not have a lower value or income potential than may have been anticipated when the investment was
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made. Moreover, any securities received by a Portfolio upon completion of an exchange offer or plan of reorganization may be restricted as to resale. As a result of a Portfolio's participation in negotiations with respect to any exchange offer or plan of reorganization with respect to an issuer of Distressed Securities, the Portfolio may be restricted from disposing of such securities.
ILLIQUID INVESTMENTS. Pursuant to Rule 22e-4 under the 1940 Act, a Portfolio (other than the Government Money Market Portfolio) may not acquire any “illiquid investment” if, immediately after the acquisition, the Portfolio would have invested more than 15% of its net assets in illiquid investments that are assets. An “illiquid investment” is any investment that a Portfolio reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Illiquid investments include repurchase agreements with a notice or demand period of more than seven days, certain over-the-counter derivative instruments, and securities and other financial instruments that are not readily marketable, unless, based upon a review of the relevant market, trading and investment-specific considerations, those investments are determined not to be illiquid. The Trust has implemented a liquidity risk management program and related procedures to identify illiquid investments pursuant to Rule 22e-4, and the Board has approved the designation of the Manager to administer the Trust’s liquidity risk management program and related procedures. The Government Money Market Portfolio may invest up to 5% of its net assets in illiquid investments. The 15% and 5% limits are applied as of the date a Portfolio purchases an illiquid investment. It is possible that a Portfolio's holding of illiquid investments could exceed the 15% limit (5% for the Government Money Market Portfolio) as a result of, for example, market developments or redemptions.
Each Portfolio may purchase certain restricted securities that can be resold to institutional investors and which may be classified as illiquid investments pursuant to the Trust’s liquidity risk management program. In many cases, those securities are traded in the institutional market under Rule 144A under the 1933 Act and are called Rule 144A securities.
Investments in illiquid investments involve more risks than investments in similar securities that are readily marketable. Illiquid investments may trade at a discount from comparable, more liquid investments. Investment of a Portfolio's assets in illiquid investments may restrict the ability of the Portfolio to dispose of its investments in a timely fashion and for a fair price as well as its ability to take advantage of market opportunities. The risks associated with illiquidity will be particularly acute where a Portfolio's operations require cash, such as when a Portfolio has net redemptions, and could result in the Portfolio borrowing to meet short-term cash requirements or incurring losses on the sale of illiquid investments.
Illiquid investments are often restricted securities sold in private placement transactions between issuers and their purchasers and may be neither listed on an exchange nor traded in other established markets. In many cases, the privately placed securities may not be freely transferable under the laws of the applicable jurisdiction or due to contractual restrictions on resale. To the extent privately placed securities may be resold in privately negotiated transactions, the prices realized from the sales could be less than those originally paid by the Portfolio or less than the fair value of the securities. In addition, issuers whose securities are not publicly traded may not be subject to the disclosure and other investor protection requirements that may be applicable if their securities were publicly traded. If any privately placed securities held by a Portfolio are required to be registered under the securities laws of one or more jurisdictions before being resold, the Portfolio may be required to bear the expenses of registration. Private placement investments may involve investments in smaller, less seasoned issuers, which may involve greater risks than investments in more established companies. These issuers may have limited product lines, markets or financial resources, or they may be dependent on a limited management group. In making investments in private placement securities, a Portfolio may obtain access to material non-public information, which may restrict the Portfolio's ability to conduct transactions in those securities.
INVESTMENT IN EMERGING MARKETS. Certain Portfolios may invest in the securities of issuers domiciled in various countries with emerging capital markets. Specifically, a country with an emerging capital market includes, but is not necessarily limited to, any country that the World Bank, the International Finance Corporation, the United Nations or its authorities has determined to have a low or middle income economy. In addition, the subadviser has broad discretion to identify or determine those countries that it considers to qualify as emerging markets. Countries with emerging markets can be found in regions such as Asia, Latin America, Eastern Europe and Africa. Investments in emerging markets may be more susceptible to the risks associated with foreign investments.
Such capital markets are emerging in a dynamic political and economic environment brought about by events over recent years that have reshaped political boundaries and traditional ideologies. In such a dynamic environment, there can be no assurance that these capital markets will continue to present viable investment opportunities for a Portfolio. In the past, governments of such nations have expropriated substantial amounts of private property, and most claims of the property owners have never been fully settled. There is no assurance that such expropriations will not reoccur. In such an event, it is possible that a Portfolio could lose the entire value of its investments in the affected markets. In addition to withholding taxes on investment income, some countries with emerging markets may impose differential capital gains taxes on foreign investors.
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Investments in the securities of issuers domiciled in countries with emerging capital markets involve certain additional risks not involved in investments in securities of issuers in more developed capital markets, such as (i) low or non-existent trading volume, resulting in a lack of liquidity and increased volatility in prices for such securities, as compared to securities of comparable issuers in more developed capital markets, (ii) uncertain national policies and social, political and economic instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of inflation or unfavorable diplomatic developments, (iii) possible fluctuations in exchange rates, differing legal systems and the existence or possible imposition of exchange controls, custodial restrictions or other foreign or US governmental laws or restrictions applicable to such investments, (iv) national policies that may limit a Portfolio’s investment opportunities such as restrictions on investment in issuers or industries deemed sensitive to national interests, and (v) the lack or relatively early development of legal structures governing private and foreign investments and private property. In addition to withholding taxes on investment income, some countries with emerging markets may impose differential capital gains taxes on foreign investors.
Also, there may be less publicly available information about issuers in emerging markets than would be available about issuers in more developed capital markets, and such issuers may not be subject to accounting, auditing and financial reporting standards and requirements comparable to those to which US companies are subject. In certain countries with emerging capital markets, reporting standards vary widely. As a result, traditional investment measurements used in the United States, such as price/earnings ratios, may not be applicable. Emerging market securities may be substantially less liquid and more volatile than those of mature markets, and companies may be held by a limited number of persons. This may adversely affect the timing and pricing of a Portfolio’s acquisition or disposal of securities.
Practices in relation to settlement of securities transactions in emerging markets involve higher risks than those in developed markets, in part because a Portfolio will need to use brokers and counterparties that are less well capitalized, and custody and registration of assets in some countries may be unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer or refusal to recognize ownership exists in some emerging markets, and, along with other factors, could result in ownership registration being completely lost. A Portfolio would absorb any loss resulting from such registration problems and may have no successful claim for compensation.
Infectious Illness Risk. The Portfolios or the securities in which the Portfolios invest may be adversely affected by the spread of infectious illness or other public health issues like pandemics or epidemics. Such infectious illnesses or public health issues may have a greater adverse impact on emerging and less developed markets.
An outbreak of an infectious respiratory illness, the novel coronavirus disease (“COVID-19”), was first detected in 2019 and continues to spread globally. The COVID-19 pandemic and the related governmental and public responses have had, and may continue to have, an impact on the Portfolios' investments and net asset value(s) and have led, and may continue to lead, to increased market volatility and the potential for illiquidity in certain classes of securities, sectors and markets.
Preventative or protective actions that governments may take with respect to COVID-19 or other pandemic or epidemic diseases may result in periods of business disruption, business closures, inability to obtain raw materials, supplies and component parts, and reduced or disrupted operations for the issuers in which the Portfolio invests. Government intervention in markets may impact interest rates, market volatility and securities pricing. The occurrence, reoccurrence and pendency of such diseases could adversely affect the economies (including through changes in business activity and increased unemployment) and financial markets either in specific countries or worldwide. Such impacts may be short term or may last for an extended period of time. Other infectious illnesses that may arise in the future could have similar or other unforeseen effects.
RESTRICTIONS ON CERTAIN INVESTMENTS. A number of publicly traded closed-end investment companies have been organized to facilitate indirect foreign investment in developing countries, and certain of such countries, such as Thailand, South Korea, Chile and Brazil have specifically authorized such Portfolios. There also are investment opportunities in certain of such countries in pooled vehicles that resemble open-end investment companies. In accordance with the 1940 Act, a Portfolio may invest up to 10% of its total assets in securities of other investment companies, not more than 5% of which may be invested in any one such company. In addition, under the 1940 Act, a Portfolio may not own more than 3% of the total outstanding voting stock of any investment company. These restrictions on investments in securities of investment companies may limit opportunities for a Portfolio to invest indirectly in certain developing countries. New shares of certain investment companies may at times be acquired only at market prices representing premiums to their net asset values. If a Portfolio acquires shares of other investment companies, shareholders would bear both their proportionate share of expenses of the Portfolio (including management and advisory fees) and, indirectly, the expenses of such other investment companies. See also “Investments in Other Investment Companies.”
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RESTRICTIONS ON FOREIGN INVESTMENTS IN ASIA-PACIFIC COUNTRIES. Some developing Asia-Pacific countries prohibit or impose substantial restrictions on investments in their capital markets, particularly their equity markets, by foreign entities such as a Portfolio. As illustrations, certain countries may require governmental approval prior to investments by foreign persons or limit the amount of investment by foreign persons in a particular company or limit the investment by foreign persons to only a specific class of securities of a company which may have less advantageous terms (including price) than securities of the company available for purchase by nationals. There can be no assurance that a Portfolio will be able to obtain required governmental approvals in a timely manner. In addition, changes to restrictions on foreign ownership of securities subsequent to a Portfolio's purchase of such securities may have an adverse effect on the value of such shares. Certain countries may restrict investment opportunities in issuers or industries deemed important to national interests.
The manner in which foreign investors may invest in companies in certain developing Asia-Pacific countries, as well as limitations on such investments, also may have an adverse impact on the operations of a Portfolio. For example, a Portfolio may be required in certain of such countries to invest initially through a local broker or other entity and then have the shares purchased re-registered in the name of the Portfolio. Re-registration may in some instances not be able to occur on a timely basis, resulting in a delay during which a Portfolio may be denied certain of its rights as an investor, including rights as to dividends or to be made aware of certain corporate actions. There also may be instances where a Portfolio places a purchase order but is subsequently informed, at the time of re-registration, that the permissible allocation of the investment to foreign investors has been filled, depriving the Portfolio of the ability to make its desired investment at that time.
Substantial limitations may exist in certain countries with respect to a Portfolio's ability to repatriate investment income, capital or the proceeds of sales of securities by foreign investors, or by temporary market closures in such countries. A Portfolio could be adversely affected by delays in, or a refusal to grant, any required governmental approval for repatriation of capital, as well as by the application to the Portfolio of any restrictions on investments. For example, in September 1998, Malaysia imposed currency controls that limited a Portfolio's ability to repatriate proceeds of Malaysian investments. It is possible that Malaysia, or certain other countries may impose similar restrictions or other restrictions relating to their currencies or to securities of issuers in those countries. In addition, in 2020, Chinese exchanges were temporarily closed due to the outbreak of Coronavirus, an infectious disease. To the extent that such restrictions, market closure, and other relevant market, trading and investment-specific considerations have the effect of making certain investments illiquid, securities may not be available to meet redemptions. Depending on a variety of financial factors, the percentage of a Portfolio's portfolio subject to currency controls may increase. In the event other countries impose similar controls, the portion of the Portfolio's assets that may be used to meet redemptions may be further decreased. Even where there is no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects of the operations of a Portfolio. For example, investments may be withdrawn from the People's Republic of China only in US or Hong Kong dollars and only at an exchange rate established by the government once each week. In certain countries, banks or other financial institutions may be among the leading companies or have actively traded securities. The 1940 Act restricts a Portfolio's investments in any equity securities of an issuer that, in its most recent fiscal year, derived more than 15% of its revenues from “securities related activities,” as defined by the rules thereunder. These provisions may restrict a Portfolio's investments in certain foreign banks and other financial institutions.
RISK OF INVESTMENTS IN THE PEOPLE’S REPUBLIC OF CHINA (PRC). Certain Portfolios may invest in securities and instruments that are economically tied to the People’s Republic of China (PRC). The risks of investing in foreign securities and emerging market countries apply to investments economically tied to the PRC. In addition, investments economically tied to the PRC are subject to: (i) inefficiencies resulting from erratic growth; (ii) the unavailability of consistently-reliable economic data; (iii) potentially high rates of inflation; (iv) dependence on exports and international trade; (v) relatively high levels of asset price volatility; (vi) small-market capitalization; (vii) less liquidity and limited accessibility by foreign investors; (viii) greater competition from regional economies; (ix) fluctuations in currency exchange rates or currency devaluation by the PRC government or central bank, particularly in light of the relative lack of currency hedging instruments and controls on the ability to exchange local currency for US dollars; (x) the relatively small size and absence of operating history of many Chinese companies; (xi) the developing nature of the legal and regulatory framework for securities markets, custody arrangements and commerce; (xii) uncertainty and potential changes with respect to the rules and regulations of PRC market access programs through which such investments are made; (xiii) the commitment of the government of the PRC to continue with its economic reforms; and (xiv) the risk that Chinese regulators may suspend trading in Chinese issuers (or permit such issuers to suspend trading) during market disruptions, natural disasters or health crises, such as an outbreak of an infectious disease and that such suspensions may be widespread. In addition, there is a lack of clarity in the laws and regulations of the PRC, and a lower level of regulation and enforcement activity in these securities markets relative to more developed international markets.
The PRC is ruled by the Communist Party. Investments in the PRC are subject to risks associated with greater governmental control over, and involvement in, the economy. The PRC manages its currency at artificial levels relative to the US dollar, rather than at levels determined by the market. This type of system can lead to sudden and large adjustments in the currency, which, in turn, can have a
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disruptive and negative effect on foreign investors. The PRC also may restrict the free conversion of its currency into foreign currencies, including the US dollar. Currency repatriation restrictions may have the effect of making securities and instruments tied to the PRC relatively illiquid, particularly in connection with redemption requests. In addition, the government of the PRC exercises significant control over economic growth through direct and heavy involvement in resource allocation and monetary policy, control over payment of foreign currency-denominated obligations and provision of preferential treatment to particular industries and/or companies. The PRC has historically been prone to natural disasters, such as droughts, floods, earthquakes and tsunamis, and the region’s economy may be affected by such environmental events in the future. A Portfolio’s investment in the PRC is, therefore, subject to the risk of such events.
On November 12, 2020, the U.S. President signed an Executive Order that prohibits U.S. persons (which includes individuals and entities like the Portfolios) from purchasing or investing in publicly-traded securities of companies identified by the U.S. government as “Communist Chinese military companies.” The Executive Order became effective on January 11, 2021, and could limit the Portfolios' ability to invest in certain Chinese companies' publicly-traded securities.
Hong Kong Political Risk. Hong Kong reverted to Chinese sovereignty on July 1, 1997, as a Special Administrative Region (SAR) of the PRC under the principle of “one country, two systems.” Although the PRC is obligated to maintain the current capitalist economic and social system of Hong Kong through June 30, 2047, the continuation of economic and social freedoms enjoyed in Hong Kong is dependent on the government of the PRC. Since 1997, there have been tensions between the Chinese government and many people in Hong Kong who perceive the PRC as tightening control over Hong Kong’s semi-autonomous liberal political, economic, legal and social framework. Recent protests and unrest have increased tensions even further. Due to the interconnected nature of the Hong Kong and Chinese economies, this instability in Hong Kong may cause uncertainty in the Hong Kong and Chinese markets. In addition, the Hong Kong dollar trades at a fixed exchange rate in relation to (or, is “pegged” to) the U.S. dollar, which has contributed to the growth and stability of the Hong Kong economy. However, it is uncertain how long the currency peg will continue, or what effect the establishment of an alternative exchange rate system would have on the Hong Kong economy. Because the Portfolios’ NAVs are denominated in U.S. dollars, the establishment of an alternative exchange rate system could result in a decline in the Portfolios’ NAVs.
RISK OF INVESTING THROUGH STOCK CONNECT. China A-shares (A-shares) are equity securities of companies based in mainland China that trade on Chinese stock exchanges such as the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE). Foreign investment in A-shares on the SSE and SZSE has historically not been permitted, other than through a license granted under regulations in the People’s Republic of China (PRC) known as the Qualified Foreign Institutional Investor and Renminbi (RMB) Qualified Foreign Institutional Investor systems. Each license permits investment in A-shares only up to a specified quota.
Investment in eligible A-shares listed and traded on the SSE is also permitted through the Shanghai-Hong Kong Stock Connect program (Stock Connect). Stock Connect is a securities trading and clearing program established by Hong Kong Securities Clearing Company Limited (HKSCC), the SSE and China Securities Depository and Clearing Corporation Limited (CSDCC) that aims to provide mutual stock market access between the PRC and Hong Kong by permitting investors to trade and settle shares on each market through their local exchanges. Certain Portfolios may invest in A-shares through Stock Connect or on such other stock exchanges in China which participate in Stock Connect from time to time. Under Stock Connect, the Portfolio’s trading of eligible A-shares listed on the SSE would be effectuated through its Hong Kong broker.
Although no individual investment quotas or licensing requirements apply to investors in Stock Connect, trading through Stock Connect’s Northbound Trading Link is subject to aggregate and daily investment quota limitations that require that buy orders for A-shares be rejected once the remaining balance of the relevant quota drops to zero or the daily quota is exceeded (although the Portfolio will be permitted to sell A-shares regardless of the quota balance). These limitations may restrict the Portfolio from investing in A-shares on a timely basis, which could affect the Portfolio’s ability to effectively pursue its investment strategy. Investment quotas are also subject to change.
Investment in eligible A-shares through Stock Connect is subject to trading, clearance and settlement procedures that could pose risks to the Portfolio. A-shares purchased through Stock Connect generally may not be sold or otherwise transferred other than through Stock Connect in accordance with applicable rules. For example, PRC regulations require that in order for an investor to sell any A-shares on a certain trading day, there must be sufficient A-shares in the investor’s account before the market opens on that day. If there are insufficient A-shares in the investor’s account, the sell order will be rejected by the SSE. The Stock Exchange of Hong Kong (SEHK) carries out pre-trade checking on sell orders of certain stocks listed on the SSE market (SSE Securities) of its participants (i.e., stock brokers) to ensure that this requirement is satisfied. While shares must be designated as eligible to be traded under Stock Connect, those shares may also lose such designation, and if this occurs, such shares may be sold but cannot be purchased through Stock Connect. In addition, Stock Connect will only operate on days when both the Chinese and Hong Kong markets are open for trading and when banks in both markets are open on the corresponding settlement days. Therefore, an investment in A-shares through
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Stock Connect may subject the Portfolio to a risk of price fluctuations on days where the Chinese market is open, but Stock Connect is not trading. Moreover, day (turnaround) trading is not permitted on the A-shares market. If an investor buys A-shares on day “T,” the investor will only be able to sell the A-shares on or after day T+1. Further, since all trades of eligible Stock Connect A-shares must be settled in RMB, investors must have timely access to a reliable supply of offshore RMB, which cannot be guaranteed.
A-shares held through the nominee structure under Stock Connect will be held through HKSCC as nominee on behalf of investors. The precise nature and rights of the Portfolio as the beneficial owner of the SSE Securities through HKSCC as nominee is not well defined under PRC law. There is lack of a clear definition of, and distinction between, legal ownership and beneficial ownership under PRC law and there have been few cases involving a nominee account structure in the PRC courts. The exact nature and methods of enforcement of the rights and interests of the Portfolio under PRC law is also uncertain. In the unlikely event that HKSCC becomes subject to winding up proceedings in Hong Kong there is a risk that the SSE Securities may not be regarded as held for the beneficial ownership of the Portfolio or as part of the general assets of HKSCC available for general distribution to its creditors. Notwithstanding the fact that HKSCC does not claim proprietary interests in the SSE Securities held in its omnibus stock account in the CSDCC, the CSDCC as the share registrar for SSE listed companies will still treat HKSCC as one of the shareholders when it handles corporate actions in respect of such SSE Securities. HKSCC monitors the corporate actions affecting SSE Securities and keeps participants of Central Clearing and Settlement System (CCASS) informed of all such corporate actions that require CCASS participants to take steps in order to participate in them. Investors may only exercise their voting rights by providing their voting instructions to the HKSCC through participants of the CCASS. All voting instructions from CCASS participants will be consolidated by HKSCC, who will then submit a combined single voting instruction to the relevant SSE-listed company.
The Portfolio’s investments through Stock Connect’s Northbound Trading Link are not covered by Hong Kong’s Investor Compensation Portfolio. Hong Kong’s Investor Compensation Portfolio is established to pay compensation to investors of any nationality who suffer pecuniary losses as a result of default of a licensed intermediary or authorized financial institution in relation to exchange-traded products in Hong Kong. In addition, since the Portfolio is carrying out Northbound trading through securities brokers in Hong Kong but not PRC brokers, it is not protected by the China Securities Investor Protection Portfolio in the PRC.
Market participants are able to participate in Stock Connect subject to meeting certain information technology capability, risk management and other requirements as may be specified by the relevant exchange and/or clearing house. Further, the “connectivity” in Stock Connect requires the routing of orders across the border of Hong Kong and the PRC. This requires the development of new information technology systems on the part of the SEHK and exchange participants. There is no assurance that these systems will function properly or will continue to be adapted to changes and developments in both markets. In the event that the relevant systems fail to function properly, trading in A-shares through Stock Connect could be disrupted.
Stock Connect is subject to regulations promulgated by regulatory authorities for both exchanges. New regulations may be issued from time to time by the regulators and stock exchanges in PRC and Hong Kong in connection with operations, legal enforcement and cross-border trades under Stock Connect. The Portfolio may be adversely affected as a result of such changes. Furthermore, the securities regimes and legal systems of PRC and Hong Kong differ significantly, and issues may arise based on these differences. In addition, the Portfolio’s investments in A-shares through Stock Connect are generally subject to Chinese securities regulations and listing rules, among other restrictions. Further, different fees, costs and taxes are imposed on foreign investors acquiring A-shares obtained through Stock Connect, and these fees, costs and taxes may be higher than comparable fees, costs and taxes imposed on owners of other securities providing similar investment exposure.
A-Share Market Suspension Risk. A-shares may only be bought from, or sold to, the Portfolio at times when the relevant A-shares may be sold or purchased on the relevant Chinese stock exchange. The A-shares market has historically had a higher propensity for trading suspensions than many other global equity markets. Trading suspensions in certain stocks could lead to greater market execution risk and costs for the Portfolio. The SSE currently applies a daily price limit, set at 10%, of the amount of fluctuation permitted in the prices of A-shares during a single trading day. The daily price limit refers to price movements only and does not restrict trading within the relevant limit. There can be no assurance that a liquid market on an exchange will exist for any particular A-share or for any particular time.
RISK OF INVESTING THROUGH CIBM DIRECT. To the extent permissible by the relevant PRC regulations or authorities, certain Portfolios may also directly invest in permissible products (which include cash bonds) traded on China inter-bank bond market (CIBM), in compliance with the relevant rules issued by the People’s Bank of China (PBOC, including its Shanghai Head Office) in 2016, including the Announcement 2016 No.3 and its implementing rules (CIBM Direct Rules). An onshore trading and settlement agent shall be engaged by the subadviser to make the filing on behalf of the relevant Portfolio and conduct trading and settlement agency services for such Portfolio. PBOC will exercise on-going supervision over the onshore settlement agent and the Portfolios’ trading activity under the CIBM Direct Rules and may take relevant administrative actions, such as suspension of trading and
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mandatory exit against a Portfolio and/or the subadviser in the event of any noncompliance with the CIBM Direct Rules. The CIBM Direct Rules are very new and have yet to be tested on the market. At this stage the CIBM Direct Rules are still subject to further clarification and/or changes, which may adversely affect the Portfolios’ ability to invest in the CIBM.
RISK OF INVESTING THROUGH BOND CONNECT. In addition to the risks described under “Foreign Securities” and “Investments in the People’s Republic of China,” there are risks associated with Portfolio investments in Chinese government bonds and other PRC-based debt instruments traded on the CIBM through the Bond Connect program. The Bond Connect refers to the arrangement between Hong Kong and the PRC that enables the PRC and overseas investors to trade various types of debt securities in each other’s bond markets through connection between the relevant respective financial infrastructure institutions. Trading through Bond Connect is subject to a number of restrictions that may affect a Portfolio’s investments and returns. Investments made through Bond Connect are subject to order, clearance and settlement procedures that are relatively untested in the PRC, which could pose risks to a Portfolio. Furthermore, securities purchased via Bond Connect will be held on behalf of ultimate investors (such as a Portfolio) via a book entry omnibus account in the name of the Hong Kong Monetary Authority Central Money Markets Unit maintained with a PRC-based custodian (either the China Central Depository & Clearing Co. (CCDC) or the Shanghai Clearing House (SCH)). A Portfolio’s ownership interest in Bond Connect securities will not be reflected directly in book entries with CCDC or SCH, and will instead only be reflected on the books of its Hong Kong sub-custodian. This recordkeeping system also subjects a Portfolio to various risks, including the risk that the Portfolio may have a limited ability to enforce its rights as a bondholder, as well as the risks of settlement delays and counterparty default of the Hong Kong sub-custodian. While the ultimate investors hold a beneficial interest in Bond Connect securities, the mechanisms that beneficial owners may use to enforce their rights are untested, and courts in the PRC have limited experience in applying the concept of beneficial ownership. As such, a Portfolio may not be able to participate in corporate actions affecting its rights as a bondholder, such as timely payment of distributions, due to time constraints or other operational reasons. Bond Connect trades are settled in RMB, and investors must have timely access to a reliable supply of RMB in Hong Kong, which cannot be guaranteed. Moreover, securities purchased through Bond Connect generally may not be sold, purchased or otherwise transferred, other than through Bond Connect, in accordance with applicable rules.
A primary feature of Bond Connect is the application of the home market’s laws and rules applicable to investors in Chinese fixed-income instruments. Therefore, a Portfolio’s investments in securities via Bond Connect are generally subject to Chinese securities regulations and listing rules, among other restrictions. Such securities may lose their eligibility at any time, in which case, they could be sold, but could no longer be purchased through Bond Connect. A Portfolio will not benefit from access to Hong Kong investor compensation funds, which are set up to protect against defaults of trades, when investing through Bond Connect. Bond Connect is only available on days when markets in both the PRC and Hong Kong are open. As a result, prices of securities purchased through Bond Connect may fluctuate at times when a Portfolio is unable to add to, or exit, its position and, therefore, may limit the Portfolio’s ability to trade when it would be otherwise attractive to do so. Finally, uncertainties in the PRC tax rules governing taxation of income and gains from investments via Bond Connect could result in unexpected tax liabilities for a Portfolio. The withholding tax treatment of dividends and capital gains payable to overseas investors currently is unsettled.
The Bond Connect program is a relatively new program and may be subject to further interpretation and guidance. In addition, the trading, settlement and IT systems required for non-Chinese investors in Bond Connect are relatively new and continuing to evolve. In the event that the relevant systems do not function properly, trading through Bond Connect could be disrupted. There can be no assurance that further regulations will not affect the availability of securities in the program, the frequency of redemptions or other limitations. In addition, the application and interpretation of the laws and regulations of Hong Kong and the PRC, and the rules, policies or guidelines published or applied by relevant regulators and exchanges in respect of the Bond Connect program, are uncertain, and they may have a detrimental effect on a Portfolio’s investments and returns.
INVESTMENT IN OTHER INVESTMENT COMPANIES. Each Portfolio may invest in other investment companies, including exchange-traded funds. In accordance with the 1940 Act, a Portfolio may invest up to 10% of its total assets in securities of other investment companies. In addition, under the 1940 Act, a Portfolio may not own more than 3% of the total outstanding voting stock of any investment company and not more than 5% of the value of the Portfolio's total assets may be invested in securities of any investment company. (These limits do not restrict a Feeder Fund from investing all of its assets in shares of its Master Portfolio).
Notwithstanding the limits discussed above, a Portfolio may invest in other investment companies without regard to the limits set forth above, provided that the Portfolio complies with Rules 12d1-1, 12d1-2 and 12d1-3 promulgated by the Securities and Exchange Commission (SEC) under the 1940 Act or otherwise permitted by exemptive order, SEC releases, no-action letters or similar interpretation. As with other investments, investments in other investment companies are subject to market and selection risk. In addition, if the Portfolio acquires shares in investment companies, shareholders would bear both their proportionate share of expenses in the Portfolio (including management and advisory fees) and, indirectly, the expenses of such investment companies (including
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management and advisory fees). Investments by a money Portfolio in wholly-owned investment companies created under the laws of certain countries will not be deemed an investment in other investment companies. The underlying investment companies in which the Portfolio invests may not meet their investment objectives.
In December 2018, the SEC issued a proposed rulemaking package related to investments in other investment vehicles that, if adopted, could require the Portfolios to adjust their investments accordingly. These adjustments may have an impact on the Portfolios’ performance and may have negative risk consequences on the investing Portfolios, as well as the underlying investment vehicles.
JUNK BONDS. Junk bonds are debt securities that are rated below investment grade by the major rating agencies or are unrated securities that the subadviser believes are of comparable quality. Although junk bonds generally pay higher rates of interest than investment grade bonds, they are high risk investments that may cause income and principal losses for a Portfolio. The major risks in junk bond investments include the following:
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Junk bonds are issued by less credit worthy companies. These securities are vulnerable to adverse changes in the issuer's industry and to general economic conditions. Issuers of junk bonds may be unable to meet their interest or principal payment obligations because of an economic downturn, specific issuer developments or the unavailability of additional financing.
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The issuers of junk bonds may have a larger amount of outstanding debt relative to their assets than issuers of investment grade bonds. If the issuer experiences financial stress, it may be unable to meet its debt obligations. The issuer's ability to pay its debt obligations also may be lessened by specific issuer developments, or the unavailability of additional financing.
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Junk bonds are frequently ranked junior to claims by other creditors. If the issuer cannot meet its obligations, the senior obligations are generally paid off before the junior obligations.
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Junk bonds frequently have redemption features that permit an issuer to repurchase the security from a Portfolio before it matures. If an issuer redeems the junk bonds, a Portfolio may have to invest the proceeds in bonds with lower yields and may forgo income.
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Prices of junk bonds are subject to extreme price fluctuations. Negative economic developments may have a greater impact on the prices of junk bonds than on other higher rated fixed income securities.
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Junk bonds may be less liquid than higher rated fixed income securities even under normal economic conditions. There are fewer dealers in the junk bond market, and there may be significant differences in the prices quoted for junk bonds by the dealers. Because they are less liquid, judgment may play a greater role in valuing certain of a Portfolio's portfolio securities than in the case of securities trading in a more liquid market.
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A Portfolio may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting issuer.
LIQUIDATION OF PORTFOLIOS. Each Portfolio reserves the right to discontinue offering shares at any time, to merge or reorganize itself, or to cease operations and liquidate at any time.
MONEY MARKET INSTRUMENTS. Certain Portfolios may invest in money market instruments. Money market instruments include cash equivalents and short-term obligations of US banks, certificates of deposit, short-term obligations issued or guaranteed by the US Government or its agencies. Money market instruments also include bankers' acceptances, commercial paper, certificates of deposit and Eurodollar obligations issued or guaranteed by bank holding companies in the US, their subsidiaries and foreign branches, by foreign banking institutions, and by the World Bank and other multinational instrumentalities, as well as commercial paper and other short-term obligations of, and variable amount master demand notes, variable rate notes and similar agreements issued by, US and foreign corporations.
MONEY MARKET FUND REFORM. In July 2014, the SEC adopted amendments to Rule 2a-7 under the 1940 Act. Rule 2a-7 imposes quality, liquidity and other requirements on any registered mutual fund that holds itself out to the public as a money market fund. The Government Money Market Portfolio is subject to Rule 2a-7. Compliance with the various provisions of the amendments took effect over the course of 2015 and 2016. The new regulations impact money market funds differently depending upon the types of investors that will be permitted to invest in a fund, and the types of securities in which a fund may invest.
“Retail” money market funds have policies and procedures reasonably designed to limit their beneficial owners to natural persons. All other money market funds are considered to be “institutional” money market funds. Retail and institutional money market funds are further classified by their investments. “Prime” money market funds are permitted to invest primarily in corporate or other non-government securities, “US government” money market funds are required to invest a very high percentage of their assets in US government securities and “municipal” money market funds are required to invest significantly in municipal securities.
Under the revised rule, institutional prime money market funds and institutional municipal money market funds are required to value their portfolio securities using market-based factors, and sell and redeem shares at prices based on a floating net asset value. A floating net asset value is calculated by rounding to the fourth decimal place in the case of a money market fund with a $1.0000 share price. Retail money market funds and institutional US government money market funds are not subject to the floating net asset value requirement.
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Under the revised rule, any type of money market fund is permitted to impose a discretionary liquidity fee of up to 2% on redemptions or temporarily suspend redemptions (also known as “gate”) if the money market fund’s weekly liquid assets (as defined in Rule 2a-7) fall below 30% of the fund’s total assets and the money market fund’s board of trustees determines that the fee or gate is in the fund’s best interests. Once imposed, a discretionary liquidity fee or redemption gate will remain in effect until the fund’s board of trustees determines that the fee or gate is no longer in the fund’s best interests or the next business day after the fund’s weekly liquid assets return to 30% of the fund’s total assets, whichever occurs first. Regardless, the redemption gate is required to be lifted no later than the 10th business day after the gate is imposed, and a money market fund may not impose a redemption gate for more than 10 business days in any rolling 90-calendar day period.
Under the revised rule, any type of money market fund (except for US government money market funds) is required to impose a liquidity fee of 1% on all redemptions if the money market fund’s weekly liquid assets (as defined in Rule 2a-7) fall below 10% of the fund’s total assets, unless the fund’s board of trustees determines that the fee is not in the fund’s best interests, or that a lower or higher (up to 2%) liquidity fee is in the fund’s best interests.
Other requirements of the revised rule include enhanced website disclosure obligations, the adoption of a new form for disclosure of certain material events (such as the imposition of liquidity fees or redemption gates), stronger diversification requirements and enhanced stress testing.
Pursuant to investment policy changes approved by the Board, effective September 12, 2016, the Government Money Market Portfolio (formerly known as the AST Money Market Portfolio) is managed as a US government money market fund under Rule 2a-7, which means that it invests at least 99.5% or more of its assets in cash, government securities, and/or repurchase agreements that are fully collateralized with cash or other government securities.  At the election of the Board, the Government Money Market Portfolio is not subject to a liquidity fee and/or a redemption gate on redemptions, which might apply to other types of money market funds should certain triggering events specified in Rule 2a-7 occur.  However, the Board reserves the right, with notice to shareholders, to change the policy with respect to liquidity fees and/or redemption gates, thereby permitting the Portfolio to impose such fees and gates in the future.
MORTGAGE-BACKED SECURITIES. Investing in mortgage-backed securities involves certain unique risks in addition to those generally associated with investing in fixed income securities and in the real estate industry in general. These unique risks include the failure of a party to meet its commitments under the related operative documents, adverse interest rate changes and the effects of prepayments on mortgage cash flows. Mortgage-backed securities are “pass-through” securities, meaning that principal and interest payments made by the borrower on the underlying mortgages are passed through to a Portfolio. The value of mortgage-backed securities, like that of traditional fixed income securities, typically increases when interest rates fall and decreases when interest rates rise. However, mortgage-backed securities differ from traditional fixed income securities because of their potential for prepayment without penalty. The price paid by a Portfolio for its mortgage-backed securities, the yield the Portfolio expects to receive from such securities and the average life of the securities are based on a number of factors, including the anticipated rate of prepayment of the underlying mortgages. In a period of declining interest rates, borrowers may prepay the underlying mortgages more quickly than anticipated, thereby reducing the yield to maturity and the average life of the mortgage-backed securities. Moreover, when a Portfolio reinvests the proceeds of a prepayment in these circumstances, it will likely receive a rate of interest that is lower than the rate on the security that was prepaid.
To the extent that a Portfolio purchases mortgage-backed securities at a premium, mortgage foreclosures and principal prepayments may result in a loss to the extent of the premium paid. If a Portfolio buys such securities at a discount, both scheduled payments of principal and unscheduled prepayments will increase current and total returns and will accelerate the recognition of income which, when distributed to shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of the underlying mortgages may occur at a slower than expected rate, creating maturity extension risk. This particular risk may effectively change a security that was considered short or intermediate-term at the time of purchase into a long-term security. Since long-term securities generally fluctuate more widely in response to changes in interest rates than shorter-term securities, maturity extension risk could increase the inherent volatility of the Portfolio. Under certain interest rate and prepayment scenarios, a Portfolio may fail to recoup fully its investment in mortgage-backed securities notwithstanding any direct or indirect governmental or agency guarantee.
Most mortgage-backed securities are issued by Federal government agencies such as the Government National Mortgage Association (Ginnie Mae), or by government sponsored enterprises such as the Federal Home Loan Mortgage Corporation (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae). Principal and interest payments on mortgage-backed securities issued by the Federal government and some Federal government agencies, such as Ginnie Mae, are guaranteed by the Federal government and backed by the full faith and credit of the United States. Mortgage-backed securities issued by other government agencies or government sponsored enterprises, such as Freddie Mac or Fannie Mae, are backed only by the credit of the government agency or enterprise and are not backed by the full faith and credit of the United States. While certain mortgage-related securities receive
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government or private support, there is no assurance that such support will remain in place in the future. Additionally, mortgage-backed securities issued by government agencies or sponsored enterprises like Freddie Mac or Fannie Mae generally have very little credit risk, but may be subject to substantial interest rate risks. Private mortgage-backed securities are issued by private corporations rather than government agencies and are subject to credit risk and interest rate risk. Some mortgage-backed securities, including those issued by government agencies and government-sponsored enterprises, may be based on pools of loans that are originated by an affiliate of the Manager.
In September 2008, the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac under conservatorship and was appointed to manage their daily operations. In addition, the US Treasury entered into stock purchase agreements (SPAs) with Fannie Mae and Freddie Mac to provide them with capital in exchange for senior preferred stock. Pass-through securities issued by Fannie Mae are guaranteed as to timely payment of principal and interest by Fannie Mae. Participation certificates representing interests in mortgages from Freddie Mac’s national portfolio are guaranteed as to the timely payment of interest and principal by Freddie Mac. Private, government, or government-related entities may create mortgage loan pools offering pass-through investments in addition to those described above. The mortgages underlying these securities may be alternative mortgage instruments (that is, mortgage instruments whose principal or interest payments may vary or whose terms to maturity may be shorter than customary).
Under the direction of the FHFA, FNMA and FHLMC have entered into a joint initiative to develop a common securitization platform for the issuance of a uniform mortgage-backed security (UMBS) (the Single Security Initiative) that aligns the characteristics of FNMA and FHLMC certificates. The Single Security Initiative was implemented in June 2019, and the effects it may have on the market for mortgage-backed securities are uncertain.
FHFA and the White House have made public statements regarding plans to consider ending the conservatorships of FNMA and FHLMC. In the event that FNMA and FHLMC are taken out of conservatorship, it is unclear how the capital structure of FNMA and FHLMC would be constructed and what effects, if any, there may be on FNMA’s and FHLMC’s creditworthiness and guarantees of certain mortgage-backed securities. It is also unclear whether the U.S. Treasury would continue to enforce its rights or perform its obligations under the Senior Preferred Stock Programs. Should FNMA’s and FHLMC’s conservatorship end, there could be an adverse impact on the value of their securities, which could cause losses to a Portfolio.
In June 2019, under the Single Security Initiative, FNMA and FHLMC started issuing UMBS in place of their current offerings of TBA-eligible securities. The Single Security Initiative seeks to support the overall liquidity of the TBA market and aligns the characteristics of FNMA and FHLMC certificates. The effects that the Single Security Initiative may have on the market for TBA and other mortgage-backed securities are uncertain.
MUNICIPAL SECURITIES. Certain Portfolios may, from time to time, invest in municipal bonds including general obligation and revenue bonds. General obligation bonds are secured by the issuer's pledge of its faith, credit and taxing power for the payment of principal and interest, whereas revenue bonds are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise or other specific revenue source. A Portfolio may also invest in municipal notes including tax, revenue and bond anticipation notes which are issued to obtain Portfolios for various public purposes.
Municipal securities include notes and bonds issued by or on behalf of states, territories and possessions of the United States and their political subdivisions, agencies and instrumentalities and the District of Columbia, the interest on which is generally eligible for exclusion from federal income tax and, in certain instances, applicable state or local income and personal property taxes. Such securities are traded primarily in the over-the-counter market.
The interest rates payable on certain municipal bonds and municipal notes are not fixed and may fluctuate based upon changes in market rates. Municipal bonds and notes of this type are called “variable rate” obligations. The interest rate payable on a variable rate obligation is adjusted either at predesignated intervals or whenever there is a change in the market rate of interest on which the interest rate payable is based. Other features may include the right whereby a Portfolio may demand prepayment of the principal amount of the obligation prior to its stated maturity (a demand feature) and the right of the issuer to prepay the principal amount prior to maturity. The principal benefit of a variable rate obligation is that the interest rate adjustment minimizes changes in the market value of the obligation. As a result, the purchase of variable rate obligations should enhance the ability of a Portfolio to maintain a stable NAV per share and to sell an obligation prior to maturity at a price approximating the full principal amount of the obligation.
Variable or floating rate securities include participation interests therein and inverse floaters. Floating rate securities normally have a rate of interest that is set as a specific percentage of a designated base rate, such as the rate on Treasury Bonds or Bills. The interest rate on floating rate securities changes whenever there is a change in the designated base interest rate. Variable rate securities provide for a specific periodic adjustment in the interest rate based on prevailing market rates and generally would allow a Portfolio to demand payment of the obligation on short notice at par plus accrued interest, which amount may, at times, be more or less than the amount
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the Portfolio paid for them. Some floating rate and variable rate securities have maturities longer than 397 calendar days but afford the holder the right to demand payment at dates earlier than the final maturity date. Such floating rate and variable rate securities will be treated as having maturities equal to the demand date or the period of adjustment of the interest rate whichever is longer.
An inverse floater is a debt instrument with a floating or variable interest rate that moves in the opposite direction of the interest rate on another security or the value of an index. Changes in the interest rate on the other security or index inversely affect the residual interest rate paid on the inverse floater, with the result that the inverse floater's price will be considerably more volatile than that of a fixed rate bond. Generally, income from inverse floating rate bonds will decrease when short-term interest rates increase, and will increase when short-term interest rates decrease. Such securities have the effect of providing a degree of investment leverage, since they may increase or decrease in value in response to changes, as an illustration, in market interest rates at a rate that is a multiple (typically two) of the rate at which fixed-rate, long-term, tax-exempt securities increase or decrease in response to such changes. As a result, the market values of such securities generally will be more volatile than the market values of fixed-rate tax-exempt securities. While inverse floaters may expose a Portfolio to leverage risk, they do not constitute borrowings for purposes of a Portfolio's restrictions on borrowings. For additional information relating to inverse floaters, please see “Indexed and Inverse Securities.”
Private Investment in Public Equities (PIPEs) Risk. PIPE transactions typically involve the purchase of securities directly from a publicly traded company or its affiliates in a private placement transaction, typically at a discount to the market price of the company’s common stock. In a PIPE transaction, a Portfolio may bear the price risk from the time of pricing until the time of closing. Equity issued in this manner is often subject to transfer restrictions and is therefore less liquid than equity issued through a registered public offering. A Portfolio may be subject to lock-up agreements that prohibit transfers for a fixed period of time. In addition, because the sale of the securities in a PIPE transaction is not registered under the Securities Act of 1933, as amended, the securities are restricted and cannot be immediately resold into the public markets. A Portfolio may enter into a registration rights agreement with the issuer pursuant to which the issuer commits to file a resale registration statement allowing the Portfolio to publicly resell its securities. However, the ability of a Portfolio to freely transfer the shares is conditioned upon, among other things, the SEC’s preparedness to declare the resale registration statement effective and the issuer’s right to suspend the Portfolio’s use of the resale registration statement, if the issuer is pursuing a transaction or some other material non-public event is occurring. Accordingly, PIPE securities may be subject to risks associated with illiquid investments.
Quantitative Investing Risk. The Manager or a subadviser may employ and/or rely on algorithms, models or other systems in connection with certain investment activities, including research, forecasting, selection and execution processes (together, Systems). These Systems rely heavily on the use of proprietary and nonproprietary data, software, hardware and intellectual property, including data, software and hardware that may be licensed or otherwise obtained from third parties. The use of such Systems has inherent limitations and risks. Although they strive to do so, there can be no assurance that the Manager/subadviser will develop and use Systems appropriately and effectively. Errors may occur in the design, writing, testing, monitoring and/or implementation of Systems, including in the manner in which Systems function together. The effectiveness of Systems may diminish over time, including as a result of market changes and changes in the behavior of market participants. The quality of the resulting analyses, investment selections, portfolio construction, asset allocations, proposed trades, risk management and trading strategies depends on a number of factors, including the accuracy and quality of data inputs into the Systems, the mathematical and analytical assumptions and underpinnings of the Systems’ coding, the accuracy in translating those analytics into program code or interpreting the output of a System by another System in order to facilitate a transaction, changes in market conditions, the successful integration of the various Systems into the portfolio selection and trading process, and whether actual market events correspond to one or more assumptions underlying the Systems. Accordingly, Systems are subject to errors and/or mistakes (System Incidents) that may adversely impact a Portfolio. For example, System Incidents may result in Systems performing in a manner other than as intended, including, but not limited to, failure to achieve desired performance or investment objectives, execution of unanticipated trades or failure to execute intended trades, or failure to identify hedging or other risk management opportunities or targets. Further, if incorrect market data is entered into an otherwise properly functioning System, the System’s resulting output, including proposed trades or investment recommendations, may be inconsistent with the underlying investment strategy. Most Systems require continual monitoring and enhancements, and there is no guarantee that such enhancements will be successful, or that Systems will operate as intended. The successful deployment of an investment strategy, the portfolio construction process and/or the trading process could be severely compromised by software or hardware malfunctions, viruses, glitches, connectivity loss, system crashes or various other System Incidents, including, in particular, where multiple Systems contribute to the process (i.e., where one System develops a potential recommended signal or possible trade, and another System interprets or optimizes that recommended signal or possible trade to facilitate a trade order). System Incidents may be difficult to detect and the Manager/subadviser may not immediately or ever detect certain System Incidents, which may have an increasing impact on a Portfolio over time. There is no guarantee that measures taken to address a System Incident will be successful.
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REAL ESTATE RELATED SECURITIES. Although no Portfolio may invest directly in real estate, certain Portfolios may invest in equity securities of issuers that are principally engaged in the real estate industry. Therefore, an investment in such a Portfolio is subject to certain risks associated with the ownership of real estate and with the real estate industry in general. These risks include, among others: possible declines in the value of real estate; risks related to general and local economic conditions; possible lack of availability of mortgage Portfolios or other limitations on access to capital; overbuilding; risks associated with leverage; market illiquidity; extended vacancies of properties; increase in competition, property taxes, capital expenditures and operating expenses; changes in zoning laws or other governmental regulation; costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems; tenant bankruptcies or other credit problems; casualty or condemnation losses; uninsured damages from floods, earthquakes or other natural disasters; limitations on and variations in rents, including decreases in market rates for rents; investment in developments that are not completed or that are subject to delays in completion; and changes in interest rates. To the extent that assets underlying a Portfolio's investments are concentrated geographically, by property type or in certain other respects, the Portfolio may be subject to certain of the foregoing risks to a greater extent. Investments by a Portfolio in securities of companies providing mortgage servicing will be subject to the risks associated with refinancings and their impact on servicing rights. In addition, if a Portfolio receives rental income or income from the disposition of real property acquired as a result of a default on securities the Portfolio owns, the receipt of such income may adversely affect the Portfolio's ability to retain its tax status as a regulated investment company because of certain income source requirements applicable to regulated investment companies under the Code.
REAL ESTATE INVESTMENT TRUSTS (REITs). Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, may not be diversified geographically or by property type, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs must also meet certain requirements under the Code to avoid entity level tax and be eligible to pass-through certain tax attributes of their income to shareholders. REITs are consequently subject to the risk of failing to meet these requirements for favorable tax treatment and of failing to maintain their exemptions from registration under the 1940 Act. REITs are also subject to the risks of changes in the Code, affecting their tax status.
REITs (especially mortgage REITs) are also subject to interest rate risks. When interest rates decline, the value of a REIT's investment in fixed rate obligations can be expected to rise. Conversely, when interest rates rise, the value of a REIT's investment in fixed rate obligations can be expected to decline. In contrast, as interest rates on adjustable rate mortgage loans are reset periodically, yields on a REIT's investments in such loans will gradually align themselves to reflect changes in market interest rates, causing the value of such investments to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed rate obligations.
Investing in certain REITs involves risks similar to those associated with investing in small capitalization companies. These REITs may have limited financial resources, may trade less frequently and in limited volume and may be subject to more abrupt or erratic price movements than larger company securities. Historically, small capitalization stocks, such as these REITs, have been more volatile in price than the larger capitalization stocks included in the S&P 500 Index. The management of a REIT may be subject to conflicts of interest with respect to the operation of the business of the REIT and may be involved in real estate activities competitive with the REIT. REITs may own properties through joint ventures or in other circumstances in which the REIT may not have control over its investments. REITs may incur significant amounts of leverage.
REPURCHASE AGREEMENTS. A Portfolio may invest in securities pursuant to repurchase agreements. A Portfolio will enter into repurchase agreements only with parties meeting creditworthiness standards as set forth in the Portfolio's repurchase agreement procedures.
Under such agreements, the other party agrees, upon entering into the contract with a Portfolio, to repurchase the security at a mutually agreed-upon time and price in a specified currency, thereby determining the yield during the term of the agreement. This results in a fixed rate of return insulated from market fluctuations during such period, although such return may be affected by currency fluctuations. In the case of repurchase agreements, the prices at which the trades are conducted do not reflect accrued interest on the underlying obligation. Such agreements usually cover short periods, such as under one week. Repurchase agreements may be construed to be collateralized loans by the purchaser to the seller secured by the securities transferred to the purchaser.
In the case of a repurchase agreement, as a purchaser, a Portfolio will require all repurchase agreements to be fully collateralized at all times by cash or other liquid assets in an amount at least equal to the resale price. The seller is required to provide additional collateral if the market value of the securities falls below the repurchase price at any time during the term of the repurchase agreement. In the event of default by the seller under a repurchase agreement construed to be a collateralized loan, the underlying securities are not owned by the Portfolio but only constitute collateral for the seller's obligation to pay the repurchase price. Therefore, the Portfolio may suffer time delays and incur costs or possible losses in connection with disposition of the collateral.
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A Portfolio may participate in a joint repurchase agreement account with other investment companies managed by PGIM Investments pursuant to an order of the SEC. On a daily basis, any uninvested cash balances of the Portfolio may be aggregated with those of such investment companies and invested in one or more repurchase agreements. Each Portfolio participates in the income earned or accrued in the joint account based on the percentage of its investment.
Reverse Repurchase Agreements Risk. Reverse repurchase agreements are transactions in which a Portfolio sells a security and simultaneously commits to repurchase that security from the buyer, such as a bank or broker-dealer, at an agreed upon price on an agreed-upon future date. The repurchase price consists of the sale price plus an incremental amount reflecting the interest cost to the Portfolio on the proceeds it has received from the initial sale. Reverse repurchase agreements involve the risk that the value of securities that the Portfolio is obligated to repurchase under the agreement may decline below the repurchase price. Additionally, such transactions are only advantageous if the interest cost to the Portfolio of the reverse repurchase transaction is less than the cost of obtaining the cash otherwise. Interest costs on the proceeds received in a reverse repurchase agreement may exceed the return received on the investments made by the Portfolio with those proceeds, resulting in reduced returns to shareholders. When a Portfolio enters into a reverse repurchase agreement, it is subject to the risk that the buyer (counterparty) may default on its obligations to the Portfolio. In the event of default, a Portfolio may experience delays, costs, and losses, all of which may reduce returns to shareholders. Investing reverse repurchase proceeds may also have a leveraging effect on a Portfolio. A Portfolio’s use of leverage can magnify the effect of any gains or losses, causing the Portfolio to be more volatile than if it had not been leveraged.
DOLLAR ROLLS. Certain Portfolios may enter into dollar rolls. In a dollar roll, a Portfolio sells securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type and coupon) securities on a specified future date from the same party. During the roll period, a Portfolio foregoes principal and interest paid on the securities. A Portfolio is compensated by the difference between the current sale price and the forward price for the future purchase (often referred to as the drop) as well as by the interest earned on the cash proceeds of the initial sale. The Portfolio will establish a segregated account in which it will maintain cash or other liquid assets, marked to market daily, having a value equal to its obligations in respect of dollar rolls.
Dollar rolls involve the risk that the market value of the securities retained by the Portfolio may decline below the price of the securities, the Portfolio has sold but is obligated to repurchase under the agreement. In the event the buyer of securities under a dollar roll files for bankruptcy or becomes insolvent, the Portfolio's use of the proceeds of the agreement may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Portfolio's obligation to repurchase the securities. Cash proceeds from dollar rolls may be invested in cash or other liquid assets.
SECURITIES LENDING. Unless otherwise noted, the Portfolio may lend its portfolio securities to brokers, dealers and other financial institutions subject to applicable regulatory requirements and guidance, including the requirements that: (1) the aggregate market value of securities loaned will not at any time exceed 33 1/3% of the total assets of the Portfolio; (2) the borrower pledge and maintain with the Portfolio collateral consisting of cash, an irrevocable letter of credit, or securities issued or guaranteed by the US Government having at all times a value of not less than 100% of the value of the securities lent; and (3) the loan be made subject to termination by the Portfolio at any time. Goldman Sachs Bank USA d/b/a Goldman Sachs Agency Lending (GSAL) serves as securities lending agent for the Portfolio, and in that role administers the Portfolio’s securities lending program. As compensation for these services, GSAL receives a portion of any amounts earned by the Portfolio through lending securities.
The Portfolio may invest the cash collateral and/or it may receive a fee from the borrower. To the extent that cash collateral is invested, it will be invested in an affiliated prime money market fund and will be subject to market depreciation or appreciation. The Portfolio will be responsible for any loss that results from this investment of collateral.
On termination of the loan, the borrower is required to return the securities to the Portfolio, and any gain or loss in the market price during the loan would inure to the Portfolio. If the borrower defaults on its obligation to return the securities lent because of insolvency or other reasons, the Portfolio could experience delays and costs in recovering the securities lent or in gaining access to the collateral. In such situations, the Portfolio may sell the collateral and purchase a replacement investment in the market. There is a risk that the value of the collateral could decrease below the value of the replacement investment by the time the replacement investment is purchased.
During the time portfolio securities are on loan, the borrower will pay the Portfolio an amount equivalent to any dividend or interest paid on such securities. Voting or consent rights which accompany loaned securities pass to the borrower. However, all loans may be terminated at any time to facilitate the exercise of voting or other consent rights with respect to matters considered to be material. The Portfolio bears the risk that there may be a delay in the return of the securities which may impair the Portfolio’s ability to exercise such rights.
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SECURITIES OF SMALLER OR EMERGING GROWTH COMPANIES. Investment in smaller or emerging growth companies involves greater risk than is customarily associated with investments in more established companies. The securities of smaller or emerging growth companies may be subject to more abrupt or erratic market movements than larger, more established companies or the market average in general. These companies may have limited product lines, markets or financial resources, or they may be dependent on a limited management group.
While smaller or emerging growth company issuers may offer greater opportunities for capital appreciation than large cap issuers, investments in smaller or emerging growth companies may involve greater risks and thus may be considered speculative. The Manager believes that properly selected companies of this type have the potential to increase their earnings or market valuation at a rate substantially in excess of the general growth of the economy. Full development of these companies and trends frequently takes time.
Small cap and emerging growth securities will often be traded only in the over-the-counter market or on a regional securities exchange and may not be traded every day or in the volume typical of trading on a national securities exchange. As a result, the disposition by a Portfolio of portfolio securities to meet redemptions or otherwise may require a Portfolio to make many small sales over a lengthy period of time, or to sell these securities at a discount from market prices or during periods when, in the Manager’s judgment, such disposition is not desirable.
While the process of selection and continuous supervision by the Manager does not, of course, guarantee successful investment results, it does provide access to an asset class not available to the average individual due to the time and cost involved. Careful initial selection is particularly important in this area as many new enterprises have promise but lack certain of the factors necessary to prosper. Investing in small cap and emerging growth companies requires specialized research and analysis. In addition, many investors cannot invest sufficient assets in such companies to provide wide diversification.
Small companies are generally little known to most individual investors although some may be dominant in their respective industries. The Manager believes that relatively small companies will continue to have the opportunity to develop into significant business enterprises. A Portfolio may invest in securities of small issuers in the relatively early stages of business development that have a new technology, a unique or proprietary product or service, or a favorable market position. Such companies may not be counted upon to develop into major industrial companies, but Portfolio management believes that eventual recognition of their special value characteristics by the investment community can provide above-average long-term growth to the portfolio.
Equity securities of specific small cap issuers may present different opportunities for long-term capital appreciation during varying portions of economic or securities markets cycles, as well as during varying stages of their business development. The market valuation of small cap issuers tends to fluctuate during economic or market cycles, presenting attractive investment opportunities at various points during these cycles.
Smaller companies, due to the size and kinds of markets that they serve, may be less susceptible than large companies to intervention from the Federal government by means of price controls, regulations or litigation.
SHORT SALES AND SHORT SALES AGAINST-THE-BOX. Certain Portfolios may make short sales of securities, either as a hedge against potential declines in value of a portfolio security or to realize appreciation when a security that the Portfolio does not own declines in value. When a Portfolio makes a short sale, it borrows the security sold short and delivers it to the broker-dealer through which it made the short sale. A Portfolio may have to pay a fee to borrow particular securities and is often obligated to turn over any payments received on such borrowed securities to the lender of the securities. The Portfolio may not be able to limit any losses resulting from share price volatility if the security indefinitely continues to increase in value at such specified time.
A Portfolio secures its obligation to replace the borrowed security by depositing collateral with the broker-dealer, usually in cash, US Government securities or other liquid securities similar to those borrowed. With respect to the uncovered short positions, a Portfolio is required to (1) deposit similar collateral with its custodian or otherwise segregate collateral on its records, to the extent that the value of the collateral in the aggregate is at all times equal to at least 100% of the current market value of the security sold short, or (2) a Portfolio must otherwise cover its short position. Depending on arrangements made with the broker-dealer from which the Portfolio borrowed the security, regarding payment over of any payments received by a Portfolio on such security, a Portfolio may not receive any payments (including interest) on its collateral deposited with such broker-dealer. Because making short sales in securities that it does not own exposes a Portfolio to the risks associated with those securities, such short sales involve speculative exposure risk. As a result, if a Portfolio makes short sales in securities that increase in value, it will likely underperform similar mutual Portfolios that do not make short sales in securities they do not own. A Portfolio will incur a loss as a result of a short sale if the price of the security increases between the date of the short sale and the date on which the Portfolio replaces the borrowed security. A Portfolio will realize a gain if the security declines in price between those dates. There can be no assurance that a Portfolio will be able to close out a short
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sale position at any particular time or at an acceptable price. Although a Portfolio's gain is limited to the price at which it sold the security short, its potential loss is limited only by the maximum attainable price of the security, less the price at which the security was sold and may, theoretically, be unlimited.
Certain Portfolios may also make short sales against-the-box. A short sale against-the-box is a short sale in which a Portfolio owns an equal amount of the securities sold short, or securities convertible or exchangeable for, with or without payment of any further consideration, such securities. However, if further consideration is required in connection with the conversion or exchange, cash or other liquid assets, in an amount equal to such consideration must be segregated on a Portfolio's records or with its Custodian.
SOVEREIGN DEBT. Investment in sovereign debt can involve a high degree of risk. The governmental entity that controls the repayment of sovereign debt may not be able or willing to repay the principal and/or interest when due in accordance with the terms of such debt. A governmental entity's willingness or ability to repay principal and interest due in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the government entity's policy towards the International Monetary Fund and the political constraints to which a government entity may be subject. Governmental entities may also be dependent on expected disbursements from foreign governments, multilateral agencies and others abroad to reduce principal and interest arrearages on their debt. The commitment on the part of these governments, agencies and others to make such disbursements may be conditioned on the implementation of economic reforms and/or economic performance and the timely service of such debtor's obligations. Failure to implement such reforms, achieve such levels of economic performance or repay principal or interest when due may result in the cancellation of such third parties' commitments to lend Portfolios to the governmental entity, which may further impair such debtor's ability or willingness to timely service its debts. Consequently, governmental entities may default on their sovereign debt. Holders of sovereign debt may be requested to participate in the rescheduling of such debt and to extend further loans to government entities. In the event of a default by a governmental entity, there may be few or no effective legal remedies for collecting on such debt.
SPECIAL PURPOSE ACQUISITION COMPANIES. A Portfolio may invest in stock, warrants, and other securities of special purpose acquisition companies (SPACs) or similar special purpose entities that pool funds to seek potential acquisition or merger opportunities. A SPAC is typically a publicly traded company that raises funds through an initial public offering (IPO) for the purpose of acquiring or merging with an unaffiliated company to be identified subsequent to the SPAC's IPO. SPACs are often used as a vehicle to transition a company from private to publicly traded. The securities of a SPAC are often issued in “units” that include one share of common stock and one right or warrant (or partial right or warrant) conveying the right to purchase additional shares or partial shares. Unless and until a transaction is completed, a SPAC generally invests its assets (less a portion retained to cover expenses) in U.S. Government securities, money market fund securities and cash. To the extent the SPAC is invested in cash or similar securities, this may impact a Portfolio's ability to meet its investment objective. If an acquisition or merger that meets the requirements for the SPAC is not completed within a pre-established period of time, the invested funds are returned to the SPAC's shareholders, less certain permitted expenses, and any rights or warrants issued by the SPAC will expire worthless. Because SPACs and similar entities have no operating history or ongoing business other than seeking acquisitions, the value of their securities is particularly dependent on the ability of the entity's management to identify and complete a suitable transaction. Some SPACs may pursue acquisitions or mergers only within certain industries or regions, which may further increase the volatility of their securities' prices. In addition to purchasing publicly traded SPAC securities, a Portfolio may invest in SPACs through additional financings via securities offerings that are exempt from registration under the federal securities laws (restricted securities). No public market will exist for these restricted securities unless and until they are registered for resale with the SEC, and such securities may be considered illiquid and/or be subject to restrictions on resale. It may also be difficult to value restricted securities issued by SPACs.
An investment in a SPAC is subject to a variety of risks, including that: a significant portion of the funds raised by the SPAC for the purpose of identifying and effecting an acquisition or merger may be expended during the search for a target transaction; an attractive acquisition or merger target may not be identified and the SPAC will be required to return any remaining invested funds to shareholders; attractive acquisition or merger targets may become scarce if the number of SPACs seeking to acquire operating businesses increases; any proposed merger or acquisition may be unable to obtain the requisite approval, if any, of SPAC shareholders and/or antitrust and securities regulators; an acquisition or merger once effected may prove unsuccessful and an investment in the SPAC may lose value; the warrants or other rights with respect to the SPAC held by the Portfolio may expire worthless or may be repurchased or retired by the SPAC at an unfavorable price; the Portfolio may be delayed in receiving any redemption or liquidation proceeds from a SPAC to which it is entitled; an investment in a SPAC may be diluted by subsequent public or private offerings of securities in the SPAC or by other investors exercising existing rights to purchase securities of the SPAC; SPAC sponsors generally purchase interests in the SPAC at more favorable terms than investors in the IPO or subsequent investors on the open market; no or only a thinly traded market for shares of or interests in a SPAC may develop, leaving the Portfolio unable to sell its interest in a SPAC or to sell its interest only at a price below what the Portfolio believes is the SPAC security's value; and the values of investments in SPACs may be highly volatile and may depreciate significantly over time.
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STANDBY COMMITMENT AGREEMENTS. A Portfolio may enter into standby commitment agreements. These agreements commit a Portfolio, for a stated period of time, to purchase a stated amount of securities that may be issued and sold to that Portfolio at the option of the issuer. The price of the security is fixed at the time of the commitment. At the time of entering into the agreement the Portfolio is paid a commitment fee, regardless of whether or not the security is ultimately issued. A Portfolio will enter into such agreements for the purpose of investing in the security underlying the commitment at a price that is considered advantageous to the Portfolio. A Portfolio will limit its investment in such commitments so that the aggregate purchase price of securities subject to such commitments, together with the value of portfolio securities subject to legal restrictions on resale that affect their marketability, will not exceed 15% of its net assets taken at the time of the commitment. A Portfolio segregates liquid assets in an aggregate amount equal to the purchase price of the securities underlying the commitment. There can be no assurance that the securities subject to a standby commitment will be issued, and the value of the security, if issued, on the delivery date may be more or less than its purchase price. Since the issuance of the security underlying the commitment is at the option of the issuer, the Portfolio may bear the risk of a decline in the value of such security and may not benefit from any appreciation in the value of the security during the commitment period. The purchase of a security subject to a standby commitment agreement and the related commitment fee will be recorded on the date on which the security can reasonably be expected to be issued, and the value of the security thereafter will be reflected in the calculation of a Portfolio's net asset value. The cost basis of the security will be adjusted by the amount of the commitment fee. In the event the security is not issued, the commitment fee will be recorded as income on the expiration date of the standby commitment.
STRIPPED SECURITIES. Stripped securities are created when the issuer separates the interest and principal components of an instrument and sells them as separate securities. In general, one security is entitled to receive the interest payments on the underlying assets (the interest only or “IO” security) and the other to receive the principal payments (the principal only or “PO” security). Some stripped securities may receive a combination of interest and principal payments. The yields to maturity on IOs and POs are sensitive to the expected or anticipated rate of principal payments (including prepayments) on the related underlying assets, and principal payments may have a material effect on yield to maturity. If the underlying assets experience greater than anticipated prepayments of principal, a Portfolio may not fully recoup its initial investment in IOs. Conversely, if the underlying assets experience less than anticipated prepayments of principal, the yield on POs could be adversely affected. Stripped securities may be highly sensitive to changes in interest rates and rates of prepayment.
STRUCTURED NOTES. Certain Portfolios may invest in structured notes. The values of the structured notes in which a Portfolio will invest may be linked to equity securities or equity indices or other instruments or indices (reference instruments). These notes differ from other types of debt securities in several respects. The interest rate or principal amount payable at maturity may vary based on changes in the value of the equity security, instrument, or index. A structured note may be positively or negatively indexed; that is, its value or interest rate may increase or decrease if the value of the reference instrument increases. Similarly, its value may increase or decrease if the value of the reference instrument decreases. Further, the change in the principal amount payable with respect to, or the interest rate of, a structured note may be a multiple of the percentage change (positive or negative) in the value of the underlying reference instrument(s).
Investments in structured notes involve certain risks, including the credit risk of the issuer and the normal risks of price changes in response to changes in interest rates. Further, in the case of certain structured notes, a decline or increase in the value of the reference instrument may cause the interest rate to be reduced to zero, and any further declines or increases in the reference instrument may then reduce the principal amount payable on maturity. The percentage by which the value of the structured note decreases may be far greater than the percentage by which the value of the reference instrument increases or decreases. Finally, these securities may be less liquid than other types of securities, and may be more volatile than their underlying reference instruments.
SUKUK. Sukuk are certificates structured to comply with Sharia law and its investment principles. These certificates usually represent the beneficial ownership interest in a portfolio of eligible existing or future tangible or intangible assets (“underlying assets”). In a typical sukuk, a special purpose vehicle (“SPV”) issues certificates to investors in exchange for their capital. The SPV transfers the capital to or for the benefit of the entity that is raising the capital (the “obligor”) in exchange for the underlying assets of the obligor that are held in trust by the SPV. The obligor is obligated, usually through a series of contracts, to make periodic payments to investors through the SPV over a specified period of time and a final payment to investors through the SPV on a date certain. Obligors of sukuk include financial institutions and corporations, foreign governments and agencies of foreign governments, including issuers in emerging markets.
Although under Sharia law, sukuk involve the sharing of profits and losses in the underlying asset financed by the investment in the certificates, most sukuk do not provide investors with bona fide legal ownership of the underlying assets, and the periodic and final payments to sukuk investors are not generally linked to the value of the underlying assets. As a result, most sukuk are considered unsecured obligations whose risks and returns are similar to those of conventional debt instruments. Investors typically have no direct recourse to the underlying assets and do not have a secured claim against the obligor. Sukuk investors are subject to the creditworthiness of the obligor, and the obligor may be unwilling or unable to meet its periodic or final payment obligations. In
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addition, investors' ability to pursue and enforce actions with respect to these payment obligations or to otherwise enforce the terms of the sukuk, restructure the sukuk, obtain a judgment in a court of competent jurisdiction, and/or attach assets of the obligor may be limited. As with conventional debt instruments, sukuk prices change in response to interest rate changes.
The structural complexity of sukuk and the immaturity of the sukuk market, increases the potential risks of investing in sukuk, including operational, legal, and investment risks. While the sukuk market has grown in recent years, sukuk can be less liquid than other types of investments and it may be difficult at times to invest in or dispose of sukuk. In addition, evolving interpretations of Sharia law by courts or Islamic scholars on sukuk structures and sukuk transferability, or a determination subsequent to the issuance of the sukuk by some Islamic scholars that certain sukuk do not comply with Sharia law and its investment principles, could have a dramatic adverse effect on the price and liquidity of a particular sukuk or the sukuk market in general.
SUPRANATIONAL ENTITIES. A Portfolio may invest in debt securities of supranational entities. Examples include the International Bank for Reconstruction and Development (the World Bank), the Asian Development Bank and the Inter-American Development Bank. The government members, or “stockholders,” usually make initial capital contributions to the supranational entity and in many cases are committed to make additional capital contributions if the supranational entity is unable to repay its borrowings.
TEMPORARY DEFENSIVE STRATEGY AND SHORT-TERM INVESTMENTS. Each Portfolio may temporarily invest without limit in money market instruments, including commercial paper of US corporations, certificates of deposit, bankers' acceptances and other obligations of domestic banks, and obligations issued or guaranteed by the US government, its agencies or its instrumentalities, as part of a temporary defensive strategy or to maintain liquidity to meet redemptions. Money market instruments typically have a maturity of one year or less as measured from the date of purchase.
A Portfolio also may temporarily hold cash or invest in money market instruments pending investment of proceeds from new sales of Portfolio shares or during periods of portfolio restructuring.
WARRANTS AND RIGHTS. Warrants and rights are securities permitting, but not obligating, the warrant holder to subscribe for other securities. Buying a warrant does not make a Portfolio a shareholder of the underlying stock. The warrant holder has no right to dividends or votes on the underlying stock. A warrant does not carry any right to assets of the issuer, and for this reason investment in warrants may be more speculative than other equity-based investments.
WHEN ISSUED SECURITIES, DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. A Portfolio may purchase or sell securities that it is entitled to receive on a when issued basis. A Portfolio may also purchase or sell securities on a delayed delivery basis or through a forward commitment. These transactions involve the purchase or sale of securities by a Portfolio at an established price with payment and delivery taking place in the future. A Portfolio enters into these transactions to obtain what is considered an advantageous price to the Portfolio at the time of entering into the transaction. No Portfolio has established any limit on the percentage of its assets that may be committed in connection with these transactions. When a Portfolio purchases securities in these transactions, the Portfolio segregates liquid securities in an amount equal to the amount of its purchase commitments.
There can be no assurance that a security purchased on a when issued basis will be issued or that a security purchased or sold through a forward commitment will be delivered. The value of securities in these transactions on the delivery date may be more or less than the Portfolio's purchase price. The Portfolio may bear the risk of a decline in the value of the security in these transactions and may not benefit from an appreciation in the value of the security during the commitment period.
US GOVERNMENT SECURITIES. Certain Portfolios may invest in adjustable rate and fixed rate US Government securities. US Government securities are instruments issued or guaranteed by the US Treasury or by an agency or instrumentality of the US Government. US Government guarantees do not extend to the yield or value of the securities or a Portfolio's shares. Not all US Government securities are backed by the full faith and credit of the United States. Some are supported only by the credit of the issuing agency.
US Treasury securities include bills, notes, bonds and other debt securities issued by the US Treasury. These instruments are direct obligations of the US Government and, as such, are backed by the full faith and credit of the United States. They differ primarily in their interest rates, the lengths of their maturities and the dates of their issuances. US Government guarantees do not extend to the yield or value of the securities or a Portfolio’s shares.
Securities issued by agencies of the US Government or instrumentalities of the US Government, including those which are guaranteed by Federal agencies or instrumentalities, may or may not be backed by the full faith and credit of the United States. Obligations of the Ginnie Mae, the Farmers Home Administration and the Small Business Administration are backed by the full faith and credit of the
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United States. In the case of securities not backed by the full faith and credit of the United States, a Portfolio must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment and may not be able to assert a claim against the United States if the agency or instrumentality does not meet its commitments.
Certain Portfolios may also invest in component parts of US Government securities, namely either the corpus (principal) of such obligations or one or more of the interest payments scheduled to be paid on such obligations. These obligations may take the form of (1) obligations from which the interest coupons have been stripped; (2) the interest coupons that are stripped; (3) book-entries at a Federal Reserve member bank representing ownership of obligation components; or (4) receipts evidencing the component parts (corpus or coupons) of US Government obligations that have not actually been stripped. Such receipts evidence ownership of component parts of US Government obligations (corpus or coupons) purchased by a third party (typically an investment banking firm) and held on behalf of the third party in physical or book-entry form by a major commercial bank or trust company pursuant to a custody agreement with the third party. A Portfolio may also invest in custodial receipts held by a third party that are not US Government securities. US Government securities may be affected by changing interest rates.
ZERO COUPON SECURITIES, PAY-IN-KIND SECURITIES AND DEFERRED PAYMENT SECURITIES. Certain Portfolios may invest in zero coupon securities. Zero coupon securities are securities that are sold at a discount to par value and on which interest payments are not made during the life of the security. The discount approximates the total amount of interest the security will accrue and compound over the period until maturity on the particular interest payment date at a rate of interest reflecting the market rate of the security at the time of issuance. Upon maturity, the holder is entitled to receive the par value of the security. While interest payments are not made on such securities, holders of such securities are deemed to have received income (phantom income) annually, notwithstanding that cash may not be received currently. The effect of owning instruments that do not make current interest payments is that a fixed yield is earned not only on the original investment but also, in effect, on all discount accretion during the life of the obligations. This implicit reinvestment of earnings at the same rate eliminates the risk of being unable to invest distributions at a rate as high as the implicit yield on the zero coupon bond, but at the same time eliminates the holder's ability to reinvest at higher rates in the future. For this reason, some of these securities may be subject to substantially greater price fluctuations during periods of changing market interest rates than are comparable securities that pay interest currently, which fluctuation increases the longer the period to maturity. These investments benefit the issuer by mitigating its need for cash to meet debt service, but also require a higher rate of return to attract investors who are willing to defer receipt of cash.
A Portfolio accrues income with respect to these securities for Federal income tax and accounting purposes prior to the receipt of cash payments. Zero coupon securities may be subject to greater fluctuation in value and lesser liquidity in the event of adverse market conditions than comparable rated securities paying cash interest at regular intervals. In addition to the above-described risks, there are certain other risks related to investing in zero coupon securities. During a period of severe market conditions, the market for such securities may become even less liquid. In addition, as these securities do not pay cash interest, a Portfolio's investment exposure to these securities and their risks, including credit risk, will increase during the time these securities are held in the Portfolio's portfolio. Further, to maintain its qualification for pass-through treatment under the Federal tax laws, a Portfolio is required to distribute income to its shareholders and, consequently, may have to dispose of its portfolio securities under disadvantageous circumstances to generate the cash, or may have to leverage itself by borrowing the cash to satisfy these distributions, as they relate to the income accrued but not yet received. The required distributions will result in an increase in a Portfolio's exposure to such securities.
Pay-in-kind securities are securities that have interest payable by delivery of additional securities. Upon maturity, the holder is entitled to receive the aggregate par value of the securities. Deferred payment securities are securities that remain a zero coupon security until a predetermined date, at which time the stated coupon rate becomes effective and interest becomes payable at regular intervals. Holders of these types of securities are deemed to have received income (phantom income) annually, notwithstanding that cash may not be received currently. The effect of owning instruments which do not make current interest payments is that a fixed yield is earned not only on the original investment but also, in effect, on all discount accretion during the life of the obligations. This implicit reinvestment of earnings at the same rate eliminates the risk of being unable to invest distributions at a rate as high as the implicit yield on the zero coupon bond, but at the same time eliminates the holder's ability to reinvest at higher rates in the future. For this reason, some of these securities may be subject to substantially greater price fluctuations during periods of changing market interest rates than are comparable securities which pay interest currently, which fluctuation increases the longer the period to maturity. These investments benefit the issuer by mitigating its need for cash to meet debt service, but also require a higher rate of return to attract investors who are willing to defer receipt of cash. Zero coupon, pay-in-kind and deferred payment securities may be subject to greater fluctuation in value and lesser liquidity in the event of adverse market conditions than comparable rated securities paying cash interest at regular intervals.
In addition to the above described risks, there are certain other risks related to investing in zero coupon, pay-in-kind and deferred payment securities. During a period of severe market conditions, the market for such securities may become even less liquid. In addition, as these securities do not pay cash interest, the Portfolio's investment exposure to these securities and their risks, including
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credit risk, will increase during the time these securities are held in the Portfolio's portfolio. Further, to maintain its qualification for pass-through treatment under the federal tax laws, the Portfolio is required to distribute income to its shareholders and, consequently, may have to dispose of its portfolio securities under disadvantageous circumstances to generate the cash, or may have to leverage itself by borrowing the cash to satisfy these distributions, as they relate to the distribution of phantom income and the value of the paid-in-kind interest. The required distributions will result in an increase in the Portfolio's exposure to such securities.
NET ASSET VALUES
Any purchase or sale of Portfolio shares is made at the net asset value, or NAV, of such shares. The price at which a purchase or redemption is made is based on the next calculation of the NAV after the order is received in good order. The NAV of each Portfolio is typically determined on each day the NYSE is open for trading as of the close of the exchange's regular trading session (which is generally 4:00 p.m. New York time). The Trust will not treat an intraday unscheduled disruption in NYSE trading as a closure of the NYSE and will price its shares as of 4:00 p.m. if the particular disruption directly affects only the NYSE. The NYSE is closed on most national holidays and Good Friday. The Trust does not price, and shareholders will not be able to purchase or redeem, the Trust's shares on days when the NYSE is closed but the primary markets for the Trust's foreign securities are open, even though the value of these securities may have changed. Conversely, the Trust will ordinarily price its shares, and shareholders may purchase and redeem shares, on days that the NYSE is open but foreign securities markets are closed.
The securities held by each of the Trust's portfolios are valued based upon market quotations or, if not readily available, at fair value as determined in good faith under procedures established by the Board. The Trust may use fair value pricing if it determines that a market quotation is not reliable based, among other things, on market conditions that occur after the quotation is derived or after the closing of the primary market on which the security is traded, but before the time that the NAV is determined. This use of fair value pricing most commonly occurs with securities that are primarily traded outside of the US because such securities present time-zone arbitrage opportunities when events or conditions affecting the prices of specific securities or the prices of securities traded in such markets generally occur after the close of the foreign markets but prior to the time that a Portfolio determines its NAV.
The Trust may also use fair value pricing with respect to US traded securities if, for example, trading in a particular security is halted and does not resume before a Portfolio calculates its NAV or the exchange on which a security is traded closes early. In addition, fair value pricing is used for securities where the pricing agent or principal market maker does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Manager (or subadviser) does not represent fair value. Different valuation methods may result in differing values for the same security. The fair value of a portfolio security that a Portfolio uses to determine its NAV may differ from the security's published or quoted price. If a Portfolio needs to implement fair value pricing after the NAV publishing deadline but before shares of the Portfolio are processed, the NAV you receive or pay may differ from the published NAV price. For purposes of computing each Portfolio's NAV, we will value each Portfolio's futures contracts 15 minutes after the close of regular trading on the NYSE. Except when we fair value securities, we normally value each foreign security held by the Trust as of the close of the security's primary market.
Fair value pricing procedures are designed to result in prices for a Portfolio's securities and its NAV that are reasonable in light of the circumstances which make or have made market quotations unavailable or unreliable, and to reduce arbitrage opportunities available to short-term traders. There is no assurance, however, that fair value pricing will more accurately reflect the market value of a security than the market price of such security on that day or that it will prevent dilution of a Portfolio's NAV by short-term traders. In the event that the fair valuation of a security results in a change of $0.01 or more to a Portfolio’s NAV per share and/or in the aggregate results in a change of one half of one percent or more of a Portfolio’s daily NAV, the Board shall promptly be notified, in detail, of the fair valuation, and the fair valuation will be reported on at the next regularly scheduled Board meeting. Also, the Board receives, on an interim basis, minutes of the meetings of the Trust’s Valuation Committee that occur between regularly scheduled Board meetings.
The NAV for each of the Portfolios is determined by a simple calculation. It's the total value of a Portfolio (assets minus liabilities) divided by the total number of shares outstanding.
To determine a Portfolio's NAV, its holdings are valued as follows:
Equity securities for which the primary market is on an exchange (whether domestic or foreign) shall be valued at the last sale price on such exchange or market on the day of valuation or, if there was no sale on such day, at the mean between the last bid and asked prices on such day or at the last bid price on such day in the absence of an asked price. Securities included within the NASDAQ market shall be valued at the NASDAQ official closing price (NOCP) on the day of valuation, or if there was no NOCP issued, at the last sale price on such day. Securities included within the NASDAQ market for which there is no NOCP and no last sale price on the day of valuation shall be valued at the mean between the last bid and asked prices on such day or at the last bid price on such day in the absence of an asked price. Equity securities that are not sold on an exchange or NASDAQ are generally valued by an independent pricing agent or principal market maker.
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A Portfolio may own securities that are primarily listed on foreign exchanges that trade on weekends or other days when the Portfolios do not price their shares. Therefore, the value of a Portfolio's assets may change on days when shareholders cannot purchase or redeem Portfolio shares.
Convertible debt securities that are traded in the over-the-counter market, including listed convertible debt securities for which the primary market is believed by PGIM Investments or a subadviser to be over-the-counter, are valued on the day of valuation at an evaluated bid price provided by an independent pricing agent or, in the absence of a valuation provided by an independent pricing agent, at the bid price provided by a principal market maker or primary market dealer.
Other debt securities—those that are not valued on an amortized cost basis—are valued using an independent pricing service. Options on stock and stock indexes that are traded on a national securities exchange are valued at the last sale price on such exchange on the day of valuation or, if there was no such sale on such day, at the mean between the most recently quoted bid and asked prices on such exchange.
Futures contracts and options on futures contracts are valued at the last sale price at the close of the commodities exchange or board of trade on which they are traded. If there has been no sale that day, the securities will be valued at the mean between the most recently quoted bid and asked prices on that exchange or board of trade.
Forward currency exchange contracts are valued at the cost of covering or offsetting such contracts calculated on the day of valuation. Securities which are valued in accordance herewith in a currency other than US dollars shall be converted to US dollar equivalents at a rate obtained from a recognized bank, dealer or independent service on the day of valuation.
Over-the-counter (OTC) options are valued at the mean between bid and asked prices provided by a dealer (which may be the counterparty). A subadviser will monitor the market prices of the securities underlying the OTC options with a view to determining the necessity of obtaining additional bid and ask quotations from other dealers to assess the validity of the prices received from the primary pricing dealer.
All short-term debt securities, including bonds, notes, debentures and other debt securities, and money market instruments such as certificates of deposit, commercial paper, bankers' acceptances and obligations of domestic and foreign banks for which market quotations are readily available, are valued by an independent pricing agent or principal market maker (if available, otherwise a primary market dealer).
TAXATION
This discussion of federal income tax consequences applies to the Participating Insurance Companies because they are the direct shareholders of the Trust. Contract owners should consult their Contract prospectus for information relating to the tax matters applicable to their Contracts. In addition, variable contract owners may wish to consult with their own tax advisors as to the tax consequences of investments in the Trust, including the application of state and local taxes.
The Portfolio currently intends to be treated as a partnership for federal income tax purposes. As a result, the Portfolio's income, gains, losses, deductions, and credits will be “passed through” pro rata directly to the Participating Insurance Companies and retain the same character for federal income tax purposes. Distributions may be made to the various separate accounts of the Participating Insurance Companies in the form of additional shares (not in cash).
Under Code Section 817(h), a segregated asset account upon which a variable annuity contract or variable life insurance policy is based must be “adequately diversified.” A segregated asset account will be adequately diversified if it satisfies one of two alternative tests set forth in Treasury regulations. For purposes of these alternative diversification tests, a segregated asset account investing in shares of a regulated investment company will be entitled to “look-through” the regulated investment company to its pro rata portion of the regulated investment company's assets, provided the regulated investment company satisfies certain conditions relating to the ownership of its shares. The Trust intends to satisfy these ownership conditions. Further, the Trust intends that the Portfolio separately will be adequately diversified. Accordingly, a segregated asset account investing solely in shares of the Portfolio will be adequately diversified, and a segregated asset account investing in shares of one or more portfolios and shares of other adequately diversified funds generally will be adequately diversified.
The foregoing discussion of federal income tax consequences is based on tax laws and regulations in effect on the date of this SAI, and is subject to change by legislative or administrative action. A description of other tax considerations generally affecting the Trust and its shareholders is found in the section of the Prospectus entitled “Federal Income Taxes.” No attempt is made to present a detailed explanation of the tax treatment of the Trust or its shareholders. No attempt is made to present a detailed explanation of state or local tax matters. The discussion herein and in the Prospectus is not intended as a substitute for careful tax planning.
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DISCLOSURE OF PORTFOLIO HOLDINGS
PORTFOLIOS OTHER THAN THE GOVERNMENT MONEY MARKET PORTFOLIO. Each Portfolio's portfolio holdings as of the end of the second and fourth fiscal quarters are made public, as required by law, in the Trust's annual and semi-annual reports. These reports are filed with the SEC on Form N-CSR and mailed to shareholders within 60 days after the end of the second and fourth fiscal quarters. The Trust's annual and semi-annual reports are posted on the Trust's website. Each Portfolio's complete holdings are disclosed to the SEC monthly on Form N-PORT, with every third month made available to the public by the SEC 60 days after the end of the Portfolios’ fiscal quarter. In addition, the Trust may provide a full list of each Portfolio's portfolio holdings as of the end of each month on its website no sooner than approximately three business days prior to the end of the following month. For certain asset allocation Portfolios, the Trust may also release summary statistics regarding asset allocations and other characteristics on a daily basis on the Trust’s website. For all other Portfolios, the Trust may also release, at a sleeve level and/or the composite level, each Portfolio's top ten holdings (or in the case of a fund of funds the complete list of portfolio funds and/or the top ten holdings of the portfolio funds), and summary statistics regarding sectors, countries and/or industries and other characteristics, as of each month end, with all such information posted to the Trust’s website approximately 15 days after the end of the month, unless noted otherwise herein.
In addition to the forgoing, the AST Quantitative Modeling Portfolio may disclose on its website on both the 15th day of each month and the last day of each month a percentage breakdown of its assets that are invested in Equity Underlying Portfolios (as defined in its Prospectus) versus Debt-Money Market Underlying Portfolios (as defined in its Prospectus). Such information for the AST Quantitative Modeling Portfolio shall be as of a date at least five calendar days prior to its release. If the 15th day or the last day of any particular month is a non-business day, such holdings information for the AST Quantitative Modeling Portfolio shall be provided as of the immediately preceding business day.
GOVERNMENT MONEY MARKET PORTFOLIO. The Government Money Market Portfolio will release complete portfolio holdings and certain other portfolio information to the SEC as filed on Form N-MFP and to its website as required by Rules 2a-7 and 30b1-7 of the Investment Company Act of 1940.
When authorized by the Trust's Chief Compliance Officer and another officer of the Trust, portfolio holdings information may be disseminated more frequently or at different periods than as described above. The Trust has entered into ongoing arrangements to make available information about the Trust's portfolio holdings. Parties receiving this information may include intermediaries that distribute the Trust’s shares, third party providers of auditing, custody, proxy voting and other services for the Trust, rating and ranking organizations, and certain affiliated persons of the Trust, as described below. The procedures utilized to determine eligibility are set forth below:
Procedures for Release of Portfolio Holdings Information:
1. A request for release of Portfolio holdings shall be provided by such third party setting forth a legitimate business purpose for such release which shall specify the Portfolio, the terms of such release, and frequency (e.g., level of detail staleness). The request shall address whether there are any conflicts of interest between the Portfolio and the investment adviser, sub-adviser, principal underwriter or any affiliated person thereof and how such conflicts shall be dealt with to demonstrate that the disclosure is in the best interest of the shareholders of the Portfolio.
2. The request shall be forwarded to the Chief Compliance Officer of the Trust, or his delegate, for review and approval.
3. A confidentiality agreement in the form approved by an officer of the Trust must be executed with the recipient of the Portfolio holdings information.
4. An officer of the Portfolio shall approve the release and agreement. Copies of the release and agreement shall be sent to PGIM Investments’ law department.
5. Written notification of the approval shall be sent by such officer to PGIM Investments’ Fund Administration Department to arrange the release of Portfolio holdings information.
6. PGIM Investments’ Fund Administration Department shall arrange for the release of Portfolio holdings information by the Portfolio's custodian bank(s).
As of the date of this Statement of Additional Information, the Trust will provide:
1. Traditional External Recipients/Vendors
■
Full holdings on a daily basis to Institutional Shareholder Services (ISS), Broadridge and Glass, Lewis & Co (proxy voting administrator/agents) at the end of each day;
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■
Full holdings on a daily basis to ISS (securities class action claims services administrator) at the end of each day;
■
Full holdings on a daily basis to each Portfolio's subadviser(s) (as identified in the Trust's Prospectus), custodian bank, sub-custodian (including foreign sub-custodians), if any, and accounting agents (which includes the custodian bank and any other accounting agent that may be appointed) at the end of each day.
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When a Portfolio has more than one subadviser, each subadviser receives holdings information only with respect to the “sleeve” or segment of the Portfolio for which the subadviser has responsibility;
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Full holdings on a daily basis to Goldman Sachs Bank USA, doing business as Goldman Sachs Agency Lending (securities lending agent) at the end of each day;
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Full holdings to a Portfolio's independent registered public accounting firm as soon as practicable following the Portfolio's fiscal year-end or on an as-needed basis;
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Full holdings to a Portfolio’s counsel on an as-needed basis;
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Full holdings to a Portfolio’s independent board members on an as-needed basis; and
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Full holdings to financial printers as soon as practicable following the end of a Portfolio's quarterly, semi-annual and annual period ends.
2. Analytical Service Providers
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Portfolio trades on a quarterly basis to Abel/Noser Corp. (an agency-only broker and transaction cost analysis company) as soon as practicable following a Portfolio's fiscal quarter-end;
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Full holdings, on an as needed basis, to Zeno Consulting Group, LLC (an independent third-party transaction cost analysis company) as soon as practicable;
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Full holdings on a daily basis to FactSet Research Systems, Inc. and Lipper, Inc. (analytical services/investment research providers) at the end of each day; 
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Full holdings on a daily basis to IHS Markit, Bloomberg BVAL, ICE Data Services (InterContinental Exchange), Refinitiv (formerly known as Thompson Reuters), and J.P. Morgan Pricing Direct (securities valuation service providers) at the end of each day;
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Full holdings on a quarterly basis to Capital Institutional Services, Inc. (CAPIS) (investment research provider) when made available; and
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Full holdings on a monthly basis to FX Transparency (foreign exchange/transaction analysis) when made available.
In each case, the information disclosed must be for a legitimate business purpose and is subject to a confidentiality agreement intended to prohibit the recipient from trading on or further disseminating such information (except for legitimate business purposes). Such arrangements will be monitored on an ongoing basis and will be reviewed by the Trust's Chief Compliance Officer and PGIM Investments’ Law Department on an annual basis.
In addition, certain authorized employees of PGIM Investments receive portfolio holdings information on a quarterly, monthly or daily basis or upon request, in order to perform their business functions. All PGIM Investments employees are subject to the requirements of the personal securities trading policy of Prudential Financial, Inc., which prohibits employees from trading on, or further disseminating confidential information, including portfolio holdings information.
In no instance may the Manager or the Trust receive any compensation or consideration in exchange for the portfolio holdings information.
The Board of Trustees of the Trust has approved PGIM Investments’ Policy for the Dissemination of Portfolio Holdings. The Board shall, on a quarterly basis, be advised of any revisions to the list of detailing the recipients of the portfolio holdings information and the reason for such disclosure. The Board has delegated oversight of the Trust's disclosure of portfolio holdings to the Chief Compliance Officer.
Arrangements pursuant to which the Trust discloses non-public information with respect to its portfolio holdings do not provide for any compensation in return for the disclosure of the information.
There can be no assurance that the Trust's policies and procedures on portfolio holdings information will protect the Trust from the potential misuse of such information by individuals or entities that come into possession of the information.
PROXY VOTING
The Board has delegated to the Trust's investment manager, PGIM Investments, the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Portfolio. The Trust authorizes the Manager to delegate, in whole or in part, its proxy voting authority to its investment subadviser or third party vendors consistent with the policies set forth below. The proxy voting process shall remain subject to the supervision of the Board, including any committee thereof established for that purpose.
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The Manager and the Board view the proxy voting process as a component of the investment process and, as such, seek to ensure that all proxy proposals are voted with the primary goal of seeking the optimal benefit for the Portfolio. Consistent with this goal, the Board views the proxy voting process as a means to encourage strong corporate governance practices and ethical conduct by corporate management. The Manager and the Board maintain a policy of seeking to protect the best interests of the Portfolio should a proxy issue potentially implicate a conflict of interest between the Portfolio and the Manager or its affiliates.
The Manager delegates to the Portfolio's subadviser(s) the responsibility for voting the Portfolio's proxies. The subadviser is expected to identify and seek to obtain the optimal benefit for the Portfolio it manages, and to adopt written policies that meet certain minimum standards, including that the policies be reasonably designed to protect the best interests of the Portfolio and delineate procedures to be followed when a proxy vote presents a conflict between the interests of the Portfolio and the interests of the subadviser or its affiliates.
The Manager and the Board expect that the subadviser will notify the Manager and the Board at least annually of any such conflicts identified and confirm how the issue was resolved. In addition, the Manager expects that the subadviser will deliver to the Manager, or their appointed vendor, information required for filing the Form N-PX with the SEC. Information regarding how the Portfolio of the Trust voted proxies relating to its portfolio securities during the most recent twelve-month period ended June 30 is available on the Trust’s website and on the SEC's website at www.sec.gov.
CODES OF ETHICS
The Board has adopted a Code of Ethics. In addition, the Manager, investment subadviser(s) and Distributor have each adopted a Code of Ethics (the Codes). The Codes apply to access persons (generally, persons who have access to information about a Portfolio's investment program) and permit personnel subject to the Codes to invest in securities, including securities that may be purchased or held by a Portfolio. However, the protective provisions of the Codes prohibit certain investments and limit such personnel from making investments during periods when the Portfolio is making such investments. The Codes are on public file with, and are available from, the SEC.
APPENDIX I: DESCRIPTIONS OF SECURITY RATINGS
MOODY’S INVESTORS SERVICE, INC. (MOODY’S)
Long Term Ratings
Aaa: Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
Aa: Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
A: Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
Baa: Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
Ba: Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
B: Obligations rated B are considered speculative and are subject to high credit risk.
Caa: Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.
Ca: Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
C: Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.
Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a “(hyb)” indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.
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Short-Term Ratings
P-1: Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.
P-2: Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.
P-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.
NP: Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.
Short-Term Municipal Ratings
MIG 1: This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing.
MIG 2: This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group.
MIG 3: This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established.
SG: This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection.
S&P Global Ratings (S&P)
Long-Term Issue Credit Ratings
AAA: An obligation rated AAA has the highest rating assigned by S&P. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.
AA: An obligation rated AA differs from the highest rated obligations only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong.
A: An obligation rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong.
BBB: An obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken the obligor’s capacity to meet its financial commitment on the obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant speculative characteristics. BB indicates the least degree of speculation and C the highest. While such obligations will likely have some quality and protective characteristics, they may be outweighed by large uncertainties or major exposure to adverse conditions.
BB: An obligation rated BB is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation.
B: An obligation rated B is more vulnerable to nonpayment than obligations rated BB, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation.
CCC: An obligation rated CCC is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment. The CC rating is used when a default has not yet occurred but S&P expects default to be a virtual certainty, regardless of the anticipated time to default.
C: The C rating may be used to cover a situation where a bankruptcy petition has been filed or similar action has been taken, but payments on this obligation are being continued.
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D: An obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to 'D' if it is subject to a distressed exchange offer.
Plus (+) or Minus (–): Ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories.
Short-Term Issue Credit Ratings
A-1: A short-term obligation rated 'A-1' is rated in the highest category by S&P Global Ratings. The obligor's capacity to meet its financial commitments on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitments on these obligations is extremely strong.
A-2: A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitments on the obligation is satisfactory.
A-3: A short-term obligation rated 'A-3' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken an obligor's capacity to meet its financial commitments on the obligation.
B: A short-term obligation rated 'B' is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties that could lead to the obligor's inadequate capacity to meet its financial commitments.
C: A short-term obligation rated 'C' is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitments on the obligation.
D: A short-term obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to 'D' if it is subject to a distressed exchange offer.
Notes Ratings
An S&P Notes rating reflects the liquidity factors and market access risks unique to notes. Notes due in three years or less will likely receive a notes rating. Notes maturing beyond three years will most likely receive a long-term debt rating. The following criteria will be used in making that assessment.
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Amortization schedule-the longer the final maturity relative to other maturities the more likely it will be treated as a note.
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Source of payment-the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note.
Note rating symbols are as follows:
SP-1: Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.
SP-3: Speculative capacity to pay principal and interest.
D: D is assigned upon failure to pay the note when due, completion of a distressed exchange offer, or the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions.
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FITCH RATINGS LTD.
International Long-Term Credit Ratings
AAA: Highest Credit Quality. AAA ratings denote the lowest expectation of credit risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. AA ratings denote a very low expectation of credit risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.
A: High Credit Quality. A ratings denote expectations of low credit risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.
BBB: Good Credit Quality. BBB ratings indicate that expectations of credit risk are currently low. The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity.
BB: Speculative. BB ratings indicate an elevated vulnerability to credit risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial alternatives may be available to allow financial commitments to be met.
B: Highly Speculative. B ratings indicate that material credit risk is present.
CCC: Substantial Credit Risk. CCC ratings indicate that substantial credit risk is present.
CC: Very High Levels of Credit Risk. CC ratings indicate very high levels of credit risk.
C: Exceptionally High Levels of Credit Risk. C indicates exceptionally high levels of credit risk.
International Short-Term Credit Ratings
F1: Highest Short-Term Credit Quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature.
F2: Good Short-Term Credit Quality. Good intrinsic capacity for timely payment of financial commitments.
F3: Fair Short-Term Credit Quality. The intrinsic capacity for timely payment of financial commitments is adequate.
B: Speculative Short-Term Credit Quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions.
C: High Short-Term Default Risk. Default is a real possibility.
D: Default. Indicates the default of a short-term obligation.
Plus (+) or Minus (–): The modifiers “+” or “-” may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to AAA ratings and ratings below CCC. For the short-term rating category of F1, a “+” may be appended.
APPENDIX II: PROXY VOTING POLICIES OF THE SUBADVISERS
PGIM, INC. (PGIM)
The policy of each of PGIM's asset management units is to vote proxies in the best interests of their respective clients based on the clients’ priorities. Client interests are placed ahead of any potential interest of PGIM or its asset management units.
Because the various asset management units manage distinct classes of assets with differing management styles, some units will consider each proxy on its individual merits while other units may adopt a predetermined set of voting guidelines. The specific voting approach of each unit is noted below.
Relevant members of management and regulatory personnel oversee the proxy voting process and monitor potential conflicts of interests. In addition, should the need arise, senior members of management, as advised by Compliance and Law, are authorized to address any proxy matter involving an actual or apparent conflict of interest that cannot be resolved at the level of an individual asset management business unit.
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PGIM FIXED INCOME. PGIM Fixed Income is a business unit of PGIM. PGIM Fixed Income’s policy is to vote proxies in the best interests of its clients. In the case of pooled accounts, the policy is to vote proxies in the best interests of the pooled account. The proxy voting policy contains detailed voting guidelines on a wide variety of issues commonly voted upon by shareholders. These guidelines reflect PGIM Fixed Income’s judgment of how to further the best interests of its clients through the shareholder or debt-holder voting process.
PGIM Fixed Income invests primarily in debt securities, thus there are few traditional proxies voted by it. PGIM Fixed Income generally votes with management on routine matters such as the appointment of accountants or the election of directors. From time to time, ballot issues arise that are not addressed by the policy or circumstances may suggest a vote not in accordance with the established guidelines. In these cases, voting decisions are made on a case-by-case basis by the applicable portfolio manager taking into consideration the potential economic impact of the proposal. Not all ballots are received by PGIM Fixed Income in advance of voting deadlines, but when ballots are received in a timely fashion, PGIM Fixed Income strives to meet its voting obligations. It cannot, however, guarantee that every proxy will be voted prior to its deadline.
With respect to non-U.S. holdings, PGIM Fixed Income takes into account additional restrictions in some countries that might impair its ability to trade those securities or have other potentially adverse economic consequences. PGIM Fixed Income generally votes non-U.S. securities on a best efforts basis if it determines that voting is in the best interests of its clients.
Occasionally, a conflict of interest may arise in connection with proxy voting. For example, the issuer of the securities being voted may also be a client of PGIM Fixed Income. When PGIM Fixed Income identifies an actual or potential material conflict of interest between the firm and its clients with respect to proxy voting, the matter is presented to senior management who will resolve such issue in consultation with the compliance and legal departments. Proxy voting is reviewed by the trade management oversight committee.
Any client may obtain a copy of PGIM Fixed Income’s proxy voting policy, guidelines and procedures, as well as the proxy voting records for that client’s securities, by contacting the account management representative responsible for the client’s account.
PGIM REAL ESTATE. PGIM Real Estate's proxy voting policy contains detailed voting guidelines on a wide variety of issues commonly voted upon by shareholders. These guidelines reflect PGIM Real Estate's judgment of how to further the best long-range economic interest of our clients (i.e. the mutual interest of clients in seeing the appreciation in value of a common investment over time) through the shareholder voting process. PGIM Real Estate's policy is generally to vote proxies on social or political issues on a case by case basis. Additionally, where issues are not addressed by our policy, or when circumstances suggest a vote not in accordance with our established guidelines, voting decisions are made on a case-by-case basis taking into consideration the potential economic impact of the proposal. With respect to international holdings, we take into account additional restrictions in some countries that might impair our ability to trade those securities or have other potentially adverse economic consequences, and generally vote foreign securities on a best efforts basis in accordance with the recommendations of the issuer's management if we determine that voting is in the best economic interest of our clients.
PGIM Real Estate utilizes the services of a third party proxy voting facilitator, and upon receipt of proxies will direct the voting facilitator to vote in a manner consistent with PGIM Real Estate's established proxy voting guidelines described above (assuming timely receipt of proxy materials from issuers and custodians). In accordance with its obligations under the Advisers Act, PGIM Real Estate provides full disclosure of its proxy voting policy, guidelines and procedures to its clients upon their request, and will also provide to any client, upon request, the proxy voting records for that client's securities.
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PART C
OTHER INFORMATION
Item 28. Exhibits.
(c) None
(d)(1)(g) Contractual investment management fee waivers and/or contractual expense caps for selected AST portfolios. Filed herewith.
C-1
(d)(1)(h) Contractual investment management fee waivers and/or contractual expense caps for AST Academic Strategies Asset Allocation Portfolio, AST Balanced Asset Allocation Portfolio, AST Capital Growth Asset Allocation Portfolio and AST Preservation Asset Allocation Portfolio. Filed herewith.
(d)(2)(b) Amendment to Investment Management Agreement, among the Registrant and PGIM Investments LLC, dated December 1, 2021. Filed herewith.
(d)(2)(g) Contractual investment management fee waiver and/or contractual expense cap for the AST Global Bond Portfolio and AST QMA International Core Equity Portfolio. Filed herewith.
(d)(2)(h) Contractual investment management fee waiver and/or contractual expense cap for the AST Bond Portfolio 2033. Filed herewith.
C-2
(d)(17) Subadvisory Agreement among PGIM Investments LLC, PGIM, Inc. and PGIM Limited for the AST Bond Portfolio 2033. Filed herewith.
(d)(18)(b) Amendment to Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and T. Rowe Price Associates, Inc., for the AST T. Rowe Price Asset Allocation Portfolio. Filed herewith.
C-3
(d)(21)(b) Amendment to Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and LSV Asset Management for the AST International Value Portfolio. Filed herewith.
C-4
C-5
(d)(38) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and each of QMA LLC, Jennison Associates LLC, and PGIM, Inc. for the AST Balanced Asset Allocation Portfolio. Filed herewith.
(d)(39) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and Massachusetts Financial Services Company for the AST Balanced Asset Allocation Portfolio. Filed herewith.
(d)(40) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and Wellington Management Company LLP for the AST Balanced Asset Allocation Portfolio. Filed herewith.
(d)(41) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and ClearBridge Investments, LLC for the AST Balanced Asset Allocation Portfolio. Filed herewith.
(d)(42) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and J.P. Morgan Investment Management, Inc. for the AST Balanced Asset Allocation Portfolio. Filed herewith.
(d)(43) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and each of QMA LLC, Jennison Associates LLC, and PGIM, Inc. for the AST Capital Growth Asset Allocation Portfolio. Filed herewith.
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(d)(44) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and Massachusetts Financial Services Company for the AST Capital Growth Asset Allocation Portfolio. Filed herewith.
(d)(45) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and Wellington Management Company LLP for the AST Capital Growth Asset Allocation Portfolio. Filed herewith.
(d)(46) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and ClearBridge Investments, LLC for the AST Capital Growth Asset Allocation Portfolio. Filed herewith.
(d)(47) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and J.P. Morgan Investment Management, Inc. for the AST Capital Growth Asset Allocation Portfolio. Filed herewith.
(d)(48) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and each of QMA LLC, Jennison Associates LLC, and PGIM, Inc. for the AST Preservation Asset Allocation Portfolio. Filed herewith.
(d)(49) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and Massachusetts Financial Services Company for the AST Preservation Asset Allocation Portfolio. Filed herewith.
(d)(50) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and Wellington Management Company LLP for the AST Preservation Asset Allocation Portfolio. Filed herewith.
(d)(51) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and ClearBridge Investments, LLC for the AST Preservation Asset Allocation Portfolio. Filed herewith.
(d)(52) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and J.P. Morgan Investment Management, Inc. for the AST Preservation Asset Allocation Portfolio. Filed herewith.
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(d)(58) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC, and each of PGIM, Inc., Jennison Associates LLC and QMA LLC for the AST Academic Strategies Asset Allocation Portfolio. Filed herewith.
(d)(59) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC, and Massachusetts Financial Services Company for the AST Academic Strategies Asset Allocation Portfolio. Filed herewith.
(d)(60) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC, and Wellington Management Company LLP for the AST Academic Strategies Asset Allocation Portfolio. Filed herewith.
(d)(61) Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC, and J.P. Morgan Investment Management Inc. for the AST Academic Strategies Asset Allocation Portfolio. Filed herewith.
C-8
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(d)(84)(b) Amendment to Subadvisory Agreement among PGIM Investments LLC, QS Investors, Brandywine Global Investment Management, LLC; ClearBridge Investments, LLC, Western Asset Management Company, LLC, Western Asset Management Company Limited and Franklin Advisers, Inc. for the AST Franklin 85/15 Diversified Allocation Portfolio. Filed herewith.
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(d)(87)(b) Amendment to Subadvisory Agreement between AST Investment Services, Inc., PGIM Investments LLC and Lazard Asset Management LLC for the AST International Value Portfolio. Filed herewith.
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C-12
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(e)(3) Distribution Agreement for the shares of each Portfolio of the Registrant, between Prudential Annuities Distributors, Inc. and the Registrant. Filed herewith.
(f) None.
(g)(2)(b) Amendment to the Custody Agreement between the Registrant and The Bank of New York Mellon. Filed herewith.
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(g)(3)(h) Addition of AST Bond Portfolio 2033 to the Accounting Services Agreement among the Registrant and The Bank of New York Mellon (as assigned from BNY Mellon Investment Servicing (US) Inc. f/k/a PFPC Inc.). Filed herewith.
(h)(1)(b) Amendment to the Amended and Restated Transfer Agency and Service Agreement dated May 29, 2007. Filed herewith.
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C-16
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(i)(19) Consent of Counsel for the Registrant. Filed herewith.
(k) None.
(m)(1) Shareholder Services and Distribution Plan. Filed herewith.
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(m)(9) Shareholder Services and Distribution (12b-1) Fee contractual waiver for the AST Bond Portfolio 2033. Filed herewith.
(n) None.
(o) None.
(p)(3) Code of Ethics of Cohen & Steers Capital Management, Inc. Filed herewith.
(p)(5) Code of Ethics of Hotchkis and Wiley Capital Management LLC. Filed herewith.
(p)(9) Code of Ethics of Pacific Investment Management Company LLC. Filed herewith.
(p)(10) Code of Ethics of T. Rowe Price Associates, Inc dated March 1, 2021. Filed herewith.
(p)(11) Code of Ethics of LSV Asset Management dated March 3, 2021. Filed herewith.
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(p)(15) Code of Ethics of Western Asset Management Company, LLC and Western Asset Management Company Limited. Filed herewith.
(p)(26) Code of Ethics of Wellington Management Company LLP. Filed herewith.
(p)(27) Code of Ethics of Victory Capital Management, Inc. Filed herewith.
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Item 29. Persons Controlled by or under Common Control with the Registrant.
Registrant does not control any person within the meaning of the Investment Company Act of 1940. Registrant may be deemed to be under common control with its investment manager and its affiliates because a controlling interest in Registrant is held of record by Prudential Annuities Life Assurance Corporation. See Registrant’s Statement of Additional Information under “Management and Advisory Arrangements” and “Other Information.”
Item 30. Indemnification.
Section 5.2 of the Registrant’s Second Amended and Restated Declaration of Trust provides as follows:
The Trust shall indemnify each of its Trustees, Trustee Emeritus, officers, employees, and agents (including persons who serve at its request as directors, officers, employees, agents or trustees of another organization in which it has any interest as a shareholder, creditor or otherwise) against all liabilities and expenses (including amounts paid in satisfaction of judgments, in compromise, as fines and penalties, and as counsel fees) reasonably incurred by him in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, in which he may be involved or with which he may be threatened, while in office or thereafter, by reason of his being or having been such a trustee, trustee emeritus, officer, employee or agent, except with respect to any matter as to which he shall have been adjudicated to be liable to the Trust or its Shareholders by reason of having acted in bad faith, willful misfeasance, gross negligence or reckless disregard of his duties; provided, however, that as to any matter disposed of by a compromise payment by such person, pursuant to a consent decree or otherwise, no indemnification either for said payment or for any other expenses shall be provided unless approved as in the best interests of the Trust, after notice that it involves such indemnification, by at least a majority of the disinterested Trustees acting on the matter (provided that a majority of the disinterested Trustees then in office act on the matter) upon a determination, based upon a review of readily available facts, that (i) such person acted in good faith in the reasonable belief that his or her action was in the best interests of the Trust and (ii) is not liable to the Trust or the Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of duties; or the trust shall have received a written opinion from independent legal counsel approved by the Trustees to the effect that (x) if the matter of good faith and reasonable belief as to the best interests of the Trust, had been adjudicated, it would have been adjudicated in favor of such person, and (y) based upon a review of readily available facts such trustee, officer, employee or agent did not engage in willful misfeasance, gross negligence or reckless disregard of duty. The rights accruing to any Person under these provisions shall not exclude any other right to which he may be
C-21
lawfully entitled; provided that no Person may satisfy any right of indemnity or reimbursement granted herein or in Section 5.1 or to which he may be otherwise entitled except out of the property of the Trust, and no Shareholder shall be personally liable to any Person with respect to any claim for indemnity or reimbursement or otherwise.
The Trustees may make advance payments in connection with indemnification under this Section 5.2, provided that the indemnified person shall have given a written undertaking to reimburse the Trust in the event it is subsequently determined that he is not entitled to such indemnification and, provided further, that the Trust shall have obtained protection, satisfactory in the sole judgment of the disinterested Trustees acting on the matter (provided that a majority of the disinterested Trustees then in office act on the matter), against losses arising out of such advance payments or such Trustees, or independent legal counsel, in a written opinion, shall have determined, based upon a review of readily available facts that there is reason to believe that such person will be found to be entitled to such indemnification.
With respect to liability of the Investment Manager to Registrant or to shareholders of Registrant’s Portfolios under the Investment Management Agreements, reference is made to Section 13 or 14 of each Investment Management Agreement filed herewith or incorporated by reference herein.
With respect to the Subadvisers indemnification of the Investment Manager and its affiliated and controlling persons, and the Investment Manager’s indemnification of each Subadviser and its affiliated and controlling persons, reference is made to Section 14 of each Subadvisory Agreement filed herewith or incorporated by reference herein.  Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission (the “Commission”) such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant or expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 31. Business and other Connections of the Investment Adviser.
AST Investment Services, Incorporated (“ASTI”), One Corporate Drive, Shelton, Connecticut 06484, and PGIM Investments LLC (“PGIM Investments”), 655 Broad Street, Newark, New Jersey 07102, serve as the co-investment managers to the Registrant. Information as to the business and other connections of the officers and directors of ASTI is included in ASTI’s Form ADV (File No. 801-40532), including the amendments to such Form ADV filed with the Commission, and is incorporated herein by reference. Information as to the business and other connections of the officers and directors of PGIM Investments is included in PGIM Investments’ Form ADV (File No. 801-3110), including the amendments to such Form ADV filed with the Commission, and is incorporated herein by reference.
Item 32. Principal Underwriters.
(a) Prudential Annuities Distributors, Inc. (PAD), One Corporate Drive, Shelton, Connecticut 06484 serves as the principal underwriter and distributor for shares of each Portfolio of Advanced Series Trust.  PAD is a registered broker-dealer and member of the Financial Industry Regulatory Authority (FINRA). The shares of each Portfolio of Advanced Series Trust are currently offered only to insurance company separate accounts as an investment option for variable annuity and variable life insurance contracts. 
(b) The following table sets forth certain information regarding the directors and officers of PAD. 
Name and Principal Business Address
Positions and Offices with Underwriter
James F. Mullery
One Corporate Drive
Shelton, Connecticut 06484-6208
President & CEO and Director
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Name and Principal Business Address
Positions and Offices with Underwriter
Ann Nanda
One Corporate Drive
Shelton, Connecticut 06484-6208
Senior Vice President and Director
Susan M. Mann
213 Washington Street
Newark, New Jersey 07102-2917
Senior Vice President and Director
Dianne D. Bogoian
One Corporate Drive
Shelton, Connecticut 06484-6208
Senior Vice President and Director
 
 
Elizabeth Guerrera
One Corporate Drive
Shelton, Connecticut 06484-6208
Vice President and Director
Kevin M. Brayton
280 Trumbull Street
Hartford, Connecticut 06103-3509
Senior Vice President and Director
Christopher J. Hagan
2101 Welsh Road
Dresher, Pennsylvania 19025-5000
Vice President
Patricia L. O’Shea
213 Washington Street
Newark, New Jersey 07102-2917
Chief Operating Officer
Francine B. Boucher
Three Gateway Center
Newark, New Jersey 07102-4061
Chief Legal Officer, Vice President and
Secretary
Kevin Chaillet
213 Washington Street
Newark, New Jersey 07102-2917
Treasurer
Robert P. Smit
3 Gateway Center
Newark, New Jersey 07102-4061
Chief Financial Officer and Controller
 
 
William Wilcox
28 Trumbull Street
Hartford, Connecticut 06103-3509
Vice President and Chief Compliance
Officer
Charles H. Smith
Three Gateway Center
Newark, New Jersey 07102-4061
AML Officer
Lynn K. Stone
One Corporate Drive
Shelton, Connecticut 06484-6208
Vice President
Scott P. Haggerty
One Corporate Drive
Shelton, Connecticut 06484-6208
Vice President
Jessica Conley
2101 Welsh Road
Dresher, Pennsylvania 19025-5000
Vice President
Item 33. Location of Accounts and Records.
All accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act and the Rules thereunder are maintained at the offices of The Bank of New York Mellon Corp. (BNY), 240 Greenwich Street, New York, New York 10286, PGIM, Inc., 655 Broad Street, Newark, New Jersey 07102, the Registrant, 655 Broad Street, Newark, New Jersey 07102, and Prudential Mutual Fund Services LLC (PMFS), 655 Broad Street, Newark, New Jersey 07102.
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Documents required by Rules 31a-1(b) (4), (5), (6), (7), (9), (10) and (11) and 31a-1 (d) and (f) will be kept at 655 Broad Street, Newark, New Jersey 07102, and the remaining accounts, books and other documents required by such other pertinent provisions of Section 31(a) and the Rules promulgated thereunder will be kept by BNY and PMFS.
Item 34. Management Services.
Other than as set forth under the caption “How the Trust is Managed ” in the Prospectus and the caption “Management and Advisory Arrangements” in the SAI, constituting Parts A and B, respectively, of this Post-Effective Amendment to the Registration Statement, Registrant is not a party to any management-related service contract.
Item 35. Undertakings.
Not applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment Company Act, the Fund certifies that it meets all of the requirements for effectiveness of this Post-Effective Amendment to the Registration Statement under Rule 485(b) under the Securities Act and has duly caused this Post-Effective Amendment to the Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Newark, and State of New Jersey, on the 15th day of December, 2021.
ADVANCED SERIES TRUST
Timothy S. Cronin*
Timothy S. Cronin
President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the date indicated. 
Signature
Title
Date
Timothy S. Cronin*
Timothy S. Cronin
President and Principal Executive Officer
 
Susan Davenport Austin*
Susan Davenport Austin
Trustee
 
Sherry S. Barrat*
Sherry S. Barrat
Trustee
 
Kay Ryan Booth*
Kay Ryan Booth
Trustee
 
Stephen M. Chipman*
Stephen M. Chipman
Trustee
 
Robert F. Gunia*
Robert F. Gunia
Trustee
 
Thomas T. Mooney *
Thomas T. Mooney
Trustee
 
Thomas M. O’Brien*
Thomas M. O’Brien
Trustee
 
Jessica Bibliowicz*
Jessica Bibliowicz
Trustee
 
Christian J. Kelly*
Christian J. Kelly
Treasurer, Principal Financial and Accounting
Officer
 
*By: /s/ Melissa Gonzalez
Melissa Gonzalez
Attorney-in-Fact
December 15, 2021
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POWER OF ATTORNEY
The undersigned, Susan Davenport Austin, Sherry S. Barrat, Jessica M. Bibliowicz, Kay Ryan Booth, Stephen M. Chipman, Timothy S. Cronin, Robert F. Gunia, Thomas T. Mooney, Thomas M. O’Brien and Christian J. Kelly, as directors/trustees and/or officers of each of the registered investment companies listed in Appendix A hereto hereby authorize Andrew French, Claudia DiGiacomo, Melissa Gonzalez, Patrick McGuinness and Debra Rubano, or any of them, as attorney-in-fact, to sign on his or her behalf in the capacities indicated (and not in such person’s personal individual capacity for personal financial or estate planning), the Registration Statement on Form N-1A, filed for such registered investment company or any amendment thereto (including any pre-effective or post-effective amendments) and any and all supplements or other instruments in connection therewith, including Form N-PX, Forms 3, 4 and 5 for or on behalf of each registered investment company listed in Appendix A or any current or future series thereof, and to file the same, with all exhibits thereto, with the Securities and Exchange Commission
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall constitute one instrument.  
 
 
 
/s/ Susan Davenport Austin
Susan Davenport Austin
 
 
/s/ Sherry S. Barrat
Sherry S. Barrat
 
 
/s/ Jessica M. Bibliowicz
Jessica M. Bibliowicz
 
 
/s/ Kay Ryan Booth
Kay Ryan Booth
 
 
/s/ Stephen M. Chipman
Stephen M. Chipman
 
 
/s/ Timothy S. Cronin
Timothy S. Cronin
 
 
/s/ Robert F. Gunia
Robert F. Gunia
 
 
/s/ Thomas T. Mooney
Thomas T. Mooney
 
 
/s/ Thomas M. O’Brien
Thomas M. O’Brien
 
 
/s/ Christian J. Kelly
Christian J. Kelly
 
 
 
 
 
Dated: March 19, 2021
 
 
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Appendix A
Advanced Series Trust
The Prudential Series Fund
Prudential’s Gibraltar Fund, Inc.
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Advanced Series Trust
Exhibit Index 
Item 28
Exhibit No.
Description
(d)(1)(g)
Contractual investment management fee waivers and/or contractual expense caps for selected AST
portfolios.
(d)(1)(h)
Contractual investment management fee waivers and/or contractual expense caps for AST Academic
Strategies Asset Allocation Portfolio, AST Balanced Asset Allocation Portfolio, AST Capital Growth Asset
Allocation Portfolio and AST Preservation Asset Allocation Portfolio.
(d)(2)(b)
Amendment to Investment Management Agreement, among the Registrant and PGIM Investments LLC,
dated December 1, 2021.
(d)(2)(g)
Contractual investment management fee waiver and/or contractual expense cap for the AST Global Bond
Portfolio and AST QMA International Core Equity Portfolio.
(d)(2)(h)
Contractual investment management fee waiver and/or contractual expense cap for the AST Bond
Portfolio 2033.
(d)(17)
Subadvisory Agreement among PGIM Investments LLC, PGIM, Inc. and PGIM Limited for the AST Bond
Portfolio 2033.
(d)(18)(b)
Amendment to Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC
and T. Rowe Price Associates, Inc., for the AST T. Rowe Price Asset Allocation Portfolio.
(d)(21)(b)
Amendment to Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC
and LSV Asset Management for the AST International Value Portfolio.
(d)(33)(b)
Amendment to Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC
and LSV Asset Management for the AST Advanced Strategies Portfolio.
(d)(38)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and each of QMA
LLC, Jennison Associates LLC, and PGIM, Inc. for the AST Balanced Asset Allocation Portfolio.
(d)(39)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and
Massachusetts Financial Services Company for the AST Balanced Asset Allocation Portfolio.
(d)(40)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and Wellington
Management Company LLP for the AST Balanced Asset Allocation Portfolio.
(d)(41)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and ClearBridge
Investments, LLC for the AST Balanced Asset Allocation Portfolio.
(d)(42)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and J.P. Morgan
Investment Management, Inc. for the AST Balanced Asset Allocation Portfolio.
(d)(43)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and each of QMA
LLC, Jennison Associates LLC, and PGIM, Inc. for the AST Capital Growth Asset Allocation Portfolio.
(d)(44)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and
Massachusetts Financial Services Company for the AST Capital Growth Asset Allocation Portfolio.
(d)(45)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and Wellington
Management Company LLP for the AST Capital Growth Asset Allocation Portfolio.
(d)(46)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and ClearBridge
Investments, LLC for the AST Capital Growth Asset Allocation Portfolio.
(d)(47)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and J.P. Morgan
Investment Management, Inc. for the AST Capital Growth Asset Allocation Portfolio.
(d)(48)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and each of QMA
LLC, Jennison Associates LLC, and PGIM, Inc. for the AST Preservation Asset Allocation Portfolio.
(d)(49)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and
Massachusetts Financial Services Company for the AST Preservation Asset Allocation Portfolio.
(d)(50)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and Wellington
Management Company LLP for the AST Preservation Asset Allocation Portfolio.
(d)(51)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and ClearBridge
Investments, LLC for the AST Preservation Asset Allocation Portfolio.
(d)(52)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC and J.P. Morgan
Investment Management, Inc. for the AST Preservation Asset Allocation Portfolio.
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Item 28
Exhibit No.
Description
(d)(58)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC, and each of
PGIM, Inc., Jennison Associates LLC and QMA LLC for the AST Academic Strategies Asset Allocation
Portfolio.
(d)(59)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC, and
Massachusetts Financial Services Company for the AST Academic Strategies Asset Allocation Portfolio.
(d)(60)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC, and Wellington
Management Company LLP for the AST Academic Strategies Asset Allocation Portfolio.
(d)(61)
Subadvisory Agreement among AST Investment Services, Inc., PGIM Investments LLC, and J.P. Morgan
Investment Management Inc. for the AST Academic Strategies Asset Allocation Portfolio.
(d)(84)(b)
Amendment to Subadvisory Agreement among PGIM Investments LLC, QS Investors, Brandywine Global
Investment Management, LLC; ClearBridge Investments, LLC, Western Asset Management Company,
LLC, Western Asset Management Company Limited and Franklin Advisers, Inc. for the AST Franklin
85/15 Diversified Allocation Portfolio.
(d)(87)(b)
Amendment to Subadvisory Agreement between AST Investment Services, Inc., PGIM Investments LLC
and Lazard Asset Management LLC for the AST International Value Portfolio.
(e)(3)
Distribution Agreement for the shares of each Portfolio of the Registrant, between Prudential Annuities
Distributors, Inc. and the Registrant.
(g)(2)(b)
Amendment to the Custody Agreement between the Registrant and The Bank of New York Mellon.
(g)(3)(h)
Addition of AST Bond Portfolio 2033 to the Accounting Services Agreement among the Registrant and
The Bank of New York Mellon (as assigned from BNY Mellon Investment Servicing (US) Inc. f/k/a PFPC
Inc.).
(h)(1)(b)
Amendment to the Amended and Restated Transfer Agency and Service Agreement dated May 29,
2007.
(i)(19)
Consent of Counsel for the Registrant.
(m)(1)
Shareholder Services and Distribution Plan.
(m)(9)
Shareholder Services and Distribution (12b-1) Fee contractual waiver for the AST Bond Portfolio 2033.
(p)(3)
Code of Ethics of Cohen & Steers Capital Management, Inc.
(p)(5)
Code of Ethics of Hotchkis and Wiley Capital Management LLC.
(p)(9)
Code of Ethics of Pacific Investment Management Company LLC.
(p)(10)
Code of Ethics of T. Rowe Price Associates, Inc dated March 1, 2021.
(p)(11)
Code of Ethics of LSV Asset Management dated March 3, 2021.
(p)(15)
Code of Ethics of Western Asset Management Company, LLC and Western Asset Management Company
Limited.
(p)(26)
Code of Ethics of Wellington Management Company LLP.
(p)(27)
Code of Ethics of Victory Capital Management, Inc.
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PGIM Investments LLC 

655 Broad Street 

Newark, New Jersey 07102 

  

AST Investment Services, Inc. 

One Corporate Drive 

Shelton, Connecticut 06484 

  

The Board of Trustees of Advanced Series Trust 

655 Broad Street 

Newark, New Jersey 07102 

  

Re: Contractual Expense Caps 

  

PGIM Investments LLC and AST Investment Services, Inc. (collectively, the "Manager") hereby agree to cap expenses / reimburse certain expenses and/or waive a portion of their investment management fees as more particularly described and set forth for the Portfolios listed on Exhibit A hereto. 

  

  

Very truly yours, 

  

  

PGIM Investments LLC
 

  

By: /s/ Timothy Cronin
Name: Timothy Cronin

Title: Senior Vice President 

  

  

  

AST Investment Services, Inc.
 

  

By: /s/ Timothy Cronin 

Name:

Timothy Cronin 

Title:

President 

 

 

 

Exhibit A 

  

Effective June 7, 2021 

  

  

AST BlackRock/Loomis Sayles Bond Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.69% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST BlackRock Low Duration Bond Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.72% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST ClearBridge Dividend Growth Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.91% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Cohen & Steers Realty Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.10% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Cohen & Steers Global Realty Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.09% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

 

AST Emerging Markets Equity Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.28% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

This replaces the previous contractual expense cap of 1.30% that was set to expire on June 30, 2022. 

  

AST Goldman Sachs Small-Cap Value Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.03% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. The Manager has also contractually agreed to waive a portion of its investment management fee equal to the management fee of any acquired fund managed or subadvised by Goldman Sachs Asset Management, L.P. 

  

AST High Yield Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.85% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Hotchkis & Wiley Large-Cap Value Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.81% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST International Growth Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.06% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

 

AST International Value Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.08% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Jennison Large-Cap Growth Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.98% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Large-Cap Core Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.80% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

This replaces the previous contractual expense cap of 0.810% that was set to expire on June 30, 2022. 

  

  

AST Loomis Sayles Large-Cap Growth Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.91% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST MFS Growth Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.96% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

 

AST MFS Large-Cap Value Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.92% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Mid-Cap Growth Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.05% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Mid-Cap Value Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases, of interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.97% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

This replaces the previous contractual expense cap of 1.00% that was set to expire on June 30, 2022. 

  

  

AST Prudential Core Bond Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.73% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST QMA US Equity Alpha Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.12% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

 

AST Small-Cap Growth Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.99% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Small-Cap Growth Opportunities Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.05% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Small-Cap Value Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.99% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST T. Rowe Price Large-Cap Growth Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.88% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST T. Rowe Price Large-Cap Value Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.81% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

 

AST T. Rowe Price Natural Resources Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.99% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Western Asset Core Plus Bond Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.77% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

AST Western Asset Emerging Markets Debt Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.06% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

  

  

1 

  


PGIM Investments LLC 

655 Broad Street 

Newark, New Jersey 07102 

  

AST Investment Services, Inc. 

One Corporate Drive 

Shelton, Connecticut 06484 

  

The Board of Trustees of Advanced Series Trust 

655 Broad Street 

Newark, New Jersey 07102 

  

Re: Contractual Fee Waivers 

  

PGIM Investments LLC and AST Investment Services, Inc. (collectively, the "Manager") hereby agree to cap expenses / reimburse certain expenses and/or waive a portion of their investment management fees as more particularly described and set forth for the Portfolios listed on Exhibit A hereto. 

  

  

Very truly yours, 

  

  

PGIM Investments LLC
 

  

By: /s/ Timothy Cronin
Name: Timothy Cronin

Title: Senior Vice President

  

  

  

AST Investment Services, Inc.
 

  

By: /s/ Timothy Cronin 

Name:

Timothy Cronin 

Title:

President 

 

 

 

Exhibit A 

  

Effective June 7, 2021 

  

  

AST Academic Strategies Asset Allocation Portfolio: The Manager has contractually agreed to waive 0.02% of its investment management fee through June 30, 2022. The Manager has also contractually agreed to waive a portion of their investment management fee and distribution fee, respectively, equal to the amount of the management and distribution fee received from other portfolios of the Trust due to the Portfolio's investment in any such portfolios. In addition, the Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio's investment management fee plus other expenses (exclusive, in all cases of, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 1.13% of the Portfolio's average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. These arrangements may not be terminated or modified without the prior approval of the Trust's Board of Trustees. 

  

This replaces the 0.007% contractual waiver that was previously set to expire on June 30, 2022. 

  

AST Balanced Asset Allocation Portfolio:  The Manager has contractually agreed to waive 0.02% of its investment management fee through June 30, 2022. The Manager has also contractually agreed to waive a portion of their investment management fee and distribution fee, respectively, equal to the amount of the management and distribution fee received from other portfolios of the Trust due to the Portfolio's investment in any such portfolios. In addition, the Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio's investment management fee plus other expenses (exclusive, in all cases of, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.89% of the Portfolio's average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. These arrangements may not be terminated or modified without the prior approval of the Trust's Board of Trustees. 

  

AST Capital Growth Asset Allocation Portfolio:  The Manager has contractually agreed to waive 0.02% of its investment management fee through June 30, 2022. The Manager has also contractually agreed to waive a portion of their investment management fee and distribution fee, respectively, equal to the amount of the management and distribution fee received from other portfolios of the Trust due to the Portfolio's investment in any such portfolios. In addition, the Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio's investment management fee plus other expenses (exclusive, in all cases of, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.89% of the Portfolio's average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. These arrangements may not be terminated or modified without the prior approval of the Trust's Board of Trustees. 

  

AST Preservation Asset Allocation Portfolio:

 

The Manager has contractually agreed to waive 0.02% of its investment management fee through June 30, 2022. The Manager has also contractually agreed to waive a portion of their investment management fee and distribution fee, respectively, equal to the amount of the management and distribution fee received from other portfolios of the Trust due to the Portfolio's investment in any such portfolios. In addition, the Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio's investment management fee plus other expenses (exclusive, in all cases of, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.89% of the Portfolio's average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. These arrangements may not be terminated or modified without the prior approval of the Trust's Board of Trustees. 

  


ADVANCED SERIES TRUST
 

  

AMENDMENT NO. 6 TO MANAGEMENT AGREEMENT 

Amendment No. 6 to Management Agreement made this 1st day of December, 2021, by and between Advanced Series Trust (AST), on behalf of each series listed on Schedule A hereto (collectively, the Portfolios) and PGIM Investments LLC (PGIM Investments or the Manager).  

WHEREAS, the Manager has entered into a Management Agreement (the Management Agreement) dated February 25, 2013 with AST for the Portfolios, as amended from time to time, pursuant to which PGIM Investments acts as Manager of AST; and 

WHEREAS, AST and the Manager have mutually agreed to revise Schedule A of the Management Agreement in order to include the AST Bond Portfolio 2033 as a new series of AST (the New Portfolio), and whereby the New Portfolio compensates the Manager for the services provided by the Manager to the New Portfolio under the Management Agreement; and  

NOW THEREFORE, the parties mutually agree as follows: 

1.  The management fee rate schedule for the Portfolios appearing in Schedule A of the Management Agreement is hereby deleted in its entirety and is replaced with the attached Schedule A. 

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.  

  

ADVANCED SERIES TRUST

By: /s/ Timothy Cronin
Name: Timothy S. Cronin
Title:   President


PGIM INVESTMENTS LLC

By: /s/ Timothy Cronin
Name: Timothy S. Cronin 

Title:  Senior Vice President 

  

 

ADVANCED SERIES TRUST

Schedule “A” 

Portfolio 

Contractual Fee Rate 

AST Prudential Flexible Multi-Strategy Portfolio
(effective as of April 27, 2020) 

0.7825% of average daily net assets to $300 million;
0.7725% on next $200 million of average daily net assets;
0.7625% on next $250 million of average daily net assets;
0.7525% on next $2.5 billion of average daily net assets;
0.7425% on next $2.75 billion of average daily net assets;
0.7125% on next $4 billion of average daily net assets;
0.6925% over $10 billion of average daily net assets 

AST Franklin 85/15 Diversified Allocation Portfolio
(formerly, AST Legg Mason Diversified Growth Portfolio) 

0.7325% of average daily net assets to $300 million;
0.7225% on next $200 million of average daily net assets;
0.7125% on next $250 million of average daily net assets;
0.7025% on next $2.5 billion of average daily net assets;
0.6925% on next $2.75 billion of average daily net assets;
0.6625% on next $4 billion of average daily net assets;
0.6425% over $10 billion of average daily net assets 

AST T. Rowe Price Diversified Real Growth Portfolio 

0.7325% of average daily net assets to $300 million;
0.7225% on next $200 million of average daily net assets;
0.7125% on next $250 million of average daily net assets;
0.7025% on next $2.5 billion of average daily net assets;
0.6925% on next $2.75 billion of average daily net assets;
0.6625% on next $4 billion of average daily net assets;
0.6425% over $10 billion of average daily net assets 

AST Bond Portfolio 2026* 

0.4925% of average daily net assets to $500 million;
0.4725% on next $4.5 billion of average daily net assets;
0.4625% on next $5 billion of average daily net assets;
0.4525% over $10 billion of average daily net assets 

AST Bond Portfolio 2027* 

0.4925% of average daily net assets to $500 million;
0.4725% on next $4.5 billion of average daily net assets;
0.4625% on next $5 billion of average daily net assets;
0.4525% over $10 billion of average daily net assets 

AST Bond Portfolio 2028* 

0.4925% of average daily net assets to $500 million;
0.4725% on next $4.5 billion of average daily net assets;
0.4625% on next $5 billion of average daily net assets;
0.4525% over $10 billion of average daily net assets 

AST Bond Portfolio 2029* 

0.4925% of average daily net assets to $500 million;
0.4725% on next $4.5 billion of average daily net assets;
0.4625% on next $5 billion of average daily net assets;
0.4525% over $10 billion of average daily net assets 

AST Bond Portfolio 2030* 

0.4925% of average daily net assets to $500 million;
0.4725% on next $4.5 billion of average daily net assets;
0.4625% on next $5 billion of average daily net assets;
0.4525% over $10 billion of average daily net assets 

AST Bond Portfolio 2031* 

0.4925% of average daily net assets to $500 million;
0.4725% on next $4.5 billion of average daily net assets;
0.4625% on next $5 billion of average daily net assets;
0.4525% over $10 billion of average daily net assets 

AST Bond Portfolio 2032* 

0.4925% of average daily net assets to $500 million;
0.4725% on next $4.5 billion of average daily net assets;
0.4625% on next $5 billion of average daily net assets;
0.4525% over $10 billion of average daily net assets 

AST Bond Portfolio 2033* 

0.4925% of average daily net assets to $500 million;
0.4725% on next $4.5 billion of average daily net assets;
0.4625% on next $5 billion of average daily net assets;
0.4525% over $10 billion of average daily net assets 

AST QMA International Core Equity Portfolio 

0.7325% of average daily net assets to $300 million;
0.7225% on next $200 million of average daily net assets;
0.7125% on next $250 million of average daily net assets;
0.7025% on next $2.5 billion of average daily net assets;
0.6925% on next $2.75 billion of average daily net assets;
0.6625% on next $4 billion of average daily net assets;
0.6425% over $10 billion of average daily net assets 

AST Global Bond Portfolio
(formerly, AST Wellington Management Global Bond Portfolio) 

0.64% of average daily net assets to $300 million;
0.63% on next $200 million of average daily net assets;
0.62% on next $250 million of average daily net assets;
0.61% on next $2.5 billion of average daily net assets;
0.60% on next $2.75 billion of average daily net assets;
0.57% on next $4 billion of average daily net assets;
0.55% over $10 billion of average daily net assets 

AST American Funds Growth Allocation Portfolio 

0.6825% of average daily net assets to $300 million;
0.6725% on next $200 million of average daily net assets;
0.6625% on next $250 million of average daily net assets;
0.6525% on next $2.5 billion of average daily net assets;
0.6425% on next $2.75 billion of average daily net assets;
0.6125% on next $4 billion of average daily net assets;
0.5925% over $10 billion of average daily net assets 

AST BlackRock 60/40 Target Allocation ETF Portfolio 

0.525% of average daily net assets to $300 million;
0.515% on next $200 million of average daily net assets;
0.505% on next $250 million of average daily net assets;
0.495% on next $2.5 billion of average daily net assets;
0.485% on next $2.75 billion of average daily net assets;
0.455% on next $4 billion of average daily net assets;
0.435% over $10 billion of average daily net assets 

AST BlackRock 80/20 Target Allocation ETF Portfolio 

0.525% of average daily net assets to $300 million;
0.515% on next $200 million of average daily net assets;
0.505% on next $250 million of average daily net assets;
0.495% on next $2.5 billion of average daily net assets;
0.485% on next $2.75 billion of average daily net assets;
0.455% on next $4 billion of average daily net assets;
0.435% over $10 billion of average daily net assets 

AST BlackRock Corporate Bond Portfolio 

0.5325% of average daily net assets to $300 million;
0.5225% on next $200 million of average daily net assets;
0.5125% on next $250 million of average daily net assets;
0.5025% on next $2.5 billion of average daily net assets;
0.4925% on next $2.75 billion of average daily net assets;
0.4625% on next $4 billion of average daily net assets;
0.4425% on next $2.5 billion of average daily net assets;
0.4225% on next $2.5 billion of average daily net assets;
0.4025% on next $5 billion of average daily net assets;


0.3825% over $20 billion of average daily net assets 

AST PIMCO Corporate Bond Portfolio 

0.5325% of average daily net assets to $300 million;
0.5225% on next $200 million of average daily net assets;
0.5125% on next $250 million of average daily net assets;
0.5025% on next $2.5 billion of average daily net assets;
0.4925% on next $2.75 billion of average daily net assets;
0.4625% on next $4 billion of average daily net assets;
0.4425% on next $2.5 billion of average daily net assets;
0.4225% on next $2.5 billion of average daily net assets;
0.4025% on next $5 billion of average daily net assets;
0.3825% over $20 billion of average daily net assets 

AST Prudential Corporate Bond Portfolio** 

0.5325% of average daily net assets to $300 million;
0.5225% on next $200 million of average daily net assets;
0.5125% on next $250 million of average daily net assets;
0.5025% on next $2.5 billion of average daily net assets;
0.4925% on next $2.75 billion of average daily net assets;
0.4625% on next $4 billion of average daily net assets;
0.4425% on next $2.5 billion of average daily net assets;
0.4225% on next $2.5 billion of average daily net assets;
0.4025% on next $5 billion of average daily net assets;
0.3825% over $20 billion of average daily net assets 

AST T. Rowe Price Corporate Bond Portfolio 

0.5325% of average daily net assets to $300 million;
0.5225% on next $200 million of average daily net assets;
0.5125% on next $250 million of average daily net assets;
0.5025% on next $2.5 billion of average daily net assets;
0.4925% on next $2.75 billion of average daily net assets;
0.4625% on next $4 billion of average daily net assets;
0.4425% on next $2.5 billion of average daily net assets;
0.4225% on next $2.5 billion of average daily net assets;
0.4025% on next $5 billion of average daily net assets;
0.3825% over $20 billion of average daily net assets 

AST Western Asset Corporate Bond Portfolio 

0.5325% of average daily net assets to $300 million;
0.5225% on next $200 million of average daily net assets;
0.5125% on next $250 million of average daily net assets;
0.5025% on next $2.5 billion of average daily net assets;
0.4925% on next $2.75 billion of average daily net assets;
0.4625% on next $4 billion of average daily net assets;
0.4425% on next $2.5 billion of average daily net assets;
0.4225% on next $2.5 billion of average daily net assets;
0.4025% on next $5 billion of average daily net assets;
0.3825% over $20 billion of average daily net assets 

*The assets for each of the AST Bond Portfolio 2021, AST Bond Portfolio 2022, AST Bond Portfolio 2023, AST Bond Portfolio 2024, AST Bond Portfolio 2025, AST Bond Portfolio 2026, AST Bond Portfolio 2027, AST Bond Portfolio 2028, AST Bond Portfolio 2029, AST Bond Portfolio 2030, AST Bond Portfolio 2031, AST Bond Portfolio 2032, AST Bond Portfolio 2033 and AST Investment Grade Bond Portfolio are aggregated for purposes of determining the fee rate applicable to each Portfolio. 

**The assets of the AST Prudential Corporate Bond Portfolio will be aggregated with the assets of the AST Multi-Sector Fixed Income Portfolio. 

As of December 1, 2021 


PGIM Investments LLC 

655 Broad Street 

Newark, New Jersey 07102 

  

The Board of Trustees of Advanced Series Trust 

655 Broad Street 

Newark, New Jersey 07102 

  

Re: Contractual Expense Caps 

  

PGIM Investments LLC (the "Manager”) hereby agrees to cap expenses / reimburse certain expenses and/or waive a portion of its investment management fee as more particularly described and set forth for the Portfolios listed on Exhibit A hereto. 

  

  

Very truly yours, 

  

  

PGIM Investments LLC
 

  

By: /s/ Timothy Cronin
 

Name: Timothy Cronin 

Title: Senior Vice President

 

  

  

  

  

 

 

  

Exhibit A 

  

Effective June 7, 2021 

  

AST Global Bond Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.84% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  

This replaces the previous contractual expense cap of 0.880% that was set to expire on June 30, 2022. 

  

AST QMA International Core Equity Portfolio: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases of, interest, brokerage, taxes (such as income and foreign withholding taxes, stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.99% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 

  


PGIM Investments LLC 

655 Broad Street 

Newark, New Jersey 07102 

  

December 1, 2021 

  

The Board of Trustees of Advanced Series Trust 

655 Broad Street 

Newark, New Jersey 07102 

  

Re: Contractual Fee Waiver 

  

PGIM Investments LLC (the “Manager”) hereby agrees to cap expenses / reimburse certain expenses and/or waive a portion of its investment management fees as more particularly described and set forth for the Portfolio listed on Exhibit A hereto. 

  

  

Very truly yours, 

  

  

PGIM Investments LLC
 

  

By: /s/ Timothy Cronin
 

Name:  Timothy S. Cronin

Title: Senior Vice President

 

  

  

  

  

 

 

 

Exhibit A 

  

AST Bond Portfolio 2033: The Manager has contractually agreed to waive a portion of its investment management fee and/or reimburse certain expenses of the Portfolio so that the Portfolio’s investment management fee plus other expenses (exclusive, in all cases, of brokerage, taxes (such as income and foreign withholding taxes, including stamp duty and deferred tax expenses), extraordinary expenses, acquired fund fees and expenses, and certain other Portfolio expenses such as dividend and interest expense and broker charges on short sales) do not exceed 0.93% of the Portfolio’s average daily net assets through June 30, 2023. Expenses waived/reimbursed by the Manager may be recouped by the Manager within the same fiscal year during which such waiver/reimbursement is made if such recoupment can be realized without exceeding the expense limit in effect at the time of the recoupment for that fiscal year. This arrangement may not be terminated or modified without the prior approval of the Trust’s Board of Trustees. 


Execution Version  

  

ADVANCED SERIES TRUST 

  

AST Bond Portfolio 2033
 

SUBADVISORY AGREEMENT 

  

Subadvisory Agreement (Agreement) made as of this 19th day of November, 2021 between PGIM Investments LLC (PGIM Investments or the Manager), a New York limited liability company, and PGIM, Inc. (PGIM), a New Jersey Corporation, and PGIM Limited (PGIM Limited), a United Kingdom limited company (PGIM and PGIM Limited are collectively referred to herein as the Subadvisers). 

  

WHEREAS, the Manager has entered into a Management Agreement (the Management Agreement) dated February 25, 2013, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments acts as Manager of the Trust; and 

  

WHEREAS, the Manager, acting pursuant to the Management Agreement, desires to retain the Subadvisers to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Manager shall from time to time direct, and the Subadvisers are willing to render such investment advisory services; and 

  

WHEREAS, PGIM Limited is authorized and regulated in the United Kingdom by the Financial Conduct Authority and both PGIM Limited and PGIM are each registered with the Securities and Exchange Commission (the Commission) as an investment adviser under the Investment Advisers Act of 1940, as amended (the Advisers Act). 

  

NOW, THEREFORE, the parties hereto agree as follows: 

  

1. (a) Subject to the supervision of the Manager and the Board of Trustees of the Trust, the Subadvisers shall manage such portion of the Trust's portfolio as delegated to the Subadvisers by the Manager, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadvisers shall provide supervision of such portion of the Trust's investments as the Manager shall direct, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash. 

  

(ii) In the performance of their duties and obligations under this Agreement, the Subadvisers shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust's valuation procedures as provided to it by the Manager (the Trust Documents) and with the instructions and directions of the Manager and of the Board of Trustees of the Trust, co-operate with the Manager's (or its designees') personnel responsible for monitoring the Trust's compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, and all other applicable federal and state laws and regulations. In connection therewith, the Subadvisers shall, among other things, prepare and file such reports as are, or may in the future be, required by the Commission. The Manager shall provide Subadvisers timely with copies of any updated Trust Documents. 

  

(iii) The Subadvisers shall determine the securities, futures contracts and other instruments to be purchased or sold by such portion of the Trust's portfolio, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with the Subadvisers (collectively, Brokers), to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time. In providing the Trust with investment supervision, it is recognized that the Subadvisers will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadvisers may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadvisers’ other clients may be a party. The Manager (or Subadvisers) to the Trust each shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser(s)) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Manager (or the Subadvisers) with respect to the Trust and other accounts as to which they or it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. On occasions when the Subadvisers deem the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadvisers, the Subadvisers, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadvisers in the manner the Subadvisers consider to be the most equitable and consistent with their fiduciary obligations to the Trust and to such other clients. Pursuant to the rules promulgated under Section 326 of the USA Patriot Act, Brokers are required to obtain, verify and record information that identifies each person who opens an account with them.  In accordance therewith, Brokers whom the Subadvisers select to execute transactions in the Trust’s account may seek identifying information about the Trust. 

  

(iv) The Subadvisers shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadvisers shall make reasonably available their employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(v) The Subadvisers or an affiliate shall provide the Trust's custodian on each business day with information relating to all transactions concerning the portion of the Trust's assets they manage, and shall provide the Manager with such information upon request of the Manager. 

  

(vi) The investment management services provided by the Subadvisers hereunder are not to be deemed exclusive, and the Subadvisers shall be free to render similar services to others. Conversely, the Subadvisers and the Manager understand and agree that if the Manager manages the Trust in a "manager-of-managers" style, the Manager will, among other things, (i) continually evaluate the performance of the Subadvisers through quantitative and qualitative analysis and consultations with the Subadvisers, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadvisers recognize that their services may be terminated or modified pursuant to this process.  

  

(vii) The Subadvisers acknowledge that the Manager and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadvisers hereby agree that they shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust's portfolio or any other transactions of Trust assets. 

  

(b) The Subadvisers shall authorize and permit any of their directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadvisers under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) The Subadvisers shall keep the Trust's books and records required to be maintained by the Subadvisers pursuant to paragraph 1(a) hereof and shall timely furnish to the Manager all information relating to the Subadvisers’ services hereunder needed by the Manager to keep the other books and records of the Trust required by Rule 31a-I under the 1940 Act or any successor regulation. The Subadvisers agree that all records which they maintain for the Trust are the property of the Trust, and the Subadvisers will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadvisers may retain a copy of such records. The Subadvisers further agree to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(d)

The Subadvisers are commodity trading advisors duly registered with the Commodity Futures Trading Commission (the CFTC) and are members in good standing of the National Futures Association (the NFA). The Subadvisers shall maintain such registration and membership in good standing during the term of this Agreement. Further, the Subadvisers agree to notify the Manager promptly upon (i) a statutory disqualification of the Subadvisers under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadvisers’ commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadvisers are subject or have been advised they are a target. 

  

(e) In connection with their duties under this Agreement, the Subadvisers agree to maintain adequate compliance procedures to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940 (the Advisers Act), and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

  

(f) The Subadvisers shall maintain a written code of ethics (the Code of Ethics) that they reasonably believe complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Manager and the Trust, and shall institute procedures reasonably necessary to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadvisers shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadvisers represent that they maintain adequate compliance procedures to ensure their compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, the Subadvisers represent that they have policies and procedures regarding the detection and prevention of the misuse of material, non-public information by the Subadvisers and their employees as required by the Insider Trading and Securities Fraud Enforcement Act of 1988, a copy of which shall be provided to the Manager and the Trust upon reasonable request. The Subadvisers shall assure that their employees comply in all material respects with the provisions of Section 16 of the 1934 Act, and shall cooperate reasonably with the Manager for purposes of filing any required reports with the Securities and Exchange Commission (the Commission) or such other regulator having appropriate jurisdiction.  

  

(g) The Subadvisers shall furnish to the Manager copies of all records prepared in connection with (i) the performance of this Agreement and (ii) the maintenance of compliance procedures pursuant to paragraph 1(e) hereof as the Manager may reasonably request. 

  

(h) The Subadvisers shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Trust's portfolio, subject to such reasonable reporting and other requirements as shall be established by the Manager. 

  

(i) The Subadvisers acknowledge that they are responsible for evaluating whether market quotations are readily available for the Trust's portfolio investments and whether those market quotations are reliable for purposes of valuing the Trust's portfolio investments and determining the Trust's net asset value per share and promptly notifying the Manager upon the occurrence of any significant event with respect to any of the Trust's portfolio investments in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff. Upon reasonable request from the Manager, the Subadvisers (through a qualified person) will assist the valuation committee of the Trust or the Manager in valuing investments of the Trust as may be required from time to time, including making available information of which the Subadvisers have knowledge related to the investments being valued. 

  

(j) The Subadvisers shall provide the Manager with any information reasonably requested regarding their management of the Trust's portfolio required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadvisers shall provide the Manager with any reasonable certification, documentation or other information reasonably requested or required by the Manager for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadvisers shall promptly inform the Trust and the Manager if the Subadvisers become aware of any information in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(k) The Subadvisers shall comply with the Trust Documents provided to the Subadvisers by the Manager. The Subadvisers shall notify the Manager as soon as reasonably practicable upon detection of any material breach of such Trust Documents.  

  

(l) The Subadvisers shall keep the Manager informed of developments relating to their duties as Subadvisers of which the Subadvisers have, or should have, knowledge that would materially affect the Trust. In this regard, the Subadvisers shall provide the Trust, the Manager, and their respective officers with such periodic reports concerning the obligations the Subadvisers have assumed under this Agreement and the Manager may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadvisers shall provide the Manager and the Board with reports regarding the Subadvisers’ management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadvisers and the Manager. The Subadvisers shall certify quarterly to the Manager that they and their “Advisory Persons” (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadvisers have done to seek to ensure such compliance in the future. Annually, the Subadvisers shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadvisers ‘Code of Ethics and compliance program, respectively, to the Manager. Upon written request of the Manager with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadvisers shall permit representatives of the Trust or the Manager to examine reports (or summaries of the reports) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Manager shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadvisers’ performance of its duties under this Agreement. The Manager shall provide (or cause the Trust's custodian to provide) timely information to the Subadvisers regarding such matters as the composition of assets in the portion of the Trust managed by the Subadvisers, cash requirements and cash available for investment in such portion of the Trust, and all other information as may be reasonably necessary for the Subadvisers to perform their duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadvisers). 

  

3. For the services provided pursuant to this Agreement, the Manager shall pay the Subadvisers as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the portion of the Trust managed by the Subadvisers as described in the attached Schedule A. Liability for payment of compensation by the Manager to the Subadvisers under this Agreement is contingent upon the Manager's receipt of payment from the Trust for management services described under the Management Agreement between the Trust and the Manager. Expense caps or fee waivers for the Trust that may be agreed to by the Manager, but not agreed to by the Subadvisers, shall not cause a reduction in the amount of the payment to the Subadvisers by the Manager. 

  

4. (a) The Subadvisers acknowledges that, in the course of its engagement by the Manager, the Subadvisers may receive or have access to confidential and proprietary information of the Manager or third parties with whom the Manager conducts business.  Such information is collectively referred to as “Confidential Information.”  Confidential Information includes the Manager’s business and other proprietary information, written or oral. 

  

(b)

The Subadvisers certify that (i) their treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) they have implemented and currently maintain an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures necessary to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Manager, or to any person who may be identified by Confidential Information.  The Subadvisers shall immediately notify the Manager if the Subadvisers are in material breach of this Section.  At the Manager’s request, the Subadvisers agree to certify in writing to the Manager, their compliance with the terms of this Section. 

  

(c)

The Subadvisers shall notify the Manager or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadvisers’ obligations set forth in its Information Security Program and this Agreement. 

  

(d)

The Subadvisers shall review and, as appropriate, revise their Information Security Program at least annually or whenever there is a material change in the Subadvisers’ business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadvisers may not alter or modify their Information Security Program in such a way that will weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Subadvisers shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to the minimum number of the Subadvisers’ employees who require such access in order to provide the services to the Manager. 

  

(f)

The Subadvisers shall conduct periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and evaluate and improve, where necessary, the effectiveness of its information security controls.  Such assessments will also consider the Subadvisers’ compliance with its Information Security Program and the laws applicable to the Subadvisers. 

  

(g)

The Subadvisers shall conduct regular penetration and vulnerability testing of their information technology infrastructure and networks.  If any testing detects any anomalies, intrusions, or vulnerabilities in any information technology systems processing, storing or transmitting any of the Manager’s Confidential Information, the Subadvisers shall promptly report those findings to the Manager. 

  

(h)

The Subadvisers shall notify the Manager, promptly and without unreasonable delay, but in no event more than 48 hours of learning of any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to Confidential Information may have occurred or is under investigation (a “Security Incident”). Thereafter, the Subadvisers shall: (i) promptly furnish to the Manager full details of the Security Incident; (ii) assist and cooperate with the Manager and the Manager’s designated representatives in the Manager’s investigation of the Subadvisers, Subadvisers’ employees or third parties related to the Security Incident.  The Subadvisers will provide the Manager with physical access to the facilities and operations affected, facilitate the Manager’s interviews with Subadvisers’ employees and others involved in the matter, and make available to the Manager all relevant records, logs, files, and data; (iii) cooperate with the Manager in any litigation or other formal action against third parties deemed necessary by the Manager to protect the Manager’s rights; and  (iv) take appropriate action to prevent a recurrence of any Security Incident. 

  

(i)

Upon the Manager’s reasonable request at any time during the term of the Agreement, the Subadvisers shall promptly provide the Manager with information related to the Subadvisers’ information security safeguards and practices.  

  

(j)

For the purpose of auditing the Subadvisers’ compliance with this Section, the Subadvisers shall provide to the Manager, on reasonable notice: (a) access to the Subadvisers’ information processing premises and records; (b) reasonable assistance and cooperation of the Subadvisers’ relevant staff; and (c) reasonable facilities at the Subadvisers’ premises.   

  

5. The Subadvisers will not engage any third party to provide services to the portion of the Trust's portfolio as delegated to the Subadvisers by the Manager without the express written consent of the Manager.  To the extent that the Subadviser receives approval from the Manager to engage a third-party service provider, the Subadvisers assume all responsibility for any action or inaction of the service provider as it related to the Trust's portfolio as delegated to the Subadvisers by the Manager.  In addition, the Subadvisers shall fully indemnify, hold harmless, and defend the Manager and its directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) which arise out of or relate to the provision of services provided by any such service provider. 

  

6. The Subadvisers shall not be liable for any error of judgment or for any loss suffered by the Trust or the Manager in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadvisers’ part in the performance of their duties or from its reckless disregard of their obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Manager or the Trust may have against the Subadvisers under federal or state securities laws. The Manager shall indemnify the Subadvisers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Manager's willful misfeasance, bad faith, gross negligence, reckless disregard of their duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadvisers shall indemnify the Manager, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Subadvisers’ willful misfeasance, bad faith, gross negligence, or reckless disregard of their duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Trust, or by the Manager or the Subadvisers at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadvisers agree that they will promptly notify the Trust and the Manager of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadvisers.   

  

To the extent that the Manager delegates to the Subadvisers management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Manager, the Subadvisers agree that their duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Manager begins the transition process to allocate management responsibility to the Subadvisers. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Manager at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadvisers at 7 Giralda Farms, Madison, NJ 07940, Attention: Chief Legal Officer (for PGIM) and at Grand Buildings 1-3 Strand Trafalgar Square, London WC2N 5HR, Attention: Chief Legal Officer (for PGIM Limited). 

  

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadvisers’ directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadvisers’ right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Manager agrees to furnish the Subadvisers at their principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadvisers in any way, prior to use thereof and not to use material if the Subadvisers reasonably object in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Manager also agrees to furnish the Subadvisers, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadvisers. The Manager further agrees to prospectively make reasonable changes to such materials upon the Subadvisers’ written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadvisers may be furnished to the Subadvisers hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the date first above written.

 

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

  

Name: Timothy Cronin 

Title: Senior Vice President 

  

  

PGIM, INC. 

  

By: /s/ Daniel Malooly 

  

Name: Daniel Malooly 

Title: Vice President 

  

  

PGIM LIMITED 

  

By: /s/ Sarah McMullen 

  

Name: Sarah McMullen 

Title: Director, PGIM Ltd 

  

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by PGIM Fixed Income, a business unit of PGIM, Inc., and PGIM Limited (collectively for purposes of this Schedule A referred to as PGIM), PGIM Investments LLC will pay PGIM an advisory fee on the net assets managed by PGIM that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio*,** 

  

AST Bond Portfolio 2033 

  

0.15% of average daily net assets to $500 million; 

0.14% of the next $1.5 billion of average daily net assets; and 

0.12% of average daily net assets over $2 billion. 

* In the event PGIM invests Portfolio assets in other pooled investment vehicles it manages or subadvises, PGIM will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to PGIM with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the investment subadvisory fee payable to PGIM, the subadvisory fee will be calculated using the combined average daily net assets of the AST Bond Portfolio 2022, AST Bond Portfolio 2023, AST Bond Portfolio 2024, AST Bond Portfolio 2025, AST Bond Portfolio 2026, AST Bond Portfolio 2027, AST Bond Portfolio 2028, AST Bond Portfolio 2029, AST Bond Portfolio 2030, AST Bond Portfolio 2031, AST Bond Portfolio 2032, AST Bond Portfolio 2033 and the AST Investment Grade Bond Portfolio, and the assets of any future portfolios of the Trust that are subadvised by PGIM pursuant to target maturity or constant duration investment strategies that are used in connection with non-discretionary asset transfers under certain living benefit programs. 

  

Dated as of:  November 19, 2021 

  


Execution Version 

Amendment to Subadvisory Agreement  

for AST T. ROWE PRICE ASSET ALLOCATION PORTFOLIO 

  

AST Investment Services, Inc., PGIM Investments LLC (formerly Prudential Investments LLC) (collectively, the “Manager”) and T. Rowe Price Associates, Inc. (the “Subadviser”) hereby agree to amend the Subadvisory Agreement, dated as of May 1, 2003, as amended February 1, 2016, by and among the Manager and the Subadviser, pursuant to which the Subadviser has been retained to provide investment advisory services to the AST T. Rowe Price Asset Allocation Portfolio as follows; 

  

1.

Schedule A is hereby deleted and replaced with the attached Schedule A.   

  

     IN WITNESS HEREOF, AST Investment Services, Inc., PGIM Investments LLC, and T. Rowe Price Associates, Inc. have duly executed this Amendment as of the effective date of this Amendment. 

  

  

  

AST Investment Services, Inc.  

By: /s/ Timothy Cronin 

Name: Timothy Cronin 

Title: President 

  

  

  

PGIM INVESTMENTS LLC  

  

By: /s/ Timothy Cronin 

Name: Timothy Cronin 

Title: Senior Vice President 

  

  

  

T. Rowe price associates, inc. 

  

By: /s/ Terence Baptiste 

Name: Terence Baptiste 

Title: Vice President 

  

  

  

  

Effective Date as Revised: October 18, 2021 

  

 

SCHEDULE A 

  

Advanced Series Trust 

  

AST T. Rowe Price Asset Allocation Portfolio
 

As compensation for services provided by T. Rowe Price Associates, Inc. (“T. Rowe Price”), AST Investment Services, Inc. and PGIM Investments LLC (collectively, “Manager”), as applicable, will pay T. Rowe Price a subadvisory fee on the net assets managed by T. Rowe Price that is equal, on an annualized basis, to the following:  

  

Portfolio 

Subadvisory Fee* 

AST T. Rowe Price Asset Allocation Portfolio 

  

  

For assets up to $15 billion 

0.50% first $25 million
0.35% from $25 million to $50 million
0.26% from $50 million to $10 billion 

0.25% from $10 billion to $15 billion 

  

For assets in excess of $15 billion 

0.23% on all assets 

  

* In the event T. Rowe Price invests Portfolio assets in other pooled investment vehicles it manages or subadvises, T. Rowe Price will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to T. Rowe Price with respect to the Portfolio assets invested in such acquired fund. Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

  

  

Effective Date as Revised:  October 18, 2021 

  


Execution Version 

Amendment to Subadvisory Agreement  

for AST INTERNATIONAL VALUE PORTFOLIO OF 

ADVANCED SERIES TRUST 

  

AST Investment Services, Inc. (formerly, American Skandia Investment Services, Inc.), PGIM Investments LLC (formerly, Prudential Investments LLC) (collectively, the “Manager”) and LSV Asset Management (the “Subadviser”) hereby agree to amend the Subadvisory Agreement, dated as of November 1, 2004, as amended January 1, 2007 and January 1, 2019, by and among the Manager and the Subadviser, pursuant to which the Subadviser has been retained to provide investment advisory services to the AST International Value Portfolio, as follows; 

1.

Schedule A is hereby deleted and replaced with the attached Schedule A.   

  

     IN WITNESS HEREOF, AST Investment Services, Inc., PGIM Investments LLC, and LSV Asset Management have duly executed this Amendment as of the effective date of this Amendment. 

  

AST Investment Services, Inc.  

     

  By: /s/ Timothy Cronin

  Name: Timothy S. Cronin 

  Title: President 

  

PGIM INVESTMENTS LLC

   

  By: /s/ Timothy Cronin

Name: Timothy S. Cronin 

Title: Senior Vice President 

  

  

LSV ASSET MANAGEMENT 

    

  By: /s/ Kevin Phelan 

Name: Kevin Phelan 

Title: Chief Operating Officer 

  

  

Effective Date as Revised: December 1, 2021
 

  

 

SCHEDULE A 

  

Advanced Series Trust 

AST International Value Portfolio
 

As compensation for services provided by LSV Asset Management (“LSV”), AST Investment Services, Inc. and PGIM Investments LLC (collectively, “Manager”), as applicable, will pay LSV a subadvisory fee on the net assets managed by LSV* that is equal, on an annualized basis, to the following:  

  

Portfolio 

Subadvisory Fee** 

AST International Value Portfolio* 

Under $1.25 billion 

0.450% of average daily net assets to $150 million; 

0.425% of average daily net assets over $150 million to $300 million; 

0.400% of average daily net assets over $300 million to $450 million; 

0.375% of average daily net assets over $450 million to $750 million; 

0.350% of average daily net assets over $750 million 

Over $1.25 billion 

0.350% on all assets 

* For purposes of calculating the advisory fee payable to LSV, the assets managed by LSV in the following will be aggregated: (i) the AST Advanced Strategies Portfolio of Advanced Series Trust; (ii) the AST International Value Portfolio of Advanced Series Trust; (iii) the PSF Global Portfolio of The Prudential Series Fund; and (iv) any other portfolio subadvised by LSV on behalf of the Manager pursuant to substantially the same investment strategy. 

** In the event LSV invests Portfolio assets in other pooled investment vehicles it manages or subadvises, LSV will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to LSV with respect to the Portfolio assets invested in such acquired fund. Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

  

Effective Date as Revised:  December 1, 2021 

  

  


Execution Version 

Amendment to Subadvisory Agreement 

for AST ADVANCED STRATEGIES PORTFOLIO OF 

ADVANCED SERIES TRUST 

  

AST Investment Services, Inc. (formerly, American Skandia Investment Services, Inc.), PGIM Investments LLC (formerly, Prudential Investments LLC) (collectively, the “Manager”) and LSV Asset Management (the “Subadviser”) hereby agree to amend the Subadvisory Agreement, dated as of March 20, 2006, as amended January 1, 2007 and January 1, 2019, by and among the Manager and the Subadviser, pursuant to which the Subadviser has been retained to provide investment advisory services to the AST Advanced Strategies Portfolio, as follows; 

  

1.

Schedule A is hereby deleted and replaced with the attached Schedule A.   

  

     IN WITNESS HEREOF, AST Investment Services, Inc., PGIM Investments LLC, and LSV Asset Management have duly executed this Amendment as of the effective date of this Amendment. 

  

AST Investment Services, Inc.  

  

By: /s/ Timothy Cronin 
Name: Timothy S. Cronin 
Title: President 

  

PGIM INVESTMENTS LLC 

    

By: /s/ Timothy Cronin 
Name: Timothy S. Cronin
Title: Senior Vice President 

    

LSV ASSET MANAGEMENT 

  

By: /s/ Kevin Phelan 

Name: Kevin Phelan 
Title: Chief Operating Officer 

  

  

Effective Date as Revised: December 1, 2021
 

  

 

SCHEDULE A 

  

Advanced Series Trust 

AST Advanced Strategies Portfolio
 

As compensation for services provided by LSV Asset Management (“LSV”), AST Investment Services, Inc. and PGIM Investments LLC (collectively, “Manager”), as applicable, will pay LSV a subadvisory fee on the net assets managed by LSV* that is equal, on an annualized basis, to the following:  

  

Portfolio 

Subadvisory Fee** 

AST Advanced Strategies Portfolio* 

Under $1.25 billion 

0.450% of average daily net assets to $150 million; 

0.425% of average daily net assets over $150 million to $300 million; 

0.400% of average daily net assets over $300 million to $450 million; 

0.375% of average daily net assets over $450 million to $750 million; 

0.350% of average daily net assets over $750 million 

Over $1.25 billion 

0.35% on all assets 

*For purposes of calculating the advisory fee payable to LSV, the assets managed by LSV in the following will be aggregated: (i) the AST Advanced Strategies Portfolio of Advanced Series Trust; (ii) the AST International Value Portfolio of Advanced Series Trust; (iii) the PSF Global Portfolio of The Prudential Series Fund; and (iv) any other portfolio subadvised by LSV on behalf of the Manager pursuant to substantially the same investment strategy. 

**In the event LSV invests Portfolio assets in other pooled investment vehicles it manages or subadvises, LSV will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to LSV with respect to the Portfolio assets invested in such acquired fund. Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

  

Effective Date as Revised:  December 1, 2021 

  

  



 

ADVANCED SERIES TRUST 

  

AST Balanced Asset Allocation Portfolio
 

Subadvisory Agreement 

  

This Agreement (the “Agreement”) is made as of this 19th day of May, 2021, by and among PGIM Investments LLC (“PGIM Investments”), a New York limited liability company and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) (“ASTIS”), a Maryland corporation (together, the “Co-Managers”) on the one hand, and on the other hand each, severally, of Jennison Associates LLC, a Delaware limited liability company (“Jennison”), QMA LLC, a New Jersey limited liability company (“QMA”), and PGIM, Inc., a New Jersey Corporation (“PGIM”). Each of Jennison, QMA and PGIM shall be referred to herein as a “Subadviser.” 

  

This Agreement replaces the previous subadvisory agreement for the AST Balanced Asset Allocation Portfolio.   

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the “Management Agreement”) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the “Trust”) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust; 

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desires to retain each Subadviser to provide investment advisory services to the Trust in respect of one or more of its constituent series of shares as specified in Schedule A hereto and to manage such portion of the Trust as the Co-Managers shall from time to time direct (such portion of the Trust with respect to a Subadviser, the “Allocated Assets”), and each Subadviser is willing to render such investment advisory services;  

  

NOW, THEREFORE, the Parties agree as follows: 

  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust (the “Board”), each Subadviser shall manage such Allocated Assets as are delegated to such Subadviser by the Co-Managers from time to time, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions applicable to such Allocated Assets as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings: 


(i) Each Subadviser shall provide advice, management and supervision with respect to its Allocated Assets, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash.  The Co-Managers may, from time to time, allocate and reallocate the Trust’s assets among the Subadvisers.  In addition, the Co-Managers may determine not to allocate any portion of the Trust’s assets to a Subadviser for a period of time during the term of this Agreement.  A Subadviser’s responsibilities for providing investment advisory services to the Trust shall be limited solely to its Allocated Assets. 

  

(ii) In the performance of its duties and obligations under this Agreement, each Subadviser shall (A) act in conformity with the the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, and the Prospectus, as provided to it by the Co-Managers (collectively, the “Trust Documents”), and with the instructions and directions of the Co-Managers or the Board; (B) reasonably co-operate with the Co-Managers's (or its designees') personnel responsible for monitoring the Trust's compliance; and (C) conform to, and comply with, the material requirements of all applicable federal and state laws and regulations, including but not limited to the 1940 Act and the Commodity Exchange Act of 1936, as amended (the “CEA

”). In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required by the Securities and Exchange Commission (the “Commission”). The Co-Managers shall provide each Subadviser timely with copies of any updated Trust Documents. 

  

(iii) Each Subadviser, with respect to its Allocated Assets, shall determine the securities, funds, futures contracts and other instruments to be purchased or sold, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with such Subadviser (collectively, “Brokers”), as such Subadviser may determine.  In selecting brokers, dealers or futures commissions merchants with which to execute portfolio transactions, it is recognized that a Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, a Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. Each Subadviser shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with such Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of such Subadviser with respect to the Trust and other accounts as to which it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. On occasions when a Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of such Subadviser, such Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by such Subadviser in the manner such Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.  Each Subadviser may execute on behalf of the Trust certain agreements, instruments and documents in connection with the services performed by it under this Agreement. These may include, without limitation, brokerage agreements, clearing agreements, account documentation, futures and options agreements, swap agreements, other investment-related agreements, and any other agreements, documents or instruments the Subadviser believes are appropriate or desirable in performing its duties under this Agreement.  

  

(iv) Each Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Board such periodic and special reports as the Board may reasonably request. Each Subadviser shall make reasonably available its employees and officers for consultation with any of the members of the Board or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, to assist in the valuation of the Trust's securities. 

  

(v) Each Subadviser or an affiliate shall provide to the Trust’s custodian (the “Custodian”) on each business day with such information relating to its Allocated Assets as the Custodian may reasonably requet, and shall provide the Co-Managers with such information upon request of the Co-Managers. 

  

(vi) The investment management services provided by each Subadviser hereunder are not to be deemed exclusive, and each Subadviser shall be free to render similar services to others. Conversely, each Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "Co-Managers-of-Co-Managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadvisers through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Board as to whether the contract with one or more Subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Board regarding the results of its evaluation and monitoring functions. Each Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) Each Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-10, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and each Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust, including any Subadviser, with respect to transactions in securities for the Trust's portfolio or any other transactions involving Trust assets. 

  

(b) Each Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as members of the Board or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by each Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) Each Subadviser shall keep the Trust's books and records required to be maintained by such Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to such Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. Each Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and each Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that such Subadviser may retain a copy of such records. Each Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 


(d) Each Subadviser is, to the extent required by applicable law, a commodity trading advisor (“CTA”) duly registered with the Commodity Futures Trading Commission (the “CFTC”) and is a member in good standing of the National Futures Association (the “NFA”); provided, for the avoidance of doubt, that, as of the date of this Agreement, Jennison is neither a registered CTA nor a member of the NFA. Each Subadviser shall maintain such registration and membership in good standing, or compliance with applicable requirements for exemption therefrom, during the term of this Agreement. Further, each Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of such Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of such Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

  

(e) In connection with its duties under this Agreement, each Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with all state and federal regulations, and the rules of any self-regulatory organization applicable to it including, for example, the 1940 Act, the CEA, and the Investment Advisers Act of 1940 (the “Advisers Act”), as amended. 

  

(f) Each Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with (i) the performance of this Agreement and (ii) the maintenance of compliance procedures pursuant to paragraph 1(e) hereof as the Co-Managers may reasonably request. 

  

(g) Each Subadviser shall maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably designed  to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. Each Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, each Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(h) Each Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in its Allocated Assets, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers.  Each Subadviser shall vote such proxies in accordance with its internal proxy voting policy. 

  

(i) Pursuant to the delegation of fair valuation of the Trust’s securities to the Co-Managers by the Board, the valuation committee of the Co-Managers shall have primary responsibility for valuation of the Trust’s assets. The Co-Managers represents and warrants to each Subadviser that such delegation of valuation responsibility complies with applicable law.  Upon reasonable request from the Co-Managers, each Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including being reasonably available to consult with the valuation committee of the Trust and the Co-Managers and making available information as to which the Subadviser has knowledge related to the investments being valued;  provided, however, that the valuation committee of the Co-Managers shall retain primary day-to-day responsibility for valuation of the Trust’s assets.  In addition, each Subadviser will use its reasonable efforts to promptly notify the Co-Managers in the event that such Subadviser becomes aware that the Trust is carrying a security in such Subadviser’s Allocated Assets at a value that such Subadviser believes does not fairly represent the price that could be obtained for the security in a current market transaction. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review each Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Custodian to provide) timely information to each Subadviser regarding the composition of assets in the Subadviser’s Allocated Assets, cash requirements and cash available for investment in such Allocated Assets, and all other information as may be reasonably necessary for such Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board that affect the duties of such Subadviser). 

  

3. In consideration of the services provided pursuant to this Agreement, the Co-Managers shall pay each Subadviser as full compensation a fee equal to the average of the net asset value of the Allocated Assets determined each day during the preceding month multiplied by the annual rate set forth on the attached Schedule A. Liability for payment of compensation by the Co-Managers to each Subadviser under this Agreement is contingent upon the Co-Managers's receipt of payment from the Trust for management services described under the Management Agreement. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by a Subadviser, shall not cause a reduction in the amount of the payment to such Subadviser by the Co-Managers. 

  

4. (a) Each Subadviser acknowledges that, in the course of its engagement by the Co-Managers, a Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conducts business in relation to services provided to the Trust by the Subadviser.  Such information, with respect to a Subadviser which knows or should know is confidential, is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’s business and other proprietary information, written or oral as it relates to services provided to the Trust by the Subadviser. 

  

(b)

Each Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program

”) including administrative, technical, and physical safeguards and other security measures designed to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Managers, or to any person who may be identified by Confidential Information.  Each Subadviser shall promptly and without unreasonable delay, but in no event more than 48 hours of learning of a material breach of this Section, notify the Co-Managers if such Subadviser is in material breach of this Section.  At the Co-Managers’s request, the Subadviser shall certify in writing to the Co-Managers, its compliance with the terms of this Section. 

  

(c)

Each Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

Each Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in such Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser shall not alter or modify its Information Security Program in such a way that will weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Information Security Program shall include, without limitation: (i) access controls to prevent the unauthorized or inappropriate use of Confidential Information; (ii) periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and (iii) regular penetration and vulnerability testing of its information technology infrastructure and networks. 

  

(f)

The Subadviser shall notify the Co-Managers, promptly and without unreasonable delay, but in no event more than 48 hours of learning of any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to Confidential Information may have occurred (each, a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Co-Managers full details of the Security Incident; (ii) assist and cooperate with the Co-Managers and the Co-Managers’s designated representatives in the Co-Managers’s investigation of the Subadviser, employees or third parties related to the Security Incident, which may include requests for all relevant records, logs, files, and data; (iii) cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co-Managers’s rights; and  (iv) take appropriate action to prevent a recurrence of any Security Incident. 

  

(g)

Upon the Co-Managers’s reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(h)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice, reasonable assistance and cooperation of the Subadviser’s relevant staff.   

  

(i)

Notwithstanding any obligations set forth in this Agreement (including this section 4), the Co-Managers acknowledge and agree that the Subadvisers shall not be required to share any privileged or confidential information, proprietary data, quantitative models and similar information with the Co-Managers.  

  

5. No Subadviser will engage any third party to provide services with respect to its Allocated Assets without the express written consent of the Co-Managers.  To the extent that each Subadviser receives approval from the Co-Managers to engage a third-party service provider, the Subadviser assumes all responsibility for any action or inaction of the service provider as it related to its Allocated Assets.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and its directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) which arise out of or relate to the provision of services provided by any such service provider.  For the avoidance of doubt, none of the Custodian or any party with or through whom a Subadviser trades shall be deemed to be an agent engaged by Subadviser for purposes of this section 5. 

  

6. Each Subadviser assumes no responsibility under this Agreement other than to render the services to be provided by such Subadviser hereunder in good faith.  No Subadviser shall be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on such Subadviser's part in the performance of its duties hereunder or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against such Subadviser under federal or state securities laws. The Co-Managers shall indemnify each Subadviser, its respective affiliated persons, officers, directors, and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Co-Managers's willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. Each Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of such Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for an initial term of one year from the date hereof and such term shall extend automatically each year thereafter for subsequent one-year terms; provided that each annual extension is subject to approval by the Board; and, provided further that this Agreement may be terminated (a) without the payment of any penalty, by the Board or by vote of a majority of the outstanding voting securities of the Trust as provided in the 1940 Act, or (b) by the Co-Managers or by a Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. Termination of this Agreement by a Subadviser shall terminate this Agreement only with respect to such Subadviser and the Agreement shall otherwise continue in full force and effect. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. Each Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of such Subadviser. 

  

To the extent that the Co-Managers delegate to a Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, such Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser, provided however, that if a party other than the Subadviser is engaged to transition the portfolio to the Subadviser’s strategy (a “Transition Co-Managers”), Subadviser shall have no responsibilities under Sections 1(a)(iii) and (v) until such time as the portfolio is released to the Subadviser for trading. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to a Subadviser at the address set forth beneath its signature below. 


8. Nothing in this Agreement shall limit or restrict the right of any of a Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict a Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or

such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

13. This Agreement, including Schedule A hereto, embodies the entire agreement and understanding among the parties hereto, and supersedes all prior agreements and understandings relating to the subject matter hereof.  Should any part of this Agreement be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement should not be affected thereby.  This Agreement shall be binding on and inure to the benefits of the parties hereto and their respective successors. 

  

14. The obligations of each Subadviser hereunder are several and not joint. Each Subadviser shall be liable only for its own obligations hereunder.  No Subadviser shall be a guarantor of or jointly liable for the obligations of any other Subadviser.  No Subadviser shall have any interest in the performance of, or remedy against, any other Subadviser in connection herewith. 

 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
 

  

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

Name: Timothy S. Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

By:  /s/ Timothy Cronin 

Name:  Timothy S. Cronin 

Title:  President 

  

  

JENNISON ASSOCIATES LLC 

  

By: /s/ William C. Ings 

Name: William C. Ings 

Title: Managing Director 

  

Address for Notices:  

Jennison Associates LLC 

477 Lexington Avenue, New York, NY 10017 

Attention: Secretary (with a copy to Jennison’s Chief Legal Officer). 

  

  

PGIM, INC. 

  

By: /s/ Daniel Malooly 

Name: Daniel Malooly 

Title: Vice President 

  

Address for Notices:  

PGIM, Inc. (PGIM Fixed Income)  

655 Broad Street 

Newark, NJ 07102  

Attention: Chief Legal Officer 

Fax: 973-802-6834 

  

For changes to guidelines and related communications: 

PGIM, Inc. 

655 Broad Street, 8th Floor 

Newark, NJ 07102 

Attention: Client Services Team 

E-mail: pgim_client_services@pgim.com 

  

  

 

QMA LLC 

  

By: /s/ Stephen Brundage 

Name: Stephen Brundage 

Title: Vice President 

  

Address for Notices:  

QMA LLC 

Gateway Center Two 

100 Mulberry Street, Newark, NJ 07102 

Attention: Secretary (with a copy to QMA LLC’s Chief Legal Officer) 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by each Subadviser, acting severally and not jointly, PGIM Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay each Subadviser a subadvisory fee on the net assets managed by such Subadviser that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadviser 

Subadvisory Fee for the Portfolio* 

  

AST Balanced Asset Allocation Portfolio 

  

Jennison Associates LLC**  

0.35% of average daily net assets to $100 million;  

0.30% of the next $100 million of average daily net assets; 

0.275% of the next $300 million of average daily net assets; 

0.25% of the next $2.5 billion of average daily net assets;  

0.23% of average daily net assets over $3 billion 

PGIM Fixed Income, a business unit of PGIM, Inc.***, + 

0.17% of average daily net assets to $750 million;  

0.16% of the next $750 million of average daily net assets;  

0.14% of average daily net assets over $1.5 billion 

QMA LLC # 

For Asset Allocation Services: 

0.04% of average daily net assets 

  

For Quantitative Equity Management (including the overlay sleeve): 

0.30% of average daily net assets to $1 billion;  

0.25% of average daily net assets on next $5 billion;  

0.225% of average daily net assets over $6 billion 

* In the event a Subadviser invests its Allocated Assets in any other pooled investment vehicle it manages or subadvises, such Subadviser will waive its subadvisory fee hereunder in an amount equal to the acquired fund fee paid to a Subadviser with respect to the Allocated Assets so invested.  Notwithstanding the foregoing, under no circumstances will the subadvisory fee waivers referred to in the preceding sentence exceed 100% of the subadvisory fee. 

  

** The subadvisory assets managed by Jennison under the AST Balanced Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable Jennison, the average daily net assets in each underlying sleeve will be combined. 

  

For purposes of calculating the advisory fee payable to Jennison, the fee percentage applicable to the Allocated Assets will be a single blended rate determined in accordance with the schedule set forth above.  For purposes of determining this rate, the average daily net assets shall be the aggregate of the Allocated Assets together with the assets managed by Jennison in: (i) the AST Capital Growth Asset Allocation Portfolio; (ii) the Preservation Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.   

  

*** The subadvisory assets managed by PGIM Fixed Income under the AST Balanced Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to PGIM Fixed Income, the average daily net assets in each underlying sleeve will be combined. 

  

For purposes of calculating the advisory fee payable to PGIM Fixed Income, the assets managed by PGIM Fixed Income in the AST Balanced Asset Allocation Portfolio will be aggregated with the assets managed by PGIM Fixed Income in: (i) the AST Capital Growth Asset Allocation Portfolio; (ii) the AST Preservation Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio. 

  

+ PGIM maintains a delegation agreement with PGIM Limited, an affiliated investment manager of PGIM that is authorized and regulated in the United Kingdom by the Financial Conduct Authority and registered with the US Securities and Exchange Commission under the Advisers Act and a portion of the subadvisory fee payable to PGIM as subadviser may be payable to PGIM Limited as a sub-subadviser under this Agreement. 

  

# The subadvisory assets managed by QMA under the AST Balanced Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to QMA, not including asset allocation services, the average daily net assets in each underlying sleeve will be combined.  The fee percentage applicable to the Allocated Assets will be a single blended rate determined in accordance with the schedule set forth above 

  

For purposes of calculating the advisory fee payable to QMA, not including the asset allocation services, the assets managed by QMA in the AST Balanced Asset Allocation Portfolio will be aggregated with the assets managed by QMA in: (i) the AST Preservation Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.   

  

  

Dated as of:  May 19, 2021  

1 

  


Execution Version 

ADVANCED SERIES TRUST 

  

AST Balanced Asset Allocation Portfolio
 

  

SUBADVISORY AGREEMENT 

  

Agreement made as of this 19th day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (ASTIS), a Maryland corporation (together, the Co-Managers), and Massachusetts Financial Services Company (d/b/a MFS Investment Management), a Delaware corporation (MFS or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust; and 

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct, and the Subadviser is willing to render such investment advisory services; and 

  

NOW, THEREFORE, the Parties agree as follows: 

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of such portion of the Trust's investments as the Co-Managers shall direct, and the Subadviser shall have discretion to determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash. 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and any procedures adopted by the Board applicable to the services provided by the Subadviser hereunder including any amendments to those procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust's compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, each as applicable to the services provided by the Subadviser hereunder and all other applicable federal and state laws and regulations (collectively, "Applicable Law"). Subject to the Co-Managers' oversight, Subadviser shall monitor compliance with Applicable Law based on Subadviser's books and records and, to the extent provided, information provided by the Co-Managers and/or the Trust's Custodian. In connection therewith, the Subadviser shall be responsible for the preparation and filing of Schedule l3G and Form 13-F reflecting the Trust's securities holdings unless otherwise directed in writing by the Co-Managers. The Subadviser shall not be responsible for the preparation or filing of any other reports required of the Trust by any governmental or regulatory agency, except as expressly agreed to in writing. The Co-Managers shall provide Subadviser with timely copies of any updated Trust Documents. Until the Co-Managers or the Trust delivers any Trust Document regarding the management of the Trust or the Subadviser's duties hereunder to the Subadviser, the Subdviser shall not be liable and shall be fully protected in relying on any previously delivered document sent by the Co-Managers or the Trust to the Subadviser. 

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by such portion of the Trust's portfolio, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants (including, but not limited to, any person or entity affiliated with the Co-Managers or the Subadviser) (collectively, Brokers), to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. The Co-Managers (or the Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission.  

  

The Subadviser may execute account documentation, agreements, contracts and other documents requested by brokers, dealers, counterparties and other persons in connection with its management of the assets of the Trust, including, without limitation, transaction term sheets and confirmations, certifications regarding the Trust's status as an accredited investor, qualified institutional buyer or qualified purchaser and certifications regarding other factual matters as may be requested by brokers, dealers or counterparties in connection with the Subadviser’s management of the Trust's assets.  

  

On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.
 

(iv) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act as applicable to the Subadviser, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(v) The Subadviser or an affiliate shall provide the Trust's custodian on each business day with information relating to all transactions concerning the portion of the Trust's assets it manages, and shall provide the Co-Managers with such information upon request of the Co-Managers.  The parties acknowledge and agree that the Subadviser is not a custodian of the Trust assets and will not take possession or custody of such assets. 

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust's portfolio or any other transactions of Trust assets.
 

(b) The Subadviser shall, to the extent permitted by its Code of Ethics and other applicable internal policies and procedures, authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(d) The Co-Managers acknowledge that Subadviser is registered with the Commodity Futures Trading Commission (“CFTC”) and National Futures Association (the “NFA”) as a commodity trading advisor and that Subadviser will provide commodity trading advice to the Trust as if Subadviser were exempt from registration as a commodity trading advisor. The Subadviser represents that it shall provide commodity trading advice to the Trust in a manner consistent with any applicable duties and obligations, as set forth in the Commodity Exchange Act of 1936, as amended (the “CEA”), and all rules and regulations promulgated thereunder. The Co-Managers represent and warrant that they are excluded from the definition of commodity pool operator pursuant to CFTC Regulation 4.5 with respect to the Trust, and the Co-Managers have timely filed a notice of eligibility as required by CFTC Regulation 4.5 with respect to the Trust and will, during the term of this Agreement, maintain and reaffirm such notice of eligibility as required by CFTC Regulation 4.5.   

  

(e) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, each as applicable to the services provided by the Subadviser hereunder and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

  

(f) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably necessary to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures designed to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(g) The Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with this Agreement, including but not limited to such monthly, quarterly, or annual reports concerning the Subadviser's transactions with respect to the investments and securities held in the Trust's portfolio and the performance of the Trust's portfolio as well as the compliance procedures pursuant to paragraph 1(d) hereof as the Co-Managers may reasonably request. 

  

(h) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Trust's portfolio in accordance with the Subadviser's proxy voting policies and procedures, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers. It shall be the sole responsibility of the Co-Managers to process and file any claim forms or other documentation relating to any securities class action or other litigation on behalf of the Trust; however, upon reasonable request, Subadviser will cooperate with the Co-Managers to the extent necessary for the Co-Managers to pursue or participate in any such action.  The Subadviser shall not have the obligation to commence or defend lawsuits or other legal actions on behalf of the Co-Managers or the Trust brought by or against third parties, including lawsuits and legal actions brought by or against the Co-Managers or the Trust relating to securities purchased by the Trust. Notwithstanding the foregoing, the Subadviser shall have the authority but no obligation to participate in any in-court or out-of-court workouts, restructurings, or bankruptcies involving securities held by the Trust during the term of the Agreement on behalf of the Co-Managers or the Trust and take any and all actions in connection therewith that the Subadviser in its discretion deems necessary or appropriate.  

  

(i) The Subadviser agrees to use reasonable efforts (i) to monitor whether market quotations are readily available for the Trust's portfolio investments and whether those market quotations are reliable for purposes of internally valuing the Trust's portfolio investments and determining the Trust's net asset value per share; and (ii) to promptly notify the Co-Managers upon the occurrence of any significant event with respect to any of the Trust's portfolio investments in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff, in conformity with the Trust's valuation procedures. Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued.  The Co-Managers and the Trust acknowledge and agree that (i) the Subadviser is not the Trust's pricing agent and shall not be deemed a substitute for any independent pricing agent and/or valuation committee of the Trust pursuant to the Trust's Fair Valuation Policies and Procedures; and (ii) none of the information which the Subadviser provides the Co-Managers hereunder shall be deemed to be the official books and records of the Fund for tax, accounting or any other purposes.   

  

(j) The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Trust's portfolio required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information regarding the Subadviser or the services provided by Subadviser hereunder that has been provided by the Subadviser to the Co-Managers for inclusion in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(k) The Subadviser shall comply with the Trust’s Documents provided to the Subadviser by the Co-Managers. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon determination of any material breach of such Trust Documents.  

  

(l) The Subadviser shall keep the Trust’s Co-Managers informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written reasonable request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall respond to such requests for information as to such reports (e.g., provide summaries of such reports with personal information redacted and subject in all cases to privacy and confidentiality obligations and to the extent the Subadviser is not prohibited from doing so under applicable law) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the portion of the Trust managed by the Subadviser, cash requirements and cash available for investment in such portion of the Trust, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser).  The Co-Managers shall provide on an on-going basis a list of all affiliates of the Co-Managers and the Trust, including publicly traded affiliates of the Co-Managers that may not be purchased by the Fund (such list shall include security name, cusip number, sedol and/or applicable ticker) and a list of all brokers and underwriters affiliated with the Co-Managers for reporting transactions under applicable provisions of the 1940 Act.  The Co-Managers represent and warrant that the Trust (i) is a qualified institutional buyer as that term is defined in Rule 144A under the Securities Act of 1033, as amended, and (ii) is not a "restricted person" under Rule 5130 and Rule 5131 of the Financial Industry Regulatory Authority, Inc. ("FINRA") and thus the Trust is not prohibited from participating in the allocation of initial public offerings of equity securities offered by FINRA members.  The Co-Managers agree to promptly notify the Subadviser if any of the foregoing representations ceases to be true or correct.   

  

The Co-Managers hereby acknowledge receipt of the Subadviser's most recent Form ADV Part 2A and relevant Form ADV Part(s) 2B.  Co-Managers hereby consent to electronic delivery of Subadviser's Form ADV and any Form ADV amendments and/or annual updates provided by the Subadviser to the Co-Managers as required by applicable law. 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers' receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers.  

  

4. (a) Each party acknowledges that, in the course of dealing, it may receive or have access to confidential and proprietary information (including, without limitation, the Trust’s portfolio holdings) of the other party or third parties with whom the Co-Managers conducts business.  Such information is collectively referred to as “Confidential Information.”  Each party agrees that it shall treat Confidential Information of the other party as confidential and shall not use such Confidential Information or disclose such Confidential Information to third parties, except to the extent necessary for the purposes of rendering services or performing the obligations pursuant to this Agreement or as required by applicable law, rule or regulation or as otherwise expressly agreed to in writing by the parties.   

  

(b)

The Subadviser further certifies that (i) its treatment of Confidential Information is in compliance in all material respects with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures designed to seek to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Managers, or to any person who may be identified by Confidential Information.  The Subadviser shall immediately notify the Co-Managers if the Subadviser is in material breach of this Section 4(b).  At the Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section 4(b). 

  

(c)

The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that will represent a departure from industry standards. 

  

(e)

The Subadviser shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to the minimum number of the Subadviser’s employees and/or agents who require such access in order to provide the services to the Co-Managers. 

  

(f)

The Subadviser shall conduct periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and evaluate and improve, where necessary, the effectiveness of its information security controls.  Such assessments will also consider the Subadviser’s compliance with its Information Security Program and the laws applicable to the Subadviser. 

  

(g)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.  If any testing detects any anomalies, intrusions, or vulnerabilities in any information technology systems processing, storing or transmitting any of the Trust’s and/or Co-Managers’ Confidential Information and any of the Trust's and/or the Co-Managers' Confidential Information has been determined to have been subject to unauthorized disclosure, the Subadviser shall promptly report those findings to the Co-Managers. 

  

(h)

The Subadviser shall notify the Co-Managers, promptly and without unreasonable delay, but in no event more than 48 hours of learning of any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to the Trust's or Co-Managers' Confidential Information that has occurred (a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Co-Managers a summary of the Security Incident; (ii) assist communicate, and cooperate with the Co-Managers and the Co-Managers’ designated representatives throughout the investigation of the Security Incident.  The Subadviser will make appropripate personnel of Subadviser available to the designated representatives of the Co-Managers to discuss the matter, and shall cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co-Managers’ rights; and  (iii) take appropriate action to seek to prevent a recurrence of such Security Incident. 

  

(i)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(j)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice: (a) reasonable assistance and cooperation of the Subadviser’s relevant staff who can provide information concerning Subadviser's information processing premises and records; and (b) reasonable facilities at the Subadviser’s premises.   

  

5. The Subadviser will not engage any third party to provide advisory services ("Service Provider") to the portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers.  To the extent that the Subadviser receives approval from the Co-Managers to engage a Service Provider, the Subadviser assumes all responsibility for any action or inaction of the Service Provider as it relates to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and its directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) as a result of any action or inaction of the Service Provider as it relates to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.   

  

6. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser. 

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser. The Subadviser’s duties and obligations hereunder shall not begin prior to the effective date of the termination of the previously named subadviser in the Trust’s registration statement disclosure. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at Massachusetts Financial Services Company, 111 Huntington Avenue, Boston, MA 02199, Attention: Legal Department, with a copy to the following e-mail address: InstitutionalClientService@mfs.com. 

  

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

  

  

  

  

  

  

 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 


 

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

Name: Timothy S. Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

By:  /s/ Timothy Cronin 

Name:  Timothy S. Cronin 

Title:  President 

  

  

MASSACHUSETTS FINANCIAL SERVICES COMPANY D/B/A MFS INVESTMENT MANAGEMENT 

  

By: /s/ Carol Geremia 

Name: Carol Geremia 

Title: President 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by Massachusetts Financial Services Company d/b/a MFS Investment Management (MFS), PGIM Investments LLC and AST Investment Services, Inc. will pay MFS a subadvisory fee on the net assets managed by MFS that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio*, ** 

  

  

AST Balanced Asset Allocation Portfolio  

  

0.30% of average daily net assets to $100 million;  

0.285% of the next $150 million of average daily net assets; 

0.27% of the next $250 million of average daily net assets; 

0.25% of average daily net assets over $500 million 

  

  

* In the event MFS invests Portfolio assets in other pooled investment vehicles it manages or subadvises, MFS will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to MFS with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to MFS, the assets managed by MFS in the AST Balanced Asset Allocation Portfolio will be aggregated with the assets managed by MFS in: (i) the AST Capital Growth Asset Allocation Portfolio; (ii) the Preservation Asset Allocation Portfolio; and (iii) the AST Academic Strategies Asset Allocation Portfolio. 

  

  

Dated as of:  May 19, 2021 

  


Execution Version 

  

ADVANCED SERIES TRUST 

  

AST Balanced Asset Allocation Portfolio
 

SUBADVISORY AGREEMENT 

  

Agreement made as of this 14 day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) (ASTIS), a Maryland corporation (together, the Co-Managers), and Wellington Management Company LLP, a Delaware limited liability partnership (Wellington Management or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust; and
 

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct (the “Account”), and the Subadviser is willing to render such investment advisory services; and
 

NOW, THEREFORE, the Parties agree as follows: 

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage the Account as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of the Account as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash and shall have full power and authority to act on behalf of the Trust with respect to the purchase, sale, exchange, conversion or other transactions in any and all stocks, bonds, other securities cash or currencies, and other Account assets. The Subadviser, upon written consent by the Co-Managers, may engage any of its affiliates to assist it with providing its services under this Agreement (including affiliates outside of the United States), provided that the Subadviser will remain responsible for the performance of its obligations under the Agreement and  shall be   responsible to the Co-Managers for the acts and omissions of any affiliate  to the same extent   as it is for its own acts and omissions . 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust's valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust's compliance and, as applicable, will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, and all other applicable federal and state laws and regulations. In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required of Subadviser by the Securities and Exchange Commission (the Commission). The Co-Managers shall provide the Subadviser timely with copies of any updated Trust Documents. The Subadviser shall have a reasonable period to comply with instructions and/or bring the Account into compliance with any changes to the Trust Documents. The Co-Managers covenant that any instructions or modifications to Trust Documents shall be consistent with the provisions of law, regulatory policies and organizational documents applicable to the Trust.  

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by the Account , as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with the Subadviser (collectively, Brokers), to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time.  The Subadviser’s broker selection shall be conducted in accordance with its Policies and Procedures on Order Execution, as may be amended from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. The Subadviser shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Subadviser with respect to the Trust and other accounts as to which it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable over time and consistent with its fiduciary obligations to the Trust and to such other clients. 

  

(iv) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(v) The Subadviser or an affiliate shall provide the Trust's custodian (“Custodian”) on each business day with information relating to all transactions concerning the Account, and shall provide the Co-Managers with such information upon request of the Co-Managers. All transactions will be consummated by payment to, or delivery by the Custodian, of all cash and/or securities due to or from the Account according to local market settlement conventions. The Subadviser shall not act as custodian for the Account.  Notwithstanding any other provision in this Agreement, the Subadviser shall not hold, directly or indirectly, funds or securities contained in the Account or have any authority to obtain possession of them.   

  

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Account or any other transactions of Trust assets.
 

(b) The Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(d) The Subadviser is a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. The Co-Managers acknowledge that Subadviser, while registered, may rely on exemptions from registration as to some accounts it advises including the Account, upon written notice to Co-Managers. Further, the Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of the Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could reasonably lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target that is material to Subadviser’s ability to perform investment management services pursuant to this Agreement. 

  

(e) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures reasonably designed to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

  

(f) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably designed to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures reasonably designed to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(g)The Subadviser will notify the Co-Managers of any additions to or withdrawals of corporate partners of the Subadviser within a reasonable time after such additions or withdrawals. 

  

(i) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Account , subject to such reasonable reporting and other requirements as shall be established by the Co-Managers and shall vote such proxies in accordance with Subadviser’s Global Proxy Voting Policies and Procedures, as may be amended from time to time.  The Co-Managers authorize the Subadviser to instruct the Custodian to forward promptly to the Subadviser copies of all proxies and shareholder communications relating to proxy votes involving securities held in the Account (other than materials relating to legal proceedings.) The Co-Managers and the Trust agree that Subadviser will not be responsible or liable for failing to vote any proxies where it has not received the proxies or related shareholder communications in a timely manner. 

  

(j) The Subadviser will not compile or file claims or take any related actions on behalf of the Trust in any class action, bankruptcy or other legal proceeding related to securities currently or previously held in the Account. Subadviser shall provide reasonable assistance as the Trust or Co-Managers may reasonably request in any matter relating to legal proceedings relating to  the investments and securities held in the Account that Subadviser supervises.  Such assistance, will include, but will not be limited to, providing necessary data in the possession of Subadviser relating to the Account, assisting with interrogatories, and if necessary, providing testimony.   

  

(k) The Subadviser acknowledges that it is responsible for evaluating whether market quotations are readily available for the Trust's portfolio investments and whether those market quotations are reliable for purposes of valuing the Trust's portfolio investments and determining the Trust's net asset value per share and promptly notifying the Co-Managers upon the occurrence of any significant event with respect to any of the Trust's portfolio investments in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff. Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued. The Co-Managers acknowledge that the Subadviser is not the official pricing agent with respect to the Trust’s portfolio investments.  

  

(l)

The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Account required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(m) The Subadviser shall comply with the provisions of the Trust’s Documents provided to the Subadviser by the Co-Managers that are applicable to the Subadviser. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon detection of any material breach of such Trust Documents.  

  

(n) The Subadviser shall keep the Trust’s Co-Managers informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall permit representatives of the Trust or the Co-Manager to examine reports (or summaries of the reports) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the Account managed by the Subadviser, cash requirements and cash available for investment in the Account, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser). 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers' receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers. 

  

4. (a) The Subadviser acknowledges that, in the course of its engagement by the Co-Managers, the Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conducts business.  Such information is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’ business and other proprietary information, written or oral. 

  

(b) The Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures intended to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm to the Co-Managers, or to any person who may be identified by Confidential Information.  The Subadviser shall notify the Co-Managers as soon as practicable if the Subadviser is in material breach of this Section.  At the Co-Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section. For the avoidance of doubt, Subadviser may disclose Confidential Information where disclosure is required or permitted by law or requested by any governmental or regulatory authority that may have jurisdiction over either party,  provided that 

 the  Subadviser gives the Co-Managers prompt written notice of such requirement prior to such disclosure  , to the extent feasible and permitted by law,   and assistance in obtaining an order protecting the information from public disclosure   as necessary  .   

The Co-Managers and Trust agree not to make use of the investment decisions or recommendations of the Subadviser, other than with respect to the Account, without the prior written consent of the Subadviser. In addition, the Co-Manager and the Trust shall use its best efforts to ensure that any of its agents or affiliates who may gain access to the investment decisions or recommendations of the Subadviser shall be made aware of its proprietary nature and shall likewise treat it as confidential. 

  

(c) The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that could reasonably be foreseen to weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Subadviser shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to the minimum number of the Subadviser’s roles which require such access in order to provide the services to the Co-Managers. 

  

(f)

The Subadviser shall conduct periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and evaluate and improve, where necessary, the effectiveness of its information security controls.  Such assessments will also consider the Subadviser’s compliance with its Information Security Program and the laws applicable to the Subadviser. 

  

(g)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.   

  

(h)

Except with respect to applicable legal prohibitions and compliance with requests from law enforcement, Subadviser confirms that upon any potential or actual known security breach Subadviser will: 

  

4.

promptly investigate such breach or potential breach, 

4.

promptly notify the Co-Managers of such breach or potential breach if the investigation reveals a likelihood that Co-Manager's Confidential Information was materially affected, such notification targeted to occur within 48 hours (two business days), but no later than 72 hours (three business days) after such breach has been identified determination, and,  

4.

implement necessary corrective actions.   Such corrective actions shall include:  

  

i.

performing an analysis to determine the cause of the security breach;  

ii.

providing the Co-Managers with a report detailing the cause of the security breach and the material involved;  

iii.

promptly remedying or mitigating the security breach to a commercially reasonable extent; and 

iv.

reasonable cooperation with the Co-Managers and its designees and with any civil or criminal authority in any investigation or action related to the unauthorized, unlawful or accidental access, use, processing, disclosure, transfer destruction, loss or alteration.   

  

(i)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

5. Other than as set forth in this Agreement, the Subadviser will not engage any third party to provide services to the Account as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers, other than as necessary to perform administrative or ancillary services for the Account, including security and cash reconciliation, portfolio pricing and corporate action processing.  The Subadviser will act in good faith and with reasonable skill and care in the selection, use and monitoring of such agents. To the extent that the Subadviser receives approval from the Co-Managers to engage a third-party service provider, Subadviser  shall be  responsible to the Co-Managers for the acts and omissions of the third-party service provider to the same extent as it is for its own acts and omissions to the same extent that Subadviser would be responsible for its own actions or inactions.  Furthermore, the Subadviser may utilize unaffiliated third-party data service providers in effecting compliance with the prospectus and/or instructions from the Co-Managers, and the

Subadviser shall not be held responsible for any losses resulting from non-compliance with the prospectus or Co-Manager instructions where the Subadviser has reasonably relied on information provided by third-party data service providers.  

  

6. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser. 

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement, as applicable, with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 280 Congress Street, Boston, MA 02210, Attention: Legal and Compliance. 

  

The Co-Managers consent to electronic delivery of any reports or other information that may be requested by the Co-Managers or the Trust or is required to be delivered by the Subadviser under this Agreement, or pursuant to applicable law, rule or regulation, including delivery of Part 2 of Subadviser’s Form ADV and any updates thereto, and the Co-Managers represent that they have the means to, and will access, such disclosures in electronic format and the Subadviser shall provide the Co-Managers with hard copies of any such disclosures upon request.  The Co-Managers may revoke this consent upon written notice to Subadviser. 

  

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such

prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. Except as otherwise specified in the Trust Documents, the Subadviser will provide investment management services for the Account without regard to any tax consequences that may result from any action taken or omitted by Subadviser on behalf of the Account. Neither the Subadviser nor any of its affiliates provide tax advice in connection with investment of the assets in the Account, and the Co-Managers are responsible for determining and paying any taxes owed with respect to the activities of the Account.
 

11. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

12. The Agreement may be executed simultaneously in any number of counterparts, each of which will be deemed to be an original, but all of which together will constitute one and the same instrument.  

  

13. This Agreement shall be governed by the laws of the State of New York. If any court of competent jurisdiction at any time holds that any provision in this Agreement is invalid or unenforceable in whole or in part, the invalidity or unenforceability of such provision shall not affect the other provisions of this Agreement which will remain in full force and effect.  The parties shall use their reasonable efforts to agree on a new provision which will, as far as possible, achieve the same purpose as the provision that is held invalid or unenforceable. 

  

14. No party to this Agreement will be liable for any failure or delay in performing any of its obligations under or pursuant to the Agreement, and any such failure or delay in performing its obligations will not constitute a breach of the Agreement, if such failure or delay is due to any cause whatsoever outside its reasonable control.  Any such non-performing party will be entitled to a reasonable extension of the time for performing such obligations.  Events outside a party's reasonable control include any event or circumstance that the party is unable to avoid using reasonable skill and care. 

  

15. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

16. The parties agree that this Agreement and any documents related hereto may be electronically signed.  The parties agree that any electronic signatures appearing on this Agreement and any related documents are the same as handwritten signatures for the purposes of validity, enforceability and admissibility. 

  

 

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT.  

  

  

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.

 

PGIM INVESTMENTS LLC 

  

  

By: /s/ Timothy Cronin 

Name: Timothy Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

  

By: /s/ Timothy Cronin 

Name:  Timothy Cronin 

Title:  President 

  

  

  

WELLINGTON MANAGEMENT COMPANY LLP 

  

  

By: /s/ Steven Muson 

Name: Steven Muson 

Title: Senior Managing Director 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by Wellington Management Company LLP (Wellington Management), PGIM Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay Wellington Management a subadvisory fee on the net assets managed by Wellington Management that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio* 

  

  

AST Balanced Asset Allocation Portfolio 

  

  

0.19% of average daily net assets  

  

* In the event Wellington Management invests Portfolio assets in other pooled investment vehicles it manages or subadvises, Wellington Management will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to Wellington Management with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

  

  

Dated as of:  May 14, 2021 

  


Execution Version 

ADVANCED SERIES TRUST

AST Balanced Asset Allocation Portfolio 


SUBADVISORY AGREEMENT 

  

Agreement made as of this 17 day of May, 2021 between PGIM Investments LLC (PI), a New York limited liability company and AST Investment Services, Inc. (AST), a Maryland corporation (together, the Co-Managers), and ClearBridge Investments, LLC, a Delaware corporation (ClearBridge or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PI and AST act as Co-Managers of the Trust; and  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct, and the Subadviser is willing to render such investment advisory services; and  

NOW, THEREFORE, the Parties agree as follows:  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust’s portfolio as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust’s investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such Prospectus and Statement of Additional Information as currently in effect and as amended or supplemented from time to time, being herein called the “Prospectus”), and subject to the following understandings:  

(i) The Subadviser shall provide supervision of such portion of the Trust's investments as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained or sold by the Trust, and what portion of the assets will be invested or held uninvested as cash.  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust’s valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust’s compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), and all other applicable federal and state laws and regulations. In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required by the Securities and Exchange Commission (the Commission). The Co-Managers shall provide Subadviser timely with copies of any updated Trust Documents.  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by such portion of the Trust's portfolio, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants (including but not limited to any broker or dealer affiliated with the Co-Managers or the Subadviser) to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by brokers, dealers or futures commission merchants who may effect or be a party to any such transaction or other transactions to which the Subadviser’s other clients may be a party. The Co-Managers (or Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through broker-dealers (including, to the extent legally permissible, broker-dealers affiliated with the Subadviser(s)) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and to cause the Trust to pay any such broker-dealers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another broker-dealer would have charged for effecting that transaction, if the brokerage or research services provided by such broker-dealer, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission.  

On occasions when the Subadviser deems the purchase or sale of a security or futures contract to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities or futures contracts to be sold or purchased. In such event, allocation of the securities or futures contracts so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.   The Subadviser may execute on behalf of the Trust certain agreements, instruments and documents in connection with the services performed by it under this Agreement. These may include, without limitation, brokerage agreements, clearing agreements, account documentation, futures and options agreements, swap agreements, other investment-related agreements, and any other agreements, documents or instruments the Subadviser believes are appropriate or desirable in performing its duties under this Agreement. 

(iv) The Subadviser shall maintain all books and records with respect to the Trust’s portfolio transactions effected by it as required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act, and shall render to the Trust’s Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust’s securities.  

(v) The Subadviser or an affiliate shall provide the Trust's Custodian on each business day with information relating to all transactions concerning the portion of the Trust’s assets it manages, and shall provide the Co-Managers with such information upon request of the Co-Managers.  

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a “manager-of-managers” style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii)  periodically make recommendations to the Trust’s Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1 under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust’s portfolio or any other transactions of Trust assets.  

(b) The Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees.  

(c) The Subadviser shall keep the Trust’s books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser’s services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will surrender promptly to the Trust any of such records upon the Trust’s request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof.  

(d) The Subadviser is, to the extent required by applicable law, a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. Further, the Subadviser agrees to notify the Manager promptly upon (i) a statutory disqualification of such Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

(e)  In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

(f) The Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with (i) the performance of this Agreement and (ii) the maintenance of compliance procedures pursuant to paragraph 1(d) hereof as the Manager may reasonably request.  

(g) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Trust’s portfolio, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers.  

(h) The Subadviser acknowledges that it is responsible for evaluating whether market quotations are readily available for the Trust’s portfolio securities and whether those market quotations are reliable for purposes of valuing the Trust’s portfolio securities and determining the Trust’s net asset value per share and promptly notifying the Co-Managers upon the occurrence of any significant event with respect to any of the Trust’s portfolio securities in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff.  Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing securities of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the securities being valued. 

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser’s performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust’s custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the portion of the Trust managed by the Subadviser, cash requirements and cash available for investment in such portion of the Trust, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser).  

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust’s average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A.  Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers’ receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers.  Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers.  

  

4. (a) The Subadviser acknowledges that, in the course of its engagement by the Co-Managers, the Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conduct business in relation to the Series of the Trust allocated to Subadviser. Such information is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’ business and other proprietary information, written or oral as relates to the Series of the Trust allocated to Subadviser. 

  

(b)

The Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures necessary to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Manager, or to any person who may be identified by Confidential Information.  The Subadviser shall promptly and without unreasonable delay, but in no event more than 48 hours of learning of a material breach of this Section, notify the Manager if the Subadviser is in material breach of this Section.  At the Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section. 

  

(c)

The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.   

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that will weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Subadviser shall maintain an appropriate Information Security Program which includes, but is not limited to: (i) access controls to prevent the unauthorized or inappropriate use of Confidential Information,(ii) periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality and integrity of Confidential Information; and (iii) regular penetration and vulnerability testing of its information technology infrastructure and networks.  

  

(f)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.  If any testing detects any intrusions of any information technology systems processing, storing or transmitting any of the Manager’s Confidential Information, the Subadviser shall promptly report those findings to the Manager. 

  

(g)

The Subadviser shall notify the Co-Managers promptly and without unreasonable delay, but in no event more than 48 hours after determining that any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to Confidential Information occurred (a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Manager full details of the Security Incident; (ii) assist and cooperate with the Co-Managers and the Co-Managers’ designated representatives in the Co-Managers’ investigation of the Subadviser, employees or third parties related to the Security Incident, which may include requests for all relevant records, logs, files, and data; (iii) cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co- Managers’ rights; and  (iv) take appropriate action to prevent a recurrence of any Security Incident. 

  

(h)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(i)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice reasonable assistance and cooperation of the Subadviser’s relevant staff.   

  

5. The Subadviser will not engage any third party to provide investment advisory services to the portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers.  To the extent the Subadviser receives approval from the Co-Managers to engage such third-party service provider, the Subadviser assumes all responsibility for any action or inaction of the service provider as it related to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and their directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) which arise out of or relate to the provision of services provided by any such service provider. 

  

6.  The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser’s part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including attorneys’ fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys’ fees, which may be sustained as a result of the Subadviser’s willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws.  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days’ nor less than 30 days’ written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of  control (as defined in the 1940 Act) of the Subadviser.  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co- Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser provided however, that if a party other than the Subadviser is engaged to transition the portfolio to the Subadviser’s strategy (a “Transition Manager”), Subadviser shall have no responsibilities under Sections 1(a)(iii) and (v) until such time as the portfolio is released to the Subadviser for trading. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PI) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for AST); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 620 8th Avenue, 47th Floor, New York, New York, 10018, Attention: General Counsel. 

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser’s directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser’s right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association.  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.   During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser’s written request, and to implement those changes in the next regularly scheduled production of those materials. All such prospectuses, proxy statements, reports to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act.  

11. This Agreement shall be governed by the laws of the State of New York.  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order.  

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 

  

PGIM INVESTMENTS LLC  

  

  

By:  /s/ Timothy Cronin
Name:Timothy S. Cronin
Title: Senior Vice President 

  

  

  

AST INVESTMENT SERVICES, INC. 

  

  

By:  /s/ Timothy Cronin 

Name:Timothy S. Cronin 

Title:President 

  

  

  

CLEARBRIDGE INVESTMENTS, LLC 

  

By:  /s/ Cynthia K. List
Name:  Cynthia K. List
Title:   CFO 

 

SCHEDULE A 

ADVANCED SERIES TRUST

 

As compensation for services provided by ClearBridge Investments (ClearBridge), LLC, PGIM Investments LLC and AST Investment Services, Inc. will pay ClearBridge a subadvisory fee on the net assets managed by ClearBridge that is equal, on an annualized basis, to the following: 

Portfolio Name  

Subadvisory Fee*, **  

  

AST Balanced Asset Allocation Portfolio 

  

0.35% of average daily net assets to $100 million;  

0.29% of the next $150 million of average daily net assets; 

0.27% of the next $250 million of average daily net assets; 

0.23% of average daily net assets over $500 million 

  

    

* In the event ClearBridge invests Portfolio assets in other pooled investment vehicles it manages or subadvises, ClearBridge will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to ClearBridge with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to ClearBridge, the assets managed by ClearBridge in the AST Balanced Asset Allocation Portfolio will be aggregated with the assets managed by ClearBridge in: (i) the AST Capital Growth Asset Allocation Portfolio; and (ii) the Preservation Asset Allocation Portfolio. 

  

Dated as of : May 17, 2021 

  

  

  


Execution Version 

ADVANCED SERIES TRUST 

  

AST Balanced Asset Allocation Portfolio 

  

SUBADVISORY AGREEMENT 

  

Agreement made as of this 13 day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (ASTIS), a Maryland corporation (together, the Co-Managers), and J.P. Morgan Investment Management Inc., a Delaware corporation, (J.P. Morgan or the Subadviser), and effective as of a date mutually agreed upon by the Co-Managers and Subadviser; 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and AST act as Co-Managers of the Trust;  

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually, a Portfolio or the Trust and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct and the Subadviser is willing to render such investment advisory services; and 

  

NOW, THEREFORE, the Parties agree as follows: 

  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers (the “Allocated Portion”), including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of the Allocated Portion of the Trust's investments as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash. 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust's valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust that are not inconsistent with the Trust Documents), cooperate with the Co-Managers’ (or their designees') personnel responsible for monitoring the Trust's compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, and all other applicable federal laws and regulations. In addition, the Subadviser shall manage the Allocated Portion in conformity with applicable state laws and regulations and such state insurance laws as Manager informs Subadviser are applicable to the Trust (“State Insurance Laws”).  In connection therewith, the Subadviser shall, among other things, assist the Co-Managers in the preparation and filing of such reports as the Trust is, or may in the future be, required to file with the Securities and Exchange Commission (the Commission). The Co-Managers shall provide Subadviser timely with copies of any updated Trust Documents. 

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by the Allocated Portion, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with the Subadviser (collectively, Brokers), as it determines in its discretion subject to the requirements of  this subsection (iii). In executing transactions for the Trust and selecting Brokers, the Subadviser will use its best efforts to seek on behalf of the Trust the best overall terms available. Within the framework of this policy, the Subadviser shall consider all the factors that it deems relevant including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the Broker, the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis and, for any portion of the Portfolio managed by the Subadviser from its offices outside the United Kingdom, the research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser’s other clients may be a party.  (If the Subadviser manages a portion of the Portfolio’s assets from its offices in the United Kingdom (“UK Managed Assets”), the brokerage commissions paid on transactions in the UK Managed Assets will compensate the broker for trade execution only. Brokerage commissions paid on transactions involving assets the Subadviser manages from its offices outside the United Kingdom (“Non-UK Managed Assets”) may compensate the broker for both trade execution and investment research services.)    

  

For Non-UK Managed Assets, the Co-Managers (or Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain the best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the Co-Managers or Subadviser determine(s) in good faith that such commission was reasonable in relation to the value of the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it or an affiliate may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act).  

  

On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.  The Co-Managers recognize that, in some cases, this procedure may limit the size of the position that may be acquired or sold for the Trust.  The Co-Managers hereby acknowledge receipt of the current best execution policy of Subadviser’s London branch and consent to Subadviser following such policy.  Subadviser shall provide the Co-Managers with updated versions of such policy as it may be amended, supplemented, or modified from time to time.  Subject to the requirements of U.S. laws rules, and regulations, including, without limitation, the 1940 Act and the Investment Advisers Act of 1940, as amended (the Advisers Act), and the rules thereunder, the Co-Managers agree that the Subadviser’s London branch may follow the then-current version of such best execution policy in managing the portion of the Portfolio’s assets assigned to it. In addition, the Co-Managers agree that in managing the portion of the Portfolio’s assets assigned to it, the Subadviser’s London branch may execute trades outside a trading venue as that term is defined in the “Markets in Financial Instruments Directive.”   

  

(iv) The Subadviser is authorized to purchase, sell, hold and generally deal in and with derivatives as set forth in the Prospectus of the Trust. The Co-Managers hereby authorize Subadviser to open accounts and execute documents, representations, warranties, indemnities and representation letters in the name of, binding against and on behalf of the Trust, including without limitation, futures account agreements and master agreements related to derivatives transactions for all purposes necessary or desirable in Subadviser’s view to effectuate Subadviser’s activities under this Agreement.  To the extent the Portfolio qualifies as a “qualified eligible person” within the meaning of the Commodity Futures Trading Commission (“CFTC”) Regulation Rule 4.7, the Co-Managers on behalf of the Portfolio consent to the Portfolio’s treatment by the Subadviser as a qualified eligible person.  

  

(v) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(vi) The Subadviser or an affiliate shall provide the Trust's custodian on each business day with information relating to all transactions concerning the Allocated Portion, and shall provide the Co-Managers with such information upon request of the Co-Managers. 

  

(vii) The Subadviser and the Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(viii) The Co-Managers acknowledge that investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others.  Manager agrees that Subadviser may give advice and take action with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Trust. It is Subadviser's policy, to the extent practicable, to allocate investment opportunities among clients over a period of time on a fair and equitable basis.  Manager recognizes that Subadviser, in effecting transactions for its various accounts, may not always be able to take or liquidate investment positions in the same security at the same time and at the same price. It is understood that Subadviser shall not have any obligations to purchase or sell, or to recommend for purchase or sale, for the Trust any security which Subadviser or its affiliates, their directors, officers, principals or employees may purchase or sell for its or their own accounts or for the account of any other client, if in the opinion of Subadviser such transaction or investment appears unsuitable, impractical or undesirable for the Trust, except as required by law. Nothing in this Agreement will in any way limit or restrict Subadviser or any of its respective officers, directors, principals, affiliates or employees from buying, selling or trading in any securities for its or their own accounts or other accounts.  Manager acknowledges and agrees that Subadviser and its affiliates may make different investment decisions with respect to each of its clients or for its own account, and that such fact shall not be relied upon by Manager or any of Manager’s agents or representatives as evidence of a breach of Subadviser 's duties hereunder. Nothing in this Agreement shall limit or restrict the right of the Subadviser, the Co-Managers, the Trust, or any of their respective directors, officers, affiliates or employees to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature.   

  

(ix) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust's portfolio or any other transactions of Trust assets. 

  

(x) Conflicts of interest may arise in the course of providing the Subadviser's services and information on the Subadviser's conflicts of interest policy may be found in the Subadviser’s FCA Disclosure Document and its current Form ADV provided to the Co-Managers. 

  

(b) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-I under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(c) The Subadviser is a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. Further, the Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of the Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) to the extent permitted by law, regulation, regulatory requirement or the Subadviser’s policy, the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

  

(d) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures designed to comply with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable federal regulations and state law and/or requirements, State Insurance Laws and applicable rules of any self-regulatory organization. 

  

(e) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably necessary to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures designed to comply with the 1940 Act, the Advisers Act, and other applicable federal laws and regulations, state law and/or requirements and State Insurance Laws. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(f) The Subadviser shall furnish to the Co-Managers copies of (i) all records prepared in connection with the performance of this Agreement and (ii) any reports prepared for external distribution in accordance with the compliance procedures maintained pursuant to paragraph 1(d) hereof as the Co-Managers may reasonably request. 

  

(g) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Allocated Portion in accordance with the Subadviser’s proxy voting policy in effect from time to time and the Subadviser will comply with such reasonable reporting and other requirements as shall be established by the Co-Managers. 

  

(h) The Subadviser agrees to provide reasonable assistance to the Co-Managers or the Trust's Custodian in determining the value of any of the Trust’s portfolio investments.   Such reasonable assistance shall include (but is not limited to): (i)  upon the request of the Co-Managers or the Trust's Custodian, assisting in obtaining bids and offers or quotes from broker/dealers or market-makers with respect to portfolio investments; and (ii) notifying the Co-Managers in the event the Subadviser has reason to believe that the price it has received for a portfolio investment held by the Allocated Portion does not appear to reflect corporate actions, news, significant events or such investment otherwise requires review to determine if fair valuation may be necessary under the Trust’s valuation procedures.  Upon reasonable request from the Co-Managers, the Subadviser shall make its employees and officers reasonably available for consultation with the valuation committee of the Trust or the Co-Managers to assist them in their valuation of the investments of the Trust as the valuation committee or the Co-Managers may request from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued.  

  

(i) The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Trust's portfolio required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(j) The Subadviser shall comply with the applicable portions of the Trust’s Documents provided to the Subadviser by the Co-Managers. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon detection of any material breach of such Trust Documents.  

  

(k) The Subadviser shall keep the Trust’s Manager informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall permit representatives of the Trust or the Co-Managers to examine reports (or summaries of the reports) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the Allocated Portion, cash requirements and cash available for investment in the Allocated Portion, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser). 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the Allocated Portion as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers’ receipt of payment from the Trust for management services described under the Management Agreement between the Trust and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers. 

  

4. Confidentiality. (a) Each party agrees that it will treat confidentially all information provided by any other party (the “Discloser”) regarding the Discloser’s businesses and operations, including without limitation the investment activities or holdings of the Allocated Portion (“Confidential Information”).  All Confidential Information provided by the Discloser shall be used only by the other party hereto (the “Recipient”) solely for the purposes of rendering services pursuant to this Agreement, and shall not be disclosed to any third party, without the prior consent of the Discloser, except for a limited number of employees, attorneys, accountants and other advisers of the Recipient and its affiliates under common control with Recipient on a need-to-know basis and solely for the purposes of rendering services under this Agreement.   

  

(b) Confidential Information shall not include any information that: (i) is public when provided or thereafter becomes public through no wrongful act of the Recipient; (ii) is demonstrably known to the Recipient prior to execution of this Agreement; (iii) is independently developed by the Recipient through no wrongful act of the Recipient in the ordinary course of business outside of this Agreement; (iv) is generally employed by the trade at the time that the Recipient learns of such information or knowledge; or (v) has been rightfully and lawfully obtained by the Recipient from any third party.  

  

(c) In the event that the Recipient is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil investigative demand or similar process, or by a governmental or regulatory agency or authority), in connection with any proceeding, to disclose any of the Discloser’s Confidential Information, the Recipient will, to the extent permitted by law, regulation or regulatory authority, give the Discloser prompt written notice of such request or requirement to allow the Discloser an opportunity to obtain a protective order or otherwise obtain assurances that confidential treatment will be accorded to such Confidential Information.  In the event that such protective order or other remedy is not obtained, disclosure shall be made of only that portion of the Confidential Information that is legally required to be disclosed.  All Confidential Information disclosed as required by law shall nonetheless continue to be deemed Confidential Information.  Notwithstanding anything to the contrary in the foregoing, no such notification shall be required in respect of any disclosure to regulatory authorities having jurisdiction over the Recipient or any of its affiliates. 

  

(d)  Notwithstanding anything to the contrary in the foregoing, to the extent that any market counterparty with whom Subadviser deals requires information relating to the Portfolio or the Trust (including, but not limited to, the identity and market value of the Portfolio, or the Allocated Portion), Subadviser shall be permitted to disclose such information to the extent necessary to effect transactions on behalf of the Trust.  

  

5. The Parties’ Information Security Programs. Each party represents and warrants the following: 

  

(a)

It and its parent company have implemented and currently maintain an effective information security program (the “Information Security Program”) which includes administrative, technical, and physical safeguards and other security measures necessary to protect (i) the security and confidentiality of Confidential Information; (ii) against anticipated threats or hazards to the security or integrity of Confidential Information; and (iii) against unauthorized access to, destruction, modification, disclosure or use of Confidential Information.   

(b)

Its Information Security Program complies with applicable laws and regulations with respect to the privacy and data security of Confidential Information.  

(c)

It shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to its employees who require such access in order to provide the services under this Agreement. 

(d)

It or its parent company conducts risk assessments as it determines to be reasonably necessary to identify and assess risks to the security, confidentiality, and integrity of Confidential Information; and evaluates, where necessary, the effectiveness of its information security controls.   

(e)

In the event that it confirms unauthorized access, disclosure, or material damage to Confidential Information (each a “Security Incident”), it shall notify the other party as soon as reasonably practicable. 

(f) It shall provide the other party with information related to its Information Security Program. 

(g)

Upon Co-Managers’ request, Subadviser will include a member(s) of its staff that is familiar with its Information Security Program in the periodic due diligence meetings with Co-Managers’ staff to provide a presentation and answer questions on its Information Security Program.  

  

6. (a) The Subadviser will not engage any third party to provide discretionary investment management services to the Allocated Portion without the express written consent of the Co-Managers.  The Subadviser may employ an affiliate or a third party to perform administrative duties such as accounting, reporting, proxy voting and other ancillary services without the prior consent of the Co-Managers. In either case, the Subadviser will act in good faith in the selection, use and monitoring of affiliates and other third parties, and any delegation or appointment hereunder shall not relieve the Subadviser of any of its obligations under this Agreement. The Subadviser agrees that it remains liable to the Co-Managers for an affiliate’s or third party’s compliance with this Agreement, applicable regulations and requirements to the same extent as if the Subadviser itself had acted or failed to act instead of the affiliate or third party. 

  

(b) Notwithstanding any other provision of the Agreement, the Subadviser: (i) may provide information about the Co-Managers and the Trust to any affiliate or any unaffiliated third party for purposes of this Section 6; and (ii) shall ensure that any affiliate or unaffiliated third party to which services have been delegated hereunder is subject to confidentiality and non-disclosure obligations that are substantially similar to the confidentiality and non-disclosure obligations to which the Subadviser is subject under this Agreement. 

  

7. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, and their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a direct result of the Co-Managers’ willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, its affiliated persons, and their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a direct result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. Neither the Co-Managers nor the Subadviser shall be liable for any special, consequential, incidental or punitive damages.
 

8. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Trust, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser.   

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a Portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated Portfolio or portion thereof shall commence as of the close of business on the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser.  The Co-Managers will commence the transition process for the delegated Portfolio or portion thereof of the Portfolio listed on Schedule A at the close of business on a date mutually agreed upon by the Co-Managers and the Subadviser and the Subadviser will become a subadviser of the Portfolio at that time. Notwithstanding anything to the contrary in the foregoing, if the Co-Managers engage a transition manager to execute purchases and sales in the delegated Portfolio or delegated portion thereof, the Subadviser will not be liable for losses caused by the default, fraud, act or omission, negligence or willful misconduct of such transition manager.   

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 277 Park Avenue, Floor 8, New York, NY 10172, Attention: Scott Moritz. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

13. The Co-Managers and the Trust each acknowledges that the Subadviser operates so as to comply with all applicable federal, state and local laws relating to the prevention of money laundering and terrorist financing. The Co-Managers and the Trust each hereby acknowledges that it or its service provider agent has policies and procedures in place designed to comply with Anti -Money Laundering (“AML”) requirements in the United States, including the Bank Secrecy Act as amended by the USA PATRIOT ACT as amended, and other applicable laws and regulations in those jurisdictions where the Co-Managers or the Trust operate, relating to the prevention of money laundering and terrorist financing (“AML Program”). The Co-Managers and the Trust each also acknowledges that it or its service provider agent has policies and procedures in place designed to comply with the prohibitions and restrictions mandated by the U.S. Treasury Department’s Office of Foreign Assets Control and all other sanctions laws and regulations applicable in the jurisdictions in which it operates. To the knowledge of the Co-Managers and the Trust, any solicitations and other activities by it or, as applicable, its service providers in connection with the Trust have been and will be conducted in accordance with such applicable AML and sanctions laws and regulations 

  

 

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS ACCOUNT DOCUMENT.
 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 

  


PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

  

Name: Timothy Cronin 

Title: Senior Vice President 

  

  

AST Investment Services, INC. 

  

By: /s/ Timothy Cronin 

  

Name: Timothy Cronin 

Title: President 

  

  

J.P. MORGAN INVESTMENT MANAGEMENT INC. 

  

By: /s/ Scott Moritz 

  

Name: Scott Moritz 

Title: Vice President 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by J.P. Morgan Investment Management Inc. (J.P. Morgan), PGIM Investments LLC and AST Investment Services, Inc. will pay J.P. Morgan a subadvisory fee on the average daily net assets managed by J.P. Morgan that is equal, on an annualized basis, to the following: 

  

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio*, ** 

  

  

AST Balanced Asset Allocation Portfolio 

  

  

Large Cap Core Sleeve: 

0.20% of average daily net assets to $500 million;  

0.18% of the next $500 million of average daily net assets; and 

0.17% of average daily net assets over $1 billion 

  

Equity Income Sleeve: 

0.34% of average daily net assets 

  

* In the event J.P. Morgan invests Trust assets in other pooled investment vehicles it manages or subadvises, J.P. Morgan will waive its subadvisory fee for the Trust in an amount equal to the acquired fund fee paid to J.P. Morgan with respect to the Trust assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to J.P. Morgan, the assets managed by J.P. Morgan in the AST Balanced Asset Allocation Portfolio will be aggregated with the assets managed by J.P. Morgan in: (i) the AST Capital Growth Asset Allocation Portfolio; (ii) the Preservation Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Large-Cap Core Portfolio. 

  

  

  

Dated as of: May 13, 2021 

  

  


ADVANCED SERIES TRUST 

  

AST Capital Growth Asset Allocation Portfolio
 

Subadvisory Agreement 

  

This Agreement (the “Agreement”) is made as of this 19th day of May, 2021, by and among PGIM Investments LLC (“PGIM Investments”), a New York limited liability company and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) (“ASTIS”), a Maryland corporation (together, the “Co-Managers”) on the one hand, and on the other hand each, severally, of Jennison Associates LLC, a Delaware limited liability company (“Jennison”), QMA LLC, a New Jersey limited liability company (“QMA”), and PGIM, Inc., a New Jersey Corporation (“PGIM”). Each of Jennison, QMA and PGIM shall be referred to herein as a “Subadviser.” 

  

This Agreement replaces the previous subadvisory agreement for the AST Capital Growth Asset Allocation Portfolio.   

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the “Management Agreement”) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the “Trust”) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust;  

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desires to retain each Subadviser to provide investment advisory services to the Trust in respect of one or more of its constituent series of shares as specified in Schedule A hereto and to manage such portion of the Trust as the Co-Managers shall from time to time direct (such portion of the Trust with respect to a Subadviser, the “Allocated Assets”), and each Subadviser is willing to render such investment advisory services;  

  

NOW, THEREFORE, the Parties agree as follows: 

  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust (the “Board”), each Subadviser shall manage such Allocated Assets as are delegated to such Subadviser by the Co-Managers from time to time, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions applicable to such Allocated Assets as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings: 


(i) Each Subadviser shall provide advice, management and supervision with respect to its Allocated Assets, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash.  The Co-Managers may, from time to time, allocate and reallocate the Trust’s assets among the Subadvisers.  In addition, the Co-Managers may determine not to allocate any portion of the Trust’s assets to a Subadviser for a period of time during the term of this Agreement.  A Subadviser’s responsibilities for providing investment advisory services to the Trust shall be limited solely to its Allocated Assets. 

  

(ii) In the performance of its duties and obligations under this Agreement, each Subadviser shall (A) act in conformity with the the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, and the Prospectus, as provided to it by the Co-Managers (collectively, the “Trust Documents”), and with the instructions and directions of the Co-Managers or the Board; (B) reasonably co-operate with the Co-Managers's (or its designees') personnel responsible for monitoring the Trust's compliance; and (C) conform to, and comply with, the material requirements of all applicable federal and state laws and regulations, including but not limited to the 1940 Act and the Commodity Exchange Act of 1936, as amended (the “CEA

”). In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required by the Securities and Exchange Commission (the “Commission”). The Co-Managers shall provide each Subadviser timely with copies of any updated Trust Documents. 

  

(iii) Each Subadviser, with respect to its Allocated Assets, shall determine the securities, funds, futures contracts and other instruments to be purchased or sold, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with such Subadviser (collectively, “Brokers”), as such Subadviser may determine.  In selecting brokers, dealers or futures commissions merchants with which to execute portfolio transactions, it is recognized that a Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, a Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. Each Subadviser shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with such Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of such Subadviser with respect to the Trust and other accounts as to which it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. On occasions when a Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of such Subadviser, such Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by such Subadviser in the manner such Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.  Each Subadviser may execute on behalf of the Trust certain agreements, instruments and documents in connection with the services performed by it under this Agreement. These may include, without limitation, brokerage agreements, clearing agreements, account documentation, futures and options agreements, swap agreements, other investment-related agreements, and any other agreements, documents or instruments the Subadviser believes are appropriate or desirable in performing its duties under this Agreement.  

  

(iv) Each Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Board such periodic and special reports as the Board may reasonably request. Each Subadviser shall make reasonably available its employees and officers for consultation with any of the members of the Board or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, to assist in the valuation of the Trust's securities. 

  

(v) Each Subadviser or an affiliate shall provide to the Trust’s custodian (the “Custodian”) on each business day with such information relating to its Allocated Assets as the Custodian may reasonably requet, and shall provide the Co-Managers with such information upon request of the Co-Managers. 

  

(vi) The investment management services provided by each Subadviser hereunder are not to be deemed exclusive, and each Subadviser shall be free to render similar services to others. Conversely, each Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "Co-Managers-of-Co-Managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadvisers through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Board as to whether the contract with one or more Subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Board regarding the results of its evaluation and monitoring functions. Each Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) Each Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-10, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and each Subadviser hereby agrees that it shall not consult

with any other subadviser to the Trust, including any Subadviser, with respect to transactions in securities for the Trust's portfolio or any other transactions involving Trust assets. 

  

(b) Each Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as members of the Board or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by each Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) Each Subadviser shall keep the Trust's books and records required to be maintained by such Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to such Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. Each Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and each Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that such Subadviser may retain a copy of such records. Each Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 


(d) Each Subadviser is, to the extent required by applicable law, a commodity trading advisor (“CTA”) duly registered with the Commodity Futures Trading Commission (the “CFTC”) and is a member in good standing of the National Futures Association (the “NFA”); provided, for the avoidance of doubt, that, as of the date of this Agreement, Jennison is neither a registered CTA nor a member of the NFA. Each Subadviser shall maintain such registration and membership in good standing, or compliance with applicable requirements for exemption therefrom, during the term of this Agreement. Further, each Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of such Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of such Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

  

(e) In connection with its duties under this Agreement, each Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with all state and federal regulations, and the rules of any self-regulatory organization applicable to it including, for example, the 1940 Act, the CEA, and the Investment Advisers Act of 1940 (the “Advisers Act”), as amended. 

  

(f) Each Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with (i) the performance of this Agreement and (ii) the maintenance of compliance procedures pursuant to paragraph 1(e) hereof as the Co-Managers may reasonably request. 

  

(g) Each Subadviser shall maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably designed  to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. Each Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, each Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(h) Each Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in its Allocated Assets, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers.  Each Subadviser shall vote such proxies in accordance with its internal proxy voting policy. 

  

(i) Pursuant to the delegation of fair valuation of the Trust’s securities to the Co-Managers by the Board, the valuation committee of the Co-Managers shall have primary responsibility for valuation of the Trust’s assets. The Co-Managers represents and warrants to each Subadviser that such delegation of valuation responsibility complies with applicable law.  Upon reasonable request from the Co-Managers, each Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including being reasonably available to consult with the valuation committee of the Trust and the Co-Managers and making available information as to which the Subadviser has knowledge related to the investments being valued;  provided, however, that the valuation committee of the Co-Managers shall retain primary day-to-day responsibility for valuation of the Trust’s assets.  In addition, each Subadviser will use its reasonable efforts to promptly notify the Co-Managers in the event that such Subadviser becomes aware that the Trust is carrying a security in such Subadviser’s Allocated Assets at a value that such Subadviser believes does not fairly represent the price that could be obtained for the security in a current market transaction. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review each Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Custodian to provide) timely information to each Subadviser regarding the composition of assets in the Subadviser’s Allocated Assets, cash requirements and cash available for investment in such Allocated Assets, and all other information as may be reasonably necessary for such Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board that affect the duties of such Subadviser). 

  

3. In consideration of the services provided pursuant to this Agreement, the Co-Managers shall pay each Subadviser as full compensation a fee equal to the average of the net asset value of the Allocated Assets determined each day during the preceding month multiplied by the annual rate set forth on the attached Schedule A. Liability for payment of compensation by the Co-Managers to each Subadviser under this Agreement is contingent upon the Co-Managers's receipt of payment from the Trust for management services described under the Management Agreement. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by a Subadviser, shall not cause a reduction in the amount of the payment to such Subadviser by the Co-Managers. 

  

4. (a) Each Subadviser acknowledges that, in the course of its engagement by the Co-Managers, a Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conducts business in relation to services provided to the Trust by the Subadviser.  Such information, with respect to a Subadviser which knows or should know is confidential, is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’s business and other proprietary information, written or oral as it relates to services provided to the Trust by the Subadviser. 

  

(b)

Each Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures designed to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Managers, or to any person who may be identified by Confidential Information.  Each Subadviser shall promptly and without unreasonable delay, but in no event more than 48 hours of learning of a material breach of this Section, notify the Co-Managers if such Subadviser is in material breach of this Section.  At the Co-Managers’s request, the Subadviser shall certify in writing to the Co-Managers, its compliance with the terms of this Section. 

  

(c)

Each Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

Each Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in such Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser shall not alter or modify its Information Security Program in such a way that will weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Information Security Program shall include, without limitation: (i) access controls to prevent the unauthorized or inappropriate use of Confidential Information; (ii) periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and (iii) regular penetration and vulnerability testing of its information technology infrastructure and networks. 

  

(f)

The Subadviser shall notify the Co-Managers, promptly and without unreasonable delay, but in no event more than 48 hours of learning of any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to Confidential Information may have occurred (each, a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Co-Managers full details of the Security Incident; (ii) assist and cooperate with the Co-Managers and the Co-Managers’s designated representatives in the Co-Managers’s investigation of the Subadviser, employees or third parties related to the Security Incident, which may include requests for all relevant records, logs, files, and data; (iii) cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co-Managers’s rights; and  (iv) take appropriate action to prevent a recurrence of any Security Incident. 

  

(g)

Upon the Co-Managers’s reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(h)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice, reasonable assistance and cooperation of the Subadviser’s relevant staff.   

  

(i)

Notwithstanding any obligations set forth in this Agreement (including this section 4), the Co-Managers acknowledge and agree that the Subadvisers shall not be required to share any privileged or confidential information, proprietary data, quantitative models and similar information with the Co-Managers.  

  

5. No Subadviser will engage any third party to provide services with respect to its Allocated Assets without the express written consent of the Co-Managers.  To the extent that each Subadviser receives approval from the Co-Managers to engage a third-party service provider, the Subadviser assumes all responsibility for any action or inaction of the service provider as it related to its Allocated Assets.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and its directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) which arise out of or relate to the provision of services provided by any such service provider.  For the avoidance of doubt, none of the Custodian or any party with or through whom a Subadviser trades shall be deemed to be an agent engaged by Subadviser for purposes of this section 5. 

  

6. Each Subadviser assumes no responsibility under this Agreement other than to render the services to be provided by such Subadviser hereunder in good faith.  No Subadviser shall be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on such Subadviser's part in the performance of its duties hereunder or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against such Subadviser under federal or state securities laws. The Co-Managers shall indemnify each Subadviser, its respective affiliated persons, officers, directors, and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Co-Managers's willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. Each Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a

result of such Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for an initial term of one year from the date hereof and such term shall extend automatically each year thereafter for subsequent one-year terms; provided that each annual extension is subject to approval by the Board; and, provided further that this Agreement may be terminated (a) without the payment of any penalty, by the Board or by vote of a majority of the outstanding voting securities of the Trust as provided in the 1940 Act, or (b) by the Co-Managers or by a Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. Termination of this Agreement by a Subadviser shall terminate this Agreement only with respect to such Subadviser and the Agreement shall otherwise continue in full force and effect. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. Each Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of such Subadviser. 

  

To the extent that the Co-Managers delegate to a Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, such Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser, provided however, that if a party other than the Subadviser is engaged to transition the portfolio to the Subadviser’s strategy (a “Transition Co-Managers”), Subadviser shall have no responsibilities under Sections 1(a)(iii) and (v) until such time as the portfolio is released to the Subadviser for trading. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to a Subadviser at the address set forth beneath its signature below. 


8. Nothing in this Agreement shall limit or restrict the right of any of a Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict a Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

13. This Agreement, including Schedule A hereto, embodies the entire agreement and understanding among the parties hereto, and supersedes all prior agreements and understandings relating to the subject matter hereof.  Should any part of this Agreement be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement should not be affected thereby.  This Agreement shall be binding on and inure to the benefits of the parties hereto and their respective successors. 

  

14. The obligations of each Subadviser hereunder are several and not joint. Each Subadviser shall be liable only for its own obligations hereunder.  No Subadviser shall be a guarantor of or jointly liable for the obligations of any other Subadviser.  No Subadviser shall have any interest in the performance of, or remedy against, any other Subadviser in connection herewith. 

 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
 

  

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

Name: Timothy S. Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

By:  /s/ Timothy Cronin 

Name:  Timothy S. Cronin 

Title:  President 

  

  

JENNISON ASSOCIATES LLC 

  

By: /s/ William C. Ings 

Name: William C. Ings 

Title: Managing Director 

  

Address for Notices:  

Jennison Associates LLC 

477 Lexington Avenue, New York, NY 10017 

Attention: Secretary (with a copy to Jennison’s Chief Legal Officer). 

  

  

PGIM, INC. 

  

By: /s/ Daniel Malooly 

Name: Daniel Malooly 

Title: Vice President 

  

Address for Notices:  

PGIM, Inc. (PGIM Fixed Income)  

655 Broad Street 

Newark, NJ 07102  

Attention: Chief Legal Officer 

Fax: 973-802-6834 

  

For changes to guidelines and related communications: 

PGIM, Inc. 

655 Broad Street, 8th Floor 

Newark, NJ 07102 

Attention: Client Services Team 

E-mail: pgim_client_services@pgim.com 

  

  

  

 

QMA LLC 

  

By: /s/ Stephen Brundage 

Name: Stephen Brundage 

Title: Vice President 

  

Address for Notices:  

QMA LLC 

Gateway Center Two 

100 Mulberry Street, Newark, NJ 07102 

Attention: Secretary (with a copy to QMA LLC’s Chief Legal Officer) 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by each Subadviser, acting severally and not jointly, PGIM Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay each Subadviser a subadvisory fee on the net assets managed by such Subadviser that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadviser 

Subadvisory Fee for the Portfolio* 

  

AST Capital Growth Asset Allocation Portfolio 

  

Jennison Associates LLC**  

0.35% of average daily net assets to $100 million;  

0.30% of the next $100 million of average daily net assets; 

0.275% of the next $300 million of average daily net assets; 

0.25% of the next $2.5 billion of average daily net assets;  

0.23% of average daily net assets over $3 billion 

PGIM Fixed Income, a business unit of PGIM, Inc.***, + 

  

0.17% of average daily net assets to $750 million;  

0.16% of the next $750 million of average daily net assets;  

0.14% of average daily net assets over $1.5 billion 

QMA LLC# 

For Asset Allocation Services: 

0.04% of average daily net assets 

  

For Quantitative Equity Management (including the overlay sleeve): 

0.30% of average daily net assets to $1 billion;  

0.25% of average daily net assets on next $5 billion;  

0.225% of average daily net assets over $6 billion 

* In the event a Subadviser invests its Allocated Assets in any other pooled investment vehicle it manages or subadvises, such Subadviser will waive its subadvisory fee hereunder in an amount equal to the acquired fund fee paid to a Subadviser with respect to the Allocated Assets so invested.  Notwithstanding the foregoing, under no circumstances will the subadvisory fee waivers referred to in the preceding sentence exceed 100% of the subadvisory fee. 

** The subadvisory assets managed by Jennison under the AST Capital Growth Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to Jennison, the average daily net assets in each underlying sleeve will be combined. 

  

For purposes of calculating the advisory fee payable to Jennison, the fee percentage applicable to the Allocated Assets will be a single blended rate determined in accordance with the schedule set forth above.  For purposes of determining this rate, the average daily net assets shall be the aggregate of the Allocated Assets together with the assets managed by Jennison in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the Preservation Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.   

  

*** The subadvisory assets managed by PGIM Fixed Income under the AST Capital Growth Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to PGIM Fixed Income, the average daily net assets in each underlying sleeve will be combined. 

  

For purposes of calculating the advisory fee payable to PGIM Fixed Income, the assets managed by PGIM Fixed Income in the AST Capital Growth Asset Allocation Portfolio will be aggregated with the assets managed by PGIM Fixed Income in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Preservation Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio. 

  

+ PGIM maintains a delegation agreement with PGIM Limited, an affiliated investment manager of PGIM that is authorized and regulated in the United Kingdom by the Financial Conduct Authority and registered with the US Securities and Exchange Commission under the Advisers Act and a portion of the subadvisory fee payable to PGIM as subadviser may be payable to PGIM Limited as a sub-subadviser under this Agreement. 

  

# The subadvisory assets managed by QMA under the AST Capital Growth Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to QMA, not including asset allocation services, the average daily net assets in each underlying sleeve will be combined.  The fee percentage applicable to the Allocated Assets will be a single blended rate determined in accordance with the schedule set forth above 

  

For purposes of calculating the advisory fee payable to QMA, not including the asset allocation services, the assets managed by QMA in the AST Capital Growth Allocation Portfolio will be aggregated with the assets managed by QMA in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Preservation Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.   

  

Dated as of:  May 19, 2021 

1 

  


Execution Version 

ADVANCED SERIES TRUST 

  

AST Capital Growth Asset Allocation Portfolio
 

  

SUBADVISORY AGREEMENT 

  

Agreement made as of this 19 day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (ASTIS), a Maryland corporation (together, the Co-Managers), and Massachusetts Financial Services Company (d/b/a MFS Investment Management), a Delaware corporation (MFS or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust; and 

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct, and the Subadviser is willing to render such investment advisory services; and 

  

NOW, THEREFORE, the Parties agree as follows: 

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of such portion of the Trust's investments as the Co-Managers shall direct, and the Subadviser shall have discretion to determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash. 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and any procedures adopted by the Board applicable to the services provided by the Subadviser hereunder including any amendments to those procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust's compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, each as applicable to the services provided by the Subadviser hereunder and all other applicable federal and state laws and regulations (collectively, "Applicable Law"). Subject to the Co-Managers' oversight, Subadviser shall monitor compliance with Applicable Law based on Subadviser's books and records and, to the extent provided, information provided by the Co-Managers and/or the Trust's Custodian. In connection therewith, the Subadviser shall be responsible for the preparation and filing of Schedule l3G and Form 13-F reflecting the Trust's securities holdings unless otherwise directed in writing by the Co-Managers. The Subadviser shall not be responsible for the preparation or filing of any other reports required of the Trust by any governmental or regulatory agency, except as expressly agreed to in writing. The Co-Managers shall provide Subadviser with timely copies of any updated Trust Documents. Until the Co-Managers or the Trust delivers any Trust Document regarding the management of the Trust or the Subadviser's duties hereunder to the Subadviser, the Subdviser shall not be liable and shall be fully protected in relying on any previously delivered document sent by the Co-Managers or the Trust to the Subadviser. 

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by such portion of the Trust's portfolio, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants (including, but not limited to, any person or entity affiliated with the Co-Managers or the Subadviser) (collectively, Brokers), to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. The Co-Managers (or the Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission.  

  

The Subadviser may execute account documentation, agreements, contracts and other documents requested by brokers, dealers, counterparties and other persons in connection with its management of the assets of the Trust, including, without limitation, transaction term sheets and confirmations, certifications regarding the Trust's status as an accredited investor, qualified institutional buyer or qualified purchaser and certifications regarding other factual matters as may be requested by brokers, dealers or counterparties in connection with the Subadviser’s management of the Trust's assets.  

  

On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.
 

(iv) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act as applicable to the Subadviser, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(v) The Subadviser or an affiliate shall provide the Trust's custodian on each business day with information relating to all transactions concerning the portion of the Trust's assets it manages, and shall provide the Co-Managers with such information upon request of the Co-Managers.  The parties acknowledge and agree that the Subadviser is not a custodian of the Trust assets and will not take possession or custody of such assets. 

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust's portfolio or any other transactions of Trust assets.
 

(b) The Subadviser shall, to the extent permitted by its Code of Ethics and other applicable internal policies and procedures, authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(d) The Co-Managers acknowledge that Subadviser is registered with the Commodity Futures Trading Commission (“CFTC”) and National Futures Association (the “NFA”) as a commodity trading advisor and that Subadviser will provide commodity trading advice to the Trust as if Subadviser were exempt from registration as a commodity trading advisor. The Subadviser represents that it shall provide commodity trading advice to the Trust in a manner consistent with any applicable duties and obligations, as set forth in the Commodity Exchange Act of 1936, as amended (the “CEA”), and all rules and regulations promulgated thereunder. The Co-Managers represent and warrant that they are excluded from the definition of commodity pool operator pursuant to CFTC Regulation 4.5 with respect to the Trust, and the Co-Managers have timely filed a notice of eligibility as required by CFTC Regulation 4.5 with respect to the Trust and will, during the term of this Agreement, maintain and reaffirm such notice of eligibility as required by CFTC Regulation 4.5.   

  

(e) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, each as applicable to the services provided by the Subadviser hereunder and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

  

(f) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably necessary to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures designed to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(g) The Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with this Agreement, including but not limited to such monthly, quarterly, or annual reports concerning the Subadviser's transactions with respect to the investments and securities held in the Trust's portfolio and the performance of the Trust's portfolio as well as the compliance procedures pursuant to paragraph 1(d) hereof as the Co-Managers may reasonably request. 

  

(h) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Trust's portfolio in accordance with the Subadviser's proxy voting policies and procedures, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers. It shall be the sole responsibility of the Co-Managers to process and file any claim forms or other documentation relating to any securities class action or other litigation on behalf of the Trust; however, upon reasonable request, Subadviser will cooperate with the Co-Managers to the extent necessary for the Co-Managers to pursue or participate in any such action.  The Subadviser shall not have the obligation to commence or defend lawsuits or other legal actions on behalf of the Co-Managers or the Trust brought by or against third parties, including lawsuits and legal actions brought by or against the Co-Managers or the Trust relating to securities purchased by the Trust. Notwithstanding the foregoing, the Subadviser shall have the authority but no obligation to participate in any in-court or out-of-court workouts, restructurings, or bankruptcies involving securities held by the Trust during the term of the Agreement on behalf of the Co-Managers or the Trust and take any and all actions in connection therewith that the Subadviser in its discretion deems necessary or appropriate.  

  

(i) The Subadviser agrees to use reasonable efforts (i) to monitor whether market quotations are readily available for the Trust's portfolio investments and whether those market quotations are reliable for purposes of internally valuing the Trust's portfolio investments and determining the Trust's net asset value per share; and (ii) to promptly notify the Co-Managers upon the occurrence of any significant event with respect to any of the Trust's portfolio investments in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff, in conformity with the Trust's valuation procedures. Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued.  The Co-Managers and the Trust acknowledge and agree that (i) the Subadviser is not the Trust's pricing agent and shall not be deemed a substitute for any independent pricing agent and/or valuation committee of the Trust pursuant to the Trust's Fair Valuation Policies and Procedures; and (ii) none of the information which the Subadviser provides the Co-Managers hereunder shall be deemed to be the official books and records of the Fund for tax, accounting or any other purposes.   

  

(j) The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Trust's portfolio required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information regarding the Subadviser or the services provided by Subadviser hereunder that has been provided by the Subadviser to the Co-Managers for inclusion in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(k) The Subadviser shall comply with the Trust’s Documents provided to the Subadviser by the Co-Managers. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon determination of any material breach of such Trust Documents.  

  

(l) The Subadviser shall keep the Trust’s Co-Managers informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written reasonable request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall respond to such requests for information as to such reports (e.g., provide summaries of such reports with personal information redacted and subject in all cases to privacy and confidentiality obligations and to the extent the Subadviser is not prohibited from doing so under applicable law) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the portion of the Trust managed by the Subadviser, cash requirements and cash available for investment in such portion of the Trust, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser).  The Co-Managers shall provide on an on-going basis a list of all affiliates of the Co-Managers and the Trust, including publicly traded affiliates of the Co-Managers that may not be purchased by the Fund (such list shall include security name, cusip number, sedol and/or applicable ticker) and a list of all brokers and underwriters affiliated with the Co-Managers for reporting transactions under applicable provisions of the 1940 Act.  The Co-Managers represent and warrant that the Trust (i) is a qualified institutional buyer as that term is defined in Rule 144A under the Securities Act of 1033, as amended, and (ii) is not a "restricted person" under Rule 5130 and Rule 5131 of the Financial Industry Regulatory Authority, Inc. ("FINRA") and thus the Trust is not prohibited from participating in the allocation of initial public offerings of equity securities offered by FINRA members.  The Co-Managers agree to promptly notify the Subadviser if any of the foregoing representations ceases to be true or correct.   

  

The Co-Managers hereby acknowledge receipt of the Subadviser's most recent Form ADV Part 2A and relevant Form ADV Part(s) 2B.  Co-Managers hereby consent to electronic delivery of Subadviser's Form ADV and any Form ADV amendments and/or annual updates provided by the Subadviser to the Co-Managers as required by applicable law. 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers' receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers.  

  

4. (a) Each party acknowledges that, in the course of dealing, it may receive or have access to confidential and proprietary information (including, without limitation, the Trust’s portfolio holdings) of the other party or third parties with whom the Co-Managers conducts business.  Such information is collectively referred to as “Confidential Information.”  Each party agrees that it shall treat Confidential Information of the other party as confidential and shall not use such Confidential Information or disclose such Confidential Information to third parties, except to the extent necessary for the purposes of rendering services or performing the obligations pursuant to this Agreement or as required by applicable law, rule or regulation or as otherwise expressly agreed to in writing by the parties.   

  

(b)

The Subadviser further certifies that (i) its treatment of Confidential Information is in compliance in all material respects with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures designed to seek to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Managers, or to any person who may be identified by Confidential Information.  The Subadviser shall immediately notify the Co-Managers if the Subadviser is in material breach of this Section 4(b).  At the Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section 4(b). 

  

(c)

The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that will represent a departure from industry standards. 

  

(e)

The Subadviser shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to the minimum number of the Subadviser’s employees and/or agents who require such access in order to provide the services to the Co-Managers. 

  

(f)

The Subadviser shall conduct periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and evaluate and improve, where necessary, the effectiveness of its information security controls.  Such assessments will also consider the Subadviser’s compliance with its Information Security Program and the laws applicable to the Subadviser. 

  

(g)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.  If any testing detects any anomalies, intrusions, or vulnerabilities in any information technology systems processing, storing or transmitting any of the Trust’s and/or Co-Managers’ Confidential Information and any of the Trust's and/or the Co-Managers' Confidential Information has been determined to have been subject to unauthorized disclosure, the Subadviser shall promptly report those findings to the Co-Managers. 

  

(h)

The Subadviser shall notify the Co-Managers, promptly and without unreasonable delay, but in no event more than 48 hours of learning of any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to the Trust's or Co-Managers' Confidential Information that has occurred (a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Co-Managers a summary of the Security Incident; (ii) assist communicate, and cooperate with the Co-Managers and the Co-Managers’ designated representatives throughout the investigation of the Security Incident.  The Subadviser will make appropripate personnel of Subadviser available to the designated representatives of the Co-Managers to discuss the matter, and shall cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co-Managers’ rights; and  (iii) take appropriate action to seek to prevent a recurrence of such Security Incident. 

  

(i)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(j)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice: (a) reasonable assistance and cooperation of the Subadviser’s relevant staff who can provide information concerning Subadviser's information processing premises and records; and (b) reasonable facilities at the Subadviser’s premises.   

  

5. The Subadviser will not engage any third party to provide advisory services ("Service Provider") to the portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers.  To the extent that the Subadviser receives approval from the Co-Managers to engage a Service Provider, the Subadviser assumes all responsibility for any action or inaction of the Service Provider as it relates to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and its directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) as a result of any action or inaction of the Service Provider as it relates to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.   

  

6. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser. 

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser. The Subadviser’s duties and obligations hereunder shall not begin prior to the effective date of the termination of the previously named subadviser in the Trust’s registration statement disclosure. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at Massachusetts Financial Services Company, 111 Huntington Avenue, Boston, MA 02199, Attention: Legal Department, with a copy to the following e-mail address: InstitutionalClientService@mfs.com. 

  

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

  

  

  

  

  

  

 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 


 

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

Name: Timothy S. Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

By:  /s/ Timothy Cronin 

Name:  Timothy S. Cronin 

Title:  President 

  

  

MASSACHUSETTS FINANCIAL SERVICES COMPANY D/B/A MFS INVESTMENT MANAGEMENT 

  

By: /s/ Carol Geremia 

Name: Carol Geremia 

Title: President 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by Massachusetts Financial Services Company d/b/a MFS Investment Management (MFS), PGIM Investments LLC and AST Investment Services, Inc. will pay MFS a subadvisory fee on the net assets managed by MFS that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio*, ** 

  

  

AST Capital Growth Asset Allocation Portfolio  

  

0.30% of average daily net assets to $100 million;  

0.285% of the next $150 million of average daily net assets; 

0.27% of the next $250 million of average daily net assets; 

0.25% of average daily net assets over $500 million 

  

  

* In the event MFS invests Portfolio assets in other pooled investment vehicles it manages or subadvises, MFS will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to MFS with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to MFS, the assets managed by MFS in the AST Capital Growth Asset Allocation Portfolio will be aggregated with the assets managed by MFS in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the Preservation Asset Allocation Portfolio; and (iii) the AST Academic Strategies Asset Allocation Portfolio. 

  

  

Dated as of:  May 19, 2021 

  


Execution Version 

  

ADVANCED SERIES TRUST 

  

AST Capital Growth Asset Allocation Portfolio
 

SUBADVISORY AGREEMENT 

  

Agreement made as of this 14 day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) (ASTIS), a Maryland corporation (together, the Co-Managers), and Wellington Management Company LLP, a Delaware limited liability partnership (Wellington Management or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust; and
 

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct (the “Account”), and the Subadviser is willing to render such investment advisory services; and
 

NOW, THEREFORE, the Parties agree as follows: 

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage the Account as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of the Account as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash and shall have full power and authority to act on behalf of the Trust with respect to the purchase, sale, exchange, conversion or other transactions in any and all stocks, bonds, other securities cash or currencies, and other Account assets. The Subadviser, upon written consent by the Co-Managers, may engage any of its affiliates to assist it with providing its services under this Agreement (including affiliates outside of the United States), provided that the Subadviser will remain responsible for the performance of its obligations under the Agreement and  shall be   responsible to the Co-Managers for the acts and omissions of any affiliate  to the same extent   as it is for its own acts and omissions . 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust's valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust's compliance and, as applicable, will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, and all other applicable federal and state laws and regulations. In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required of Subadviser by the Securities and Exchange Commission (the Commission). The Co-Managers shall provide the Subadviser timely with copies of any updated Trust Documents. The Subadviser shall have a reasonable period to comply with instructions and/or bring the Account into compliance with any changes to the Trust Documents. The Co-Managers covenant that any instructions or modifications to Trust Documents shall be consistent with the provisions of law, regulatory policies and organizational documents applicable to the Trust.  

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by the Account , as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with the Subadviser (collectively, Brokers), to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time.  The Subadviser’s broker selection shall be conducted in accordance with its Policies and Procedures on Order Execution, as may be amended from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. The Subadviser shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Subadviser with respect to the Trust and other accounts as to which it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable over time and consistent with its fiduciary obligations to the Trust and to such other clients. 

  

(iv) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(v) The Subadviser or an affiliate shall provide the Trust's custodian (“Custodian”) on each business day with information relating to all transactions concerning the Account, and shall provide the Co-Managers with such information upon request of the Co-Managers. All transactions will be consummated by payment to, or delivery by the Custodian, of all cash and/or securities due to or from the Account according to local market settlement conventions. The Subadviser shall not act as custodian for the Account.  Notwithstanding any other provision in this Agreement, the Subadviser shall not hold, directly or indirectly, funds or securities contained in the Account or have any authority to obtain possession of them.   

  

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Account or any other transactions of Trust assets.
 

(b) The Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(d) The Subadviser is a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. The Co-Managers acknowledge that Subadviser, while registered, may rely on exemptions from registration as to some accounts it advises including the Account, upon written notice to Co-Managers. Further, the Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of the Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could reasonably lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target that is material to Subadviser’s ability to perform investment management services pursuant to this Agreement. 

  

(e) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures reasonably designed to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

  

(f) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably designed to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures reasonably designed to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(g)The Subadviser will notify the Co-Managers of any additions to or withdrawals of corporate partners of the Subadviser within a reasonable time after such additions or withdrawals. 

  

(i) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Account , subject to such reasonable reporting and other requirements as shall be established by the Co-Managers and shall vote such proxies in accordance with Subadviser’s Global Proxy Voting Policies and Procedures, as may be amended from time to time.  The Co-Managers authorize the Subadviser to instruct the Custodian to forward promptly to the Subadviser copies of all proxies and shareholder communications relating to proxy votes involving securities held in the Account (other than materials relating to legal proceedings.) The Co-Managers and the Trust agree that Subadviser will not be responsible or liable for failing to vote any proxies where it has not received the proxies or related shareholder communications in a timely manner. 

  

(j) The Subadviser will not compile or file claims or take any related actions on behalf of the Trust in any class action, bankruptcy or other legal proceeding related to securities currently or previously held in the Account. Subadviser shall provide reasonable assistance as the Trust or Co-Managers may reasonably request in any matter relating to legal proceedings relating to  the investments and securities held in the Account that Subadviser supervises.  Such assistance, will include, but will not be limited to, providing necessary data in the possession of Subadviser relating to the Account, assisting with interrogatories, and if necessary, providing testimony.   

  

(k) The Subadviser acknowledges that it is responsible for evaluating whether market quotations are readily available for the Trust's portfolio investments and whether those market quotations are reliable for purposes of valuing the Trust's portfolio investments and determining the Trust's net asset value per share and promptly notifying the Co-Managers upon the occurrence of any significant event with respect to any of the Trust's portfolio investments in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff. Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued. The Co-Managers acknowledge that the Subadviser is not the official pricing agent with respect to the Trust’s portfolio investments.  

  

(l)

The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Account required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(m) The Subadviser shall comply with the provisions of the Trust’s Documents provided to the Subadviser by the Co-Managers that are applicable to the Subadviser. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon detection of any material breach of such Trust Documents.  

  

(n) The Subadviser shall keep the Trust’s Co-Managers informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall permit representatives of the Trust or the Co-Manager to examine reports (or summaries of the reports) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the Account managed by the Subadviser, cash requirements and cash available for investment in the Account, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser). 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers' receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers. 

  

4. (a) The Subadviser acknowledges that, in the course of its engagement by the Co-Managers, the Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conducts business.  Such information is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’ business and other proprietary information, written or oral. 

  

(b) The Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures intended to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm to the Co-Managers, or to any person who may be identified by Confidential Information.  The Subadviser shall notify the Co-Managers as soon as practicable if the Subadviser is in material breach of this Section.  At the Co-Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section. For the avoidance of doubt, Subadviser may disclose Confidential Information where disclosure is required or permitted by law or requested by any governmental or regulatory authority that may have jurisdiction over either party,  provided that 

 the  Subadviser gives the Co-Managers prompt written notice of such requirement prior to such disclosure  , to the extent feasible and permitted by law,   and assistance in obtaining an order protecting the information from public disclosure   as necessary  .   

The Co-Managers and Trust agree not to make use of the investment decisions or recommendations of the Subadviser, other than with respect to the Account, without the prior written consent of the Subadviser. In addition, the Co-Manager and the Trust shall use its best efforts to ensure that any of its agents or affiliates who may gain access to the investment decisions or recommendations of the Subadviser shall be made aware of its proprietary nature and shall likewise treat it as confidential. 

  

(c) The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that could reasonably be foreseen to weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Subadviser shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to the minimum number of the Subadviser’s roles which require such access in order to provide the services to the Co-Managers. 

  

(f)

The Subadviser shall conduct periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and evaluate and improve, where necessary, the effectiveness of its information security controls.  Such assessments will also consider the Subadviser’s compliance with its Information Security Program and the laws applicable to the Subadviser. 

  

(g)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.   

  

(h)

Except with respect to applicable legal prohibitions and compliance with requests from law enforcement, Subadviser confirms that upon any potential or actual known security breach Subadviser will: 

  

4.

promptly investigate such breach or potential breach, 

4.

promptly notify the Co-Managers of such breach or potential breach if the investigation reveals a likelihood that Co-Manager's Confidential Information was materially affected, such notification targeted to occur within 48 hours (two business days), but no later than 72 hours (three business days) after such breach has been identified determination, and,  

4.

implement necessary corrective actions.   Such corrective actions shall include:  

  

i.

performing an analysis to determine the cause of the security breach;  

ii.

providing the Co-Managers with a report detailing the cause of the security breach and the material involved;  

iii.

promptly remedying or mitigating the security breach to a commercially reasonable extent; and 

iv.

reasonable cooperation with the Co-Managers and its designees and with any civil or criminal authority in any investigation or action related to the unauthorized, unlawful or accidental access, use, processing, disclosure, transfer destruction, loss or alteration.   

  

(i)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

5. Other than as set forth in this Agreement, the Subadviser will not engage any third party to provide services to the Account as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers, other than as necessary to perform administrative or ancillary services for the Account, including security and cash reconciliation, portfolio pricing and corporate action processing.  The Subadviser will act in good faith and with reasonable skill and care in the selection, use and monitoring of such agents. To the extent that the Subadviser receives approval from the Co-Managers to engage a third-party service provider, Subadviser  shall be  responsible to the Co-Managers for the acts and omissions of the third-party service provider to the same extent as it is for its own acts and omissions to the same extent that Subadviser would be responsible for its own actions or inactions.  Furthermore, the Subadviser may utilize unaffiliated third-party data service providers in effecting compliance with the prospectus and/or instructions from the Co-Managers, and the

Subadviser shall not be held responsible for any losses resulting from non-compliance with the prospectus or Co-Manager instructions where the Subadviser has reasonably relied on information provided by third-party data service providers.  

  

6. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser. 

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement, as applicable, with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 280 Congress Street, Boston, MA 02210, Attention: Legal and Compliance. 

  

The Co-Managers consent to electronic delivery of any reports or other information that may be requested by the Co-Managers or the Trust or is required to be delivered by the Subadviser under this Agreement, or pursuant to applicable law, rule or regulation, including delivery of Part 2 of Subadviser’s Form ADV and any updates thereto, and the Co-Managers represent that they have the means to, and will access, such disclosures in electronic format and the Subadviser shall provide the Co-Managers with hard copies of any such disclosures upon request.  The Co-Managers may revoke this consent upon written notice to Subadviser. 

  

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such

prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. Except as otherwise specified in the Trust Documents, the Subadviser will provide investment management services for the Account without regard to any tax consequences that may result from any action taken or omitted by Subadviser on behalf of the Account. Neither the Subadviser nor any of its affiliates provide tax advice in connection with investment of the assets in the Account, and the Co-Managers are responsible for determining and paying any taxes owed with respect to the activities of the Account.
 

11. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

12. The Agreement may be executed simultaneously in any number of counterparts, each of which will be deemed to be an original, but all of which together will constitute one and the same instrument.  

  

13. This Agreement shall be governed by the laws of the State of New York. If any court of competent jurisdiction at any time holds that any provision in this Agreement is invalid or unenforceable in whole or in part, the invalidity or unenforceability of such provision shall not affect the other provisions of this Agreement which will remain in full force and effect.  The parties shall use their reasonable efforts to agree on a new provision which will, as far as possible, achieve the same purpose as the provision that is held invalid or unenforceable. 

  

14. No party to this Agreement will be liable for any failure or delay in performing any of its obligations under or pursuant to the Agreement, and any such failure or delay in performing its obligations will not constitute a breach of the Agreement, if such failure or delay is due to any cause whatsoever outside its reasonable control.  Any such non-performing party will be entitled to a reasonable extension of the time for performing such obligations.  Events outside a party's reasonable control include any event or circumstance that the party is unable to avoid using reasonable skill and care. 

  

15. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

16. The parties agree that this Agreement and any documents related hereto may be electronically signed.  The parties agree that any electronic signatures appearing on this Agreement and any related documents are the same as handwritten signatures for the purposes of validity, enforceability and admissibility. 

  

 

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT.  

  

  

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.

 

PGIM INVESTMENTS LLC 

  

  

By: /s/ Timothy Cronin 

Name: Timothy Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

  

By:  /s/ Timothy Cronin 

Name:  Timothy Cronin 

Title:  President 

  

  

  

WELLINGTON MANAGEMENT COMPANY LLP 

  

  

By: /s/ Steven Muson 

Name: Steven Muson 

Title: Senior Managing Director 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by Wellington Management Company LLP (Wellington Management), PGIM Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay Wellington Management a subadvisory fee on the net assets managed by Wellington Management that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio* 

  

  

AST Capital Growth Asset Allocation Portfolio 

  

  

0.19% of average daily net assets  

  

* In the event Wellington Management invests Portfolio assets in other pooled investment vehicles it manages or subadvises, Wellington Management will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to Wellington Management with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

  

  

Dated as of:  May 14, 2021 

  


Execution Version 

ADVANCED SERIES TRUST

AST Capital Growth Asset Allocation Portfolio 


SUBADVISORY AGREEMENT 

  

Agreement made as of this 17 day of May, 2021 between PGIM Investments LLC (PI), a New York limited liability company and AST Investment Services, Inc. (AST), a Maryland corporation (together, the Co-Managers), and ClearBridge Investments, LLC, a Delaware corporation (ClearBridge or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PI and AST act as Co-Managers of the Trust; and  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct, and the Subadviser is willing to render such investment advisory services; and  

NOW, THEREFORE, the Parties agree as follows:  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust’s portfolio as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust’s investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such Prospectus and Statement of Additional Information as currently in effect and as amended or supplemented from time to time, being herein called the “Prospectus”), and subject to the following understandings:  

(i) The Subadviser shall provide supervision of such portion of the Trust's investments as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained or sold by the Trust, and what portion of the assets will be invested or held uninvested as cash.  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust’s valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust’s compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), and all other applicable federal and state laws and regulations. In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required by the Securities and Exchange Commission (the Commission). The Co-Managers shall provide Subadviser timely with copies of any updated Trust Documents.  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by such portion of the Trust's portfolio, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants (including but not limited to any broker or dealer affiliated with the Co-Managers or the Subadviser) to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by brokers, dealers or futures commission merchants who may effect or be a party to any such transaction or other transactions to which the Subadviser’s other clients may be a party. The Co-Managers (or Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through broker-dealers (including, to the extent legally permissible, broker-dealers affiliated with the Subadviser(s)) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and to cause the Trust to pay any such broker-dealers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another broker-dealer would have charged for effecting that transaction, if the brokerage or research services provided by such broker-dealer, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission.  

On occasions when the Subadviser deems the purchase or sale of a security or futures contract to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities or futures contracts to be sold or purchased. In such event, allocation of the securities or futures contracts so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.   The Subadviser may execute on behalf of the Trust certain agreements, instruments and documents in connection with the services performed by it under this Agreement. These may include, without limitation, brokerage agreements, clearing agreements, account documentation, futures and options agreements, swap agreements, other investment-related agreements, and any other agreements, documents or instruments the Subadviser believes are appropriate or desirable in performing its duties under this Agreement. 

(iv) The Subadviser shall maintain all books and records with respect to the Trust’s portfolio transactions effected by it as required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act, and shall render to the Trust’s Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust’s securities.  

(v) The Subadviser or an affiliate shall provide the Trust's Custodian on each business day with information relating to all transactions concerning the portion of the Trust’s assets it manages, and shall provide the Co-Managers with such information upon request of the Co-Managers.  

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a “manager-of-managers” style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii)  periodically make recommendations to the Trust’s Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1 under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust’s portfolio or any other transactions of Trust assets.  

(b) The Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees.  

(c) The Subadviser shall keep the Trust’s books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser’s services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will surrender promptly to the Trust any of such records upon the Trust’s request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof.  

(d) The Subadviser is, to the extent required by applicable law, a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. Further, the Subadviser agrees to notify the Manager promptly upon (i) a statutory disqualification of such Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

(e) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

(f) The Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with (i) the performance of this Agreement and (ii) the maintenance of compliance procedures pursuant to paragraph 1(d) hereof as the Manager may reasonably request.  

(g) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Trust’s portfolio, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers.  

(h) The Subadviser acknowledges that it is responsible for evaluating whether market quotations are readily available for the Trust’s portfolio securities and whether those market quotations are reliable for purposes of valuing the Trust’s portfolio securities and determining the Trust’s net asset value per share and promptly notifying the Co-Managers upon the occurrence of any significant event with respect to any of the Trust’s portfolio securities in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff.  Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing securities of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the securities being valued. 

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser’s performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust’s custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the portion of the Trust managed by the Subadviser, cash requirements and cash available for investment in such portion of the Trust, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser).  

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust’s average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A.  Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers’ receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers.  Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers.  

  

4. (a) The Subadviser acknowledges that, in the course of its engagement by the Co-Managers, the Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conduct business in relation to the Series of the Trust allocated to Subadviser. Such information is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’ business and other proprietary information, written or oral as relates to the Series of the Trust allocated to Subadviser. 

  

(b)

The Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures necessary to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Manager, or to any person who may be identified by Confidential Information.  The Subadviser shall promptly and without unreasonable delay, but in no event more than 48 hours of learning of a material breach of this Section, notify the Manager if the Subadviser is in material breach of this Section.  At the Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section. 

  

(c)

The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.   

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that will weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Subadviser shall maintain an appropriate Information Security Program which includes, but is not limited to: (i) access controls to prevent the unauthorized or inappropriate use of Confidential Information,(ii) periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality and integrity of Confidential Information; and (iii) regular penetration and vulnerability testing of its information technology infrastructure and networks.  

  

(f)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.  If any testing detects any intrusions of any information technology systems processing, storing or transmitting any of the Manager’s Confidential Information, the Subadviser shall promptly report those findings to the Manager. 

  

(g)

The Subadviser shall notify the Co-Managers promptly and without unreasonable delay, but in no event more than 48 hours after determining that any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to Confidential Information occurred (a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Manager full details of the Security Incident; (ii) assist and cooperate with the Co-Managers and the Co-Managers’ designated representatives in the Co-Managers’ investigation of the Subadviser, employees or third parties related to the Security Incident, which may include requests for all relevant records, logs, files, and data; (iii) cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co- Managers’ rights; and  (iv) take appropriate action to prevent a recurrence of any Security Incident. 

  

(h)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(i)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice reasonable assistance and cooperation of the Subadviser’s relevant staff.   

  

5. The Subadviser will not engage any third party to provide investment advisory services to the portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers.  To the extent the Subadviser receives approval from the Co-Managers to engage such third-party service provider, the Subadviser assumes all responsibility for any action or inaction of the service provider as it related to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and their directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) which arise out of or relate to the provision of services provided by any such service provider. 

  

6. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser’s part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including attorneys’ fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys’ fees, which may be sustained as a result of the Subadviser’s willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws.  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days’ nor less than 30 days’ written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of  control (as defined in the 1940 Act) of the Subadviser.  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co- Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser provided however, that if a party other than the Subadviser is engaged to transition the portfolio to the Subadviser’s strategy (a “Transition Manager”), Subadviser shall have no responsibilities under Sections 1(a)(iii) and (v) until such time as the portfolio is released to the Subadviser for trading. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PI) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for AST); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 620 8th Avenue, 47th Floor, New York, New York, 10018, Attention: General Counsel. 

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser’s directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser’s right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association.  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.   During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser’s written request, and to implement those changes in the next regularly scheduled production of those materials. All such prospectuses, proxy statements, reports to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act.  

11. This Agreement shall be governed by the laws of the State of New York.  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order.  

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 

  

PGIM INVESTMENTS LLC  

  

  

By:  /s/ Timothy Cronin
Name:Timothy S. Cronin
Title: Senior Vice President 

  

  

  

AST INVESTMENT SERVICES, INC. 

  

  

By:  /s/ Timothy Cronin 

Name:Timothy S. Cronin 

Title:President 

  

  

  

CLEARBRIDGE INVESTMENTS, LLC 

  

By:  /s/ Cynthia K. List
Name:  Cynthia K. List
Title: CFO  

 

SCHEDULE A 

ADVANCED SERIES TRUST

 

As compensation for services provided by ClearBridge Investments (ClearBridge), LLC, PGIM Investments LLC and AST Investment Services, Inc. will pay ClearBridge a subadvisory fee on the net assets managed by ClearBridge that is equal, on an annualized basis, to the following: 

Portfolio Name  

Subadvisory Fee*, **  

  

AST Capital Growth Asset Allocation Portfolio 

  

0.35% of average daily net assets to $100 million;  

0.29% of the next $150 million of average daily net assets; 

0.27% of the next $250 million of average daily net assets; 

0.23% of average daily net assets over $500 million 

  

    

* In the event ClearBridge invests Portfolio assets in other pooled investment vehicles it manages or subadvises, ClearBridge will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to ClearBridge with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to ClearBridge, the assets managed by ClearBridge in the AST Capital Growth Asset Allocation Portfolio will be aggregated with the assets managed by ClearBridge in: (i) the AST Balanced Asset Allocation Portfolio; and (ii) the Preservation Asset Allocation Portfolio. 

  

Dated as of: May 17, 2021 

  

  

  


Execution Version 

ADVANCED SERIES TRUST 

  

AST Capital Growth Asset Allocation Portfolio 

  

SUBADVISORY AGREEMENT 

  

Agreement made as of this 13 day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (ASTIS), a Maryland corporation (together, the Co-Managers), and J.P. Morgan Investment Management Inc., a Delaware corporation, (J.P. Morgan or the Subadviser), and effective as of a date mutually agreed upon by the Co-Managers and Subadviser; 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and AST act as Co-Managers of the Trust;  

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually, a Portfolio or the Trust and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct and the Subadviser is willing to render such investment advisory services; and 

  

NOW, THEREFORE, the Parties agree as follows: 

  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers (the “Allocated Portion”), including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of the Allocated Portion of the Trust's investments as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash. 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust's valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust that are not inconsistent with the Trust Documents), cooperate with the Co-Managers’ (or their designees') personnel responsible for monitoring the Trust's compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, and all other applicable federal laws and regulations. In addition, the Subadviser shall manage the Allocated Portion in conformity with applicable state laws and regulations and such state insurance laws as Manager informs Subadviser are applicable to the Trust (“State Insurance Laws”).  In connection therewith, the Subadviser shall, among other things, assist the Co-Managers in the preparation and filing of such reports as the Trust is, or may in the future be, required to file with the Securities and Exchange Commission (the Commission). The Co-Managers shall provide Subadviser timely with copies of any updated Trust Documents. 

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by the Allocated Portion, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with the Subadviser (collectively, Brokers), as it determines in its discretion subject to the requirements of  this subsection (iii). In executing transactions for the Trust and selecting Brokers, the Subadviser will use its best efforts to seek on behalf of the Trust the best overall terms available. Within the framework of this policy, the Subadviser shall consider all the factors that it deems relevant including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the Broker, the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis and, for any portion of the Portfolio managed by the Subadviser from its offices outside the United Kingdom, the research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser’s other clients may be a party.  (If the Subadviser manages a portion of the Portfolio’s assets from its offices in the United Kingdom (“UK Managed Assets”), the brokerage commissions paid on transactions in the UK Managed Assets will compensate the broker for trade execution only. Brokerage commissions paid on transactions involving assets the Subadviser manages from its offices outside the United Kingdom (“Non-UK Managed Assets”) may compensate the broker for both trade execution and investment research services.)    

  

For Non-UK Managed Assets, the Co-Managers (or Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain the best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the Co-Managers or Subadviser determine(s) in good faith that such commission was reasonable in relation to the value of the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it or an affiliate may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act).  

  

On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.  The Co-Managers recognize that, in some cases, this procedure may limit the size of the position that may be acquired or sold for the Trust.  The Co-Managers hereby acknowledge receipt of the current best execution policy of Subadviser’s London branch and consent to Subadviser following such policy.  Subadviser shall provide the Co-Managers with updated versions of such policy as it may be amended, supplemented, or modified from time to time.  Subject to the requirements of U.S. laws rules, and regulations, including, without limitation, the 1940 Act and the Investment Advisers Act of 1940, as amended (the Advisers Act), and the rules thereunder, the Co-Managers agree that the Subadviser’s London branch may follow the then-current version of such best execution policy in managing the portion of the Portfolio’s assets assigned to it. In addition, the Co-Managers agree that in managing the portion of the Portfolio’s assets assigned to it, the Subadviser’s London branch may execute trades outside a trading venue as that term is defined in the “Markets in Financial Instruments Directive.”   

  

(iv) The Subadviser is authorized to purchase, sell, hold and generally deal in and with derivatives as set forth in the Prospectus of the Trust. The Co-Managers hereby authorize Subadviser to open accounts and execute documents, representations, warranties, indemnities and representation letters in the name of, binding against and on behalf of the Trust, including without limitation, futures account agreements and master agreements related to derivatives transactions for all purposes necessary or desirable in Subadviser’s view to effectuate Subadviser’s activities under this Agreement.  To the extent the Portfolio qualifies as a “qualified eligible person” within the meaning of the Commodity Futures Trading Commission (“CFTC”) Regulation Rule 4.7, the Co-Managers on behalf of the Portfolio consent to the Portfolio’s treatment by the Subadviser as a qualified eligible person.  

  

(v) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(vi) The Subadviser or an affiliate shall provide the Trust's custodian on each business day with information relating to all transactions concerning the Allocated Portion, and shall provide the Co-Managers with such information upon request of the Co-Managers. 

  

(vii) The Subadviser and the Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(viii) The Co-Managers acknowledge that investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others.  Manager agrees that Subadviser may give advice and take action with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Trust. It is Subadviser's policy, to the extent practicable, to allocate investment opportunities among clients over a period of time on a fair and equitable basis.  Manager recognizes that Subadviser, in effecting transactions for its various accounts, may not always be able to take or liquidate investment positions in the same security at the same time and at the same price. It is understood that Subadviser shall not have any obligations to purchase or sell, or to recommend for purchase or sale, for the Trust any security which Subadviser or its affiliates, their directors, officers, principals or employees may purchase or sell for its or their own accounts or for the account of any other client, if in the opinion of Subadviser such transaction or investment appears unsuitable, impractical or undesirable for the Trust, except as required by law. Nothing in this Agreement will in any way limit or restrict Subadviser or any of its respective officers, directors, principals, affiliates or employees from buying, selling or trading in any securities for its or their own accounts or other accounts.  Manager acknowledges and agrees that Subadviser and its affiliates may make different investment decisions with respect to each of its clients or for its own account, and that such fact shall not be relied upon by Manager or any of Manager’s agents or representatives as evidence of a breach of Subadviser 's duties hereunder. Nothing in this Agreement shall limit or restrict the right of the Subadviser, the Co-Managers, the Trust, or any of their respective directors, officers, affiliates or employees to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature.   

  

(ix) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust's portfolio or any other transactions of Trust assets. 

  

(x) Conflicts of interest may arise in the course of providing the Subadviser's services and information on the Subadviser's conflicts of interest policy may be found in the Subadviser’s FCA Disclosure Document and its current Form ADV provided to the Co-Managers. 

  

(b) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-I under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(c) The Subadviser is a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. Further, the Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of the Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) to the extent permitted by law, regulation, regulatory requirement or the Subadviser’s policy, the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

  

(d) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures designed to comply with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable federal regulations and state law and/or requirements, State Insurance Laws and applicable rules of any self-regulatory organization. 

  

(e) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably necessary to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures designed to comply with the 1940 Act, the Advisers Act, and other applicable federal laws and regulations, state law and/or requirements and State Insurance Laws. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(f) The Subadviser shall furnish to the Co-Managers copies of (i) all records prepared in connection with the performance of this Agreement and (ii) any reports prepared for external distribution in accordance with the compliance procedures maintained pursuant to paragraph 1(d) hereof as the Co-Managers may reasonably request. 

  

(g) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Allocated Portion in accordance with the Subadviser’s proxy voting policy in effect from time to time and the Subadviser will comply with such reasonable reporting and other requirements as shall be established by the Co-Managers. 

  

(h) The Subadviser agrees to provide reasonable assistance to the Co-Managers or the Trust's Custodian in determining the value of any of the Trust’s portfolio investments.   Such reasonable assistance shall include (but is not limited to): (i)  upon the request of the Co-Managers or the Trust's Custodian, assisting in obtaining bids and offers or quotes from broker/dealers or market-makers with respect to portfolio investments; and (ii) notifying the Co-Managers in the event the Subadviser has reason to believe that the price it has received for a portfolio investment held by the Allocated Portion does not appear to reflect corporate actions, news, significant events or such investment otherwise requires review to determine if fair valuation may be necessary under the Trust’s valuation procedures.  Upon reasonable request from the Co-Managers, the Subadviser shall make its employees and officers reasonably available for consultation with the valuation committee of the Trust or the Co-Managers to assist them in their valuation of the investments of the Trust as the valuation committee or the Co-Managers may request from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued.  

  

(i) The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Trust's portfolio required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(j) The Subadviser shall comply with the applicable portions of the Trust’s Documents provided to the Subadviser by the Co-Managers. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon detection of any material breach of such Trust Documents.  

  

(k) The Subadviser shall keep the Trust’s Manager informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall permit representatives of the Trust or the Co-Managers to examine reports (or summaries of the reports) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the Allocated Portion, cash requirements and cash available for investment in the Allocated Portion, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser). 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the Allocated Portion as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers’ receipt of payment from the Trust for management services described under the Management Agreement between the Trust and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers. 

  

4. Confidentiality. (a) Each party agrees that it will treat confidentially all information provided by any other party (the “Discloser”) regarding the Discloser’s businesses and operations, including without limitation the investment activities or holdings of the Allocated Portion (“Confidential Information”).  All Confidential Information provided by the Discloser shall be used only by the other party hereto (the “Recipient”) solely for the purposes of rendering services pursuant to this Agreement, and shall not be disclosed to any third party, without the prior consent of the Discloser, except for a limited number of employees, attorneys, accountants and other advisers of the Recipient and its affiliates under common control with Recipient on a need-to-know basis and solely for the purposes of rendering services under this Agreement.   

  

(b) Confidential Information shall not include any information that: (i) is public when provided or thereafter becomes public through no wrongful act of the Recipient; (ii) is demonstrably known to the Recipient prior to execution of this Agreement; (iii) is independently developed by the Recipient through no wrongful act of the Recipient in the ordinary course of business outside of this Agreement; (iv) is generally employed by the trade at the time that the Recipient learns of such information or knowledge; or (v) has been rightfully and lawfully obtained by the Recipient from any third party.  

  

(c) In the event that the Recipient is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil investigative demand or similar process, or by a governmental or regulatory agency or authority), in connection with any proceeding, to disclose any of the Discloser’s Confidential Information, the Recipient will, to the extent permitted by law, regulation or regulatory authority, give the Discloser prompt written notice of such request or requirement to allow the Discloser an opportunity to obtain a protective order or otherwise obtain assurances that confidential treatment will be accorded to such Confidential Information.  In the event that such protective order or other remedy is not obtained, disclosure shall be made of only that portion of the Confidential Information that is legally required to be disclosed.  All Confidential Information disclosed as required by law shall nonetheless continue to be deemed Confidential Information.  Notwithstanding anything to the contrary in the foregoing, no such notification shall be required in respect of any disclosure to regulatory authorities having jurisdiction over the Recipient or any of its affiliates. 

  

(d) Notwithstanding anything to the contrary in the foregoing, to the extent that any market counterparty with whom Subadviser deals requires information relating to the Portfolio or the Trust (including, but not limited to, the identity and market value of the Portfolio, or the Allocated Portion), Subadviser shall be permitted to disclose such information to the extent necessary to effect transactions on behalf of the Trust.  

  

5. The Parties’ Information Security Programs. Each party represents and warrants the following: 

  

(a)

It and its parent company have implemented and currently maintain an effective information security program (the “Information Security Program”) which includes administrative, technical, and physical safeguards and other security measures necessary to protect (i) the security and confidentiality of Confidential Information; (ii) against anticipated threats or hazards to the security or integrity of Confidential Information; and (iii) against unauthorized access to, destruction, modification, disclosure or use of Confidential Information.   

(b)

Its Information Security Program complies with applicable laws and regulations with respect to the privacy and data security of Confidential Information.  

(c)

It shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to its employees who require such access in order to provide the services under this Agreement. 

(d)

It or its parent company conducts risk assessments as it determines to be reasonably necessary to identify and assess risks to the security, confidentiality, and integrity of Confidential Information; and evaluates, where necessary, the effectiveness of its information security controls.   

(e)

In the event that it confirms unauthorized access, disclosure, or material damage to Confidential Information (each a “Security Incident”), it shall notify the other party as soon as reasonably practicable. 

(f)   It shall provide the other party with information related to its Information Security Program. 

(g)

Upon Co-Managers’ request, Subadviser will include a member(s) of its staff that is familiar with its Information Security Program in the periodic due diligence meetings with Co-Managers’ staff to provide a presentation and answer questions on its Information Security Program.  

  

6. (a) The Subadviser will not engage any third party to provide discretionary investment management services to the Allocated Portion without the express written consent of the Co-Managers.  The Subadviser may employ an affiliate or a third party to perform administrative duties such as accounting, reporting, proxy voting and other ancillary services without the prior consent of the Co-Managers. In either case, the Subadviser will act in good faith in the selection, use and monitoring of affiliates and other third parties, and any delegation or appointment hereunder shall not relieve the Subadviser of any of its obligations under this Agreement. The Subadviser agrees that it remains liable to the Co-Managers for an affiliate’s or third party’s compliance with this Agreement, applicable regulations and requirements to the same extent as if the Subadviser itself had acted or failed to act instead of the affiliate or third party. 

  

(b) Notwithstanding any other provision of the Agreement, the Subadviser: (i) may provide information about the Co-Managers and the Trust to any affiliate or any unaffiliated third party for purposes of this Section 6; and (ii) shall ensure that any affiliate or unaffiliated third party to which services have been delegated hereunder is subject to confidentiality and non-disclosure obligations that are substantially similar to the confidentiality and non-disclosure obligations to which the Subadviser is subject under this Agreement. 

  

7. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, and their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a direct result of the Co-Managers’ willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, its affiliated persons, and their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a direct result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. Neither the Co-Managers nor the Subadviser shall be liable for any special, consequential, incidental or punitive damages.
 

8. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Trust, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser.   

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a Portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated Portfolio or portion thereof shall commence as of the close of business on the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser.  The Co-Managers will commence the transition process for the delegated Portfolio or portion thereof of the Portfolio listed on Schedule A at the close of business on a date mutually agreed upon by the Co-Managers and the Subadviser and the Subadviser will become a subadviser of the Portfolio at that time. Notwithstanding anything to the contrary in the foregoing, if the Co-Managers engage a transition manager to execute purchases and sales in the delegated Portfolio or delegated portion thereof, the Subadviser will not be liable for losses caused by the default, fraud, act or omission, negligence or willful misconduct of such transition manager.   

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 277 Park Avenue, Floor 8, New York, NY 10172, Attention: Scott Moritz. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

13. The Co-Managers and the Trust each acknowledges that the Subadviser operates so as to comply with all applicable federal, state and local laws relating to the prevention of money laundering and terrorist financing. The Co-Managers and the Trust each hereby acknowledges that it or its service provider agent has policies and procedures in place designed to comply with Anti -Money Laundering (“AML”) requirements in the United States, including the Bank Secrecy Act as amended by the USA PATRIOT ACT as amended, and other applicable laws and regulations in those jurisdictions where the Co-Managers or the Trust operate, relating to the prevention of money laundering and terrorist financing (“AML Program”). The Co-Managers and the Trust each also acknowledges that it or its service provider agent has policies and procedures in place designed to comply with the prohibitions and restrictions mandated by the U.S. Treasury Department’s Office of Foreign Assets Control and all other sanctions laws and regulations applicable in the jurisdictions in which it operates. To the knowledge of the Co-Managers and the Trust, any solicitations and other activities by it or, as applicable, its service providers in connection with the Trust have been and will be conducted in accordance with such applicable AML and sanctions laws and regulations 

  

 

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS ACCOUNT DOCUMENT.
 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 

  


PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

  

Name: Timothy Cronin 

Title: Senior Vice President 

  

  

AST Investment Services, INC. 

  

By: /s/ Timothy Cronin 

  

Name: Timothy Cronin 

Title: President 

  

  

J.P. MORGAN INVESTMENT MANAGEMENT INC. 

  

By: /s/ Scott Moritz 

  

Name: Scott Moritz 

Title: Vice President 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by J.P. Morgan Investment Management Inc. (J.P. Morgan), PGIM Investments LLC and AST Investment Services, Inc. will pay J.P. Morgan a subadvisory fee on the average daily net assets managed by J.P. Morgan that is equal, on an annualized basis, to the following: 

  

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio*, ** 

  

  

AST Capital Growth Asset Allocation Portfolio 

  

  

Large Cap Core Sleeve: 

0.20% of average daily net assets to $500 million;  

0.18% of the next $500 million of average daily net assets; and 

0.17% of average daily net assets over $1 billion 

  

Equity Income Sleeve: 

0.34% of average daily net assets 

  

* In the event J.P. Morgan invests Trust assets in other pooled investment vehicles it manages or subadvises, J.P. Morgan will waive its subadvisory fee for the Trust in an amount equal to the acquired fund fee paid to J.P. Morgan with respect to the Trust assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to J.P. Morgan, the assets managed by J.P. Morgan in the AST Capital Growth Asset Allocation Portfolio will be aggregated with the assets managed by J.P. Morgan in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the Preservation Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Large-Cap Core Portfolio. 

  

  

  

Dated as of: May 13, 2021 

  


ADVANCED SERIES TRUST 

  

AST Preservation Asset Allocation Portfolio
 

Subadvisory Agreement 

  

This Agreement (the “Agreement”) is made as of this 19th day of May, 2021, by and among PGIM Investments LLC (“PGIM Investments”), a New York limited liability company and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) (“ASTIS”), a Maryland corporation (together, the “Co-Managers”) on the one hand, and on the other hand each, severally, of Jennison Associates LLC, a Delaware limited liability company (“Jennison”), QMA LLC, a New Jersey limited liability company (“QMA”), and PGIM, Inc., a New Jersey Corporation (“PGIM”). Each of Jennison, QMA and PGIM shall be referred to herein as a “Subadviser.” 

  

This Agreement replaces the previous subadvisory agreement for the AST Preservation Asset Allocation Portfolio.   

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the “Management Agreement”) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the “Trust”) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust;  

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desires to retain each Subadviser to provide investment advisory services to the Trust in respect of one or more of its constituent series of shares as specified in Schedule A hereto and to manage such portion of the Trust as the Co-Managers shall from time to time direct (such portion of the Trust with respect to a Subadviser, the “Allocated Assets”), and each Subadviser is willing to render such investment advisory services;  

  

NOW, THEREFORE, the Parties agree as follows: 

  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust (the “Board”), each Subadviser shall manage such Allocated Assets as are delegated to such Subadviser by the Co-Managers from time to time, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions applicable to such Allocated Assets as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings: 


(i) Each Subadviser shall provide advice, management and supervision with respect to its Allocated Assets, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash.  The Co-Managers may, from time to time, allocate and reallocate the Trust’s assets among the Subadvisers.  In addition, the Co-Managers may determine not to allocate any portion of the Trust’s assets to a Subadviser for a period of time during the term of this Agreement.  A Subadviser’s responsibilities for providing investment advisory services to the Trust shall be limited solely to its Allocated Assets. 

  

(ii) In the performance of its duties and obligations under this Agreement, each Subadviser shall (A) act in conformity with the the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, and the Prospectus, as provided to it by the Co-Managers (collectively, the “Trust Documents”), and with the instructions and directions of the Co-Managers or the Board; (B) reasonably co-operate with the Co-Managers's (or its designees') personnel responsible for monitoring the Trust's compliance; and (C) conform to, and comply with, the material requirements of all applicable federal and state laws and regulations, including but not limited to the 1940 Act and the Commodity Exchange Act of 1936, as amended (the “CEA

”). In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required by the Securities and Exchange Commission (the “Commission”). The Co-Managers shall provide each Subadviser timely with copies of any updated Trust Documents. 

  

(iii) Each Subadviser, with respect to its Allocated Assets, shall determine the securities, funds, futures contracts and other instruments to be purchased or sold, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with such Subadviser (collectively, “Brokers”), as such Subadviser may determine.  In selecting brokers, dealers or futures commissions merchants with which to execute portfolio transactions, it is recognized that a Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, a Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. Each Subadviser shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with such Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of such Subadviser with respect to the Trust and other accounts as to which it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. On occasions when a Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of such Subadviser, such Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by such Subadviser in the manner such Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.  Each Subadviser may execute on behalf of the Trust certain agreements, instruments and documents in connection with the services performed by it under this Agreement. These may include, without limitation, brokerage agreements, clearing agreements, account documentation, futures and options agreements, swap agreements, other investment-related agreements, and any other agreements, documents or instruments the Subadviser believes are appropriate or desirable in performing its duties under this Agreement.  

  

(iv) Each Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Board such periodic and special reports as the Board may reasonably request. Each Subadviser shall make reasonably available its employees and officers for consultation with any of the members of the Board or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, to assist in the valuation of the Trust's securities. 

  

(v) Each Subadviser or an affiliate shall provide to the Trust’s custodian (the “Custodian”) on each business day with such information relating to its Allocated Assets as the Custodian may reasonably requet, and shall provide the Co-Managers with such information upon request of the Co-Managers. 

  

(vi) The investment management services provided by each Subadviser hereunder are not to be deemed exclusive, and each Subadviser shall be free to render similar services to others. Conversely, each Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "Co-Managers-of-Co-Managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadvisers through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Board as to whether the contract with one or more Subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Board regarding the results of its evaluation and monitoring functions. Each Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) Each Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-10, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and each Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust, including any Subadviser, with respect to transactions in securities for the Trust's portfolio or any other transactions involving Trust assets. 

  

(b) Each Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as members of the Board or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by each Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) Each Subadviser shall keep the Trust's books and records required to be maintained by such Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to such Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. Each Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and each Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that such Subadviser may retain a copy of such records. Each Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 


(d) Each Subadviser is, to the extent required by applicable law, a commodity trading advisor (“CTA”) duly registered with the Commodity Futures Trading Commission (the “CFTC”) and is a member in good standing of the National Futures Association (the “NFA”); provided, for the avoidance of doubt, that, as of the date of this Agreement, Jennison is neither a registered CTA nor a member of the NFA. Each Subadviser shall maintain such registration and membership in good standing, or compliance with applicable requirements for exemption therefrom, during the term of this Agreement. Further, each Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of such Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of such Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

  

(e) In connection with its duties under this Agreement, each Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with all state and federal regulations, and the rules of any self-regulatory organization applicable to it including, for example, the 1940 Act, the CEA, and the Investment Advisers Act of 1940 (the “Advisers Act”), as amended. 

  

(f) Each Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with (i) the performance of this Agreement and (ii) the maintenance of compliance procedures pursuant to paragraph 1(e) hereof as the Co-Managers may reasonably request. 

  

(g) Each Subadviser shall maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably designed  to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. Each Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, each Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(h) Each Subadviser shall be responsible for the voting of all shareholder

proxies with respect to the investments and securities held in its Allocated Assets, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers.  Each Subadviser shall vote such proxies in accordance with its internal proxy voting policy. 

  

(i) Pursuant to the delegation of fair valuation of the Trust’s securities to the Co-Managers by the Board, the valuation committee of the Co-Managers shall have primary responsibility for valuation of the Trust’s assets. The Co-Managers represents and warrants to each Subadviser that such delegation of valuation responsibility complies with applicable law.  Upon reasonable request from the Co-Managers, each Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including being reasonably available to consult with the valuation committee of the Trust and the Co-Managers and making available information as to which the Subadviser has knowledge related to the investments being valued;  provided, however, that the valuation committee of the Co-Managers shall retain primary day-to-day responsibility for valuation of the Trust’s assets.  In addition, each Subadviser will use its reasonable efforts to promptly notify the Co-Managers in the event that such Subadviser becomes aware that the Trust is carrying a security in such Subadviser’s Allocated Assets at a value that such Subadviser believes does not fairly represent the price that could be obtained for the security in a current market transaction. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review each Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Custodian to provide) timely information to each Subadviser regarding the composition of assets in the Subadviser’s Allocated Assets, cash requirements and cash available for investment in such Allocated Assets, and all other information as may be reasonably necessary for such Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board that affect the duties of such Subadviser). 

  

3. In consideration of the services provided pursuant to this Agreement, the Co-Managers shall pay each Subadviser as full compensation a fee equal to the average of the net asset value of the Allocated Assets determined each day during the preceding month multiplied by the annual rate set forth on the attached Schedule A. Liability for payment of compensation by the Co-Managers to each Subadviser under this Agreement is contingent upon the Co-Managers's receipt of payment from the Trust for management services described under the Management Agreement. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by a Subadviser, shall not cause a reduction in the amount of the payment to such Subadviser by the Co-Managers. 

  

4. (a) Each Subadviser acknowledges that, in the course of its engagement by the Co-Managers, a Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conducts business in relation to services provided to the Trust by the Subadviser.  Such information, with respect to a Subadviser which knows or should know is confidential, is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’s business and other proprietary information, written or oral as it relates to services provided to the Trust by the Subadviser. 

  

(b)

Each Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures designed to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Managers, or to any person who may be identified by Confidential Information.  Each Subadviser shall promptly and without unreasonable delay, but in no event more than 48 hours of learning of a material breach of this Section, notify the Co-Managers if such Subadviser is in material breach of this Section.  At the Co-Managers’s request, the Subadviser shall certify in writing to the Co-Managers, its compliance with the terms of this Section. 

  

(c)

Each Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

Each Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in such Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser shall not alter or modify its Information Security Program in such a way that will weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Information Security Program shall include, without limitation: (i) access controls to prevent the unauthorized or inappropriate use of Confidential Information; (ii) periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and (iii) regular penetration and vulnerability testing of its information technology infrastructure and networks. 

  

(f)

The Subadviser shall notify the Co-Managers, promptly and without unreasonable delay, but in no event more than 48 hours of learning of any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to Confidential Information may have occurred (each, a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Co-Managers full details of the Security Incident; (ii) assist and cooperate with the Co-Managers and the Co-Managers’s designated representatives in the Co-Managers’s investigation of the Subadviser, employees or third parties related to the Security Incident, which may include requests for all relevant records, logs, files, and data; (iii) cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co-Managers’s rights; and  (iv) take appropriate action to prevent a recurrence of any Security Incident. 

  

(g)

Upon the Co-Managers’s reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(h)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice, reasonable assistance and cooperation of the Subadviser’s relevant staff.   

  

(i)

Notwithstanding any obligations set forth in this Agreement (including this section 4), the Co-Managers acknowledge and agree that the Subadvisers shall not be required to share any privileged or confidential information, proprietary data, quantitative models and similar information with the Co-Managers.  

  

5. No Subadviser will engage any third party to provide services with respect to its Allocated Assets without the express written consent of the Co-Managers.  To the extent that each Subadviser receives approval from the Co-Managers to engage a third-party service provider, the Subadviser assumes all responsibility for any action or inaction of the service provider as it related to its Allocated Assets.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and its directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) which arise out of or relate to the provision of services provided by any such service provider.  For the avoidance of doubt, none of the Custodian or any party with or through whom a Subadviser trades shall be deemed to be an agent engaged by Subadviser for purposes of this section 5. 

  

6.

Each Subadviser assumes no responsibility under this Agreement other than to render the services to be provided by such Subadviser hereunder in good faith.  No Subadviser shall be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on such Subadviser's part in the performance of its duties hereunder or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against such Subadviser under federal or state securities laws. The Co-Managers shall indemnify each Subadviser, its respective affiliated persons, officers, directors, and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Co-Managers's willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. Each Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of such Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for an initial term of one year from the date hereof and such term shall extend automatically each year thereafter for subsequent one-year terms; provided that each annual extension is subject to approval by the Board; and, provided further that this Agreement may be terminated (a) without the payment of any penalty, by the Board or by vote of a majority of the outstanding voting securities of the Trust as provided in the 1940 Act, or (b) by the Co-Managers or by a Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. Termination of this Agreement by a Subadviser shall terminate this Agreement only with respect to such Subadviser and the Agreement shall otherwise continue in full force and effect. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. Each Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of such Subadviser. 

  

To the extent that the Co-Managers delegate to a Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, such Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser, provided however, that if a party other than the Subadviser is engaged to transition the portfolio to the Subadviser’s strategy (a “Transition Co-Managers”), Subadviser shall have no responsibilities under Sections 1(a)(iii) and (v) until such time as the portfolio is released to the Subadviser for trading. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to a Subadviser at the address set forth beneath its signature below. 


8. Nothing in this Agreement shall limit or restrict the right of any of a Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict a Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or

the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

13. This Agreement, including Schedule A hereto, embodies the entire agreement and understanding among the parties hereto, and supersedes all prior agreements and understandings relating to the subject matter hereof.  Should any part of this Agreement be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement should not be affected thereby.  This Agreement shall be binding on and inure to the benefits of the parties hereto and their respective successors. 

  

14. The obligations of each Subadviser hereunder are several and not joint. Each Subadviser shall be liable only for its own obligations hereunder.  No Subadviser shall be a guarantor of or jointly liable for the obligations of any other Subadviser.  No Subadviser shall have any interest in the performance of, or remedy against, any other Subadviser in connection herewith. 

 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
 

  

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

Name: Timothy S. Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

By:  /s/ Timothy Cronin 

Name:  Timothy S. Cronin 

Title:  President 

  

  

JENNISON ASSOCIATES LLC 

  

By: /s/ William C. Ings 

Name: William C. Ings 

Title: Managing Director 

  

Address for Notices:  

Jennison Associates LLC 

477 Lexington Avenue, New York, NY 10017 

Attention: Secretary (with a copy to Jennison’s Chief Legal Officer). 

  

  

PGIM, INC. 

  

By: /s/ Daniel Malooly 

Name: Daniel Malooly 

Title: Vice President 

  

Address for Notices:  

PGIM, Inc. (PGIM Fixed Income)  

655 Broad Street 

Newark, NJ 07102  

Attention: Chief Legal Officer 

Fax: 973-802-6834 

  

For changes to guidelines and related communications: 

PGIM, Inc. 

655 Broad Street, 8th Floor 

Newark, NJ 07102 

Attention: Client Services Team 

E-mail: pgim_client_services@pgim.com 

  

  

  

  

 

QMA LLC 

  

By: /s/ Stephen Brundage 

Name: Stephen Brundage 

Title: Vice President 

  

Address for Notices:  

QMA LLC 

Gateway Center Two 

100 Mulberry Street, Newark, NJ 07102 

Attention: Secretary (with a copy to QMA LLC’s Chief Legal Officer) 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by each Subadviser, acting severally and not jointly, PGIM Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay each Subadviser a subadvisory fee on the net assets managed by such Subadviser that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadviser 

Subadvisory Fee for the Portfolio* 

  

AST Preservation Asset Allocation Portfolio 

  

Jennison Associates LLC**  

0.35% of average daily net assets to $100 million;  

0.30% of the next $100 million of average daily net assets; 

0.275% of the next $300 million of average daily net assets; 

0.25% of the next $2.5 billion of average daily net assets;  

0.23% of average daily net assets over $3 billion 

PGIM Fixed Income, a business unit of PGIM, Inc.***, + 

  

0.17% of average daily net assets to $750 million;  

0.16% of the next $750 million of average daily net assets;  

0.14% of average daily net assets over $1.5 billion 

QMA LLC# 

For Asset Allocation Services: 

0.04% of average daily net assets 

  

For Quantitative Equity Management (including the overlay sleeve): 

0.30% of average daily net assets to $1 billion;  

0.25% of average daily net assets on next $5 billion;  

0.225% of average daily net assets over $6 billion 

* In the event a Subadviser invests its Allocated Assets in any other pooled investment vehicle it manages or subadvises, such Subadviser will waive its subadvisory fee hereunder in an amount equal to the acquired fund fee paid to a Subadviser with respect to the Allocated Assets so invested.  Notwithstanding the foregoing, under no circumstances will the subadvisory fee waivers referred to in the preceding sentence exceed 100% of the subadvisory fee. 

** The subadvisory assets managed by Jennison under the AST Preservation Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to Jennison, the average daily net assets in each underlying sleeve will be combined. 

For purposes of calculating the advisory fee payable to Jennison, the fee percentage applicable to the Allocated Assets will be a single blended rate determined in accordance with the schedule set forth above.  For purposes of determining this rate, the average daily net assets shall be the aggregate of the Allocated Assets together with the assets managed by Jennison in: (i) the AST Capital Growth Asset Allocation Portfolio; (ii) the Balanced Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.   

  

*** The subadvisory assets managed by PGIM Fixed Income under the AST Preservation Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to PGIM Fixed Income, the average daily net assets in each underlying sleeve will be combined. 

  

For purposes of calculating the advisory fee payable to PGIM Fixed Income, the assets managed by PGIM Fixed Income in the AST Preservation Asset Allocation Portfolio will be aggregated with the assets managed by PGIM Fixed Income in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio. 

+ PGIM maintains a delegation agreement with PGIM Limited, an affiliated investment manager of PGIM that is authorized and regulated in the United Kingdom by the Financial Conduct Authority and registered with the US Securities and Exchange Commission under the Advisers Act and a portion of the subadvisory fee payable to PGIM as subadviser may be payable to PGIM Limited as a sub-subadviser under this Agreement. 

# The subadvisory assets managed by QMA under the AST Preservation Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to QMA, not including asset allocation services, the average daily net assets in each underlying sleeve will be combined.  The fee percentage applicable to the Allocated Assets will be a single blended rate determined in accordance with the schedule set forth above 

  

For purposes of calculating the advisory fee payable to QMA, not including the asset allocation services, the assets managed by QMA in the AST Preservation Asset Allocation Portfolio will be aggregated with the assets managed by QMA in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.   

  

Dated as of:  May 19, 2021  

1 

  


Execution Version 

ADVANCED SERIES TRUST 

  

AST Preservation Asset Allocation Portfolio
 

  

SUBADVISORY AGREEMENT 

  

Agreement made as of this 19th day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (ASTIS), a Maryland corporation (together, the Co-Managers), and Massachusetts Financial Services Company (d/b/a MFS Investment Management), a Delaware corporation (MFS or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust; and 

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct, and the Subadviser is willing to render such investment advisory services; and 

  

NOW, THEREFORE, the Parties agree as follows: 

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of such portion of the Trust's investments as the Co-Managers shall direct, and the Subadviser shall have discretion to determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash. 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and any procedures adopted by the Board applicable to the services provided by the Subadviser hereunder including any amendments to those procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust's compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, each as applicable to the services provided by the Subadviser hereunder and all other applicable federal and state laws and regulations (collectively, "Applicable Law"). Subject to the Co-Managers' oversight, Subadviser shall monitor compliance with Applicable Law based on Subadviser's books and records and, to the extent provided, information provided by the Co-Managers and/or the Trust's Custodian. In connection therewith, the Subadviser shall be responsible for the preparation and filing of Schedule l3G and Form 13-F reflecting the Trust's securities holdings unless otherwise directed in writing by the Co-Managers. The Subadviser shall not be responsible for the preparation or filing of any other reports required of the Trust by any governmental or regulatory agency, except as expressly agreed to in writing. The Co-Managers shall provide Subadviser with timely copies of any updated Trust Documents. Until the Co-Managers or the Trust delivers any Trust Document regarding the management of the Trust or the Subadviser's duties hereunder to the Subadviser, the Subdviser shall not be liable and shall be fully protected in relying on any previously delivered document sent by the Co-Managers or the Trust to the Subadviser. 

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by such portion of the Trust's portfolio, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants (including, but not limited to, any person or entity affiliated with the Co-Managers or the Subadviser) (collectively, Brokers), to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. The Co-Managers (or the Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission.  

  

The Subadviser may execute account documentation, agreements, contracts and other documents requested by brokers, dealers, counterparties and other persons in connection with its management of the assets of the Trust, including, without limitation, transaction term sheets and confirmations, certifications regarding the Trust's status as an accredited investor, qualified institutional buyer or qualified purchaser and certifications regarding other factual matters as may be requested by brokers, dealers or counterparties in connection with the Subadviser’s management of the Trust's assets.  

  

On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.
 

(iv) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act as applicable to the Subadviser, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(v) The Subadviser or an affiliate shall provide the Trust's custodian on each business day with information relating to all transactions concerning the portion of the Trust's assets it manages, and shall provide the Co-Managers with such information upon request of the Co-Managers.  The parties acknowledge and agree that the Subadviser is not a custodian of the Trust assets and will not take possession or custody of such assets. 

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust's portfolio or any other transactions of Trust assets.
 

(b) The Subadviser shall, to the extent permitted by its Code of Ethics and other applicable internal policies and procedures, authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(d) The Co-Managers acknowledge that Subadviser is registered with the Commodity Futures Trading Commission (“CFTC”) and National Futures Association (the “NFA”) as a commodity trading advisor and that Subadviser will provide commodity trading advice to the Trust as if Subadviser were exempt from registration as a commodity trading advisor. The Subadviser represents that it shall provide commodity trading advice to the Trust in a manner consistent with any applicable duties and obligations, as set forth in the Commodity Exchange Act of 1936, as amended (the “CEA”), and all rules and regulations promulgated thereunder. The Co-Managers represent and warrant that they are excluded from the definition of commodity pool operator pursuant to CFTC Regulation 4.5 with respect to the Trust, and the Co-Managers have timely filed a notice of eligibility as required by CFTC Regulation 4.5 with respect to the Trust and will, during the term of this Agreement, maintain and reaffirm such notice of eligibility as required by CFTC Regulation 4.5.   

  

(e) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, each as applicable to the services provided by the Subadviser hereunder and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

  

(f) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably necessary to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures designed to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(g) The Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with this Agreement, including but not limited to such monthly, quarterly, or annual reports concerning the Subadviser's transactions with respect to the investments and securities held in the Trust's portfolio and the performance of the Trust's portfolio as well as the compliance procedures pursuant to paragraph 1(d) hereof as the Co-Managers may reasonably request. 

  

(h) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Trust's portfolio in accordance with the Subadviser's proxy voting policies and procedures, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers. It shall be the sole responsibility of the Co-Managers to process and file any claim forms or other documentation relating to any securities class action or other litigation on behalf of the Trust; however, upon reasonable request, Subadviser will cooperate with the Co-Managers to the extent necessary for the Co-Managers to pursue or participate in any such action.  The Subadviser shall not have the obligation to commence or defend lawsuits or other legal actions on behalf of the Co-Managers or the Trust brought by or against third parties, including lawsuits and legal actions brought by or against the Co-Managers or the Trust relating to securities purchased by the Trust. Notwithstanding the foregoing, the Subadviser shall have the authority but no obligation to participate in any in-court or out-of-court workouts, restructurings, or bankruptcies involving securities held by the Trust during the term of the Agreement on behalf of the Co-Managers or the Trust and take any and all actions in connection therewith that the Subadviser in its discretion deems necessary or appropriate.  

  

(i) The Subadviser agrees to use reasonable efforts (i) to monitor whether market quotations are readily available for the Trust's portfolio investments and whether those market quotations are reliable for purposes of internally valuing the Trust's portfolio investments and determining the Trust's net asset value per share; and (ii) to promptly notify the Co-Managers upon the occurrence of any significant event with respect to any of the Trust's portfolio investments in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff, in conformity with the Trust's valuation procedures. Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued.  The Co-Managers and the Trust acknowledge and agree that (i) the Subadviser is not the Trust's pricing agent and shall not be deemed a substitute for any independent pricing agent and/or valuation committee of the Trust pursuant to the Trust's Fair Valuation Policies and Procedures; and (ii) none of the information which the Subadviser provides the Co-Managers hereunder shall be deemed to be the official books and records of the Fund for tax, accounting or any other purposes.   

  

(j) The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Trust's portfolio required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information regarding the Subadviser or the services provided by Subadviser hereunder that has been provided by the Subadviser to the Co-Managers for inclusion in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(k) The Subadviser shall comply with the Trust’s Documents provided to the Subadviser by the Co-Managers. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon determination of any material breach of such Trust Documents.  

  

(l) The Subadviser shall keep the Trust’s Co-Managers informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written reasonable request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall respond to such requests for information as to such reports (e.g., provide summaries of such reports with personal information redacted and subject in all cases to privacy and confidentiality obligations and to the extent the Subadviser is not prohibited from doing so under applicable law) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the portion of the Trust managed by the Subadviser, cash requirements and cash available for investment in such portion of the Trust, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser).  The Co-Managers shall provide on an on-going basis a list of all affiliates of the Co-Managers and the Trust, including publicly traded affiliates of the Co-Managers that may not be purchased by the Fund (such list shall include security name, cusip number, sedol and/or applicable ticker) and a list of all brokers and underwriters affiliated with the Co-Managers for reporting transactions under applicable provisions of the 1940 Act.  The Co-Managers represent and warrant that the Trust (i) is a qualified institutional buyer as that term is defined in Rule 144A under the Securities Act of 1033, as amended, and (ii) is not a "restricted person" under Rule 5130 and Rule 5131 of the Financial Industry Regulatory Authority, Inc. ("FINRA") and thus the Trust is not prohibited from participating in the allocation of initial public offerings of equity securities offered by FINRA members.  The Co-Managers agree to promptly notify the Subadviser if any of the foregoing representations ceases to be true or correct.   

  

The Co-Managers hereby acknowledge receipt of the Subadviser's most recent Form ADV Part 2A and relevant Form ADV Part(s) 2B.  Co-Managers hereby consent to electronic delivery of Subadviser's Form ADV and any Form ADV amendments and/or annual updates provided by the Subadviser to the Co-Managers as required by applicable law. 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers' receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers.  

  

4. (a) Each party acknowledges that, in the course of dealing, it may receive or have access to confidential and proprietary information (including, without limitation, the Trust’s portfolio holdings) of the other party or third parties with whom the Co-Managers conducts business.  Such information is collectively referred to as “Confidential Information.”  Each party agrees that it shall treat Confidential Information of the other party as confidential and shall not use such Confidential Information or disclose such Confidential Information to third parties, except to the extent necessary for the purposes of rendering services or performing the obligations pursuant to this Agreement or as required by applicable law, rule or regulation or as otherwise expressly agreed to in writing by the parties.   

  

(b)

The Subadviser further certifies that (i) its treatment of Confidential Information is in compliance in all material respects with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures designed to seek to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Managers, or to any person who may be identified by Confidential Information.  The Subadviser shall immediately notify the Co-Managers if the Subadviser is in material breach of this Section 4(b).  At the Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section 4(b). 

  

(c)

The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that will represent a departure from industry standards. 

  

(e)

The Subadviser shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to the minimum number of the Subadviser’s employees and/or agents who require such access in order to provide the services to the Co-Managers. 

  

(f)

The Subadviser shall conduct periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and evaluate and improve, where necessary, the effectiveness of its information security controls.  Such assessments will also consider the Subadviser’s compliance with its Information Security Program and the laws applicable to the Subadviser. 

  

(g)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.  If any testing detects any anomalies, intrusions, or vulnerabilities in any information technology systems processing, storing or transmitting any of the Trust’s and/or Co-Managers’ Confidential Information and any of the Trust's and/or the Co-Managers' Confidential Information has been determined to have been subject to unauthorized disclosure, the Subadviser shall promptly report those findings to the Co-Managers. 

  

(h)

The Subadviser shall notify the Co-Managers, promptly and without unreasonable delay, but in no event more than 48 hours of learning of any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to the Trust's or Co-Managers' Confidential Information that has occurred (a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Co-Managers a summary of the Security Incident; (ii) assist communicate, and cooperate with the Co-Managers and the Co-Managers’ designated representatives throughout the investigation of the Security Incident.  The Subadviser will make appropripate personnel of Subadviser available to the designated representatives of the Co-Managers to discuss the matter, and shall cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co-Managers’ rights; and  (iii) take appropriate action to seek to prevent a recurrence of such Security Incident. 

  

(i)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(j)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice: (a) reasonable assistance and cooperation of the Subadviser’s relevant staff who can provide information concerning Subadviser's information processing premises and records; and (b) reasonable facilities at the Subadviser’s premises.   

  

5. The Subadviser will not engage any third party to provide advisory services ("Service Provider") to the portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers.  To the extent that the Subadviser receives approval from the Co-Managers to engage a Service Provider, the Subadviser assumes all responsibility for any action or inaction of the Service Provider as it relates to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and its directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) as a result of any action or inaction of the Service Provider as it relates to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.   

  

6. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser. 

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser. The Subadviser’s duties and obligations hereunder shall not begin prior to the effective date of the termination of the previously named subadviser in the Trust’s registration statement disclosure. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at Massachusetts Financial Services Company, 111 Huntington Avenue, Boston, MA 02199, Attention: Legal Department, with a copy to the following e-mail address: InstitutionalClientService@mfs.com. 

  

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

  

  

  

  

  

  

 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 


 

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

Name: Timothy S. Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

By:  /s/ Timothy Cronin 

Name:  Timothy S. Cronin 

Title:  President 

  

  

MASSACHUSETTS FINANCIAL SERVICES COMPANY D/B/A MFS INVESTMENT MANAGEMENT 

  

By: /s/ Carol Geremia 

Name: Carol Geremia 

Title: President 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by Massachusetts Financial Services Company d/b/a MFS Investment Management (MFS), PGIM Investments LLC and AST Investment Services, Inc. will pay MFS a subadvisory fee on the net assets managed by MFS that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio*, ** 

  

  

AST Preservation Asset Allocation Portfolio  

  

0.30% of average daily net assets to $100 million;  

0.285% of the next $150 million of average daily net assets; 

0.27% of the next $250 million of average daily net assets; 

0.25% of average daily net assets over $500 million 

  

  

* In the event MFS invests Portfolio assets in other pooled investment vehicles it manages or subadvises, MFS will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to MFS with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to MFS, the assets managed by MFS in the AST Preservation Asset Allocation Portfolio will be aggregated with the assets managed by MFS in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the Capital Growth Asset Allocation Portfolio; and (iii) the AST Academic Strategies Asset Allocation Portfolio. 

  

  

Dated as of:  May 19, 2021 

  


Execution Version 

  

ADVANCED SERIES TRUST 

  

AST Preservation Asset Allocation Portfolio
 

SUBADVISORY AGREEMENT 

  

Agreement made as of this 14 day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) (ASTIS), a Maryland corporation (together, the Co-Managers), and Wellington Management Company LLP, a Delaware limited liability partnership (Wellington Management or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust; and
 

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct (the “Account”), and the Subadviser is willing to render such investment advisory services; and
 

NOW, THEREFORE, the Parties agree as follows: 

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage the Account as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of the Account as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash and shall have full power and authority to act on behalf of the Trust with respect to the purchase, sale, exchange, conversion or other transactions in any and all stocks, bonds, other securities cash or currencies, and other Account assets. The Subadviser, upon written consent by the Co-Managers, may engage any of its affiliates to assist it with providing its services under this Agreement (including affiliates outside of the United States), provided that the Subadviser will remain responsible for the performance of its obligations under the Agreement and  shall be   responsible to the Co-Managers for the acts and omissions of any affiliate  to the same extent   as it is for its own acts and omissions . 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust's valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust's compliance and, as applicable, will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, and all other applicable federal and state laws and regulations. In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required of Subadviser by the Securities and Exchange Commission (the Commission). The Co-Managers shall provide the Subadviser timely with copies of any updated Trust Documents. The Subadviser shall have a reasonable period to comply with instructions and/or bring the Account into compliance with any changes to the Trust Documents. The Co-Managers covenant that any instructions or modifications to Trust Documents shall be consistent with the provisions of law, regulatory policies and organizational documents applicable to the Trust.  

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by the Account , as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with the Subadviser (collectively, Brokers), to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time.  The Subadviser’s broker selection shall be conducted in accordance with its Policies and Procedures on Order Execution, as may be amended from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. The Subadviser shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Subadviser with respect to the Trust and other accounts as to which it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable over time and consistent with its fiduciary obligations to the Trust and to such other clients. 

  

(iv) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(v) The Subadviser or an affiliate shall provide the Trust's custodian (“Custodian”) on each business day with information relating to all transactions concerning the Account, and shall provide the Co-Managers with such information upon request of the Co-Managers. All transactions will be consummated by payment to, or delivery by the Custodian, of all cash and/or securities due to or from the Account according to local market settlement conventions. The Subadviser shall not act as custodian for the Account.  Notwithstanding any other provision in this Agreement, the Subadviser shall not hold, directly or indirectly, funds or securities contained in the Account or have any authority to obtain possession of them.   

  

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Account or any other transactions of Trust assets.
 

(b) The Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(d) The Subadviser is a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. The Co-Managers acknowledge that Subadviser, while registered, may rely on exemptions from registration as to some accounts it advises including the Account, upon written notice to Co-Managers. Further, the Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of the Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could reasonably lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target that is material to Subadviser’s ability to perform investment management services pursuant to this Agreement. 

  

(e) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures reasonably designed to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

  

(f) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably designed to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures reasonably designed to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(g)The Subadviser will notify the Co-Managers of any additions to or withdrawals of corporate partners of the Subadviser within a reasonable time after such additions or withdrawals. 

  

(i) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Account , subject to such reasonable reporting and other requirements as shall be established by the Co-Managers and shall vote such proxies in accordance with Subadviser’s Global Proxy Voting Policies and Procedures, as may be amended from time to time.  The Co-Managers authorize the Subadviser to instruct the Custodian to forward promptly to the Subadviser copies of all proxies and shareholder communications relating to proxy votes involving securities held in the Account (other than materials relating to legal proceedings.) The Co-Managers and the Trust agree that Subadviser will not be responsible or liable for failing to vote any proxies where it has not received the proxies or related shareholder communications in a timely manner. 

  

(j) The Subadviser will not compile or file claims or take any related actions on behalf of the Trust in any class action, bankruptcy or other legal proceeding related to securities currently or previously held in the Account. Subadviser shall provide reasonable assistance as the Trust or Co-Managers may reasonably request in any matter relating to legal proceedings relating to  the investments and securities held in the Account that Subadviser supervises.  Such assistance, will include, but will not be limited to, providing necessary data in the possession of Subadviser relating to the Account, assisting with interrogatories, and if necessary, providing testimony.   

  

(k) The Subadviser acknowledges that it is responsible for evaluating whether market quotations are readily available for the Trust's portfolio investments and whether those market quotations are reliable for purposes of valuing the Trust's portfolio investments and determining the Trust's net asset value per share and promptly notifying the Co-Managers upon the occurrence of any significant event with respect to any of the Trust's portfolio investments in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff. Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued. The Co-Managers acknowledge that the Subadviser is not the official pricing agent with respect to the Trust’s portfolio investments.  

  

(l)

The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Account required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(m) The Subadviser shall comply with the provisions of the Trust’s Documents provided to the Subadviser by the Co-Managers that are applicable to the Subadviser. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon detection of any material breach of such Trust Documents.  

  

(n) The Subadviser shall keep the Trust’s Co-Managers informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall permit representatives of the Trust or the Co-Manager to examine reports (or summaries of the reports) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the Account managed by the Subadviser, cash requirements and cash available for investment in the Account, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser). 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers' receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers. 

  

4. (a) The Subadviser acknowledges that, in the course of its engagement by the Co-Managers, the Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conducts business.  Such information is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’ business and other proprietary information, written or oral. 

  

(b) The Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures intended to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm to the Co-Managers, or to any person who may be identified by Confidential Information.  The Subadviser shall notify the Co-Managers as soon as practicable if the Subadviser is in material breach of this Section.  At the Co-Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section. For the avoidance of doubt, Subadviser may disclose Confidential Information where disclosure is required or permitted by law or requested by any governmental or regulatory authority that may have jurisdiction over either party,  provided that 

 the  Subadviser gives the Co-Managers prompt written notice of such requirement prior to such disclosure  , to the extent feasible and permitted by law,   and assistance in obtaining an order protecting the information from public disclosure   as necessary  .   

The Co-Managers and Trust agree not to make use of the investment decisions or recommendations of the Subadviser, other than with respect to the Account, without the prior written consent of the Subadviser. In addition, the Co-Manager and the Trust shall use its best efforts to ensure that any of its agents or affiliates who may gain access to the investment decisions or recommendations of the Subadviser shall be made aware of its proprietary nature and shall likewise treat it as confidential. 

  

(c) The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that could reasonably be foreseen to weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Subadviser shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to the minimum number of the Subadviser’s roles which require such access in order to provide the services to the Co-Managers. 

  

(f)

The Subadviser shall conduct periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and evaluate and improve, where necessary, the effectiveness of its information security controls.  Such assessments will also consider the Subadviser’s compliance with its Information Security Program and the laws applicable to the Subadviser. 

  

(g)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.   

  

(h)

Except with respect to applicable legal prohibitions and compliance with requests from law enforcement, Subadviser confirms that upon any potential or actual known security breach Subadviser will: 

  

4.

promptly investigate such breach or potential breach, 

4.

promptly notify the Co-Managers of such breach or potential breach if the investigation reveals a likelihood that Co-Manager's Confidential Information was materially affected, such notification targeted to occur within 48 hours (two business days), but no later than 72 hours (three business days) after such breach has been identified determination, and,  

4.

implement necessary corrective actions.   Such corrective actions shall include:  

  

i.

performing an analysis to determine the cause of the security breach;  

ii.

providing the Co-Managers with a report detailing the cause of the security breach and the material involved;  

iii.

promptly remedying or mitigating the security breach to a commercially reasonable extent; and 

iv.

reasonable cooperation with the Co-Managers and its designees and with any civil or criminal authority in any investigation or action related to the unauthorized, unlawful or accidental access, use, processing, disclosure, transfer destruction, loss or alteration.   

  

(i)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

5. Other than as set forth in this Agreement, the Subadviser will not engage any third party to provide services to the Account as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers, other than as necessary to perform administrative or ancillary services for the Account, including security and cash reconciliation, portfolio pricing and corporate action processing.  The Subadviser will act in good faith and with reasonable skill and care in the selection, use and monitoring of such agents. To the extent that the Subadviser receives approval from the Co-Managers to engage a third-party service provider, Subadviser  shall be  responsible to the Co-Managers for the acts and omissions of the third-party service provider to the same extent as it is for its own acts and omissions to the same extent that Subadviser would be responsible for its own actions or inactions.  Furthermore, the Subadviser may utilize unaffiliated third-party data service providers in effecting compliance with the prospectus and/or instructions from the Co-Managers, and the

Subadviser shall not be held responsible for any losses resulting from non-compliance with the prospectus or  Co-Manager instructions where the Subadviser has reasonably relied on information provided by third-party data service providers.  

  

6. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser. 

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement, as applicable, with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 280 Congress Street, Boston, MA 02210, Attention: Legal and Compliance. 

  

The Co-Managers consent to electronic delivery of any reports or other information that may be requested by the Co-Managers or the Trust or is required to be delivered by the Subadviser under this Agreement, or pursuant to applicable law, rule or regulation, including delivery of Part 2 of Subadviser’s Form ADV and any updates thereto, and the Co-Managers represent that they have the means to, and will access, such disclosures in electronic format and the Subadviser shall provide the Co-Managers with hard copies of any such disclosures upon request.  The Co-Managers may revoke this consent upon written notice to Subadviser. 

  

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such

prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. Except as otherwise specified in the Trust Documents, the Subadviser will provide investment management services for the Account without regard to any tax consequences that may result from any action taken or omitted by Subadviser on behalf of the Account. Neither the Subadviser nor any of its affiliates provide tax advice in connection with investment of the assets in the Account, and the Co-Managers are responsible for determining and paying any taxes owed with respect to the activities of the Account.
 

11. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

12. The Agreement may be executed simultaneously in any number of counterparts, each of which will be deemed to be an original, but all of which together will constitute one and the same instrument.  

  

13. This Agreement shall be governed by the laws of the State of New York. If any court of competent jurisdiction at any time holds that any provision in this Agreement is invalid or unenforceable in whole or in part, the invalidity or unenforceability of such provision shall not affect the other provisions of this Agreement which will remain in full force and effect.  The parties shall use their reasonable efforts to agree on a new provision which will, as far as possible, achieve the same purpose as the provision that is held invalid or unenforceable. 

  

14. No party to this Agreement will be liable for any failure or delay in performing any of its obligations under or pursuant to the Agreement, and any such failure or delay in performing its obligations will not constitute a breach of the Agreement, if such failure or delay is due to any cause whatsoever outside its reasonable control.  Any such non-performing party will be entitled to a reasonable extension of the time for performing such obligations.  Events outside a party's reasonable control include any event or circumstance that the party is unable to avoid using reasonable skill and care. 

  

15. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

16. The parties agree that this Agreement and any documents related hereto may be electronically signed.  The parties agree that any electronic signatures appearing on this Agreement and any related documents are the same as handwritten signatures for the purposes of validity, enforceability and admissibility. 

  

 

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT.  

  

  

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.

 

PGIM INVESTMENTS LLC 

  

  

By: /s/ Timothy Cronin 

Name: Timothy Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

  

By:  /s/ Timothy Cronin 

Name:  Timothy Cronin 

Title:  President 

  

  

  

WELLINGTON MANAGEMENT COMPANY LLP 

  

  

By: /s/ Steven Muson 

Name: Steven Muson 

Title: Senior Managing Director 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by Wellington Management Company LLP (Wellington Management), PGIM Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay Wellington Management a subadvisory fee on the net assets managed by Wellington Management that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio* 

  

  

AST Preservation Asset Allocation Portfolio 

  

  

0.19% of average daily net assets  

  

* In the event Wellington Management invests Portfolio assets in other pooled investment vehicles it manages or subadvises, Wellington Management will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to Wellington Management with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

  

  

Dated as of:  May 14, 2021 

  

  

  

  

  

  


Execution Version 

ADVANCED SERIES TRUST

AST Preservation Asset Allocation Portfolio 


SUBADVISORY AGREEMENT 

  

Agreement made as of this 17 day of May, 2021 between PGIM Investments LLC (PI), a New York limited liability company and AST Investment Services, Inc. (AST), a Maryland corporation (together, the Co-Managers), and ClearBridge Investments, LLC, a Delaware corporation (ClearBridge or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PI and AST act as Co-Managers of the Trust; and  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct, and the Subadviser is willing to render such investment advisory services; and  

NOW, THEREFORE, the Parties agree as follows:  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust’s portfolio as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust’s investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such Prospectus and Statement of Additional Information as currently in effect and as amended or supplemented from time to time, being herein called the “Prospectus”), and subject to the following understandings:  

(i) The Subadviser shall provide supervision of such portion of the Trust's investments as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained or sold by the Trust, and what portion of the assets will be invested or held uninvested as cash.  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust’s valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust’s compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), and all other applicable federal and state laws and regulations. In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required by the Securities and Exchange Commission (the Commission). The Co-Managers shall provide Subadviser timely with copies of any updated Trust Documents.  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by such portion of the Trust's portfolio, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants (including but not limited to any broker or dealer affiliated with the Co-Managers or the Subadviser) to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by brokers, dealers or futures commission merchants who may effect or be a party to any such transaction or other transactions to which the Subadviser’s other clients may be a party. The Co-Managers (or Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through broker-dealers (including, to the extent legally permissible, broker-dealers affiliated with the Subadviser(s)) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and to cause the Trust to pay any such broker-dealers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another broker-dealer would have charged for effecting that transaction, if the brokerage or research services provided by such broker-dealer, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission.  

On occasions when the Subadviser deems the purchase or sale of a security or futures contract to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities or futures contracts to be sold or purchased. In such event, allocation of the securities or futures contracts so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.   The Subadviser may execute on behalf of the Trust certain agreements, instruments and documents in connection with the services performed by it under this Agreement. These may include, without limitation, brokerage agreements, clearing agreements, account documentation, futures and options agreements, swap agreements, other investment-related agreements, and any other agreements, documents or instruments the Subadviser believes are appropriate or desirable in performing its duties under this Agreement. 

(iv) The Subadviser shall maintain all books and records with respect to the Trust’s portfolio transactions effected by it as required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act, and shall render to the Trust’s Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust’s securities.  

(v) The Subadviser or an affiliate shall provide the Trust's Custodian on each business day with information relating to all transactions concerning the portion of the Trust’s assets it manages, and shall provide the Co-Managers with such information upon request of the Co-Managers.  

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a “manager-of-managers” style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii)  periodically make recommendations to the Trust’s Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1 under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust’s portfolio or any other transactions of Trust assets.  

(b) The Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees.  

(c) The Subadviser shall keep the Trust’s books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser’s services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will surrender promptly to the Trust any of such records upon the Trust’s request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof.  

(d) The Subadviser is, to the extent required by applicable law, a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. Further, the Subadviser agrees to notify the Manager promptly upon (i) a statutory disqualification of such Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

(e) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

(f) The Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with (i) the performance of this Agreement and (ii) the maintenance of compliance procedures pursuant to paragraph 1(d) hereof as the Manager may reasonably request.  

(g) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Trust’s portfolio, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers.  

(h) The Subadviser acknowledges that it is responsible for evaluating whether market quotations are readily available for the Trust’s portfolio securities and whether those market quotations are reliable for purposes of valuing the Trust’s portfolio securities and determining the Trust’s net asset value per share and promptly notifying the Co-Managers upon the occurrence of any significant event with respect to any of the Trust’s portfolio securities in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff.  Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing securities of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the securities being valued. 

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser’s performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust’s custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the portion of the Trust managed by the Subadviser, cash requirements and cash available for investment in such portion of the Trust, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser).  

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust’s average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A.  Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers’ receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers.  Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers.  

  

4. (a) The Subadviser acknowledges that, in the course of its engagement by the Co-Managers, the Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conduct business in relation to the Series of the Trust allocated to Subadviser. Such information is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’ business and other proprietary information, written or oral as relates to the Series of the Trust allocated to Subadviser. 

  

(b)

The Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures necessary to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Manager, or to any person who may be identified by Confidential Information.  The Subadviser shall promptly and without unreasonable delay, but in no event more than 48 hours of learning of a material breach of this Section, notify the Manager if the Subadviser is in material breach of this Section.  At the Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section. 

  

(c)

The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.   

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that will weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Subadviser shall maintain an appropriate Information Security Program which includes, but is not limited to: (i) access controls to prevent the unauthorized or inappropriate use of Confidential Information,(ii) periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality and integrity of Confidential Information; and (iii) regular penetration and vulnerability testing of its information technology infrastructure and networks.  

  

(f)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.  If any testing detects any intrusions of any information technology systems processing, storing or transmitting any of the Manager’s Confidential Information, the Subadviser shall promptly report those findings to the Manager. 

  

(g)

The Subadviser shall notify the Co-Managers promptly and without unreasonable delay, but in no event more than 48 hours after determining that any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to Confidential Information occurred (a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Manager full details of the Security Incident; (ii) assist and cooperate with the Co-Managers and the Co-Managers’ designated representatives in the Co-Managers’ investigation of the Subadviser, employees or third parties related to the Security Incident, which may include requests for all relevant records, logs, files, and data; (iii) cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co- Managers’ rights; and  (iv) take appropriate action to prevent a recurrence of any Security Incident. 

  

(h)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(i)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice reasonable assistance and cooperation of the Subadviser’s relevant staff.   

  

5. The Subadviser will not engage any third party to provide investment advisory services to the portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers.  To the extent the Subadviser receives approval from the Co-Managers to engage such third-party service provider, the Subadviser assumes all responsibility for any action or inaction of the service provider as it related to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and their directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) which arise out of or relate to the provision of services provided by any such service provider. 

  

6.  The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser’s part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including attorneys’ fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys’ fees, which may be sustained as a result of the Subadviser’s willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws.  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days’ nor less than 30 days’ written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of  control (as defined in the 1940 Act) of the Subadviser.  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co- Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser provided however, that if a party other than the Subadviser is engaged to transition the portfolio to the Subadviser’s strategy (a “Transition Manager”), Subadviser shall have no responsibilities under Sections 1(a)(iii) and (v) until such time as the portfolio is released to the Subadviser for trading. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PI) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for AST); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 620 8th Avenue, 47th Floor, New York, New York, 10018, Attention: General Counsel. 

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser’s directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser’s right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association.  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.   During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser’s written request, and to implement those changes in the next regularly scheduled production of those materials. All such prospectuses, proxy statements, reports to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act.  

11. This Agreement shall be governed by the laws of the State of New York.  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order.  

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 

  

PGIM INVESTMENTS LLC  

  

  

By:  /s/ Timothy Cronin
Name:Timothy S. Cronin
Title: Senior Vice President 

  

  

  

AST INVESTMENT SERVICES, INC. 

  

  

By:  /s/ Timothy Cronin
Name:Timothy S. Cronin 

Title:President 

  

  

  

CLEARBRIDGE INVESTMENTS, LLC 

  

By:  /s/ Cynthia K. List
Name:  Cynthia K. List
Title:   CFO 

 

SCHEDULE A 

ADVANCED SERIES TRUST

 

As compensation for services provided by ClearBridge Investments (ClearBridge), LLC, PGIM Investments LLC and AST Investment Services, Inc. will pay ClearBridge a subadvisory fee on the net assets managed by ClearBridge that is equal, on an annualized basis, to the following: 

Portfolio Name  

Subadvisory Fee*, **  

  

AST Preservation Asset Allocation Portfolio 

  

0.35% of average daily net assets to $100 million;  

0.29% of the next $150 million of average daily net assets; 

0.27% of the next $250 million of average daily net assets; 

0.23% of average daily net assets over $500 million 

  

    

* In the event ClearBridge invests Portfolio assets in other pooled investment vehicles it manages or subadvises, ClearBridge will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to ClearBridge with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to ClearBridge, the assets managed by ClearBridge in the AST Preservation Asset Allocation Portfolio will be aggregated with the assets managed by ClearBridge in: (i) the AST Balanced Asset Allocation Portfolio; and (ii) the Capital Growth Asset Allocation Portfolio. 

  

Dated as of : May 17, 2021 

  

  

  


Execution Version 

ADVANCED SERIES TRUST 

  

AST Preservation Asset Allocation Portfolio 

  

SUBADVISORY AGREEMENT 

  

Agreement made as of this 13 day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (ASTIS), a Maryland corporation (together, the Co-Managers), and J.P. Morgan Investment Management Inc., a Delaware corporation, (J.P. Morgan or the Subadviser), and effective as of a date mutually agreed upon by the Co-Managers and Subadviser; 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and AST act as Co-Managers of the Trust;  

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually, a Portfolio or the Trust and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct and the Subadviser is willing to render such investment advisory services; and 

  

NOW, THEREFORE, the Parties agree as follows: 

  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers (the “Allocated Portion”), including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of the Allocated Portion of the Trust's investments as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash. 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust's valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust that are not inconsistent with the Trust Documents), cooperate with the Co-Managers’ (or their designees') personnel responsible for monitoring the Trust's compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, and all other applicable federal laws and regulations. In addition, the Subadviser shall manage the Allocated Portion in conformity with applicable state laws and regulations and such state insurance laws as Manager informs Subadviser are applicable to the Trust (“State Insurance Laws”).  In connection therewith, the Subadviser shall, among other things, assist the Co-Managers in the preparation and filing of such reports as the Trust is, or may in the future be, required to file with the Securities and Exchange Commission (the Commission). The Co-Managers shall provide Subadviser timely with copies of any updated Trust Documents. 

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by the Allocated Portion, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with the Subadviser (collectively, Brokers), as it determines in its discretion subject to the requirements of  this subsection (iii). In executing transactions for the Trust and selecting Brokers, the Subadviser will use its best efforts to seek on behalf of the Trust the best overall terms available. Within the framework of this policy, the Subadviser shall consider all the factors that it deems relevant including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the Broker, the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis and, for any portion of the Portfolio managed by the Subadviser from its offices outside the United Kingdom, the research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser’s other clients may be a party.  (If the Subadviser manages a portion of the Portfolio’s assets from its offices in the United Kingdom (“UK Managed Assets”), the brokerage commissions paid on transactions in the UK Managed Assets will compensate the broker for trade execution only. Brokerage commissions paid on transactions involving assets the Subadviser manages from its offices outside the United Kingdom (“Non-UK Managed Assets”) may compensate the broker for both trade execution and investment research services.)    

  

For Non-UK Managed Assets, the Co-Managers (or Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain the best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the Co-Managers or Subadviser determine(s) in good faith that such commission was reasonable in relation to the value of the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it or an affiliate may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act).  

  

On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.  The Co-Managers recognize that, in some cases, this procedure may limit the size of the position that may be acquired or sold for the Trust.  The Co-Managers hereby acknowledge receipt of the current best execution policy of Subadviser’s London branch and consent to Subadviser following such policy.  Subadviser shall provide the Co-Managers with updated versions of such policy as it may be amended, supplemented, or modified from time to time.  Subject to the requirements of U.S. laws rules, and regulations, including, without limitation, the 1940 Act and the Investment Advisers Act of 1940, as amended (the Advisers Act), and the rules thereunder, the Co-Managers agree that the Subadviser’s London branch may follow the then-current version of such best execution policy in managing the portion of the Portfolio’s assets assigned to it. In addition, the Co-Managers agree that in managing the portion of the Portfolio’s assets assigned to it, the Subadviser’s London branch may execute trades outside a trading venue as that term is defined in the “Markets in Financial Instruments Directive.”   

  

(iv) The Subadviser is authorized to purchase, sell, hold and generally deal in and with derivatives as set forth in the Prospectus of the Trust. The Co-Managers hereby authorize Subadviser to open accounts and execute documents, representations, warranties, indemnities and representation letters in the name of, binding against and on behalf of the Trust, including without limitation, futures account agreements and master agreements related to derivatives transactions for all purposes necessary or desirable in Subadviser’s view to effectuate Subadviser’s activities under this Agreement.  To the extent the Portfolio qualifies as a “qualified eligible person” within the meaning of the Commodity Futures Trading Commission (“CFTC”) Regulation Rule 4.7, the Co-Managers on behalf of the Portfolio consent to the Portfolio’s treatment by the Subadviser as a qualified eligible person.  

  

(v) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(vi) The Subadviser or an affiliate shall provide the Trust's custodian on each business day with information relating to all transactions concerning the Allocated Portion, and shall provide the Co-Managers with such information upon request of the Co-Managers. 

  

(vii) The Subadviser and the Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(viii) The Co-Managers acknowledge that investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others.  Manager agrees that Subadviser may give advice and take action with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Trust. It is Subadviser's policy, to the extent practicable, to allocate investment opportunities among clients over a period of time on a fair and equitable basis.  Manager recognizes that Subadviser, in effecting transactions for its various accounts, may not always be able to take or liquidate investment positions in the same security at the same time and at the same price. It is understood that Subadviser shall not have any obligations to purchase or sell, or to recommend for purchase or sale, for the Trust any security which Subadviser or its affiliates, their directors, officers, principals or employees may purchase or sell for its or their own accounts or for the account of any other client, if in the opinion of Subadviser such transaction or investment appears unsuitable, impractical or undesirable for the Trust, except as required by law. Nothing in this Agreement will in any way limit or restrict Subadviser or any of its respective officers, directors, principals, affiliates or employees from buying, selling or trading in any securities for its or their own accounts or other accounts.  Manager acknowledges and agrees that Subadviser and its affiliates may make different investment decisions with respect to each of its clients or for its own account, and that such fact shall not be relied upon by Manager or any of Manager’s agents or representatives as evidence of a breach of Subadviser 's duties hereunder. Nothing in this Agreement shall limit or restrict the right of the Subadviser, the Co-Managers, the Trust, or any of their respective directors, officers, affiliates or employees to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature.   

  

(ix) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust's portfolio or any other transactions of Trust assets. 

  

(x) Conflicts of interest may arise in the course of providing the Subadviser's services and information on the Subadviser's conflicts of interest policy may be found in the Subadviser’s FCA Disclosure Document and its current Form ADV provided to the Co-Managers. 

  

(b) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-I under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(c) The Subadviser is a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. Further, the Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of the Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) to the extent permitted by law, regulation, regulatory requirement or the Subadviser’s policy, the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

  

(d) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures designed to comply with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable federal regulations and state law and/or requirements, State Insurance Laws and applicable rules of any self-regulatory organization. 

  

(e) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably necessary to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures designed to comply with the 1940 Act, the Advisers Act, and other applicable federal laws and regulations, state law and/or requirements and State Insurance Laws. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(f) The Subadviser shall furnish to the Co-Managers copies of (i) all records prepared in connection with the performance of this Agreement and (ii) any reports prepared for external distribution in accordance with the compliance procedures maintained pursuant to paragraph 1(d) hereof as the Co-Managers may reasonably request. 

  

(g) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Allocated Portion in accordance with the Subadviser’s proxy voting policy in effect from time to time and the Subadviser will comply with such reasonable reporting and other requirements as shall be established by the Co-Managers. 

  

(h) The Subadviser agrees to provide reasonable assistance to the Co-Managers or the Trust's Custodian in determining the value of any of the Trust’s portfolio investments.   Such reasonable assistance shall include (but is not limited to): (i)  upon the request of the Co-Managers or the Trust's Custodian, assisting in obtaining bids and offers or quotes from broker/dealers or market-makers with respect to portfolio investments; and (ii) notifying the Co-Managers in the event the Subadviser has reason to believe that the price it has received for a portfolio investment held by the Allocated Portion does not appear to reflect corporate actions, news, significant events or such investment otherwise requires review to determine if fair valuation may be necessary under the Trust’s valuation procedures.  Upon reasonable request from the Co-Managers, the Subadviser shall make its employees and officers reasonably available for consultation with the valuation committee of the Trust or the Co-Managers to assist them in their valuation of the investments of the Trust as the valuation committee or the Co-Managers may request from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued.  

  

(i) The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Trust's portfolio required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(j) The Subadviser shall comply with the applicable portions of the Trust’s Documents provided to the Subadviser by the Co-Managers. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon detection of any material breach of such Trust Documents.  

  

(k) The Subadviser shall keep the Trust’s Manager informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall permit representatives of the Trust or the Co-Managers to examine reports (or summaries of the reports) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the Allocated Portion, cash requirements and cash available for investment in the Allocated Portion, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser). 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the Allocated Portion as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers’ receipt of payment from the Trust for management services described under the Management Agreement between the Trust and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers. 

  

4. Confidentiality. (a) Each party agrees that it will treat confidentially all information provided by any other party (the “Discloser”) regarding the Discloser’s businesses and operations, including without limitation the investment activities or holdings of the Allocated Portion (“Confidential Information”).  All Confidential Information provided by the Discloser shall be used only by the other party hereto (the “Recipient”) solely for the purposes of rendering services pursuant to this Agreement, and shall not be disclosed to any third party, without the prior consent of the Discloser, except for a limited number of employees, attorneys, accountants and other advisers of the Recipient and its affiliates under common control with Recipient on a need-to-know basis and solely for the purposes of rendering services under this Agreement.   

  

(b) Confidential Information shall not include any information that: (i) is public when provided or thereafter becomes public through no wrongful act of the Recipient; (ii) is demonstrably known to the Recipient prior to execution of this Agreement; (iii) is independently developed by the Recipient through no wrongful act of the Recipient in the ordinary course of business outside of this Agreement; (iv) is generally employed by the trade at the time that the Recipient learns of such information or knowledge; or (v) has been rightfully and lawfully obtained by the Recipient from any third party.  

  

(c) In the event that the Recipient is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil investigative demand or similar process, or by a governmental or regulatory agency or authority), in connection with any proceeding, to disclose any of the Discloser’s Confidential Information, the Recipient will, to the extent permitted by law, regulation or regulatory authority, give the Discloser prompt written notice of such request or requirement to allow the Discloser an opportunity to obtain a protective order or otherwise obtain assurances that confidential treatment will be accorded to such Confidential Information.  In the event that such protective order or other remedy is not obtained, disclosure shall be made of only that portion of the Confidential Information that is legally required to be disclosed.  All Confidential Information disclosed as required by law shall nonetheless continue to be deemed Confidential Information.  Notwithstanding anything to the contrary in the foregoing, no such notification shall be required in respect of any disclosure to regulatory authorities having jurisdiction over the Recipient or any of its affiliates. 

  

(d) Notwithstanding anything to the contrary in the foregoing, to the extent that any market counterparty with whom Subadviser deals requires information relating to the Portfolio or the Trust (including, but not limited to, the identity and market value of the Portfolio, or the Allocated Portion), Subadviser shall be permitted to disclose such information to the extent necessary to effect transactions on behalf of the Trust.  

  

5. The Parties’ Information Security Programs. Each party represents and warrants the following: 

  

(a)

It and its parent company have implemented and currently maintain an effective information security program (the “Information Security Program”) which includes administrative, technical, and physical safeguards and other security measures necessary to protect (i) the security and confidentiality of Confidential Information; (ii) against anticipated threats or hazards to the security or integrity of Confidential Information; and (iii) against unauthorized access to, destruction, modification, disclosure or use of Confidential Information.   

(b)

Its Information Security Program complies with applicable laws and regulations with respect to the privacy and data security of Confidential Information.  

(c)

It shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to its employees who require such access in order to provide the services under this Agreement. 

(d)

It or its parent company conducts risk assessments as it determines to be reasonably necessary to identify and assess risks to the security, confidentiality, and integrity of Confidential Information; and evaluates, where necessary, the effectiveness of its information security controls.   

(e)

In the event that it confirms unauthorized access, disclosure, or material damage to Confidential Information (each a “Security Incident”), it shall notify the other party as soon as reasonably practicable. 

(f)   It shall provide the other party with information related to its Information Security Program. 

(g)

Upon Co-Managers’ request, Subadviser will include a member(s) of its staff that is familiar with its Information Security Program in the periodic due diligence meetings with Co-Managers’ staff to provide a presentation and answer questions on its Information Security Program.  

  

6. (a) The Subadviser will not engage any third party to provide discretionary investment management services to the Allocated Portion without the express written consent of the Co-Managers.  The Subadviser may employ an affiliate or a third party to perform administrative duties such as accounting, reporting, proxy voting and other ancillary services without the prior consent of the Co-Managers. In either case, the Subadviser will act in good faith in the selection, use and monitoring of affiliates and other third parties, and any delegation or appointment hereunder shall not relieve the Subadviser of any of its obligations under this Agreement. The Subadviser agrees that it remains liable to the Co-Managers for an affiliate’s or third party’s compliance with this Agreement, applicable regulations and requirements to the same extent as if the Subadviser itself had acted or failed to act instead of the affiliate or third party. 

  

(b) Notwithstanding any other provision of the Agreement, the Subadviser: (i) may provide information about the Co-Managers and the Trust to any affiliate or any unaffiliated third party for purposes of this Section 6; and (ii) shall ensure that any affiliate or unaffiliated third party to which services have been delegated hereunder is subject to confidentiality and non-disclosure obligations that are substantially similar to the confidentiality and non-disclosure obligations to which the Subadviser is subject under this Agreement. 

  

7. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, and their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a direct result of the Co-Managers’ willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, its affiliated persons, and their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a direct result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. Neither the Co-Managers nor the Subadviser shall be liable for any special, consequential, incidental or punitive damages.
 

8. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Trust, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser.   

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a Portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated Portfolio or portion thereof shall commence as of the close of business on the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser.  The Co-Managers will commence the transition process for the delegated Portfolio or portion thereof of the Portfolio listed on Schedule A at the close of business on a date mutually agreed upon by the Co-Managers and the Subadviser and the Subadviser will become a subadviser of the Portfolio at that time. Notwithstanding anything to the contrary in the foregoing, if the Co-Managers engage a transition manager to execute purchases and sales in the delegated Portfolio or delegated portion thereof, the Subadviser will not be liable for losses caused by the default, fraud, act or omission, negligence or willful misconduct of such transition manager.   

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 277 Park Avenue, Floor 8, New York, NY 10172, Attention: Scott Moritz. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

13. The Co-Managers and the Trust each acknowledges that the Subadviser operates so as to comply with all applicable federal, state and local laws relating to the prevention of money laundering and terrorist financing. The Co-Managers and the Trust each hereby acknowledges that it or its service provider agent has policies and procedures in place designed to comply with Anti -Money Laundering (“AML”) requirements in the United States, including the Bank Secrecy Act as amended by the USA PATRIOT ACT as amended, and other applicable laws and regulations in those jurisdictions where the Co-Managers or the Trust operate, relating to the prevention of money laundering and terrorist financing (“AML Program”). The Co-Managers and the Trust each also acknowledges that it or its service provider agent has policies and procedures in place designed to comply with the prohibitions and restrictions mandated by the U.S. Treasury Department’s Office of Foreign Assets Control and all other sanctions laws and regulations applicable in the jurisdictions in which it operates. To the knowledge of the Co-Managers and the Trust, any solicitations and other activities by it or, as applicable, its service providers in connection with the Trust have been and will be conducted in accordance with such applicable AML and sanctions laws and regulations 

  

 

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS ACCOUNT DOCUMENT.
 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 

  


PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

  

Name: Timothy Cronin 

Title: Senior Vice President 

  

  

AST Investment Services, INC. 

  

By: /s/ Timothy Cronin 

  

Name: Timothy Cronin 

Title: President 

  

  

J.P. MORGAN INVESTMENT MANAGEMENT INC. 

  

By: /s/ Scott Moritz 

  

Name: Scott Moritz 

Title: Vice President 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by J.P. Morgan Investment Management Inc. (J.P. Morgan), PGIM Investments LLC and AST Investment Services, Inc. will pay J.P. Morgan a subadvisory fee on the average daily net assets managed by J.P. Morgan that is equal, on an annualized basis, to the following: 

  

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio*, ** 

  

AST Preservation Asset Allocation Portfolio 

  

Large Cap Core Sleeve: 

0.20% of average daily net assets to $500 million;  

0.18% of the next $500 million of average daily net assets; and 

0.17% of average daily net assets over $1 billion 

  

Equity Income Sleeve: 

0.34% of average daily net assets 

  

* In the event J.P. Morgan invests Trust assets in other pooled investment vehicles it manages or subadvises, J.P. Morgan will waive its subadvisory fee for the Trust in an amount equal to the acquired fund fee paid to J.P. Morgan with respect to the Trust assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to J.P. Morgan, the assets managed by J.P. Morgan in the AST Preservation Asset Allocation Portfolio will be aggregated with the assets managed by J.P. Morgan in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the Capital Growth Asset Allocation Portfolio; (iii) the AST Academic Strategies Asset Allocation Portfolio; and (iv) the AST Large-Cap Core Portfolio. 

  

  

  

  

Dated as of: May 13, 2021 

  


  

ADVANCED SERIES TRUST 

  

AST Academic Strategies Asset Allocation Portfolio
 

Subadvisory Agreement 

  

This Agreement (the “Agreement”) is made as of this 19th day of May, 2021, by and among PGIM Investments LLC (“PGIM Investments”), a New York limited liability company and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) (“ASTIS”), a Maryland corporation (together, the “Co-Managers”) on the one hand, and on the other hand each, severally, of Jennison Associates LLC, a Delaware limited liability company (“Jennison”), QMA LLC, a New Jersey limited liability company (“QMA”), and PGIM, Inc., a New Jersey Corporation (“PGIM”). Each of Jennison, QMA and PGIM shall be referred to herein as a “Subadviser.” 

  

This Agreement replaces the previous subadvisory agreement for the AST Academic Strategies Asset Allocation Portfolio.   

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the “Management Agreement”) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the “Trust”) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust;  

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desires to retain each Subadviser to provide investment advisory services to the Trust in respect of one or more of its constituent series of shares as specified in Schedule A hereto and to manage such portion of the Trust as the Co-Managers shall from time to time direct (such portion of the Trust with respect to a Subadviser, the “Allocated Assets”), and each Subadviser is willing to render such investment advisory services;  

  

NOW, THEREFORE, the Parties agree as follows: 

  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust (the “Board”), each Subadviser shall manage such Allocated Assets as are delegated to such Subadviser by the Co-Managers from time to time, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions applicable to such Allocated Assets as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings: 


(i) Each Subadviser shall provide advice, management and supervision with respect to its Allocated Assets, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash.  The Co-Managers may, from time to time, allocate and reallocate the Trust’s assets among the Subadvisers.  In addition, the Co-Managers may determine not to allocate any portion of the Trust’s assets to a Subadviser for a period of time during the term of this Agreement.  A Subadviser’s responsibilities for providing investment advisory services to the Trust shall be limited solely to its Allocated Assets. 

  

(ii) In the performance of its duties and obligations under this Agreement, each Subadviser shall (A) act in conformity with the the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, and the Prospectus, as provided to it by the Co-Managers (collectively, the “Trust Documents”), and with the instructions and directions of the Co-Managers or the Board; (B) reasonably co-operate with the Co-Managers's (or its designees') personnel responsible for monitoring the Trust's compliance; and (C) conform to, and comply with, the material requirements of all applicable federal and state laws and regulations, including but not limited to the 1940 Act and the Commodity Exchange Act of 1936, as amended (the “CEA

”). In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required by the Securities and Exchange Commission (the “Commission”). The Co-Managers shall provide each Subadviser timely with copies of any updated Trust Documents. 

  

(iii) Each Subadviser, with respect to its Allocated Assets, shall determine the securities, funds, futures contracts and other instruments to be purchased or sold, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with such Subadviser (collectively, “Brokers”), as such Subadviser may determine.  In selecting brokers, dealers or futures commissions merchants with which to execute portfolio transactions, it is recognized that a Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, a Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. Each Subadviser shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with such Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of such Subadviser with respect to the Trust and other accounts as to which it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. On occasions when a Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of such Subadviser, such Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by such Subadviser in the manner such Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.  Each Subadviser may execute on behalf of the Trust certain agreements, instruments and documents in connection with the services performed by it under this Agreement. These may include, without limitation, brokerage agreements, clearing agreements, account documentation, futures and options agreements, swap agreements, other investment-related agreements, and any other agreements, documents or instruments the Subadviser believes are appropriate or desirable in performing its duties under this Agreement.  

  

(iv) Each Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Board such periodic and special reports as the Board may reasonably request. Each Subadviser shall make reasonably available its employees and officers for consultation with any of the members of the Board or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, to assist in the valuation of the Trust's securities. 

  

(v) Each Subadviser or an affiliate shall provide to the Trust’s custodian (the “Custodian”) on each business day with such information relating to its Allocated Assets as the Custodian may reasonably requet, and shall provide the Co-Managers with such information upon request of the Co-Managers. 

  

(vi) The investment management services provided by each Subadviser hereunder are not to be deemed exclusive, and each Subadviser shall be free to render similar services to others. Conversely, each Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "Co-Managers-of-Co-Managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadvisers through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Board as to whether the contract with one or more Subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Board regarding the results of its evaluation and monitoring functions. Each Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) Each Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-10, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and each Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust, including any Subadviser, with respect to transactions in securities for the Trust's portfolio or any other transactions involving Trust assets. 

  

(b) Each Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as members of the Board or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by each Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) Each Subadviser shall keep the Trust's books and records required to be maintained by such Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to such Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. Each Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and each Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that such Subadviser may retain a copy of such records. Each Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 


(d) Each Subadviser is, to the extent required by applicable law, a commodity trading advisor (“CTA”) duly registered with the Commodity Futures Trading Commission (the “CFTC”) and is a member in good standing of the National Futures Association (the “NFA”); provided, for the avoidance of doubt, that, as of the date of this Agreement, Jennison is neither a registered CTA nor a member of the NFA. Each Subadviser shall maintain such registration and membership in good standing, or compliance with applicable requirements for exemption therefrom, during the term of this Agreement. Further, each Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of such Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of such Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

  

(e) In connection with its duties under this Agreement, each Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with all state and federal regulations, and the rules of any self-regulatory organization applicable to it including, for example, the 1940 Act, the CEA, and the Investment Advisers Act of 1940 (the “Advisers Act”), as amended. 

  

(f) Each Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with (i) the performance of this Agreement and (ii) the maintenance of compliance procedures pursuant to paragraph 1(e) hereof as the Co-Managers may reasonably request. 

  

(g) Each Subadviser shall maintain a written code of ethics (the “Code of Ethics”) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably designed  to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. Each Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, each Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(h) Each Subadviser shall be responsible for the voting of all shareholder

proxies with respect to the investments and securities held in its Allocated Assets, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers.  Each Subadviser shall vote such proxies in accordance with its internal proxy voting policy. 

  

(i) Pursuant to the delegation of fair valuation of the Trust’s securities to the Co-Managers by the Board, the valuation committee of the Co-Managers shall have primary responsibility for valuation of the Trust’s assets. The Co-Managers represents and warrants to each Subadviser that such delegation of valuation responsibility complies with applicable law.  Upon reasonable request from the Co-Managers, each Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including being reasonably available to consult with the valuation committee of the Trust and the Co-Managers and making available information as to which the Subadviser has knowledge related to the investments being valued;  provided, however, that the valuation committee of the Co-Managers shall retain primary day-to-day responsibility for valuation of the Trust’s assets.  In addition, each Subadviser will use its reasonable efforts to promptly notify the Co-Managers in the event that such Subadviser becomes aware that the Trust is carrying a security in such Subadviser’s Allocated Assets at a value that such Subadviser believes does not fairly represent the price that could be obtained for the security in a current market transaction. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review each Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Custodian to provide) timely information to each Subadviser regarding the composition of assets in the Subadviser’s Allocated Assets, cash requirements and cash available for investment in such Allocated Assets, and all other information as may be reasonably necessary for such Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board that affect the duties of such Subadviser). 

  

3. In consideration of the services provided pursuant to this Agreement, the Co-Managers shall pay each Subadviser as full compensation a fee equal to the average of the net asset value of the Allocated Assets determined each day during the preceding month multiplied by the annual rate set forth on the attached Schedule A. Liability for payment of compensation by the Co-Managers to each Subadviser under this Agreement is contingent upon the Co-Managers's receipt of payment from the Trust for management services described under the Management Agreement. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by a Subadviser, shall not cause a reduction in the amount of the payment to such Subadviser by the Co-Managers. 

  

4. (a) Each Subadviser acknowledges that, in the course of its engagement by the Co-Managers, a Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conducts business in relation to services provided to the Trust by the Subadviser.  Such information, with respect to a Subadviser which knows or should know is confidential, is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’s business and other proprietary information, written or oral as it relates to services provided to the Trust by the Subadviser. 

  

(b)

Each Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures designed to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Managers, or to any person who may be identified by Confidential Information.  Each Subadviser shall promptly and without unreasonable delay, but in no event more than 48 hours of learning of a material breach of this Section, notify the Co-Managers if such Subadviser is in material breach of this Section.  At the Co-Managers’s request, the Subadviser shall certify in writing to the Co-Managers, its compliance with the terms of this Section. 

  

(c)

Each Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

Each Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in such Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser shall not alter or modify its Information Security Program in such a way that will weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Information Security Program shall include, without limitation: (i) access controls to prevent the unauthorized or inappropriate use of Confidential Information; (ii) periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and (iii) regular penetration and vulnerability testing of its information technology infrastructure and networks. 

  

(f)

The Subadviser shall notify the Co-Managers, promptly and without unreasonable delay, but in no event more than 48 hours of learning of any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to Confidential Information may have occurred (each, a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Co-Managers full details of the Security Incident; (ii) assist and cooperate with the Co-Managers and the Co-Managers’s designated representatives in the Co-Managers’s investigation of the Subadviser, employees or third parties related to the Security Incident, which may include requests for all relevant records, logs, files, and data; (iii) cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co-Managers’s rights; and  (iv) take appropriate action to prevent a recurrence of any Security Incident. 

  

(g)

Upon the Co-Managers’s reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(h)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice, reasonable assistance and cooperation of the Subadviser’s relevant staff.   

  

(i)

Notwithstanding any obligations set forth in this Agreement (including this section 4), the Co-Managers acknowledge and agree that the Subadvisers shall not be required to share any privileged or confidential information, proprietary data, quantitative models and similar information with the Co-Managers.  

  

5. No Subadviser will engage any third party to provide services with respect to its Allocated Assets without the express written consent of the Co-Managers.  To the extent that each Subadviser receives approval from the Co-Managers to engage a third-party service provider, the Subadviser assumes all responsibility for any action or inaction of the service provider as it related to its Allocated Assets.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and its directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) which arise out of or relate to the provision of services provided by any such service provider.  For the avoidance of doubt, none of the Custodian or any party with or through whom a Subadviser trades shall be deemed to be an agent engaged by Subadviser for purposes of this section 5. 

  

6.

Each Subadviser assumes no responsibility under this Agreement other than to render the services to be provided by such Subadviser hereunder in good faith.  No Subadviser shall be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on such Subadviser's part in the performance of its duties hereunder or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against such Subadviser under federal or state securities laws. The Co-Managers shall indemnify each Subadviser, its respective affiliated persons, officers, directors, and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Co-Managers's willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. Each Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of such Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for an initial term of one year from the date hereof and such term shall extend automatically each year thereafter for subsequent one-year terms; provided that each annual extension is subject to approval by the Board; and, provided further that this Agreement may be terminated (a) without the payment of any penalty, by the Board or by vote of a majority of the outstanding voting securities of the Trust as provided in the 1940 Act, or (b) by the Co-Managers or by a Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. Termination of this Agreement by a Subadviser shall terminate this Agreement only with respect to such Subadviser and the Agreement shall otherwise continue in full force and effect. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. Each Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of such Subadviser. 

  

To the extent that the Co-Managers delegate to a Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, such Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser, provided however, that if a party other than the Subadviser is engaged to transition the portfolio to the Subadviser’s strategy (a “Transition Co-Managers”), Subadviser shall have no responsibilities under Sections 1(a)(iii) and (v) until such time as the portfolio is released to the Subadviser for trading. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to a Subadviser at the address set forth beneath its signature below. 


8. Nothing in this Agreement shall limit or restrict the right of any of a Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict a Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or

the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

13. This Agreement, including Schedule A hereto, embodies the entire agreement and understanding among the parties hereto, and supersedes all prior agreements and understandings relating to the subject matter hereof.  Should any part of this Agreement be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement should not be affected thereby.  This Agreement shall be binding on and inure to the benefits of the parties hereto and their respective successors. 

  

14. The obligations of each Subadviser hereunder are several and not joint. Each Subadviser shall be liable only for its own obligations hereunder.  No Subadviser shall be a guarantor of or jointly liable for the obligations of any other Subadviser.  No Subadviser shall have any interest in the performance of, or remedy against, any other Subadviser in connection herewith. 

 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
 

  

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

Name: Timothy S. Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

By:  /s/ Timothy Cronin 

Name:  Timothy S. Cronin 

Title:  President 

  

  

JENNISON ASSOCIATES LLC 

  

By: /s/ William C. Ings 

Name: William C. Ings 

Title: Managing Director 

  

Address for Notices:  

Jennison Associates LLC 

477 Lexington Avenue, New York, NY 10017 

Attention: Secretary (with a copy to Jennison’s Chief Legal Officer). 

  

  

PGIM, INC. 

  

By: /s/ Daniel Malooly 

Name: Daniel Malooly 

Title: Vice President 

  

Address for Notices:  

PGIM, Inc. (PGIM Fixed Income)  

655 Broad Street 

Newark, NJ 07102  

Attention: Chief Legal Officer 

Fax: 973-802-6834 

  

For changes to guidelines and related communications: 

PGIM, Inc. 

655 Broad Street, 8th Floor 

Newark, NJ 07102 

Attention: Client Services Team 

E-mail: pgim_client_services@pgim.com 

  

  

  

  

 

PGIM, INC. 

  

By: /s/ Rick Romano 

Name: Rick Romano 

Title: Managing Director 

  

Address for Notices: 

PGIM, Inc. (PGIM Real Estate) 

7 Giralda Farms, Madison, New Jersey 07940 

  

QMA LLC 

  

By: /s/ Stephen Brundage 

Name: Stephen Brundage 

Title: Vice President 

  

Address for Notices:  

QMA LLC 

Gateway Center Two 

100 Mulberry Street, Newark, NJ 07102 

Attention: Secretary (with a copy to QMA LLC’s Chief Legal Officer) 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by each Subadviser, acting severally and not jointly, PGIM Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay each Subadviser a subadvisory fee on the net assets managed by such Subadviser that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadviser 

Subadvisory Fee for the Portfolio* 

  

AST Academic Strategies Asset Allocation Portfolio 

  

Jennison Associates LLC**  

0.35% of average daily net assets to $100 million;  

0.30% of the next $100 million of average daily net assets; 

0.275% of the next $300 million of average daily net assets; 

0.25% of the next $2.5 billion of average daily net assets;  

0.23% of average daily net assets over $3 billion 

PGIM Fixed Income, a business unit of PGIM, Inc.***+ 

  

0.17% of average daily net assets to $750 million;  

0.16% of the next $750 million of average daily net assets;  

0.14% of average daily net assets over $1.5 billion 

PGIM Real Estate, a business unit of PGIM, Inc. 

  

0.38% of average daily net assets 

QMA LLC# 

For Asset Allocation Services 

0.075% of average daily net assets 

  

For Quantitative Equity and Overlay Management (including the overlay sleeve): 

0.32% of average daily net assets to $1 billion;  

0.27% of average daily net assets on next $5 billion;  

0.245% of average daily net assets over $6 billion 

* In the event a Subadviser invests its Allocated Assets in any other pooled investment vehicle it manages or subadvises, such Subadviser will waive its subadvisory fee hereunder in an amount equal to the acquired fund fee paid to a Subadviser with respect to the Allocated Assets so invested.  Notwithstanding the foregoing, under no circumstances will the subadvisory fee waivers referred to in the preceding sentence exceed 100% of the subadvisory fee. 

  

** The subadvisory assets managed by Jennison under the AST Academic Strategies Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to Jennison, the average daily net assets in each underlying sleeve will be combined. 

  

For purposes of calculating the advisory fee payable to Jennison, the fee percentage applicable to the Allocated Assets will be a single blended rate determined in accordance with the schedule set forth above.  For purposes of determining this rate, the average daily net assets shall be the aggregate of the Allocated Assets together with the assets managed by Jennison in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; (iii) the AST Preservation Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.  

  

*** The subadvisory assets managed by PGIM Fixed Income under the AST Academic Strategies Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to PGIM Fixed Income, the average daily net assets in each underlying sleeve will be combined. 

For purposes of calculating the advisory fee payable to PGIM Fixed Income, the assets managed by PGIM Fixed Income in the AST Academic Strategies Asset Allocation Portfolio will be aggregated with the assets managed by PGIM Fixed Income in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; (iii) the AST Preservation Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio. 

  

+ PGIM maintains a delegation agreement with PGIM Limited, an affiliated investment manager of PGIM that is authorized and regulated in the United Kingdom by the Financial Conduct Authority and registered with the US Securities and Exchange Commission under the Advisers Act and a portion of the subadvisory fee payable to PGIM as subadviser may be payable to PGIM Limited as a sub-subadviser under this Agreement. 

  

# The subadvisory assets managed by QMA under the AST Academic Strategies Asset Allocation Portfolio are comprised of underlying sleeves.  For purposes of calculating the subadvisory fee payable to QMA, not including asset allocation services, the average daily net assets in each underlying sleeve will be combined.  The fee percentage applicable to the Allocated Assets will be a single blended rate determined in accordance with the schedule set forth above 

  

For purposes of calculating the advisory fee payable to QMA, not including the asset allocation services, the assets managed by QMA in the AST Academic Strategies Asset Allocation Portfolio will be aggregated with the assets managed by QMA in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the AST Capital Growth Asset Allocation Portfolio; (iii) the AST Preservation Asset Allocation Portfolio; and (iv) the AST Prudential Growth Allocation Portfolio.   

  

  

Dated as of:  May 19, 2021  

1 

  


Execution Version 

ADVANCED SERIES TRUST 

  

AST Academic Strategies Asset Allocation Portfolio
 

  

SUBADVISORY AGREEMENT 

  

Agreement made as of this 19th day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (ASTIS), a Maryland corporation (together, the Co-Managers), and Massachusetts Financial Services Company (d/b/a MFS Investment Management), a Delaware corporation (MFS or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust; and 

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct, and the Subadviser is willing to render such investment advisory services; and 

  

NOW, THEREFORE, the Parties agree as follows: 

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of such portion of the Trust's investments as the Co-Managers shall direct, and the Subadviser shall have discretion to determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash. 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and any procedures adopted by the Board applicable to the services provided by the Subadviser hereunder including any amendments to those procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust's compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, each as applicable to the services provided by the Subadviser hereunder and all other applicable federal and state laws and regulations (collectively, "Applicable Law"). Subject to the Co-Managers' oversight, Subadviser shall monitor compliance with Applicable Law based on Subadviser's books and records and, to the extent provided, information provided by the Co-Managers and/or the Trust's Custodian. In connection therewith, the Subadviser shall be responsible for the preparation and filing of Schedule l3G and Form 13-F reflecting the Trust's securities holdings unless otherwise directed in writing by the Co-Managers. The Subadviser shall not be responsible for the preparation or filing of any other reports required of the Trust by any governmental or regulatory agency, except as expressly agreed to in writing. The Co-Managers shall provide Subadviser with timely copies of any updated Trust Documents. Until the Co-Managers or the Trust delivers any Trust Document regarding the management of the Trust or the Subadviser's duties hereunder to the Subadviser, the Subdviser shall not be liable and shall be fully protected in relying on any previously delivered document sent by the Co-Managers or the Trust to the Subadviser. 

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by such portion of the Trust's portfolio, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants (including, but not limited to, any person or entity affiliated with the Co-Managers or the Subadviser) (collectively, Brokers), to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. The Co-Managers (or the Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission.  

  

The Subadviser may execute account documentation, agreements, contracts and other documents requested by brokers, dealers, counterparties and other persons in connection with its management of the assets of the Trust, including, without limitation, transaction term sheets and confirmations, certifications regarding the Trust's status as an accredited investor, qualified institutional buyer or qualified purchaser and certifications regarding other factual matters as may be requested by brokers, dealers or counterparties in connection with the Subadviser’s management of the Trust's assets.  

  

On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.
 

(iv) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act as applicable to the Subadviser, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(v) The Subadviser or an affiliate shall provide the Trust's custodian on each business day with information relating to all transactions concerning the portion of the Trust's assets it manages, and shall provide the Co-Managers with such information upon request of the Co-Managers.  The parties acknowledge and agree that the Subadviser is not a custodian of the Trust assets and will not take possession or custody of such assets. 

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust's portfolio or any other transactions of Trust assets.
 

(b) The Subadviser shall, to the extent permitted by its Code of Ethics and other applicable internal policies and procedures, authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(d) The Co-Managers acknowledge that Subadviser is registered with the Commodity Futures Trading Commission (“CFTC”) and National Futures Association (the “NFA”) as a commodity trading advisor and that Subadviser will provide commodity trading advice to the Trust as if Subadviser were exempt from registration as a commodity trading advisor. The Subadviser represents that it shall provide commodity trading advice to the Trust in a manner consistent with any applicable duties and obligations, as set forth in the Commodity Exchange Act of 1936, as amended (the “CEA”), and all rules and regulations promulgated thereunder. The Co-Managers represent and warrant that they are excluded from the definition of commodity pool operator pursuant to CFTC Regulation 4.5 with respect to the Trust, and the Co-Managers have timely filed a notice of eligibility as required by CFTC Regulation 4.5 with respect to the Trust and will, during the term of this Agreement, maintain and reaffirm such notice of eligibility as required by CFTC Regulation 4.5.   

  

(e) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, each as applicable to the services provided by the Subadviser hereunder and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

  

(f) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably necessary to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures designed to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(g) The Subadviser shall furnish to the Co-Managers copies of all records prepared in connection with this Agreement, including but not limited to such monthly, quarterly, or annual reports concerning the Subadviser's transactions with respect to the investments and securities held in the Trust's portfolio and the performance of the Trust's portfolio as well as the compliance procedures pursuant to paragraph 1(d) hereof as the Co-Managers may reasonably request. 

  

(h) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Trust's portfolio in accordance with the Subadviser's proxy voting policies and procedures, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers. It shall be the sole responsibility of the Co-Managers to process and file any claim forms or other documentation relating to any securities class action or other litigation on behalf of the Trust; however, upon reasonable request, Subadviser will cooperate with the Co-Managers to the extent necessary for the Co-Managers to pursue or participate in any such action.  The Subadviser shall not have the obligation to commence or defend lawsuits or other legal actions on behalf of the Co-Managers or the Trust brought by or against third parties, including lawsuits and legal actions brought by or against the Co-Managers or the Trust relating to securities purchased by the Trust. Notwithstanding the foregoing, the Subadviser shall have the authority but no obligation to participate in any in-court or out-of-court workouts, restructurings, or bankruptcies involving securities held by the Trust during the term of the Agreement on behalf of the Co-Managers or the Trust and take any and all actions in connection therewith that the Subadviser in its discretion deems necessary or appropriate.  

  

(i) The Subadviser agrees to use reasonable efforts (i) to monitor whether market quotations are readily available for the Trust's portfolio investments and whether those market quotations are reliable for purposes of internally valuing the Trust's portfolio investments and determining the Trust's net asset value per share; and (ii) to promptly notify the Co-Managers upon the occurrence of any significant event with respect to any of the Trust's portfolio investments in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff, in conformity with the Trust's valuation procedures. Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued.  The Co-Managers and the Trust acknowledge and agree that (i) the Subadviser is not the Trust's pricing agent and shall not be deemed a substitute for any independent pricing agent and/or valuation committee of the Trust pursuant to the Trust's Fair Valuation Policies and Procedures; and (ii) none of the information which the Subadviser provides the Co-Managers hereunder shall be deemed to be the official books and records of the Fund for tax, accounting or any other purposes.   

  

(j) The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Trust's portfolio required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information regarding the Subadviser or the services provided by Subadviser hereunder that has been provided by the Subadviser to the Co-Managers for inclusion in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(k) The Subadviser shall comply with the Trust’s Documents provided to the Subadviser by the Co-Managers. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon determination of any material breach of such Trust Documents.  

  

(l) The Subadviser shall keep the Trust’s Co-Managers informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written reasonable request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall respond to such requests for information as to such reports (e.g., provide summaries of such reports with personal information redacted and subject in all cases to privacy and confidentiality obligations and to the extent the Subadviser is not prohibited from doing so under applicable law) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the portion of the Trust managed by the Subadviser, cash requirements and cash available for investment in such portion of the Trust, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser).  The Co-Managers shall provide on an on-going basis a list of all affiliates of the Co-Managers and the Trust, including publicly traded affiliates of the Co-Managers that may not be purchased by the Fund (such list shall include security name, cusip number, sedol and/or applicable ticker) and a list of all brokers and underwriters affiliated with the Co-Managers for reporting transactions under applicable provisions of the 1940 Act.  The Co-Managers represent and warrant that the Trust (i) is a qualified institutional buyer as that term is defined in Rule 144A under the Securities Act of 1033, as amended, and (ii) is not a "restricted person" under Rule 5130 and Rule 5131 of the Financial Industry Regulatory Authority, Inc. ("FINRA") and thus the Trust is not prohibited from participating in the allocation of initial public offerings of equity securities offered by FINRA members.  The Co-Managers agree to promptly notify the Subadviser if any of the foregoing representations ceases to be true or correct.   

  

The Co-Managers hereby acknowledge receipt of the Subadviser's most recent Form ADV Part 2A and relevant Form ADV Part(s) 2B.  Co-Managers hereby consent to electronic delivery of Subadviser's Form ADV and any Form ADV amendments and/or annual updates provided by the Subadviser to the Co-Managers as required by applicable law. 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers' receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers.  

  

4. (a) Each party acknowledges that, in the course of dealing, it may receive or have access to confidential and proprietary information (including, without limitation, the Trust’s portfolio holdings) of the other party or third parties with whom the Co-Managers conducts business.  Such information is collectively referred to as “Confidential Information.”  Each party agrees that it shall treat Confidential Information of the other party as confidential and shall not use such Confidential Information or disclose such Confidential Information to third parties, except to the extent necessary for the purposes of rendering services or performing the obligations pursuant to this Agreement or as required by applicable law, rule or regulation or as otherwise expressly agreed to in writing by the parties.   

  

(b)

The Subadviser further certifies that (i) its treatment of Confidential Information is in compliance in all material respects with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures designed to seek to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm or inconvenience to the Co-Managers, or to any person who may be identified by Confidential Information.  The Subadviser shall immediately notify the Co-Managers if the Subadviser is in material breach of this Section 4(b).  At the Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section 4(b). 

  

(c)

The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that will represent a departure from industry standards. 

  

(e)

The Subadviser shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to the minimum number of the Subadviser’s employees and/or agents who require such access in order to provide the services to the Co-Managers. 

  

(f)

The Subadviser shall conduct periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and evaluate and improve, where necessary, the effectiveness of its information security controls.  Such assessments will also consider the Subadviser’s compliance with its Information Security Program and the laws applicable to the Subadviser. 

  

(g)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.  If any testing detects any anomalies, intrusions, or vulnerabilities in any information technology systems processing, storing or transmitting any of the Trust’s and/or Co-Managers’ Confidential Information and any of the Trust's and/or the Co-Managers' Confidential Information has been determined to have been subject to unauthorized disclosure, the Subadviser shall promptly report those findings to the Co-Managers. 

  

(h)

The Subadviser shall notify the Co-Managers, promptly and without unreasonable delay, but in no event more than 48 hours of learning of any unauthorized access or disclosure, unauthorized, unlawful or accidental loss, misuse, destruction, acquisition of, or damage to the Trust's or Co-Managers' Confidential Information that has occurred (a “Security Incident”). Thereafter, the Subadviser shall: (i) promptly furnish to the Co-Managers a summary of the Security Incident; (ii) assist communicate, and cooperate with the Co-Managers and the Co-Managers’ designated representatives throughout the investigation of the Security Incident.  The Subadviser will make appropripate personnel of Subadviser available to the designated representatives of the Co-Managers to discuss the matter, and shall cooperate with the Co-Managers in any litigation or other formal action against third parties deemed necessary by the Co-Managers to protect the Co-Managers’ rights; and  (iii) take appropriate action to seek to prevent a recurrence of such Security Incident. 

  

(i)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

(j)

For the purpose of auditing the Subadviser’s compliance with this Section, the Subadviser shall provide to the Co-Managers, on reasonable notice: (a) reasonable assistance and cooperation of the Subadviser’s relevant staff who can provide information concerning Subadviser's information processing premises and records; and (b) reasonable facilities at the Subadviser’s premises.   

  

5. The Subadviser will not engage any third party to provide advisory services ("Service Provider") to the portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers.  To the extent that the Subadviser receives approval from the Co-Managers to engage a Service Provider, the Subadviser assumes all responsibility for any action or inaction of the Service Provider as it relates to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.  In addition, the Subadviser shall fully indemnify, hold harmless, and defend the Co-Managers and its directors, officers, employees, agents, and affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs, and expenses (including but not limited to reasonable attorney’s fees and costs) as a result of any action or inaction of the Service Provider as it relates to the Trust's portfolio as delegated to the Subadviser by the Co-Managers.   

  

6. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser. 

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser. The Subadviser’s duties and obligations hereunder shall not begin prior to the effective date of the termination of the previously named subadviser in the Trust’s registration statement disclosure. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at Massachusetts Financial Services Company, 111 Huntington Avenue, Boston, MA 02199, Attention: Legal Department, with a copy to the following e-mail address: InstitutionalClientService@mfs.com. 

  

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

  

  

  

  

  

  

 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 


 

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

Name: Timothy S. Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

By:  /s/ Timothy Cronin 

Name:  Timothy S. Cronin 

Title:  President 

  

  

MASSACHUSETTS FINANCIAL SERVICES COMPANY D/B/A MFS INVESTMENT MANAGEMENT 

  

By: /s/ Carol Geremia 

Name: Carol Geremia 

Title: President 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by Massachusetts Financial Services Company d/b/a MFS Investment Management (MFS), PGIM Investments LLC and AST Investment Services, Inc. will pay MFS a subadvisory fee on the net assets managed by MFS that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio*, ** 

  

  

AST Academic Strategies Asset Allocation Portfolio  

  

0.30% of average daily net assets to $100 million;  

0.285% of the next $150 million of average daily net assets; 

0.27% of the next $250 million of average daily net assets; 

0.25% of average daily net assets over $500 million 

  

  

* In the event MFS invests Portfolio assets in other pooled investment vehicles it manages or subadvises, MFS will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to MFS with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to MFS, the assets managed by MFS in the AST Academic Strategies Asset Allocation Portfolio will be aggregated with the assets managed by MFS in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the Capital Growth Asset Allocation Portfolio; and (iii) the AST Preservation Asset Allocation Portfolio. 

  

  

Dated as of:  May 19, 2021 

  


Execution Ready 

  

ADVANCED SERIES TRUST 

  

AST Academic Strategies Asset Allocation Portfolio
 

SUBADVISORY AGREEMENT 

  

Agreement made as of this 14 day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) (ASTIS), a Maryland corporation (together, the Co-Managers), and Wellington Management Company LLP, a Delaware limited liability partnership (Wellington Management or the Subadviser), 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and ASTIS act as Co-Managers of the Trust; and
 

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct (the “Account”), and the Subadviser is willing to render such investment advisory services; and
 

NOW, THEREFORE, the Parties agree as follows: 

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage the Account as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of the Account as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash and shall have full power and authority to act on behalf of the Trust with respect to the purchase, sale, exchange, conversion or other transactions in any and all stocks, bonds, other securities cash or currencies, and other Account assets. The Subadviser, upon written consent by the Co-Managers, may engage any of its affiliates to assist it with providing its services under this Agreement (including affiliates outside of the United States), provided that the Subadviser will remain responsible for the performance of its obligations under the Agreement and  shall be   responsible to the Co-Managers for the acts and omissions of any affiliate  to the same extent   as it is for its own acts and omissions . 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust's valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust's compliance and, as applicable, will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, and all other applicable federal and state laws and regulations. In connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be, required of Subadviser by the Securities and Exchange Commission (the Commission). The Co-Managers shall provide the Subadviser timely with copies of any updated Trust Documents. The Subadviser shall have a reasonable period to comply with instructions and/or bring the Account into compliance with any changes to the Trust Documents. The Co-Managers covenant that any instructions or modifications to Trust Documents shall be consistent with the provisions of law, regulatory policies and organizational documents applicable to the Trust.  

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by the Account , as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with the Subadviser (collectively, Brokers), to carry out the policy with respect to brokerage as set forth in the Trust's Prospectus or as the Board of Trustees may direct in writing from time to time.  The Subadviser’s broker selection shall be conducted in accordance with its Policies and Procedures on Order Execution, as may be amended from time to time. In providing the Trust with investment supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility, research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a party. The Subadviser shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Subadviser with respect to the Trust and other accounts as to which it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission. On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable over time and consistent with its fiduciary obligations to the Trust and to such other clients. 

  

(iv) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(v) The Subadviser or an affiliate shall provide the Trust's custodian (“Custodian”) on each business day with information relating to all transactions concerning the Account, and shall provide the Co-Managers with such information upon request of the Co-Managers. All transactions will be consummated by payment to, or delivery by the Custodian, of all cash and/or securities due to or from the Account according to local market settlement conventions. The Subadviser shall not act as custodian for the Account.  Notwithstanding any other provision in this Agreement, the Subadviser shall not hold, directly or indirectly, funds or securities contained in the Account or have any authority to obtain possession of them.   

  

(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Account or any other transactions of Trust assets.
 

(b) The Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as Trustees or officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of such directors, officers or employees. 

  

(c) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(d) The Subadviser is a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. The Co-Managers acknowledge that Subadviser, while registered, may rely on exemptions from registration as to some accounts it advises including the Account, upon written notice to Co-Managers. Further, the Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of the Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) the institution of an action or proceeding that could reasonably lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target that is material to Subadviser’s ability to perform investment management services pursuant to this Agreement. 

  

(e) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures reasonably designed to ensure its compliance with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable state and federal regulations, and applicable rules of any self-regulatory organization. 

  

(f) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably designed to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures reasonably designed to ensure its compliance with the 1940 Act, the Advisers Act, and other applicable federal and state laws and regulations. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(g)The Subadviser will notify the Co-Managers of any additions to or withdrawals of corporate partners of the Subadviser within a reasonable time after such additions or withdrawals. 

  

(i) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Account , subject to such reasonable reporting and other requirements as shall be established by the Co-Managers and shall vote such proxies in accordance with Subadviser’s Global Proxy Voting Policies and Procedures, as may be amended from time to time.  The Co-Managers authorize the Subadviser to instruct the Custodian to forward promptly to the Subadviser copies of all proxies and shareholder communications relating to proxy votes involving securities held in the Account (other than materials relating to legal proceedings.) The Co-Managers and the Trust agree that Subadviser will not be responsible or liable for failing to vote any proxies where it has not received the proxies or related shareholder communications in a timely manner. 

  

(j) The Subadviser will not compile or file claims or take any related actions on behalf of the Trust in any class action, bankruptcy or other legal proceeding related to securities currently or previously held in the Account. Subadviser shall provide reasonable assistance as the Trust or Co-Managers may reasonably request in any matter relating to legal proceedings relating to  the investments and securities held in the Account that Subadviser supervises.  Such assistance, will include, but will not be limited to, providing necessary data in the possession of Subadviser relating to the Account, assisting with interrogatories, and if necessary, providing testimony.   

  

(k) The Subadviser acknowledges that it is responsible for evaluating whether market quotations are readily available for the Trust's portfolio investments and whether those market quotations are reliable for purposes of valuing the Trust's portfolio investments and determining the Trust's net asset value per share and promptly notifying the Co-Managers upon the occurrence of any significant event with respect to any of the Trust's portfolio investments in accordance with the requirements of the 1940 Act and any related written guidance from the Commission and the Commission staff. Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the Trust or the Co-Managers in valuing investments of the Trust as may be required from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued. The Co-Managers acknowledge that the Subadviser is not the official pricing agent with respect to the Trust’s portfolio investments.  

  

(l)

The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Account required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(m) The Subadviser shall comply with the provisions of the Trust’s Documents provided to the Subadviser by the Co-Managers that are applicable to the Subadviser. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon detection of any material breach of such Trust Documents.  

  

(n) The Subadviser shall keep the Trust’s Co-Managers informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall permit representatives of the Trust or the Co-Manager to examine reports (or summaries of the reports) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the Account managed by the Subadviser, cash requirements and cash available for investment in the Account, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser). 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers' receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers. 

  

4. (a) The Subadviser acknowledges that, in the course of its engagement by the Co-Managers, the Subadviser may receive or have access to confidential and proprietary information of the Co-Managers or third parties with whom the Co-Managers conducts business.  Such information is collectively referred to as “Confidential Information.”  Confidential Information includes the Co-Managers’ business and other proprietary information, written or oral. 

  

(b) The Subadviser certifies that (i) its treatment of Confidential Information is in compliance with applicable laws and regulations with respect to privacy and data security, and (ii) it has implemented and currently maintains an effective written information security program (“Information Security Program”) including administrative, technical, and physical safeguards and other security measures intended to (a) ensure the security and confidentiality of Confidential Information; (b) protect against any anticipated threats or hazards to the security or integrity of Confidential Information; and (c) protect against unauthorized access to, destruction, modification, disclosure or use of Confidential Information that could result in substantial harm to the Co-Managers, or to any person who may be identified by Confidential Information.  The Subadviser shall notify the Co-Managers as soon as practicable if the Subadviser is in material breach of this Section.  At the Co-Manager’s request, the Subadviser agrees to certify in writing to the Manager, its compliance with the terms of this Section. For the avoidance of doubt, Subadviser may disclose Confidential Information where disclosure is required or permitted by law or requested by any governmental or regulatory authority that may have jurisdiction over either party,  provided that 

 the  Subadviser gives the Co-Managers prompt written notice of such requirement prior to such disclosure  , to the extent feasible and permitted by law,   and assistance in obtaining an order protecting the information from public disclosure   as necessary  .   

The Co-Managers and Trust agree not to make use of the investment decisions or recommendations of the Subadviser, other than with respect to the Account, without the prior written consent of the Subadviser. In addition, the Co-Manager and the Trust shall use its best efforts to ensure that any of its agents or affiliates who may gain access to the investment decisions or recommendations of the Subadviser shall be made aware of its proprietary nature and shall likewise treat it as confidential. 

  

(c) The Subadviser shall notify the Co-Managers or its agents of its designated primary security manager.  The security manager will be responsible for managing and coordinating the performance of the Subadviser’s obligations set forth in its Information Security Program and this Agreement. 

  

(d)

The Subadviser shall review and, as appropriate, revise its Information Security Program at least annually or whenever there is a material change in the Subadviser’s business practices that may reasonably affect the security, confidentiality or integrity of Confidential Information.  During the course of providing the services, the Subadviser may not alter or modify its Information Security Program in such a way that could reasonably be foreseen to weaken or compromise the security, confidentiality, or integrity of Confidential Information. 

  

(e)

The Subadviser shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to the minimum number of the Subadviser’s roles which require such access in order to provide the services to the Co-Managers. 

  

(f)

The Subadviser shall conduct periodic risk assessments to identify and assess reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of Confidential Information; and evaluate and improve, where necessary, the effectiveness of its information security controls.  Such assessments will also consider the Subadviser’s compliance with its Information Security Program and the laws applicable to the Subadviser. 

  

(g)

The Subadviser shall conduct regular penetration and vulnerability testing of its information technology infrastructure and networks.   

  

(h)

Except with respect to applicable legal prohibitions and compliance with requests from law enforcement, Subadviser confirms that upon any potential or actual known security breach Subadviser will: 

  

4.

promptly investigate such breach or potential breach, 

4.

promptly notify the Co-Managers of such breach or potential breach if the investigation reveals a likelihood that Co-Manager's Confidential Information was materially affected, such notification targeted to occur within 48 hours (two business days), but no later than 72 hours (three business days) after such breach has been identified determination, and,  

4.

implement necessary corrective actions.   Such corrective actions shall include:  

  

i.

performing an analysis to determine the cause of the security breach;  

ii.

providing the Co-Managers with a report detailing the cause of the security breach and the material involved;  

iii.

promptly remedying or mitigating the security breach to a commercially reasonable extent; and 

iv.

reasonable cooperation with the Co-Managers and its designees and with any civil or criminal authority in any investigation or action related to the unauthorized, unlawful or accidental access, use, processing, disclosure, transfer destruction, loss or alteration.   

  

(i)

Upon the Co-Managers’ reasonable request at any time during the term of the Agreement, the Subadviser shall promptly provide the Co-Managers with information related to the Subadviser’s information security safeguards and practices.  

  

5. Other than as set forth in this Agreement, the Subadviser will not engage any third party to provide services to the Account as delegated to the Subadviser by the Co-Managers without the express written consent of the Co-Managers, other than as necessary to perform administrative or ancillary services for the Account, including security and cash reconciliation, portfolio pricing and corporate action processing.  The Subadviser will act in good faith and with reasonable skill and care in the selection, use and monitoring of such agents. To the extent that the Subadviser receives approval from the Co-Managers to engage a third-party service provider, Subadviser  shall be  responsible to the Co-Managers for the acts and omissions of the third-party service provider to the same extent as it is for its own acts and omissions to the same extent that Subadviser would be responsible for its own actions or inactions.  Furthermore, the Subadviser may utilize unaffiliated third-party data service providers in effecting compliance with the prospectus and/or instructions from the Co-Managers, and the

Subadviser shall not be held responsible for any losses resulting from non-compliance with the prospectus or  Co-Manager instructions where the Subadviser has reasonably relied on information provided by third-party data service providers.  

  

6. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, its officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. 

  

7. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser. 

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement, as applicable, with respect to that delegated portfolio or portion thereof shall commence as of the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser. 

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 280 Congress Street, Boston, MA 02210, Attention: Legal and Compliance. 

  

The Co-Managers consent to electronic delivery of any reports or other information that may be requested by the Co-Managers or the Trust or is required to be delivered by the Subadviser under this Agreement, or pursuant to applicable law, rule or regulation, including delivery of Part 2 of Subadviser’s Form ADV and any updates thereto, and the Co-Managers represent that they have the means to, and will access, such disclosures in electronic format and the Subadviser shall provide the Co-Managers with hard copies of any such disclosures upon request.  The Co-Managers may revoke this consent upon written notice to Subadviser. 

  

8. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser's directors, officers or employees who may also be a Trustee, officer or employee of the Trust to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such

prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. Except as otherwise specified in the Trust Documents, the Subadviser will provide investment management services for the Account without regard to any tax consequences that may result from any action taken or omitted by Subadviser on behalf of the Account. Neither the Subadviser nor any of its affiliates provide tax advice in connection with investment of the assets in the Account, and the Co-Managers are responsible for determining and paying any taxes owed with respect to the activities of the Account.
 

11. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

12. The Agreement may be executed simultaneously in any number of counterparts, each of which will be deemed to be an original, but all of which together will constitute one and the same instrument.  

  

13. This Agreement shall be governed by the laws of the State of New York. If any court of competent jurisdiction at any time holds that any provision in this Agreement is invalid or unenforceable in whole or in part, the invalidity or unenforceability of such provision shall not affect the other provisions of this Agreement which will remain in full force and effect.  The parties shall use their reasonable efforts to agree on a new provision which will, as far as possible, achieve the same purpose as the provision that is held invalid or unenforceable. 

  

14. No party to this Agreement will be liable for any failure or delay in performing any of its obligations under or pursuant to the Agreement, and any such failure or delay in performing its obligations will not constitute a breach of the Agreement, if such failure or delay is due to any cause whatsoever outside its reasonable control.  Any such non-performing party will be entitled to a reasonable extension of the time for performing such obligations.  Events outside a party's reasonable control include any event or circumstance that the party is unable to avoid using reasonable skill and care. 

  

15. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

16. The parties agree that this Agreement and any documents related hereto may be electronically signed.  The parties agree that any electronic signatures appearing on this Agreement and any related documents are the same as handwritten signatures for the purposes of validity, enforceability and admissibility. 

  

 

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT.  

  

  

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.

 

PGIM INVESTMENTS LLC 

  

  

By: /s/ Timothy Cronin 

Name: Timothy Cronin 

Title: Senior Vice President 

  

  

AST INVESTMENT SERVICES, INC. 

  

  

By:  /s/ Timothy Cronin 

Name:  Timothy Cronin 

Title:  President 

  

  

  

WELLINGTON MANAGEMENT COMPANY LLP 

  

  

By: /s/ Steven Muson 

Name: Steven Muson 

Title: Senior Managing Director 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by Wellington Management Company LLP (Wellington Management), PGIM Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay Wellington Management a subadvisory fee on the net assets managed by Wellington Management that is equal, on an annualized basis, to the following: 

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio* 

  

  

AST Academic Strategies Asset Allocation Portfolio 

  

  

0.19% of average daily net assets  

* In the event Wellington Management invests Portfolio assets in other pooled investment vehicles it manages or subadvises, Wellington Management will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to Wellington Management with respect to the Portfolio assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

  

  

Dated as of:  May 14, 2021 

  

  


Execution Version 

ADVANCED SERIES TRUST 

  

AST Academic Strategies Asset Allocation Portfolio 

  

SUBADVISORY AGREEMENT 

  

Agreement made as of this 13 day of May, 2021 between PGIM Investments LLC (PGIM Investments), a New York limited liability company and AST Investment Services, Inc. (ASTIS), a Maryland corporation (together, the Co-Managers), and J.P. Morgan Investment Management Inc., a Delaware corporation, (J.P. Morgan or the Subadviser), and effective as of a date mutually agreed upon by the Co-Managers and Subadviser; 

  

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PGIM Investments and AST act as Co-Managers of the Trust;  

  

WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A hereto (individually, a Portfolio or the Trust and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as the Co-Managers shall from time to time direct and the Subadviser is willing to render such investment advisory services; and 

  

NOW, THEREFORE, the Parties agree as follows: 

  

1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage such portion of the Trust's portfolio as delegated to the Subadviser by the Co-Managers (the “Allocated Portion”), including the purchase, retention and disposition thereof, in accordance with the Trust's investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such prospectus and statement of additional information as currently in effect and as amended or supplemented from time to time, being herein called the "Prospectus"), and subject to the following understandings:  


(i) The Subadviser shall provide supervision of the Allocated Portion of the Trust's investments as the Co-Managers shall direct, and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what portion of the assets will be invested or held uninvested as cash. 

  

(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust's valuation procedures as provided to it by the Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust that are not inconsistent with the Trust Documents), cooperate with the Co-Managers’ (or their designees') personnel responsible for monitoring the Trust's compliance and will conform to, and comply with, the requirements of the 1940 Act, the Commodity Exchange Act of 1936, as amended (the CEA), the Internal Revenue Code of 1986, as amended, and all other applicable federal laws and regulations. In addition, the Subadviser shall manage the Allocated Portion in conformity with applicable state laws and regulations and such state insurance laws as Manager informs Subadviser are applicable to the Trust (“State Insurance Laws”).  In connection therewith, the Subadviser shall, among other things, assist the Co-Managers in the preparation and filing of such reports as the Trust is, or may in the future be, required to file with the Securities and Exchange Commission (the Commission). The Co-Managers shall provide Subadviser timely with copies of any updated Trust Documents. 

  

(iii) The Subadviser shall determine the securities, futures contracts and other instruments to be purchased or sold by the Allocated Portion, as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants, including any person or entity affiliated with the Subadviser (collectively, Brokers), as it determines in its discretion subject to the requirements of  this subsection (iii). In executing transactions for the Trust and selecting Brokers, the Subadviser will use its best efforts to seek on behalf of the Trust the best overall terms available. Within the framework of this policy, the Subadviser shall consider all the factors that it deems relevant including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the Broker, the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis and, for any portion of the Portfolio managed by the Subadviser from its offices outside the United Kingdom, the research and investment information and other services provided by Brokers who may effect or be a party to any such transaction or other transactions to which the Subadviser’s other clients may be a party.  (If the Subadviser manages a portion of the Portfolio’s assets from its offices in the United Kingdom (“UK Managed Assets”), the brokerage commissions paid on transactions in the UK Managed Assets will compensate the broker for trade execution only. Brokerage commissions paid on transactions involving assets the Subadviser manages from its offices outside the United Kingdom (“Non-UK Managed Assets”) may compensate the broker for both trade execution and investment research services.)    

  

For Non-UK Managed Assets, the Co-Managers (or Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through Brokers (including, to the extent legally permissible, Brokers affiliated with the Subadviser) qualified to obtain the best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the 1934 Act), and to cause the Trust to pay any such Brokers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another Broker would have charged for effecting that transaction, if the Co-Managers or Subadviser determine(s) in good faith that such commission was reasonable in relation to the value of the brokerage or research services provided by such Broker, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers (or the Subadviser) with respect to the Trust and other accounts as to which they or it or an affiliate may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934 Act).  

  

On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other instrument to be in the best interest of the Trust as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities, futures contracts or other instruments to be sold or purchased. In such event, allocation of the securities, futures contracts or other instruments so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to such other clients.  The Co-Managers recognize that, in some cases, this procedure may limit the size of the position that may be acquired or sold for the Trust.  The Co-Managers hereby acknowledge receipt of the current best execution policy of Subadviser’s London branch and consent to Subadviser following such policy.  Subadviser shall provide the Co-Managers with updated versions of such policy as it may be amended, supplemented, or modified from time to time.  Subject to the requirements of U.S. laws rules, and regulations, including, without limitation, the 1940 Act and the Investment Advisers Act of 1940, as amended (the Advisers Act), and the rules thereunder, the Co-Managers agree that the Subadviser’s London branch may follow the then-current version of such best execution policy in managing the portion of the Portfolio’s assets assigned to it. In addition, the Co-Managers agree that in managing the portion of the Portfolio’s assets assigned to it, the Subadviser’s London branch may execute trades outside a trading venue as that term is defined in the “Markets in Financial Instruments Directive.”   

  

(iv) The Subadviser is authorized to purchase, sell, hold and generally deal in and with derivatives as set forth in the Prospectus of the Trust. The Co-Managers hereby authorize Subadviser to open accounts and execute documents, representations, warranties, indemnities and representation letters in the name of, binding against and on behalf of the Trust, including without limitation, futures account agreements and master agreements related to derivatives transactions for all purposes necessary or desirable in Subadviser’s view to effectuate Subadviser’s activities under this Agreement.  To the extent the Portfolio qualifies as a “qualified eligible person” within the meaning of the Commodity Futures Trading Commission (“CFTC”) Regulation Rule 4.7, the Co-Managers on behalf of the Portfolio consent to the Portfolio’s treatment by the Subadviser as a qualified eligible person.  

  

(v) The Subadviser shall maintain all books and records with respect to the Trust's portfolio transactions effected by it as required by Rule 31a-l under the 1940 Act, and shall render to the Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without limitation, the valuation of the Trust's securities. 

  

(vi) The Subadviser or an affiliate shall provide the Trust's custodian on each business day with information relating to all transactions concerning the Allocated Portion, and shall provide the Co-Managers with such information upon request of the Co-Managers. 

  

(vii) The Subadviser and the Co-Managers understand and agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers will, among other things, (i) continually evaluate the performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make recommendations to the Trust's Board as to whether the contract with one or more subadvisers should be renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.  

  

(viii) The Co-Managers acknowledge that investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to render similar services to others.  Manager agrees that Subadviser may give advice and take action with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Trust. It is Subadviser's policy, to the extent practicable, to allocate investment opportunities among clients over a period of time on a fair and equitable basis.  Manager recognizes that Subadviser, in effecting transactions for its various accounts, may not always be able to take or liquidate investment positions in the same security at the same time and at the same price. It is understood that Subadviser shall not have any obligations to purchase or sell, or to recommend for purchase or sale, for the Trust any security which Subadviser or its affiliates, their directors, officers, principals or employees may purchase or sell for its or their own accounts or for the account of any other client, if in the opinion of Subadviser such transaction or investment appears unsuitable, impractical or undesirable for the Trust, except as required by law. Nothing in this Agreement will in any way limit or restrict Subadviser or any of its respective officers, directors, principals, affiliates or employees from buying, selling or trading in any securities for its or their own accounts or other accounts.  Manager acknowledges and agrees that Subadviser and its affiliates may make different investment decisions with respect to each of its clients or for its own account, and that such fact shall not be relied upon by Manager or any of Manager’s agents or representatives as evidence of a breach of Subadviser 's duties hereunder. Nothing in this Agreement shall limit or restrict the right of the Subadviser, the Co-Managers, the Trust, or any of their respective directors, officers, affiliates or employees to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a dissimilar nature.   

  

(ix) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule l0f-3, Rule 12d3-1 and Rule 17e-l under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Trust with respect to transactions in securities for the Trust's portfolio or any other transactions of Trust assets. 

  

(x) Conflicts of interest may arise in the course of providing the Subadviser's services and information on the Subadviser's conflicts of interest policy may be found in the Subadviser’s FCA Disclosure Document and its current Form ADV provided to the Co-Managers. 

  

(b) The Subadviser shall keep the Trust's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-I under the 1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will tender promptly to the Trust any of such records upon the Trust's request, provided, however, that the Subadviser may retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof. 

  

(c) The Subadviser is a commodity trading advisor duly registered with the Commodity Futures Trading Commission (the CFTC) and is a member in good standing of the National Futures Association (the NFA). The Subadviser shall maintain such registration and membership in good standing during the term of this Agreement. Further, the Subadviser agrees to notify the Co-Managers promptly upon (i) a statutory disqualification of the Subadviser under Sections 8a(2) or 8a(3) of the CEA, (ii) a suspension, revocation or limitation of the Subadviser’s commodity trading advisor registration or NFA membership, or (iii) to the extent permitted by law, regulation, regulatory requirement or the Subadviser’s policy, the institution of an action or proceeding that could lead to a statutory disqualification under the CEA or an investigation by any governmental agency or self-regulatory organization of which the Subadviser is subject or has been advised it is a target. 

  

(d) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures designed to comply with the 1940 Act, the CEA, the Investment Advisers Act of 1940, as amended, and other applicable federal regulations and state law and/or requirements, State Insurance Laws and applicable rules of any self-regulatory organization. 

  

(e) The Subadviser shall maintain a written code of ethics (the Code of Ethics) that it reasonably believes complies with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act, a copy of which shall be provided to the Co-Managers and the Trust, and shall institute procedures reasonably necessary to prevent any Access Person (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from violating its Code of Ethics. The Subadviser shall follow such Code of Ethics in performing its services under this Agreement. Further, the Subadviser represents that it maintains adequate compliance procedures designed to comply with the 1940 Act, the Advisers Act, and other applicable federal laws and regulations, state law and/or requirements and State Insurance Laws. In particular, the Subadviser represents that it has policies and procedures regarding the detection and prevention of the misuse of material, non public information by the Subadviser and its employees as required by the applicable federal securities laws. 

  

(f) The Subadviser shall furnish to the Co-Managers copies of (i) all records prepared in connection with the performance of this Agreement and (ii) any reports prepared for external distribution in accordance with the compliance procedures maintained pursuant to paragraph 1(d) hereof as the Co-Managers may reasonably request. 

  

(g) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Allocated Portion in accordance with the Subadviser’s proxy voting policy in effect from time to time and the Subadviser will comply with such reasonable reporting and other requirements as shall be established by the Co-Managers. 

  

(h) The Subadviser agrees to provide reasonable assistance to the Co-Managers or the Trust's Custodian in determining the value of any of the Trust’s portfolio investments.   Such reasonable assistance shall include (but is not limited to): (i)  upon the request of the Co-Managers or the Trust's Custodian, assisting in obtaining bids and offers or quotes from broker/dealers or market-makers with respect to portfolio investments; and (ii) notifying the Co-Managers in the event the Subadviser has reason to believe that the price it has received for a portfolio investment held by the Allocated Portion does not appear to reflect corporate actions, news, significant events or such investment otherwise requires review to determine if fair valuation may be necessary under the Trust’s valuation procedures.  Upon reasonable request from the Co-Managers, the Subadviser shall make its employees and officers reasonably available for consultation with the valuation committee of the Trust or the Co-Managers to assist them in their valuation of the investments of the Trust as the valuation committee or the Co-Managers may request from time to time, including making available information of which the Subadviser has knowledge related to the investments being valued.  

  

(i) The Subadviser shall provide the Co-Managers with any information reasonably requested regarding its management of the Trust's portfolio required for any shareholder report, amended registration statement, or prospectus supplement to be filed by the Trust with the Commission. The Subadviser shall provide the Co-Managers with any reasonable certification, documentation or other information reasonably requested or required by the Co-Managers for purposes of the certifications of shareholder reports by the Trust's principal financial officer and principal executive officer pursuant to the Sarbanes Oxley Act of 2002 or other law or regulation. The Subadviser shall promptly inform the Trust and the Co-Managers if the Subadviser becomes aware of any information in the Prospectus that is (or will become) materially inaccurate or incomplete. 

  

(j) The Subadviser shall comply with the applicable portions of the Trust’s Documents provided to the Subadviser by the Co-Managers. The Subadviser shall notify the Co-Managers as soon as reasonably practicable upon detection of any material breach of such Trust Documents.  

  

(k) The Subadviser shall keep the Trust’s Manager informed of developments relating to its duties as Subadviser of which the Subadviser has, or should have, knowledge that would materially affect the Trust. In this regard, the Subadviser shall provide the Trust, the Co-Managers, and their respective officers with such periodic reports concerning the obligations the Subadviser has assumed under this Agreement and the Co-Managers may from time to time reasonably request. Additionally, prior to each Board meeting, the Subadviser shall provide the Co-Managers and the Board with reports regarding the Subadviser's management of the Trust's portfolio during the most recently completed quarter, in such form as may be mutually agreed upon by the Subadviser and the Co-Managers. The Subadviser shall certify quarterly to the Co-Managers that it and its "Advisory Persons" (as defined in Rule 17j-1 under the 1940 Act) have complied materially with the requirements of Rule 17j-1 under the 1940 Act during the previous quarter or, if not, explain what the Subadviser has done to seek to ensure such compliance in the future. Annually, the Subadviser shall furnish a written report, which complies with the requirements of Rule 17j-1 and Rule 38a-1 under the 1940 Act, concerning the Subadviser's Code of Ethics and compliance program, respectively, to the Co-Managers. Upon written request of the Co-Managers with respect to material violations of the Code of Ethics directly affecting the Trust, the Subadviser shall permit representatives of the Trust or the Co-Managers to examine reports (or summaries of the reports) required to be made by Rule 17j-l(d)(1) relating to enforcement of the Code of Ethics. 

  

2. The Co-Managers shall continue to have responsibility for all services to be provided to the Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust's custodian to provide) timely information to the Subadviser regarding such matters as the composition of assets in the Allocated Portion, cash requirements and cash available for investment in the Allocated Portion, and all other information as may be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the Board of Trustees of the Trust that affect the duties of the Subadviser). 

  

3. For the services provided pursuant to this Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the Allocated Portion as described in the attached Schedule A. Liability for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers’ receipt of payment from the Trust for management services described under the Management Agreement between the Trust and the Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers. 

  

4. Confidentiality. (a) Each party agrees that it will treat confidentially all information provided by any other party (the “Discloser”) regarding the Discloser’s businesses and operations, including without limitation the investment activities or holdings of the Allocated Portion (“Confidential Information”).  All Confidential Information provided by the Discloser shall be used only by the other party hereto (the “Recipient”) solely for the purposes of rendering services pursuant to this Agreement, and shall not be disclosed to any third party, without the prior consent of the Discloser, except for a limited number of employees, attorneys, accountants and other advisers of the Recipient and its affiliates under common control with Recipient on a need-to-know basis and solely for the purposes of rendering services under this Agreement.   

  

(b) Confidential Information shall not include any information that: (i) is public when provided or thereafter becomes public through no wrongful act of the Recipient; (ii) is demonstrably known to the Recipient prior to execution of this Agreement; (iii) is independently developed by the Recipient through no wrongful act of the Recipient in the ordinary course of business outside of this Agreement; (iv) is generally employed by the trade at the time that the Recipient learns of such information or knowledge; or (v) has been rightfully and lawfully obtained by the Recipient from any third party.  

  

(c) In the event that the Recipient is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil investigative demand or similar process, or by a governmental or regulatory agency or authority), in connection with any proceeding, to disclose any of the Discloser’s Confidential Information, the Recipient will, to the extent permitted by law, regulation or regulatory authority, give the Discloser prompt written notice of such request or requirement to allow the Discloser an opportunity to obtain a protective order or otherwise obtain assurances that confidential treatment will be accorded to such Confidential Information.  In the event that such protective order or other remedy is not obtained, disclosure shall be made of only that portion of the Confidential Information that is legally required to be disclosed.  All Confidential Information disclosed as required by law shall nonetheless continue to be deemed Confidential Information.  Notwithstanding anything to the contrary in the foregoing, no such notification shall be required in respect of any disclosure to regulatory authorities having jurisdiction over the Recipient or any of its affiliates. 

  

(d) Notwithstanding anything to the contrary in the foregoing, to the extent that any market counterparty with whom Subadviser deals requires information relating to the Portfolio or the Trust (including, but not limited to, the identity and market value of the Portfolio, or the Allocated Portion), Subadviser shall be permitted to disclose such information to the extent necessary to effect transactions on behalf of the Trust.  

  

5. The Parties’ Information Security Programs. Each party represents and warrants the following: 

  

(a)

It and its parent company have implemented and currently maintain an effective information security program (the “Information Security Program”) which includes administrative, technical, and physical safeguards and other security measures necessary to protect (i) the security and confidentiality of Confidential Information; (ii) against anticipated threats or hazards to the security or integrity of Confidential Information; and (iii) against unauthorized access to, destruction, modification, disclosure or use of Confidential Information.   

(b)

Its Information Security Program complies with applicable laws and regulations with respect to the privacy and data security of Confidential Information.  

(c)

It shall maintain appropriate access controls, including, but not limited to, limiting access to Confidential Information to its employees who require such access in order to provide the services under this Agreement. 

(d)

It or its parent company conducts risk assessments as it determines to be reasonably necessary to identify and assess risks to the security, confidentiality, and integrity of Confidential Information; and evaluates, where necessary, the effectiveness of its information security controls.   

(e)

In the event that it confirms unauthorized access, disclosure, or material damage to Confidential Information (each a “Security Incident”), it shall notify the other party as soon as reasonably practicable. 

(f) It shall provide the other party with information related to its Information Security Program. 

(g)

Upon Co-Managers’ request, Subadviser will include a member(s) of its staff that is familiar with its Information Security Program in the periodic due diligence meetings with Co-Managers’ staff to provide a presentation and answer questions on its Information Security Program.  

  

6. (a) The Subadviser will not engage any third party to provide discretionary investment management services to the Allocated Portion without the express written consent of the Co-Managers.  The Subadviser may employ an affiliate or a third party to perform administrative duties such as accounting, reporting, proxy voting and other ancillary services without the prior consent of the Co-Managers. In either case, the Subadviser will act in good faith in the selection, use and monitoring of affiliates and other third parties, and any delegation or appointment hereunder shall not relieve the Subadviser of any of its obligations under this Agreement. The Subadviser agrees that it remains liable to the Co-Managers for an affiliate’s or third party’s compliance with this Agreement, applicable regulations and requirements to the same extent as if the Subadviser itself had acted or failed to act instead of the affiliate or third party. 

  

(b) Notwithstanding any other provision of the Agreement, the Subadviser: (i) may provide information about the Co-Managers and the Trust to any affiliate or any unaffiliated third party for purposes of this Section 6; and (ii) shall ensure that any affiliate or unaffiliated third party to which services have been delegated hereunder is subject to confidentiality and non-disclosure obligations that are substantially similar to the confidentiality and non-disclosure obligations to which the Subadviser is subject under this Agreement. 

  

7. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated persons, and their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a direct result of the Co-Managers’ willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the Co-Managers, its affiliated persons, and their officers, directors and employees, for any liability and expenses, including reasonable attorneys' fees, which may be sustained as a direct result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. Neither the Co-Managers nor the Subadviser shall be liable for any special, consequential, incidental or punitive damages.
 

8. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Trust, or by the Co-Managers or the Subadviser at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 1940 Act) of this Agreement, including, but not limited to, a change of control (as defined in the 1940 Act) of the Subadviser.   

  

To the extent that the Co-Managers delegate to the Subadviser management of all or a portion of a Portfolio of the Trust previously managed by a different subadviser or the Co-Managers, the Subadviser agrees that its duties and obligations under this Agreement with respect to that delegated Portfolio or portion thereof shall commence as of the close of business on the date the Co-Managers begin the transition process to allocate management responsibility to the Subadviser.  The Co-Managers will commence the transition process for the delegated Portfolio or portion thereof of the Portfolio listed on Schedule A at the close of business on a date mutually agreed upon by the Co-Managers and the Subadviser and the Subadviser will become a subadviser of the Portfolio at that time. Notwithstanding anything to the contrary in the foregoing, if the Co-Managers engage a transition manager to execute purchases and sales in the delegated Portfolio or delegated portion thereof, the Subadviser will not be liable for losses caused by the default, fraud, act or omission, negligence or willful misconduct of such transition manager.   

  

Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, (1) to the Co-Managers at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary (for PGIM Investments) and One Corporate Drive, Shelton, Connecticut, 06484, Attention: Secretary (for ASTIS); (2) to the Trust at 655 Broad Street, 17th Floor, Newark, NJ 07102, Attention: Secretary; or (3) to the Subadviser at 277 Park Avenue, Floor 8, New York, NY 10172, Attention: Scott Moritz. 

  

9. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof.  During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser, upon request, representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser's written request, and to implement those changes in the next regularly scheduled production of those materials or as soon as reasonably practical. All such prospectuses, proxy statements, replies to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery. 

  

10. This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements of the 1940 Act. 

  

11. This Agreement shall be governed by the laws of the State of New York. 

  

12. Any question of interpretation of any term or provision of this Agreement having a counterpart or otherwise derived from a term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. 

  

13. The Co-Managers and the Trust each acknowledges that the Subadviser operates so as to comply with all applicable federal, state and local laws relating to the prevention of money laundering and terrorist financing. The Co-Managers and the Trust each hereby acknowledges that it or its service provider agent has policies and procedures in place designed to comply with Anti -Money Laundering (“AML”) requirements in the United States, including the Bank Secrecy Act as amended by the USA PATRIOT ACT as amended, and other applicable laws and regulations in those jurisdictions where the Co-Managers or the Trust operate, relating to the prevention of money laundering and terrorist financing (“AML Program”). The Co-Managers and the Trust each also acknowledges that it or its service provider agent has policies and procedures in place designed to comply with the prohibitions and restrictions mandated by the U.S. Treasury Department’s Office of Foreign Assets Control and all other sanctions laws and regulations applicable in the jurisdictions in which it operates. To the knowledge of the Co-Managers and the Trust, any solicitations and other activities by it or, as applicable, its service providers in connection with the Trust have been and will be conducted in accordance with such applicable AML and sanctions laws and regulations 

  

 

PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS ACCOUNT DOCUMENT.
 

IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written. 

  


PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

  

Name: Timothy Cronin 

Title: Senior Vice President 

  

  

AST Investment Services, INC. 

  

By: /s/ Timothy Cronin 

  

Name: Timothy Cronin 

Title: President 

  

  

J.P. MORGAN INVESTMENT MANAGEMENT INC. 

  

By: /s/ Scott Moritz 

  

Name: Scott Moritz 

Title: Vice President 

  

  

SCHEDULE A 

ADVANCED SERIES TRUST 

  

  

As compensation for services provided by J.P. Morgan Investment Management Inc. (J.P. Morgan), PGIM Investments LLC and AST Investment Services, Inc. will pay J.P. Morgan a subadvisory fee on the average daily net assets managed by J.P. Morgan that is equal, on an annualized basis, to the following: 

  

  

Portfolio Name  

  

Subadvisory Fee for the Portfolio*, ** 

  

  

AST Academic Strategies Asset Allocation Portfolio 

  

  

Large Cap Core Sleeve: 

0.20% of average daily net assets to $500 million;  

0.18% of the next $500 million of average daily net assets; and 

0.17% of average daily net assets over $1 billion 

  

* In the event J.P. Morgan invests Trust assets in other pooled investment vehicles it manages or subadvises, J.P. Morgan will waive its subadvisory fee for the Trust in an amount equal to the acquired fund fee paid to J.P. Morgan with respect to the Trust assets invested in such acquired fund.  Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

** For purposes of calculating the advisory fee payable to J.P. Morgan, the assets managed by J.P. Morgan in the AST Academic Strategies Asset Allocation Portfolio will be aggregated with the assets managed by J.P. Morgan in: (i) the AST Balanced Asset Allocation Portfolio; (ii) the Capital Growth Asset Allocation Portfolio; (iii) the AST Preservation Asset Allocation Portfolio; and (iv) the AST Large-Cap Core Portfolio. 

  

  

  

  

Dated as of: May 13, 2021 

  


Execution Version 

  

Amendment to Subadvisory Agreement
FOR AST FRANKLIN 85/15 DIVERSIFIED ALLOCATION PORTFOLIO OF
ADVANCED SERIES TRUST
 

  

PGIM Investments LLC (the “Manager”), QS Investors, LLC (“QS”), Brandywine Global Investment Management, LLC (“Brandywine”), ClearBridge Investments, LLC (“ClearBridge”), Western Asset Management Company, LLC (“WAMCO”), Western Asset Management Company Limited (“WAML”) and Franklin Advisers, Inc. (“Franklin” and collectively, the “Subadvisers”) hereby agree to amend the subadvisory agreement for the AST Franklin 85/15 Diversified Allocation Portfolio (the “Portfolio”), dated as of July 31, 2020, as amended on April 26, 2021, by and among the Manager and the Subadvisers (the “Agreement”) to: (i) remove QS as a party to the Agreement; and (ii) amend the existing Schedule A to the Agreement.   

  

The Agreement is hereby amended as follows: 

  

1.

QS Investors, LLC is hereby removed as a party to the Agreement and hereafter all references in the Agreement to a “Subadviser” shall refer to Brandywine, ClearBridge, WAMCO, WAML and Franklin; and  

  

2.

Schedule A is hereby deleted and replaced with the attached Schedule A. 

  

  

  

  

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 

IN WITNESS HEREOF, PGIM Investments LLC, QS Investors, LLC, Brandywine Global Investment Management, LLC, ClearBridge Investments, LLC, Western Asset Management Company, LLC, Western Asset Management Company Limited and Franklin Advisers, Inc. have duly executed this Amendment as of the effective date of this Amendment. 

  

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin 

Name: Timothy S. Cronin 

Title: Senior Vice President 

  

  

QS INVESTORS, LLC 

  

By: /s/ Steven R. Ducker 

Name: Steven R. Ducker 

Title: Chief Compliance Officer 

  

Address for Notices: 

  

QS Investors, LLC  

880 Third Avenue, 7th Floor  

New York, NY 10022  

Attn: Business Management 

  

  

BRANDYWINE GLOBAL INVESTMENT MANAGEMENT, LLC 

  

By: /s/ Mark Glassman 

Name: Mark P. Glassman 

Title: Chief Administrative Officer 

  

Address for Notices: 

  

Brandywine Global Investment Management, LLC 1735 Market Street, Suite 1800 

Philadelphia, PA 19103  

  

  

CLEARBRIDGE INVESTMENTS, LLC 

  

By: /s/ Cindy K. List 

Name: Cindy List 

Title: Chief Financial Officer 

  

Address for Notices: 

  

ClearBridge Investments, LLC 

620 8th Avenue 

New York, NY 10018 

WESTERN ASSET MANAGEMENT COMPANY, LLC 

  

By: /s/ Marzo Bernardi 

Name: Marzo Bernardi 

Title: Director of Global Client Service & Marketing 

  

Address for Notices: 

  

Western Asset Management Company, LLC 

385 East Colorado Boulevard 

Pasadena, CA 91101  

  

  

WESTERN ASSET MANAGEMENT COMPANY LIMITED 

  

By: /s/ Marzo Bernardi 

Name: Marzo Bernardi 

Title: Director of Global Client Service & Marketing 

  

Address for Notices: 

  

Western Asset Management Company Limited 

10 Exchange Square 

Primrose Street 

London EC2A 2EN  

  

  

FRANKLIN ADVISERS, INC. 

  

By: /s/ William Yun 

Name: William Y. Yun 

Title: Executive Vice President 

  

Address for Notices: 

  

Franklin Advisers, Inc. 

One Franklin Parkway 

San Mateo, California 99403 

Attn: General Counsel 

With a copy to: 

Franklin Templeton Investments
One Franklin Parkway
San Mateo, California 99403 
Attn: General Counsel 

  

  

Effective Date as Revised: August 7, 2021 

 

SCHEDULE A 

  

ADVANCED SERIES TRUST
 

As compensation for services provided by Franklin Advisers, Inc. (“Franklin”) and its affiliates, Brandywine Global Investment Management, LLC, ClearBridge Investments, LLC, Western Asset Management Company, LLC and Western Asset Management Company Limited, Inc. for the AST Franklin 85/15 Diversified Allocation Portfolio (the “Portfolio”), PGIM Investments LLC will pay Franklin a subadvisory fee on the aggregate net assets managed by the Subadvisers that is equal, on an annualized basis, to the following: 

Portfolio Name 

Contractual Subadvisory Fee Rate* 

  

AST Franklin 85/15 Diversified Allocation Portfolio  

  

0.330% of average daily net assets to $250 million;
0.305% of average daily net assets over $250 million to $500 million;
0.280% of average daily net assets over $500 million to $750 million;
0.255% of average daily net assets over $750 million to $1 billion;
0.230% of average daily net assets over $1 billion to $2 billion; and
0.205% of average daily net assets over $2 billion. 

  

* Franklin has agreed to a contractual fee waiver arrangement that applies to the Portfolio. Under this arrangement, Franklin will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund subadvisory fee paid to Franklin for any portfolio affiliated with the Trust.  In addition, Franklin will waive its subadvisory fee for the Portfolio in an amount equal to the management or subadvisory fee it receives for acquired funds that are not affiliated with the Trust.  Notwithstanding the foregoing, the subadvisory fee waiver will not exceed 100% of the subadvisory fee. 

  

  

  

Effective Date as Revised: August 7, 2021 

  

  

  

  

1 


Amendment to Subadvisory Agreement  

for AST INTERNATIONAL VALUE PORTFOLIO OF 

ADVANCED SERIES TRUST 

  

AST Investment Services, Inc. (formerly, American Skandia Investment Services, Inc.), PGIM Investments LLC (formerly, Prudential Investments LLC) (collectively, the “Manager”) and Lazard Asset Management LLC (the “Subadviser”) hereby agree to amend the Subadvisory Agreement, dated as of September 24, 2014, by and among the Manager and the Subadviser, pursuant to which the Subadviser has been retained to provide investment advisory services to the AST International Value Portfolio, as follows; 

1.

Schedule A is hereby deleted and replaced with the attached Schedule A.   

  

     IN WITNESS HEREOF, AST Investment Services, Inc., PGIM Investments LLC, and Lazard Asset Management LLC have duly executed this Amendment as of the effective date of this Amendment. 

  

AST Investment Services, Inc.  

   

By: /s/ Timothy Cronin 
Name: Timothy S. Cronin 
Title: President 

  

PGIM INVESTMENTS LLC 

  

By: /s/ Timothy Cronin
Name: Timothy S. Cronin 
Title: Senior Vice President 

  

  

LAZARD ASSET MANAGEMENT LLC 

   

By: /s/ Nathan Paul 

Name: Nathan Paul 
Title: Chief Business Officer 

  

  

Effective Date as Revised: December 1, 2021
 

  

 

SCHEDULE A 

  

Advanced Series Trust 

AST International Value Portfolio
 

As compensation for services provided by Lazard Asset Management LLC (“Lazard”), AST Investment Services, Inc. (“ASTIS”) and PGIM Investments LLC (“PGIM Investments”), as applicable, will pay Lazard a subadvisory fee on the net assets managed by Lazard* that is equal, on an annualized basis, to the following:  

  

Portfolio 

Subadvisory Fee** 

AST International Value Portfolio* 

0.34% of average daily net assets on first $300 million;
0.30% of average daily net assets over $300 million 

* For purposes of the subadvisory fee calculation, the assets managed by Lazard in the International Value Portfolio will be aggregated with: assets in any other retail and insurance funds/portfolios that are subadvised by Lazard, managed by PGIM Investments and/or ASTIS, and have substantially the same international investment strategy; and assets of certain insurance company separate accounts managed by Lazard for the retirement business of Prudential and its affiliates according to Lazard’s international equity and international equity select strategies. 

** In the event Lazard invests Portfolio assets in other pooled investment vehicles it manages or subadvises, Lazard will waive its subadvisory fee for the Portfolio in an amount equal to the acquired fund fee paid to Lazard with respect to the Portfolio assets invested in such acquired fund. Notwithstanding the foregoing, the subadvisory fee waivers will not exceed 100% of the subadvisory fee. 

  

Effective Date as Revised:  December 1, 2021 

  

  


ADVANCED SERIES TRUST 

  

Distribution Agreement 

  

THIS DISTRIBUTION AGREEMENT (the “Agreement”) is made as of February 25, 2013, between the Advanced Series Trust (the “Trust”), on behalf of the portfolios set forth on attached Exhibit A (each, a “Portfolio” and, collectively, the “Portfolios”), and Prudential Annuities Distributors, Inc., a Delaware corporation (the “Distributor”). 

  

WITNESSETH 

  

WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), as an open-end, management investment company and it is in the interest of the Trust to offer the shares of each Portfolio (the “Shares”) for sale continuously; 

  

WHEREAS, the Distributor is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); 

  

WHEREAS, the Trust and the Distributor wish to enter into this Agreement, under which the Distributor shall act as principal underwriter for the Trust and each Portfolio and shall act as the agent for the Trust and each Portfolio with respect to the continuous offering of the Shares from and after the date hereof in order to facilitate the distribution of the Shares; and 

  

WHEREAS, the Trust has adopted a Shareholder Services and Distribution Plan pursuant to Rule 12b-1 under the Investment Company Act with respect to the Shares of some or all of the Portfolios (the “Plan”) authorizing payments by the Portfolios to the Distributor with respect to certain shareholder services and distribution services as set forth in the Plan. 

  

NOW, THEREFORE, the parties agree as follows: 

  

Section 1. Appointment of the Distributor  

  

The Trust hereby appoints the Distributor as principal underwriter for the Trust and the Portfolios and agent for the Trust and the Portfolios for the sale of the Shares. The Shares shall be sold only to insurance companies and their separate accounts that have entered into participation agreements with the Trust (“Participating Insurance Companies”), qualified plans and other purchasers permitted by Section 817(h) of the Internal Revenue Code of 1986, as amended (the “Code”), and associated regulations (collectively, “Permissible Shareholders”). The Distributor hereby accepts such appointment and agrees that it will use commercially reasonable efforts to sell the Shares. The Distributor, as agent, does not undertake to sell any specific amount of the Shares. The parties hereby agree during the term of this Agreement that the Portfolios will sell the Shares through the Distributor on the terms and conditions set forth below and in the participation agreements with the Participating Insurance Companies and any other Permissible Shareholders (the “Participation Agreements”). 

  

Section 2. Exclusive Nature of Duties  

  

The Distributor shall be the exclusive representative of the Trust to act as principal underwriter and agent of the Trust and the Portfolios for the sale of the Shares, except that: 

  

2.1 The exclusive rights granted to the Distributor to sell the Shares shall not apply to any Shares issued in connection with the merger or consolidation of any other investment company with a Portfolio or the acquisition by purchase or otherwise of all (or substantially all) the assets or the outstanding shares of any such company by a Portfolio. 

  

  

  

Section 3. Purchase of Shares from the Trust 

  

3.1 The Shares shall be sold by the Distributor as the agent of the Trust to Permissible Shareholders at the net asset value next determined as set forth in the Prospectus after an order to purchase Shares is properly received. The term “Prospectus” shall mean the Summary Prospectus, Prospectus and Statement of Additional Information of the applicable Portfolio that is included as part of the Trust’s Registration Statement, as such Summary Prospectus, Prospectus and Statement of Additional Information may be amended or supplemented from time to time, and the term “Registration Statement” shall mean the Registration Statement filed by the Trust with the Securities and Exchange Commission and effective under the Securities Act of 1933, as amended (the “Securities Act”), and the Investment Company Act, as such Registration Statement is amended from time to time. 

  

3.2 The Trust shall have the right to suspend the sale of any or all of the Shares at times when redemption is suspended pursuant to the conditions in Section 4.3 hereof or at such other times as may be determined by the Trust’s Board of Trustees in its sole discretion (the “Board”). 

  

3.3 The Shares shall be sold in accordance with the terms and conditions of the Participation Agreements. 

  

Section 4. Redemption of Shares by the Trust 

  

4.1 Any of the outstanding Shares may be tendered for redemption at any time, and the Trust (or the Distributor acting as the Trust’s agent) agrees to redeem the Shares so tendered in accordance with the Trust’s Declaration of Trust as amended from time to time, and in accordance with the applicable provisions of the Prospectus. The price to be paid to redeem the Shares shall be equal to the net asset value next determined as set forth in the Prospectus after an order to redeem the Shares is properly received (the “Redemption Price”). 

  

4.2 The Shares shall be redeemed in accordance with the terms and conditions of the Participation Agreements. 

  

4.3 Redemption of any Shares or payment may be suspended at times when the New York Stock Exchange (the “NYSE”) is closed for other than customary weekends and holidays, when trading on the NYSE is restricted, when an emergency exists as a result of which disposal by the Trust of securities owned by it is not reasonably practicable or it is not reasonably practicable for the Trust fairly to determine the value of its net assets, or during any other period when the Securities and Exchange Commission, by order, so permits.  

  

Section 5. Duties of the Trust  

  

5.1 Subject to the possible suspension of the sale of the Shares as provided herein, the Trust agrees to sell the Shares so long as it has Shares of the respective Portfolio available. 

  

5.2 The Trust shall furnish the Distributor copies of all information, financial statements and other papers which the Distributor may reasonably request for use in connection with the distribution of the Shares. The Trust shall make available to the Distributor copies of its Prospectus and annual and semi-annual reports upon request.  

  

5.3 The Trust shall take, from time to time, but subject to the necessary approval of the Board, all necessary action to register the Shares under the Securities Act, to the end that there will be available for sale such number of Shares as the Distributor reasonably may expect to sell. The Trust agrees to file from time to time such amendments, reports and other documents as may be necessary in order that there will be no untrue statement of a material fact in the Registration Statement, or necessary in order that there will be no omission to state a material fact in the Registration Statement which omission would make the statements therein misleading.  

  

  

 

Section 6. Duties of the Distributor  

  

6.1 The Distributor shall be responsible for preparing all sales literature (e.g., advertisements, brochures and shareholder communications) with respect to each of the Portfolios, and shall file with the Financial Industry Regulatory Authority (“FINRA”) or the appropriate regulators all such materials as are required to be filed under applicable laws and regulations. 

  

6.2 Sales of the Shares shall be on the terms described in the Prospectus. The Distributor may enter into similar arrangements with other investment companies. The Distributor shall not be obligated to sell any specific number of Shares. 

  

6.3 The Distributor shall provide or arrange for the provision of the services set forth in the Plan. 

  

6.4 The Distributor shall use reasonable efforts in all respects duly to conform with the requirements of all federal and state laws relating to the sale of the Shares, including, without limitation, all rules and regulations made or adopted pursuant to the Securities Act, the Exchange Act, the Investment Company Act, the regulations of FINRA, or its predecessor, the National Association of Securities Dealers, and all other applicable federal and state laws, rules and regulations. Specifically, the Distributor shall adopt and follow procedures for the confirmation of transactions as may be necessary to comply with the requirements of Rule 10b-10 under the Securities Exchange Act and the rules of FINRA. 

  

6.5 The Distributor shall act as agent of the Trust in connection with the sale and redemption of the Shares. Except as otherwise provided in this Agreement, the Distributor shall act as principal with respect to all other matters relating to the promotion or the sale of the Shares.  

  

6.6 The Distributor shall prepare reports for the Board regarding its activities under this Agreement as from time to time shall be reasonably requested by the Board, including reports regarding the use of payments received by the Distributor under the Plan. 

  

6.7 The Distributor agrees on behalf of itself and its employees to treat confidentially and as proprietary information of the Trust all records and other information relative to the Portfolios and/or the Trust and its prior, present or potential shareholders, and not to use such records and information for any purpose other than performance of its responsibilities and duties hereunder, except when so requested by the Trust or after prior notification to and approval in writing by the Trust, which approval shall not be unreasonably withheld and may not be withheld where the Distributor may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities. 

  

Section 7. Payments to the Distributor  

  

The Trust shall pay to the Distributor, as compensation for services under the Plan, any fee set forth in the Plan. Any such fee is subject to the terms of the Plan. No additional compensation or reimbursement for expenses shall be provided by the Trust with respect to services under the Plan or services under this Agreement.  

  

Section 8. Allocation of Expenses 

  

The Trust shall bear all costs and expenses of the continuous offering of the Shares (except for those costs and expenses borne by the Distributor pursuant to the Plan and subject to the requirements of Rule 12b-1 under the Investment Company Act), including fees and disbursements of the Trust’s counsel and auditors, in connection with the preparation and filing of any required Registration Statements and/or Prospectuses under the Investment Company Act or the Securities Act, and all amendments and supplements thereto, and preparing and mailing annual and periodic reports and proxy materials to shareholders (including but not limited to the expense of setting in type any such Registration Statements, Prospectuses, annual or periodic reports or proxy materials). The Trust shall also bear the expenses it assumes pursuant to the Plan, so long as the Plan is in effect.  

  

  

Section 9. Indemnification 

  

9.1 The Trust agrees to indemnify, defend and hold the Distributor, and its officers and any person who controls the Distributor within the meaning of Section 15 of the Securities Act, free and harmless from and against any and all claims, demands, liabilities and expenses (including the cost of investigating or defending such claims, demands or liabilities and any reasonable counsel fees incurred in connection therewith) which the Distributor, its officers or any such controlling person may incur under the Securities Act, or under common law or otherwise, arising out of or based upon any untrue statement of a material fact contained in the Registration Statement or Prospectus or arising out of or based upon any alleged omission to state a material fact required to be stated in either thereof or necessary to make the statements in either thereof not misleading, except insofar as such claims, demands, liabilities or expenses arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information furnished by the Distributor to the Trust for use in the Registration Statement or Prospectus; provided, however, that this indemnity agreement shall not inure to the benefit of any such officer or controlling person unless a court of competent jurisdiction shall determine in a final decision on the merits, that the person to be indemnified was not liable by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of its reckless disregard of its obligations under this Agreement (“disabling conduct”), or, in the absence of such a decision, a reasonable determination, based upon a review of the facts, that the indemnified person was not liable by reason of disabling conduct, by (a) a vote of a majority of a quorum of Trustees, including a majority of Trustees who are neither “interested persons” of the Trust as defined in Section 2(a)(19) of the Investment Company Act nor parties to the proceeding, or (b) an independent legal counsel in a written opinion. The Trust’s agreement to indemnify the Distributor or its officers and any such controlling person as aforesaid is expressly conditioned upon the Trust’s being promptly notified of any action brought against the Distributor or its officers, or any such controlling person, such notification to be given by letter or telegram addressed to the Trust at its principal business office. The Trust agrees to promptly notify the Distributor of the commencement of any litigation or proceedings against the Trust or any of its officers or directors in connection with the issue and sale of any Shares.  

  

9.2 The Distributor agrees to indemnify, defend and hold the Trust, its officers and Trustees and any person who controls the Trust, if any, within the meaning of Section 15 of the Securities Act, free and harmless from and against any and all claims, demands, liabilities and expenses (including the cost of investigating or defending against such claims, demands or liabilities and any reasonable counsel fees incurred in connection therewith) which the Trust, its officers and Trustees or any such controlling person may incur under the Securities Act or under common law or otherwise, but only to the extent that such liability or expense incurred by the Trust, its Trustees or officers or such controlling person resulting from such claims or demands shall arise out of or be based upon any alleged untrue statement of a material fact contained in information furnished by the Distributor to the Trust for use in the Registration Statement or Prospectus or shall arise out of or be based upon any alleged omission to state a material fact in connection with such information required to be stated in the Registration Statement or Prospectus or necessary to make such information not misleading. The Distributor’s agreement to indemnify the Trust, its officers and Trustees and any such controlling person as aforesaid, is expressly conditioned upon the Distributor’s being promptly notified of any action brought against the Trust, its officers and directors or any such controlling person, such notification being given to the Distributor at its principal business office. 

  

9.3 Except as provided in Section 9.1, the Distributor shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust or any Portfolio in connection with matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or negligence on its part in the performance of its duties or from reckless disregard of its obligations and duties under this Agreement. 

  

Section 10. Duration and Termination of this Agreement  

  

10.1 This Agreement shall become effective as of the date first above written and shall remain in force only so long as such continuance is specifically approved at least annually by (a) the Board of the Trust, or by the vote of a majority of the outstanding voting securities of the applicable Portfolio, and (b) by the vote of a majority of those Trustees who are not parties to this Agreement or interested persons of any such parties and who have no direct or indirect financial interest in this Agreement or in the operation of the Plan or in any agreement related 

thereto (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting upon such approval. 

  

10.2 This Agreement may be terminated at any time, without the payment of any penalty, by a majority of the Independent Trustees or by vote of a majority of the outstanding voting securities of the applicable Portfolio, or by the Distributor, on sixty (60) days’ written notice to the other party. This Agreement shall automatically terminate in the event of its assignment. 

  

10.3 The terms “affiliated person,” “assignment,” “interested person” and “vote of a majority of the outstanding voting securities,” when used in this Agreement, shall have the respective meanings specified in the Investment Company Act. 

  

Section 11. Amendments to this Agreement 

  

This Agreement may be amended by the parties only if such amendment is specifically approved by (a) the Board of the Trust, or by the vote of a majority of the outstanding voting securities of the applicable Portfolio, and (b) by the vote of a majority of the Independent Trustees cast in person at a meeting called for the purpose of voting on such amendment. 

  

Section 12. Separate Agreement as to Portfolios 

  

The amendment or termination of this Agreement with respect to any Portfolio shall not result in the amendment or termination of this Agreement with respect to any other Portfolio unless explicitly so provided. 

  

Section 13. Governing Law  

  

The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of New Jersey as at the time in effect, without regard to its conflicts of laws principles, and the applicable provisions of the Investment Company Act. To the extent that the applicable law of the State of New Jersey, or any of the provisions herein, conflicts with the applicable provisions of the Investment Company Act, the latter shall control. 

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year above written. 

  

  

Prudential Annuities Distributors, Inc. 

  

  

By: /s/ George Gannon 

Name:  George Gannon 

Title:  President 

  

  

Advanced Series Trust (on behalf of its portfolios as
listed on Exhibit A). 

  

  

By: /s/ Robert F. O’Donnell 

Name:  Robert F. O’Donnell 

Title:  President 

  

 

Exhibit A 

AST Academic Strategies Asset Allocation Portfolio 

AST Advanced Strategies Portfolio 

AST AllianzGI World Trends Portfolio (formerly, AST RCM World Trends Portfolio) 

AST American Funds Growth Allocation Portfolio 

AST Balanced Asset Allocation Portfolio 

AST BlackRock 60/40 Target Allocation ETF Portfolio 

AST BlackRock 80/20 Target Allocation ETF Portfolio 

AST BlackRock Corporate Bond Portfolio 

AST BlackRock Global Strategies Portfolio 

AST BlackRock Low Duration Bond Portfolio (formerly, AST PIMCO Limited Maturity Bond Portfolio) 

AST BlackRock/Loomis Sayles Bond Portfolio (formerly, AST PIMCO Total Return Bond Portfolio) 

AST Bond Portfolio 2021 

AST Bond Portfolio 2022 

AST Bond Portfolio 2023 

AST Bond Portfolio 2024 

AST Bond Portfolio 2025 

AST Bond Portfolio 2026 

AST Bond Portfolio 2027 

AST Bond Portfolio 2028 

AST Bond Portfolio 2029 

AST Bond Portfolio 2030 

AST Bond Portfolio 2031 

AST Bond Portfolio 2032 

AST Bond Portfolio 2032 

AST Capital Growth Asset Allocation Portfolio 

AST ClearBridge Dividend Growth Portfolio 

AST Cohen & Steers Global Realty Portfolio (formerly, AST Global Real Estate Portfolio) 

AST Cohen & Steers Realty Portfolio 

AST Emerging Markets Equity Portfolio (formerly, AST Parametric Emerging Markets Equity Portfolio) 

AST Franklin 85/15 Diversified Allocation Portfolio (formerly, AST Legg Mason Diversified Growth Portfolio) 

AST Global Bond Portfolio (formerly, AST Wellington Management Global Bond Portfolio) 

AST Goldman Sachs Small-Cap Value Portfolio 

AST Government Money Market Portfolio (formerly, AST Money Market Portfolio) 

AST High Yield Portfolio 

AST Hotchkis & Wiley Large-Cap Value Portfolio (formerly, AST Large-Cap Value Portfolio) 

AST International Growth Portfolio 

AST International Value Portfolio 

AST Investment Grade Bond Portfolio 

AST J.P. Morgan Global Thematic Portfolio  

AST J.P. Morgan International Equity Portfolio 

AST J.P. Morgan Tactical Preservation Portfolio (formerly, AST J.P. Morgan Strategic Opportunities Portfolio) 

AST Jennison Large-Cap Growth Portfolio 

AST Large-Cap Core Portfolio (formerly, AST QMA Large-Cap Portfolio) 

AST Loomis Sayles Large-Cap Growth Portfolio (formerly, AST Marsico Capital Growth Portfolio) 

AST MFS Global Equity Portfolio 

AST MFS Growth Allocation Portfolio (formerly, AST New Discovery Asset Allocation Portfolio) 

AST MFS Growth Portfolio 

AST MFS Large-Cap Value Portfolio 

AST Mid-Cap Growth Portfolio (formerly, AST Goldman Sachs Mid-Cap Growth Portfolio) 

AST Mid-Cap Value Portfolio (formerly, AST Neuberger Berman/LSV Mid-Cap Value Portfolio) 

AST Multi-Sector Fixed Income Portfolio (formerly, AST Long Duration Bond Portfolio) 

AST PIMCO Corporate Bond Portfolio 

AST Preservation Asset Allocation Portfolio 

AST Prudential Core Bond Portfolio 

AST Prudential Corporate Bond Portfolio 

AST Prudential Flexible Multi-Strategy Portfolio 

AST Prudential Growth Allocation Portfolio  

AST QMA International Core Equity Portfolio 

AST Quantitative Modeling Portfolio 

AST Small-Cap Growth Opportunities Portfolio (formerly, AST Federated Aggressive Growth Portfolio) 

AST Small-Cap Growth Portfolio 

AST Small-Cap Value Portfolio 

AST T. Rowe Price Asset Allocation Portfolio 

AST T. Rowe Price Corporate Bond Portfolio 

AST T. Rowe Price Diversified Real Growth Portfolio 

AST T. Rowe Price Growth Opportunities Portfolio 

AST T. Rowe Price Large-Cap Growth Portfolio 

AST T. Rowe Price Large-Cap Value Portfolio (formerly, AST Value Equity Portfolio) 

AST T. Rowe Price Natural Resources Portfolio 

AST Wellington Management Hedged Equity Portfolio (formerly, AST Aggressive Asset Allocation Portfolio) 

AST Western Asset Core Plus Bond Portfolio 

AST Western Asset Corporate Bond Portfolio 

AST Western Asset Emerging Markets Debt Portfolio 

  

Dated February 25, 2013, as amended effective as of April 29, 2013.  As further amended effective as of December 31, 2013.  As further amended as of April 15, 2014, July 1, 2015, December 21, 2015, December 15, 2016, December 1, 2017, April 2, 2018, December 11, 2018, July 1, 2019, October 8, 2019, December 2, 2019, December 11, 2020 and December 1, 2021. 

  


AMENDMENT 

Amendment made as of December 1, 2021, to that certain Custody Agreement dated as of November 7, 2002, as amended from time to time, between each Fund listed on the attached Schedule A thereto, including any series thereof (the “Fund”) and The Bank of New York Mellon (formerly, The Bank of New York) (“Custodian”) (such Custody Agreement hereinafter referred to as the “Custody Agreement”).  Capitalized terms not otherwise defined herein shall have the meaning assigned to them pursuant to the Custody Agreement. 

  

WHEREAS, the parties wish to amend the Custody Agreement to add certain Funds, as parties to the Custody Agreement; 

  

NOW, THEREFORE, for and in consideration of the mutual promises hereinafter set forth, the parties hereto agree as follows: 

  

1.

Schedule A of the Custody Agreement shall be amended as set forth in Exhibit I to this Amendment, attached hereto and made a part hereof. 

  

2.

Each party represents to the other that this Amendment has been duly executed. 

  

3.

This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts, shall, together, constitute only one amendment. 

  

4.

This Amendment shall become effective for each Fund as of the date of first service as listed in Exhibit I hereto upon execution by the parties hereto. From and after the execution hereof, any reference to the Custody Agreement shall be a reference to the Custody Agreement as amended hereby. Except as amended hereby, the Custody Agreement shall remain in full force and effect. 

  

IN WITNESS WHEREOF, each Fund and Custodian have caused this Amendment to be executed by their duly authorized representatives, as of the day and year first above written. 

  

  

EACH FUND LISTED ON 

EXHIBIT I HERETO 

  

By:        /s/ Deborah Conway 

Name:   Deborah Conway 

Title:     Assistant Treasurer 

  

THE BANK OF NEW YORK MELLON 

  

By:        /s/ Richard Menia
Name:   Richard Menia 

Title:     Vice President 

  

  

  

 

 

Exhibit I 

SCHEDULE A TO THE CUSTODY AGREEMENT 

  

INSURANCE FUNDS 

RIC/Fund Name 

Former Name 

Date of First Service 

  

Advanced Series Trust 

  

  

AST American Funds Growth Allocation Portfolio 

  

4/5/18 

AST BlackRock 60/40 Target Allocation ETF Portfolio 

  

12/11/18 

AST BlackRock 80/20 Target Allocation ETF Portfolio 

  

12/11/18 

AST BlackRock Corporate Bond Portfolio 

  

7/1/19 

AST BlackRock Global Strategies Portfolio 

  

5/1/11 

AST Bond Portfolio 2021 

  

12/31/09 

AST Bond Portfolio 2022 

  

12/31/10 

AST Bond Portfolio 2023 

  

12/28/11 

AST Bond Portfolio 2024 

  

11/14/12 

AST Bond Portfolio 2025 

  

12/5/13 

AST Bond Portfolio 2026 

  

1/2/15 

AST Bond Portfolio 2027 

  

12/21/15 

AST Bond Portfolio 2028 

  

12/15/16 

AST Bond Portfolio 2029 

  

12/1/17 

AST Bond Portfolio 2030 

  

12/11/18 

AST Bond Portfolio 2031 

  

12/2/19 

AST Bond Portfolio 2032 

  

12/11/20 

AST Bond Portfolio 2033 

  

12/1/21 

AST ClearBridge Dividend Growth Portfolio 

  

2/25/13 

AST Global Bond Portfolio 

AST Wellington Management Global Bond Portfolio 

7/8/15 

AST Investment Grade Bond Portfolio 

  

1/28/08 

AST Jennison Large-Cap Growth Portfolio 

  

9/25/09 

AST Large-Cap Core Portfolio 

AST QMA Large-Cap Portfolio 

4/29/13 

AST Franklin 85/15 Diversified Allocation Portfolio 

AST Legg Mason Diversified Growth Portfolio 

7/1/14 

AST MFS Growth Allocation Portfolio 

AST New Discovery Asset Allocation Portfolio 

3/25/12 

AST MFS Large-Cap Value Portfolio 

  

8/20/12 

AST Multi-Sector Fixed-Income Portfolio 

AST Long Duration Bond Portfolio 

2/25/13 

AST PIMCO Corporate Bond Portfolio 

  

7/1/19 

AST Prudential Core Bond Portfolio 

  

10/5/11 

AST Prudential Corporate Bond Portfolio  

  

7/1/19 

AST Prudential Flexible Multi-Strategy Portfolio 

  

4/15/14 

AST QMA International Core Equity Portfolio 

  

1/5/15 

AST Quantitative Modeling Portfolio 

  

5/1/11 

AST T. Rowe Price Corporate Bond Portfolio 

  

7/1/19 

AST T. Rowe Price Diversified Real Growth Portfolio 

  

4/15/14 

AST T. Rowe Price Growth Opportunities Portfolio 

  

12/5/13 

AST Wellington Management Hedged Equity Portfolio 

AST Aggressive Asset Allocation Portfolio 

5/1/11 

 

AST Western Asset Corporate Bond Portfolio 

  

7/1/19 

AST Western Asset Emerging Markets Debt Portfolio 

  

8/20/12 

  

The Prudential Series Fund 

  

  

PSF PGIM 50/50 Balanced Portfolio 

Conservative Balanced Portfolio  

7/25/05 

PSF PGIM Total Return Bond Portfolio 

Diversified Bond Portfolio  

7/25/05 

PSF PGIM Flexible Managed Portfolio 

Flexible Managed Portfolio  

7/25/05 

PSF Global Portfolio 

Global Portfolio  

7/25/05 

PSF PGIM Government Income Portfolio 

Government Income Portfolio 

7/25/05 

PSF PGIM Government Money Market Portfolio 

Government Money Market Portfolio, Money Market Portfolio 

9/12/05 

PSF PGIM High Yield Bond Portfolio 

High Yield Bond Portfolio  

7/25/05 

PSF PGIM Jennison Growth Portfolio 

Jennison Portfolio  

7/25/05 

PSF PGIM Jennison Focused Blend Portfolio 

Jennison 20/20 Focus Portfolio  

7/25/05 

PSF Natural Resources Portfolio 

Natural Resources Portfolio  

7/25/05 

PSF Small-Cap Stock Index Portfolio 

Small Capitalization Stock Portfolio  

7/25/05 

PSF Stock Index Portfolio 

Stock Index Portfolio  

7/25/05 

PSF PGIM Jennison Value Portfolio 

Value Portfolio  

7/25/05 

PSF Mid-Cap Growth Portfolio 

SP Prudential U.S. Emerging Growth Portfolio  

7/25/05 

  

Prudential Gibraltar Fund 

  

7/25/05 

  

RETAIL FUNDS 

RIC/Fund Name 

Former Name 

Date of First Service 

  

Prudential Global Total Return Fund, Inc.  

Dryden Global Total Return Fund, Inc. 

  

PGIM Global Total Return Fund 

Prudential Global Total Return Fund, Prudential Global Total Return Fund, Inc. 

6/6/05 

PGIM Global Total Return (USD Hedged) Fund 

Prudential Global Total Return (USD Hedged) Fund 

12/1/17 

Prudential Government Money Market Fund, Inc. 

Prudential MoneyMart Assets, Inc., MoneyMart Assets, Inc. 

  

PGIM Government Money Market Fund 

Prudential Government Money Market Fund, Inc. 

6/6/05 

  

Prudential Investment Portfolios, Inc. 

  

  

PGIM Balanced Fund 

Prudential Balanced Fund, Prudential Asset Allocation Fund, Dryden Asset Allocation Fund, Dryden Active Allocation Fund 

6/6/05 

PGIM Jennison Focused Value Fund 

PGIM Jennison Equity Opportunity Fund, Prudential Jennison Equity Opportunity Fund, Jennison Equity Opportunity Fund 

6/27/05 

PGIM Jennison Growth Fund  

Prudential Jennison Growth Fund, Jennison Growth Fund 

6/27/05 

  

Prudential Investment Portfolios 2 

Dryden Core Investment Fund 

  

PGIM QMA Commodity Strategies Fund 

Prudential Commodity Strategies Fund 

11/1/16 

PGIM QMA Commodity Strategies Subsidiary, Ltd. 

Prudential Commodity Strategies Subsidiary, Ltd. 

11/1/16 

PGIM Core Conservative Bond Fund 

Prudential Core Conservative Bond Fund 

11/1/16 

PGIM Core Short Term Bond Fund   

Prudential Core Short Term Bond Fund, Short Term Bond Series 

6/6/05 

 

PGIM Core Ultra Short Bond Fund  

Prudential Core Ultra Short Bond Fund, Prudential Core Taxable Money Market Fund, Taxable Money Market Series 

6/6/05 

PGIM Institutional Money Market Fund 

Prudential Institutional Money Market Fund 

7/15/16 

PGIM Jennison Small-Cap Core Equity Fund 

Prudential Jennison Small-Cap Core Equity Fund 

11/1/16 

PGIM QMA Emerging Markets Equity Fund 

Prudential QMA Emerging Markets Equity Fund 

11/1/16 

PGIM QMA International Developed Markets Index Fund 

Prudential QMA International Developed Markets Index Fund 

11/1/16 

PGIM QMA Mid-Cap Core Equity Fund 

Prudential QMA Mid-Cap Core Equity Fund 

11/1/16 

PGIM QMA US Broad Market Index Fund 

Prudential QMA US Broad Market Index Fund 

11/1/16 

PGIM TIPS Fund 

Prudential TIPS Fund  

11/1/16 

Prudential Investment Portfolios 3 

Jennison Dryden Opportunity Funds, Strategic Partners Opportunity Funds 

  

PGIM Jennison Focused Growth Fund   

Prudential Jennison Select Growth Fund, Jennison Select Growth Fund, Strategic Partners Focused Growth Fund 

12/9/02 

PGIM Real Assets Fund  

Prudential Real Assets Fund 

12/30/10 

PGIM Real Assets Subsidiary, Ltd.  

Prudential Real Assets Subsidiary, Ltd. 

12/30/10 

PGIM Strategic Bond Fund 

Prudential Unconstrained Bond Fund, PGIM Unconstrained Bond Fund 

6/1/15 

PGIM Global Dynamic Bond Fund 

Prudential Global Absolute Return Bond Fund, PGIM Global Absolute Return Bond Fund  

10/1/15 

PGIM Wadhwani Systematic Absolute Return Fund 

PGIM QMAW Systematic Absolute Return Fund 

09/28/21 

  

Prudential Investment Portfolios 4 

Dryden Municipal Bond Fund 

  

PGIM Muni High Income Fund  

Prudential Muni High Income Fund, High Income Series 

6/6/05 

  

Prudential Investment Portfolios 5 

Strategic Partners Style Specific Funds 

  

PGIM 60/40 Allocation Fund 

  

9/1/15 

Prudential Day One Income Fund 

  

11/1/16 

Prudential Day One 2015 Fund 

  

11/1/16 

Prudential Day One 2020 Fund 

  

11/1/16 

Prudential Day One 2025 Fund 

  

11/1/16 

Prudential Day One 2030 Fund 

  

11/1/16 

Prudential Day One 2035 Fund 

  

11/1/16 

Prudential Day One 2040 Fund 

  

11/1/16 

Prudential Day One 2045 Fund 

  

11/1/16 

Prudential Day One 2050 Fund 

  

11/1/16 

Prudential Day One 2055 Fund 

  

11/1/16 

Prudential Day One 2060 Fund 

  

11/1/16 

Prudential Day One 2065 Fund 

  

12/16/19 

PGIM Jennison Diversified Growth Fund   

Prudential Jennison Diversified Growth Fund and Prudential Jennison Conservative Growth Fund   

11/18/02 

PGIM Jennison Rising Dividend Fund 

Prudential Jennison Rising Dividend Fund 

3/5/14 

  

Prudential Investment Portfolios 6 

Dryden California Municipal Fund 

  

PGIM California Muni Income Fund  

Prudential California Muni Income Fund 

9/12/05 

  

Prudential Investment Portfolios 7 

JennisonDryden Portfolios 

  

PGIM Jennison Value Fund    

Prudential Jennison Value Fund    

6/27/05 

  

Prudential Investment Portfolios 8 

Dryden Index Series Fund 

  

PGIM QMA Stock Index Fund   

Prudential QMA Stock Index Fund, Prudential Stock Index Fund   

6/27/05 

PGIM Securitized Credit Fund 

  

7/1/19 

  

Prudential Investment Portfolios 9 

Dryden Tax-Managed Funds 

  

PGIM Absolute Return Bond Fund  

Prudential Absolute Return Bond Fund  

3/30/11 

PGIM International Bond Fund 

Prudential International Bond Fund 

11/1/16 

PGIM QMA Large-Cap Core Equity Fund  

Prudential QMA Large-Cap Core Equity Fund, Prudential Large-Cap Core Equity Fund, Dryden Large-Cap Core Equity Fund 

6/27/05 

PGIM Select Real Estate Fund 

Prudential Select Real Estate Fund 

7/7/14 

PGIM Real Estate Income Fund 

Prudential Real Estate Income Fund 

6/1/15 

  

Prudential Investment Portfolios 12 

Prudential Global Real Estate Fund 

  

PGIM Global Real Estate Fund 

Prudential Global Real Estate Fund 

9/17/10 

PGIM Short Duration Muni Fund 

PGIM Short Duration Muni High Income Fund, Prudential Short Duration Muni High Income Fund 

5/28/14 

PGIM US Real Estate Fund 

Prudential US Real Estate Fund 

12/21/10 

PGIM Jennison Technology Fund 

  

6/18/18 

PGIM Jennison NextGeneration Global Opportunities Fund 

  

09/14/21 

PGIM Jennison International Small-Mid Cap Opportunities Fund 

  

09/14/21 

  

Prudential Investment Portfolios, Inc. 14 

Prudential Government Income Fund, Inc. 

  

PGIM Government Income Fund   

Prudential Government Income Fund, Dryden Government Income Fund, Inc. 

7/25/05 

PGIM Floating Rate Income Fund   

Prudential Floating Rate Income Fund   

3/30/11 

Prudential Investment Portfolios, Inc. 15  

Prudential High Yield Fund, Inc., Dryden High Yield Fund, Inc. 

  

PGIM Short Duration High Yield Income Fund  

Prudential Short Duration High Yield Income Fund  

9/24/12 

PGIM High Yield Fund  

Prudential High Yield Fund  

7/25/05 

PGIM ESG High Yield Fund 

  

12/8/21 

Prudential Investment Portfolios, Inc. 17 

Prudential Total Return Bond Fund, Inc., Dryden Total Return Bond Fund, Inc. 

  

PGIM Total Return Bond Fund 

Prudential Total Return Bond Fund 

7/25/05 

PGIM Short Duration Multi-Sector Bond Fund 

Prudential Short Duration Multi-Sector Bond Fund 

12/5/13 

PGIM ESG Total Return Bond Fund 

  

09/30/21 

Prudential Investment Portfolios 18 

Prudential Jennison 20/20 Focus Fund, Jennison 20/20 Focus Fund 

6/27/05 

PGIM Jennison 20/20 Focus Fund 

Prudential Jennison 20/20 Focus Fund 

6/27/05 

PGIM Jennison MLP Fund 

Prudential Jennison MLP Fund 

12/5/13 

Prudential Jennison Blend Fund, Inc 

Jennison Blend Fund, Inc., Strategic Partners Equity Fund, Inc. 

  

PGIM Jennison Blend Fund 

Prudential Jennison Blend Fund, Inc 

9/12/05 

 

Prudential Jennison Mid-Cap Growth Fund, Inc.  

Jennison Mid-Cap Growth Fund, Inc., Jennison U.S. Emerging Growth Fund, Inc. 

  

PGIM Jennison Mid-Cap Growth Fund 

Prudential Jennison Mid-Cap Growth Fund, Inc. 

6/27/05 

  

Prudential Jennison Natural Resources Fund, Inc.  

Jennison Natural Resources Fund, Inc. 

  

PGIM Jennison Natural Resources Fund 

Prudential Jennison Natural Resources Fund, Inc. 

6/27/05 

  

Prudential Jennison Small Company Fund, Inc.  

Jennison Small Company Fund, Inc. 

  

PGIM Jennison Small Company Fund  

Prudential Jennison Small Company Fund, Inc.  

6/27/05 

  

Prudential National Muni Fund, Inc.  

Dryden National Municipals Fund, Inc. 

  

PGIM National Muni Fund  

Prudential National Muni Fund, Inc.  

9/12/05 

  

Prudential Sector Funds  

Jennison Sector Funds, Inc. 

  

PGIM Jennison Financial Services Fund  

Prudential Jennison Financial Services Fund and Prudential Financial Services Fund 

6/27/05 

PGIM Jennison Health Sciences Fund  

Prudential Health Sciences Fund d/b/a Prudential Jennison Health Sciences Fund, Jennison Health Sciences Fund 

6/27/05 

PGIM Jennison Utility Fund  

Prudential Utility Fund d/b/a Prudential Jennison Utility Fund, Jennison Utility Fund 

6/27/05 

  

Prudential Short-Term Corporate Bond Fund, Inc.  

Dryden Short-Term Bond Fund, Inc. 

  

PGIM Short-Term Corporate Bond Fund  

Prudential Short-Term Corporate Bond Fund, Inc.  

6/6/05 

  

Prudential World Fund, Inc.  

  

  

PGIM Emerging Markets Debt Local Currency Fund 

Prudential Emerging Markets Debt Local Currency Fund 

3/30/11 

PGIM Emerging Markets Debt Hard Currency Fund 

Prudential Emerging Markets Debt Hard Currency Fund 

12/1/17 

PGIM QMA International Equity Fund 

Prudential QMA International Equity, Fund Prudential International Equity Fund 

6/6/05 

PGIM Jennison Emerging Markets Equity Opportunities Fund 

Prudential Jennison Emerging Markets Equity Fund 

9/3/14 

PGIM Jennison Global Infrastructure Fund 

Prudential Jennison Global Infrastructure Fund 

8/12/13 

PGIM Jennison Global Opportunities Fund 

Prudential Jennison Global Opportunities Fund 

3/14/12 

PGIM Jennison International Opportunities Fund 

Prudential Jennison International Opportunities Fund 

6/5/12 

  

CLOSED END FUNDS 

RIC/Fund Name 

Former Name 

Date of First Service 

PGIM Short Duration High Yield Fund, Inc. 

Prudential Short Duration High Yield Fund, Inc. 

3/8/12 

PGIM Global Short Duration High Yield Fund, Inc. 

Prudential Global Short Duration High Yield Fund, Inc. 

9/24/12 

PGIM Short Duration High Yield Opportunities Fund 

  

10/9/20 

  

  


ADDITION OF PORTFOLIOS TO ACCOUNTING SERVICES AGREEMENT

This document relates to the addition by each registered investment company listed on Attachment A to this document (each an "Additional Fund") to the Agreement (as defined below) of its investment portfolio listed on Attachment A to this document.

WHEREAS, each Additional Fund wishes to retain The Bank of New York Mellon (as assigned from BNY Mellon Investment Servicing (US) Inc. f/k/a PFPC Inc.)) ("BNY Mellon") to provide the services set forth in the Agreement (as defined below) to its investment portfolios listed on Attachment A to this document (each an "Additional Portfolio"), and BNY Mellon wishes to furnish such services;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and intending to be legally bound hereby, each Additional Fund and BNY Mellon agree as follows:

1.For purposes of this document:

A."Agreement" means the Accounting Services Agreement initially made as of July 1, 2005 separately by and between each of Advanced Series Trust (f/k/a American Skandia Trust) and Prudential Investment Portfolios, Inc. 10 (f/k/a Strategic Partners Mutual Funds, Inc.) (each of which is a "Fund" under such Accounting Services Agreement) and BNY Mellon, as such Accounting Services Agreement may be amended or amended and restated from time to time.

B."Effective Date" means, with respect to a particular Additional Portfolio, the effective date listed for such Additional Portfolio on Attachment A to this document (or such other date as agreed in writing between BNY Mellon and the Additional Fund to which such Additional Portfolio relates).

2.Each Additional Fund hereby appoints BNY Mellon to provide the services set forth in the Agreement, in accordance with the terms set forth in the Agreement, to each of its Additional Portfolios as of the Effective Date for each such respective Additional Portfolio. BNY Mellon accepts such appointment and agrees to furnish such services as of the relevant Effective Date.

3.[Reserved].

1

4.An Additional Portfolio shall be deemed to be listed on Exhibit A attached to the Agreement as of the Effective Date for such Additional Portfolio, and as of the Effective Date for a particular Additional Portfolio (but not before such Effective Date) such Additional Portfolio shall be a "Portfolio" for all purposes under the Agreement.

5.For clarity and notwithstanding the provisions of the first sentence of Section 22(c) of the Agreement, this document embodies a portion of the agreement and understanding between each Additional Fund and BNY Mellon relating to the subject matter of the Agreement and the Agreement shall not supersede the terms and provisions of this document.

6.BNY Mellon is entering into this document with each of the Additional Funds separately, and any duty, obligation or liability owed or incurred by BNY Mellon with respect to a particular Additional Fund shall be owed or incurred solely with respect to that Additional Fund, and shall not in any way create any duty, obligation or liability with respect to any other Additional Fund. This document shall be interpreted to carry out the intent of the parties hereto that

BNY Mellon is entering into a separate arrangement with each separate Additional Fund.

2

Agreed:

 

 

 

The Bank of New York Mellon

Each Registered Investment Company set

 

 

 

 

Forth on Attachment A attached hereto

By: /s/ Richard Menia

By: /s/ Deborah Conway

 

 

 

 

Name: Richard Menia

Name: Deborah Conway

Title: Vice President

Title: Assistant Treasurer

Dated:

December 1, 2021

 

3

ATTACHMENT A

ADDITIONAL FUND

ADDITIONAL PORTFOLIO

EFFECTIVE DATE

 

 

 

Prudential Investment Portfolios,

PGIM ESG High Yield Bond Fund

12/8/21

Inc. 15

 

 

Advanced Series Trust

AST Bond Portfolio 2033

12/15/21

4


AMENDMENT 

  

AMENDMENT made as of December 1, 2021 to that certain Amended and Restated Transfer Agency and Service Agreement made as of May 29, 2007 (the “TA Agreement”), between each of the investment companies listed in Exhibit A hereto including any series thereof (the “Fund”) and Prudential Mutual Fund Services LLC (“PMFS”). Capitalized terms not otherwise defined herein shall have the meaning assigned to them pursuant to the TA Agreement. 

  

WHEREAS, the parties wish to amend the TA Agreement to add certain Funds, as parties to the TA Agreement. 

  

NOW, THEREFORE, for and in consideration of the mutual promises hereinafter set forth, the parties hereto agree as follows: 

  

1.

Exhibit A of the TA Agreement shall be amended as set forth in this Amendment, attached hereto and made a part hereof. 

  

2.

Each party represents to the other that this Amendment has been duly executed. 

  

3.

This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts, shall, together, constitute only one amendment. 

  

4.

This Amendment shall become effective for each Fund as of the date of first service as listed in Exhibit A hereto upon execution by the parties hereto. From and after the execution hereof, any reference to the TA Agreement shall be a reference to the TA Agreement as amended hereby. Except as amended hereby, the TA Agreement shall remain in full force and effect. 

  

IN WITNESS WHEREOF, the Fund and PMFS have caused this Amendment to be executed by their duly authorized representatives, as of the day and year first above written. 

  

  

EACH FUND LISTED ON EXHIBIT A HERETO 

  

  

By:/s/ Scott Benjamin 

Scott E. Benjamin  

Title:Executive Vice President  

  

PRUDENTIAL MUTUAL FUND SERVICES LLC 

  

By:/s/ Hansjerg Schlenker 

Hansjerg P. Schlenker 

Title:Senior Vice President 

  

EXHIBIT A 

  

FUNDS AND PORTFOLIOS 

  

RETAIL FUNDS 

  

RIC/Fund Name 

Former Name 

  

Prudential Global Total Return Fund, Inc.  

  

PGIM Global Total Return Fund 

Prudential Global Total Return Fund, Prudential Global Total Return Fund, Inc. 

PGIM Global Total Return (USD Hedged) Fund 

Prudential Global Total Return (USD Hedged) Fund 

  

Prudential Government Money Market Fund, Inc. 

Prudential MoneyMart Assets, Inc. 

PGIM Government Money Market Fund 

Prudential Government Money Market Fund, Inc. 

  

Prudential Investment Portfolios, Inc. 

  

PGIM Balanced Fund 

Prudential Balanced Fund and Prudential Asset Allocation Fund 

PGIM Jennison Focused Value Fund  

PGIM Jennison Equity Opportunity Fund, Prudential Jennison Equity Opportunity Fund 

PGIM Jennison Growth Fund  

Prudential Jennison Growth Fund 

  

Prudential Investment Portfolios 2 

  

PGIM QMA Commodity Strategies Fund 

Prudential Commodity Strategies Fund 

PGIM Core Conservative Bond Fund 

Prudential Core Conservative Bond Fund 

PGIM Core Short Term Bond Fund   

Prudential Core Short Term Bond Fund 

PGIM Core Ultra Short Bond Fund  

Prudential Core Ultra Short Bond Fund and Prudential Core Taxable Money Market Fund 

PGIM Institutional Money Market Fund 

Prudential Institutional Money Market Fund 

PGIM Jennison Small-Cap Core Equity Fund 

Prudential Jennison Small-Cap Core Equity Fund 

PGIM QMA Emerging Markets Equity Fund 

Prudential QMA Emerging Markets Equity Fund 

PGIM QMA International Developed Markets Index Fund 

Prudential QMA International Developed Markets Index Fund 

PGIM QMA Mid-Cap Core Equity Fund 

Prudential QMA Mid-Cap Core Equity Fund 

PGIM QMA US Broad Market Index Fund 

Prudential QMA US Broad Market Index Fund 

PGIM TIPS Fund 

Prudential TIPS Fund, Prudential TIPS Enhanced Index Fund 

Prudential Investment Portfolios 3 

  

PGIM Global Dynamic Bond Fund 

Prudential Global Absolute Return Bond Fund, PGIM Global Absolute Return Bond Fund 

PGIM Focused Growth Fund   

Prudential Jennison Select Growth Fund   

PGIM QMA Large-Cap Value Fund 

Prudential QMA Strategic Value Fund and Prudential Strategic Value Fund 

PGIM Real Assets Fund  

Prudential Real Assets Fund 

PGIM Strategic Bond Fund 

Prudential Unconstrained Bond Fund, PGIM Unconstrained Bond Fund 

PGIM Wadhwani Systematic Absolute Return Fund 

PGIM QMAW Systematic Absolute Return Fund 

  

Prudential Investment Portfolios 4 

  

PGIM Muni High Income Fund  

Prudential Muni High Income Fund 

  

Prudential Investment Portfolios 5 

  

PGIM 60/40 Allocation Fund 

Prudential 60/40 Allocation Fund 

Prudential Day One Income Fund 

  

Prudential Day One 2015 Fund 

  

Prudential Day One 2020 Fund 

  

Prudential Day One 2025 Fund 

  

Prudential Day One 2030 Fund 

  

Prudential Day One 2035 Fund 

  

Prudential Day One 2040 Fund 

  

Prudential Day One 2045 Fund 

  

Prudential Day One 2050 Fund 

  

Prudential Day One 2055 Fund 

  

Prudential Day One 2060 Fund 

  

Prudential Day One 2065 Fund 

  

PGIM Jennison Diversified Growth Fund   

Prudential Jennison Diversified Growth Fund and Prudential Jennison Conservative Growth Fund   

PGIM Jennison Rising Dividend Fund 

Prudential Jennison Rising Dividend Fund 

  

Prudential Investment Portfolios 6 

  

PGIM California Muni Income Fund  

Prudential California Muni Income Fund 

  

Prudential Investment Portfolios 7 

  

PGIM Jennison Value Fund    

Prudential Jennison Value Fund    

  

Prudential Investment Portfolios 8 

  

PGIM QMA Stock Index Fund   

Prudential QMA Stock Index Fund and Prudential Stock Index Fund   

PGIM Securitized Credit Fund 

  

  

Prudential Investment Portfolios 9 

  

PGIM Absolute Return Bond Fund  

Prudential Absolute Return Bond Fund  

PGIM International Bond Fund 

Prudential International Bond Fund 

PGIM QMA Large-Cap Core Equity Fund  

Prudential QMA Large-Cap Core Equity Fund and Prudential Large-Cap Core Equity Fund 

PGIM Real Estate Income Fund 

Prudential Real Estate Income Fund 

PGIM Select Real Estate Fund 

Prudential Select Real Estate Fund 

  

Prudential Investment Portfolios, Inc. 10 

  

PGIM Jennison Global Equity Income Fund 

PGIM Jennison Equity Income Fund, Prudential Jennison Equity Income Fund 

PGIM QMA Mid-Cap Value Fund 

Prudential QMA Mid-Cap Value Fund and Prudential Mid-Cap Value Fund 

  

Prudential Investment Portfolios 12 

  

PGIM Global Real Estate Fund 

Prudential Global Real Estate Fund 

PGIM Short Duration Muni Fund 

PGIM Short Duration Muni High Income Fund, Prudential Short Duration Muni High Income Fund 

PGIM US Real Estate Fund 

Prudential US Real Estate Fund 

PGIM Jennison Technology Fund 

  

PGIM Jennison NextGeneration Global Opportunities Fund 

  

PGIM Jennison International Small-Mid Cap Opportunities Fund 

  

  

Prudential Investment Portfolios, Inc. 14 

  

PGIM Government Income Fund   

Prudential Government Income Fund 

PGIM Floating Rate Income Fund   

Prudential Floating Rate Income Fund   

  

Prudential Investment Portfolios, Inc. 15  

  

PGIM High Yield Fund  

Prudential High Yield Fund  

PGIM Short Duration High Yield Income Fund  

Prudential Short Duration High Yield Income Fund  

PGIM ESG High Yield Fund 

  

  

Prudential Investment Portfolios 16 

  

PGIM Income Builder Fund 

Prudential Income Builder Fund and Target Conservative Allocation Fund 

  

Prudential Investment Portfolios, Inc. 17 

  

PGIM Short Duration Multi-Sector Bond Fund 

Prudential Short Duration Multi-Sector Bond Fund 

PGIM Total Return Bond Fund 

Prudential Total Return Bond Fund 

PGIM ESG Total Return Bond Fund 

  

  

Prudential Investment Portfolios 18 

  

PGIM Jennison 20/20 Focus Fund 

Prudential Jennison 20/20 Focus Fund 

PGIM Jennison MLP Fund 

Prudential Jennison MLP Fund 

  

Prudential Jennison Blend Fund, Inc 

  

PGIM Jennison Blend Fund 

Prudential Jennison Blend Fund, Inc 

  

Prudential Jennison Mid-Cap Growth Fund, Inc.  

  

PGIM Jennison Mid-Cap Growth Fund 

Prudential Jennison Mid-Cap Growth Fund, Inc. 

  

Prudential Jennison Natural Resources Fund, Inc.  

  

PGIM Jennison Natural Resources Fund 

Prudential Jennison Natural Resources Fund, Inc. 

  

Prudential Jennison Small Company Fund, Inc.  

  

PGIM Jennison Small Company Fund  

Prudential Jennison Small Company Fund, Inc.  

  

Prudential National Muni Fund, Inc.  

  

PGIM National Muni Fund  

Prudential National Muni Fund, Inc.  

  

Prudential Sector Funds  

  

PGIM Jennison Financial Services Fund  

Prudential Jennison Financial Services Fund and Prudential Financial Services Fund 

PGIM Jennison Health Sciences Fund  

Prudential Health Sciences Fund d/b/a Prudential Jennison Health Sciences Fund 

PGIM Jennison Utility Fund  

Prudential Utility Fund d/b/a Prudential Jennison Utility Fund 

  

Prudential Short-Term Corporate Bond Fund, Inc.  

  

PGIM Short-Term Corporate Bond Fund  

Prudential Short-Term Corporate Bond Fund, Inc.  

  

Prudential World Fund, Inc.  

  

PGIM Emerging Markets Debt Hard Currency Fund 

Prudential Emerging Markets Debt Hard Currency Fund 

PGIM Emerging Markets Debt Local Currency Fund 

Prudential Emerging Markets Debt Local Currency Fund 

PGIM QMA International Equity Fund 

Prudential QMA International Equity Fund and Prudential International Equity Fund 

PGIM Jennison Emerging Markets Equity Opportunities Fund 

Prudential Jennison Emerging Markets Equity Fund 

PGIM Jennison Global Infrastructure Fund 

Prudential Jennison Global Infrastructure Fund 

PGIM Jennison Global Opportunities Fund 

Prudential Jennison Global Opportunities Fund 

PGIM Jennison International Opportunities Fund 

Prudential Jennison International Opportunities Fund 


The Target Portfolio Trust 

  

PGIM Core Bond Fund 

Prudential Core Bond Fund and Intermediate-Term Bond Portfolio 

PGIM Corporate Bond Fund 

Prudential Corporate Bond Fund and Mortgage Backed Securities Portfolio 

PGIM QMA Small-Cap Value Fund 

Prudential QMA Small-Cap Value Fund, Prudential Small-Cap Value Fund and Small Capitalization Value Portfolio 

  

  

INSURANCE FUNDS 

RIC/Fund Name 

Former Name 

Advanced Series Trust 

  

AST Academic Strategies Asset Allocation Portfolio 

  

AST Advanced Strategies Portfolio 

  

AST AllianzGI World Trends Portfolio 

AST RCM World Trends Portfolio 

AST American Funds Growth Allocation Portfolio 

  

AST Balanced Asset Allocation Portfolio 

  

AST BlackRock 60/40 Target Allocation ETF Portfolio 

  

AST BlackRock 80/20 Target Allocation ETF Portfolio 

  

AST BlackRock Corporate Bond Portfolio 

  

AST BlackRock Global Strategies Portfolio 

  

AST BlackRock Low Duration Bond Portfolio 

AST PIMCO Limited Maturity Bond Portfolio 

AST BlackRock/Loomis Sayles Bond Portfolio 

AST PIMCO Total Return Bond Portfolio 

AST Bond Portfolio 2021 

  

AST Bond Portfolio 2022 

  

AST Bond Portfolio 2023 

  

AST Bond Portfolio 2024 

  

AST Bond Portfolio 2025 

  

AST Bond Portfolio 2026 

  

AST Bond Portfolio 2027 

  

AST Bond Portfolio 2028 

  

AST Bond Portfolio 2029 

  

AST Bond Portfolio 2030 

  

AST Bond Portfolio 2031 

  

AST Bond Portfolio 2032 

  

AST Bond Portfolio 2033 

  

AST Capital Growth Asset Allocation Portfolio 

  

AST ClearBridge Dividend Growth Portfolio 

  

AST Cohen & Steers Global Realty Portfolio 

AST Global Real Estate Portfolio 

AST Cohen & Steers Realty Portfolio 

  

AST Emerging Markets Equity Portfolio 

AST Parametric Emerging Markets Equity Portfolio 

AST Global Bond Portfolio 

AST Wellington Management Global Bond Portfolio 

AST Goldman Sachs Small-Cap Value Portfolio 

  

AST Government Money Market Portfolio 

AST Money Market Portfolio 

AST High Yield Portfolio 

  

AST Hotchkis & Wiley Large-Cap Value Portfolio 

AST Large-Cap Value Portfolio 

AST International Growth Portfolio 

  

AST International Value Portfolio 

  

AST Investment Grade Bond Portfolio 

  

AST J.P. Morgan Global Thematic Portfolio 

  

AST J.P. Morgan International Equity Portfolio 

  

AST J.P. Morgan Tactical Preservation Portfolio 

AST J.P. Morgan Strategic Opportunities Portfolio 

AST Jennison Large-Cap Growth Portfolio 

  

AST Large-Cap Core Portfolio 

AST QMA Large-Cap Portfolio 

AST Franklin 85/15 Diversified Allocation Portfolio 

AST Legg Mason Diversified Growth Portfolio 

AST Loomis Sayles Large-Cap Growth Portfolio 

  

AST MFS Global Equity Portfolio 

  

AST MFS Growth Allocation Portfolio 

AST New Discovery Asset Allocation Portfolio 

AST MFS Growth Portfolio 

  

AST MFS Large-Cap Value Portfolio 

  

AST Mid-Cap Growth Portfolio 

AST Goldman Sachs Mid-Cap Growth Portfolio 

AST Mid-Cap Value Portfolio 

AST Neuberger Berman/LSV Mid-Cap Value Portfolio 

AST Multi-Sector Fixed-Income Portfolio 

  

AST PIMCO Corporate Bond Portfolio 

  

AST Preservation Asset Allocation Portfolio 

  

AST Prudential Core Bond Portfolio 

  

AST Prudential Corporate Bond Portfolio 

  

AST Prudential Growth Allocation Portfolio 

  

AST Prudential Flexible Multi-Strategy Portfolio 

  

AST QMA International Core Equity Portfolio 

  

AST Quantitative Modeling Portfolio 

  

AST Small-Cap Growth Opportunities Portfolio 

AST Federated Aggressive Growth Portfolio 

AST Small-Cap Growth Portfolio 

  

AST Small-Cap Value Portfolio 

  

AST T. Rowe Price Asset Allocation Portfolio 

  

AST T. Rowe Price Corporate Bond Portfolio 

  

AST T. Rowe Price Diversified Real Growth Portfolio 

  

AST T. Rowe Price Growth Opportunities Portfolio 

  

AST T. Rowe Price Large-Cap Growth Portfolio 

  

AST T. Rowe Price Large-Cap Value Portfolio 

AST Value Equity Portfolio 

AST T. Rowe Price Natural Resources Portfolio 

  

AST Wellington Management Hedged Equity Portfolio 

  

AST Western Asset Core Plus Bond Portfolio 

  

AST Western Asset Corporate Bond Portfolio 

  

AST Western Asset Emerging Markets Debt Portfolio 

  

  

The Prudential Series Fund 

  

PSF PGIM 50/50 Balanced Portfolio 

Conservative Balanced Portfolio  

PSF PGIM Total Return Bond Portfolio 

Diversified Bond Portfolio  

PSF PGIM Jennison Blend Portfolio 

Equity Portfolio 

PSF PGIM Flexible Managed Portfolio 

Flexible Managed Portfolio  

PSF Global Portfolio 

Global Portfolio  

PSF PGIM Government Income Portfolio 

Government Income Portfolio 

PSF PGIM Government Money Market Portfolio 

Government Money Market Portfolio  

PSF PGIM High Yield Bond Portfolio 

High Yield Bond Portfolio  

PSF PGIM Jennison Growth Portfolio 

Jennison Portfolio  

PSF PGIM Jennison Focused Blend Portfolio 

Jennison 20/20 Focus Portfolio  

PSF Natural Resources Portfolio 

Natural Resources Portfolio  

PSF Small-Cap Stock Index Portfolio 

Small Capitalization Stock Portfolio  

PSF Stock Index Portfolio 

Stock Index Portfolio  

PSF PGIM Jennison Value Portfolio 

Value Portfolio  

PSF International Growth Portfolio 

SP International Growth Portfolio 

PSF Mid-Cap Growth Portfolio 

SP Prudential U.S. Emerging Growth Portfolio  

PSF Small-Cap Value Portfolio 

SP Small-Cap Value Portfolio 

  

End of Exhibit A 

1 

  


 

  

Goodwin Procter LLP 

Counselors at Law 

1900 N Street NW 

Washington, DC 20036 

T: 202.346.4000 

F: 202.346.4444 

  

  

December 15, 2021 

  

  

  

  

Advanced Series Trust 

655 Broad Street 

17th Floor 

Newark, New Jersey 07102 

  

Re:

Advanced Series Trust (“Registrant”) Form N-1A; Post-Effective Amendment No. 184 to the Registration Statement under the Securities Act of 1933 and Amendment No. 186 to the Registration Statement under the Investment Company Act of 1940 (the “Amendment”) 

  

Ladies and Gentlemen: 

  

We provided an opinion to the Registrant dated April 25, 2005 (the “Opinion”), which the Registrant filed as an exhibit to its Registration Statement filed April 29, 2005. 

  

We consent to the filing of this letter with the Securities and Exchange Commission as an exhibit to the Amendment and the incorporation by reference of the Opinion as an exhibit to the Amendment.  We also consent to the reference in the Registration Statement to the Trust to the fact that Goodwin Procter LLP serves as counsel to the Trust and has provided the Opinion. 

  

  

Very truly yours, 

  

/s/ Goodwin Procter LLP 

  

Goodwin Procter LLP 

  

  


ADVANCED SERIES TRUST 

SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
 

WHEREAS, the Board of Trustees of the Advanced Series Trust (the “Trust”), including a majority of the Independent Trustees (as defined herein), have concluded in the exercise of their reasonable business judgment and in light of their fiduciary duties under the Investment Company Act of 1940, as amended (the “Act”), that there is a reasonable likelihood that this Plan (the “Plan”) will benefit each of the Trust’s portfolios listed on Schedule A (each a “Portfolio”) and the shareholders of each Portfolio; 


NOW, THEREFORE, this Plan is hereby adopted as follows:
 

Section 1. The Trust is authorized to pay a fee (the “Services and Distribution Fee”) for the services 

rendered and expenses borne as set forth in Section 2, including services and expenses in connection with the distribution of shares of the Trust, at an annual rate with respect to each Portfolio not to exceed 0.25% of the average daily net assets of the Portfolio. The Trust shall pay the Services and Distribution Fee to the distributor of the Trust’s shares (“Distributor”). Subject to such limit and subject to the provisions hereof, the Services and Distribution Fee must be approved at least annually by:

(a) a majority of the Board of Trustees of the Trust and 

(b) a majority of the Trustees who (i) are not “interested persons” of the Trust, as defined in the Act, and (ii) have no direct or indirect financial interest in the operation of the Plan or any agreements related thereto (the “Independent Trustees”).

If at any time this Plan shall not be in effect with respect to the shares of all Portfolios of the Trust, the Services and Distribution Fee shall be computed on the basis of the net assets of the shares of those Portfolios for which the Plan is in effect. The Services and Distribution Fee shall be accrued daily and paid bi-weekly or at such other intervals as the Board of Trustees shall determine. The Services and Distribution Fee shall not apply to Portfolios that invest all of their assets in other Portfolios. For Portfolios that invest a portion of their assets in other Portfolios, the Services and Distribution Fee shall apply only on assets not invested in other Portfolios.
 

Section 2. The Distributor shall provide (or arrange for the provision of) the following services and bear the following expenses (collectively, the “Services”): 


• printing and mailing of prospectuses, statements of additional information, supplements, proxy 

statement materials, and annual and semi-annual reports for current owners of variable life or variable 

annuity contracts indirectly investing in the shares (the “Contracts”); 

• reconciling and balancing separate account investments in the Portfolios; 

• reconciling and providing notice to the Trust of net cash flow and cash requirements for net redemption 

orders; 

• confirming transactions; 

• providing Contract owner services related to investments in the Portfolios, including assisting the Trust 

with proxy solicitations, including providing solicitation and tabulation services, and investigating and 

responding to inquiries from Contract owners that relate to the Portfolios; 

• providing periodic reports to the Trust and regarding the Portfolios to third-party reporting services; 

• paying compensation to and expenses, including overhead, of employees of the Distributor and other 

broker-dealers and financial intermediaries that engage in the distribution of the shares, including but 

not limited to commissions, servicing fees and marketing fees; 

• printing and mailing of prospectuses, statements of additional information, supplements and annual and 

semi-annual reports for prospective Contract owners; 

• paying expenses relating to the development, preparation, printing, and mailing of advertisements, 

sales literature, and other promotional materials describing and/or relating to the Portfolios; 

• paying expenses of holding seminars and sales meetings designed to promote the distribution of the 

shares; 

• paying expenses of obtaining information and providing explanations to Contract owners regarding 

investment objectives, policies, performance and other information about the Trust and its Portfolios; 

• paying expenses of training sales personnel regarding the Portfolios; and 

• providing other services and bearing other expenses for the benefit of the Portfolios, including 

activities primarily intended to result in the sale of shares of the Trust.
 

Section 3. This Plan shall not take effect until it has been approved by votes of the majority (or whatever 

greater percentage may, from time to time, be required by Section 12(b) of the Act or the rules and regulations thereunder) of both (a) the Trustees, and (b) the Independent Trustees cast in person at a meeting called for the purpose of voting on this Plan. If adopted with respect to a Portfolio after the public offering of shares of that Portfolio (or the sale of shares to persons who are not affiliated persons of the Portfolio, affiliated persons of such persons, affiliated persons of the promoter or affiliated persons of such persons), the Plan shall not take effect until it has been approved by a vote of at least a majority of the outstanding voting securities of the Portfolio. Any agreement related to the Plan must be approved by votes of the majority (or whatever greater percentage may, from time to time, be required by Section 12(b) of the Act or the rules and regulations thereunder) of both (a) the Trustees, and (b) the Independent Trustees cast in person at a meeting called for the purpose of voting on the agreement.
 

Section 4. To the extent any payments made by a Portfolio pursuant to the Plan are deemed payments for the financing of any activity primarily intended to result in the sale of shares within the context of Rule 12b-1 under the Act, such payments shall be deemed to be approved under the Plan. Notwithstanding anything herein to the contrary, no Portfolio shall be obligated to make any payments under the Plan that exceed the maximum amounts payable under Rule 2830 of the Conduct Rules of the National Association of Securities Dealers, Inc., or any successor rule thereto adopted by the Financial Industry Regulatory Authority.

Section 5. This Plan shall continue in effect for a period of more than one year after it takes effect only so 

long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in Section 3 hereof. 


Section 6. Any person authorized to direct the disposition of monies paid or payable by the shares of the 

Trust pursuant to this Plan or any related agreement shall provide to the Board of Trustees of the Trust, and the Trustees shall review, at least quarterly, a written report of the amounts so expended and the purposes for which such expenditures were made. 

  

Section 7. This Plan may be terminated at any time with respect to the shares of any Portfolio by vote of a 

majority of the Independent Trustees, or by vote of a majority of the outstanding voting securities representing the shares of that Portfolio.
 

All agreements with any person relating to implementation of this Plan with respect to the shares of any 

Portfolio shall be in writing, and any agreement related to this Plan with respect to the shares of any Portfolio shall provide:
 

(a) That such agreement may be terminated at any time, without payment of any penalty, by vote of a 

majority of the Independent Trustees or by vote of a majority of the outstanding voting securities 

representing the shares of such Portfolio, on not more than 60 days’ written notice to any other party to 

the agreement; and 


(b) That such agreement shall terminate automatically in the event of its assignment. 

  

Section 8. This Plan may not be amended to materially increase the amount of Services and Distribution Fee permitted pursuant to Section 1 hereof with respect to any Portfolio until it has been approved by a vote of at least a majority of the outstanding voting securities representing the shares of that Portfolio. 


Section 9. The Trust shall preserve copies of this Plan, and any related agreement or written report regarding this Plan presented to the Board of Trustees for a period of not less than six years from the date of the Plan, agreement or written report, as the case may be, the first two years in an easily accessible place. 

  

Section 10. The provisions of the Plan are severable for each Portfolio of the Trust, and whenever any action is to be taken with respect to the Plan, such action shall be taken separately for each Portfolio of the Trust. 


Section 11. While the Plan is in effect, the Board of Trustees shall satisfy the fund governance standards as defined in Rule 0-1(a)(7) under the Act. 


Section 12. As used in this Plan, the terms “assignment,” “interested person,” and “majority of the 

outstanding voting securities” shall have the respective meanings specified in the Act and the rules and 

regulations thereunder, subject to such exemptions as may be granted by the Securities and Exchange 

Commission. 

 

  

Schedule A
 

AST Academic Strategies Asset Allocation Portfolio 

AST Advanced Strategies Portfolio 

AST AllianzGI World Trends Portfolio 

AST American Funds Growth Allocation Portfolio 

AST Balanced Asset Allocation Portfolio 

AST BlackRock 60/40 Target Allocation ETF Portfolio 

AST BlackRock 80/20 Target Allocation ETF Portfolio 

AST BlackRock Global Strategies Portfolio 

AST BlackRock Low Duration Bond Portfolio 

AST BlackRock/Loomis Sayles Bond Portfolio 

AST Bond Portfolio 2021 

AST Bond Portfolio 2022 

AST Bond Portfolio 2023 

AST Bond Portfolio 2024 

AST Bond Portfolio 2025 

AST Bond Portfolio 2026 

AST Bond Portfolio 2027 

AST Bond Portfolio 2028 

AST Bond Portfolio 2029 

AST Bond Portfolio 2030 

AST Bond Portfolio 2031 

AST Bond Portfolio 2032 

AST Bond Portfolio 2033 

AST Capital Growth Asset Allocation Portfolio 

AST ClearBridge Dividend Growth Portfolio 

AST Cohen & Steers Global Realty Portfolio 

AST Cohen & Steers Realty Portfolio 

AST Global Bond Portfolio 

AST Emerging Markets Equity Portfolio 

AST Franklin 85/15 Diversified Allocation Portfolio 

AST Goldman Sachs Small-Cap Value Portfolio 

AST Government Money Market Portfolio 

AST High Yield Portfolio 

AST Hotchkis & Wiley Large-Cap Value Portfolio 

AST International Growth Portfolio 

AST International Value Portfolio 

AST Investment Grade Bond Portfolio 

AST J.P. Morgan Global Thematic Portfolio 

AST J.P. Morgan International Equity Portfolio 

AST J.P. Morgan Tactical Preservation Portfolio 

AST Jennison Large-Cap Growth Portfolio 

AST Large-Cap Core Portfolio 

AST Loomis Sayles Large-Cap Growth Portfolio 

AST MFS Global Equity Portfolio 

AST MFS Growth Portfolio 

AST MFS Growth Allocation Portfolio 

AST MFS Large-Cap Value Portfolio 

AST Mid-Cap Growth Portfolio 

AST Mid-Cap Value Portfolio 

AST Multi-Sector Fixed Income Portfolio 

AST Preservation Asset Allocation Portfolio 

AST Prudential Core Bond Portfolio 

AST Prudential Flexible Multi-Strategy Portfolio 

AST Prudential Growth Allocation Portfolio 

AST QMA International Core Equity Portfolio 

AST Small-Cap Growth Portfolio 

AST Small-Cap Growth Opportunities Portfolio 

AST Small-Cap Value Portfolio 

AST T. Rowe Price Asset Allocation Portfolio 

AST T. Rowe Price Diversified Real Growth Portfolio 

AST T. Rowe Price Growth Opportunities Portfolio 

AST T. Rowe Price Large-Cap Growth Portfolio 

AST T. Rowe Price Large-Cap Value Portfolio 

AST T. Rowe Price Natural Resources Portfolio 

AST Wellington Management Hedged Equity Portfolio 

AST Western Asset Core Plus Bond Portfolio 

AST Western Asset Emerging Markets Debt Portfolio 


ADVANCED SERIES TRUST

AST Bond Portfolio 2033
 

Notice of Rule 12b-1 Fee Waiver 

THIS NOTICE OF RULE 12B-1 FEE WAIVER is signed as of December 1, 2021, by PRUDENTIAL ANNUITIES DISTRIBUTORS, INC. (PAD), the principal underwriter of the shares of each Portfolio of the Advanced Series Trust, an open-end management investment company (the Trust). 

  

WHEREAS, PAD desires to waive a portion of its distribution and shareholder services fees (Rule 12b-1 fees) payable by the AST Bond Portfolio 2033 (the Portfolio) of the Trust; and 

  

WHEREAS, PAD understands and intends that the Trust will rely on this Notice and agreement in preparing a registration statement on Form N-1A and in accruing the Portfolio’s expenses for purposes of calculating net asset value and for other purposes, and expressly permits the Trust to do so; and 

  

WHEREAS, shareholders of the Portfolio will benefit from the ongoing contractual waiver by incurring lower operating expenses than they would absent such waiver. 

  

NOW, THEREFORE, PAD hereby provides notice that it has agreed to limit the distribution and service fees (Rule 12b-1 fees) incurred the Portfolio of the Trust pursuant to the waiver schedule set forth below: 

  

Average Daily Net Assets of Portfolio 

Distribution and Service Fee
 (12b-1 Fee) Rate Including Waiver 

Up to and including $300 million 

0.25% (no waiver) 

Over $300 million up to and including $500 million 

0.23% 

Over $500 million up to and including $750 million 

0.22% 

Over $750 million 

0.21% 

  

This contractual waiver schedule, as set forth above, shall not have an expiration or termination date, and may not be modified or discontinued. 

  

  

  

 

IN WITNESS WHEREOF, PAD has signed this Notice of Rule 12b-1 Fee Waiver as of the day and year first above written. 

  


PRUDENTIAL ANNUITIES DISTRIBUTORS, INC. 

  

  

By: /s/ James Mullery 

Name: James Mullery 

Title: President and Chief Executive Officer 

  

  

  



Hotchkis and Wiley Capital Management Compliance Manual

2 – Code of Ethics

2 – Code of Ethics

2021-09

2 – CODE OF ETHICS

The personal trading and investment activities of employees of H&W are the subject of various federal securities laws, rules and regulations. Underlying these requirements is the fiduciary capacity in which H&W acts for its clients. As a fiduciary, H&W has a duty of loyalty to clients that requires the firm to act in the best interests of its clients and always place clients' interests first and foremost.

When H&W employees invest for their own accounts, conflicts of interest may arise between clients and employees. The conflicts may include an employee taking an investment opportunity from clients for the employee's own portfolio, using an employee's advisory position to take advantage of available investments or front running, which includes an employee trading before placing client transactions, thereby taking advantage of information or using client portfolio assets to have an effect on the market that is used to the employee's benefit.

The securities laws and regulations that cover the personal trading and investment activities of advisory personnel include: (a) the anti-fraud provisions (Section 206) of the Advisers Act that prohibit any scheme, practice, transaction or a course of business that operates as a fraud or deceit on a client; (b) Form ADV and Rule 204-3 requirements that provide that an adviser disclose its practices and its interests in client transactions, among other things; (c) Rule 204A-1 requirement that an adviser establish, maintain, and enforce a written code of ethics policy; (d) recordkeeping requirements (Rule 204-2(a)(12) of the Advisers Act) for the personal trading of advisory representatives; (e) Rule 17j-1 of the Investment Company Act of 1940 regarding the personal trading of access persons; and (f) Section 10(b) of the Exchange Act and Rule 10b-5 thereunder regarding the use of manipulative and deceptive devices.

H&W shall not be deemed to have violated the provisions of the books and records rules because of its failure to record securities transactions of any advisory representative if H&W establishes that it instituted adequate procedures and used reasonable diligence to obtain promptly reports of all transactions required to be recorded.

To implement its employee personal trading policies, H&W has adopted the Code of Ethics included as Appendix 2-A. All employees are required to preclear their personal trades (excluding certain exempt securities) using the employee trading pre-clearance and monitoring system ("SchwabCT"). All requests and approvals are maintained in the SchwabCT system (effective in January 2013). On a periodic basis, management reports on employees' securities trades are provided to the Chief Executive Officer, President, Chief Operating Officer, and Chief Compliance Officer.

Employee transactions in H&W advised and sub-advised mutual funds are also subject to preclearance requirements.

2 – Code of Ethics

2-1

2021-09

Appendix 2-A

Joint Code of Ethics

Hotchkis and Wiley Capital Management, LLC ("H&W")

And Registered Investment Companies

For which H&W Serves as Investment Adviser

Updated As of September 1, 2021

________________________________________________________________________

This Code of Ethics is adopted by Hotchkis and Wiley Capital Management, LLC ("H&W") and Hotchkis and Wiley Funds (the "Funds") pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended ("1940 Act") and Rule 204A-1 under the Investment Advisers Act of 1940, as amended (the "Advisers Act"). Except where noted, the Code applies to all H&W employees and all "Advisory Persons" (as defined in Rule 17j-1) of the Funds.1

Section 1 – Statement of General Fiduciary Principles and Standard of Business Conduct

The Code of Ethics is based on the fundamental principle that H&W and its employees must put client interests first. As an investment adviser, H&W has fiduciary responsibilities to its clients, including the Funds and any other investment companies for which it serves as an investment adviser or sub-adviser. Among H&W's fiduciary responsibilities is the responsibility to ensure that its employees conduct their personal Securities2 transactions in a manner which does not interfere or appear to interfere with any client transactions, or otherwise take unfair advantage of H&W's relationship to clients. All employees must adhere to this fundamental principle as well as comply with the specific provisions set forth herein.

More generally, H&W standards of business conduct are based on principles of openness, integrity, honesty and trust. It bears emphasis that technical compliance with the Code of Ethics will not insulate from scrutiny transactions which show a pattern of compromise or abuse of an employee's fiduciary responsibilities to clients. Accordingly,

1The definition of "Advisory Persons" includes, among others, all trustees and officers of the Funds, and all directors and officers of H&W. Other than the Independent Trustees and outsourced Chief Compliance Officer (CCO) of the Funds, who are not employees of H&W, this Code generally refers only to "employees" or, where necessary, to "Independent Trustees" or "Outsourced CCO."

2"Security" means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing.

2 – Code of Ethics

2-2

2021-09

all employees must seek to avoid any actual or potential conflicts, or the appearance of such conflicts, between their personal interests and the interests of clients.

Section 2 – Standards of Business Conduct

A.Compliance with Laws and Regulations

Employees must comply with applicable federal securities laws. As part of this requirement, employees are not permitted, in connection with the purchase or sale, directly or indirectly, of a Security held or to be acquired by a client:

a.To defraud such client in any manner;

b.To mislead such client, including making a statement that omits material facts;

c.To engage in any act, practice or course of conduct which operates or would operate as a fraud or deceit upon such client;

d.To engage in any manipulative practice with respect to such client; or

e.To engage in any manipulative practice with respect to securities, including price manipulation.

B.Conflicts of Interest

As a fiduciary, H&W has an affirmative duty of care, loyalty, honesty, and good faith to act in the best interests of its clients. Compliance with this duty can be achieved by trying to avoid conflicts of interest and by fully disclosing all material facts concerning any conflict that does arise with respect to any client. Employees must try to avoid situations that have even the appearance of conflict or impropriety.

Conflicts Among Client Interests. Conflicts of interest may arise where the firm or its employees have reason to favor the interest of one client over another (e.g., larger accounts over smaller accounts, accounts compensated by performance fees over asset-based fees). H&W prohibits inappropriate favoritism of one client over another client that would constitute a breach of fiduciary duty.

Competing with Client Trades. Employees are prohibited from using knowledge about pending or currently considered Securities transactions for clients to profit personally, directly or indirectly, as a result of such transactions, including by purchasing or selling such Securities. Conflicts raised by personal Securities transactions are also addressed more specifically in Section 3.

C.Insider Trading Policy

Employees are prohibited from buying or selling any Security while in the possession of material nonpublic information about the issuer of the Security. Material information is generally defined as information that a reasonable investor would likely consider important in making his or her investment decision or information that is reasonably certain to have a substantial effect on the price of a company's Securities. Information is nonpublic unless it has been effectively communicated to the market place. It is the SEC's position that the term "material nonpublic information" relates not

2 – Code of Ethics

2-3

2021-09

only to issuers but also to H&W's Securities recommendations and client Securities holdings and transactions.

Employees are also prohibited from communicating to third parties any material nonpublic information about any security or issuer of Securities. Additionally, no employee may use inside information about H&W activities to benefit any client or to gain personal benefit. Any violation may result in sanctions, which could include termination of employment with H&W.

Section 3 – Restrictions Relating to Securities Transactions

A. General Trading Restrictions for all Employees

The following restrictions apply to all employees:

1.Employees and Other Covered Persons. All employees are subject to the general trading restrictions described in Section 3. These requirements extend to trading activities by an employee's spouse, minor children or dependent person living in the same household, trustee and custodial accounts or any other account in which the employee has a financial interest or over which the employee has investment discretion (other than H&W managed separate accounts). The Chief Compliance Officer (and/or executive officer designee) may, in his or her discretion, determine that an account of an employee's child or dependent person living in the same household are not subject to the trading restrictions under the Code given relevant facts and circumstances.

2.Preclearance. All employees must obtain written approval from the Chief Compliance Officer ("CCO") or preclearance delegate prior to entering into any Securities transaction (with the exception of exempted Securities as listed in Section 4) in all accounts. Approval of a transaction, once given, is effective for 1 business day, (the day approval was granted unless otherwise specified in the written approval), or until the employee discovers that the information provided at the time the transaction was approved is no longer accurate. Any transaction not completed within the 1 day (or other specified) time period will require reapproval.

Setting up or adjustments to systematic purchases and/or sales of any Security through an automated investment plan needs preclearance, but subsequent systematic transactions do not need preclearance.

With respect to mutual funds, the following apply:

∙Transactions in the Funds or other mutual funds advised or sub-advised by H&W need preclearance.

∙Setting up systematic future contributions to and/or withdrawals from the Funds/or other advised or sub-advised mutual funds do not need preclearance.

∙Exchanges into and out of an H&W-advised mutual fund in the Hotchkis and Wiley 401(k) plan need preclearance.

2 – Code of Ethics

2-4

2021-09

Employees may preclear trades only in cases where they have a present intention to transact in the Security for which preclearance is sought. It is H&W's view that it is not appropriate for an employee to obtain a general or open-ended preclearance to cover the eventuality that he or she may buy or sell a Security at some point on a particular day depending upon market developments. This requirement would not prohibit a price limit order, provided that the employee has a present intention to effect a transaction at such price. Consistent with the foregoing, an employee may not simultaneously request preclearance to buy and sell the same Security.

Personal trades of Compliance employees must be precleared by another person from the Compliance Department.

3.Restrictions on Transactions. No employee may purchase or sell any Security which at the time is being purchased or sold, or to the employee's knowledge is being considered for purchase or sale, by any Fund, or other mutual fund or separate account managed by H&W (each, an "H&W Client").

4.Restrictions on Related Securities. The restrictions and procedures applicable to the transactions in Securities by employees set forth in this Code of Ethics shall similarly apply to Securities that are issued by the same issuer and whose value or return is related, in whole or in part, to the value or return of the Security purchased or sold or being contemplated for purchase or sale during the relevant period by an H&W Client. For example, options or warrants to purchase common stock, and convertible debt and convertible preferred stock of a particular issuer would be considered related to the underlying common stock of that issuer for purposes of this policy. In sum, the related Security would be treated as if it were the underlying Security for the purpose of the preclearance procedures described herein.

5.Private Placements. Employee purchases and sales of "private placement" Securities (including all private equity partnerships, hedge funds, limited partnership or venture capital funds) must be precleared. No employee may engage in any such transaction unless the CCO or a preclearance delegate and the employee's manager have each previously determined in writing that the contemplated investment does not involve any potential for conflict with the investment activities of any H&W Client.

If, after receiving the required approval, an employee has any material role in the subsequent consideration by any H&W Client of an investment in the same or affiliated issuer, the employee must disclose his or her interest in the private placement investment to the CCO and the employee's manager. The decision to purchase Securities of the issuer by an H&W Client account must be independently reviewed and authorized by the employee's manager.

6.Initial Public Offerings. All initial public offerings require pre-clearance (including corporate, government, or municipal debt public offerings). Employees are prohibited from acquiring any securities in an initial public equity offering.

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7.Blackout Periods. Employees may not buy or sell a Security within 7 calendar days either before or after a target percentage purchase or sale of the same or related Security by an H&W Client account (excluding cash flow trades and employee trades in the same direction after a target trade in client accounts). For example (in an opposite direction employee trade), if a Fund buys a Security on day 0, day 8 is the first day an employee may sell the Security for his or her own account. Personal trades for employees, however, shall have no effect on an H&W Client account's ability to trade.

8.Establishing Positions Counter to H&W Client Positions. An employee may not establish a long position in his or her personal account in a Security if an H&W Client account would benefit from a decrease in the value of such Security. For example, an employee would be prohibited from establishing a long position in any of the following circumstances:

∙

∙

∙

An H&W Client account holds a put option on such Security (aside from a put purchased for hedging purposes where the H&W Client account holds the underlying Security).

An H&W Client account has written a call option on such Security.

An H&W Client account has sold such Security short, other than "against- the-box."

Employees may not:

∙Purchase a put option or write a call option where an H&W Client account holds a long position in the underlying Security.

∙Short sell any Security where an H&W Client account holds a long position in the same Security or otherwise maintains a position where the account would benefit from an increase in the value of the Security.

This restriction does not apply to exchange traded funds which may be used by an H&W Client account to equitize cash.

9.Prohibition on Short-Term Profits. Employees are prohibited from profiting on any sale and subsequent purchase, or any purchase and subsequent sale, of the same (or equivalent) Securities occurring within 60 calendar days ("short-term profit").

This holding period also applies to all permitted option transactions; therefore, for example, an employee may not purchase or write an option if the option will expire in less than 60 days (unless such a person is buying or writing an option on a Security that he or she has held more than 60 days). In determining short-term profits, all employee directed transactions within a 60-day period in all accounts related to the employee will be taken into consideration in determining short-term profits, regardless of his or her intentions to do otherwise (e.g., tax or other trading strategies). Should an employee fail to preclear a trade that results in a short-term profit, the trade would be subject to reversal with all costs and expenses related to the trade borne by the employee, and he or she would be required to disgorge the profit. Transactions not required to be precleared under Section 4 will not be subject to this prohibition. Exchanges between the Funds and other H&W-advised mutual funds within the H&W 401(k) plan also are not

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subject to this prohibition. However, transactions in direct holdings of the Funds and other H&W-advised mutual funds are subject to this prohibition, excluding accounts with systematic contributions and/or withdrawals.

B. Trading Restrictions for Independent Trustees and Outsourced CCO of the Funds

The following restrictions apply only to Independent Trustees and the Outsourced CCO of the Funds (i.e., any Trustee who is not an "interested person" of the Funds, within the meaning of the 1940 Act):

1.Restrictions on Purchases. No Independent Trustee, nor the Outsourced CCO may purchase any Security which, to the Trustee's or the Outsourced CCO's knowledge at the time, is being purchased or is being considered for purchase by the Funds.

2.Restrictions on Sales. No Independent Trustee, nor the Outsourced CCO may sell any Security which, to the Trustee's or the Outsourced CCO's knowledge at the time, is being sold or is being considered for sale by the Funds.

3.Restrictions on Trades in Securities Related in Value. The restrictions applicable to the transactions in Securities by Independent Trustees and the Outsourced CCO shall similarly apply to Securities that are issued by the same issuer and whose value or return is related, in whole or in part, to the value or return of the Security purchased or sold by the Funds (see Section 3.A.4.).

Section 4 - Exempted Transactions/Securities

With respect to H&W's investment activities, H&W has determined that the following Securities transactions do not present the opportunity for improper trading activities that Rule 17j-1 and Rule 204A-1 are designed to prevent; therefore, the restrictions set forth in Section 3 (including preclearance, prohibition on short-term profits and blackout periods) shall not apply.

A.Purchases or sales of Securities in an account over which the employee has no direct or indirect influence or control (e.g., an account managed on a fully discretionary basis by an investment adviser or trustee)(referred to as "Discretionary Accounts").

B.Purchases or sales of direct obligations of the U.S. Government.

C.Purchases or sales of bank certificates, bankers acceptances, commercial paper and other high quality short-term debt instruments, including repurchase agreements.

D.Purchases or sales of open-end registered investment companies (including money market funds), variable annuities and unit investment trusts, excluding the Funds and other mutual funds advised or sub-advised by H&W.

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E.Purchases or sales of closed-end funds or unit investment trusts that are invested only in exempted types of Securities as listed in Section 4, excluding closed-end funds or unit investment trusts, if any, advised or sub-advised by H&W.

F.Purchases or sales of exchange traded funds (ETFs) or commingled investment funds on broad-based indices or invested only in exempted types of Securities listed in Section 4, excluding ETFs or commingled investment funds, if any, advised or sub-advised by H&W.

"Broad-based indices" include (but are not limited to) the S&P 100, S&P 500, Wilshire 5000, Russell 1000, Russell 2000, Russell 3000, FTSE 100, FTSE Large Cap, FTSE NASDAQ 500, FTSE NASDAQ Mid Cap, FTSE NASDAQ Small Cap, Nikkei 225, Dow 30, MSCI, MSCI Emerging Market Index, NASDAQ Composite, NASDAQ Global Market Composite, NASDAQ 100, NASDAQ Q-50, NASDAQ -100 Equal Weighted Index, NASDAQ Capital Market Composite, NASDAQ Mid Cap, NASDAQ Small Cap, and E-Mini S&P 500. For other "broad-based indices" that are not specifically detailed above, employees must consult with the Compliance Department prior to any transactions.

G.Employer stock purchased and sold through employer-sponsored benefit plans in which the spouse or dependent relative of an H&W employee may participate (e.g., employee stock purchase plans or 401(k) plans) and sales of employer stock (or the exercise of stock options) that is received as compensation by an H&W employee's spouse.

H.Purchases or sales of Securities which are non-volitional on the part of the employee (e.g., an in-the-money option that is automatically exercised by a broker; a Security that is called away as a result of an exercise of an option; or a Security that is sold by a broker, without employee consultation, i.e., to meet a margin call not met by the employee).

I.Purchases of Securities which are made by reinvesting cash dividends pursuant to an automatic dividend reinvestment plan.

J.Purchases or sales of Securities transacted as part of an automatic investment plan involving predetermined amounts on predetermined dates. However, set-up or adjustments to systematic purchases and/or sales of any Security needs preclearance.

K.Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its Securities, to the extent such rights were acquired from such issuer.

L.Transactions in Securities pursuant to a bona fide tender offer made for any and all such Securities to all similarly situated shareholders in conjunction with mergers, acquisitions, reorganizations and/or similar corporate actions.

MPurchases or sales of commodities, futures (which include interest rate futures, currency futures and futures on broad-based indices), options (which include

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options on futures, interest rate options, currency options and options on broad- based indices), and swaps (which include interest rate swaps, currency swaps, and swaps on broad-based indices).

N.The receipt of a bona fide gift of Securities. (Gifting of Securities, however, require pre-clearance.)

O.Employees' donation of Securities to qualified 501(c)(3) charitable organizations.

P.Purchases or sales of municipal bonds (including 529 plans) and auction rate securities traded in the secondary market. Any purchase in an initial public offering of municipal debt or auction rate securities requires preclearance.

Q.Purchases or sales of direct obligations of any foreign governments.

R.Transactions in digital assets (e.g., cryptocurrencies, digital tokens, etc.), except for any transactions in "initial coin offerings" which require pre-clearance.

Section 5 – Reporting by Employees and Other Covered Persons

The reporting requirements of this Section 5 apply to all employees. The requirements will also apply to all Securities transactions in the accounts of a spouse, minor children or dependent person living in the same household, trustee and custodial accounts or any other account in which the employee has a financial interest or over which the employee has investment discretion (other than H&W managed separate accounts). The Chief Compliance Officer (and/or executive officer designee) may, in his or her discretion, determine that an account of an employee's child or dependent person living in the same household are not subject to reporting requirements under the Code given relevant facts and circumstances. The requirements do not apply to Securities acquired for accounts over which the employee has no direct or indirect control or influence.

H&W may subject interns and temporary or contract employees to the Code given their specific job responsibilities, including their involvement in making securities recommendations or access to such information, and access to nonpublic information on clients' holdings and trading activities.

Employees are deemed to have complied with the requirements of Section 5.B. and C. provided that the Compliance Department receives duplicate statements and confirmations and such statements and confirms contain all of the information required in Section 5.B and C. Employees who do not have any brokerage accounts are required to submit a quarterly report noting that they have no brokerage accounts, nor transacted in reportable Securities.

With respect to exempt Securities referred to in Section 4 which do not require preclearance, employees must nonetheless report those exempt Securities defined in Section 4. as described below, except for the following:

1. open-end mutual funds not advised or sub-advised by H&W.

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2.529 Plans that are college savings plans established and maintained by states, state agencies, and other state entities that H&W does not manage, distribute, market or underwrite the 529 Plan or the investments and strategies underlying the 529 Plan.

3.529 Plans that are prepaid college tuition plans where the account owner does not participate in investment decisions regarding his or her contributions to the 529 Plan, nor where H&W acts as program manager for the 529 Plan.

Employees who effect reportable transactions outside of a brokerage account (e.g., optional purchases or sales through an automatic investment program directly with an issuer) will be deemed to have complied with this requirement by preclearing transactions with the Compliance Department and by reporting their holdings quarterly on the "Personal Securities Holdings" form, as required by the Compliance Department.

A.Initial Holdings Report. Each new employee will be given a copy of the Code of Ethics. Within 10 days of commencement of employment, each employee shall file an Acknowledgement stating that he or she has been supplied a copy of and has read and understands the provisions of the Code, and must also disclose their personal Securities holdings to the Compliance Department. (Similarly, Securities holdings of all new related accounts must be reported to the Compliance Department within 10 days of the date that such account becomes related to the employee.) Information must be current as of a date no more than 45 days prior to the date the report was submitted. Initial holdings reports must identify the following:

1.The title and type of the Security (including, as applicable, the exchange ticker symbol or CUSIP number), number of shares, and principal amount with respect to each Security holding;

2.The name of any broker, dealer or bank with whom the employee maintained an account in which any Securities were held for the direct and indirect benefit of the employee as of the date the individual became an employee; and

3.The date that the report is submitted by the employee.

B.Quarterly Transaction Report. All employees must submit no later than thirty (30) calendar days following the end of each quarter a list of all Securities transacted during the quarter.

1.Each employee shall report all transactions in Securities in which the person has, or by reason of such transaction acquires, any direct or indirect beneficial ownership. Reports shall be filed with the Compliance Department quarterly. Each employee must also report any personal Securities accounts established during the quarter. The CCO shall submit confidential quarterly and/or annual reports with respect to his or her own personal Securities transactions and personal Securities accounts established to an officer designated to receive his or her reports, who shall act in all respects in the manner prescribed herein for the CCO. In addition, the review of transactions and holdings reports by compliance personnel with responsibility for the Code's administration are reviewed by the CCO.

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2.Every report shall be made no later than 30 days after the end of the calendar quarter in which the transaction to which the report relates was effected, and shall contain the following information:

(i)The date of the transaction, the title of the Security (including, as applicable, the exchange ticker symbol or CUSIP number), the interest rate and maturity (if applicable), the number of shares and principal amount involved;

(ii)The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);

(iii)The price at which the transaction was effected;

(iv)The name of the broker, dealer or bank with or through which the transaction was effected;

(v)The date the report is submitted by the employee; and

(vi)With respect to any personal Securities account established during the quarter, the broker, dealer or bank with whom the account was established, and the date the account was established.

3.In the event the employee has no reportable transactions in Securities during the quarter, the report should be so noted and returned signed and dated.

C.Annual Holdings Report. All employees must submit an annual holdings report reflecting holdings as of a date no more than 45 days before the report is submitted. As indicated above, employees who provide statements from their brokers/dealers are deemed to have automatically complied with this requirement, provided the reports contain all required information set forth in Section 5.A above.

D.Annual Certification of Compliance; Amendments to Code. All H&W employees must certify annually to the Compliance Department that (1) they have read and understand and agree to abide by this Code of Ethics; (2) they have complied with all requirements of the Code of Ethics, except as otherwise notified by or reported to the Compliance Department that they have not complied with certain of such requirements; and (3) they have reported all transactions and holdings required to be reported under the Code of Ethics. All H&W employees must receive and acknowledge receipt of any material amendments to the Code of Ethics.

E.Discretionary Accounts. H&W employees who have accounts over which he or she has no direct or indirect influence or control shall provide the Compliance Department with an account statement, including transactions and holdings, on a quarterly basis.

F.Review of Transactions and Holdings Reports. All Securities transactions reports and holdings reports (including Discretionary Account transactions/holdings reports) will be reviewed by Compliance personnel (or designated persons) according to procedures established by the Compliance Department.

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Section 6 – Reporting by Independent Trustees and Outsourced CCO of the Funds

Independent Trustees and the Outsourced CCO of the Funds need only report a transaction in a Security if the Trustee or Outsourced CCO, at the time of that transaction, knew or, in the ordinary course of fulfilling the official duties of a Trustee or Outsourced CCO of the Funds, should have known that, during the 15-day period immediately preceding the date of the transaction by the Trustee or Outsourced CCO, the Security was purchased or sold by the Funds or was being considered for purchase or sale by the Funds. In reporting such transactions, Independent Trustees or the Outsourced CCO must provide: the date of the transaction, a complete description of the Security, number of shares, principal amount, nature of the transaction, price, commission, and name of broker/dealer through which the transaction was effected.

As indicated in Section 5.D. for employees, Independent Trustees and the Outsourced CCO of the Funds are similarly required to certify annually to the Compliance Department that (1) they have read and understand and agree to abide by this Code of Ethics; (2) they have complied with all requirements of the Code of Ethics, except as otherwise notified by or reported to the Compliance Department that they have not complied with certain of such requirements; and (3) they have reported all transactions required to be reported under the Code of Ethics.

Section 7 – Approval and Review by Board of Trustees

The Board of Trustees of the Funds, including a majority of Trustees who are Independent Trustees, must approve this Code of Ethics. Additionally, any material changes to this Code must be approved by the Board within six months after adoption of any material change. The Board must base its approval of the Code and any material changes to the Code on a determination that the Code contains provisions reasonably necessary to prevent employees from engaging in any conduct prohibited by Rule 17j-1. Prior to approving the Code or any material change to the Code, the Board must receive a certification from the Funds and H&W that each has adopted procedures reasonably necessary to prevent employees from violating the Code of Ethics.

Section 8 – Review of H&W Annual Report

At least annually, the Funds and H&W must furnish to the Funds' Board of Trustees, and the Board of Trustees must consider, a written report that (1) describes any issues arising under this Code of Ethics or procedures since the last report to the Board of Trustees, including, but not limited to, information about material violations of the Code of Ethics or procedures and sanctions imposed in response to the material violations and (2) certifies that the Funds and H&W have adopted procedures reasonably necessary to prevent H&W employees from violating this Code of Ethics.

Section 9 - Sanctions

Potential violations of the Code of Ethics must be brought to the attention of the CCO or her designee, will be investigated and, if appropriate, sanctions will be imposed. Upon completion of the investigation, if necessary, the matter may also be reviewed by the Chief Executive Officer (CEO), President and/or Chief Operating Officer (COO), who

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will determine whether any further sanctions should be imposed. Sanctions may include, but are not limited to, a letter of caution or warning, reversal of a trade, disgorgement of a profit or absorption of costs associated with a trade, supervisor approval to trade for a prescribed period, fine or other monetary penalty, suspension of personal trading privileges, suspension of employment (with or without compensation), and termination of employment.

Section 10 – Reporting Violations

All employees are required to report any violation of this Code of Ethics by any person to the CCO immediately upon first becoming aware of such violation. Failure to report violations may result in any of the sanctions described in Section 9, including termination of employment.

Section 11 – Exceptions

An exception to any of the policies, restrictions or requirements set forth herein may be granted only upon a showing by the employee to the CEO, President and/or COO that such waiver: (i) is necessary to alleviate hardship or is the result of unforeseen circumstances or is otherwise appropriate under all relevant facts and circumstances; (ii) will not be inconsistent with the purposes and objectives of the Code; (iii) will not adversely affect the interests of advisory clients of H&W or the interest of H&W and (iv) will not result in a transaction or conduct that would violate provisions of applicable laws or regulations. A transaction in a Security due to a change in the employee's investment objectives, tax strategies, or special new investment opportunities would not constitute acceptable reasons for a waiver.

Section 12 – Confidentiality

All employee transactions and holdings information will be maintained in confidence, except to the extent necessary to implement and enforce the provisions of the Code or to comply with applicable law or requests from governmental or regulatory agencies. In addition, in the event of violations or apparent violations of the Code, certain information may be disclosed to affected H&W clients.

Section 13 – Recordkeeping

H&W will maintain all records relevant to this Code of Ethics as required under the Advisers Act and the 1940 Act.

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Code of Ethics

Policy

PIMCO's Code of Ethics sets out standards of conduct to help you avoid potential conflicts of interest that may arise from your personal securities transactions and outside business activities.

All employees must read and understand the Code.

Effective Date: May 2009

Last Revision: August 2021

CODE OF ETHICS | August 2021 1

PIMCO's Code of Ethics ("Code") contains the rules that govern your personal trading and outside business activities. These rules are summarized below. Please see the Code for more details (capitalized terms are defined in the Appendix).

YOU HAVE THE FOLLOWING FUNDAMENTAL RESPONSIBILITIES:

∙You have a duty to place the interests of Clients first

∙You must avoid any actual or potential conflict of interest

∙You must not take inappropriate advantage of your position at PIMCO

∙You must comply with all applicable Securities and Commodities Laws

You must pre-clear and receive approval for your Personal Securities Transactions, unless an exemption is available. Personal Securities Transaction is a very broad concept and includes transactions in Securities, Derivatives, currencies for investment purposes and commodities for investment purposes, but does not include direct transactions in Cryptocurrencies, except as noted in Appendix IV for Bitcoin Portfolio Persons. It is your responsibility to understand the treatment of any proposed transaction under the Code by checking the definitions found in Appendix I. You are encouraged to consult with a Compliance Officer if you have any question as to the status of a particular instrument under the Code.

Personal Real Estate Investment Transactions (as defined in Appendix II) that constitute Private Placements are Personal Securities Transactions that are subject to the Code, and must be pre-cleared and receive prior approval in accordance with Section III.C.

You can pre-clear and receive approval for your transaction by the following two-step process:

Step 1: To pre-clear a transaction, you must input the details of the proposed transaction into the Compliance Portal system (accessible through the PIMCO Intranet) and follow the instructions.

Step 2: You will receive notification as to whether your proposed transaction is approved or denied. If your proposed transaction is approved, the approval is valid only for the day on which the approval was granted and the following business day, unless otherwise indicated in the approval confirmation or unless you are notified differently by a Compliance Officer. If you do not execute your transaction within the required timeframe or if the information in your request changes, you must repeat the pre-clearance process prior to undertaking the transaction.

Generally, certain types of transactions, such as purchases or sales of government securities, open-end mutual funds, and interval funds, do not require pre-clearance and approval. See Sections III.C.2. and III.C.3. of the Code for specific guidance.

However, Portfolio Persons (see Appendix I) are subject to more restrictive pre-clearance requirements, which are set forth in Section III.C.2.a.

CODE OF ETHICS | August 2021 2

BLACK-OUT PERIODS FOR PORTFOLIO PERSONS

Employees classified as Portfolio Persons are prohibited from executing certain transactions during black-out periods, as defined below:

∙Purchases or sales prior to, and including, seven calendar days before a Client transaction in the same Financial Instrument or any Related Financial Instrument (each as defined in Appendix I)

∙Purchases or sales within three calendar days following a Client transaction in the same Financial Instrument or any Related Financial Instrument

CIRCUMSTANCES THAT MAY RESTRICT YOUR PERSONAL SECURITIES TRANSACTIONS:

∙When there are pending Client orders in the same Financial Instrument or a Related Financial Instrument

∙Black-out periods in closed-end funds advised or sub-advised by PIMCO

∙Section 16 holding periods

∙Investments in:

oInitial Public Offerings (with certain exemptions for fixed income and other securities) o Special Purpose Acquisition Companies (SPACs)

oPrivate Placements and hedge funds

oSecurities issued by Allianz SE

oSecurities on PIMCO's Restricted Securities List

The Code has other requirements that may restrict your personal securities transactions in addition to those summarized above. Please review the entire Code. Remember that you can be sanctioned for failing to comply with the Code. If you have any questions, please ask a Compliance Officer.

PIMCO CODE OF ETHICS

I.INTRODUCTION

This Code of Ethics ("Code") sets out standards of conduct to help PIMCO's directors, officers and employees (each, an "Employee" and collectively, "Employees")1 avoid potential conflicts that may arise from their Personal Securities Transactions and outside business activities. You must read and understand this Code. Compliance can assist you with any questions.

II. YOUR FUNDAMENTAL RESPONSIBILITIES

PIMCO insists on a culture that promotes honesty and high ethical standards. This Code is intended to assist Employees in meeting the high ethical standards PIMCO follows in conducting its business. The following general fiduciary principles must govern your activities:

∙You have a duty to place the interests of Clients first

∙You must avoid any actual or potential conflict of interest

∙You must not take inappropriate advantage of your position at PIMCO

∙You must comply with all applicable Securities and Commodities Laws

If you violate this Code or its associated policies and procedures, PIMCO may impose disciplinary action against you, including full or partial disgorgement of profits, a reduction in discretionary compensation,

1Employees also include certain employees of PIMCO Investments and employees designated as dual-personnel of Gurtin Municipal Bond

Management ("Gurtin Dual-Personnel"). For the avoidance of doubt, Gurtin Dual-Personnel are subject to the Code of Ethics in their capacity as both PIMCO employees and Gurtin Dual-Personnel. Additionally, employees of certain non-U.S. affiliates of PIMCO are known as "Associated Persons." Associated Persons are subject to the respective Code of Ethics of the affiliate with which they are employed.

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censure, demotion, suspension or dismissal, or any other sanction or remedial action required or permitted by law, rule or regulation.

III.PERSONAL INVESTMENTS A. In General

In general, when making personal investments you must exercise extreme care to ensure that you do not violate this Code and your fiduciary duties. You may not take inappropriate advantage of your position at PIMCO in connection with your personal investments. In addition, any excessive or inappropriate trading that, in PIMCO's view, interferes with job performance, or compromises the duty that PIMCO owes to its Clients, will not be tolerated. This Code covers the personal investments of all Employees and their Immediate Family Members (see Appendix I). Therefore, you and your Immediate Family Members must conduct all your personal investments consistent with this Code.

B. Prohibition on Short-Term Trading ("30 Calendar Day Rule")

Employees are prohibited from engaging in short-term trading strategies for their own accounts. Unless specifically exempted under this Code, a short term trade is any purchase followed by a sell, or any sell followed by a purchase, of the same Financial Instrument within 30 calendar days.

This prohibition applies on a last in, first out basis: 1) even if the purchase and sell transactions occur in different accounts; 2) regardless of any designated tax lots associated with the purchase or sell transaction; and 3) only to Financial Instruments that require pre-clearance under the Section III.C. of the Code.

The date of the first transaction is considered day one, and Employees may not execute a transaction in the opposite direction until day 31. Employees will absorb any losses and will be instructed to disgorge any profits associated with short term trades in any Financial Instrument that requires pre-clearance. Compliance will calculate profits based on any or all opposite way transactions that occur within a 30 calendar day period, even if the transactions result in realized losses in one or more individual account(s). Transaction costs and potential tax liabilities will not be included in the profit calculations. Compliance also may instruct the employee to reverse a transaction that violates the 30 Calendar Rule.

Profits from such trades must be disgorged as required by a Compliance Officer.

Note, an Option transaction with an expiration date within the 30 calendar days, as described above, of the initial purchase or sale date is also prohibited. Options must have an expiration date that is at least 31 days from the initial purchase or sale date.

See the Appendix for specific guidance on options trading with regards to pre-clearance and the 30 Calendar Day Rule.

Notwithstanding the foregoing, disgorgement will not be required for transactions in which the calculated profit is less than $25.

The following transactions are exempt from the 30 Calendar Day Rule:

1.Transactions that are exempt from the pre-clearance and approval requirement as provided in Sections III.C.2. and III.C.3. of the Code (i.e., Exempt Reportable Transactions and Exempt Transactions as defined in those Sections). For purposes of this exclusion, although Portfolio Persons must observe the pre-clearance requirements specified in Section II.C.2.a., Portfolio Persons' transactions in direct obligations of the U.S. or non-U.S. Government are excluded from the 30 Calendar Day Rule.

2.Transactions that 'roll forward' Options or Futures, i.e., the simultaneous closing and opening of Options or Futures contracts solely to extend the expiration or maturity of the initial position to the month

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immediately following such expiration or maturity, but that otherwise maintain the economic features (e.g., size and strike price) of the position.

a.When a transaction is rolled forward, day one for purposes of calculating compliance with the 30

Calendar Day Rule will be the date of the initial purchase and not the date of any subsequent roll forward transaction(s).

Note: Notwithstanding the exemption from the 30 Calendar Day Rule, transactions that roll forward Options or Futures positions are still subject to the applicable pre-clearance requirements of the Code.

3.Transactions in cash-equivalent ETFs provided permission is obtained from Compliance in advance.

Prior to transacting, all Employees must represent in their pre-clearance request that the transaction is not in contravention of the 30 Calendar Day Rule.

C. Pre-clearance and Approval of Personal Securities Transactions

You must pre-clear and receive prior approval for all Personal Securities Transactions unless the transaction is subject to an exemption under this Code.

The Pre-clearance and Approval Process described below applies to all Employees and their Immediate Family Members.

1.Pre-clearance and Approval Process

Pre-clearance and approval of Personal Securities Transactions helps PIMCO prevent certain investments that may conflict with Client trading activities or other regulatory requirements. Except as provided in Sections III.C.2. and III.C.3. below, you must pre-clear and receive prior approval for all Personal Securities Transactions by following the two-step process below:

The Pre-clearance and Approval Process is a two-step process:

Step 1: To pre-clear a transaction, you must input the details of the proposed transaction into the Compliance Portal system (accessible through the PIMCO Intranet) and follow the instructions. See Sections III.C.2. and III.C.3. for certain transactions that do not require pre-clearance and approval.

Step 2: You will receive notification as to whether your proposed transaction is approved or denied. If your proposed transaction is approved, the approval is valid only for the day on which the approval was granted and the following business day, unless otherwise indicated in the approval confirmation or unless you are notified differently by a Compliance Officer. If you do not execute your transaction within the required timeframe or if the information in your pre-clearance request changes, you must repeat the pre-clearance process prior to undertaking the transaction.

Note: If you place a Good-until-Canceled ("GTC") or Limit Order and the order is not fully executed or filled by the end of the following business day (midnight local time), you must repeat the pre-clearance process.

2.Transactions Excluded from the Pre-clearance and Approval Requirement (but still subject to the Reporting Requirements)

Except as otherwise provided below, you are not required to pre-clear and receive prior approval for the

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following Personal Securities Transactions, although you are still responsible for complying with the

reporting requirements of Section V. of this Code for these transactions (each, an "Exempt Reportable Transaction"):

a.Purchases2 or sales of direct obligations of the U.S. Government or any other national government

. However, if you are a Portfolio Person, as defined in the Code, you are required to pre- clear and receive prior approval for purchases and sales of direct obligations of the U.S. Government or any other national government except as set forth in Section III.C.3.f. below;

b.The acquisition or disposition of a Financial Instrument as the result of a stock dividend, stock

split, reverse stock split, merger, consolidation, spin-off or other similar corporate distribution or reorganization applicable to such holders of a class of Financial Instrument or, with respect to

Financial Instruments except Futures, a non-volitional assignment or call pursuant to an options contract (voluntary corporate actions require pre-clearance);

c.Transactions in open-end mutual funds or interval funds (including those held through a variable insurance product account) managed or sub-advised by PIMCO or an Allianz affiliated entity (in other words, transactions in funds managed or sub-advised by PIMCO or an Allianz affiliated entity must be reported but do not need to be pre-cleared).

Similarly, direct investments in open-end mutual funds or interval funds managed or sub-advised by PIMCO or an Allianz affiliated entity that are held within a qualified tuition program sponsored by a state, state agency or educational institution and authorized by Internal Revenue Code Section 529 (also known as a 529 Plan) must be reported but do not need to be pre-cleared. Further, investments in an Allianz 529 Plan must also be reported, even if such account does not hold PIMCO or Allianz affiliated funds. The Compliance department has access to information on

your holdings in PIMCO private funds and open-end mutual funds in your PIMCO/Allianz 401(k). However, your personal accounts including PCRA, deferred compensation plans, Fund Invest and Allianz Employee Stock Purchase Plan must be disclosed via the Compliance Portal;

d.Transactions in any Non-Discretionary Account for which you and your Immediate Family Member(s): (i) do not exercise investment discretion; (ii) do not receive notice of specific transactions prior to execution; and (iii) otherwise have no direct or indirect influence or control. You must still disclose the account and complete a managed account certification in Compliance Portal.

e.Transactions pursuant to an Automatic Investment Plan, including the Allianz Employee Stock Purchase Plan, except that any transaction overriding the Automatic Investment Plan's

predetermined schedule and allocation must be pre-cleared and approved. Notwithstanding the foregoing, an employee may make adjustments to the future percentage investment allocations in the Allianz employee stock purchase plan without pre-clearance.

Employee/Immediate Family Member directed sales from an Automatic Investment Plan, including the Allianz Employee Stock Purchase Plan, are subject to pre-clearance; and

f.Transactions in accounts held on automated asset allocation platforms over which neither you nor an Immediate Family Member exercises any investment discretion, including with respect to the Financial Instruments involved in such transactions and the allocation percentages utilized within the asset allocation platform. You must contact the Compliance Officer if you have this type of account.

It is important to remember that transactions in Closed-End Funds and ETFs are subject to the pre- clearance and blackout period requirements.

2 See Section III.C.3.f. for certain additional exemptions.

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3.Transactions Excluded from the Pre-clearance and Approval Requirement and Reporting Requirements

All Personal Securities Transactions by Employees must be reported under the Code with a few limited exceptions set forth below. The following Personal Securities Transactions are exempt from the pre- clearance, approval, and reporting requirements provided in Sections III.C and V. of the Code (each, an "Exempt Transaction"):

a.Purchases or sales of bank certificates of deposit ("CDs"), bankers acceptances, commercial paper and other high quality, non-sovereign short-term debt instruments (with an original maturity of less than one year), including repurchase agreements;

b.Purchases which are made by reinvesting dividends (cash or in-kind) on a Financial Instrument including reinvestments pursuant to an Automatic Investment Plan;

c.Purchases/sales of physical currencies or physical commodities not for investment purposes;3

d.Purchases or sales of open-end mutual funds or interval funds (including those held through a variable insurance product direct account or a 529 Plan account) that are not managed or sub- advised by PIMCO or an Allianz affiliated entity

e.Purchases or sales of unit investment trusts that are invested exclusively in one or more open-end mutual funds that are not advised or sub-advised by PIMCO or an Allianz affiliated entity; and

f.Purchases of direct obligations of the U.S. Government where such transactions are effected via non-competitive bid or of U.S. savings bonds through the U.S. Department of the Treasury's TreasuryDirect system.

D. Additional Requirements Applicable to Portfolio Persons

If you are a "Portfolio Person" (see Appendix I) with respect to a Client transaction, you are subject to the blackout periods listed below. Note that transactions that do not require pre-clearance under Sections III.C.2. and III.C.3. of the Code are not subject to these blackout periods. Regardless of whether you are required to pre-clear your transaction, you must not take inappropriate advantage of your position as a Portfolio Person in violation of the Code.

1.Purchases and sales seven calendar days prior to a Client transaction

A Portfolio Person may not transact in a Financial Instrument prior to, and including, seven calendar days before transacting in the same Financial Instrument or a Related Financial Instrument for a Client. Similarly, a Portfolio Person may not transact in a Financial Instrument prior to, and including, seven calendar days if the Portfolio Person knows of another Portfolio Person's intention to transact in the same Financial Instrument for

aClient. Thus, if you personally transact within seven calendar days (inclusive) of a Client transaction in the same or Related Financial Instrument, your personal securities transaction will be considered a violation of the Code of Ethics unless the Client transaction was directed by someone else without your knowledge or you disclose to Compliance that you are aware of a pending firm transaction, and a Compliance Officer approves your personal securities transaction outside of the Compliance Portal.

Specific conditions for research analysts

A research analyst may not transact in the same Financial Instrument, any other Financial Instrument

3For the avoidance of doubt, direct purchases/sales of Cryptocurrencies are not "Personal Securities Transactions" (as defined in Appendix I) and thus are not subject to the pre-clearance and reporting requirements, except as noted in Appendix IV for Bitcoin Portfolio Persons. However, Derivatives on and indirect investments in Cryptocurrencies are "Personal Securities Transactions" and are subject to the pre-clearance and re- porting requirements.

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issued by the same issuer or a Related Financial Instrument that such research analyst is analyzing for a Client (whether such analysis was requested by another person or was undertaken on the research analyst's own initiative). Such prohibition remains in effect until the research analyst is notified in writing that the Financial Instrument has been selected or rejected for purchase or sale for a Client account or until the research analyst obtains permission to transact in the same Financial Instrument, any other Financial Instrument issued by the same issuer or a Related Financial Instrument from a Managing Director supervisor and a Compliance Officer.

2.Purchases and sales within three calendar days following a Client transaction

A Portfolio Person may not transact in a Financial Instrument within three calendar days after (i) transacting in the same Financial Instrument or a Related Financial Instrument for a Client; or (ii) a Client's transaction in the same Financial Instrument or a Related Financial Instrument if the Portfolio Person knows that another Portfolio Person has transacted in such Financial Instrument or a Related Financial Instrument for a Client.

3.Specific provisions for Real Estate Portfolio Persons with respect to PIMCO advised private funds that invest in real estate4

Real Estate Portfolio Persons must report Personal Real Estate Investment Transactions5 and pre-clear and receive prior approval of certain Personal Real Estate Investment Transactions.

Please refer to Appendix II for a discussion of the pre-clearance and reporting requirements for Personal Real Estate Investment Transactions.

Please note that Personal Real Estate Investment Transactions that constitute Private Placements are Personal Securities Transactions and must be pre-cleared and receive prior approval in accordance with Section III.C of the Code.

Prior to transacting, Portfolio Persons must represent in their pre-clearance request that they are not

aware of any pending transactions or proposed transactions in the next seven calendar days in the same Financial Instrument or a Related Financial Instrument for any Client. Please consider the timing of your

personal transactions carefully.

E. Circumstances that May Restrict Your Trading

If your Personal Securities Transaction falls within one of the following categories, it will generally be denied by the Compliance Officer. It is your responsibility to initially determine if any of the following categories apply to your situation or transaction:

1.Pending Orders

If the gross aggregate market value exposure of your transaction in the Financial Instrument requiring pre-clearance over a 30 calendar day period across all your Personal Securities Accounts exceeds $25,000 and (i) the Financial Instrument or a Related Financial Instrument has been purchased or sold by a Client on that day; or (ii) there is a pending Client order in the Financial Instrument or a Related Financial Instrument, then you CANNOT trade the Financial Instrument or any Related Financial Instrument on the same day and your pre-clearance request will be denied. This prohibition is in addition to any other requirements or prohibitions in this Code that may be applicable (e.g., under "III.D. Additional Requirements Applicable to Portfolio Persons").

As a general matter, transactions up to $250,000 per day in common stock publicly issued by an issuer,

4For purposes of this clause 3 and Appendix II, the term Financial Instrument as it applies to Personal Securities Transactions of Portfolio Per- sons shall include Real Estate Investment Transactions.

5See Appendix II for definition of Real Estate Portfolio Person and Personal Real Estate Investment Transactions.

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and options thereon, included in the Standard & Poor's 500 Index ("S&P 500® Index") will be permitted (subject to any other applicable requirements of the Code, such as the pre-clearance and blackout period requirements). Note, with respect to an option transaction, exposure is measured by the underlying notional value of the option.

Transactions that 'roll forward' Futures contracts or Options on Futures contracts may be approved. Such a roll is considered to be the simultaneous closing and opening of Futures or Options on Futures solely to extend the expiration or maturity of the previous position to the next available contract period immediately following such expiration or maturity, but that otherwise maintains the same economic features (e.g., size and strike price) of the position.

2.Initial Public Offerings, SPACs, Private Placements and Investments in Hedge Funds

As a general matter, you should expect that pre-clearance requests involving Initial Public Offerings (except for fixed-income, preferred, business development companies, registered investment companies, commodity pools and convertible securities offerings) and SPACs will be denied. Proposed transactions in private placements, or hedge funds will be reviewed by the Compliance Officer and subject to a number of criteria, including whether the investment opportunity should be reserved for Clients.

3.Allianz SE Investments

You may not trade in shares of Allianz SE during any designated blackout period. In general, the trading windows end six weeks prior to the release of Allianz SE annual financial statements and two weeks prior to the release of Allianz SE quarterly results. This restriction applies to the exercise of cash-settled options or any kind of rights granted under compensation or incentive programs that completely or in part refer to Allianz SE. Allianz SE blackout dates are communicated to employees and are posted on the employee trading center. A list of such blackout periods is accessible through the PIMCO Intranet.

4.Blackout Period in any Closed End Fund Advised or Sub-Advised by PIMCO

You may not trade any closed end fund advised or sub-advised by PIMCO during a designated blackout period. A list of such blackout periods is accessible through the PIMCO Intranet.

5.Trade Restricted Securities List

The Legal and Compliance department maintains and periodically updates the Trade Restricted Securities List that contains certain securities that may not be traded by Employees. The Trade Restricted Securities List is not distributed to employees, but requests to purchase or sell any security on the Trade Restricted Securities List will be denied.

6.Section 16 Holding Periods

If you are a reporting person under Section 16 of the Securities Exchange Act of 1934, with respect to any closed end fund advised or sub-advised by PIMCO, you are subject to a six month holding period and you must make certain filings with the SEC. It is your responsibility to determine if you are subject to Section 16 requirements and to arrange for appropriate filings. Please consult a Compliance Officer for more information.

F. Excessive Trading and Market Timing of Mutual Fund Shares.

The issue of excessive trading and market timing by mutual fund shareholders is serious and not unique to PIMCO. You are subject to the terms and restrictions of an open-end mutual fund's prospectus, including re-

strictions such fund may impose on excessive trading. You may not engage in trading of shares of an open- end mutual fund that is inconsistent with the prospectus of that fund.

G. Your Actions are Subject to Review by a Compliance Officer and Your Supervisor

The Compliance Officer may undertake such investigation as he or she considers necessary to determine if

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your proposed transaction complies with this Code, including post-trade monitoring. The Compliance Officer may impose measures intended to avoid potential conflicts of interest or to address any trading that requires additional scrutiny.

In addition to the Compliance Officer, your supervisor may, unless restricted by relevant regulations, review your personal trading activity on a periodic or more frequent basis. This individual will work with the Compliance Officer on any such reviews.

H. Consequences for Violations of this Code

1.If determined appropriate by the General Counsel or Compliance Officer you may be subject to remedial actions (a) if you violate this Code; or (b) to protect the integrity and reputation of PIMCO even in the absence of a proven violation. Such remedial actions may include, but are not limited to, full or partial disgorgement of the profits you earned on an investment transaction, a reduction in discretionary performance compensation, censure, demotion, suspension or dismissal, or any other sanction or remedial action required or permitted by law, rule or regulation. As part of any remedial action, you may be required to reverse an investment transaction and forfeit any profit or to absorb any loss from the transaction.

2.PIMCO's General Counsel or Compliance Officer shall have the authority to determine whether you have violated this Code and, if so, to impose, in consultation with an employee's supervisor and other relevant parties, the remedial actions they consider appropriate or required by law, rule or regulation. In making

their determination, the General Counsel or Compliance Officer, in consultation with an employee's supervisor and other relevant parties, may consider, among other factors, the gravity of your violation, the frequency of your violations, whether any violation caused harm or the potential of harm to a Client, your efforts to cooperate with their investigation, and your efforts to correct any conduct that led to a violation.

IV. YOUR ONGOING OBLIGATIONS UNDER THIS CODE

This Code imposes certain ongoing obligations on you. If you have any questions regarding these obligations please contact the Compliance Officer.

A. Insider Trading

The fiduciary principles of this Code and Securities and Commodities Laws prohibit you from trading while in possession of material, non-public information ("MNPI") received from any source or communicating this information to others.6 If you believe you may have access to material, non-public information or are unsure about whether information is material or non-public, please consult a Compliance Officer and the PIMCO MNPI Policy. Any violation of PIMCO's MNPI Policy may result in penalties that could include termination of employment with

PIMCO.

B. Compliance with Securities Laws

You must comply with all applicable Securities and Commodities Laws.

C. Duty to Report Violations of this Code

You are required to promptly report any violation of this Code of which you become aware, whether your own

or another Employee's. Reports of violations other than your own may be made anonymously and

confidentially to the Compliance Officer.

D. Right to Communicate Directly with Governmental, Regulatory or Self-Regulatory Bodies

6As described in Section III.C.2, purchases or sales of open-end mutual funds and interval funds managedor sub-advised by PIMCO are exempt from the pre-clearance and approval process; however, the insider trading prohibition described above applies to MNPI received with respect to an open-end mutual fund or interval fund advised or sub-advised by PIMCO or its affiliates. Non-public information regarding a mutual fund or interval fund is MNPI if such information could materially impact the fund's net asset value.

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This Code will not be interpreted or applied in any manner that would violate any PIMCO employee's legal rights as an employee under applicable law. For example, nothing in this Code or Appendices attached hereto prohibits or in any way restricts any PIMCO employee from reporting possible violations of law or regulation to, otherwise communicating directly with, cooperating with or providing information to any governmental or regulatory body or any self-regulatory organization or making other disclosures that are protected under applicable law or regulations of the Securities and Exchange Commission or any other governmental or regulatory body or self-regulatory organization. A PIMCO employee does not need prior PIMCO authorization before taking any such action and a PIMCO employee is not required to inform PIMCO if he or she chooses to take such action.

V.YOUR REPORTING REQUIREMENTS

A. On-Line Certification of Receipt and Quarterly Compliance Certification

You will be required to certify your receipt of this Code. On a quarterly basis you must certify that any personal investments effected during the quarter were done in compliance with this Code. You will also be required to certify your ongoing compliance with this Code on a quarterly basis. Required certifications must be completed within 30 calendar days following the end of the quarter, unless otherwise approved by a Compliance Officer.

B. Reports of Securities Holdings

You and your Immediate Family Members must report all your Personal Securities Accounts and all transactions in your Personal Securities Accounts unless the transaction is an Exempt Transaction. You must agree to allow your broker-dealer to provide the Compliance Officer with electronic reports of your Personal Securities Accounts and transactions and to allow the Compliance department to access all Personal Securities Account information. You will also be required to certify on a quarterly basis that you have reported all of your Personal Securities Accounts to Compliance via the personal trading system (accessible through the PIMCO Intranet). Required certifications must be completed within 30 calendar days following the end of the quarter.

1.Approved Brokers

You and your Immediate Family Members must maintain your Personal Securities Accounts with an Approved Broker. The list of Approved Brokers is accessible through the PIMCO Intranet or a Compliance Officer.

If you maintain a Personal Securities Account at a broker-dealer other than at an Approved Broker, you will need to close those accounts or transfer them to an Approved Broker within a specified period of time, unless otherwise granted an exemption by a Compliance Officer. Upon opening a Personal Securities Account at an Approved Broker, Employees are required to disclose the Personal Securities Account to Compliance via the personal trading system (accessible through the PIMCO Intranet). By maintaining your Personal Securities Account with one or more of the Approved Brokers, you and your Immediate Family Member's quarterly and annual transaction summaries will be sent directly to the Compliance department for review.

2.Initial Holdings Report

Within ten calendar days of becoming an Employee, you must submit via the personal trading system (accessible through the PIMCO Intranet) an Initial Report of Personal Securities Accounts and all holdings in Financial Instruments except Exempt Transactions. This includes all holdings in Private Placements, such as private equity and hedge fund investments. Please contact the Compliance Officer if you have not already completed this Initial Report of Personal Securities Accounts and all holdings in Financial Instruments.

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3.Quarterly and Annual Holdings Report

If you maintain (i) Personal Securities Accounts with broker-dealers that are not on the list of Approved Brokers, or (ii) a Beneficial Interest in Financial Instruments not held in a Personal Securities Account, please contact the Compliance Officer to arrange for providing quarterly and annual reports within 30 days following quarter end.

4.Changes in Your Immediate Family Members

You must promptly notify a Compliance Officer of any change to your Immediate Family Members (e.g., as a result of a marriage, divorce, legal separation, death, adoption, movement from your household or change in dependence status) that may affect the Personal Securities Accounts for which you have reporting or other responsibilities.

VI. COMPLIANCE DEPARTMENT RESPONSIBILITIES

A. Authority to Grant Waivers of the Requirements of this Code

The Compliance Officer, in consultation with PIMCO's General Counsel or his or her designee, has the authority to exempt any Employee or any personal investment transaction from any or all of the provisions of this Code if the Compliance Officer determines that such exemption would not be against the interests of any Client and is consistent with applicable laws and regulations, including Rule 204A-1 under the Advisers Act and Rule 17j-1 under the Investment Company Act. The Compliance Officer will prepare and file a written memorandum of any exemption granted, describing the circumstances and reasons for the exemption.

B. Annual Report to Boards of Funds that PIMCO Advises or Sub-Advises

PIMCO will furnish a written report annually to the directors or trustees of each fund that PIMCO advises or sub-advises. Each report will describe any issues arising under this Code, or under procedures implemented by PIMCO to prevent violations of this Code, since PIMCO's last report, including, but not limited to, information about material violations of this Code, procedures and sanctions imposed in response to such material violations, and certify that PIMCO has adopted procedures reasonably necessary to prevent its Employees from violating this Code.

C. Maintenance of Records

The Compliance Officer will keep all records maintained at PIMCO's primary office for at least two years and will otherwise keep in an easily accessible place for at least five years from the end of either the fiscal year in which the document was created or the last fiscal year during which the document was effective or in force, whichever is later. Such records include: copies of this Code and any amendments hereto, all Personal Securities Account statements and reports of Employees, a list of all Employees and persons responsible for reviewing Employees reports, copies of all pre-clearance forms, records of violations and actions taken as a result of violations, and acknowledgments, certifications and other memoranda relating to the administration of this Code.

VII. ACTIVITIES OUTSIDE OF PIMCO

A.Approval of Activities Outside of PIMCO

1.You may not engage in full-time or part-time service as an officer, director, partner, manager, member, proprietor, principal, consultant or employee of any Business Organization or Non-Profit Organization other than PIMCO, PIMCO Investments, the PIMCO Foundation, PIMCO Partners, or a

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fund for which PIMCO is an adviser (whether or not that business organization is publicly traded) unless you have received the prior written approval from PIMCO's General Counsel or other designated person.

2.Without prior written approval, you may not provide financial advice (e.g., through service on a finance or investment committee) to a private, educational or charitable organization (other than a trust or foundation established by you or an Immediate Family Member) or enter into any agreement to be employed or to accept compensation in any form (e.g., in the form of commissions, salary, fees, bonuses, shares or contingent compensation) from any person or entity other than PIMCO or one of its affiliates.

3.Certain non-compensated positions in which you would serve in a decision-making capacity (such as on a board of directors for a charity or Non-Profit Organization) must also have been reviewed or approved by PIMCO's General Counsel or other designated person.

4.PIMCO's General Counsel or other designated person may approve such an outside activity if he or she determines that your service or activities outside of PIMCO would not be inconsistent with the interests of PIMCO and its Clients. Other factors that may be considered include any remuneration received or proposed to be received as part of the activity, whether the activity or expected time spent is consistent with your duties to PIMCO and its Clients, and any other factors deemed relevant. PIMCO's General Counsel or other designated person may also stipulate that approval of your participation in the outside activity is subject to specified conditions. Requests to serve on the board of a publicly traded entity will generally be denied.

5.Regardless of the outcome of PIMCO's review of your participation in any proposed outside activity, you may not, directly or indirectly, publicly suggest, claim or imply that PIMCO is associated with or in any way approves the activity.

VIII. TEMPORARY EMPLOYEES

Temporary Employees that are classified as Contingent Workforce are considered "Employees" for purposes of this Code. The Compliance Officer may exempt such persons from any requirement hereunder if the Compliance Officer determines that such exemption would not have a material adverse effect on any Client account. It is the Temporary Employee's responsibility to understand the applicability of the Code (including any exemptions) based on the specific facts and circumstances of the employee's role, responsibilities and access to information.

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APPENDIX I

Glossary

The following definitions apply to the capitalized terms used in this Code:

Approved Broker – means a broker-dealer approved by the Compliance Officer. The list of Approved Brokers for each PIMCO location is accessible through the PIMCO Intranet or can be obtained from the Compliance Officer.

Associated Persons – means an employee of PIMCO LLC's non-U.S. affiliates. Associated Persons are subject to the respective Code of Ethics of the non-U.S. affiliate with whom they are employed, which are, in relevant part, substantially the same as this Code. Associated Persons are subject to the oversight and supervision of PIMCO LLC.

Automatic Investment Plan – means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan.

Beneficial Interest – means when a person has or shares direct or indirect pecuniary interest in accounts or in reportable Financial Instruments. Pecuniary interest means that a person has the ability to profit, directly or indirectly, or share in any profit from a transaction. Indirect pecuniary interest extends to, unless specifically excepted by a Compliance Officer, an interest in a Financial Instrument held by: (1) a joint account to which you are a party; (2) a partnership in which you are a general partner; (3) a partnership in which you or an Immediate Family Member holds a controlling interest and with respect to which Financial Instrument you or an Immediate Family Member has investment discretion; (4) a limited liability company in which you are a managing member; (5) a limited liability company in which you or an Immediate Family Member holds a controlling interest and with respect to which Financial Instrument you or an Immediate Family Member has investment discretion; (6) a trust in which you or an Immediate Family Member has a vested interest or serves as a trustee with investment discretion; (7) a closely-held corporation in which you or an Immediate Family Member holds a controlling interest and with respect to which Financial Instrument you or an Immediate Family Member has investment discretion; or (8) any account (including retirement, pension, deferred compensation or similar account) in which you or an Immediate Family has a substantial economic interest. A pecuniary interest (thus, Beneficial Interest) may arise with respect to any Financial Instrument including without limitation those (such as private equity and hedge fund investments) obtained through Private Placements.

Bitcoin Account – solely for the purposes of the Bitcoin Portfolio Person addendum, means any Personal Securities Account that holds or is expected to hold Bitcoin.

Bitcoin Portfolio Person – means when any person who directly supports or directs trading in Bitcoin on behalf of PIMCO clients.

Business Organization – means an entity formed for the purpose of carrying on a commercial enterprise and/or to achieve certain commercial goals. It may take the form a sole proprietorship, partnership, limited liability company, corporation or other structure.

Client – means any person or entity to which PIMCO provides investment advisory services.

Contingent Workforce – means individuals subject to provisional work agreements which may include temporary contract workers, independent contractors or independent consultants.

Cryptocurrency – means any virtual or digital representation of value, token or other asset in which encryption techniques are used to regulate the generation of such assets and to verify the transfer of assets, which is not a Security or otherwise characterized as a security under the relevant law.

Derivative – means (1) any Futures (as defined below); and (2) a forward contract, a "swap", a "cap", a "collar", a "floor" and an over-the-counter option (other than an option on a foreign currency, an option on a basket of

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currencies, an option on a Security or an option on an index of Securities, which are included in the definition of "Security"). Questions regarding whether a particular instrument or transaction is a Derivative for purposes of this policy should be directed to the Compliance Officer or his or her designee. For avoidance of doubt, a derivative on a Cryptocurrency is considered to be a "Derivative" for purposes of the Code.

Financial Instrument – means a Security, Derivative, commodity or currency as investment, but does not include Cryptocurrencies. For the avoidance of doubt, futures contracts on Cryptocurrencies are "Financial Instruments" for purposes of the Code.

Futures – means a futures contract and an option on a futures contract traded on a U.S. or non-U.S. board of trade, such as the Chicago Board of Trade or the London International Financial Futures Exchange.

Immediate Family Member of an Employee – means: (1) any of the following persons sharing the same household

with the Employee (which does not include temporary house guests): a person's child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, legal guardian, adoptive relative, or domestic partner; (2) any person sharing the same household with the Employee (which does not include temporary house guests)that holds an account in which the Employee is a joint owner or listed as a beneficiary; or (3) any person sharing the same household with the Employee in which the Employee contributes to the maintenance of the household and material financial support of such person.

Initial Public Offering – means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934.

Non-Discretionary Account – means any account managed by a broker dealer, futures commission merchant, or trustee as to which neither the Employee nor an Immediate Family Member: (1) exercises investment discretion; (2) receives notice of specific transactions prior to execution; and (3) has direct or indirect influence or control over the account.

Non-Profit Organization – means an organization (generally tax-exempt) that serves the public interest. In general, the purpose of this type of organization must be charitable, educational, scientific, religious or literary. A nonprofit organization is often dedicated to furthering a particular social cause or advocating for a particular point of view.

Personal Securities Account – means (1) any account (including any custody account, safekeeping account, retirement account such as an IRA or 401(k) plan, and any account maintained by an entity that may act as a broker or principal) in which an Employee has any direct or indirect Beneficial Interest, including Personal Securities Accounts and trusts for the benefit of such persons; and (2) any account maintained for a financial dependent. Thus, the term "Personal Securities Accounts" also includes, among others:

(i)Trusts for which the Employee acts as trustee, executor or custodian;

(ii)Accounts of or for the benefit of a person who receives financial support from the Employee;

(iii)Accounts of or for the benefit of an Immediate Family Member; and

(iv)Accounts in which the Employee is a joint owner or has trading authority.

For the avoidance of doubt, the term "Personal Securities Account" does not include: (1) an account on the U.S. Department of the Treasury's TreasuryDirect system, so long as the securities purchased through and/or held in such account may only be, or were, purchased through a non-competitive bid process; or (2) any account with direct holdings of Cryptocurrencies. For avoidance of doubt, an account that holds Derivatives on Cryptocurrencies would constitute a "Personal Securities Account" for purposes of the Code, and is subject to the requirements of Section V.B above.

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Personal Securities Transaction – means transactions in Securities (whether publicly offered or a Private Placement), Derivatives, currencies for investment purposes and commodities for investment purposes, but does not include direct transactions in a Cryptocurrency, except for Bitcoin Portfolio Persons as noted in Appendix IV. For the avoidance of doubt, "Personal Securities Transaction" includes Derivatives on a Cryptocurrency.

PIMCO – means "Pacific Investment Management Company LLC".

PIMCO Investments – means "PIMCO Investments LLC".

Portfolio Person – means an Employee, including a portfolio manager with respect to an account, who: (1) provides information or advice with respect to the purchase or sale of a Financial Instrument, such as a research analyst; or (2) helps execute a portfolio manager's investment decisions. Members of Portfolio Risk Management, and Economists are also considered to be Portfolio Persons. Generally, a Portfolio Person with respect to a Client transaction includes the generalist portfolio manager for the Client, the specialist portfolio manager or trading assistant with respect to the transactions in that account attributable to that specialist or trading assistant, and any research analyst that played a role in researching or recommending a particular Financial Instrument.

Private Placement – means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) or pursuant to SEC Rules 504, 505 or 506 under the Securities Act of 1933, including hedge funds or private equity funds or similar laws of non-U.S. jurisdictions.

Related Financial Instrument – means any Derivative directly tied to the same underlying Financial Instrument, including, but not limited to, any swap, option or warrant to purchase or sell that same underlying Financial Instrument, and any Derivative convertible into or exchangeable for that same underlying Financial Instrument. For example, the purchase and exercise of an option to acquire a Security is subject to the same restrictions that would apply to the purchase of the Security itself.

Securities and Commodities Laws – means the securities and/or commodities laws of any jurisdiction applicable to any Employee, including for any employee located in the U.S. or employed by PIMCO, the following laws: Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Investment Company Act of 1940, the Investment Advisers Act of 1940, Title V of the Gramm-Leach-Bliley Act, any rules adopted by the U.S. Securities and Exchange Commission under any of these statutes, the Bank Secrecy Act as it applies to funds, broker-dealers and investment advisers, and any rules adopted thereunder by the U.S. Securities and Exchange Commission or the U.S. Department of the Treasury, the Commodity Exchange Act, any rules adopted by the U.S. Commodity Futures Trading Commission under this statute, and applicable rules adopted by the National Futures Association.

Security – means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract (e.g., investment in a business), voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral rights, any put, call, straddle, option, or privilege on any security, (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or in general, any interest of instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing.

Compliance Portal – means PIMCO's proprietary employee trading pre-clearance system.

CODE OF ETHICS | August 2021 16

APPENDIX II

PIMCO-advised private funds and accounts make investments in real estate.

Real Estate Portfolio Persons must generally pre-clear and receive prior approval from the Compliance Officer for Personal Real Estate Investment Transactions like other Personal Securities Transactions.

Real Estate Portfolio Person – means a Portfolio Person, or any other Employee designated by a Compliance Officer, with respect to PIMCO advised private funds that executes Real Estate Investment Transactions.

Real Estate Investment Transactions – means transactions involving real estate (such as, without limitation, purchases, sales, financings or other forms of investments in office, multifamily, retail, commercial, industrial or hospitality properties or interest in real estate services or service providers), either directly or through investments in funds (other than registered investment companies or publicly traded Securities that are otherwise subject to the Code of Ethics), joint ventures, partnerships, limited liability companies, mortgage or mezzanine loans or other Securities (other than publicly traded Securities that are otherwise subject to the Code of Ethics).

Personal Real Estate Investment Transactions – means Real Estate Investment Transactions for investment purposes.

Indirect investments (e.g., real estate funds or partnerships) may also be subject to pre-clearance as Private Placements under the Code of Ethics. Like other types of personal investments, you are required to report Personal Real Estate Investment Transactions on a quarterly basis.

Notwithstanding the above:

∙Transactions involving residential properties owned for personal use (such as a primary residence or a vacation home), as well as loans, advances or gifts to Immediate Family Members to assist in their purchase or maintenance of such properties, are not subject to pre-clearance or the reporting requirements.

∙Transactions involving one- to four-unit residential properties purchased for investment purposes are not subject to pre-clearance, so long as such transaction would not (i) constitute a Security (e.g., an interest in an entity of which you are not the general partner, managing member or equivalent), or (ii) violate any of your responsibilities under the Code of Ethics. Such transactions are subject to the reporting requirements, however.

Trades of Securities or instruments that are identified by a ticker, CUSIP, ISIN or Sedol must be pre-cleared using Compliance Portal (accessible through the PIMCO Intranet).

The Code of Ethics requires you to avoid conflicts of interest related to personal investments, including Personal Real Estate Investment Transactions. You are expected to avoid any investment, interest or association which interferes or might interfere with your independent exercise of judgment in the best interest of PIMCO and its Clients, including funds advised by PIMCO. Disclosure of personal or other circumstances constituting a conflict of interest should be reported to the Compliance Officer.

CODE OF ETHICS | August 2021 17

APPENDIX III

See the below for specific guidance on options trading with regards to pre-clearance and the 30 Calendar Day Rule.

Option Trading

Pre-clearance Required

Subject to Short Term Trading Restriction

("30 Calendar Day Rule")

 

 

 

 

Yes

 

 

The option's expiration date must be greater

 

 

than 30 days from the date of the option

 

 

transaction.

 

 

An options contract cannot be bought and

Purchasing/Selling an Option

Yes

sold, or sold and bought, within 30 calendar

days.

 

 

 

 

For avoidance of doubt, employees may

 

 

trade a different options contract (ie. different

 

 

expiration or strike) within 30 calendar days.

 

 

 

 

 

No

Involuntary Option Assign-

No

The acquisition/disposition of a

ment/Exercise of Existing Option

Purchase or sale of underlying

security resulting from an existing option

Position

Security not directed by the

position via an involuntary assignment/exer-

 

Employee

cise is not subject to the 30 Calendar Day

 

 

Rule

 

Yes

Yes

 

After the receipt or disposal of the

Directing an Option Exercise of

To exercise an option, the purchase

underlying security due to a directed option

Existing Options Position

or sale of the underlying security

exercise, employees are prohibited from

 

must be pre-cleared before directing

 

executing an opposite way transaction in the

 

the option exercise

underlying security for 30 calendar days

 

 

 

 

 

 

Yes

No

 

The same option on a futures contract

Rolling an Option on a Future7

Pre-clearance of both legs of the

bought and sold, or sold and bought within

(see section III.B.2.)

transaction is required to roll the op-

30 days to roll the exposure is not subject to

 

tion

the 30 Calendar Day Rule

 

 

 

Yes

Yes

Rolling an Option on All Other

Pre-clearance of both legs of the

Other options are not allowed to roll within

Underlying Securities

transaction is required to roll the op-

30 calendar days (i.e., they are subject to the

 

tion

30 Calendar Day Rule)

7 For the avoidance of doubt, futures are allowed to be rolled within 30 calendar days.

CODE OF ETHICS | August 2021 18

APPENDIX IV

Bitcoin Portfolio Person Requirements

PIMCO has established special requirements that apply to Bitcoin Portfolio Persons, defined as employees who directly support or direct trading in Bitcoin on behalf of PIMCO clients. Bitcoin Portfolio Persons must:

∙Report all Bitcoin Accounts within the Compliance Portal and provide quarterly and annual statements of transactions and holdings reports to Compliance within 30 calendar days following each quarter end

oFor the avoidance of doubt, each Bitcoin Portfolio Person must ensure that all Bitcoin Accounts are held with a provider that can generate a transactions history report for submission to Compliance

∙Pre-clear all Bitcoin transactions(including purchases, sales, andconversionsbetween Bitcoin and anotherasset) within the Compliance Portal (CUSIP: BTCPHY005)

∙Bitcoin transactions executed in an opposite way within 30-calendar days are prohibited (purchase and sale, sale and purchase, or equivalent conversions); see Section III.B. for further details regarding the short-term trading prohibition

oNote that the short term trading prohibition applies even if the purchase/sale/conversion transactions occur in different Bitcoin Accounts

∙Not transact in Bitcoin: (i) seven calendar days prior to, (ii) three calendar days after, or (iii) the same day of, in each case, a PIMCO client trade in Bitcoin; see Section III.D. for further details regarding the blackout period prohibition

 

 

Restriction Applicable to

 

 

Bitcoin Portfolio Persons

 

Report Bitcoin Accounts

Yes

Bitcoin

Pre-clear Transactions

Yes

30-Calendar Day Rule

Yes

 

 

Blackout Period

Yes

CODE OF ETHICS | August 2021 19


  

  

  

  

  

  

  

  

  

  

  

  

CODE OF ETHICS AND CONDUCT 

  

  

  

  

  

  

T. ROWE PRICE GROUP, INC. 

AND ITS AFFILIATES 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

          Effective March 1, 2021 

 

CODE OF ETHICS AND CONDUCT 

OF 

T. ROWE PRICE GROUP, INC. 

AND ITS AFFILIATES 

  

  

Table of Contents 

  

GENERAL POLICY STATEMENT1-1 

 

Purpose of Code of Ethics and Conduct

1-1 

 

Persons and Entities Subject to the Code

1-2 

 

Definition of Supervised Persons

1-2 

 

Status as a Fiduciary

1-2 

 

Adviser Act Requirements for Supervised Persons

1-3 

 

NASDAQ Requirements

1-3 

 

What the Code Does Not Cover

1-3 

 

Sarbanes-Oxley Codes

1-4 

 

Compliance Procedures for Funds and Federal Advisers

1-4 

 

Compliance with the Code

1-4 

 

Questions Regarding the Code

1-4 

STANDARDS OF CONDUCT OF PRICE GROUP AND ITS PERSONNEL2-1 

 

Allocation of Brokerage Policy

2-1 

 

Annual Compliance Certification

2-1 

 

Anti-Bribery Laws and Prohibitions Against Illegal Payments

2-1 

 

Antitrust

2-2,7-1 

 

Anti-Money Laundering

2-2 

 

Appropriate Conduct

2-2 

 

Charitable Contributions

2-2 

 

Conflicts of Interest

2-4 

 

Relationships with Profitmaking Enterprises

2-4 

 

Service with Nonprofitmaking Organizations

2-5 

 

Relationships with Financial Service Firms

2-5 

 

Relationships with a Bank

2-6 

 

Existing Relationships with Potential Vendors

2-6 

 

Investment in Client/Vendor Company Stock

2-6 

 

Confidentiality

2-7 

 

Expense Payments and Reimbursements

2-7 

 

Financial Reporting

2-8 

 

Gifts and Business Entertainment

2-8 

 

Human Resources

2-8 

 

Equal Opportunity

2-8 

 

Drug and Alcohol Policy

2-8 

 

Policy Against Harassment and Discrimination

2-8 

 

Health and Safety in the Workplace

2-9 

 

Use of Employee Likenesses and Information

2-9 

 

Employment of Former Government and Self-Regulatory Organization Employees

2-9 

 

Inside Information

2-9,4-1 

 

Investment Clubs

2-9 

 

Marketing and Sales Activities

2-10 

 

Outside Business Activities

2-10 

 

Past and Current Litigation and Inquiries from Regulators or Governmental Organizations

2-10 

 

Political Activities and Contributions

2-10 

 

Lobbying

2-12 

 

Professional Designations

2-12 

 

Protection of Corporate Assets

2-12 

 

Quality of Services

2-13 

 

Record Retention and Destruction

2-13 

 

Referral Fees

2-13 

 

Release of Information to the Press

2-13 

 

Responsibility to Report Violations

2-14 

 

General Obligation

2-14 

 

Global Whistleblower Procedures

2-14 

 

Sarbanes-Oxley Whistleblower Procedures

2-14 

 

Sarbanes-Oxley Attorney Reporting Requirements

2-14 

 

Circulation of Rumors

2-15 

 

Service as Trustee, Executor or Personal Representative

2-15 

 

Speaking Engagements and Publications

2-15 

 

Social Media

2-16 

 

Systems Security

2-16,6-1 

STATEMENT OF POLICY ON Gifts And BuSiness entertainment3-1 

STATEMENT OF POLICY ON MATERIAL, INSIDE (NON-PUBLIC) INFORMATION4-1 

STATEMENT OF POLICY ON SECURITIES TRANSACTIONS5-1 

STATEMENT OF POLICY ON SYSTEMS SECURITY AND RELATED ISSUES6-1 

STATEMENT OF POLICY ON Compliance with Antitrust Laws7-1 

Statement of Policy on Privacy8-1 

 

  

CODE OF ETHICS AND CONDUCT 

OF 

T. ROWE PRICE GROUP, INC. 

AND ITS AFFILIATES 

  

GENERAL POLICY STATEMENT 

  

Purpose of Code of Ethics and Conduct.  As a global investment management firm, we are considered a fiduciary to many of our clients and owe them a duty of undivided loyalty.  Our clients entrust us with their financial well-being and expect us to always act in their best interests.  Over the course of our Company’s history, we have earned a reputation for fair dealing, honesty, candor, objectivity and unbending integrity.  This has been possible by conducting our business on a set of shared values and principles of trust. 

  

In order to educate our personnel, protect our reputation, and ensure that our tradition of integrity remains as a principle by which we conduct business, T. Rowe Price Group, Inc. (“T. Rowe Price,” “TRP”, “Price Group” or “Group”) has adopted this Code of Ethics and Conduct (“Code”).  Our Code establishes standards of conduct that we expect each associate to fully understand and agree to adopt.  As we are in a highly regulated industry, we are governed by an ever-increasing body of federal, state, and international laws as well as countless rules and regulations which, if not observed, can subject the firm and its employees to regulatory sanctions.  All associates are expected to comply with all laws and regulations applicable to T. Rowe Price business.  Our Code contains 31 separate Standards of Conduct as well as the following six separate Statements of Policy: 

  

1.

Statement of Policy on Gifts and Business Entertainment 

2.

Statement of Policy on Material, Inside (Non-Public) Information 

3.

Statement of Policy on Securities Transactions 

4.

Statement of Policy on Systems Security and Related Issues 

5.

Statement of Policy on Compliance with Antitrust Laws 

6.

Statement of Policy on Privacy 

A copy of this Code will be retained by the Legal Department for five years from the date it is last in effect.  While the Code is intended to provide you with guidance and certainty as to whether or not certain actions or practices are permissible, it does not cover every issue that you may face.  The firm maintains other compliance-oriented manuals and handbooks that may be directly applicable to your specific responsibilities and duties.  Nevertheless, the Code should be viewed as a guide for you and the firm as to how we jointly must conduct our business to live up to our guiding tenet that the interests of our clients and customers must always come first. 

  

Each new employee will be provided with the current Code and must acknowledge their understanding of the Code. All employees have access to the current Code on the intranet.  Each employee will be required to provide Price Group with an acknowledgement of their understanding of the current Code on at least an annual basis.  All  acknowledgements will be retained as required by the Investment Advisers Act of 1940 (the “Advisers Act”). 

  

Please read the Code carefully and observe and adhere to its guidance. 

  

Persons and Entities Subject to the Code.  Unless otherwise determined by the Chairperson of the Ethics Committee, the following entities and individuals are subject to the Code: 

  

·

Price Group 

·

The subsidiaries and affiliates of Price Group 

·

The officers, directors and employees of Price Group and its affiliates and subsidiaries 

  

Unless the context otherwise requires, the terms “T. Rowe Price”, “Price Group” and “Group” refer to Price Group and all its affiliates and subsidiaries. 

  

In addition, the following persons are subject to the Code: 

  

1.

Any contingent worker (independent or agency-provided contract worker) whose assignments exceed four weeks or whose cumulative assignments exceed eight weeks over a twelve-month period and whose work is closely related to the ongoing work of Price Group employees (versus project work that stands apart from ongoing work); and 

  

2.

Any contingent worker whose assignment is more than casual in nature or who will be exposed to the kinds of information (via systems access or otherwise) and situations that would create conflicts on matters covered in the Code. 

 

The independent directors of Price Group, T. Rowe Price Mutual Funds (“Price Funds”), and the T. Rowe Price Exchange-Traded Funds (“Price ETFs”) are subject to the principles of the Code generally and to specific provisions of the Code as noted. “Price ETFs” includes the T. Rowe Price semi-transparent actively-managed ETFs (“STA ETFs”) that operate pursuant to SEC exemptive relief dated December 2019 (the “STA ETF Exemptive Relief”) unless expressly noted otherwise. 

  

Definition of Supervised Persons.  Under the Advisers Act, the officers, directors (or other persons occupying a similar status or performing similar functions) and employees of the Price Advisers, as well as any other persons who provide advice on behalf of a Price Adviser and are subject to the Price Adviser’s supervision and control are “Supervised Persons”. 

  

Status as a Fiduciary.  Several of Price Group’s subsidiaries are investment advisers registered with the U.S. Securities and Exchange Commission (“SEC”).  These include T. Rowe Price Associates, Inc. (“TRPA”), T. Rowe Price International Ltd (“TRPIL”), T. Rowe Price Advisory Services, Inc. (“TRPAS”), T. Rowe Price (Canada), Inc. (“TRP Canada”), T. Rowe Price Singapore Private Ltd. (“TRPSING”), T. Rowe Price Japan, Inc. (“TRPJ”), T. Rowe Price Australia Limited (“TRPAU”), and T. Rowe Price Hong Kong Limited (“TRPHK”). 

  

TRPIL is also authorized and regulated by the UK Financial Conduct Authority (“FCA”). TRPIL is also subject to regulation by the Dubai Financial Services Authority (in respect of its DFIC Representative Office). 

  

TRPHK is also authorized and regulated by the Securities and Futures Commission (“SFC”) of Hong Kong. 

  

TRPSING is also authorized and regulated by the Monetary Authority of Singapore (“MAS”). 

  

TRP Canada is also registered with the Ontario Securities Commission, the Manitoba Securities Commission, the British Columbia Securities Commission, the Saskatchewan Financial Services Commission, the Nova Scotia Securities Commission, the New Brunswick Securities Commission, the Financial Markets Authority (Quebec), and the Alberta Securities Commission. 

  

TRPJ is licensed by the Japan Financial Services Authority (“FSA”). 

  

TRPAU also holds an Australian Financial Services License issued by the Australian Securities & Investments Commission (“ASIC”). 

  

All advisers affiliated with Price Group will be referred to collectively as the “Price Advisers” unless the context otherwise requires.  The Price Advisers will register with additional securities regulators as required by their respective businesses.  The primary responsibility of the Price Advisers is to render to their advisory clients on a professional basis unbiased advice regarding their clients’ investments.  As investment advisers, the Price Advisers have a fiduciary relationship with all of their clients, which means that they have an absolute duty of undivided loyalty, fairness and good faith toward their clients and mutual fund shareholders and a corresponding obligation to refrain from taking any action or seeking any benefit for themselves which would, or which would appear to, prejudice the rights of any client or shareholder or conflict with his or her best interests. 

  

Adviser Act Requirements for Supervised Persons.  The Advisers Act requires investment advisers to adopt Codes that: 

  

·

Establish a standard of business conduct, applicable to Supervised Persons, reflecting the fiduciary obligations of the adviser and its Supervised Persons; 

·

Require Supervised Persons to comply with all applicable laws; 

·

Require Supervised Persons to report violations of the Code promptly to the adviser’s Chief Compliance Officer;  and  

·

Require the adviser to provide each Supervised Person with a copy of the Code and any amendments and requiring Supervised Persons to provide the adviser with an acknowledgement of receipt of the Code and any amendments. 

  

Price Group applies these requirements to all persons subject to the Code, including all Supervised Persons. 

  

NASDAQ Requirements.  Nasdaq Stock Market, Inc. (“NASDAQ”) rules require listed companies to adopt a Code of Conduct for all directors, officers, and employees.  Price Group is listed on NASDAQ.  This Code is designed to fulfill this NASDAQ requirement.  A waiver of this Code for an executive officer or director of T. Rowe Price Group, Inc. must be granted by Price Group’s Board of Directors and reported as required by the pertinent NASDAQ rule. 

  

Additional Regulatory Requirements Beyond the Code.   The Code was not written for the purpose of covering all policies, rules and regulations to which personnel may be subject.  For example, T. Rowe Price Investment Services, Inc. (“Investment Services”) is regulated by the Financial Industry Regulatory Authority (“FINRA

”) and, as such, is required to maintain written supervisory procedures to enable it to supervise the activities of its registered representatives and associated persons to ensure compliance with applicable securities laws and regulations and with the applicable rules of FINRA.  In addition, TRPIL, TRP Canada, and other TRP entities are subject to several non-U.S. regulatory authorities. 

  

Sarbanes-Oxley Codes.  The principal Executive and Senior Financial Officers of Price Group, Price Funds, and the Price ETFs are also subject to codes (collectively the “S-O Codes”) adopted to bring these entities into compliance with the applicable requirements of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”).  These S-O Codes, which are available along with this Code on the firm’s intranet site, are supplementary to this Code, but administered separately from it and each other. 

  

Compliance Procedures for Funds and Federal Advisers.  Under rule 38a-1 of the Investment Company Act of 1940, each fund board is required to adopt written policies and procedures reasonably designed to prevent the fund from violating federal securities laws.  These procedures must provide for the oversight of compliance by the fund’s advisers, principal underwriters, administrators and transfer agents.  Under Rule 206(4)-7 of the Investment Advisers Act of 1940, it is unlawful for an investment adviser to provide investment advice unless it has adopted and implemented policies and procedures reasonably designed to prevent violations of federal securities laws by the adviser and its supervised persons. 

  

Compliance with the Code.  Strict compliance with the provisions of this Code is considered a basic condition of employment or association with the firm.  An employee may be subject to disciplinary action, up to and including termination, for refusing to cooperate with an internal or external investigation.  An employee may be required to surrender any profit realized from a transaction that is deemed to be in violation of the Code.  In addition, a breach of the Code may constitute grounds for disciplinary action, including fines and dismissal from employment.  Employees may appeal to the Management Committee any ruling or decision rendered with respect to the Code.   

  

Questions regarding the Code should be referred to Code_of_Ethics@TRowePrice.com 

  

  

  

STANDARDS OF CONDUCT OF PRICE GROUP AND ITS PERSONNEL 

  

Allocation of Brokerage Policy. The policies of each of the Price Advisers with respect to the allocation of client brokerage are set forth in Part 2A of Form ADV of each of the Price Advisers. The Form ADV is each Price Adviser’s registration statement filed with the SEC. It is imperative that all employees, especially those who are in a position to make recommendations regarding brokerage allocation or who are authorized to select brokers that will execute securities transactions on behalf of our clients, read and become fully knowledgeable concerning our policies in this regard.  Any questions regarding any of the Price Advisers’ allocation policies for client brokerage should be addressed to the respective Equity Best Execution or Fixed Income Best Execution Committee.  

  

Annual Compliance Certification.  Annually each person subject to the Code is required to complete an Annual Compliance Certification (“ACC”) regarding his or her compliance with various provisions of the Code.   Associates must notify Code Compliance (via the Code of Ethics mailbox) should any responses to these questions change during the subsequent calendar year.  Each Access Person (defined on page 5-3), except the independent directors of the Price Funds and Price ETFs, must file an Initial Holdings Report as well as complete the ACC which will include a reporting and certification of securities accounts and holdings.   

  

Anti-Bribery Laws and Prohibitions Against Illegal Payments.  State, U.S., and international laws prohibit the payment of bribes, kickbacks, inducements or other illegal gratuities or payments by or on behalf of Price Group.  Price Group, through its policies and practices, is committed to comply fully with these laws.  T. Rowe Price prohibits its employees as well as anyone acting on its behalf from making any type of illegal payment.  The U.S. Foreign Corrupt Practices Act (“FCPA”) makes it a crime to directly or indirectly pay, promise to pay, offer to pay or authorize the payment of any money or anything of value to any government official in connection with obtaining or retaining business or influencing such official in order to secure an improper advantage.  The term “government official” is broadly defined to include any officer or employee of a government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality thereof, or for or on behalf of any such public international organization, and any political party, party official or candidate for public office. 

  

Additionally, the UK Bribery Act 2010 (“Bribery Act”) contains wide prohibitions on illegal payments and specifically prohibits bribery between private parties.  Also, the Bribery Act provides for severe civil and criminal penalties against individuals and corporations. 

  

Under these Anti-bribery laws, actions constituting a bribe or illegal payment are interpreted broadly and could include excessive, repeated or lavish entertainment and/or gifts.  Associates must adhere to the guidelines of gift and business entertainment policy and procedures and, if required by the applicable procedure, indicate in the reporting process whether a recipient of a gift or business entertainment is a government official. 

  

If you are solicited to make or receive an illegal payment or have any questions about this section of the Code, you should contact the Legal Department.  Also, an anonymous Hotline (888-651-6223) has been established for employees to report any concerns they have regarding illegal payments, including potential violations of the FCPA and the Bribery Act. 

  

Antitrust.  The U.S. antitrust laws are designed to ensure fair competition and preserve the free enterprise system.  Other jurisdictions have requirements based on similar principals.  Some of the most common antitrust issues with which an employee may be confronted are in the areas of pricing (adviser fees) and trade association activity.  To ensure its employees’ understanding of these laws, Price Group has adopted a Statement of Policy on Compliance with Antitrust Laws (page 7-1). 

  

Anti-Money Laundering.  T. Rowe Price has a legal and fiduciary duty to help guard against accounts under management from being used for fraudulent activities, money laundering, or the financing of terrorist activities.  T. Rowe Price will not knowingly engage in any activity that facilitates money laundering or the funding of terrorist or criminal activities. The firm has developed procedures to help detect and prevent such activity from occurring and will comply with all laws and regulations to which T. Rowe Price is subject including those rules and regulations requiring the reporting of suspicious activity.  It is each associate’s responsibility to protect the firm from exploitation by money launderers.  Refer to the Global Financial Crimes Prevention web-based training in myLearning for more information on money laundering and the relevant laws and regulations. 

  

Appropriate Conduct.  Associates are expected to conduct themselves in an appropriate and responsible manner in the workplace, when on company business outside the office, and at company-sponsored events.  Inappropriate behavior reflects poorly on the associate and may impact T. Rowe Price.  Managers should be especially mindful that they should set the standard for appropriate behavior. 

  

Charitable Contributions.  Employees should be sensitive to a possible perception of undue influence before making or requesting charitable contributions to or from a client, prospect, vendor, or other business contact.  Under certain Anti-bribery laws, regulators may consider charitable contributions to be improper payments, even when the person who has requested that the contribution be made receives no direct monetary benefit.  Accordingly, when making charitable contributions in response to requests from business contacts, associates must be mindful of how Anti-bribery laws could be implicated.  In no case should charitable contributions be made on a quid pro quo basis. 

  

Supervision of Charitable Contribution Requests.  Managers and Division Heads are responsible for ensuring that responses to requests from clients, vendors, and other business contact and our requests to clients, vendors, and other business contacts for charitable contributions comply with these guidelines as well as respective departmental policies.  Charitable contributions should be considered as separate and distinct from marketing and advertising expenditures.  If you have any questions about a proposed charitable contribution, you should contact the Chairperson of the Ethics Committee before proceeding. 

  

Requests Received from Clients, Vendors or Other Business Contacts for Corporate Charitable Contributions.  On occasion, a T. Rowe Price entity may be asked by an employee of a client, vendor, or other business contact to make a charitable donation.  In those instances where the T. Rowe Price Foundation does not make the contribution, the decision about the charitable contribution is made by the T. Rowe Price entity, subject to the following conditions: 

  

·

The amount of charitable contribution may not be linked to the actual or anticipated level of business with the client, vendor or other business contact whose employee is soliciting the charitable contribution; 

·

There is no reason to believe that the employee requesting the contribution will derive an improper economic or pecuniary benefit as a result of the proposed contribution; 

·

If the T. Rowe Price entity considering the contribution is unfamiliar with the charity, its personnel should confirm with the Central Control Group that the charity does not appear on the Office of Foreign Assets Control’s Specially Designated Nationals List; 

·

The contribution should be made payable directly to the charity; and 

·

Associates of the T. Rowe Price entity considering the contribution should check with Finance to determine the appropriate T. Rowe Price entity to make the contribution. 

  

In addition, if the requested amount exceeds $1,000 the request must be referred to the Chairperson of the Ethics Committee for prior approval. 

  

Some broker-dealer’s sponsor days, often referred to as “miracle” days, where they pledge that proceeds received on that day will be donated to a specific charity.  Because of fiduciary and best execution obligations, the Price Advisers cannot agree to direct trades to a broker-dealer in support of such an event at either a client’s or the broker-dealer’s request.  The Price Advisers are not prohibited, however, from placing trades for best execution that happen to occur on a “miracle” day or similar time and thus benefit a charity. 

  

Requests Received from Clients, Vendors or Other Business Contacts for Personal Charitable Contributions.  On occasion, a T. Rowe Price employee may be asked by an employee of a client, vendor or other business contact to make a charitable contribution.  If the employee makes a contribution directly to the charity and the contribution is not made in the name of or for the benefit of the business contact, no Code of Ethics or FINRA issues arise.  For example, a plan fiduciary might mention that her husband has recently recovered from a heart problem and that she is raising funds for a charity that supports cardiac research.  The T. Rowe Price employee can make a personal contribution to that charity and if the contribution is not tied to the name of the business contact and does not create a benefit for her, the employee does not need to request prior clearance of or notify T. Rowe Price about the contribution. 

  

However, personal charitable contributions made in the name of and for the benefit of a business contact should be treated as “gifts” to the business contact.  For example, if the business contact raises a certain amount of money, he or she gets a tangible award or opportunity like the chance to participate in a marathon.  For business contacts related to T. Rowe Price fund business or other broker-dealer related business, contributions of the latter type are subject to FINRA’s $100 limit.  For other business activities not regulated by FINRA, contributions in excess of $100 must be prior approved by the Chairperson of the Ethics Committee. 

  

Requests to Clients, Vendors, or Other Business Contacts for Charitable Contributions.

  Employees should be sensitive to a possible perception of undue influence before requesting a client, vendor, business contact or an employee of such an entity to make a charitable contribution.  In no case should such a request be made on a quid pro quo basis.  If you have any questions about requesting a charitable contribution you should contact the Chairperson of the Ethics Committee before proceeding. 

  

NASDAQ Listing Rules.  Under the NASDAQ listing rules, specific restrictions may apply to contributions to a charitable organization for which an independent director of T. Rowe Price Group, Inc. serves as an officer.  Specifically, contributions to such organizations during a fiscal year may not exceed the higher of five percent of the organizations revenues or $200,000.  Contributions in excess of these thresholds may invalidate a director’s “independent” classification. 

  

Conflicts of Interest.  All employees must avoid placing themselves in a “compromising position” where their interests may be in conflict with those of Price Group or its clients.  In addition, employees are legally required to perform their job duties in the best interests of the firm; referred to as a duty of loyalty.  This means that employees cannot enrich themselves at the expense of T. Rowe Price, actively compete with the firm, divert business to a competitor, and must always seek to protect the assets of the T. Rowe Price.   

  

Relationships with Profitmaking Enterprises.  Depending upon the circumstances, an employee may be prohibited from creating or maintaining a relationship with a profitmaking enterprise.  In all cases, written approval must be obtained as described below. 

  

General Prohibitions.  Employees are generally prohibited from serving as officers or directors of any issuer (company) that is approved or likely to be approved for purchase in our firm’s client accounts.  In addition, an employee may not accept or continue outside employment that will require him or her to become registered (or duly registered) as a representative of an unaffiliated broker-dealer, investment adviser or insurance broker or company unless approval to do so is first obtained in writing from the Chief Compliance Officer (“CCO”) of the broker-dealer.  An employee also may not become independently registered as an investment adviser. 

  

Approval Process.  Any outside business activity, which may include a second job, appointment as an officer or director of or a member of an advisory board to a for-profit enterprise, or self-employment, must be approved in writing by the employee’s supervisor.  If the employee is a registered representative of T. Rowe Price Investment Services, he or she must provide the Legal Registration Group with prior written notice.  Any reported outside business activity of a registered representative is reviewed by Investment Services’ CCO, or designee, in order to determine if disclosure to FINRA is required. 

  

Review by Ethics Committee

.  If an employee contemplates obtaining an interest or relationship that might conflict or appear to conflict with the interest of Price Group, he or she must also receive the prior written approval of the Chairperson of the Ethics Committee or his or her designee and, as appropriate, the Ethics Committee itself.  Examples of relationships that might create a conflict or appear to create a conflict of interest may include appointment as a director, officer or partner of or member of an advisory board to an outside profitmaking enterprise, employment by another firm in the securities industry, or self-employment in an investment capacity.  Decisions by the Ethics Committee regarding such positions in outside profitmaking enterprises may be reviewed by the Management Committee before becoming final. 

  

Approved Service as Director or Similar Position.  Certain employees may serve as directors or as members of creditor committees or in similar positions for non-public, for-profit entities in connection with their professional activities at the firm.  An employee must receive the written permission of the Management Committee before accepting such a position and must relinquish the position if the entity becomes publicly held, unless otherwise determined by the Management Committee. 

  

Service with Nonprofitmaking Organizations.  Price Group encourages its employees to become involved in community programs and civic affairs.  However, employees should not permit such activities to affect the performance of their job responsibilities. 

  

Approval Process.  The approval process for service with a non-profitmaking organization varies depending upon the activity undertaken. 

  

By Supervisor.  An employee must receive the approval of his or her supervisor in writing before accepting a position as an officer, trustee, or member of the Board of Directors of any nonprofit organization. 

  

By Ethics Committee Chairperson.  If there is any possibility that the organization will issue and/or sell securities, the employee must also receive the written approval of the Chairperson of the Ethics Committee or his or her designee and, as appropriate, the Chief Compliance Officer of the broker-dealer before accepting the position. 

  

Although individuals serving as officers, Board members or trustees for nonprofitmaking entities that will not issue or sell securities do not need to receive this additional approval, they must be sensitive to potential conflict of interest situations (e.g., the entity is considering entering a business relationship with a T. Rowe Price entity) and must contact the Chairperson of the Ethics Committee for guidance if such a situation arises. 

  

Relationships with Financial Services Firms.  In order to avoid any actual or apparent conflicts of interest, employees are prohibited from investing in or entering into any relationship, either directly or indirectly, with corporations, partnerships, or other entities that are engaged in business as a broker, a dealer, an underwriter, and/or an investment adviser.  As described above, this prohibition generally extends to registration and/or licensure with an unaffiliated firm.  This prohibition, however, is not meant to prevent employees from purchasing publicly traded securities of broker-dealers, investment advisers or other companies engaged in the mutual fund industry.  All such purchases are subject to prior transaction clearance and reporting procedures, as applicable.  This policy also does not preclude an employee from engaging an outside investment adviser to manage his or her assets. 

  

If any member of employee’s immediate family is employed by or has a partnership interest in a broker-dealer, investment adviser, or other entity engaged in the mutual fund industry, the relationship must be reported to the Ethics Committee. 

  

An ownership interest of 0.5% or more in any entity, including a broker-dealer, investment adviser or other company engaged in the mutual fund industry, must be reported to the Code Compliance Team. 

  

Relationships with a Bank.  In order to avoid any regulatory conflicts of interests associated with an outside business activity associated with a bank, employees are required to obtain prior written approval before engaging in any outside business activity with a bank. 

  

Approval Process.  Any outside business activity with a bank, such as a second job, must be approved in writing by the employee’s supervisor and by the Chairperson of the Ethics Committee, or his designee. 

  

Existing Relationships with Potential Vendors.  If an employee is going to be involved in the selection of a vendor to supply goods or services to the firm, he or she must disclose the existence of any ongoing personal or family relationship with any principal of the vendor to the Chairperson of the Ethics Committee in writing before becoming involved in the selection process. 

  

Investment in Client/Vendor Company Stock.  In some instances, existing or prospective clients (e.g., clients with full-service relationships with T. Rowe Price Retirement Plan Services, Inc.) or vendors ask to speak to our portfolio managers and/or analysts who have responsibility for a Price Fund or Price ETF or other managed account in an effort to promote investment in their securities.  While these meetings present an opportunity to learn more about the client/vendor and may therefore be helpful to T. Rowe Price, employees must be aware of the potential conflicts presented by such meetings.  In order to avoid any actual or apparent conflicts of interest: 

  

·

Employees are prohibited from providing any internal information (e.g., internal ratings or plans for future Price Fund, Price ETF, or other client account purchases) to the client or vendor regarding the securities, except to the extent specifically authorized by the Legal Department, and 

·

Investment decisions of employees regarding a client’s or vendor’s securities must be made independently of the client or vendor relationship and cannot be based on any express or implied quid pro quo.  If a situation arises where a client has suggested that it is considering either expanding or eliminating its relationship with T. Rowe Price (or, in the case of a vendor, offering a more or less favorable pricing structure) based upon whether Price increases purchases of the client’s or vendor’s securities, the Chairperson of the Ethics Committee should be consulted immediately for guidance. 

  

In addition, the use of information derived from such meetings with existing or prospective clients or vendors must conform to the Statement of Policy on Material, Inside (Non-Public) Information. 

  

Conflicts in Connection with Proxy Voting.  If a portfolio manager or analyst with the authority to vote a proxy or recommend a proxy vote for a security owned by a Price Fund, Price ETF, or a client of a Price Adviser has an immediate family member who is an officer or director or has a material business relationship with the issuer of the security, the portfolio manager or analyst should inform the Proxy Committee of the relationship so that the Proxy Committee can assess any conflict of interest that may affect whether the proxy should or should not be voted in accordance with the firm’s proxy voting policies. 

  

Confidentiality.  The exercise of confidentiality extends to the all areas of our operations, including internal operating procedures and planning; current, prospective and former clients; investment advice; investment research; employee information and contractual obligations to protect third party confidential information.  The duty to exercise confidentiality applies not only while associates and others are with the firm, but also after a person leaves the firm.  Following are examples of the type of confidential information with which associates may come into contact: 

  

·

Internal operating procedures and planning, including methods of operation and portfolio management, corporate financial information, and future initiatives the firm is considering. 

·

Client information, including the identity of current, prospective, or former clients of any type (e.g., mutual fund shareholder, separate account client, etc.), agents of clients, and related data concerning clients (e.g., government-issued numbers, account numbers, addresses, investments, etc.). 

·

Confidential information of third parties with whom we deal, such as the business operations of a vendor we use. 

·

Investment research, including what securities we are considering for purchase or sale on behalf of our commingled investment vehicles or clients. 

·

Information about our associates and contractors, such as name, government-issued numbers, health conditions, and financial or performance information. 

·

Portfolio holdings for a commingled investment vehicle or separate account. (See “T. Rowe Price Mutual Funds and Exchange-Traded Funds Information Release Policy”) 

  

In addition to laws that can apply to the collection and use of such information, Price Group also may be subject to contractual commitments.  It is important to remember that your role is to use confidential information of others, such as information of clients or other associates, only as needed to perform your job; to handle such information in a secure manner; to not use or share such data for your own or other non-business purposes; and to promptly report any potential issues about the security, availability, or integrity of such information to the Help Desk.   

  

Expense Payments and Reimbursements.

  As a general rule, T. Rowe Price will not pay or reimburse expenses, such as travel, accommodation and meals, to a business contact and will not accept payment or reimbursement from a business contact for those types of expenses.  Exceptions may only be granted with approval of the employee’s supervisor and Division Head and the Chairperson of the Ethics Committee.  Business units may adopt policies and procedures that permit T. Rowe Price to pay or reimburse expenses incurred by business contacts for attendance at certain T. Rowe Price sponsored events.  Such policies and procedures must contain provisions that describe the circumstances in which such payments are allowed and the controls and conditions that will apply.  Additionally, the policies and procedures must be approved by the Division Head and the Chairperson of the Ethics Committee.  This general rule does not apply to “business entertainment” which is covered in the Statement of Policy on Gifts and Business Entertainment. 

  

Financial Reporting.  Price Group’s records are maintained in a manner that provides for an accurate record of all financial transactions in conformity with generally accepted accounting principles.  No false or deceptive entries may be made, and all entries must contain an appropriate description of the underlying transaction.  All reports, vouchers, bills, invoices, payroll and service records and other essential data must be accurate, honest and timely and should provide an accurate and complete representation of the facts.  The Audit Committee of Price Group has adopted specific procedures regarding the receipt, retention and treatment of certain auditing and accounting complaints. Price ETFs, as publicly traded companies, must comply with these requirements related to complaints.  The Price Funds voluntarily comply with these requirements.  As such, the Audit Committee of the Price ETFs and Price Funds has adopted policies and procedures regarding the receipt, retention and treatment of certain auditing and accounting complaints for ETFs and Price Funds. Refer to Responsibility to Report Violations on page 2-14. 

  

Gifts and Business Entertainment.  The firm has adopted a comprehensive policy on providing and receiving gifts and business entertainment, which is found in the Code in the Statement of Policy on Gifts and Business Entertainment (page 3-1). 

  

Human Resources.  Associates should refer to the appropriate Associate Handbook for more information on the policies referenced in this section as well as other Human Resources policies. 

  

Equal Opportunity.  Price Group is committed to the principles of equal employment opportunity (“EEO”) and the maximum optimization of our associates’ abilities.  We believe our continued success depends on the equal treatment of all employees and applicants without regard to race, religion, creed, color, national origin, sex, gender, age, physical and mental disability, marital status, sexual orientation, gender identity or expression, citizenship status, military and veteran status, pregnancy, or any other classification protected by federal, state or local laws. 

  

This commitment to EEO covers all aspects of the employment relationship including recruitment, application and initial employment, promotion, transfer, training and development, compensation, and benefits.  All associates of T. Rowe Price are expected to comply with the spirit and intent of our EEO Policy.  If you feel you have not been treated in accordance with this policy, contact your immediate supervisor, the appropriate Price Group manager or a Human Resources representative.  No retaliation will be taken against you if you report an incident of alleged discrimination in good faith. 

  

Drug and Alcohol Policy.  Price Group is committed to providing a drug-free workplace and preventing alcohol abuse in the workplace.  Drug and alcohol misuse and abuse affect the health, safety, and well-being of all Price Group associates and customers and restrict the firm’s ability to carry out its mission.  Associates must perform job duties unimpaired by illegal drugs or the improper use of legal drugs or alcohol. 

  

Policy Against Harassment and Discrimination

.  Price Group is committed to providing a safe working environment in which all individuals are treated with respect and dignity.  Associates have the right to enjoy a workplace that is conducive to high performance, promotes equal opportunity, and prohibits discrimination including harassment. 

  

Price Group will not tolerate harassment, discrimination, or other types of inappropriate behavior directed by or toward an associate, supervisor/manager, contractor, vendor, customer, visitor, or other business partner.  Accordingly, the firm will not tolerate harassment or intimidation of any associate based on race, religion, creed, color, national origin, sex, gender, age, disability, marital status, sexual orientation, gender identity or expression, citizenship status, veteran status, pregnancy discrimination, or any other classification protected by country, federal, state, or local law.  In addition, Price Group does not tolerate slurs, threats, intimidation, or any similar written, verbal, physical, or computer-related conduct that denigrates or shows hostility or aversion toward any individual.   Harassment will not be tolerated on our property or in any other work-related setting such as business-sponsored social events or business trips.  If you are found to have engaged in conduct inconsistent with this policy, you will be subject to appropriate disciplinary action, up to and including, termination of employment. 

  

Health and Safety in the Workplace.  Price Group recognizes its responsibility to provide personnel a safe and healthful workplace and proper facilities to help them perform their jobs effectively. 

  

Use of Employee Likenesses and Information.   Price Group is permitted to use employees' names, biographical information, images, job descriptions, and other relevant business data for purposes of complying with legal requirements and/or as part of its legitimate interests in managing its business, including any T. Rowe Price sponsored community or charitable event.  Price Group will seek an employee's explicit consent for a proposed use of the employee's likeness or other information when required to do so under applicable law.  

  

Employment of Former Government and Self-Regulatory Organization Employees.  U.S. laws and regulations govern the employment of former employees of the U.S. Government and its agencies, including the SEC.  In addition, certain states have adopted similar statutory restrictions.  Finally, certain states and municipalities that are clients of the Price Advisers have imposed contractual restrictions in this regard.  Before any action is taken to discuss employment by Price Group of a former government or regulatory or self-regulatory organization employee, whether in the U.S. or internationally, guidance must be obtained from the Legal Department. 

  

Inside Information.  The purchase or sale of securities while in possession of material, inside information is prohibited by U.S., UK, and other international, state and other governmental laws and regulations.  Information is considered inside and material if it has not been publicly disclosed and is sufficiently important that it would affect the decision of a reasonable person to buy, sell or hold securities in an issuer, including Price Group.  Under no circumstances may you transmit such information to any other person, except to Price Group personnel who are required to be kept informed on the subject.  You should read and understand the Statement of Policy on Material, Inside (Non-Public) Information. 

  

Investment Clubs

.  Access Persons must receive the prior clearance of the Chairperson of the Ethics Committee or their designee before forming or participating in a stock or investment club.  Transactions in which Access Persons have beneficial ownership or control (defined on page 5-4) through investment clubs are subject to the firm’s Statement of Policy on Securities Transactions.  Approval to form or participate in a stock or investment club may permit the execution of securities transactions without prior transaction clearance by the Access Person, except transactions in Price Group stock, if the Access Person has beneficial ownership solely by virtue of his or her spouse’s participation in the club and has no investment control or input into decisions regarding the club’s securities transactions.  Non-Access Persons (defined on page 5-4) do not have to receive prior clearance to form or participate in a stock or investment club and need only obtain prior clearance of transactions in Price Group stock. 

  

Marketing and Sales Activities.  All written and oral sales and marketing materials and presentations must be in compliance with applicable SEC, FINRA, Global Investment Performance Standards (“GIPS”), FCA, and other applicable international requirements.  All such materials (whether for the Price Funds, Price ETFs, other commingled investment vehicles, non-Price funds, or various advisory or Brokerage services) must be reviewed and approved by the Legal Department’s Global Communications Compliance Team, as appropriate, prior to use.  All performance data distributed outside the firm, including total return and yield information, must be obtained from databases sponsored by the Performance Group. 

  

Outside Business Activities.  Please refer to Conflicts of Interest (page 2-4). 

  

Past and Current Litigation and Inquiries from Regulators or Governmental Organizations.  As a condition of employment, each new employee is required to provide information regarding past and current civil (including arbitrations) and criminal actions and certain regulatory matters.  Price Group uses the information obtained to respond to questions asked on governmental, regulatory, and self-regulatory registration forms and for insurance and bonding purposes. 

  

Each employee is responsible for keeping responses pertaining to past and current civil (including arbitrations) and criminal actions and certain regulatory matters updated (notify Code Compliance). An employee should notify Human Resources and either the Legal Department or the International Compliance Team promptly if he or she: 

  

·

Becomes the subject of any proceeding or is convicted of or pleads guilty or no contest to or agrees to enter a pretrial diversion program relating to any felony or misdemeanor or similar criminal charge in a U.S. (federal, state, or local), foreign or military court,  

·

Becomes the subject of a Regulatory Action, which includes any action initiated by a securities regulator (e.g. Securities and Exchange Commission (U.S.), Financial Conduct Authority (UK), Securities and Futures Commission of Hong Kong, etc.), or 

·

Receives an inquiry from any regulator or governmental authority. 

  

Political Activities and Contributions

.  Price Group and its subsidiaries as well as their employees are subject to various federal, state and local laws regarding political contributions.  These regulations can restrict the ability of the firm and its employees to make political contributions.  In particular, the SEC has adopted Rule 206(4)-5 of the Advisers Act, known as the “Pay-To-Play” rule.  The rule was adopted to address pay-to-play practices under which direct or indirect payments by investment advisers, and certain of their executive or employees, to state and local government officials in the U.S. may be perceived to improperly influence the award of government investment business.  Generally, the rule prohibits an investment adviser from providing advisory services for compensation to a government entity client for two years after the adviser or certain of its executives or employees make a contribution over a de minimis amount to certain elected officials or candidates.  The rule affects T. Rowe Price and its employees because government entities use the firm’s advisory services and also invest in T. Rowe Price mutual funds. 

  

The firm has adopted a “Statement of Policy Regarding Political Contributions” (“Political Contributions Policy” or “Policy”) to comply with the SEC rule and other applicable laws and requirements.  Under the Policy, all T. Rowe Price employees globally are required to prior clear proposed political contributions, as defined in the Policy, to any candidate, officeholder, political party, Political Action Committee (“PAC”), political organization, or bond ballot campaign in the U.S.  Note that employees must separately ensure that they are eligible by applicable law to make the contribution at issue; for example, U.S. law generally permits only U.S. citizens and "green card" holders to contribute to federal, state, and local elections.  Employees are generally prohibited from coordinating, or soliciting third parties to make, a contribution or payment to any candidate, officeholder, political party, PAC, political organization, or bond ballot campaign in the U.S.  Additionally, employees are prohibited from doing anything indirectly that, if done directly, would violate this Policy.  Any questions about the Political Contributions Policy should be directed to the “Political Contribution Requests” mailbox. 

  

In addition to the requirements imposed by the SEC rule, all U.S.-based officers and directors of Price Group and its subsidiaries are required to disclose certain Maryland local and state political contributions on a semi-annual basis and certain Pennsylvania political contributions on an annual basis.  Certain employees associated with Investment Services are subject to limitations on and additional reporting requirements about their political contributions under Rule G-37 of the U.S. Municipal Securities Rulemaking Board (“MSRB”). Furthermore, the firm and/or some employees are subject to additional restrictions because of client contractual stipulations. 

  

U.S. law prohibits corporate contributions to campaign elections for federal office (e.g., U.S. Senate and House of Representatives).  The SEC rule effectively prohibits corporate contributions by the firm to state and local elections. 

  

No political contribution of corporate funds, direct or indirect, to any political candidate or party, or to any other program that might use the contribution for a political candidate or party, or use of corporate property, services or other assets may be made without the written prior approval of the Legal Department. These prohibitions cover not only direct contributions, but also indirect assistance or support of candidates or political parties through purchase of tickets to special dinners or other fundraising events, or the furnishing of any other goods, services or equipment to political parties or committees. Neither Price Group nor its employees or independent directors may make a political contribution for the purpose of obtaining or retaining business with government entities. 

  

T. Rowe Price does not reimburse employees for making contributions to individual candidates or committees.  Additionally, the firm cannot provide paid leave time to employees for political campaign activity.  However, employees may use personal time or paid vacation or may request unpaid leave to participate in political campaigning. 

  

T. Rowe Price does not have a PAC.  However, T. Rowe Price has granted permission to the Investment Company Institute’s PAC (“ICI PAC

”), which serves the interests of the Investment company industry, to solicit T. Rowe Price’s senior management on an annual basis to make contributions to ICI PAC or candidates designated by ICI PAC.  Contributions to ICI PAC are entirely voluntary.  Additionally, proposed contributions to the ICI PAC must go through the prior clearance process. 

  

As noted above, the SEC rule prohibits most solicitation activities.  To the extent the Legal Department approves solicitation activities in accordance with applicable rules or other requirements employees, officers, and directors of T. Rowe Price may not solicit campaign contributions from employees without adhering to T. Rowe Price’s policies regarding solicitation.  These include the following:  

  

·

It must be clear that the solicitation is personal and is not being made on behalf of T. Rowe Price. 

·

It must be clear that any contribution is entirely voluntary. 

·

T. Rowe Price’s stationery and email system may not be used. 

  

An employee who wants to participate in political campaigns or run for political office should consult with his or her immediate supervisor to make sure that this activity does not conflict with his or her job responsibilities.  Also, the employee should contact the Legal Department to discuss any activities which may be prohibited. 

  

Lobbying.  It is important to realize that under some state laws, even limited contact, either in person or by other means, with public officials in that state may trigger that state’s lobbying laws.  For example, in Maryland, if $2,500 of a person’s compensation can be attributed to face-to-face contact with legislative or executive officials in a six-month reporting period, he or she may be required to register as a Maryland lobbyist subject to a variety of restrictions and requirements.  Therefore, it is imperative that you avoid any lobbying on behalf of the firm, whether in-person or by other means (e.g., telephone, letter) unless the activity is cleared first by the Legal Department, so that you do not inadvertently become subject to regulation as a lobbyist.  If you have any question whether your contact with a state’s officials may trigger lobbying laws in that state, please contact the Legal Department before proceeding. 

  

Professional Designations.  It is the supervisor’s responsibility to confirm that any designation (CFA, CFP, etc.) used by his or her direct reports in connection with T. Rowe Price business, including its use,  is a valid designation issued by a reputable credentialing organization.  In addition, the supervisor must take reasonable steps to confirm that the associate has earned the designation; it is relevant to his or her job and is authorized to use it.  It is the responsibility of the associate to comply with the professional standards and reporting obligations of the organization that administers and authorizes the use of the professional designation.  Any questions should be directed to the Legal Department. 

  

Protection of Corporate Assets.  All personnel are responsible for taking measures to ensure that Price Group’s assets are properly protected.  This responsibility not only applies to our business facilities, equipment and supplies, but also to intangible assets such as proprietary research or marketing information, corporate trademarks and service marks, copyrights, client relationships, and business opportunities.  Accordingly, you may not solicit for your personal benefit clients or utilize client relationships to the detriment of the firm.  Similarly, you may not solicit co-workers to act in any manner detrimental to the firm’s interests. 

  

Quality of Services.  It is a continuing policy of Price Group to provide investment products and services that meet applicable laws, regulations and industry standards, are offered to the public in a manner that ensures that each client/shareholder understands the objectives of each investment product selected, and are properly advertised and sold in accordance with all applicable SEC, FCA, FINRA, and other international, state and self-regulatory rules and regulations. 

  

The quality of Price Group’s investment products and services and operations affects our reputation, productivity, profitability, and market position.  Price Group’s goal is to be a quality leader and to create conditions that allow and encourage all employees to perform their duties in an efficient, effective manner. 

  

Record Retention and Destruction.  Under various U.S., UK, other international, state, and other governmental laws and regulations, certain of Price Group’s subsidiaries are required to produce, maintain and retain various records, documents and other written (including electronic) communications.   Different requirements can apply depending on the type of records, for example client-related records as opposed to HR-related records or general business records. Any questions regarding retention requirements should be addressed to the Legal Department or the TRP International Compliance Team. 

  

You must use care in disposing of any confidential records or correspondence.  Confidential material that is to be discarded should be placed in designated bins or should be shredded, as your department requires.  If a quantity of material is involved, you should contact Document Management for instructions regarding proper disposal.  Documents stored off-site are destroyed on a regular basis if the destruction is approved by the appropriate business contact. 

  

Generally, there can be legal prohibitions from destroying any existing records that may be relevant to any current, pending or threatened litigation, or regulatory investigation or audit.  These records would include emails, calendars, memoranda, board agendas, recorded conversations, studies, work papers, computer notes, handwritten notes, telephone records, expense reports, or similar material.  If your business area is affected by litigation or an investigation or audit, you can expect to receive instructions from the Legal Department on how to proceed.  Regardless of whether you receive such instructions, you should be prepared to secure relevant records once you become aware that they are subject to litigation or regulatory investigations or audits. 

  

All personnel are responsible for adhering to the firm’s record maintenance, retention, and destruction policies. 

  

Referral Fees.  U.S. securities laws strictly prohibit the payment of any type of referral fee unless certain conditions are met.  This would include any compensation to persons who refer clients or shareholders to T. Rowe Price (e.g., brokers, registered representatives, consultants, or any other persons) either directly in cash, by fee splitting, or indirectly by the providing of gifts or services (including the allocation of brokerage).  The FCA also prohibits the offering of any inducement likely to conflict with the duties of the recipient.  No arrangements should be entered into obligating Price Group or any employee to pay a referral fee unless approved first by the Legal Department. 

  

Release of Information to the Press.

  All requests for information from the media concerning T. Rowe Price Group’s corporate affairs, mutual funds, Price ETFs, investment services, investment philosophy and policies, and related subjects should be referred to the appropriate Corporate Communications/Public Relations contact for reply.  Investment professionals who are contacted directly by the press concerning a particular fund’s investment strategy or market outlook may use their own discretion but are advised to check with the appropriate Corporate Communications/Public Relations contact if they do not know the reporter or feel it may be inappropriate to comment on a particular matter.  Please refer to the Global Media Engagement Guidelines located on the Exchange for additional information. 

  

Responsibility to Report Violations.  The following is a description of reporting requirements and procedures that may or do arise if an officer or employee becomes aware of material violations of the Code or applicable laws or regulations. 

  

General Obligation.  If an officer or employee becomes aware of a material violation of the Code or any applicable law or regulation, he or she must report it to the Chief Compliance Officer of the applicable Price Adviser (“Chief Compliance Officer”) or his or her designee, provided the designee provides a copy of all reports of violations to the Chief Compliance Officer.  Reports submitted in paper form should be sent in a confidential envelope.  Any report may be submitted anonymously; anonymous complaints must be in writing and sent in a confidential envelope to the Chief Compliance Officer.  Officers and employees may also contact any governmental and/or regulatory authority (e.g. SEC and FINRA in the U.S., FCA in the UK, SFC in Hong Kong, etc.).   

  

Global Whistleblower Procedures. Price Group has adopted procedures for associates to report potential or actual violations of laws and regulations in each of the jurisdictions in which it operates.  The procedures outline steps associates can take to report matters internally to the Legal Department, or on an anonymous basis through the Whistleblower Hotline, or externally to a regulatory authority.  The procedures are located in the firm’s policy and procedures repository. 

  

It is Price Group’s policy that no adverse action will be taken against any person as a result of that person becoming aware of a violation of the Code and reporting the violation in good faith. 

  

Sarbanes-Oxley Whistleblower Procedures for Price Group.  Pursuant to the Sarbanes-Oxley Act, the Audit Committee of Price Group has adopted procedures (“Procedures”) regarding the receipt, retention and treatment of complaints received by Price Group regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees of Price Group or any of its affiliates of concerns regarding questionable accounting or auditing matters.  All employees should familiarize themselves with these Procedures, which are posted in the firm’s policies and procedures repository. 

  

Under the Procedures, complaints regarding certain auditing and accounting matters should be sent to Chief Legal Counsel, T. Rowe Price Group, Inc., The Legal Department either through interoffice mail in a confidential envelope or by mail marked confidential to P.O. Box 37283, Baltimore, Maryland 21297-3283, or a report may be made by calling the toll-free hotline at 888-651-6223. 

  

Sarbanes-Oxley Whistleblower Procedures for Price ETFs and Price Funds

.  Pursuant to NYSE Arca Rule and the Sarbanes-Oxley Act, the Audit Committee of Price ETFs and Price Funds has adopted procedures regarding the receipt, retention and treatment of complaints received by Price ETFs and Price Funds regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees of Price ETFs or Price Funds of concerns regarding questionable accounting or auditing matters.  See “Policy on Complaints Related to ETFs and Mutual Fund Accounting Matters”.  All employees should familiarize themselves with these Procedures, which are posted in the firm’s policies and procedures repository.  

  

Under the Procedures, complaints regarding certain auditing and accounting matters should be sent to Chief Compliance Officer of the Price Funds and Price ETFs. The Legal Department either through interoffice mail in a confidential envelope or by mail marked confidential to P.O. Box 37283, Baltimore, Maryland 21297-3283, or a report may be made by calling the toll-free hotline at 888-651-6223. 

  

Sarbanes-Oxley Attorney Reporting Requirements.  Attorneys employed or retained by Price Group or any of the Price Funds or Price ETFs are also subject to certain reporting requirements under the Sarbanes-Oxley Act.  The relevant procedures are posted in the firm’s policies and procedures repository. 

  

Circulation of Rumors.  Individuals subject to the Code shall not originate or circulate in any manner a rumor concerning any security which the individual knows or has reasonable grounds for believing is false or misleading or would improperly influence the market price of that security.  You must promptly report to the Legal Department any circumstance which would reasonably lead you to believe that such a rumor might have been originated or circulated.   

  

Service as Trustee, Executor or Personal Representative.  You may serve as the trustee, co-trustee, executor or personal representative (collectively; “position of trust”) for the estate of or a trust created by close family members.  You may also serve in a position of trust for estates or trusts created by non-family members subject to approval by the Ethics Committee.  However, if an Access Person expects to be actively involved in an investment capacity in connection with an estate or trust created by a nonfamily member, the associate must first be granted permission by the Ethics Committee.  If you serve in any of these capacities, securities transactions affected in such accounts will be subject to the prior transaction clearance (Access Persons only, except for Price Group stock transactions, which require prior transaction clearance by all associates) and reporting requirements (Access Persons and Non-Access Persons) of our Statement of Policy on Securities Transactions.  If you presently serve in any of these capacities for non-family members, you should report the relationship in writing to the Ethics Committee. 

  

Speaking Engagements and Publications.  Employees are often asked to accept speaking engagements on the subject of investments, finance, or their own particular specialty with our organization.  This is encouraged by the firm as it enhances our public relations.  You should obtain approval from your supervisor and Division Head before you accept such requests.  You may also accept an offer to teach a course or seminar on investments or related topics (for example, at a local college) in your individual capacity with the approval of your supervisor and Division Head, provided the course is in compliance with the Guidelines found in T. Rowe Price Investment Services’ Compliance Manual.  Before making any commitment to write or publish any article or book on a subject related to investments or your work at Price Group, approval should be obtained from your supervisor and Division Head. 

  

Social Media.  As T. Rowe Price associates, anything we say or do in our personal communications, including on social media, can reflect on T. Rowe Price’s brand and reputation.  We should be aware of this when making personal posts and remember that nothing we say in the social media space is totally private and, in fact, may be available indefinitely. 

  

While T. Rowe Price does not discourage associates from using social media to maintain personal connections, it is important to understand what is acceptable and prohibited when using social media.  The T. Rowe Price Policy for Associate Use of Social Media, available on the Exchange, sets forth the permissible use of social media, whether for personal or business use, by T. Rowe Price associates.  Examples of permissible and impermissible actions include: 

  

·

Do not discuss work or specific projects or products on any social network account; 

·

Do not post any information about T. Rowe Price products, services, competitors, business contacts, or other associates without prior authorization and training; 

·

Do not respond to questions or comments about T, Rowe Price products or services without prior authorization and training; 

·

Do not comment on any individual posts; 

·

Associates can share any T. Rowe Price job vacancy listed on the T. Rowe Price Careers site or LinkedIn Jobs page on the network of their choice; 

·

Associates can “like” or “follow” T. Rowe Price social media pages; and 

·

Associates can only “like” and share individuals posts that have been identified as approved for associate interaction. 

  

The policy applies whether or not associates are on company premises and whether or not associates are using a T. Rowe Price system, T. Rowe Price-issued device, or personal device.  The policy is designed to provide associates with clear direction when using social media to ensure the firm’s compliance with applicable regulations when engaging in social media channels, and to protect our associates, our clients, and the company. 

  

Systems Security.  Computer systems and programs play a central role in Price Group’s operations.  To establish appropriate systems security to minimize potential for loss or disruptions to our computer operations, Price Group has adopted a Statement of Policy on Systems Security and Related Issues (page 6-1). 

  

T. ROWE PRICE GROUP, INC. 

Statement of Policy  

on  

Gifts And BuSiness entertainment  

  

T. Rowe Price adopted this policy to govern the receipt and giving of gifts and business entertainment by all employees of T. Rowe Price globally (“Associates”).  The giving and receiving of gifts and business entertainment must be carefully considered by Associates to avoid even the appearance of conflicts of interest.   

  

Associates are encouraged to ask for guidance about how to apply this policy in advance of giving or receiving a gift or business entertainment.  Questions can be directed to your manager or to the Legal Department.    

  

The Code and laws in numerous jurisdictions regulate gifts and entertainment to ensure that such practices do not constitute the direct or indirect provision or receipt of bribes, kickbacks, quid pro quos, or other corrupt practices.  Please refer to the “Foreign Corrupt Practices Act and Other Illegal Payments” section of the Code and the firm’s “Compliance Policy and Program Statement Relating to Anti-Bribery Laws and Prohibitions Against Illegal Payments.” 

  

Specific controls are applicable to ERISA plans and certain other regulatory regimes – see “Jurisdictions and Specific Requirements” section.   

  

Gifts 

  

The term “gift” has a broad meaning, including merchandise, gratuities and the use of property or facilities for weekends, vacations, and trips, including transportation and lodging costs, but does not include items of nominal value (defined later in this policy).     

  

General rules for all Associates: 

  

·

You may not give gifts in excess of US$100 (aggregate annual limit per business contact).  You may not receive gifts in excess of US$100 (aggregate annual limit per organization).  Please note that gifts given to a business contact’s family member (e.g., spouse or children) will count towards the US$100 annual gift limit for that business contact. 

·

You may not accept gifts from broker-dealers. 

·

You may not give gifts to or receive gifts from a vendor, client, prospect, or a lead manager of a consultant who has active negotiations or Requests for Proposals (“RFPs”) for services or products. 

·

Any gift, given or received, must be reported.  

·

Gifts may never be given or received in consideration of any business or transaction, or in connection with the purchase or sale of client securities or other investments. 

·

Gifts of cash or cash equivalents may not be given or received. 

  

  

  

  

Items of Nominal Value 

Other than as noted in the Jurisdictions and Specific Requirements section of this policy, the term “gift” as described in this policy does not include an item of nominal value.  Items with a value of US$50 or less are regarded as nominal items.  For example, items such as pens, notepads, modest desk ornaments, or items that display the giving firm’s logo, which are typically given out at conferences or elsewhere, would generally fall within this exclusion. If an item is to be given in connection with the broker-dealer’s business, its value must not exceed US$50 and the item must have the TRP corporate logo permanently affixed to be exempt from the definition of “gift.”   

  

Personal Gift Exclusion 

A personal gift given or received in recognition of a “life event” such as a baby or wedding gift, does not fall within this policy provided the gift is not “in relation to the business of the employer of the recipient.” There should be a pre-existing personal or family relationship between the giver and the recipient. The giver, not the firm, should pay for the gift. In addition, if an Associate is giving a gift in recognition of a life event, the giver must obtain prior approval from his/her supervisor, Business Unit Head if different, and the Chairperson of the Ethics Committee. If these conditions are met, the recordkeeping requirements and the US$100 limit do not apply.   

  

Gifts Received by Attendees at an Event 

Any gift or gifts received by Associates at an event (e.g., industry conference, vendor user conference, investor relations event, etc.), other than nominal gifts (see above), must be reported and the total value cannot exceed the US$100 gift limit.  If an event provides a gift or gifts with a value greater than US$100, Associates may decline to accept the gift, donate it to charity or, with the approval of the Chairperson of the Ethics Committee, present the gift to the Associate’s Business Unit for a random draw of an identified group of associates of an appropriate size.  

  

Group Gifts   

When a group gift valued at up to US$100 (e.g., chocolate assortment) is sent by a T. Rowe Price Associate, the gift report must identify the name of at least one business contact at the receiving organization.  If an Associate or a T. Rowe Price department receives a gift that is valued in excess of the US$100 limit, it can be shared amongst Associates provided no single Associate’s share of the gift exceeds the US$100 limit.  Alternatively, with the approval of the Chairperson of the Ethics Committee, the gift can be awarded to the winner of a random draw of an identified group of associates of an appropriate size or donate it to charity. 

  

Recurring Gifts  

Tickets or other gifts (including nominal value items) may not be given nor accepted from a business contact or firm on a standing, recurring, or ongoing basis. Supervisors are responsible for monitoring how frequently their Associates receive and give gifts to/from specific business contacts to avoid potential conflicts of interest. 

  

Calculation of Value 

Gifts should be valued at the cost paid by the giver.  Associates and Managers should be mindful that if the market value of a gift is materially greater than the cost, consultation with the Legal Department may be appropriate to determine if another value should be used.  

  

  

  

Business Entertainment  

  

Entertainment must serve a legitimate and appropriate business purpose (“Business Entertainment”).  Generally, business entertainment includes meals and sporting events with business contacts (e.g., clients or vendors).  Associates should be mindful that business entertainment should generally not be solicited and only accepted after an invitation from your host.  Both the Associate and the business contact must be in attendance for an event to be classified as business entertainment. Business entertainment should not be so frequent or so lavish with the same business contact or client, that when viewed in its entirety, it could be viewed as a potential conflict of interest.  See “Jurisdictions and Specific Requirements” for additional restrictions on Business Entertainment. 

  

Reporting and Prior Clearance 

  

1.

Business entertainment valued above US$100 per person must be reported.  

2.

Business entertainment that exceeds US$250 per person requires prior approval by the Associate’s Manager and either the Business Unit Head or Region/Segment Head (as determined by the Business Unit).  

  

3.

Broker-dealer provision: All meal business entertainment received from broker-dealers above US$100 per person requires prior approval by the Associate’s Manager and must be reported.  All non-meal business entertainment received from broker-dealers, regardless of value, requires prior approval by the Associate’s Manager and must be reported.  T. Rowe Price (or in some cases, the Associate) will pay or reimburse the broker-dealer for such reported business entertainment.   

  

4.

Business entertainment that includes a guest (e.g., spouse or child) requires prior approval by the Associate’s Manager and either the Business Unit Head or Region/Segment Head (as determined by the Business Unit).  Keep in mind that the Associate may need to pay for the cost of the guest. 

  

5.

Business entertainment that does not occur in the normal course of business or is an event of national prominence requires prior approval by the Associate’s Manager and either the Business Unit Head or Region/Segment Head (as determined by the Business Unit). 

6.

Business entertainment may never be given or received in consideration of any business or transaction, or in connection with the purchase or sale of client securities or other investments. 

  

Each Business Unit will implement procedures to assess and consider relevant factors when determining if approval should be granted in the circumstances requiring prior approval.  For example, factors may include the purpose of the meeting, the nature of the event being conducive to conversation, the exclusivity of the event, the frequency of interaction with the business contact and whether T. Rowe Price or the Associate should be bearing some portion or all of the associated cost. 

  

Post-Event Approval 

In certain situations, an Associate may not be able to ascertain the cost of an event until after its conclusion, such as business dinners. In the event the business entertainment was expected to be within these reporting thresholds (e.g., less than US$250 per person) but unexpectedly exceeds them, the Associate must promptly report such entertainment to his/her Manager for further discussion. In these limited circumstances and after review by the Associate’s Manager, “post-event” approval by a Region/Segment Head or Business Unit Head (as determined by the Business Unit) will be considered to be in compliance with this policy.  

  

Transportation and Lodging 

Generally, the cost of transportation and lodging expenses associated with business entertainment should be borne by the party using the transportation or lodging.  Ordinary ground transportation such as a taxi ride or a courtesy shuttle is not subject to this restriction.     

  

Active RFPs/Business Transactions 

Associates may not entertain key decision makers of a vendor, prospect or current client (or their lead manager consultant) with an active RFP or where material negotiations of specific business or transactions are taking place.  Key decision makers are those individuals who have significant influence on the decision related to the RFP or transaction which would include an ERISA plan fiduciary representative.  However, meals closely associated with substantive business meetings (i.e., plan reviews, due diligence visits, investment reviews, educational sessions) are permitted.   

  

Large-Scale Events 

The cost-per-individual at an event (e.g., industry conference, vendor user conference, investor relations event) is not counted towards US$250 prior approval threshold provided that the conference has a reasonable relationship to the duties of the attending Associate(s) and the expenses for attendance are reasonable in light of the benefits afforded to the firm by such attendance. Associates should keep in mind that if there are separate excursions or other entertainment connected with the large-scale event (e.g., golf outings, boating trips, etc.) then the reporting and prior clearance requirements will apply to these separate events. 

  

Calculation of Value 

Business entertainment should be valued at the cost paid by the giver.  Associates and Managers should be mindful that if the market value of an event is materially greater than the cost, consultation with the Legal Department may be appropriate to determine if another value should be used.  

  

Jurisdictions and Specific Requirements  

  

In addition to the general gift and entertainment rules in this policy, certain jurisdictions or regulators may impose restrictions that are more stringent than the general provisions of this policy. Associates that work in a jurisdiction outside of their primary office jurisdiction are subject to the rules of the jurisdiction with the higher standards. The following sets forth a summary of those restrictions.  

  

TRPIL and Its European Subsidiaries Associates: UK FCA Inducements Rules and Guidance  

The FCA Conduct of Business rules requires that gifts and entertainment provided or received must not impair our ability to act in the best interests of our clients. Guidance issued by the FCA notes that business entertainment in the form of sporting events or other social events may not be considered as capable of enhancing the quality of service to clients as they may either not be conducive to business discussions or the discussions could better take place without these activities.  The following additional policy requirements apply to T. Rowe Price International Ltd (“TRPIL”) and its European subsidiaries:  

  

Business Entertainment:  All non-meal business entertainment provided or received, regardless of value, and regardless of whether it is provided by a broker-dealer or to or from other third-party business contacts, requires prior approval by the associate’s manager and must be reported. T. Rowe Price (or in some cases, the associate) will pay or reimburse the donor for such reported business entertainment.  

  

In determining approval, the associates’ manager must consider whether the non-meal entertainment is capable of enhancing the quality of service to the client. Spectating at a sporting event or attending a concert or the theatre will not generally be considered to enhance the quality of service to the client and cannot generally therefore be accepted from or given to a third party. Participatory events such as a round of golf may be acceptable upon demonstration by the associate that the event is both conducive to business discussions and ultimately benefits our client. The approval must be clearly documented.  

  

While the reimbursement to the business contact (by T. Rowe Price or the associate) removes the key inducement, there is possibly an intrinsic value in the invitation to an event in that it may not be available to the general public due to its popularity, the associate must be able to clearly demonstrate that the full market value is reimbursed to the business contact in order for their manager to approve. 

  

U.S. - ERISA Covered Plans: US$250 Annual Limit   

In accordance with guidance from the U.S. Department of Labor, the annual limit in this policy on gifts and business entertainment provided to an ERISA plan fiduciary representative (including plan advisers serving in a fiduciary capacity) is US$250.  All gifts and business entertainment provided to a fiduciary business contact count towards this US$250 annual limit and must be prior approved by the Associate’s Manager or Region/Segment Head (as determined by the Business Unit) to help ensure the annual limit is not exceeded, except as provided below. Note that all gifts and business entertainment provided to a fiduciary business contact are subject to this policy’s reporting and prior clearance rules, even if not counted towards the US$250 annual limit. 

  

1.

Meals provided by Associates to fiduciary business contacts at educational conferences, including T. Rowe Price hosted conferences; do not count towards the US$250 annual limit. 

  

2.

Meals and entertainment provided at educational conferences hosted by T. Rowe Price do not count towards the US$250 annual unit.  Note that fiduciary business contacts may be subject to rules pertaining to their acceptance of meals and entertainment at such events. Consult with the Compliance Manager/SME within your business unit to determine your business unit guidelines for reminding recipients of these rules. 

  

3.

Meals provided to fiduciary business contacts and closely associated with substantive business meetings (e.g., plan reviews, due diligence visits, investment reviews, educational sessions) do not count towards the US$250 annual limit.  

  

4.

Expenses for ordinary ground transportation such as taxi ride or courtesy shuttle that are closely associated with a substantive business meeting or an educational conference do not count towards the US$250 annual limit.  Transportation expenses associated with relationship-building and other forms of entertainment would count towards the US$250 annual limit. 

  

5.

Items of nominal value given to fiduciary business contacts are not subject to this policy’s reporting requirements and do not count towards the US$250 annual limit. Generally, items that are less than US$10 are deemed to have nominal value. For the avoidance of doubt, any item that has a value greater than US$10, including items with a corporate logo permanently affixed, count towards the US$250 annual limit and must be reported. 

  

6.

Meals and entertainment provided by a Business Unit Head to a fiduciary business contact for purposes of obtaining market intelligence (and not to support sales activity) do not count towards the US$250 annual limit. 

  

Note that all gifts, business entertainment, and meals given to or attended by guests of the fiduciary business contact(s) (including in the context of an educational conference) count towards the US$250 annual limit for the fiduciary and are subject to this policy’s reporting and prior clearance rules.   

  

Providing services or support (including some types of marketing support) to an ERISA plan fiduciary may be considered a gift. Consult with the Compliance Manager/SME within your business unit for assistance in evaluating whether such services or support would be subject to this policy. 

  

Country and U.S. State Specific Requirements  

Countries and U.S. states may adopt rules that govern the provision of gifts and business entertainment.  Such rules may impose strict dollar limits or prohibitions on providing gifts and business entertainment which may be more restrictive than this policy. Additionally, these rules may impose increased reporting requirements on Associates.  The Legal Department will work with business units to inform them of these jurisdictions’ specific rules.  

  

Reporting   

  

It is ultimately the Associate’s responsibility to properly report gifts and business entertainment, whether given or received, in accordance with each business unit’s reporting procedures.  All gifts must be reported within ten business days.  All business entertainment must be reported promptly.    

  

All gifts and business entertainment reports will be available for review by Legal & Compliance, including International Compliance, in conjunction with their responsibility to oversee our firm-wide compliance. 

  

The U.S. Department of Labor has established strict gift and entertainment reporting rules relative to ERISA clients.  All gifts and business entertainment of US$10 or more accepted from, provided to, or in relation to ERISA clients should be reported under the Associate’s business unit’s procedures.   

  

Chair of the Ethics Committee 

Special circumstances may arise that would require the review of the Chair of the Ethics Committee and may result in exceptions being granted to part or all of this policy. 

  

T. ROWE PRICE GROUP, INC. 

STATEMENT OF POLICY 

ON 

MATERIAL, INSIDE (NON-PUBLIC) INFORMATION 

  

Policy of Price Group on Insider Trading.  It is the policy of Price Group and its affiliates to forbid any of their officers, directors, employees, or other personnel (e.g., consultants) while in possession of material, non-public information, from trading securities or recommending transactions, either personally or in their proprietary accounts or on behalf of others (including mutual funds and private accounts) or communicating material, non-public information to others in violation of securities laws of the U.S., the UK, or any other country that has jurisdiction over its activities.  Material, non-public information includes not only certain information about issuers, but also certain information about T. Rowe Price Group, Inc. and its operating subsidiaries as well as information pertaining to Price Funds, Price ETFs, and other clients.  

  

Purpose of Statement of Policy.  As a global firm, Price Group is subject to a wide array of laws and regulations that prohibit the misuse of inside information.  The purpose of this Statement of Policy (“Statement”) is to describe and explain:  (i) the general legal prohibitions and sanctions regarding insider trading under U.S. and global regulations and how they are applicable across the firm globally; (ii) the meaning of the key concepts underlying the prohibitions; (iii) your obligations in the event you come into possession of material, non-public information; and (iv) the firm’s educational program regarding insider trading.  Additionally, the U.S. Insider Trading and Securities Fraud Enforcement Act (“Act”) requires Price Group to establish, maintain, and enforce written procedures designed to prevent insider trading. 

  

Many jurisdictions, including Hong Kong, Singapore, Japan, Australia and most European countries, have laws and regulations prohibiting the misuse of inside information.  While this Statement does not make specific reference to these laws and regulations, the Statement provides general guidance regarding appropriate activities that is applicable to all employees globally.  There is, however, no substitute for knowledge of local laws and regulations. Employees are expected to understand the relevant local requirements where they work and comply with them.  Any questions regarding the laws or regulations of any jurisdiction should be directed to the Legal & Compliance Department or the TRP International Compliance Team. 

  

The Basic Insider Trading Prohibition.  The “insider trading” doctrine under U.S. securities laws generally prohibits any person (including investment advisers) from: 

  

·

Trading in a security while in possession of material, non-public information regarding the issuer of the security; 

·

Tipping such information to others; 

·

Recommending the purchase or sale of securities while in possession of such information; 

·

Assisting someone who is engaged in any of the above activities. 

  

Thus, “insider trading” is not limited to insiders of the issuer whose securities are being traded.  It can also apply to non-insiders, such as investment analysts, portfolio managers, consultants and stockbrokers.  In addition, it is not limited to persons who trade.  It also covers persons who tip material, non-public information or recommend transactions in securities while in possession of such information.  A “security” includes not just equity securities, but any security (e.g.,

corporate and municipal debt securities, including securities issued by the federal government). 

  

“Need to Know” Policy.  All information regarding planned, prospective or ongoing securities transactions must be treated as confidential.  Such information must be confined, even within the firm, to only those individuals and departments that must have such information in order for the respective entity to carry out its engagement properly and effectively. Ordinarily, these prohibitions will restrict information to only those persons who are involved in the matter. 

  

Transactions Involving Price Group Stock.  You are reminded that you are an “insider” with respect to Price Group since Price Group is a public company and its stock is traded on the NASDAQ Stock market.  It is therefore important that you not discuss with family, friends or other persons any matter concerning Price Group that might involve material, non-public information, whether favorable or unfavorable.  You are prohibited from trading Price Group stock (TROW) if you are privy to material, non-public information. 

  

Sanctions.  Penalties for trading on material, non-public information are severe, both for the individuals involved in such unlawful conduct and for their firms.  A person or entity that violates the insider trading laws can be subject to some or all of the penalties described below, even if he/she/it does not personally benefit from the violation: 

  

·

Injunctions; 

·

Treble damages; 

·

Disgorgement of profits; 

·

Criminal fines; 

·

Jail sentences; 

·

Civil penalties for the person who committed the violation (which would, under normal circumstances, be the employee and not the firm); and 

·

Civil penalties for the controlling entity (e.g., Price Associates) and other persons, such as managers and supervisors, who are deemed to be controlling persons. 

  

In addition, any violation of this Statement can be expected to result in serious sanctions being imposed by Price Group, including dismissal of the person(s) involved.  The provisions of U.S. and UK law discussed below, and the laws of other jurisdictions are complex and wide ranging.  If you are in any doubt about how they affect you, you must consult the Legal & Compliance Department or the TRP International Compliance Team, as appropriate. 

  

U.S LAW AND REGULATION REGARDING INSIDER TRADING PROHIBITIONS 

  

Introduction.  “Insider trading” is a top enforcement priority of the U.S. Securities and Exchange Commission.  The Insider Trading and Securities Fraud Enforcement Act has far-reaching impact on all public companies and especially those engaged in the securities brokerage or investment advisory industries, including directors, executive officers and other controlling persons of such companies.  Specifically, the Insider Trading and Securities Fraud Enforcement Act: 

  

Written Procedures.  Requires SEC-registered brokers, dealers and investment advisers to establish, maintain and enforce written policies and procedures reasonably designed to prevent the misuse of material, non-public information by such persons. 

Penalties.

  Imposes severe civil penalties on brokerage firms, investment advisers, their management and advisory personnel, and other “controlling persons” who fail to take adequate steps to prevent insider trading and illegal tipping by employees and other “controlled persons.”  Additionally, the Act contains substantial criminal penalties, including monetary fines and jail sentences. 

  

Private Right of Action.  Establishes a statutory private right of action on behalf of contemporaneous traders against insider traders and their controlling persons. 

  

Bounty Payments.  Authorizes the SEC to award bounty payments to persons who provide information leading to the successful prosecution of insider trading violations.  Bounty payments are at the discretion of the SEC but may not exceed 10 – 30% of the penalty imposed. 

  

The Act has been supplemented by three SEC rules, 10b5-1, 10b5-2 and Fair Disclosure, which are discussed later in this Statement. 

  

Basic Concepts of Insider Trading.  The four critical concepts under U.S. law in insider trading cases are: (1) fiduciary duty/misappropriation, (2) materiality, (3) non-public and (4) use/possession.  Each concept is discussed below. 

  

Fiduciary Duty/Misappropriation.  In two decisions, the U.S. Supreme Court outlined when insider trading and tipping violate the federal securities law if the trading or tipping of the information results in a breach of duty of trust or confidence. 

  

The concept of who constitutes an “insider” is broad.  It includes officers, directors, and employees of an issuer.  In addition, a person can be a “temporary insider” if he or she enters into a confidential relationship in the conduct of an issuer’s affairs and, as a result, is given access to information solely for the issuer’s purpose.  A temporary insider can include, among others, an issuer’s attorneys, accountants, consultants, and bank lending officers, as well as the employees of such organizations.  In addition, any person may become a temporary insider of an issuer if he or she advises the issuer or provides other services, provided the issuer expects such person to keep any material, non-public information confidential. 

  

A typical breach of duty arises when an insider purchases securities of his or her corporation on the basis of material, non-public information.  Such conduct breaches a duty owed to the corporation’s shareholders.  The duty breached, however, need not be to shareholders to support liability for insider trading; it could also involve a breach of duty to a client, an employer, employees, or even a personal acquaintance.  For example, courts have held that if the insider receives a personal benefit (either direct or indirect) from the disclosure, such as a pecuniary gain or reputational benefit; that would be enough to find a fiduciary breach. 

  

Court decisions have held that under a “misappropriation” theory, an outsider (such as an investment analyst) may be liable if he or she breaches a duty to anyone by: (1) obtaining information improperly, or (2) using information that was obtained properly for an improper purpose.  For example, if information is given to an analyst on a confidential basis and the analyst uses that information for trading purposes, liability could arise under the misappropriation theory.  Similarly, an analyst who trades in breach of a duty owed either to his or her employer or client may be liable under the misappropriation theory.  For example, the Supreme Court upheld the misappropriation theory when a lawyer received material, non-public information from a law partner who represented a client contemplating a tender offer, where that lawyer used the information to trade in the securities of the target company. 

  

SEC Rule 10b5-2 provides a non-exclusive definition of circumstances in which a person has a duty of trust or confidence for purposes of the “misappropriation” theory of insider trading.  It states that a “duty of trust or confidence” exists in the following circumstances, among others: 

  

(7)

Whenever a person agrees to maintain information in confidence; 

  

(8)

Whenever the person communicating the material, nonpublic information and the person to whom it is communicated have a history, pattern, or practice of sharing confidences, that resulted in a reasonable expectation of confidentiality; or 

  

(9)

Whenever a person receives or obtains material, non-public information from his or her spouse, parent, child, or sibling unless it is shown affirmatively, based on the facts and circumstances of that family relationship, that there was no reasonable expectation of confidentiality. 

  

The situations in which a person can trade while in possession of material, non-public information without breaching a duty are so complex and uncertain that the only safe course is not to trade, tip or recommend securities while in possession of material, non-public information. 

  

Materiality.  Insider trading restrictions arise only when the information that is used for trading, tipping or recommendations is “material.”  The information need not be so important that it would have changed an investor’s decision to buy or sell; rather, it is enough that it is the type of information on which reasonable investors rely in making purchase, sale, or hold decisions. 

  

Resolving Close Cases.  The U.S. Supreme Court has held that, in close cases, doubts about whether or not information is material should be resolved in favor of a finding of materiality. You should also be aware that your judgment regarding materiality may be reviewed by a court or the SEC with the 20-20 vision of hindsight. 

Effect on Market Price.  Any information that, upon disclosure, is likely to have a significant impact on the market price of a security should be considered material. 

Future Events.  The materiality of facts relating to the possible occurrence of future events depends on the likelihood that the event will occur and the significance of the event if it does occur. 

  

Illustrations.  The following list, though not exhaustive, illustrates the types of matters that might be considered material:  a joint venture, merger or acquisition; the declaration or omission of dividends; the acquisition or loss of a significant contract; a change in control or a significant change in management; a call of securities for redemption; the borrowing of a significant amount of funds; the purchase or sale of a significant asset; a significant change in capital investment plans; a significant labor dispute or disputes with subcontractors or suppliers; an event requiring an issuer to file a current report on Form 8-K with the SEC; establishment of a program to make purchases of the issuer’s own shares; a tender offer for another issuer’s securities; an event of technical default or default on interest and/or principal payments; advance knowledge of an upcoming publication that is expected to affect the market price of the stock. 

Illustrations for the STA ETFs. The STA ETF Exemptive Relief provides that, because (unlike traditional ETFs) the STA ETFs do not disclose portfolio holdings daily, the selective disclosure of material nonpublic information, including information other than portfolio information, would be more likely to provide an unfair advantage to the recipient than in other ETFs. Non-public information that could be material to the STA ETFs includes, but is not limited to, current holdings information, investment decisions, and any potential arbitrage deficiencies that could necessitate Board-directed corrective action.  This is not an exhaustive list. 

  

Non-Public vs. Public Information.  Any information that is not “public” is deemed to be “non-public.”  Just as an investor is permitted to trade on the basis of information that is not material, he or she may also trade on the basis of information that is public.  Information is considered public if it has been disseminated in a manner making it available to investors generally.  An example of non-public information would include information provided to a select group of analysts but not made available to the investment community at large.  Set forth below are a number of ways in which non-public information may be made public. 

  

Disclosure to News Services and National Papers. The U.S. stock exchanges require exchange-traded issuers to disseminate material, non-public information about their company to: (1) the national business and financial newswire services (e.g. Bloomberg, Thomson Reuters, etc.); (2) the national service (Associated Press); and (3) The New York Times and The Wall Street Journal. 

  

Local Disclosure.  An announcement by an issuer in a local newspaper might be sufficient for an issuer that is only locally traded but might not be sufficient for an issuer that has a national market. 

  

Information in SEC Reports.  Information contained in reports filed with the SEC will be deemed to be public. 

  

If Price Group is in possession of material, non-public information with respect to a security before such information is disseminated to the public (i.e., such as being disclosed in one of the public media described above), Price Group and its personnel must wait a sufficient period of time after the information is first publicly released before trading or initiating transactions to allow the information to be fully disseminated.  Price Group may also follow Information Barrier procedures, as described on page 4-9 of this Statement. 

  

Concept of Use/Possession.  It is important to note that the SEC takes the position that the law regarding insider trading prohibits any person from trading in a security in violation of a duty of trust and confidence while in possession of material, non-public information regarding the security.  This is in contrast to trading on the basis of the material, non-public information.  To illustrate the problems created by the use of the “possession” standard, as opposed to the “caused” standard, the following three examples are provided: 

  

First, if the investment committee to a Price mutual fund were to obtain material, non-public information about one of its portfolio companies from a Price equity research analyst, that fund would be prohibited from trading in the securities to which that information relates.  The prohibition would last until the information is no longer material or non-public. 

  

Second, if the investment committee to a Price mutual fund obtained material, non-public information about a particular portfolio security but continued to trade in that security, then the committee members, the applicable Price Adviser, and possibly management personnel might be liable for insider trading violations. 

  

Third, even if the investment committee to the Fund does not come into possession of the material, non-public information known to the equity research analyst, if it trades in the security, it may have a difficult burden of proving to the SEC or to a court that it was not in possession of such information. 

  

The SEC has expressed its view about the concept of trading “on the basis of” material, non-public information in Rule 10b5-1.  Under Rule 10b5-1, and subject to the affirmative defenses contained in the rule, a purchase or sale of a security of an issuer is “on the basis” material non-public information about that security or issuer if the person making the purchase or sale was aware of the material, non-public information when the person made the purchase or sale. 

  

A person’s purchase or sale is not “on the basis of” material, non-public information if he or she demonstrates that: 

  

(A)

Before becoming aware of the information, the person had: 

  

(1)

Entered into a binding contract to purchase or sell the security; 

(2)

Instructed another person to purchase or sell the security for the instructing person’s account, or 

(3)

Adopted a written plan for trading securities. 

  

When a contract, instruction or plan is relied upon under this rule, it must meet detailed criteria set forth in Rule 10b5-1(c)(1)(i)(B) and (C). 

  

Under Rule 10b5-1, a person other than a natural person (e.g., one of the Price Advisers) may also demonstrate that a purchase or sale of securities is not “on the basis of” material, non-public information if it demonstrates that: 

  

·

The individual making the investment decision on behalf of the person to purchase or sell the securities was not aware of the information; and  

  

·

The person had implemented reasonable policies and procedures, taking into consideration the nature of the person’s business, to ensure that individuals making investment decisions would not violate the laws prohibiting trading on the basis of material, non-public information.  These policies and procedures may include those that restrict any purchase, sale, and causing any purchase or sale of any security as to which the person has material, non-public information, or those that prevent such individuals from becoming aware of such information. 

  

Tender Offers.

  Tender offers are subject to particularly strict regulation under the securities laws.  Specifically, trading in securities that are the subject of an actual or impending tender offer by a person who is in possession of material, non-public information relating to the offer is illegal, regardless of whether there was a breach of fiduciary duty.  Under no circumstances should you trade in securities while in possession of material, non-public information regarding a potential tender offer.  

  

Selective Disclosure of Material, Non-Public Information by Public Companies.  The SEC has adopted Regulation FD to prohibit certain issuers from selectively disclosing material, non-public information to certain persons who would be expected to trade on it.  The rule applies only to publicly traded domestic (U.S.) companies, not to foreign government or foreign private issuers. 

  

Under this rule, whenever: 

  

·

An issuer, or person acting on its behalf, 

·

Discloses material, non-public information, 

·

To securities professionals, institutional investors, broker-dealers, and holders of the issuer’s securities, 

·

The issuer must make public disclosure of that same information, 

·

Simultaneously (for intentional disclosures), or 

·

Promptly within 24 hours after knowledge of the disclosure by a senior official (for non-intentional disclosures) 

  

Regulation FD does not apply to all of the issuer’s employees; rather only communication by an issuer’s senior management (executive officers and directors), its investor relations professionals, and others who regularly communicate with market professionals and security holders are covered.  Certain recipients of information are also excluded from the rule’s coverage, including persons who are subject to a confidentiality agreement, credit rating agencies, and “temporary insiders,” such as the issuer’s lawyers, investment bankers, or accountants. 

  

Selective Disclosure of Material, Non-Public Information Related to the STA ETFs.   

While Regulation Fair Disclosure (“Regulation FD”) does not directly apply to registered open-end funds, it is applicable to the STA ETFs pursuant to the STA ETF Exemptive Relief.  The STA ETF Exemptive Relief requires each STA ETF and each person acting on behalf of an STA ETF to comply with and agree to be subject to the requirements of Regulation FD as if it applied to them.  In order to align with these requirements, the STA ETFs will comply with the Policy and Procedure for Release of Material Non-Pubic Information Related to the Semi-Transparent ETFs, as well as the T. Rowe Price Mutual Funds and Exchange-Traded Funds Portfolio Information Release Policy with respect to the frequency and timing of dissemination of information to the T. Rowe Price website. If  T. Rowe Price employees acting on behalf of the STA ETFs selectively disclose MNPI related to a STA ETF to an external party (other than a service provider subject to confidentiality agreement as described below), the STA ETF must comply with Regulation FD by promptly issuing a press release or otherwise publicly releasing the information just disclosed on a selective basis through a “recognized channel of distribution”.   

  

Expert Network Services.

  Expert networks may be used by approved investment staff to supplement the investment process.  Expert networks provide investors with access to individuals having a particular expertise or specialization, such as industry consultants, vendors, doctors, attorneys, suppliers, or past executives of particular companies.  Expert network services can be an important component of the investment research process, and Price Group has implemented various controls to govern these interactions.  A strict approval process is in place for utilizing a new expert network service.  Also, a reporting and oversight process exists in the Equity Division to ensure that the services are being used properly by only appropriate investment staff. 

  

Information Regarding Price Group. 

  

The illustrations of material information found on page 4-4 of this Statement are equally applicable to Price Group as a public company and should serve as examples of the types of matters that you should not discuss with persons outside the firm.  Remember, even though you may have not intent to violate any federal securities law, an offhand comment to a friend might be used unbeknownst to you by such friend to effect purchases or sales of Price Group stock.  If such transactions were discovered and your friend was prosecuted, your status as an informant or “tipper” would directly involve you in the case.  If you have concerns or questions about whether certain information constitutes material, non-public information pertaining to Price Group you should contact the Legal & Compliance Department. 

  

Information Regarding T. Rowe Price Funds, Price ETFs, and Subadvised Funds. 

  

Employees who possess material, non-public information pertaining to a Price Fund, Price ETF, or subadvised fund are prohibited from trading in the shares of the fund.  Associates may obtain or possess information about significant portfolio activity of a fund, such as an unscheduled disbursement or receipt that is not reflected in the fund’s NAV, which could be regarded as material.  For example, an associate may learn of a significant tax refund or litigation recovery that a fund is entitled to but has not been entered as a receivable because the amount and timing are unknown.  Such information could constitute material, non-public information.  Information regarding future events that would not be expected to have a known impact on the fund’s NAV, such as a large subscription by an institutional shareholder or a change in the fund’s portfolio manager, while considered highly sensitive information (not to be shared with others outside of T. Rowe Price), would not typically constitute material, non-public information for these purposes.  If you have concerns or questions about whether certain information constitutes material, non-public information pertaining to a Price Fund, Price ETF, or subadvised fund you should contact the Legal & Compliance Department. 

  

LAWS AND REGULATIONS REGARDING INSIDER TRADING PROHIBITIONS OUTSIDE THE U.S. 

  

The jurisdictions outside the U.S. that regulate some T. Rowe Price entities have laws in this area that are based on principles similar to those of the U.S. described in this Statement.  If you comply with the Code, then you will comply with the requirements of these jurisdictions.  If you have any concerns about local requirements, please contact the TRP International Compliance Team or the Legal & Compliance Department. 

  

PROCEDURES TO BE FOLLOWED WHEN RECEIVING MATERIAL, NON-PUBLIC INFORMATION 

  

Whenever you believe that you have or may have come into possession of material, non-public information, you should immediately contact the appropriate Legal & Compliance Department person or group and refrain from disclosing the information to anyone else, including persons within Price Group, unless specifically advised to the contrary.  The individual may not disclose the information or trade in the security until a determination is made by Legal & Compliance.  U.S.-based personnel should contact the Legal & Compliance Department and international personnel should contact the International Compliance Team.   

  

Specifically, you may not: 

  

·

Trade in securities to which the material, non-public information relates; 

·

Disclose the information to others; 

·

Recommend purchases or sales of the securities to which the information relates. 

  

If it is determined that the information is material and non-public, the issuer will be placed on either: 

  

·

A Restricted List (“Restricted List”) in order to prohibit trading in the security by both clients and Access Persons; or& 

·

A Watch List (“Watch List”), which restricts the flow of the information to others within Price Group in order to allow the Price Advisers investment personnel to continue their ordinary investment activities.  This procedure is commonly referred to as an Information Barrier. 

  

The Watch List is highly confidential and should, under no circumstances, be disseminated to anyone except authorized personnel in the Legal & Compliance Department and Code Compliance who are responsible for placing issuers on and monitoring trades in securities of issuers included on the Watch List.  As described below, if an individual on the TRP International Compliance Team believes that an issuer should be placed on the Watch List, he or she will contact Code Compliance.  Code Compliance will coordinate review of trading in the securities of that issuer with the TRP International Compliance Team as appropriate. 

  

The person whose possession of or access to inside information has caused the inclusion of an issuer on the Watch List may never trade or recommend the trade of the securities of that issuer without the specific prior approval of the Legal & Compliance Department. 

  

The Restricted List is also highly confidential and should, under no circumstances, be disseminated to anyone outside Price Group.  Individuals with access to the Restricted List should not disclose its contents to anyone within Price Group who does not have a legitimate business need to know this information. 

  

Code Compliance will remove the issuer from the Watch List or Restricted List when the information is no longer material or non-public. 

  

Specific Procedures Relating to the Safeguarding of Inside Information. 

  

To ensure the integrity of the Information Barrier, and the confidentiality of the Restricted List, it is important that you take the following steps to safeguard the confidentiality of material, non-public information: 

  

·

Do not discuss confidential information in public places such as elevators, hallways or social gatherings; 

  

·

To the extent practical, limit access to the areas of the firm where confidential information could be observed or overheard to employees with a business need for being in the area; 

·

Avoid using speaker phones in areas where unauthorized persons may overhear conversations; 

·

Where appropriate, maintain the confidentiality of client identities by using code names or numbers for confidential projects; 

·

Exercise care to avoid placing documents containing confidential information in areas where they may be read by unauthorized persons and store such documents in secure locations when they are not in use;  

·

Destroy copies of confidential documents no longer needed for a project.  However, Record Retention and Destruction guidelines should be reviewed before taking any action; and 

·

Comply with the Price ETFs Information Barrier policy to safeguard non-public information. 

  

ADDITIONAL PROCEDURES 

  

Education Program.  While the probability of research analysts and portfolio managers being exposed to material, non-public information with respect to issuers considered for investment by clients is greater than that of other personnel, it is imperative that all personnel understand this Statement, particularly since the insider trading restrictions also apply to transactions in the stock of Price Group. 

  

To ensure that all appropriate personnel are properly informed of and understand Price Group’s policy with respect to insider trading, the following program has been adopted. 

  

Initial Review and Training for New Personnel.  All new persons subject to the Code, which includes this Statement, will be given the Code at the time of their association and will be required to certify that they have read it.  In addition, each new employee is required to take web-based training promptly after his or her start date. 

  

Revision of Statement.  All persons subject to the Code will be informed whenever this Statement is materially revised. 

  

Annual Review.  All persons subject to the Code receive training on the Code annually.   

  

Acknowledgement of Compliance.  All persons subject to the Code will be asked to acknowledge their understanding of an adherence to the Code, including this Statement, on at least an annual basis. 

  

Questions.  If you have any questions with respect to the interpretation or application of this Statement, you are encouraged to discuss them with your immediate supervisor, the Legal & Compliance Department, or the TRP International Compliance Team as appropriate. 

  

T. ROWE PRICE GROUP, INC. 

STATEMENT OF POLICY  

ON 

SECURITIES TRANSACTIONS 

  

BACKGROUND INFORMATION. 

  

Legal Requirement.  In accordance with the requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Insider Trading and Securities Fraud Enforcement Act of 1988, and the various UK and other jurisdictions’ laws and regulations, Price Group, the mutual funds (“Price Funds”), and the exchange-traded funds (“Price ETFs”) which its affiliates manage, have adopted this Statement of Policy on Securities Transactions (“Statement”). 

  

Price Advisers’ Fiduciary Position.  As investment advisers, the Price Advisers are in a fiduciary position which requires them to act with an eye only to the benefit of their clients, avoiding those situations which might place, or appear to place, the interests of the Price Advisers or their officers, directors and employees in conflict with the interests of clients. 

  

Purpose of Statement of Policy.  The Statement was developed to help guide Price Group’s employees and independent directors and the independent directors of the Price Funds and Price ETFs in the conduct of their personal investments and to: 

  

·

Eliminate the possibility of a transaction occurring that the SEC or other regulatory bodies would view as inconsistent with our role as a fiduciary; 

·

Avoid situations where it might appear that Price Group, Price Funds, or the Price ETFs or any of their officers, directors, employees, or other personnel had personally benefited at the expense of a client or fund shareholder or taken inappropriate advantage of their fiduciary positions; and  

·

Prevent, as well as detect, the misuse of material, non-public information. 

  

Price Group’s, Price Funds’, and the Price ETFs’ reputations could be adversely affected as the result of even a single transaction considered questionable in light of the fiduciary duties of the Price Advisers and the independent directors of the Price Funds and Price ETFs. 

  

  

QUESTIONS ABOUT THE STATEMENT.   Questions regarding the policy can be directed to Code Compliance (Code_of_Ethics@TRowePrice.com) . 

  

  

  

  

  

  

  

  

  

  

EXCESSIVE TRADING AND MARKET TIMING OF MUTUAL FUND SHARES.  The issue of excessive trading and market timing by mutual fund shareholders is a serious one and is not unique to T. Rowe Price.  Employees may not engage in trading of shares of a Price Fund that is inconsistent with the prospectus of that Fund. 

  

Excessive or short-term trading in fund shares may disrupt management of a fund and raise its costs.  The Board of Directors/Trustees of the Price Funds have adopted a policy to deter excessive and short-term trading (the “Policy”), which applies to persons trading directly with T. Rowe Price and indirectly through intermediaries.  Under this Policy, T. Rowe Price may bar excessive and short-term traders from purchasing shares. 

  

This Policy is set forth in each Fund’s prospectus, which governs all trading activity in the Fund regardless of whether you are holding T. Rowe Price Fund shares as a retail investor or through your T. Rowe Price U.S. Retirement Program account. 

  

Although the Fund may issue a warning letter regarding excessive trading or market timing, any trade activity in violation of the Policy will also be reviewed by the Chief Compliance Officer, who will refer instances to the Ethics Committee as he or she feels appropriate.  The Ethics Committee, based on its review, may take disciplinary action, including suspension of trading privileges, forfeiture of profits or the amount of losses avoided, and termination of employment, as it deems appropriate. 

  

Employees are also expected to abide by trading restrictions imposed by other funds as described in their prospectuses.  If you violate the trading restrictions of a non-Price Fund, the Ethics Committee may impose the same penalties available for violation of the Price Funds excessive trading Policy. 

  

FRONT RUNNING.  Front Running is inconsistent with our responsibility to serve the interests of clients.  It is generally defined as the purchase or sale of a security by an officer, director or employee of an investment adviser or mutual fund in anticipation of and prior to the adviser effecting similar transactions for its clients in order to take advantage of or avoid changes in market prices affected by client transactions. 

  

PERSONS SUBJECT TO STATEMENT.  The provisions of this Statement apply as described below to the following persons and entities.  Each person and entity (except the independent directors of Price Group) is classified as either an Access Person or a Non-Access Person as described below.  The provisions of this Statement may also apply to an Access Person’s or Non-Access Person’s spouse, minor children, and certain other relatives, as further described on page 5-4 of this Statement.  All Access Persons except the independent directors of the Price Funds and Price ETFs are subject to all provisions of this Statement except certain restrictions on purchases in initial public offerings that apply only to Investment Personnel.  The independent directors of the Price Funds and Price ETFs are not subject to prior transaction clearance requirements and are subject to modified reporting as described on page 5-19.  Non-Access Persons are subject to the general principles of the Statement and its reporting requirements but are only required to receive prior transaction clearance for transactions in Price Group stock.  The persons and entities covered by this Statement are: 

  

  

Price Group.  Price Group, each of its subsidiaries and affiliates, and their retirement plans. 

  

Employee Partnerships. Partnerships such as Pratt Street Ventures. 

  

Personnel. Each officer, inside director and employee of Price Group and its subsidiaries and its affiliates. 

  

Certain Contingent Workers.  These workers include: 

·

All contingent workers whose assignments exceed four weeks or whose cumulative assignments exceed eight weeks over a twelve-month period and whose work is closely related to the ongoing work of Price Group’s employees (versus project work that stands apart from ongoing work); and 

·

Any contingent worker whose assignment is more than casual in nature or who will be exposed to the kinds of information and situations that would create conflicts on matters covered in the Code. 

  

Exceptions must be approved by Code Compliance (Code_of_Ethics@TRowePrice.com) 

  

Independent Directors of Price Group, Price Funds, and the Price ETFs.  The independent directors of Price Group include those directors of Price Group who are neither officers nor employees of Price Group or any of its subsidiaries or affiliates.  The independent directors of the Price Funds and Price ETFs include those directors of the Price Funds and Price ETFs who are not deemed to be “interested persons” of Price Group. 

  

Although subject to the general principles of this Statement, including the definition of “beneficial ownership,” independent directors are subject only to modified reporting requirements (pages 5-20 to 5-22).  The trades of the independent directors of the Price Funds and Price ETFs are not subject to prior transaction clearance requirements.  The trades of the independent directors of Price Group are not subject to prior transaction clearance requirements except for transactions in Price Group stock. 

  

ACCESS PERSONS.  Certain persons and entities are classified as “Access Persons” under the Code.  The term “Access Persons” means: 

  

·

The Price Advisers; 

·

Any officer or director of any of the Price Advisers or the Price Funds, including the Price ETFs (except the independent directors of the Price Funds and Price ETFs);  

·

Any person associated with any of the Price Advisers, Price Funds, or the Price ETFs who, in connection with his or her regular functions or duties, makes, participates in, obtains or has access to non-public information regarding the purchase or sale of securities by a Price Fund, Price ETF, or other advisory client, or to non-public information regarding any securities holdings of any client of a Price Adviser, including the Price Funds and Price ETFs, or whose functions relate to the making of any recommendations with respect to the purchases or sales. 

  

All Access Persons are notified of their status under the Code.   

  

Investment Personnel.  An Access Person is further identified as “Investment Personnel” if, in connection with his or her regular functions or duties, he or she “makes or participates in making, or is closely associated with personnel who make recommendations regarding the purchase or sale of securities” by a Price Fund, Price ETF, or other advisory client. 

  

The term “Investment Personnel” includes, but is not limited to: 

  

·

Those employees who are authorized to make investment decisions or to recommend securities transactions on behalf of the firm’s clients (investment counselors and members of the mutual fund advisory committees); 

·

Research and credit analysts;  

·

Traders who assist in the investment process; and 

·

Support staff who assist in the investment process. 

  

All Investment Personnel are deemed Access Persons under the Code.   

  

NON-ACCESS PERSONS.  Persons who do not fall within the definition of Access Persons are deemed “Non-Access Persons.”  If a Non-Access Person is married to an Access Person, then the non-Access Person is deemed to be an Access Person.   

  

TRANSACTIONS SUBJECT TO STATEMENT.  Except as provided below, the provisions of this Statement apply to transactions that fall under either one of the following two conditions: 

  

First, you are a “beneficial owner” of the security under the Rule 16a-1 of the Exchange Act, defined as follows; or 

  

Second, if you control or direct securities trading for another person or entity, those trades are subject to this Statement even if you are not a beneficial owner of the securities.  For example, if you have an exercisable trading authorization (e.g., a power of attorney to direct transactions in another person’s account) of an unrelated person’s or entity’s brokerage account, or are directing another person’s or entity’s trades, those transactions will usually be subject to this Statement to the same extent your personal trades would be as described below. 

  

Definition of Beneficial Owner.  A “beneficial owner” is any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares in the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the security.  Being the beneficiary of an account, such as a 401(k) or securities account, does not necessarily mean a person is a “beneficial owner” unless one of the following conditions exists. 

  

A person has beneficial ownership in: 

  

·

Securities held by members of the person’s immediate family (e.g. spouse, child, etc.) sharing the same household, although the presumption of beneficial ownership may be rebutted; 

·

A person’s interest in securities held by a trust, which may include both trustees with investment control and, in some instances, trust beneficiaries; 

·

A person’s right to acquire securities through the exercise or conversion of any derivative security, whether or not presently exercisable; 

·

A general partner’s proportionate interest in the portfolio securities held by either a general or limited partnership; 

·

Certain performance-related fees other than an asset-based fee, received by any broker, dealer, bank, insurance company, investment company, investment adviser, investment manager, trustee or person or entity performing a similar function; and 

·

A person’s right to dividends that are separated or separable from the underlying securities.  Otherwise, right to dividends alone shall not represent beneficial ownership in the securities. 

  

A shareholder shall not be deemed to have beneficial ownership in the portfolio securities held by a corporation or similar entity in which the person owns securities if the shareholder is not a controlling shareholder of the entity and does not have or share investment control over the entity’s portfolio.  If you become the beneficial owner of another’s securities (e.g., by marriage to the owner of the securities) or begin to direct trading of another’s securities, then the associated securities accounts become subject to the account reporting requirements outlined on page 5-16.   

  

Requests for Clarifications or Interpretations Regarding Beneficial Ownership or Control.  If you have beneficial ownership of a security, any transaction involving that security is presumed to be subject to the relevant requirements of this Statement, unless you have no direct or indirect influence or control over the transaction.  Such a situation may arise, for example, if you have delegated investment authority to an independent investment adviser or your spouse or family member (residing with you) has an independent trading program in which you have no input or control.  Similarly, if your spouse or family member has investment control over, but not beneficial ownership in, an unrelated account, the Statement may not apply to those securities and you may wish to seek clarification or an interpretation. 

  

If you are involved in an investment account for a family situation, trust, partnership, corporation, etc., which you feel should not be subject to the Statement’s relevant prior transaction clearance and/or reporting requirements, you should submit a written request for clarification or interpretation to either Code Compliance (Code_of_Ethics@TRowePrice.com)  or the TRP International Compliance Team  .    Any such request for clarification or interpretations should name the account, your interest in the account, the persons or firms responsible for its management, and the specific facts of the situation.   Do not assume that the Statement is not applicable; you must receive a clarification or interpretation about the applicability of the Statement.  Clarifications and interpretations are not self-executing; you must receive a response to a request for clarification or interpretation directly from the Code Compliance  Team   or the TRP International Compliance Team before proceeding with the transaction or other action covered by this Statement. 

  

PRIOR TRANSACTION CLEARANCE REQUIREMENTS GENERALLY.  As described, certain transactions require prior clearance before execution.  Receiving prior transaction clearance does not relieve you from conducting your personal securities transactions in full compliance with the Code, including its prohibition on trading while in possession of material, inside information, and the 60-Day Rule, and with applicable law, including the prohibition on Front Running. 

  

TRANSACTIONS IN STOCK OF PRICE GROUP.  Because Price Group is a public company, ownership of its stock subjects its officers, inside and independent directors, employees and all others subject to the Code to special legal requirements under the U.S. securities laws.  

You are responsible for your own compliance with these requirements.  In connection with these legal requirements, Price Group has adopted the following rules and procedures: 

  

Independent Directors of Price Funds or Price ETFs.  The independent directors of the Price Funds or Price ETFs are prohibited from owning the stock or other securities of Price Group. 

  

Quarterly Earnings Report.  Generally, all Access Persons and Non-Access Persons and the independent directors of Price Group must refrain from initiating transactions in Price Group stock in which they have a beneficial interest from the second trading day after quarter end (or such other date as management shall from time to time determine) through the day of filing the firm’s earnings release with the SEC.  You will be notified quarterly in regards to the controlling (blackout) dates. 

  

Prior Transaction Clearance of Price Group Stock Transactions Generally.  Access Persons and Non-Access Persons and the independent directors of Price Group are required to obtain clearance prior to effecting any proposed transaction involving shares of Price Group stock owned beneficially, including any Price Group stock owned in the Employee Stock Purchase Plan (“ESPP”).  Moving shares of Price Group stock (held outside of the ESPP) between securities firms or to/from individual or joint brokerage accounts does not have to receive prior clearance. Prior clearance is required to transfer shares to another person, entity, or trust account.  

  

Prior Transaction Clearance Procedures for Price Group Stock.  Requests for prior transaction clearance must be submitted to the myTRPcompliance system. 

  

Gifts.  The giving of or receipt of Price Group stock (TROW) must be prior cleared.  This includes donation transactions into donor-advised funds such as T. Rowe Price Charitable, as well as any other charitable gifting. 

  

Prohibition Regarding Transactions in Price Group Options.  Transactions in options (other than stock options granted to T. Rowe Price associates) on Price Group stock are not permitted. 

  

Prohibition Regarding Short Sales of Price Group Stock.  Short sales of Price Group stock are not permitted. 

  

Hedging Transactions in Price Group Stock.  Entering into any contract or purchasing any instrument designed to hedge or offset any decrease in the market value of Price Group stock is not permitted. 

  

Applicability of 60-Day Rule to Price Group Stock Transactions.  Transactions in Price Group stock are subject to the 60-Day Rule except for transactions effected through the ESPP, the exercise of employee stock options granted by Price Group and the subsequent sale of the derivative shares, and shares obtained through an established dividend reinvestment program.  Refer to page 5-26 for a full description of the 60-Day Rule. 

  

Only Price Group stock that has been held for at least 60 days may be gifted.  You must receive prior clearance before gifting shares of Price Group stock.  Purchases of Price Group stock in the ESPP through payroll deduction are not considered in determining the applicability of the 60-Day Rule to market transactions in Price Group stock.  To avoid issues with the 60-day rule, shares may not be transferred out of or otherwise removed from the ESPP if the shares have been held for less than 60 days. 

  

Access Persons and Non-Access Persons and the independent directors of Price Group must obtain prior transaction clearance of any transaction involving Price Group stock, (unless specifically exempted, such as transfers of form of ownership). 

  

Initial Disclosure of Holdings of Price Group Stock.  Each new employee must report any shares of Price Group stock of which he or she has beneficial ownership no later than ten business days after his or her starting date. 

  

Dividend Reinvestment Plans for Price Group Stock.  Purchases of Price Group stock owned outside of the ESPP and effected through a dividend reinvestment plan need not receive prior transaction clearance.  Reporting of transactions effected through that plan need only be made quarterly through statements provided to the Code Compliance Team or by the financial institution (e.g. broker-dealer) where the account is maintained, except in the case of employees who are subject to Section 16 of the Exchange Act, who must report such transactions immediately. 

  

Effectiveness of Prior Clearance.  Prior transaction clearance of transactions in Price Group stock is effective for three business days from and including the date the clearance is granted (taking into consideration the time zone), unless (i) advised to the contrary by the Payroll and Stock Transaction Group prior to the proposed transaction, or (ii) the person receiving the clearance comes into possession of material, non-public information concerning the firm.  If the proposed transaction in Price Group stock is not executed within this time period, a new clearance must be obtained before the individual can execute the proposed transaction. 

  

Reporting of Disposition of Proposed Transaction.  If the transaction request was executed, the Payroll & Stock Transaction Team will receive an electronic or paper confirmation of the transaction and your records will be updated accordingly. 

  

Insider Reporting and Liability.  Under current SEC rules, certain officers, directors and 10% stockholders of a publicly traded company (“Insiders”) are subject to the requirements of Section 16.  Insiders include the directors and certain executive officers of Price Group.  The Payroll and Stock Transaction Group informs all those who are Insiders of their obligations under Section 16. 

  

SEC Reporting.  There are three reporting forms which Insiders are required to file with the SEC to report their purchase, sale and transfer transactions in, and holdings of, Price Group stock.  Although the Payroll and Stock Transaction Group will provide assistance in complying with these requirements as an accommodation to Insiders, it remains the legal responsibility of each Insider to ensure that the applicable reports are filed in a timely manner. 

  

·

Form 3.  The initial ownership report by an Insider is required to be filed on Form 3.  This report must be filed within ten days after a person becomes an Insider (i.e., is elected as a director or appointed as an executive officer) to report all current holdings of Price Group stock.  Following the election or appointment of an Insider, the Payroll and Stock Transaction Group will deliver to the Insider a Form 3 for appropriate signatures and will file the form electronically with the SEC. 

·

Form 4.  Any change in the Insider’s ownership of Price Group stock must be reported on a Form 4 unless eligible for deferred reporting on year-end Form 5.  The Form 4 must be filed electronically before the end of the second business day following the day on which a transaction resulting in a change in beneficial ownership has been executed.  Following receipt of the Notice of Disposition of the proposed transaction, the Payroll and Stock Transaction Group will deliver to the Insider a Form 4, as applicable, for appropriate signatures and will file the form electronically with the SEC. 

·

Form 5.  Any transaction or holding that is exempt from reporting on Form 4, such as small purchases of stock, gifts, etc. may be reported electronically on a deferred basis on Form 5 within 45 calendar days after the end of the calendar year in which the transaction occurred.  No Form 5 is necessary if all transactions and holdings were previously reported on Form 4. 

  

Liability for Short-Swing Profits.  Under the U.S. securities laws, profit realized by certain officers, as well as directors and 10% stockholders of a company (including Price Group) as a result of a purchase and sale (or sale and purchase) of stock of the company within a period of less than six months must be returned to the firm or its designated payee upon request. 

  

PRIOR TRANSACTION CLEARANCE REQUIREMENTS - ACCESS PERSONS.  

  

Access Persons must obtain prior transaction clearance (approval) before directly or indirectly initiating the purchase or sale of a security in an account in which the Access Person is a beneficial owner (page 5-4).  This includes the writing of an option to purchase or sell a security and the acquisition of any shares in an Automatic Investment Plan through a non-systematic investment.  Following are exceptions to the prior transaction clearance requirement: 

  

·

The independent directors of the Price Funds and Price ETFs are generally not required to receive prior transaction clearance so long as they have no knowledge of trades being transacted for the Price Funds or Price ETFs; and 

·

Any Price Adviser is not required to receive prior transaction clearance when T. Rowe Price seed money is deployed to establish a client/product strategy. 

  

Non-Access Persons are not required to obtain prior clearance before engaging in any securities transactions, except for transactions in Price Group stock. 

  

Where required, prior transaction clearance must be obtained regardless of whether the transaction is affected through TRP Brokerage (generally available only to U.S. residents) or through an unaffiliated broker-dealer or other entity.  Please note that the prior clearance procedures do not check compliance with the 60-Day Rule (page 5-266); you are responsible for ensuring your compliance with this rule. 

  

TRANSACTIONS (OTHER THAN IN PRICE GROUP STOCK) THAT DO NOT REQUIRE EITHER PRIOR TRANSACTION CLEARANCE OR REPORTING UNLESS THEY OCCUR IN A “REPORTABLE FUND.”  The following transactions do not require either prior transaction clearance or reporting: 

  

Mutual Funds and Variable Insurance Products.  The purchase or redemption of shares of any open-end investment companies and variable insurance products, except that Access Persons must report transactions in Reportable Funds (page 5-11). 

  

Undertakings for Collective Investments in Transferrable Securities (UCITS).  The purchase or redemption of shares in an open-ended European investment fund established in accordance with the UCITS Directive provided that a Price Adviser does not serve as an adviser to the fund. 

  

Automatic Investment Plans.  Transactions through a program in which regular periodic purchases or withdrawals are made automatically in or from investment accounts in accordance with a predetermined schedule and allocation.  However, the initial automatic investment does require prior clearance.  An Access Person must report any securities owned as a result of transactions in an Automatic Investment Plan on his or her Annual Report.  Any transaction that overrides the pre-set schedule or allocations of an automatic investment plan (a “non-systematic transaction”) must be reported by both Access Persons and non-Access Persons and Access Persons must also receive prior transaction clearance for such a transaction if the transaction would otherwise require prior transaction clearance. 

  

Donor-Advised Funds.  Transactions within donor-advised funds, such as  

T. Rowe Price Charitable, do not require prior clearance or reporting.  However, a gift of Price Group stock into a donor-advised fund is required to be prior cleared and reported. 

  

U.S Government Obligations.  Purchases or sales of direct obligations of the U.S Government. 

  

Commercial Paper and Similar Instruments.  Bankers’ acceptances, bank certificates of deposit, commercial paper and high-quality, short-term debt instruments, including repurchase agreements. 

  

Certain Unit Investment Trusts.  Shares issued by unit investment trusts that are invested exclusively in one or more open-end funds, if none of the underlying funds is a Reportable Fund. 

  

Currency.  Direct foreign currency transactions (spot and forward trades) in the Japanese Yen or British Pound, for example.  However, securitized or financial instruments used for currency exposure (e.g. ProShares Ultra Yen ETF), must be reported. 

Cryptocurrency.  Transactions in cryptocurrency, such as Bitcoin, Ethereum, etc., do not require prior clearance or reporting.  However, transactions in any publicly traded cryptocurrency tracker instrument would require prior clearance and reporting.  Participation in Initial Coin Offerings (ICOs) is prohibited.   

  

TRANSACTIONS (OTHER THAN PRICE GROUP STOCK) THAT DO NOT REQUIRE PRIOR TRANSACTION CLEARANCE BUT MUST BE REPORTED BY BOTH ACCESS PERSONS AND NON-ACCESS PERSONS.  The following transactions do not require prior transaction clearance but must be reported: 

  

Non-T. Rowe Price Exchange-Traded Funds (“ETFs”).  Transactions in non-T. Rowe Price ETFs, including non-T. Rowe Price ETFs authorized as UCITS, do not require prior clearance but must be reported.  Access Persons are prohibited to transact in inverse/short and narrow ETFs. Short sale transactions in long and narrow ETFs is also prohibited. Access Persons are responsible for their compliance to these two prohibitions.  Contact the Code Compliance Team regarding any uncertainty in contemplated ETF transactions. Narrow ETFs include, but are not limited to, those focused on specific industries (e.g. energy, healthcare, financial services, etc.), commodities, currencies, and specific geographical markets (e.g. countries or regions).  

  

Unit Investment Trusts.  Purchases or sales of shares in unit investment trusts registered under the Investment Company Act of 1940, unless the unit investment trust is an ETF, in which case the ETF protocols apply. 

  

National Government Obligations (other than U.S.).  Purchases or sales of direct obligations of national (non-U.S.) governments. 

  

Variable Rate Demand Notes.  This financial instrument is an unsecured debt obligation of a corporate entity.  These instruments generally pay a floating interest rate slightly above the prevailing money market rates and include check-writing capabilities.  It is not a money market fund nor is it equivalent to a bank deposit or bank account, therefore the instrument is not protected by the Securities Investor Protection Corporation or Federal Deposit Insurance Corporation. 

  

Pro Rata Distributions.  Purchases effected by the exercise of rights issued pro-rata to all holders of a class of securities or the sale of rights so received. 

  

Tender Offers. Purchases and sales of securities pursuant to a mandatory (e.g., the holder has no choice or elections regarding the offer) tender offer.  Merger elections, however, that presents holders of acquired securities, with exchange options that typically include cash or securities of the acquiring company and/or a combination thereof, must be prior cleared. 

  

Exercise of Stock Option of Corporate Employer by Spouse.  Transactions involving the exercise by an Access Person’s spouse of a stock option issued by the corporation employing the spouse.  However, a subsequent sale of the stock obtained by means of the exercise, including sales effected by a “cash-less” transactions, must receive prior transaction clearance. 

  

Restricted Stock Plan Automatic Sales for Tax Purposes by Spouse.  Transactions commonly called “net sales” whereby upon vesting of restricted shares, a portion of the shares are automatically sold in order to cover the tax obligation. 

  

Inheritances.  The acquisition of securities through inheritance. 

  

Gifts.  The giving of or receipt of a security as a gift.  However, a gift of or receipt of Price Group stock must be prior cleared. 

  

Stock Splits, Reverse Stock Splits, and Similar Acquisitions and Dispositions.  The mandatory acquisition of additional shares or the disposition of existing corporate holdings through stock splits, reverse stock splits, stock dividends, exercise of rights, exchange or conversion.  Reporting of such transactions must be made within 30 days of the end of the quarter in which they occurred.  Reporting is deemed to have been made if the acquisition or disposition is reported on a confirmation, statement or similar document sent to Code Compliance. 

  

Spousal Employee-Sponsored Payroll Deduction Plans.  Purchases, but not sales, by an Access Person’s spouse pursuant to an employee-sponsored payroll deduction plan (e.g., a 401(k) plan or employee stock purchase plan), provided the Code Compliance Section has been previously notified by the Access Person that the spouse will be participating in the payroll deduction plan.  Reporting of such transactions must be made within 30 days of the end of the quarter in which they occurred.  A sale or exchange of stock held in such a plan is subject to the prior transaction clearance requirements for Access Persons. 

  

Partial Shares Sold.  Partial shares held in an account that are sold when the account is transferred to another broker-dealer or to new owner or partial shares sold automatically by the broker-dealer. 

  

TRANSACTIONS (OTHER THAN PRICE GROUP STOCK) THAT DO NOT REQUIRE PRIOR TRANSACTION CLEARANCE BUT MUST BE REPORTED BY ACCESS PERSONS ONLY. 

  

Reportable TRP-Advised Funds (“Reportable Funds”) Not Held On A T. Rowe Price Platform. Access Persons must report the purchases and sales of shares of Reportable Funds. A Reportable Fund is any open-end investment company, including money market funds and UCITS, for which any of the Price Advisers serves as an investment adviser.  This includes not only the Price Funds, non-Price ETFs, SICAVs, OEICs, ITMs, AUTs, and any Price-advised investment products, but also any fund managed by any of the Price Advisers either through subadvised relationships, including any fund holdings offered through retirement plans (e.g., 401(k) plans) other than the T. Rowe Price U.S. Retirement Plan, or as an investment option offered as part of a variable annuity.  Legal & Compliance maintains a listing of subadvised Reportable Funds on the TRP Exchange. 

  

Access Persons must inform the Code Compliance Team about ownership of shares of Price Funds.  Once this notification has been given, if the Price Fund is held on the T. Rowe Price platform, or in the T. Rowe Price U.S. Retirement Plan, or the T. Rowe Price UK Retirement Schema, the Access Person need not report these transactions directly.  In instances where Price Funds are held through an intermediary, transactions in shares of those Price Funds must be reported as described on page 5-18. 

  

Interests in Section 529 College Savings Plans not held on the T. Rowe Price Platform.  Access Persons must report the purchase and sale of interests in any Section 529 College Savings Plan for which any Price Adviser serves as an adviser or subadviser to the plan.  Access Persons must inform the Code Compliance Team about ownership of interests in the Maryland College Investment Plan, the T. Rowe Price College Savings Plan and the University of Alaska College Savings Plan.  For these specific plans only, once this notification has been given, an Access Person need not report transactions directly (page 5-18).  In instances where ownership interests in 529 College Savings Plans that are advised or subadvised by a Price Adviser are held through an intermediary, transactions must be reported as described on page 5-18. 

  

The Chief Compliance Officer or his or her designee reviews at a minimum the transaction reports for all securities required to be reported under the Advisers Act or the Investment Company Act for all employees, officers, and inside directors of Price Group and its affiliates and for the independent directors of the Price Funds. 

  

TRANSACTIONS THAT REQUIRE PRIOR TRANSACTION CLEARANCE BY ACCESS PERSONS.  Generally, Access Persons are required to obtain prior clearance for all buy and sell transactions in individual stocks, bonds, closed-end funds, private investments, and derivatives (e.g. options, swaps, futures, etc.) of these securities, as well as T. Rowe Price ETFs that you are considered to be the beneficial owner. If the transaction or security is not subject to prior transaction clearance, as outlined in this policy, you should assume that it is subject to the prior clearance requirement unless specifically informed otherwise by the Code Compliance Team or the TRP International Compliance Team.   

  

Among the transactions for which Access Persons must receive prior transaction clearance are: 

  

·

Non-systematic transactions in a security that is not exempt from prior transaction clearance; 

·

Close-end fund transactions, including U.K, Canadian, and other non-U.S. investment trusts. 

·

Price ETFs (See the chart in the “TRANSACTIONS IN PRICE ETFs.” 

  

  

  

  

  

  

  

  

  

  

  

  

  

TRANSACTIONS IN PRICE ETFs. Guidelines specific to the Price ETFs are as follows: 

  

Access Person 

Non-Access Persons 

Independent Directors 

Must Pre-clear Trades in Price ETFs 

YES 

NO 

NO 

Must Post-report Trades in Price ETFs 

YES 

YES 

YES 

Subject to 60-day Rule 

YES 

NO 

NO 

Subject to Ad hoc Trading Restrictions  

YES 

NO 

YES 

Ability to Buy/Sell Price ETFs in the Primary Market 

NO 

NO 

NO 

Ability to Sell Short the Price ETFs 

NO 

NO 

NO 

Ability to Transact in Options of the Price ETFs 

NO 

NO 

NO 

  

  

OTHER TRANSACTION REPORTING REQUIREMENTS.  Any transaction that is subject to the prior transaction clearance requirements on behalf of an Access Person (except the independent directors of the Price Funds and Price ETFs), including purchases in initial public offerings and private placement transactions, must be reported.  Although Non-Access Persons are not required to receive prior transaction clearance for securities transactions (other than Price Group stock), they must report any transaction that would require prior transaction clearance by an Access Person.  The independent directors of Price Group, the Price Funds, and Price ETFs are subject to modified reporting requirements. 

  

PROCEDURES FOR OBTAINING PRIOR TRANSACTION CLEARANCE (OTHER THAN PRICE GROUP STOCK) FOR ACCESS PERSONS.  Unless prior transaction clearance is not required as described in this policy or determined by the Chairperson of the Ethics Committee, Access Persons must receive prior transaction clearance for all securities transactions. 

  

Access Persons should follow the procedures before engaging in the transactions described.  If an Access Person is not certain whether a proposed transaction is subject to the prior transaction clearance requirements, he or she should contact the Code Compliance Team before proceeding. 

  

  

  

  

Procedures for Obtaining Prior Transaction Clearance for Initial Public Offerings (“IPOs”): 

  

Non-Investment Personnel.  Access Persons who are not Investment Personnel (“Non-Investment Personnel”) may purchase securities that are the subject of an IPO only after receiving prior transaction clearance in writing from the Chairperson of the Ethics Committee or their designee.  An IPO would include, for example, an offering of securities registered under the Securities Act of 1933 when the issuer of the securities, immediately before the registration, was not subject to certain reporting requirements of the Exchange Act.  This requirement applies to all IPOs regardless of market. 

  

In considering such a request for prior transaction clearance, the Chairperson or their designee will determine whether the proposed transaction presents a conflict of interest with any of the firm’s clients or otherwise violates the Code.  The Chairperson or his or her designee will also consider whether: 

  

1.

The purchase is made through the Non-Investment Personnel’s regular broker; 

2.

The number of shares to be purchased is commensurate with the normal size and activity of the Non-Investment Personnel’s account; and 

3.

The transaction otherwise meets the requirements of the FINRA restrictions, as applicable, regarding the sale of a new issue to an account in which a “restricted person,” as defined in FINRA Rule 5130, has a beneficial interest. 

  

Non-Investment Personnel will not be permitted to purchase shares in an IPO if any of the firm’s clients are prohibited from doing so because of affiliated transaction restrictions.  This prohibition will remain in effect until the firm’s clients have had the opportunity to purchase in the secondary market once the underwriting is completed – commonly referred to as the aftermarket.  The 60-Day Rule applies to transactions in securities purchased in an IPO. 

  

Investment Personnel.  Investment Personnel may not purchase securities in an IPO. 

  

Non-Access Persons.  Although Non-Access Persons are not required to receive prior transaction clearance before purchasing shares in an IPO, any Non-Access Person who is a registered representative or associated person of Investment Services is reminded that FINRA Rule 5130 may restrict his or her ability to buy shares in a new issue in any market. 

  

Procedures for Obtaining Prior Transaction Clearance for Private Placements:  

  

Access Persons may not invest in a private placement of securities, including the purchase of limited partnership interests, unless prior transaction clearance in writing has been obtained from the Chairperson of the Ethics Committee or their designee.  This prior clearance provision includes situations involving investment transactions made in small businesses typically sourced through family or friends as well as any other referral source. 

  

A private placement is generally defined as an offering that is exempt from registration by a regulatory authority and sold through a private offering.  Private placement investments generally require the investor to complete a written questionnaire or subscription agreement and be regarded as a professional or accredited investor. 

  

Crowdfunding.  Investments made through crowdfunding sites that serve to match entrepreneurs with investors, through which investors receive an equity stake in the business, are generally considered to be private placements and would require prior clearance.  In contrast, providing funding through crowdfunding sites that serve to fund projects or philanthropic ventures are not considered private placements and therefore would not require prior clearance. 

  

If an Access Person has any questions about whether a transaction is, in fact, a private placement, he or she should contact the Chairperson of the Ethics Committee or their designee. 

  

In considering a request for prior transaction clearance for a private placement, the Chairperson will determine whether the investment opportunity (private placement) should be reserved for the firm’s clients, and whether the opportunity is being offered to the Access Person by virtue of his or her position with the firm.  The Chairperson will also secure, if appropriate, the approval of the proposed transaction from the chairperson of the applicable investment steering committee.   

  

Continuing Obligation.  An Access Person who has received prior transaction clearance to invest and does invest in a private placement of securities and who, at a later date, anticipates participating in the firm’s investment decision process regarding the purchase or sale of securities of the issuer of that private placement on behalf of any client, must immediately disclose his or her prior investment in the private placement to the Chairperson of the Ethics Committee and to the chairperson of the appropriate investment steering committee. 

  

Registered representatives of Investment Services are reminded that FINRA rules may restrict investment in a private placement in certain circumstances. 

  

Procedures for Obtaining Prior Transaction Clearance for All Other Securities Transactions: 

  

Requests for prior transaction clearance by Access Persons for all other securities transactions requiring prior transaction clearance should generally be made via myTRPcompliance on the firm’s intranet.  The myTRPcompliance system automatically sends any request for prior transaction approval that requires manual intervention to the Code Compliance Team.  If you cannot access myTRPcompliance, requests may be made by email to the Legal Compliance Employee Trading mailbox.  All requests must include the name of the security, a definitive security identifier (e.g., CUSIP, ticker, or Sedol), the number of shares or amount of bond involved, and the nature of the transaction, i.e., whether the transaction is a purchase, sale, short sale, or buy to cover, as well as the intended account in which to transact. Responses to all requests will be made by myTRPcompliance or the Code Compliance Team, documenting the request and whether or not prior transaction clearance has been granted.  The myTRPcompliance system maintains the record of all approval and denials, whether automatic or manual. 

  

Effectiveness of Prior Transaction Clearance.  Prior transaction clearance of a securities transaction is effective for three business days from and including

the date the clearance is granted (taking into consideration the time zone), regardless of the time of day when clearance is granted.  If the proposed securities transaction is not executed within this time, a new clearance must be obtained.  For example, if prior transaction clearance is granted at 2:00 pm Monday, the trade must be executed by Wednesday.  In situations where it appears that the trade will not be executed within three business days even if the order is entered in that time period (e.g., certain transactions through transfer agents or spousal employee-sponsored payroll deduction plans), please notify the Code Compliance Team after prior clearance has been granted, but before entering the order with the executing agent. 

  

Reminder.  If you are an Access Person and become the beneficial owner of another’s securities (e.g., by marriage to the owner of the securities) or begin to direct trading of another’s securities, then transactions in those securities also become subject to the prior transaction clearance requirements.  You must also report acquisition of beneficial ownership or control of these securities within ten business days of your knowledge of their existence. 

  

REASONS FOR DISALLOWING ANY REQUESTED TRANSACTION.  Prior transaction clearance will usually not be granted if: 

  

Pending Client Orders.  Orders have been placed by any of the Price Advisers to purchase or sell the security unless certain size or volume parameters as described (on page 5-24) under “Large Issuer/Volume Transactions” are met. 

  

Purchases and Sales within Seven Calendar Days.  The security has been purchased or sold by any client of a Price Adviser within seven calendar days immediately prior to the date of the proposed transaction, unless certain size or volume parameters as described (on page 5-24) under “Large Issuer/Volume Transactions” are met. 

  

For example, if a client transaction occurs on Monday, prior transaction clearance is not generally granted to An Access Person to purchase or sell that security until Tuesday of the following week.  Transactions in securities in pure, as opposed to enhanced, index funds are not considered for this purpose.  If all clients have eliminated their holdings in a particular security, the seven-calendar day restriction is not applicable to an Access Person’s transactions in that security. 

  

Company Rating Changes.  A change in the rating of a company has occurred within seven calendar days immediately prior to the date of the proposed transaction.  Accordingly, trading would not be permitted until the eighth calendar day. 

  

Securities Subject to Internal Trading Restrictions.  The security is limited or restricted by any of the Price Advisers as to purchase or sale by Access Persons. 

  

STA ETF Trading Restrictions.  In general, Access Persons and Independent Directors will be restricted/prohibited from transacting in any STA ETF upon notification that it surpasses one of the Corrective Action Thresholds triggering the requirement for an ad hoc ETF Board meeting to evaluate the possible need for corrective measures. Additional situations or events could trigger ad hoc trading restrictions for Access Persons and/or Independent Directors. 

  

Requests for Reconsideration of Prior Transaction Clearance Denials.  

If an Access Person has not been granted a requested prior transaction clearance, he or she may apply to the Chairperson of the Ethics Committee or their designee for reconsideration.  Such a request must be in writing and must fully describe the basis upon which the reconsideration is being requested.  As part of the reconsideration process, the Chairperson or their designee will determine if any client of any of the Price Advisers may be disadvantaged by the proposed transaction by the Access Person.  The factors the Chairperson or their designee may consider in making this determination include: 

  

·

The size of the proposed transaction; 

·

The nature of the proposed transaction (i.e., buy or sell) and of any recent, current or pending client transactions; 

·

The trading volume of the security that is the subject of the proposed Access Person transaction; 

·

The existence of any current or pending order in the security for any client of a Price Adviser; 

·

The reason the Access Person wants to trade (e.g., to provide funds for the purchase of a home); and 

·

The number of times the Access Person has requested prior transaction clearance for the proposed trade and the amount of time elapsed between each prior transaction clearance request. 

  

TRANSACTION CONFIRMATIONS AND PERIODIC ACCOUNT STATEMENTS.  All Access Persons (except the independent directors of the Price Funds and Price ETFs) and Non-Access Persons must request broker-dealers, investment advisers, banks, or other financial institutions executing their transactions to send a duplicate confirmation or contract note with respect to each and every reportable transaction, including Price Group stock, and a copy of all periodic statements for all securities accounts in which the Access Person or Non-Access Person is considered to have beneficial ownership and/or control (see discussion of beneficial ownership and control concepts on page 5-4) to the following address: 

  

T. Rowe Price 

Legal & Compliance Department 

Mailcode: OM-2455 

P.O. Box 17218 

Baltimore, Maryland 21297-1218   

  

T. Rowe Price has established relationships and electronic data feeds with many broker-dealers for purposes of obtaining duplicate confirmations and contract notes as well as periodic statements.  Certain broker-dealers require employee consent before sending such confirmations, contract notes, and statements to T. Rowe Price.  In those cases, Code Compliance will contact the employee and obtain the required authorization. 

  

The independent directors of Price Group, the Price Funds, and Price ETFs are subject to modified reporting requirements described at pages 5-20 to 5-22. 

  

If transaction or statement information is provided in a language other than English, the employee should provide an English translation. 

  

NOTIFICATION OF SECURITIES ACCOUNTS.  All persons and all entities subject to this Statement must report their securities accounts upon joining the firm as well as obtain prior approval for all new accounts opened while employed by T. Rowe Price.  New T. Rowe Price brokerage accounts do not require prior approval but must be reported.  Prior approval is obtained through myTRPcompliance and an instruction for obtaining such approval is located on the Compliance & Ethics page on the Exchange 

  

The independent directors of Price Group, Price Funds, and the Price ETFs are not subject to this requirement. 

  

New Personnel Subject to the Code.  A person subject to the Code must report in myTRPcompliance, all existing securities accounts maintained with any broker, dealer, investment adviser, bank or other financial institution within ten business days of association with the firm. 

  

Associates do not have to report accounts at transfer agents or similar entities if the only securities in those accounts are variable insurance products or open-end mutual funds if these are the only types of securities that can be held or traded in the accounts.  If other securities can be held or traded, the accounts must be reported.  For example, if you have an account at a transfer agent that can only hold shares of a mutual fund; that account does not have to be reported.  If, however, you have a brokerage account it must be reported even if the only securities currently held or traded in it are mutual funds. 

  

Officers, Directors and Registered Representatives of TRP Investment Services.  FINRA requires each associated person of T. Rowe Price Investment Services to: 

  

·

Obtain prior approval for a new securities account; and  

·

If the securities account is with a broker-dealer, provide the broker-dealer with written notice of his or her association with TRP Investment Services. 

  

Annual Statement by Access Persons.  Every January each Access Person, except an Access Person who is an independent director of the Price Funds or Price ETFs, must file with the firm a list of their accounts as of year-end. 

  

PROCEDURES FOR REPORTING TRANSACTIONS.  The following requirements apply both to Access Persons and Non-Access Persons except the independent directors of Price Group and the Price Funds or Price ETFs, who are subject to modified reporting requirements: 

  

Report Form.  If the executing firm provides a confirmation, contract note or similar document directly to the firm, you do not need to make a further report.  The date this document is received by the Code Compliance Team will be deemed the date the report is submitted for purposes of SEC compliance.  The Code Compliance Team must receive the confirmation or similar document no later than 30 days after the end of the calendar quarter in which the transaction occurred.   

  

What Information Is Required.  Each transaction report must contain, at a minimum, the following information about each transaction involving a reportable security in which you had, or as a result of the transaction acquired, any direct or indirect beneficial ownership: 

  

·

The date of the transaction 

·

The title of the security 

·

The ticker symbol or CUSIP number, as applicable 

·

The interest rate and maturity date, as applicable 

·

The number of shares, as applicable 

·

The principal amount of each reportable security involved, as applicable 

·

The nature of the transaction (i.e. purchase, sale or any other type of acquisition or disposition) 

·

The price of the security at which the transaction was affected 

·

The name of the broker, dealer or bank with or through which the transaction was affected 

  

When Reports are Due.  You must report a securities transaction within ten business days after the trade date or within ten business days after the date on which you first gain knowledge of the transaction (for example, a bequest) if this is later.  A transaction in a Reportable Fund, a spousal payroll deduction plan or a stock split or similar acquisition or disposition must be reported within 30 days of the end of the quarter in which it occurred. 

  

Access Person Reporting of Reportable Funds and T. Rowe Price-Advised Section 529 College Savings Plan Interests HELD on the T. Rowe Price Platform or HELD by the TRP UK Retirement Schema.  You are required to inform Code Compliance about Reportable Funds and/or T. Rowe Price-advised Section 529 College Savings Plan interests (i.e., the Maryland College Investment Plan, the T. Rowe Price College Savings Plan and the University of Alaska College Savings Plan) held on the T. Rowe Price Platform or held by the TRP UK Retirement Schema.   Once you have done this, you do not have to report any transactions in those securities.  Your transactions and holdings will be updated and reported automatically to Code Compliance on a periodic basis.  You should report your new account via myTRPcompliance (located on the Exchange) when you first establish an account in a Reportable Fund or invest in a T. Rowe Price-advised Section 529 College Savings Plan held on a T. Rowe Price Platform or held by the TRP UK Retirement Plan.  

  

Access Person Reporting of Reportable Funds and T. Rowe Price-Advised Section 529 College Savings Plan Interests NOT HELD on the T. Rowe Price Platform.  You must notify Code Compliance of any Reportable Fund or T. Rowe Price-advised Section 529 College Savings Plan interests that you beneficially own or control that are held at any intermediary.  This would include, for example, a Price Fund held in your spouse’s retirement plan, even if T. Rowe Price Retirement Plan Services acts as the administrator or record-keeper of that plan.  Any transaction in a Reportable Fund or in interests in a T. Rowe Price-advised Section 529 College Savings Plan must be reported by duplicate transaction confirmations and statements sent directly by the intermediary to the Code Compliance Team or by the Access Person directly using the “Securities Transactions” form (located in myTRPcompliance) within 30 days of the end of the quarter in which the transaction occurred. 

  

Reporting Certain Private Placement Transactions.  If your investment requires periodic capital calls (e.g.,

in a limited partnership) you must report each capital call.  This is required even if you are an Access Person and you received prior transaction clearance for a total cumulative investment.  In addition, you must report any distributions you receive in the form of securities. 

  

Reminder.  If you become the beneficial owner of another’s securities (e.g., by marriage to the owner of the securities) or begin to direct trading of another’s securities, the transactions in these securities become subject to the transaction reporting requirements. 

  

REPORTING REQUIREMENTS FOR THE INDEPENDENT DIRECTORS OF THE PRICE FUNDS AND PRICE ETFs. 

  

Transactions in Publicly Traded Securities.  An independent director of the Price Funds and Price ETFs must report transactions in publicly traded securities where the independent director controls or directs such transactions.  These reporting requirements apply to transactions the independent director effects for his or her own beneficial ownership as well as the beneficial ownership of others, such as a spouse or other family member.  An independent director does not have to report securities transactions in accounts over which the independent director has no direct or indirect influence such as an account over which the independent director has granted full investment discretion to a financial adviser.  The independent director should contact the Legal & Compliance Department to request approval to exempt any such accounts from this reporting requirement. 

  

Transactions in Non-Publicly Traded Securities.  An independent director does not have to report transactions in securities which are not traded on an exchange (i.e., non-publicly traded securities), unless the independent director knew, or in the ordinary course of fulfilling his or her official duties as an independent director of the Price Funds or Price ETFs, should have known that during the 15-day period immediately before or after the independent director’s transaction in such non-publicly traded security, a Price Adviser purchased, sold or considered purchasing or selling such security for a Price Fund, Price ETF, or Price advisory client. 

  

Methods of Reporting.  An independent director has the option to satisfy his or her obligation to report transactions in securities via a Quarterly Report or by arranging for the executing brokers of such transactions to provide duplicate transaction confirmations directly to the Code Compliance Team. 

  

Quarterly Reports.  If a Price Fund or Price ETF independent director elects to report his or her transactions quarterly: (1) a report for each securities transaction must be filed with the Code Compliance Team no later than thirty days after the end of the calendar quarter in which the transaction was effected; and (2) a report must be filed for each quarter, regardless of whether there have been any reportable transactions.   

  

Duplicate Confirmation Reporting.  An independent director of the Price Funds or Price ETFs may also instruct his or her broker to send duplicate transaction confirmations directly to the Code Compliance Team.   

  

Among the types of transactions that are commonly not reported through a broker confirmation and may therefore have to be reported directly to T. Rowe Price are: 

  

·

Exercise of Stock Options of a Corporate Employer; 

·

Inheritance of a Security; 

·

Gift of a Security; and 

·

Transactions in Certain Commodity Futures Contracts (e.g., financial indices). 

  

An independent director of the Price Funds or Price ETFs must include any transactions listed above, as applicable, in his or her Quarterly Reports if not otherwise contained in a duplicate broker confirmation.  

  

Reporting of Officership, Directorship, General Partnership or Other Managerial Positions Apart from the Price Funds or Price ETFs.  An independent director of the Price Funds or Price ETFs shall report to the Code Compliance Team any officership, directorship, general partnership, or other managerial position which he or she holds with any public, private, or governmental issuer other than the Price Funds or Price ETFs. 

  

Reporting of Significant Ownership. 

  

Issuers (Other than Non-Public Investment partnerships, Pools or Funds).  If an independent director of the Price Funds or Price ETFs owns more than ½ of 1% of the total outstanding shares of a public or private issuer (other than a non-public investment partnership, pool or fund), he or she must immediately report this ownership in writing to the Code Compliance Team, providing the name of the issuer and the total number of the issuer’s shares beneficially owned. 

  

Non-Public Investment Partnerships, Pools or Funds.  If an independent director of the Price Funds or Price ETFs owns more than ½ of 1% of the total outstanding shares or units of a non-public investment partnership, pool or fund over which the independent director exercises control or influence, the independent director must report such ownership in writing to the Code Compliance Team.  For non-public investment partnerships, pools or funds where the independent director does not exercise control or influence, the independent director need not report such ownership to the Code Compliance Section unless and until such ownership exceeds 4% of the total outstanding shares or units of the entity. 

  

Investments in Price Group.  An independent director of the Price Funds or Price ETFs is prohibited from owning the common stock or other securities of Price Group. 

  

Investments in Non-Listed Securities Firms.  An independent director of the Price Funds or Price ETFs may not purchase or sell the shares of a broker-dealer, underwriter or federally registered investment adviser unless that entity is traded on an exchange or the purchase or sale has otherwise been approved by the Price Fund or Price ETF Boards. 

  

Dealing with Clients.  

Aside from market transactions effected through securities exchanges, an independent director of the Price Funds or Price ETFs may not knowingly transact with a Price Fund or Price ETF.  This prohibition does not preclude the purchase or redemption of shares of any open-end mutual fund or purchase or sale of any shares of a Price ETF that is a client of any Price Advisers. 

  

Prior Transaction Clearance Requirements.  The independent directors of the Price Funds and Price ETFs are generally not required to receive prior transaction clearance so long as they have no knowledge of trades being transacted for the Price Funds or Price ETFs. 

  

REPORTING REQUIREMENTS FOR THE INDEPENDENT DIRECTORS OF PRICE GROUP OR ITS SUBSIDIARIES. 

  

Reporting of Personal Securities Transactions. An independent director is not required to report his or her personal securities transactions, including Price ETFs, (other than transactions in Price Group stock) as long as the independent director does not obtain information about the Price Advisers’ investment research, recommendations, or transactions.  However, each independent director is reminded that changes to certain information reported by the respective independent director in the Annual Questionnaire for Independent Directors are required to be reported to Corporate Records (e.g., changes in holdings of stock of financial institutions or financial institution holding companies). 

  

Reporting of Officership, Directorship, General Partnership or Other Managerial Positions Apart from Price Group.  An independent director shall report to the Code Compliance Team any officership, directorship, general partnership or other managerial position which he or she holds with any public, private, or governmental issuer other than Price Group or any of its subsidiaries. 

  

Reporting of Significant Ownership. 

  

Issuers (Other than Non-Public Investment Partnerships, Pools or Funds).  If an independent director owns more than ½ of 1% of the total outstanding shares of a public or private issuer (other than a non-public investment partnership, pool or fund), he or she must report this ownership in writing to the Code Compliance Team, providing the name of the issuer and the total number of the issuer’s shares beneficially owned. 

  

Non-Public Investment Partnerships, Pools or Funds.  If an independent director owns more than ½ of 1% of the total outstanding shares or units of a non-public investment partnership, pool or fund over which the independent director exercises control or influence, the independent director must report such ownership in writing to the Code Compliance Team.  For non-public investment partnerships, pools or funds where the independent director does not exercise control or influence, the independent director need not report such ownership to the Code Compliance Team unless and until such ownership exceeds 4% of the total outstanding shares or units of the entity. 

  

Investments in Non-Listed Securities Firms.  An independent director should be mindful of potential conflicts of interest associated with transactions and/or ownership of a broker-dealer, underwriter or federally registered investment adviser that is not publicly traded.  Directors should consult with the T. Rowe Price Chief Legal Counsel regarding such matters. 

  

MISCELLANEOUS RULES REGARDING PERSONAL SECURITIES TRANSACTIONS.  These rules vary in their applicability depending upon whether you are an Access Person. 

  

The following rules apply to all Access Persons, except the independent directors of the Price Funds or Price ETFs, and to all Non-Access Persons: 

  

Dealing with Clients.  Access Persons and Non-Access Persons may not, directly or indirectly, sell to or purchase from a client any security.  Market transactions are not subject to this restriction.  This prohibition does not preclude the purchase or redemption of shares of any open-end mutual fund that is a client of any of the Price Advisers and does not apply to transactions in a spousal employer-sponsored payroll deduction plan or spousal employer-sponsored stock option plan. 

  

Investment Clubs.  These restrictions vary depending upon the person’s status, as follows: 

  

Non-Access Persons.  A Non-Access Person may form or participate in a stock or investment club without prior clearance from the Chairperson of the Ethics Committee (U.S.-based personnel) or the TRP International Compliance Team (international personnel).  Only transactions in Price Group stock are subject to prior transaction clearance.  Club transactions must be reported just as the Non-Access Person’s individual trades are reported. 

  

Access Persons.  An Access Person may not form or participate in a stock or investment club unless prior written clearance has been obtained from the Chairperson of the Ethics Committee (U.S.-based personnel) or the TRP International Compliance Team (international personnel).  Generally, transactions by such a stock or investment club in which an Access Person has beneficial ownership or control are subject to the same prior transaction clearance and reporting requirements applicable to an individual Access Person’s trades.  If, however, the Access Person has beneficial ownership solely by virtue of his or her spouse’s participation in the club and has no investment control or input into decisions regarding the club’s securities transactions, the Chairperson of the Ethics Committee or the TRP International Compliance Team may, as appropriate as part of the prior clearance process, require the prior transaction clearance of Price Group stock transactions only. 

  

Margin Accounts.  While margin accounts are discouraged, you may open and maintain margin accounts for the purchase of securities provided such accounts are with firms with which you maintain a regular securities account relationship. 

  

Limit Orders.  While limit orders are permitted, Access Persons must be careful using “good until cancelled” orders keeping in mind that prior clearance is valid for three business days.  Use of “day” limit orders are encouraged. 

  

Trading Activity.  You are discouraged from engaging in a pattern of securities transactions that either: 

  

·

Is so excessively frequent as to potentially impact your ability to carry out your assigned responsibilities, or 

·

Involves securities positions that are disproportionate to your net assets. 

  

At the discretion of the Chairperson of the Ethics Committee, written notification of excessive trading may be sent to you and/or the appropriate supervisor if ten or more reportable trades occur in your account or accounts in a month. 

  

The following rules apply only to Access Persons other than the independent directors of the Price Funds or Price ETFs: 

  

Large Issuer/Volume Transactions.  Although subject to prior transaction clearance, transactions involving securities of certain large issuers or of issuers with high trading volumes, within the parameters set by the Ethics Committee (the “Large Issuer/Volume List”), will be permitted under normal circumstances, as follows: 

  

Transactions involving no more than U.S $50,000 (all amounts are in U.S. dollars) or the nearest round lot (even if the amount of the transaction marginally exceeds $50,000) per security per seven (7) calendar-day period in securities of: 

  

·

Issuers with market capitalizations of $7.5 billion or more, or 

·

U.S. issuers with an average daily trading volume in excess of 750,000 shares over the preceding 90 trading days in the U.S. 

  

are usually permitted, unless the rating on the security has been changed within the seven calendar days immediately prior to the date of the proposed transaction.  These parameters are subject to change by the Ethics Committee.  An Access Person should be aware that if prior transaction clearance is granted for a specific number of shares lower than the number requested, the individual may not be able to receive permission to buy or sell additional shares of the issuer for the next seven calendar days. 

  

Small Cap Issuer Transactions.  Although subject to prior transaction clearance, transactions involving securities of certain small cap issuers may not be approved if there was a ratings change or ratings initiation in the previous 14 calendar days.  Small cap issuers are defined as issuers with a market capitalization of $2.0 billion or less. 

  

Transactions Involving Options on Large Issuer/Volume List Securities.  Access Persons may not purchase uncovered put options or sell uncovered call options unless otherwise permitted under the “Options and Futures” discussion that follows.  Otherwise, in the case of options on an individual security on the Large Issuer/Volume List (if it has not had a rating change), an Access Person may trade the greater of five contracts or sufficient option contracts to control $50,000 in the underlying security; thus an Access Person may trade five contracts even if this permits the Access Person to control more than $50,000 in the underlying security.  Similarly, the Access Person may trade more than five contracts as long as the number of contracts does not permit him or her to control more than $50,000 in the underlying security. 

  

Client Limit Orders.  Although subject to prior transaction clearance, an Access Person’s proposed trade in a security is usually permitted even if a limit order has been entered for a client for the same security, if: 

·

The Access Person’s trade will be entered as a market order; and 

·

The client’s limit order is 10% or more away from the market price at the time the Access Person requests prior transaction clearance. 

  

General Information on Options and Futures.  If a transaction in the underlying instrument does not require prior transaction clearance (e.g., National Government Obligations, Unit Investment Trusts), then an options or futures transaction on the underlying instrument does not require prior transaction clearance.  However, all options and futures transactions, including options on future contracts, must be reported even if a transaction in the underlying instrument would not have to be reported (e.g., U.S. Government Obligations).  Similarly, all “over the counter” derivatives transactions (i.e., swaps traded pursuant to an ISDA agreement) must be reported even if the transaction in the underlying instrument would not have to be reported. Transactions in publicly traded options on Price Group stock are not permitted.  Please note that Contracts for Difference are treated under this Statement in the same manner as call options, and, as a result, are subject to the 60-Day Rule. 

  

Before engaging in options and futures transactions, Access Persons should understand the impact that the 60-Day Rule and intervening client transactions may have upon their ability to close out a position with a profit (see “Closing or Exercising Options Positions”). 

  

Options and Futures on Securities and Indices Not Held by Clients of the Price Advisers.  There are no specific restrictions with respect to the purchase, sale or writing of put or call options or any other option or futures activity, such as multiple writings, spreads and straddles, on a security (and options or futures on such security) or index that is not held by any of the Price Advisers’ clients. 

  

Options on Securities Held by Clients of the Price Advisers.  With respect to options on securities of companies which are held by any of Price Advisers’ clients, it is the firm’s policy that an Access Person should not profit from a price decline of a security owned by a client (other than a “pure” Index account).  Therefore, an Access Person may:  (i) purchase call options and sell covered call options and (ii) purchase covered put options and sell put options.  An Access Person may not purchase uncovered put options or sell uncovered call options, even if the issuer of the underlying securities is included on the Large Issuer/Volume List, unless purchased in connection with other options on the same security as part of a straddle, combination or spread strategy which is designed to result in a profit to the Access Person if the underlying security rises in or does not change in value.  The purchase, sale and exercise of options are subject to the same restrictions as those set forth with respect to securities, i.e., the option should be treated as if it were the common stock itself. 

  

Other Options and Futures Held by Clients of the Price Advisers.  Any other option or futures transaction with respect to domestic or foreign securities held by any of the Price Advisers’ clients will receive prior transaction clearance if appropriate after due consideration is given, based on the particular facts presented, as to whether the proposed transaction or series of transactions might appear to or actually create a conflict with the interests of any of the Price Advisers’ clients.  Such transactions include transactions in futures and options on futures involving financial instruments regulated solely by the U. S. Commodity Futures Trading Commission. 

Closing or Exercising Option Positions.   If you are the holder of an option and you intend to close (sell) the option or exercise the option, prior transaction clearance is required.  However, if you have written (sold) an option and the option is exercised against you, without any action on your part, no prior transaction clearance is required. A client transaction in the underlying security or any restriction associated with the underlying security may prevent any option transaction from being closed or exercised, therefore Access Persons should be cautious when transacting in options. 

  

Short Sales.  Short sales by Access Persons are subject to prior clearance unless the security itself does not otherwise require prior clearance.  Short sale transactions in long and narrow ETFs, as well as the Price ETFs are prohibited.  In addition, Access Persons may not sell any security short which is owned by any client of one of the Price Advisers unless a transaction in that security would not require prior clearance.  Short sales of Price Group stock are not permitted.  All short sales are subject to the 60-Day Rule. 

  

The 60-Day Rule.  Access Persons are prohibited from profiting from the purchase and sale or sale and purchase (e.g., short sales, sell to open, and other similar transactions) of the same (or equivalent) securities within 60 calendar days.  An “equivalent” security means any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege at a price related to the subject security, or similar securities with a value derived from the value of the subject security.  Thus, for example, the rule prohibits options transactions on or short sales of a security that may result in a gain within 60 days of the purchase of the underlying security.  Any series of transactions made which violate (or are counter to) the spirit of the 60-Day Rule, such as the establishment of a long position and subsequent establishment of a short position (or vice versa), in the same (or equivalent) security, may be deemed a violation by the Ethics Committee.  This prohibition is not intended to include legitimate hedging transactions.  If you have questions about whether a contemplated transaction would violate the 60-Day Rule or the spirit of the Rule, you should seek an interpretation from Code Compliance prior to initiating the transaction.  Violations of the 60-Day Rule will be subject to a disgorgement of profit and any other applicable sanctions.  The disgorgement of profit does not take into consideration any tax lot accounting associated with the security.  It is simply the calculated gain as a result of the buy and sale (or sale and purchase) within the 60-day period. 

  

In addition, the rule applies regardless of the Access Person’s other holdings of the same security or whether the Access person has split his or her holdings into tax lots.  For example, if an Access Person buys 100 shares of XYZ stock on March 1 and another 100 shares of XYZ stock on November 27, he or she may not sell any shares of XYZ stock at a profit for 60 days following November 27.  Similarly, an Access Person must own the underlying security for more than 60 days before entering into any options transaction on that security. 

  

  

The 60-Day Rule “clock” restarts each time the Access person trades in that security. 

  

The closing of a position in an option or Contract for Difference on any security other than an index will result in a 60-Day Rule violation if the position was opened within the 60-day window and the closing transaction results in a gain.  Multiple positions will not be netted to determine an overall gain or loss in options on the same underlying security expiring on the same day unless the offsetting option positions were clearly part of an options strategy.  Contact the Legal Compliance Employee Trading mailbox regarding the applicability of the contemplated strategy with the 60-Day Rule. 

  

The 60-Day Rule does not apply to: 

·

Any transaction by a Non-Access Person other than transactions in Price Group stock not excluded below; 

·

Any transaction which because of its nature or the nature of the security involved does not require prior transaction clearance (e.g., if an Access Person inherits a security, a transaction that did not require prior transaction clearance, then he or she may sell the security inherited at a profit within 60 calendar days of its acquisition; other examples include the purchase or sale of a unit investment trust, the exercise of a corporate stock option by an Access Person’s spouse, or pro-rata distributions; 

·

Any transaction in Price Group stock effected through the ESPP (note that the 60-Day rule does apply to shares transferred out of the ESPP to a securities account; generally, however, an employee remaining in the ESPP may not transfer shares held less than 60 days out of the ESPP); 

·

The exercise of “company-granted” Price Group stock options or receipt of Price Group shares through Company-based awards and the subsequent sale of the derivative shares; and 

·

Any purchase of Price Group stock through an established dividend reinvestment plan. 

  

Access Persons are responsible for checking their compliance with this rule before entering a trade.  If you have any questions about whether this rule will be triggered by a proposed transaction, you should contact Code Compliance or International Compliance before requesting prior transaction clearance for the proposed trade.  Access Persons may request in writing an interpretation from the Chairperson of the Ethics Committee that the 60-Day Rule should not apply to a specific transaction or transactions. 

  

Expanded Holding Period Requirement for Employees in Japan.  Securities owned by staff employed by TRPJ may be subject to a longer holding period than 60 days.  If you have any questions about this restriction, you should contact International Compliance. 

  

Investments in Non-Listed Securities Firms.  Access Persons may not purchase or sell the shares of a broker-dealer, underwriter or federally registered investment adviser unless that entity is traded on an exchange or listed as a NASDAQ stock or prior transaction clearance is given under the private placement procedures. 

  

REPORTING OF ONE – HALF OF ONE PERCENT OWNERSHIP.  If an employee owns more than ½ of 1% of the total outstanding shares of a public or private company, he or she must immediately report this in writing to Code Compliance (via the Code of Ethics mailbox), providing the name of the company and the total number of such company’s shares beneficially owned. 

  

GAMBLING RELATED TO THE SECURITIES MARKETS.  

All associates subject to the Code are prohibited from wagering, betting or gambling related to individual securities, securities indices, currency spreads, or other similar financial indices or instruments.  This prohibition applies to wagers placed through casinos, betting parlors or internet gambling sites and is applicable regardless of where the activity is initiated (e.g., home or firm computer or telephone).  This specific prohibition does not restrict the purchase or sale of securities through a securities account reported to Code Compliance even if these transactions are effected with a speculative investment objective.   

  

INITIAL DISCLOSURE OF PERSONAL SECURITIES HOLDINGS BY ACCESS PERSONS.  Upon commencement of employment, appointment or promotion (no later than 10 calendar days after the starting date), each Access Person, except an independent director of the Price Funds or Price ETFs, is required by U.S. securities laws to disclose all current securities holdings in which he or she is considered to have beneficial ownership or control (“Initial Holdings Report") (see page 5-4 for definition of the term Beneficial Owner) and provide or reconfirm the information regarding all of his or her securities accounts.  Access Persons should use myTRPcompliance, located on the Exchange, to disclose and certify their Initial Holdings Report.  SEC Rules require that each Initial Holding Report contain, at a minimum, the following information: 

  

·

Securities title; 

·

Securities type; 

·

Exchange ticker number or CUSIP number, as applicable; 

·

Number of shares or principal amount of each reportable securities in which the Access Person has any direct or indirect beneficial ownership; 

·

The name of any broker, dealer or both with which the Access Person maintains an account in which any securities are held for the Access Person’s direct or indirect benefit; and 

·

The date the Access Person submits the Initial Holding Report. 

  

The information provided must be current as of a date no more than 45 days prior to the date the person becomes an Access Person. 

  

ANNUAL DISCLOSURE OF PERSONAL SECURITIES HOLDINGS BY ACCESS PERSONS.  Each Access Person, except an independent director of the Price Funds or Price ETFs, is also required to file an Annual Compliance Certification as of December 31 of each year.  This report can be completed by using myTRPcompliance located on the Exchange.  This report is due by no later than January 31.  The Chief Compliance Officer or their designee reviews all Annual Compliance Certifications. 

  

  

SANCTIONS. Strict compliance with the provisions of this Statement is considered a basic provision of employment or other association with Price Group, Price Funds, and the Price ETFs. The Ethics Committee, the Code Compliance Team, and the TRP International Compliance Team are primarily responsible for administering this Statement.  In fulfilling this function, the Ethics Committee will institute such procedures as it deems reasonably necessary to monitor each person’s and entity’s compliance with this Statement and to otherwise prevent and detect violations. 

  

  

Violations by Access Persons, Non-Access Persons and Independent Directors of Price Group.  Upon discovering a material violation of this Statement by any person or entity other than an independent director of a Price Fund, the Ethics Committee will impose such sanctions as it deems appropriate and as are approved by the Management Committee or the Board of Directors including, inter alia, a letter of censure or suspension, a fine, a suspension of trading privileges or termination of employment and/or officership of the violator.  In addition, the violator may be required to forfeit any profit realized from any transaction that is in violation of this Statement to the T. Rowe Price Foundation or an approved international non-profit organization.  All material violations of this Statement shall be reported to the Board of Directors of Price Group and to the Board of Directors of any Price Fund or Price ETF with respect to whose securities such violations may have been involved. 

  

Following are sanctions guidelines associated with violations of this Statement.  These guidelines are supplemental to the forfeiture of profit associated with certain violations where an associate economically benefited.  Code Compliance will utilize a rolling two-year, look-back period in the administration of the sanctions guidelines.   

  

First Violation 

·

Associate and manager notification, and 

·

Associate required to complete online remedial training course. 

  

Second Violation 

·

Associate and escalated manager notifications up to, and including, applicable Management Committee (“MC”) member, 

·

Associate required to complete online remedial training course, 

·

Associate required to meet with applicable Chief Compliance Officer and Senior Compliance Manager, and 

·

Associate fined according to officer or role guidelines. 

  

Associate 

VP TRP Group 

Investment Personnel 

Portfolio Manager, 

Business Unit Leader, 

MC Member 

$250 

$750 

$750 

$1,500 

  

Third Violation 

·

Associate and escalated manager notifications up to, and including, applicable Management Committee (“MC”) member, 

·

Chief Executive Officer notified, 

·

Associate required to complete online remedial training course, 

·

Associate subject to three-month trading prohibition, and 

·

Associate fined according to officer or role guidelines. 

  

Associate 

VP TRP Group 

Investment Personnel 

Portfolio Manager, 

Business Unit Leader, 

MC Member 

$500 

$2,000 

$2,000 

$5,000 

  

  

Fourth Violation 

·

Sanctions to be determined by Ethics Committee. 

  

Violations by Independent Directors of Price Funds or Price ETFs.  Upon discovering a material violation of this Statement by an independent director of a Price Fund, the Ethics Committee shall report such violation to the Board on which the director serves.  The Price Fund or Price ETF Board will impose such sanctions as it deems appropriate. 

  

T. ROWE PRICE GROUP, INC. 

STATEMENT OF POLICY  

ON 

SYSTEMS SECURITY AND RELATED ISSUES 

  

Purpose of Statement of Policy (“Statement”).  The central and critical role of computer systems in our firm’s operations underscores the importance of ensuring their confidentiality, availability, and integrity.  Our data is an extremely valuable asset and should be protected by all system users.  Data within the T. Rowe Price Group network should be considered proprietary and confidential and should be protected as such.  This Statement should be read in conjunction with the Statement of Policy on Privacy (page 8-1). 

  

Systems activities and information will be referred to collectively in this Statement as the “Systems”. The Systems include all hardware, software, operating systems, and wired and wireless network resources involved in the business of T. Rowe Price; all information transmitted, received, logged or stored through the Systems including email, voice mail, messaging, printers, and online facsimiles; and all back-ups and records retained for regulatory or other purposes including all portable and fixed storage media and locations for storage. Information also includes any work products that are created while working at or on behalf of T. Rowe Price and are the exclusive property of T. Rowe Price unless otherwise stipulated. 

  

The Systems also include the use of computer access, data, services and equipment provided by T. Rowe Price including any access to the Internet or via Internet; access to and use of commercial and specialized software programs and systems licensed or developed for the firm’s use; access to and use of customer and T. Rowe Price business data; use of and data on T. Rowe Price desktop and portable computers, and other mobile devices such as smart phones and tablets. The use, access, or storage of data on non-T. Rowe Price equipment (including but not limited to personally owned or “home” equipment, hotel or business center-supplied devices, web and/or cloud services, and conference supplied or internet café terminals) used for T. Rowe Price business purposes is included in the definition of systems, as appropriate. 

  

Any new device, application or methodology offered by T. Rowe Price subsequent to the date of this version of this Statement, or that comes into common use for business purposes, is also covered under this definition of T. Rowe Price Systems and information. 

  

This Statement establishes an acceptable use policy for all Price Group Associates and all other individuals, including vendors, cloud services, service providers and contractors, with Price Group systems access.  

  

The Statement has been designed to give associates guidelines to: 

  

·

Maintain and protect the integrity of customer, corporate, and employee confidential information; 

·

Prevent the unauthorized use of or access to our firm’s computer Systems; 

·

Prevent breaches and the introduction of malicious software; and  

·

Respond to incidents and alert management in accordance with defined practices. 

Any material violation of this Statement may lead to disciplinary sanctions, up to and including dismissal of individuals involved.  Additionally, actions in violation of this Statement may constitute a crime under applicable laws. 

By using the firm’s Systems, you agree to be bound by this Statement and consent to the access to and disclosure of all information by the firm and do not have any expectation of privacy in connection with the use of the Systems. 

  

SECURITY PRINCIPLES.  T. Rowe Price maintains a security organization, with supporting policies, to provide guidance and direction on appropriate security controls to all associates and users. Key principles for end users or associate behavior include: 

  

·

Security Responsibility. Security is everyone’s responsibility at T. Rowe Price. 

·

Suspicious Activity. Report all suspicious activity to the Help Desk immediately. 

·

Authorized System Users.  Access to systems is restricted to authorized users who need access in order to support their business activities. This includes systems that are External to the T. Rowe Price environment. 

·

User-IDs and Passwords.  Every user is assigned a unique User-ID.  Each User-ID has a password that must be kept confidential by the users. Employee IDs and easily deducible information should not be used for passwords. Users will be held accountable for work performed with their User-IDs.  

·

Secure Desk / Asset. Sensitive information must be secured and/or locked appropriately when unattended. This includes electronic and physical information. 

·

Mobile Assets. All portable computer equipment (e.g., laptops, smart phones, flash drives) containing information that is sensitive must be encrypted and password protected where possible. In the event of loss or theft, contact the Help Desk immediately. 

·

Incident Response. T. Rowe Price has the authority, at its own discretion, to disable any ID or activity as needed to respond to a security issue.  Efforts will be made to contact presumed owners of these IDs as appropriate; however, IDs may be disabled as part of system or vulnerability management processes. 

  

INTERNET ACCESS AND OTHER ONLINE SERVICES.  Accessing the Internet and accessing T. Rowe Price systems from the Internet presents special security considerations due to the nature of the connection and the security concerns present in Internet services.  When using Internet access or other online services, the following policies apply: 

  

·

The use of firm Systems is intended for legitimate business purposes and individuals should limit personal use. You may not use the firm’s Systems in any way that might pose a business risk or data privacy risk or in a manner that violates laws.  

·

Do not use firm’s Systems to access or send inappropriate content, including, but not limited to adult or gambling internet sites or to create or forward communications that could be offensive to others or embarrassing to you or T. Rowe Price.  

·

T. Rowe Price may block access to internet sites or emails without prior notice based on potential risk to the firm or for other business reasons.   

·

You may not access or download anything for installation or storage onto the firm’s computers for personal use including, but not limited to, streaming media, videos, music, games, or messaging and mail applications. 

·

T. Rowe Price Systems may not be used to remotely control, maintain, or service unauthorized computers or systems.  T. Rowe Price systems may not be connected to non-T. Rowe Price networks, as this could lead to system attack/compromise and data loss. Wireless routers and/or hotspots may not be connected to the T. Rowe Price network. 

·

No person or entity may contract for domain names for use by Price Group or for the benefit of Price Group without express authority from the Legal & Compliance Department.  Internet domain names are assets of the firm and are purchased and maintained centrally.  This also includes free account registrations such as those on social networking sites and web email. 

·

Only approved Systems and solutions may be used to conduct T. Rowe Price business. The independent use of other technologies, including peer-to-peer file sharing networks or software, web file storage, removeable storage devices (e.g. USB and hard drives), and Instant Messaging, are prohibited as they may not meet regulatory requirements to transfer, monitor and archive electronic communications. No personal email accounts may ever be used to send or receive business or client related communications. 

·

Associates are prohibited from using personal mobile devices to conduct Price Group business activities except as defined in the Mobile Device Policy or as authorized by management. Non-public customer information may not be stored on personal mobile devices. If personal devices are used to conduct business activities, personal devices and/or content could be requested as part of an investigation or subpoena.  

·

The Technology and Recovery Centers are considered sensitive locations and their location should not be publicly disclosed. If asked for their location by clients or others, please direct the inquiry to your manager or the Help Desk for evaluation.  

  

Guidelines for Installing Software.  Only approved software is authorized to be installed on Price Group systems.  Any software program that is used by Price Group personnel in connection with the business of the firm must be ordered through the Help Desk.  T. Rowe Price has the authority, at its own discretion; to remove any installed software, downloaded software, or any other application or executable that is not authorized for use by Price Group or may pose a security risk. 

  

Downloading or Copying and Remote Printing.  Downloading or copying software using T. Rowe Price Systems, including documents, graphics, programs and other computer-based materials, from any outside source is not permitted unless it is authorized. Downloads and copies may introduce viruses and malicious code into Systems. Downloading or uploading copyrighted materials may violate the rights of the authors of the materials, may create a liability, privacy or security breach, or cause embarrassment to the firm. Downloading or copying T. Rowe Price data or source code to an unapproved removable storage device is prohibited.  Remotely printing T. Rowe Price data from any outside printer (e.g. hotel, home, etc.) is not permitted unless authorized. 

  

PROTECTION FROM MALICOUS CODE.  “Malicious code” is computer code that is designed to damage or access software or data on a computer system.  T. Rowe Price manages a comprehensive malicious code prevention and control program to protect Systems and data.  Introducing a virus or similar malicious code into the Price Group Systems by engaging in prohibited actions or by failing to implement recommended precautions may lead to disciplinary actions.  Pranks, jokes, or other actions that simulate or trigger a system security event such as, but not limited to, a computer virus are prohibited. Users must comply with the following security practices: 

·

Contact the Help Desk.  Immediately contact the Help Desk for anything that appears suspicious or is identified as malicious.  The Help Desk will determine whether the device is infected, the severity of the infection, and the appropriate remedial actions. 

·

Be Careful when Opening Emails.  Carefully review emails, attachments, or links prior to opening or accessing them, as they may contain malicious code or viruses.  Report suspicious emails as soon as feasible.   

·

Approved Devices. Only connect devices issued or approved by T. Rowe Price into Systems to reduce the risk of malware infections. This includes, but is not limited to, thumb drives, mobile devices such as smart phones or tablets, and gadgets/novelties powered by USB ports.  

·

Maintain Security Settings.  Users should not disable virus scanning features, password settings, or other security features for any reason.  Failure to maintain updated scanning files is also prohibited. 

·

Keep T. Rowe Price Mobile Assets Updated.  Users who receive a Price Group technology asset must install updates as instructed by the Help Desk and/or connect the asset to the Price Group network on a regular basis to receive software, application, and operating system security updates.   

·

Keep Personal Computer Assets Updated.  Users must maintain anti-virus software, application, and operating system security updates on all non-T. Rowe Price or personally owned assets that are used to access the T. Rowe Price network.  Remote devices that do not meet these requirements may be prevented from connecting to the T. Rowe Price network. 

·

Report Unauthorized Network Connections.  Report any attempts to create an unauthorized or foreign connection to the network to the Help Desk. 

  

CONFIDENTIALITY OF SYSTEM ACTIVITIES AND INFORMATION.  System activities and access on Price Group computers is subject to monitoring by firm personnel or others.  All such information are records of the firm and the sole property of the firm.  The firm reserves the right to monitor, access, and disclose for any purpose all information, including all messages sent, received, transmitted, or stored through the Systems.  

  

Certain departments at T. Rowe Price record telephone conversations placed to and from the department (this includes but is not limited to the Call Centers and Corporate Actions Department).  These recordings are made for various purposes, such as for quality review, when required by law, recording of instructions, as well as for other business reasons.  Any telephone conversations placed to and from these departments (including internal calls) will be recorded and subject to monitoring.   

  

Information, including electronic communications, entered into our firm’s computers but later deleted from the Systems may continue to be maintained for applicable periods on our firm’s back-up repositories or in records retained for regulatory or other purposes.  

  

PARTICIPATION ON SOCIAL MEDIA SITES.  Associates are directed to the Social Media Policy located on the Exchange to understand their responsibilities with respect to social media. 

  

QUESTIONS REGARDING THIS STATEMENT.  Please contact the Legal & Compliance Department if you have any questions regarding this Statement. 

  

  

T. Rowe Price Group, Inc. 

Statement of Policy 

On 

Compliance with Antitrust Laws 

  

Purpose of Statement of Policy.  To protect the interests of Price Group and its personnel, Price Group has adopted this Statement of Policy on Compliance with Antitrust Laws (“Statement”) to: 

  

·

Describe the legal principles governing prohibited anticompetitive activity in the conduct of Price Group’s business; and 

·

Establish guidelines for contacts with other members of the investment management industry to avoid violations of the antitrust laws. 

  

The Basic U.S. Anticompetitive Activity Prohibition.  Section 1 of the U.S. Sherman Antitrust Act (the “Act”) prohibits agreements, understandings, or joint actions between companies that constitute a “restraint of trade”, i.e., that reduce or eliminate competition. 

  

This prohibition is triggered only by an agreement or action among two or more companies; unilateral action never violates the Act.  To constitute an illegal agreement, however, an understanding does not need to be formal or written.  Comments made in conversations, casual comments at meetings, or even as little as “a knowing wink,” as one case says, may be sufficient to establish an illegal agreement under the Act. 

  

The agreed-upon action must be anticompetitive.  Some actions are “per se” anticompetitive, while others are judged according to a “rule of reason.” 

  

·

Some activities have been found to be so inherently anticompetitive that a court will not even permit the argument that they have a pro-competitive component.  Examples of such per se illegal activities are bid-rigging; agreements between competitors to fix prices or terms of doing business; to divide up markets in any way, such as exclusive territories; or to jointly boycott a competitor or service provider. 

·

Other joint agreements or activities will be examined by a court using the rule of reason approach to see if the pro-competitive results of the arrangement outweigh the anticompetitive effects.  Under certain circumstances, permissible agreements among competitors may include a buyers’ cooperative, or a syndicate of buyers for an initial public offering of securities.  The rule of reason analysis requires a detailed inquiry into market power and market conditions. 

  

There is also an exception for joint activity designed to influence government action.  Such activity is protected by the First Amendment to the U.S. Constitution.  For example, members of an industry may agree to lobby Congress jointly to enact legislation that may be manifestly anticompetitive. 

  

Penalties for Violating the Sherman Act.  A charge that the Act has been violated can be brought as a civil or a criminal action.  Civil damages can include treble damages, plus attorney’s fees.  Criminal penalties for individuals can include fines of up to $1,000,000 and ten years in jail, and $100 million or more for corporations.  The maximum fine may be increased to twice the amount conspirators gained from the illegal acts or twice the money lost by the victims of the crime, if either of those amounts is over $100 million. 

  

Situations in Which Antitrust Issues May Arise.  To avoid violating the Act, any discussion with other members of the investment management industry regarding which securities to buy or sell and under what circumstances we buy or sell them, or about the manner in which we market our mutual funds, other commingled vehicles, and investment and retirement services, must be made with the prohibitions of the Act in mind.  In addition, any discussion with our competitors about the use of particular vendors or service providers may implicate the Sherman Act. 

  

Trade Association Meetings and Activities.  A trade association is a group of competitors who join together to share common interests and seek common solutions to common problems.  Such associations are at a high risk for anticompetitive activity and are closely scrutinized by regulators.  Attorneys for trade associations, such as the Investment Company Institute, are typically present at meetings of members to assist in avoiding violations. 

  

Permissible Activities: 

·

Discussion of how to make the industry more competitive. 

·

An exchange of information or ideas that have pro-competitive or competitively neutral effects, such as: methods of protecting the health or safety of workers; methods of educating customers and preventing abuses; and information regarding how to design and operate training programs. 

·

Collective action to petition government entities. 

  

Activities to Avoid: 

·

Any discussion or direct exchange of current information about prices, salaries, fees, or terms and conditions of sales.  Even if such information is publicly available, problems can arise if the information available to the public is difficult to compile or not as current as that being exchanged. 

·

Discussion of specific customers, markets, or territories. 

·

Negative discussions of service providers that could give rise to an inference of a joint refusal to deal with the provider (a “boycott”). 

  

Investment-Related Discussions 

  

Permissible Activities: 

  

·

Buyers or sellers with a common economic interest may join together to facilitate securities transactions that might otherwise not occur, such as the formation of a syndicate to buy in a private placement or initial public offering of an issuer’s stock, or negotiations among creditors of an insolvent or bankrupt company.   

  

·

Competing investment managers are permitted to serve on creditors’ committees together and engage in other similar activities in connection with bankruptcies and other judicial proceedings. 

  

  

Activities to Avoid: 

  

·

It is important to avoid anything that suggests involvement with any other firm in any threats to “boycott” or “blackball” new offerings, including making any ambiguous statement that, taken out of context, might be misunderstood to imply such joint action.  Avoid careless or unguarded comments that a hostile or suspicious listener might interpret as suggesting prohibited coordinated behavior between Price Group and any other potential buyer. 

  

Example:  After an Illinois municipal bond default where the state legislature retroactively abrogated some of the bondholders’ rights, several investment management complexes organized to protest the state’s action.  In doing so, there was arguably an implied threat that members of the group would boycott future Illinois municipal bond offerings.  Such a boycott would be a violation of the Act.  The investment management firms’ action led to an 18-month U.S. Department of Justice investigation.  Although the investigation did not lead to any legal action, it was extremely expensive and time consuming for the firms and individual managers involved. 

  

·

If you are present when anyone outside of Price Group suggests that two or more investors with a grievance against an issuer coordinate future purchasing decisions, you should immediately reject any such suggestion.  As soon as possible thereafter, notify the Legal Department, which will take whatever further steps are necessary. 

  

Benchmarking. Benchmarking is the process of measuring and comparing an organization’s processes, products and services to those of industry leaders for the purpose of adopting innovative practices for improvement. 

  

·

Because benchmarking usually involves the direct exchange of information with competitors, it is particularly subject to the risk of violating the antitrust laws. 

·

The list of issues that may and should not be discussed in the context of a trade association also applies in the benchmarking process. 

·

All proposed benchmarking agreements must be reviewed by the Legal & Compliance Department before the firm agrees to participate in such a survey. 

  

Discussions with Companies 

It is acceptable for Price Group personnel to have individual discussions with executives of companies whether or not Price Group advisers have invested in those companies on behalf of investment advisory clients.  However, caution should be exercised when having discussions with multiple companies that are in the same industry; particularly companies in concentrated industries.  It could create legal issues if an individual or entity that speaks with competing companies passes confidential or sensitive business information between or among those companies.  Such indirect exchanges of information could be evidence of collusion among the competing firms and the individual or entity passing the information could be the subject of litigation alleging industry collusion.  For the same reason, you should avoid discussions with executives of companies that suggest a common industry position on a competitive issue such as prices, supply, capacity, market entry, or product development, especially that you or Price Group is suggesting or endorsing such a common position.  If you have questions about the acceptable scope of discussions with companies, contact the Legal & Compliance Department. 

  

Antitrust Restrictions Related to Acquisitions, Mergers and Other Transactions 

Basic Restrictions.  The U.S. Clayton Act bars any corporate transaction that is likely to substantially lessen competition in a particular market.  This law applies not just to mergers, but to any acquisition of stock or assets, regardless of whether it transfers ownership or control.  Generally, acquisitions by Price Group and similar entities do not raise issues under the Clayton Act. However, acquisitions of shares in competing companies by active investors who may seek to alter the competitive behavior of the companies they hold can be subject to challenge under the Clayton Act. 

Reporting Requirements.  Acquisitions of any significant size may be reportable to government antitrust authorities.  In general, acquisitions by Price Group advisers on behalf of investment advisory clients are exempt from such requirements so long as the acquisitions are made solely for investment purposes.  However, if any Price Group entity or employee seeks to influence the regular business decisions of a company in which Price Group advisers have holdings, the exemption from reporting may not apply.  Contact the Legal & Compliance Department if you have any questions. 

International Requirements.  The UK, European Union (“E.U.”), and several countries in the Asia-Pacific (“APAC”) region have requirements based on principles similar to those of U.S. law.  In many cases, the laws of the E.U. are stricter than the laws of the U.S.  If you have specific questions about UK, E.U., or APAC requirements, contact the Legal & Compliance Department. 

Antitrust Laws Relating to Employment 

The U.S. antitrust laws apply to competition among firms to hire employees.  An agreement among competing employers to fix the terms of employment for potential hires or to limit employment of another’s employees can subject the firm or individual to civil or criminal enforcement action. 

  

T. Rowe Price Group, Inc. 

Statement of Policy  

on  

Privacy 

  

Scope and Enforcement 

This Policy applies to all T. Rowe Price associates, contractors and directors with respect to all operations carried out globally by T. Rowe Price which involve the processing of personal data. 

  

It is the responsibility of every associate, contractor and director throughout T. Rowe Price to comply with this Policy. Understanding of this Policy is supported through mandatory training for associates and contractors. The principles behind the Policy also are reflected in T. Rowe Price’s Code of Ethics and Conduct, acknowledgement of which is required on an annual basis. Violations of this Policy may constitute grounds for disciplinary actions, up to and including, termination of employment or removal from your position. 

  

T. Rowe Price senior management ultimately is responsible for promoting compliance to this Policy. 

  

Definitions 

Data Security Incident means an event that impacts the security (confidentiality, integrity, or availability) of personal data, institutional client data, and/or T. Rowe Price confidential data by: 

a.

Ending up in an unexpected place, either internal or external to T. Rowe Price,  

b.

Being accessible in a way that is broader than intended,  

c.

Being lost or stolen,  

d.

Being altered in an unexpected or unauthorized way, or 

e.

Being unavailable in an unexpected or unauthorized way. 

  

Personal Data means any information relating to an individual that identifies the individual or could reasonably be used to identify the individual regardless of the medium involved (e.g., paper, electronic, video or audio) or how it was obtained (e.g., from an application form or through a cookie on a website that can identify an individual). Examples of personal data include contact details, identification numbers, financial data, passwords, IP addresses, pictures, online search history, and geolocation information. As required by applicable law, it also includes sensitive personal data, such as health or medical information, government-issued identification numbers, racial or ethnic origin, political opinions, religious or similar beliefs, trade union memberships, criminal offenses, sexual life information and genetic or biometric data. 

  

The most common sources of personal data relates to clients and associates. While the privacy/data protection laws of countries typically do not extend to entities or non-personal data, we apply appropriate security safeguards to protect information related to clients and other confidential data as defined in this Code. 

  

Processing means any operation or set of operations which is performed on personal data or on sets of personal data, whether or not by automated means, such as collection, recording, organization, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, restriction, erasure or destruction. 

  

Privacy Principles 

T. Rowe Price's business operations shall be consistent with the following Privacy Principles. These principles are binding across our business. 

  

4.

Lawful Processing.  T. Rowe Price collects, uses, and shares personal data where we have lawful grounds and legitimate business reasons for doing so. We are subject to data protection and privacy laws within each of the jurisdictions in which we operate and we undertake to conduct our business in compliance with these laws. We also are committed to helping individuals understand what information we collect, how we use it, the circumstances under which we share it with third parties, and, as applicable, what choices they have. We explain this to clients, associates and business contacts in our privacy notices as required by applicable law. We review our privacy notices regularly to keep them up to date and to ensure they match our internal practices. 

  

5.

Purposes.  We collect personal data for legitimate purposes, and we strive to collect only as much personal data as we need to achieve those purposes. Though personal data can help us improve the services we provide, we should leverage it in a manner that is compliant with applicable regulation and consistent with and proportionate to our corporate policies and goals. 

  

6.

Data Accuracy.  The firm take steps to ensure that the personal data we hold is accurate, relevant, and, where necessary, kept up to date. 

  

7.

Data Retention and Disposal.  We keep personal data to comply with applicable laws and obligations and take steps to ensure the safe destruction or de-identification of personal data when it is no longer required by law to be retained or it is no longer necessary for a legitimate business purpose. 

  

8.

Rights of Individuals.  T. Rowe Price is committed to addressing the privacy rights of individuals, as set forth in applicable laws, with respect to our processing of their personal data. 

  

9.

Information Security.  We use appropriate technical and organizational measures to keep personal data secure and ensure its integrity, confidentiality and availability across our systems. We regularly evaluate changes in technology and changes in risk and respond as appropriate. 

  

10.

International Transfers of Personal Data.  T. Rowe Price is a global business and as such we transfer personal data internationally in the normal course of business. We are committed to maintaining adequate safeguards, as required by applicable laws, to protect the personal data we transfer to a country that is not regarded as having fully equivalent data protection laws. 

  

11.

Accountability.  We are all responsible for upholding the Privacy Principles and respecting individuals' privacy rights. We have a collective and individual duty to protect our clients’, associates’ and business partners’ personal data. In order to create an environment of trust and to comply with applicable laws, all individuals operating within or on behalf of T. Rowe Price are required to comply with our Privacy Principles, including proactively applying Privacy by Design to help us uphold our commitments to the protection of personal data. 

  

Roles and Responsibilities 

While the Privacy Principles apply to all of us at T. Rowe Price, stakeholders at different corporate levels within T. Rowe Price play a role in ensuring overall privacy risk management and data protection compliance. 

Every business unit is responsible for: 

·

Understanding and implementing this Policy and other applicable internal policies and procedures. 

·

Ensuring compliance with the applicable public facing privacy notices, and other privacy commitments. 

·

Ensuring the security of the personal data it maintains, including 

•

Allowing access to personal data only to those who require access for their job 

functions. 

•

Reporting any known or suspected data security incidents promptly to the Help Desk, option 2 (see Legal & Compliance widget on the TRP Exchange for current international toll-free numbers). 

Every associate and contingent worker is responsible for: 

·

Applying the Privacy Principles to the collection, use, and sharing of personal data and following our policies, procedures and standards regarding privacy. 

Ø

Learn how to identify personal data and report any questions to the Global Privacy Office. 

Ø

Use and share personal data consistent with the purpose(s) for which it was collected. 

Ø

Ensure that personal data is accurate, relevant, and, where necessary, kept up to date. 

Ø

Secure personal data (paper and electronic) through appropriate security safeguards against risks such as loss, unauthorized access or use, destruction, modification, or unintended or inappropriate disclosure. 

Ø

Avoid accessing, collecting or storing personal data that is not necessary for your current job responsibilities. 

Ø

Dispose of personal data securely. For example; by using shredders or secured shred/recycle bins provided in offices or appropriate electronic erasure. 

Ø

Remember that personal data belongs to T. Rowe Price and may not be copied, transferred or otherwise removed without permission. 

·

Using T. Rowe Price data and equipment appropriately and securely. 

Ø

Use T. Rowe Price data, systems and equipment for legitimate business purposes only and in accordance with applicable policies, guidelines and instructions. 

Ø

Use secure transmission protocols when sending personal data outside of T. Rowe Price (e.g., encrypted file transfers and not unencrypted emails or attachments). 

Ø

Limit internal access to personal data to those with a genuine “need to know,” and limit the amount of personal data to that which is necessary to accomplish the business purpose. 

Ø

Do not install or use any unapproved software. 

Ø

Manage business applications on TRP computers and telecommunications devices in accordance with this Global Privacy Policy and any separate policies of Global Technology for a particular type of device or system. 

·

Reporting known or suspected data security incidents. 

Ø

Report known or suspected data security incidents without delay to the Help Desk (Select option 2 on Help Desk menu) and also follow any internal reporting required within your business unit. Be alert for: 

o

Suspicious activity related to a computer, network, or software application. 

o

Potential or actual loss, misuse, improper access or modification of personal data. 

o

The security of any system or device containing personal data has been compromised. 

o

An incident in which personal data has been accessed, used or disclosed in violation of any applicable policy. 

o

Once submitted, the incident will be investigated, and corrective actions implemented, as necessary or as appropriate. 

·

Completing required training. 

Ø

Complete all required privacy and information security training. 

  

  

  

  

  

  


LSV ASSET MANAGEMENT

CODE OF ETHICS

AND

PERSONAL TRADING POLICY

March 3, 2021

1

LSV Asset Management Code of Ethics and Personal Trading Policy

I. GENERAL POLICY

LSV Asset Management ("LSV") serves as discretionary investment adviser to a variety of clients, including pension plans, foundations, endowments, corporations, unregistered pooled funds and mutual funds ("Advisory Clients"). The securities accounts over which LSV has investment discretion on behalf of these Advisory Clients are referred to in this document as "Investment Vehicles".

All natural persons who are employees of LSV ("Staff Members") must act in accordance with this Code of Ethics and Personal Trading Policy ("Policy") and in a manner which avoids any actual or potential conflict of interest. Staff Members must not take advantage of their position of trust and responsibility, and must place the interests of Advisory Clients first. When buying or selling securities, Staff Members must not employ any device, scheme or artifice to defraud, mislead, or manipulate any Investment Vehicle, Advisory Client or security.

Staff Members are subject to different restrictions and pre-clearance requirements for their personal trades, depending on their responsibilities or location. It is important that all Staff Members read this document carefully and understand the restrictions, pre-clearance, and reporting requirements applicable to them.

In addition to the Policy, Staff Members are subject to all applicable policies and procedures discussed in LSV's Investment Adviser Policies and Procedures Manual (the "Compliance Manual") and Information Security Policy.

Every Staff Member must read and retain a copy of this Policy, the Compliance Manual, the Information Security Policy and all amendments thereto, and agree to abide by the terms of each document.

Any questions regarding LSV's policy or procedures should be referred to the Compliance Department ("Compliance"). All violations must be promptly reported to the Chief Compliance Officer ("CCO"). No retaliation will be taken against any Staff Member solely for, in good faith, reporting a violation of this Policy, the Compliance Manual or the Information Security Policy.

II.CODE OF CONDUCT

∙All Staff Members are to maintain the highest standard of professional conduct.

∙All Staff Members must maintain the confidentiality of all information entrusted by clients.

∙All Staff Members must serve the financial interest of clients. All recommendations to clients and decisions on behalf of clients must be made solely in the best interest of clients.

∙All Staff Members must provide to clients all reasonably requested information as well as other information they may need to make informed decisions. All client inquiries must be answered promptly, completely and truthfully.

∙All Staff Members involved in sales situations must discuss fully with the prospective client the nature of services provided by LSV for the compensation it receives. All material facts relating to any actual or potential conflicts of interest involving LSV must be fully disclosed

2

LSV Asset Management Code of Ethics and Personal Trading Policy

to prospective clients. In addition, these Staff Members, in particular, must comply with the anti-bribery provisions of the Foreign Corrupt Practices Act ("FCPA").

∙All Staff Members must comply fully with all applicable Federal securities laws and regulatory requirements.

III.DEFINITIONS

A.Access Person – A Staff Member who meets any of the following criteria:

∙has access to nonpublic information regarding clients' purchase or sale of securities;

∙is involved in making securities recommendations to clients;

∙has access to securities recommendations that are nonpublic;

∙has access to nonpublic information regarding the portfolio holdings of Affiliated Mutual Funds;

∙works in LSV's Chicago office; or

∙is a director, officer, or partner of LSV.

B.Affiliated Mutual Fund – any U.S.-registered mutual fund to which LSV or an SEI Investments entity serves as investment adviser, investment sub-adviser or principal underwriter.

C.Reportable Security – any interest or instrument commonly known as a security (whether publicly traded or privately offered) including the following:

∙Equity and equity-like securities, including initial public offerings (IPOs)

∙Fixed income securities (excluding the short-term instruments listed below)*

∙Affiliated Mutual Funds (including all LSV funds, SEI funds, and funds sub-advised by LSV)**

∙iShares and exchange-traded funds

∙Convertible bonds

∙Derivatives

∙Cryptocurrencies

∙Private placements1

∙Equity and equity-like securities which an Access Person presents as a gift to a third party, including members of an Access Person's immediate family

*This includes obligations issued by state and municipal governments with maturities longer than 366 days.

**Reporting of Affiliated Mutual Fund transactions is not required if such transactions are made pursuant to an automatic investment plan, such as the 401(k) plan; provided that if a Staff Member opens a brokerage account within the 401(k) plan, the transactions in such account must be reported on the quarterly securities transaction report or by providing duplicate statements for the account to Compliance.

Reportable Security does not include:

1Private placement means an offering that is exempt from registration under the Securities Act of 1933 pursuant to section 4(2) or section 4(6) or pursuant to Rules 504, 505 or 506 of the Securities Act of 1933 (e.g., hedge funds, private equity funds and limited liability companies).

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LSV Asset Management Code of Ethics and Personal Trading Policy

Direct obligations of the Government of the United States; bankers acceptances, bank certificates of deposit, commercial paper, and high quality short-term debt instruments, including repurchase agreements; shares issued by money market funds; shares issued by open-end funds (other than Affiliated Mutual Funds); and shares issued by unit investment trusts that are invested exclusively in one or more open-end funds (other than Affiliated Mutual Funds).

D.Pre-Clearance Security – INCLUDES:

∙Equities (from any country)

∙Initial public offerings (IPOs)

∙Private placements

∙Any equity-like securities (warrants, rights, options, futures, swaps, etc. on individual equities)

∙Convertible bonds

Pre-Clearance Securities DO NOT INCLUDE publicly-traded fixed income securities, mutual funds, including Affiliated Mutual Funds, exchange-traded funds, closed-end funds and derivatives on indexes or commodities.

E.A Security is "being purchased or sold" by an Investment Vehicle from the time the purchase or sale order for the security has been recorded as an active order in LSV's trade order management system

(Charles River IMS), until the time when the order has been completed or terminated.

F.Security generally will have the meaning set forth in Section 202(a)(18) of the Investment Advisers Act of 1940, as amended (the "Advisers Act"), such that it includes: (i) any note, stock, treasury stock, security future, bond, debenture or evidence of indebtedness; (ii) any certificate of interest or participation in any profit-sharing agreement; (iii) any collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, or certificate of deposit for a security; (iv) any fractional undivided interest in oil, gas or other mineral rights; (v) any put, call, straddle, option or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof); (vi) any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency; or (vii) in general, any interest or instrument commonly known as a "security," or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the foregoing.

IV. RESTRICTIONS ON PERSONAL SECURITIES TRANSACTIONS

Access Persons who work in the Chicago office may not purchase or sell, directly or indirectly, any Pre-Clearance Security if the security is currently being purchased or sold, or has been purchased or sold by LSV for an Investment Vehicle in any of the 3 business days prior to the Access Person's trade in that security.

If an Access Person who works in the Chicago office trades in a Pre-Clearance Security and LSV subsequently purchases or sells that security for an Investment Vehicle during the 3 business day period after the Access Person's trade in that security, the Access Person's trade is subject to review and any gains or profits realized may be subject to forfeiture.

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LSV Asset Management Code of Ethics and Personal Trading Policy

If an Access Person who works in the Chicago office has requested pre-clearance to sell a security and that request has been denied, the Access Person can appeal to the CCO if they can evidence that it is a financial hardship for them not to be able to sell the security until LSV is no longer active in that security.

While LSV does not have a formal holding period once a Pre-Clearance Security has been purchased, the trading patterns of Access Persons who work in the Chicago office and request pre-clearance to sell the same security within 30 days after the initial purchase will be reviewed by Compliance in order to understand the reasoning for the sale, whether similar sales on similar timeframes are expected in the future and other factors that may be relevant based on the particular transaction.

V. PERSONAL TRADING PRE-CLEARANCE

Access Persons who work in the Chicago office must pre-clear personal transactions in any Pre- Clearance Securities.

Access Persons who do not work in the Chicago office are permitted to only pre-clear personal transactions in IPOs and private placements with the prior approval of Compliance.

For investments in LSV's private funds, acceptance of the Access Person's subscription document will be deemed to be approval of a pre-clearance request.

Unless otherwise specified by Compliance, any clearance granted is valid for 1 business day, the day on which clearance is granted.

Pre-clearance requests are currently made via the ComplySci platform and must be made during the regular trading hours of the New York Stock Exchange ("NYSE"), provided that trades can be executed during NYSE after-hours trading if, and on the same day, pre-clearance has been granted during the regular trading hours of the NYSE. Compliance will address on a case-by-case basis pre-clearance requests involving non-U.S. securities that only trade on non-U.S. exchanges or requests made by Access Persons who work in the Chicago office outside of the regular trading hours of the NYSE.

A determination as to whether non-employees who are working in the Chicago office are subject to the Policy is made on a case-by-case basis by Compliance.

The following transactions do not have to be pre-cleared:

∙Purchases or sales of instruments that are not Pre-Clearance Securities;

∙Purchases or sales over which the Access Person has no direct or indirect influence or control;

∙Purchases or sales which are non-volitional on the part of the Access Person, such as purchases or sales upon exercise of puts or calls written by the Access Person and sales from a margin account pursuant to a bona fide margin call;

∙Purchases or sales effected within the pre-determined parameters of an automatic investment plan;

∙Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer;

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LSV Asset Management Code of Ethics and Personal Trading Policy

∙Transactions effected in accounts over which a third party exercises discretion, if such account is identified to Compliance and an exception is granted by Compliance; provided that reporting of transactions and holdings in such accounts will typically be required; and

∙Transfers of equity or equity-like securities which are made as a gift to a third party, including a member of the Access Person's immediate family.

Transactions which appear upon reasonable inquiry and investigation to present no reasonable likelihood of harm to any Investment Vehicle and which are otherwise in accordance with Rule l7j-l of the Investment Company Act of 1940 (the "1940 Act") and other applicable SEC rules shall be entitled to clearance.

VI. OTHER RESTRICTIONS

Gifts and Entertainment

Staff Members may not receive gifts exceeding $200 per year from any person or entity that does or seeks to do business with LSV on behalf of any Investment Vehicle. For purposes of this section, "gift" does not include gifts that are shared in the office by multiple Staff Members (for example, holiday gift baskets). Subject to the following restrictions, Staff Members may accept meals, local transportation and reasonable entertainment received in the normal course of a business relationship from such persons or entities. If a Staff Member has any concerns regarding whether or not such entertainment is reasonable, he or she should consult with Compliance prior to accepting such entertainment. If a Staff Member receives an invitation to an entertainment event (such as a sporting event, a concert or other similar event) the value of which exceeds or is expected to exceed $200, such Staff Member must notify Compliance prior to accepting and/or attending such event. In addition, the Staff Member must report the name of the party extending the invitation, the relationship to LSV of such party and the name of the representative(s) of the party that will be present at the event. In addition to the $200 prior notification requirement, Staff Members are also required to report a gift (other than gifts shared in the office (e.g., holiday baskets)) or entertainment, in each case, of $50 or more on their quarterly securities transaction report.

Gifts (other than meals, local transportation and reasonable entertainment provided in the normal course of a business relationship) may not be made to the following clients and prospective clients without the prior approval of the CCO or Compliance Officer: fiduciaries of ERISA clients (i.e., those that exercise discretion over the ERISA plan), Taft-Hartley clients or their representatives and public fund clients or their representatives

Subject to the following, meals, local transportation and reasonable entertainment provided in the normal course of a business relationship ("Business Entertainment") may be extended to prospective clients and clients. For Business Entertainment provided to fiduciaries of ERISA clients, Taft-Hartley clients or their representatives or public fund clients or their representatives, certain restrictions, including reporting requirements, may apply. Staff members should consult with the CCO or Compliance Officer prior to incurring any such expenses if they have any questions regarding the incurrence of such expenses. Business Entertainment expenses are reviewed by the Chief Operating Officer for appropriateness.

The CCO or Compliance Officer must receive prior notification of ALL gifts exceeding $200 in value (whether or not CCO or Compliance Officer approval is required) to any person or entity that does or seeks to do business with LSV on behalf of any Investment Vehicle. ALL such gifts exceeding $200 in

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LSV Asset Management Code of Ethics and Personal Trading Policy

value must be recorded in a log provided by Compliance. This includes gifts made to consultants and anyone who is a fiduciary to the client. In addition, charitable contributions, sponsorship of scholarships or support of other events and other similar expenses incurred by the Firm from time to time may not be made to improperly influence business with any client or other party and must be pre-cleared by Compliance.

At all Business Entertainment activities provided by the Firm or its personnel, a Firm representative must attend the activity. In addition, when participating in Business Entertainment provided by others, a representative of the third party must be present. Accepting or providing Business Entertainment activities where the giver or a Firm representative, as applicable, does not attend is considered a gift subject to the restrictions on gifts described herein.

Notwithstanding the foregoing specific restrictions, no Staff Member may participate in any business relationship or accept any gift that could reasonably be expected to affect their independence, objectivity, or loyalty to clients.

Outside Business Activities

Staff Members may not serve on the board of directors of any publicly-traded company absent prior authorization from the CCO, and any employment or other outside business activity in the financial services industry must be reviewed and approved in advance by the CCO. In addition, all outside business activities, including membership on any for-profit or non-profit company board or other employment, must be reported to Compliance.

Political Contributions

Staff Members may not make political contributions to any elected official, any candidate for office, any successful candidate or any political party in any state in the United States or any political subdivision thereof. Contributions include anything of value (such as donation of office space or resources) even if not a cash contribution.

In addition, Staff Members may not solicit or coordinate campaign contributions from others for any elected official, any candidate for office, any successful candidate or any political party in any state in the United States, or any political subdivision thereof. Prohibited solicitation and coordination activities include hosting or sponsoring fundraising events.

Staff Members may not pay a third party, such as a solicitor or placement agent, to solicit a government client on behalf of LSV.

Staff Members are prohibited from making contributions to a candidate's political action committee ("PAC") or to a Super PAC supporting a particular candidate. This prohibition does not apply to contributions to the national committees or governing bodies of any recognized national political party or to contributions to other PACs not connected to any candidate or official or small group of candidates or officials. A record of all contributions to PACs by the Firm and its personnel is required to be maintained by the Firm under applicable SEC regulations. Prior to making any contribution to any PAC, Staff Members must consult with Compliance so that appropriate documentation can be obtained.

Staff Members may make contributions to the campaigns of candidates running for federal office if such candidate is not currently holding office in any state or political subdivision thereof.

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LSV Asset Management Code of Ethics and Personal Trading Policy

Political contributions and other political activities of spouses and other immediate family members of a Staff Member are not prohibited by this policy so long as they are not directed by a Staff Member.

In addition, Staff Members should note that SEC rules broadly prohibit doing anything indirectly that cannot be done directly (such as making a contribution to a PAC that will, in turn, give the contribution to a prohibited candidate).

Prior to employment, all prospective Staff Members will be required to report all (i) contributions to any elected official, any candidate for office, any successful candidate or any political party in any state in the United States or any political subdivision thereof and (ii) payments to a political party or to a PAC, in each case, within the previous two years of the date of employment.

Social Media

Staff Members may not use any form of social media, i.e. Facebook, Twitter, LinkedIn, etc., to discuss or share information about LSV, or any of its clients or products. Staff Members may post their current employment status and title at LSV (e.g., on LinkedIn), but may not post any other information about the Firm's business or products.

Anti-bribery and the FCPA

Staff Members are prohibited from engaging in any conduct on behalf of the Firm that may be construed as a bribe. In general, such conduct includes (1) offering, promising or giving any financial or other advantage to a person with the intention of influencing the person to perform his or her function improperly or where the acceptance of the advantage itself would be improper or illegal and (2) requesting, agreeing to receive or accepting any financial or other advantage where such request, agreement or acceptance would be improper or illegal or would be likely to influence the Staff Member in the performance of his or her role.

In addition, Staff Members involved in sales situations are prohibited from engaging in any conduct that would violate the anti-bribery provisions of the FCPA, specifically the making of any payments, including any offer, payment, promise to pay or authorization of the payment of money or anything of value, directly or indirectly (such as through a third party), to foreign government officials, including representatives of state-owned enterprises, representatives of sovereign wealth funds, royal family members, political parties and candidates and representatives of public international organizations (such as the International Monetary Fund), to assist in obtaining or retaining business.

Intermediaries engaged to solicit clients or provide other services to LSV are also prohibited from engaging in such prohibited activities described in this section on behalf of LSV. Staff Members that work with such parties should exercise reasonable oversight over their activities and must report any suspicious activities to Compliance.

VII. REPORTING REQUIREMENTS

The requirements of this section are applicable to Reportable Securities directly or indirectly owned by the Access Person or a member of the Access Person's immediate family (parent, spouse of a parent, child, spouse of a child, spouse, brother, or sister, including step and adoptive relationships living in the

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LSV Asset Management Code of Ethics and Personal Trading Policy

same household as the Access Person), or in any account over which the Access Person exercises investment discretion or control and in such other circumstances as determined by Compliance.

1.Access Persons must report transactions in Reportable Securities on a quarterly basis, within 30 days after the end of the quarter. Duplicate account statements may be substituted for the report if they are received by Compliance within 30 days after the end of the quarter.

2.Access Persons must report ALL new and terminated Securities accounts, including accounts that do not hold Reportable Securities and accounts over which they do not have investment discretion, within 30 days after the opening or termination of the account. This information must include the name of the broker dealer or bank at which the account is held and the date the account was established or terminated.

3.Access Persons must report all holdings of Reportable Securities and a list of all Securities accounts as of the end of the year (or as of an earlier date in December of that year) within 30 days after the end of each calendar year. Information in this report must be current as of a date no more than 45 days before the report is submitted. Duplicate account statements may be substituted for this report if they are received by Compliance within 30 days after the end of the calendar year.

4.Access Persons must report all holdings of Reportable Securities and a list of all accounts that hold Securities, even accounts that do not hold Reportable Securities, within 10 days of commencement of employment or of becoming an Access Person. The report must show holdings as of a date not more than 45 days prior to the employee becoming an Access Person.

5.Access Persons who have reported to Compliance accounts over which they do not have investment discretion, must provide acknowledgement that the status of those accounts has not changed on an annual basis via the ComplySci platform.

6.Staff Members must provide acknowledgement of the Policy and any amendments thereto, on an annual basis via the ComplySci platform.

7.Non-employees who work in the Chicago office, and have been deemed to be subject to some or all of the parts of the Policy, must report, on a quarterly basis, transactions in Reportable Securities.

VIII. COMPLIANCE REVIEW DUTIES

Compliance will (i) review the reports and information listed in VII above to ensure that pre-clearance has been appropriately obtained and all information required under the Advisers Act and the 1940 Act is contained in such reports; (ii) review the trading of Access Persons for patterns that may indicate abuse; (iii) decide on appropriate interpretations of and exceptions to the Policy and disciplinary action in the event of violation of the Policy; (iv) report material violations to LSV senior management; (v) report annually to the board of directors of investment company clients regarding material violations of the Policy and certify that appropriate procedures are in place; and (vi) provide copies of the Policy and any amendments thereto to all Staff Members.

IX. RECORDKEEPING

LSV shall preserve in an easily accessible place:

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LSV Asset Management Code of Ethics and Personal Trading Policy

∙A copy of the current Policy in effect and a copy of any predecessor policy for a period of five years after it was last in effect;

∙A record of any violation of the Policy and of any action taken as a result of the violation, for a period of five years from the end of the fiscal year in which the violation occurred;

∙A record of all acknowledgments, either written or via the ComplySci platform, for each person who is currently, or within the past five years was, required to acknowledge their receipt of this Policy and any amendments thereto. All acknowledgements for a person must be kept for the period such person is a Staff Member of LSV and until five years after the person ceases to be a Staff Member of LSV;

∙A record of each report (or broker confirmations and statements provided in lieu thereof) made by an Access Person for a period of five years from the end of the fiscal year in which the report was made, the first two years in an easily accessible place;

∙A record of the names of persons who are currently, or within the past five years were, Access Persons of LSV;

∙A record of any decision, and the reasons supporting the decision to approve Access Persons' acquisitions of IPOs or private placements for at least five years after the end of the fiscal year in which the approval is granted; and

∙A copy of each report furnished to the board of any investment company pursuant to Rule 17j- 1(c)(2)(ii) of the 1940 Act, describing issues arising under the Policy and certifying that LSV has adopted procedures reasonably designed to prevent Access Persons from violating this Policy.

X.PROHIBITION ON INSIDER TRADING

All Staff Members are required to refrain from trading on the basis of inside information about LSV, its affiliates, clients or any securities. This section provides basic information to assist Staff Members in determining if they are in possession of inside information.

What is "Material" Information?

Information is material when there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions. Generally, if disclosing certain information will have a substantial effect on the price of a company's securities, or on the perceived value of the company, or of a controlling interest in the company, the information is material. However, information may be material even if it does not have any immediate direct effect on price or value.

What is "Nonpublic" Information?

Information about a publicly-traded security or issuer is "public" when it has been disseminated broadly to investors in the marketplace. Tangible evidence of such dissemination is the best indication that the information is public. For example, information is public after it has become available to the general public through a public filing with the SEC or other governmental agency, the Dow Jones "tape", the Wall Street Journal or other publication of general circulation or televised or

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LSV Asset Management Code of Ethics and Personal Trading Policy

electronic media, including social media platforms, and after sufficient time has passed so that the information has been disseminated widely.

Information about securities that are not publicly traded, or about the issuers of such securities, is not ordinarily disseminated broadly to the public. However, for purposes of this Policy, such private information may be considered "public" private information to the extent that the information has been disclosed generally to the issuer's security holders and creditors. For example, information contained in a private placement memorandum to potential investors may be considered "public" private information with respect to the class of persons who received the memorandum, but may still be considered "nonpublic" information with respect to creditors who were not entitled to receive the memorandum. As another example, a controlling shareholder may have access to internal projections that are not disclosed to minority shareholders; such information would be considered "nonpublic" information.

Who Is an Insider?

Unlawful insider trading occurs when a person with a duty not to take advantage of material nonpublic information violates that duty. A person in possession of such information but not subject to such a duty is not prohibited from trading. Whether a duty exists is a complex legal question. This portion of the Policy is intended to provide an overview only, and should not be read as an exhaustive discussion of ways in which persons may become subject to insider trading prohibitions.

Insiders of a company include its officers, directors (or partners), and employees, and may also include a controlling shareholder or other controlling person. A person who has access to information about the company because of some special trust or other confidential relationship with a company is considered a temporary insider of that company. Investment advisers, lawyers, auditors, financial institutions, and certain consultants and all of their officers, directors or partners, and employees are all likely to be temporary insiders of their clients.

Officers, directors or partners, and employees of a controlling shareholder may be temporary insiders of the controlled company, or may otherwise be subject to a duty not to take advantage of inside information.

What is Misappropriation?

Misappropriation usually occurs when a person acquires inside information about Company A in violation of a duty owed to Company B. For example, an employee of Company B may know that Company B is negotiating a merger with Company A; the employee has material nonpublic information about Company A and must not trade in Company A's shares.

As another example, Staff Members who, because of their association with LSV, receive inside information as to the identity of the companies being considered for investment by Investment Vehicles or by other clients, have a duty not to take advantage of that information.

What is Tipping?

Tipping is passing along inside information; the recipient of a tip becomes subject to a duty not to trade while in possession of that information. A tip occurs when an insider or misappropriator (the "tipper") discloses inside information to another person, who knows or should know that the tipper was breaching

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LSV Asset Management Code of Ethics and Personal Trading Policy

a duty by disclosing the information and that the tipper was providing the information for an improper purpose.

What to do if you have Inside Information

Before executing any securities transaction for your personal account or for others, you must consider and determine whether you have access to material, nonpublic information. If you think that you might have access to material, nonpublic information, you should take the following steps:

i. Report the information and proposed trade immediately to Compliance.

ii.Do not purchase or sell the securities on behalf of yourself or others.

iii.Do not communicate the information inside or outside LSV, other than to Compliance.

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LSV Asset Management Code of Ethics and Personal Trading Policy

Acknowledgements

I have read and I understand the Policy. I certify that I have, to date, complied and will continue to comply with the Policy and any amendments thereto, and applicable Federal securities laws. I understand that any violation may lead to sanctions, including my dismissal.

☐If applicable, I certify that the status of any account(s) I have previously reported to Compliance as accounts over which a third party exercises investment discretion has not changed. PLEASE ONLY

CHECK THIS BOX IF YOU HAVE IDENTIFIED ACCOUNTS AS MANAGED.

I further certify that I am not disqualified from employment with an investment adviser as described in Section 9 of the 1940 Act.

Signature:__________________________________ Date:________________

Name (please print):_______________________________

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LSV Asset Management Code of Ethics and Personal Trading Policy


CODE OF ETHICS

Western Asset Investment Grade Income Fund, Inc.

Western Asset Management Company, LLC

Western Asset Management Company Limited Western Asset Management Company Pte. Ltd.

Western Asset Funds, Inc.

Western Asset Premier Bond Fund

Western Asset Inflation-Linked Income Fund

Western Asset Inflation-Linked Opportunities & Income Fund

Revised June 30, 2021

TABLE OF CONTENTS

What are the Objectives and Spirit of the Code?

3

Who is Subject to the Code?

5

Who Administers the Code?

7

Fiduciary Duty to Clients and Funds

9

Reporting of Personal Trading

11

Preclearance Process for Personal Trading

16

• What Trades Must Be Precleared?

16

• What Trades are Not Required to be Precleared?

17

• How does the Preclearance Process Work?

19

Personal Trading Restrictions

20

•

Holding Periods

21

•

Blackout Periods

21

• Preclearance Sought in Good Faith

22

Requirements for Fund Directors

23

2

WHAT ARE THE OBJECTIVES AND SPIRIT OF THE CODE?

Adoption of Code of Ethics by Western Asset and the Funds. Western Asset Management Company, Western Asset Management Company Pte. Ltd. and Western Asset Management Company Limited (referred to generally as "Western Asset") act as fiduciaries and, as such, are entrusted to act in the best interests of all clients, including investment companies. Accordingly, Western Asset has adopted this Code of Ethics in order to ensure that employees uphold their fiduciary obligations and to place the interests of clients, including the Funds, before their own.

In addition, Western Asset Investment Grade Income Fund, Western Asset Premier Bond Fund, Western Asset Funds, Inc., Western Asset Inflation-Linked Securities & Income Fund and Western Asset Inflation- Linked Income Fund (referred to generally as the "Funds") have also adopted this Code of Ethics in order to ensure that persons associated with the Funds, including Directors/Trustees ("Directors"), honor their fiduciary commitment to place the interests of the Funds before their own.

Regulatory Requirement. The Investment Company Act of 1940 requires each investment company (i.e., the Funds), as well as its investment adviser and principal underwriter, to adopt a code of ethics. In addition, the Investment Advisers Act of 1940 requires each investment adviser (i.e., Western Asset) to adopt a code of ethics. Both Acts also require that records be kept relating to the administration of the Code of Ethics. This Code of Ethics shall be read and interpreted in a manner consistent with these Acts and their related rules.

Compliance with Applicable Law. All persons associated with Western Asset are obligated to understand and comply with their obligations under applicable law. Among other things, laws and regulations make clear that it is illegal to defraud clients and Funds in any manner, mislead clients or Funds by affirmative statement or by omitting a material fact that should be disclosed, or to engage in any manipulative conduct with respect to clients, Funds, or the trading of securities.

Confidential Information. All persons associated with Western Asset and the Funds may be in a position to know about client identities, investment objectives, funding levels, and future plans as well as information about the transactions that Western Asset executes on their behalf and the securities holdings in their accounts. All this information is considered confidential and must not be shared unless otherwise permitted.

Avoiding Conflicts of Interest. Neither Western Asset employees nor Fund Directors may take advantage of their knowledge or position to place their interests ahead of Western Asset clients or the Funds, as the case may be. Different obligations may apply to different persons under this Code of Ethics, but this duty includes an obligation not to improperly trade in personal investment accounts, as well as an obligation to maintain complete objectivity and independence in making decisions that impact the management of client assets, including the Funds. Western Asset employees and Fund Directors must disclose all material facts concerning any potential conflict of interest that may arise to the Funds' Chief Compliance Officer or the Western Asset Chief Compliance Officer, as appropriate.

Upholding the Spirit of the Code of Ethics. The Code of Ethics sets forth principles and standards of conduct, but it does not and cannot cover every possible scenario or circumstance. Each person is expected to act in accordance with the spirit of the Code of Ethics and their fiduciary duty. Technical compliance with

3

the Code of Ethics is not sufficient if a particular action or series of actions would violate the spirit of the Code of Ethics.

Western Asset Compliance Policies and Procedures. In addition to the Code of Ethics, Western Asset has established policies and procedures that are designed to address compliance requirements and conflicts and potential conflicts of interest not related to personal trading. Employees have an obligation to follow Western Asset's compliance policies and procedures.

4

WHO IS SUBJECT TO THE CODE?

While the spirit and objectives of the Code generally are the same for each person covered by the Code of Ethics, different specific requirements may apply to different categories of people. Western Asset and the Funds have both adopted the Code of Ethics, and the requirements for Western Asset employees differ from those for Fund Directors. You must understand what category or categories apply to you in order to understand which requirements you are subject to.

Western Asset Employees, Officers and Directors. As a condition of employment, all Western Asset employees, officers and directors (generally referred to as "Western Asset employees") must read, understand and agree to comply with the Code of Ethics. You have an obligation to seek guidance or take any other appropriate steps to make sure you understand your obligations under the Code of Ethics. On an annual basis, you are required to certify that you have read and understand the Code of Ethics and agree to comply.

Western Asset Independent Contractors. Independent contractors may be subject to the Code of Ethics depending on the length of time with Western Asset, the nature of the engagement and the access to information. If designated, you are required to comply with the Code of Ethics and make all the required certifications. All independent contractors are still obliged to observe obligations of confidentiality and other terms of their engagements.

Directors of the Funds. The Code of Ethics applies to interested Directors of the Funds who are also Western Asset employees or otherwise interested persons because of their business affiliations with Western Asset. Interested Directors who are also employees or are otherwise interested persons because of their business affiliations with Franklin Templeton Investments are subject to the Franklin Templeton Investments Code of Ethics.

•What are the "Funds"?

oWestern Asset Funds, Inc.

oWestern Asset Investment Grade Income Fund, Inc. o Western Asset Premier Bond Fund

o Western Asset Inflation-Linked Income Fund

o Western Asset Inflation-Linked Opportunities & Income Fund.

•If a Director is considered to be an "interested person" of a Fund, its investment adviser or principal underwriter within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, then he or she is considered an Interested Director.

•If a Director is not considered to be an "interested person," then he or she is considered to be a Disinterested Director.

•If you are both a Fund Director and an employee of Western Asset, you are subject to the requirements that apply to you as an employee of Western Asset, as applicable.

5

•Western Asset Interested Directors are subject to those requirements forth in the Section below titled "Requirements for Fund Directors."

Access Persons. Western Asset employees and Fund Officers and Directors are considered "Access Persons" because they may have access to information regarding investment decisions, transactions and holdings. Other people may also be considered to be "Access Persons" and subject to the same requirements as Western Asset employees including the following:

•Any natural person that has the power to exercise a controlling influence over the management and policies of Western Asset or the Funds and who obtains information concerning recommendations made to a client account, including a Fund, with regard to the purchase or sale of a security.

•Any person who provides advice on behalf of Western Asset and is subject to Western Asset's supervision and control.

•Any other such person as the Chief Compliance Officer of Western Asset or the Funds designate.

Investment Persons. If you are a Western Asset employee and you also make recommendations or investment decisions on behalf of Western Asset as part of your regular functions or duties, or you make or participate in making recommendations regarding the purchase or sale of securities for a Western Asset client or account, you are considered an "Investment Person." Investment Persons are subject to all the requirements of Western Asset employees, but also must comply with additional restrictions due to their knowledge and involvement with investment decisions Western Asset is considering or planning for the future.

Other Codes of Ethics. If you are an Access Person under this Code, but you are employed principally by affiliates of Western Asset and you are subject to a Code of Ethics that complies with applicable law, you are subject to the relevant provisions of the Code of Ethics of your principal employer and not subject to this Code. The principal application of this is for those subject to codes of Franklin Resources, Inc. and related subsidiaries (collectively, "Franklin Templeton Investments.")

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WHO ADMINISTERS THE CODE?

Western Asset Pasadena Management Committee:

•Responsibilities. The Western Asset Pasadena Management Committee has ultimate responsibility for the Code of Ethics. The Management Committee shall review and approve or deny any changes or proposed changes to the Code of Ethics. The Management Committee shall also receive periodic reports from the Legal and Compliance Department regarding violations of the Code of Ethics. The Management Committee shall determine the appropriate policy with respect to sanctions for Code of Ethics violations. The Management Committee may delegate the administration of this Code of Ethics to other individuals or departments, including the power to impose sanctions for particular violations according to the framework approved by the Committee.

•Interpretation: The Management Committee is the final arbiter of questions of interpretation under this Code of Ethics.

Western Asset Chief Compliance Officer:

•Receipt of Violations. The Chief Compliance Officer (known as the "CCO") for Western Asset is the person designated to receive all violations of the Code of Ethics. If a Western Asset employee becomes aware of a violation of this Code of Ethics or a violation of applicable law, they have an obligation to report the matter promptly to the CCO.

•Review of Violations. The Western Asset CCO must review all violations of the Code of Ethics and oversee any appropriate investigation and subsequent response with respect to Western Asset.

Chief Compliance Officer for the Funds:

•Responsibilities. The Chief Compliance Officer for the Funds is responsible for overseeing the administration of the Funds' compliance policies and procedures.

•Reporting of Violations. All violations of the Funds' Code of Ethics must be reported to the Funds' Chief Compliance Officer. To the extent that a violation involves a Fund Director, the Funds' CCO shall oversee any appropriate investigation and subsequent response with respect to the Funds.

Sanctions for Violations of the Code of Ethics:

•If you violate the Code of Ethics, you may be subject to sanctions. Violations may take a variety of forms, depending on the facts and circumstances and should reflect the nature of the violation, the risk to clients and other similar factors.

•In evaluating a violation, a variety of factors may be considered including any evidence of a violation of the law, potential or actual harm to client interests, evidence of fraud, neglect or indifference to the Code of Ethics, frequency of violations, prior violations, and cooperation or mitigation efforts of the employee.

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•Sanctions may include any of the following types of sanctions or such other sanctions as may be deemed appropriate:

o Verbal or written warnings

o Written warnings with copies to the employee's supervisor and/or personnel file

o Limits on personal trading activities, such as limits on the ability to trade or open new positions o Requirements to disgorge profits and/or reverse trades

o Referrals to Human Resources for disciplinary action o Terminations

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FIDUCIARY DUTY TO CLIENTS AND FUNDS

Comply with Applicable Law. A variety of securities laws, including those described in this Code of Ethics, apply to the operation of Western Asset and the Funds. It is your responsibility to understand your obligations under these laws and to comply with those requirements. You have an obligation to seek assistance from the Legal and Compliance Department if you are unsure of what your obligations are under this Code of Ethics.

Fiduciary Duty. As a fiduciary for Western Asset clients, including the Funds, you have an obligation to act in clients' best interests. You must scrupulously avoid serving your personal interests ahead of the interests of clients and the Funds. That includes making sure that client interests come first and that you avoid any potential or actual conflicts of interest. That fiduciary duty extends to all aspects of the business. Conflicts and potential conflicts can arise in a variety of situations. You may have information regarding clients, their investment strategies, strategic plans, assets, holdings, transactions, personnel matters and other information. This information may not be communicated in any manner to benefit yourself or other persons. This obligation extends to avoiding potential conflicts between client accounts as well. You may not inappropriately favor the interests of one client over another.

Compliance with the Code of Ethics. All new staff are provided with a copy of this Code of Ethics upon joining the Firm and the current version is posted on the Firm's intranet. From time to time, the Firm may revise the Code of Ethics and you will be provided with a copy of any such amendments to the Code. On an annual basis and when the Code of Ethics is amended, you will be required to acknowledge in writing that you have received, understand and agree to comply with the Code of Ethics.

Personal Interests. As a general matter, you may not improperly take personal advantage of your knowledge of recent, pending or intended securities activities for clients, including the Funds. In addition, you may not improperly take advantage of your position to personally gain at the expense of the interests of Western Asset, clients, or the Funds.

Maintaining the Best Interests of Clients. The provisions of this Code of Ethics address some of the ways in which you are expected to uphold the fiduciary duty to clients and the Funds. It is not an exclusive list.

Confidentiality. Unless otherwise permitted, information regarding clients or their accounts may not be shared with persons outside of the Firm, such as vendors, family members, or market participants. In particular, information regarding the trading intentions of clients or Western Asset on behalf of its clients may not be shared.

Personal trading:

•A potential conflict exists between the interests of clients (including the Funds) and your personal investment activities. This conflict may take shape in a variety of ways, including the particular trades you execute and the volume of trading you do.

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•You may not engage in an excessive volume of trading in your personal accounts. High volumes of personal trading may raise concerns that your energies and interests are not aligned with client interests.

•Depending on the particular security that you choose to buy, a holding period may also apply that requires you to hold that security for a minimum period of time.

•At all times, you have an obligation to refrain from personally trading to manipulate the prices of securities and trading on material non-public information.

•Given the potential conflict that exists between client transactions, holdings and intentions and your personal trading activity, the Code of Ethics contains detailed requirements regarding your personal conduct and the monitoring of your personal trading activity. The remaining sections of the Code of Ethics provide guidance on the requirements that must be followed in connection with your personal trading activity.

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REPORTING OF PERSONAL TRADING

You must provide information regarding your personal investment accounts as required under this Code of Ethics. Reporting obligations take effect at the inception of your involvement with Western Asset or a Fund, and continue on a monthly, quarterly and annual basis. As with other provisions of the Code of Ethics, you are expected to understand and comply with the obligations that apply to you. (Applicable provisions for Western Asset Interested Directors are described more fully below in the Section titled "Requirements for Fund Directors.")

In order to monitor potential conflicts of interest and your compliance with the Code, Western Asset employees and Interested Directors must identify investment accounts and provide information on particular securities transactions in those accounts.

Western Asset Management Company employees (i.e., those located in the Pasadena and New York offices) must maintain personal brokerage accounts only with brokers approved by the Firm. New hires must transfer their accounts within 90-days of hire. The criterion for broker approval is whether a broker is willing and able to provide electronic feeds to Western Asset for purposes of monitoring and administration of the Code of Ethics and Western Asset's systems can effectively accommodate the electronic feeds. A list of approved brokers shall be published by the Legal and Compliance Department for reference by employees. Limited exceptions may be granted by the General Counsel or Chief Compliance Officer in such cases as may be necessary or prudent on a case by case basis (such as for accounts of family members of employees).

Which investment accounts do Western Asset employees and Western Asset Interested Directors need to report?

Report any of the following investment accounts:

•Any investment account with a broker-dealer or bank in which you have a direct or indirect interest, including accounts that are yours or that you share jointly with another person. This includes joint accounts, spousal accounts, UTMA accounts, partnerships, trusts and controlling interests in corporations.

oThis requirement generally will cover any type of brokerage account opened with a broker- dealer or bank.

oYou must also report any Individual Retirement Account ("IRA") held with a broker-dealer or bank.

•Any investment account with a broker-dealer or bank over which you have investment decision- making authority (including accounts you are named on, such as being a guardian, executor or trustee, as well as accounts you are not named on, such as an account owned by another person for which you have been granted trading authority).

•Any investment account with a broker-dealer or bank established by partnership, corporation, or other entity in which you have a direct or indirect interest through any formal or informal understanding or agreement.

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•Any college savings account in which you hold securities issued under Section 529 of the Internal Revenue Code and in which you have a direct or indirect interest.

•Any account established to hold shares in a Franklin Resources, Inc. Employee Stock Investment Plan (ESIP) or similar plan.

•Any other account that the Western Asset Management Committee or its delegate deems appropriate in light of your interest or involvement.

•You are presumed to have investment decision-making authority for, and therefore must report, any investment account of a member of your immediate family if they live in the same household as you. (Immediate family includes a spouse, child, grandchild, stepchild, parent, grandparent, sibling, mother or father-in-law, son or daughter in-law, or brother or sister in-law.) You may rebut this presumption if you are able to provide Western Asset with satisfactory assurances that you have no material interest in the account and exercise no control over investment decisions made regarding the account. Consult with the Legal and Compliance Department for guidance regarding this process.

Do not report any of the following accounts:

•Do not report investment accounts that are not held at a broker-dealer or bank that permit investments only in shares of open-end investment companies or funds:

oDo not report such an investment account if the account holds only shares in money market funds.

oDo not report such an investment account if you only invest in open-end funds not advised or sub-advised by Western Asset or a Franklin Templeton Investments affiliate. If you begin investing in open-end funds advised or sub-advised by Western Asset or an affiliate, you must report the investment account.

•Do not report any 401(k), 403(b) or other company sponsored retirement accounts unless there is trading activity in funds advised or sub-advised by Western Asset or an affiliate. The list is available from the Legal and Compliance Department. Note: If you have a Western Asset 401(k) account, no additional reporting is required, but you are subject to the holding period requirements described in the Section below titled "Personal Trading Restrictions."

What reports are Western Asset employees and Western Asset Interested Directors required to provide?

At hire: What information is required when you are hired or become a Western Asset employee or a Western Asset Interested Director of a Fund?

•You must report all of your investment accounts. (See information above for more detail on which accounts must be reported.)

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•The report must either include copies of statements or the name of the broker, dealer or bank, title on the account, security names, exchange ticker and CUSIP as applicable, and the number of shares and principal amount of all holdings.

•There is no requirement to report holdings of digital tokens, altcoins, crypto currencies or similar assets. This obligation may be revised based on further regulatory guidance, particularly if such instruments are deemed to be "securities."

•You must sign and date all initial reports.

•You must report required information within 10 calendar days from the date of hire or the date on which you become a Western Asset employee or Western Asset Interested Director.

•All the information that you report must be no more than 45 days old.

•The Legal and Compliance Department will attempt to arrange with your brokerage firm to receive duplicate confirmations and statements to enable the firm to monitor your trading activities, but your assistance may be required.

Electronic Confirmations and Statements: The Western Asset Legal and Compliance Department will attempt to arrange to receive duplicate copies of transaction confirmations and account statements for each investment account directly from each financial institution with whom you have reported having an investment account. To the extent that Western Asset is able to directly obtain such information, you will not be required to separately provide the information described below for quarterly or annual transaction reports. You may be asked to confirm Western Asset's records in lieu of providing your own holdings or transaction reports. Your assistance may be required for information Western Asset does not have or is not able to obtain otherwise, which may include providing statements to Western Asset yourself or coordinating with your financial institution to send confirmations and statements to Western Asset.

Quarterly Transaction Reports: What information is required on a quarterly basis?

•You must report all transactions in covered securities in which you have a direct or indirect beneficial interest during a quarter to the Legal and Compliance Department within 30 days after quarter end, regardless of whether the account is required to be reported as described above.

oWhat are "covered securities"? "Covered securities" are any security as defined by the Investment Advisers Act of 1940, Investment Company Act of 1940, any financial instrument related to a security, including fixed income securities, any equity securities, any derivatives on fixed income or equity securities, ETFs, closed-end mutual funds, and any open-end mutual funds managed, advised or sub-advised by Western Asset or an affiliate. "Covered securities" does not include digital tokens, altcoins, crypto currencies or similar assets. This obligation may be revised based on further regulatory guidance, particularly if such instruments are deemed to be "securities."

o"Covered securities" does not include obligations of the US government, bankers acceptances, bank certificates of deposit, commercial paper and high quality short term debt

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instruments such as repurchase agreements and other instruments as described below in the Section titled "What Trades are Not Required to be Precleared?"

•The report shall state the title and number of shares, the principal amount of the security involved, the interest rate and maturity date if applicable, the date and nature of the transaction, the price at which the transaction was effected and the name of the broker, dealer or bank with or through whom the transaction was effected.

•The report must also include the date it was submitted.

•You may not be required to file a quarterly report if the Legal and Compliance Department received duplicate copies of your broker confirmations and statements within the 30 day time period. From time to time, however, the Legal and Compliance Department may not receive all duplicate statements from brokers or may not receive them on a timely basis. In those cases, you will be notified by the Legal and Compliance Department and you have an obligation to provide copies of the statements or report all transactions you execute during the quarter in some other form.

•If you have no investment accounts or executed no transactions in covered securities, you may be asked to confirm that you had no investment activity (either independent of an account or in a newly opened account).

Annual Holdings Reports: What information is required on an annual basis?

•You must provide a list of all covered securities in which you have a direct or indirect interest, including those not held in an account at a broker-dealer or bank. The list must include the title, the exchange ticker or CUSIP number as applicable, number of shares and principal amount of each covered security. Copies of investment account statements containing such information are sufficient. Holdings are not required to include digital tokens, altcoins, crypto currencies or similar assets unless they are held in a securities account at a broker-dealer or bank.

•You must report the account number, account name and financial institution for each investment account with a broker-dealer of bank for which you are required to report.

•While the Western Asset Legal and Compliance Department may be receiving duplicate statements and confirmations for your investment accounts, this annual reporting requirement is intended to serve as a check to make sure that all of Western Asset's information is accurate and current.

•The information in the annual report must be current as of a date no more than 45 days before the report is submitted and the annual report must include the date it was submitted to the Western Asset Legal and Compliance Department.

•You also must certify annually that you have complied with the requirements of this Code of Ethics and that you have disclosed or reported all transactions and holdings required to be disclosed or reported pursuant to the requirements of this Code.

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New Investment Accounts: When do I need to report new investment accounts that are required to be reported under the Code of Ethics?

•After you open an account or after you assume a role or obtain an interest in an account that requires reporting (as discussed in the Section titled "Reporting of Personal Trading"), you have 30 calendar days after the end of the quarter to report the account.

•You must report the title of the account, the name of the financial institution for the account, the date the account was established (or the date on which you gained an interest or authority that requires the account to be reported) and the date reported.

Additional Reporting for Certain Persons. What additional reporting obligations exist for Directors and Officers of Closed-End Investment Companies, officers or Western Asset, or designated members of the Western Asset Investment Strategy Group?

•Section 16 of the Securities Exchange Act of 1934 requires Directors and Officers of any closed-end investment company to report to the Securities and Exchange Commission changes in their personal ownership of that closed-end investment company's stock. Note that reporting is not required for all close-end investment companies, but only the shares of those closed-end funds for which a person serves as a director or officer.

•In addition, Section 16 requires Western Asset officers and designated members of the Western Asset Investment Strategy Group to forfeit to the Fund any profit realized from any purchase and sale, or any sale and purchase, of Fund shares within any period of less than six months. Under Section 16, holding periods operate on a "last in, first out" methodology, so the six month holding period for all holdings re-sets with each new purchase. Such persons should consult the Western Asset Legal and Compliance Department for further guidance regarding specific provisions of the law, including applicable reporting requirements

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•If provided with the necessary information, the Western Asset Legal and Compliance Department will assist and make the filings with the Securities and Exchange Commission on your behalf.

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PRECLEARANCE PROCESS FOR PERSONAL TRADING

Before you execute a personal trade, the trade may need to be precleared to ensure that there is no conflict with Western Asset's current trading activities on behalf of its clients (including the Funds). All Western Asset employees are required to preclear trades in securities except as provided below.

WHAT TRADES MUST BE PRECLEARED?

Any Security (unless excluded below). You must preclear trades in any security, which means any bond, stock, debenture, certificate of interest or participation in any profit sharing venture, warrant, right and generally anything that meets the definition of "security" under the Investment Advisers Act of 1940 and the Investment Company Act of 1940. Except for money market instruments, G-7 government direct obligations and government direct obligations of Singapore and Australia, all fixed income securities must be precleared.

Restricted List. Subject to the caveat below for common stock, you are required to preclear the securities of any issuer that are listed on the Western Asset restricted list.

Common Stocks. You are only required to preclear publicly traded common stocks if the issuer of the common stock is listed on the Western Asset restricted list. In cases where the common stock is on the restricted list, designated as being eligible for trading, and the issuer has USD$10 billion or more in market capitalization, pre-clearance is only required if your trade is over USD$100,000 in value. Restrictions also apply to investments in private placements (including private funds) or initial public offerings (see discussion below). Preclearance is not required, however, for trading in stocks issued by Franklin Resources, Inc. as long as all other restrictions such as restricted periods are followed.

Stocks of Brazilian Issuers. You must preclear all Brazilian equity trades except trades of a de minimis amount (i.e., trades of 500 shares or less per day for any issuer with a market capitalization in excess of USD$10 billion). This preclearance requirement includes both common and preferred shares as well as local shares and GDR/ADR securities.

Derivatives. Trades in any financial instrument related to a security that is required to be pre-cleared, including options on securities, futures contracts, single stock futures, options on futures contracts and any other derivative must be precleared.

Shares in any Affiliated Open or Closed-end Mutual Fund or REIT. Preclearance is required if you purchase or sell shares of open-end or closed-end funds and/or REITs advised or sub-advised by Western Asset outside of your Western Asset 401(k) participant account. This includes preclearance for such purchases or sales in a spouse's retirement account. You are not required to preclear trades in your Western Asset 401(k) participant account. Note: No preclearance is required for investments in any money market funds.

Systematic Investment Plans. Preclearance is required when executing an initial instruction for any purchases or sales that are made pursuant to a systematic investment or withdrawal plan involving a security that requires preclearance. For example, a systematic investment plan that regularly purchases

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shares of a Western Asset Fund would need to be precleared when the initial instruction was made, but not for each specific subsequent purchase. A systematic investment or withdrawal plan is one pursuant to which a prescribed purchase or sale will be automatically made on a regular, predetermined basis without affirmative action by the Access Person. As such, only the initial investment instruction (and any subsequent changes to the instruction) requires preclearance.

Private Placement Securities. All Western Asset employees must preclear any trades in private placement securities (i.e., any offering that is exempt from registration under the Securities Act of 1933 pursuant to section 4(2) or 4(6) or pursuant to rule 504, rule 505, or rule 506 under the Securities Act of 1933) whether or not fixed income related. This requirement includes all private investment partnerships or funds such as hedge funds and private real estate holding partnerships.

Initial Public Offerings. Investment Persons are prohibited from participating in Initial Public Offerings (other than closed-end fund offerings where Western Asset is an adviser or sub-adviser). Special Purpose Acquisition Company (SPAC) offerings are considered Initial Public Offerings.

529 College Savings Plans. Any transaction in units of a college savings plan established under Section 529 of the Internal Revenue Code where the underlying investments are open-end funds advised or sub- advised by Western Asset or an affiliate. A list of such funds is available from the Legal and Compliance Department.

Transactions in Retirement Accounts and Deferred Compensation Plans. All purchases or sales of investment companies or funds advised or sub-advised by Western Asset in any retirement account other than your Western Asset 401(k) participant account or Deferred Compensation Plan must be precleared. Note: Trades in investment companies or funds in your Western Asset 401(k) account are not required to be precleared, but are subject to a 60-day holding period if they are advised or sub-advised by Western Asset. Trades in the brokerage portion of your Western Asset 401(k) such as those in individual tickers or CUSIPs are subject to the same personal trading pre-clear rules as if they were purchased outside of the 401(k) account.

Shares of Preferred Stock. You are required to preclear all transactions in shares of preferred stock.

WHAT TRADES ARE NOT REQUIRED TO BE PRECLEARED?

Common Stocks. As long as the issuer of the securities is not listed on the Western Asset restricted list, you are not required to preclear publicly traded common stocks. All Western Asset employees are also required to preclear an equity security in the case of a private placement or an initial public offering (see discussion above).

Government Securities. Trades in any direct obligations of the U.S. Government or any G7 government are not required to be precleared.

High Quality Short-term Debt Instruments. High quality short term debt instruments including bankers acceptances, bank certificates of deposit, commercial paper, variable-rate demand notes, repurchase agreements and other high quality short-term debt instruments (meaning any instrument that has a maturity at issuance of less than 366 days and that is rated in one of the two highest rating categories

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by a nationally recognized statistical rating organization, such as S&P or Moody's) are not required to be precleared.

Money Market Funds. Trades in any investment company or fund that is a money market fund are not required to be precleared.

Open-End Mutual Funds. Trades in open-end mutual funds that are not advised or sub-advised by Western Asset are not required to be precleared.

Closed-End Mutual Funds, Exchange Traded Funds ("ETFs") and Real Estate Investment Trusts ("REITs"). Transactions of closed end mutual funds, ETFs and REITs are not required to be precleared

unless they are advised by Western Asset.

Transactions Retirement Accounts and Deferred Compensation Plans. Purchases or sales of investment companies or funds in your Western Asset 401(k) participant account or Deferred Compensation Plan are not required to be precleared. Note: Trades in your Western Asset 401(k) account are not required to be precleared, but are subject to a holding period requirement if they are advised or sub-advised by Western Asset. Trades in the brokerage portion of your Western Asset 401(k) such as those in individual tickers or CUSIPs are subject to the same personal trading pre-clear rules as if they were purchased outside of the 401(k) account.

Employee Savings Investment Plans. Purchases, sales of Franklin Resources, Inc. stock in Employee Savings Investment Plans or similar are not required to be pre-cleared. Elections to participate or stop participating or changes to participation levels are not required to be pre-cleared.

Systematic Investment Plans. Any purchases or sales that are made pursuant to a systematic investment or withdrawal plan that has previously been approved by a Preclearance Officer. A systematic investment plan is any plan where a sale or purchase will be automatically made on a regular, predetermined basis without your authorization for each transaction. The first instruction must be precleared, but each subsequent purchase is not required to be precleared unless changes are made to the terms of the standing order.

No Knowledge. Securities transactions where you have no knowledge of the transaction before it is completed (for example, a transaction effected by a Trustee of a blind trust or discretionary trades involving an investment partnership or investment club, when you are neither consulted nor advised of the trade before it is executed) are not required to be precleared.

Certain Corporate Actions. Any acquisition of securities through stock dividends, dividend reinvestments, stock splits, reverse stock splits, mergers, consolidations, spin-offs, exercise of rights or other similar corporate reorganizations or distributions generally applicable to all holders of the same class of securities is not required to be precleared.

Options-Related Activity. Any acquisition or disposition of a security in connection with an option- related transaction that has been previously approved. For example, if you receive approval to write a covered call, and the call is later exercised, you are not required to obtain preclearance in order to exercise the call. Preclearance of a derivative of a security is required only if the underlying security requires preclearance.

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Commodities, Futures and Options on Futures. Any transaction involving commodities, futures (including currency futures and futures on securities comprising part of a broad-based, publicly traded market based index of stocks) and options on futures. Preclearance is required for any single issuer derivatives, such as single stock futures.

529 College Savings Plans. Any transaction in units of a college savings plan established under Section 529 of the Internal Revenue Code, unless the underlying investment includes open-end funds advised or sub-advised by Western Asset or an affiliate.

Digital Assets. Digital tokens, altcoins, crypto currencies or similar assets Crypto currency is treated the same as any other currency and is not a security, so it does not require pre-clearance. This obligation may be revised based on further regulatory guidance.

Miscellaneous. Any transaction in any other securities as the Western Asset Chief Compliance Officer may designate on the grounds that the risk of abuse is minimal or non-existent.

HOW DOES THE PRECLEARANCE PROCESS WORK?

Understand the Preclearance requirements. Review the Section above titled "Preclearance Process for Personal Trading" to determine if the security requires preclearance.

Trading Authorization Form. Obtain and complete a Trading Authorization Form or access the on-line personal trading system (if available to you).

Submission for approval. Submit the request for approval to a Preclearance Officer for a determination of approval or denial. The Chief Compliance Officer shall designate Preclearance Officers to consider requests for approval or denials.

Approval or Denial. The Preclearance Officer shall determine whether approval of the proposed trade would place the individual's interests ahead of the interests of Western Asset clients (including the Funds). To be valid, a Preclearance Officer must sign the Trading Authorization Form or otherwise evidence approval.

Expiration of Trading Permission. Trade authorizations expire at the end of the trading day during which authorization is granted. Trade authorizations also expire if they are revoked or if you learn that the information provided in the Trade Authorization request is not accurate. If the authorization expires, a new authorization must be obtained before the trade order may be placed. If an order is placed but has not been executed before the authorization expires (e.g., a limit order), no new authorization is necessary unless the order is amended in any way.

Transactions of a Preclearance Officer. A Preclearance Officer may not approve his or her own Trading Authorization Form.

Proxies. You may designate a representative to complete and submit a Trade Authorization Form if you are unable to complete the form on your behalf in order to obtain proper authorization.

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PERSONAL TRADING RESTRICTIONS

In addition to reporting and preclearance obligations, you are also subject to restrictions regarding the manner in which you trade and hold securities in any personal investment accounts for which you report transactions. (The Section above titled "Reporting of Personal Trading" describes which accounts must be reported.)

For all Western Asset employees:

•Market Manipulation. You shall not execute any securities transactions with the intent to raise, lower, or maintain the price of any security or to falsely create the appearance of trading activity.

•Spread Betting. Spread Betting is a speculative transaction that involves taking a bet on the price movement of a security, index or other financial product via a spread betting company. Spread betting on financial products is not permitted and employees may not use spread betting accounts to circumvent the Code of Ethics. Spread betting on non-financial products, such as sporting events, is not covered by the Code of Ethics.

•Trading on Inside Information. You shall not purchase or sell any security if you have material nonpublic information about the security or the issuer of the security. You are also subject to Western Asset's policy on insider trading. This policy applies both to personal transactions and to transactions executed by Western Asset personnel on behalf of client accounts.

•Excessive Personal Trading. You are limited to 75 transactions per calendar quarter. Transactions are defined as executions - therefore, a buy and a sell of the same security are considered as two transactions and multiple fills for limit orders are each considered a transaction unless brokers provide information to permit independent confirmation that multiple confirmations originated from a single order. This does not apply to accounts held by family members where you do not have any trading authority, fully managed accounts where you have given permission to another party to manage your account, and rebalancing of investments in the 401(k), 403(b) or any other company sponsored retirement accounts. Single expressions of investment intent with multiple executions are counted as a single trade (i.e., multiple fills on a limit or a block trade across multiple family accounts). Corporate actions or options exercises are not counted. Quant-type strategies declared in advance and done with the approval of the Chief Compliance Officer may be exempted if the individual exercises no discretion over when or if their orders are actually executed.

•Initial Public Offerings for Investment Persons: Investment Persons may not purchase any securities through an initial public offering (other than closed-end funds for which Western Asset is an adviser or sub-adviser).

Regardless of whether a transaction is specifically prohibited in this Code of Ethics, you may not engage in any personal securities transactions that (i) impact your ability to carry out your assigned duties or (ii) increase the possibility of an actual or apparent conflict of interest.

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Holding Periods for securities in personal accounts for all Western Asset employees:

•After making a purchase, you must hold that security for at least 30 calendar days unless specified otherwise below. Holding periods are measured on a first-in-first-out basis unless otherwise specified below. The holding period applies if investment exposure takes the form of single stock futures, options or other similar instruments.

•Holding periods apply for all securities except transactions in money market funds, government/sovereign securities issued by G-7 countries and derivatives on such securities, high quality short-term debt instruments, ETFs or other index securities, options on broad-based indices, currencies, and open-end mutual funds not advised by Western Asset.

•A 60-day holding period applies for all mutual funds, investment companies, unit trusts, REITs, or other commingled vehicles for which Western Asset serves as adviser or sub-adviser.

•This limitation applies to any purchases or sales in your individual retirement account, 401(k), deferred compensation plan, or any similar retirement plan or investment account for you or your immediate family. There is no holding period for purchases or sales done through a systematic investment or withdrawal plan.

•There is no holding period for accounts held by family members where you do not have any trading authority or fully managed accounts where you have given permission to another party to manage your account. You may not direct or recommend trades or take any other action that serves to circumvent the provisions of the Code of Ethics.

•The holding period may be deemed inapplicable in circumstances such as stop-loss orders declared in advance or extreme market volatility if prudent and consistent with the Firm's overarching fiduciary duties to clients and regulatory obligations.

Blackout Periods:

•One Day Blackout period for all Western Asset employees:

oYou may not purchase or sell a fixed-income security (or any security convertible into a fixed income security) of an issuer on the same day in which Western Asset is purchasing or selling a fixed-income security from that same issuer.

oContemporaneous trading activity will be the basis for a denial of a request for trading preclearance.

•Seven Day Blackout period for Investment Persons:

oYou may not purchase or sell a fixed income security (or any security convertible into a fixed income security) if Western Asset purchases or sells securities of the same issuer within seven calendar days before or after the date of your purchase or sale.

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Preclearance Sought and Obtained in Good Faith:

•The blackout period restriction may be deemed inapplicable if, consistent with the overarching duty to put client interests ahead of personal or Firm interests, an Access Person making a personal transaction has sought and received preclearance. This determination will take into account such factors as the degree of involvement in or access to the persons or teams making the investment decision.

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REQUIREMENTS FOR FUND DIRECTORS

Interested Directors of the Funds that are also Western Asset employees

•If you are an Interested Director and also a Western Asset or Franklin Templeton Investments employee, you are subject to all the Code of Ethics requirements that apply to you as a Western Asset or Franklin Templeton Investments employee. Accordingly, if you are a Western Asset employee, you are required to comply with all provisions of this Code of Ethics. If you are a Franklin Templeton Investments employee, you are not subject to the provision of this Code of Ethics, but you are required to comply with the Franklin Templeton Investments Code of Ethics.

•You are also subject to the requirements under Section 16 of the Securities and Exchange Act of 1934. For Interested Directors who are also Western Asset employees, this obligation is addressed in the Section above titled "Reporting of Personal Trading."

Interested Directors of the Funds that are not Western Asset employees

•Applicable Provisions of the Code of Ethics. For an Interested Director that is not a Western Asset employee, only the requirements as set forth in the following Sections of the Code of Ethics shall apply:

oObjectives and Spirit of the Code o Persons Subject to the Code

o Persons Who Administer the Code o Reporting of Personal Trading

o Requirements for Fund Directors

These sections may also incorporate other parts of the Code of Ethics by reference.

•Rule 17j-1 Requirements with Respect to Reporting of Personal Trading. The requirements described above in the Section titled "Reporting of Personal Trading" shall only apply to the extent required by Rule 17j-1. In particular, no reporting of any open-end mutual funds is required.

•Section 16 Reporting. Section 16 of the Securities and Exchange Act of 1934 requires all Directors of closed-end investment companies to report changes in your personal ownership of shares of investment companies for which you a Director. If provided with the necessary information, the Legal and Compliance Department will assist and make filings with the Securities and Exchange Commission on your behalf.

•Section 16 Personal Trading Restrictions. Section 16 of the Securities and Exchange Act requires a Director to forfeit to the Fund any profit realized from any purchase and sale, or any sale and purchase, of Fund shares within any period of less than six months. Under Section 16, holding periods operate on a "last in, first out" methodology, so the six month holding period for all holdings re-sets with each new purchase.

23


Code of Ethics

Personal investing Gifts and entertainment Outside activities Client confidentiality

2 August 2021

Jean M. Hynes

Chief Executive Officer

The reputation of a thousand years may be determined by the conduct of one hour.

– Ancient proverb

A message from our CEO

Our ability to thrive as an organization is driven by our shared values, and integrity is at the top of the list. This is reflected in our commitment to the "Client, Firm, Self" framework, through which all of our decisions should be viewed if we are to earn and maintain the trust of our clients.

Each and every one of us has a role to play in sustaining our clients' trust. We must test every decision we make, no matter how small, against our fiduciary obligations and our high ethical standards. If there is the slightest doubt about whether a decision is in the best interests of our clients, then bring it to someone's attention — your manager, the Legal and Compliance team, or any of my direct reports. But don't just let it go. This is what it means to be a fiduciary: complete dedication to conscientious stewardship of client assets.

To support this mandate, our Code of Ethics sets out standards for our personal conduct, including personal investing, acceptance of gifts and entertainment, outside activities, and client confidentiality. Please take the time to read the Code, familiarize yourself with the rules, and determine what you need to do to comply with them. Remember, too, that while our Code of Ethics is reviewed and updated regularly, no set of rules can address every possible circumstance. And so I ask you to remain vigilant, exercise good judgment, ask for help when you need it, consider

not just the letter but the spirit of the laws that govern our industry, and do your part to safeguard our clients' trust.

Sincerely,

Jean M. Hynes

Chief Executive Officer

Contents

Standards of conduct . . . . . . . . . . . .

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. 1. . . . . . . . . . .

Who is subject to the Code of Ethics? . . .

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.1. . . . .

Personal investing . . . . . . . . . . . . . . . . . . . . . .

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. . . . . . . . . . .

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. 2

Which types of investments and related activities

 

 

 

 

are prohibited? . . . . . . . . . . . . . . . .

.

對 . . . . . .

. .

2

Which investment accounts must be reported? .

.

. . . . . .

. .

. 3

What are the reporting responsibilities for all personnel? . . . . . . . 4 What are the preclearance responsibilities for all personnel? . . . . . 5 What are the additional requirements for investment professionals? . . 6

Gifts and entertainment . . . . . . . . . .

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Outside activities . . . . . . . . . . . . .

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. . .8. . . . . .

Client confidentiality . . . . . . . . . . . .

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. ..8. . .

How we enforce our Code of Ethics .

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. . . 8

Exceptions from the Code of Ethics

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Closing . . . . . . . . . . . . . . . . . . . .

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Wellington Management Code of Ethics

1

Standards of conduct

Our standards of conduct are straightforward and essential. Any transaction or activity that violates either of the standards of conduct below is prohibited, regardless of whether it meets the technical rules found elsewhere in the Code of Ethics.

1.We act as fiduciarieS to our clients. Each of us must put our clients' interests above our own and must not take advantage of our management of clients' assets for our own benefit. Our firm's policies and procedures implement these principles with respect to our conduct of the firm's business. This Code of Ethics implements the same principles with respect to our personal conduct. The procedures set forth in the Code govern specific transactions, but each of us must be mindful at all times that our behavior, including our personal investing activity, must meet our fiduciary obligations to our clients.

2.We act with inteGrity and in accOrdance with both the letter and the spirit of the law. Our business is highly regulated, and we are committed as a firm to compliance with those regulations. Each of us must also recognize our obligations as individuals to understand and obey the laws that apply to us in the conduct of our duties. They include laws and regulations that apply specifically to investment advisors, as well as more broadly applicable laws ranging from the prohibition against trading on material nonpublic information and other forms of market abuse to anticorruption statutes such as the US Foreign Corrupt Practices Act and the UK Bribery Act. The firm provides training on their requirements. Each of us must take advantage of these resources to ensure that our own conduct complies with the law.

Who is subject to the Code of Ethics?

Our Code of Ethics applies to all employees of Wellington Management and its affiliates around the world. Its restrictions on personal investing also apply to temporary personnel (including co-ops and interns) and consultants whose tenure with Wellington Management exceeds 90 days and who are deemed by the Chief Compliance Officer to have access to nonpublic investment research, client holdings, or trade information.

All Wellington Management personnel receive a copy of the Code of Ethics (and any amendments) and must certify, upon joining the firm and annually thereafter, that they have read and understood it and have complied with its requirements.

Adherence to the Code of Ethics is a basic condition of employment. Failure to adhere to our Code of Ethics may result in disciplinary action, including termination of employment.

If you have any doubt as to the appropriateness of any activity, believe that you have violated the Code, or become aware of a violation of the Code by another individual, you should consult the manager of the Code of Ethics Team, Chief Compliance Officer, General Counsel, or Chair of the Ethics Committee. You also have the right to report violations of law or regulation directly to relevant governmental agencies. You do not need the firm's prior authorization to make any such report or disclosures and are not required to notify the firm that you have done so.

For additional information regarding our Code of Ethics Policy refer to the Guide to Our Policy document available on the firm's Intranet.

Wellington Management Code of Ethics

2

Personal investing

As fiduciaries, each of us must avoid taking personal advantage of our knowledge of investment activity in client accounts. Although our Code of Ethics sets out a number of specific restrictions on personal investing designed to reflect this principle, no set of rules can anticipate every situation. Each of us must adhere to the spirit, and not just the letter, of our Code in meeting this fiduciary obligation to our clients.

Which types of investments and related activities are prohibited?

Our Code of Ethics prohibits the following personal investments and investment-related activities:

•Purchasing or selling the following:

–Initial public offerings (IPOs) of any securities

–Securities of an issuer being bought or sold on behalf of clients until one trading day after such buying or selling is completed or canceled

–Securities of an issuer that is the subject of a new, changed, or reissued but unchanged action recommendation from a global industry research or fixed income credit analyst until two business days following issuance or reissuance of the recommendation

–Securities of an issuer that is mentioned at the Morning Meeting or the Early Morning Meeting until two business days following the meeting

–Securities that are the subject of a firmwide restriction

–Single-stock futures

–Options with an expiration date that is within 60 calendar days of the transaction date (excluding shares of exchange-traded funds (ETFs))

–Securities of broker/dealers (or their affiliates) that the firm has approved for execution of client trades

–Securities of any securities market or exchange on which the firm trades on behalf of clients

•Purchasing an equity security (excluding ETFs) if your aggregate ownership of the equity security exceeds 0.05% of the total shares outstanding of the issuer

•Taking a profit from any trading activity within a

60 calendar day window

•Using a derivative instrument to circumvent a restriction in the Code of Ethics

Short-term trading

You are prohibited from taking a profit from any trading activity within a 60-calendar day window on any security that requires preclearance. For example, if you buy shares of stock

(or options on such shares) and then sell those shares within 60 days at a profit, an exception will be identified and any gain from the transactions must be surrendered. Gains are calculated based on a last in, first out (LIFO) method for purposes of this restriction. This short-term trading rule does not apply to securities exempt from the Code's preclearance requirements.

Wellington Management Code of Ethics

3

Which investment accounts must be reported?

You are required to report any investment account over which you exercise investment discretion or from which any of the following individuals enjoy economic benefits: (i) your spouse, domestic partner, or minor children, and (ii) any other dependents living in your household,

and

that holds or is capable of holding any of the following covered investments:

•Shares of stocks, ADRs, or other equity securities (including any security convertible into equity securities)

•Bonds or notes (other than sovereign government bonds issued by Canada, France, Germany, Italy, Japan, the United Kingdom, or the United States, as well as bankers' acceptances, CDs, commercial paper, and high-quality, short-term debt instruments)

•Interest in a variable annuity product in which the underlying assets are held in a subaccount managed by Wellington Management

•Shares of exchange-traded funds (ETFs)

•Shares of closed-end funds

•Options on securities

•Securities futures

•Interest in private placement securities (other than Wellington Management sponsored products)

•Shares of funds managed by Wellington Management (other than money market funds)

Please see Appendix A for a detailed summary of reporting requirements by security type.

For purposes of the Code of Ethics, these investment accounts are referred to as reportable accounts. Examples of common account types include brokerage accounts, retirement accounts, employee stock compensation plans, and transfer agent accounts. Reportable accounts also include those from which you or an immediate family member may benefit indirectly, such as a family trust or family partnership, and accounts in which you have a joint ownership interest, such as a joint brokerage account.

Accounts not requiring reporting

You do not need to report the following accounts via the Code of Ethics System since the administrator will provide the Code of Ethics Team with access to relevant holdings and transaction information:

•Accounts maintained within the Wellington Retirement and Pension Plan or similar firm-sponsored retirement or benefit plans identified by the Ethics Committee

•Accounts maintained directly with Wellington Trust Company or other Wellington Management

Sponsored Products

Although these accounts do not need to be reported, your investment activities in these accounts must comply with the standards of conduct embodied in our Code of Ethics.

Non-volitional transactions include:
Investments made through automatic dividend reinvestment or rebalancing plans and stock purchase plan acquisitions
Transactions that result from corporate actions applicable to all similar security holders (such as splits, tender offers, mergers, and stock dividends)

Wellington Management Code of Ethics

4

Managed account exemptions

An account from which you or immediate family members could benefit financially, but over which neither you nor they have any investment discretion or influence (a managed account), may be exempted from the Code of Ethics' personal investing requirements upon written request and approval. An example of a managed account would be a professionally advised account about which you will not be consulted or have any input on specific transactions placed by the investment manager prior to their execution.

Designated Brokers For US Reportable Accounts

US-based reportable accounts must be held at one or more of the brokers on the Designated Brokers List. This requirement does not apply to managed accounts that are exempt from certain provisions of the Code of Ethics, employee stock purchase and stock option plans and other accounts (including pension, retirement and compensation accounts) required to be held at a specific broker.

New employees must transfer all reportable accounts to a Designated Broker within 45 days from the start of their employment.

What are the reporting responsibilities for all personnel?

Initial and annual holdings reports

You must disclose all reportable accounts and all covered investments you hold within 10 calendar days after you begin employment at or association with Wellington Management. You will be required to review and update your holdings and securities account

information annually thereafter.

For initial holdings reports, holdings information must be current as of a date no more than 45 days prior to the date you became covered by the Code of Ethics. Please note that you cannot make personal trades until you have filed an initial holdings report via the Code of Ethics System on the Intranet.

For subsequent annual reports, holdings information must be current as of a date no more than 45 days prior to the date the report is submitted. Please note that your annual holdings report must account for both volitional and non-volitional transactions.

At the time you file your initial and annual reports, you will be asked to confirm that you have read and understood the Code of Ethics and any amendments.

Quarterly transactions reports

You must submit a quarterly transaction report no later than 30 calendar days after quarter-end via the Code of Ethics System on the Intranet, even if you did not make any personal trades during that quarter. In the reports, you must either confirm that you did not make any personal trades (except for those resulting from non-volitional events) or provide information regarding all volitional transactions in covered investments.

Duplicate statements and trade confirmations

For each of your reportable accounts, you are required to provide duplicate statements and duplicate trade confirmations to Wellington Management.

Wellington Management Code of Ethics

5

What are the preclearance responsibilities for all personnel?

Preclearance of publicly traded securities

You must receive clearance before buying or selling stocks, bonds, options, and most other publicly traded securities (excluding ETFs) in any reportable account. A full list of the categories of publicly traded securities requiring preclearance, and of certain exceptions to this requirement, is included in Appendix A. Transactions in accounts that are not reportable accounts do not require preclearance or reporting.

Preclearance requests must be submitted online via the Code of Ethics System, which is accessible through the Intranet. If clearance is granted, the approval will be effective for a period of 24 hours. If you preclear a transaction and then place a limit order with your broker, that limit order must either be executed or expire

at the end of the 24-hour period. If you want to execute the order after the 24-hour period expires, you must resubmit your preclearance request.

Please note that preclearance approval does not alter your responsibility to ensure that each personal securities transaction complies with the general standards of conduct, the reporting requirements, the restrictions on short-term trading, or the special rules for investment professionals set out in our Code of Ethics.

Caution on short sales, margin transactions, and options

You may engage in short sales and margin transactions and may purchase or sell options (excluding options on ETFs) provided you receive preclearance and meet all other applicable requirements under our Code of Ethics (including the additional rules for investment professionals described on page 7). Please note, however, that these types of transactions can have unintended consequences. For example, any sale by your broker to cover a margin call or to buy in a short position will be in violation of the Code unless precleared. Likewise, any volitional sale of securities acquired at the expiration of a long call option will be in violation of the Code unless precleared. You are responsible for ensuring any subsequent volitional actions relating to these types of transactions meet the requirements of the Code.

Preclearance of private placement securities

You cannot invest in securities offered to potential investors in a private placement without first obtaining prior approval. Approval may be granted after a review of the facts and circumstances, including whether:

•an investment in the securities is likely to result in future conflicts with client accounts (e.g., upon a future public offering), and

•you are being offered the opportunity due to your employment at or association with Wellington Management.

Investments in our own privately offered investment vehicles (our Sponsored Products), including collective investment funds and common trust funds maintained by Wellington Trust Company, na, our hedge funds, and our non-US domiciled funds, have been approved under the Code and therefore do not require the submission of a Private Placement Approval Form.

Wellington Management Code of Ethics

6

What are the additional requirements for investment professionals?

If you are a portfolio manager, research analyst, or other investment professional who has portfolio management responsibilities for a client account (e.g., designated portfolio manager, backup portfolio manager, investment team member), or who otherwise has direct authority to make decisions to buy or sell securities in a client account (referred to here as an investment professional), you are required to adhere to additional rules and restrictions on your personal securities transactions. However, as no set of rules can anticipate every situation, you must remember to place our clients' interests first whenever you transact in securities that are also held in client accounts you manage.

The following provisions of the code are intended to allow investment professionals to make long-term investments in securities. However, you may not be able to sell personal investments for extended periods of time and therefore should consider the liquidity, tax planning, market, and similar risks associated with making personal investments in securities of an issuer that are or may be held in client accounts.

•invEStmEnt PrOfESSiOnal blaCkOut PEriOdS — You cannot buy or sell a security (excluding shares of exchange-traded funds (ETFs)) for a period of 14 calendar days before or after any transaction in the same issuer by a client account for which you serve as an investment professional. In addition, you may not sell personal holdings in a security of the same issuer (excluding ETFs) that is held by a client account for which you serve as an investment professional until the later of the following periods: (i) one calendar year from the date of your last purchase and (ii) 90 calendar days after all of your client accounts liquidate all holdings of the same issuer.

If you anticipate receiving a cash flow or redemption request in a client portfolio that will result in the purchase or sale of securities that you also hold in your personal account, you should take care to avoid transactions in those securities in your personal account in the days leading up to the client transactions. However, unanticipated cash flows and redemptions in client accounts and unexpected market events do occur from time to time, and a personal trade made in the prior 14 days should never prevent you from buying or selling a security in a client account if the trade would be in the client's best interest. If you find yourself in that situation and need to buy or sell a security in a client account within the 14 calendar days following your personal transaction in a security of the same issuer, you should attempt to notify the Code of Ethics Team or your local Compliance Officer in advance of placing the trade. If you are unable to reach any of those individuals and the trade is time sensitive, you should proceed with the client trade and notify the Code of Ethics Team promptly after submitting it.

•Short Sales by an Investment Professional — An investment professional may not personally take a short position in a security of an issuer in which he or she holds a long position in a client account.

Wellington Management Code of Ethics

7

Gifts and entertainment

Our guiding principle of "client, firm, self" also governs the receipt of gifts and entertainment from clients, consultants, brokers/dealers, research providers, vendors, companies in which we may invest, and others with whom the firm does business. As fiduciaries to our clients, we must always place our clients' interests first and cannot allow gifts or entertainment opportunities to influence the actions we take on behalf of our clients. In keeping with this standard, you must follow several specific requirements:

Accepting Gifts — You may only accept gifts of nominal value, which include logoed items, flower arrangements, gift baskets, and food, as well as other gifts with an approximate value of less than US$100 or the local equivalent per year from a single source. You may not accept a gift of cash, including a cash equivalent such as a gift card, regardless of the amount. If you receive a gift that violates the Code, you must return the gift or consult with the Chief Compliance Officer to determine appropriate action under the circumstances.

Accepting BusineSS Meals — Business meals are permitted provided that neither the cost nor the frequency is excessive and there is a legitimate business purpose. If the host is a broker/dealer or research provider, the host must be reimbursed for the full amount of your proportionate share of the total cost of the meal if the approximate value of the meal is more than US$100 or the local equivalent.

Accepting Entertainment OpportunitieS — The firm recognizes that participation in entertainment opportunities with representatives from organizations with which the firm does business, such as con- sultants, broker/dealers, research providers, vendors, and companies in which we may invest, can help to further legitimate business interests. However, participation in such entertainment opportunities should be infrequent and is subject to the following conditions:

1.A representative of the hosting organization must be present;

2.The primary purpose of the event must be to discuss business or to build a business relationship;

3.You must receive prior approval from your business manager;

4.If the host is a broker/dealer or research provider, the host must be reimbursed for the full amount of the entertainment opportunity; and

5.For all other entertainment opportunities, the host must be reimbursed for the full face value of any entertainment ticket(s) if:

•the entertainment opportunity requires a ticket with a face value of more than US$200 or the local equivalent, or is a high-profile event (e.g., a major sporting event),

•you wish to accept more than one ticket, or

•the host has invited numerous Wellington Management representatives.

Business managers must clear their own participation under the circumstances described above with the Chief Compliance Officer or Chair of the Ethics Committee.

Please note that even if you pay for the full face value of a ticket, you may attend the event only if the host is present.

Lodging and Air Travel — You may not accept a gift of lodging or air travel in connection with any entertainment opportunity. If you participate in an entertainment opportunity for which lodging or air travel is paid for by the host, you must reimburse the host for the equivalent cost, as determined by Wellington Management's travel manager.

Wellington Management Code of Ethics

8

Soliciting Gifts, Entertainment Opportunities, or Contributions — In your capacity as an employee of the firm, you may not solicit gifts, entertainment opportunities, or charitable or political contributions for yourself, or on behalf of clients, prospects, or others, from brokers, vendors, clients, or consultants with whom the firm conducts business or from companies in which the firm may invest.

Sourcing Entertainment Opportunities — You may not request tickets to entertainment events from the firm's Trading department or any other Wellington Management department, or employee, nor from any broker, vendor, company in which we may invest, or other organization with which the firm conducts business.

Outside activities

While the firm recognizes that you may engage in business or charitable activities in your personal time, you must take steps to avoid conflicts of interest between your private interests and our clients' interests. As a result, all significant outside business or charitable activities (e.g., additional employment, consulting work, directorships or officerships) must be approved by your business manager and by the Chief Compliance Officer, General Counsel, or Chair of the Ethics Committee prior to the acceptance of such a position (or if you are new, upon joining the firm). Approval will be granted only if it is determined that the activity does not present a significant conflict of interest. Directorships in public companies (or companies reasonably expected to become public companies) will generally not be authorized, while service with charitable organizations generally will be permitted.

Client confidentiality

Any nonpublic information concerning our clients that you acquire in connection with your employment at the firm is confidential. This includes information regarding actual or contemplated investment decisions, portfolio composition, research recommendations, and client interests. You should not discuss client business, including the existence of a client relationship, with outsiders unless it is a necessary part of your job responsibilities.

How we enforce our Code of Ethics

Legal and Compliance is responsible for monitoring compliance with the Code of Ethics. Members of Legal and Compliance will periodically request certifications and review holdings and transaction reports for potential violations. They may also request additional information or reports.

It is our collective responsibility to uphold the Code of Ethics. In addition to the formal reporting requirements described in this Code of Ethics, you have a responsibility to report any violations of the Code. If you have any doubt as to the appropriateness of any activity, believe that you have violated the Code, or become aware of a violation of the Code by another individual, you should consult the manager of the Code of Ethics Team, Chief Compliance Officer, General Counsel, or Chair of the Ethics Committee.

Wellington Management Code of Ethics

9

Potential violations of the Code of Ethics will be investigated and considered by representatives of Legal and Compliance and/or the Ethics Committee. All violations of the Code of Ethics will be reported to the Chief Compliance Officer. Violations are taken seriously and may result in sanctions or other consequences, including:

•a warning

•referral to your business manager and/or senior management

•reversal of a trade or the return of a gift

•disgorgement of profits or of the value of a gift

•a limitation or restriction on personal investing

•termination of employment

•referral to civil or criminal authorities

If you become aware of any potential conflicts of interest that you believe are not addressed by our Code of Ethics or other policies, please contact the Chief Compliance Officer, the General Counsel, or the manager of the Code of Ethics Team.

Exceptions from the Code of Ethics

The Chief Compliance Officer may grant an exception from the Code, including preclearance, other trading restrictions, and certain reporting requirements on a case-by-case basis if it is determined that the proposed conduct involves no opportunity for abuse and does not conflict with client interests. Exceptions are expected to be rare.

Closing

As a firm, we seek excellence in the people we employ, the products and services we offer, the way we meet our ethical and fiduciary responsibilities, and the working environment we create for ourselves. Our Code of Ethics embodies that commitment. Accordingly, each of us must take care that our actions fully meet the high standards of conduct and professional behavior we have adopted. Most importantly, we must all remember "client, firm, self" is our most fundamental guiding principle.

Wellington Management Code of Ethics

10

APPENDIX A

No Preclearance or Reporting Required:

Open-end investment funds not managed by Wellington Management1

Interests in a variable annuity product in which the underlying assets are held in a fund not managed by Wellington Management

Direct obligations of the US government (including obligations issued by GNMA and PEFCO) or the governments of Canada, France, Germany, Italy, Japan, or the United Kingdom

Cash

Money market instruments or other short-term debt instruments rated P-1 or P-2, A-1 or A-2, or their equivalents2

Bankers' acceptances, CDs, commercial paper

Wellington Trust Company Pools

Wellington Sponsored Hedge Funds

Securities futures and options on direct obligations of the US government or the governments of Canada, France, Germany, Italy, Japan, or the United Kingdom, and associated derivatives

Options, forwards, and futures on commodities and foreign exchange, and associated derivatives

Transactions in approved managed accounts

Reporting of Securities Transactions Required (no need to preclear and not subject to the 60-day holding period):

Open-end investment funds managed by Wellington Management1 (other than money market funds)

Interests in a variable annuity or insurance product in which the underlying assets are held in a fund managed by Wellington Management

Futures and options on securities indices

Gifts of securities to you or a reportable account

Gifts of securities from you or a reportable account

Non-volitional transactions (splits, tender offers, mergers, stock dividends, dividend reinvestments, etc.)

Preclearance and Reporting of Securities Transactions Required:

Bonds and notes (other than direct obligations of the US government or the governments of Canada, France, Germany, Italy, Japan, or the United Kingdom, as well as bankers' acceptances, CDs, commercial paper, and high-quality, short-term debt instruments)

Stock (common and preferred) or other equity securities, including any security convertible into equity securities

Closed-end funds

Unit investment trusts

American Depositary Receipts

Options on securities (but not their non-volitional exercise or expiration), excluding ETFs

Warrants

Rights

Prohibited Investments and Activities:

Initial public offerings (IPOs) of any securities

Single-stock futures

Options expiring within 60 days of purchase, excluding ETFs

Securities being bought or sold on behalf of clients until one trading day after such buying or selling is completed or canceled

Securities of an issuer that is the subject of a new, changed, or reissued but unchanged action recommendation from a global industry research or fixed income credit analyst until two business days following issuance or reissuance of the recommendation

Securities of an issuer that is mentioned at the Morning Meeting or the Early Morning Meeting until two business days following the meeting

Securities on the firmwide restricted list

Profiting from any short-term (i.e., within 60 days) trading activity

Securities of broker/dealers or their affiliates with which the firm conducts business

Securities of any securities market or exchange on which the firm trades

Using a derivative instrument to circumvent the requirements of the Code of Ethics

Purchasing an equity security if your aggregate ownership of the equity security exceeds 0.05% of the total shares outstanding of the issuer, excluding ETFs

This appendix is current as of 2 August 2021 and may be amended at the discretion of the Ethics Committee.

1A list of funds advised or subadvised by Wellington Management ("Wellington-Managed Funds") is available online via the Code of Ethics System. However, you remain responsible for confirming whether any particular investment represents a Wellington-Managed Fund.

2If the instrument is unrated, it must be of equivalent duration and comparable quality.

G2529_3


Victory Capital Management Inc. Code of Ethics

Victory Capital Management Inc.

Code of Ethics

Effective June 1, 2021

Previously updated: January 1, 2021

Victory Capital Management Inc. Code of Ethics

 

 

 

June 1, 2021

1.

Introduction ......................................................................................................................................

1

2.

Definitions.........................................................................................................................................

2

3.

Culture of Compliance.....................................................................................................................

4

4.

Policy Statement on Insider Trading..............................................................................................

5

A. Introduction ...........................................................................................................................................

5

B. Scope of the Policy Statement..............................................................................................................

5

C. What is Material Information? ...............................................................................................................

5

D. What is Non-Public Information? ..........................................................................................................

6

E. Identifying Inside Information ................................................................................................................

6

F. Contact with Public Companies ............................................................................................................

7

G. Tender Offers........................................................................................................................................

7

H. Protecting Sensitive Information ...........................................................................................................

7

I.

Trading in Securities Listed on Exchanges in Other Countries ............................................................

7

J.

Public Company Confidential Records .................................................................................................

7

5.

Conflicts of Interest..........................................................................................................................

8

A. Gifts and Entertainment ........................................................................................................................

8

B. Political Contributions ...........................................................................................................................

9

C. Outside Business Activities.................................................................................................................

10

D. Other Prohibitions on Conduct............................................................................................................

11

E. Review of Employee Communications ...............................................................................................

12

6.

Standards of Business Conduct...................................................................................................

12

7.

Personal Trading, Code of Ethics Reporting and Certifications...............................................

12

A. Employee Investment Accounts .........................................................................................................

13

B. Employee Investment Account Reporting...........................................................................................

14

Victory Capital Management Inc. Code of Ethics

 

 

 

 

June 1, 2021

C. Personal Trading Requirements and Restrictions ..............................................................................

15

D. Representation and Warranties ..........................................................................................................

17

E. Quarterly and Annual Certifications of Compliance ............................................................................

17

F. Review Procedures.............................................................................................................................

18

G. Recordkeeping....................................................................................................................................

18

H. Whistleblower Provisions ....................................................................................................................

18

I.

Confidentiality......................................................................................................................................

18

J.

Reporting to the Board of Directors of Affiliated Funds ......................................................................

18

8.

Code of Ethics Violation Guidelines ............................................................................................

18

Appendix 1 – Affiliated Funds, Proprietary Funds & Reportable Funds.......................................................

i

Appendix 2 – Approved Brokers List ...........................................................................................................

ii

Appendix 3 – Investment Account Disclosure .............................................................................................

iii

Appendix 4 – Reportable Securities ...........................................................................................................

iv

Appendix 5 – ETFs Eligible for De Minimis Transaction Exemption ..........................................................

vi

Supplement 1 - RS Investments (Hong Kong) Limited Code of Ethics Supplement ("Hong Kong

 

Supplement")................................................................................................................................................

vii

Supplement 2 - RS Investment Management (Singapore) Pte. Ltd. ("RSIMS") Code of Ethics

 

 

Supplement ("Singapore Supplement") ........................................................................................................

x

Victory Capital Management Inc. Code of Ethics

June 1, 2021

 

1. INTRODUCTION

Rule 204A-1 of the Investment Advisers Act of 1940 ("Advisers Act") requires all investment advisers registered with the Securities and Exchange Commission ("SEC") to adopt codes of ethics that set forth standards of conduct and require compliance with federal securities laws. Victory Capital Management Inc. a registered investment adviser under the Advisers Act, and its subsidiaries, RS Investments (UK) Limited, RS Investments (Hong Kong) Limited, and RS Investment Management (Singapore) Pte. Ltd. (collectively, "Victory Capital"), have adopted this Code of Ethics ("Code"), which sets forth the standards of business conduct that are required of Victory Capital employees. As an adviser to regulated investment companies, Victory Capital also adopts this Code in adherence to Rule 17j-11 under the Investment Company Act of 1940, as amended (the "Investment Company Act"). Officers and employees of RS Investments (Hong Kong) Limited and RS Investment Management (Singapore) Pte. Ltd. should also review the related Code supplements.

Victory Capital is an indirect, wholly owned subsidiary of Victory Capital Holdings, Inc. ("VCH"). VCH is a Delaware corporation with its Class A common stock listed on the NASDAQ Global Select Market, under the ticker symbol "VCTR." As a public company, new compliance policies were adopted by VCH. The VCH policies are in addition to the compliance program of Victory Capital. In particular, the VCH policies that apply to all Victory Capital employees include: (1) Code of Business Conduct and Ethics, (2) Corporate Communications Policy and (3) Insider Trading Policy. These policies are available through the company intranet site "Under the wing".

Victory Capital Services, Inc. ("VCS"), a Victory Capital affiliate, is a registered broker-dealer and principal underwriter of Victory Capital's Affiliated Funds (defined herein) and has adopted this Code in compliance with Rule 17j-1 under the Investment Company Act. Victory Capital Transfer Agent, Inc., also a Victory Capital affiliate, is the registered transfer agent for USAA Mutual Fund accounts. Victory Capital employees service USAA Mutual Fund direct accounts through a dedicated Contact Center. Victory Capital is not affiliated with United Services Automobile Association ("USAA") or its affiliates.

Victory Capital employees have a responsibility to adhere to the highest ethical principles. Thus, the Code imposes obligations in addition to those required under applicable laws and regulations. The Code is a minimum standard of conduct for employees. Additionally, Victory Capital employees must act in accordance with Victory Capital's fiduciary duty owed to clients. Therefore, literal compliance with the Code will not protect an employee if their behavior otherwise violates Victory Capital's fiduciary duty. If an employee is uncertain as to the intent or purpose of any provision of the Code, or whether a proposed action is compatible with Victory Capital's fiduciary duty, he or she should consult Victory Capital's Chief Compliance Officer ("CCO") or a member of the Compliance team.

Victory Capital recognizes the importance to its employees of being able to manage and develop their own and their dependents' financial resources through long-term investments and strategies. However, because of the potential conflicts of interest inherent in our business and our industry, Victory Capital has implemented certain standards and limitations designed to minimize these conflicts.

Victory Capital's reputation is of paramount importance; therefore, Victory Capital will not tolerate blemishes due to careless personal trading or other conduct prohibited by the Code. Consequently, Material Violations (as defined herein) of the Code may be subject to harsh sanctions. Frequent violations of the Code may

1Rule 17j-1 requires that fund advisers adopt written codes of ethics and have procedures in place to prevent their personnel from abusing their access to information about the fund's securities trading and requires "access persons" to submit reports periodically containing information about their personal securities holdings and transactions.

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result in limitations on personal securities trading or other disciplinary actions, which can include termination of employment.

2. DEFINITIONS

"Access Person" means any employee of Victory Capital or anyone deemed an Access Person by the CCO. As a matter of practice, the Board of Directors of the USAA Mutual Funds Trust, Victory Portfolios, Victory Portfolios II and Victory Variable Insurance Funds (collectively the "Victory Funds") generally consists of members who are not employees or officers of Victory Capital, or their affiliates. Unless designated by the COO, a non-employee director is not treated as an "access person" of Victory Capital, within the meaning of Rule 204A-1 under the Advisers Act and is not treated as either an "access person" or an "advisory person" of Victory Capital.

"Affiliated Funds" means any individual series portfolio of the USAA Mutual Funds Trust, Victory Portfolios, Victory Portfolios II and Victory Variable Insurance Funds, as well as other sub-advised affiliates listed in Appendix 1, each an investment company registered under the Investment Company Act.

"Automatic or Periodic Investment Plan" is a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan.

"Beneficial Interest" means the opportunity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, to profit, or share in any profit derived from, a transaction in the subject Securities. An Access Person is deemed to have a Beneficial Interest in securities owned by members of his or her Immediate Family. Common examples of Beneficial Interest include joint accounts, spousal accounts (including Non-Victory Capital Employee Compensation Programs, Non-Victory Capital Employee Stock Participation Program, and Employer-Sponsored Retirement Plan Accounts), Uniform Transfers to Minors Act accounts, partnerships, trusts and controlling interests in corporations. Any uncertainty as to whether an Access Person has a Beneficial Interest in a Security should be brought to the attention of the Compliance Department. Such questions will be resolved in accordance with, and this definition shall be interpreted in a manner consistent with, the definition of "beneficial owner" set forth in Rules 16a-1(a)(2) and (5) promulgated under the Securities Exchange Act of 1934.

"Blackout Period" means seven (7) calendar days before through three (3) calendar days after the date a client trade is executed.

"Business Entertainment" includes any social event, hospitality event, charitable event, sporting event, entertainment event, meal, leisure activity or event of like nature or purpose, and any transportation or lodging accompanying or related to such activity or event, including any entertainment activity offered in connection with an educational event or business conference, irrespective of whether any business is conducted during, or is attendant to, such activity.

"Covered Government Official" means a 1) state or local governmental official; 2) candidate for state or local office; or 3) federal candidate currently holding state or local office. A governmental "official" includes an incumbent, candidate, or successful candidate for elective office of a state or local government entity, if the office is directly or indirectly responsible for, or can influence the outcome of, the hiring of an investment adviser, or has authority to appoint any person who is directly or indirectly responsible for, or can influence the outcome of, the hiring of an investment adviser, by a state or a political subdivision of a state.

"De Minimis Security" means a security of an issuer with a market cap of $10 Billion or more at the time of purchase, In certain situations, a client trade in a De Minimis Security may not trigger a Blackout Period (see Section 7.C. Personal Trading Requirements and Restrictions for more detailed information). Personal Trades in De Minimis Securities in Personal Accounts always require pre-clearance and are subject to all other provisions of the Code.

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"Exempt Securities" means 1) direct obligations of the U.S. Government; 2) bankers' acceptances, bank certificates of deposit and commercial paper; 3) investment grade, short-term debt instruments, including repurchase agreements; 4) shares held in money market funds; 5) variable insurance products that invest in funds for which Victory Capital does not act as adviser or sub-adviser; 6) open-end mutual funds for which Victory Capital does not act as adviser or sub-adviser; and 7) investments in qualified tuition programs ("529 Plans"). Exempt Securities do not need to be pre-cleared.

"Franchise" means a group of employees who report directly or indirectly to the same Chief Investment Officer that oversees a brand-named strategy

"Immediate Family" means all family members who share the same household, including but not limited to, a spouse, domestic partner, fiancée, parents, grandparents, children, grandchildren, siblings, step-siblings, step-children, step-parents, or in-laws. Immediate Family includes adoptive relationships and any other relationships (whether or not recognized by law) that the CCO determines could lead to conflicts of interest, diversions of corporate opportunity or create the appearance of impropriety.

"Initial Holdings Report" is a report that discloses all securities holdings of every Access Person, which must be submitted to the Compliance Department within ten (10) calendar days of becoming an Access Person.

"Initial Public Offering" or "IPO" means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before such registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the 1934 Act.

"Managed Accounts" means investment advisory or brokerage accounts over which an Access Person has no direct or indirect influence or control in the investment decisions or activities.

"Material Non-Public Information" or "MNPI" means information that is both material and non-public that might have an effect on the market for a security. Access Persons who possess MNPI must not act or cause others to act on such information.

"Material Violation" means any violation of this Code or other misconduct deemed material by the CCO, in conjunction with the Compliance Committee or the Victory Capital Board of Directors.

"Maximum Allowable Trades" means Access Persons are limited to 20 trades per calendar quarter across their Personal Accounts. A trade in the same security in multiple accounts on the same day will count as one trade towards the Maximum Allowable Trades in a quarter. Trades that do not require pre-clearance (i.e. open-end mutual funds, dividend reinvestments) will not count towards the Maximum Allowable Trades.

"MCO" means MyComplianceOffice, which is a web-based compliance system used to track and approve employee personal trading, gifts and entertainment, political contributions, and outside business activities, store policies, and facilitate employee certifications and manage other compliance objectives.

"Personal Account" means an investment account in which an employee retains investment discretion.

"Personal Trading" or "Personal Trades" means trades or transactions by Access Persons in their Personal Accounts.

"Proprietary Fund" is a fund or product in which Victory Capital or its employees have an aggregate of 25% or more Beneficial Interest. See Appendix 1 – Affiliated Funds, Proprietary Funds & Reportable Funds for more information.

"Reportable Fund" means any investment company registered under the Investment Company Act for which Victory Capital is an investment adviser or a sub-adviser, or any registered investment company whose investment adviser or principal underwriter controls Victory Capital, is controlled by Victory Capital, or is under common control with Victory Capital. See Appendix 1 – Affiliated Funds, Proprietary Funds & Reportable Funds for more information.

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"Reportable Security" means any security that is not an Exempt Security, for which Access persons must submit holdings and transaction reports. See the list of Exempt Securities under Appendix 4, as defined by rule 204A-1 under the Investment Advisers Act of 1940.

"RIC" means a Regulated Investment Company.

"Short-Sell" or "Short-Selling" means the sale of a security that is not owned by the seller. Access Persons may not take a short position in a security. However, mutual funds or ETFs that correspond to the inverse performance of a broad-based index are not considered to be Short-Sales. For example, buying (long) the ProShares Short S&P500 ETF is permitted. Employees may also trade in funds that track a volatility index.

"Solutions Team" means any employee who is a member of the Solutions Platform group, generally involved in passive investments.

"Victory Capital Stock" means securities offered by VCH or any subsidiary through a registration statement that has been declared effective by the SEC (e.g. "VCTR").

3. CULTURE OF COMPLIANCE

Victory Capital's primary objective is to provide value through investment advisory, sub-advisory and other financial services to a wide range of clients, including governments, corporations, financial institutions, high net worth individuals, pension funds, and retail clients.

Victory Capital requires that all dealings on behalf of existing and prospective clients be handled with honesty, integrity and high ethical standards, and that such dealings adhere to the letter and the spirit of applicable laws, regulations and contractual guidelines. As a general matter, Victory Capital is a fiduciary that owes its clients a duty of undivided loyalty, and each employee has a responsibility to act in a manner consistent with this duty. All employees must actively work to avoid the possibility that the advice or services provided to clients is, or gives the appearance of being, based on the self-interests of Victory Capital or its employees and not in the clients' best interests. Violations of the Code must be reported promptly to the CCO or his/her designee.

Employees must act solely in the best interests their clients. Statutory and regulatory requirements impose specific responsibilities governing the behavior of personnel in carrying out their responsibilities to clients. Victory Capital and its employees must comply fully with these rules and regulations. The Legal, Compliance and Risk Department ("LCR Department") personnel are available to assist employees in meeting these requirements.

Since no set of rules can anticipate every possible situation, it is essential that Victory Capital employees and representatives obtain guidance from the CCO, Chief Legal Officer ("CLO"), or their designees when unsure how to follow these rules in letter and in spirit. It is the responsibility of all employees and representatives to fully understand and comply with the Code and the policies of Victory Capital or seek guidance from the CCO. Technical compliance with the Code and its procedures will not necessarily validate an employee's actions as appropriate. Any activity that compromises Victory Capital's integrity, even if it does not expressly violate a rule, may result in further action from the CCO. In some instances, the CCO holds discretionary authority to apply exceptions under the Code. In the CCO's absence, the CLO may act in his or her place.

Victory Capital's fiduciary responsibilities apply to a broad range of investment and related activities, including sales and marketing, portfolio management, securities trading, allocation of investment opportunities, client service, operations support, performance measurement and reporting, new product development as well as personal investing activities. These obligations include the duty to avoid material conflicts of interest (and, if this is not possible, to provide full and fair disclosure to clients in communications), to keep accurate books and records, and to supervise personnel appropriately. These concepts are further described in the sections that follow.

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4.POLICY STATEMENT ON INSIDER TRADING A. Introduction

Victory Capital seeks to foster a culture of compliance and a reputation for integrity and professionalism. Victory Capital values and endeavors to protect the confidence and trust placed in us by our clients. To further that goal, this Policy Statement implements procedures to deter the misuse of MNPI in securities transactions.

The term "insider trading" is not defined in the federal securities laws but refers generally to the situation when a person trades while aware of MNPI or communicates MNPI to others in breach of a duty of trust or confidence.

While the law concerning insider trading is not static, it is generally understood that the law prohibits any of the following:

•Trading by an insider, while aware of MNPI;

•Trading by a non-insider, while aware of MNPI, where the information was disclosed to the non-insider in violation of an insider's duty to keep it confidential; or

•Communicating MNPI to others in breach of a duty of trust or confidence.

Trading securities while in possession of MNPI or improperly communicating that information to others may result in stringent penalties. Criminal sanctions may include fines of up to $5,000,000, twenty years' imprisonment, or both. The civil penalty for a violator may be an amount up to three times the profit (or loss avoided) as a result of the insider trading violation, and a permanent bar from working in the securities industry. Investors may sue and seek to recover damages for insider trading violations.

Regardless of whether a regulatory inquiry occurs, Victory Capital views seriously any violation of this Policy Statement. Such violations constitute grounds for disciplinary sanctions, up to and including dismissal.

B. Scope of the Policy Statement

This Policy Statement is drafted broadly and will be applied and interpreted in a similar manner. It applies to all Access Persons and to transactions in any security participated in by Immediate Family members of Access Persons or trusts or corporations controlled by Access Persons.

Any questions relating to this Policy Statement should be directed to the CCO or his/her designee. You must notify the LCR Department immediately if you have any reason to believe that a violation of this Policy Statement has occurred or is about to occur.

C. What is Material Information?

Trading on inside information is not a basis for liability unless the information relied upon is deemed to be material. "Material" information is defined generally as information for which there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions, or information that is reasonably certain to have a substantial effect on the price of a company's securities. If the disclosure of that information would be expected to alter the total mix of information that is publicly available about that company, then the information is considered material. Any questions about whether information is material should be directed to a member of the LCR Department.

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Material information often relates to a company's financial results and operations, including, for example, dividend changes, earning results, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems, and extraordinary management developments. Information about a company could be material because of its expected effect on a particular class of the company's securities, all of the company's securities, the securities of another company, or the securities of several companies. Material information does not have to relate to a company's business. For example, in Carpenter v. U.S., the Supreme Court considered as material certain information about the contents of a forthcoming newspaper column that was expected to affect the market price of a security. In that case, a reporter for The Wall Street Journal was found criminally liable for disclosing to others the dates that reports on various companies would appear in the Journal and whether those reports would be favorable or not.

D. What is Non-Public Information?

For issues concerning insider trading to arise, information must not only be material, it must also be "non-public". Non-public information is information that has not been made available to investors generally. Information received in circumstances indicating that it is not yet in general circulation or where the recipient knows or should know that the information could only have been provided by an "insider" is also deemed non-public information. For non-public information to become public information, it must be disseminated through recognized channels of distribution designed to broadly reach the securities marketplace.

Facts verifying that the information is public (and therefore has become generally available) may include, for example, and without limitation, disclosure in:

•National business and financial wire service, such as Dow Jones or Reuters;

•National news service or newspaper, such as AP or The Wall Street Journal; or

•Publicly disseminated disclosure document, such as a proxy statement or prospectus.

The circulation of rumors or "talk on the street", even if accurate, widespread and reported in the media, does not constitute the requisite public disclosure. In addition, the information must not only be publicly disclosed, there must also be adequate time for the market to digest the information. Material non-public information is not made public by selective dissemination. Material information improperly disclosed only to institutional investors or to a fund analyst or a favored group of analysts retains its status as "non-public" information that must not be disclosed or otherwise misused.

Partial disclosure does not constitute public dissemination. So long as any material component of the "inside" information has yet to be publicly disclosed, the information is deemed non-public and may not be misused.

E. Identifying Inside Information

Before executing any Personal Trades or trades for client accounts, employees must determine whether they have access to MNPI. If an employee believes that he or she might have access to MNPI, the following steps should be taken:

•Report the information and proposed trade immediately to the CCO or a member of the LCR Department;

•Do not purchase or sell the securities as Personal Trades or for clients without written clearance to do so from the CCO or a member of the LCR Department; and

•Do not communicate the information inside or outside of Victory Capital, other than to the LCR Department and, if necessary, your direct manager.

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A member of the Compliance Department will determine whether the information is material and non- public.

F. Contact with Public Companies

Victory Capital's contacts with public companies represent an important part of its research efforts. Victory Capital may make investment decisions on the basis of the firm's conclusions formed through such contacts and analysis of publicly available information. Legal issues may arise if, in the course of these contacts, an employee becomes aware of MNPI. This could happen, for example, if a company's chief financial officer were to prematurely disclose quarterly results to an analyst, or an investor relations representative selectively discloses adverse news to a handful of investors.

G. Tender Offers

Tender offers represent a particular concern in the law of insider trading for two reasons. First, tender offer activity often produces extraordinary gyrations in the price of the target company's securities. Trading during this time is more likely to attract regulatory attention (and produces a disproportionate percentage of insider trading cases). Second, the SEC forbids trading and "tipping" while in possession of MNPI regarding the receipt of a tender offer, the tender offeror, the target company or anyone acting on behalf of either of these parties. Employees should exercise caution any time they become aware of non-public information relating to a tender offer.

H. Protecting Sensitive Information

Employees are responsible for safeguarding all confidential information relating to investment research, fund and client holdings, including analyst research reports, investment meeting discussions or notes, and current fund or client transaction information, regardless whether such information is deemed MNPI. Other types of information (for example, marketing plans, employment issues and shareholder identities) may also be confidential and should not be shared with individuals outside the company unless approved by the CCO or a Victory Capital executive officer.

All Access Persons are expressly prohibited from knowingly spreading any false rumor concerning any company, or any purported market development, that is designed to impact trading in or the price of that company's or any other company's securities, and from engaging in any other type of activity that constitutes illegal market manipulation.

I.Trading in Securities Listed on Exchanges in Other Countries

Trading in securities listed on exchanges in other countries is governed by the laws of that country. Access Persons who are trading in such securities must ensure compliance with applicable law, which in all relevant cases prohibits trading on the basis of MNPI or price-sensitive information, as those terms are defined in the relevant jurisdiction.

J. Public Company Confidential Records

VCH's and Victory Capital's records must always be treated as confidential and must not be disclosed or used for any purpose at any time other than for the normal course of business. Information learned about other entities in a special relationship with VCH, such as acquisition, joint venture and partnership negotiations, is confidential and must not be disclosed without proper authorization.

At all times, Access Persons are prohibited from making any recommendation or expressing any opinion as to trading in Victory Capital Stock

See VCH's Corporate Communications Policy and Insider Trading Policy for more information.

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5. CONFLICTS OF INTEREST

A "conflict of interest" exists when a person's private interests may be contrary to the interests of clients or shareholders of Victory Capital. A conflict may arise if a Victory Capital employee takes actions or has business, financial or other interests that may make it difficult to perform his or her work objectively and effectively.

Conflicts of interest may arise, for example, if a Victory Capital employee or his or her Immediate Family member receives improper personal benefits (for example, personal loans, services, or payment for services) as a result of his or her position at Victory Capital or gains personal enrichment or benefits through access to confidential information. Conflicts may also arise if a Victory Capital employee or an Immediate Family member holds a financial interest in a company that does business with Victory Capital or has outside business interests that may result in divided loyalties or compromised independent judgment. Conflicts may also arise when making securities investments for Proprietary Funds or Personal Accounts or when determining how to allocate trading opportunities.

Conflicts of interest can arise in many common situations, despite best efforts to avoid them. This Code does not attempt to identify all possible conflicts of interest. Literal compliance with each of the specific procedures will not shield Access Persons from liability for Personal Trading or other conduct that violates fiduciary duties to Victory Capital clients. Victory Capital employees are encouraged to seek clarification of, and discuss questions about, potential conflicts of interest. Any questions regarding a conflict of interest or potential conflict of interest should be directed to a manager, the CCO or a representative of the LCR Department.

The following areas represent many common types of conflicts of interests and the procedures to be followed; however, the list is not intended to be all-inclusive. A summary is provided for each case, but further details can be found in the related Policies and Procedures. For questions related to potential conflicts, please contact a member of the LCR Department.

A. Gifts and Entertainment

Gifts

Giving or receiving gifts or other items of value to or from persons doing business or seeking to do business with Victory Capital could call into question the independence of its judgment as a fiduciary of its clients. Accordingly, it is the policy of Victory Capital to permit such conduct only in accordance with the limitations stated herein.

Victory Capital's policies on gifts and entertainment are derived from industry practices. Employees should be aware that there are various laws and regulations that prohibit firms and their employees from giving anything of value to employees of various financial institutions in connection with attempts to obtain any business transaction with the institution, which is viewed as a form of bribery. If there is any question about the appropriateness of any particular gift, an employee should consult a member of the LCR Department.

Under no circumstances may a gift to Victory Capital or any employee be received as any form of compensation for services provided by Victory Capital or an employee. Gifts of nominal value may be given to or accepted from present or prospective customers, brokers, service providers, suppliers or vendors with whom Victory Capital has a business or potential business relationship. Victory Capital employees are required to promptly report all gifts given in excess of $50 in Victory Capital's expense reporting system (Concur). Any gifts received in excess of $50 must promptly be disclosed in MCO. Gifts from an individual or entity may not exceed $100 in aggregate value in any calendar year unless approval is obtained from the employee's direct manager and the LCR Department.

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Gifts of up to $100 per person per year may be provided to present or prospective customers, brokers, service providers, suppliers or vendors with whom Victory Capital has a business or potential business relationship.

Additional policies concerning gifts may be applicable depending on the type of customer (e.g., ERISA, foreign, union, government officials, or Covered Government Officials).

Please refer to Victory Capital's Gifts and Entertainment Policy (F-3) for more information.

Entertainment

Employees may sponsor and participate in Reasonable and Customary Business Entertainment. Any Business Entertainment that is not Reasonable and Customary must be pre-approved by the CCO and the employee's manager. You must accompany the persons being entertained for an entertainment activity to qualify as permissible Business Entertainment. All Business Entertainment expenses must be reported promptly in Concur, listing each attendee at the entertainment event. The receipt of Business Entertainment in excess of $50 per occurrence per employee must be disclosed promptly after each occurrence in MCO. If the client, broker, service provider, vendor or supplier is not present, the entertainment is considered a gift. Items that are normally associated with entertainment that are given or received during a virtual event can be considered entertainment as long as the appropriate parties are in attendance at the virtual event.

Additional policies concerning gifts and entertainment may be applicable depending on the type of customer (e.g., ERISA, foreign, union, government officials, or Covered Government Officials).

Please refer to Victory Capital's Gifts and Entertainment Policy (F-3) for more information.

B. Political Contributions

SEC regulations limit political contributions to Covered Government Officials by employees of investment advisory firms and certain affiliated companies. The SEC's "Pay-to-Play" Rule 206(4)-5 (the "Rule") prohibits advisers from receiving any compensation for providing investment advice to a government entity within two years after a contribution has been made by the adviser or one of its covered associates. The two-year time out is triggered by a political contribution to an official of a government entity. The date of the contribution starts the time out.

The Rule permits contributions of up to $350 per person for any election to an elected official or candidate for whom the individual is entitled to vote, and up to $150 per person for any election to an elected official or candidate for whom the individual is not entitled to vote. Many U.S. cities, states and other government entities have also adopted regulations restricting political contributions by associates of investment management firms seeking to provide services to a governmental entity. While contributions to candidates in federal elections would generally not raise any issues under state or local laws, contributions to state and local officials may not be approved depending on the circumstances. Prior to the commencement of employment, new employees must disclose all political contributions in the past 2 years to Human Resources. During employment, Victory Capital employees must receive approval from the LCR Department through MCO before making personal political contributions at all levels. Political contributions which require pre-approval include, but are not limited to, the following:

•Covered Government Officials;

•Federal candidate campaigns and affiliated committees;

•Political Action Committees (PACs) and Super PACs; and

•Non-profit organizations that may engage in political activities, such as 501(c)(4), 501(c)(6) organizations, and 527 organizations

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Note: U.S. national political party donations (e.g. Democratic or Republican) do not require pre- clearance.

Contributions include:

•Monetary contributions, gifts or loans;

•"In kind" contributions (e.g. donations of goods or services or underwriting or hosting fundraisers);

•Contributions to help pay a debt incurred in connection with an election (including transition or inaugural expenses, purchasing tickets to inaugural events);

•Contributions to joint fund-raising committees; or

•Contributions made by a PAC that is controlled by an Access Person.

See Victory Capital's Political Contributions Policy (F-2) for more information.

C. Outside Business Activities

Prior to commencement of employment with Victory Capital, all Outside Business Activities ("OBAs") must be disclosed to Human Resources. During employment and prior to commencement of any new OBA, employees must fill out and submit an OBA request form in MCO. Employees are responsible for notifying the Compliance Department of any material OBA changes and must review, update and certify quarterly to their OBA activities.

Holding Political Office/Appointments

Victory Capital employees must avoid any political appointment that may conflict with the performance of his or her duties for Victory Capital. Prior written approval must be obtained from the CCO before holding political office and, if approved, must be confirmed annually through the compliance certification process. Employees must expressly remove themselves from discussions and decisions regarding Victory Capital, its products or services when Victory Capital may be a competitor for business related to their appointment.

Outside Employment or Business Activities

Employees may pursue other interests on their own time as long as the activity doesn't reflect negatively on Victory Capital and does not interfere or conflict in any way with Victory Capital or its clients. However, full-time employees of Victory Capital should consider their position to be their primary employment.

All outside business activities must be reported to and pre-approved by both the employee's direct manager and the CCO. Outside employment or business activities may be considered any activity conducted by a Victory Capital employee for another organization or business purpose that is outside the scope of the employee's job function for Victory Capital. This includes, but is not limited to, being an employee, independent contractor, consultant, sole proprietor, officer, director or partner of another organization, or being compensated by, or having the reasonable expectation of compensation from, any other person or organization as a result of any business activity outside the scope of the relationship with Victory Capital. Certain activities are not considered reportable OBAs, including any non-investment related activity that is exclusively charitable, civic, religious or fraternal and is recognized as tax exempt.

Passive investments may be exempted from the reporting and pre-approval requirement. Although passive investments are exempted from the reporting requirements under the Outside Employment or Business Activities section of this Code, they may be subject to the reporting and pre-clearance requirements that fall under the Limited Offerings and Private Placements section of this Code. Any

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questions regarding non-compensated outside employment or business activities and passive investments should be directed to the CCO.

Absent prior approval of the CCO or the Chief Executive Officer, no employee of Victory Capital may serve on the board of directors of any publicly traded company or investment company. An employee's or Immediate Family member's service on a for-profit private company's board of directors must also be pre-approved by the employee's direct manager and the CCO or CLO, and reported on the employee's annual Code certification.

All outside employment or business activities must be reported to and pre-approved by both the employee's direct manager and the CCO and reported on the employee's quarterly certification. Employees are prohibited from the commencement of any outside employment or business activities until the CCO's final approval within MCO has occurred.

In addition to these outside employment or business activity procedures, all employees who are registered representatives of VCS must also adhere to related requirements as set forth in VCS's Written Supervisory Procedures Manual.

See Victory Capital's Outside Business Activity Policy (F-4) for more information.

Bequests

A bequest is the act of leaving or giving something of value in a will. The acceptance of a bequest from a client, vendor or business partner may raise questions about the propriety of that relationship. Any potential or actual bequest in excess of $100 made to an employee by a client, vendor, or business partner under a will or trust agreement must be reported to the LCR Department. Such bequests shall be subject to the approval of the employee's manager and CCO.

D. Other Prohibitions on Conduct

In addition to the specific prohibitions detailed elsewhere in the Code, Victory Capital employees are subject to a general requirement not to engage or participate in any act or practice that would defraud Victory Capital clients. This general prohibition includes, among other things:

•Making any untrue statement of a material fact or employing any device, scheme or artifice to defraud a client;

•Omitting to state a material fact, or failing to provide any information necessary to properly clarify any statements made, in light of the circumstances, thereby creating a materially misleading impression;

•Misuse of client confidential information;

•Making investment decisions, changing internal research ratings and trading decisions other than exclusively for the benefit and in the best interest of our clients;

•Using information about investment or trading decisions or changes in research ratings (whether considered, proposed or made) to benefit or avoid economic injury to an Access Person or anyone other than our clients.

•Taking, delaying or failing to take any action with respect to any research recommendation, report or rating or any investment or trading decision for a client in order to avoid economic injury to an Access Person or anyone other than a client;

•Purchasing or selling a security on the basis of knowledge of a possible trade by or for a client with the intent of personally profiting from personal holdings in the same or related securities ("front-running" or "scalping");

•Revealing to any other person (except in the normal course of an employee's duties on behalf of a client) any information regarding securities transactions by any client or the consideration by any client of any such securities transactions; or

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•Engaging in any act, practice or course of business that operates or would operate as a fraud or deceit on a client or engaging in any manipulative practice with respect to any client.

E.Review of Employee Communications

All correspondence related to Victory Capital's business and any client correspondence is subject to review by the LCR Department. Victory Capital is required to maintain original records of employee correspondence that is communicated on approved devices (such as through email). In addition, Victory Capital is required to monitor employee communications and compliance with Victory Capital's conflicts of interest and insider trading policies and procedures. Consequently, Victory Capital reviews or archives all employee communications, including emails and other forms of electronic communication for compliance purposes. Employees are advised that they should have no expectation of privacy regarding personal communications that are sent or received on company- provided or connected electronic devices or communication platforms, such as instant messages or emails.

Employees are prohibited from sending communications regarding Victory Capital business via any personal, non-Victory Capital email account, instant messaging, text or other method that is not captured in our archiving system. Employees may only use Victory Capital's e-mail system, instant messaging system, Bloomberg and other explicitly approved methods for business-related communications. Employees are permitted to communicate on Victory Capital's e-mail system connected through personal mobile devices such as smartphones. See Victory Capital's Corporate Information Protection and Technology Use Policy (A-8) for more information.

6.STANDARDS OF BUSINESS CONDUCT

•Every employee has a duty to place the interests of Victory Capital client accounts first and not take advantage of his or her positions at the expense of Victory Capital or its clients.

•Victory Capital employees must not mislead or defraud any Victory Capital clients by any statement, act or manipulative practice.

•All personal securities transactions must be conducted in a manner to avoid any actual, potential, or appearance of, a conflict of interest, or any abuse of an employee's position of trust and responsibility with Victory Capital.

•Victory Capital employees may not induce or cause a client to take action, or not to take action, for personal benefit.

•Victory Capital employees may not share portfolio holdings information except as permitted under Victory Capital's Disclosures of Portfolio Securities Policy (B-15). See the policy for more information.

•Every Access Person must notify the CCO or CLO, as soon as reasonably practical, if he or she is arrested, arraigned, indicted or pleads no contest or guilty to any criminal offense (other than minor traffic violations) or if named as a defendant in any investment-related civil proceeding or any administrative or disciplinary action.

7.PERSONAL TRADING, CODE OF ETHICS REPORTING AND CERTIFICATIONS

Personal Trading is a privilege granted by Victory Capital that may be withdrawn at any time. The CCO has complete discretion over all Personal Trading activity and has no obligation to explain any denial or restriction relating thereto. Employees who violate Personal Trading restrictions may be required to disgorge any gains generated (or losses avoided) by Personal Trading. Access Persons must maintain adequate records of all Personal Trading transactions and be prepared to disclose those transactions to the LCR Department.

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A. Employee Investment Accounts

Subject to disclosure and pre-clearance requirements, Access Persons may open and maintain Managed Accounts and Personal Accounts with select brokers supported by MCO through direct electronic feeds ("Approved Brokers"). Any accounts held with a broker that is not on the Approved Broker List must be transferred to an Approved Broker within 90 days of the commencement of employment with Victory Capital.

On a case-by-case basis, the LCR Department may approve certain accounts held with brokers that are not on the Approved Brokers List. The LCR Department must still receive duplicate statements and confirmations directly from the broker for each of these types of accounts.

For a list of Approved Brokers see Appendix 2 – Approved Brokers List. For a summary of account disclosure requirements see Appendix 3 – Investment Account Disclosure. For a summary of pre- clearance requirements see Appendix 4 – Reportable Securities.

Managed Accounts

Access Persons may open and maintain Managed Accounts with Approved Brokers. With the exception of IPOs and Limited Offerings, the requirements listed below under Personal Trading Requirements and Restrictions do not apply to Managed Accounts. Participation in an IPO or a private placement in a Managed Account still requires prior approval of the CCO or his/her designee.

Managed Accounts require the following:

•They must be approved by the LCR Department prior to trading or on the next quarterly certification, whichever is sooner;

•At the end of each quarter, all employees must certify that all Managed Accounts have been disclosed and verify all transactions are correctly reflected in MCO;

•The employee must certify and the LCR Department must be able to independently verify that the account is truly discretionary;

•The broker must provide to the Compliance Department duplicate confirmations or an electronic data feed of each transaction in the account;

•Access Persons may not exercise any direct or indirect influence or control over the transactions; and

•Access Persons must certify quarterly that they had no direct or indirect influence or control over any transactions that occurred in their Managed Accounts.

Failure to adhere to these requirements could lead to disciplinary actions and penalties up to and including termination.

Personal Accounts

Access Persons may open and maintain Personal Accounts with brokers on the Approved Brokers List. All requirements listed below under Personal Trading Requirements and Restrictions apply to Personal Accounts.

Personal Accounts require the following:

•They must be approved by the LCR Department prior to trading or on the next quarterly certification, whichever is sooner;

•At the end of each quarter, all employees must certify that all Personal Accounts have been disclosed and verify all Personal Trades or transactions are correctly reflected in MCO.

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Access Persons acknowledge and agree that Victory Capital may request and obtain information regarding Personal Accounts from broker-dealers. Victory Capital may use personal information, including name, address and social security numbers, to identify and verify employee accounts.

B. Employee Investment Account Reporting

Investment Account Disclosure

All Personal Accounts and Managed Accounts must be disclosed to and approved by the LCR Department prior to trading or on the next quarterly certification, whichever is sooner. New Hires may not trade in their existing accounts until they have been disclosed and approved by the LCR Department. By regulation, such disclosure must take place within 10 days of hire. Failure to comply may result in sanctions imposed by the Victory Capital Compliance Committee and/or Board of Directors.

Initial Holdings Report/Annual Holdings Report

No Personal Trading will be authorized before the LCR Department has received a completed Initial Holdings Report as part of the new hire on-boarding process. Any exceptions must be approved by the CCO. The Initial Holdings Report must be submitted to the Compliance Department within ten

(10)calendar days of becoming an Access Person. All Access Persons must submit a similar report annually to the Compliance Department. These reports must include the following information:

•The date when the individual became an Access Person (Initial Holdings Report only);

•The name of each Personal Account in which any securities are or could be held in the Beneficial Interest of the Access Person, and the name of the broker-dealer or financial institution holding these accounts;

•Current holdings in private placements (or non-public offering), including private equity, hedge funds or partnerships; and

•Each Reportable Security or Reportable Fund in which the Access Person has a Beneficial Interest, including title, number of shares, and principal amount. Holdings information must be current as of 45 calendar days before the report is submitted.

Quarterly Securities Transaction Report

At the end of each quarter, every Access Person must verify his or her Personal Trades or transactions in Personal Accounts through MCO by submitting a Securities Transaction Report ("STR") no later than 30 calendar days following the end of each calendar quarter (whether or not trades were made). The STR must include:

•A description of any transaction in a Reportable Security or Reportable Fund effected during the preceding quarter, such as the date, number of shares, principal amount of securities involved, nature of the transaction (i.e., a buy or a sell), price, and the name of the broker- dealer or financial institution that effected the transaction; and

•The name and number for any account established in the preceding quarter, including the name and address of the broker-dealer or financial institution where the account is held and the date it was created.

Certain transactions are exempt from the quarterly reporting requirement. See "Summary of Pre- clearance Requirements" in Appendix 4 – Reportable Securities for more information.

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C. Personal Trading Requirements and Restrictions

Prohibited Securities and Transactions

Commodities, currencies, futures, options, and selling securities short are prohibited in Personal Accounts.

Investments in companies under common control of VCH are also prohibited in Personal Accounts.

Pre-clearance Requirement

Transactions that require pre-clearance are listed in Appendix 4 – Reportable Securities.

For transactions that require preclearance, employees must obtain compliance approval prior to executing the transaction. Approval may only be requested by submitting a Personal Trade Pre- Clearance Request ("PTR") in MCO. Compliance approval expires at the end of the trading day approval was provided (see exception granted to Covered Persons, as defined in VCH's Insider Trading Policy).

In certain circumstances, an approved and executed Personal Trade may need to be broken or profits disgorged (e.g. a Blackout Period triggered by subsequent client trading).

Cryptocurrencies – Trading in cryptocurrencies must be pre-cleared using the appropriate section of the Trade Pre-Clearance form within MCO. Such trades must be executed either in an account at a firm that is on our approved broker list (see Appendix 2) or in an account that does not offer any security trading capability. Accounts established to trade cryptocurrencies that do not have security trading capabilities must be reported in MCO. Receiving pre-clearance approval does not relieve employees of their fiduciary duty and their responsibility to follow the spirit of the Code.

The LCR department will review cryptocurrency trade requests for perceived or actual conflicts. As a general rule, the LCR department expects that cryptocurrencies traded on common crypto exchanges (e.g. Coinbase) will not pose a conflict and would be approved. Trades in cryptocurrencies will not be subject to the Short-Term Trading Period or count towards an employee's Maximum Allowable Trades, however the LCR department may deny trades if it determines an actual or perceived conflict exists or an employee is trading too frequently. Decisions for approval and denial are the sole responsibility of the LCR Department and are final.

Employees should be aware that the regulatory environment continues to evolve with respect to cryptocurrencies. In the future, Victory Capital may require you to divest crypto holdings or hold them only at approved account providers if deemed necessary to meet regulatory requirements.

Prohibition on Personal Trades Ahead of Client Pending Orders

Access Persons are prohibited from executing Personal Trades in securities where they are aware of any pending orders in such securities by any Franchise that, if executed, would trigger a Blackout Period, create a conflict, or disadvantage a client. Adherence to the above Pre-Clearance Requirement does not provide relief from this prohibition.

Franchise Blackout Period

The Franchise Blackout Period is triggered by all client trades within an employee's specific Franchise. There are no exceptions to the Franchise Blackout period. Therefore, a Personal Trade by a Franchise employee in the same name as a client trade of that employee's Franchise during a Blackout Period is strictly prohibited.

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Solutions Team Blackout Period

The Solutions Team Blackout Period is triggered by all Solutions Platform client trades. Therefore, a Personal Trade by a Solutions Team member during a Blackout Period in the same name as a Solutions Platform client is generally prohibited. Personal Trades in De Minimis Securities by Solutions Team members are not subject to the Solutions Team Blackout Period. The CCO, or his/her designee, may determine that a non-volitional client trade (e.g. cash flow trading) did not trigger a Blackout Period. In such cases, Compliance will confirm that there are no other potential conflicts before approving the Personal Trade.

The CCO, or his/her designee, may extend the Solutions Team Blackout Period beyond 10 days and apply it to employees outside of the Solutions Team during rebalance periods.

Standard Blackout Period

For all other employees (e.g. support staff), the Standard Blackout Period is triggered by all client trades. Therefore, a Personal Trade by an employee during a Blackout Period in the same name as any client is generally prohibited. Personal Trades in De Minimis Securities are not subject to the Standard Blackout Period. The CCO, or his/her designee, may determine that a non-volitional client trade (e.g. cash flow trading) did not trigger a Blackout Period. In such cases, Compliance will confirm that there are no other potential conflicts before approving the Personal Trade. Additionally, in certain situations (e.g. shared office spaces), the CCO, or his/her designee, may apply the Standard Blackout Period to Franchise or Solutions employees.

Short-Term Holding Period

Personal Trading must be for investment purposes rather than for speculation. Access Persons may not purchase and sell or sell and purchase the same security within sixty (60) calendar days, calculated on a LIFO basis. This means each purchase will require you to hold your entire position in that security for 60 days. Similarly, this means each sale will require you not to purchase that name for 60 days. Excess profits (or losses avoided) as a result of violating this restriction may be subject to disgorgement. Access persons should carefully consider whether they have the conviction to hold an entire position or refrain from adding to a position for at least 60 days before engaging in buy or sell transactions. See exceptions related to trading in Victory Capital stock. The Short-Term Holding Period only applies to transactions that require pre-clearance.

The CCO, in his/her sole discretion, may approve exceptions to this requirement.

Maximum Allowable Trades

Access Persons are limited to 20 Personal Trades per calendar quarter across their Personal Accounts. A trade in the same security in multiple accounts on the same day will count as one trade. The CCO, in his/her sole discretion, may approve exceptions to this requirement.

Small Market Capitalization Securities

Victory Capital generally discourages Personal Trading in smaller market capitalization stocks (e.g. less than $1 billion), especially any "microcap stocks", as these securities could lead to a potential conflict of interest if they are also purchased in client accounts. Personal Trading by members of a Franchise in common holdings with Victory Capital clients, especially in low volume or low market capitalization stocks, could lead to a potential conflict of interest and therefore may be prohibited.

IPO Rule

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No Access Person may directly or indirectly acquire a Beneficial Interest in any securities offered in an IPO or in an Initial Coin Offering (ICO), in a Personal Account or Managed Account, without prior approval of the CCO or his/her designee.

Limited Offerings (Private Placements)

No Access Person may acquire a Beneficial Interest in a private placement without the prior approval of the CCO or his/her designee. Prior approval is required whether investing directly or through a Personal Account or Managed Account. Private placements, such as investment in a private company, investments in a hedge fund or other private investment fund are reportable through the pre-clearance process. Subsequent capital contributions and full or partial redemptions must be pre- cleared through MCO.

Market Timing Mutual Fund Transactions

Access Persons shall not participate in any activity that may be construed as market timing of mutual funds. Specifically, no employee shall engage in excessive trading or market timing activities as described in each prospectus of a Proprietary Fund or Reportable Fund.

Trading in Victory Capital Stock

Victory Capital Stock (VCTR) is a Reportable Security under the Code and any transaction in VCTR in a Personal Account must be precleared. Victory employees may be eligible for certain benefits related to VCTR, such as participation in the ESPP and grants of stock options or restricted stock. Certain transactions related to these benefits will require pre-clearance. For a summary of pre- clearance requirements for VCTR see Pre-Clearance Requirements for Victory Capital Stock under Appendix 4 – Reportable Securities. If an employee is uncertain whether a transaction requires pre- clearance, they should consult with the CCO or a member of the Compliance Department prior to trading.

VCTR transactions related to the above employee benefits will not trigger the Short-Term Holding Period in a Personal Account. Likewise, VCTR transactions in a Personal Account will not affect an employee's ability to exercise such employee benefits.

Covered Persons, as defined in VCH's Insider Trading Policy, will have 3 business days upon receipt of approval to effect transactions in VCTR.

D. Representations and Warranties

Each time an Access Person submits a PTR, that Access Person shall be deemed to make the following representations and warranties:

•They are not in possession of any MNPI for the requested security;

•They are not aware of any client trading in the same security during any Blackout Period to which the employee is subject

•They have not traded the same position in the opposite direction, in the past 60 days (Mandatory Short-Term Holding Period);

E.Quarterly and Annual Certifications of Compliance

Each Access Person is required to certify quarterly that he or she has disclosed all reportable:

1.Gifts and entertainment;

2.Outside Business Activities;

3.Political activity and contributions;

4.All Personal Trading Accounts, including Managed Accounts; and

5.Personal Trades.

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Each Access Person is required to certify annually to the following:

1.They have read, understand and complied with this Code and other related policies;

2.They have read, understand and complied with Victory Capital's Corporate Information Protection and Technology Use Policy (A-8);

3.They have provided and verified all reportable holdings data; and

4.They have answered all additional questions and disclosures within Victory Capital's Annual Code of Ethics Certification in an accurate and truthful manner.

F.Review Procedures

The LCR Department will maintain review procedures consistent with this Code.

G. Recordkeeping

All Code of Ethics records will be maintained pursuant to the provisions of Rule 204A-1 under the Advisers Act and Rule 17j-1 under the Investment Company Act. See Victory Capital's Books and Records Policy (M-13) for more information.

H. Whistleblower Provisions

If an Access Person believes that there has been a violation of this Code, he or she must promptly notify the CCO or CLO or report anonymously to the Victory Capital Ethics telephone hotline at 800- 584-9055. Access Persons are protected from retaliation for reporting violations of this Code. Retaliation or the threat of retaliation against an Access Person for reporting a violation constitutes a further violation of this Code and may lead to immediate suspension and further sanctions. See Victory Capital's Whistleblower and Reporting Suspicious Activity Policy (F-8) for more information.

Victory Capital is also responsible for communicating the Affiliated Funds' whistleblower procedures to our employees. The Affiliated Funds have implemented procedures for receiving anonymous reports of suspected or actual violations of Affiliated Funds' policies and questionable accounting, internal accounting controls, or auditing matters. Call 866-844-3863 to initiate a report regarding an Affiliated Fund.

I.Confidentiality

All information obtained from any employee shall be kept in strict confidence, except when requested by the SEC or any other regulatory or self-regulatory organization, and may otherwise be disclosed to the extent required by law or regulation. Additionally, certain information may be provided to a broker-dealer, service provider or vendor, such as employee name, social security number and home address, in order to ascertain Personal Trading activity that is required to be disclosed by an Access Person.

J. Reporting to the Board of Directors of Affiliated Funds

At least annually, Victory Capital will provide the Board of Directors of Affiliated Funds with information regarding: 1) any Material Violations under this Code and any sanctions imposed as a response to such Material Violation; and 2) certification that Victory Capital has adopted procedures necessary to prevent Access Persons from violating this Code.

8. CODE OF ETHICS VIOLATION GUIDELINES

Each Access Person is responsible for conducting his or her activities in accordance with this Code. Violations of the Code may result in applicable sanctions.

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Sanctions may correlate to the severity of the violation and may take into consideration, among other things, such factors as the frequency and severity of any prior violations. The CCO may recommend escalation to the Victory Capital Board of Directors and Compliance Committee. When necessary, the Victory Capital Board of Directors may obtain input from the Compliance Committee and the CCO when determining whether such violation is a Material Violation.

The CCO holds discretionary authority to revoke Personal Trading privileges for any length of time and also reserves the right to lift Personal Trading sanctions in response to market conditions. Additionally, the CCO or Compliance Committee may impose a monetary penalty for any violation. The CCO will report all warnings, violations and sanctions to the Compliance Committee.

Minor Violations

•Provided incorrect or incomplete account or trading information

•Engaging in a pattern of discouraged or excessive trading

•Trading without pre-clearance approval when trade would have normally been approved and additional violations did not occur

•Failure to submit a complete or timely initial or annual holdings or securities transactions report

•Failure to provide the Compliance Department a duplicate confirmation in a timely manner after request or notice by the Compliance Department

•Failure to pre-clear properly an outside business activity prior to commencement of such activity

•Failure to complete a quarterly or annual certification by due date

•Failure to pre-clear an investment in a private placement that would have been approved

Technical Violations

•Any pattern of a Minor Violation within a 12-month period may qualify as a Technical Violation

•Failure to report a Personal Account

•Trading without pre-clearance approval when trade would not have been approved

•Trading without pre-clearance or supplied incorrect information, which may have resulted in additional violations

•Failure to pre-clear any activity that would have been denied by the Compliance Department

•Any willful violations of the Code, as determined by the CCO, to be more severe than a Minor Violation

Repeat Technical Violations

•Any Technical Violation that is repeated at least two

(2) times during a 12-month period

Potential Actions

•LCR Department may question employee and document response

•1st violation within a 12-month period may result in a warning letter

•CCO and Compliance Committee may be notified of all warnings and citations given to employees

•Employee may be required to break a trade or disgorge profits from the trade

•Any additional actions the CCO or LCR Department deem appropriate under the circumstances

Potential Actions

•LCR Department may question employee and document response

•LCR Department may issue a warning letter

•Compliance Committee may be notified

•Human Resources may be notified

•Employee may be required to break a trade or disgorge profits from the trade – any such profits will be collected by Victory Capital and donated to charity

•Temporary ban from Personal Trading for no less than 30 calendar days

•A fine may be imposed, as determined by the CCO on a case-by-case basis

•Any other actions deemed appropriate by the CCO or the LCR Department

Potential Actions

•CCO may meet with employee's direct manager to discuss violation

•Human Resources may be notified

•Employee may be required to break a trade or disgorge profits from the trade – any such profits will be collected by Victory Capital and donated to charity

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• Three (3) or more technical violations within a 12-

 

 

 

month period may receive a citation letter, monetary

 

 

fine and loss of Personal Trading privileges for no

 

 

less than 90 calendar days

 

 

• Any other actions deemed appropriate by the CCO or

 

 

the LCR Department

 

 

 

 

Material Violations / Fraudulent Actions

 

Potential Actions

 

• Any Material Violation

 

• Compliance Committee will review and recommend

 

 

sanctions and penalties up to and including

 

 

termination of employment

 

 

• The Board of Directors and, when applicable, clients

 

 

may be notified

 

• Possible criminal sanctions imposed by regulatory

 

 

authorities

 

• A fine of $10,000 may be imposed by the Board of

 

 

Directors

 

 

• Any other actions deemed appropriate by the CCO,

 

 

Compliance Committee or the Board of Directors

The Code of Ethics Violation Guidelines provides examples of potential Code violations and the actions that Victory Capital might take if employees are in violation of the Code; it is not intended to serve as an exhaustive list of potential Code violations or actions relating thereto. All findings of Code violations and any actions relating thereto will be made on a case-by-case basis. The CCO has discretion to interpret violations and impose various sanctions in response to such violations as deemed necessary.

Reconsideration

If an Access Person wishes to dispute a violation notice, he or she may submit a written explanation of the circumstances of the violation to the CCO. The CCO (and the CLO if escalation is deemed necessary) will review submissions on a case by case basis. The CCO and CLO are under no obligation to change any sanction that has been imposed.

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Appendix 1 – Affiliated Funds, Proprietary Funds & Reportable Funds

As described in this Code, certain restrictions apply to trading in an Affiliated Fund, a Proprietary Fund and any fund sub-advised by Victory Capital. Please refer to the company's intranet site "Under the wing" for a complete list or follow one of the links below.

Affiliated Funds

For the most up-to-date list of Affiliated Victory Funds, please visit www.vcm.com.

Proprietary Funds

Pre-clearance is required before trading in one of the following Proprietary Funds, which is a fund or product in which Victory Capital or its employees have an aggregate of 25% or more Beneficial Interest:

•Victory Munder Small Cap Growth Fund (MASCX, MYSGX), managed by Munder Capital Management

•Victory Munder Small Cap/Mid-Cap Blend (strategy), managed by Munder Capital Management

Sub-Advised Funds

Victory Capital acts as sub-adviser to a number of unaffiliated registered investment companies (mutual funds). Please refer to Victory Capital Management Inc.'s ADV filed with the SEC by searching for the firm name on https://www.adviserinfo.sec.gov .  ADV Part 1 contains SECTION 5.G.(3), which lists "Advisers to Registered Investment Companies and Business Development Companies". The name of the fund complex can be obtained by searching for the SEC File Number (under More Options) using EDGAR: https://www.sec.gov/edgar/searchedgar/companysearch.html .  A complete list is also available on the company's intranet site "Under the wing" under the compliance tab.

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Appendix 2 – Approved Brokers List

You are allowed to open new or maintain existing personal or managed accounts at any of the brokers listed below. However, you may NOT begin trading in a brokerage account until it is reported in MCO and set up on our broker data feed. The approved brokers have been divided into tiers based on how responsive they typically are to our requests to add new accounts to the broker data feed.

Tier 1 Approved Brokers

These brokers provide enhanced broker data feed functionality and typically add new accounts to our broker data feed within 1 – 3 business days.

1.Charles Schwab

2.Fidelity Investments

3.Interactive Brokers

4.TD Ameritrade

Tier 2 Approved Brokers

These brokers may take longer than Tier 1 Approved Brokers, but they generally add new accounts to our broker data feed within 5 business days.

1.Ameriprise Financial Services

2.E*TRADE

3.Edward Jones

4.Merrill Lynch

5.UBS

6.Vanguard

Tier 3 Approved Brokers

These brokers may require you to sign a form before they will add a new account to our broker data feed, and/or typically take longer to update the feed once all their requirements are met – your ability to trade in a new account at these firms may be significantly delayed.

1.JP Morgan Chase

2.Morgan Stanley

3.Northern Trust

4.Raymond James

5.RBC

6.Wells Fargo

Approved Non-Brokers

The following types of accounts are typically not held through a traditional brokerage firm but are still allowed under the Code of Ethics – you may be required to manually report transactions effected in reportable securities within these types of accounts.

1.Employer Sponsored Retirement Plans

2.ESOP/ESPP

3.Direct Registration Service (DRS – i.e. Computershare, American Stock Transfer Company, etc.)

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Appendix 3 – Investment Account Disclosure

New Hires may not trade in their existing accounts until they have been disclosed and approved by the LCR Department. By regulation, such disclosure must take place within 10 days of hire. All new Personal Accounts and Managed Accounts must be reported to the LCR Department prior to trading or on the next quarterly certification, whichever is sooner. Failure to comply may result in sanctions imposed by the Victory Capital Compliance Committee and/or Board of Directors.

The below chart summarizes certain account types and their disclosure requirements. If an employee has a beneficial interest in any account identified below, they must follow the disclosure requirements. If an employee is uncertain whether an account should be disclosed or if they have a beneficial interest in an account not listed below, he or she should consult with the CCO or a member of the Compliance team.

Account Type

Initial Disclosure

Periodic Verification

 

 

 

All Personal Accounts

Yes

Yes

All Managed Accounts

Yes

Yes

Affiliated Fund Direct Accounts

Yes

Yes

401(k) if able to hold Reportable Securities

Yes

Yes

Security Lending Accounts

Yes

Yes

Margin Accounts

Yes

Yes

Investment Club Accounts

Yes

Yes

 

 

 

Private Placements

Yes

No

 

 

 

Unaffliated Open-end Mutual Fund Direct Accounts

No

No

 

 

 

Retirement accounts if unable to hold Reportable Securities

No

No

 

 

 

529 Plans

No

No

Bank accounts if unable to hold Reportable Securities

No

No

 

 

 

Donor Advised Fund (only pre-clear gift of stock to account)

No

No

 

 

 

HSA Investments (if unable to hold Reportable Securities)

No

No

 

 

 

Accounts that facilitate trading cryptocurrencies

Yes

Yes

 

 

 

Also see the Account Reporting Job Aid for more details.

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Appendix 4 – Reportable Securities

Personal Accounts generally require employees to pre-clear transactions by submitting PTRs through MCO. See Section VI: Personal Trading Requirements and Restrictions for more information.

Summary of Pre-clearance and Reporting Requirements

The below chart summarizes the pre-clearance and reporting requirements of certain security types. Additional details can be found in the Pre-Clearance Job Aid. If an employee is uncertain whether a transaction requires pre-clearance, he or she should consult with the CCO or a member of the Compliance team. For Victory Capital Stock, please refer to the Summary of Pre-Clearance Requirements for Victory Capital Stock provided in this Appendix.

Prohibited in Personal Accounts

Commodities

Futures

Options

Currencies

Selling Securities Short

Companies under common control with VCH

Pre-clear in Managed Accounts and Personal Accounts

Initial Public Offerings (IPO)

Initial Coin Offerings (ICO)

Private placements

Pre-clear in Personal Accounts

Equities

Corporate, High-Yield, Convertible, International, and Municipal Bonds

Exchange-traded funds (ETFs), including Victory Capital ETFs

Exchange-traded notes (ETNs)

Closed-end funds

Mortgage-Backed Securities

Agency Securities (e.g. Fannie Mae, Freddie Mac etc.)

Trust preferred & traditional preferred securities

Any securities that are gifted or donated by an Access Person (e.g. direct to charity or to donor advised fund)

Unit investment trusts

Victory Proprietary Funds (MASCX, MYSGX, MAEMX, MYEMX)

Victory Capital 401(k) transactions greater than $100,000 in a Proprietary Fund

Cryptocurrencies (e.g. Bitcoin, Ethereum, etc.)

Reportable ONLY (pre-clearance NOT required)

Dividend Reinvestment Plans (DRIPs)

Victory or USAA Mutual Funds, unless it's a Proprietary Fund

Variable insurance products only where Victory Capital serves as adviser or sub-adviser

Exempt Transactions (only the effect of these transactions will be captured as an update on the annual holdings certification)

Approved automatic or periodic investment plans

Dividend reinvestment transactions

Corporate action transactions (e.g., stock splits, rights offerings, mergers and acquisitions)

Security lending transactions

Exempt Securities not subject to the Code

Direct obligations of the U.S. government

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Bankers' acceptances, bank certificates of deposit and commercial paper

Investment grade, short-term debt instruments, including repurchase agreements

Money market funds

Variable insurance products unless Victory Capital acts as adviser or sub-adviser

Unaffiliated open-end mutual funds

Investments in qualified tuition programs ("529 Plans"), including the USAA College Savings Plan

Physical commodity contracts

Summary of Pre-Clearance Requirements for Victory Capital Stock (ticker "VCTR")

VCTR Transaction Description

Pre-Clear

Common Stock (Class A Shares)

 

Employee purchase or sale in any Personal Account (e.g. a brokerage account for the benefit

Yes

of the employee or for the benefit of the employee's Immediate Family)

 

Employee purchase or sale in a Managed Account approved by Compliance.

No

Employee Stock Purchase Plan (ESPP)

 

Purchases made pursuant to Employee Stock Purchase Plan

No

Sales of shares acquired through the Employee Stock Purchase Plan

Yes

Options

 

Sale of shares in the open market acquired through the exercise of any options

Yes

Cash Exercise - Employee pays the entire cost of the exercise.

No

Withhold Shares - Victory Capital withholds shares equal to the cost of the exercise.

No

Restricted Stock (Class B Shares)

 

Selling restricted stock in the open market

Yes

Cash - Cash payment to cover vested shares tax liability

No

Net - Surrender shares to Victory Capital to cover vested shares tax liability

No

10b5-1 Trading Plan

 

Officers of VCH required to make filings under Section 16 of the Securities and Exchange

 

Act of 1934, as amended, conducting trades in accordance with an approved 10b5-1 Trading

No

Plan.

 

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Appendix 5 – ETFs Eligible for De Minimis Transaction Exemption

Firm trades in the following ETFs will not trigger any Blackout Period due to their use as highly liquid cash management vehicles in various Victory Capital accounts.

Name

Symbol

CUSIP

iShares 7-10 Year Treasury Bond ETF

IEF

464287440

iShares 20+ Year Treasury Bond ETF

TLT

464287432

iShares Core MSCI EAFE ETF

IEFA

46432F842

iShares Core MSCI Emerging Markets ETF

IEMG

46434G103

iShares Core S&P 500 ETF

IVV

464287200

iShares Core U.S. Aggregate Bond ETF

AGG

464287226

iShares FTSE China 25 Index

FXI

464287184

iShares iBoxx $ High Yield Corporate Bond

HYG

464288513

iShares iBoxx $ Investment Grade Corporate Bond ETF

LQD

464287242

iShares MSCI ACWI Index Fund

ACWI

464288257

iShares MSCI China Index Fund

MCHI

46429B671

iShares MSCI Emerging Index Fund ETF

EEM

464287234

iShares MSCI EAFE Index Fund ETF

EFA

464287465

iShares MSCI Japan Index Fund ETF

EWJ

464286848

iShares MSCI India

INDA

46429B598

iShares Russell 1000

IWF

464287614

iShares Russell 2000 ETF

IWM

464287655

iShares Russell 2000 Value

IWN

464287630

iShares Russell Mid-Cap Value

IWS

464287473

SPDR Bloomberg Barclays High Yield Bond ETF

JNK

78468R622

SPDR S&P 500 ETF

SPY

78462F103

SPDR S&P MidCap 400 ETF

MDY

78467Y107

Vanguard FTSE All-World ex-US ETF

VEU

922042775

Vanguard FTSE Developed Markets ETF

VEA

921943858

Vanguard FTSE Emerging Markets ETF

VWO

922042858

Vanguard FTSE Europe ETF

VGK

922042874

Vanguard Mortgage-Backed Securities ETF

VMBS

92206C771

Vanguard Real Estate ETF

VNQ

922908553

Vanguard Short-Term Bond ETF

BSV

921937827

Vanguard Short-Term Corporate Bond ETF

VCSH

92206C409

Vanguard S&P 500 ETF

VOO

922908363

Vanguard Total Bond Market ETF

BND

921937835

Vanguard Total International Stock ETF

VXUS

921909768

Vanguard Total Stock Market ETF

VTI

922908769

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Supplement 1

RS Investments (Hong Kong) Limited

Code of Ethics Supplement ("Hong Kong Supplement")

The following policies and procedures are in addition to, and supersede where relevant, the policies and procedures detailed in the Code.

I.COMPLIANCE General

Compliance with all regulatory requirements is of the utmost importance to RS Investments (Hong Kong) Limited ("RSHK"). All staff members of RSHK should read and understand the content of the Code and Victory Capital's Compliance Manual (the "Compliance Manual"), and each staff member should also read and understand the content of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (the "Code of Conduct") and the Fund Manager Code of Conduct (the "FMCC") issued by the Securities and Futures Commission (the "SFC") where such staff member is licensed by the SFC. RSHK should at all times have at least one designated Compliance Officer. The Compliance Officer and the responsible officers who are ultimately responsible for seeking to ensure compliance by RSHK with all applicable regulatory requirements on a daily basis are identified in the RSHK Compliance Manual.

In addition, it is also the duty of all staff members of RSHK to comply with the contents of the Code and the Compliance Manual, and to observe all other regulatory requirements as applicable to them from time to time, in all their activities on behalf of RSHK. Failure to do so may result in disciplinary action.

II.PROHIBITED CONDUCT General

Every director, manager or any other person involved in the management of RSHK has a statutory obligation to take all reasonable measures from time to time to seek to ensure that proper safeguards exist to prevent RSHK from acting in a way which would result in RSHK perpetrating any market misconduct under the Securities and Futures Ordinance (the "SFO").

Market Misconduct

"Market misconduct" under the SFO means:

1.Insider dealing

2.False trading

3.Price rigging

4.Disclosure of information about prohibited transactions

5.Disclosure of false or misleading information inducing transactions stock market manipulation; and

6.Includes attempting to engage in, or assisting, counseling or procuring another person to engage in any of the above activities

Insider Dealing

See Section IV – Policy Statement on Insider Trading for more information.

False Trading

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False trading attracts civil and criminal liabilities. In brief, false trading occurs when a person, in Hong Kong or elsewhere, engages in conduct intending that, or being reckless as to whether, it creates, or is likely to create, a false or misleading appearance of active trading in securities or futures contracts traded on a Hong Kong or overseas market. An on-market "wash sale" or "matched order" is presumed to create a false or misleading appearance of active trading.

Price Rigging

Price rigging attracts civil and criminal liabilities. In brief, price rigging occurs where a person, in Hong Kong or elsewhere engages, directly or indirectly, in:

1.A wash sale which maintains, increases, reduces, stabilizes or causes fluctuations in, the price of securities traded on a Hong Kong market; or

2.Any fictitious or artificial transaction or device, intending that, or being reckless as to whether, it maintains, increases, reduces, stabilizes or causes fluctuations in, the price of securities, or the price for dealing in futures contracts, traded on a Hong Kong market.

There will also be a breach where such activity is carried out in Hong Kong which affects shares and futures contracts that are traded on an overseas market.

Disclosure of Prohibited Transactions and Disclosure of False and Misleading Information

Disclosure of prohibited transactions and disclosure of false and misleading information inducing transactions attract civil and criminal liabilities. In brief, these occur when a person discloses, circulates or disseminates information:

1.To the effect that the price of securities of a corporation, or the price for dealings in futures contracts, will be maintained, reduced or stabilized because of a prohibited transaction; or

2.That is likely to induce a transaction in securities or futures contracts if the information is false or misleading.

Stock Market Manipulation

Stock market manipulation attracts civil and criminal liabilities under the laws of Hong Kong. It is prohibited when, in Hong Kong or elsewhere, a person enters into, directly or indirectly, two or more transactions in securities that by themselves or in conjunction with any other transaction increase reduce, maintain or stabilize the price of securities and with the effect of influencing the investment decisions of other persons.

Other Offenses

All Victory Capital employees, including the employees of RSHK, are prohibited from engaging in the Short- Selling of any securities, including "naked" or "uncovered," Short-Selling on the SEHK. It is a criminal offence under the SFO for a person to sell securities at or through the SEHK unless at the time of the sale he (or his client, if he acts as an agent) has a presently exercisable and unconditional right to vest the securities in the purchaser of them, or believes and has reasonable grounds to believe that he (or his client, as the case may be) has such a right.

RSHK should also note that section 171 of the SFO imposes a duty to report Short-Selling transactions (which are covered) on both the seller (as a principal, whether he is a client or an intermediary) and the intermediary (as an agent). RSHK must also observe the Securities and Futures (Short-Selling and Securities Borrowing and Lending (Miscellaneous) Rules) and the SFC's "Guidance Note on Short-Selling Reporting and Stock Lending Record Keeping Requirements" as applicable.

RSHK and the employees of RSHK shall not make any unsolicited call (unless specifically allowed under s174 of the SFO or under the Securities and Futures (Unsolicited Calls – Exclusion) Rules in order to induce

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or attempt to induce another person to sell or purchase securities, futures contract or leveraged foreign exchange contract.

Other criminal offences under the SFO include:

1.Offence involving fraudulent or deceptive devices etc. in transactions in securities, futures contracts or leveraged foreign exchange trading;

2.Offence of disclosing false or misleading information inducing others to enter into leveraged foreign exchange contracts; and

3.Offence of falsely representing dealings in futures contracts on behalf of others, etc.

Other Misconduct

Prohibition on Shadowing

An employee is prohibited from replicating deliberately what the clients of RSHK trade for the purpose of making speculative profits or avoiding losses.

Prohibition on Churning or Twisting

RSHK is not permitted to generate high commission income by putting excessive orders through the client accounts.

Prohibition on Rat Trading

An employee is prohibited from rat trading, which covers deliberate trading to the disadvantage of the client. For example, a fund manager might execute a buy order and delay allocating it to the funds or accounts it manages. If the price moves up, he may allocate it to his own account or to a nominee account at the lower execution price. On the other hand, he may delay executing the order and, if the price moves down, buy it at the lower price for himself or herself and sell it to the fund or accounts that it manages.

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Supplement 2

RS Investment Management (Singapore) Pte. Ltd. ("RSIMS")

Code of Ethics Supplement ("Singapore Supplement")

The policies and procedures in this Singapore Supplement to the Code apply to Access Persons of RSIMS and are in addition to, and supplement, the policies and procedures detailed in the Code.

Matters set out in the relevant sections of this Singapore Supplement shall be read in conjunction, and as one, with the Code. To the extent there is any inconsistency between the Code and this Singapore Supplement, this Singapore Supplement shall prevail.

Short-Selling of Securities

All Victory Capital employees, including employees of RSIMS, are prohibited from Short-Selling any security.

Trading on Inside Information

In addition to the requirements set out in the Code, all employees of RSIMS and all members of their Immediate Family are required to comply with all applicable laws in Singapore in relation to any Securities Transactions. Such laws include but are not limited to Part XII (Market Conduct) of the Securities and Futures Act (Chapter 289 of Singapore) ("SFA") which set out prohibitions against the following conduct:

•False trading and market rigging transactions;

•Securities market manipulation and manipulation of prices of futures contracts and cornering;

•The making of false or misleading statements or the dissemination of information that is false or misleading;

•Fraudulently inducing persons to deal in securities or trade in futures contracts;

•Employment of fraudulent or deceptive devices, or manipulative and deceptive devices;

•Bucketing; and

•Insider trading and tipping off.

Reporting Requirements

In addition to the Personal Account and Personal Trading requirements and restrictions set out in the Code, each employee of RSIMS who acts as a representative of RSIMS in RSIMS' capacity as the holder of a capital markets services license issued pursuant to the SFA for fund management (each a "Relevant Access Person") is required to maintain a register of his or her interests in securities (as such term is defined in section 2(1) of the SFA, the relevant extract of which is set out in the Appendix) that are listed for quotation, or quoted, on a securities exchange or recognized market operator in the prescribed  Form 15 to the Securities and  Futures (Licensing and Conduct of Business) Regulations (Rg 10).

Within 7 days after the date he or she acquires the interest in the relevant securities, each Relevant Access Person shall be required to enter into his or her register:

1.Particulars of securities in which such Relevant Access Person has any interest; and

2.Particulars of such interests.

Where there is any change in any interest in the securities of such Relevant Access Person, he or she shall enter particulars of the change (including the date of the change and the circumstances by reason of which the change has occurred), within 7 days after the date of the change.

All entries in the register must be kept in an easily accessible form for a period of not less than 5 years after the date on which such entry was first made. The register shall:

1. If in physical form, be kept at RSIMS's principal place of business in Singapore; or

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2.If in electronic form, be kept in such manner so as to ensure that full access to the register may be gained by the Monetary Authority of Singapore ("MAS") at RSIMS's principal place of business in Singapore.

RSIMS is required to maintain records of the place at which the Relevant Access Persons keep their respective registers and the places at which copies of those registers are kept in Singapore. As a separate matter, RSIMS is also required to maintain a Form 15 in relation to RSIMS' own interests in the relevant Securities.

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