<PAGE>
As filed with the Securities and Exchange Commission on December 15, 1995
1933 Act Registration No. 2-11357
1940 Act Registration No. 811-582
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. ______ [ ]
Post-Effective Amendment No. __74__ [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 29 [ X ]
(Check appropriate box or boxes)
NEUBERGER & BERMAN EQUITY FUNDS
(Exact Name of the Registrant as Specified in Charter)
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
(Address of Principal Executive Offices)
Registrant's Telephone Number, including area code: (212) 476-8800
Lawrence Zicklin, President
Neuberger & Berman Equity Funds
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Arthur C. Delibert, Esq.
Kirkpatrick & Lockhart LLP
South Lobby - 9th Floor
1800 M Street, N.W.
Washington, D.C. 20036-5891
(Names and Addresses of agents for service)
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to paragraph (b)
__x__ on December 15, 1995 pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)(1)
_____ on __________ pursuant to paragraph (a)(1)
_____ 75 days after filing pursuant to paragraph (a)(2)
_____ on __________ pursuant to paragraph (a)(2)
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended, and filed the notice required
by such rule for its 1995 fiscal year on October 24, 1995.
<PAGE>
Neuberger & Berman Equity Funds is a "master/feeder fund." This
Post-Effective Amendment No. 74 includes signature pages for the master
funds, Equity Managers Trust and Global Managers Trust, and appropriate
officers and trustees thereof.
Page ______ of ______
Exhibit Index Begins on
Page _______
<PAGE>
NEUBERGER & BERMAN EQUITY FUNDS
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 74 ON FORM N-1A
This post-effective amendment consists of the following papers and
documents.
Cover Sheet
Contents of Post-Effective Amendment No. 74 on Form N-1A
Cross Reference Sheet
Neuberger & Berman Focus Fund
Neuberger & Berman Genesis Fund
Neuberger & Berman Guardian Fund
Neuberger & Berman International Fund
Neuberger & Berman Manhattan Fund
Neuberger & Berman Partners Fund
Neuberger & Berman Socially Responsive Fund
Part A - Prospectus
Part B - Statement of Additional Information
Part C - Other Information
Signature Pages
Exhibits
<PAGE>
NEUBERGER & BERMAN EQUITY FUNDS
POST-EFFECTIVE AMENDMENT NO. 74 ON FORM N-1A
Cross Reference Sheet
This cross reference sheet relates to the Prospectus
and Statement of Additional Information for
Neuberger & Berman Focus Fund,
Neuberger & Berman Genesis Fund,
Neuberger & Berman Guardian Fund,
Neuberger & Berman International Fund
Neuberger & Berman Manhattan Fund,
Neuberger & Berman Partners Fund, and
Neuberger & Berman Socially Responsive Fund
<TABLE>
<CAPTION>
Form N-1A Item No. Caption in Part A Prospectus
------------------ ----------------------------
<S> <C> <C>
Item 1. Cover Page Front Cover Page
Item 2. Synopsis Expense Information; Summary
Item 3. Condensed Financial Financial Highlights; Performance
Information Information
Item 4. General Description of Investment Program; Description of
Registrant Investments; Special Information
Regarding Organization, Capitalization,
and Other Matters
Item 5. Management of the Fund Management and Administration; Other
Information; Back Cover Page
Item 6. Capital Stock and Front Cover Page; Dividends, Other
Other Securities Distributions, and Taxes; Special
Information Regarding Organization,
Capitalization, and Other Matters
Item 7. Purchase of Securities How to Buy Shares; Additional
Being Offered Information on Telephone Transactions;
Shareholder Services; Share Prices and
Net Asset Value; Management and
Administration
<PAGE>
Item 8. Redemption or How to Sell Shares; Additional
Repurchase Information on Telephone Transactions;
Shareholder Services; Share Prices and
Net Asset Value
Item 9. Pending Legal Not Applicable
Proceedings
Caption in Part B
Form N-1A Item No. Statement of Additional Information
------------------ -----------------------------------
<S> <C> <C>
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and Organization
History
Item 13. Investment Objectives and Investment Information; Certain Risk
Policies Considerations
Item 14. Management of the Fund Trustees and Officers
Item 15. Control Persons and Control Persons and Principal Holders
Principal Holders of of Securities
Securities
Item 16. Investment Advisory and Investment Management and
Other Services Administration Services; Trustees and
Officers; Distribution Arrangements;
Reports To Shareholders; Custodian and
Transfer Agent; Independent Auditors/
Accountants
Item 17. Brokerage Allocation Portfolio Transactions
Item 18. Capital Stock and Other Investment Information; Additional
Securities Redemption Information; Dividends and
Other Distributions
Item 19. Purchase and Redemption Additional Purchase Information;
Additional Exchange Information;
Additional Redemption Information;
Distribution Arrangements
Item 20. Tax Status Dividends and Other Distributions;
Additional Tax Information
<PAGE>
Item 21. Underwriters Investment Management and
Administration Services; Distribution
Arrangements
Item 22. Calculation of Performance Information
Performance Data
Item 23. Financial Statements Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Post-Effective Amendment
No. 74.
<PAGE>
PROSPECTUS
- ------------------------------------------------------------------------------
December 15, 1995
[Neuberger&Berman LOGO]
EQUITY FUNDS(SM)
Neuberger&Berman
FOCUS FUND
Neuberger&Berman
GENESIS FUND
Neuberger&Berman
GUARDIAN FUND
Neuberger&Berman
INTERNATIONAL FUND
Neuberger&Berman
MANHATTAN FUND
Neuberger&Berman
PARTNERS FUND
Neuberger&Berman
SOCIALLY RESPONSIVE FUND
No Sales Charges
No Redemption Fees
No 12b -1 Fees
<PAGE>
Neuberger&Berman
EQUITY FUNDS
No-Load Equity Funds
- -------------------------------------------------------------------------------
Neuberger&Berman FOCUS FUND Neuberger&Berman MANHATTAN FUND
Neuberger&Berman GENESIS FUND Neuberger&Berman PARTNERS FUND
Neuberger&Berman GUARDIAN FUND Neuberger&Berman SOCIALLY RESPONSIVE FUND
Neuberger&Berman INTERNATIONAL FUND
Initial Purchase--$1,000 Minimum
Automatic Investing--$100 Minimum Per Month
Gift Programs and IRAs--$250 Minimum
Call 800-877-9700
Each of the above-named funds (a "Fund") invests all of its net investable
assets in its corresponding portfolio of Equity Managers Trust or, in the case
of Neuberger& Berman International Fund, in the corresponding portfolio of
Global Managers Trust (each a "Portfolio"). Equity Managers Trust and Global
Managers Trust ("Managers Trusts") are open-end management investment companies
managed by Neuberger&Berman Management Incorporated ("N&B Management"). Each
Portfolio invests in securities in accordance with an investment objective,
policies, and limitations identical to those of its corresponding Fund. The
investment performance of each Fund directly corresponds with the investment
performance of its corresponding Portfolio. This "master/feeder fund" structure
is different from that of many other investment companies which directly
acquire and manage their own portfolios of securities. For more information on
this unique structure that you should consider, see "Summary" on page 3, and
"Special Information Regarding Organization, Capitalization, and Other Matters"
on page 32.
Please read this Prospectus before investing in any of the Funds and keep
it for future reference. It contains information about the Funds that a
prospective investor should know before investing. A Statement of Additional
Information ("SAI") about the Funds and Portfolios, dated December 15, 1995, is
on file with the Securities and Exchange Commission. The SAI is incorporated
herein by reference (so it is legally considered a part of this Prospectus).
You can obtain a free copy of the SAI by calling N&B Management at
800-877-9700. Prospectus Dated December 15, 1995
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
SUMMARY 3
The Funds and Portfolios; Risk Factors 3
Management 5
The Neuberger&Berman Investment Approach 5
EXPENSE INFORMATION 7
Shareholder Transaction Expenses for Each Fund 7
Annual Fund Operating Expenses 7
Example 9
FINANCIAL HIGHLIGHTS 10
Focus Fund 11
Genesis Fund 12
Guardian Fund 13
International Fund 14
Manhattan Fund 15
Partners Fund 16
Socially Responsive Fund 17
INVESTMENT PROGRAMS 21
Focus Portfolio 21
Genesis Portfolio 22
Guardian Portfolio 23
International Portfolio 23
Manhattan Portfolio 24
Partners Portfolio 25
Socially Responsive Portfolio 25
Short-Term Trading; Portfolio Turnover 27
Borrowings 27
Other Investments 28
PERFORMANCE INFORMATION 29
Total Return Information 31
SPECIAL INFORMATION REGARDING ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 32
The Funds 32
The Portfolios 33
HOW TO BUY SHARES 35
By Mail 35
By Wire 35
By Telephone 36
By Exchanging Shares 36
Other Information 36
HOW TO SELL SHARES 38
By Mail or Facsimile Transmission (Fax) 38
By Telephone 39
Other Information 39
ADDITIONAL INFORMATION ON TELEPHONE TRANSACTIONS 41
SHAREHOLDER SERVICES 42
Automatic Investing and Dollar Cost Averaging 42
Exchange Privilege 42
Systematic Withdrawal Plans 43
Retirement Plans 43
SHARE PRICES AND NET ASSET VALUE 44
DIVIDENDS, OTHER DISTRIBUTIONS, AND TAXES 45
Distribution Options 45
Taxes 45
MANAGEMENT AND ADMINISTRATION 47
Trustees and Officers 47
Investment Manager, Administrator, Distributor, and Sub-Adviser 47
Expenses 49
Transfer and Shareholder Servicing Arrangements 51
DESCRIPTION OF INVESTMENTS 52
USE OF JOINT PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION 59
OTHER INFORMATION 60
Directory 60
Funds Eligible For Exchange 60
</TABLE>
<PAGE>
SUMMARY
The Funds and Portfolios; Risk Factors
- -------------------------------------------------------------------------------
Each Fund is a series of Neuberger&Berman Equity Funds (the "Trust") and
invests in a corresponding Portfolio that, in turn, invests in securities in
accordance with an investment objective, policies, and limitations that are
identical to those of the Fund. This is sometimes called a master/feeder fund
structure, because each Fund "feeds" shareholders' investments into its
corresponding Portfolio, a "master" fund. The structure looks like this:
-------------------------
Shareholders
-------------------------
(down arrow) BUY SHARES IN
-------------------------
Funds
-------------------------
(down arrow) INVEST IN
-------------------------
Portfolios
-------------------------
(down arrow) INVEST IN
-------------------------
Stocks & Other Securities
-------------------------
The trustees who oversee the Funds believe that this structure may benefit
shareholders; investment in a Portfolio by investors in addition to a Fund may
enable the Portfolio to achieve economies of scale that could reduce expenses.
For more information about the organization of the Funds and the Portfolios,
including certain features of the master/feeder fund structure, see "Special
Information Regarding Organization, Capitalization, and Other Matters" on page
32. An investment in any Fund involves certain risks, depending upon the types
of investments made by its corresponding Portfolio. For more details about each
Portfolio, its investments and their risks, see "Investment Programs" on page
21 and "Description of Investments" on page 52.
3
<PAGE>
The following table is a summary highlighting features of the Funds and
their corresponding Portfolios. You may want to invest in a variety of Funds to
fit your particular investment needs. Please see "Investment Programs" on page
21. Of course, there can be no assurance that a Fund will meet its investment
objective.
<TABLE>
<CAPTION>
Neuberger&Berman
Equity Funds Investment Style Portfolio Characteristics
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
GUARDIAN FUND Broadly diversified, A growth and income fund that invests in
large-cap value stocks of established, high-quality companies
fund. Relatively low that are not well followed on Wall Street or
portfolio turnover. are temporarily out of favor.
FOCUS FUND Large-cap value Invests in common stocks selected from 13
fund, more multi-industry sectors of the economy. To
concentrated maximize potential return, the Portfolio
portfolio than normally makes at least 90% of its
Guardian. Relatively investments in not more than six sectors of
low portfolio the economy believed by the portfolio
turnover. managers to be undervalued.
GENESIS FUND Broadly diversified, Invests in stocks of companies with small
small-cap value market capitalizations (usually up to $750
fund. Relatively low million). Portfolio manager seeks to buy the
portfolio turnover. stocks of strong companies with a history of
solid performance and a proven management
team, which are selling at attractive prices.
INTERNATIONAL FUND Broadly diversified, Seeks long-term capital appreciation by
medium-to-large-cap investing primarily in foreign stocks, both
international equity in developed economies and in emerging
fund. Capitalization markets. Portfolio manager seeks undervalued
is relative to each companies in countries with strong potential
national market. for growth.
MANHATTAN FUND Broadly diversified, Invests in securities believed to have the
medium-to-large-cap maximum potential for long-term capital
growth fund. appreciation. Portfolio manager follows a
Relatively low "growth at a reasonable price" philosophy and
portfolio turnover. searches for financially sound, growing
companies with a special competitive
advantage or a product that makes their
stocks attractive.
PARTNERS FUND Broadly diversified, Seeks capital growth through an approach that
medium-to-large-cap is intended to increase capital with
value fund. Moderate reasonable risk. Portfolio managers look at
portfolio turnover. fundamentals, focusing particularly on cash
flow, return on capital, and asset values.
SOCIALLY Broadly diversified, Seeks long-term capital appreciation by
RESPONSIVE FUND large-cap value investing in common stocks of companies that
fund. meet both financial and social criteria.
</TABLE>
4
<PAGE>
Management
- -------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman, L.P.
("Neuberger&Berman") as sub-adviser, selects investments for the Portfolios.
N&B Management also provides administrative services to the Portfolios and the
Funds and acts as distributor of Fund shares. See "Management and
Administration" on page 47. If you want to know how to buy and sell shares of
the Funds or exchange them for shares of other Neuberger&Berman Funds(SM), see
"How to Buy Shares" on page 35, "How to Sell Shares" on page 38, and
"Shareholder Services -- Exchange Privilege" on page 42.
The Neuberger&Berman Investment Approach
- -------------------------------------------------------------------------------
While each Portfolio has its own investment objective, policies, and
limitations, each Portfolio is managed using one of two basic investment
approaches -- value and growth.
A value-oriented portfolio manager buys stocks that are selling for less
than their perceived market value. These include stocks that are currently
under-researched or are temporarily out of favor on Wall Street.
Portfolio managers identify value stocks in several ways. One of the most
common identifiers is a low price-to-earnings ratio -- that is, stocks selling
at multiples of earnings per share that are lower than that of the market as a
whole. Other criteria are high dividend yield, a strong balance sheet and
financial position, a recent company restructuring with the potential to
realize hidden values, strong management, and low price-to-book value (net
value of the company's assets).
While a value approach concentrates on undervalued securities in relation
to their fundamental economic value, a growth approach seeks out stocks of
companies that are projected to grow at above-average rates and may appear
poised for a period of accelerated earnings.
The growth portfolio manager is willing to pay a higher share price in the
hope that the stock's earnings momentum will carry the stock's price higher. As
a stock's price increases based on strong earnings, the stock's original price
appears low in relation to the growth rate of its earnings. Sometimes this
happens when a particular company or industry is temporarily out of favor with
the market or under-researched. This strategy is called "growth at a reasonable
price."
Neuberger&Berman believes that, over time, securities that are undervalued
are more likely to appreciate in price and be subject to less risk of price
decline than securities whose market prices have already reached their
perceived economic value. This approach also contemplates selling portfolio
securities when they are considered to have reached their potential.
5
<PAGE>
In general, Neuberger&Berman Focus, Neuberger&Berman Genesis,
Neuberger&Berman Guardian, Neuberger&Berman Partners and Neuberger& Berman
Socially Responsive Portfolios adhere to a value-oriented investment approach.
Neuberger&Berman Manhattan Portfolio places a greater emphasis on finding
securities whose measures of fundamental value are low in relation to the
growth rate of their future earnings and cash flow, as projected by the
portfolio manager, and that Portfolio is therefore willing to invest in
securities with prices that are somewhat higher multiples of earnings.
Neuberger&Berman International Portfolio uses an investment process that
includes a combination of country selection and individual security selection
primarily based on a value-driven investment approach.
6
<PAGE>
EXPENSE INFORMATION
This section gives you certain information about the expenses of each Fund
and its corresponding Portfolio. See "Performance Information" for important
facts about the investment performance of each Fund, after taking expenses into
account.
Shareholder Transaction Expenses for Each Fund
- -------------------------------------------------------------------------------
As shown by this table, you pay no transaction charges when you buy or sell
Fund shares.
<TABLE>
<CAPTION>
<S> <C>
Sales Charge Imposed on Purchases NONE
Sales Charge Imposed on Reinvested Dividends NONE
Deferred Sales Charges NONE
Redemption Fees NONE
Exchange Fees NONE
</TABLE>
If you want to redeem shares by wire transfer, the Funds' transfer agent
charges a fee (currently $8.00) for each wire redemption. Shareholders who have
one or more accounts in the Neuberger&Berman Funds(SM) aggregating $250,000 or
more in value are not charged for wire redemptions; the $8.00 fee is borne by
N&B Management.
Annual Fund Operating Expenses
(as a percentage of average net assets)
- -------------------------------------------------------------------------------
The following table shows annual Total Operating Expenses for each Fund,
which are paid out of the assets of the Fund and which include the Fund's pro
rata portion of the Operating Expenses of its corresponding Portfolio. These
expenses are borne indirectly by Fund shareholders. Each Fund pays N&B
Management an administration fee based on the Fund's average daily net
assets. Each Portfolio pays N&B Management a management fee, based on the
Portfolio's average daily net assets; a pro rata portion of this fee is borne
indirectly by the corresponding Fund. Therefore, the table combines management
and administration fees. The Funds and Portfolios also incur other expenses for
things such as accounting and legal fees, maintaining shareholder records, and
furnishing shareholder statements and Fund reports. "Operating Expenses"
exclude interest, taxes, brokerage commissions, and extraordinary expenses. The
Funds' expenses are factored into their share prices and dividends and are not
charged directly to Fund shareholders. For more information, see "Management
and Administration" and the SAI.
7
<PAGE>
<TABLE>
<CAPTION>
Neuberger&Berman Management and 12b-1 Other Operating
Equity Funds Administration Fees Fees Expenses Total Expenses
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOCUS FUND 0.79% None 0.13% 0.92%
GENESIS FUND 1.01%+ None 0.32% 1.33%+
GUARDIAN FUND 0.72% None 0.12% 0.84%
INTERNATIONAL FUND* 0.00% None 1.70% 1.70%
MANHATTAN FUND 0.80% None 0.22% 1.02%
PARTNERS FUND 0.76% None 0.11% 0.87%
SOCIALLY RESPONSIVE FUND* 0.00% None 1.50% 1.50%
</TABLE>
+(Reflects N&B Management's waiver of certain management fees, described below)
*(Reflects N&B Management's expense reimbursement undertaking, described below)
Total Operating Expenses for each Fund have been restated based upon
current administration fees for the Fund and management fees for its
corresponding Portfolio; "Other Expenses" are based on each Fund's and
Portfolio's expenses for the past fiscal year. The trustees of the Trust
believe that the aggregate per share expenses of each Fund and its
corresponding Portfolio will be approximately equal to the expenses the Fund
would incur if its assets were invested directly in the type of securities held
by its corresponding Portfolio. The trustees of the Trust also believe that
investment in a Portfolio by investors in addition to a Fund may enable the
Portfolio to achieve economies of scale which could reduce expenses. The
expenses and returns of other funds that may invest in the Portfolios may
differ from those of the Funds.
The above table reflects N&B Management's voluntary undertaking until
December 31, 1996, to reimburse Neuberger&Berman Socially Responsive Fund for
its Operating Expenses and its pro rata share of Neuberger&Berman Socially
Responsive Portfolio's Operating Expenses which, in the aggregate, exceed 1.50%
per annum of that Fund's average daily net assets. Absent the reimbursement,
Management and Administration Fees, Other Expenses, and Total Operating
Expenses would be 0.17%, 2.33%, and 2.50%, respectively, per annum of the
average daily net assets of Neuberger&Berman Socially Responsive Fund (or
slightly higher if permitted by state securities authorities). N&B Management
has voluntarily agreed to waive a portion of the management fee borne directly
by Neuberger&Berman Genesis Portfolio and indirectly by Neuberger&Berman
Genesis Fund to reduce the fee by 0.10% per annum of the average daily net
assets of Neuberger&Berman Genesis Portfolio. Absent the waiver, Management and
Administration Fees would be 1.11%, and Total Operating Expenses would be
1.43%, per annum of the average daily net assets of Neuberger&Berman Genesis
Fund. The above table also reflects N&B Management's voluntary undertaking
until December 31, 1996 to reimburse Neuberger&Berman International Fund for
its Operating Expenses and its pro rata share of the Operating Expenses of
Neuberger&Berman International Portfolio that, in the aggregate, exceed 1.70%
per annum of that Fund's average daily net assets. Absent the reimburse-
8
<PAGE>
ment, Management and Administration Fees, Other Expenses, and Total Operating
Expenses would be 0.31%, 2.19%, and 2.50%, respectively, per annum of the
average daily net assets of Neuberger&Berman International Fund (or slightly
higher if permitted by state securities authorities).
For more information about the current expense reimbursement undertakings
and fee waiver, see "Expenses" on page 49.
Example
- -------------------------------------------------------------------------------
To illustrate the effect of Operating Expenses, let's assume that each
Fund's annual return is 5% and that it had Total Operating Expenses described
in the table above. For every $1,000 you invested in each Fund, you would have
paid the following amounts of total expenses if you closed your account at the
end of each of the following time periods:
<TABLE>
<CAPTION>
Neuberger&Berman
Equity Funds 1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOCUS FUND $ 9 $29 $51 $113
GENESIS FUND $14 $42 $73 $160
GUARDIAN FUND $ 9 $27 $47 $104
INTERNATIONAL FUND $17 $54 $92 $201
MANHATTAN FUND $10 $32 $56 $125
PARTNERS FUND $ 9 $28 $48 $107
SOCIALLY RESPONSIVE FUND $15 $47 $82 $179
</TABLE>
The assumption in this example of a 5% annual return is required by
regulations of the Securities and Exchange Commission applicable to all mutual
funds. The information in the table should not be considered a representation
of past or future expenses or rates of return; actual expenses or returns may
be greater or less than those shown, and may change if expense reimbursements
change.
9
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- -------------------------------------------------------------------------------
The financial information in the following tables is for each Fund as of
August 31, 1995 and includes data related to each Fund (except Neuberger&Berman
International Fund and Neuberger&Berman Socially Responsive Fund) before it was
converted into a series of the Trust on August 2, 1993. Neuberger&Berman
Socially Responsive Fund commenced operations on March 16, 1994.
Neuberger&Berman International Fund commenced operations on June 15, 1994. This
information has been audited by the Funds' respective independent
auditors/accountants. You may obtain, at no cost, further information about the
performance of the Funds in their annual reports to shareholders. The annual
reports contain the auditors'/accountants' reports. Please call 800-877-9700
for a free copy and for up-to-date information. Also, see "Performance
Information."
10
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Focus Fund((1))
- -------------------------------------------------------------------------------
The following table includes selected data for a share outstanding
throughout each year and other performance information derived from the
Financial Statements. It should be read in conjunction with its corresponding
Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
October 1,
Year Ended 1992 to
August 31, August 31, Year Ended September 30,
1995(2) 1994(2) 1993(2) 1992 1991 1990 1989 1988 1987 1986
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $24.42 $24.00 $19.31 $18.91 $16.66 $19.01 $16.60 $20.10 $17.96 $17.46
-----------------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income .17 .21 .23 .29 .38 .44 .46 .46 .48 .83
Net Gains or Losses on Securities
(both realized and unrealized) 5.97 2.16 4.65 2.62 2.96 (1.84) 4.83 (2.98) 5.46 2.21
-----------------------------------------------------------------------------------------
Total from Investment Operations 6.14 2.37 4.88 2.91 3.34 (1.40) 5.29 (2.52) 5.94 3.04
-----------------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.20) (.25) (.04) (.31) (.37) (.39) (.49) (.47) (.49) (.88)
Distributions (from capital gains) (1.48) (1.70) (.15) (2.20) (.72) (.56) (2.39) (.51) (3.31) (1.66)
-----------------------------------------------------------------------------------------
Total Distributions (1.68) (1.95) (.19) (2.51) (1.09) (.95) (2.88) (.98) (3.80) (2.54)
-----------------------------------------------------------------------------------------
Net Asset Value, End of Year $28.88 $24.42 $24.00 $19.31 $18.91 $16.66 $19.01 $16.60 $20.10 $17.96
-----------------------------------------------------------------------------------------
Total Return++ +27.47% +10.35% +25.39%(3) +15.51% +20.20% -7.54% +32.23% -12.44% +33.07% +17.35%
-----------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $956.0 $643.9 $573.9 $439.2 $399.2 $368.6 $441.3 $375.2 $481.1 $376.4
-----------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets .87% .85% .92%(4) .91% .93% .92% .99% 1.01% .86% .88%
-----------------------------------------------------------------------------------------
Ratio of Net Income to Average Net
Assets .75% .89% 1.18%(4) 1.46% 2.01% 2.34% 2.39% 2.64% 2.21% 4.08%
-----------------------------------------------------------------------------------------
Portfolio Turnover Rate((5)) -- -- 52% 77% 60% 66% 60% 66% 88% 28%
-----------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Highlights.
11
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Genesis Fund
- -------------------------------------------------------------------------------
The following table includes selected data for a share outstanding
throughout each year and other performance information derived from the
Financial Statements. It should be read in conjunction with its corresponding
Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period from Period from
Year Ended August 1, 1993 September 27, 1988(6)
August 31, to August 31, Year Ended July 31, to July 31,
1995(2) 1994(2) 1993(2) 1993 1992 1991 1990 1989
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $8.27 $8.2 $8.30 $7.10 $6.41 $5.78 $6.25 $5.00
Income from Investment Operations
---------------------------------------------------------------------------------------
Net Investment Income (Loss) -- (.01) -- .01 (.01) .03 .02 .02
Net Gains or Losses on Securities
(both realized and unrealized) 1.56 .42 .32 1.19 .80 .64 (.35) 1.24
---------------------------------------------------------------------------------------
Total from Investment Operations 1.56 .41 .32 1.20 .79 .67 (.33) 1.26
---------------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment income) -- (.01) -- -- (.01) (.04) (.02) (.01)
Distributions (from capital gains) (.31) (.75) -- -- (.09) -- (.12) --
---------------------------------------------------------------------------------------
Total Distributions (.31) (.76) -- -- (.10) (.04) (.14) (.01)
---------------------------------------------------------------------------------------
Net Asset Value, End of Year $9.52 $8.27 $8.62 $8.30 $7.10 $6.41 $5.78 $6.25
---------------------------------------------------------------------------------------
Total Return++ +19.69% +4.77% +3.86%(3) +16.90% +12.38% +11.80% -5.33% +25.24%(3)
---------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $111.5 $135.6 $118.5 $113.5 $72.2 $27.8 $20.8 $18.1
---------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets 1.35%(7) 1.36% 1.51%(4) 1.65% 2.00%(7) 2.00%(7) 2.00%(7) 2.00%(4,7)
---------------------------------------------------------------------------------------
Ratio of Net Income (Loss) to Average
Net Assets (.16%)(7) (.20%) (.08%)(4) .15% (.14%)(7) .60%(7) .41%(7) .51%(4,7)
---------------------------------------------------------------------------------------
Portfolio Turnover Rate( (5)) -- -- -- 54% 23% 46% 37% 10%
---------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Highlights.
12
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Guardian Fund
- -------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements((8)). It should be read in conjunction with its corresponding
Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
November 1, 1989
to August 31,
Year Ended August 31, Year Ended October 31,
1995(2) 1994(2) 1993(2) 1992 1991 1990 1989 1988 1987 1986
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Year $19.52 $18.57 $15.73 $14.90 $11.90 $13.20 $12.31 $11.08 $13.17 $12.18
-------------------------------------------------------------------------------------------
Income from Investment
Operations
Net Investment Income .27 .24 .30 .29 .32 .31 .35 .35 .40 .49
Net Gains or Losses on
Securities (both realized
and unrealized) 4.30 1.41 3.45 1.71 3.20 (1.36) 2.08 2.55 (.77) 2.50
-------------------------------------------------------------------------------------------
Total from Investment
Operations 4.57 1.65 3.75 2.00 3.52 (1.05) 2.43 2.90 (.37) 2.99
-------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.25) (.30) (.25) (.26) (.35) (.25) (.36) (.36) (.41) (.50)
Distributions (from capital
gains) (.23) (.40) (.66) (.91) (.17) -- (1.18) (1.31) (1.31) (1.50)
-------------------------------------------------------------------------------------------
Total Distributions (.48) (.70) (.91) (1.17) (.52) (.25) (1.54) (1.67) (1.72) (2.00)
Net Asset Value, End of Year $23.61 $19.52 $18.57 $15.73 $14.90 $11.90 $13.20 $12.31 $11.08 $13.17
-------------------------------------------------------------------------------------------
Total Return++ +24.06% +9.12% +24.43% +13.88% +30.48% -8.08%(3) +19.91% +26.79% -3.05% +24.76%
--------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $3,947.5 $2,416.5 $1,787.0 $802.9 $628.6 $496.3 $569.3 $539.1 $461.1 $531.8
---------------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets .80% .80% .81% .82% .84% .86%(4) .84% .84% .74% .73%
---------------------------------------------------------------------------------------------
Ratio of Net Income to
Average Net Assets 1.40% 1.36% 2.01% 1.90% 2.46% 2.89%(4) 2.59% 2.80% 2.72% 3.59%
---------------------------------------------------------------------------------------------
Portfolio Turnover Rate(5) -- -- 27% 41% 59% 58% 52% 73% 91% 70%
---------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Highlights
13
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
International Fund
- -------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of the Portfolio's income
and expenses. It should be read in conjunction with the Portfolio's Financial
Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
Year Ended June 15,
August 31, 1994(10) to
1995 August 31, 1994
-------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Year $10.46 $10.00
------------------------------
Income from Investment Operations
Net Investment Income .06 .01
------------------------------
Net Gains or Losses on Securities
(both realized and unrealized) .21 .45
------------------------------
Total from Investment Operations .27 .46
------------------------------
Less Distributions
Dividends (from net investment income) (.03) --
-------------------------------
Net Asset Value, End of Year $10.70 $10.46
------------------------------
Total Return++ +2.60% +4.60%(3)
-------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $26.4 $ 6.2
------------------------------
Ratio of Expenses to Average Net Assets((7)) 1.70% 1.70%(4)
------------------------------
Ratio of Net Income to Average Net Assets((7)) .73% .57%(4)
------------------------------
</TABLE>
See Notes to Financial Highlights.
14
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Manhattan Fund
- -------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Year Ended August 31, Year Ended December 31,
1995(2) 1994(2) 1993(2) 1992 1991 1990(9) 1989 1988 1987 1986
- -------------------------------------- ------ ----- ------ ---- ---- ------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $11.28 $12.94 $11.59 $11.55 $ 9.46 $10.44 $ 9.04 $ 7.81 $ 8.95 $ 8.86
------------------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income -- .02 .02 .06 .13 .10 .18 .17 .14 .10
Net Gains or Losses on Securities
(both realized and unrealized) 2.70 .40 3.06 .49 2.27 (1.08) 2.45 1.26 (.07) 1.31
-----------------------------------------------------------------------------------------
Total from Investment Operations 2.70 .42 3.08 .55 2.40 (.98) 2.63 1.43 .07 1.41
-----------------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.01) (.02) (.05) (.11) (.16) -- (.18) (.16) (.26) (.08)
Distributions (from capital gains) (.70) (2.06) (1.68) (.40) (.15) -- (1.05) (.04) (.95) (1.24)
-----------------------------------------------------------------------------------------
Total Distributions (.71) (2.08) (1.73) (.51) (.31) -- (1.23) (.20) (1.21) (1.32)
-----------------------------------------------------------------------------------------
Net Asset Value, End of Year $13.27 $11.28 $12.94 $11.59 $11.55 $ 9.46 $10.44 $ 9.04 $ 7.81 $ 8.95
-----------------------------------------------------------------------------------------
Total Return++ +26.00% +3.49% +27.76% +4.74% +26.17% -9.39%(3) +29.09% +18.31% +0.43% +16.83%
-----------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $612.0 $510.3 $537.6 $400.7 $429.0 $355.6 $404.7 $341.7 $329.0 $293.7
-----------------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets .98% .96% 1.04% 1.07% 1.09% 1.14%(4) 1.12% 1.18% .98% 1.10%
-----------------------------------------------------------------------------------------
Ratio of Net Income to Average
Net Assets .03% .16% .20% .57% 1.28% 1.44%(4) 1.60% 1.55% 1.58% 1.34%
-----------------------------------------------------------------------------------------
Portfolio Turnover Rate(5) -- -- 76%(4) 83% 78% 91%(4) 77% 70% 111% 96%
-----------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Highlights
15
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Partners Fund
- -------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
Year Ended July 1, 1993 to
August 31, August 31, Year Ended June 30,
1995(2) 1994(2) 1993(2) 1993 1992 1991 1990 1989 1988 1987 1986
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Year $ 21.32 $ 22.46 $ 20.98 $ 18.96 $ 17.80 $ 18.11 $ 19.04 $ 16.84 $ 20.83 $ 20.63 $ 17.42
------------------------------------------------------------------------------------------------------
Income from Investment
Operations
Net Investment Income .17 .10 .02 .16 .23 .50 .83 .71 .55 .44 .42
Net Gains or Losses on
Securities
(both realized and
unrealized) 3.94 1.07 1.46 3.84 2.05 .27 .68 2.14 (1.05) 2.45 4.71
------------------------------------------------------------------------------------------------------
Total from Investment
Operations 4.11 1.17 1.48 4.00 2.28 .77 1.51 2.85 (.50) 2.89 5.13
------------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.11) (.11) -- (.19) (.34) (.74) (.76) (.65) (.70) (.44) (.65)
Distributions (from
capital gains) (1.60) (2.20) -- (1.79) (.78) (.34) (1.68) -- (2.79) (2.25) (1.27)
-----------------------------------------------------------------------------------------------------
Total Distributions (1.71) (2.31) -- (1.98) (1.12) (1.08) (2.44) (.65) (3.49) (2.69) (1.92)
-----------------------------------------------------------------------------------------------------
Net Asset Value, End
of Year $ 23.72 $ 21.32 $ 22.46 $ 20.98 $ 18.96 $ 17.80 $ 18.11 $ 19.04 $ 16.84 $ 20.83 $ 20.63
-----------------------------------------------------------------------------------------------------
Total Return++ +21.53% +5.56% +7.05%(3) +21.78% +13.23% +5.14% +8.11% +17.59% -2.73% +16.98% +33.17%
-----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $1,564.0 $1,335.9 $1,185.1 $1,085.6 $852.9 $823.5 $793.8 $743.0 $718.8 $757.7 $433.3
-----------------------------------------------------------------------------------------------------
Ratio of Expenses
to Average Net Assets .83% .81% .84%(4) .86% .86% .88% .91% .97% .95% .86% .89%
-----------------------------------------------------------------------------------------------------
Ratio of Net Income
to Average Net Assets .83% .48% .59%(4) .83% 1.23% 2.84% 4.53% 3.96% 3.28% 2.93% 3.23%
-----------------------------------------------------------------------------------------------------
Portfolio Turnover Rate(5) -- -- 6% 82% 97% 161% 136% 157% 210% 169% 181%
-----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Highlights.
16
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Socially Responsive Fund
- -------------------------------------------------------------------------------
The following table includes selected data for a share outstanding
throughout each year and other performance information derived from the
Financial Statements. The per share amounts and ratios which are shown reflect
income and expenses, including the Fund's proportionate share of its
corresponding Portfolio's income and expenses. It should be read in conjunction
with its corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Year Ended Period from
August 31, March 16, 1994(6)
1995 to August 31, 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Year $10.07 $10.00
--------------------------------
Income from Investment Operations
Net Investment Income .03 .01
Net Gains or Losses on Securities
(both realized and unrealized) 1.76 .06
--------------------------------
Total from Investment Operations 1.79 .07
--------------------------------
Less Distributions
Dividends (from net investment income) (.02) --
--------------------------------
Net Asset Value, End of Year $11.84 $10.07
--------------------------------
Total Return++ +17.82% +0.70%(3)
--------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $8.2 $ 2.3
--------------------------------
Ratio of Expenses to Average Net Assets(7) 1.51% 1.50%(4)
--------------------------------
Ratio of Net Income to Average Net Assets(7) .36% .50%(4)
--------------------------------
</TABLE>
See Notes to Financial Highlights.
17
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
1) Prior to January 1, 1995, the name of Neuberger&Berman Focus Fund was
Neuberger&Berman Selected Sectors Fund.
2) The per share amounts and ratios which are shown reflect income and
expenses, including each Fund's proportionate share of its corresponding
Portfolio's income and expenses.
3) Not annualized.
4) Annualized.
5) Each Fund (except Neuberger&Berman Socially Responsive Fund and
Neuberger&Berman International Fund) transferred all of its investment
securities into its respective Portfolio on August 2, 1993. After that date
each Fund has invested only in its corresponding Portfolio, and that
Portfolio, rather than the Fund, has engaged in securities transactions.
Therefore, after that date, no Fund has calculated a portfolio turnover
rate. The portfolio turnover rates for each Portfolio were as follows:
<TABLE>
<CAPTION>
Year Ended Period from
August 31, August 2, 1993
1995 1994 to August 31, 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Neuberger&Berman Focus Portfolio 36% 52% 4%
Neuberger&Berman Genesis Portfolio 37% 63% 3%
Neuberger&Berman Guardian Portfolio 26% 24% 3%
Neuberger&Berman Manhattan Portfolio 44% 50% 3%
Neuberger&Berman Partners Portfolio 98% 75% 8%
</TABLE>
The portfolio turnover rates for Neuberger&Berman Socially Responsive Port-
folio for the period March 14, 1994 (commencement of operations) to August
31, 1994 and the year ended August 31, 1995 were 14% and 58%, respectively.
The portfolio turnover rates for Neuberger&Berman International Portfolio
for the period June 15, 1994 (commencement of operations) to August 31,
1994 and the year ended August 31, 1995 were 5% and 41%, respectively.
6) The date investment operations commenced.
7) Neuberger&Berman GENESIS Fund. After reimbursement of expenses by N&B
Management. Had N&B Management not undertaken such action the annualized
ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
Year Ended Period from
July 31, September 27, 1988
1991 1990 to July 31, 1989
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Expenses 2.16% 2.40% 3.79%
Net Investment Income (Loss) .44% .01% (1.28%)
</TABLE>
18
<PAGE>
Had Neuberger&Berman Genesis Fund not reimbursed N&B Management, the
annualized ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
Year Ended
July 31, 1992
- -------------------------------------------------------------------------------
<S> <C>
Expenses 1.65%
Net Investment Income .21%
</TABLE>
Had N&B Management not waived a portion of the management fee borne
directly by Neuberger&Berman Genesis Portfolio, and indirectly by
Neuberger&Berman Genesis Fund, the annualized ratios to average daily net
assets would have been:
<TABLE>
<CAPTION>
Year Ended
August 31, 1995
- -------------------------------------------------------------------------------
<S> <C>
Expenses 1.38%
Net Investment Loss (.19%)
</TABLE>
Neuberger&Berman INTERNATIONAL Fund. After reimbursement of expenses by the
then investment adviser and the administrator. Had the then investment
adviser and the administrator not undertaken such action the annualized
ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
Period from
Year Ended June 15, 1994 to
August 31, 1995 August 31, 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Expenses 2.50% 2.50%
Net Investment Income Loss (.07%) (.23%)
</TABLE>
Neuberger&Berman SOCIALLY RESPONSIVE Fund. After reimbursement of expenses
by N&B Management. Had N&B Management not undertaken such action the
annualized ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
Year Ended Period from
August 31, March 16, 1994
1995 to August 31, 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Expenses 2.50% 2.50%
Net Investment Income Loss (.63%) (.50%)
</TABLE>
8) Adjusted for a 200% stock dividend effective January 20, 1993.
9) For the eight-month period ended August 31, 1990.
10) The date investment operations commenced. BNP-N&B Global Asset Management
L.P. ("BNP-N&B Global"), a joint venture of Neuberger&Berman and Banque
Nationale de Paris ("BNP"), served as investment adviser to Neuberger&
Berman International Portfolio from its inception until November 1, 1995.
++ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of each Fund during each year
and assumes dividends and other distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results.
Investment returns and principal may fluctuate and shares when redeemed may
be worth more or less than original
19
<PAGE>
cost. For Neuberger&Berman International Fund and Neuberger&Berman Socially
Responsive Fund, total return would have been lower if N&B Management had
not reimbursed certain expenses. For Neuberger&Berman Genesis Fund, total
return would have been lower if N&B Management had not waived a portion of
the Portfolio's management fee.
20
<PAGE>
INVESTMENT PROGRAMS
The investment policies and limitations of each Fund and its corresponding
Portfolio are identical. Each Fund invests only in its corresponding Portfolio.
Therefore, the following shows you the kinds of securities in which each
Portfolio invests. For an explanation of some types of investments, see
"Description of Investments," on page 52.
Investment policies and limitations of the Funds and Portfolios are not
fundamental unless otherwise specified in this Prospectus or the SAI. While a
non-fundamental policy or limitation may be changed by the trustees of the
Trust or of the corresponding Managers Trust without shareholder approval, the
Funds intend to notify shareholders before making any material change to such
policies or limitations. Fundamental policies may not be changed without
shareholder approval.
The investment objectives of the Funds and Portfolios are not fundamental.
The Funds have undertaken to a state securities commission that they will seek
shareholder approval before changing any investment objective. The Funds have
also undertaken not to change their investment objective without 30 days' prior
notice to shareholders. There can be no assurance that the Funds or Portfolios
will achieve their objectives. Each Fund, by itself, does not represent a
comprehensive investment program.
Additional investment techniques, features, and limitations concerning the
Portfolios' investment programs are described in the SAI.
Neuberger&Berman Focus Portfolio
- -------------------------------------------------------------------------------
The investment objective of Neuberger&Berman Focus Portfolio and
Neuberger&Berman Focus Fund is to seek long-term capital appreciation.
Neuberger&Berman Focus Portfolio invests principally in common stocks
selected from the following 13 multi-industry sectors of the economy:
<TABLE>
<CAPTION>
<S> <C> <C>
(bullet)Autos & Housing (bullet)Health Care (bullet)Technology
(bullet)Consumer Goods & Services (bullet)Heavy Industry (bullet)Transportation
(bullet)Defense & Aerospace (bullet)Machinery & Equipment (bullet)Utilities
(bullet)Energy (bullet)Media & Entertainment
(bullet)Financial Services (bullet)Retailing
</TABLE>
To maximize potential return, the Portfolio normally makes at least 90% of
its investments in not more than six sectors it identifies as undervalued.
Where a particular industry may fall within more than one sector, N&B
Management uses its judgment and experience to determine the placement of that
industry within a sector. The Portfolio uses the value-oriented investment
approach to identify stocks believed to be undervalued, including stocks that
are temporarily out of favor in the market. The Portfolio then focuses its
investments in the sectors in which the undervalued stocks are clustered. These
sectors are believed to offer the greatest potential for capital growth. This
investment approach is different from that of most other mutual funds that
emphasize sector
21
<PAGE>
investment. Those funds either invest in only a single economic sector or
choose a number of sectors by analyzing general economic trends. Further
information on the Portfolio's securities holdings and their allocation by
sector is included in the Fund's annual report to shareholders, which is
available at no cost upon request. The sectors are more fully described in the
SAI.
The Portfolio may be affected more by any single economic, political, or
regulatory development than a more diversified mutual fund. The risk of decline
in the Portfolio's asset value due to an adverse development may be partially
offset by the value- oriented investment approach. To further reduce this risk,
the Portfolio may not (i) invest more than 50% of its total assets in any one
sector, (ii) as a fundamental policy, concentrate 25% or more of its total
assets in the securities of companies having their principal business
activities in any one industry, or (iii) invest more than 5% of its total
assets in the securities of any one company.
Neuberger&Berman Genesis Portfolio
- -------------------------------------------------------------------------------
The investment objective of Neuberger&Berman Genesis Portfolio and
Neuberger&Berman Genesis Fund is to seek capital appreciation.
Neuberger&Berman Genesis Portfolio invests principally in common stocks of
companies with small market capitalizations ("small-cap companies"). Market
capitalization means the total market value of a company's outstanding common
stock. The Portfolio regards companies with market capitalizations of up to
$750 million as small-cap companies. There is no necessary correlation between
market capitalization and the financial attributes -- such as levels of assets,
revenues or income -- commonly used to measure the size of a company.
Studies indicate that the market values of small-cap company stocks, such
as those included in the Russell 2000 Index and the Wilshire 1750 or quoted on
Nasdaq, have a cyclical relationship with larger capitalization stocks. Over
the last 30 years, small-cap company stocks have outperformed larger
capitalization stocks about two-thirds of the time, even though small-cap
stocks have usually declined more than larger capitalization stocks in
declining markets. There can be no assurance that this pattern will continue.
Small-cap company stocks generally are considered to offer greater
potential for appreciation than securities of companies with larger market
capitalization. Most small-cap company stocks pay low or no dividends, and the
Portfolio seeks long-term appreciation, rather than income. Small-cap company
stocks also have higher risk and volatility, because most are not as broadly
traded as stocks of companies with larger capitalization and their prices thus
may fluctuate more widely and abruptly. Small-cap company securities are also
less researched and often overlooked and undervalued in the market.
The Portfolio tries to enhance the potential for appreciation and limit the
risk of decline in the value of its securities by employing the value-oriented
investment approach. The Portfolio seeks securities that appear to be
underpriced and are issued by companies with proven management, sound finances,
and strong potential for
22
<PAGE>
market growth. To reduce risk, the Portfolio diversifies its holdings among
many companies and industries. The Portfolio focuses on the fundamentals of
each small-cap company, instead of trying to anticipate what changes might
occur in the stock market, the economy, or the political environment. This
approach differs from that used by many other funds investing in small-cap
company stocks, which often buy stocks of companies they believe will have
above-average earnings growth, based on anticipated future developments. In
contrast, the Portfolio's securities are generally selected in the belief that
they are currently undervalued, based on existing conditions.
The Portfolio generally expects to be almost fully invested in small-cap
stocks, but it may invest up to 15% of its total assets in securities of
companies whose market capitalizations exceed $750 million.
Neuberger&Berman Guardian Portfolio
- -------------------------------------------------------------------------------
The investment objective of Neuberger&Berman Guardian Portfolio and
Neuberger&Berman Guardian Fund is to seek capital appreciation and,
secondarily, current income.
Neuberger&Berman Guardian Portfolio invests primarily in a large number of
common stocks of long-established, high-quality companies. The Portfolio uses
the value-oriented investment approach in selecting securities. Thus, N&B
Management looks for such factors as low price-to-earnings ratios, strong
balance sheets, solid management, and consistent earnings. The Portfolio
diversifies its holdings among many different companies and industries.
The Fund and its predecessor have paid their shareholders an income
dividend every quarter and a capital gain distribution every year since the
predecessor's inception in 1950. Of course, this past record does not
necessarily predict the Fund's future practices.
Neuberger&Berman International Portfolio
- -------------------------------------------------------------------------------
The investment objective of Neuberger&Berman International Portfolio and
Neuberger&Berman International Fund is to seek long-term capital appreciation
by investing primarily in a diversified portfolio of equity securities of
foreign issuers. Foreign issuers are issuers organized and doing business
principally outside the U.S. and include non-U.S. governments, their agencies,
and instrumentalities.
The Portfolio invests primarily in equity securities of medium-to-large-
capitalization companies, determined in relation to each national market,
traded on foreign exchanges. The Portfolio normally invests in issuers in at
least three foreign countries. The strategy of N&B Management is to select
attractive investment opportunities outside the U.S., allocating the
Portfolio's assets among investments in economically mature countries and
emerging industrialized countries. At least 65% of the Portfolio's total assets
normally are invested in equity securities of foreign issuers. The Portfolio
may invest more heavily in certain countries than in others. From time to time,
the Portfolio may invest a significant portion of its assets in Japan.
23
<PAGE>
The Portfolio may also invest in foreign securities in the form of American
Depositary Receipts (ADRs), European Depositary Receipts (EDRs), Global
Depositary Receipts (GDRs), International Depositary Receipts (IDRs) or other
similar securities representing an interest in securities of foreign issuers.
Because the Portfolio invests primarily in foreign securities, it may be
subject to greater risks and higher expenses than equity funds that invest
primarily in securities of U.S. issuers. Such risks may be even greater in
emerging industrialized and less developed countries.
The risks of investing in foreign securities include, but are not limited
to, possible adverse political and economic developments in a particular
country, differences between foreign and U.S. regulatory systems, and foreign
securities markets that are smaller and less well-regulated than those in the
U.S. There is often less information publicly available about foreign issuers,
and many foreign countries do not follow the financial accounting standards
used in the U.S. Most of the securities held by the Portfolio are denominated
in foreign currencies, and the value of these investments can be adversely
affected by fluctuations in foreign currency values. Some foreign currencies
can be volatile and may be subject to governmental controls or intervention.
The Portfolio may use techniques such as options, futures, forward foreign
currency exchange contracts ("forward contracts"), and short selling, for
hedging purposes and in an attempt to realize income. The Portfolio may also
use leverage to facilitate transactions entered into by the Portfolio for
hedging purposes. The use of these strategies may entail special risks.
Neuberger&Berman Manhattan Portfolio
- -------------------------------------------------------------------------------
The investment objective of Neuberger&Berman Manhattan Portfolio and
Neuberger&Berman Manhattan Fund is to seek capital appreciation without regard
to income.
Neuberger&Berman Manhattan Portfolio generally invests in securities of
medium-to-large-capitalization companies believed to have the maximum
potential for long-term capital appreciation. It does not seek to invest in
securities that pay dividends or interest, and any such income is incidental.
The Portfolio expects to be almost fully invested in common stocks, often of
companies that may be temporarily out of favor in the market.
The Portfolio's growth investment program involves greater risks and share
price volatility than programs that invest in more conservative securities.
Moreover, the Portfolio does not follow a policy of active trading for
short-term profits. Accordingly, the Portfolio may be more appropriate for
investors with a longer-range perspective. The Portfolio uses a "growth at a
reasonable price" investment approach. When N&B Management believes that
particular securities have greater potential for long-term capital
appreciation, the Portfolio may purchase such securities at prices with
relatively higher multiples to measures of economic value (such as earnings or
cash flow) than other Portfolios. In addition, the Portfolio focuses on
companies with strong balance sheets and reasonable valua-
24
<PAGE>
tions relative to their growth rates. It also diversifies its investments into
many companies and industries.
Neuberger&Berman Partners Portfolio
- -------------------------------------------------------------------------------
The investment objective of Neuberger&Berman Partners Portfolio and
Neuberger&Berman Partners Fund is to seek capital growth.
Neuberger&Berman Partners Portfolio invests principally in common stocks of
medium-to-large-capitalization established companies, using the value-oriented
investment approach. The Portfolio seeks capital growth through an investment
approach that is designed to increase capital with reasonable risk. Its
investment program seeks securities believed to be undervalued based on strong
fundamentals, including low price-to-earnings ratios, consistent cash flow, and
the company's track record through all parts of the market cycle.
The Portfolio considers additional factors when selecting securities,
including ownership by a company's management of the company's stock and the
dominance of a company in its particular field.
Neuberger&Berman Socially Responsive Portfolio
- -------------------------------------------------------------------------------
The investment objective of Neuberger&Berman Socially Responsive Portfolio
and Neuberger&Berman Socially Responsive Fund is to seek long-term capital
appreciation by investing primarily in securities of companies that meet both
financial criteria and the Social Policy.
In seeking capital appreciation, the Portfolio generally follows a
value-oriented investment approach to the selection of individual securities.
Prospective investments are first subjected to detailed financial analysis and
are not studied further unless N&B Management believes that they are currently
undervalued relative to the issuer's assets and potential earning power.
The Portfolio expects to be nearly fully invested at all times, primarily
in common stock. It may also invest in convertible securities and preferred
stock and in foreign securities and ADRs of foreign companies that meet the
Social Policy. On occasion, deposits with community banks and credit unions may
be considered for investment. Under normal conditions, at least 65% of the
Portfolio's total assets are invested in accordance with the Social Policy, and
at least 65% of total assets are invested in equity securities.
The Portfolio may also engage in portfolio management techniques that are
not subject to the Social Policy, such as selling short against-the-box,
lending securities, and purchasing and selling put and call options on
securities or currencies, futures contracts, options on futures contracts, and
forward contracts.
SOCIAL POLICY. Companies deemed acceptable from a financial standpoint are
evaluated by N&B Management using a proprietary database that Neuberger& Berman
has designed to develop and monitor information on companies in various
categories of social criteria. N&B Management seeks to invest in issuers that
show
25
<PAGE>
leadership in the following major areas of social impact: environment, and
workplace diversity and employment. N&B Management also evaluates investments
based on companies' records in other areas of concern: public health, type of
products, and corporate citizenship.
The Portfolio's social orientation is predicated in part on the belief that
good corporate citizenship is good business; that is, good policies with
respect to such social criteria as employment and environmental practices may
often have a positive impact on the company's "bottom line." N&B Management
recognizes, however, that many social criteria represent goals rather than
achievements and that goals are often difficult to quantify. In each area, N&B
Management seeks to elicit and understand management's vision of the company's
social role, giving weight to enlightened, progressive policies. N&B Management
attempts to assess the objectivity of all information included in the database.
However, decisions made by N&B Management inevitably involve some level of
subjective judgment.
N&B Management seeks to invest in companies that show leadership in
addressing environmental problems effectively and in promoting progressive
workplace policies, especially as they affect women and minorities. It seeks to
identify companies committed to improving their environmental performance by
examining their policies and programs in such areas as energy conservation,
pollution reduction and control, waste management, recycling, and careful
stewardship of natural resources. In a similar manner, N&B Management seeks to
identify companies whose policies and practices recognize the importance of
human resources to corporate productivity and the centrality of the work
experience to the quality of life of all employees. N&B Management seeks to
invest in companies that demonstrate leadership in such areas as providing and
promoting equal opportunity, investing in the training and re-training of
workers, promoting a safe working environment, providing family-oriented flexi-
ble benefits, and involving workers in job and workflow engineering.
In making investment decisions, N&B Management takes into account a
company's record as a member of the various communities of which it is a part
and its commitment to product quality and value. Currently, the Social Policy
screens out any company which derives more than (i) 5% of its total annual
revenue from manufacturing and selling alcohol and/or tobacco, (ii) 5% of its
total annual revenue from sales in or services related to gambling, or (iii)
10% of its total annual revenue from the manufacturing of weapons systems.
Additionally, the Portfolio does not invest in any company that derives its
total annual revenue primarily from non-consumer sales to the military, or that
owns or operates one or more nuclear power facilities or is a major supplier of
nuclear power services.
The information used by N&B Management in evaluating prospective
investments for conformity with the Social Policy is obtained primarily from
services that specialize in reporting information from issuers or from agencies
that oversee issuers' activities or compliance with laws and regulations.
Additionally, the information may come
26
<PAGE>
from public interest groups and from N&B Management's discussions with company
representatives.
Not every issuer selected by N&B Management will demonstrate leadership in
each category of the Social Policy. The social records of most companies are
written in shades of gray. For example, a company may have a progressive record
in employee relations and community affairs but a poor one on product marketing
issues. Another company may have a mixed record within a single area. Finally,
it is often difficult to distinguish between substantive commitment and public
relations. This principle works both ways: there are many companies with
excellent records on social issues that maintain a low profile for one reason
or another. Taking these factors into consideration, N&B Management emphasizes
the overall direction that companies take toward demonstrating leadership in
the areas of social impact, paying particular attention to progress achieved
toward these goals.
If securities held by the Portfolio no longer satisfy the Social Policy,
the Portfolio will seek to dispose of the securities as soon as reasonably
practicable, which may cause the Portfolio to sell the securities at a time not
desirable from a purely financial standpoint.
Short-Term Trading; Portfolio Turnover
- -------------------------------------------------------------------------------
Although the Portfolios do not purchase securities with the intention of
profiting from short-term trading, each Portfolio may sell securities when N&B
Management believes such action is advisable. The portfolio turnover rates for
each Portfolio are set forth under "Notes to Financial Highlights." It is
anticipated that the annual turnover rate of Neuberger&Berman Manhattan
Portfolio and of Neuberger&Berman Partners Portfolio in some fiscal years may
exceed 100%. Turnover rates in excess of 100% may result in higher transaction
costs (which are borne directly by the Portfolio) and a possible increase in
short-term capital gains (or losses). See "Dividends, Other Distributions, and
Taxes" on page 45 and the SAI.
Borrowings
- -------------------------------------------------------------------------------
Each Portfolio, except Neuberger&Berman International Portfolio, has a
fundamental policy that it may not borrow money, except that it may (1) borrow
money from banks for temporary or emergency purposes and not for leveraging or
investment and (2) enter into reverse repurchase agreements for any purpose, so
long as the aggregate amount of borrowings and reverse repurchase agreements
does not exceed one-third of the Portfolio's total assets (including the amount
borrowed) less liabilities (other than borrowings). None of the Portfolios
expects to borrow money. As a non-fundamental policy, none of the Portfolios
may purchase portfolio securities if its outstanding borrowings, including
reverse repurchase agreements, exceed 5% of its total assets.
Neuberger&Berman International Portfolio has a fundamental policy that it
may not borrow money, except that it may (1) borrow money from banks for
temporary
27
<PAGE>
or emergency purposes and for leveraging or investment and (2) enter into
reverse repurchase agreements for any purpose, so long as the aggregate amount
of borrowings and reverse repurchase agreements does not exceed one-third of
the Portfolio's total assets (including the amount borrowed) less liabilities
(other than borrowings).
Neuberger&Berman International Portfolio may borrow money from banks to
facilitate transactions that it enters into for hedging purposes, which is a
form of leverage. This leverage may exaggerate the gains and losses on the
Portfolio's investments and changes in the net asset value of Neuberger&Berman
International Fund's shares. Leverage also creates interest expenses; if those
expenses exceed the return on the transactions that the borrowings facilitate,
the Portfolio will be in a worse position than if it had not borrowed. The use
of derivatives in connection with leverage may create the potential for
significant losses. The Portfolio may pledge assets in connection with
permitted borrowings.
Other Investments
- -------------------------------------------------------------------------------
For temporary defensive purposes, each Portfolio (except Neuberger&Berman
Socially Responsive Portfolio and Neuberger&Berman International Portfolio) may
invest up to 100% of its total assets in cash and cash equivalents, U.S.
Government and Agency Securities, commercial paper and certain other money
market instruments, as well as repurchase agreements collateralized by the
foregoing.
Any part of Neuberger&Berman Socially Responsive Portfolio's assets may be
retained temporarily in investment grade debt securities and other investment
grade fixed income securities of non-governmental issuers, U.S. Government and
Agency Securities, repurchase agreements, money market instruments, commercial
paper, and cash and cash equivalents when N&B Management believes that
significant adverse market, economic, political, or other circumstances require
prompt action to avoid losses. In addition, because of the master/feeder fund
structure, Neuberger&Berman Socially Responsive Fund and Neuberger&Berman
Socially Responsive Portfolio deal with large institutional investors, and the
Portfolio may hold such instruments pending investment or payout when the
Portfolio has received a large influx of cash due to sales of Neuberger&Berman
Socially Responsive Fund shares, or shares of other funds which invest in the
Portfolio, or when it anticipates a substantial redemption. Generally, the
foregoing temporary investments for Neuberger&Berman Socially Responsive
Portfolio are selected with a concern for the social impact of each investment.
For temporary defensive purposes, Neuberger&Berman International Portfolio
may invest up to 100% of its total assets in short-term foreign and U.S.
investments, such as cash or cash equivalents, commercial paper, short-term
bank obligations, government and agency securities, and repurchase agreements.
Neuberger&Berman International Portfolio may also invest in such instruments to
increase liquidity or to provide collateral to be held in segregated accounts.
28
<PAGE>
PERFORMANCE INFORMATION
The performance of the Funds is commonly measured as total return. Total
return is the change in value of an investment in a fund over a particular
period, assuming that all distributions have been reinvested. Thus, total
return reflects dividend income, other distributions, and variations in share
prices from the beginning to the end of a period.
An average annual total return is a hypothetical rate of return that, if
achieved annually, would result in the same cumulative total return as was
actually achieved for the period. This smooths out variations in performance.
Past results do not, of course, guarantee future performance. Share prices may
vary, and your shares when redeemed may be worth more or less than your
original purchase price.
The following table shows the average annual total returns for the period
ended August 31, 1995 (the most recent fiscal year-end of the Funds) of a
1-year, 5-year, and 10-year investment in each Fund and its predecessor (except
Neuberger&Berman Socially Responsive Fund and Neuberger&Berman International
Fund). The table also shows a comparison with the S&P 500 Index for each Fund
except Neuberger&Berman Genesis Fund, which is compared with the Russell 2000
Index, and Neuberger&Berman International Fund, which is compared with the EAFE
Index. The S&P 500 Index is the Standard & Poor's 500 Composite Stock Price
Index, an unmanaged index generally considered to be representative of overall
stock market activity. The Russell 2000 is an unmanaged index of the securities
of the 2,000 issuers having the smallest capitalization in the Russell 3000
Index, representing about 7% of the Russell 3000's total market capitalization.
The EAFE Index is the Morgan Stanley Capital International Europe, Australia,
Far East Index, an unmanaged index of non-U.S. equity market performance.
Please note that indices do not take into account any fees and expenses of
investing in the individual securities that they track, and that individuals
cannot invest directly in any index. Further information regarding the Funds'
performance is presented in their annual reports to shareholders, which are
available without charge by calling 800-877-9700.
29
<PAGE>
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS
ENDED AUGUST 31, 1995
<TABLE>
<CAPTION>
Neuberger&Berman Since Inception
Equity Funds 1 Year 5 Years 10 Years Inception Date
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOCUS FUND +27.47% +18.52% +14.77% +11.97% 10/19/55
GUARDIAN FUND +24.06% +20.14% +15.66% +13.10% 6/1/50
MANHATTAN FUND +26.00% +17.10% +15.01% +17.69% 3/1/79*
PARTNERS FUND +21.53% +16.05% +14.43% +17.70% 1/20/75*
SOCIALLY RESPONSIVE FUND +17.82% N/A N/A +12.42% 3/16/94
S&P 500 +21.42% +15.13% +15.17% N/A N/A
GENESIS FUND +19.69% +17.25% N/A +12.54% 9/27/88
RUSSELL 2000 +20.83% +19.01% N/A N/A N/A
INTERNATIONAL FUND + 2.60% N/A N/A + 6.02% 6/15/94
EAFE INDEX + 0.79% N/A N/A N/A N/A
</TABLE>
* The dates when N&B Management became investment adviser to the predecessors
of these Funds.
Prior to November 1991, the investment policies of the predecessor of
Neuberger&Berman Focus Fund required that a substantial percentage of its
assets be invested in the energy field; accordingly, performance results prior
to that time do not necessarily reflect the level of performance that might
have been achieved had the Fund's current policies been in effect during that
period. BNP-N&B Global served as the investment adviser to Neuberger&Berman
International Portfolio from its inception until November 1, 1995; however, the
same individuals have been responsible for portfolio management both before and
after that date. Had N&B Management not reimbursed certain expenses of
Neuberger&Berman International Fund and Neuberger&Berman Socially Responsive
Fund and waived a portion of the management fee borne indirectly by
Neuberger&Berman Genesis Fund, the total returns of those Funds would have been
lower.
The following table lets you take a closer look at how each Fund (except
Neuberger&Berman Socially Responsive Fund and Neuberger&Berman International
Fund) and its predecessor performed year by year, in terms of an annual per
share total return for each calendar year (ending December 31). Please note
that the above chart reflects information for periods ended on the Funds' last
fiscal year-end (that is, as of August 31, 1995).
30
<PAGE>
TOTAL RETURN FOR CALENDAR YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
Neuberger&Berman
Equity Funds 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOCUS FUND + 4.8% +22.4% +10.1% +0.6% +16.5% +29.8% -5.9% +24.7% +21.1% +16.3% +0.9%
GUARDIAN
FUND + 7.3 +25.0 +11.9 -1.0 +28.0 +21.5 -4.7 +34.3 +19.0 +14.5 +0.6
MANHATTAN
FUND + 7.1 +37.1 +16.8 +0.4 +18.3 +29.1 -8.1 +30.9 +17.8 +10.0 -3.6
PARTNERS
FUND + 8.0 +29.9 +17.3 +4.3 +15.5 +22.8 -5.1 +22.4 +17.5 +16.5 -1.9
S&P 500 + 6.2 +31.6 +18.6 +5.2 +16.5 +31.6 -3.1 +30.3 + 7.6 +10.0 +1.4
GENESIS
FUND N/A N/A N/A N/A N/A +17.3 -16.2 +41.6 +15.6 +13.9 -1.8
RUSSELL
2000 N/A N/A N/A N/A N/A +16.3 -19.5 +46.0 +18.4 +18.9 -1.8
</TABLE>
TOTAL RETURN INFORMATION. You can obtain current performance information
about each Fund by calling N&B Management at 800-877-9700.
31
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Funds
- -------------------------------------------------------------------------------
Each Fund is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated December 23, 1992. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate series. The predecessors of the Funds
described herein (except Neuberger&Berman Socially Responsive Fund and
Neuberger&Berman International Fund) were converted into the Funds on August 2,
1993; these conversions were approved by the shareholders of the predecessors
of the Funds in May 1993. Neuberger&Berman Socially Responsive Fund commenced
operations on March 16, 1994. Neuberger&Berman International Fund commenced
operations on June 15, 1994. Each Fund invests all of its net investable assets
in its corresponding Portfolio, in each case receiving a beneficial interest in
that Portfolio. The trustees of the Trust may establish additional series or
classes of shares, without the approval of shareholders. The assets of each
series belong only to that series, and the liabilities of each series are borne
solely by that series and no other.
DESCRIPTION OF SHARES. Each Fund is authorized to issue an unlimited number
of shares of beneficial interest (par value $0.001 per share). Shares of each
Fund represent equal proportionate interests in the assets of that Fund only
and have identical voting, dividend, redemption, liquidation, and other rights.
All shares issued are fully paid and non-assessable, and shareholders have no
preemptive or other right to subscribe to any additional shares.
SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to hold
annual meetings of shareholders of the Funds. The trustees will call special
meetings of shareholders of a Fund only if required under the 1940 Act or in
their discretion or upon the written request of holders of 10% or more of the
outstanding shares of that Fund entitled to vote.
CERTAIN PROVISIONS OF TRUST INSTRUMENT. Under Delaware law, the
shareholders of a Fund will not be personally liable for the obligations of any
Fund; a shareholder is entitled to the same limitation of personal liability
extended to shareholders of corporations. To guard against the risk that
Delaware law might not be applied in other states, the Trust Instrument
requires that every written obligation of the Trust or a Fund contain a
statement that such obligation may be enforced only against the assets of the
Trust or Fund and provides for indemnification out of Trust or Fund property of
any shareholder nevertheless held personally liable for Trust or Fund
obligations, respectively.
32
<PAGE>
The Portfolios
- -------------------------------------------------------------------------------
Each Portfolio (except Neuberger&Berman International Portfolio) is a
separate series of Equity Managers Trust, a New York common law trust organized
as of December 1, 1992. Neuberger&Berman International Portfolio is a separate
series of Global Managers Trust, a New York common law trust organized as of
March 18, 1994. The Managers Trusts are registered under the 1940 Act as
diversified, open-end management investment companies. Equity Managers Trust
has six separate Portfolios. Global Managers Trust currently has one Portfolio.
The assets of each Portfolio belong only to that Portfolio, and the liabilities
of each Portfolio are borne solely by that Portfolio and no other.
FUNDS' INVESTMENTS IN PORTFOLIOS. Each Fund is a "feeder fund" that seeks
to achieve its investment objective by investing all of its net investable
assets in its corresponding Portfolio, which is a "master fund." The Portfolio,
which has the same investment objective, policies, and limitations as the Fund,
in turn invests in securities; its corresponding Fund thus acquires an indirect
interest in those securities. Historically, N&B Management, which is the
administrator of each Fund and the investment manager of each Portfolio, has
sponsored, with Neuberger&Berman, traditionally structured mutual funds since
1950. However, it has operated 12 master funds and 20 feeder funds since August
1993 and now operates 21 master funds and 30 feeder funds. This "master/feeder
fund" structure is depicted in the "Summary" on page 3.
Each Fund's investment in its corresponding Portfolio is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in a Portfolio. Six mutual funds that are series of
Neuberger&Berman Equity Trust ("N&B Equity Trust") invest all of their
respective net investable assets in the six corresponding Portfolios of Equity
Managers Trust. Five mutual funds that are series of Neuberger&Berman Equity
Assets ("N&B Equity Assets") are expected to begin operations in 1996. These
series will invest all of their respective net investable assets in five
Portfolios of Equity Managers Trust. Each Portfolio may also permit other
investment companies and/or other institutional investors to invest in the
Portfolio. All investors will invest in a Portfolio on the same terms and
conditions as a Fund and will pay a proportionate share of the Portfolio's
expenses. N&B Equity Trust does not, and N&B Equity Assets will not, sell its
shares directly to members of the general public. Other investors in a
Portfolio are not required to sell their shares at the same public offering
price as a Fund, could have a different administration fee and expenses than a
Fund, and (except N&B Equity Trust and N&B Equity Assets) might charge a sales
commission. Therefore, Fund shareholders may have different returns than
shareholders in another investment company that invests exclusively in the
Portfolio. There is currently no such other investment company that offers its
shares directly to members of the general public. Information regarding any
fund that may invest in a Portfolio in the future will be available from N&B
Management by calling 800-877-9700.
The trustees of the Trust believe that investment in a Portfolio by a
series of N&B Equity Trust or N&B Equity Assets or other potential investors in
addition to a Fund
33
<PAGE>
may enable the Portfolio to realize economies of scale that could reduce its
operating expenses, thereby producing higher returns and benefitting all
shareholders. However, a Fund's investment in its corresponding Portfolio may
be affected by the actions of other large investors in the Portfolio, if any.
For example, if a large investor in a Portfolio (other than a Fund) redeemed
its interest in the Portfolio, the Portfolio's remaining investors (including
the Fund) might, as a result, experience higher pro rata operating expenses,
thereby producing lower returns.
Each Fund may withdraw its entire investment from its corresponding
Portfolio at any time, if the trustees of the Trust determine that it is in the
best interests of the Fund and its shareholders to do so. A Fund might
withdraw, for example, if there were other investors in a Portfolio with power
to, and who did by a vote of all investors (including the Fund), change the
investment objective, policies, or limitations of the Portfolio in a manner not
acceptable to the trustees of the Trust. A withdrawal could result in a
distribution in kind of securities (as opposed to a cash distribution) by the
Portfolio. That distribution could result in a less diversified portfolio of
investments for the Fund and could affect adversely the liquidity of the Fund's
investment portfolio. If the Fund decided to convert those securities to
cash, it usually would incur brokerage fees or other transaction costs. If a
Fund withdrew its investment from a Portfolio, the trustees would consider what
action might be taken, including the investment of all of the Fund's net
investable assets in another pooled investment entity having substantially the
same investment objective as the Fund or the retention by the Fund of its own
investment manager to manage its assets in accordance with its investment
objective, policies, and limitations. The inability of the Fund to find a
suitable replacement could have a significant impact on shareholders.
INVESTOR MEETINGS AND VOTING. Each Portfolio normally will not hold
meetings of investors except as required by the 1940 Act. Each investor in a
Portfolio will be entitled to vote in proportion to its relative beneficial
interest in the Portfolio. On most issues subjected to a vote of investors, a
Fund will solicit proxies from its shareholders and will vote its interest in
the Portfolio in proportion to the votes cast by the Fund's shareholders. If
there are other investors in a Portfolio, there can be no assurance that any
issue that receives a majority of the votes cast by Fund shareholders will
receive a majority of votes cast by all Portfolio investors; indeed, if other
investors hold a majority interest in a Portfolio, they could have voting
control of the Portfolio.
CERTAIN PROVISIONS. Each investor in a Portfolio, including a Fund, will be
liable for all obligations of the Portfolio. However, the risk of an investor
in a Portfolio incurring financial loss on account of such liability would be
limited to circumstances in which the Portfolio had inadequate insurance and
was unable to meet its obligations out of its assets. Upon liquidation of a
Portfolio, investors would be entitled to share pro rata in the net assets of
the Portfolio available for distribution to investors.
34
<PAGE>
HOW TO BUY SHARES
You can buy shares of any Fund directly by mail, wire, or telephone, or
through an exchange of shares of another Neuberger&Berman Fund(SM) (see "Funds
Eligible for Exchange"). Shares are purchased at the next price calculated on a
day the New York Stock Exchange ("NYSE") is open, after your order is received
and accepted. Prices for shares of all Funds are usually calculated as of 4
p.m. Eastern time.
Minimum investment requirements are shown below. In addition, you can
invest as little as $100 each month under an automatic investing plan (see
"Automatic Investing and Dollar Cost Averaging").
N&B Management, in its discretion, may waive the minimum investment
requirements.
By Mail
- -------------------------------------------------------------------------------
Send your check or money order payable to "Neuberger&Berman Funds" by mail
to:
Neuberger&Berman Funds
Boston Service Center
P.O. Box 8403
Boston, MA 02266-8403
or by overnight courier, U.S. Express Mail, or registered or certified mail to:
Neuberger&Berman Funds
c/o State Street Bank and Trust Company
2 Heritage Drive
North Quincy, MA 02171
Be sure to specify the name of the Fund whose shares you want to buy. If
this is your first purchase, please send a minimum of $1,000 for shares of each
Fund you want to buy. For an additional purchase, please send at least $100 for
shares of any Fund. Unless your check or money order is made payable on its
face to Neuberger&Berman Funds, it may not be accepted. Third party checks will
not be accepted.
By Wire
- -------------------------------------------------------------------------------
Call 800-877-9700 for instructions on how to wire money to buy shares. Your
wire goes to State Street Bank and Trust Company ("State Street") and must
include your name, the name of the Fund whose shares you want to buy, and your
account number. The minimum for a first purchase and for each additional
purchase of shares of any Fund by wire is $1,000.
35
<PAGE>
By Telephone
- -------------------------------------------------------------------------------
Call 800-877-9700 to buy shares of any Fund. The minimum for a first
purchase and for each additional purchase of shares of any Fund by telephone is
$1,000. Your order may be canceled if your payment is not received by the third
business day after your order is placed. In that case you could be liable for
any resulting losses or fees a Fund or its agents have incurred. To recover
those losses or fees, a Fund has the right to bill you or to redeem shares from
your account. To meet the three-day deadline, you can wire payment, send a
check through overnight mail, or call 800-877-9700 for information on how to
make electronic transfers through your bank. Please refer to "Additional
Information on Telephone Transactions."
By Exchanging Shares
- -------------------------------------------------------------------------------
Call 800-877-9700 for instructions on how to invest by exchanging shares of
another Neuberger&Berman Fund(SM) for shares of a Fund. To buy Fund shares by
an exchange, both fund accounts must be registered in the same name, address,
and taxpayer ID number. The minimum for a first purchase and for each
additional purchase of shares of any Fund by an exchange is $1,000 worth of
shares of the other fund. For more details, see "Shareholder Services --
Exchange Privilege" and "Funds Eligible for Exchange."
Other Information
- -------------------------------------------------------------------------------
(bullet) You must pay for your shares in U.S. dollars by check or money order
(drawn on a U.S. bank), or by bank or federal funds wire transfer;
cash cannot be accepted.
(bullet) Each Fund has the right to suspend the offering of its shares for a
period of time. Each Fund also has the right to accept or reject a
purchase order in its sole discretion, including certain purchase
orders using the exchange privilege. See "Shareholder Services --
Exchange Privilege."
(bullet) If you pay by check and your check does not clear, or if you order
shares by telephone and fail to pay for them, your purchase will be
canceled and you could be liable for any resulting losses or fees a
Fund or its agents have incurred. To recover those losses or fees, a
Fund has the right to bill you or to redeem shares from your account.
(bullet) When you sign your application for a new Fund account, you are
certifying that your Social Security or other taxpayer ID number is
correct and whether you are subject to backup withholding. If you
violate certain federal income tax provisions, the Internal Revenue
Service can require the Funds to withhold 31% of your taxable
distributions and redemptions.
36
<PAGE>
(bullet) You can also buy shares of the Funds indirectly through certain
stockbrokers, banks, and other financial institutions, some of which
may charge you a fee.
(bullet) The Funds will not issue a certificate for your shares unless you
write to State Street and request it. Most shareholders do not want
certificates, because you must present the certificate to sell or
exchange the shares it represents. This means that you would be able
to sell or exchange those shares only by mail, and not by telephone
or fax. If you lose your certificate, you will have to pay the
expense of replacing it.
37
<PAGE>
HOW TO SELL SHARES
You can sell (redeem) all or some of your shares at any time by mail, fax,
or telephone. However, if you have a certificate for your shares (including
shares of a Fund's predecessor), you can redeem those shares only by sending
the certificate by mail. You can also sell shares by exchanging them for shares
of other Neuberger&Berman Funds(SM); see "Shareholder Services -- Exchange
Privilege" for details.
To sell shares held in a retirement account or by a trust, estate,
guardian, or business organization, please call 800-225-1596 for instructions.
Your shares are sold at the next price calculated on a day the NYSE is
open, after your sales order is received and accepted. Prices for shares of all
Funds are usually calculated as of 4 p.m. Eastern time.
Unless otherwise instructed, the Fund will mail a check for your sales
proceeds, payable to the owner(s) shown on your account ("record owner"), to
the address shown on your account ("record address"). You may designate in your
Fund application a bank account to which, at your request, State Street will
wire your sales proceeds. State Street currently charges a fee of $8.00 for
each wire. However, if you have one or more accounts in the Neuberger&Berman
Funds(SM) aggregating $250,000 or more in value, you will not be charged for
wire redemptions; your $8.00 fee will be paid by N&B Management.
If you purchased shares directly through certain stockbrokers, banks, or
other financial institutions, you may sell those shares only through those
organizations, some of which may charge you a fee.
By Mail or Facsimile Transmission (Fax)
- -------------------------------------------------------------------------------
Write a redemption request letter with your name and account number, the
Fund's name, and the dollar amount or number of shares of the Fund you want to
sell, together with any other instructions, and send it by mail to:
Neuberger&Berman Funds
Boston Service Center
P.O. Box 8403
Boston, MA 02266-8403
or by overnight courier, U.S. Express Mail, or registered or certified mail to:
Neuberger&Berman Funds
c/o State Street Bank and Trust Company
2 Heritage Drive
North Quincy, MA 02171
or by fax, to redeem up to $50,000 worth of shares, to 212-476-8848. If shares
are issued in certificate form, they are not eligible to be redeemed by fax. If
you have
38
<PAGE>
changed the record address by telephone or fax, shares may not be redeemed by
fax for 15 days after receipt of the address change. Please call 800-877-9700
to confirm receipt and acceptance of any order submitted by fax.
Be sure to have all owners sign the request exactly as their names appear
on the account and include the certificate for your shares if you have one.
To protect you and the Fund against fraud, your signature on a redemption
request must have a signature guarantee if (1) you want to sell more than
$50,000 worth of shares, (2) you want the redemption check to be made out to
someone other than the record owner, (3) you want the check to be mailed
somewhere other than to the record address, or (4) you want the proceeds to be
wired to a bank account not named in your application or in your prior written
instruction with a signature guarantee. You can obtain a signature guarantee
from most banks, stockbrokers and dealers, credit unions, and other financial
institutions, but not from a notary public.
For a redemption request sent by fax, limited to not more than $50,000, the
redemption check may be made out only to the record owner and mailed to the
record address or the proceeds wired to a bank account named in your
application or in a written instruction from the record owner with a signature
guarantee.
By Telephone
- -------------------------------------------------------------------------------
To sell shares worth at least $500, call 800-877-9700, giving your name and
account number, the name of the Fund, and the dollar amount or number of shares
you want to sell.
You can sell shares by telephone unless (1) you have declined this service
either in your application or later by writing or by submitting an appropriate
form to State Street, (2) you have a certificate for such shares, or (3) you
want to sell shares from a retirement account. In addition, if you have changed
the record address by telephone or fax, shares may not be redeemed by telephone
for 15 days after receipt of the address change.
Please refer to "Additional Information on Telephone Transactions."
Other Information
- -------------------------------------------------------------------------------
(bullet) Usually, redemption proceeds will be mailed to you on the next
business day, but in any case within three calendar days (under
unusual circumstances the Funds may take longer, as permitted by
law). You may also call 800-877-9700 for information on how to
receive electronic transfers through your bank.
(bullet) Each Fund may delay paying for any redemption until it is reasonably
satisfied that the check used to buy shares has cleared, which may
take up to 15 days after the purchase date. So if you plan to sell
shares shortly after buying them, you may want to pay for the
purchase with a certified check or money order or by wire transfer.
39
<PAGE>
(bullet) Each Fund may suspend redemptions or postpone payments on days when
the NYSE is closed (besides weekends and holidays), when trading on
the NYSE is restricted, or as permitted by the Securities and
Exchange Commission.
(bullet) If, because you sold shares, your account balance with any Fund falls
below $1,000, the Fund has the right to close your account after
giving you at least 60 days' written notice to reestablish the
minimum balance. If you do not do so, the Fund may redeem your
remaining shares at their price on the date of redemption and will
send the redemption proceeds to you.
40
<PAGE>
ADDITIONAL INFORMATION ON TELEPHONE TRANSACTIONS
A Fund at any time can limit the number of its shares you can buy by
telephone or can stop accepting telephone orders. You can sell or exchange
shares by telephone, unless (1) you have declined these services in your
application or by written notice to N&B Management or State Street, with your
signature guaranteed, or (2) you have a certificate for such shares. Each Fund
or its agent follows reasonable procedures -- requiring you to provide a form
of personal identification when you telephone, recording your telephone call,
and sending you a written confirmation of each telephone transaction --
designed to confirm that telephone instructions are genuine. However, no Fund
or its agent is responsible for the authenticity of telephone instructions or
for any losses caused by fraudulent or unauthorized telephone instructions if
the Fund or its agent reasonably believed that the instructions were genuine.
If you are unable to reach N&B Management by telephone (which might be the
case, for example, during periods of unusual market activity), consider sending
your transaction instructions by fax, overnight courier, or U.S. Express Mail.
Beginning in the Spring of 1996, you will be able to buy, sell or exchange
shares using an automated telephone service that will be available 24 hours a
day, every day, to investors using a touch-tone phone. Further information
regarding this service, including use of a Personal Identification Number (PIN)
and a menu of features, will be sent to all shareholders in advance.
41
<PAGE>
SHAREHOLDER SERVICES
Several other services are available to assist you in making and managing
your investment in the Funds.
Automatic Investing and Dollar Cost Averaging
- -------------------------------------------------------------------------------
If you want to invest regularly, you may participate in a plan that lets
you automatically buy a minimum of $100 worth of shares in any Fund each month
using dollar cost averaging. Under this plan, you buy a fixed dollar amount of
shares in any of the Funds at pre-set intervals. You may pay for the shares by
automatic transfers from your account in any Neuberger&Berman money market fund
or by pre-authorized checks drawn on your bank account. You buy more shares
when a Fund's share price is relatively low and fewer shares when a Fund's
share price is relatively high. Thus, under this plan your average cost of
shares would generally be lower than if you bought a fixed number of shares at
the same intervals. To benefit from dollar cost averaging, you should be
financially prepared to continue your participation for a long enough period to
include times when Fund share prices are lower. Of course, the plan does not
guarantee a profit and will not protect you against losses in a declining
market. For further information, call 800-877-9700.
Exchange Privilege
- -------------------------------------------------------------------------------
To exchange your shares in a Fund for shares in another Neuberger&Berman
Fund(SM), call 800-877-9700 between 8 a.m. and 4 p.m., Eastern time, on any
Monday through Friday (unless the NYSE is closed). See "Funds Eligible for
Exchange." You may also effect an exchange by sending a letter to
Neuberger&Berman Management Incorporated, 605 Third Avenue, 2nd Floor, New
York, NY 10158-0180, Attention: [Name of Fund], or by faxing the letter to
212-476-8848, giving your name and account number, the name of the Fund, the
dollar amount or number of shares you want to sell, and the name of the fund
whose shares you want to buy. Please call 800-877-9700 to confirm receipt and
acceptance of any order submitted by fax. If you have a certificate for your
shares, you can exchange them only by mailing the certificate with your letter
requesting the exchange. You can use the telephone exchange privilege unless
(1) you have declined it in your application or by later writing to N&B
Management or State Street, or (2) you have a certificate for such shares. An
exchange must be for at least $1,000 worth of shares, and if the exchange is
your first purchase in another Neuberger&Berman Fund(SM), it must be for at
least the minimum initial investment amount for that fund. Shares are exchanged
at the next price calculated on a day the NYSE is open, after your exchange
order is received and accepted.
42
<PAGE>
Please note the following about the exchange privilege:
(bullet) You can exchange shares only between accounts registered in the same
name, address, and taxpayer ID number.
(bullet) A telephone exchange order cannot be modified or canceled.
(bullet) You can exchange only into a mutual fund whose shares are eligible
for sale in your state under applicable state securities laws.
(bullet) An exchange may have tax consequences for you.
(bullet) Because excessive trading (including short-term "market timing"
trading) can hurt a Fund's performance, each Fund may refuse any
exchange orders (1) if they appear to be market-timing transactions
involving significant portions of a Fund's assets or (2) from any
shareholder account if the shareholder has been advised that previous
use of the exchange privilege was considered excessive. Accounts
under common ownership or control, including those with the same
taxpayer ID number, will be considered one account for this purpose.
(bullet) Each Fund may impose other restrictions on the exchange privilege, or
modify or terminate the privilege, but will try to give you advance
notice whenever it can reasonably do so.
Please refer to "Additional Information on Telephone Transactions."
Systematic Withdrawal Plans
- -------------------------------------------------------------------------------
If you own shares of a Fund worth at least $5,000, you can open a
Systematic Withdrawal Plan. Under such a plan, you arrange to withdraw a
specific amount (at least $50) on a monthly, quarterly, semi-annual, or annual
basis, or you can have your account completely paid out over a specified period
of time. You can also arrange for periodic cash withdrawals from your Fund
account to pay fees to your financial planner or investment adviser. Because
the price of shares of each Fund fluctuates, you may incur capital gains or
losses when you redeem shares of the Funds through a Systematic Withdrawal Plan
or by other methods. Call 800-877-9700 for more information.
Retirement Plans
- -------------------------------------------------------------------------------
Retirement plans permit you to defer paying taxes on investment income and
capital gains. Contributions to these plans may also be tax deductible. Please
call 800-877-9700 for information on a variety of retirement plans, including
individual retirement accounts, simplified employee pension plans,
self-employed individual retirement plans (so-called "Keogh Plans"), corporate
profit-sharing and money purchase pension plans, section 401(k) plans, and
section 403(b)(7) accounts offered by N&B Management. The assets of these plans
may be invested in any of the Funds.
43
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Fund's shares are bought or sold at a price that is the Fund's net
asset value ("NAV") per share. The NAVs for each Fund and its corresponding
Portfolio are calculated by subtracting liabilities from total assets (in the
case of a Portfolio, the market value of the securities the Portfolio holds
plus cash and other assets; in the case of a Fund, its percentage interest in
its corresponding Portfolio, multiplied by the Portfolio's NAV, plus any other
assets). Each Fund's per share NAV is calculated by dividing its NAV by the
number of Fund shares outstanding and rounding the result to the nearest full
cent. Each Fund and its corresponding Portfolio calculate their NAVs as of the
close of regular trading on the NYSE, usually 4 p.m. Eastern time, on each day
the NYSE is open.
Each Portfolio (except Neuberger&Berman International Portfolio) values
securities (including options) listed on the NYSE, the American Stock Exchange
or other national securities exchanges or quoted on Nasdaq, and other
securities for which market quotations are readily available, at the last sale
price on the day the securities are being valued. If there is no sale of such a
security on that day, that security is valued at the mean between its closing
bid and asked prices. The Portfolios value all other securities and assets,
including restricted securities, by a method that the trustees of Equity
Managers Trust believe accurately reflects fair value.
Neuberger&Berman International Portfolio values equity securities at the
last sale price on the principal exchange or in the principal over-the-counter
market in which such securities are traded, as of the close of business on the
day the securities are being valued or, if there are no sales, at the last
available bid price. Debt obligations are valued at the last available bid
price for such securities or, if such prices are not available, at prices for
securities of comparable maturity, quality, and type. Foreign securities are
translated from the local currency into U.S. dollars using current exchange
rates. The Portfolio values all other types of securities and assets, including
restricted securities and securities for which market quotations are not
readily available, by a method that the trustees of Global Managers Trust
believe accurately reflects fair value.
Neuberger&Berman International Portfolio's portfolio securities are traded
primarily in foreign markets which may be open on days when the NYSE is closed.
As a result, the NAV of Neuberger&Berman International Fund may be
significantly affected on days when shareholders have no access to that Fund.
44
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS,
AND TAXES
Each Fund distributes substantially all of its share of any net investment
income (net of the Fund's expenses), net realized capital gains and net
realized gains from foreign currency transactions earned or realized by its
corresponding Portfolio, normally in December. Investors who are considering
the purchase of Fund shares in December should take this into account because
of the tax consequences of such distributions. In addition, Neuberger&Berman
Guardian Fund distributes substantially all of its share of Neuberger&Berman
Guardian Portfolio's net investment income, if any, at the end of each calendar
quarter.
Distribution Options
- -------------------------------------------------------------------------------
REINVESTMENT IN SHARES. All dividends and other distributions paid on
shares of a Fund are automatically reinvested in additional shares of that
Fund, unless you elect to receive them in cash. Dividends and other
distributions are reinvested at the Fund's per share NAV, usually as of the
date the dividend or other distribution is payable. For retirement accounts,
all distributions are automatically reinvested in shares; when you are at least
59-1/2 years old, you can elect to receive distributions in cash without
incurring a premature distribution penalty tax.
DIVIDENDS IN CASH. You may elect to receive dividends in cash, with other
distributions being reinvested in additional Fund shares, by checking that
election box on your application.
ALL DISTRIBUTIONS IN CASH. You may elect to receive all dividends and other
distributions in cash, by checking that election box on your application.
Checks for cash distributions usually will be mailed no later than seven
days after the payable date. However, if you purchased your shares with a
check, distributions on those shares may not be paid in cash until the Fund is
reasonably satisfied that your check has cleared, which may take up to 15 days
after the purchase date. You can change any distribution election by writing to
State Street, the Funds' shareholder servicing agent.
Taxes
- -------------------------------------------------------------------------------
Each Fund intends to continue to qualify for treatment as a regulated
investment company for federal income tax purposes so that it will be relieved
of federal income tax on that part of its taxable income and realized gains
that it distributes to its shareholders.
Your investment has certain tax consequences, depending on the type of your
account. If you have a retirement account, taxes are deferred.
45
<PAGE>
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax and
may also be subject to state and local income taxes. Your distributions are
taxable when they are paid, whether in cash or by reinvestment in additional
Fund shares, except that distributions declared in December to shareholders of
record on a date in that month and paid in the following January are taxable as
if they were paid on December 31 of the year in which the distributions were
declared.
For federal income tax purposes, dividends and distributions of net
short-term capital gain and net gains from certain foreign currency
transactions are taxed as ordinary income. Distributions of net capital gain
(the excess of net long-term capital gain over net short-term capital loss),
when designated as such, are generally taxed as long-term capital gain, no
matter how long you have owned your shares. Distributions of net capital gain
may include gains from the sale of portfolio securities that appreciated in
value before you bought your shares.
Every January, your Fund will send you a statement showing the amount of
distributions paid to you in the previous year. Information accompanying your
statement will show the portion of those distributions that generally are not
taxable in certain states.
TAXES ON REDEMPTIONS. Capital gains realized on redemption of Fund shares,
including redemptions in connection with exchanges to other Neuberger&Berman
Funds(SM), are subject to tax. A capital gain (or loss) is the difference
between the amount you paid for the shares (including the value of any
dividends and other distributions that were reinvested) and the amount you
receive when you sell them.
When you sell shares you will receive a confirmation statement showing the
number of shares you sold and the price. Every January you will also receive a
consolidated transaction statement for the previous year. Be sure to keep your
statements; they will be useful to you and your tax preparer in determining the
capital gains and losses from your redemptions.
The foregoing is only a summary of some of the important tax considerations
affecting each Fund and its shareholders. See the SAI for additional tax
information. There may be other federal, state, local, or foreign tax
considerations applicable to a particular investor. Therefore, you should
consult your tax adviser.
46
<PAGE>
MANAGEMENT AND ADMINISTRATION
Trustees and Officers
- -------------------------------------------------------------------------------
The trustees of the Trust and the trustees of the Managers Trusts have
oversight responsibility for the operations of each Fund and each Portfolio,
respectively. The SAI contains general background information about each
trustee and officer of the Trust and of the Managers Trusts. The trustees and
officers of the Trust and of the Managers Trusts who are officers and/or
directors of N&B Management and/or partners of Neuberger&Berman serve without
compensation from the Funds or the Portfolios. All trustees of the Managers
Trusts also serve as trustees of the Trust. The trustees of the Trust and of
the Managers Trusts, including a majority of those trustees who are not
"interested persons" (as defined in the 1940 Act) of any Fund, have adopted
written procedures reasonably appropriate to deal with potential conflicts of
interest between the Trust and the Managers Trusts, including, if necessary,
creating a separate board of trustees of the Managers Trusts.
Investment Manager, Administrator,
Distributor, and Sub-Adviser
- -------------------------------------------------------------------------------
N&B Management serves as the investment manager of each Portfolio, as
administrator of each Fund, and as distributor of the shares of each Fund. N&B
Management and its predecessor firms have specialized in the management of
no-load mutual funds since 1950. In addition to serving the seven Portfolios,
N&B Management currently serves as investment manager of other mutual funds.
Neuberger&Berman, which acts as sub-adviser for the Portfolios and other mutual
funds managed by N&B Management, also serves as investment adviser of three
investment companies. The mutual funds managed by N&B Management and
Neuberger&Berman had aggregate net assets of approximately $11.4 billion as of
September 30, 1995.
As sub-adviser, Neuberger&Berman furnishes N&B Management with investment
recommendations and research without added cost to the Portfolios.
Neuberger&Berman is a member firm of the NYSE and other principal exchanges and
may act as the Portfolios' broker in the purchase and sale of their securities.
Neuberger&Berman and its affiliates, including N&B Management, manage
securities accounts that had approximately $37.6 billion of assets as of
September 30, 1995. All of the voting stock of N&B Management is owned by
individuals who are general partners of Neuberger&Berman.
State Street Cayman Trust Company, Ltd. ("State Street Cayman"), located in
George Town, Grand Cayman, provides certain administrative, fund accounting and
transfer agency services for Neuberger&Berman International Portfolio, which
has its principal offices in the Cayman Islands.
47
<PAGE>
The following is information about the individuals who are primarily
responsible for the day-to-day management of the Portfolios:
Neuberger&Berman Focus Portfolio and Neuberger&Berman Guardian Portfolio --
Kent C. Simons and Lawrence Marx III. Mr. Simons and Mr. Marx are Vice
Presidents of N&B Management and general partners of Neuberger&Berman. Mr.
Simons has had responsibility for Neuberger&Berman Focus Portfolio and
Neuberger&Berman Focus Fund's predecessor since 1988, and for Neuberger& Berman
Guardian Portfolio and Neuberger&Berman Guardian Fund's predecessor since 1983.
Mr. Marx has had those responsibilities since 1988.
Neuberger&Berman Genesis Portfolio -- Judith M. Vale. Ms. Vale, who has
been a member of Neuberger&Berman's Small Cap Group since 1992 and a Vice
President of N&B Management since November 1994, has been primarily responsible
for the day-to-day management of Neuberger&Berman Genesis Portfolio since
February, 1994. Ms. Vale was a portfolio manager for another investment
management group from 1990 to 1992, and was a senior fund analyst at another
prominent investment adviser from 1987 to 1990.
Neuberger&Berman International Portfolio -- Felix Rovelli and Robert
Cresci. Mr. Rovelli has been responsible for Neuberger&Berman International
Portfolio since its inception in June 1994. Mr. Rovelli is a Vice President of
N&B Management and was a Senior Vice President-Senior Equity Portfolio Manager
of BNP-N&B Global from May 1994 until October 1995. He previously served as
first vice president and portfolio manager of another mutual fund that invested
in international equity securities, from April 1990 to April 1994. Mr. Cresci
is an Assistant Vice President of N&B Management and was an Assistant Portfolio
Manager of BNP-N&B Global from May 1994 until October 1995. He previously
served as an assistant portfolio manager of another mutual fund that invested
in international equity securities, from 1992 until May 1994.
Neuberger&Berman Manhattan Portfolio -- Mark R. Goldstein and Susan
Switzer. Mr. Goldstein is a Vice President of N&B Management and a general
partner of Neuberger&Berman. Previously he was a securities analyst and
portfolio manager with that firm. He has had responsibility for
Neuberger&Berman Manhattan Portfolio and Neuberger&Berman Manhattan Fund's
predecessor since June 1992. Ms. Switzer has been an Assistant Vice President
of N&B Management since March 1995 and a portfolio manager for Neuberger&Berman
since January 1995. Ms. Switzer was a research analyst and assistant portfolio
manager for another money management firm from 1989 to 1994.
Neuberger&Berman Partners Portfolio -- Michael M. Kassen and Robert I.
Gendelman. Mr. Kassen is a Vice President of N&B Management and a general
partner of Neuberger&Berman. He has had responsibility for Neuberger&Berman
Partners Portfolio and Neuberger&Berman Partners Fund's predecessor since June
1990. Mr. Gendelman is a senior portfolio manager for Neuberger&Berman and an
48
<PAGE>
Assistant Vice President of N&B Management. Mr. Gendelman has had
responsibility for Neuberger&Berman Partners Portfolio since October 1994. He
was a portfolio manager for another mutual fund manager from 1992 to 1993 and
was managing partner of an investment partnership from 1988 to 1992.
Neuberger&Berman Socially Responsive Portfolio -- Janet Prindle and
Farha-Joyce Haboucha. Ms. Prindle, a Vice President of N&B Management since
November 1993, has been a general partner of Neuberger&Berman since 1985. Ms.
Haboucha has been a Vice President of N&B Management since November 1994 and an
employee of Neuberger&Berman since 1986. Mmes. Prindle and Haboucha, who are
Co-Directors of Socially Responsive Investment Services at Neuberger&Berman,
have been researching and developing corporate responsibility criteria as they
apply to investments since 1989. They have been managing money using these
criteria since 1990. Ms. Prindle has been responsible for Neuberger&Berman
Socially Responsive Portfolio since its inception in March 1994.
Neuberger&Berman acts as the principal broker for the Portfolios (except
Neuberger&Berman International Portfolio), and may act as broker for Neuberger&
Berman International Portfolio, in the purchase and sale of portfolio
securities and in the purchase and sale of options, and for those services
receives brokerage commissions. In effecting securities transactions, each
Portfolio seeks to obtain the best price and execution of orders. For more
information, see the SAI.
The partners and employees of Neuberger&Berman and officers and employees
of N&B Management, together with their families, have invested over $100
million of their own money in Neuberger&Berman Funds(SM).
To mitigate the possibility that a Portfolio will be adversely affected by
personal trading of employees, the Trust, the Managers Trusts, N&B Management,
and Neuberger&Berman have adopted policies that restrict securities trading in
personal accounts of the portfolio managers and others who normally come into
possession of information on portfolio transactions.
Expenses
- -------------------------------------------------------------------------------
N&B Management provides investment management services to each Portfolio
that include, among other things, making and implementing investment decisions
and providing facilities and personnel necessary to operate the Portfolio. N&B
Management provides administrative services to each Fund that include
furnishing similar facilities and personnel for the Fund and performing certain
shareholder, shareholder- related, and other services. For such administrative
services, each Fund pays N&B Management a fee at the annual rate of 0.26% of
that Fund's average daily net assets. With a Fund's consent, N&B Management may
subcontract to third parties some of its responsibilities to that Fund under
the administration agreement. For investment management services, each
Portfolio (except Neuberger&Berman Genesis Portfolio
49
<PAGE>
and Neuberger&Berman International Portfolio) pays N&B Management a fee at the
annual rate of 0.55% of the first $250 million of that Portfolio's average
daily net assets, 0.525% of the next $250 million, 0.50% of the next $250
million, 0.475% of the next $250 million, 0.45% of the next $500 million, and
0.425% of average daily net assets in excess of $1.5 billion. Neuberger&Berman
Genesis Portfolio pays N&B Management a fee for investment management services
at the annual rate of 0.85% of the first $250 million of that Portfolio's
average daily net assets, 0.80% of the next $250 million, 0.75% of the next
$250 million, 0.70% of the next $250 million, and 0.65% of average daily net
assets in excess of $1 billion.
Neuberger&Berman International Portfolio pays N&B Management a fee for
investment management services at the annual rate of 0.85% of the first $250
million of the Portfolio's average daily net assets, 0.825% of the next $250
million, 0.80% of the next $250 million, 0.775% of the next $250 million, 0.75%
of the next $500 million, and 0.725% of average daily net assets in excess of
$1.5 billion. This management fee is higher than that paid by most domestic
equity funds, but is consistent with the average fee levels of other
international equity funds.
During their 1995 fiscal years, each Fund accrued administration fees, and
a pro rata portion of the corresponding Portfolio's management fees, as an
annualized percentage of each Fund's average daily net assets, as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<S> <C>
Neuberger&Berman Focus Fund 0.72%
Neuberger&Berman Genesis Fund 1.04%
Neuberger&Berman Guardian Fund 0.65%
Neuberger&Berman International Fund 1.67%
Neuberger&Berman Manhattan Fund 0.73%
Neuberger&Berman Partners Fund 0.69%
Neuberger&Berman Socially Responsive Fund 0.75%
</TABLE>
See "Expense Information -- Annual Fund Operating Expenses" for anticipated
fees for the current fiscal year.
Each Fund bears all expenses of its operations other than those borne by
N&B Management as administrator of the Fund and as distributor of its shares.
Each Portfolio bears all expenses of its operations other than those borne by
N&B Management as investment manager of the Portfolio. These expenses include,
but are not limited to, for the Funds and Portfolios, legal and accounting fees
and compensation for trustees who are not affiliated with N&B Management; for
the Funds, transfer agent fees, and the cost of printing and sending reports
and proxy materials to shareholders; and for the Portfolios, custodial fees for
securities.
N&B Management has voluntarily undertaken until December 31, 1996, to reim-
burse Neuberger&Berman Socially Responsive Fund for its Operating Expenses
and its pro rata share of its corresponding Portfolio's Operating Expenses
50
<PAGE>
which exceed, in the aggregate, 1.50% per annum of the Fund's average daily net
assets. The Fund has in turn agreed to repay N&B Management through March 14,
1998, for the excess Operating Expenses N&B Management previously reimbursed to
the Fund, so long as the Fund's annual Operating Expenses during that period do
not exceed the above expense limitation. N&B Management has voluntarily agreed
to waive a portion of the management fee borne directly by Neuberger&Berman
Genesis Portfolio and indirectly by Neuberger&Berman Genesis Fund to reduce the
fee by 0.10% per annum of the average daily net assets of Neuberger&Berman
Genesis Portfolio. N&B Management has voluntarily undertaken until December 31,
1996 to reimburse Neuberger&Berman International Fund for its Operating
Expenses and its pro rata share of the Operating Expenses of its corresponding
Portfolio that exceed, in the aggregate, 1.70% per annum of the Fund's average
daily net assets. The Fund has in turn agreed to repay N&B Management through
December 31, 1998, for the excess Operating Expenses N&B Management previously
reimbursed to the Fund, so long as the Fund's annual Operating Expenses during
that period do not exceed the above expense limitation. The effect of
reimbursement or a waiver by N&B Management is to reduce a Fund's expenses and
thereby increase its total return.
During their 1995 fiscal years, each Fund bore Total Operating Expenses as
an annualized percentage of its average daily net assets (after taking into
consideration N&B Management's expense reimbursement for Neuberger&Berman
Socially Responsive Fund and for Neuberger&Berman International Fund and N&B
Management's waiver of a portion of the management fee borne indirectly by
Neuberger&Berman Genesis Fund), as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<S> <C>
Neuberger&Berman Focus Fund 0.87%
Neuberger&Berman Genesis Fund 1.35%
Neuberger&Berman Guardian Fund 0.80%
Neuberger&Berman International Fund 1.70%
Neuberger&Berman Manhattan Fund 0.98%
Neuberger&Berman Partners Fund 0.83%
Neuberger&Berman Socially Responsive Fund 1.51%
</TABLE>
Transfer and Shareholder Servicing Arrangements
- -------------------------------------------------------------------------------
The Funds' transfer and shareholder servicing agent is State Street. State
Street administers purchases, redemptions, and transfers of Fund shares and the
payment of dividends and other distributions through its Boston Service Center,
P.O. Box 8403, Boston, MA 02266-8403.
51
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to common stocks and other securities referred to in
"Investment Programs" herein, each Portfolio may make the following
investments, among others, individually or in combination, although it may not
necessarily buy all of the types of securities or use all of the investment
techniques that are described. For additional information on the following
investments or other types of investments which the Portfolios may make, see
the SAI.
ILLIQUID SECURITIES. Each Portfolio may invest up to 10% of its net assets
(5% in the case of Neuberger&Berman Genesis Portfolio) in illiquid securities,
which are securities that cannot be expected to be sold within seven days at
approximately the price at which they are valued. Due to the absence of an
active trading market, a Portfolio may experience difficulty in valuing or
disposing of illiquid securities. N&B Management determines the liquidity of
the Portfolios' securities, under supervision of the trustees of the Managers
Trusts. Securities that are freely tradeable in their country of origin or in
their principal market are not considered illiquid securities even if they are
not registered for sale in the U.S.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. Each Portfolio may invest
in restricted securities and Rule 144A securities. Restricted securities cannot
be sold to the public without registration under the Securities Act of 1933
("1933 Act"). Unless registered for sale, these securities can be sold only in
privately negotiated transactions or pursuant to an exemption from
registration. Restricted securities are generally considered illiquid. Rule
144A securities, although not registered, may be resold to qualified
institutional buyers in accordance with Rule 144A under the 1933 Act.
Unregistered securities may also be sold abroad pursuant to Regulation S under
the 1933 Act. N&B Management, acting pursuant to guidelines established by the
trustees of the Managers Trusts, may determine that some restricted securities
are liquid.
FOREIGN SECURITIES. Each Portfolio (except Neuberger&Berman International
Portfolio) may invest up to 10% of the value of its total assets in foreign
securities. The 10% limitation does not apply to foreign securities that are
denominated in U.S. dollars, including ADRs.
Neuberger&Berman International Portfolio invests primarily in foreign
securities. Foreign securities are those of issuers organized and doing
business principally outside the U.S., including non-U.S. governments, their
agencies, and instrumentalities. The Portfolio may also invest in ADRs, EDRs,
GDRs, and IDRs. ADRs (sponsored or unsponsored) are receipts typically issued
by a U.S. bank or trust company evidencing its ownership of the underlying
foreign securities. Most ADRs are denominated in U.S. dollars and are traded on
a U.S. stock exchange. Issuers of the securities underlying unsponsored ADRs
are not contractually obligated to disclose material information in the U.S.
and, therefore, the market value of the unsponsored
52
<PAGE>
ADR may not reflect the effect of such information. EDRs and IDRs are receipts
typically issued by a European bank or trust company evidencing its ownership
of the underlying foreign securities. GDRs are receipts issued by either a U.S.
or non-U.S. banking institution evidencing its ownership of the underlying
foreign securities and are often denominated in U.S. dollars.
Factors affecting investments in foreign securities include, but are not
limited to, varying custody, brokerage and settlement practices; difficulty in
pricing some foreign securities; less public information about issuers of
securities; less governmental regulation and supervision of issuance and
trading of securities; the unavailability of financial information or the
difficulty of interpreting financial information prepared under foreign
accounting standards; less liquidity and more volatility in foreign securities
markets; the possibility of expropriation; the imposition of foreign
withholding and other taxes; political, social, or diplomatic developments;
limitations on the movement of funds or other assets of a Portfolio between
different countries; difficulties in invoking legal process abroad and
enforcing contractual obligations; and the difficulty of assessing economic
trends in foreign countries. Investment in foreign securities also involves
higher brokerage and custodial expenses than does investment in domestic
securities.
In addition, investing in securities of foreign companies and governments
may involve other risks which are not ordinarily associated with investing in
domestic securities. These risks include changes in currency exchange rates and
currency exchange control regulations or other foreign or U.S. laws or
restrictions applicable to such investments or devaluations of foreign
currencies. A decline in the exchange rate between the U.S. dollar and another
currency would reduce the value of portfolio securities denominated in that
currency irrespective of the performance of the underlying investment. In
addition, a Portfolio may incur costs in connection with conversion between
various currencies. Investments in depositary receipts (whether or not
denominated in U.S. dollars) may be subject to exchange controls and changes in
rates of exchange with the U.S. dollar because the underlying security is
usually denominated in foreign currency.
All of the foregoing risks may be intensified in emerging industrialized
and less developed countries.
JAPANESE INVESTMENTS. As noted above, all of the Portfolios may invest in
foreign securities, including securities of Japanese issuers. Neuberger&Berman
International Portfolio may invest a significant portion of its assets in
securities of Japanese issuers. The performance of the Portfolio may therefore
be significantly affected by events affecting the Japanese economy and the
exchange rate between the Japanese yen and the U.S. dollar. Japan has
experienced a severe recession, including a decline in real estate values and
other events that adversely affect the balance sheets of many financial
institutions and indicate that there may be structural weaknesses in the
Japanese financial system. The effects of this economic downturn may be felt
for a considerable
53
<PAGE>
period and are being exacerbated by the currency exchange rate. Japan is
heavily dependent on foreign oil. Japan is located in a seismically active
area, and severe earthquakes may damage important elements of the country's
infrastructure. Japan's economic prospects may be affected by the political and
military situations of its near neighbors, notably North and South Korea, China
and Russia.
OTHER INVESTMENT COMPANIES. Neuberger&Berman International Portfolio may
invest up to 10% of its total assets in the shares of other investment
companies. Such investment may be the most practical or only manner in which
the Portfolio can participate in certain foreign markets because of the
expenses involved or because other vehicles for investing in certain countries
may not be available at the time the Portfolio is ready to make an investment.
As a shareholder in an investment company, the Portfolio would bear its pro
rata share of that investment company's expenses. Investment in other funds may
involve the payment of substantial premiums above the value of such issuers'
portfolio securities. Neuberger&Berman International Portfolio does not intend
to invest in such funds unless, in the judgment of N&B Management, the
potential benefits of such investment justify the payment of any applicable
premium or sales charge.
COVERED CALL OPTIONS. Each Portfolio (except Neuberger&Berman International
Portfolio) may try to reduce the risk of securities price changes (hedge) or
generate income by writing (selling) covered call options against securities
held in its portfolio having a market value not exceeding 10% of its net assets
and may purchase call options in related closing transactions. The purchaser of
a call option acquires the right to buy a portfolio security at a fixed price
during a specified period. The maximum price the seller may realize on the
security during the option period is the fixed price; the seller continues to
bear the risk of a decline in the security's price, although this risk is
reduced by the premium received for the option.
FOREIGN CURRENCY TRANSACTIONS. Neuberger&Berman International Portfolio may
enter into forward contracts in order to protect against adverse changes in
future foreign currency exchange rates. The Portfolio may enter into contracts
to purchase foreign currencies to protect against an anticipated rise in the
U.S. dollar price of securities it intends to purchase. The Portfolio may also
enter into contracts to sell foreign currencies to protect against a decline in
value of its foreign currency denominated portfolio securities due to a decline
in the value of foreign currencies against the U.S. dollar. Contracts to sell
foreign currency could limit any potential gain which might be realized by the
Portfolio if the value of the hedged currency increased.
Neuberger&Berman International Portfolio may also enter into forward
contracts for non-hedging purposes when N&B Management anticipates that the
foreign currency will appreciate or depreciate in value, but securities
denominated in that currency do not present attractive investment opportunities
and are not held in the Portfolio. The Portfolio may also engage in
cross-hedging by using forward contracts in one currency to hedge against
fluctuations in the value of securities denominated in
54
<PAGE>
a different currency if N&B Management believes that there is a pattern of
correlation between the two currencies.
PUT AND CALL OPTIONS ON FOREIGN CURRENCIES, SECURITIES, AND SECURITIES
INDICES. Neuberger&Berman International Portfolio may purchase and write put
and call options on foreign currencies for the purpose of protecting against
declines in the dollar value of foreign portfolio securities and against
increases in the U.S. dollar cost of foreign securities to be acquired. The
Portfolio may also use options on foreign currencies to cross-hedge. In
addition, the Portfolio may purchase put or call options on currencies for
non-hedging purposes when N&B Management expects that the currency will
appreciate or depreciate in value, but securities denominated in that currency
do not present attractive investment opportunities and are not held in the
Portfolio. Options on foreign currencies to be written or purchased by the
Portfolio may be traded on U.S. or foreign exchanges or over-the-counter.
Options on foreign currencies which are traded in the over-the-counter market
may be considered illiquid and subject to the restriction on illiquid
securities.
To realize greater income than would be realized on portfolio securities
transactions alone, Neuberger&Berman International Portfolio may write put and
call options on any securities in which it may invest or options on any
securities index based on securities in which the Portfolio may invest. The
Portfolio will not write a call option on a security or currency unless it owns
the underlying security or currency or has the right to obtain it at no
additional cost.
The writing and purchasing of options is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions, including price volatility and
a high degree of leverage. The Portfolio pays brokerage commissions or spreads
in connection with its options transactions, as well as for purchases and sales
of underlying securities or currencies. The writing of options could result in
significant increases in the Portfolio's turnover rate.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. Neuberger&Berman
International Portfolio may enter into futures contracts on debt securities,
interest rates, securities indices and currencies, and purchase and sell
options on such contracts on both U.S. and foreign exchanges. The Portfolio may
engage in such transactions for hedging and non-hedging purposes.
GENERAL RISKS OF OPTIONS, FUTURES AND FORWARD CONTRACTS. The primary risks
in using put and call options, futures contracts, options on futures contracts,
and forward contracts ("Financial Instruments") are (1) imperfect correlation
or no correlation between changes in market value of the securities held by a
Portfolio and the prices of Financial Instruments; (2) possible lack of a
liquid secondary market for Financial Instruments and the resulting inability
to close out Financial Instruments when desired; (3) the fact that the skills
needed to use Financial Instruments are different from those needed to select a
Portfolio's securities; and (4) the fact that, although use of
55
<PAGE>
Financial Instruments for hedging purposes can reduce the risk of loss, they
also can reduce the opportunity for gain, or even result in losses, by
offsetting favorable price movements in hedged investments. When a Portfolio
uses Financial Instruments, the Portfolio will place cash or high-grade, liquid
debt securities in a segregated account to the extent required by SEC staff
policy. Another risk of Financial Instruments is the possible inability of a
Portfolio to purchase or sell a security at a time that would otherwise be
favorable for it to do so, or the possible need for a Portfolio to sell a
security at a disadvantageous time, due to its need to maintain "cover" or to
segregate securities in connection with its use of Financial Instruments.
Futures, options and forward contracts are considered "derivatives." Losses
that may arise from certain futures transactions are potentially unlimited.
SHORT SALES AGAINST-THE-BOX. Each Portfolio may make short sales
against-the-box, in which it sells securities short only if it owns or has the
right to obtain without payment of additional consideration an equal amount of
the same type of securities sold. Short selling against-the-box may defer
recognition of gains or losses into a later tax period.
SHORT SALES. Neuberger&Berman International Portfolio may attempt to limit
exposure to a possible decline in the market value of portfolio securities
through short sales of securities which N&B Management believes possess
volatility characteristics similar to those being hedged. The Portfolio also
may use short sales in an attempt to realize gain. To effect a short sale, the
Portfolio borrows a security from a brokerage firm to make delivery to the
buyer. The Portfolio then is obligated to replace the borrowed security by
purchasing it at the market price at the time of replacement. Until the
security is replaced, the Portfolio is required to pay to the lender any
accrued interest or dividends and may be required to pay a premium.
Neuberger&Berman International Portfolio will realize a gain if the
security declines in price between the date of the short sale and the date on
which the Portfolio replaces the borrowed security. The Portfolio will incur a
loss if the price of the security increases between those dates. The amount of
any gain will be decreased, and the amount of any loss increased, by the amount
of any premium or interest the Portfolio may be required to pay in connection
with a short sale. A short position may be adversely affected by imperfect
correlation between movements in the price of the security sold short and the
securities being hedged.
FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. In a when-issued or forward
commitment transaction, Neuberger&Berman International Portfolio commits to
purchase securities at a future date (generally within two months) and pays for
them when they are delivered. If the seller fails to complete the sale, the
Portfolio may lose the opportunity to obtain a favorable price and yield.
When-issued securities or securities subject to a forward commitment may
decline or increase in value during the period from the Portfolio's investment
commitment to the settlement of the purchase.
56
<PAGE>
REPURCHASE AGREEMENTS/SECURITIES LOANS. In a repurchase agreement, a
Portfolio buys a security from a Federal Reserve member bank (or, in the case
of Neuberger&Berman International Portfolio, a foreign bank or a U.S. branch or
agency of a foreign bank) or a securities dealer and simultaneously agrees to
sell it back at a higher price, at a specified date, usually less than a week
later. The underlying securities must fall within the Portfolio's investment
policies and limitations. Each Portfolio also may lend portfolio securities to
banks, brokerage firms, or institutional investors to earn income. Costs,
delays, or losses could result if the selling party to a repurchase agreement
or the borrower of portfolio securities becomes bankrupt or otherwise defaults.
N&B Management monitors the creditworthiness of sellers and borrowers.
REVERSE REPURCHASE AGREEMENTS. Neuberger&Berman International Portfolio may
enter into reverse repurchase agreements. In such a transaction, the Portfolio
sells a security to a bank or securities dealer and simultaneously agrees to
repurchase it at an agreed upon price on a specific date. The Portfolio will
maintain a segregated account consisting of cash or high-grade, liquid debt
obligations to cover its obligations under reverse repurchase agreements.
OTHER INVESTMENTS. Although each Portfolio invests primarily in common
stocks, when market conditions warrant it may invest in preferred stocks,
securities convertible into or exchangeable for common stocks, U.S. Government
and Agency Securities, investment grade debt securities, or money market
instruments, or may retain assets in cash or cash equivalents.
"Investment grade" debt securities are those receiving one of the four
highest ratings from Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's ("S&P"), or another nationally recognized statistical rating
organization ("NRSRO") or, if unrated by any NRSRO, deemed comparable by N&B
Management to such rated securities ("Comparable Unrated Securities") under
guidelines established by the trustees of the Managers Trusts. The value of the
fixed income securities in which a Portfolio may invest is likely to decline in
times of rising interest rates. Conversely, when rates fall, the value of a
Portfolio's fixed income investments is likely to rise.
U.S. Government securities are obligations of the U.S. Treasury backed by
the full faith and credit of the United States. U.S. Government Agency
Securities are issued or guaranteed by U.S. Government agencies or
instrumentalities; by other U.S. Government-sponsored enterprises, such as the
Government National Mortgage Association, Federal National Mortgage
Association, Federal Home Loan Mortgage Corporation, Student Loan Marketing
Association, and Tennessee Valley Authority; and by various federally chartered
or sponsored banks. Some U.S. Government Agency Securities are supported by the
full faith and credit of the United States, while others may be supported by
the issuer's ability to borrow from the U.S. Treasury, subject to the
Treasury's discretion in certain cases, or only by the credit of the issuer.
U.S. Government Agency Securities include U.S. Government mortgage-backed
securities.
57
<PAGE>
The market prices of U.S. Government securities are not guaranteed by the
Government and generally fluctuate with changing interest rates.
Neuberger&Berman Socially Responsive Portfolio may invest up to 20% of its
net assets in convertible securities. A convertible security is a bond,
debenture, note, preferred stock, or other security that may be converted into
or exchanged for a prescribed amount of common stock of the same or a different
issuer within a particular period of time at a specified price or formula.
Neuberger&Berman Socially Responsive Portfolio does not intend to purchase any
convertible securities that are not investment grade.
Neuberger&Berman International Portfolio may invest up to 5% of its net
assets in U.S. dollar-denominated and non-U.S. dollar-denominated corporate and
government debt securities of foreign issuers.
Neuberger&Berman International Portfolio may invest in debt securities of
any rating, including those rated below investment grade and Comparable Unrated
Securities. Neuberger&Berman Partners Portfolio may invest up to 15% of its net
assets in debt securities rated below investment grade or Comparable Unrated
Securities. Such securities, as well as those rated by Moody's in its fourth
highest category (Baa) or Comparable Unrated Securities, may be considered
predominantly speculative, although, as debt securities, they generally have
priority over equity securities of the same issuer and are generally better
secured. Debt securities in the lowest rating categories may involve a
substantial risk of default or may be in default. Changes in economic
conditions or developments regarding the individual issuer are more likely to
cause price volatility and weaken the capacity of the issuer of such securities
to make principal and interest payments than is the case for higher grade debt
securities. An economic downturn affecting the issuer may result in an
increased incidence of default. The market for lower-rated securities may be
thinner and less active than for higher-rated securities. Neuberger&Berman
International Portfolio and Neuberger&Berman Partners Portfolio will invest in
such securities only when N&B Management concludes that the anticipated return
to the Portfolio on such an investment warrants exposure to the additional
level of risk. A further description of Moody's and S&P's ratings is included
in the Appendix to the SAI.
Neuberger&Berman International Portfolio may invest in indexed securities
whose value is linked to currencies, interest rates, commodities, indices, or
other financial indicators. Most indexed securities are short-to-intermediate
term fixed income securities whose values at maturity or interest rates rise or
fall according to the change in one or more specified underlying instruments.
Indexed securities may be positively or negatively indexed (i.e., their value
may increase or decrease if the underlying instrument appreciates), and may
have return characteristics similar to direct investments in the underlying
instrument or to one or more options on the underlying instrument. Indexed
securities may be more volatile than the underlying instrument itself.
58
<PAGE>
USE OF JOINT PROSPECTUS AND STATEMENT
OF ADDITIONAL INFORMATION
Each Fund and its corresponding Portfolio acknowledges that it is solely
responsible for all information or lack of information about that Fund and
Portfolio in this Prospectus or in the SAI, and no other Fund or Portfolio is
responsible therefor. The trustees of the Trust and of the Managers Trusts have
considered this factor in approving each Fund's use of a single combined
Prospectus and combined SAI.
59
<PAGE>
OTHER INFORMATION
DIRECTORY
Investment Manager, Administrator,
and Distributor
Neuberger&Berman Management Incorporated
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
800-877-9700
Institutional Services 800-366-6264
Sub-Adviser
Neuberger&Berman, L.P.
605 Third Avenue
New York, NY 10158-3698
Custodian and Shareholder
Servicing Agent
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Address correspondence to:
Neuberger&Berman Funds
Boston Service Center
P.O. Box 8403
Boston, MA 02266-8403
800-225-1596
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 M Street, NW
Washington, DC 20036-5891
FUNDS ELIGIBLE FOR EXCHANGE
Equity Funds
Neuberger&Berman Focus Fund
Neuberger&Berman Genesis Fund
Neuberger&Berman Guardian Fund
Neuberger&Berman International Fund
Neuberger&Berman Manhattan Fund
Neuberger&Berman Partners Fund
Neuberger&Berman Socially
Responsive Fund
Money Market Funds
Neuberger&Berman Government
Money Fund
Neuberger&Berman Cash Reserves
Bond Funds
Neuberger&Berman Ultra Short Bond Fund
Neuberger&Berman Limited Maturity
Bond Fund
Neuberger&Berman Government
Income Fund
Municipal Funds
Neuberger&Berman Municipal Money Fund
Neuberger&Berman Municipal
Securities Trust
Neuberger&Berman New York Insured
Intermediate Fund (available to residents of
New York and Florida only)
Neuberger&Berman, Neuberger&Berman Management Inc., and the above-named Funds
are service marks of Neuberger&Berman Management Inc.
(c)1995 Neuberger&Berman Management Inc.
60
<PAGE>
Neuberger&Berman [LOGO]Management Inc.
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800-877-9700
This wrapper is not part of the Prospectus.
[recyle LOGO] PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS NBEP00031295
<PAGE>
__________________________________________________________________________
NEUBERGER & BERMAN EQUITY FUNDS AND PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION
DATED DECEMBER 15, 1995
Neuberger & Berman Neuberger & Berman
Manhattan Fund Genesis Fund
(and Neuberger & Berman (and Neuberger & Berman
Manhattan Portfolio) Genesis Portfolio)
Neuberger & Berman Neuberger & Berman
Focus Fund Guardian Fund
(and Neuberger & Berman (and Neuberger & Berman
Focus Portfolio) Guardian Portfolio)
Neuberger & Berman Neuberger & Berman
Partners Fund Socially Responsive Fund
(and Neuberger & Berman (and Neuberger & Berman
Partners Portfolio Socially Responsive Portfolio)
Neuberger & Berman
International Fund
(and Neuberger & Berman
International Portfolio)
No-Load Mutual Funds
605 Third Avenue, 2nd Floor, New York, NY 10158-0180
Toll-Free 800-877-9700
__________________________________________________________________________
Neuberger & Berman MANHATTAN Fund, Neuberger & Berman GENESIS
Fund, Neuberger & Berman FOCUS Fund, Neuberger & Berman GUARDIAN Fund,
Neuberger & Berman PARTNERS Fund, Neuberger & Berman SOCIALLY RESPONSIVE
Fund, and Neuberger & Berman INTERNATIONAL Fund (each a "Fund") are no-
load mutual funds that offer shares pursuant to a Prospectus dated
December 15, 1995. The above-named Funds invest all of their net
investable assets in Neuberger & Berman MANHATTAN Portfolio, Neuberger &
Berman GENESIS Portfolio, Neuberger & Berman FOCUS Portfolio, Neuberger &
Berman GUARDIAN Portfolio, Neuberger & Berman PARTNERS Portfolio,
Neuberger & Berman SOCIALLY RESPONSIVE Portfolio and Neuberger & Berman
INTERNATIONAL Portfolio (each a "Portfolio"), respectively.
The Funds' Prospectus provides basic information that an
investor should know before investing. A copy of the Prospectus may be
obtained, without charge, from Neuberger & Berman Management Incorporated
<PAGE>
("N&B Management"), 605 Third Avenue, 2nd Floor, New York, NY 10158-0180,
or by calling 800-877-9700.
This Statement of Additional Information ("SAI") is not a
prospectus and should be read in conjunction with the Prospectus.
No person has been authorized to give any information or to
make any representations not contained in the Prospectus or in this SAI in
connection with the offering made by the Prospectus, and, if given or
made, such information or representations must not be relied upon as
having been authorized by a Fund or its distributor. The Prospectus and
this SAI do not constitute an offering by a Fund or its distributor in any
jurisdiction in which such offering may not lawfully be made.
- 2 -
<PAGE>
TABLE OF CONTENTS
Page
INVESTMENT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 1
Investment Policies and Limitations . . . . . . . . . . . . 2
Mark R. Goldstein, Portfolio Manager of Neuberger & Berman
MANHATTAN Portfolio . . . . . . . . . . . . . . . . 11
Judith M. Vale, Portfolio Manager of Neuberger & Berman
GENESIS Portfolio . . . . . . . . . . . . . . . . . 12
Kent C. Simons and Lawrence Marx III, Portfolio Managers
of Neuberger & Berman FOCUS and Neuberger &
Berman GUARDIAN Portfolios . . . . . . . . . . . . . 12
Michael M. Kassen and Robert I. Gendelman, Portfolio
Managers of Neuberger & Berman PARTNERS Portfolio . 13
Janet W. Prindle, Portfolio Manager of Neuberger & Berman
SOCIALLY RESPONSIVE Portfolio . . . . . . . . . . . 14
Felix Rovelli, Portfolio Manager of Neuberger & Berman
INTERNATIONAL Portfolio . . . . . . . . . . . . . . 15
Additional Investment Information . . . . . . . . . . . . . 20
Neuberger & Berman FOCUS Portfolio - Description of
Economic Sectors. . . . . . . . . . . . . . . . . . 54
Neuberger & Berman SOCIALLY RESPONSIVE Portfolio -
Description of Social Policy . . . . . . . . . . . . 57
PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 60
Total Return Computations . . . . . . . . . . . . . . . . . 60
Comparative Information . . . . . . . . . . . . . . . . . . 62
Other Performance Information . . . . . . . . . . . . . . . 64
CERTAIN RISK CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . 65
TRUSTEES AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . 65
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES . . . . . . . . . . 74
Investment Manager and Administrator . . . . . . . . . . . . 74
Sub-Adviser . . . . . . . . . . . . . . . . . . . . . . . . 79
Investment Companies Managed . . . . . . . . . . . . . . . . 80
Management and Control of N&B Management . . . . . . . . . . 83
DISTRIBUTION ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . 84
ADDITIONAL PURCHASE INFORMATION . . . . . . . . . . . . . . . . . . . 84
Automatic Investing and Dollar Cost Averaging . . . . . . . 84
ADDITIONAL EXCHANGE INFORMATION . . . . . . . . . . . . . . . . . . . 85
ADDITIONAL REDEMPTION INFORMATION . . . . . . . . . . . . . . . . . . 87
Suspension of Redemptions . . . . . . . . . . . . . . . . . 87
Redemptions in Kind . . . . . . . . . . . . . . . . . . . . 88
- i -
<PAGE>
Page
DIVIDENDS AND OTHER DISTRIBUTIONS . . . . . . . . . . . . . . . . . . 88
ADDITIONAL TAX INFORMATION . . . . . . . . . . . . . . . . . . . . . 89
Taxation of the Funds . . . . . . . . . . . . . . . . . . . 89
Taxation of the Portfolios . . . . . . . . . . . . . . . . . 90
Taxation of the Funds' Shareholders . . . . . . . . . . . . 94
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . 94
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . 103
REPORTS TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . 103
ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
CUSTODIAN AND TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . 104
INDEPENDENT AUDITORS/ACCOUNTANTS . . . . . . . . . . . . . . . . . . 104
LEGAL COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES . . . . . . . . . 105
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . 107
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 107
Appendix A -- RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER . . . . 109
Appendix B -- PERFORMANCE DATA . . . . . . . . . . . . . . . . . . . 112
Appendix C -- THE ART OF INVESTMENT:
A CONVERSATION WITH ROY NEUBERGER . . . . . . . . . . 113
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INVESTMENT INFORMATION
Each Fund is a separate series of Neuberger & Berman Equity Funds
("Trust"), a Delaware business trust that is registered with the
Securities and Exchange Commission ("SEC") as an open-end management
investment company. Each Fund seeks its investment objective by investing
all of its net investable assets in a Portfolio of Equity Managers Trust
or, in the case of Neuberger & Berman INTERNATIONAL Fund, in a Portfolio
of Global Managers Trust, that has an investment objective identical to,
and a name similar to, that of the Fund. Each Portfolio, in turn, invests
in accordance with an investment objective, policies, and limitations
identical to those of its corresponding Fund. (Equity Managers Trust and
Global Managers Trust ("Managers Trusts") are open-end management
investment companies managed by N&B Management; the Managers Trusts,
together with the Trust, are referred to below as the "Trusts.") Prior to
January 1, 1995, the names of Neuberger & Berman FOCUS Fund and Neuberger
& Berman FOCUS Portfolio were Neuberger & Berman Selected Sectors Fund and
Neuberger & Berman Selected Sectors Portfolio, respectively. Before
August 2, 1993, the respective names of the Funds (except Neuberger &
Berman SOCIALLY RESPONSIVE Fund and Neuberger & Berman INTERNATIONAL Fund)
were Neuberger & Berman Manhattan Fund, Inc., Neuberger & Berman Genesis
Fund, Inc., Neuberger & Berman Selected Sectors Fund, Inc., Neuberger &
Berman Guardian Fund, Inc., and Neuberger & Berman Partners Fund, Inc.
(collectively, "predecessors"). Prior to November 17, 1995, the name of
Neuberger & Berman INTERNATIONAL Portfolio was International Portfolio.
The following information supplements the discussion in the
Prospectus of the investment objective, policies, and limitations of each
Fund and Portfolio. The investment objective and, unless otherwise
specified, the investment policies and limitations of each Fund and
Portfolio are not fundamental. Although any investment policy or
limitation that is not fundamental may be changed by the trustees of the
Trust ("Fund Trustees") or of the corresponding Managers Trust ("Portfolio
Trustees") without shareholder approval, each Fund intends to notify its
shareholders before changing its investment objective or implementing any
material change in any non-fundamental policy or limitation. In addition,
pursuant to an undertaking made to a state securities commission, no
changes may be made in Neuberger & Berman INTERNATIONAL Fund's non-
fundamental policies numbered 3, 7, and 8 below, except upon 30 days'
notice to that Fund's shareholders. The fundamental investment policies
and limitations of a Fund or a Portfolio may not be changed without the
approval of the lesser of (1) 67% of the total units of beneficial
interest ("shares") of the Fund or Portfolio represented at a meeting at
which more than 50% of the outstanding Fund or Portfolio shares are
represented or (2) a majority of the outstanding shares of the Fund or
Portfolio. This vote is required by the Investment Company Act of 1940
("1940 Act") and is referred to in this SAI as a "1940 Act majority vote."
Whenever a Fund is called upon to vote on a change in a fundamental
investment policy or limitation of its corresponding Portfolio, the Fund
casts its votes thereon in proportion to the votes of its shareholders at
a meeting thereof called for that purpose.
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<PAGE>
Investment Policies and Limitations
Each Fund (except Neuberger & Berman SOCIALLY RESPONSIVE Fund and
Neuberger & Berman INTERNATIONAL Fund) has the following fundamental
investment policy, to enable it to invest in its corresponding Portfolio:
Notwithstanding any other investment policy of
the Fund, the Fund may invest all of its
investable assets (cash, securities, and receiv-
ables relating to securities) in an open-end
management investment company having substan-
tially the same investment objective, policies,
and limitations as the Fund.
Neuberger & Berman SOCIALLY RESPONSIVE Fund has the following
fundamental investment policy, to enable it to invest in its corresponding
Portfolio:
Notwithstanding any other investment policy of
the Fund, the Fund may invest all of its net
investable assets (cash, securities, and receiv-
ables relating to securities) in an open-end
management investment company having substan-
tially the same investment objective, policies,
and limitations as the Fund.
Neuberger & Berman INTERNATIONAL Fund has the following
fundamental investment policy, to enable it to invest in its corresponding
Portfolio:
Notwithstanding any other investment policy of
the Fund, the Fund may invest all of its net
investable assets in an open-end management
investment company having substantially the same
investment objective, policies, and limitations
as the Fund.
All other fundamental investment policies and limitations and the
non-fundamental investment policies and limitations of each Fund and its
corresponding Portfolio are identical. Therefore, although the following
discusses the investment policies and limitations of the Portfolios, it
applies equally to their corresponding Funds.
Except for the limitation on borrowing and the limitation on
ownership of portfolio securities by officers and trustees, any investment
policy or limitation that involves a maximum percentage of securities or
assets will not be considered to be violated unless the percentage
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<PAGE>
limitation is exceeded immediately after, and because of, a transaction by
a Portfolio.
The Portfolios (except Neuberger & Berman INTERNATIONAL
Portfolio) have the following fundamental investment policies and
limitations:
1. Borrowing. No Portfolio may borrow money, except that a
Portfolio may (i) borrow money from banks for temporary or emergency
purposes and not for leveraging or investment and (ii) enter into reverse
repurchase agreements for any purpose; provided that (i) and (ii) in
combination do not exceed 33-1/3% of the value of its total assets
(including the amount borrowed) less liabilities (other than borrowings).
If at any time borrowings exceed 33-1/3% of the value of a Portfolio's
total assets, that Portfolio will reduce its borrowings within three days
(excluding Sundays and holidays) to the extent necessary to comply with
the 33-1/3% limitation.
2. Commodities. No Portfolio may purchase physical
commodities or contracts thereon, unless acquired as a result of the
ownership of securities or instruments, but this restriction shall not
prohibit a Portfolio from purchasing futures contracts or options
(including options on futures contracts, but excluding options or futures
contracts on physical commodities) or from investing in securities of any
kind.
3. Diversification. No Portfolio may, 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 U.S. 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 that issuer or (ii) the Portfolio would hold more than 10%
of the outstanding voting securities of that issuer.
4. Industry Concentration. No Portfolio may purchase any
security if, as a result, 25% or more of its total assets (taken at
current value) would be invested in the securities of issuers having their
principal business activities in the same industry. This limitation does
not apply to securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities.
5. Lending. No Portfolio may lend any security or make any
other loan if, as a result, more than 33-1/3% of its total assets (taken
at current value) would be lent to other parties, except, in accordance
with its investment objective, policies, and limitations, (i) through the
purchase of a portion of an issue of debt securities or (ii) by engaging
in repurchase agreements.
6. Real Estate. No Portfolio may purchase real estate
unless acquired as a result of the ownership of securities or instruments,
but this restriction shall not prohibit a Portfolio from purchasing
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<PAGE>
securities issued by entities or investment vehicles that own or deal in
real estate or interests therein or instruments secured by real estate or
interests therein.
7. Senior Securities. No Portfolio may issue senior
securities, except as permitted under the 1940 Act.
8. Underwriting. No Portfolio may underwrite securities of
other issuers, except to the extent that a Portfolio, in disposing of
portfolio securities, may be deemed to be an underwriter within the
meaning of the Securities Act of 1933 ("1933 Act").
The following non-fundamental investment policies and limitations
apply to all Portfolios (except Neuberger & Berman SOCIALLY RESPONSIVE and
Neuberger & Berman INTERNATIONAL Portfolios):
1. Borrowing. No Portfolio may purchase securities if
outstanding borrowings, including any reverse repurchase agreements,
exceed 5% of its total assets.
2. Lending. Except for the purchase of debt securities and
engaging in repurchase agreements, no Portfolio may make any loans other
than securities loans.
3. Investments in Other Investment Companies. No Portfolio
may purchase securities of other investment companies, except to the
extent permitted by the 1940 Act and in the open market at no more than
customary brokerage commission rates. This limitation does not apply to
securities received or acquired as dividends, through offers of exchange,
or as a result of a reorganization, consolidation, or merger.
4. Margin Transactions. No Portfolio may purchase
securities on margin from brokers or other lenders, except that a
Portfolio may obtain such short-term credits as are necessary for the
clearance of securities transactions. Margin payments in connection with
transactions in futures contracts and options on futures contracts shall
not constitute the purchase of securities on margin and shall not be
deemed to violate the foregoing limitation.
5. Short Sales. No Portfolio may sell securities short
unless it owns, or has the right to obtain without payment of additional
consideration, securities equivalent in kind and amount to the securities
sold. Transactions in forward contracts, futures contracts and options
shall not constitute selling securities short.
6. Ownership of Portfolio Securities by Officers and
Trustees. No Portfolio may purchase or retain the securities of any
issuer if, to the knowledge of N&B Management, those officers and trustees
of Equity Managers Trust and officers and directors of N&B Management who
each owns individually more than 1/2 of 1% of the outstanding securities
of such issuer, together own more than 5% of such securities.
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<PAGE>
7. Unseasoned Issuers. No Portfolio may purchase the
securities of any issuer (other than securities issued or guaranteed by
domestic or foreign governments or political subdivisions thereof) if, as
a result, more than 5% of the Portfolio's total assets would be invested
in the securities of business enterprises that, including predecessors,
have a record of less than three years of continuous operation.
8. Puts, Calls, Straddles, or Spreads. No Portfolio may
invest in puts, calls, straddles, spreads, or any combination thereof,
except that each Portfolio may (i) write (sell) covered call options
against portfolio securities having a market value not exceeding 10% of
its net assets and (ii) purchase call options in related closing transac-
tions. The Portfolios do not construe the foregoing limitation to pre-
clude them from purchasing or writing options on futures contracts or from
purchasing securities with rights to put the securities to the issuer or a
guarantor.
9. Illiquid Securities. No Portfolio may purchase any secu-
rity if, as a result, more than 10% (5% in the case of Neuberger & Berman
GENESIS Portfolio) of its net assets would be invested in illiquid securi-
ties. Illiquid securities include securities that cannot be sold within
seven days in the ordinary course of business for approximately the amount
at which the Portfolio has valued the securities, such as repurchase
agreements maturing in more than seven days.
10. Foreign Securities. No Portfolio may invest more than
10% of the value of its total assets in securities of foreign issuers,
provided that this limitation shall not apply to foreign securities
denominated in U.S. dollars, including American Depositary Receipts
("ADRs").
11. Oil and Gas Programs. No Portfolio may invest in
participations or other direct interests in oil, gas, or other mineral
leases or exploration or development programs, but each Portfolio may
purchase securities of companies that own interests in any of the
foregoing.
12. Real Estate. No Portfolio may purchase or sell real
property (including interests in real estate limited partnerships, but
excluding readily marketable interests in real estate investment trusts
and readily marketable securities of companies that invest in real
estate); provided that no Portfolio may purchase any security if, as a
result, more than 10% of its total assets would be invested in securities
of real estate investment trusts.
In addition to the foregoing non-fundamental investment policies
and limitations, which apply to each Portfolio (except Neuberger & Berman
SOCIALLY RESPONSIVE and Neuberger & Berman INTERNATIONAL Portfolios), the
following non-fundamental investment policies and limitations apply to the
indicated Portfolios:
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<PAGE>
13. Investments in Any One Issuer (Neuberger & Berman
GENESIS, Neuberger & Berman FOCUS, and Neuberger & Berman GUARDIAN
Portfolios). None of these Portfolios may purchase the securities of any
one issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities) if, as a result,
more than 5% of the Portfolio's total assets would be invested in the
securities of that issuer.
14. Warrants (Neuberger & Berman GENESIS, Neuberger & Berman
FOCUS, and Neuberger & Berman GUARDIAN Portfolios). None of these
Portfolios may invest more than 5% of its net assets in warrants,
including warrants that are not listed on the New York Stock Exchange
("NYSE") or American Stock Exchange ("AmEx"), or more than 2% of its net
assets in such unlisted warrants. For purposes of this limitation,
warrants are valued at the lower of cost or market value, and warrants
acquired by a Portfolio in units or attached to securities may be deemed
to be without value.
15. Pledging (Neuberger & Berman GENESIS and Neuberger &
Berman GUARDIAN Portfolios). Neither of these Portfolios may pledge or
hypothecate any of its assets, except that (i) for Neuberger & Berman
GENESIS Portfolio, this limitation does not apply to the deposit of
portfolio securities as collateral in connection with short sales against-
the-box, and the Portfolio may pledge or hypothecate up to 15% of its
total assets to collateralize a borrowing permitted under fundamental
policy 1 above or a letter of credit issued for a purpose set forth in
that policy and (ii) each Portfolio may pledge or hypothecate up to 5% of
its total assets in connection with its entry into any agreement or
arrangement pursuant to which a bank furnishes a letter of credit to
collateralize a capital commitment made by the Portfolio to a mutual
insurance company of which the Portfolio is a member.
16. Sector Concentration (Neuberger & Berman FOCUS
Portfolio). This Portfolio may not invest more than 50% of its total
assets in any one economic sector.
Each Portfolio (except Neuberger & Berman SOCIALLY RESPONSIVE and
Neuberger & Berman INTERNATIONAL Portfolios), as an operating policy, does
not intend to invest in futures contracts and options thereon during the
coming year.
The following non-fundamental investment policies and limitations
apply to Neuberger & Berman SOCIALLY RESPONSIVE Portfolio:
1. Borrowing. The Portfolio may not purchase securities if
outstanding borrowings, including any reverse repurchase agreements,
exceed 5% of its total assets.
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<PAGE>
2. Lending. Except for the purchase of debt securities and
engaging in repurchase agreements, the Portfolio may not make any loans
other than securities loans.
3. Investments in Other Investment Companies. The Portfolio
may not purchase securities of other investment companies, except to the
extent permitted by the 1940 Act and in the open market at no more than
customary brokerage commission rates. This limitation does not apply to
securities received or acquired as dividends, through offers of exchange,
or as a result of a reorganization, consolidation, or merger.
4. Margin Transactions. The Portfolio may not purchase
securities on margin from brokers or other lenders, except that the
Portfolio may obtain such short-term credits as are necessary for the
clearance of securities transactions. Margin payments in connection with
transactions in futures contracts and options on futures contracts shall
not constitute the purchase of securities on margin and shall not be
deemed to violate the foregoing limitation.
5. Short Sales. The Portfolio may not sell securities short
unless it owns, or has the right to obtain without payment of additional
consideration, securities equivalent in kind and amount to the securities
sold. Transactions in forward contracts, futures contracts, and options
shall not constitute selling securities short.
6. Ownership of Portfolio Securities by Officers and
Trustees. The Portfolio may not purchase or retain the securities of any
issuer if, to the knowledge of N&B Management, those officers and trustees
of Equity Managers Trust and officers and directors of N&B Management who
each owns individually more than 1/2 of 1% of the outstanding securities
of such issuer, together own more than 5% of such securities.
7. Unseasoned Issuers. The Portfolio may not purchase the
securities of any issuer (other than securities issued or guaranteed by
domestic or foreign governments or political subdivisions thereof) if, as
a result, more than 5% of the Portfolio's total assets would be invested
in the securities of business enterprises that, including predecessors,
have a record of less than three years of continuous operation.
8. Illiquid Securities. The Portfolio may not purchase any
security if, as a result, more than 10% of its net assets would be in-
vested in illiquid securities. Illiquid securities include securities
that cannot be sold within seven days in the ordinary course of business
for approximately the amount at which the Portfolio has valued the
securities, such as repurchase agreements maturing in more than seven
days.
9. Foreign Securities. The Portfolio may not invest
more than 10% of the value of its total assets in securities of foreign
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<PAGE>
issuers, provided that this limitation shall not apply to foreign
securities denominated in U.S. dollars, including ADRs.
10. Oil and Gas Programs. The Portfolio may not invest in
participations or other direct interests in oil, gas, or other mineral
leases or exploration or development programs, but the Portfolio may
purchase securities of companies that own interests in any of the
foregoing.
11. Real Estate. The Portfolio may not invest in real estate
limited partnerships.
12. Warrants. The Portfolio does not intend to invest in
warrants (but may hold warrants obtained in units or attached to
securities).
Neuberger & Berman INTERNATIONAL Portfolio's fundamental
investment policies and limitations are as follows:
1. Borrowing. The Portfolio may not borrow money, except
that the Portfolio may (i) borrow money from banks for temporary or
emergency purposes and for leveraging or investment and (ii) enter into
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33-1/3% of the value of its total assets
(including the amount borrowed) less liabilities (other than borrowings).
If at any time borrowings exceed 33-1/3% of the value of the Portfolio's
total assets, the Portfolio will reduce its borrowings within three days
(excluding Sundays and holidays) to the extent necessary to comply with
the 33-1/3% limitation.
2. Commodities. The Portfolio may not purchase physical
commodities or contracts thereon, unless acquired as a result of the
ownership of securities or instruments, but this restriction shall not
prohibit the Portfolio from purchasing futures contracts, options
(including options on futures contracts, but excluding options or futures
contracts on physical commodities), foreign currencies or forward
contracts, or from investing in securities of any kind.
3. Diversification. The Portfolio may not, with respect to
75% of the value of its total assets, purchase the securities of any
issuer if, as a result, (i) more than 5% of the value of the Portfolio's
total assets would be invested in the securities of that issuer or
(ii) the Portfolio would hold more than 10% of the outstanding voting
securities of that issuer. This limitation does not apply to securities
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
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<PAGE>
4. Industry Concentration. The Portfolio may not purchase
any security if, as a result, 25% or more of its total assets (taken at
current value) would be invested in the securities of issuers having their
principal business activities in the same industry. This limitation does
not apply to securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
5. Lending. The Portfolio may not lend any security or make
any other loan if, as a result, more than 33-1/3% of its total assets
(taken at current value) would be lent to other parties, except, in
accordance with its investment objective, policies, and limitations, (i)
through the purchase of a portion of an issue of debt securities or (ii)
by engaging in repurchase agreements.
6. Real Estate. The Portfolio may not invest any part of
its total assets in real estate or interests in real estate unless
acquired as a result of the ownership of securities or instruments, but
this restriction shall not prohibit the Portfolio from purchasing readily
marketable securities issued by entities or investment vehicles that own
or deal in real estate or interests therein or instruments secured by real
estate or interests therein.
7. Senior Securities. The Portfolio may not issue senior
securities, except as permitted under the 1940 Act.
8. Underwriting. The Portfolio may not underwrite securi-
ties of other issuers, except to the extent that the Portfolio, in
disposing of portfolio securities, may be deemed to be an underwriter
within the meaning of the 1933 Act.
The following non-fundamental investment policies and limitations
apply to Neuberger & Berman INTERNATIONAL Portfolio:
1. Investments in Any One Issuer. At the close of each
quarter of the Portfolio's tax year, (i) no more than 25% of its total
assets may be invested in the securities of a single issuer, and (ii) with
regard to 50% of its total assets, no more than 5% of total assets may be
invested in the securities of a single issuer. These limitations do not
apply to U.S. Government securities, as defined for tax purposes.
2. Lending. Except for the purchase of debt securities and
engaging in repurchase agreements, the Portfolio may not make any loans
other than securities loans.
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<PAGE>
3. Investments in Other Investment Companies. The Portfolio
may not purchase securities of other investment companies, except to the
extent permitted by the 1940 Act and in the open market at no more than
customary brokerage commission rates. This limitation does not apply to
securities received or acquired as dividends, through offers of exchange,
or as a result of a reorganization, consolidation, or merger.
4. Margin Transactions. The Portfolio may not purchase
securities on margin from brokers or other lenders, except that the
Portfolio may obtain such short-term credits as are necessary for the
clearance of securities transactions. Margin payments in connection with
transactions in futures contracts and options on futures contracts shall
not constitute the purchase of securities on margin and shall not be
deemed to violate the foregoing limitation.
5. Short Sales. The Portfolio may not engage in a short
sale (except a short sale against-the-box) if, as a result, the dollar
amount of all short sales would exceed 25% of its net assets or if, as a
result, the value of securities of any one issuer in which the Portfolio
would be short would exceed 2% of the value of the Portfolio's net assets
or 2% of the securities of any class of any issuer. Transactions in
forward contracts, futures contracts and options are not considered short
sales.
6. Ownership of Portfolio Securities by Officers and
Trustees. The Portfolio may not purchase or retain the securities of any
issuer if, to the knowledge of N&B Management, those officers and trustees
of Global Managers Trust and officers and directors of N&B Management who
each owns individually more than 1/2 of 1% of the outstanding securities
of such issuer, together own more than 5% of such securities.
7. Unseasoned Issuers. The Portfolio may not purchase the
securities of any issuer (other than securities issued or guaranteed by
domestic or foreign governments or political subdivisions thereof) if, as
a result, more than 5% of the Portfolio's total assets would be invested
in the securities of business enterprises that, including predecessors,
have a record of less than three years of continuous operation.
8. Illiquid Securities. The Portfolio may not purchase any
security if, as a result, more than 10% of its net assets would be in-
vested in illiquid securities. Illiquid securities include securities
that cannot be sold within seven days in the ordinary course of business
for approximately the amount at which the Portfolio has valued the
securities, such as repurchase agreements maturing in more than seven
days.
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<PAGE>
9. Restricted Securities. The Portfolio may not purchase a
security restricted as to resale if, as a result thereof, more than 10% of
the Portfolio's total assets would be invested in restricted securities.
Securities that can be sold freely in the principal market in which they
are traded are not considered restricted, even if they cannot be sold in
the United States.
10. Warrants. The Portfolio may not invest more than 5% of its
net assets in warrants, whether or not such warrants are listed on the
NYSE or the AmEx, or more than 2% of its net assets in unlisted warrants.
For purposes of this limitation, warrants are valued at the lower of cost
or market value, and warrants acquired by the Portfolio in units or
attached to securities are deemed to be without value, even if the
warrants are later separated from the unit.
11. Oil and Gas Programs. The Portfolio may not invest in
participations or other direct interests in oil, gas, or other mineral
leases or exploration or development programs, but the Portfolio may
purchase securities of companies that own interests in any of the
foregoing.
12. Real Estate. The Portfolio may not invest in real estate
limited partnerships.
MARK R. GOLDSTEIN, PORTFOLIO MANAGER OF NEUBERGER & BERMAN MANHATTAN
PORTFOLIO
Neuberger & Berman MANHATTAN Portfolio's objective is capital
appreciation, without regard to income. "The Portfolio differs from the
other Portfolios in its willingness to invest in stocks with
price/earnings ratios or price-to-cash-flow ratios that are reasonable
relative to a company's growth prospects and that of the general market,"
says Mark Goldstein, its portfolio manager. Mr. Goldstein has
consistently followed this approach as a portfolio manager at N&B
Management. He looks for stocks of financially sound companies with a
special market capability, a competitive advantage or a product that makes
them particularly attractive over the long term, but likes to purchase
them at a reasonable price relative to their growth rates. Mr. Goldstein
calls this approach "GARP" -- growth at a reasonable price. "An investor
shouldn't try to beat the market by trading funds like stocks. The
hardest thing to do -- but the best thing to do -- is to put in some money
when the market is down and keep it there. That's how one really builds
wealth over the long term -- a mutual fund is a great long-term
investment."
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<PAGE>
"We view value both on a relative and an absolute basis, so we
may buy stocks with somewhat above-market historical growth rates,"
Mr. Goldstein explains. "We also tend to stay more fully invested when we
think the market is attractive for quality growth companies. But we will
get out of stocks and into cash when we think there are no reasonable
values available."
JUDITH M. VALE, PORTFOLIO MANAGER OF NEUBERGER & BERMAN GENESIS PORTFOLIO
The predecessor of Neuberger & Berman GENESIS Fund was
established in 1988. A long-term growth fund dedicated to small
capitalization stocks (companies with total market value of outstanding
capital stock of less than $750 million), Neuberger & Berman GENESIS
Portfolio is devoted to the same value principles as the other equity
funds managed by N&B Management. "Neuberger & Berman GENESIS Portfolio
buys stocks that we believe are currently undervalued, unlike small
capitalization stock funds offered by many other firms, which look for
companies whose earnings reflect future developments," says its portfolio
manager Judith Vale.
"Many people think that small capitalization stock funds are
predominantly invested in high-risk, high-tech companies. Not Neuberger &
Berman GENESIS Portfolio. We look for the same fundamentals in small
capitalization stocks as our other funds look for in stocks of larger
companies. We stick to the areas we understand. I'm looking for the most
persistent earnings growth at the lowest multiple." Ms. Vale looks for
well-established companies with entrepreneurial management and sound
finances. She also looks for catalysts to exposing value, such as
management changes and new product lines. Often, these are firms that
have suffered temporary setbacks or undergone a restructuring.
Why a small capitalization stock fund? Research has demonstrated
that, over the last 30 years, smaller capitalization stocks as a group
have outperformed larger capitalization stocks two-thirds of the time.1/
Ms. Vale points out, "This Portfolio offers the ability to share in the
growth potential of small capitalization stocks."
KENT C. SIMONS AND LAWRENCE MARX III, PORTFOLIO MANAGERS OF NEUBERGER &
BERMAN FOCUS AND NEUBERGER & BERMAN GUARDIAN PORTFOLIOS
These Portfolios are managed by two veterans of N&B Management
who have consistently followed their value-oriented philosophy over many
years: Kent Simons and Larry Marx.
1/ Source: Ibbotson and Sinquefield.
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<PAGE>
Neuberger & Berman FOCUS Portfolio's investment objective is
long-term capital appreciation. Like the other Portfolios that use a
value-oriented investment approach, it seeks to buy undervalued securities
that offer opportunities for growth, but then focuses its assets in those
sectors where undervalued stocks are clustered. "We begin by looking for
stocks that are selling for less than we think they're worth, a 'bottom-up
approach'" says Mr. Simons. "More often than not, such stocks are in a
few economic sectors that are out of favor and are undervalued as a group.
I think 90% of cheap stocks deserve to be cheap. My job is to find the
10% that don't."
"We don't pick sectors for Neuberger & Berman FOCUS Portfolio
based on our perception of how the economy is going to do. Nor do we
engage in making economic or currency predictions. We look for stocks
with either low relative or low absolute valuations," explains Mr. Marx.
"Often, these stocks will be found in a particular sector, but we didn't
start out being bullish on that sector. It's just where we happened to
find the values. We find that if one company comes under a cloud, it
tends to happen to its whole industry. If an investment manager rotated
the sectors in a portfolio by buying sectors when they are undervalued and
selling them when they become fully valued, the manager would be able to
achieve above-average performance."
Neuberger & Berman GUARDIAN Portfolio subscribes to the same
stock-picking philosophy followed since Neuberger & Berman GUARDIAN Fund's
predecessor was founded by Roy R. Neuberger in 1950.
It's no great trick for a mutual fund to make money when the
market is rising. The tide that lifts stock values will carry most funds
along. The true test of management is its ability to make money even when
the market is flat or declining. By that measure, Neuberger & Berman
GUARDIAN Fund and its predecessor have served shareholders well and have
paid a dividend every quarter and a capital gain distribution every year
since 1950. Of course, there can be no assurance that this trend will
continue.
Both Mr. Simons and Mr. Marx place a high premium on being
knowledgeable about the companies whose stocks they buy for Neuberger &
Berman GUARDIAN Portfolio. That knowledge is important, because sometimes
it takes courage to buy stocks that the rest of the market has forsaken.
Says Mr. Marx, "We're usually early in and early out. We'd rather buy an
undervalued stock because we expect it to become fairly valued than buy
one fairly valued and hope it becomes overvalued. We like a stock 'under
a rock' or with a cloud over it; you are not going to get great companies
at great valuations when the market perception is great."
"People who switch around a lot are not going to benefit from our
approach. They're following the market -- we're looking at fundamentals."
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MICHAEL M. KASSEN AND ROBERT I. GENDELMAN, PORTFOLIO MANAGERS OF NEUBERGER
& BERMAN PARTNERS PORTFOLIO
"Neuberger & Berman PARTNERS Portfolio's objective is capital
growth," say its portfolio managers Michael Kassen and Robert Gendelman.
"We want to make money in good markets and not give up those gains during
rough times."
"Our investors seek consistent performance and have a moderate
risk tolerance. They do know, however, that stock investments can provide
the long-term upside potential essential to meeting their long-term
investment goals, particularly a comfortable retirement and planning for a
college education."
"We look for stocks that are undervalued in the marketplace
either in relation to strong current fundamentals, such as low price-to-
earnings ratios, consistent cash flow, and support from asset values, or
in relation to the growth of their future earnings, as projected by N&B
Management. If the market goes down, those stocks we elect to hold,
historically, go down less."
The co-portfolio managers monitor stocks of medium- to large-
sized companies that often are not closely scrutinized by other investors.
The managers research these companies in order to determine if they will
produce a new product, become an acquisition target, or undergo a
financial restructuring.
What else catches Mr. Kassen's and Mr. Gendelman's eyes? "We
like managements that own their own stock. These companies usually seek
to build shareholder wealth by buying back shares or making acquisitions
that have a swift and positive impact on the bottom line."
To increase the upside potential, the managers zero in on
companies that dominate their industries or their specialized niches.
Their reasoning? "Market leaders tend to earn higher levels of profits."
Neuberger & Berman PARTNERS Portfolio invests in a wide array of
stocks, and no single stock makes up more than a small fraction of the
Portfolio's total assets. Of course, the Portfolio's holdings are subject
to change.
JANET W. PRINDLE, PORTFOLIO MANAGER OF NEUBERGER & BERMAN SOCIALLY
RESPONSIVE PORTFOLIO
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How does Janet Prindle manage Neuberger & Berman SOCIALLY
RESPONSIVE Portfolio? "We select securities through a two-phase detection
process. The first is financial. We analyze a universe of companies
according to N&B Management's value-oriented philosophy, looking for
stocks which are undervalued for any number of reasons. We focus on
financial fundamentals including balance sheet ratios and cash flow
analysis, and we meet with company management in an effort to understand
how those unrecognized values might be realized in the market. The second
part of the process is social screening. Our social research is based on
the same kind of philosophy that governs our financial approach: we
believe that first-hand knowledge and experience are our most important
tools. Utilizing a proprietary database, we do careful, in-depth tracking
and we analyze a large number of companies on some eighty issues in six
broad social categories. We use a wide variety of sources to determine
company practices and policies in these areas, and we analyze performance
in light of our knowledge of the issues and of the best practices in each
industry. We understand that, for many issues and in many industries,
absolute standards are elusive and often counterproductive. Thus, in
addition to quantitative measurements, we place value on such indicators
as management commitment, progress, direction, and industry leadership."
FELIX ROVELLI, PORTFOLIO MANAGER OF NEUBERGER & BERMAN INTERNATIONAL
PORTFOLIO
International Investing
Equity portfolios consisting solely of domestic investments
generally have not enjoyed the higher returns foreign opportunities can
offer. For more than thirty years, for example, the growth rate of many
foreign economies has outpaced that of the United States. While the
United States accounted for almost 66% of the world's total securities
market capitalization in 1970, it accounted for less than 37% of that
total at the end of 1994 -- or less than half of the dollar value of the
world's available stocks and bonds today.2/
Over time, a number of international equity markets have
outperformed their U.S. counterparts. Although there are no guarantees,
foreign markets could continue to provide attractive investment
opportunities.
In addition, according to Morgan Stanley Capital International,
the leading companies in any given sector are not always U.S.-based. For
example, 22 of the largest 25 automobile companies are based outside the
United States, as are 20 of the top 25 banks.
2/ Source: Morgan Stanley Capital International.
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A principal advantage of investing overseas is diversification.
A diversified portfolio gives investors the opportunity to pursue
increased overall return while reducing risk. It is prudent to diversify
by taking advantage of investment opportunities in more than one country's
stock or bond market. By investing in several countries through a
worldwide portfolio, investors can lower their exposure and vulnerability
to weakness in any one market. Investors should be aware, however, that
international investing is not a guarantee against market risk and may be
affected by economic factors described in the Prospectus, such as the
prospects of individual companies and other risks such as currency
fluctuations or controls, expropriation, nationalization and confiscatory
taxation.
Furthermore, for the individual investor, buying foreign stocks
and bonds can be difficult, involving many decisions. Accessing
international markets is complicated; few individuals have the time or
resources to evaluate thoroughly foreign companies and markets, or the
ability to incur the high transaction costs of direct investment in such
markets. A mutual fund investing in foreign securities offers an investor
broad diversification at a relatively low cost.
The Portfolio invests primarily in equity securities of companies
located in developed foreign economies, as well as in "emerging markets."
In all cases, N&B Management's investment process includes a combination
of "top-down country allocation" and "bottom-up security selection."
TOP-DOWN APPROACH TO REGIONAL AND COUNTRY DIVERSIFICATION
N&B Management uses extensive economic research to identify
countries that offer attractive investment opportunities, by analyzing
factors such as gross domestic product growth rates, interest rate trends,
and currency exchange rates. Market valuations, combined with correlation
and volatility comparisons, provide N&B Management with a target
allocation across twenty or more countries.
BOTTOM-UP APPROACH TO SECURITY SELECTION
N&B Management's value-driven style seeks out attractively priced
issues, by concentrating on criteria such as a low price-to-earnings ratio
relative to earnings growth rate, balance sheet strength, low price to
cash flow, and management quality. Typically, over 100 individual issues
will comprise the portfolio. The portfolio will be comprised of
securities of medium- to large-capitalization companies, determined in
relation to each individual national market.
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<PAGE>
CURRENCY RISK MANAGEMENT
Exchange rate movements and volatility are important factors in
international investing. The portfolio manager believes in actively
managing the Portfolio's currency exposure, in an effort to capitalize on
foreign currency trends and to reduce overall portfolio volatility.
Currency risk management is performed separately from equity analysis.
The portfolio manager uses a combination of economic analysis to guide the
Portfolio's longer-term posture and quantitative trend analysis to assist
in timing decisions with respect to whether (or when) to invest in
instruments denominated in a particular foreign currency, or whether (or
when) to hedge particular foreign currencies in which liquid foreign
exchange markets exist.
An Interview with Felix Rovelli
Q: Why should investors allocate a portion of their assets
to international markets?
A: First, an investor who does not invest internationally
misses out on more than two-thirds of the world's potential investment
opportunities. The U.S. stock market today represents less than one-half
of the world's stock market capitalization, and the U.S. portion continues
to shrink as other countries around the world introduce or expand the size
of their equity markets. Privatizations of government-owned corporations,
initial public offerings, and the occasional creation of official stock
exchanges in emerging economies continuously present new opportunities for
capital in an expanding global market.
Second, many foreign economies are in earlier stages of
development than ours and are growing fast. Economic growth can often
mean potential for investment growth.
Finally, international investing helps an investor
increase diversification and can reduce risk. Domestic and foreign
markets generally do not all move in the same direction, so gains in one
market may offset losses in another.
Q: Does international investing involve special risks?
A: Currency risk is one important risk presented by
international investing. Fluctuations in exchange rates can either add to
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or reduce an investor's returns, a fact that anyone who invests in foreign
markets should keep in mind.
Other risks include, but are not limited to, greater
market volatility, less government supervision and availability of public
information, and the possibility of adverse economic or political
developments. The special risks of foreign investing are discussed in
greater detail in the Prospectus.
Q: What are some of the advantages of investing in an
international fund?
A: An international mutual fund can be a convenient way to
invest internationally and diversify assets among several markets to
reduce risk.
Additionally, the considerable burden of obtaining
timely, accurate, and comprehensive information about foreign economies
and securities is left to seasoned professional managers.
OVER THE PAST DECADE, ONE OF THE MAJOR INDICES OF
INTERNATIONAL STOCKS OUTPERFORMED THE S&P 500 INDEX, WHICH REPRESENTS AN
AVERAGE OF THE PRICES OF CERTAIN MAJOR U.S. STOCKS.
If you had invested $10,000 in the international and U.S.
stocks comprising both indices ten years ago, here's what your investments
would have been worth as of June 30, 1995:3/
Value of Avg. annualized
investment total return
International stocks (EAFE) $45,587 16.38%
Domestic stocks (S&P 500) $39,131 14.62%
3/ Source: Ibbotson Associates. For the period ended June 30,
1995. International stocks are represented by the Morgan Stanley Capital
International European, Australia, Far East (EAFE) Index, an unmanaged
index of non-U.S. equity performance. Domestic stocks are represented by
the Standard & Poor's 500 Index, an unmanaged index of U.S. equity
performance. Indices do not take into account any fees and expenses of
investing in the individual securities that they track; individuals cannot
invest directly in any index. Average annualized total returns are
measured in U.S. dollars and include changes in share price, dividends
paid and the gross effect of reinvesting dividends.
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<PAGE>
Of course, these historical results may not continue in
the future and cannot predict or reflect the performance of Neuberger &
Berman INTERNATIONAL Fund. In addition, investors should keep in mind the
added risks inherent in foreign markets, such as currency exchange
fluctuations, interest rates, and economic and political conditions, all
of which can lead to a greater degree of volatility than funds that invest
primarily in U.S. stocks.
Q: What is your investment approach?
A: We seek to capitalize on investments in countries where
we believe that positive economic and political factors are likely to
produce above-average returns. Studies have shown that the allocation of
assets among countries is typically the most important factor contributing
to portfolio performance. We believe that, in the long term, a nation's
economic growth and the performance of its equity market are highly
correlated. Therefore, we continuously evaluate the global economic
outlook as well as individual country data to guide country allocation.
Our process also leads to diversification across many countries, typically
twenty or more, in an effort to limit total portfolio risk.
We strive to invest in companies within the selected
countries that are in the best position to capitalize on such positive
developments or companies that are most attractively valued. We usually
include in the Portfolio's investments the securities of large-
capitalization companies, determined in relation to each individual
national market, as well as securities of faster-growing, medium-sized
companies that offer potentially higher returns but are often associated
with higher risk.
The criteria for security selection focus on companies
with leadership in specific markets or niches within specific industries,
which appear to exhibit positive fundamentals and seem undervalued
relative to their earnings potential or the worth of their assets.
Typically, in emerging markets, we invest in relatively large, established
companies that we believe possess the managerial, financial, and marketing
strength to exploit successfully the growth of a dynamic economy. In more
developed markets, such as Europe and Japan, the Portfolio may invest to a
higher degree in medium-sized companies. Medium-sized companies can often
provide above-average growth and are less followed by market analysts, a
fact that sometimes leads to inefficient valuation.
Finally, we strive to limit total portfolio volatility
and protect the value of portfolio securities by selectively hedging the
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<PAGE>
Portfolio's foreign currency exposure in times when we expect the U.S.
dollar to strengthen.
Q: How do you perceive the current outlook?
A: There is still an abundance of exciting investment
opportunities around the world. Many equity markets still have not
reached the maturity stage of the U.S. market and have much more room to
grow. There are new markets opening up to foreign investment and many
changes are occurring in markets where equity investments have
traditionally commanded less attention than fixed income securities.
In addition, it appears to us that both Europe and Japan
recently passed the bottom of their economic cycles. In many economies,
the current recession has been the most severe of all recessions in the
last five decades. With global inflation still in check, many economies
should continue to have lower interest rates, which, coupled with a
forecast of recovery in profits, could positively impact stock market
returns.
Timely Opportunity for Investors Looking for International Bargains
"IF YOU HAVE MOST OF YOUR MONEY IN U.S. STOCKS, NOW MAY BE A GOOD
TIME TO SHIFT PART OF YOUR PORTFOLIO ABROAD." THE WALL STREET JOURNAL,
JULY 25, 1995.
While the U.S. stock market has been reaching new highs in recent
months, you may be able to find more bargains in international stocks than
you may locate on Wall Street. "Today, we are finding a large supply of
what we believe to be excellent companies whose stocks are priced at very
low levels," explains Felix Rovelli, portfolio manager for Neuberger &
Berman INTERNATIONAL Portfolio, a fund that invests in the stocks of
companies outside the United States.
"For the past year," Rovelli continues, "the economies of many
countries have been growing, and the fundamentals of many selected
individual company stocks have looked strong. Yet because of concerns --
over Mexico and the falling U.S. dollar, among other things --
international stock prices have lagged. That is, until recently."
AFTER FACING SETBACKS IN 1994 AND EARLIER THIS YEAR, PLENTY OF
REGIONS OUTSIDE THE UNITED STATES HAVE BEGUN TO BOUNCE BACK.
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<PAGE>
In its June 1995 quarterly report on mutual funds, The Wall
Street Journal reported that stock markets in both emerging areas and
developed European countries rebounded strongly from April 1st to June
30th.4/
What is causing this apparent turnaround? France, Italy, and
other European countries have been recovering from recessions. In
developing countries like Thailand and Malaysia, the economies have been
moving ahead at impressive growth rates of 6% to 10% annually -- over
twice the U.S. rate.
NEUBERGER & BERMAN INTERNATIONAL PORTFOLIO SEARCHES FAR AND WIDE
FOR THE BEST BARGAINS OUTSIDE THE UNITED STATES.
Without restrictions as to regions, portfolio manager Felix
Rovelli can exploit investment opportunities wherever and whenever they
arise -- in both developed and emerging economies. He invests in the
stocks of companies with solid fundamentals that he believes to be
undervalued and to have above-average potential for capital appreciation.
Additional Investment Information
Some or all of the Portfolios, as indicated below, may make the
following investments, among others, although they may not buy all of the
types of securities or use all of the investment techniques that are
described.
Repurchase Agreements (All Portfolios). Repurchase agreements
are agreements under which a Portfolio purchases securities from a bank
that is a member of the Federal Reserve System (or, in the case of
Neuberger & Berman INTERNATIONAL Portfolio, from a foreign bank or a U.S.
branch or agency of a foreign bank) or from a securities dealer that
agrees to repurchase the securities from the Portfolio at a higher price
on a designated future date. Repurchase agreements generally are for a
short period of time, usually less than a week. No Portfolio may enter
into a repurchase agreement with a maturity of more than seven days if, as
a result, more than 10% (5% in the case of Neuberger & Berman GENESIS
Portfolio) of the value of its net assets would then be invested in such
repurchase agreements and other illiquid securities. A Portfolio may
enter into a repurchase agreement only if (1) the underlying securities
are of the type that the Portfolio's investment policies and limitations
would allow it to purchase directly, (2) the market value of the under-
lying securities, including accrued interest, at all times equals or
4/ July 7, 1995. Drawn from data supplied by Lipper Analytical
Services.
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<PAGE>
exceeds the value of the repurchase agreement, and (3) payment for the
underlying securities is made only upon satisfactory evidence that the
securities are being held for the Portfolio's account by its custodian or
a bank acting as the Portfolio's agent. If Neuberger & Berman
INTERNATIONAL Portfolio enters into a repurchase agreement subject to
foreign law and the counter-party defaults, Neuberger & Berman
INTERNATIONAL Portfolio may not enjoy protections comparable to those
provided to certain repurchase agreements under U.S. bankruptcy law, and
may suffer delays and losses in disposing of the collateral as a result.
Securities Loans (All Portfolios). In order to realize income,
each Portfolio may lend portfolio securities with a value not exceeding
33-1/3% of its total assets to banks, brokerage firms, or institutional
investors judged creditworthy by N&B Management. Borrowers are required
continuously to secure their obligations to return securities on loan from
the Portfolio by depositing collateral in a form determined to be satis-
factory by the Portfolio Trustees. The collateral, which must be marked
to market daily, must be equal to at least 100% of the market value of the
loaned securities, which will also be marked to market daily. N&B
Management believes the risk of loss on these transactions is slight
because, if a borrower were to default for any reason, the collateral
should satisfy the obligation. However, as with other extensions of
secured credit, loans of portfolio securities involve some risk of loss of
rights in the collateral should the borrower fail financially.
Restricted Securities and Rule 144A Securities (All Portfolios).
Each Portfolio may invest in restricted securities, which are securities
that may not be sold to the public without an effective registration
statement under the 1933 Act or, if they are unregistered, may be sold
only in a privately negotiated transaction or pursuant to an exemption
from registration. In recognition of the increased size and liquidity of
the institutional market for unregistered securities and the importance of
institutional investors in the formation of capital, the SEC has adopted
Rule 144A under the 1933 Act. Rule 144A is designed further to facilitate
efficient trading among institutional investors by permitting the sale of
certain unregistered securities to qualified institutional buyers. To the
extent privately placed securities held by a Portfolio qualify under Rule
144A, and an institutional market develops for those securities, the
Portfolio likely will be able to dispose of the securities without regis-
tering them under the 1933 Act. To the extent that institutional buyers
become, for a time, uninterested in purchasing these securities, investing
in Rule 144A securities could increase the level of a Portfolio's
illiquidity. N&B Management, acting under guidelines established by the
Portfolio Trustees, may determine that certain securities qualified for
trading under Rule 144A are liquid. Foreign securities that can be freely
sold in the markets in which they are principally traded are not
considered to be restricted. Regulation S under the 1933 Act permits the
sale abroad of securities that are not registered for sale in the United
States.
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<PAGE>
Where registration is required, a Portfolio may be
obligated to pay all or part of the registration expenses, and a
considerable period may elapse between the decision to sell and the time
the Portfolio may be permitted to sell a security under an effective
registration statement. If, during such a period, adverse market
conditions were to develop, the Portfolio might obtain a less favorable
price than prevailed when it decided to sell. To the extent privately
placed securities, including Rule 144A securities, are illiquid, purchases
thereof will be subject to each Portfolio's 10% (5% in the case of
Neuberger & Berman GENESIS Portfolio) limit on investments in illiquid
securities. Restricted securities for which no market exists are priced
at fair value as determined in accordance with procedures approved and
periodically reviewed by the Portfolio Trustees.
Reverse Repurchase Agreements (All Portfolios). In a reverse
repurchase agreement, a Portfolio sells portfolio securities subject to
its agreement to repurchase the securities at a later date for a fixed
price reflecting a market rate of interest; these agreements are
considered borrowings for purposes of the Portfolios' investment policies
and limitations concerning borrowings. While a reverse repurchase
agreement is outstanding, a Portfolio will maintain with its custodian in
a segregated account cash, U.S. Government or Agency Securities, or other
liquid, high-grade debt securities, marked to market daily, in an amount
at least equal to the Portfolio's obligations under the agreement. There
is a risk that the contra-party to a reverse repurchase agreement will be
unable or unwilling to complete the transaction as scheduled, which may
result in losses to the Portfolio.
Leverage (Neuberger & Berman INTERNATIONAL Portfolio). The
Portfolio may make investments when borrowings are outstanding.
Leveraging the Portfolio creates an opportunity for increased net income
but, at the same time, creates special risk considerations. For example,
leverage may exaggerate changes in the Portfolio's and the corresponding
Fund's net asset values ("NAVs") and in their yields. Although the
principal of such borrowings will be fixed, the Portfolio's assets may
change in value during the time the borrowing is outstanding. Leverage
creates interest expenses for the Portfolio. To the extent the income
derived from securities purchased with borrowed funds exceeds the interest
the Portfolio will have to pay, the Portfolio's net income will be greater
than it would be if leverage were not used. Conversely, if the income
from the assets obtained with borrowed funds is not sufficient to cover
the cost of leveraging, the net income of the Portfolio will be less than
it would be if leverage were not used, and therefore the amount available
for distribution to stockholders as dividends will be reduced. Reverse
repurchase agreements create leverage, a speculative factor, and are
considered borrowings for purposes of the Portfolio's investment
limitations.
Generally, the Portfolio does not intend to use leverage for
investment purposes. It may, however, use leverage to purchase securities
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<PAGE>
needed to close out short sales entered into for hedging purposes and to
facilitate other hedging transactions.
Foreign Securities (All Portfolios). Each Portfolio may invest
in U.S. dollar-denominated securities issued by foreign issuers (including
banks, governments, and quasi-governmental organizations) and foreign
branches of U.S. banks, including negotiable certificates of deposit
("CDs"), bankers' acceptances and commercial paper. These investments are
subject to each Portfolio's quality standards. While investments in
foreign securities are intended to reduce risk by providing further diver-
sification, such investments involve sovereign and other risks, in
addition to the credit and market risks normally associated with domestic
securities. These additional risks include the possibility of adverse
political and economic developments (including political instability) and
the potentially adverse effects of unavailability of public information
regarding issuers, less governmental supervision and regulation of
financial markets, reduced liquidity of certain financial markets, and the
lack of uniform accounting, auditing, and financial standards or the
application of standards that are different or less stringent than those
applied in the United States.
Each Portfolio also may invest in equity, debt, or other income-
producing securities that are denominated in or indexed to foreign curren-
cies, including (1) common and preferred stocks, (2) CDs, commercial
paper, fixed time deposits, and bankers' acceptances issued by foreign
banks, (3) obligations of other corporations, and (4) obligations of
foreign governments or their subdivisions, agencies, and instrumentali-
ties, international agencies, and supranational entities. Investing in
foreign currency denominated securities includes the special risks asso-
ciated with investing in non-U.S. issuers described in the preceding
paragraph and the additional risks of (1) adverse changes in foreign
exchange rates, (2) nationalization, expropriation, or confiscatory taxa-
tion, (3) adverse changes in investment or exchange control regulations
(which could prevent cash from being brought back to the United States),
and (4) expropriation or nationalization of foreign portfolio companies.
Additionally, dividends and interest payable on foreign securities may be
subject to foreign taxes, including taxes withheld from those payments.
Commissions on foreign securities exchanges are often at fixed rates and
are generally higher than negotiated commissions on U.S. exchanges,
although the Portfolios endeavor to achieve the most favorable net results
on portfolio transactions. Each Portfolio (except Neuberger & Berman
INTERNATIONAL Portfolio) may invest only in securities of issuers in
countries whose governments are considered stable by N&B Management.
Foreign securities often trade with less frequency and in less
volume than domestic securities and therefore may exhibit greater price
volatility. Additional costs associated with an investment in foreign
securities may include higher custodial fees than apply to domestic
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<PAGE>
custody arrangements, and transaction costs of foreign currency
conversions.
Prices of foreign securities and exchange rates for foreign
currencies may be affected by the interest rates prevailing in other
countries. Interest rates in other countries are often affected by local
factors, including the strength of the local economy, the demand for
borrowing, the government's fiscal and monetary policies, and the
international balance of payments. Individual foreign economies may
differ favorably or unfavorably from the U.S. economy in such respects as
growth of gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency, and balance of payments position.
Foreign markets also have different clearance and settlement
procedures, and, in certain markets, there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Such
delays in settlement could result in temporary periods when a portion of
the assets of a Portfolio are uninvested and no return is earned thereon.
The inability of a Portfolio to make intended security purchases due to
settlement problems could cause the Portfolio to miss attractive
investment opportunities. Inability to dispose of portfolio securities
due to settlement problems could result in losses to a Portfolio due to
subsequent declines in value of the portfolio securities, or, if the
Portfolio has entered into a contract to sell the securities, could result
in possible liability to the purchaser.
In order to limit the risk inherent in investing in foreign
currency denominated securities, a Portfolio (except Neuberger & Berman
INTERNATIONAL Portfolio) may not purchase any such security if, after such
purchase, more than 10% of its total assets (taken at market value) would
be invested in foreign currency denominated securities. Within that
limitation, however, no Portfolio is restricted in the amount it may
invest in securities denominated in any one foreign currency.
Forward Commitments and When-Issued Securities (Neuberger &
Berman INTERNATIONAL Portfolio). The Portfolio may purchase securities on
a when-issued basis and may purchase or sell securities on a forward
commitment basis. These transactions involve a commitment by the
Portfolio to purchase or sell securities at a future date (ordinarily one
or two months later). The price of the underlying securities (usually
expressed in terms of yield) and the date when the securities will be
delivered and paid for (the settlement date) are fixed at the time the
transaction is negotiated. When-issued purchases and forward commitment
transactions are negotiated directly with the other party, and such
commitments are not traded on exchanges.
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<PAGE>
When-issued purchases and forward commitment transactions enable
the Portfolio to "lock in" what N&B Management believes to be an
attractive price or yield on a particular security for a period of time,
regardless of future changes in interest rates. For instance, in periods
of rising interest rates and falling prices, the Portfolio might sell
securities it owns on a forward commitment basis to limit its exposure to
falling prices. In periods of falling interest rates and rising prices,
the Portfolio might purchase a security on a when-issued or forward
commitment basis and sell a similar security to settle such purchase,
thereby obtaining the benefit of currently higher yields.
The value of securities purchased on a when-issued or forward
commitment basis and any subsequent fluctuations in their value are
reflected in the computation of the Portfolio's NAV starting on the date
of the agreement to purchase the securities. The Portfolio does not earn
interest on securities it has committed to purchase until they are paid
for and delivered on the settlement date. When the Portfolio makes a
forward commitment to sell securities it owns, the proceeds to be received
upon settlement are included in the Portfolio's assets. Fluctuations in
the market value of the underlying securities are not reflected in the
Portfolio's daily net asset value as long as the commitment to sell
remains in effect. Settlement of when-issued purchases and forward
commitment transactions generally takes place within two months after the
date of the transaction, but the Portfolio may agree to a longer
settlement period.
The Portfolio will purchase securities on a when-issued basis or
purchase or sell securities on a forward commitment basis only with the
intention of completing the transaction and actually purchasing or selling
the securities. If deemed advisable as a matter of investment strategy,
however, the Portfolio may dispose of or renegotiate a commitment after it
has been entered into. The Portfolio also may sell securities it has
committed to purchase before those securities are delivered to the
Portfolio on the settlement date. The Portfolio may realize a capital
gain or loss in connection with these transactions.
When the Portfolio purchases securities on a when-issued or
forward commitment basis, the Portfolio's custodian will maintain in a
segregated account securities having a value (determined daily) at least
equal to the amount of the Portfolio's purchase commitments. In the case
of a forward commitment to sell portfolio securities, the custodian will
hold the portfolio securities themselves in a segregated account while the
commitment is outstanding. These procedures are designed to ensure that
the Portfolio maintains sufficient assets at all times to cover its
obligations under when-issued purchases and forward commitment
transactions.
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FUTURES, OPTIONS ON FUTURES, OPTIONS ON SECURITIES,
FORWARD CONTRACTS, AND OPTIONS ON FOREIGN
CURRENCIES (COLLECTIVELY, "FINANCIAL INSTRUMENTS")
(ALL PORTFOLIOS EXCEPT NEUBERGER & BERMAN
INTERNATIONAL PORTFOLIO)
Futures Contracts and Options Thereon (Neuberger & Berman
SOCIALLY RESPONSIVE Portfolio). The Portfolio may purchase and sell
interest rate futures contracts, stock and bond index futures contracts,
and foreign currency futures contracts and options thereon in an attempt
to hedge against changes in the prices of securities or, in the case of
foreign currency futures and options thereon, to hedge against expected
changes in prevailing currency exchange rates. Because the futures
markets may be more liquid than the cash markets, the use of futures
contracts permits the Portfolio to enhance portfolio liquidity and
maintain a defensive position without having to sell portfolio securities.
The Portfolio does not engage in transactions in futures or options on
futures for speculation. The Portfolio views investment in (i) interest
rate and securities index futures and options thereon as a maturity
management device and/or a device to reduce risk or preserve total return
in an adverse environment for the hedged securities, and (ii) foreign
currency futures and options thereon as a means of establishing more
definitely the effective return on securities denominated in foreign
currencies that are held or intended to be acquired by the Portfolio.
Futures contracts and options thereon are traded only on national futures
exchanges.
A "sale" of a futures contract (or a "short" futures position)
entails the assumption of a contractual obligation to deliver the
securities or currency underlying the contract at a specified price at a
specified future time. A "purchase" of a futures contract (or a "long"
futures position) entails the assumption of a contractual obligation to
acquire the securities or currency underlying the contract at a specified
price at a specified future time. Certain futures, including stock and
bond index futures, are settled on a net cash payment basis rather than by
the sale and delivery of the securities underlying the futures.
"Margin" with respect to a futures contract is the amount of
assets that must be deposited by the Portfolio with, or for the benefit
of, a futures commission merchant in order to initiate and maintain the
Portfolio's futures positions. The margin deposit made by the Portfolio
when it enters into a futures contract ("initial margin") is intended to
assure its performance of the contract. If the price of the futures
contract changes -- increases in the case of a short (sale) position or
decreases in the case of a long (purchase) position -- so that the
unrealized loss on the contract causes the margin deposit not to satisfy
margin requirements, the Portfolio will be required to make an additional
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<PAGE>
margin deposit ("variation margin"). However, if favorable price changes
in the futures contract cause the margin deposit to exceed the required
margin, the excess will be paid to the Portfolio. In computing its daily
net asset value, the Portfolio marks to market the current value of its
open futures positions. The Portfolio also must make margin deposits with
respect to options on futures that it has written. If the futures
commission merchant holding the margin deposit goes bankrupt, the
Portfolio could suffer a delay in recovering its funds and could
ultimately suffer a loss.
U.S. futures contracts (except certain currency futures) are
traded on exchanges that have been designated as "contract markets" by the
Commodity Futures Trading Commission ("CFTC"), an agency of the U.S.
Government; futures transactions must be executed through a futures
commission merchant that is a member of the relevant contract market. The
exchange's affiliated clearing organization guarantees performance of the
contracts between the clearing members of the exchange.
Although futures contracts by their terms may require the actual
delivery or acquisition of the underlying securities or currency, in most
cases the contractual obligation is extinguished by being offset before
the expiration of the contract, without the parties having to make or take
delivery of the assets. A futures position is offset by buying (to offset
an earlier sale) or selling (to offset an earlier purchase) an identical
futures contract calling for delivery in the same month.
Although the Portfolio believes that the use of futures contracts
will benefit it, if N&B Management's judgment about the general direction
of the markets is incorrect, the Portfolio's overall return would be lower
than if it had not entered into any such contracts. Moreover, the spread
between values in the cash and futures markets is subject to distortion
due to differences in the character of those markets. Because of the
possibility of distortion, even a correct forecast of general market
trends by N&B Management may not result in a successful transaction.
An option on a futures contract gives the purchaser the right, in
return for the premium paid, to assume a position in the contract (a long
position if the option is a call and a short position if the option is a
put) at a specified exercise price at any time during the option exercise
period. The writer of the option is required upon exercise to assume a
short futures position (if the option is a call) or a long futures
position (if the option is a put). Upon exercise of the option, the
assumption of offsetting futures positions by the writer and holder of the
option is accompanied by delivery of the accumulated cash balance in the
writer's futures margin account. That balance represents the amount by
which the market price of the futures contract at exercise exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price
of the option.
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<PAGE>
The prices of futures contracts are volatile and are influenced
by, among other things, actual and anticipated changes in interest rates,
which in turn are affected by fiscal and monetary policies and by national
and international political and economic events. At best, the correlation
between changes in prices of futures contracts and of the securities being
hedged can be only approximate. Decisions regarding whether, when, and
how to hedge involve skill and judgment. Even a well-conceived hedge may
be unsuccessful to some degree because of unexpected market behavior or
interest rate trends or lack of correlation between the futures markets
and the securities markets. Because of the low margin deposits required,
futures trading involves an extremely high degree of leverage; as a
result, a relatively small price movement in a futures contract may result
in immediate and substantial loss, or gain, to the investor. Losses that
may arise from certain futures transactions are potentially unlimited.
Most U.S. futures exchanges limit the amount of fluctuation in
the price of a futures contract or option thereon during a single trading
day; once the daily limit has been reached, no trades thereof may be made
on that day at a price beyond that limit. The daily limit only governs
price movements during a particular trading day, however; it thus does not
limit potential losses, because the limit may prevent the liquidation of
unfavorable positions. Prices can move to the daily limit for several
consecutive trading days with little or no trading, thereby preventing
liquidation of futures and options positions and subjecting traders to
substantial losses. If this were to happen with respect to a position
held by the Portfolio, it could (depending on the size of the position)
have an adverse impact on the NAV of the Portfolio.
Covered Call Options (All Portfolios). Neuberger & Berman
SOCIALLY RESPONSIVE Portfolio may write or purchase covered call options
on securities it owns. Each of the other Portfolios may write or purchase
covered call options on securities it owns valued at up to 10% of its net
assets. Generally, the purpose of writing and purchasing these options is
to reduce the effect of price fluctuations of securities held by the
Portfolio on the Portfolio's and its corresponding Fund's NAVs. Neuberger
& Berman SOCIALLY RESPONSIVE Portfolio may also write covered call options
to earn premium income. Portfolio securities on which call options may be
written and purchased by a Portfolio are purchased solely on the basis of
investment considerations consistent with the Portfolio's investment
objective.
When a Portfolio writes a call option, it is obligated to sell a
security to a purchaser at a specified price at any time the purchaser
requests until a certain date, and receives a premium for writing the call
option. So long as the obligation of the call option continues, the
Portfolio may be assigned an exercise notice, requiring it to deliver the
underlying security against payment of the exercise price. The Portfolio
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<PAGE>
may be obligated to deliver securities underlying an option at less than
the market price, thereby giving up any additional gain on the security.
Each Portfolio writes only "covered" call options on securities
it owns. The writing of covered call options is a conservative investment
technique that is believed to involve relatively little risk (in contrast
to the writing of "naked" or uncovered call options, which the Portfolios
will not do), but is capable of enhancing the Portfolios' total return.
When writing a covered call option, a Portfolio, in return for the
premium, gives up the opportunity for profit from a price increase in the
underlying security above the exercise price, but conversely retains the
risk of loss should the price of the security decline.
If a call option that a Portfolio has written expires
unexercised, the Portfolio will realize a gain in the amount of the
premium; however, that gain may be offset by a decline in the market value
of the underlying security during the option period. If the call option
is exercised, the Portfolio will realize a gain or loss from the sale of
the underlying security.
When a Portfolio purchases a call option, it pays a premium for
the right to purchase a security from the writer at a specified price
until a specified date. A Portfolio would purchase a call option to
offset a previously written call option. Neuberger & Berman SOCIALLY
RESPONSIVE Portfolio also may purchase a call option to protect against an
increase in the price of the securities it intends to purchase.
Put Options (Neuberger & Berman SOCIALLY RESPONSIVE Portfolio).
The Portfolio may write or purchase put options on securities. Generally,
the purpose of writing and purchasing these options is to reduce the
effect of price fluctuations of securities held by the Portfolio on the
Portfolio's and its corresponding Fund's NAVs.
The Portfolio will receive a premium for writing a put option,
which obligates the Portfolio to acquire a certain security at a certain
price at any time until a certain date if the purchaser of the option
decides to sell such security. The Portfolio may be obligated to purchase
the underlying security at more than its current value.
When the Portfolio purchases a put option, it pays a
premium to the writer for the right to sell a security to the writer for a
specified amount at any time until a certain date. The Portfolio would
purchase a put option in order to protect itself against a decline in the
market value of a security it owns.
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<PAGE>
Portfolio securities on which put options may be written and
purchased by the Portfolio are purchased solely on the basis of investment
considerations consistent with the Portfolio's investment objective. When
writing a put option, the Portfolio, in return for the premium, takes the
risk that it must purchase the underlying security at the exercise price,
which may be higher than the current market price of the security. If a
put option that the Portfolio has written expires unexercised, the
Portfolio will realize a gain in the amount of the premium. A Portfolio
will realize a profit or loss from a closing purchase transaction if the
cost of the transaction is less or more than the premium received from
writing the put option.
Put and Call Options, In General. The obligation under any
option terminates upon expiration of the option or, at an earlier time,
when the writer offsets the option by entering into a "closing purchase
transaction" to purchase an option of the same series. If an option is
purchased by the Portfolio and is never exercised, the Portfolio will lose
the entire amount of the premium paid.
Options are traded both on national securities exchanges and in
the over-the-counter ("OTC") market. Exchange-traded options in the
United States are issued by a clearing organization affiliated with the
exchange on which the option is listed; the clearing organization in
effect guarantees completion of every exchange-traded option. In
contrast, OTC options are contracts between the Portfolio and its counter-
party with no clearing organization guarantee. Thus, when the Portfolio
sells (or purchases) an OTC option, it generally will be able to "close
out" the option prior to its expiration only by entering into a closing
transaction with the dealer to whom (or from whom) the Portfolio
originally sold (or purchased) the option. There can be no assurance that
the Portfolio would be able to liquidate an OTC option at any time prior
to expiration. Unless a Portfolio is able to effect a closing purchase
transaction in a covered OTC call option it has written, it will not be
able to liquidate securities used as cover until the option expires or is
exercised or until different cover is substituted. In the event of the
counter-party's insolvency, a Portfolio may be unable to liquidate its
options position and the associated cover. N&B Management monitors the
creditworthiness of dealers with which a Portfolio may engage in OTC
options transactions, and limits the Portfolios' counter-parties in such
transactions to dealers with a net worth of at least $20 million as
reported in their latest financial statements.
The assets used as cover for OTC options written by a Portfolio
will be considered illiquid unless the OTC options are sold to qualified
dealers who agree that the Portfolio may repurchase any OTC option it
writes at a maximum price to be calculated by a formula set forth in the
option agreement. The cover for an OTC call option written subject to
this procedure will be considered illiquid only to the extent that the
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<PAGE>
maximum repurchase price under the formula exceeds the intrinsic value of
the option.
The premium received (or paid) by the Portfolio when it writes
(or purchases) an option is the amount at which the option is currently
traded on the applicable exchange, less (or plus) a commission. The
premium may reflect, among other things, the current market price of the
underlying security, the relationship of the exercise price to the market
price, the historical price volatility of the underlying security, the
length of the option period, the general supply of and demand for credit,
and the general interest rate environment. The premium received by the
Portfolio for writing an option is recorded as a liability on the
Portfolio's statement of assets and liabilities. This liability is
adjusted daily to the option's current market value, which is the sales
price on the option's last reported trade on that day before the time the
Portfolio's NAV is computed or, in the absence of any trades thereof on
that day, the mean between the closing bid and ask prices.
Closing transactions are effected in order to realize a profit on
an outstanding option, to prevent an underlying security from being
called, or to permit the sale or the put of the underlying security.
Furthermore, effecting a closing transaction permits Neuberger & Berman
SOCIALLY RESPONSIVE Portfolio to write another call option on the
underlying security with a different exercise price or expiration date or
both. If any Portfolio desires to sell a security on which it has written
a call option, it will seek to effect a closing transaction prior to, or
concurrently with, the sale of the security. There is, of course, no
assurance that a Portfolio will be able to effect closing transactions at
favorable prices. If a Portfolio cannot enter into such a transaction, it
may be required to hold a security that it might otherwise have sold (or
purchase a security that it would not have otherwise bought), in which
case it would continue to be at market risk on the security.
A Portfolio will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the
premium received from writing the call or put option. However, because
increases in the market price of a call option generally reflect increases
in the market price of the underlying security, any loss resulting from
the repurchase of a call option is likely to be offset in whole or in part
by appreciation of the underlying security owned by the Portfolio.
A Portfolio pays brokerage commissions in connection with
purchasing or writing options, including those used to close out existing
positions. These brokerage commissions normally are higher than those
applicable to purchases and sales of portfolio securities.
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<PAGE>
Options normally have expiration dates between three and nine
months from the date written. The exercise price of an option may be
below, equal to, or above the market value of the underlying security at
the time the option is written. From time to time, Neuberger & Berman
SOCIALLY RESPONSIVE Portfolio may purchase an underlying security for
delivery in accordance with an exercise notice of a call option assigned
to it, rather than delivering the security from its portfolio. In those
cases, additional brokerage commissions are incurred.
Forward Foreign Currency Contracts (All Portfolios). Each
Portfolio may enter into contracts for the purchase or sale of a specific
currency at a future date at a fixed price ("forward contracts") in
amounts not exceeding 5% of its net assets. The Portfolios enter into
forward contracts in an attempt to hedge against expected changes in
prevailing currency exchange rates. The Portfolios do not engage in
transactions in forward contracts for speculation; they view investments
in forward contracts as a means of establishing more definitely the effec-
tive return on securities denominated in foreign currencies that are held
or intended to be acquired by them. Forward contract transactions include
forward sales or purchases of foreign currencies for the purpose of pro-
tecting the U.S. dollar value of securities held or to be acquired by a
Portfolio or protecting the U.S. dollar equivalent of dividends, interest,
or other payments on those securities.
N&B Management believes that the use of foreign currency hedging
techniques, including "cross-hedges," can help protect against declines in
the U.S. dollar value of income available for distribution and declines in
a Portfolio's NAV resulting from adverse changes in currency exchange
rates. For example, the return available from securities denominated in a
particular foreign currency would diminish if the value of the U.S. dollar
increased against that currency. Such a decline could be partially or
completely offset by an increase in value of a cross-hedge involving a
forward contract to sell a different foreign currency, where the contract
is available on terms more advantageous to a Portfolio than a contract to
sell the currency in which the securities being hedged are denominated.
N&B Management believes that hedges and cross-hedges can, therefore,
provide significant protection of NAV in the event of a general rise in
the U.S. dollar against foreign currencies. However, a hedge or cross-
hedge cannot protect against exchange rate risks perfectly, and, if N&B
Management is incorrect in its judgment of future exchange rate relation-
ships, a Portfolio could be in a less advantageous position than if such a
hedge had not been established. In addition, because forward contracts
are not traded on an exchange, the assets used to cover such contracts may
be illiquid.
Options on Foreign Currencies (All Portfolios). Each Portfolio
may write and purchase covered call and put options on foreign currencies,
in amounts not exceeding 5% of its net assets. A Portfolio would engage
in such transactions to protect against declines in the U.S. dollar value
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<PAGE>
of portfolio securities or increases in the U.S. dollar cost of securities
to be acquired or to protect the U.S. dollar equivalent of dividends,
interest, or other payments on those securities. As with other types of
options, however, writing an option on foreign currency constitutes only a
partial hedge, up to the amount of the premium received, and a Portfolio
could be required to purchase or sell foreign currencies at
disadvantageous exchange rates, thereby incurring losses. The risks of
currency options are similar to the risks of other options, discussed
herein. Certain options on foreign currencies are traded on the OTC
market and involve liquidity and credit risks that may not be present in
the case of exchange-traded currency options.
GENERAL CONSIDERATIONS INVOLVING FINANCIAL INSTRUMENTS
(ALL PORTFOLIOS EXCEPT NEUBERGER & BERMAN INTERNATIONAL
PORTFOLIO)
Futures Contracts and Options Thereon; Put and Call Options. To
the extent a Portfolio sells or purchases futures contracts and/or writes
options thereon or options on foreign currencies that are traded on an
exchange regulated by the CFTC other than for bona fide hedging purposes
(as defined by the CFTC), the aggregate initial margin and premiums on
those positions (excluding the amount by which options are "in-the-money")
may not exceed 5% of the Portfolio's net assets. As noted above, the
Portfolios (except Neuberger & Berman SOCIALLY RESPONSIVE Portfolio) do
not intend to invest in futures contracts and options thereon during the
coming year.
In addition, pursuant to state securities laws, (1) the aggregate
premiums paid by a Portfolio on all options (both exchange-traded and OTC)
held by it at any time may not exceed 20% of its net assets, and (2) the
aggregate margin deposits required on all exchange-traded futures
contracts and related options held by a Portfolio at any time may not
exceed 5% of its total assets. Also, pursuant to an undertaking to a
state securities law administrator, Neuberger & Berman SOCIALLY RESPONSIVE
Portfolio will not purchase puts, calls, straddles, spreads, or any
combination thereof if, by reason of such purchase, the value of its
aggregate investment in such instruments will exceed 5% of its total
assets.
Risks Involved in Using Financial Instruments. The primary risks
in using Financial Instruments are (1) imperfect correlation or no
correlation between changes in market value of the securities held or to
be acquired by a Portfolio and changes in market value of Financial
Instruments; (2) possible lack of a liquid secondary market for Financial
Instruments and the resulting inability to close out Financial Instruments
when desired; (3) the fact that the skills needed to use Financial
Instruments are different from those needed to select a Portfolio's
securities; (4) the fact that, although use of Financial Instruments for
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<PAGE>
hedging purposes can reduce the risk of loss, they also can reduce the
opportunity for gain, or even result in losses, by offsetting favorable
price movements in hedged investments; and (5) the possible inability of a
Portfolio to purchase or sell a portfolio security at a time that would
otherwise be favorable for it to do so, or the possible need for a
Portfolio to sell a portfolio security at a disadvantageous time, due to
its need to maintain "cover" or to segregate securities in connection with
its use of Financial Instruments. N&B Management intends to reduce the
risk of imperfect correlation by investing only in Financial Instruments
whose behavior is expected to resemble that of a Portfolio's underlying
securities. N&B Management intends to reduce the risk that a Portfolio
will be unable to close out Financial Instruments by entering into such
transactions only if N&B Management believes there will be an active and
liquid secondary market. Financial Instruments used by the Portfolios are
generally considered "derivatives." There can be no assurance that a
Portfolio's use of Financial Instruments will be successful.
The Portfolios' use of Financial Instruments may be limited by
the requirements of the Internal Revenue Code of 1986, as amended
("Code"), that apply to each Fund for qualification as a regulated
investment company ("RIC"). See "Additional Tax Information."
Cover for Financial Instruments. Each Portfolio will comply with
SEC guidelines regarding cover for Financial Instruments and, if the
guidelines so require, set aside in a segregated account with its
custodian cash, U.S. Government or Agency Securities, or other liquid,
high-grade debt securities in the prescribed amount. Securities held in a
segregated account cannot be sold while the futures, option, or forward
strategy covered by those securities is outstanding, unless they are
replaced with other suitable assets. As a result, segregation of a large
percentage of a Portfolio's assets could impede portfolio management or
the Portfolio's ability to meet current obligations. A Portfolio may be
unable promptly to dispose of assets which cover, or are segregated with
respect to, an illiquid futures, option, or forward position; this
inability may result in a loss to the Portfolio.
FUTURES, OPTIONS ON FUTURES, OPTIONS ON SECURITIES AND
INDICES, FORWARD CONTRACTS, AND OPTIONS ON FOREIGN
CURRENCIES (COLLECTIVELY, "FINANCIAL INSTRUMENTS")
(NEUBERGER & BERMAN INTERNATIONAL PORTFOLIO ONLY)
Put and Call Options on Individual Securities (Neuberger & Berman
INTERNATIONAL Portfolio). The Portfolio may write call options and
purchase put options on securities in order to hedge (i.e., write or
purchase options to reduce the effect of price fluctuations of securities
held by the Portfolio on the Portfolio's and the corresponding Fund's
NAVs). The Portfolio may also purchase or write put options, purchase
call options and write covered call options in an attempt to enhance
income.
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The obligation under any option terminates upon expiration of the
option or, at an earlier time, when the writer offsets the option by
entering into a "closing purchase transaction" to purchase an option of
the same series. If an option is purchased by the Portfolio and is never
exercised, the Portfolio will lose the entire amount of the premium paid.
The Portfolio will receive a premium for writing a put option,
which obligates the Portfolio to acquire a certain security at a certain
price at any time until a certain date if the purchaser of the option
decides to sell such security. The Portfolio may be obligated to purchase
the underlying security at more than its current value.
When the Portfolio purchases a put option, it pays a premium to
the writer for the right to sell a security to the writer for a specified
amount at any time until a certain date. The Portfolio would purchase a
put option in order to protect itself against a decline in the market
value of a security it owns.
When the Portfolio writes a call option, it is obligated to sell
a security to a purchaser at a specified price at any time the purchaser
requests until a certain date, and receives a premium for writing the call
option. So long as the obligation of the call option continues, the
Portfolio may be assigned an exercise notice, requiring it to deliver the
underlying security against payment of the exercise price. The Portfolio
may be obligated to deliver securities underlying an option at less than
the market price, thereby giving up any additional gain on the security.
The Portfolio intends to write only "covered" call options on securities
it owns.
When the Portfolio purchases a call option, it pays a premium for
the right to purchase a security from the writer at a specified price
until a specified date. The Portfolio would purchase a call option in
order to protect against an increase in the price of securities it intends
to purchase or to offset a previously written call option.
Portfolio securities on which call and put options may be written
and purchased by the Portfolio are purchased solely on the basis of
investment considerations consistent with the Portfolio's investment
objective. The writing of covered call options is a conservative
investment technique that is believed to involve relatively little risk
(in contrast to the writing of "naked" or uncovered call options, which
the Portfolio will not do) but is capable of enhancing the Portfolio's
total return. When writing a covered call option, the Portfolio, in
return for the premium, gives up the opportunity for profit from a price
increase in the underlying security above the exercise price, but
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conversely retains the risk of loss should the price of the security
decline. When writing a put option, the Portfolio, in return for the
premium, takes the risk that it must purchase the underlying security at
the exercise price, which may be higher than the current market price of
the security. If a call or put option that the Portfolio has written
expires unexercised, the Portfolio will realize a gain in the amount of
the premium; however, in the case of a call option, that gain may be
offset by a decline in the market value of the underlying security during
the option period. If the call option is exercised, the Portfolio will
realize a gain or loss from the sale of the underlying security.
Securities options are traded both on exchanges and in the OTC
market. Exchange-traded options are issued by a clearing organization
affiliated with the exchange on which the option is listed; the clearing
organization in effect guarantees completion of every exchange-traded
option. In contrast, OTC options are contracts between the Portfolio and
its counter-party with no clearing organization guarantee. Thus, when the
Portfolio sells (or purchases) an OTC option, it generally will be able to
close out the option prior to its expiration only by entering into a
closing transaction with the dealer to whom (or from whom) the Portfolio
originally sold (or purchased) the option. There can be no assurance that
the Portfolio would be able to liquidate an OTC option at any time prior
to expiration. Unless the Portfolio is able to effect a closing purchase
transaction in a covered OTC call option it has written, it will not be
able to liquidate securities used as cover until the option expires or is
exercised or until different cover is substituted. In the event of the
counter-party's insolvency, the Portfolio may be unable to liquidate its
options position and the associated cover. N&B Management monitors the
creditworthiness of dealers with which the Portfolio may engage in OTC
options transactions, and limits the Portfolio's counter-parties in such
transactions to dealers with a net worth of at least $20 million as
reported in their latest financial statements.
The assets used as cover (or held in a segregated account) for
OTC options written by the Portfolio will be considered illiquid unless
the OTC options are sold to qualified dealers who agree that the Portfolio
may repurchase any OTC option it writes at a maximum price to be
calculated by a formula set forth in the option agreement. The cover for
an OTC call option written subject to this procedure will be considered
illiquid only to the extent that the maximum repurchase price under the
formula exceeds the intrinsic value of the option.
The premium received (or paid) by the Portfolio when it writes
(or purchases) a call or put option is the amount at which the option is
currently traded on the applicable exchange, less (or plus) a commission.
The premium may reflect, among other things, the current market price of
the underlying security, the relationship of the exercise price to the
market price, the historical price volatility of the underlying security,
the length of the option period, the general supply of and demand for
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credit, and the general interest rate environment. The premium received
by the Portfolio for writing a covered call or put option is recorded as a
liability on the Portfolio's statement of assets and liabilities. This
liability is adjusted daily to the option's current market value, which is
the sales price on the option's last reported trade on that day before the
time the Portfolio's NAV is computed or, in the absence of any trades
thereof on that day, the mean between the closing bid and ask prices.
Closing transactions are effected in order to realize a profit on
an outstanding option, to prevent an underlying security from being
called, or to permit the sale or the put of the underlying security.
Furthermore, effecting a closing transaction permits the Portfolio to
write another call option on the underlying security with a different
exercise price or expiration date or both. If the Portfolio desires to
sell a particular security on which it has written a call option, it will
seek to effect a closing transaction prior to, or concurrently with, the
sale of the security. There is, of course, no assurance that the
Portfolio will be able to effect closing transactions at favorable prices.
If the Portfolio cannot enter into such a transaction, it may be required
to hold a security that it might otherwise have sold (or purchase a
security that it would not have otherwise bought), in which case it would
continue to be subject to market risk on the security.
The Portfolio will realize a profit or loss from a closing
purchase transaction if the cost of the transaction is less or more than
the premium received from writing the call or put option. However,
because increases in the market price of a call option generally reflect
increases in the market price of the underlying security, any loss
resulting from the repurchase of a call option is likely to be offset in
whole or in part by appreciation of the underlying security owned by the
Portfolio.
Options normally have expiration dates between three and nine
months from the date written. The Portfolio may purchase both European-
style options and American-style options. European-style options are only
exercisable immediately prior to their expiration date. American-style
options, in contrast, are exercisable at any time prior to their
expiration date. The exercise price of an option may be below, equal to,
or above the market value of the underlying security at the time the
option is written. From time to time, the Portfolio may purchase an
underlying security for delivery in accordance with an exercise notice of
a call option assigned to it, rather than delivering the security from its
portfolio. In those cases, additional brokerage commissions are incurred.
Put and Call Options on Securities Indices (Neuberger & Berman
INTERNATIONAL Portfolio). The Portfolio may write or purchase put and
call options on securities indices for the purpose of hedging against the
risk of unfavorable price movements that would adversely affect the value
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of the Portfolio's securities or securities the Portfolio intends to buy.
However, the Portfolio currently does not expect to invest a substantial
portion of its assets in securities index options. Unlike a securities
option, which gives the holder the right to purchase or sell a specified
security at a specified price, an option on a securities index gives the
holder the right to receive a cash "exercise settlement amount" equal to
(1) the difference between the exercise price of the option and the value
of the underlying securities index on the exercise date multiplied by
(2) a fixed "index multiplier."
A securities index fluctuates with changes in the market values
of the securities included in the index. Options on stock indices are
currently traded on the Chicago Board Options Exchange, the NYSE, the
AmEx, and other U.S. and foreign exchanges.
The Portfolio may purchase put options in order to hedge against
an anticipated decline in securities market prices that might adversely
affect the value of the Portfolio's portfolio securities. If the
Portfolio purchases a put option on a securities index, the amount of the
payment it would receive upon exercising the option would depend on the
extent of any decline in the level of the securities index below the
exercise price. Such payments would tend to offset a decline in the value
of the Portfolio's portfolio securities. However, if the level of the
securities index increases and remains above the exercise price while the
put option is outstanding, the Portfolio will not be able to exercise the
option profitably and will lose the amount of the premium and any
transaction costs. Such loss may be partially offset by an increase in
the value of the Portfolio's portfolio securities.
The Portfolio may purchase call options on securities indices in
order to participate in an anticipated increase in securities market
prices. If the Portfolio purchases a call option on a securities index,
the amount of the payment it would receive upon exercising the option
would depend on the extent of any increase in the level of the securities
index above the exercise price. Such payments would, in effect, allow the
Portfolio to benefit from securities market appreciation even though it
may not have had sufficient cash to purchase the underlying securities.
Such payments may also offset increases in the price of securities that
the Portfolio intends to purchase. If, however, the level of the
securities index declines and remains below the exercise price while the
call option is outstanding, the Portfolio will not be able to exercise the
option profitably and will lose the amount of the premium and any
transaction costs. Such loss may be partially offset by a reduction in
the price the Portfolio pays to buy additional securities for its
portfolio.
The Portfolio may write securities index options in order to
close out positions in securities index options which it has purchased.
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These closing sale transactions enable the Portfolio immediately to
realize gains or minimize losses on its options positions. If the
Portfolio is unable to effect a closing sale transaction with respect to
options that it has purchased, it would have to exercise the options in
order to realize any profit and may incur transaction costs.
The hours of trading for options may not conform to the hours
during which the underlying securities are traded. To the extent that the
options markets close before the markets for the underlying securities,
significant price and rate movements can take place in the underlying
markets that cannot be reflected in the options markets.
The effectiveness of hedging through the purchase of securities
index options will depend upon the extent to which price movements in the
portfolio securities being hedged correlate with price movements in the
selected securities index. Perfect correlation is not possible because
the securities held or to be acquired by the Portfolio will not exactly
match the composition of the securities indices on which options are
available. In addition, the purchase of securities index options involves
the risk that the premium and transaction costs paid by the Portfolio in
purchasing an option will be lost as a result of unanticipated movements
in prices of the securities comprising the securities index on which the
option is based.
All securities index options purchased by the Portfolio will be
listed and traded on an exchange.
Other Risks of Options Transactions. The Portfolio may purchase
and sell options that are traded on both U.S. and foreign exchanges.
There is no assurance that a liquid secondary market on a domestic or
foreign options exchange will exist for any particular exchange-traded
option or at any particular time, and, for some options, no secondary
market on an exchange may exist. If the Portfolio is unable to effect a
closing purchase transaction with respect to covered call options it has
written, it will not be able to sell the underlying securities or dispose
of assets held in a segregated account until the options expire or are
exercised.
Reasons for the absence of a liquid secondary market on an
exchange include the following: (1) there may be insufficient interest in
trading certain options; (2) restrictions may be imposed by an exchange on
opening transactions or closing transactions or both; (3) trading halts,
suspensions or other restrictions may be imposed with respect to
particular classes or series of options or underlying securities;
(4) unusual or unforeseen circumstances may interrupt normal operations on
an exchange; (5) the facilities of an exchange or its clearing
organization may not at all times be adequate to handle current trading
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volume; or (6) one or more exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of
options (or a particular class or series of options), in which event the
secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options that had been issued by
the clearing organization as a result of trades on that exchange would
continue to be exercisable in accordance with their terms.
The writing and purchase of options is a highly specialized
activity which involves investment techniques and risks different from
those associated with ordinary portfolio securities transactions. The
writing of options on securities involves a risk that the Portfolio will
be required to sell or purchase such securities at a price less favorable
than the current market price and will lose the benefit of appreciation or
depreciation in the market price of such securities.
The Portfolio would incur brokerage commissions or spreads in
connection with its options transactions, as well as for purchases and
sales of underlying securities. Brokerage commissions for options
transactions may be higher or lower than for portfolio securities
transactions. The writing of options could result in a significant
increase in the Portfolio's turnover rate.
Futures Contracts (Neuberger & Berman INTERNATIONAL Portfolio).
The Portfolio may enter into futures contracts for the purchase or sale of
individual securities and futures contracts on securities indices which
are traded on exchanges licensed and regulated by the CFTC or on foreign
exchanges. Trading on foreign exchanges is subject to the legal
requirements of the jurisdiction in which the exchange is located and to
the rules of such foreign exchange. The Portfolio may purchase and sell
futures for bona fide hedging and non-hedging purposes (i.e., in an effort
to enhance income) as defined in regulations of the CFTC.
A futures contract on a security is a binding contractual
commitment which, if held to maturity, will result in an obligation to
make or accept delivery during a particular month of securities having a
standardized face value and rate of return. By purchasing futures on
securities, the Portfolio will legally obligate itself to accept delivery
of the underlying security and to pay the agreed price. By selling
futures on securities, the Portfolio will legally obligate itself to make
delivery of the security and receive payment of the agreed price.
Open futures positions on securities are valued at the most
recent settlement price, unless such price does not reflect the fair value
of the contract, in which case the position will be valued by or under the
direction of the Portfolio Trustees.
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Futures contracts on securities normally are not held to maturity
but are instead liquidated through offsetting transactions which may
result in a profit or loss. While futures contracts on securities entered
into by the Portfolio will usually be liquidated in this manner, the
Portfolio may instead make or take delivery of the underlying securities
whenever it appears economically advantageous for it to do so. A clearing
corporation associated with the exchange on which futures on securities
are traded assumes responsibility for closing out open futures positions
and guarantees that, if still open, the sale or purchase of securities
will be performed on the settlement date.
A securities index futures contract does not require the physical
delivery of securities, but merely provides for profits and losses
resulting from changes in the market value of the contract to be credited
or debited at the close of each trading day to the respective accounts of
the parties to the contract. On the contract's expiration date, a final
cash settlement occurs, and the futures positions are simply closed out.
Changes in the market value of a particular securities index futures
contract reflect changes in the specified index of the securities on which
the futures contract is based.
The Portfolio sells futures contracts in order to offset a
possible decline in the value of its portfolio securities. When a futures
contract is sold by the Portfolio, the value of the contract will tend to
rise when the value of the Portfolio's securities declines and will tend
to fall when the value of such securities increases. The Portfolio
purchases futures contracts in order to fix what N&B Management believes
to be a favorable price for securities the Portfolio intends to purchase.
If a futures contract is purchased by the Portfolio, the value of the
contract will tend to change together with changes in the value of such
securities.
The Portfolio may also purchase put and call options on futures
contracts for bona fide hedging and non-hedging purposes. A put option
purchased by the Portfolio would give it the right to assume a position as
the seller of a futures contract (assume a short position). A call option
purchased by the Portfolio would give it the right to assume a position as
the purchaser of a futures contract (assume a long position). The
Portfolio pays a premium when it purchases an option on a futures
contract. In exchange for the premium, the Portfolio becomes entitled to
exercise the option, but is not required to do so. If the option cannot
be profitably exercised before it expires, the Portfolio's loss will be
limited to the amount of the premium and any transaction costs.
In addition, the Portfolio may write (sell) put and call options
on futures contracts for bona fide hedging and non-hedging purposes.
Writing a put option on a futures contract generates a premium, which may
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partially offset an increase in the price of securities that the Portfolio
intends to purchase. However, the Portfolio becomes obligated to purchase
a futures contract, which may have a value lower than the exercise price.
Conversely, writing a call option on a futures contract generates a
premium which may partially offset a decline in the value of the
Portfolio's assets. By writing a call option, the Portfolio becomes
obligated, in exchange for the premium, to sell a futures contract, which
may have a value higher than the exercise price.
The Portfolio may enter into closing purchase or sale
transactions in order to terminate a futures contract. The Portfolio may
close out an option which it has purchased or written by selling or
purchasing an offsetting option of the same series. There is no guarantee
that such closing transactions can be effected. The Portfolio's ability
to enter into closing transactions depends on the development and
maintenance of a liquid market, which may not exist at all times.
Although futures and options transactions are intended to enable
the Portfolio to manage interest rate or stock market risks, unanticipated
changes in interest rates or market prices could result in poorer
performance than if the Portfolio had not entered into such transactions.
Even if N&B Management correctly predicts interest rate or market price
movements, a hedge could be unsuccessful if changes in the value of the
Portfolio's futures position do not correspond to changes in the value of
its investments. This lack of correlation between the Portfolio's futures
and securities positions may be caused by differences between the futures
and securities markets or by differences between the securities underlying
the Portfolio's futures position and the securities held by or to be
purchased for the Portfolio. N&B Management attempts to minimize these
risks through careful selection and monitoring of the Portfolio's futures
and options positions. The ability to predict the direction of the
securities markets and interest rates involves skills different from those
used in selecting securities.
The prices of futures contracts depend primarily on the value or
level of the securities or indices on which they are based. Because there
are a limited number of types of futures contracts, it is likely that the
standardized futures contracts available to the Portfolio will not exactly
match the securities the Portfolio wishes to hedge or intends to purchase,
and consequently will not provide a perfect hedge against all price
fluctuations. To compensate for differences in historical volatility
between positions the Portfolio wishes to hedge and the standardized
futures contracts available to it, the Portfolio may purchase or sell
futures contracts with a greater or lesser value than the securities it
wishes to hedge or intends to purchase.
Foreign Currency Transactions (Neuberger & Berman INTERNATIONAL
Portfolio). The Portfolio may engage in foreign currency exchange
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transactions. Such transactions are conducted either on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange
market, or through entering into forward contracts to purchase or sell
foreign currencies. The Portfolio may enter into forward contracts in
order to protect against uncertainty in the level of future foreign
currency exchange rates and may also enter into forward contracts for non-
hedging purposes. A forward contract involves an obligation to purchase
or sell a specific currency at a future date, which may be any fixed
number of days (usually less than one year) from the date of the contract
agreed upon by the parties, at a price set at the time of the contract.
These contracts are traded in the interbank market directly between
traders (usually large commercial banks) and their customers. A forward
contract generally has no deposit requirement, and no commissions are
charged at any stage for trades. Although foreign exchange dealers do not
charge a fee for conversion, they do realize a profit based on the
difference (the spread) between the prices at which they are buying and
selling various currencies.
When the Portfolio enters into a contract for the purchase or
sale of a security denominated in a foreign currency, it may wish to "lock
in" the U.S. dollar price of the security. By entering into a forward
contract for the purchase or sale, for a fixed amount of U.S. dollars, of
the amount of foreign currency involved in the underlying security
transactions, the Portfolio will be able to protect itself against a
possible loss. Such loss would result from an adverse change in the
relationship between the U.S. dollar and the foreign currency during the
period between the date on which the security is purchased or sold and the
date on which payment is made or received.
When N&B Management believes that the currency of a particular
foreign country may suffer a substantial decline against the U.S. dollar,
the Portfolio may also enter into a forward contract to sell, for a fixed
amount of dollars, an amount of foreign currency which approximates the
value of some or all of the portfolio securities denominated in such
foreign currency. The precise matching of the forward contract amounts
and the value of the Portfolio's foreign currency denominated securities
will not generally be possible, since the future value of such securities
will change as a consequence of market movements between the date the
forward contract is entered into and the date it matures.
The Portfolio may also engage in cross-hedging by using forward
contracts in one currency to hedge against fluctuations in the value of
securities denominated in a different currency, when N&B Management
believes that there is a pattern of correlation between the two
currencies. The Portfolio may also purchase and sell forward contracts
for non-hedging purposes when N&B Management anticipates that a foreign
currency will appreciate or depreciate in value, but securities in that
currency do not present attractive investment opportunities and are not
held in the Portfolio's investment portfolio.
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When the Portfolio engages in foreign currency transactions for
hedging purposes, it will not enter into forward contracts to sell
currency or maintain a net exposure to such contracts if their
consummation would obligate the Portfolio to deliver an amount of foreign
currency in excess of the value of the Portfolio's portfolio securities or
other assets denominated in that currency. At the consummation of the
forward contract, the Portfolio may either make delivery of the foreign
currency or terminate its contractual obligation to deliver by purchasing
an offsetting contract obligating it to purchase the same amount of such
foreign currency at the same maturity date. If the Portfolio chooses to
make delivery of the foreign currency, it may be required to obtain such
currency through the sale of portfolio securities denominated in such
currency or through conversion of other assets of the Portfolio into such
currency. If the Portfolio engages in an offsetting transaction, it will
incur a gain or a loss to the extent that there has been a change in
forward contract prices. Closing purchase transactions with respect to
forward contracts are usually made with the currency trader who is a party
to the original forward contract.
The Portfolio is not required to enter into such transactions and
will not do so unless deemed appropriate by N&B Management.
Using forward contracts to protect the value of the Portfolio's
securities against a decline in the value of a currency does not eliminate
fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange which can be achieved at some future point
in time. The precise projection of short-term currency market movements
is not possible, and short-term hedging provides a means of fixing the
dollar value of only a portion of the Portfolio's foreign assets.
While the Portfolio may enter into forward contracts to reduce
currency exchange rate risks, transactions in such contracts involve
certain other risks. Thus, while the Portfolio may benefit from such
transactions, unanticipated changes in currency exchange rates may result
in a poorer overall performance for the Portfolio than if it had not
engaged in any such transactions. Moreover, there may be imperfect
correlation between the Portfolio's holdings of securities denominated in
a particular currency and forward contracts entered into by the Portfolio.
Such imperfect correlation may cause the Portfolio to sustain losses or
may prevent the Portfolio from achieving a complete hedge. The Portfolio
may experience delays in the settlement of its foreign currency
transactions.
An issuer of fixed income securities purchased by the Portfolio
may be domiciled in a country other than the country in whose currency the
instrument is denominated. The Portfolio may also invest in debt
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securities denominated in the European Currency Unit ("ECU"), which is a
"basket" consisting of a specified amount of the currencies of certain of
the member states of the European Union. The specific amounts of
currencies comprising the ECU may be adjusted by the Council of Ministers
of the European Union from time to time to reflect changes in relative
values of the underlying currencies. In addition, the Portfolio may
invest in securities denominated in other currency baskets. The market
for ECUs may become illiquid at times of uncertainty or rapid change in
the European currency markets, limiting the Portfolio's ability to prevent
potential losses.
Currency Futures and Options Thereon (Neuberger & Berman
INTERNATIONAL Portfolio). The Portfolio may enter into currency futures
contracts and options on such futures contracts in domestic and foreign
markets and may do so for hedging or non-hedging purposes (i.e., in an
effort to enhance income) as defined in CFTC regulations. The Portfolio
may sell a currency futures contract or a call option, or it may purchase
a put option on such futures contract, if N&B Management anticipates that
exchange rates for a particular currency will fall. Such a transaction
will be used as a hedge (or, in the case of a sale of a call option, a
partial hedge) against a decrease in the value of the Portfolio's
securities denominated in such currency. If N&B Management anticipates
that a particular currency will rise, the Portfolio may purchase a
currency futures contract or a call option to protect against an increase
in the price of securities which are denominated in a particular currency
and which the Portfolio intends to purchase. The Portfolio may also
purchase a currency futures contract, or a call option thereon, for non-
hedging purposes when N&B Management anticipates that a particular
currency will appreciate in value, but securities denominated in that
currency do not present an attractive investment and are not included in
the Portfolio's portfolio.
The sale of a currency futures contract creates an obligation by
the Portfolio, as seller, to deliver the amount of currency called for in
the contract at a specified future time for a specified price. The
purchase of a currency futures contract creates an obligation by the
Portfolio, as purchaser, to take delivery of an amount of currency at a
specified future time at a specified price. Although the terms of
currency futures contracts specify actual delivery or receipt, in most
instances the contracts are closed out before the settlement date without
the parties making or taking of delivery of the currency. A currency
futures contract is closed out by entering into an offsetting purchase or
sale transaction. To close out a currency futures contract sold by the
Portfolio, the Portfolio purchases a currency futures contract for the
same aggregate amount of currency and same delivery date. If the price in
the sale exceeds the price in the offsetting purchase, the Portfolio is
immediately paid the difference. Similarly, to close out a currency
futures contract purchased by the Portfolio, the Portfolio sells a
currency futures contract. If the offsetting sale price exceeds the
purchase price, the Portfolio realizes a gain. Likewise, if the
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offsetting sale price is less than the purchase price, the Portfolio
realizes a loss.
Unlike a currency futures contract, which requires the parties to
buy and sell currency on a set date, an option on a futures contract
entitles its holder to decide on or before a future date whether to enter
into such a contract. If the holder decides not to enter into the
contract, the premium paid for the option is lost. For the holder of an
option, there are no daily payments of cash for variation margin to
reflect changes in the value of the underlying contract, as there are by a
purchaser or seller of a currency futures contract.
A risk in employing currency futures contracts to protect against
price volatility of portfolio securities which are denominated in a
particular currency is that the prices of such currency futures contracts
may not completely correlate with the cash prices of the Portfolio's
securities. The correlation may be distorted by the fact that the
currency futures market may be dominated by short-term traders seeking to
profit from changes in exchange rates. This would reduce the value of
such contracts used for hedging purposes over a short-term period. Such
distortions are generally minor and would diminish as the contract
approaches maturity. Another risk is that N&B Management could be
incorrect in its expectation as to the direction or extent of various
exchange rate movements or the time span within which such movements will
take place. When the Portfolio purchases currency futures contracts, an
amount of securities, cash, or cash equivalents equal to the market value
of the currency futures contract (minus any required margin) will be
deposited in a segregated account to collateralize the position and
thereby limit the use of such futures contracts.
Put and call options on currency futures have characteristics
similar to those of other options. In particular, the ability to
establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market for such options.
Options on Foreign Currencies (Neuberger & Berman INTERNATIONAL
Portfolio). The Portfolio may purchase options on foreign currencies for
hedging purposes in a manner similar to currency futures contracts or
forward contracts. For example, a decline in the dollar value of a
foreign currency in which portfolio securities are denominated will reduce
the dollar value of such securities, even if their value in the foreign
currency remains constant. In order to protect against such decreases in
the value of portfolio securities, the Portfolio may purchase put options
on the foreign currency. If the value of the currency declines, the
Portfolio will have the right to sell such currency for a fixed amount of
dollars which exceeds the market value of such currency. This would
result in a gain that may offset, in whole or in part, the negative effect
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of currency depreciation on the value of the Portfolio's securities
denominated in that currency.
Conversely, if a rise in the dollar value of a currency is
projected for securities to be acquired by the Portfolio, thereby
increasing the cost of such securities, the Portfolio may purchase call
options on such currency. If the value of the currency increases
sufficiently, the Portfolio will have the right to purchase such currency
for a fixed amount of dollars which is less than the market value of such
currency. Such a purchase would result in a gain that may offset, at
least partially, the effect of any currency-related increase in the price
of securities the Portfolio intends to acquire.
As in the case of other types of options transactions, however,
the benefit the Portfolio derives from purchasing foreign currency options
will be reduced by the amount of the premium and related transaction
costs. In addition, if currency exchange rates do not move in the
direction or to the extent anticipated, the Portfolio could sustain losses
on transactions in foreign currency options which would deprive it of all
or a portion of the benefits of advantageous changes in such rates.
The Portfolio may also write options on foreign currencies for
hedging purposes. For example, if N&B Management anticipates a decline in
the dollar value of foreign currency denominated securities because of
declining exchange rates, the Portfolio could, instead of purchasing a put
option, write a call option on the relevant currency. If the expected
decline occurs, the option most likely will not be exercised, and the
decrease in value of portfolio securities will be offset, at least
partially, by the amount of the premium received by the Portfolio.
Similarly, the Portfolio could write a put option on the relevant
currency, instead of purchasing a call option, to hedge against an
anticipated increase in the dollar cost of securities to be acquired. If
exchange rates move in the manner projected, the put option most likely
will expire unexercised and allow the Portfolio to offset such increased
cost up to the amount of the premium.
However, as in the case of other types of options transactions,
the writing of a foreign currency option will constitute only a partial
hedge up to the amount of the premium and only if rates move in the
expected direction. If unanticipated exchange rate fluctuations occur,
the option may be exercised, and the Portfolio would be required to
purchase or sell the underlying currency at a loss which may not be fully
offset by the amount of the premium. As a result of writing options on
foreign currencies, the Portfolio also may be required to forego all or a
portion of the benefits which might otherwise have been obtained from
favorable movements in currency exchange rates.
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The Portfolio may purchase call options on foreign currencies for
non-hedging purposes when N&B Management anticipates that a currency will
appreciate in value, but securities denominated in that currency do not
present attractive investment opportunities and are not included in the
Portfolio's portfolio. The Portfolio may write (sell) put and covered
call options on any currency in order to realize greater income than would
be realized on portfolio securities alone. However, in writing covered
call options for income, the Portfolio may forego the opportunity to
profit from an increase in the market value of the underlying currency.
Also, when writing put options, the Portfolio accepts, in return for the
option premium, the risk that it may be required to purchase the
underlying currency at a price in excess of the currency's market value at
the time of purchase.
The Portfolio would normally purchase call options for non-
hedging purposes in anticipation of an increase in the market value of a
currency. The Portfolio would ordinarily realize a gain if, during the
option period, the value of such currency exceeded the sum of the exercise
price, the premium paid and transaction costs. Otherwise the Portfolio
would realize either no gain or a loss on the purchase of the call option.
Put options may be purchased by the Portfolio for the purpose of
benefiting from a decline in the value of currencies which it does not
own. The Portfolio would ordinarily realize a gain if, during the option
period, the value of the underlying currency decreased below the exercise
price sufficiently to more than cover the premium and transaction costs.
Otherwise the Portfolio would realize either no gain or a loss on the
purchase of the put option.
A call option on foreign currency written by the Portfolio is
"covered" if the Portfolio owns the underlying foreign currency, or if it
has an absolute and immediate right to acquire that foreign currency
without additional cash consideration. A call option is also covered if
the Portfolio holds a call on the same foreign currency for the same
principal amount as the call written where the exercise price of the call
held is (1) equal to or less than the exercise price of the call written
or (2) greater than the exercise price of the call written if the amount
of the difference is maintained by the Portfolio in cash or liquid, high-
grade debt securities in a segregated account with its custodian.
Limitations on Options, Futures Contracts and Foreign Currency
Transactions. The Portfolio is required to maintain margin deposits with,
or for the benefit of, futures commission merchants through which it
effects futures transactions. The Portfolio must deposit initial margin
each time it enters into a futures contract. Such initial margin is
usually equal to a percentage of the contract's value. In addition, daily
variation margin payments in cash are required to reflect gains and losses
on open futures positions. As a result, the Portfolio may be required to
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make additional margin payments during the term of a futures contract.
The Portfolio may not purchase or sell futures contracts (including
currency futures contracts) or related options (including certain options
on foreign currencies) on foreign or U.S. exchanges if immediately
thereafter the aggregate amount of initial margin deposits and premiums
paid on the Portfolio's existing positions (excluding futures contracts
and options entered into for bona fide hedging purposes and net of the
amount the options are "in the money") would exceed 5% of the market value
of the Portfolio's net assets. When the Portfolio purchases futures
contracts or writes put options thereon, the Portfolio will deposit an
amount of cash, cash equivalents or securities denominated in the
appropriate currency equal to the market value of the futures contracts
and options (less any related margin deposits) in a segregated account
with its custodian to collateralize the position, thereby limiting the use
of such futures contracts. Pursuant to an undertaking made to a state
securities administrator, the Portfolio will not invest more than 5% of
its total assets in instruments commonly known as options, financial
futures, or stock index futures, other than hedging positions or positions
that are covered by cash or securities. Also, the Portfolio has
undertaken that it will not invest more than 5% of its total assets in
puts, calls, straddles, spreads, or any combination thereof.
When the Portfolio enters into forward contracts for the sale or
purchase of currencies, the Portfolio will either cover its position or
establish a segregated account. The Portfolio will consider its position
covered if it has securities in the currency subject to the forward
contract, or otherwise has the right to obtain that currency at no
additional cost. In the alternative, the Portfolio will place cash which
is not available for investment, liquid, high-grade debt securities or
other securities (denominated in the foreign currency subject to the
forward contract) in a separate account. The amounts in such separate
account will equal the value of the Portfolio's assets which are committed
to the consummation of foreign currency exchange contracts. If the value
of the securities placed in the separate account declines, the Portfolio
will place additional cash or securities in the account on a daily basis
so that the value of the account will equal the amount of the Portfolio's
commitments with respect to such contracts.
The extent to which the Portfolio may enter into futures and
options transactions may be limited by the requirements of federal income
tax law applicable to Neuberger & Berman INTERNATIONAL Fund for
qualification as a RIC. See "Additional Tax Information."
Short Sales (Neuberger & Berman INTERNATIONAL Portfolio). The
Portfolio may enter into short sales of securities to the extent permitted
by its non-fundamental investment policies and limitations. Under
applicable guidelines of the SEC staff, if the Portfolio engages in a
short sale (other than a short sale against-the-box), it must put in a
segregated account (not with the broker) an amount of cash or U.S.
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Government securities equal to the difference between (1) the market value
of the securities sold short at the time they were sold short and (2) any
cash or U.S. Government securities required to be deposited as collateral
with the broker in connection with the short sale (not including the
proceeds from the short sale). In addition, until the Portfolio replaces
the borrowed security, it must daily maintain the segregated account at
such a level that (1) the amount deposited in it plus the amount deposited
with the broker as collateral equals the current market value of the
securities sold short, and (2) the amount deposited in it plus the amount
deposited with the broker as collateral is not less than the market value
of the securities at the time they were sold short.
The effect of short selling on the Portfolio is similar to the
effect of leverage. Short selling may exaggerate changes in the
Portfolio's and Neuberger & Berman International Fund's NAVs and yields.
Short selling may also produce higher than normal portfolio turnover,
which may result in increased transaction costs to the Portfolio and may
result in gains from the sale of securities deemed to have been held for
less than three months. Such gains must be limited in order for Neuberger
& Berman INTERNATIONAL Fund to continue to qualify as a RIC. See
"Additional Tax Information."
Fixed Income Securities (All Portfolios). While the emphasis of
the Portfolios' investment programs is on common stocks and other equity
securities (including preferred stocks and securities convertible into or
exchangeable for common stocks), the Portfolios may also invest in money
market instruments, U.S. Government or Agency Securities, and other fixed
income securities. Each Portfolio (except Neuberger & Berman
INTERNATIONAL Portfolio) may invest in corporate bonds and debentures
receiving one of the four highest ratings from Standard & Poor's ("S&P"),
Moody's Investors Service, Inc. ("Moody's"), or any other nationally
recognized statistical rating organization ("NRSRO") or, if not rated by
any NRSRO, deemed comparable by N&B Management to such rated securities
("Comparable Unrated Securities"). In addition, Neuberger & Berman
PARTNERS Portfolio may invest up to 15% of its net assets in corporate
debt securities rated below investment grade or Comparable Unrated
Securities. The ratings of an NRSRO represent its opinion as to the
quality of securities it undertakes to rate. Ratings are not absolute
standards of quality; consequently, securities with the same maturity,
coupon, and rating may have different yields. The Portfolios rely
primarily on ratings assigned by S&P and Moody's, which are described in
Appendix A to this SAI.
Neuberger & Berman INTERNATIONAL Portfolio may invest in foreign
corporate bonds and debentures and sovereign debt instruments issued or
guaranteed by foreign governments, their agencies or instrumentalities.
Neuberger & Berman INTERNATIONAL Portfolio may invest in debt securities
of any rating, including those rated below investment grade and Comparable
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Unrated Securities. Foreign debt securities are subject to risks similar
to those of other foreign securities.
Fixed income securities are subject to the risk of an issuer's
inability to meet principal and interest payments on its obligations
("credit risk") and are subject to price volatility due to such factors as
interest rate sensitivity, market perception of the creditworthiness of
the issuer, and general market liquidity ("market risk"). Lower-rated
securities are more likely to react to developments affecting market and
credit risk than are more highly rated securities, which react primarily
to movements in the general level of interest rates. Debt securities in
the lowest rating categories may involve a substantial risk of default or
may be in default. Changes in economic conditions or developments
regarding the individual issuer are more likely to cause price volatility
and weaken the capacity of the issuer of such securities to make principal
and interest payments than is the case for higher-grade debt securities.
An economic downturn affecting the issuer may result in an increased
incidence of default. The market for lower-rated securities may be
thinner and less active than for higher-rated securities. Pricing of
thinly traded securities requires greater judgment than pricing of
securities for which market transactions are regularly reported. N&B
Management will invest in such securities only when it concludes that the
anticipated return on such an investment to Neuberger & Berman PARTNERS
Portfolio or Neuberger & Berman INTERNATIONAL Portfolio and their
corresponding Funds warrants exposure to the additional level of risk.
Subsequent to its purchase by a Portfolio, an issue of debt secu-
rities may cease to be rated or its rating may be reduced, so that the
securities would not be eligible for purchase by that Portfolio. In such
a case, Neuberger & Berman SOCIALLY RESPONSIVE Portfolio will engage in an
orderly disposition of the downgraded securities, and each other Portfolio
(except Neuberger & Berman INTERNATIONAL Portfolio) will engage in an
orderly disposition of the downgraded securities to the extent necessary
to ensure that the Portfolio's holdings of such securities will not exceed
5% of its net assets. N&B Management will make a determination as to
whether Neuberger & Berman INTERNATIONAL Portfolio should dispose of the
downgraded securities.
Commercial Paper (All Portfolios). Commercial paper is a short-
term debt security issued by a corporation or bank for purposes such as
financing current operations. The Portfolios may invest only in
commercial paper receiving the highest rating from S&P (A-1) or Moody's
(P-1), or deemed by N&B Management to be of equivalent quality. Neuberger
& Berman INTERNATIONAL Portfolio may invest in such commercial paper as a
defensive measure, to increase liquidity or as needed for segregated
accounts.
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Each Portfolio may invest in commercial paper that cannot be
resold to the public without an effective registration statement under the
1933 Act. While restricted commercial paper normally is deemed illiquid,
N&B Management may in certain cases determine that such paper is liquid,
pursuant to guidelines established by the Portfolio Trustees.
Zero Coupon Securities (Neuberger & Berman PARTNERS and Neuberger
& Berman SOCIALLY RESPONSIVE Portfolios). Each of these Portfolios may
invest up to 5% of its net assets in zero coupon securities, which are
debt obligations that do not entitle the holder to any periodic payment of
interest prior to maturity or that specify a future date when the
securities begin to pay current interest. Zero coupon securities are
issued and traded at a discount from their face amount or par value. This
discount varies depending on prevailing interest rates, the time remaining
until cash payments begin, the liquidity of the security, and the
perceived credit quality of the issuer.
The discount on zero coupon securities ("original issue dis-
count") is taken into account by each Portfolio prior to the receipt of
any actual payments. Because each Fund must distribute substantially all
of its income (including its pro rata share of its corresponding
Portfolio's original issue discount) to its shareholders each year for
income and excise tax purposes (see "Additional Tax Information --
Taxation of the Funds"), a Portfolio may have to dispose of portfolio
securities under disadvantageous circumstances to generate cash, or may be
required to borrow, to satisfy its corresponding Fund's distribution
requirements.
The market prices of zero coupon securities generally are more
volatile than the prices of securities that pay interest periodically.
Zero coupon securities are likely to respond to changes in interest rates
to a greater degree than other types of debt securities having similar
maturities and credit quality.
Convertible Securities (All Portfolios). The Portfolios may
invest in convertible securities. A convertible security entitles the
holder to receive interest paid or accrued on debt or the dividend paid on
preferred stock until the convertible security matures or is redeemed,
converted or exchanged. Before conversion, such securities ordinarily
provide a stream of income with generally higher yields than common stocks
of the same or similar issuers, but lower than the yield on non-
convertible debt. Convertible securities are usually subordinated to
comparable-tier non-convertible securities but rank senior to common stock
in a corporation's capital structure. The value of a convertible security
is a function of (1) its yield in comparison to the yields of other
securities of comparable maturity and quality that do not have a
conversion privilege and (2) its worth if converted into the underlying
common stock.
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Convertible securities are typically issued by smaller
capitalization companies whose stock prices may be volatile. The price of
a convertible security often reflects variations in the price of the
underlying common stock in a way that non-convertible debt does not. A
convertible security may be subject to redemption at the option of the
issuer at a price established in the security's governing instrument. If
a convertible security held by a Portfolio is called for redemption, the
Portfolio will be required to convert it into the underlying common stock,
sell it to a third party or permit the issuer to redeem the security. Any
of these actions could have an adverse effect on the Portfolio's and the
corresponding Fund's ability to achieve their investment objectives.
Preferred Stock (All Portfolios). The Portfolios may invest in
preferred stock. Unlike interest payments on debt securities, dividends
on preferred stock are generally payable at the discretion of the issuer's
board of directors, although preferred shareholders may have certain
rights if dividends are not paid. Shareholders may suffer a loss of value
if dividends are not paid and generally have no legal recourse against the
issuer. The market prices of preferred stocks are generally more
sensitive to changes in the issuer's creditworthiness than are the prices
of debt securities.
NEUBERGER & BERMAN FOCUS PORTFOLIO - DESCRIPTION OF ECONOMIC SECTORS.
Neuberger & Berman FOCUS Portfolio seeks to achieve its invest-
ment objective by investing principally in common stocks in the following
thirteen multi-industry economic sectors, normally concentrating at least
90% of its investments in not more than six such sectors:
(1) AUTOS AND HOUSING SECTOR: Companies engaged in design,
production, or sale of automobiles, automobile parts, mobile homes, or
related products ("automobile industries") or design, construction,
renovation, or refurbishing of residential dwellings. The value of
securities of companies in the automobile industries is affected by, among
other things, foreign competition, the level of consumer confidence and
consumer debt, and installment loan rates. The housing construction
industry may be affected by the level of consumer confidence and consumer
debt, mortgage rates, tax laws, and the inflation outlook.
(2) CONSUMER GOODS AND SERVICES SECTOR: Companies engaged in
providing consumer goods or services, including design, processing,
production, sale, or storage of packaged, canned, bottled, or frozen foods
and beverages and design, production, or sale of home furnishings,
appliances, clothing, accessories, cosmetics, or perfumes. Certain of
these companies are subject to government regulation affecting the use of
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various food additives and production methods, which could affect
profitability. Also, the success of food- and fashion-related products
may be strongly affected by fads, marketing campaigns, health concerns,
and other factors affecting supply and demand.
(3) DEFENSE AND AEROSPACE SECTOR: Companies engaged in re-
search, manufacture, or sale of products or services related to the
defense or aerospace industries, including air transport; data processing
or computer-related services; communications systems; military weapons or
transportation; general aviation equipment, missiles, space launch
vehicles, or spacecraft; machinery for guidance, propulsion, or control of
flight vehicles; and airborne or ground-based equipment essential to the
test, operation, or maintenance of flight vehicles. Because these
companies rely largely on U.S. (and foreign) governmental demand for their
products and services, their financial conditions are heavily influenced
by defense spending policies.
(4) ENERGY SECTOR: Companies involved in the production,
transmission, or marketing of energy from oil, gas, or coal, as well as
nuclear, geothermal, oil shale, or solar sources of energy (but excluding
public utility companies). Also included are companies that provide
component products or services for those activities. The value of these
companies' securities varies based on the price and supply of energy fuels
and may be affected by international politics, energy conservation, the
success of exploration projects, environmental considerations, and the tax
and other regulatory policies of various governments.
(5) FINANCIAL SERVICES SECTOR: Companies providing financial
services to consumers or industry, including commercial banks and savings
and loan associations, consumer and industrial finance companies,
securities brokerage companies, leasing companies, and insurance
companies. These companies are subject to extensive governmental
regulations. Their profitability may fluctuate significantly as a result
of volatile interest rates, concerns about particular banks and savings
institutions, and general economic conditions.
(6) HEALTH CARE SECTOR: Companies engaged in design, manu-
facture, or sale of products or services used in connection with the
provision of health care, including pharmaceutical companies; firms that
design, manufacture, sell, or supply medical, dental, or optical products,
hardware, or services; companies involved in biotechnology, medical
diagnostic, or biochemical research and development; and companies that
operate health care facilities. Many of these companies are subject to
government regulation and potential health care reforms, which could
affect the price and availability of their products and services. Also,
products and services of these companies could quickly become obsolete.
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(7) HEAVY INDUSTRY SECTOR: Companies engaged in research,
development, manufacture, or marketing of products, processes, or services
related to the agriculture, chemicals, containers, forest products,
non-ferrous metals, steel, or pollution control industries, including
synthetic and natural materials (for example, chemicals, plastics,
fertilizers, gases, fibers, flavorings, or fragrances), paper, wood
products, steel, and cement. Certain of these companies are subject to
state and federal regulation, which could require alteration or cessation
of production of a product, payment of fines, or cleaning of a disposal
site. Furthermore, because some of the materials and processes used by
these companies involve hazardous components, there are additional risks
associated with their production, handling, and disposal. The risk of
product obsolescence also is present.
(8) MACHINERY AND EQUIPMENT SECTOR: Companies engaged in the
research, development, or manufacture of products, processes, or services
relating to electrical equipment, machinery, pollution control, or
construction services, including transformers, motors, turbines, hand
tools, earth-moving equipment, and waste disposal services. The
profitability of most of these companies may fluctuate significantly in
response to capital spending and general economic conditions. As is the
case for the heavy industry sector, there are risks associated with the
production, handling, and disposal of materials and processes that involve
hazardous components and the risk of product obsolescence.
(9) MEDIA AND ENTERTAINMENT SECTOR: Companies engaged in
design, production, or distribution of goods or services for the media
industries (including television or radio broadcasting or manufacturing,
publishing, recordings and musical instruments, motion pictures, and
photography) and the entertainment industries (including sports arenas,
amusement and theme parks, gaming casinos, sporting goods, camping and
recreational equipment, toys and games, travel-related services, hotels
and motels, and fast food and other restaurants). Many products produced
by companies in this sector -- for example, video and electronic games --
may become obsolete quickly. Additionally, companies engaged in tele-
vision and radio broadcast are subject to government regulation.
(10) RETAILING SECTOR: Companies engaged in retail distribu-
tion of home furnishings, food products, clothing, pharmaceuticals,
leisure products, or other consumer goods, including department stores,
supermarkets, and retail chains specializing in particular items such as
shoes, toys, or pharmaceuticals. The value of these companies' securities
fluctuates based on consumer spending patterns, which depend on inflation
and interest rates, the level of consumer debt, and seasonal shopping
habits. The success or failure of a company in this highly competitive
sector depends on its ability to predict rapidly changing consumer tastes.
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(11) TECHNOLOGY SECTOR: Companies that are expected to have
or develop products, processes, or services that will provide, or will
benefit significantly from, technological advances and improvements or
future automation trends, including semiconductors, computers and
peripheral equipment, scientific instruments, computer software,
telecommunications equipment, and electronic components, instruments, and
systems. These companies are sensitive to foreign competition and import
tariffs. Also, many of their products may become obsolete quickly.
(12) TRANSPORTATION SECTOR: Companies involved in providing
transportation of people and products, including airlines, railroads, and
trucking firms. Revenues of these companies are affected by fluctuations
in fuel prices and government regulation of fares.
(13) UTILITIES SECTOR: Companies in the public utilities
industry and companies that derive a substantial majority of their
revenues through supplying public utilities (including companies engaged
in the manufacture, production, generation, transmission, or sale of gas
and electric energy) and that provide telephone, telegraph, satellite,
microwave, and other communication facilities to the public. The gas and
electric public utilities industries are subject to various uncertainties,
including the outcome of political issues concerning the environment,
prices of fuel for electric generation, availability of natural gas, and
risks associated with the construction and operation of nuclear power
facilities.
NEUBERGER & BERMAN SOCIALLY RESPONSIVE PORTFOLIO - DESCRIPTION OF SOCIAL
POLICY
Background Information on Socially Responsive Investing
In an era when many people are concerned about the relationship
between business and society, socially responsive investing ("SRI") is a
mechanism for assuring that investors' social values are reflected in
their investment decisions. As such, SRI is a direct descendent of the
successful effort begun in the early 1970's to encourage companies to
divest their South African operations and subscribe to the Sullivan
Principles. Today, a growing number of individuals and institutions are
applying similar strategies to a broad range of problems.
Although there are many strategies available to the socially
responsive investor, including proxy activism, below-market loans to
community projects, and venture capital, the SRI strategies used by the
Portfolio generally fall into two categories:
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AVOIDANCE INVESTING. Most socially responsive investors
seek to avoid holding securities of companies whose products or policies
are seen as being at odds with the social good. The most common
exclusions historically have involved tobacco companies and weapons
manufacturers.
LEADERSHIP INVESTING. A growing number of investors actively
look for companies with progressive programs that are exemplary or
companies which make it their business to try to solve some of the
problems of today's society.
The marriage of social and financial objectives would not have
surprised Adam Smith who was, first and foremost, a moral philosopher.
The Wealth of Nations is firmly rooted in the Enlightenment conviction
that the purpose of capital is the social good and the related belief that
idle capital is both wasteful and unethical. But, what very likely would
have surprised Smith is the sheer complexity of the social issues we face
today and the diversity of our attitudes toward the social good. War and
peace, race and gender, the distribution of wealth, and the conservation
of natural resources -- the social agenda is long and compelling. It is
also something about which reasonable people differ. What should
society's priorities be? What can and should be done about them? And
what is the role of business in addressing them? Since corporations are
on the front lines of so many key issues in today's world, a growing
number of investors feel that a corporation's role cannot be ignored.
This is true of some of the most important issues of the day such as equal
opportunity and the environment.
The Socially Responsive Database
Neuberger & Berman, L.P. ("Neuberger & Berman"), the Portfolio's
sub-adviser, maintains a proprietary database of information about the
social impact of the companies it follows. N&B Management uses the
database to evaluate social issues after it deems a stock acceptable from
a financial standpoint for acquisition by the Portfolio. More and more
frequently, however, N&B Management is finding that, by monitoring social
issues, it gains insight into the financial well-being of a company
because of a convergence of social and financial criteria on a company's
bottom line. This is especially evident in the areas of product quality
and marketing, workforce diversity, and the environment. The aim of the
database is to be as accurate, comprehensive, and flexible as possible,
given that much of the information concerning corporate responsibility
comes from subjective sources. Information for the database is gathered
by Neuberger & Berman in many categories and then analyzed by N&B
Management in the following six categories of corporate responsibility:
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WORKPLACE DIVERSITY AND EMPLOYMENT. N&B Management looks for
companies that show leadership in areas such as employee training and
promotion policies and benefits, such as flextime, generous profit
sharing, and parental leave. N&B Management looks for active programs to
promote women and minorities and takes into account their representation
among the officers and members of an issuer's board of directors. As a
basis for exclusion, N&B Management looks for Equal Employment Opportunity
Act infractions and Occupational Safety and Health Act violations;
examines each case in terms of severity, frequency, and time elapsed since
the incident; and considers actions taken by the company since the
violation. N&B Management also monitors companies' progress and attitudes
toward these issues.
ENVIRONMENT. A company's impact on the environment depends
largely on the industry. Therefore, N&B Management examines a company's
environmental record vis-a-vis those of its peers in the industry. All
companies operating in an industry with inherently high environmental
risks are likely to have had problems in such areas as toxic chemical
emissions, federal and state fines, and Superfund sites. For these
companies, N&B Management examines their problems in terms of severity,
frequency, and elapsed time. N&B Management then balances the record
against whatever leadership the company may have demonstrated in terms of
environmental policies, procedures, and practices. N&B Management defines
an environmental leadership company as one that puts into place strong
affirmative programs to minimize emissions, promote safety, reduce waste
at the source, insure energy conservation, protect natural resources, and
incorporate recycling into its processes and products. N&B Management
looks for the commitment and active involvement of senior management in
all these areas. Several major manufacturers which still produce
substantial amounts of pollution are among the leaders in developing
outstanding waste source reduction and remediation programs.
PRODUCT. N&B Management considers company announcements, press
reports, and public interest publications relating to the health, safety,
quality, labeling, advertising, and promotion of both consumer and
industrial products. N&B Management takes note of companies with a strong
commitment to quality and with marketing practices which are ethical and
consumer-friendly. N&B Management pays particular attention to companies
whose products and services promote progressive solutions to social
problems.
PUBLIC HEALTH. N&B Management measures the participation of
companies in such industries and markets as alcohol, tobacco, gambling and
nuclear power. N&B Management also considers the impact of products and
marketing activities related to those products on nutritional and other
health concerns, both domestically and in foreign markets.
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WEAPONS. N&B Management keeps track of domestic military sales
and, whenever possible, foreign military sales and categorizes them as
nuclear weapons related, other weapons related, and non-weapon military
supplies, such as micro-chip manufacturers and companies that make
uniforms for military personnel.
CORPORATE CITIZENSHIP. N&B Management gathers information about
a company's participation in community affairs, its policies with respect
to charitable contributions, and its support of education and the arts.
N&B Management looks for companies with a focus, dealing with issues not
just by making financial contributions, but also by asking the questions:
What can we do to help? What do we have to offer? Volunteerism, high-
school mentoring programs, scholarships and grants, and in-kind donations
to specific groups are just a few ways that companies have responded to
these questions.
Impementation of Social Policy
Companies deemed acceptable by N&B Management from a financial
standpoint are analyzed using Neuberger & Berman's database. The
companies are then evaluated by the portfolio managers to determine if the
companies' policies, practices, products, and services withstand scrutiny
in the following major areas of concern: the environment and workplace
diversity and employment. Companies are then further evaluated to
determine their track record in issues and areas of concern such as public
health, weapons, product, and corporate citizenship.
The issues and areas of concern that are tracked lend themselves
to objective analysis in varying degrees. Few, however, can be resolved
entirely on the basis of scientifically demonstrable facts. Moreover, a
substantial amount of important information comes from sources that do not
purport to be disinterested. Thus, the quality and usefulness of the
information in the database depend on Neuberger & Berman's ability to tap
a wide variety of sources and on the experience and judgement of the
people at N&B Management who interpret the information.
In applying the information in the database to stock selection
for the Portfolio, N&B Management considers several factors. N&B
Management examines the severity and frequency of various infractions, as
well as the time elapsed since their occurrence. N&B Management also
takes into account any remedial action which has been taken by the company
relating to these infractions. N&B Management notes any quality
innovations made by the company in its effort to create positive change
and looks at the company's overall social trend.
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PERFORMANCE INFORMATION
Each Fund's performance figures are based on historical
earnings and are not intended to indicate future performance. The share
price and total return of each Fund will vary, and an investment in a
Fund, when redeemed, may be worth more or less than an investor's original
cost.
Total Return Computations
Each Fund may advertise certain total return information.
An average annual compounded rate of return ("T") may be computed by using
the redeemable value at the end of a specified period ("ERV") of a
hypothetical initial investment of $1,000 ("P") over a period of time
("n") according to the formula:
n
P(1+T) = ERV
Average annual total return smooths out year-to-year variations
and, in that respect, differs from actual year-to-year results.
The average annual total returns for Neuberger & Berman MANHATTAN
Fund and its predecessor for the one-, five-, and ten-year periods ended
August 31, 1995, were 26.00%, 17.10%, and 15.01%, respectively. If an
investor had invested $1,000 in the Fund's or its predecessor's shares on
September 1, 1994, September 1, 1990, and September 1, 1985, the NAV of
that investor's holdings would have been $1,260, $2,201, and $4,051,
respectively, on August 31, 1995. Appendix B to this SAI includes a table
showing the results of an investment in the Fund's predecessor of $100,000
on March 1, 1979, when N&B Management became its investment adviser, and a
systematic withdrawal plan under which, on a monthly basis, 8% of the
initial investment was withdrawn each year through August 31, 1995, plus
other tables.
The average annual total returns for Neuberger & Berman GENESIS
Fund and its predecessor for the one- and five-year periods ended August
31, 1995, and for the period from September 27, 1988 (commencement of
operations) through August 31, 1995, were 19.69%, 17.25%, and 12.54%,
respectively. If an investor had invested $1,000 in that predecessor's
shares on September 27, 1988, the NAV of that investor's holdings would
have been $2,268 on August 31, 1995. Appendix B to this SAI includes a
table showing the growth of an investment in the Fund's predecessor of
$10,000 on September 27, 1988 through August 31, 1995.
The average annual total returns for Neuberger & Berman FOCUS
Fund and its predecessor for the one-, five-, and ten-year periods ended
August 31, 1995, were 27.47%, 18.52%, and 14.77%, respectively. Appendix
B to this SAI includes a table showing the growth of an investment in the
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Fund's predecessor of $200,000 on October 19, 1955, the date of its
inception, and a systematic withdrawal plan under which, on a monthly
basis, 10% of the initial investment was withdrawn each year through
August 31, 1995, plus other tables.
The average annual total returns for Neuberger & Berman GUARDIAN
Fund and its predecessor for the one-, five-, and ten-year periods ended
August 31, 1995, were 24.06%, 20.14%, and 15.66%, respectively. Appendix
B to this SAI includes tables showing (1) the results, in 5-year incre-
ments, of an investment of $200,000 in that predecessor on June 1, 1950,
the date of its inception, and a systematic withdrawal plan under which,
on a monthly basis, 10% of the initial investment was withdrawn each year,
and (2) the results of investing $5,000 per year at the highest and lowest
prices per share of the Fund or its predecessor since 1980, plus other
tables.
The average annual total returns for Neuberger & Berman PARTNERS
Fund and its predecessor for the one-, five-, and ten-year periods ended
August 31, 1995, were 21.53%, 16.05%, and 14.43%, respectively. Appendix
B to this SAI includes tables showing (1) the results of an investment of
$100,000 in that predecessor on January 1, 1977, and a systematic with-
drawal plan under which, on a monthly basis, 8% of the initial investment
was withdrawn each year, and (2) the results of investing $5,000 per year
at the highest and lowest prices per share of the Fund or its predecessor
since 1980, plus other tables.
The average annual total returns for Neuberger & Berman SOCIALLY
RESPONSIVE Fund for the one-year period ended August 31, 1995, and for the
period from March 16, 1994 (commencement of operations) through August 31,
1995, were 17.82% and 12.42%, respectively.
The average annual total returns for Neuberger & Berman
INTERNATIONAL Fund for the one-year period ended August 31, 1995, and for
the period from June 15, 1994 (commencement of operations) through
August 31, 1995, were 2.06% and 6.02%, respectively. During those
periods, the then investment adviser to Neuberger & Berman INTERNATIONAL
Portfolio and N&B Management, as the Fund's administrator, reimbursed
certain expenses of the Portfolio and the Fund, respectively. Such action
had the effect of increasing total return. If an investor had invested
$10,000 in the Fund's shares on June 15, 1994, the NAV of that investor's
holdings would have been $10,732 on August 31, 1995.
BNP-N&B Global Asset Management L.P. ("BNP-N&B Global"), a joint
venture of Banque Nationale de Paris ("BNP") and Neuberger & Berman,
served as the investment adviser to Neuberger & Berman INTERNATIONAL
Portfolio from its inception until November 1, 1995. On that date, N&B
Management became that Portfolio's investment manager, and Neuberger &
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Berman became its sub-adviser; there has been no change in the personnel
responsible for daily management of the Portfolio.
COMPARATIVE INFORMATION
Prior to January 5, 1989, the investment policies of the
predecessor of Neuberger & Berman FOCUS Fund required that at least 80% of
its investments normally be in energy-related investments; prior to
November 1, 1991, those investment policies required that at least 25% of
its investments normally be in the energy sector. Neuberger & Berman
FOCUS Fund may be required, under applicable law, to include information
reflecting the predecessor's performance and expenses before November 1,
1991, in its advertisements, sales literature, financial statements, and
other documents filed with the SEC and/or provided to current and
prospective shareholders. Investors should be aware that such information
may not accurately reflect the level of performance and expenses that
would have been experienced had the predecessor been operating under the
Fund's current investment policies.
From time to time each Fund's performance may be compared with:
(1) data (that may be expressed as rankings or
ratings) published by independent services or
publications (including newspapers, newsletters, and
financial periodicals) that monitor the performance of
mutual funds, such as Lipper Analytical Services, Inc.,
C.D.A. Investment Technologies, Inc., Wiesenberger
Investment Companies Service, Investment Company Data
Inc., Morningstar, Inc., Micropal Incorporated, and
quarterly mutual fund rankings by Money, Fortune, Forbes,
Business Week, Personal Investor, and U.S. News & World
Report magazines, The Wall Street Journal, New York
Times, Kiplingers Personal Finance, and Barron's News-
paper, or
(2) recognized stock and other indices, such as
the S&P 500 Composite Stock Price Index ("S&P 500
Index"), S&P Small Cap 600 Index ("S&P 600 Index"), S&P
Mid Cap 400 Index ("S&P 400 Index"), Russell 2000 Stock
Index, Dow Jones Industrial Average ("DJIA"), Wilshire
1750, Nasdaq Composite Index, Value Line Index, U.S.
Department of Labor Consumer Price Index ("Consumer Price
Index"), College Board Survey of Colleges Annual
Increases of College Costs, Kanon Bloch's Family
Performance Index, the Barra Growth Index, the Barra
Value Index, the EAFE Index, the Financial Times World
XUS Index, and various other domestic, international, and
global indices. The S&P 500 Index is a broad index of
common stock prices, while the DJIA represents a narrower
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<PAGE>
segment of industrial companies. The S&P 600 Index
includes stocks that range in market value from $27
million to $880 million, with an average of $302 million.
The S&P 400 Index measures mid-sized companies with an
average market capitalization of $1.2 billion. The EAFE
Index is an unmanaged index of common stock prices of
more than 900 companies from Europe, Australia, and the
Far East translated into U.S. dollars. The Financial
Times World XUS Index is an index of 24 international
markets, excluding the U.S. market. Each assumes
reinvestment of distributions and is calculated without
regard to tax consequences or the costs of investing.
Each Portfolio may invest in different types of
securities from those included in some of the above
indices.
Neuberger & Berman SOCIALLY RESPONSIVE Fund may also be compared
to various socially responsive indices, including The Domini Social Index
and those developed by the quantitative department of Prudential
Securities, such as that department's Large and Mid-Cap portfolio indices
for various breakdowns ("Sin" Stock Free, Cigarette-Stock Free, S&P
Composite, etc.).
Evaluations of the Funds' performance, their total returns, and
comparisons may be used in advertisements and in information furnished to
current and prospective shareholders (collectively, "Advertisements").
The Funds may also be compared to individual asset classes such as common
stocks, small-cap stocks, or Treasury bonds, based on information supplied
by Ibbotson and Sinquefield.
OTHER PERFORMANCE INFORMATION
From time to time, information about a Portfolio's portfolio
allocation and holdings as of a particular date may be included in
Advertisements for the corresponding Fund. This information, for example,
may include the Portfolio's portfolio diversification by asset type or, in
the case of Neuberger & Berman SOCIALLY RESPONSIVE Portfolio, by the
social characteristics of companies owned. Information used in
Advertisements may include statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds that may be
employed to meet specific financial goals, such as (1) funding retirement,
(2) paying for children's education, and (3) financially supporting aging
parents.
N&B Management believes that many of its common stock funds may
be attractive investment vehicles for conservative investors who are
interested in long-term appreciation from stock investments, but who have
a moderate tolerance for risk. Such investors may include, for example,
individuals (1) planning for or facing retirement, (2) receiving or
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<PAGE>
expecting to receive lump-sum distributions from individual retirement
accounts ("IRAs"), self-employed individual retirement plans ("Keogh
plans"), or other retirement plans, (3) anticipating rollovers of CDs or
IRAs, Keogh plans, or other retirement plans, and (4) receiving a
significant amount of money as a result of inheritance, sale of a
business, or termination of employment.
Investors who may find Neuberger & Berman PARTNERS Fund,
Neuberger & Berman GUARDIAN Fund or Neuberger & Berman FOCUS Fund to be an
attractive investment vehicle also include parents saving to meet college
costs for their children. For instance, the cost of a college education
is rapidly approaching the cost of the average family home. Four years'
tuition, room and board at a top private institution can already cost over
$80,000. If college expenses continue to increase at current rates, by
the time today's pre-schooler enters the ivy-covered halls in 2009, four
years at a private college may easily cost $200,000!5/
Information relating to inflation and its effects on the
dollar also may be included in Advertisements. For example, after ten
years, the purchasing power of $25,000 would shrink to $16,621, $14,968,
$13,465, and $12,100, respectively, if the annual rates of inflation
during that period were 4%, 5%, 6%, and 7%, respectively. (To calculate
the purchasing power, the value at the end of each year is reduced by the
inflation rate for the ten-year period.)
Information regarding the effects of automatic invest-
ment, systematic withdrawal plans, investing at market highs and/or lows,
and investing early versus late for retirement plans also may be included
in Advertisements, if appropriate.
From time to time the investment philosophy of N&B Man-
agement's founder, Roy R. Neuberger, may be included in the Funds'
Advertisements. This philosophy is described in further detail in "The
Art of Investing: A Conversation with Roy Neuberger," attached as Appendix
C to this SAI.
CERTAIN RISK CONSIDERATIONS
Although each Portfolio seeks to reduce risk by investing
in a diversified portfolio, diversification does not eliminate all risk.
There can, of course, be no assurance that any Portfolio will achieve its
investment objective, and an investment in a Fund involves certain risks
that are described in the sections entitled "Investment Programs" and
"Description of Investments" in the Prospectus and "Investment Information
-- Additional Investment Information" in this SAI.
5/ Source: College Board, 1994, 1995 Annual Survey of Colleges,
Princeton, NJ, assuming an average 6% increase in annual expenses.
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<PAGE>
TRUSTEES AND OFFICERS
The following table sets forth information concerning the
trustees and officers of the Trusts, including their addresses and
principal business experience during the past five years. Some persons
named as trustees and officers also serve in similar capacities for other
funds, and (where applicable) their corresponding portfolios, administered
or managed by N&B Management and Neuberger & Berman.
THE TRUST AND EQUITY MANAGERS TRUST:
<TABLE>
<CAPTION>
Positions Held
With the Trust and
Name, Age, and Address(1) Equity Managers Trust Principal Occupation(s)(2)
<C> <S> <C>
Faith Colish (60) Trustee of each Trust Attorney at Law, Faith Colish, A
63 Wall Street Professional Corporation.
24th Floor
New York, NY 10005
Donald M. Cox (73) Trustee of each Trust Retired. Formerly Senior Vice President
435 East 52nd Street and Director of Exxon Corporation;
New York, NY 10022 Director of Emigrant Savings Bank.
Stanley Egener* (61) Chairman of the Board, Partner of Neuberger & Berman; President
Chief Executive Officer, and Director of N&B Management;
and Trustee of each Chairman of the Board, Chief Executive
Trust Officer, and Trustee of eight other
mutual funds for which N&B Management
acts as investment manager or
administrator.
Alan R. Gruber (68) Trustee of each Trust Chairman and Chief Executive Officer of
Orion Capital Corporation Orion Capital Corporation (property and
600 Fifth Avenue casualty insurance); Director of
24th Floor Trenwick Group, Inc. (property and
New York, NY 10020 casualty reinsurance); Chairman of the
Board and Director of Guaranty National
Corporation (property and casualty
insurance); formerly Director of Ketema,
Inc. (diversified manufacturer).
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<PAGE>
Positions Held
With the Trust and
Name, Age, and Address(1) Equity Managers Trust Principal Occupation(s)(2)
Howard A. Mileaf (57) Trustee of each Trust Vice President and Special Counsel to
Wheeling Pittsburgh Wheeling Pittsburgh Corporation (holding
Corporation company) since 1992; formerly Vice
110 East 59th Street President and General Counsel of Keene
New York, NY 10022 Corporation (manufacturer of industrial
products); Director of Kevlin
Corporation (manufacturer of microwave
and other products).
Edward I. O'Brien* (67) Trustee of each Trust Until 1993, President of the Securities
12 Woods Lane Industry Association ("SIA") (securities
Scarsdale, NY 10583 industry's representative in government
relations and regulatory matters at the
federal and state levels); until
November 1993, employee of the SIA;
Director of Legg Mason, Inc.
John T. Patterson, Jr. (67) Trustee of each Trust President of SOBRO (South Bronx Overall
90 Riverside Drive Economic Development Corporation).
Apartment 1B
New York, NY 10024
John P. Rosenthal (63) Trustee of each Trust Senior Vice President of Burnham
Burnham Securities Inc. Securities Inc. (a registered broker-
Burnham Asset Management Corp. dealer) since 1991; formerly Partner of
1325 Avenue of the Americas Silberberg, Rosenthal & Co. (member of
17th Floor National Association of Securities
New York, NY 10019 Dealers, Inc.); Director, Cancer
Treatment Holdings, Inc.
Cornelius T. Ryan (64) Trustee of each Trust General Partner of Oxford Partners and
Oxford Bioscience Partners Oxford Bioscience Partners (venture
315 Post Road West capital partnerships) and President of
Westport, CT 06880 Oxford Venture Corporation; Director of
Capital Cash Management Trust (money
market fund) and Prime Cash Fund.
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<PAGE>
Positions Held
With the Trust and
Name, Age, and Address(1) Equity Managers Trust Principal Occupation(s)(2)
Gustave H. Shubert (66) Trustee of each Trust Senior Fellow/Corporate Advisor and
13838 Sunset Boulevard Advisory Trustee of Rand (a non-profit
Pacific Palisades, CA 90272 public interest research institution)
since 1989; Honorary Member of the Board
of Overseers of the Institute for Civil
Justice, the Policy Advisory Committee
of the Clinical Scholars Program at the
University of California, the American
Association for the Advancement of
Science, the Counsel on Foreign
Relations, and the Institute for
Strategic Studies (London); advisor to
the Program Evaluation and Methodology
Division of the U.S. General Accounting
Office; formerly Senior Vice President
and Trustee of Rand.
Lawrence Zicklin* (59) President and Trustee of Partner of Neuberger & Berman; Director
each Trust of N&B Management; President and/or
Trustee of five other mutual funds for
which N&B Management acts as investment
manager or administrator.
Daniel J. Sullivan (55) Vice President of each Senior Vice President of N&B Management
Trust since 1992; prior thereto, Vice Presi-
dent of N&B Management; Vice President
of eight other mutual funds for which
N&B Management acts as investment
manager or administrator.
Michael J. Weiner (48) Vice President and Senior Vice President and Treasurer of
Principal Financial N&B Management since 1992; prior
Officer of each Trust thereto, Vice President and Treasurer of
N&B Management and Treasurer of certain
mutual funds for which N&B Management
acted as investment adviser; Vice
President and Principal Financial
Officer of eight other mutual funds for
which N&B Management acts as investment
manager or administrator.
Claudia A. Brandon (38) Secretary of each Trust Vice President of N&B Management;
Secretary of eight other mutual funds
for which N&B Management acts as
investment manager or administrator.
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<PAGE>
Positions Held
With the Trust and
Name, Age, and Address(1) Equity Managers Trust Principal Occupation(s)(2)
Richard Russell (48) Treasurer and Principal Vice President of N&B Management since
Accounting Officer of 1993; prior thereto, Assistant Vice
each Trust President of N&B Management; Treasurer
and Principal Accounting Officer of
eight other mutual funds for which N&B
Management acts as investment manager or
administrator.
Stacy Cooper-Shugrue (32) Assistant Secretary of Assistant Vice President of N&B
each Trust Management since 1993; employee of N&B
Management since 1989; Assistant
Secretary of eight other mutual funds
for which N&B Management acts as
investment manager or administrator.
C. Carl Randolph (57) Assistant Secretary of Partner of Neuberger & Berman since
each Trust 1992; employee thereof since 1971;
Assistant Secretary of eight other
mutual funds for which N&B Management
acts as investment manager or
administrator.
GLOBAL MANAGERS TRUST
Positions Held
with Global
Name, Age, and Address(1) Managers Trust Principal Occupation(s)(2)
<S> <C> <C>
Stanley Egener* (61) Chairman of the Board, (See above)
Chief Executive Officer,
and Trustee
Howard A. Mileaf (57) Trustee (See above)
Wheeling Pittsburgh
Corporation
110 East 59th Street New
York, NY 10022
John T. Patterson, Jr. (67) Trustee (See above)
90 Riverside Drive
Apartment 1B
New York, NY 10024
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<PAGE>
Positions Held
with Global
Name, Age, and Address(1) Managers Trust Principal Occupation(s)(2)
John P. Rosenthal (63) Trustee (See above)
Burnham Securities Inc.
Burnham Asset Management
Corp.
1325 Avenue of the Americas
17th Floor
New York, NY 10019
Lawrence Zicklin* (59) President (See above)
Daniel J. Sullivan (55) Vice President (See above)
Michael J. Weiner (48) Vice President and (See above)
Principal Financial
Officer
Richard Russell (48) Treasurer and Principal (See above)
Accounting Officer
Claudia A. Brandon (38) Secretary (See above)
Stacy Cooper-Shugrue (32) Assistant Secretary (See above)
C. Carl Randolph (57) Assistant Secretary (See above)
Jacqueline Henning (53) Assistant Treasurer Managing Director, State Street
Cayman Trust Co., Ltd. since 1994;
Assistant Director, Morgan Grenfell,
1993-94; Bank of Nova Scotia Trust
Co. (Cayman) Ltd., Managing
Director, 1988-93.
Lenore Joan McCabe (34) Assistant Secretary Operations Supervisor, State Street
Cayman Trust Co., Ltd.; Project
Manager, State Street Canada, Inc.,
1992-94; employee, Boston Financial
Data Services, 1984-92.
</TABLE>
____________________
(1) Unless otherwise indicated, the business address of each listed
person is 605 Third Avenue, New York, New York 10158.
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<PAGE>
(2) Except as otherwise indicated, each individual has held the positions
shown for at least the last five years.
* Indicates an "interested person" within the meaning of the 1940
Act. Messrs. Egener and Zicklin are interested persons of each Trust by
virtue of the fact that they are officers and/or directors of N&B
Management and partners of Neuberger & Berman. Mr. O'Brien is an
interested person of the Trust and Equity Managers Trust by virtue of the
fact that he is a director of Legg Mason, Inc., a wholly owned subsidiary
of which, from time to time, serves as a broker or dealer to the
Portfolios and other funds for which N&B Management serves as investment
manager.
The Trust's Trust Instrument and each Managers Trust's
Declaration of Trust provides that it will indemnify its trustees and
officers against liabilities and expenses reasonably incurred in
connection with litigation in which they may be involved because of their
offices with the Trust, unless it is adjudicated that they engaged in bad
faith, willful misfeasance, gross negligence, or reckless disregard of the
duties involved in the conduct of their offices. In the case of
settlement, such indemnification will not be provided unless it has been
determined (by a court or other body approving the settlement or other
disposition, by a majority of disinterested trustees based upon a review
of readily available facts, or in a written opinion of independent
counsel) that such officers or trustees have not engaged in willful
misfeasance, bad faith, gross negligence, or reckless disregard of their
duties.
For the fiscal year ended August 31, 1995, each Fund and
Portfolio paid the following fees and expenses to Fund and Portfolio
Trustees who were not affiliated with N&B Management or Neuberger &
Berman: Neuberger & Berman MANHATTAN Fund and Portfolio - $36,037;
Neuberger & Berman GENESIS Fund and Portfolio - $13,798; Neuberger &
Berman FOCUS Fund and Portfolio - $41,811; Neuberger & Berman GUARDIAN
Fund and Portfolio - $162,778; Neuberger & Berman PARTNERS Fund and
Portfolio - $81,404; Neuberger & Berman SOCIALLY RESPONSIVE Fund and
Portfolio - $926; and Neuberger & Berman INTERNATIONAL Fund and
Portfolio - $33,528.
The following table sets forth information concerning the
compensation of the trustees and officers of the Trust. None of the
Neuberger & Berman Funds(SERVICEMARK) has any retirement plan for its
trustees or officers.
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<PAGE>
TABLE OF COMPENSATION
FOR FISCAL YEAR ENDED 8/31/95
<TABLE>
<CAPTION>
Aggregate Total Compensation from the
Name and Position Compensation from Neuberger & Berman Fund
with the Trust the Trust Complex Paid to Trustees
<S> <C> <C>
Faith Colish $ 14,140 $ 39,000
Trustee (5 other investment
companies)
Donald M. Cox $ 14,140 $ 31,000
Trustee (3 other investment
companies)
Stanley Egener $ 0 $ 0
Chairman of the Board, Chief (9 other investment
Executive Officer, and Trustee companies)
Alan R. Gruber $ 14,140 $ 31,000
Trustee (3 other investment
companies)
Howard A. Mileaf $ 15,571 $ 36,500
Trustee (4 other investment
companies)
Edward I. O'Brien $ 14,587 $ 31,500
Trustee (3 other investment
companies)
John T. Patterson, Jr. $ 14,604 $ 34,500
Trustee (4 other investment
companies)
John P. Rosenthal $ 13,916 $ 33,000
Trustee (4 other investment
companies)
Cornelius T. Ryan $ 15,571 $ 33,500
Trustee (3 other investment
companies)
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<PAGE>
Aggregate Total Compensation from the
Name and Position Compensation from Neuberger & Berman Fund
with the Trust the Trust Complex Paid to Trustees
Gustave H. Shubert $ 13,916 $ 30,000
Trustee (3 other investment
companies)
Lawrence Zicklin $ 0 $ 0
President and Trustee (5 other investment
companies)
</TABLE>
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
Investment Manager and Administrator
Because all of the Funds' net investable assets are invested in
their corresponding Portfolios, the Funds do not need an investment
manager. N&B Management serves as the investment manager to all the
Portfolios (except Neuberger & Berman INTERNATIONAL Portfolio) pursuant to
a management agreement with Equity Managers Trust, dated as of August 2,
1993 ("EMT Management Agreement"). The EMT Management Agreement was
approved by the holders of the interests in all the Portfolios (except
Neuberger & Berman SOCIALLY RESPONSIVE Portfolio) on August 2, 1993, and
by the holders of the interests in Neuberger & Berman SOCIALLY RESPONSIVE
Portfolio on March 9, 1994. That Portfolio was authorized to become
subject to the EMT Management Agreement by vote of the Portfolio Trustees
on October 20, 1993, and became subject to it on March 14, 1994. N&B
Management serves as the investment manager to Neuberger & Berman
INTERNATIONAL Portfolio pursuant to a management agreement with Global
Managers Trust, dated as of November 1, 1995 ("GMT Management Agreement").
The GMT Management Agreement was approved by the holders of the interests
in Neuberger & Berman INTERNATIONAL Portfolio on October 25, 1995. That
Portfolio was authorized to become subject to the GMT Management Agreement
by vote of the Portfolio Trustees on August 8, 1995, and became subject to
it on November 1, 1995.
The EMT Management Agreement and GMT Management Agreement
("Management Agreements") provide, in substance, that N&B Management will
make and implement investment decisions for the Portfolios in its
discretion and will continuously develop an investment program for the
Portfolios' assets. The Management Agreements permit N&B Management to
effect securities transactions on behalf of each Portfolio through
associated persons of N&B Management. The Management Agreements also
specifically permit N&B Management to compensate, through higher
commissions, brokers and dealers who provide investment research and
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<PAGE>
analysis to the Portfolios, although N&B Management has no current plans
to do so.
N&B Management provides to each Portfolio, without separate cost,
office space, equipment, and facilities and the personnel necessary to
perform executive, administrative, and clerical functions. N&B Management
pays all salaries, expenses, and fees of the officers, trustees, and
employees of the Managers Trusts who are officers, directors, or employees
of N&B Management. Two directors of N&B Management (who also are partners
of Neuberger & Berman), one of whom also serves as an officer of N&B
Management, presently serve as trustees and/or officers of the Trusts.
See "Trustees and Officers." Each Portfolio pays N&B Management a
management fee based on the Portfolio's average daily net assets, as
described in the Prospectus.
N&B Management provides similar facilities, services, and
personnel to each Fund pursuant to an administration agreement dated
May 1, 1995 ("Administration Agreement"). Neuberger & Berman
INTERNATIONAL Fund was authorized to become subject to the Administration
Agreement by vote of the Fund Trustees on August 11, 1995, and became
subject to it on November 1, 1995. For such administrative services, each
Fund pays N&B Management a fee based on the Fund's average daily net
assets, as described in the Prospectus.
Under the Administration Agreement, N&B Management also provides
to each Fund and its shareholders certain shareholder, shareholder-
related, and other services that are not furnished by the Fund's
shareholder servicing agent. N&B Management provides the direct
shareholder services specified in the Administration Agreement, assists
the shareholder servicing agent in the development and implementation of
specified programs and systems to enhance overall shareholder servicing
capabilities, solicits and gathers shareholder proxies, performs services
connected with the qualification of each Fund's shares for sale in various
states, and furnishes other services the parties agree from time to time
should be provided under the Administration Agreement.
From time to time, N&B Management or a Fund may enter into
arrangements with registered broker-dealers or other third parties
pursuant to which it pays the broker-dealer or third party a per account
fee or a fee based on a percentage of the aggregate net asset value of
Fund shares purchased by the broker-dealer or third party on behalf of its
customers, in payment for administrative and other services rendered to
such customers.
Because Neuberger & Berman INTERNATIONAL Portfolio has its
principal offices in the Cayman Islands, Global Managers Trust has entered
into an Administrative Services Agreement with State Street Cayman Trust
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<PAGE>
Company Ltd. ("State Street Cayman"), Elizabethan Square, P.O. Box 1984,
George Town, Grand Cayman, Cayman Islands, effective August 31, 1994.
Under the Administrative Services Agreement, State Street Cayman provides
sufficient personnel and suitable facilities for the principal offices of
Neuberger & Berman INTERNATIONAL Portfolio and provides certain
administrative, fund accounting, and transfer agency services with respect
to that Portfolio. The Administrative Services Agreement terminates if
assigned by State Street Cayman; however, State Street Cayman is permitted
to, and does, employ an affiliate, State Street Canada, Inc., to perform
certain accounting functions.
Prior to August 2, 1993, N&B Management provided investment
advisory and administrative services to the predecessor of each Fund
(except Neuberger & Berman SOCIALLY RESPONSIVE Fund and Neuberger & Berman
INTERNATIONAL Fund) under an investment advisory agreement with that fund.
As compensation for these services, each predecessor (except that of
Neuberger & Berman GENESIS Fund) paid N&B Management a fee at the annual
rate of 0.70% for the first $250 million of average daily net assets of
the fund, 0.675% of the next $250 million of average daily net assets,
0.65% of the next $250 million of average daily net assets, 0.625% of the
next $250 million of average daily net assets, and 0.60% of average daily
net assets in excess of $1 billion. The predecessor of Neuberger & Berman
GENESIS Fund paid a fee at an annual rate of 1.00% of average daily net
assets.
Prior to November 1, 1995, Neuberger & Berman INTERNATIONAL
Portfolio was advised by BNP-N&B Global pursuant to an investment advisory
agreement dated June 15, 1994. During that period, BNP-N&B Global
voluntarily reimbursed the Portfolio to the extent that its operating
expenses (excluding interest, taxes, brokerage commissions, and
extraordinary expenses) exceeded 0.70% per annum of the Portfolio's
average daily net assets. N&B Management provided the Portfolio with
administrative services pursuant to a separate administration agreement
dated June 15, 1994. Prior to November 1, 1995, N&B Management provided
similar services to the Fund pursuant to an administration agreement dated
June 15, 1994 and amended May 1, 1995.
During the fiscal years ended August 31, 1995 and 1994,
Neuberger & Berman MANHATTAN Fund accrued management and administration
fees of $3,685,282 and $3,512,058, respectively. During the fiscal year
ended August 31, 1993, that Fund and its predecessor accrued advisory or
management and administration fees of $3,445,962. During the fiscal years
ended August 31, 1995 and 1994, Neuberger & Berman GENESIS Fund accrued
management and administration fees of $1,155,623 and $1,245,944,
respectively. During the period from May 1, 1995 to August 31, 1995, N&B
Management waived $35,769 of management fees borne indirectly by Neuberger
& Berman GENESIS Fund. For the period August 1 to August 31, 1993, that
Fund accrued management and administration fees of $97,157. During the
fiscal year ended July 31, 1993, the predecessor of that Fund accrued
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<PAGE>
advisory fees of $927,601. During the fiscal years ended August 31, 1995
and 1994, Neuberger & Berman FOCUS Fund accrued management and
administration fees of $5,114,879 and $4,066,847, respectively. During
the period October 1, 1992 to August 31, 1993, that Fund and its
predecessor accrued advisory or management and administration fees of
$3,218,892. During the fiscal years ended August 31, 1995 and 1994,
Neuberger & Berman GUARDIAN Fund accrued management and administration
fees of $18,549,364 and $12,798,776, respectively. During the fiscal year
ended August 31, 1993, that Fund and its predecessor accrued advisory or
management and administration fees of $8,070,013. During the fiscal years
ended August 31, 1995 and 1994, Neuberger & Berman PARTNERS Fund accrued
management and administration fees of $9,233,615 and $8,090,161,
respectively. During the period July 1 to August 31, 1993, that Fund and
its predecessor accrued advisory or management and administration fees of
$1,234,030. During the fiscal year ended June 30, 1993, the predecessor
of that Fund accrued advisory fees of $6,374,454.
During the fiscal year ended August 31, 1995, and the period from
March 16, 1994 (commencement of operations) to August 31, 1994, Neuberger
& Berman SOCIALLY RESPONSIVE Fund accrued management and administration
fees of $37,197 and $3,082, respectively. For those same periods, N&B
Management reimbursed that Fund for $78,940 and $25,172, respectively, of
expenses. During the fiscal year ended August 31, 1995, and the period
from June 15, 1994 (commencement of operations) through August 31, 1994,
Neuberger & Berman INTERNATIONAL Fund accrued advisory and administration
fees of $317,147 and $30,926, respectively. For those same periods, BNP-
N&B Global and N&B Management reimbursed that Fund for $407,108 and
$94,246, respectively, in expenses.
Prior to May 1, 1995, the shareholder services described above
were provided pursuant to a separate agreement between the Trust and N&B
Management. As compensation for these services, each Fund paid N&B
Management a monthly fee calculated at the annual rate of 0.04% of the
average daily net assets of that Fund. From the period February 1, 1991
until January 31, 1994, the monthly fee under the shareholder service
agreement then in effect was at the annual rate of $6 per shareholder
account. During the period from September 1, 1994 to April 30, 1995, and
the fiscal year ended August 31, 1994, Neuberger & Berman MANHATTAN Fund
paid and accrued $127,079 and $238,777, respectively, for these services.
For the fiscal year ended August 31, 1993, that Fund and its predecessor
paid and accrued $295,254 for these services. During the period from
September 1, 1994 to April 30, 1995, and the fiscal year ended August 31,
1994, Neuberger & Berman GENESIS Fund paid and accrued $29,930 and
$51,345, respectively, for these services. For the period August 1 to
August 31, 1993, that Fund paid and accrued $4,316 for these services.
For the fiscal year ended July 31, 1993, the predecessor of Neuberger &
Berman GENESIS Fund paid and accrued $40,898 for these services. During
the period from September 1, 1994 to April 30, 1995, and the fiscal year
ended August 31, 1994, Neuberger & Berman FOCUS Fund paid and accrued
$169,437 and $208,303, respectively, for these services. For the period
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<PAGE>
October 1, 1992 to August 31, 1993, Neuberger & Berman FOCUS Fund and its
predecessor paid and accrued $139,636. During the period from
September 1, 1994 to April 30, 1995, and the fiscal year ended August 31,
1994, Neuberger & Berman GUARDIAN Fund paid and accrued $670,627 and
$714,032, respectively, for these services. For the fiscal year ended
August 31, 1993, that Fund and its predecessor paid and accrued $290,441
for these services. During the period from September 1, 1994 to April 30,
1995, and the fiscal year ended August 31, 1994, Neuberger & Berman
PARTNERS Fund paid and accrued $340,751 and $430,948, respectively, for
these services. For the period July 1 to August 31, 1993, Neuberger &
Berman PARTNERS Fund and its predecessor paid and accrued $54,994 for
these services. For the fiscal year ended June 30, 1993, the predecessor
of that Fund paid and accrued $318,784 for these services. For the period
from September 1, 1994 to April 30, 1995, and for the period from
March 16, 1994 (commencement of operations) until August 31, 1994,
Neuberger & Berman SOCIALLY RESPONSIVE Fund paid and accrued $1,085 and
$174, respectively, for these services. For the period from September 1,
1995 to April 30, 1995, and for the period from June 15, 1994
(commencement of operations) to August 31, 1994, Neuberger & Berman
INTERNATIONAL Fund paid and accrued $4,178 and $342, respectively, for
these services.
The Management Agreements continue with respect to each Portfolio
for a period of two years after the date the Portfolio became subject
thereto. The Management Agreements are renewable thereafter from year to
year with respect to each Portfolio, so long as their continuance is
approved at least annually (1) by the vote of a majority of the Portfolio
Trustees who are not "interested persons" of N&B Management or the
corresponding Managers Trust ("Independent Portfolio Trustees"), cast in
person at a meeting called for the purpose of voting on such approval, and
(2) by the vote of a majority of the Portfolio Trustees or by a 1940 Act
majority vote of the outstanding shares in that Portfolio. The
Administration Agreement continues with respect to each Fund for a period
of two years after the date the Fund became subject thereto. The
Administration Agreement is renewable from year to year with respect to a
Fund, so long as its continuance is approved at least annually (1) by the
vote of a majority of the Fund Trustees who are not "interested persons"
of N&B Management or the Trust ("Independent Fund Trustees"), cast in
person at a meeting called for the purpose of voting on such approval, and
(2) by the vote of a majority of the Fund Trustees or by a 1940 Act
majority vote of the outstanding shares in the Fund.
The Management Agreements are terminable, without penalty, with
respect to a Portfolio on 60 days' written notice either by the
corresponding Managers Trust or by N&B Management. The Administration
Agreement is terminable, without penalty, with respect to a Fund on 60
days' written notice either by N&B Management or by the Trust if
authorized by the Fund Trustees, including a majority of the Independent
Fund Trustees. Each Agreement terminates automatically if it is assigned.
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<PAGE>
In addition to the voluntary expense reimbursements described in
the Prospectus under "Management and Administration -- Expenses," N&B
Management has agreed in the Management Agreements to reimburse each
Fund's expenses, as follows. If, in any fiscal year, a Fund's Aggregate
Operating Expenses (as defined below) exceed the most restrictive expense
limitation imposed under the securities laws of the states in which that
Fund's shares are qualified for sale ("State Expense Limitation"), then
N&B Management will pay the Fund the amount of that excess, less the
amount of any reduction of the administration fee payable by the Fund
under a similar State Expense Limitation contained in the Administration
Agreement. N&B Management will have no obligation to pay a Fund, however,
for any expenses that exceed the pro rata portion of the management fees
attributable to that Fund's interest in its corresponding Portfolio. At
the date of this SAI, the most restrictive State Expense Limitation to
which any Fund expects to be subject is 2 1/2% of the first $30 million of
average net assets, 2% of the next $70 million of average net assets, and
1-1/2% of average net assets over $100 million.
For purposes of the State Expense Limitation, the term "Aggregate
Operating Expenses" means a Fund's operating expenses plus its pro rata
portion of its corresponding Portfolio's operating expenses (including any
fees or expense reimbursements payable to N&B Management and any
compensation payable thereto pursuant to (1) the Administration Agreement
or (2) any other agreement or arrangement with the respective Managers
Trust in regard to the Portfolio; but excluding (with respect to both the
Fund and the Portfolio) interest, taxes, brokerage commissions, litigation
and indemnification expenses, and other extraordinary expenses not
incurred in the ordinary course of business).
SUBADVISER
N&B Management retains Neuberger & Berman, 605 Third Avenue, New
York, NY 10158-3698, as sub-adviser with respect to each Portfolio (except
Neuberger & Berman INTERNATIONAL Portfolio) pursuant to a sub-advisory
agreement dated August 2, 1993 ("EMT Sub-Advisory Agreement"). The EMT
Sub-Advisory Agreement was approved by the holders of the interests in the
Portfolios (except Neuberger & Berman SOCIALLY RESPONSIVE Portfolio) on
August 2, 1993, and by the holders of the interests in Neuberger & Berman
SOCIALLY RESPONSIVE Portfolio on March 9, 1994. That Portfolio was
authorized to become subject to the EMT Sub-Advisory Agreement by vote of
the Portfolio Trustees on October 20, 1993, and became subject to it on
March 14, 1994. N&B Management retains Neuberger & Berman as sub-adviser
with respect to Neuberger & Berman INTERNATIONAL Portfolio pursuant to a
sub-advisory agreement dated November 1, 1995 ("GMT Sub-Advisory
Agreement"). The GMT Sub-Advisory Agreement was approved by the holders
of the interests in the Neuberger & Berman INTERNATIONAL Portfolio on
October 25, 1995. That Portfolio was authorized to become subject to the
GMT Sub-Advisory Agreement by vote of the Portfolio Trustees on August 8,
1995, and became subject to it on November 1, 1995.
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<PAGE>
The EMT Sub-Advisory Agreement and GMT Sub-Advisory Agreement
("Sub-Advisory Agreements") provide in substance that Neuberger & Berman
will furnish to N&B Management, upon reasonable request, the same type of
investment recommendations and research that Neuberger & Berman, from time
to time, provides to its partners and employees for use in managing client
accounts. In this manner, N&B Management expects to have available to it,
in addition to research from other professional sources, the capability of
the research staff of Neuberger & Berman. This staff consists of
approximately fourteen investment analysts, each of whom specializes in
studying one or more industries, under the supervision of the Director of
Research, who is also available for consultation with N&B Management. The
Sub-Advisory Agreements provide that N&B Management will pay for the
services rendered by Neuberger & Berman based on the direct and indirect
costs to Neuberger & Berman in connection with those services. Neuberger
& Berman also serves as sub-adviser for all of the other mutual funds
managed by N&B Management.
The Sub-Advisory Agreements continue with respect to each
Portfolio for a period of two years after the date the Portfolio became
subject thereto, and are renewable from year to year, subject to approval
of their continuance in the same manner as the Management Agreements. The
Sub-Advisory Agreements are subject to termination, without penalty, with
respect to each Portfolio by the Portfolio Trustees, by a 1940 Act
majority vote of the outstanding Portfolio shares, by N&B Management, or
by Neuberger & Berman on not less than 30 nor more than 60 days' written
notice. The Sub-Advisory Agreements also terminate automatically with
respect to each Portfolio if they are assigned or if the Management
Agreement terminates with respect to that Portfolio.
Most money managers that come to the Neuberger & Berman
organization have at least fifteen years experience. Neuberger & Berman
and N&B Management employ experienced professionals that work in a
competitive environment.
INVESTMENT COMPANIES MANAGED
N&B Management currently serves as investment manager of the
following investment companies. As of September 30, 1995, these
companies, along with three investment companies advised by Neuberger &
Berman, had aggregate net assets of approximately $11.4 billion, as shown
in the following list:
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<PAGE>
<TABLE>
<CAPTION>
Approximate Net
Assets at September
Name 30, 1995
<S> <C> <C>
Neuberger & Berman Cash Reserves Portfolio . . . . . . . . . . . $ 377,608,169
(investment portfolio for Neuberger & Berman
Cash Reserves)
Neuberger & Berman Government Income Portfolio . . . . . . . . . $ 12,053,656
(investment portfolio for Neuberger & Berman
Government Income Fund and Neuberger & Berman
Government Income Trust)
Neuberger & Berman Government Money Portfolio . . . . . . . . . . $ 346,898,132
(investment portfolio for Neuberger & Berman
Government Money Fund)
Neuberger & Berman Limited Maturity Bond Portfolio . . . . . . . $ 309,540,451
(investment portfolio for Neuberger & Berman
Limited Maturity Bond Fund and Neuberger & Berman
Limited Maturity Bond Trust)
Neuberger & Berman Municipal Money Portfolio . . . . . . . . . . $ 149,657,613
(investment portfolio for Neuberger & Berman
Municipal Money Fund)
Neuberger & Berman Municipal Securities Portfolio . . . . . . . . $ 44,568,635
(investment portfolio for Neuberger & Berman
Municipal Securities Trust)
Neuberger & Berman New York Insured Intermediate Portfolio . . . $ 10,679,324
(investment portfolio for Neuberger & Berman
New York Insured Intermediate Fund)
Neuberger & Berman Ultra Short Bond Portfolio . . . . . . . . . . $ 102,903,312
(investment portfolio for Neuberger & Berman
Ultra Short Bond Fund and Neuberger & Berman
Ultra Short Bond Trust)
Neuberger & Berman Focus Portfolio . . . . . . . . . . . . . . . $1,031,915,664
(investment portfolio for Neuberger & Berman
Focus Fund and Neuberger & Berman Focus Trust)
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<PAGE>
Approximate Net
Assets at September
Name 30, 1995
<S> <C> <C>
Neuberger & Berman Genesis Portfolio . . . . . . . . . . . . . . $ 145,188,783
(investment portfolio for Neuberger & Berman Genesis Fund and
Neuberger & Berman Genesis Trust)
Neuberger & Berman Guardian Portfolio . . . . . . . . . . . . . $4,943,764,830
(investment portfolio for Neuberger & Berman
Guardian Fund and Neuberger & Berman Guardian Trust)
Neuberger & Berman International Portfolio . . . . . . . . . . . $ 29,990,616
(investment portfolio for Neuberger & Berman
International Fund)
Neuberger & Berman Manhattan Portfolio . . . . . . . . . . . . . $ 670,916,038
(investment portfolio for Neuberger & Berman
Manhattan Fund and Neuberger & Berman Manhattan Trust)
Neuberger & Berman Partners Portfolio . . . . . . . . . . . . . . $1,664,460,688
(investment portfolio for Neuberger & Berman
Partners Fund and Neuberger & Berman Partners Trust)
Neuberger & Berman Socially Responsive Portfolio . . . . . . . $ 102,675,093
(investment portfolio for Neuberger & Berman
Socially Responsive Fund, Neuberger & Berman
Socially Responsive Trust, and Neuberger & Berman
NYCDC Socially Responsive Trust)
Neuberger & Berman Advisers Managers Trust (six series) . . . . . $1,257,506,124
</TABLE>
In addition, Neuberger & Berman serves as investment adviser to
three investment companies, Plan Investment Fund, Inc., AHA Investment
Fund, Inc., and AHA Full Maturity, with assets of $85,110,472,
$110,683,193, and $23,891,472, respectively, at September 30, 1995.
The investment decisions concerning the Portfolios and the other
funds and portfolios managed by N&B Management (collectively, "Other N&B
Funds") have been and will continue to be made independently of one
another. In terms of their investment objectives, most of the Other N&B
Funds differ from the Portfolios. Even where the investment objectives
are similar, however, the methods used by the Other N&B Funds and the
Portfolios to achieve their objectives may differ.
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<PAGE>
There may be occasions when a Portfolio and one or more of the
Other N&B Funds or other accounts managed by Neuberger & Berman are
contemporaneously engaged in purchasing or selling the same securities
from or to third parties. When this occurs, the transactions are averaged
as to price and allocated as to amounts in accordance with a formula
considered to be equitable to the funds involved. Although in some cases
this arrangement may have a detrimental effect on the price or volume of
the securities as to a Portfolio, in other cases it is believed that a
Portfolio's ability to participate in volume transactions may produce
better executions for it. In any case, it is the judgment of the
Portfolio Trustees that the desirability of the Portfolios' having their
advisory arrangements with N&B Management outweighs any disadvantages that
may result from contemporaneous transactions. The investment results
achieved by all of the funds managed by N&B Management have varied from
one another in the past and are likely to vary in the future.
Management and Control of N&B Management
The directors and officers of N&B Management, all of whom have
offices at the same address as N&B Management, are Richard A. Cantor,
Chairman of the Board and director; Stanley Egener, President and
director; Theresa A. Havell, Vice President and director; Irwin Lainoff,
director; Marvin C. Schwartz, director; Lawrence Zicklin, director; Daniel
J. Sullivan, Senior Vice President; Michael J. Weiner, Senior Vice
President and Treasurer; Claudia A. Brandon, Vice President; William
Cunningham, Vice President; Clara Del Villar, Vice President; Mark R.
Goldstein, Vice President; Farha-Joyce Haboucha, Vice President; Michael
M. Kassen, Vice President; Michael Lamberti, Vice President; Josephine P.
Mahaney, Vice President; Lawrence Marx III, Vice President; Ellen Metzger,
Vice President and Secretary; Janet W. Prindle, Vice President; Felix
Rovelli, Vice President; Richard Russell, Vice President; Kent C. Simons,
Vice President; Frederick B. Soule, Vice President; Judith M. Vale, Vice
President; Thomas Wolfe, Vice President; Andrea Trachtenberg, Vice
President of Marketing; Patrick T. Byrne, Assistant Vice President; Robert
Conti, Assistant Vice President; Stacy Cooper-Shugrue, Assistant Vice
President; Robert Cresci, Assistant Vice President; Barbara DiGiorgio,
Assistant Vice President; Roberta D'Orio, Assistant Vice President; Robert
I. Gendelman, Assistant Vice President; Leslie Holliday-Soto, Assistant
Vice President; Carmen G. Martinez, Assistant Vice President; Paul
Metzger, Assistant Vice President; Susan Switzer, Assistant Vice
President; Susan Walsh, Assistant Vice President; and Celeste Wischerth,
Assistant Vice President. Messrs. Cantor, Egener, Lainoff, Schwartz,
Zicklin, Goldstein, Kassen, Marx, and Simons and Mmes. Havell and Prindle
are general partners of Neuberger & Berman.
Mr. Egener is a trustee and officer of the Trust and the Managers
Trusts. Mr. Zicklin is a trustee of the Trust and Equity Managers Trust
and an officer of the Trust and the Managers Trusts. Messrs. Sullivan,
Weiner, and Russell and Mmes. Brandon and Cooper-Shugrue are officers of
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<PAGE>
each Trust. C. Carl Randolph, a general partner of Neuberger & Berman,
also is an officer of each Trust.
All of the outstanding voting stock in N&B Management is owned by
persons who are also general partners of Neuberger & Berman.
DISTRIBUTION ARRANGEMENTS
N&B Management serves as the distributor ("Distributor") in
connection with the offering of each Fund's shares on a no-load basis. In
connection with the sale of its shares, each Fund has authorized the
Distributor to give only the information, and to make only the statements
and representations, contained in the Prospectus and this SAI or that
properly may be included in sales literature and advertisements in
accordance with the 1933 Act, the 1940 Act, and applicable rules of self-
regulatory organizations. Sales may be made only by the Prospectus, which
may be delivered either personally, through the mails, or by electronic
means. The Distributor is the Funds' "principal underwriter" within the
meaning of the 1940 Act and, as such, acts as agent in arranging for the
sale of each Fund's shares without sales commission or other compensation
and bears all advertising and promotion expenses incurred in the sale of
the Funds' shares.
The Distributor or one of its affiliates may, from time to time
deem it desirable to offer to a Fund's shareholders, through use of its
shareholder list, the shares of other mutual funds for which the
Distributor acts as distributor or other products or services. Any such
use of the Funds' shareholder lists, however, will be made subject to
terms and conditions, if any, approved by a majority of the Independent
Fund Trustees. These lists will not be used to offer the Funds'
shareholders any investment products or services other than those managed
or distributed by N&B Management or Neuberger & Berman.
The Trust, on behalf of each Fund, and the Distributor are parties
to a Distribution Agreement that continues until August 2, 1996. The
Distribution Agreement may be renewed annually if specifically approved by
(1) the vote of a majority of the Fund Trustees or a 1940 Act majority
vote of the Fund's outstanding shares and (2) the vote of a majority of
the Independent Fund Trustees, cast in person at a meeting called for the
purpose of voting on such approval. The Distribution Agreement may be
terminated by either party and will automatically terminate on its
assignment, in the same manner as the Management Agreements.
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<PAGE>
ADDITIONAL PURCHASE INFORMATION
Automatic Investing and Dollar Cost Averaging
Shareholders may arrange to have a fixed amount automatically
invested in Fund shares each month. To do so, a shareholder must complete
an application, available from the Distributor, electing to have automatic
investments funded either through (1) redemptions from his or her account
in a money market fund for which N&B Management serves as investment
manager (subject to a minimum monthly investment of $100) or
(2) withdrawals from the shareholder's checking account (in which case the
minimum monthly investment is $100). A shareholder who elects to parti-
cipate in automatic investing through his or her checking account must
include a voided check with the completed application. A completed
application should be sent to Neuberger & Berman Management Incorporated,
605 Third Avenue, 2nd Floor, New York, NY 10158-0180.
Automatic investing enables a shareholder to take advantage of
"dollar cost averaging." As a result of dollar cost averaging, a
shareholder's average cost of Fund shares generally would be lower than if
the shareholder purchased a fixed number of shares at the same pre-set
intervals. Additional information on dollar cost averaging may be
obtained from the Distributor.
ADDITIONAL EXCHANGE INFORMATION
As more fully set forth in the section of the Prospectus entitled
"Shareholder Services -- Exchange Privilege," shareholders may redeem at
least $1,000 worth of a Fund's shares and invest the proceeds in shares of
one or more of the other Funds or Other N&B Funds that are briefly
described below, provided that the minimum investment requirements of the
other fund(s) are met.
INCOME FUNDS
Neuberger & Berman A U.S. Government securities money market
Government Money Fund fund seeking maximum safety and liquidity and
the highest available current income. Through
its corresponding portfolio, the fund invests
only in U.S. Treasury obligations and other
money market instruments backed by the full
faith and credit of the United States. It
seeks to maintain a constant purchase and
redemption price of $1.00.
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<PAGE>
Neuberger & Berman A money market fund seeking the highest
Cash Reserves current income consistent with safety and
liquidity. Through its corresponding
portfolio, the fund invests in high-quality
money market instruments. It seeks to
maintain a constant purchase and redemption
price of $1.00.
Neuberger & Berman Seeks a higher total return than is available
Ultra Short Bond Fund from money market funds, with minimal risk to
principal and liquidity. Through its
corresponding portfolio, the fund invests in
high- quality money market instruments and
short-term debt securities.
Neuberger & Berman Seeks the highest current income consistent
Limited Maturity Bond with low risk to principal and liquidity and,
Fund secondarily, total return. Through its
corresponding portfolio, the fund invests in
short- to intermediate-term debt securities of
at least investment grade.
Neuberger & Berman Seeks a high level of current income and total
Government Income Fund return, consistent with safety of principal.
At least 65% of the corresponding portfolio's
investments are in U.S. Government securities
that are issued or guaranteed as to principal
and interest by the U.S. Government or its
agencies, including U.S. Government mortgage-
backed securities; at least 25% of its
investments are in mortgage-backed and asset-
backed securities.
MUNICIPAL FUNDS
Neuberger & Berman A money market fund seeking the maximum
Municipal Money Fund current income exempt from federal income tax,
consistent with safety and liquidity. Through
its corresponding portfolio, the fund invests
in high-quality, short-term tax-exempt munici-
pal securities. It seeks to maintain a
constant purchase and redemption price of
$1.00.
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<PAGE>
Neuberger & Berman A short- to intermediate-term bond fund
Municipal Securities seeking high current tax-exempt income with
Trust low risk to principal, limited price
fluctuation, and liquidity and, secondarily,
total return. Through its corresponding
portfolio, the fund invests in municipal
securities rated A or better.
Neuberger & Berman An intermediate-term bond fund which seeks a
New York Insured high level of current income exempt from
Intermediate Fund federal income tax and New York State and New
York City personal income taxes, consistent
with preservation of capital.
Any Fund described herein, and any of the Income or Municipal
Funds, may terminate or modify its exchange privilege in the future.
Fund shareholders who are considering exchanging shares into any
of the funds listed above should note that (1) the Income and Municipal
Funds are series of a Delaware business trust (named "Neuberger & Berman
Income Funds") that is registered with the SEC as an open-end management
investment company, and (2) each series of Neuberger & Berman Income Funds
invests all its net investable assets in a portfolio of Income Managers
Trust, an open-end management investment company that is managed by N&B
Management. Each such portfolio has an investment objective identical to
that of its corresponding fund and invests in accordance with investment
policies and limitations identical to those of that fund.
Before effecting an exchange, Fund shareholders must obtain and
should review a currently effective prospectus of the fund into which the
exchange is to be made. In this regard, it should be noted that the
Income and Municipal Funds share a prospectus, except for Neuberger &
Berman New York Insured Intermediate Fund which has its own prospectus.
An exchange is treated as a sale for federal income tax purposes and,
depending on the circumstances, a short- or long-term capital gain or loss
may be realized.
There can be no assurance that Neuberger & Berman Government Money
Fund, Neuberger & Berman Cash Reserves, or Neuberger & Berman Municipal
Money Fund, each of which is a money market fund that seeks to maintain a
constant purchase and redemption price of $1.00, will be able to maintain
that price. An investment in any of the above-referenced funds, as in any
other mutual fund, is neither insured nor guaranteed by the U.S.
Government.
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<PAGE>
ADDITIONAL REDEMPTION INFORMATION
Suspension of Redemptions
The right to redeem a Fund's shares may be suspended or payment of
the redemption price postponed (1) when the NYSE is closed (other than
weekend and holiday closings), (2) when trading on the NYSE is restricted,
(3) when an emergency exists as a result of which it is not reasonably
practicable for the corresponding Portfolio to dispose of securities it
owns or fairly to determine the value of its net assets, or (4) for such
other period as the SEC may by order permit for the protection of a Fund's
shareholders; provided that applicable SEC rules and regulations shall
govern whether the conditions prescribed in (2) or (3) exist. If the
right of redemption is suspended, shareholders may withdraw their offers
of redemption, or they will receive payment at the NAV per share in effect
at the close of business on the first day the NYSE is open ("Business
Day") after termination of the suspension.
Redemptions in Kind
Each Fund reserves the right, under certain conditions, to honor
any request for redemption, or a combination of requests from the same
shareholder in any 90-day period, totalling $250,000 or 1% of the net
assets of the Fund, whichever is less, by making payment in whole or in
part in securities valued as described under "Account and Share
Information -- Share Prices and Net Asset Value" in the Prospectus. If
payment is made in securities, a shareholder generally will incur
brokerage expenses in converting those securities into cash and will be
subject to fluctuations in the market price of those securities until they
are sold. The Funds do not redeem in kind under normal circumstances, but
would do so when the Fund Trustees determine that it is in the best
interests of a Fund's shareholders as a whole. Redemptions in kind will
be made with readily marketable securities to the extent possible.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each Fund distributes to its shareholders amounts equal to
substantially all of its proportionate share of any net investment income
(after deducting expenses incurred directly by the Fund), net capital
gains (both long-term and short-term), and net gains from foreign currency
transactions earned or realized by its corresponding Portfolio. Each Fund
calculates its net investment income and NAV per share as of the close of
regular trading on the NYSE on each Business Day (usually 4:00 p.m.
Eastern time).
A Portfolio's net investment income consists of all income accrued
on portfolio assets less accrued expenses, but does not include realized
gains and losses. Net investment income and realized gains and losses are
reflected in a Portfolio's NAV (and, hence, its corresponding Fund's NAV)
until they are distributed. Dividends from net investment income and
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<PAGE>
distributions of net realized capital and foreign currency gains, if any,
normally are paid once annually, in December, except that Neuberger &
Berman GUARDIAN Fund distributes substantially all of its share of
Neuberger & Berman GUARDIAN Portfolio's net investment income, if any, at
the end of each calendar quarter.
Dividends and/or other distributions are automatically reinvested
in additional shares of the distributing Fund, unless and until the
shareholder elects to receive them in cash ("cash election"). Share-
holders may make a cash election on the original account application or at
a later date by writing to State Street Bank and Trust Company ("State
Street"), c/o Boston Service Center, P.O. Box 8403, Boston, MA 02266-8403.
To the extent dividends and other distributions are subject to federal,
state, or local income taxation, they are taxable to the shareholders
whether received in cash or reinvested in Fund shares.
A cash election with respect to any Fund remains in effect until
the shareholder notifies State Street in writing to discontinue the
election. If it is determined, however, that the U.S. Postal Service
cannot properly deliver Fund mailings to the shareholder, the Fund will
terminate the shareholder's cash election. Thereafter, the shareholder's
dividends and other distributions will automatically be reinvested in
additional Fund shares until the shareholder notifies State Street or the
Fund in writing of his or her correct address and requests in writing that
the cash election be reinstated.
ADDITIONAL TAX INFORMATION
Taxation of the Funds
In order to continue to qualify for treatment as a RIC under the
Code, each Fund must distribute to its shareholders for each taxable year
at least 90% of its investment company taxable income (consisting
generally of net investment income, net short-term capital gain, and net
gains from certain foreign currency transactions) ("Distribution
Requirement") and must meet several additional requirements. With respect
to each Fund, these requirements include the following: (1) the Fund must
derive at least 90% of its gross income each taxable year from dividends,
interest, payments with respect to securities loans, and gains from the
sale or other disposition of securities or foreign currencies, or other
income (including gains from Financial Instruments) derived with respect
to its business of investing in securities or those currencies ("Income
Requirement"); (2) the Fund must derive less than 30% of its gross income
each taxable year from the sale or other disposition of securities, or any
of the following, that were held for less than three months -- (i)
Financial Instruments (other than those on foreign currencies), or (ii)
foreign currencies or Financial Instruments thereon that are not directly
related to the Fund's principal business of investing in securities (or
options and futures with respect thereto) ("Short-Short Limitation"); and
(3) at the close of each quarter of the Fund's taxable year, (i) at least
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<PAGE>
50% of the value of its total assets must be represented by cash and cash
items, U.S. Government securities, and other securities limited, in
respect of any one issuer, to an amount that does not exceed 5% of the
value of the Fund's total assets and does not represent more than 10% of
the issuer's outstanding voting securities, and (ii) not more than 25% of
the value of its total assets may be invested in securities (other than
U.S. Government securities) of any one issuer.
The Funds (except Neuberger & Berman SOCIALLY RESPONSIVE Fund and
Neuberger & Berman INTERNATIONAL Fund) have received a ruling from the
Internal Revenue Service ("Service") that each such Fund, as an investor
in its corresponding Portfolio, will be deemed to own a proportionate
share of the Portfolio's assets and income for purposes of determining
whether the Fund satisfies all the requirements described above to qualify
as a RIC. Although this ruling may not be relied on as precedent by
Neuberger & Berman SOCIALLY RESPONSIVE Fund and Neuberger & Berman
INTERNATIONAL Fund, N&B Management believes that the reasoning thereof
and, hence, its conclusion apply to those Funds as well.
Each Fund will be subject to a nondeductible 4% excise tax
("Excise Tax") to the extent it fails to distribute by the end of any
calendar year substantially all of its ordinary income for that year and
capital gain net income for the one-year period ended on October 31 of
that year, plus certain other amounts.
See the next section for a discussion of the tax consequences to
the Funds of distributions to them from the Portfolios, investments by the
Portfolios in certain securities, and hedging transactions engaged in by
the Portfolios.
Taxation of the Portfolios
The Portfolios (except Neuberger & Berman SOCIALLY RESPONSIVE
Portfolio and Neuberger & Berman INTERNATIONAL Portfolio) have received a
ruling from the Service to the effect that, among other things, each such
Portfolio will be treated as a separate partnership for federal income tax
purposes and will not be a "publicly traded partnership." Although this
ruling may not be relied on as precedent by Neuberger & Berman SOCIALLY
RESPONSIVE Portfolio and Neuberger & Berman INTERNATIONAL Portfolio, N&B
Management believes the reasoning thereof and, hence, its conclusion apply
to those Portfolios as well. As a result, no Portfolio is subject to
federal income tax; instead, each investor in a Portfolio, such as a Fund,
is required to take into account in determining its federal income tax
liability its share of the Portfolio's income, gains, losses, deductions,
and credits, without regard to whether it has received any cash
distributions from the Portfolio. Each Portfolio also is not subject to
Delaware or New York income or franchise tax.
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Because each Fund is deemed to own a proportionate share of its
corresponding Portfolio's assets and income for purposes of determining
whether the Fund satisfies the requirements to qualify as a RIC, each
Portfolio intends to continue to conduct its operations so that its
corresponding Fund will be able to continue to satisfy all those
requirements.
Distributions to a Fund from its corresponding Portfolio (whether
pursuant to a partial or complete withdrawal or otherwise) will not result
in the Fund's recognition of any gain or loss for federal income tax
purposes, except that (1) gain will be recognized to the extent any cash
that is distributed exceeds the Fund's basis for its interest in the
Portfolio before the distribution, (2) income or gain will be recognized
if the distribution is in liquidation of the Fund's entire interest in the
Portfolio and includes a disproportionate share of any unrealized
receivables held by the Portfolio, (3) loss will be recognized if a liqui-
dation distribution consists solely of cash and/or unrealized receivables,
and (4) gain or loss may be recognized on a distribution to a Fund that
contributed property to a Portfolio (all Funds other than Neuberger &
Berman SOCIALLY RESPONSIVE Fund and Neuberger & Berman INTERNATIONAL
Fund). A Fund's basis for its interest in its corresponding Portfolio
generally equals the amount of cash and the basis of any property the Fund
invests in the Portfolio, increased by the Fund's share of the Portfolio's
net income and gains and decreased by (1) the amount of cash and the basis
of any property the Portfolio distributes to the Fund and (2) the Fund's
share of the Portfolio's losses.
Dividends and interest received by a Portfolio may be subject to
income, withholding, or other taxes imposed by foreign countries and U.S.
possessions that would reduce the yield on its securities. Tax treaties
between certain countries and the United States may reduce or eliminate
these foreign taxes, however, and many foreign countries do not impose
taxes on capital gains in respect of investments by foreign investors. If
more than 50% of the value of Neuberger & Berman INTERNATIONAL Fund's
total assets (including its share of Neuberger & Berman INTERNATIONAL
Portfolio's total assets) at the close of its taxable year consists of
securities of foreign corporations, that Fund will be eligible to, and
may, file an election with the Service that will enable its shareholders,
in effect, to receive the benefit of the foreign tax credit with respect
to any foreign and U.S. possessions income taxes paid by the Portfolio
that are treated as paid by the Fund. Pursuant to the election, Neuberger
& Berman INTERNATIONAL Fund would treat those taxes as dividends paid to
its shareholders and each shareholder would be required to (1) include in
gross income, and treat as paid by such taxpayer, his or her proportionate
share of those taxes, (2) treat his or her share of those taxes and of any
dividend paid by the Fund that represents income from foreign or U.S.
possessions sources as his or her own income from those sources, and
(3) either deduct the taxes deemed paid by him or her in computing his or
her taxable income or, alternatively, use the foregoing information in
calculating the foreign tax credit against his or her federal income tax.
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Neuberger & Berman INTERNATIONAL Fund will report to its shareholders
shortly after each taxable year their respective shares of the income from
sources within, and taxes paid to, foreign countries and U.S. possessions
if it makes this election.
A Portfolio may invest in the stock of "passive foreign investment
companies" ("PFICs"). A PFIC is a foreign corporation that, in general,
meets either of the following tests: (1) at least 75% of its gross income
is passive or (2) an average of at least 50% of its assets produce, or are
held for the production of, passive income. Under certain circumstances,
if a Portfolio holds stock of a PFIC, its corresponding Fund (indirectly
through its interest in the Portfolio) will be subject to federal income
tax on a portion of any "excess distribution" received on the stock or of
any gain on disposition of the stock (collectively, "PFIC income"), plus
interest thereon, even if the Fund distributes the PFIC income as a
taxable dividend to its shareholders. The balance of the PFIC income will
be included in the Fund's investment company taxable income and, accord-
ingly, will not be taxable to it to the extent that income is distributed
to its shareholders.
If a Portfolio invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund," then in lieu of its corresponding Fund's
incurring the foregoing tax and interest obligation, the Fund would be
required to include in income each year its pro rata share of the
Portfolio's pro rata share of the qualified electing fund's annual
ordinary earnings and net capital gain (the excess of net long-term
capital gain over net short-term capital loss) -- which most likely would
have to be distributed by the Fund to satisfy the Distribution Requirement
and to avoid imposition of the Excise Tax -- even if those earnings and
gain were not received by the Portfolio. In most instances it will be
very difficult, if not impossible, to make this election because of
certain requirements thereof.
Pursuant to proposed regulations, open-end RICs, such as the
Funds, would be entitled to elect to mark to market their stock in certain
PFICs. Marking to market, in this context, means recognizing as gain for
each taxable year the excess, as of the end of that year, of the fair
market value of each such PFIC's stock over the adjusted basis in that
stock (including mark to market gain for each prior year for which an
election was in effect).
The Portfolios' use of hedging strategies, such as writing
(selling) and purchasing options and futures contracts and entering into
forward contracts, involves complex rules that will determine for income
tax purposes the character and timing of recognition of the gains and
losses the Portfolios realize in connection therewith. Income from
foreign currencies (except certain gains therefrom that may be excluded by
future regulations), and income from transactions in Financial Instruments
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derived by the Portfolio with respect to its business of investing in
securities or foreign currencies, will qualify as permissible income for
its corresponding Fund under the Income Requirement. However, income from
the disposition by a Portfolio of Financial Instruments (other than those
on foreign currencies) will be subject to the Short-Short Limitation for
its corresponding Fund if they are held for less than three months.
Income from the disposition of foreign currencies, and Financial
Instruments on foreign currencies, that are not directly related to a
Portfolio's principal business of investing in securities (or options and
futures with respect thereto) also will be subject to the Short-Short
Limitation for its corresponding Fund if they are held for less than three
months.
If a Portfolio satisfies certain requirements, any increase in
value of a position that is part of a "designated hedge" will be offset by
any decrease in value (whether realized or not) of the offsetting hedging
position during the period of the hedge for purposes of determining
whether its corresponding Fund satisfies the Short-Short Limitation.
Thus, only the net gain (if any) from the designated hedge will be
included in gross income for purposes of that limitation. Each Portfolio
will consider whether it should seek to qualify for this treatment for its
hedging transactions. To the extent a Portfolio does not so qualify, it
may be forced to defer the closing out of certain Financial Instruments
beyond the time when it otherwise would be advantageous to do so, in order
for its corresponding Fund to continue to qualify as a RIC.
Exchange-traded futures contracts and listed options thereon
("Section 1256 contracts") are required to be marked to market (that is,
treated as having been sold at market value) at the end of a Portfolio's
taxable year. Sixty percent of any gain or loss recognized as a result of
these "deemed sales," and 60% of any net realized gain or loss from any
actual sales, of Section 1256 contracts are treated as long-term capital
gain or loss; the remainder is treated as short-term capital gain or loss.
Neuberger & Berman PARTNERS Portfolio and Neuberger & Berman
SOCIALLY RESPONSIVE Portfolio each may acquire zero coupon securities or
other securities issued with original issue discount ("OID"). As a holder
of those securities, each Portfolio (and, through it, its corresponding
Fund) must take into account the OID that accrues on the securities during
the taxable year, even if it receives no corresponding payment on the
securities during the year. Because each Fund annually must distribute
substantially all of its investment company taxable income (including its
share of its corresponding Portfolio's accrued OID) to satisfy the
Distribution Requirement and to avoid imposition of the Excise Tax, the
Fund may be required in a particular year to distribute as a dividend an
amount that is greater than its proportionate share of the total amount of
cash its corresponding Portfolio actually receives. Those distributions
will be made from a Fund's (or its proportionate share of its
corresponding Portfolio's) cash assets or, if necessary, from the proceeds
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of sales of that Portfolio's securities. A Portfolio may realize capital
gains or losses from those sales, which would increase or decrease its
corresponding Fund's investment company taxable income and/or net capital
gain. In addition, any such gains may be realized on the disposition of
securities held for less than three months. Because of the Short-Short
Limitation, any such gains would reduce a Portfolio's ability to sell
other securities, or certain Financial Instruments, held for less than
three months that it might wish to sell in the ordinary course of its
portfolio management.
Taxation of the Funds' Shareholders
If Fund shares are sold at a loss after being held for six months
or less, the loss will be treated as long-term, instead of short-term,
capital loss to the extent of any capital gain distributions received on
those shares. Investors also should be aware that if shares of any Fund
are purchased shortly before the record date for a dividend or other
distribution, the purchaser will receive some portion of the purchase
price back as a taxable distribution.
Each Fund is required to withhold 31% of all dividends, other
distributions, and redemption proceeds payable to any individuals and
certain other non-corporate shareholders who do not provide the Fund with
a correct taxpayer identification number. Withholding at that rate also
is required from dividends and other distributions payable to such
shareholders who otherwise are subject to backup withholding.
As described under "How to Sell Shares" in the Prospectus, a Fund
may close a shareholder's account with the Fund and redeem the remaining
shares if the account balance falls below the specified minimum and the
shareholder fails to reestablish the minimum balance after being given the
opportunity to do so. If an account that is closed pursuant to the
foregoing was maintained for an IRA or a qualified retirement plan
(including a simplified employee pension plan, Keogh plan, corporate
profit-sharing and money purchase pension plan, Code section 401(k) plan,
and Code section 403(b)(7) account), the Fund's payment of the redemption
proceeds to the accountholder may result in adverse tax consequences for
the accountholder. The accountholder should consult his or her tax
adviser regarding any such consequences.
PORTFOLIO TRANSACTIONS
Neuberger & Berman acts as principal broker for each Portfolio
(except Neuberger & Berman INTERNATIONAL Portfolio) in the purchase and
sale of its portfolio securities (other than the substantial portion of
the portfolio transactions of Neuberger & Berman GENESIS Portfolio that
involves securities traded on the OTC market, which that Portfolio
purchases and sells in principal transactions with dealers who are the
principal purchase and sale of options on its securities. Neuberger &
Berman and BNP-International Financial Services Corporation ("BNP-
International"), a wholly-owned subsidiary of BNP and an affiliate of an
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affiliate of Neuberger & Berman, may act as Neuberger & Berman
INTERNATIONAL Portfolio's brokers. Transactions in portfolio securities
for which Neuberger & Berman or any other affiliate serves as broker will
be effected in accordance with Rule 17e-1 under the 1940 Act.
During the period September 1, 1992 to August 2, 1993, Neuberger &
Berman MANHATTAN Fund's predecessor paid brokerage commissions of
$971,770, of which $770,566 was paid to Neuberger & Berman. During the
period August 3 to August 31, 1993, Neuberger & Berman MANHATTAN Portfolio
paid brokerage commissions of $42,780, of which $32,922 was paid to
Neuberger & Berman. During the fiscal year ended August 31, 1994, that
Portfolio paid brokerage commissions of $655,640, of which $525,610 was
paid to Neuberger & Berman.
During the fiscal year ended August 31, 1995, Neuberger & Berman
MANHATTAN Portfolio paid brokerage commissions of $654,982, of which
$436,568 was paid to Neuberger & Berman. Transactions in which that
Portfolio used Neuberger & Berman as broker comprised 73.70% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 66.65% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 94.53% of the
$218,414 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$81,737,328) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its "regular brokers or
dealers" (as defined in the 1940 Act) ("Regular B/Ds"): Bear Stearns &
Co. Inc., and Morgan Stanley & Co., Inc.; at that date, that Portfolio
held the securities of its Regular B/Ds with an aggregate value as
follows: Bear Stearns & Co. Inc., $6,187,500, and Morgan Stanley & Co.,
Inc., $10,859,370.
During the fiscal year ended July 31, 1993, Neuberger & Berman
GENESIS Fund's predecessor paid brokerage commissions of $172,558, of
which $138,912 was paid to Neuberger & Berman. During the period August 3
to August 31, 1993, Neuberger & Berman GENESIS Portfolio paid brokerage
commissions of $13,580, of which $10,660 was paid to Neuberger & Berman.
During the fiscal year ended August 31, 1994, that Portfolio paid
brokerage commissions of $287,587, of which $170,883 was paid to Neuberger
& Berman.
During the fiscal year ended August 31, 1995, Neuberger & Berman
GENESIS Portfolio paid brokerage commissions of $199,718, of which
$118,014 was paid to Neuberger & Berman. Transactions in which that
Portfolio used Neuberger & Berman as broker comprised 55.55% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 59.09% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 80.60% of the
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$81,704 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$21,361,399) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its Regular B/Ds: EXXON
Credit Corp., and General Electric Capital Corp.; at that date, that
Portfolio held the securities of its Regular B/Ds with an aggregate value
as follows: None.
During the period October 1, 1992 to August 2, 1993, Neuberger &
Berman FOCUS Fund's predecessor paid brokerage commissions of $629,567, of
which $470,622 was paid to Neuberger & Berman. During the period August 3
to August 31, 1993, Neuberger & Berman FOCUS Portfolio paid brokerage
commissions of $46,296, of which $42,606 was paid to Neuberger & Berman.
During the fiscal year ended August 31, 1994, that Portfolio paid
brokerage commissions of $719,994, of which $567,972 was paid to Neuberger
& Berman.
During the fiscal year ended August 31, 1995, Neuberger & Berman
FOCUS Portfolio paid brokerage commissions of $1,031,245, of which
$617,957 was paid to Neuberger & Berman. Transactions in which that
Portfolio used Neuberger & Berman as broker comprised 66.83% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 59.92% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 89.62% of the
$413,288 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$160,855,610) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its Regular B/Ds: EXXON
Credit Corp., General Electric Capital Corp., and Merrill Lynch, Pierce,
Fenner & Smith, Inc.; at that date, that Portfolio held the securities of
its Regular B/Ds with an aggregate value as follows: General Electric
Capital Corp., $2,300,000, and Merrill Lynch, Pierce, Fenner & Smith,
Inc., $14,406,250.
During the period September 1, 1992 to August 2, 1993, Neuberger &
Beran GUARDIAN Fund's predecessor paid brokerage commissions of
$1,682,745, of which $1,152,169 was paid to Neuberger & Berman. During
the period August 3 to August 31, 1993, Neuberger & Berman GUARDIAN
Portfolio paid brokerage commissions of $201,981, of which $149,496 was
paid to Neuberger & Berman. During the fiscal year ended August 31, 1994,
that Portfolio paid brokerage commissions of $2,207,401, of which
$1,647,807 was paid to Neuberger & Berman.
During the fiscal year ended August 31, 1995, Neuberger & Berman
GUARDIAN Portfolio paid brokerage commissions of $3,751,206, of which
$2,521,523 was paid to Neuberger & Berman. Transactions in which that
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Portfolio used Neuberger & Berman as broker comprised 70.49% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 67.22% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 82.78% of the
$1,229,683 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$509,609,733) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its Regular B/Ds: EXXON
Credit Corp., General Electric Capital Corp., and Merrill Lynch, Pierce,
Fenner & Smith, Inc.; at that date, that Portfolio held the securities of
its Regular B/Ds with an aggregate value as follows: General Electric
Capital Corp., $1,500,000, and Merrill Lynch, Pierce, Fenner & Smith,
Inc., $48,116,875.
During the fiscal year ended June 30, 1993 and the period July 1
to August 2, 1993, Neuberger & Berman PARTNERS Fund's predecessor paid
brokerage commissions of $2,427,437 and $304,028, respectively, of which
$1,853,250 and $241,044, respectively, were paid to Neuberger & Berman.
During the period August 3 to August 31, 1993, Neuberger & Berman PARTNERS
Portfolio paid brokerage commissions of $373,486, of which $272,542 was
paid to Neuberger & Berman. During the fiscal year ended August 31, 1994,
that Portfolio paid brokerage commissions of $2,994,540, of which
$2,031,570 was paid to Neuberger & Berman.
During the fiscal year ended August 31, 1995, Neuberger & Berman
PARTNERS Portfolio paid brokerage commissions of $4,608,156, of which
$3,092,789 was paid to Neuberger & Berman. Transactions in which that
Portfolio used Neuberger & Berman as broker comprised 71.83% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 67.12% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 95.02% of the
$1,515,367 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$600,676,631) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its Regular B/Ds:
Salomon Brothers, Inc., EXXON Credit Corp., and General Electric Capital
Corp.; at that date, that Portfolio held the securities of its Regular
B/Ds with an aggregate value as follows: General Electric Capital Corp.,
$7,600,000.
During the period from March 16, 1994 (commencement of operations)
through August 31, 1994, and the fiscal year ended August 31, 1995,
Neuberger & Berman SOCIALLY RESPONSIVE Portfolio paid brokerage
commissions of $46,374 and $138,378, respectively, of which $46,050 and
$95,964, respectively, were paid to Neuberger & Berman. Transactions in
which that Portfolio used Neuberger & Berman as broker comprised 72.32% of
the aggregate dollar amount of transactions involving the payment of
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commissions, and 69.35% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. 93.17% of the
$42,414 paid to other brokers by that Portfolio during that fiscal year
(representing commissions on transactions involving approximately
$17,590,257) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its Regular B/Ds: None;
at that date, that Portfolio held the securities of its Regular B/Ds with
an aggregate value as follows: None.
During the period June 15, 1994 (commencement of operations)
through August 31, 1994, and the fiscal year ended August 31, 1995,
Neuberger & Berman INTERNATIONAL Portfolio paid brokerage commissions of
$24,554 and $128,324, respectively. During those periods, that Portfolio
paid commissions of $330 and $4,110, respectively, to Neuberger & Berman
and $0 and $0, respectively, to BNP-International. Transactions in which
the Portfolio used Neuberger & Berman as broker comprised 5.22% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 3.20% of the aggregate brokerage commissions paid by the
Portfolio, during the fiscal year ended August 31, 1995. Of the $124,214
paid to other brokers by that Portfolio during that fiscal year, $99,897
(representing commissions on transactions involving approximately
$24,688,049) was directed to those brokers because of research services
they provided. During the fiscal year ended August 31, 1995, that
Portfolio acquired securities of the following of its Regular B/Ds: HSBC
Securities, Nomura Securities International, and Kleinwart Benson North
America Inc.; at that date, the Portfolio held the securities of its
Regular B/Ds with an aggregate value as follows: HSBC Securities,
$150,471.
Insofar as portfolio transactions of Neuberger & Berman
PARTNERS Portfolio result from active management of equity securities, and
insofar as portfolio transactions of Neuberger & Berman MANHATTAN
Portfolio result from seeking capital appreciation by selling securities
whenever sales are deemed advisable without regard to the length of time
the securities may have been held, it may be expected that the aggregate
brokerage commissions paid by those Portfolios to brokers (including
Neuberger & Berman where it acts in that capacity) may be greater than if
securities were selected solely on a long-term basis.
Portfolio securities are, from time to time, loaned by a Portfolio
to Neuberger & Berman in accordance with the terms and conditions of an
order issued by the SEC. The order exempts such transactions from
provisions of the 1940 Act that would otherwise prohibit such
transactions, subject to certain conditions. Among the conditions of the
order, securities loans made by a Portfolio to Neuberger & Berman must be
fully secured by cash collateral. Under the order, the portion of the
income on the cash collateral which may be shared with Neuberger & Berman
is determined with reference to concurrent arrangements between Neuberger
& Berman and non-affiliated lenders with which it engages in similar
transactions. In addition, where Neuberger & Berman borrows securities
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from a Portfolio in order to relend them to others, Neuberger & Berman is
required to pay that Portfolio, on a quarterly basis, certain "excess
earnings" that Neuberger & Berman otherwise has derived from the relending
of the borrowed securities. When Neuberger & Berman desires to borrow a
security that a Portfolio has indicated a willingness to lend, Neuberger &
Berman must borrow such security from that Portfolio, rather than from an
unaffiliated lender, unless the unaffiliated lender is willing to lend
such security on more favorable terms (as specified in the order) than
that Portfolio. If a Portfolio's expenses exceed its income in any
securities loan transaction with Neuberger & Berman, Neuberger & Berman
must reimburse that Portfolio for such loss.
During the fiscal year ended August 31, 1995, Neuberger & Berman
MANHATTAN Portfolio earned interest income of $507,239 from the
collateralization of securities loans, from which Neuberger & Berman was
paid $270,594. During the fiscal years ended August 31, 1994 and 1993,
that Portfolio and the predecessor of Neuberger & Berman MANHATTAN Fund
earned no interest income from the collateralization of securities loans.
During the fiscal years ended August 31, 1995, 1994, and 1993,
Neuberger & Berman GENESIS Portfolio earned no interest income from the
collateralization of securities loans.
During the fiscal years ended August 31, 1995 and 1994, Neuberger
& Berman GUARDIAN Portfolio earned interest income of $1,430,672 and
$147,103, respectively, from the collateralization of securities loans,
from which Neuberger & Berman was paid $1,252,190 and $119,620,
respectively. During the period August 3 to August 31, 1993, that
Portfolio earned interest income of $3,164 from the collateralization of
securities loans, from which Neuberger & Berman was paid $2,881. During
the period September 1, 1992 to August 1, 1993, the predecessor of
Neuberger & Berman GUARDIAN Fund earned interest income of $23,677 from
the collateralization of securities loans, from which Neuberger & Berman
was paid $3,242.
During the fiscal years ended August 31, 1995 and 1994, Neuberger
& Berman FOCUS Portfolio earned interest income of $327,447 and $38,627,
respectively, from the collateralization of securities loans, from which
Neuberger & Berman was paid $291,207 and $33,225, respectively. During
the period August 3 to August 31, 1993, that Portfolio earned no interest
income from the collateralization of securities loans. During the period
October 1, 1992 to August 2, 1993, the predecessor of Neuberger & Berman
FOCUS Fund earned interest income of $2,482 from the collateralization of
securities loans, from which Neuberger & Berman was paid $1,381.
During the fiscal years ended August 31, 1995 and 1994, Neuberger
& Berman PARTNERS Portfolio earned interest income of $52,410 and $16,085,
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respectively, from the collateralization of securities loans, from which
Neuberger & Berman was paid $48,736 and $13,880, respectively. During the
period August 3 to August 31, 1993, that Portfolio earned no interest
income from the collateralization of securities loans. During the period
July 1, 1993 to August 2, 1993, the predecessor of Neuberger & Berman
PARTNERS Fund earned interest income of $3,952 from the collateralization
of securities loans, from which Neuberger & Berman was paid $2,002.
During the fiscal year ended August 31, 1995, and the period March
16, 1994 (commencement of operations) to August 31, 1994, Neuberger &
Berman SOCIALLY RESPONSIVE Portfolio earned no interest from the
collateralization of securities loans.
During the fiscal year ended August 31, 1995, and the period June
15, 1994 (commencement of operations) to August 31, 1994, Neuberger &
Berman INTERNATIONAL Portfolio earned no interest income from the
collateralization of securities loans.
Each Portfolio may also lend securities to unaffiliated entities,
including brokers or dealers, banks and other recognized institutional
borrowers of securities, provided that cash or equivalent collateral,
equal to at least 100% of the market value of the securities loaned, is
continuously maintained by the borrower with the Portfolio. During the
time securities are on loan, the borrower will pay the Portfolio an amount
equivalent to any dividends or interest paid on such securities. The
Portfolio may invest the cash collateral and earn income, or it may
receive an agreed upon amount of interest income from a borrower who has
delivered equivalent collateral. These loans are subject to termination
at the option of the Portfolio or the borrower. The Portfolio may pay
reasonable administrative and custodial fees in connection with a loan and
may pay a negotiated portion of the interest earned on the cash or
equivalent collateral to the borrower or placing broker. The Portfolio
does not have the right to vote securities on loan, but would terminate
the loan and regain the right to vote if that were considered important
with respect to the investment.
A committee of Independent Portfolio Trustees from time to time
reviews, among other things, information relating to securities loans by
the Portfolios.
In effecting securities transactions, each Portfolio generally
seeks to obtain the best price and execution of orders. Commission rates,
being a component of price, are considered along with other relevant
factors. Each Portfolio plans to continue to use Neuberger & Berman (or
any other affiliated broker or dealer) as its broker where, in the judg-
ment of N&B Management (the Portfolio's investment manager and an
affiliate of the broker), that firm is able to obtain a price and
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execution at least as favorable as other qualified brokers. To the
Portfolios' knowledge, however, no affiliate of any Portfolio receives
give-ups or reciprocal business in connection with their securities
transactions.
The use of Neuberger & Berman (or other affiliates) as a broker
for each Portfolio is subject to the requirements of Section 11(a) of the
Securities Exchange Act of 1934. Section 11(a) prohibits members of
national securities exchanges from retaining compensation for executing
exchange transactions for accounts which they or their affiliates manage,
except where they have the authorization of the persons authorized to
transact business for the account and comply with certain annual reporting
requirements. The Portfolio Trustees have expressly authorized Neuberger
& Berman and other affiliates to retain such compensation, and Neuberger &
Berman and other affiliates comply with the reporting requirements of
Section 11(a).
Under the 1940 Act, commissions paid by a Portfolio to Neuberger &
Berman (or other affiliates) in connection with a purchase or sale of
securities on a securities exchange may not exceed the usual and customary
broker's commission. Accordingly, it is each Portfolio's policy that the
commissions paid to Neuberger & Berman (or other affiliates) must, in N&B
Management's judgment, be (1) at least as favorable as those charged by
other brokers having comparable execution capability and (2) at least as
favorable as commissions contemporaneously charged by Neuberger & Berman
(or other affiliates) on comparable transactions for its most favored
unaffiliated customers, except for accounts for which Neuberger & Berman
acts as a clearing broker for another brokerage firm and customers of
Neuberger & Berman considered by a majority of the Independent Portfolio
Trustees not to be comparable to the Portfolio. The Portfolios do not
deem it practicable and in their best interests to solicit competitive
bids for commissions on each transaction effected by Neuberger & Berman
(or other affiliates). However, consideration regularly is given to
information concerning the prevailing level of commissions charged by
other brokers on comparable transactions during comparable periods of
time. The 1940 Act generally prohibits Neuberger & Berman (or other
affiliates) from acting as principal in the purchase or sale of securities
for a Portfolio's account, unless an appropriate exemption is available.
A committee of Independent Portfolio Trustees from time to time
reviews, among other things, information relating to the commissions
charged by Neuberger & Berman to the Portfolios and to its other customers
and information concerning the prevailing level of commissions charged by
other brokers having comparable execution capability. In addition, the
procedures pursuant to which Neuberger & Berman effects brokerage
transactions for the Portfolios must be reviewed and approved no less
often than annually by a majority of the Independent Portfolio Trustees.
Each Portfolio expects that it will continue to execute a portion
of its transactions through brokers other than Neuberger & Berman. In
- 100 -
<PAGE>
selecting those brokers, N&B Management considers the quality and
reliability of brokerage services, including execution capability,
performance, and financial responsibility, and may consider research and
other investment information provided by, and sale of Fund shares effected
through, those brokers.
To ensure that accounts of all investment clients,
including a Portfolio, are treated fairly in the event that transaction
instructions for more than one investment account regarding the same
security are received by Neuberger & Berman at or about the same time,
Neuberger & Berman may combine transaction orders placed on behalf of
clients, including advisory accounts in which affiliated persons have an
investment interest, for the purpose of negotiating brokerage commissions
or obtaining a more favorable price. Where appropriate, securities
purchased or sold may be allocated, in terms of amount, to a client
according to the proportion that the size of the transaction order
actually placed by the account bears to the aggregate size of transaction
orders simultaneously made by the other accounts, subject to de minimis
exceptions, with all participating accounts paying or receiving the same
price.
A committee comprised of officers of N&B Management and partners
of Neuberger & Berman who are portfolio managers of some of the Portfolios
and Other N&B Funds (collectively, "N&B Funds") and some of Neuberger &
Berman's managed accounts ("Managed Accounts") evaluates semi-annually the
nature and quality of the brokerage and research services provided by
other brokers. Based on this evaluation, the committee establishes a list
and projected rankings of preferred brokers for use in determining the
relative amounts of commissions to be allocated to those brokers.
Ordinarily, the brokers on the list effect a large portion of the
brokerage transactions for the N&B Funds and the Managed Accounts that are
not effected by Neuberger & Berman. However, in any semi-annual period,
brokers not on the list may be used, and the relative amounts of brokerage
commissions paid to the brokers on the list may vary substantially from
the projected rankings. These variations reflect the following factors,
among others: (1) brokers not on the list or ranking below other brokers
on the list may be selected for particular transactions because they
provide better price and/or execution, which is the primary consideration
in allocating brokerage; (2) adjustments may be required because of
periodic changes in the execution or research capabilities of particular
brokers, or in the execution or research needs of the N&B Funds and/or the
Managed Accounts; and (3) the aggregate amount of brokerage commissions
generated by transactions for the N&B Funds and the Managed Accounts may
change substantially from one semi-annual period to the next.
The commissions charged by a broker other than Neuberger & Berman
(or other affiliates) may be higher than the amount another firm might
charge if N&B Management determines in good faith that the amount of those
commissions is reasonable in relation to the value of the brokerage and
- 101 -
<PAGE>
research services provided by the broker. N&B Management believes that
those research services benefit the Portfolios by supplementing the
research otherwise available to N&B Management. That research may be used
by N&B Management in servicing Other N&B Funds and, in some cases, by
Neuberger & Berman in servicing the Managed Accounts. On the other hand,
research received by N&B Management from brokers effecting portfolio
transactions on behalf of the Other N&B Funds and by Neuberger & Berman
from brokers effecting portfolio transactions on behalf of the Managed
Accounts may be used for the Portfolios' benefit.
Mark R. Goldstein, Judith M. Vale, Lawrence Marx III and Kent C.
Simons, Michael M. Kassen and Robert I. Gendelman, Janet W. Prindle, and
Felix Rovelli, each of whom is a Vice President of N&B Management (except
for Mr. Gendelman, who is an Assistant Vice President) and a general
partner of Neuberger & Berman (except for Ms. Vale, Mr. Gendelman, and
Mr. Rovelli), are the persons primarily responsible for making decisions
as to specific action to be taken with respect to the investment portfo-
lios of Neuberger & Berman MANHATTAN, Neuberger & Berman GENESIS,
Neuberger & Berman FOCUS and Neuberger & Berman GUARDIAN, Neuberger &
Berman PARTNERS, Neuberger & Berman SOCIALLY RESPONSIVE and Neuberger &
Berman INTERNATIONAL Portfolios, respectively. Each of them has full
authority to take action with respect to portfolio transactions and may or
may not consult with other personnel of N&B Management prior to taking
such action. If Mr. Goldstein is unavailable to perform his
responsibilities, Susan Switzer, who is an Assistant Vice President of N&B
Management, will assume responsibility for the portfolio of Neuberger &
Berman MANHATTAN Portfolio. If Ms. Prindle is unavailable to perform her
responsibilities, Farha-Joyce Haboucha, who is a Vice President of N&B
Management, will assume responsibility for the portfolio of Neuberger &
Berman SOCIALLY RESPONSIVE Portfolio. If Mr. Rovelli is unavailable to
perform his responsibilities, Robert Cresci, who is an Assistant Vice
President of N&B Management, will assume responsibility for the portfolio
of Neuberger & Berman INTERNATIONAL Portfolio.
Portfolio Turnover
The portfolio turnover rate is the lesser of the cost of the
securities purchased or the value of the securities sold, excluding all
securities, including options, whose maturity or expiration date at the
time of acquisition was one year or less, divided by the average monthly
value of such securities owned during the year.
REPORTS TO SHAREHOLDERS
Shareholders of each Fund receive unaudited semi-annual financial
statements, as well as year-end financial statements audited by the
independent auditors or independent accountants for the Fund and its
corresponding Portfolio. Each Fund's statements show the investments
owned by its corresponding Portfolio and the market values thereof and
- 102 -
<PAGE>
provide other information about the Fund and its operations, including the
Fund's beneficial interest in its corresponding Portfolio.
ORGANIZATION
The ultimate predecessor of Neuberger & Berman FOCUS Fund was a
Maryland corporation named "Energy Fund Incorporated." Its name was
changed to "Neuberger & Berman Selected Sectors Plus Energy, Inc." on
January 5, 1989; to "Neuberger & Berman Selected Sectors Fund, Inc." on
November 1, 1991; to "Neuberger & Berman Selected Sectors Fund" on August
2, 1993; and to Neuberger & Berman FOCUS Fund" on January 1, 1995.
Prior to November 17, 1995, the name of Neuberger &
Berman INTERNATIONAL Portfolio was "International Portfolio."
CUSTODIAN AND TRANSFER AGENT
Each Fund and Portfolio has selected State Street, 225 Franklin
Street, Boston, MA 02110, as custodian for its securities and cash. All
correspondence should be mailed to Neuberger & Berman Funds, c/o Boston
Service Center, P.O. Box 8403, Boston, MA 02266-8403. State Street also
serves as each Fund's transfer and shareholder servicing agent,
administering purchases, redemptions, and transfers of Fund shares and the
payment of dividends and other distributions through its Boston Service
Center. State Street Cayman serves as transfer agent to Neuberger &
Berman INTERNATIONAL Portfolio.
INDEPENDENT AUDITORS/ACCOUNTANTS
Each Fund and Portfolio (other than Neuberger & Berman
INTERNATIONAL Portfolio, Neuberger & Berman MANHATTAN Fund and Portfolio,
and Neuberger & Berman SOCIALLY RESPONSIVE Fund and Portfolio) has
selected Ernst & Young LLP, 200 Clarendon Street, Boston, MA 02116, as the
independent auditors who will audit its financial statements. Neuberger &
Berman INTERNATIONAL Portfolio has selected Ernst & Young, Shedden Road,
George Town, Grand Cayman, Cayman Islands as the independent auditors who
will audit its financial statements. Neuberger & Berman MANHATTAN Fund
and Portfolio and Neuberger & Berman SOCIALLY RESPONSIVE Fund and
Portfolio have selected Coopers & Lybrand L.L.P., One Post Office Square,
Boston, MA 02109, as the independent accountants who will audit their
financial statements.
LEGAL COUNSEL
Each Fund and Portfolio has selected Kirkpatrick & Lockhart LLP,
1800 M Street, N.W., Washington, D.C. 20036, as its legal counsel.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- 103 -
<PAGE>
The following table sets forth the name, address, and percentage
of ownership of each person who owned of record, or who was known by each
Fund to own beneficially or of record, 5% or more of that Fund's
outstanding shares at November 30, 1995:
<TABLE>
<CAPTION>
Percentage of
Ownership at
Name and Address November 30, 1995
<S> <C> <C>
Neuberger & Berman Charles Schwab & Co., Inc.* 9.45%
MANHATTAN Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Neuberger & Berman GENESIS Charles Schwab & Co., Inc.* 15.97%
Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Neuberger & Berman* 8.92%
11 Broadway, 12th Floor
Attn: Steve Gallaro, Operations Control
New York, NY 10004-1303
Union Central Life 7.13%
Insurance Co.
Attn: Mutual Funds Dept.
Station 3
P.O. Box 40888
Cincinnati, OH 45240-0888
Neuberger & Berman GUARDIAN Charles Schwab & Co., Inc.* 25.75%
Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
- 104 -
<PAGE>
Percentage of
Ownership at
Name and Address November 30, 1995
Neuberger & Berman PARTNERS Charles Schwab & Co., Inc.* 8.68%
Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Nationwide Life Insurance Plan 6.27%
QPVA
c/o IPO CO 67
P.O. Box 182029
Columbus, OH 43218-2029
Neuberger & Berman Charles Schwab & Co., Inc.* 30.30%
SOCIALLY RESPONSIVE Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Neuberger & Berman* 6.13%
Attn: Steve Gallaro, Operations Control
11 Broadway, 12th Floor
New York, NY 10004-1303
Lilo J. Leeds 5.99%
17 Hilltop Drive
Great Neck, NY 11021-1140
Neuberger & Berman FOCUS Charles Schwab & Co., Inc.* 11.45%
Fund Attn: Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
Town of Cheshire 14.73%
Retirement Plan
Attn: Michael A. Milone, Director of
Finance
Town of Cheshire
84 South Main St.
Cheshire, CT 06410-3108
Neuberger & Berman Trust Co., Trustee 7.26%
Neuberger & Berman Employees Profit
Sharing Plan
UTD 05/20/71
Attn: Al Boccardo
605 Third Avenue, 36th Floor
New York, NY 10158-0180
- 105 -
<PAGE>
Percentage of
Ownership at
Name and Address November 30, 1995
Neuberger & Berman Neuberger & Berman* 6.83%
INTERNATIONAL Fund 11 Broadway, 12th Floor
New York, NY 10004-1303
Attn: Steve Gallaro, Operations Control
</TABLE>
___________________________
* Charles Schwab & Co., Inc. and Neuberger & Berman hold these
shares of record for the accounts of certain of their clients and
have informed the Funds of their policy to maintain the
confidentiality of holdings in their client accounts unless
disclosure is expressly required by law.
At December 6, 1995, the trustees and officers of the Trust and
the corresponding Managers Trust, as a group, owned beneficially or of
record less than 1% of the outstanding shares of each Fund (except
Neuberger & Berman INTERNATIONAL Fund). As of that date, the trustees and
officers of the Trust and Global Managers Trust, as a group, owned 1.24%
of the outstanding shares of Neuberger & Berman INTERNATIONAL Fund.
REGISTRATION STATEMENT
This SAI and the Prospectus do not contain all the information
included in the Trust's registration statement filed with the SEC under
the 1933 Act with respect to the securities offered by the Prospectus.
Certain portions of the registration statement have been omitted pursuant
to SEC rules and regulations. The registration statement, including the
exhibits filed therewith, may be examined at the SEC's offices in Wash-
ington, D.C.
Statements contained in this SAI and in the Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and in each instance reference is made to the copy of the
contract or other document filed as an exhibit to the registration
statement, each such statement being qualified in all respects by such
reference.
FINANCIAL STATEMENTS
The following financial statements and related documents are
incorporated herein by reference from the Funds' Annual Reports to
shareholders for the fiscal year ended August 31, 1995:
- 106 -
<PAGE>
The audited financial statements of the Funds and
Portfolios and notes thereto for the fiscal year ended
August 31, 1995, and the reports of Ernst & Young LLP,
independent auditors, with respect to such audited
financial statements of Neuberger & Berman GENESIS Fund
and Portfolio, Neuberger & Berman GUARDIAN Fund and
Portfolio, Neuberger & Berman PARTNERS Fund and Portfolio,
Neuberger & Berman FOCUS Fund and Portfolio, and Neuberger
& Berman INTERNATIONAL Fund; the report of Ernst & Young,
independent auditors, with respect to such audited
financial statements of Neuberger & Berman INTERNATIONAL
Portfolio; and the reports of Coopers & Lybrand L.L.P.,
independent accountants, with respect to such audited
financial statements of Neuberger & Berman MANHATTAN Fund
and Portfolio, and Neuberger & Berman SOCIALLY RESPONSIVE
Fund and Portfolio.
- 107 -
<PAGE>
Appendix A
RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER
S&P corporate bond ratings:
AAA - Bonds rated AAA have the highest rating assigned by
S&P. Capacity to pay interest and repay principal is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay
interest and repay principal and differ from the higher rated issues only
in small degree.
A - Bonds rated A have a strong capacity to pay interest
and repay principal, although they are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
bonds in higher rated categories.
BBB - Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
principal and interest for bonds in this category than for bonds in higher
rated categories.
BB, B, CCC, CC, C - Bonds rated BB, B, CCC, CC, and C are
regarded, on balance, as predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with the terms
of the obligation. BB indicates the lowest degree of speculation and C
the highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
CI - The rating CI is reserved for income bonds on which
no interest is being paid.
D - Bonds rated D are in default, and payment of interest
and/or repayment of principal is in arrears.
Plus (+) or Minus (-) - The ratings above may be modified
by the addition of a plus or minus sign to show relative standing within
the major categories.
Moody's corporate bond ratings:
Aaa - Bonds rated Aaa are judged to be of the best qual-
ity. They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large or
an exceptionally stable margin, and principal is secure. Although the
various protective elements are likely to change, the changes that can be
visualized are most unlikely to impair the fundamentally strong position
of the issuer.
- 108 -
<PAGE>
Aa - Bonds rated Aa are judged to be of high quality by
all standards. Together with the Aaa group, they comprise what are
generally known as "high grade bonds." They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa-rated
securities, fluctuation of protective elements may be of greater
amplitude, or there may be other elements present that make the long-term
risks appear somewhat larger than in Aaa-rated securities.
A - Bonds rated A possess many favorable investment
attributes and are considered to be upper medium grade obligations.
Factors giving security to principal and interest are considered adequate,
but elements may be present that suggest a susceptibility to impairment
sometime in the future.
Baa - Bonds which are rated Baa are considered as medium
grade obligations; i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. These bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
Ba - Bonds rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B - Bonds rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa - Bonds rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with respect
to principal or interest.
Ca - Bonds rated Ca represent obligations that are
speculative in a high degree. Such issues are often in default or have
other marked shortcomings.
C - Bonds rated C are the lowest rated class of bonds,
and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Modifiers - Moody's may apply numerical modifiers 1, 2,
and 3 in each generic rating classification described above. The modifier
1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issuer ranks in the lower end of its generic
rating category.
- 109 -
<PAGE>
S&P commercial paper ratings:
A-1 - This highest category indicates that the degree of
safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics are denoted with a plus
sign (+).
Moody's commercial paper ratings
Issuers rated Prime-1 (or related supporting
institutions), also known as P-1, have a superior capacity for repayment
of short-term promissory obligations. Prime-1 repayment capacity will
normally be evidenced by the following characteristics:
- Leading market positions in well-established
industries.
- High rates of return on funds employed.
- Conservative capitalization structures with
moderate reliance on debt and ample asset
protection.
- Broad margins in earnings coverage of fixed
financial charges and high internal cash
generation.
- Well-established access to a range of financial
markets and assured sources of alternate
liquidity.
- 110 -
<PAGE>
Appendix B
PERFORMANCE DATA
- 111 -
<PAGE>
NEUBERGER & BERMAN MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, NY 10158-0006
212-476-8800
Dear Investor,
Unsure whether you should invest today?
Recently, we sent the information you requested about Neuberger&Berman
Guardian Fund -- a no-load growth-and-income fund that primarily seeks
capital appreciation. If you have recently sent in an Application, we
thank you for your business.
If not, perhaps you're waiting for the perfect time to invest. Unless
you're a short-term investor, however, investing at market highs or lows
makes little difference with Neuberger&Berman Guardian Fund -- as the
graphs below through 12/31 show*:
If you had invested $5,000 a Or, if you had invested $5,000 a
year in the Neuberger&Berman year in the Neuberger&Berman
Guardian Fund for the past 15 Guardian Fund for the past 15
years on the best** possible years on the worst** possible
day each year-the day the day each year-the day the market
market hit bottom-the peaked-this is how the account
investment value would have would have grown:
been:
PLEASE DESCRIBE GRAPHICS THAT ARE TO BE INSERTED
GRAPHICS CANNOT BE INCLUDED IN EDGAR DOCUMENTS
Graphic Showing Average Graphic Showing Average
Annual Total Return of Annual Total Return of
+15.62% +13.25%
* Performance before the Fund's August 1993 reorganization is for
its predecessor. Past performance is no guarantee of future
results. What's more, as market conditions change, your
investment return and principal value will fluctuate, and your
shares when redeemed -- may be worth more or less than your
original investment.
** 1995's investments will be made at the end of 1995 when the best and
worst days can be determined.
Regular investing cannot assure you of a profit; if you must sell when
prices are depressed, you will incur a loss.
Over the past 1-, 5-, and 10-year periods ending on March 31, 1995, the
Fund's average annual total return was +13.54%, +14.78%, and +14.38%,
<PAGE>
respectively. These results are on a "total return" basis and include
reinvestment of dividends and capital gains distributions.
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT A
COST OF LIVING INDEX
PREPARED FOR: BARBARA
Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
9/27/88 $10,000.00 $119.8000 0.00% 83.472 $119.8000 $10,000
Dividends and Capital Gains Reinvested
===== C O S T O F S H A R E S =====
Annual Cumulative Total Annual
Cumulative Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
12/31/88 10,000 0 0 10,000 0
12/31/89 10,000 0 0 10,000 0
12/31/90 10,000 0 0 10,000 0
12/31/91 10,000 0 0 10,000 0
12/31/92 10,000 0 0 10,000 0
12/31/93 10,000 0 0 10,000 0
12/31/94 10,000 0 0 10,000 0
8/31/95 10,000 0 0 10,000 0
Totals 0 0
========= V A L U E O F S H A R E S ========
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
12/31/88 10,058 0 10,058 0 10,058 83
12/31/89 10,526 0 10,526 0 10,526 83
12/31/90 11,169 0 11,169 0 11,169 83
12/31/91 11,511 0 11,511 0 11,511 83
12/31/92 11,845 0 11,845 0 11,845 83
12/31/93 12,170 0 12,170 0 12,170 83
12/31/94 12,496 0 12,496 0 12,496 83
8/31/95 12,730 0 12,730 0 12,730 83
Totals 12,730 0 12,730 0 12,730 83
<PAGE>
Average Annual Total Return for This Illustration: 3.55% (Annual Compounding)
Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 2.84% 3.22% 3.53%
</TABLE>
<PAGE>
INITIAL INVESTMENT OF $200,000
_________________________________________________________________
NEUBERGER & BERMAN FOCUS FUND
The following table* indicates the results over a 40 year period (in
5-year increments) if an investor had invested $200,000 in Focus Fund's
predecessor on October 19, 1955, the date of its inception, and had
implemented a systematic withdrawal plan under which he or she withdrew,
on a monthly basis, 10% of the initial investment each year.
Cumulative
Total Value of Remaining Amounts
Date Shares At Year End Withdrawn
----------------- ----------------------- ---------
October 19, 1955 made initial $200,000
investment
December 31, 1955 $ 224,392 $ 3,333
1960 305,458 103,333
1965 370,916 203,333
1970 342,982 303,333
1975 308,390 403,333
1980 736,673 503,333
1985 901,975 603,333
1990 1,300,055 703,333
August 31, 1995 2,933,367 796,666
* Shows reinvestment of all dividends and capital gain distributions.
Results represent past performance. Investment returns and principal
fluctuate.
<PAGE>
<TABLE>
<CAPTION>
NBSSX 07-06 13:54 **HYPO**Copr. 1995 TowersData
NEUBERGER & BERMAN FOCUS
PREPARED FOR: Focus Fund buying at the HIGHS:
Investment or Sales Shares Net Asset
Withdrawal Offering Charge Purchased or Value Net Asset
Date (-) Price Included Redeemed (-) per Share Value
---- ------------- --------- -------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
11/20/80 5,000.00 24.4900 0.00 204.165 24.4900 5,000
4/27/81 5,000.00 22.0600 0.00 226.655 22.0600 5,000
12/27/82 5,000.00 16.1500 0.00 309.598 16.1500 5,000
11/29/83 5,000.00 17.7600 0.00 281.532 17.7600 5,000
1/6/84 5,000.00 18.2700 0.00 273.673 18.2700 5,000
12/16/85 5,000.00 19.1000 0.00 261.780 19.1000 5,000
12/2/86 5,000.00 19.1200 0.00 261.506 19.1200 5,000
8/25/87 5,000.00 24.5100 0.00 203.998 24.5100 5,000
10/21/88 5,000.00 17.2200 0.00 290.360 17.2200 5,000
10/9/89 5,000.00 19.3200 0.00 258.799 19.3200 5,000
7/16/90 5,000.00 19.6300 0.00 254.712 19.6300 5,000
12/31/91 5,000.00 19.9700 0.00 250.376 19.9700 5,000
6/1/92 5,000.00 21.1500 0.00 236.407 21.1500 5,000
12/29/93 5,000.00 24.9500 0.00 200.401 24.9500 5,000
1/31/94 5,000.00 23.9300 0.00 208.943 23.9300 5,000
Dividends and Capital Gains Reinvested
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulative Total Annual Cap
Net Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- -------- ------------
<S> <C> <C> <C> <C> <C>
12/31/80 5,000 0 0 5,000 0
12/31/81 10,000 483 483 10,483 909
12/31/82 15,000 512 994 15,994 261
12/31/83 20,000 883 1,878 21,878 691
12/31/84 25,000 1,305 3,182 28,182 1,001
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- -------
<S> <C> <C> <C> <C> <C> <C>
12/31/80 4,788 0 4,788 0 4,788 204
12/31/81 7,596 934 8,530 496 9,026 512
12/31/82 11,943 1,142 13,085 1,017 14,102 874
12/31/83 18,303 1,959 20,262 2,013 22,275 1,244
<PAGE>
12/31/84 22,362 2,888 25,250 3,243 28,493 1,651
CONTINUED ON PAGE 2
<PAGE>
NEUBERGER & BERMAN FOCUS
HIGHS
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulative Total Annual Cap
Net Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- -------- ------------
<S> <C> <C> <C> <C> <C>
12/31/85 30,000 1,519 4,701 34,701 1,535
12/31/86 35,000 1,834 6,535 41,535 3,459
12/31/87 40,000 1,731 8,266 48,266 9,544
12/31/88 45,000 1,804 10,070 55,070 1,874
12/31/89 50,000 1,940 12,010 62,010 10,282
12/31/90 55,000 1,792 13,802 68,802 1,942
12/31/91 60,000 1,927 15,729 75,729 4,671
12/31/92 65,000 1,745 17,475 82,475 13,169
12/31/93 70,000 1,775 19,249 89,249 12,068
12/31/94 75,000 1,582 95,831 95,831 11,704
8/31/95 75,000 0 95,831 95,831 0
Totals 20,831 73,110
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
12/31/85 29,809 4,848 34,657 5,223 39,880 2,084
12/31/86 33,595 8,219 41,814 6,918 48,732 2,638
12/31/87 31,335 14,280 45,615 7,215 52,830 3,411
12/31/88 39,232 17,547 56,779 9,737 66,516 3,922
12/31/89 48,690 29,828 78,518 12,802 91,320 4,824
12/31/90 48,225 28,862 77,087 13,362 90,449 5,302
12/31/91 61,451 38,648 100,099 17,655 117,754 5,897
12/31/92 71,241 56,156 127,397 20,920 148,317 6,898
12/31/93 81,033 72,298 153,331 24,212 177,543 7,699
12/31/94 80,340 79,362 159,702 24,240 183,942 8,524
8/31/95 99,178 97,971 197,149 29,924 246,166 8,524
Totals 99,178 97,971 197,149 29,924 246,166 8,524
Average Annual Total Return for This Illustration: 13.21% (Annual Compounding)
Average Annual Total Returns 1-Year 5-Year 10-Year Inception Inception Date
at Net Asset Value ------ ------ ------- --------- --------------
for Periods Ending 6/30/95: 26.38% 15.48% 14.00% 11.79% 10/19/55
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
NBSSX 07-06 13:49 **HYPO** Copr. 1995 TowersData
NEUBERGER & BERMAN FOCUS
PREPARED FOR: Focus Fund buying at the LOWS:
Investment or Sales Shares Net Asset
Withdrawal Offering Charge Purchased or Value Net Asset
Date (-) Price Included Redeemed (-) per Share Value
---- ------------ --------- -------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
4/21/80 5,000.00 18.1600 0.00 275.330 18.1600 5,000
9/25/81 5,000.00 15.9500 0.00 313.480 15.9500 5,000
8/12/82 5,000.00 14.2000 0.00 352.113 14.2000 5,000
1/3/83 5,000.00 15.9700 0.00 313.087 15.9700 5,000
7/24/84 5,000.00 17.0300 0.00 293.600 17.0300 5,000
1/4/85 5,000.00 16.9800 0.00 294.464 16.9800 5,000
1/22/86 5,000.00 18.5200 0.00 269.978 18.5200 5,000
10/19/87 5,000.00 15.4800 0.00 322.997 15.4800 5,000
1/20/88 5,000.00 15.4700 0.00 323.206 15.4700 5,000
1/3/89 5,000.00 16.8700 0.00 296.384 16.8700 5,000
10/11/90 5,000.00 15.9400 0.00 313.676 15.9400 5,000
1/9/91 5,000.00 16.1700 0.00 309.215 16.1700 5,000
10/9/92 5,000.00 18.8200 0.00 265.675 18.8200 5,000
1/20/93 5,000.00 21.5900 0.00 231.598 21.5900 5,000
4/4/94 5,000.00 21.9400 0.00 227.894 21.9400 5,000
Dividends and Capital Gains Reinvested
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulative Total Annual Cap
Net Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
12/31/80 5,000 237 237 5,237 540
12/31/81 10,000 348 585 10,585 656
12/31/82 15,000 1,035 1,620 16,620 528
12/31/83 20,000 1,469 3,088 23,088 1,149
12/31/84 25,000 1,629 4,718 29,718 1,250
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- --------- ---------- --------- ---------- ----- -------
<S> <C> <C> <C> <C> <C> <C>
12/31/80 6,456 576 7,032 253 7,285 311
12/31/81 10,380 1,107 11,487 548 12,035 683
12/31/82 15,177 1,593 16,770 1,640 18,410 1,141
<PAGE>
12/31/83 22,460 2,919 25,379 3,290 28,669 1,601
12/31/84 26,712 4,061 30,773 4,797 35,570 2,061
CONTINUED ON PAGE 2
<PAGE>
**HYOO** NBSSX PAGE 2
NEUBERGER & BERMAN FOCUS
LOWS
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulative Total Annual Cap
Net Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
12/31/85 30,000 2,167 6,884 36,884 2,190
12/31/86 35,000 2,525 9,409 44,409 4,763
12/31/87 40,000 2,025 11,435 51,435 11,003
12/31/88 45,000 2,366 13,801 58,801 2,488
12/31/89 50,000 2,514 16,316 66,316 13,455
12/31/90 55,000 2,144 18,459 73,459 2,319
12/31/91 60,000 2,506 20,965 80,965 6,074
12/31/92 65,000 2,100 23,066 88,066 15,806
12/31/93 70,000 2,190 25,255 95,255 14,889
12/31/94 75,000 1,945 27,201 102,201 14,396
8/31/95 75,000 0 27,201 102,201 0
Totals 27,201 91,504
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
12/31/85 35,257 6,851 42,108 7,642 49,750 2,599
12/31/86 39,010 11,487 50,497 9,960 60,457 3,273
12/31/87 37,719 18,153 55,872 10,013 65,885 4,253
12/31/88 46,780 22,413 69,193 13,373 82,566 4,868
12/31/89 57,824 38,421 96,245 17,433 113,678 6,005
12/31/90 57,463 36,989 94,452 17,893 112,345 6,585
12/31/91 73,440 49,623 123,063 23,564 146,627 7,342
12/31/92 84,779 70,879 155,658 27,669 183,327 8,527
12/31/93 96,271 90,911 187,182 31,866 219,048 9,499
12/31/94 95,011 99,472 194,483 31,766 226,249 10,484
8/31/95 117,288 122,796 240,084 39,215 302,783 10,484
Totals 117,288 122,796 240,084 39,215 302,783 10,484
Average Annual Total Return for This Illustration: 15.01% (Annual Compounding)
Average Annual Total Returns 1-Year 5-Year 10-Year Inception Inception Date
at Net Asset Value ----- ------ ------- --------- --------------
for Periods Ending 6/30/95: 26.38% 15.48% 14.00% 11.79% 10/19/55
<PAGE>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER & BERMAN FOCUS
PREPARED FOR: BARBARA
Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- -------- --------- --------- ---------
10/19/95 $10,000.00 $6.0000 0.00% 1,666.667 $6.0000 $10,000
Dividends and Capital Gains Reinvested
===== C O S T O F S H A R E S =====
Annual Cumulative Total Annual Cap
Cumulative Income Income Investment Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
8/31/56 10,000 0 0 10,000 0
8/31/57 10,000 165 165 10,165 393
8/31/58 10,000 169 334 10,334 516
8/31/59 10,000 226 560 10,560 327
8/31/60 10,000 182 741 10,741 994
8/31/61 10,000 193 935 10,935 896
8/31/62 10,000 118 1,053 11,053 998
8/31/63 10,000 235 1,288 11,288 527
8/31/64 10,000 373 1,661 11,661 828
8/31/65 10,000 439 2,100 12,100 951
8/31/66 10,000 499 2,599 12,599 1,304
8/31/67 10,000 592 3,190 13,190 2,609
8/31/68 10,000 683 3,873 13,873 3,238
8/31/69 10,000 930 4,803 14,803 3,464
8/31/70 10,000 1,358 6,162 16,162 1,567
8/31/71 10,000 1,520 7,682 17,682 593
8/31/72 10,000 1,247 8,929 18,929 1,325
8/31/73 10,000 1,028 9,956 19,956 1,356
8/31/74 10,000 1,207 11,164 21,164 690
8/31/75 10,000 1,785 12,949 22,949 0
8/31/76 10,000 2,145 15,094 25,094 0
Totals 151,639 387,682
PAGE 1 CONTINUED ON PAGE 1A
<PAGE>
PAGE 1A
==== V A L U E O F S H A R E S =====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- ----
<S> <C> <C> <C> <C> <C> <C>
8/31/56 13,082 0 13,082 0 13,082 1,667
8/31/57 13,343 439 13,782 184 13,966 1,745
8/31/58 13,022 995 14,017 366 14,383 1,841
8/31/59 17,576 1,780 19,356 795 20,151 1,911
8/31/60 18,891 3,108 21,999 1,073 23,072 2,035
8/31/61 20,491 4,497 24,988 1,407 26,395 2,147
8/31/82 16,392 4,432 20,824 1,224 22,048 2,242
8/31/63 19,283 5,929 25,212 1,760 26,972 2,331
8/31/64 19,692 6,927 26,619 2,190 28,809 2,438
8/31/65 21,250 8,509 29,759 2,841 32,600 2,557
8/31/66 21,350 9,776 31,126 2,323 34,449 2,689
8/31/67 28,650 17,059 45,709 5,353 51,062 2,970
8/31/68 28,016 19,965 47,981 5,928 53,909 3,207
8/31/69 23,799 20,063 43,862 5,869 49,731 3,483
8/31/70 18,833 17,235 36,068 5,822 41,890 3,707
8/31/71 22,017 20,853 42,870 8,613 51,483 3,897
8/31/72 21,783 22,065 43,848 9,870 53,718 4,110
8/31/73 19,151 20,718 39,869 9,677 49,546 4,312
8/31/74 15,166 16,907 32,073 8,536 40,609 4,463
8/31/75 20,167 22,480 42,647 13,779 56,426 4,663
8/31/76 23,783 26,512 50,295 18,869 69,164 4,847
Totals 48,134 598,363 646,497 259,653 906,150 31,376
CONTINUED ON PAGE 2
<PAGE>
**HYPO** NBSSX PAGE 2 NEUBERGER & BERMAN FOCUS
=== C O S T O F S H A R E S ====
Annual Cumulative Total Annual Cap
Cumulative Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
8/31/77 10,000 2,230 17,323 27,232 1,939
8/31/78 10,000 2,425 19,748 29,748 2,631
8/31/79 10,000 3,158 22,906 32,906 3,490
8/31/80 10,000 3,951 26,857 36,857 4,191
8/31/81 10,000 5,579 32,436 42,436 12,716
8/31/82 10,000 8,199 40,635 50,635 15,446
8/31/83 10,000 8,699 49,334 59,334 4,436
8/31/84 10,000 9,691 59,025 69,025 7,580
8/31/85 10,000 9,081 68,106 78,106 6,969
8/31/86 10,000 10,569 78,675 88,675 10,684
8/31/87 10,000 11,157 89,832 99,832 21,046
8/31/88 10,000 8,807 98,639 108,639 48,561
8/31/89 10,000 8,973 107,612 117,612 9,433
8/31/90 10,000 8,987 116,599 126,599 48,090
8/31/91 10,000 7,572 124,172 134,172 8,209
8/31/92 10,000 8,144 132,316 142,316 19,739
8/31/93 10,000 6,791 139,107 149,107 51,238
8/31/94 10,000 6,710 145,817 155,817 45,629
8/31/95 10,000 5,822 151,639 161,639 43,083
Totals 151,639 387,682
=========================== VALUE OF SHARES=================================
From Cap From
From Gains Dividends
Date Investment Reinvested Sub-Total Reinvested Total Value Shares Held
---- ---------- ---------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
8/31/77 24,299 29,207 53,506 21,716 75,222 5,159
8/31/78 26,133 34,517 60,650 26,217 86,867 5,540
8/31/79 29,884 43,675 73,559 33,784 107,343 5,987
8/31/80 37,917 61,280 99,197 48,394 147,591 6,488
8/31/81 35,767 70,225 105,992 51,100 157,092 7,320
8/31/82 26,550 66,476 93,026 45,548 138,574 8,699
8/31/83 32,801 88,080 120,881 67,947 188,828 9,595
8/31/64 31,416 92,348 123,764 75,287 199,051 10,560
8/31/85 33,167 105,513 138,680 89,933 228,613 11,488
8/31/86 35,117 124,321 159,438 107,689 267,127 12,678
8/31/87 40,650 172,364 213,014 139,741 352,755 14,463
8/31/88 28,766 163,857 192,623 106,906 299,529 17,354
8/31/89 36,333 219,324 255,657 146,768 402,425 18,460
8/31/90 30,083 227,279 257,362 130,065 387,427 21,464
8/31/91 33,416 262,297 295,713 153,540 449,253 22,407
8/31/92 35,084 297,046 332,130 170,166 502,296 23,862
8/31/93 39,999 401,852 441,851 202,320 644,171 26,840
<PAGE>
=========================== VALUE OF SHARES=================================
From Cap From
From Gains Dividends
Date Investment Reinvested Sub-Total Reinvested Total Value Shares Held
---- ---------- ---------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
8/31/94 40,700 457,204 497,904 212,966 710,870 29,110
8/31/95 48,134 598,363 646,497 259,653 906,150 31,376
Totals 48,134 598,363 646,497 259,653 906,150 31,376
Average Annual Total Return for This Illustration: 11.97% (Annual Compounding)
Average Annual Total Returns 1-Year
5-
Year 10-Year
at Net Asset Value ------
---
--- -------
for Periods Ending 6/30/95: 26.38%
15.48%
14.00%
</TABLE>
<PAGE>
THE FUND'S RECORD VS. THE COST OF LIVING
_________________________________________________________________
NEUBERGER & BERMAN GENESIS FUND
$10,000 . . . An Investment History
The accompanying chart shows the growth in value of an investment in
Genesis Fund, compared with the rise in the Cost of Living. If you had
invested $10,000 in Genesis Fund's predecessor on September 27, 1988, when
the Fund was first publicly offered, and had reinvested all your capital
gain distributions and income dividends, the value of your investments as
of August 31, 1995 would have been $22,680, an increase of 127%. While
Cost of Living figures are not strictly comparable with mutual fund
performance figures, it is interesting to note that by comparison, over
the same 7 years the Cost of Living index rose by 27%. The package of
goods and services that cost $10,000 in September 1988 would have cost
$12,730 on August 31, 1995*. No adjustment has been made for any income
taxes payable by shareholders on income dividends and capital gain
distributions. The results shown are a record of past performance. There
can be no assurance as to future investment results.d
SEE ATTACHED PLOT POINTS
ATTACHMENT A
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT A
NEUBERGER & BERMAN GENESIS FUND
PREPARED FOR: BARBARA
Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
9/27/88 $10,000.00 $5.0000 0.00% 2,000.000 $5.0000 $10,000
Dividends and Capital Gains Reinvested
===== C O S T O F S H A R E S =====
Annual Cumulative Total Annual
Cumulative Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- ----------- ----- ---------
<S> <C> <C> <C> <C> <C>
12/31/88 10,000 20 20 10,020 0
12/31/89 10,000 40 60 10,060 240
12/31/90 10,000 82 142 10,142 0
12/31/91 10,000 21 163 10,163 186
12/31/92 10,000 0 163 10,163 0
12/31/93 10,000 21 184 10,184 1,574
12/31/94 10,000 0 184 10,184 710
8/31/95 10,000 0 184 10,184 0
Totals 184 2,711
========= V A L U E O F S H A R E S ========
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
12/31/88 10,320 0 10,320 20 10,340 2,004
12/31/89 11,820 240 12,060 63 12,123 2,051
12/31/90 9,820 200 10,020 134 10,154 2,068
12/31/91 13,700 465 14,165 208 14,373 2,098
12/31/92 15,840 537 16,377 241 16,618 2,098
12/31/93 16,520 2,134 18,654 272 18,926 2,291
12/31/94 15,600 2,726 18,326 257 18,583 2,382
8/31/95 19,040 3,327 22,367 313 22,680 2,382
Totals 19,040 3,327 22,367 313 22,680 2,382
Average Annual Total Return for This Illustration: 12.55% (Annual Compounding)
<PAGE>
Average Annual Total Returns 1-Year 5-Year Since Inception (9/27/88)
at Net Asset Value ------ ------ -------------------------
for Periods Ending 6/30/95: 16.39% 11.41% 11.59%
</TABLE>
<PAGE>
INITIAL INVESTMENT OF $200,000
_________________________________________________________________
NEUBERGER & BERMAN GUARDIAN FUND
The following table* indicates the results over a 45 year period (in 5-
year increments) if an investor had invested $200,000 in Guardian's
predecessor on June 1, 1950, the date of its inception, and had
implemented a systematic withdrawal plan under which he or she withdrew,
on a monthly basis, 10% of the initial investment each year.
Cumulative
Total Value of Remaining Amounts
Date Shares At Year End Withdrawn
--------------- ------------------------ ----------
June 1, 1950 made initial $200,000
investment
December 31, 1950 $ 205,803 $ 11,667
1955 278,515 111,667
1960 340,134 211,667
1965 478,271 311,667
1970 506,913 411,667
1975 573,910 511,667
1980 1,297,879 611,667
1985 2,503,141 711,667
1990 3,991,337 811,667
August 31, 1995 9,417,905 905,000
* Shows reinvestment of all dividends and capital gain distributions.
Results represent past performance. Investment returns and principal
fluctuate.
<PAGE>
NGUAX 07-06-14:00 **HYPO** Copr. 1995 TowersData
<TABLE>
<CAPTION>
NEUBERGER & BERMAN GUARDIAN FUND
PREPARED FOR: Guardian Fund buying at the HIGHS:
Sales Shares Net Asset
Investment or Offering Charge Purchased or Value Net Asset
Date Withdrawal (-) Price Included Redeemed (-) per Share Value
---- -------------- -------- -------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
11/20/80 5,000.00 11.4100 0.00 438.212 11.4100 5,000
4/27/81 5,000.00 11.1300 0.00 449.236 11.1300 5,000
12/27/82 5,000.00 11.3600 0.00 440.141 11.3600 5,000
11/29/83 5,000.00 12.9100 0.00 387.297 12.9100 5,000
1/6/84 5,000.00 13.1400 0.00 380.518 13.1400 5,000
12/16/85 5,000.00 13.0800 0.00 382.263 13.0800 5,000
12/2/86 5,000.00 13.5100 0.00 370.096 13.5100 5,000
8/25/87 5,000.00 17.1500 0.00 291.545 17.1500 5,000
10/21/88 5,000.00 13.7700 0.00 363.108 13.7700 5,000
10/9/89 5,000.00 15.3500 0.00 325.733 15.3500 5,000
7/16/90 5,000.00 13.6200 0.00 367.107 13.6200 5,000
12/31/91 5,000.00 14.9600 0.00 334.225 14.9600 5,000
6/1/92 5,000.00 15.7900 0.00 316.656 15.7900 5,000
12/29/93 5,000.00 19.1200 0.00 261.506 19.1200 5,000
1/31/94 5,000.00 19.1800 0.00 260.688 19.1800 5,000
Dividends and Capital Gains Reinvested
===== C O S T O F S H A R E S =====
Cumulative Annual Cumulative Total Annual
Net Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ----------- --------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
12/31/80 5,000 0 0 5,000 0
12/31/81 10,000 479 479 10,479 544
12/31/82 15,000 533 1,012 16,012 278
12/31/83 20,000 739 1,750 21,750 1,218
12/31/84 25,000 1,177 2,928 27,928 929
========= V A L U E O F S H A R E S ========
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
12/31/80 4,886 0 4,886 0 4,886 438
12/31/81 8,375 552 8,927 466 9,393 995
12/31/82 14,940 934 15,874 1,133 17,007 1,511
12/31/83 21,883 2,323 24,206 2,040 26,246 2,057
12/31/84 26,848 3,264 30,112 3,256 33,368 2,604
<PAGE>
CONTINUED ON PAGE 2
</TABLE>
<PAGE>
**HYPO** NGUAX Page 2
<TABLE>
<CAPTION>
NEUBERGER & BERMAN GUARDIAN FUND
HIGHS
===== C O S T O F S H A R E S =====
Cumulative Annual Cumulative Total Annual
Net Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
12/31/85 30,000 1,548 4,475 34,475 5,691
12/31/86 35,000 1,817 6,292 41,292 5,446
12/31/87 40,000 2,378 8,670 48,670 6,866
12/31/88 45,000 2,133 10,804 55,804 7,390
12/31/89 50,000 2,536 13,340 63,340 8,458
12/31/90 55,000 2,881 16,221 71,221 1,401
12/31/91 60,000 2,745 18,966 78,966 7,931
12/31/92 65,000 2,557 21,522 86,522 6,645
12/31/93 70,000 3,213 24,735 94,735 4,348
12/31/94 75,000 2,877 27,613 102,613 2,656
8/31/95 75,000 1,177 28,790 103,790 0
Totals 28,790 59,801
========= V A L U E O F S H A R E S ========
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
12/31/85 32,457 9,377 41,834 4,890 46,724 3,567
12/31/86 36,195 14,352 50,547 6,448 56,995 4,484
12/31/87 33,727 18,808 52,535 7,493 60,028 5,587
12/31/88 42,613 28,602 71,215 10,578 81,793 6,723
12/31/89 50,621 39,559 90,180 13,959 104,139 7,875
12/31/90 50,665 37,530 88,195 15,603 103,798 8,595
12/31/91 67,791 54,442 122,233 22,199 144,432 9,650
12/31/92 81,770 68,023 149,793 27,720 177,513 10,520
12/31/93 95,003 79,331 174,334 33,829 208,163 11,192
12/31/94 97,865 80,409 178,274 36,025 214,299 11,755
8/31/95 119,123 97,876 216,999 45,094 278,865 11,811
Totals 119,123 97,876 216,999 45,094 278,865 11,811
Average Annual Total Return for This Illustration: 14.82% (Annual Compounding)
<PAGE>
Inception
Average Annual Total Returns 1-Year 5-Year 10-Year Inception Date
at Net Asset Value ------ ------ ------- --------- -----------
for Periods Ending 6/30/95: 24.92% 16.17% 14.92% 13.00% 6/1/50
</TABLE>
<PAGE>
NEUBERGER & BERMAN GUARDIAN FUND
LOWS
<TABLE>
<CAPTION>
============= C O S T O F S H A R E S ===============
Cumulative Annual Cumulative Total Annual
Net Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
12/31/85 30,000 2,251 6,564 36,564 8,276
12/31/86 35,000 2,556 9,120 44,120 7,662
12/31/87 40,000 3,079 12,199 52,199 8,915
12/31/88 45,000 2,845 15,044 60,044 9,584
12/31/89 50,000 3,358 18,402 68,402 10,966
12/31/90 55,000 3,695 22,097 77,097 1,815
12/31/91 60,000 3,695 25,792 85,792 10,676
12/31/92 65,000 3,269 29,061 94,061 8,575
12/31/93 70,000 4,184 33,246 103,246 5,595
12/31/94 75,000 3,674 36,920 111,920 3,404
8/31/95 75,000 1,509 38,428 113,428 0
Totals 38,428 80,813
================ V A L U E O F S H A R E S ===============
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ----- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
12/31/85 38,698 14,805 53,503 7,165 60,668 4,631
12/31/86 42,457 21,757 64,214 9,348 73,562 5,788
12/31/87 40,330 27,059 67,389 10,548 77,937 7,254
12/31/88 51,234 40,114 91,348 14,734 106,082 8,719
12/31/89 61,166 54,584 115,750 19,271 135,021 10,211
12/31/90 61,537 51,665 113,202 21,257 134,459 11,134
12/31/91 82,799 74,706 157,505 30,196 187,701 12,541
12/31/92 98,766 92,797 191,563 37,486 229,049 13,575
12/31/93 114,365 107,888 222,253 45,586 267,839 14,400
12/31/94 117,208 109,146 226,354 48,342 274,696 15,068
8/31/95 142,669 132,855 275,524 60,436 357,459 15,140,153
Totals 142,669 132,855 275,524 60,436 357,459 15,140,153
Average Annual Total Return for This Illustration: 17.02% (Annual Compounding)
Average Annual Total Returns 1-Year 5-Year 10-Year Inceptio Inception Date
at Net Asset Value ------ ------ ------- n -------------
for Periods ending 6/30/95: 24.92% 16.17% 14.92% -------- 6/1/50
-
13.00%
<PAGE>
</TABLE>
<PAGE>
NEUBERGER & BERMAN GUARDIAN FUND
PREPARED FOR: BARBARA
<TABLE>
<CAPTION>
Sales Net Asset
Initial Offering Charge Shares Value per Initial Net
Date Investment Price Included Purchased Share Asset Value
---- --------- ------- -------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
6/1/50 $10,000.00 $3.3333 0.00% 3,000.000 3.3333 $10,000
Dividends and Capital Gains Reinvested
===== C O S T O F S H A R E S====
Annual Cumulative Total Annual Cap
Cumulative Income Income Investment Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
8/31/50 10,000 0 0 10,000 0
8/31/51 10,000 406 406 10,406 0
8/31/52 10,000 511 917 10,917 228
8/31/53 10,000 488 1,404 11,404 330
8/31/54 10,000 512 1,916 11,916 82
8/31/55 10,000 506 2,421 12,421 609
8/31/56 10,000 611 3,033 13,033 1,177
8/31/57 10,000 729 3,761 13,761 984
8/31/58 10,000 867 4,629 14,629 378
8/31/59 10,000 869 5,498 15,498 797
8/31/60 10,000 842 6,340 16,340 3,194
8/31/61 10,000 1,013 7,352 17,352 985
8/31/62 10,000 1,012 8,364 18,364 3,028
8/31/63 10,000 1,117 9,481 19,481 1,086
8/31/64 10,000 1,268 10,750 20,750 1,597
8/31/65 10,000 1,353 12,102 22,102 2,983
8/31/66 10,000 1,553 13,656 23,656 3,275
8/31/67 10,000 1,649 15,305 25,305 2,046
8/31/68 10,000 1,724 17,029 27,029 5,829
8/31/69 2,081 2,081 19,110 29,110 6,776
8/31/70 10,000 2,566 21,675 31,675 3,678
8/31/71 10,000 3,298 24,974 34,974 866
8/31/72 10,000 3,258 28,232 38,232 5,285
8/31/73 10,000 3,355 31,587 41,587 5,256
8/31/74 10,000 3,872 35,458 45,458 2,555
8/31/75 10,000 5,577 41,036 51,036 495
8/31/76 10,000 6,125 47,161 57,161 895
8/31/77 10,000 6,287 53,448 63,448 9,159
8/31/78 10,000 6,693 60,141 70,141 7,349
8/31/79 10,000 7,695 67,837 77,837 11,115
8/31/80 10,000 9,009 76,845 86,845 19,773
<PAGE>
Annual Cumulative Total Annual Cap
Cumulative Income Income Investment Gain
Date Investment Dividends Dividends Cost Distrib'n
---- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
===== C O S T O F S H A R E S =====
(cont'd)
8/31/81 10,000 11,305 88,150 98,150 41,343
8/31/82 10,000 17,522 105,672 115,672 17,945
8/31/83 10,000 18,076 123,748 133,748 9,177
8/31/84 10,000 20,004 143,752 153,752 28,486
8/31/85 10,000 19,528 163,280 173,280 14,879
8/31/86 10,000 27,134 190,415 200,415 91,182
8/31/87 10,000 27,958 218,372 228,372 77,910
8/31/88 10,000 26,953 245,325 255,325 84,700
8/31/89 10,000 26,927 272,252 282,252 85,664
8/31/90 10,000 30,193 302,445 312,445 93,568
8/31/91 10,000 31,735 334,180 344,180 14,818
8/31/92 10,000 24,360 358,540 368,540 83,873
8/31/93 10,000 25,329 383,869 393,869 65,697
8/31/94 10,000 31,774 415,644 425,644 41,951
8/31/95 10,000 24,413 443,057 453,057 25,039
Totals 443,057 878,045
====== V A L U E O F S H A R E S =========
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
8/31/50 10,070 0 10,070 0 10,070 3,000
8/31/51 11,960 0 11,960 436 12,396 3,109
8/31/52 12,279 242 12,521 978 13,499 3,298
8/31/53 11,451 549 12,000 1,384 13,384 3,507
8/31/54 13,450 740 14,190 2,182 16,372 3,652
8/31/55 17,130 1,719 18,849 3,341 22,190 3,886
8/31/56 17,380 3,019 20,399 4,024 24,423 4,216
8/31/57 16,321 3,830 20,151 4,499 24,650 4,531
8/31/58 16,960 4,427 21,387 5,636 27,023 4,780
8/31/59 21,271 6,483 27,754 8,004 35,758 5,043
8/31/60 20,160 9,559 29,719 8,470 38,189 5,683
8/31/61 23,360 12,273 35,633 10,902 46,535 5,976
8/31/62 19,769 13,016 32,785 10,163 42,948 6,517
8/31/63 23,170 16,559 39,729 13,134 52,863 6,845
8/31/64 24,960 19,612 44,572 15,480 60,052 7,218
8/31/65 25,860 23,410 49,270 17,411 66,681 7,736
8/31/66 23,259 23,993 47,252 17,072 64,324 8,296
8/31/67 29,449 32,922 62,371 23,464 85,835 8,744
8/31/68 28,760 38,443 67,203 24,725 91,928 9,589
8/31/69 25,960 40,738 66,698 24,245 90,943 10,510
8/31/70 21,620 37,139 58,759 22,637 81,396 11,295
<PAGE>
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
====== V A L U E OF S H A R E S =====
(cont'd)
8/31/71 26,400 46,409 72,809 31,308 104,117 11,831
8/31/72 26,850 53,451 80,301 35,383 115,684 12,926
8/31/73 22,880 50,080 72,960 33,326 106,286 13,936
8/31/74 17,809 41,114 58,923 29,267 88,190 14,855
8/31/75 22,720 53,090 75,810 43,788 119,598 15,792
8/31/76 28,039 66,646 94,685 60,968 155,653 16,653
8/31/77 27,440 74,636 102,076 65,961 168,037 18,371
8/31/78 30,260 90,846 121,106 80,290 201,396 19,967
8/31/79 32,420 111,545 143,965 95,231 239,196 22,134
8/31/80 34,020 140,270 174,290 109,849 284,139 25,056
8/31/81 30,590 163,434 194,024 109,262 303,286 29,744
8/31/82 28,740 172,049 200,789 120,862 321,651 33,575
8/31/83 39,530 247,290 286,820 186,311 473,131 35,907
8/31/84 38,121 267,921 306,042 200,381 506,423 39,855
8/31/85 43,361 321,568 364,929 248,995 613,924 42,476
8/31/86 45,770 452,145 497,915 294,520 792,435 51,940
8/31/87 50,320 596,295 646,615 357,179 1,003,794 59,845
8/31/88 38,510 554,755 593,265 303,185 896,450 69,835
8/31/89 45,669 763,808 809,477 390,875 1,200,352 78,850
8/31/90 35,710 681,608 717,318 333,089 1,050,407 88,245
8/31/91 44,700 871,486 916,186 454,426 1,370,612 91,987
8/31/92 47,199 1,008,397 1,055,596 505,323 1,560,919 99,211
8/31/93 55,710 1,262,510 1,318,220 624,108 1,942,328 104,595
8/31/94 58,560 1,371,124 1,429,684 689,724 2,119,408 108,576
8/31/95 70,830 1,690,843 1,761,673 867,658 2,629,331 111,365
Totals 70,830 1,690,843 1,761,673 867,658 2,629,331 111,365
Average Annual Total Return for This Illustration: 13.01% (Annual Compounding)
Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ----- ----- -------
for Periods Ending 6/30/95: 24.92% 16.17% 14.92%
</TABLE>
<PAGE>
NEUBERGER & BERMAN GUARDIAN FUND
<TABLE>
<CAPTION>
===================== C O S T O F S H A R E S ===================
Annual Cumulative Total Annual
Cumulative Income Income Investment Cap Gain
Date Investment Dividends Dividends Cost Distrib'n
<S> <C> <C> <C> <C> <C>
8/31/71 10,000 3,298 24,974 34,974 866
8/31/72 10,000 3,258 28,232 38,232 5,285
8/31/73 10,000 3,355 31,587 41,587 5,256
8/31/74 10,000 3,872 35,458 45,458 2,555
8/31/75 10,000 5,577 41,036 51,036 495
8/31/76 10,000 6,125 47,161 57,161 895
8/31/77 10,000 6,287 53,448 63,448 9,159
8/31/78 10,000 6,693 60,141 70,141 7,349
8/31/79 10,000 7,695 67,837 77,837 11,115
8/31/80 10,000 9,009 76,845 86,845 19,773
8/31/81 10,000 11,305 88,150 98,150 41,343
8/31/82 10,000 17,522 105,672 115,672 17,945
8/31/83 10,000 18,076 123,748 133,748 9,177
8/31/84 10,000 20,004 143,752 153,752 28,486
8/31/85 10,000 19,528 163,280 173,280 14,879
8/31/86 10,000 27,134 190,415 200,415 91,182
8/31/87 10,000 27,958 218,372 228,372 77,910
8/31/88 10,000 26,953 245,325 255,325 84,700
8/31/89 10,000 26,927 272,252 282,252 85,664
8/31/90 10,000 30,193 302,445 312,445 93,568
8/31/91 10,000 31,735 334,180 344,180 14,818
8/31/92 10,000 24,360 358,540 368,540 83,873
8/31/93 10,000 25,329 383,869 393,869 65,697
8/31/94 10,000 31,774 415,644 425,644 41,951
8/31/95 10,000 24,413 443,057 453,057 25,039
Totals 443,057 878,045
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
======================= V A L U E O F S H A R E S ========================
From From
From Cap Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
<S> <C> <C> <C> <C> <C> <C>
8/31/71 26,400 46,409 72,809 31,308 104,117 11,831
8/31/72 26,850 53,451 80,301 35,383 115,684 12,926
8/31/73 22,880 50,080 72,960 33,326 106,286 13,936
8/31/74 17,809 41,114 58,923 29,267 88,190 14,855
8/31/75 22,720 53,090 75,810 43,788 119,598 15,792
8/31/76 28,039 66,646 94,685 60,968 155,653 16,653
8/31/77 27,440 74,636 102,076 65,961 168,037 18,371
8/31/78 30,260 90,846 121,106 80,290 201,396 19,967
8/31/79 32,420 111,545 143,965 95,231 239,196 22,134
8/31/80 34,020 140,270 174,290 109,849 284,139 25,056
8/31/81 30,590 163,434 194,024 109,262 303,286 29,744
8/31/82 28,740 172,049 200,789 120,862 321,651 33,575
8/31/83 39,530 247,290 286,820 186,311 473,131 35,907
8/31/84 38,121 267,921 306,042 200,381 506,423 39,855
8/31/85 43,361 321,568 364,929 248,995 613,924 42,476
8/31/86 45,770 452,145 497,915 294,520 792,435 51,940
8/31/87 50,320 596,295 646,615 357,179 1,003,794 59,845
8/31/88 38,510 554,755 593,265 303,185 896,450 69,835
8/31/89 45,669 763,808 809,477 390,875 1,200,352 78,850
8/31/90 35,710 681,608 717,318 333,089 1,050,407 88,245
8/31/91 44,700 871,486 916,186 454,426 1,370,612 91,987
8/31/92 47,199 1,008,397 1,055,596 505,323 1,560,919 99,211
8/31/93 55,710 1,262,510 1,318,220 624,108 1,942,328 104,595
8/31/94 58,560 1,371,124 1,429,684 689,724 2,119,408 108,576
8/31/95 70,830 1,690,843 1,761,673 867,658 2,629,331 111,365
Totals 70,830 1,690,843 1,761,673 867,658 2,629,331 111,365
Average Annual Total Return for This Illustration: 13.01% (Annual Compounding)
Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value
for Period Ending 6/30/95: 24.92% 16.17% 14.92%
</TABLE>
<PAGE>
INITIAL INVESTMENT OF $100,000
_________________________________________________________________
NEUBERGER & BERMAN MANHATTAN FUND
The following table* indicates the results over a 16 1/2 year period if an
investor had invested $100,000 in Manhattan's predecessor on March 1,
1979, and had implemented a systematic withdrawal plan under which he or
she withdrew, on a monthly basis, 8% of the initial investment each year.
Total Value of Cumulative
Remaining Shares At Amounts
Date Year End Withdrawn
------------- ------------------ ----------
March 1, 1979 made initial
$100,000 investment
December 31, 1979 $127,622 $ 6,667
1980 164,831 14,667
1981 145,245 22,667
1982 177,074 30,667
1983 216,209 38,667
1984 222,819 46,667
1985 296,292 54,667
1986 338,049 62,667
1987 331,383 70,667
1988 383,670 78,667
1989 486,685 86,667
1990 439,583 94,667
1991 566,522 102,667
1992 657,943 110,667
1993 715,308 118,667
1994 681,664 126,667
August 31, 1995 898,426 132,000
<PAGE>
* Shows reinvestment of all dividends and capital gain distributions.
Results represent past performance. Investment returns and principal
fluctuate.
<PAGE>
<TABLE>
<CAPTION>
NMANX 07-06 13:56 **HYPO** Copr. 1995
TowersData
NEUBERGER & BERMAN MANHATTAN FUND
PREPARED FOR: Manhattan Fund buying at the HIGHS:
Investment or Sales Shares Net Asset
Withdrawal Offering Charge Purchased or Value Net Asset
Date (-) Price Included Redeemed (-) per Share Value
---- ------------ -------- -------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
11/20/80 5,000.00 4.7000 0.00 1,063.830 4.7000 5,000
4/27/81 5,000.00 4.5700 0.00 1,094.092 4.5700 5,000
12/27/82 5,000.00 5.1600 0.00 968.992 5.1600 5,000
11/29/83 5,000.00 6.2900 0.00 794.913 6.2900 5,000
1/6/84 5,000.00 6.4900 0.00 770.416 6.4900 5,000
12/16/85 5,000.00 8.9700 0.00 557.414 8.9700 5,000
12/2/86 5,000.00 10.0800 0.00 496.032 10.0800 5,000
8/25/87 5,000.00 12.3500 0.00 404.858 12.3500 5,000
10/21/88 5,000.00 9.4200 0.00 530.786 9.4200 5,000
10/9/89 5,000.00 12.2500 0.00 408.163 12.2500 5,000
7/16/90 5,000.00 10.9900 0.00 454.959 10.9900 5,000
12/31/91 5,000.00 11.6500 0.00 429.185 11.6500 5,000
6/1/92 5,000.00 11.4600 0.00 436.300 11.4600 5,000
12/29/93 5,000.00 13.1700 0.00 379.651 13.1700 5,000
1/31/94 5,000.00 11.3600 0.00 440.141 11.3600 5,000
Dividends and Capital Gains Reinvested
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulative Total Annual Cap
Net Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
12/31/80 5,000 0 0 5,000 0
12/31/81 10,000 216 216 10,216 0
12/31/82 15,000 287 503 15,503 0
12/31/83 20,000 553 1,056 21,056 0
12/31/84 25,000 886 1,943 26,943 0
Dividends and Capital Gains Reinvested
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Sub- Dividends Total Shares
Date Investment Reinvested Total Reinvested Value Held
---- ---------- ---------- ------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
<PAGE>
12/31/80 4,840 0 4,840 0 4,840 1,064
12/31/81 8,912 0 8,912 210 9,122 2,209
12/31/82 16,073 0 16,073 657 16,730 3,255
12/31/83 24,786 0 24,786 1,470 26,256 4,154
12/31/84 30,781 0 30,781 2,545 33,326 5,080
CONTINUED ON PAGE 2
<PAGE>
**HYPO** NMANX PAGE 2
NEUBERGER & BERMAN MANHATTAN FUND
HIGHS
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulativ Total Annual Cap
Net Income e Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
12/31/85 30,000 559 2,502 32,502 0
12/31/86 35,000 457 2,959 37,959 7,701
12/31/87 40,000 1,953 4,912 44,912 7,243
12/31/88 45,000 1,468 6,379 51,379 367
12/31/89 50,000 1,761 8,140 58,140 10,273
12/31/90 55,000 1,823 9,963 64,963 1,709
12/31/91 60,000 1,295 11,258 71,258 4,709
12/31/92 65,000 658 11,916 76,916 22,096
12/31/93 70,000 309 12,224 82,224 31,786
12/31/94 75,000 188 12,412 87,412 13,131
8/31/95 75,000 0 12,412 87,412 0
Totals 12,412 99,016
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
12/31/85 46,512 0 46,512 4,120 50,632 5,715
12/31/86 51,424 7,846 59,270 4,643 63,913 7,141
12/31/87 48,036 13,648 61,684 5,811 67,495 8,642
12/31/88 60,399 16,165 76,564 8,194 84,758 9,376
12/31/89 74,015 28,941 102,956 11,224 114,180 10,937
12/31/90 70,088 27,462 97,550 11,811 109,361 11,772
12/31/91 92,893 39,147 132,040 16,106 148,146 12,716
12/31/92 100,836 62,386 163,222 17,233 180,455 15,050
12/31/93 97,653 89,593 187,246 16,277 203,523 18,319
12/31/94 92,297 93,773 186,070 14,839 200,909 20,091
8/31/95 112,418 114,216 226,634 18,073 266,606 20,091
Totals 112,418 114,216 226,634 18,073 266,606 20,091
Average Annual Total Return for This Illustration: 14.05% (Annual Compounding)
Average Annual Total Returns 1-Year 5-Year 10-Year Inception Inception Date
at Net Asset Value ----- ------ ------- --------- --------------
for Periods Ending 6/30/95: 28.39% 12.56% 13.92% 17.28% 3/1/79
<PAGE>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NMANX 07-06 13:58 **HYPO**Copr. 1995 TowersData
NEUBERGER & BERMAN MANHATTAN FUND
PREPARED FOR: Guardian Fund buying at the LOWS:
Investment or Sales Shares Net Asset
Withdrawal Offering Charge Purchased or Value Net Asset
Date (-) Price Included Redeemed (-) per Share Value
---- ----------- -------- -------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
4/21/80 5,000.00 3.0700 0.00 1,628.664 3.0700 5,000
9/25/81 5,000.00 3.6900 0.00 1,355.014 3.6900 5,000
8/12/82 5,000.00 3.5700 0.00 1,400.560 3.5700 5,000
1/3/83 5,000.00 5.0700 0.00 986.193 5.0700 5,000
7/24/84 5,000.00 5.5600 0.00 899.281 5.5600 5,000
1/4/85 5,000.00 6.4300 0.00 777.605 6.4300 5,000
1/22/86 5,000.00 8.7100 0.00 574.053 8.7100 5,000
10/19/87 5,000.00 8.3000 0.00 602.410 8.3000 5,000
1/20/88 5,000.00 7.6800 0.00 651.042 7.6800 5,000
1/3/89 5,000.00 8.9700 0.00 557.414 8.9700 5,000
10/11/90 5,000.00 8.5600 0.00 584.112 8.5600 5,000
1/9/91 5,000.00 8.7700 0.00 570.125 8.7700 5,000
10/9/92 5,000.00 11.7100 0.00 426.985 11.7100 5,000
1/20/93 5,000.00 12.1300 0.00 412.201 12.1300 5,000
4/4/94 5,000.00 10.5700 0.00 473.037 10.5700 5,000
Dividends and Capital Gains Reinvested
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulative Total Annual Cap
Net Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C>
12/31/80 5,000 147 147 5,147 0
12/31/81 10,000 167 314 10,314 0
12/31/82 15,000 398 712 15,712 0
12/31/83 20,000 945 1,657 21,657 0
12/31/84 25,000 1,033 2,689 27,689 0
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- --------- ---------- --------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
12/31/80 7,410 0 7,410 188 7,598 1,670
12/31/81 12,323 0 12,323 333 12,656 3,064
12/31/82 22,535 0 22,535 964 23,499 4,572
12/31/83 33,941 0 33,941 2,316 36,257 5,737
<PAGE>
12/31/84 41,129 0 41,129 3,590 44,719 6,817
CONTINUED ON PAGE 2
<PAGE>
**HYPO** NMANX PAGE 2
NEUBERGER & BERMAN MANHATTAN FUND
LOWS
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulative Total Annual Cap
Net Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
----- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
12/31/85 30,000 835 3,525 33,525 0
12/31/86 35,000 663 4,188 39,188 10,696
12/31/87 40,000 2,630 6,818 46,818 9,765
12/31/88 45,000 1,970 8,788 53,788 492
12/31/89 50,000 2,366 11,153 61,153 13,799
12/31/90 55,000 2,444 13,597 68,597 2,291
12/31/91 60,000 1,799 15,396 75,396 6,542
12/31/92 65,000 875 16,271 81,271 29,395
12/31/93 70,000 409 16,680 86,680 42,094
12/31/94 75,000 247 16,927 91,927 17,313
8/31/95 75,000 0 16,927 91,927 0
Totals 16,927 132,388
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
----- ---------- ---------- --------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
12/31/85 62,439 0 62,439 5,870 68,309 7,710
12/31/86 68,212 10,910 79,122 6,627 85,749 9,581
12/31/87 64,228 18,692 82,920 8,153 91,073 11,661
12/31/88 80,229 22,128 102,357 11,407 113,764 12,584
12/31/89 98,472 39,354 137,826 15,540 153,366 14,690
12/31/90 93,052 37,310 130,362 16,272 146,634 15,784
12/31/91 123,333 53,330 176,663 22,204 198,867 17,070
12/31/92 132,052 84,281 216,333 23,727 240,060 20,022
12/31/93 126,939 120,189 247,128 22,395 269,523 24,260
12/31/94 118,987 125,494 244,481 20,404 264,885 26,489
8/31/95 144,926 152,852 297,778 24,853 351,503 26,489
Totals 144,926 152,852 297,778 24,853 351,503 26,489
Average Annual Total Return for This Illustration: 16.58% (Annual Compounding)
Average Annual Total Returns 1-Year 5-Year 10-Year Inception Inception Date
at Net Asset Value ------ ------ ------- --------- --------------
for Periods Ending 6/30/95: 28.39% 12.56% 13.92% 17.28% 3/1/79
<PAGE>
</TABLE>
<PAGE>
NMANX 09-18 10:05 **HYPO** Copr. 1995 TowersData
<TABLE>
<CAPTION> NEUBERGER & BERMAN MANHATTAN FUND
PREPARED FOR: BARBARA
Sales Net Asset Initial
Initial Offering Charge Shares Value Net Asset
Date Investment Price Included Purchased per Share Value
---- ---------- -------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
3/1/79 $10,000.00 $2.5600 0.00% 3,906.250 $2.5600 $10,000
Dividends and Capital Gains Reinvested
====== C O S T OF S H A R E S =====
Total Annual Cap
Cumulative Annual Income Cumulative Investment Gain
Date Investment Dividends Income Dividends Cost Distrib'n
---- ---------- ----------- ---------------- --------- ----------
<S> <C> <C> <C> <C> <C>
8/31/79 10,000 0 0 10,000 0
8/31/80 10,000 553 553 10,553 0
8/31/81 10,000 407 960 10,960 0
8/31/82 10,000 542 1,501 11,501 0
8/31/83 10,000 733 2,234 12,234 0
8/31/84 10,000 801 3,035 13,035 0
8/31/85 10,000 505 3,540 13,540 0
8/31/86 10,000 373 3,913 13,913 2,749
8/31/87 10,000 485 4,398 14,398 4,022
8/31/88 10,000 937 5,335 15,335 4,464
8/31/89 10,000 989 6,324 16,324 247
8/31/90 10,000 1,137 7,461 17,461 6,632
8/31/91 10,000 1,130 8,590 18,590 1,059
8/31/92 10,000 803 9,393 19,393 2,919
8/31/93 10,000 381 9,774 19,774 12,795
8/31/94 10,000 174 9,948 19,948 17,952
8/31/95 10,000 103 10,051 20,051 7,242
Totals 10,051 60,082
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
========== V A L U E OF S H A R E S ========
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
8/31/79 12,383 0 12,383 0 12,383 3,906
8/31/80 15,469 0 15,469 649 16,118 4,070
8/31/81 15,586 0 15,586 1,037 16,623 4,166
8/31/82 16,015 0 16,015 1,661 17,676 4,311
8/31/83 23,633 0 23,633 3,290 26,923 4,450
8/31/84 25,039 0 25,039 4,385 29,424 4,590
8/31/85 30,430 0 30,430 5,872 36,302 4,660
8/31/86 38,632 3,199 41,831 7,889 49,720 5,027
8/31/87 47,343 9,210 56,553 10,245 66,798 5,511
8/31/88 33,867 11,378 45,245 8,334 53,579 6,180
8/31/89 47,187 16,184 63,371 12,933 76,304 6,317
8/31/90 36,954 18,683 55,637 11,158 66,795 7,061
8/31/91 45,117 24,128 69,245 15,028 84,273 7,296
8/31/92 45,273 27,115 72,388 15,879 88,267 7,616
8/31/93 50,547 44,082 94,629 18,139 112,768 8,715
8/31/94 44,062 56,654 100,716 15,989 116,705 10,346
8/31/95 51,836 76,259 128,095 18,947 147,042 11,081
Totals 51,836 76,259 128,095 18,947 147,042 11,081
Average Annual Total Return for This Illustration: 17.69% (Annual Compounding)
</TABLE>
Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Periods Ending 6/30/95: 28.39% 12.56% 13.92%
<PAGE>
INITIAL INVESTMENT OF $100,000
_________________________________________________________________
NEUBERGER & BERMAN PARTNERS FUND
The following table* indicates the results over a 18 3/4 year period if an
investor had invested $100,000 in Partners' predecessor on January 1,
1977, and had implemented a systematic withdrawal plan under which he or
she withdrew, on a monthly basis, 8% of the initial investment each year.
Cumulative
Total Value of Remaining Amounts
Date Shares At Year End Withdrawn
---- ------------------------ ---------
January 1, 1977 made initial $100,000
investment
December 31, 1977 $ 98,629 $ 8,000
1978 106,264 16,000
1979 142,364 24,000
1980 181,095 32,000
1981 184,166 40,000
1982 223,667 48,000
1983 258,110 56,000
1984 270,228 64,000
1985 342,094 72,000
1986 393,054 80,000
1987 402,702 88,000
1988 456,595 96,000
1989 552,043 104,000
1990 515,865 112,000
1991 622,640 120,000
1992 722,907 128,000
1993 833,281 136,000
1994 809,607 144,000
<PAGE>
August 31, 1995 1,030,908 149,333
* Shows reinvestment of all dividends and capital gain
distributions. Results represent past performance. Investment
returns and principal fluctuate.
<PAGE>
<TABLE>
<CAPTION
NPRTX 07-06 14:08 **HYPO** Copr. 1995 TowersData
NEUBERGER & BERMAN PARTNERS FUND
PREPARED FOR: Partners Fund buying at the HIGHS:
Investment or Sales Shares Net Asset
Withdrawal Offering Charge Purchased or Value Net Asset
Date (-) Price Included Redeemed (-) per Share Value
---- ------------ ------- -------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
11/20/80 5,000.00 16.4100 0.00 304.692 16.4100 5,000
4/27/81 5,000.00 17.1100 0.00 292.227 17.1100 5,000
12/27/82 5,000.00 14.9900 0.00 333.556 14.9900 5,000
11/29/83 5,000.00 14.9200 0.00 335.121 14.9200 5,000
1/6/84 5,000.00 15.1300 0.00 330.469 15.1300 5,000
12/16/85 5,000.00 17.2700 0.00 289.519 17.2700 5,000
12/2/86 5,000.00 18.1400 0.00 275.634 18.1400 5,000
8/25/87 5,000.00 20.1800 0.00 247.770 20.1800 5,000
10/21/88 5,000.00 17.2500 0.00 289.855 17.2500 5,000
10/9/89 5,000.00 20.0200 0.00 249.750 20.0200 5,000
7/16/90 5,000.00 18.6300 0.00 268.384 18.6300 5,000
12/31/91 5,000.00 18.4400 0.00 271.150 18.4400 5,000
6/1/92 5,000.00 19.4600 0.00 256.937 19.4600 5,000
12/29/93 5,000.00 22.7300 0.00 219.974 22.7300 5,000
1/31/94 5,000.00 21.2000 0.00 235.849 21.2000 5,000
Dividends and Capital Gains Reinvested
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulative Total Annual Cap
Net Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- -------- ------------
<S> <C> <C> <C> <C> <C>
12/31/80 5,000 0 0 5,000 0
12/31/81 10,000 567 567 10,567 1,970
12/31/82 15,000 887 1,454 16,454 0
12/31/83 20,000 1,013 2,468 22,468 2,365
12/31/84 25,000 1,522 3,990 28,990 571
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
12/31/80 4,927 0 4,927 0 4,927 305
12/31/81 7,659 2,015 9,674 580 10,254 799
12/31/82 13,836 2,336 16,172 1,767 17,939 1,206
12/31/83 18,679 4,819 23,498 2,826 26,324 1,783
<PAGE>
12/31/84 23,702 5,480 29,182 4,528 33,710 2,270
CONTINUED ON PAGE 2
<PAGE>
** HYPO ** NPRTX PAGE 2
NEUBERGER & BERMAN PARTNERS FUND
HIGHS
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulative Total Annual Cap
Net Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
12/31/85 30,000 1,476 5,465 35,465 2,883
12/31/86 35,000 1,251 6,716 41,716 6,395
12/31/87 40,000 2,695 9,411 49,411 10,416
12/31/88 45,000 3,093 12,504 57,504 0
12/31/89 50,000 4,036 16,539 66,539 8,997
12/31/90 55,000 4,723 21,263 76,263 2,129
12/31/91 60,000 2,323 23,586 83,586 5,260
12/31/92 65,000 1,453 25,039 90,039 13,691
12/31/93 70,000 950 25,989 95,989 19,003
12/31/94 75,000 1,083 27,072 102,072 15,746
8/31/95 75,000 0 27,072 102,072 0
Totals 27,072 89,424
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- ----
<S> <C> <C> <C> <C> <C> <C>
12/31/85 32,356 9,541 41,897 6,875 48,772 2,842
12/31/86 37,540 16,207 53,747 8,240 61,987 3,569
12/31/87 36,279 22,824 59,103 9,513 68,616 4,556
12/31/88 45,125 25,340 70,465 13,710 84,175 5,034
12/31/89 53,252 36,219 89,471 18,761 108,232 5,993
12/31/90 51,535 34,319 85,854 21,449 107,303 6,698
12/31/91 64,322 44,919 109,241 27,058 136,299 7,391
12/31/92 73,740 61,655 135,395 30,346 165,741 8,418
12/31/93 81,759 83,570 165,329 32,729 198,058 9,605
12/31/94 77,800 90,804 168,604 30,479 199,083 10,750
8/31/95 93,051 108,602 201,653 36,452 254,981 10,750
Totals 93,051 108,602 201,653 36,452 254,981 10,750
Average Annual Total Return for This Illustration: 13.74% (Annual Compounding)
Inception
Average Annual Total Returns 1-Year 5-Year 10-Year Inception Date
at Net Asset Value ------ ------ ------- --------- --------
for Periods Ending 6/30/95: 23.95% 13.21% 13.61% 17.45% 1/20/75
<PAGE>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NPRTX 07-06 14:06 **HYPO** Copr. 1995 TowersData
NEUBERGER & BERMAN PARTNERS FUND
PREPARED FOR: Partners Fund buying at the LOWS:
Sales Shares Net Asset
Investment or Offering Charge Purchased or Value Net Asset
Date Withdrawal (-) Price Included Redeemed (-) per Share Value
---- -------------- -------- -------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
4/21/80 5,000.00 14.9900 0.00 333.556 14.9900 5,000
9/25/81 5,000.00 11.8400 0.00 422.297 11.8400 5,000
8/12/82 5,000.00 11.9400 0.00 418.760 11.9400 5,000
1/3/83 5,000.00 14.7200 0.00 339.674 14.7200 5,000
7/24/84 5,000.00 13.8600 0.00 360.750 13.8600 5,000
1/4/85 5,000.00 14.6300 0.00 341.763 14.6300 5,000
1/22/86 5,000.00 16.8800 0.00 296.209 16.8800 5,000
10/19/87 5,000.00 15.3400 0.00 325.945 15.3400 5,000
1/20/88 5,000.00 15.0400 0.00 332.447 15.0400 5,000
1/3/89 5,000.00 16.6600 0.00 300.120 16.6600 5,000
10/11/90 5,000.00 14.9400 0.00 334.672 14.9400 5,000
1/9/91 5,000.00 15.4500 0.00 323.625 15.4500 5,000
10/9/92 5,000.00 19.1000 0.00 261.780 19.1000 5,000
1/20/93 5,000.00 19.9700 0.00 250.376 19.9700 5,000
4/4/94 5,000.00 19.3600 0.00 258.264 19.3600 5,000
Dividends and Capital Gains Reinvested
=== C O S T O F S H A R E S ===
Cumulative Annual Cumulative Total Annual Cap
Net Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
12/31/80 5,000 230 230 5,230 1,004
12/31/81 10,000 399 630 10,630 1,388
12/31/82 15,000 1,094 1,723 16,723 0
12/31/83 20,000 1,541 3,264 23,264 3,596
12/31/84 25,000 1,845 5,110 30,110 692
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- -------
<S> <C> <C> <C> <C> <C> <C>
12/31/80 5,394 1,143 6,537 262 6,799 420
12/31/81 9,697 2,327 12,024 617 12,641 985
12/31/82 17,466 2,697 20,163 2,064 22,227 1,495
<PAGE>
12/31/83 22,352 6,478 28,830 3,678 32,508 2,202
12/31/84 27,845 7,284 35,129 5,744 40,873 2,752
CONTINUED ON PAGE 2
<PAGE>
**HYPO** NPRTX PAGE 2
NEUBERGER & BERMAN PARTNERS FUND
LOWS
=== C O S T O F S H A R E S ===
Annual Cumulative Total Annual Cap
Cumulative Income Income Investment Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
12/31/85 30,000 2,011 7,121 37,121 3,930
12/31/86 35,000 1,661 8,782 43,782 8,495
12/31/87 40,000 3,310 12,092 52,092 12,783
12/31/88 45,000 3,901 15,992 60,992 0
12/31/89 50,000 5,059 21,051 71,051 11,231
12/31/90 55,000 5,649 26,700 81,700 2,504
12/31/91 60,000 2,963 29,663 89,663 6,709
12/31/92 65,000 1,775 31,438 96,438 16,723
12/31/93 70,000 1,159 32,597 102,597 23,171
12/31/94 75,000 1,317 33,913 108,913 19,153
8/31/95 75,000 0 33,913 108,913 0
Totals 33,913 111,377
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends Total Shares
Date Investment Reinvested Sub-Total Reinvested Value Held
---- ---------- ---------- --------- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
12/31/85 38,041 12,790 50,831 8,876 59,707 3,479
12/31/86 43,651 21,647 6,298 10,686 75,984 4,374
12/31/87 42,755 29,536 72,291 12,175 84,466 5,609
12/31/88 53,026 32,791 85,817 17,491 103,308 6,179
12/31/89 62,696 46,460 109,156 23,843 132,999 7,364
12/31/90 60,976 43,788 104,764 26,897 131,661 8,219
12/31/91 76,153 57,311 133,464 33,983 167,447 9,081
12/31/92 86,470 77,919 164,389 38,061 202,450 10,282
12/31/93 95,718 104,770 200,488 41,017 241,505 11,712
12/31/94 90,752 113,253 204,005 38,157 242,162 13,076
8/31/95 108,541 135,450 243,991 45,636 370,155 13,076
Totals 108,541 135,450 243,991 45,636 370,155 13,076
Average Annual Total Return for This Illustration: 15.41% (Annual Compounding)
Average Annual Total Returns 1-Year 5-Year 10-Year Inception Inception Date
at Net Asset Value ------ ------ ------- --------- --------------
for Periods Ending 6/30/95: 23.95% 13.21% 13.61% 17.45% 1/20/75
</TABLE>
<PAGE>
NPRTX 09-18 10:05 **HYPO** Copr. 1995 TowersData
<TABLE>
<CAPTION>
NEUBERGER & BERMAN PARTNERS FUND
PREPARED FOR: BARBARA
Sales Net Asset Initial Net
Initial Offering Charge Shares Value Asset
Date Investment Price Included Purchased per Share Value
---- ---------- --------- ----------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
1/20/75 $10,000.00 $6.5300 0.00% 1,531.394 $6.5300 $10,000
Dividends and Capital Gains Reinvested
=== C O S T O F S H A R E S ===
Cumulative Annual Income Cumulative Income Total Investment Annual Cap Gain
Date Investment Dividends Dividends Cost Distribution
---- ---------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
8/31/75 10,000 551 551 10,551 0
8/31/76 10,000 467 1,018 11,018 0
8/31/77 10,000 383 1,401 11,401 0
8/31/78 10,000 511 1,912 11,912 0
8/31/79 10,000 804 2,716 12,716 0
8/31/80 10,000 1,249 3,965 13,965 5,446
8/31/81 10,000 2,167 6,131 16,131 7,527
8/31/82 10,000 3,390 9,521 19,521 0
8/31/83 10,000 2,802 12,323 22,323 6,537
8/31/84 10,000 2,883 15,206 25,206 1,081
8/31/85 10,000 2,795 18,001 28,001 5,461
8/31/86 10,000 2,127 20,128 30,128 10,879
8/31/87 10,000 2,409 22,537 32,537 12,101
8/31/88 10,000 3,739 26,276 36,276 4,006
8/31/89 10,000 4,786 31,063 41,063 4,206
8/31/90 10,000 3,090 34,152 44,152 7,945
8/31/91 10,000 6,011 40,163 50,163 2,709
8/31/92 10,000 2,956 43,120 53,120 6,694
8/31/93 10,000 1,722 44,841 54,841 16,219
8/31/94 10,000 1,097 45,938 55,938 21,939
8/31/95 10,000 1,220 47,158 57,158 17,743
Totals 47,158 130,493
CONTINUED ON PAGE 2
<PAGE>
Page 2
==== V A L U E O F S H A R E S ====
From Cap From
From Gains Dividends
Date Investment Reinvested Sub Total Reinvested Total Value Shares Held
---- ---------- ---------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
8/31/75 11,011 0 11,011 562 11,573 1,610
8/31/76 13,017 0 13,017 1,122 14,139 1,663
8/31/77 14,272 0 14,272 1,611 15,883 1,704
8/31/78 18,039 0 18,039 2,553 20,592 1,748
8/31/79 21,807 0 21,807 3,959 25,766 1,809
8/31/80 22,221 5,565 27,786 5,310 33,096 2,281
8/31/81 18,714 12,022 30,736 6,583 37,319 3,054
8/31/82 19,295 12,396 31,691 10,333 42,024 3,335
8/31/83 21,623 20,503 42,126 14,413 56,539 4,004
8/31/84 21,853 21,871 43,724 17,634 61,358 4,300
8/31/85 23,630 29,113 52,743 21,864 74,607 4,835
8/31/86 27,320 45,104 72,424 27,517 99,941 5,602
8/31/87 30,638 62,659 93,027 33,079 126,106 6,359
8/31/88 24,809 55,507 80,316 30,914 111,230 6,866
8/31/89 30,490 72,629 103,119 43,355 146,474 7,357
8/31/90 26,233 70,024 96,257 40,232 136,489 7,968
8/31/91 28,943 80,548 109,491 51,605 161,096 8,524
8/31/92 29,540 89,421 118,961 55,825 174,786 9,061
8/31/93 34,396 122,616 157,012 66,962 223,974 9,972
8/31/94 32,649 139,076 171,725 64,698 236,423 11,089
8/31/95 36,325 177,456 213,781 73,543 287,324 12,113
Totals 36,325 177,456 213,781 73,543 287,324 12,113
Average Annual Total Return for This Illustration: 17.69% (Annual Compounding)
Average Annual Total Returns 1-Year 5-Year 10-Year
at Net Asset Value ------ ------ -------
for Period Ending 6/30/95: 23.95% 13.21% 13.61%
</TABLE>
<PAGE>
Appendix C
THE ART OF INVESTMENT:
A CONVERSATION WITH ROY NEUBERGER
<PAGE>
The Art of Investing:
A Conversation with Roy Neuberger
"I firmly believe that
if you want to manage
your own money, you
must be a student of
the market. If you are
unwilling or unable to
do that, find someone
else to manage your
money for you."
NEUBERGER & BERMAN
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[THIS PAGE IS BLANK - IT IS AN INSIDE PAGE OF THIS BROCHURE]
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[PICTURE OF ROY NEUBERGER]
During my more than sixty-five
years of buying and selling securities,
I've been asked many questions about my
approach to investing. On the pages
that follow are a variety of my
thoughts, ideas and investment
principles which have served me well
over the years. If you gain useful
knowledge in the pursuit of profit as
well as enjoyment from these comments, I
shall be more than content.
\s\ Roy
R. Neuberger
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YOU'VE BEEN ABLE TO CONDENSE SOME OF THE
CHARACTERISTICS OF SUCCESSFUL INVESTING INTO
FIVE "RULES." WHAT ARE THEY?
Rule #1: Be flexible. My philosophy has
necessarily changed from time to time because
of events and because of mistakes. My views
change as economic, political, and
technological changes occur both on and
sometimes off our planet. It is imperative
that you be willing to change your thoughts to
meet new conditions.
Rule #2: Take your temperament into account.
Recognize whether you are by nature very
speculative or just the opposite - fearful,
timid of taking risks. But in any event --
Diversify your investments, Rule #3: Be broad-gauged. Diversify your
make sure that some of your investments, make sure that some of your
principal is kept safe, and principal is kept safe, and try to increase
try to increase your income your income as well as your capital.
as well as your capital.
[PICTURE OF ROY NEUBERGER]
Rule #4: Always remember there are many ways to
skin a cat! Ben Graham and David Dodd did it by
understanding basic values. Warren Buffet
invested his portfolio in a handful of long-
term holdings, while staying involved with the
companies' managements. Peter Lynch chose to
understand, first-hand, the products of many
hundreds of the companies he invested in.
George Soros showed his genius as a hedge fund
investor who could decipher world currency
trends. Each has been successful in his own
way. But to be successful, remember to
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Rule #5: Be skeptical. To repeat a few well-
worn useful phrases:
A. Dig for yourself.
B. Be from Missouri.
C. If it sounds too good to be true,
it probably is.
IN YOUR 65 YEARS OF INVESTING ARE THERE ANY
GENERAL PATTERNS YOU'VE OBSERVED AS TO HOW THE
MARKET BEHAVES?
Every decade that I've been involved with Wall
Street has a nuance of its own, an economic and
social climate that influences investors. But
generally, bull markets tend to be longer than
bear markets, and stock prices tend to go up
more slowly and erratically than they go down.
Bear markets tend to be shorter and of greater
intensity. The market rarely rises or declines
concurrently with business cycles longer than
six months.
AS A LEGENDARY "VALUE INVESTOR," HOW DO YOU
DEFINE VALUE INVESTING?
Value investing means finding the best values -
- either absolute or relative. Absolute means
a stock has a low market price relative to its
own fundamentals. Relative value means the
price is attractive relative to the market as a
whole.
COULD YOU DESCRIBE A STOCK WITH "GOOD VALUE"?
A classic example is a company that has a low
price to earnings ratio, a low price to book
ratio, free cash flow, a strong balance sheet,
undervalued corporate assets, unrecognized
earnings turnaround and is selling at a
discount to private market value.
These characteristics usually lead to companies
that are under-researched and have a high
degree of inside ownership and entrepreneurial
management.
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One of my colleagues at Neuberger & Berman says
he finds his value stocks either "under a
cloud" or "under a rock." "Under a cloud"
stocks are those Wall Street in general doesn't
like, because an entire industry is out of
favor and even the good stocks are being
dropped. "Under a rock" stocks are those Wall
Street is ignoring, so you have to uncover them
on your own.
ARE THERE OTHER KEY CRITERIA YOU USE TO JUDGE
STOCKS?
I'm more interested in longer-term trends in
earnings than short-term trends. Earnings
gains should be the product of long-term
strategies, superior management, taking
advantage of business opportunities and so on.
If these factors are in their proper place,
short-term earnings should not be of major
concern. Dividends are an important extra
because, if they're stable, they help support
the price of the stock.
WHAT ABOUT SELLING STOCKS?
Most individual investors should invest for the
long term but not mindlessly. A sell
discipline, often neglected by investors, is
vitally important.
"One should fall in love One should fall in love with ideas, with
with ideas, with people or people, or with idealism. But in my book, the
with idealism. But in my last thing to fall in love with is a particular
book, the last thing to security. It is after all just a sheet of paper
fall in love with is a indicating a part ownership in a corporation
particular security." and its use is purely mercenary. If you must
love a security, stay in love with it until it
gets overvalued; then let somebody else fall in
love.
[PICTURE OF ROY NEUBERGER]
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ANY OTHER ADVICE FOR INVESTORS?
I firmly believe that if you want to manage
your own money, you must be a student of the
market. If you're unwilling or unable to do
that, find someone else to manage your money
for you. Two options are a well-managed no-
load mutual fund or, if you have enough assets
for separate account management, a money
manager you trust with a good record.
HOW WOULD YOU DESCRIBE YOUR PERSONAL INVESTING
STYLE?
Every stock I buy is bought to be sold. The
market is a daily event, and I continually
review my holdings looking for selling
opportunities. I take a profit occasionally on
something that has gone up in price over what
was expected and simultaneously take losses
whenever misjudgment seems evident. This
creates a reservoir of buying power that can be
used to make fresh judgments on what are the
best values in the market at that time. My
active investing style has worked well for me
over the years, but for most investors I
recommend a longer-term approach.
I tend not to worry very must about the day to
day swings of the market, which are very hard
to comprehend. Instead, I try to be rather
clever in diagnosing values and trying to win
70 to 80 percent of the time.
YOU BEGAN INVESTING IN 1929. WHAT WAS YOUR
EXPERIENCE WITH THE "GREAT CRASH"?
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The only money I managed in the Panic of 1929
was my own. My portfolio was down about 12
percent, and I had an uneasy feeling about the
market and conditions in general. Those were
the days of 10 percent margin. I studied the
lists carefully for a stock that was overvalued
in my opinion and which I could sell short as a
hedge. I came across RCA at about $100 per
share. It had recently split 5 for 1 and
appeared overvalued. There were no dividends,
little income, a low net worth and a weak
financial position. I sold RCA short in the
amount equal to the dollar value of my long
portfolio. It proved to be a timely and
profitable move.
HOW DID THE CRASH OF 1929 AFFECT YOUR INVESTING
STYLE?
I am prematurely bearish when the market goes
up for a long time and everybody is happy
because they are richer. I am very bullish
when the market has gone down perceptibly and I
feel it has discounted any troubles we are
going to have.
HOW IMPORTANT ARE PSYCHOLOGICAL FACTORS TO
MARKET BEHAVIOR?
There are many factors in addition to economic
statistics or security analysis in a buy or
sell decision. I believe psychology plays an
important role in the Market. Some people
follow the crowd in hopes they'll be swept
along in the right direction, but if the crowd
is late in acting, this can be a bad move.
I like to be contrary. When things look bad, I
become optimistic. When everything looks rosy,
and the crowd is optimistic, I like to be a
seller. Sometimes I'm too early, but I
generally profit.
AS A RENOWNED ART COLLECTOR, DO YOU FIND
SIMILARITIES BETWEEN SELECTING STOCKS AND
SELECTING WORKS OF ART?
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Both are an art, although picking stocks is a
minor art compared with painting, sculpture or
"When things look bad, I literature. I started buying art in the 30s,
become optimistic. When and in the 40s it was a daily, almost hourly
everything looks rosy, and occurrence. My inclination to buy the works of
the crowd is optimistic, I living artists comes from Van Gogh, who sold
like to be a seller." only one painting during his lifetime. He died
in poverty, only then to become a legend and
have his work sold for millions of dollars.
[PICTURE OF ROY NEUBERGER]
There are more variables to consider now in
both buying art and picking stocks. In the
modern stock markets, the heavy use of futures
and options has changed the nature of the
investment world. In past times, the stock
market was much less complicated, as was the
art world.
Artists rose and fell on their own merits
without a lot of publicity and attention. As
more and more dealers are involved with
artists, the price of their work becomes
inflated. So I almost always buy works of
unknown, relatively undiscovered artists,
which, I suppose is similar to value investing.
But the big difference in my view of art and
stocks is that I buy a stock to sell it and
make money. I never bought paintings or
sculptures for investment in my life. The
objective is to enjoy their beauty.
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WHAT DO YOU CONSIDER THE BUSINESS MILESTONES IN
YOUR LIFE?
Being a founder of Neuberger & Berman and
creating one of the first no-load mutual funds.
I started on Wall Street in 1929, and during
the depression I managed my own money and that
of my clientele. We all prospered, but I
wanted to have my own firm. In 1939 I became a
founder of Neuberger & Berman, and for about 10
years we managed money for individuals with
substantial financial assets. But I also
wanted to offer the smaller investor the
benefits of professional money management, so
in 1950 I created the Guardian Mutual Fund (now
known as the Neuberger & Berman Guardian Fund).
The Fund was kind of an innovation in its time
because it didn't charge a sales commission. I
thought the public was being overcharged for
mutual funds, so I wanted to create a fund that
would be offered directly to the public without
a sales charge. Now of course the "no-load"
fund business is a huge industry. I managed
the Fund myself for over 28 years.
[PICTURE OF ROY NEUBERGER]
YOU'RE IN YOUR NINETIES AND STILL YOU GO INTO
THE OFFICE EVERY DAY TO MANAGE YOUR
INVESTMENTS. WHY?
I like the fun of being nimble in the stock
market, and I'm addicted to the market's
fascinations.
WHAT CLOSING WORDS OF ADVICE DO YOU HAVE ABOUT
INVESTING?
Realize that there are opportunities at all
times for the adventuresome investor. And stay
in good physical condition. It's a strange
thing. You do not dissipate your energies by
using them. Exercise your body and your brain
every day, and you'll do better in investments
and in life.
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ROY NEUBERGER: A BRIEF BIOGRAPHY
Roy Neuberger is a founder of the investment
management firm Neuberger & Berman, and a
renowned value investor. He is also a
recognized collector of contemporary American
art, much of which he has given away to museums
and colleges across the country.
During the 1920s, Roy studied art in
Paris. When he realized he didn't possess the
talent to become an artist, he decided to
collect art, and to support this passion, Roy
turned to investing -- a pursuit for which his
talents have proven more than adequate.
A TALENT FOR INVESTING
Roy began his investment career by
joining a brokerage firm in 1929, seven months
before the "Great Crash." Just weeks before
"Black Monday," he shorted the stock of RCA,
thinking it was overvalued. He profited from
the falling market and gained a reputation for
market prescience and stock selection that has
lasted his entire career.
NEUBERGER & BERMAN'S FOUNDING
Roy's investing acumen attracted many
people who wished to have him manage their
money. In 1939, at the age of 36, after
purchasing a seat on the New York Stock
Exchange, Roy founded Neuberger & Berman to
provide money management services to people who
lacked the time, interest or expertise to
manage their own assets.
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NEUBERGER & BERMAN -- OVER FIVE DECADES OF
GROWTH
Neuberger & Berman has grown through
the years and now manages approximately $30
billion of equity and fixed income assets, both
domestic and international, for individuals,
institutions, and its family of no-load mutual
funds. Today, as when the firm was founded,
Neuberger & Berman follows a value approach to
investing, designed to enable clients to
advance in good markets and minimize losses
when conditions are less favorable.
For more complete information about
the Neuberger & Berman Guardian Fund,
including fees and expenses, call
Neuberger & Berman Management at 800-
877-9700 for a free prospectus.
Please read it carefully, before you
invest or send money.
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Neuberger & Berman Management
Inc.[SERVICE MARK]
605 Third Avenue, 2nd
Floor
New York, NY 10158-
0006
Shareholder Services
(800) 877-9700
[COPYRIGHT
SYMBOL]1995 Neuberger
& Berman
PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS
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NEUBERGER & BERMAN EQUITY FUNDS
POST-EFFECTIVE AMENDMENT NO. 74 ON FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
The audited financial statements contained in the Annual Reports
to Shareholders of the Registrant for the fiscal year ended
August 31, 1995, for Neuberger & Berman Equity Funds (with
respect to Neuberger & Berman Focus Fund, Neuberger & Berman
Genesis Fund, Neuberger & Berman Guardian Fund, Neuberger &
Berman International Fund, Neuberger & Berman Manhattan Fund,
Neuberger & Berman Partners Fund, and Neuberger & Berman Socially
Responsive Fund), Equity Managers Trust (with respect to
Neuberger & Berman Focus Portfolio, Neuberger & Berman Genesis
Portfolio, Neuberger & Berman Guardian Portfolio, Neuberger &
Berman Manhattan Portfolio, Neuberger & Berman Partners
Portfolio, and Neuberger & Berman Socially Responsive Portfolio)
and Global Managers Trust (with respect to Neuberger & Berman
International Portfolio) and the reports of the independent
auditors/accountants are incorporated into the Statement of
Additional Information by reference.
Included in Part A of this Post-Effective Amendment:
FINANCIAL HIGHLIGHTS for Neuberger &
Berman Focus Fund, Neuberger & Berman
Genesis Fund, Neuberger & Berman
Guardian Fund, Neuberger & Berman
International Fund, Neuberger & Berman
Manhattan Fund, Neuberger & Berman
Partners Fund, and Neuberger & Berman
Socially Responsive Fund, for the
periods indicated therein.
(b) Exhibits:
Exhibit
Number Description
(1) (a) Certificate of Trust. Incorporated by
Reference to Post-Effective Amendment
No. 70 to Registrant's Registration
Statement, File Nos. 2-11357 and 811-
582, Edgar Accession No. 0000898432-95-
000314.
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(b) Trust Instrument of Neuberger & Berman
Equity Funds. Incorporated by Reference
to Post-Effective Amendment No. 70 to
Registrant's Registration Statement,
File Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-000314.
(c) Schedule A - Current Series of Neuberger
& Berman Equity Funds. Incorporated by
Reference to Post-Effective Amendment
No. 70 to Registrant's Registration
Statement, File Nos. 2-11357 and 811-
582, Edgar Accession No. 0000898432-95-
000314.
(2) By-laws of Neuberger & Berman Equity
Funds. Incorporated by Reference to
Post-Effective Amendment No. 70 to
Registrant's Registration Statement,
File Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-000314.
(3) Voting Trust Agreement. None.
(4) Specimen Share Certificate.
Incorporated by Reference to Post-
Effective Amendment No. 66 to
Registrant's Registration Statement,
File Nos. 2-11357 and 811-582.
(5) (a) (i) Management Agreement Between
Equity Managers Trust and
Neuberger & Berman Management
Incorporated. Incorporated by
Reference to Post-Effective
Amendment No. 70 to Registrant's
Registration Statement, File
Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-
000314.
(ii) Schedule A - Series of Equity
Managers Trust Currently Subject
to the Management Agreement.
Incorporated by Reference to
Post-Effective Amendment No. 70
to Registrant's Registration
Statement, File Nos. 2-11357 and
811-582, Edgar Accession No.
0000898432-95-000314.
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(iii) Schedule B - Schedule of
Compensation Under the
Management Agreement.
Incorporated by Reference to
Post-Effective Amendment No. 70
to Registrant's Registration
Statement, File Nos. 2-11357 and
811-582, Edgar Accession No.
0000898432-95-000314.
(b) (i) Sub-Advisory Agreement Between
Neuberger & Berman Management
Incorporated and Neuberger &
Berman, L.P. with Respect to
Equity Managers Trust.
Incorporated by Reference to
Post-Effective Amendment No. 70
to Registrant's Registration
Statement, File Nos. 2-11357 and
811-582, Edgar Accession No.
0000898432-95-000314.
(ii) Schedule A - Series of Equity
Managers Trust Currently Subject
to the Sub-Advisory Agreement.
Incorporated by Reference to
Post-Effective Amendment No. 70
to Registrant's Registration
Statement, File Nos. 2-11357 and
811-582, Edgar Accession No.
0000898432-95-000314.
(c) (i) Management Agreement Between
Global Managers Trust and
Neuberger & Berman Management
Incorporated. Filed herewith.
(ii) Schedule A - Series of Global
Managers Trust Currently Subject
to the Management Agreement.
Filed herewith.
(iii) Schedule B - Schedule of
Compensation Under the
Management Agreement. Filed
herewith.
(d) (i) Sub-Advisory Agreement Between
Neuberger & Berman Management
Incorporated and Neuberger &
Berman, L.P. with Respect to
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Global Managers Trust. Filed
herewith.
(ii) Schedule A - Series of Global
Managers Trust Currently Subject
to the Sub-Advisory Agreement.
Filed herewith.
(6) (a) Distribution Agreement Between Neuberger
& Berman Equity Funds and Neuberger &
Berman Management Incorporated.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registrant's Registration Statement,
File Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-000314.
(b) Schedule A - Series of Neuberger &
Berman Equity Funds Currently Subject to
the Distribution Agreement.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registrant's Registration Statement,
File Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-000314.
(7) Bonus, Profit Sharing or Pension Plans.
None.
(8) (a) Custodian Contract Between Neuberger &
Berman Equity Funds and State Street
Bank and Trust Company. Filed herewith.
(b) Schedule A - Approved Foreign Banking
Institutions and Securities Depositories
Under the Custodian Contract. To be
Filed by Amendment.
(c) Schedule B - Approved Foreign Banking
Institutions and Securities Depositories
under the Custodian Contract with
Respect to Neuberger & Berman
International Fund. To be Filed by
Amendment.
(9) (a) (i) Transfer Agency Agreement
Between Neuberger & Berman
Equity Funds and State Street
Bank and Trust Company.
Incorporated by Reference to
Post-Effective Amendment No. 70
to Registrant's Registration
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Statement, File Nos. 2-11357 and
811-582, Edgar Accession No.
0000898432-95-000314.
(ii) Agreement Between Neuberger &
Berman Equity Funds and State
Street Bank and Trust Company
Adding Neuberger & Berman
International Fund as a
Portfolio Governed by the
Transfer Agency Agreement.
Incorporated by Reference to
Post-Effective Amendment No. 70
to Registrant's Registration
Statement, File Nos. 2-11357 and
811-582, Edgar Accession No.
0000898432-95-000314.
(iii) First Amendment to Transfer
Agency and Service Agreement
Between Neuberger & Berman
Equity Funds and State Street
Bank and Trust Company.
Incorporated by Reference to
Post-Effective Amendment No. 70
to Registrant's Registration
Statement, File Nos. 2-11357 and
811-582, Edgar Accession No.
0000898432-95-000314.
(b) (i) Administration Agreement Between
Neuberger & Berman Equity Funds
and Neuberger & Berman
Management Incorporated.
Incorporated by Reference to
Post-Effective Amendment No. 70
to Registrant's Registration
Statement, File Nos. 2-11357 and
811-582, Edgar Accession No.
0000898432-95-000314.
(ii) Schedule A - Series of Neuberger
& Berman Equity Funds Currently
Subject to the Administration
Agreement. Incorporated by
Reference to Post-Effective
Amendment No. 71 to Registrant's
Registration Statement, File
Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-
000347.
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(iii) Schedule B - Schedule of
Compensation Under the
Administration Agreement.
Incorporated by Reference to
Post-Effective Amendment No. 70
to Registrant's Registration
Statement, File Nos. 2-11357 and
811-582, Edgar Accession No.
0000898432-95-000314.
(10) Opinion and Consent of Kirkpatrick &
Lockhart LLP on Securities Matters.
Incorporated by Reference to
Registrant's Rule 24f-2 Notice for the
Fiscal Year Ended August 31, 1995, File
Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-000341.
(11) (a) Consent of Ernst & Young LLP,
Independent Auditors. Filed herewith.
(b) Consent of Ernst & Young, Independent
Auditors. Filed herewith.
(c) Consent of Coopers & Lybrand L.L.P.,
Independent Accountants. Filed
herewith.
(12) Financial Statements Omitted from
Prospectus. None.
(13) Letter of Investment Intent. None.
(14) Prototype Retirement Plan. None.
(15) Plan Pursuant to Rule 12b-1. None.
(16) Schedule of Computation of Performance
Quotations. Incorporated by Reference
to Post-Effective Amendments Nos. 61 and
67 to Registrant's Registration
Statement, File Nos. 2-11357 and 811-
582.
(17) Financial Data Schedule. Filed
herewith.
(18) Plan Pursuant to Rule 18f-3. None.
Item 25. Persons Controlled By or Under Common Control with
Registrant.
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No person is controlled by or under common control with
the Registrant. (Registrant is organized in a master/feeder fund
structure, and technically may be considered to control the master funds
in which it invests, Equity Managers Trust and Global Managers Trust.)
Item 26. Number of Holders of Securities.
The following information is given as of November 30,
1995.
Number of
Title of Class Record Holders
-------------- --------------
Shares of beneficial
interest, $0.001 par value, of:
Neuberger & Berman Focus Fund 34,448
Neuberger & Berman Genesis Fund 6,934
Neuberger & Berman Guardian Fund 119,881
Neuberger & Berman International Fund 2,073
Neuberger & Berman Manhattan Fund 45,668
Neuberger & Berman Partners Fund 54,083
Neuberger & Berman Socially 683
Responsive Fund
Item 27. Indemnification.
A Delaware business trust may provide in its governing
instrument for indemnification of its officers and trustees from and
against any and all claims and demands whatsoever. Article IX, Section 2
of the Trust Instrument provides that the Registrant shall indemnify any
present or former trustee, officer, employee or agent of the Registrant
("Covered Person") to the fullest extent permitted by law against
liability and all expenses reasonably incurred or paid by him or her in
connection with any claim, action, suit or proceeding ("Action") in which
he or she becomes involved as a party or otherwise by virtue of his or her
being or having been a Covered Person and against amounts paid or incurred
by him or her in settlement thereof. Indemnification will not be provided
to a person adjudged by a court or other body to be liable to the
Registrant or its shareholders by reason of "willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office" ("Disabling Conduct"), or not to have acted in
good faith in the reasonable belief that his or her action was in the best
interest of the Registrant. In the event of a settlement, no
indemnification may be provided unless there has been a determination that
the officer or trustee did not engage in Disabling Conduct (i) by the
court or other body approving the settlement; (ii) by at least a majority
of those trustees who are neither interested persons, as that term is
defined in the Investment Company Act of 1940 ("1940 Act"), of the
Registrant ("Independent Trustees"), nor parties to the matter based upon
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a review of readily available facts; or (iii) by written opinion of
independent legal counsel based upon a review of readily available facts.
Pursuant to Article IX, Section 3 of the Trust Instrument, if any
present or former shareholder of any series ("Series") of the Registrant
shall be held personally liable solely by reason of his or her being or
having been a shareholder and not because of his or her acts or omissions
or for some other reason, the present or former shareholder (or his or her
heirs, executors, administrators or other legal representatives or in the
case of any entity, its general successor) shall be entitled out of the
assets belonging to the applicable Series to be held harmless from and
indemnified against all loss and expense arising from such liability. The
Registrant, on behalf of the affected Series, shall, upon request by such
shareholder, assume the defense of any claim made against such shareholder
for any act or obligation of the Series and satisfy any judgment thereon
from the assets of the Series.
Section 9 of the Management Agreements between Neuberger & Berman
Management Incorporated ("N&B Management") and Equity Managers Trust and
Global Managers Trust (Equity Managers Trust and Global Managers Trust are
collectively referred to as the "Managers Trusts") provide that neither
N&B Management nor any director, officer or employee of N&B Management
performing services for the series of the Managers Trusts at the direction
or request of N&B Management in connection with N&B Management's discharge
of its obligations under the Agreements shall be liable for any error of
judgment or mistake of law or for any loss suffered by a series in
connection with any matter to which the Agreements relates; provided, that
nothing in the Agreements shall be construed (i) to protect N&B Management
against any liability to the Managers Trusts or any series thereof or
their interest holders to which N&B Management would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of N&B Management's reckless
disregard of its obligations and duties under the Agreements, or (ii) to
protect any director, officer or employee of N&B Management who is or was
a trustee or officer of the Managers Trusts against any liability to the
Managers Trusts or any series thereof or its interest holders to which
such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved
in the conduct of such person's office with Managers Trusts.
Section 1 of the Sub-Advisory Agreements between N&B Management
and Neuberger & Berman, L.P. ("Neuberger & Berman") with respect to the
Managers Trusts provides that, in the absence of willful misfeasance, bad
faith or gross negligence in the performance of its duties or of reckless
disregard of its duties and obligations under the Agreement, Neuberger &
Berman will not be subject to any liability for any act or omission or any
loss suffered by any series of the Managers Trusts or their interest
holders in connection with the matters to which the Agreements relate.
Section 12 of the Administration Agreement between the Registrant
and N&B Management provides that N&B Management will not be liable to the
Registrant for any action taken or omitted to be taken by N&B Management
- 19 -
<PAGE>
or its employees, agents or contractors in carrying out the provisions of
the Agreement if such action was taken or omitted in good faith and
without negligence or misconduct on the part of N&B Management, or its
employees, agents or contractors. Section 13 of the Administration
Agreement provides that the Registrant shall indemnify N&B Management and
hold it harmless from and against any and all losses, damages and
expenses, including reasonable attorneys' fees and expenses, incurred by
N&B Management that result from: (i) any claim, action, suit or
proceeding in connection with N&B Management's entry into or performance
of the Agreement; or (ii) any action taken or omission to act committed by
N&B Management in the performance of its obligations under the Agreement;
or (iii) any action of N&B Management upon instructions believed in good
faith by it to have been executed by a duly authorized officer or
representative of a Series; provided, that N&B Management will not be
entitled to such indemnification in respect of actions or omissions
constituting negligence or misconduct on the part of N&B Management, or
its employees, agents or contractors. Amounts payable by the Registrant
under this provision shall be payable solely out of assets belonging to
that Series, and not from assets belonging to any other Series of the
Registrant. Section 14 of the Administration Agreement provides that N&B
Management will indemnify the Registrant and hold it harmless from and
against any and all losses, damages and expenses, including reasonable
attorneys' fees and expenses, incurred by the Registrant that result from:
(i) N&B Management's failure to comply with the terms of the Agreement; or
(ii) N&B Management's lack of good faith in performing its obligations
under the Agreement; or (iii) the negligence or misconduct of N&B
Management, or its employees, agents or contractors in connection with the
Agreement. The Registrant shall not be entitled to such indemnification
in respect of actions or omissions constituting negligence or misconduct
on the part of the Registrant or its employees, agents or contractors
other than N&B Management, unless such negligence or misconduct results
from or is accompanied by negligence or misconduct on the part of N&B
Management, any affiliated person of N&B Management, or any affiliated
person of an affiliated person of N&B Management.
Section 11 of the Distribution Agreement between the Registrant
and N&B Management provides that N&B Management shall look only to the
assets of a Series for the Registrant's performance of the Agreement by
the Registrant on behalf of such Series, and neither the Trustees nor any
of the Registrant's officers, employees or agents, whether past, present
or future, shall be personally liable therefor.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("1933 Act") 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, such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of 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
- 20 -
<PAGE>
such trustee, officer or controlling person, 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 1933 Act and will be governed by the final adjudication of such
issue.
Item 28. Business and Other Connections of Adviser and Sub-
Adviser.
There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
director or officer of N&B Management and each partner of Neuberger &
Berman is, or at any time during the past two years has been, engaged for
his or her own account or in the capacity of director, officer, employee,
partner or trustee.
<TABLE>
<CAPTION>
NAME BUSINESS AND OTHER CONNECTIONS
----- ------------------------------
<S> <C>
Claudia A. Brandon Secretary, Neuberger & Berman Advisers
Vice President, Management Trust (Delaware business trust);
N&B Management Secretary, Advisers Managers Trust; Secretary,
Neuberger & Berman Advisers Management Trust
(Massachusetts business trust) (1); Secretary,
Neuberger & Berman Income Funds; Secretary,
Neuberger & Berman Income Trust; Secretary,
Neuberger & Berman Equity Funds; Secretary,
Neuberger & Berman Equity Trust; Secretary,
Income Managers Trust; Secretary, Equity
Managers Trust; Secretary, Global Managers
Trust; Secretary, Neuberger & Berman Equity
Assets.
- 21 -
<PAGE>
NAME BUSINESS AND OTHER CONNECTIONS
----- ------------------------------
Stacy Cooper-Shugrue Assistant Secretary, Neuberger & Berman Advisers
Assistant Vice President, Management Trust (Delaware business trust);
N&B Management Assistant Secretary, Advisers Managers Trust;
Assistant Secretary, Neuberger & Berman Advisers
Management Trust (Massachusetts business trust)
(1); Assistant Secretary, Neuberger & Berman
Income Funds; Assistant Secretary, Neuberger &
Berman Income Trust; Assistant Secretary,
Neuberger & Berman Equity Funds; Assistant
Secretary, Neuberger & Berman Equity Trust;
Assistant Secretary, Income Managers Trust;
Assistant Secretary, Equity Managers Trust;
Assistant Secretary, Global Managers Trust;
Assistant Secretary, Neuberger & Berman Equity
Assets.
Robert Cresci Assistant Portfolio Manager, BNP-N&B Global
Assistant Vice President, Asset Management L.P. (joint venture of
N&B Management Neuberger & Berman and Banque Nationale de
Paris) (2); Assistant Portfolio Manager,
Vontobel (Swiss bank) (3).
Stanley Egener Chairman of the Board and Trustee, Neuberger &
President and Director, Berman Advisers Management Trust (Delaware
N&B Management; General business trust); Chairman of the Board and
Partner, Neuberger & Berman Trustee, Advisers Managers Trust; Chairman of
the Board and Trustee, Neuberger & Berman
Advisers Management Trust (Massachusetts
business trust) (1); Chairman of the Board and
Trustee, Neuberger & Berman Income Funds;
Chairman of the Board and Trustee, Neuberger &
Berman Income Trust; Chairman of the Board and
Trustee, Neuberger & Berman Equity Funds;
Chairman of the Board and Trustee, Neuberger &
Berman Equity Trust; Chairman of the Board and
Trustee, Income Managers Trust; Chairman of the
Board and Trustee, Equity Managers Trust;
Chairman of the Board and Trustee, Global
Managers Trust; Chairman of the Board and
Trustee, Neuberger & Berman Equity Assets.
Robert I. Gendelman Senior Portfolio Manager, Harpel Advisors (4).
Assistant Vice President,
N&B Management
- 22 -
<PAGE>
NAME BUSINESS AND OTHER CONNECTIONS
----- ------------------------------
Theodore P. Giuliano Executive Vice President and Trustee,
Vice President, N&B Management Neuberger & Berman Income Funds (6); Executive
(5); General Partner, Vice President and Trustee, Neuberger & Berman
Neuberger & Berman Income Trust (6); Executive Vice President and
Trustee, Income Managers Trust (6).
Theresa A. Havell President and Trustee, Neuberger & Berman Income
Vice President and Director, Funds; President and Trustee, Neuberger & Berman
N&B Management; General Income Trust; President and Trustee, Income
Partner, Neuberger & Berman Managers Trust
C. Carl Randolph Assistant Secretary, Neuberger & Berman Advisers
General Partner, Neuberger & Management Trust (Delaware business trust);
Berman Assistant Secretary, Advisers Managers Trust;
Assistant Secretary, Neuberger & Berman Advisers
Management Trust (Massachusetts business trust)
(1); Assistant Secretary, Neuberger & Berman
Income Funds; Assistant Secretary, Neuberger &
Berman Income Trust; Assistant Secretary,
Neuberger & Berman Equity Funds; Assistant
Secretary, Neuberger & Berman Equity Trust;
Assistant Secretary, Income Managers Trust;
Assistant Secretary, Equity Managers Trust;
Assistant Secretary, Global Managers Trust;
Assistant Secretary, Neuberger & Berman Equity
Assets.
Felix Rovelli Senior Vice President-Senior Equity Portfolio
Vice President, N&B Management Manager, BNP-N&B Global Asset Management L.P.
(joint venture of Neuberger & Berman and Banque
Nationale de Paris) (2); Portfolio Manager,
Vontobel (Swiss bank) (7).
Richard Russell Treasurer, Neuberger & Berman Advisers
Vice President, N&B Management Management Trust (Delaware business trust);
Treasurer, Advisers Managers Trust; Treasurer,
Neuberger & Berman Advisers Management Trust
(Massachusetts business trust) (1); Treasurer,
Neuberger & Berman Income Funds; Treasurer,
Neuberger & Berman Income Trust; Treasurer,
Neuberger & Berman Equity Funds; Treasurer,
Neuberger & Berman Equity Trust; Treasurer,
Income Managers Trust; Treasurer, Equity
Managers Trust; Treasurer, Global Managers
Trust; Treasurer, Neuberger & Berman Equity
Assets.
- 23 -
<PAGE>
NAME BUSINESS AND OTHER CONNECTIONS
----- ------------------------------
Daniel J. Sullivan Vice President, Neuberger & Berman Advisers
Senior Vice President, Management Trust (Delaware business trust); Vice
N&B Management President, Advisers Managers Trust; Vice
President, Neuberger & Berman Advisers
Management Trust (Massachusetts business trust)
(1); Vice President, Neuberger & Berman Income
Funds; Vice President, Neuberger & Berman Income
Trust; Vice President, Neuberger & Berman Equity
Funds; Vice President, Neuberger & Berman Equity
Trust; Vice President, Income Managers Trust;
Vice President, Equity Managers Trust; Vice
President, Global Managers Trust; Vice
President, Neuberger & Berman Equity Assets.
Susan Switzer Portfolio Manager, Mitchell Hutchins Asset
Assistant Vice President, Management Inc., 1285 Avenue of the Americas,
N&B Management New York, New York 10019 (8).
Michael J. Weiner Vice President, Neuberger & Berman Advisers
Senior Vice President and Management Trust (Delaware business trust); Vice
Treasurer, N&B Management President, Advisers Managers Trust; Vice
President, Neuberger & Berman Advisers
Management Trust (Massachusetts business trust)
(1); Vice President, Neuberger & Berman Income
Funds; Vice President, Neuberger & Berman Income
Trust; Vice President, Neuberger & Berman Equity
Funds; Vice President, Neuberger & Berman Equity
Trust; Vice President, Income Managers Trust;
Vice President, Equity Managers Trust; Vice
President, Global Managers Trust; Vice
President, Neuberger & Berman Equity Assets.
Lawrence Zicklin President and Trustee, Neuberger & Berman
Director, N&B Management; Advisers Management Trust (Delaware business
General Partner, Neuberger & trust); President and Trustee, Advisers Managers
Berman Trust; President and Trustee, Neuberger & Berman
Advisers Management Trust (Massachusetts
business trust) (1); President and Trustee,
Neuberger & Berman Equity Funds; President and
Trustee, Neuberger & Berman Equity Trust;
President and Trustee, Equity Managers Trust;
President, Global Managers Trust; President and
Trustee, Neuberger & Berman Equity Assets
</TABLE>
The principal address of N&B Management, Neuberger &
Berman, BNP-N&B Global Asset Management L.P. and of each of the investment
- 24 -
<PAGE>
companies named above, is 605 Third Avenue, New York, New York 10158.
Other addresses to be provided by amendment.
________________________
(1) Until April 30, 1995.
(2) Until October 31, 1995.
(3) Until May 1994.
(4) Until 1993.
(5) Until November 4, 1994.
(6) Until June 22, 1994.
(7) Until April 1994.
(8) Until 1994.
Item 29. Principal Underwriters.
(a) N&B Management, the principal underwriter
distributing securities of the Registrant, is also the principal
underwriter and distributor for each of the following investment
companies:
Neuberger & Berman Advisers Management Trust
Neuberger & Berman Equity Assets
Neuberger & Berman Equity Trust
Neuberger & Berman Income Funds
Neuberger & Berman Income Trust
N&B Management is also the investment manager to the
master funds in which the above-named investment companies invest.
(b) Set forth below is information concerning the
directors and officers of the Registrant's principal underwriter. The
principal business address of each of the persons listed is 605 Third
Avenue, New York, New York 10158-0180, which is also the address of the
Registrant's principal underwriter.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES POSITIONS AND OFFICES WITH
NAME WITH UNDERWRITER REGISTRANT
---- --------------------- ----------------------
<S> <C> <C>
Claudia A. Brandon Vice President Secretary
Patrick T. Byrne Assistant Vice President None
Richard A. Cantor Chairman of the Board and None
Director
Robert Conti Assistant Vice President None
- 25 -
<PAGE>
POSITIONS AND OFFICES POSITIONS AND OFFICES WITH
NAME WITH UNDERWRITER REGISTRANT
---- --------------------- ----------------------
Stacy Cooper-Shugrue Assistant Vice President Assistant Secretary
Robert Cresci Assistant Vice President None
William Cunningham Vice President None
Barbara DiGiorgio Assistant Vice President None
Roberta D'Orio Assistant Vice President None
Stanley Egener President and Director Chairman of the Board of Trustees
(Chief Executive Officer)
Robert I. Gendelman Assistant Vice President None
Mark R. Goldstein Vice President None
Farha-Joyce Haboucha Vice President None
Theresa A. Havell Vice President and Director None
Leslie Holliday-Soto Assistant Vice President None
Michael M. Kassen Vice President None
Irwin Lainoff Director None
Michael Lamberti Vice President None
Josephine Mahaney Vice President None
Carmen G. Martinez Assistant Vice President None
Lawrence Marx III Vice President None
Ellen Metzger Vice President and Secretary None
Paul Metzger Assistant Vice President None
Janet W. Prindle Vice President None
Felix Rovelli Vice President None
Richard Russell Vice President Treasurer (Principal Accounting
Officer)
Marvin C. Schwartz Director None
Kent C. Simons Vice President None
Frederick B. Soule Vice President None
Daniel J. Sullivan Senior Vice President Vice President
Susan Switzer Assistant Vice President None
Andrea Trachtenberg Vice President of Marketing None
- 26 -
<PAGE>
POSITIONS AND OFFICES POSITIONS AND OFFICES WITH
NAME WITH UNDERWRITER REGISTRANT
---- --------------------- ----------------------
Judith M. Vale Vice President None
Clara Del Villar Vice President None
Susan Walsh Assistant Vice President None
Michael J. Weiner Senior Vice President and Vice President
Treasurer (Principal Financial Officer)
Celeste Wischerth Assistant Vice President None
Thomas Wolfe Vice President None
Lawrence Zicklin Director Trustee and President
</TABLE>
(c) No commissions or other compensation were
received directly or indirectly from the Registrant by any principal
underwriter who was not an affiliated person of the Registrant.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act, as amended, and the rules
promulgated thereunder with respect to the Registrant are maintained at
the offices of State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110, except for the Registrant's Trust Instrument
and By-laws, minutes of meetings of the Registrant's Trustees and
shareholders and the Registrant's policies and contracts, which are
maintained at the offices of the Registrant, 605 Third Avenue, New York,
New York 10158.
All accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act, as amended, and the rules
promulgated thereunder with respect to Equity Managers Trust are
maintained at the offices of State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, except for Equity Managers
Trust's Trust Instrument and By-laws, minutes of meetings of Equity
Managers Trust's Trustees and shareholders and Equity Managers Trust's
policies and contracts, which are maintained at the offices of the Equity
Managers Trust, 605 Third Avenue, New York, New York 10158.
All accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act, as amended, and the rules
promulgated thereunder with respect to Global Managers Trust are
maintained at the offices of State Street Cayman Trust Company, Ltd.,
Elizabethan Square, P.O. Box 1984, George Town, Grand Cayman, Cayman
Islands, BWI.
- 27 -
<PAGE>
Item 31. Management Services
Other than as set forth in Parts A and B of this Post-
Effective Amendment, the Registrant is not a party to any management-
related service contract.
Item 32. Undertakings
Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest annual report
to shareholders of Neuberger & Berman Focus, Neuberger & Berman Genesis,
Neuberger & Berman Guardian, Neuberger & Berman Manhattan, Neuberger &
Berman Partners, and Neuberger & Berman Socially Responsive Funds and/or a
copy of Registrant's latest annual report to shareholders of Neuberger &
Berman International Fund, upon request and without charge.
- 28 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant, NEUBERGER & BERMAN
EQUITY FUNDS certifies that it meets all of the requirements for
effectiveness of this Post-Effective Amendment No. 74 to its Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Post-Effective Amendment to its Registration Statement to
be signed on its behalf by the undersigned, thereto duly authorized, in
the City and State of New York on the 15th day of December, 1995
NEUBERGER & BERMAN EQUITY FUNDS
/s/ Lawrence Zicklin
By:______________________
Lawrence Zicklin
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 74 has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Faith Colish
___________________* Trustee December 15, 1995
Faith Colish
/s/ Donald M. Cox
___________________* Trustee December 15, 1995
Donald M. Cox
/s/ Stanley Egener Chairman of the December 15, 1995
___________________ Board and Trustee
Stanley Egener (Chief Executive
Officer)
/s/ Howard A. Mileaf
___________________* Trustee December 15, 1995
Howard A. Mileaf
/s/ Edward I. O'Brien
___________________* Trustee December 15, 1995
Edward I. O'Brien
/s/ John T. Patterson, Jr.
___________________* Trustee December 15, 1995
John T. Patterson, Jr.
<PAGE>
SIGNATURE TITLE DATE
/s/ John P. Rosenthal
___________________* Trustee December 15, 1995
John P. Rosenthal
/s/ Cornelius T. Ryan
___________________* Trustee December 15, 1995
Cornelius T. Ryan
/s/ Gustave H. Shubert
___________________* Trustee December 15, 1995
Gustave H. Shubert
/s/ Alan R. Gruber
___________________* Trustee December 15, 1995
Alan R. Gruber
/s/ Lawrence Zicklin
___________________ President and December 15, 1995
Lawrence Zicklin Trustee
/s/ Michael J. Weiner
___________________ Vice President December 15, 1995
Michael J. Weiner (Principal
Financial
Officer)
/s/ Richard Russell
___________________ Treasurer December 15, 1995
Richard Russell (Principal
Accounting
Officer)
</TABLE>
* Signatures affixed by Arthur C. Delibert pursuant to a power of
attorney dated October 20, 1993, and filed herewith.
- 2 -
<PAGE>
POWER OF ATTORNEY
NEUBERGER & BERMAN EQUITY FUNDS, a Delaware business trust (the
"Trust"), and each of its undersigned officers and trustees hereby
nominates, constitutes and appoints Lawrence Zicklin, Michael J. Weiner,
Richard M. Phillips, Alan R. Dynner, Dana L. Platt and Arthur C. Delibert
(with full power to each of them to act alone) its/his/her true and lawful
attorney-in-fact and agent, for it/him/her and on its/his/her behalf and
in its/his/her name, place and stead in any and all capacities, to make,
execute and sign any and all amendments to the Trust's Registration
Statement on Form N-1A under the Securities Act of 1933 and/or the
Investment Company Act of 1940, any registration statements on Form N-14,
and to file with the Securities and Exchange Commission, and any other
regulatory authority having jurisdiction over the offer and sale of shares
of the Beneficial Interest of the Trust, any such amendment, and any and
all supplements thereto or to any prospectus or statement of additional
information forming a part thereof, and any and all exhibits and other
documents requisite in connection therewith, granting unto said attorneys,
and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises as fully to all intents and purposes as the Trust and the
undersigned officers and trustees itself/themselves might or could do.
IN WITNESS WHEREOF, NEUBERGER & BERMAN EQUITY FUNDS has caused
this power of attorney to be executed in its name by its President, and
attested by its Secretary, and the undersigned officers and trustees have
hereunto set their hands and seals this 20th day of October, 1993.
NEUBERGER & BERMAN EQUITY FUNDS
/s/ Lawrence Zicklin
By: _________________________________
Lawrence Zicklin, President
[SEAL]
ATTEST:
/s/ Claudia A. Brandon
______________________________
Claudia A. Brandon,
Secretary
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
/s/ Stanley Egener
______________________________ Chairman of the Board, Chief Executive Officer, and
Stanley Egener Trustee
/s/ Lawrence Zicklin
______________________________ President and Trustee
Lawrence Zicklin
/s/ Michael J. Weiner
______________________________ Vice President and Principal Financial Officer
Michael J. Weiner
/s/ Richard Russell
______________________________ Treasurer and Principal Accounting Officer
Richard Russell
______________________________ Trustee(CROSSED OUT) (Retired April 28, 1995)
Saul G. Cohen(CROSSED OUT)
/s/ Faith Colish
______________________________ Trustee
Faith Colish
/s/ Donald M. Cox
______________________________ Trustee
Donald M. Cox
/s/ Alan R. Gruber
______________________________ Trustee
Alan R. Gruber
/s/ Howard A. Mileaf
______________________________ Trustee
Howard A. Mileaf
/s/ Edward I. O'Brien
______________________________ Trustee
Edward I. O'Brien
______________________________ Trustee(CROSSED OUT)
Steven L. Osterweis(CROSSED OUT) (Retired April 28, 1995)
- 4 -
<PAGE>
SIGNATURE TITLE
/s/ John T. Patterson, Jr.
______________________________ Trustee
John T. Patterson, Jr.
/s/ John P. Rosenthal
______________________________ Trustee
John P. Rosenthal
/s/ Cornelius T. Ryan
______________________________ Trustee
Cornelius T. Ryan
/s/ Gustave H. Shubert
______________________________ Trustee
Gustave H. Shubert
______________________________ Trustee(CROSSED OUT)
Albert M. Stone(CROSSED OUT) (Retired April 28, 1995)
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, EQUITY MANAGERS TRUST certifies that
it meets all of the requirements for effectiveness of the Post-Effective
Amendment No. 74 to the Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City and State of New York on
the 15th day of December, 1995
EQUITY MANAGERS TRUST
/s/ Lawrence Zicklin
By:______________________
Lawrence Zicklin
President
Pursuant to the requirements of the Securities Act of 1933, the
Post-Effective Amendment No. 74 has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Faith Colish
___________________ Trustee December 15, 1995
Faith Colish
/s/ Donald M. Cox
___________________ Trustee December 15, 1995
Donald M. Cox
/s/ Stanley Egener Chairman of the December 15, 1995
___________________ Board and Trustee
Stanley Egener (Chief Executive
Officer)
/s/ Howard A. Mileaf
___________________ Trustee December 15, 1995
Howard A. Mileaf
/s/ Edward I. O'Brien
_____________________ Trustee December 15, 1995
Edward I. O'Brien
- 6 -
<PAGE>
SIGNATURE TITLE DATE
/s/ John T. Patterson, Jr.
_____________________ Trustee December 15, 1995
John T. Patterson, Jr.
/s/ John P. Rosenthal
_____________________ Trustee December 15, 1995
John P. Rosenthal
/s/ Cornelius T. Ryan
_____________________ Trustee December 15, 1995
Cornelius T. Ryan
/s/ Gustave H. Shubert
______________________ Trustee December 15, 1995
Gustave H. Shubert
/s/ Alan R. Gruber
___________________ Trustee December 15, 1995
Alan R. Gruber
/s/ Lawrence Zicklin
____________________ President and December 15, 1995
Lawrence Zicklin Trustee
/s/ Michael J. Weiner
_____________________ Vice President December 15, 1995
Michael J. Weiner (Principal
Financial
Officer)
/s/ Richard Russell
___________________ Treasurer December 15, 1995
Richard Russell (Principal
Accounting
Officer)
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, GLOBAL MANAGERS TRUST certifies that
it meets all of the requirements for effectiveness of Post-Effective
Amendment No. 74 to the Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, at Paradise Island, the Bahamas, on
the 17th day of November, 1995
GLOBAL MANAGERS TRUST
/s/ Stanley Egener
By:______________________
Stanley Egener, Chairman of the Board
(Chief Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, Post-
Effective Amendment No. 74 has been signed below by the following persons
in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Stanley Egener Chairman of the November 17, 1995
___________________ Board and Trustee
Stanley Egener (Chief Executive
Officer)
/s/ Howard A. Mileaf
___________________ Trustee November 17, 1995
Howard A. Mileaf
/s/ John T. Patterson, Jr. Trustee November 17, 1995
__________________________
John T. Patterson, Jr.
/s/ John P. Rosenthal Trustee November 17, 1995
_____________________
John P. Rosenthal
/s/ Michael J. Weiner Vice President November 17, 1995
_____________________ (Principal
Michael J. Weiner Financial
Officer)
- 8 -
<PAGE>
SIGNATURE TITLE DATE
/s/ Richard Russell Treasurer November 17, 1995
___________________* (Principal
Richard Russell Accounting
Officer)
</TABLE>
* Signature affixed at Paradise Island, the Bahamas, by Arthur C.
Delibert, pursuant to a power of attorney signed at Paget,
Bermuda, on May 5, 1995, and filed herewith.
<PAGE>
POWER OF ATTORNEY
GLOBAL MANAGERS TRUST, a New York trust (the "Trust"), and each
of its undersigned officers and trustees hereby nominates, constitutes and
appoints Stanley Egener, Michael J. Weiner, Alan R. Dynner, Richard M.
Phillips, Arthur C. Delibert, Susan M. Casey, Beth A. Stekler, Jacqueline
Henning and Lenore Joan McCabe (with full power to each of them to act
alone) its/his/her true and lawful attorney-in-fact and agent, for
it/him/her and on its/his/her behalf and in its/his/her name, place and
stead in any and all capacities, to make, execute and sign any and all
amendments to the Trust's Registration Statement on Form N-1A under the
Securities Act of 1933 and the Investment Company Act of 1940, any
registration statement of any feeder fund investing in the Trust, and any
registration statements on Form N-14, and to file with the Securities and
Exchange Commission, and any other regulatory authority having
jurisdiction over the offer and sale of shares of the Beneficial Interest
of the Trust, any such amendment, and any and all supplements thereto or
to any prospectus or statement of additional information forming a part
thereof, and any and all exhibits and other documents requisite in
connection therewith, granting unto said attorneys, and each of them, full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises as fully to
all intents and purposes as the Trust and the undersigned officers and
trustees itself/themselves might or could do.
IN WITNESS WHEREOF, GLOBAL MANAGERS TRUST has caused this power
of attorney to be executed in its name by its Chairman, and attested by
its Secretary, and the undersigned officers and trustees have hereunto set
their hands and seals at Paget, Bermuda, this 5th day of May, 1995.
GLOBAL MANAGERS TRUST
/s/ Stanley Egener
By: _________________________________
Stanley Egener, Chairman of the
Board
[SEAL]
ATTEST:
/s/ Claudia A. Brandon
______________________________
Claudia A. Brandon,
Secretary
[Signatures Continued on Next Page]
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SIGNATURE TITLE
<S> <C>
/s/ Stanley Egener
___________________ Chairman of the Board
Stanley Egener and Trustee (Chief
Executive Officer)
/s/ Howard A. Mileaf
___________________ Trustee
Howard A. Mileaf
/s/ John T. Patterson, Jr.
___________________ Trustee
John T. Patterson, Jr.
/s/ John P. Rosenthal
___________________ Trustee
John P. Rosenthal
___________________ Vice President
Michael J. Weiner
/s/ Richard Russell
___________________ Treasurer
Richard Russell
/s/ Claudia A. Brandon
___________________ Secretary
Claudia A. Brandon
<PAGE>
NEUBERGER & BERMAN EQUITY FUNDS
POST-EFFECTIVE AMENDMENT NO. 74 ON FORM N-1A
INDEX TO EXHIBITS
</TABLE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ------------ -----------
<S> <C> <C>
(1) (a) Certificate of Trust. Incorporated by N.A.
Reference to Post-Effective Amendment No. 70 to
Registrant's Registration Statement, File Nos.
2-11357 and 811-582, Edgar Accession No.
0000898432-95-000314.
(b) Trust Instrument of Neuberger & Berman Equity N.A.
Funds. Incorporated by Reference to Post-
Effective Amendment No. 70 to Registrant's
Registration Statement, File Nos. 2-11357 and
811-582, Edgar Accession No. 0000898432-95-
000314.
(c) Schedule A - Current Series of Neuberger & N.A.
Berman Equity Funds. Incorporated by Reference
to Post-Effective Amendment No. 70 to
Registrant's Registration Statement, File Nos.
2-11357 and 811-582, Edgar Accession No.
0000898432-95-000314.
(2) By-laws of Neuberger & Berman Equity Funds. N.A.
Incorporated by Reference to Post-Effective Amendment
No. 70 to Registrant's Registration Statement, File
Nos. 2-11357 and 811-582, Edgar Accession No.
0000898432-95-000314.
(3) Voting Trust Agreement. None. N.A.
(4) Specimen Share Certificate. Incorporated by Reference N.A.
to Post-Effective Amendment No. 66 to Registrant's
Registration Statement, File Nos. 2-11357 and 811-582.
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<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
------- ------------ -----------
(5) (a) (i) Management Agreement Between Equity N.A.
Managers Trust and Neuberger & Berman
Management Incorporated. Incorporated
by Reference to Post-Effective
Amendment No. 70 to Registrant's
Registration Statement, File Nos. 2-
11357 and 811-582, Edgar Accession No.
0000898432-95-000314.
(ii) Schedule A - Series of Equity Managers N.A.
Trust Currently Subject to the
Management Agreement. Incorporated by
Reference to Post-Effective Amendment
No. 70 to Registrant's Registration
Statement, File Nos. 2-11357 and 811-
582, Edgar Accession No. 0000898432-
95-000314.
(iii) Schedule B - Schedule of Compensation N.A.
Under the Management Agreement.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registrant's Registration Statement,
File Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-000314.
(b) (i) Sub-Advisory Agreement Between N.A.
Neuberger & Berman Management
Incorporated and Neuberger & Berman,
L.P. with Respect to Equity Managers
Trust. Incorporated by Reference to
Post-Effective Amendment No. 70 to
Registrant's Registration Statement,
File Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-000314.
(ii) Schedule A - Series of Equity Managers N.A.
Trust Currently Subject to the Sub-
Advisory Agreement. Incorporated by
Reference to Post-Effective Amendment
No. 70 to Registrant's Registration
Statement, File Nos. 2-11357 and 811-
582, Edgar Accession No. 0000898432-
95-000314.
<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
------- ------------ -----------
(c) (i) Management Agreement Between Global ____
Managers Trust and Neuberger & Berman
Management Incorporated. Filed
herewith.
(ii) Schedule A - Series of Global Managers ____
Trust Currently Subject to the
Management Agreement. Filed herewith.
(iii) Schedule B - Schedule of Compensation ____
Under the Management Agreement. Filed
herewith.
(d) (i) Sub-Advisory Agreement Between ____
Neuberger & Berman Management
Incorporated and Neuberger & Berman,
L.P. with respect to Global Managers
Trust. Filed herewith.
(ii) Schedule A - Series of Global Managers ____
Trust Currently Subject to Sub-
Advisory Agreement. Filed herewith.
(6) (a) Distribution Agreement Between Neuberger & N.A.
Berman Equity Funds and Neuberger & Berman
Management Incorporated. Incorporated by
Reference to Post-Effective Amendment No. 70 to
Registrant's Registration Statement, File Nos.
2-11357 and 811-582, Edgar Accession No.
0000898432-95-000314.
(b) Schedule A - Series of Neuberger & Berman N.A.
Equity Funds Currently Subject to the
Distribution Agreement. Incorporated by
Reference to Post-Effective Amendment No. 70 to
Registrant's Registration Statement, File Nos.
2-11357 and 811-582, Edgar Accession No.
0000898432-95-000314.
(7) Bonus, Profit Sharing or Pension Plans. None. N.A.
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<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
------- ------------ -----------
(8) (a) Custodian Contract Between Neuberger & Berman _____
Equity Funds and State Street Bank and Trust
Company. Filed herewith.
(b) Schedule A - Approved Foreign Banking N.A.
Institutions and Securities Depositories Under
the Custodian Contract. To be Filed by
Amendment.
(c) Schedule B - Approved Foreign Banking N.A.
Institutions and Securities Depositories under
the Custodian Contract with Respect to
Neuberger & Berman International Fund. To be
Filed by Amendment.
(9) (a) (i) Transfer Agency Agreement Between N.A.
Neuberger & Berman Equity Funds and
State Street Bank and Trust Company.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registrant's Registration Statement,
File Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-000314.
(ii) Agreement Between Neuberger & Berman N.A.
Equity Funds and State Street Bank and
Trust Company Adding Neuberger &
Berman International Fund as a
Portfolio Governed by the Transfer
Agency Agreement. Incorporated by
Reference to Post-Effective Amendment
No. 70 to Registrant's Registration
Statement, File Nos. 2-11357 and 811-
582, Edgar Accession No. 0000898432-
95-000314.
(iii) First Amendment to Transfer Agency and N.A.
Service Agreement Between Neuberger &
Berman Equity Funds and State Street
Bank and Trust Company. Incorporated
by Reference to Post-Effective
Amendment No. 70 to Registrant's
Registration Statement, File Nos. 2-
11357 and 811-582, Edgar Accession No.
0000898432-95-000314.
<PAGE>
Sequentially
Exhibit Numbered
Number Description Page
------- ------------ -----------
(b) (i) Administration Agreement Between N.A.
Neuberger & Berman Equity Funds and
Neuberger & Berman Management
Incorporated. Incorporated by
Reference to Post-Effective Amendment
No. 70 to Registrant's Registration
Statement, File Nos. 2-11357 and 811-
582, Edgar Accession No. 0000898432-
95-000314.
(ii) Schedule A - Series of Neuberger & N.A.
Berman Equity Funds Currently Subject
to the Administration Agreement.
Incorporated by Reference to Post-
Effective Amendment No. 71 to
Registrant's Statement File Nos. 2-
11357 and 911-582, Edgar Accession No.
0000898432-95-000347.
(iii) Schedule B - Schedule of Compensation N.A.
Under the Administration Agreement.
Incorporated by Reference to Post-
Effective Amendment No. 70 to
Registrant's Registration Statement,
File Nos. 2-11357 and 811-582, Edgar
Accession No. 0000898432-95-000314.
(10) (a) Opinion and Consent of Kirkpatrick & Lockhart N.A.
LLP on Securities Matters. Incorporated by
Reference to Registrant's Rule 24f-2 Notice for
the Fiscal Year Ended August 31, 1995, File
Nos. 2-11357 and 911-582, Edgar Accession No.
00000898432-95-000341.
(11) (a) Consent of Ernst & Young LLP, Independent ____
Auditors. Filed herewith.
(b) Consent of Ernst & Young, Independent Auditors. ____
Filed herewith.
(c) Consent of Coopers & Lybrand L.L.P., ____
Independent Accountants. Filed herewith.
(12) Financial Statements Omitted from Prospectus. None. N.A.
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Sequentially
Exhibit Numbered
Number Description Page
------- ------------ -----------
(13) Letter of Investment Intent. None. N.A.
(14) Prototype Retirement Plan. None. N.A.
(15) Plan Pursuant to Rule 12b-1. None. N.A.
(16) Schedule of Computation of Performance Quotations. N.A.
Incorporated by Reference to Post-Effective Amendment
Nos. 61 and 67 to Registrant's Registration Statement,
File Nos. 2-11357 and 811-582.
(17) Financial Data Schedule. Filed herewith. ____
(18) Plan Pursuant to Rule 18f-3. None. N.A.
</TABLE>
<PAGE>
<PAGE>
Exhibit 5(c)(i)
MANAGEMENT AGREEMENT
This Agreement is made as of November 1, 1995, between Global
Managers Trust, a New York common law trust ("Managers Trust"), and
Neuberger & Berman Management Incorporated, a New York corporation
("Manager").
W I T N E S S E T H :
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WHEREAS, Managers Trust is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end, diversified
management investment company and has established a series of shares known
as International Portfolio and has the authority to establish additional
series in the future (each a "Series"), with each Series having its own
assets and investment policies; and
WHEREAS, Managers Trust desires to retain the Manager as
investment adviser to furnish investment advisory and portfolio management
services to each Series listed in Schedule A attached hereto and to such
other Series of Managers Trust hereinafter established as agreed to from
time to time by the parties, evidenced by an addendum to Schedule A
(hereinafter "Series" shall refer to each Series which is subject to this
Agreement and all agreements and actions described herein to be made or
taken by Managers Trust on behalf of the Series), and the Manager is
willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as
follows:
1. Services of the Manager.
1.1 Investment Management Services. The Manager shall act as
the investment adviser to the Series and, as such, shall (i) obtain and
evaluate such information relating to the economy, industries, businesses,
securities markets and securities as it may deem necessary or useful in
discharging its responsibilities hereunder, (ii) formulate a continuing
program for the investment of the assets of the Series in a manner
consistent with its investment objectives, policies and restrictions, and
(iii) determine from time to time securities to be purchased, sold,
retained or lent by the Series, and implement those decisions, including
the selection of entities with or through which such purchases, sales or
loans are to be effected; provided, that the Manager will place orders
pursuant to its investment determinations either directly with the issuer
or with a broker or dealer, and if with a broker or dealer, (a) will
attempt to obtain the best net price and most favorable execution of its
orders, and (b) may nevertheless in its discretion purchase and sell
portfolio securities from and to brokers and dealers who provide the
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<PAGE>
Manager with research, analysis, advice and similar services and pay such
brokers and dealers in return a higher commission or spread than may be
charged by other brokers or dealers.
The Series hereby authorizes any entity or person associated with
the Manager which is a member of a national securities exchange to effect
any transaction on the exchange for the account of the Series which is
permitted by Section 11(a) of the Securities Exchange Act of 1934 and Rule
11a2-2(T) thereunder, and the Series hereby consents to the retention of
compensation for such transactions in accordance with said Section 11(a)
or Rule 11a2-2(T)(a)(iv).
The Series hereby authorizes the Manager, to the extent permitted
by the 1940 Act or any rule, regulation, order or Securities and Exchange
Commission staff interpretation thereunder, to purchase for the Series any
security for which any one or more of the following is acting as an
underwriter, dealer, member of a syndicate, or syndicate manager: the
Manager, its affiliates, the affiliates of any holders of interests in the
Series (any such holder of interests in the Series to be referred to
hereinafter as an "Interestholder"), the principal underwriter of any
Interestholder, or any affiliate of any of the foregoing.
The Manager shall carry out its duties with respect to the
Series' investments in accordance with applicable law and the investment
objectives, policies and restrictions of the Series adopted by the
trustees of Managers Trust ("Trustees"), and subject to such further
limitations as the Series may from time to time impose by written notice
to the Manager.
1.2 Administrative Services. The Manager shall supervise the
Series' business and affairs and shall provide such services required for
effective administration of the Series as are not provided by employees or
other agents engaged by the Series; provided, that the Manager shall not
have any obligation to provide under this Agreement any direct or indirect
services to Interestholders, any services related to the sale of interests
in the Series, or any other services which are the subject of a separate
agreement or arrangement between the Series and the Manager. Subject to
the foregoing, in providing administrative services hereunder, the Manager
shall:
1.2.1 Office Space, Equipment and Facilities. Furnish without
cost to the Series, or pay the cost of, such office space, office
equipment and office facilities as are adequate for the Series' needs.
1.2.2 Personnel. Provide, without remuneration from or other
cost to Managers Trust or the Series, the services of individuals
competent to perform all of the Series' executive, administrative and
clerical functions which are not performed by employees or other agents
engaged by the Series or by the Manager acting in some other capacity
pursuant to a separate agreement or arrangement with the Series.
1.2.3 Agents. Assist the Series in selecting and coordinating
the activities of the other agents engaged by the Series, including the
Series' custodian, independent auditors and legal counsel.
<PAGE>
1.2.4 Trustees and Officers. Authorize and permit the Manager's
directors, officers and employees who may be elected or appointed as
trustees or officers of Managers Trust to serve in such capacities,
without remuneration from or other cost to Managers Trust or the Series.
1.2.5 Books and Records. Assure that all financial, accounting
and other records required to be maintained and preserved by Managers
Trust and/or the Series are maintained and preserved by it or on its
behalf in accordance with applicable laws and regulations.
1.2.6 Reports and Filings. Assist in the preparation of (but
not pay for) all periodic reports by Managers Trust or the Series to
Interestholders of the Series and all reports and filings required to
maintain the registration and qualification of the Series, or to meet
other regulatory or tax requirements applicable to the Series, under
federal and state securities and tax laws.
2. Expenses of the Series.
2.1 Expenses to be Paid by the Manager. The Manager shall pay
all salaries, expenses and fees of the officers, trustees and employees of
the Managers Trust who are officers, directors or employees of the
Manager.
In the event that the Manager pays or assumes any expenses of
Managers Trust or a Series not required to be paid or assumed by the
Manager under this Agreement, the Manager shall not be obligated hereby to
pay or assume the same or any similar expense in the future; provided,
that nothing herein contained shall be deemed to relieve the Manager of
any obligation to Managers Trust or to a Series under any separate
agreement or arrangement between the parties.
2.2 Expenses to be Paid by the Series. Each Series shall bear
all expenses of its operation, except those specifically allocated to the
Manager under this Agreement or under any separate agreement between a
Series and the Manager. Expenses to be borne by a Series shall include
both expenses directly attributable to the operation of the Series and the
placement of interests therein, as well as the portion of any expenses of
Managers Trust that is properly allocable to the Series in a manner
approved by the trustees of Managers Trust. Subject to any separate
agreement or arrangement between Managers Trust or a Series and the
Manager, the expenses hereby allocated to each Series, and not to the
Manager, include, but are not limited to:
2.2.1 Custody. All charges of depositories, custodians, and
other agents for the transfer, receipt, safekeeping, and servicing of its
cash, securities, and other property.
2.2.2 Interestholder Servicing. All expenses of maintaining and
servicing Interestholder accounts, including but not limited to the
charges of any Interestholder servicing agent, dividend disbursing agent
or other agent engaged by a Series to service Interestholder accounts.
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2.2.3 Interestholder Reports. All expenses of preparing,
setting in type, printing and distributing reports and other
communications to Interestholders of a Series.
2.2.4 Pricing and Portfolio Valuation. All expenses of
computing a Series' net asset value per share, including any equipment or
services obtained for the purpose of pricing shares or valuing the Series'
investment portfolio.
2.2.5 Communications. All charges for equipment or services
used for communications between the Manager or the Series and any
custodian, Interestholder servicing agent, portfolio accounting services
agent, or other agent engaged by a Series.
2.2.6 Legal and Accounting Fees. All charges for services and
expenses of a Series' legal counsel and independent auditors.
2.2.7 Trustees' Fees and Expenses. With respect to each Series,
all compensation of Trustees other than those affiliated with the Manager,
all expenses incurred in connection with such unaffiliated Trustees'
services as Trustees, and all other expenses of meetings of the Trustees
or committees thereof.
2.2.8 Interestholder Meetings. All expenses incidental to
holding meetings of Interestholders, including the printing of notices and
proxy materials, and proxy solicitation therefor.
2.2.9 Bonding and Insurance. All expenses of bond, liability,
and other insurance coverage required by law or regulation or deemed
advisable by the Trustees, including, without limitation, such bond,
liability and other insurance expense that may from time to time be
allocated to the Series in a manner approved by the Trustees.
2.2.10 Brokerage Commissions. All brokers' commissions and
other charges incident to the purchase, sale or lending of a Series'
portfolio securities.
2.2.11 Taxes. All taxes or governmental fees payable by or with
respect to a Series to federal, state or other governmental agencies,
domestic or foreign, including stamp or other transfer taxes.
2.2.12 Trade Association Fees. All fees, dues and other
expenses incurred in connection with a Series' membership in any trade
association or other investment organization.
2.2.13 Nonrecurring and Extraordinary Expenses. Such
nonrecurring and extraordinary expenses as may arise, including the costs
of actions, suits, or proceedings to which the Series is a party and the
expenses a Series may incur as a result of its legal obligation to provide
indemnification to Managers Trust's officers, Trustees and agents.
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2.2.14 Organizational Expenses. Any and all organizational
expenses of a Series paid by the Manager shall be reimbursed by such
Series at such time or times agreed by such Series and the Manager.
3. Advisory Fee.
3.1 Fee. As compensation for all services rendered, facilities
provided and expenses paid or assumed by the Manager under this Agreement,
each Series shall pay the Manager an annual fee as set out in Schedule B
to this Agreement.
3.2 Computation and Payment of Fee. The advisory fee shall
accrue on each calendar day, and shall be payable monthly on the first
business day of the next succeeding calendar month. The daily fee
accruals shall be computed by multiplying the fraction of one divided by
the number of days in the calendar year by the applicable annual advisory
fee rate (as set forth in Schedule B hereto), and multiplying this product
by the net assets of the Series, determined in the manner established by
the Trustees, as of the close of business on the last preceding business
day on which the Series' net asset value was determined.
3.3 State Expense Limitation. If in any fiscal year the
operating expenses of any Interestholder in a Series plus such
Interestholder's pro rata portion of the Series' operating expenses in
such fiscal year ("Aggregate Operating Expenses", which includes any fees
or expense reimbursements payable to the Manager pursuant to this
Agreement and any compensation payable to the Manager pursuant to (i) the
Administration Agreement between such Interestholder and the Manager or
(ii) any other Agreement or arrangement with Managers Trust with respect
to that Interestholder, but excludes interest, taxes, brokerage
commissions, litigation and indemnification expenses, and other
extraordinary expenses not incurred in the ordinary course of business)
exceed the lowest applicable percentage expense limitation imposed under
the securities law and regulations of any state in which such
Interestholder's shares are qualified for sale (the "State Expense
Limitation"), then the Manager shall pay such Interestholder the amount of
such excess, less the amount of any reduction of the administration fee
referred to below; provided, that the Manager shall have no obligation
hereunder to pay such Interestholder for any such expenses which exceed
the pro rata portion of such advisory fee attributable to such
Interestholder's interest in that Series.
No payment shall be made to such Interestholder hereunder unless
and until the administration fee payable by such Interestholder under a
similar State Expense Limitation of its Administration Agreement with the
Manager has been reduced to zero. Any payment to an interestholder
hereunder shall be made monthly, by annualizing the Aggregate Operating
Expenses for each month as of the last day of such month. An adjustment
shall be made on or before the last day of the first month of the next
succeeding fiscal year if Aggregate Operating Expenses for such fiscal
year do not exceed the State Expense Limitation or if for such fiscal year
there is no applicable State Expense Limitation.
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4. Ownership of Records.
All records required to be maintained and preserved by the Series
pursuant to the provisions or rules or regulations of the Securities and
Exchange Commission under Section 31(a) of the 1940 Act and maintained and
preserved by the Manager on behalf of the Series are the property of the
Series and shall be surrendered by the Manager promptly on request by the
Series; provided, that the Manager may at its own expense make and retain
copies of any such records.
5. Reports to Manager.
The Series shall furnish or otherwise make available to the
Manager such copies of that Series' financial statements, proxy
statements, reports, and other information relating to its business and
affairs as the Manager may, at any time or from time to time, reasonably
require in order to discharge its obligations under this Agreement.
6. Reports to the Series.
The Manager shall prepare and furnish to the Series such reports,
statistical data and other information in such form and at such intervals
as the Series may reasonably request.
7. Retention of Sub-Adviser.
Subject to a Series obtaining the initial and periodic approvals
required under Section 15 of the 1940 Act, the Manager may retain a
sub-adviser, at the Manager's own cost and expense, for the purpose of
making investment recommendations and research information available to
the Manager. Retention of a sub-adviser shall in no way reduce the
responsibilities or obligations of the Manager under this Agreement and
the Manager shall be responsible to Managers Trust and the Series for all
acts or omissions of the sub-adviser in connection with the performance of
the Manager's duties hereunder.
8. Services to Other Clients.
Nothing herein contained shall limit the freedom of the Manager
or any affiliated person of the Manager to render investment management
and administrative services to other investment companies, to act as
investment adviser or investment counselor to other persons, firms or
corporations, or to engage in other business activities.
9. Limitation of Liability of Manager and its Personnel.
Neither the Manager nor any director, officer or employee of the
Manager performing services for the Series at the direction or request of
the Manager in connection with the Manager's discharge of its obligations
hereunder shall be liable for any error of judgment or mistake of law or
for any loss suffered by a Series in connection with any matter to which
this Agreement relates; provided, that nothing herein contained shall be
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construed (i) to protect the Manager against any liability to Managers
Trust or a Series or its Interestholders to which the Manager would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of the Manager's duties, or by reason of the
Manager's reckless disregard of its obligations and duties under this
Agreement, or (ii) to protect any director, officer or employee of the
Manager who is or was a Trustee or officer of Managers Trust against any
liability to Managers Trust or a Series or its Interestholders to which
such person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved
in the conduct of such person's office with Managers Trust.
10. No Liability of Other Series.
This Agreement is made by Managers Trust on behalf of each Series
pursuant to authority granted by the Trustees, and the obligations created
hereby bind only the property of that Series and are not binding on any of
the Trustees or Interestholders of the Series individually or on any other
Series.
11. Effect of Agreement.
Nothing herein contained shall be deemed to require the Series to
take any action contrary to the Declaration of Trust or By-Laws of
Managers Trust, any actions of the Trustees binding upon the Series, or
any applicable law, regulation or order to which the Series is subject or
by which it is bound, or to relieve or deprive the Trustees of their
responsibility for and control of the conduct of the business and affairs
of the Series or Managers Trust.
12. Term of Agreement.
The term of this Agreement shall begin on the date first above
written with respect to each Series listed in Schedule A on the date
hereof and, unless sooner terminated as hereinafter provided, this
Agreement shall remain in effect through November 1, 1997. With respect
to each Series added by execution of an Addendum to Schedule A, the term
of this Agreement shall begin on the date of such execution and, unless
sooner terminated as hereinafter provided, this Agreement shall remain in
effect to the date two years after such execution. Thereafter, in each
case this Agreement shall continue in effect with respect to each Series
from year to year, subject to the termination provisions and all other
terms and conditions hereof; provided, such continuance with respect to a
Series is approved at least annually by (1) a vote or written consent of
the holders of a majority of the outstanding voting securities of such
Series, or by a vote of the Trustees, and (2) by a majority of the
Trustees who are not interested persons of either party hereto
("Disinterested Trustees"); and provided further, that the Manager shall
not have notified a Series in writing at least sixty days prior to the
first expiration date hereof or at least sixty days prior to any
expiration date in any year thereafter that it does not desire such
continuation. The Manager shall furnish any Series, promptly upon its
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request, such information as may reasonably be necessary to evaluate the
terms of this Agreement or any extension, renewal or amendment thereof.
13. Amendment or Assignment of Agreement.
Any amendment to this Agreement shall be in writing signed by the
parties hereto; provided, that no such amendment shall be effective unless
authorized on behalf of any Series (i) by resolution of the Trustees,
including the vote or written consent of a majority of the Trustees who
are not parties to this Agreement or interested persons of either party
hereto, and (ii) by vote of a majority of the outstanding voting
securities of the Series. This Agreement shall terminate automatically
and immediately in the event of its assignment.
14. Termination of Agreement.
This Agreement may be terminated at any time by either party
hereto, without the payment of any penalty, upon sixty (60) days' prior
written notice to the other party; provided, that in the case of
termination by any Series, such action shall have been authorized (i) by
resolution of the Trustees, including the vote or written consent of a
majority of Trustees who are not parties to this Agreement or interested
persons of either party hereto, or (ii) by vote of a majority of the
outstanding voting securities of the Series.
15. Name of the Series.
Each Series hereby agrees that if the Manager shall at any time
for any reason cease to serve as investment adviser to a Series, the
Series shall, if and when requested by the Manager, eliminate from the
Series' name the name "Neuberger & Berman" and thereafter refrain from
using the name "Neuberger & Berman" or the initials "N&B" in connection
with its business or activities, and the foregoing agreement of a Series
shall survive any termination of this Agreement and any extension or
renewal thereof.
16. Interpretation and Definition of Terms.
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 interpretation 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 Securities and Exchange
Commission validly issued pursuant to the 1940 Act. Specifically, the
terms "vote of a majority of the outstanding voting securities,"
"interested persons," "assignment" and "affiliated person," as used in
this Agreement shall have the meanings assigned to them by Section 2(a) of
the 1940 Act. In addition, when the effect of a requirement of the 1940
Act reflected in any provision of this Agreement is modified, interpreted
or relaxed by a rule, regulation or order of the Securities and Exchange
Commission, whether of special or of general application, such provision
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shall be deemed to incorporate the effect of such rule, regulation or
order.
17. Choice of Law
This Agreement is made and to be principally performed in the
State of New York, and except insofar as the 1940 Act or other federal
laws and regulations may be controlling, this Agreement shall be governed
by, and construed and enforced in accordance with, the internal laws of
the State of New York.
18. Captions.
The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
19. Execution in Counterparts.
This Agreement may be executed simultaneously in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed by their respective officers thereunto duly authorized and
their respective seals to be hereunto affixed, as of the day and year
first above written.
GLOBAL MANAGERS TRUST
Attest: By /s/ J. Henning
------------------------
/s/ L. McCabe J. Henning
L. McCabe Assistant Treasurer
-------------------------- -----------------------
Secretary Title
NEUBERGER & BERMAN
MANAGEMENT INCORPORATED
Attest: By /s/ Stanley Egener
-------------------------
/s/ Ellen Metzger Stanley Egener
------------------------- -------------------------
Ellen Metzger President
Secretary Title
- 9 -
<PAGE>
<PAGE>
Exhibit 5(c)(ii)
GLOBAL MANAGERS TRUST
MANAGEMENT AGREEMENT
SCHEDULE A
The Series of Global Managers Trust currently subject to this
Agreement are as follows:
Initial Series
Neuberger & Berman International Portfolio
Dated: November 1, 1995
<PAGE>
<PAGE>
Exhibit 5(c)(iii)
GLOBAL MANAGERS TRUST
MANAGEMENT AGREEMENT
SCHEDULE B
Compensation pursuant to Paragraph 3 of the Global Managers Trust
Management Agreement shall be calculated in accordance with the following
schedules:
Neuberger & Berman International Portfolio
0.85% of the first $250 million of average daily net assets
0.825% of the next $250 million of average daily net assets
0.80% of the next $250 million of average daily net assets
0.775% of the next $250 million of average daily net assets
0.75% of the next $500 million of average daily net assets
0.725% of average daily net assets in excess of $1.5 billion
Dated: November 1, 1995
<PAGE>
<PAGE>
SUB-ADVISORY AGREEMENT
NEUBERGER & BERMAN MANAGEMENT INCORPORATED
605 Third Avenue
New York, New York 10158
November 1, 1995
Neuberger & Berman, L.P.
605 Third Avenue
New York, New York 10158
Dear Sirs:
We have entered into a Management Agreement with Global
Managers Trust ("Managers Trust"), with respect to its series ("Series"),
as set forth in Schedule A hereto, pursuant to which we are to act as
investment adviser to such Series. We hereby agree with you as follows:
1. You agree for the duration of this Agreement to furnish
us with such investment recommendations and research information, of the
same type as that which you from time to time provide to your partners and
employees for use in managing client accounts, all as we shall reasonably
request. In the absence of willful misfeasance, bad faith or gross
negligence in the performance of your duties, or of reckless disregard of
your duties and obligations hereunder, you shall not be subject to
liability for any act or omission or any loss suffered by any Series or
its security holders in connection with the matters to which this
Agreement relates.
2. In consideration of your agreements set forth in
paragraph 1 above, we agree to pay you on the basis of direct and indirect
costs to you of performing such agreements. Indirect costs shall be
allocated on a basis mutually satisfactory to you and us.
3. As used in this Agreement, the terms "assignment" and
"vote of a majority of the outstanding voting securities" shall have the
meanings given to them by Section 2(a)(4) and 2(a)(42), respectively, of
the Investment Company Act of 1940, as amended.
This Agreement shall terminate automatically in the event
of its assignment, or upon termination of the Management Agreement between
Managers Trust and the undersigned.
This Agreement may be terminated at any time, without the
payment of any penalty, (a) with respect to any Series by the Trustees of
Managers Trust or by vote of a majority of the outstanding voting
securities of such Series or by the undersigned on not less than thirty
nor more than sixty days' written notice addressed to you at your
principal place of business; and (b) by you, without the payment of any
penalty, on not less than thirty nor more than sixty days' written notice
<PAGE>
addressed to Managers Trust and the undersigned at Managers Trust's
principal place of business.
This Agreement shall remain in full force and effect with
respect to each Series listed in Schedule A on the date hereof through
November 1, 1997 (unless sooner terminated as provided above) and from
year to year thereafter only so long as its continuance is approved in the
manner required by the Investment Company Act of 1940, as from time to
time amended.
Schedule A to this Agreement may be modified from time to
time to reflect the addition or deletion of a Series from the terms of
this Agreement. With respect to each Series added by execution of an
addendum to Schedule A, the term of this Agreement shall begin on the date
of such execution and, unless sooner terminated as provided above, this
Agreement shall remain in effect to the date two years after such
execution and from year to year thereafter only so long as its continuance
is approved in the manner required by the Investment Company Act of 1940,
as from time to time amended.
If you are in agreement with the foregoing, please sign
the form of acceptance on the enclosed counterpart hereof and return the
same to us.
Very truly yours,
NEUBERGER & BERMAN
MANAGEMENT INCORPORATED
/s/ Stanley Egener
By: ---------------------
Stanley Egener
President
The foregoing agreement is
hereby accepted as of the date
first above written.
NEUBERGER & BERMAN, L.P.
/s/ Lawrence Zicklin
By: ------------------------
Lawrence Zicklin
- 2 -
<PAGE>
<PAGE>
NEUBERGER & BERMAN MANAGEMENT INCORPORATED
SUB-ADVISORY AGREEMENT
SCHEDULE A
The Series of Global Managers Trust currently subject to this
Agreement are as follows:
Initial Series
Neuberger & Berman International Portfolio
Dated: November 1, 1995
<PAGE>
<PAGE>
CUSTODIAN CONTRACT
Between
NEUBERGER & BERMAN EQUITY FUNDS
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held By It . . . 1
2. Duties of the Custodian with Respect to Property of the
Fund Held by the Custodian in the United States . . . . . . 2
2.1 Holding Securities . . . . . . . . . . . . . . . 2
2.2 Delivery of Securities . . . . . . . . . . . . . 2
2.3 Registration of Securities . . . . . . . . . . . 5
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . 5
2.6 Collection of Income . . . . . . . . . . . . . . 6
2.7 Payment of Fund Monies . . . . . . . . . . . . . 6
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased . . . . . . . . . 8
2.9 Appointment of Agents . . . . . . . . . . . . . . 8
2.10 Deposit of Fund Assets in Securities
System . . . . . . . . . . . . . . . . . . . . . 8
2.11 Fund Assets Held in the Custodian's
Direct Paper System . . . . . . . . . . . . . . . 9
2.12 Segregated Account . . . . . . . . . . . . . . 10
2.13 Ownership Certificates for Tax Purposes . . . . 11
2.14 Proxies . . . . . . . . . . . . . . . . . . . . 11
2.15 Communications Relating to Portfolio
Securities . . . . . . . . . . . . . . . . . . 11
3. Duties of the Custodian with Respect to Property of the
Fund Held Outside of the United States . . . . . . . . . 12
3.1 Appointment of Foreign Sub-Custodians . . . . . 12
3.2 Assets to be Held . . . . . . . . . . . . . . . 12
3.3 Foreign Securities Depositories . . . . . . . . 12
3.4 Agreements with Foreign Banking
Institutions . . . . . . . . . . . . . . . . . 12
3.5 Access of Independent Accountants of the
Fund . . . . . . . . . . . . . . . . . . . . . 13
3.6 Reports by Custodian . . . . . . . . . . . . . 13
3.7 Transactions in Foreign Custody Account . . . . 13
3.8 Liability of Foreign Sub-Custodians . . . . . . 14
3.9 Liability of custodian . . . . . . . . . . . . 14
3.10 Reimbursement for Advances . . . . . . . . . . 15
3.11 Monitoring Responsibilities . . . . . . . . . . 16
3.12 Branches of U.S. Banks . . . . . . . . . . . . 16
3.13 Foreign Exchange Transactions . . . . . . . . . 17
3.13 Tax Law . . . . . . . . . . . . . . . . . . . . 17
4. Payments for Sales or Repurchase or Redemptions of Shares
of the Fund . . . . . . . . . . . . . . . . . . . . . . 18
5. Proper Instructions . . . . . . . . . . . . . . . . . . 19
6. Actions Permitted Without Express Authority . . . . . . . 19
<PAGE>
7. Evidence of Authority . . . . . . . . . . . . . . . . . 20
8. Duties of Custodian With Respect to the Books
of Account and Calculations of Net Asset Value and
Net Income . . . . . . . . . . . . . . . . . . . . . . . 20
9. Records . . . . . . . . . . . . . . . . . . . . . . . . 20
10. Opinion of Fund's Independent Accountants . . . . . . . . 21
11. Reports to Fund by Independent Public Accountants . . . . 21
12. Compensation of Custodian . . . . . . . . . . . . . . . 21
13. Responsibility of Custodian . . . . . . . . . . . . . . 22
14. Effective Period, Termination and Amendment . . . . . . . 23
15. Successor Custodian . . . . . . . . . . . . . . . . . . 24
16. Interpretive and Additional Provisions . . . . . . . . . 24
17. Additional Funds . . . . . . . . . . . . . . . . . . . . 25
18. Massachusetts Law to Apply . . . . . . . . . . . . . . . 25
19. Limitation of Trustee, Officer and Shareholder
Liability . . . . . . . . . . . . . . . . . . . . . . . 25
20. No Liability of Other Portfolios . . . . . . . . . . . . 26
21. Confidentiality . . . . . . . . . . . . . . . . . . . . 26
22. Assignment . . . . . . . . . . . . . . . . . . . . . . . 26
23. Severability . . . . . . . . . . . . . . . . . . . . . . 26
24. Prior Contracts . . . . . . . . . . . . . . . . . . . . 26
25. Shareholder Communications Election . . . . . . . . . . . 26
<PAGE>
CUSTODIAN CONTRACT
This Contract between Neuberger & Berman Equity Funds, a business
trust organized and existing under the laws of Delaware, having its
principal place of business at 605 Third Avenue, New York, New York 10158
hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate
series, with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Fund intends to initially offer shares in six
series, Neuberger & Berman Genesis Fund, Neuberger & Berman Guardian Fund,
Neuberger & Berman Partners Fund, Neuberger & Berman Manhattan Fund, and
Neuberger & Berman Selected Sectors Fund (such series together with all
other series subsequently established by the Fund and made subject to this
Contract in accordance with paragraph 17, being herein referred to as the
"Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the
assets of each Portfolio, including securities which the Fund, on behalf
of the applicable Portfolio desires to be held in places within the United
States ("domestic securities") and securities it desires to be held
outside the United States ("foreign securities") pursuant to the
provisions of the Trust Instrument. The Fund on behalf of each Portfolio
agrees to deliver to the Custodian all securities and cash of the
Portfolios, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the
Portfolio(s) from time to time, and the cash consideration received by it
for such new or treasury shares of beneficial interest of the Fund
representing interests in the Portfolios, ("Shares") as may be issued or
sold from time to time. The Custodian shall not be responsible for any
property of a Portfolio held or received by the Portfolio and not
delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of
Article 5), the Custodian shall on behalf of the applicable Portfolio(s)
from time to time employ one or more sub-custodians, located in the United
<PAGE>
States but only in accordance with an applicable vote by the Board of
Trustees of the Fund on behalf of the applicable Portfolio(s), and
provided that the Custodian shall have no more or less responsibility or
liability to the Fund on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the
Custodian. The Custodian may employ as sub-custodian for the Fund's
foreign securities on behalf of the applicable Portfolio(s) the foreign
banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held
By the Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of each Portfolio all non-cash
property, to be held by it in the United States including all
domestic securities owned by such Portfolio, other than (a)
securities which are maintained pursuant to Section 2.10 in a
clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "Securities System"
and (b) commercial paper of an issuer for which State Street Bank
and Trust Company acts as issuing and paying agent ("Direct
Paper") which is deposited and/or maintained in the Direct Paper
System of the Custodian pursuant to Section 2.11.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or
in a Securities System account of the Custodian or in the
Custodian's Direct Paper book entry system account ("Direct Paper
System Account") only upon receipt of Proper Instructions from
the Fund on behalf of the applicable Portfolio, which may be
continuing instructions when deemed appropriate by the parties,
and only in the following cases:
1) Upon sale of such securities for the account of the
Portfolio and receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered
into by the Portfolio;
3) In the case of a sale effected through a Securities
System, in accordance with the provisions of Section 2.10
hereof;
4) To the depository agent in connection with tender or
other similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities
are called, redeemed, retired or otherwise become
2
<PAGE>
payable; provided that, in any such case, the cash or
other consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into
the name of the Portfolio or into the name of any nominee
or nominees of the Custodian or into the name or nominee
name of any agent appointed pursuant to Section 2.9 or
into the name or nominee name of any sub-custodian
appointed pursuant to Article 1; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of
units; provided that, in any such case, the new
securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities
prior to receiving payment for such securities except as
may arise from the Custodian's own negligence or willful
misconduct;
8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization
or readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities,
the surrender thereof in the exercise of such warrants,
rights or similar securities or the surrender of interim
receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
10) For delivery in connection with any loans of securities
made by the Portfolio, but only against receipt of
adequate collateral as agreed upon from time to time by
the Custodian and the Fund on behalf of the Portfolio,
which may be in the form of cash or obligations issued by
the United States government, its agencies or
instrumentalities, except that in connection with any
loans for which collateral is to be credited to the
Custodian's account in the book-entry system authorized
by the U.S. Department of the Treasury, the Custodian
will not be held liable or responsible for the delivery
3
<PAGE>
of securities owned by the Portfolio prior to the receipt
of such collateral;
11) For delivery as security in connection with any
borrowings by the Fund on behalf of the Portfolio
requiring a pledge of assets by the Fund on behalf of the
Portfolio, but only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and
a member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any
similar organization or organizations, regarding escrow
or other arrangements in connection with transactions by
the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits
in connection with transactions by the Portfolio of the
Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for a Portfolio, for delivery to such
Transfer Agent or to the holders of shares in connection
with distributions in kind, as may be described from time
to time in the currently effective prospectus and
statement of additional information of the Fund, related
to the Portfolio ("Prospectus"), in satisfaction of
requests by holders of Shares for repurchase or
redemption; and
15) For any other proper corporate purpose, but only upon
receipt of, in addition to Proper Instructions from the
Fund on behalf of the applicable Portfolio, a certified
copy of a resolution of the Board of Trustees or of the
Executive Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary,
specifying the securities of the Portfolio to be
delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be
made.
4
<PAGE>
2.3 Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in
the name of the Portfolio or in the name of any nominee of the
Fund on behalf of the Portfolio or of any nominee of the
Custodian which nominee shall be assigned exclusively to the
Portfolio, unless the Fund has authorized in writing the
appointment of a nominee to be used in common with other
registered investment companies having the same investment
adviser as the Portfolio, or in the name or nominee name of any
agent appointed pursuant to Section 2.9 or in the name or nominee
name of any sub-custodian appointed pursuant to Article 1. All
securities accepted by the Custodian on behalf of the Portfolio
under the terms of this Contract shall be in "street name" or
other good delivery form. If, however, the Fund directs the
Custodian to maintain securities in "street name", the Custodian
shall utilize its best efforts only to timely collect income due
the Fund on such securities and to notify the Fund on a best
efforts basis only of relevant corporate actions including,
without limitation, pendency of calls, maturities, tender or
exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts in the United States in the name of each
Portfolio of the Fund which shall contain only property held by
the Custodian as custodian for that Portfolio, subject only to
draft or order by the Custodian acting pursuant to the terms of
this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or
for the account of the Portfolio, other than cash maintained by
the Portfolio in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of
1940. Funds held by the Custodian for a Portfolio may be
deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust
company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust
company and the funds to be deposited with each such bank or
trust company shall on behalf of each applicable Portfolio be
approved by vote of a majority of the Board of Trustees of the
Fund. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be withdrawable by the Custodian
only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the
Fund on behalf of each applicable Portfolio and the Custodian,
the Custodian shall, upon the receipt of Proper Instructions from
the Fund on behalf of a Portfolio, make federal funds available
to such Portfolio as of specified times agreed upon from time to
time by the Fund and the Custodian in the amount of checks
5
<PAGE>
received in payment for Shares of such Portfolio which are
deposited into the Portfolio's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3,
the Custodian shall collect on a timely basis all income and
other payments with respect to registered domestic securities
held hereunder to which each Portfolio shall be entitled either
by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments
with respect to bearer domestic securities if, on the date of
payment by the issuer, such securities are held by the Custodian
or its agent and shall credit such income, as collected, to such
Portfolio's custodian account. Without limiting the generality
of the foregoing, the Custodian shall detach and present for
payment all coupons and other income items requiring presentation
as and when they become due and shall collect interest when due
on securities held hereunder. Collection of income due each
Portfolio on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Custodian so
long as the securities are registered and remain in the name of
the Fund, the Custodian, or its nominee, or in the Depository
Trust Company account of the Custodian, but otherwise shall be
the responsibility of the Fund and the Custodian will have no
duty or responsibility in connection therewith, other than to
provide the Fund with such information or data as may be
necessary to assist the Fund in arranging for the timely delivery
to the Custodian of the income to which the Portfolio is properly
entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from
the Fund on behalf of the applicable Portfolio, which may be
continuing instructions when deemed appropriate by the parties,
the Custodian shall pay out monies of a Portfolio in the
following cases only:
1) Upon the purchase of domestic securities, options,
futures contracts or options on futures contracts for the
account of the Portfolio but only (a) against the
delivery of such securities or evidence of title to such
options, futures contracts or options on futures
contracts to the Custodian (or any bank, banking firm or
trust company doing business in the United States or
abroad which is qualified under the Investment Company
Act of 1940, as amended, to act as a custodian and has
been designated by the Custodian as its agent for this
purpose) registered in the name of the Portfolio or in
the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer; (b) in
the case of a purchase effected through a Securities
System, in accordance with the conditions set forth in
Section 2.10 hereof; (c) in the case of a purchase
involving the Direct Paper System, in accordance with the
6
<PAGE>
conditions set forth in Section 2.11; (d) in the case of
repurchase agreements entered into between the Fund on
behalf of the Portfolio and the Custodian, or another
bank, or a broker-dealer which is a member of NASD, (i)
against delivery of the securities either in certificate
form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities
or (ii) against delivery of the receipt evidencing
purchase by the Portfolio of securities owned by the
Custodian along with written evidence of the agreement by
the Custodian to repurchase such securities from the
Portfolio or (e) for transfer to a time deposit account
of the Fund in any bank, whether domestic or foreign;
such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Fund as defined
in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section
2.2 hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by
the Portfolio, including but not limited to the following
payments for the account of the Portfolio: interest,
taxes, management, accounting, transfer agent and legal
fees, and operating expenses of the Fund whether or not
such expenses are to be in whole or part capitalized or
treated as deferred expenses;
5) For the payment of any dividends on Shares of the
Portfolio declared pursuant to the governing documents of
the Fund;
6) For payment of the amount of dividends received in
respect of securities sold short;
7) For any other proper purpose, but only upon receipt of,
in addition to Proper Instructions from the Fund on
behalf of the Portfolio, a certified copy of a resolution
of the Board of Trustees or of the Executive Committee of
the Fund signed by an officer of the Fund and certified
by its Secretary or an Assistant Secretary, specifying
the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose
to be a proper purpose, and naming the person or persons
to whom such payment is to be made.
7
<PAGE>
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated otherwise in this
Contract, in any and every case where payment for purchase of
domestic securities for the account of a Portfolio is made by the
Custodian in advance of receipt of the securities purchased in
the absence of specific written instructions from the Fund on
behalf of such Portfolio to so pay in advance, the Custodian
shall be absolutely liable to the Fund for such securities to the
same extent as if the securities had been received by the
Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other
bank or trust company which is itself qualified under the
Investment Company Act of 1940, as amended, and its rules or
regulations to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from
time to time direct; provided, however, that the appointment of
any agent shall not relieve the Custodian of its responsibilities
or liabilities hereunder.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a
clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of
1934, which acts as a securities depository, or in the book-entry
system authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to herein as
"Securities System" in accordance with applicable Federal Reserve
Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in
the Securities System which shall not include any assets
of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
2) The records of the Custodian with respect to securities
of the Portfolio which are maintained in a Securities
System shall identify by book-entry those securities
belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from
the Securities System that such securities have been
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
payment and transfer for the account of the Portfolio.
The Custodian shall transfer securities sold for the
account of the Portfolio upon (i) receipt of advice from
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the Securities System that payment for such securities
has been transferred to the Account, and (ii) the making
of an entry on the records of the Custodian to reflect
such transfer and payment for the account of the
Portfolio. Copies of all advices from the Securities
System of transfers of securities for the account of the
Portfolio shall identify the Portfolio, be maintained for
the Portfolio by the Custodian and be provided to the
Fund at its request. Upon request, the Custodian shall
furnish the Fund on behalf of the Portfolio confirmation
of each transfer to or from the account of the Portfolio
in the form of a written advice or notice and shall
furnish to the Fund on behalf of the Portfolio copies of
daily transaction sheets reflecting each day's
transactions in the Securities System for the account of
the Portfolio;
4) The Custodian shall provide the Fund for the Portfolio
with any report obtained by the Custodian (or by any
agent appointed by the Custodian pursuant to Section 2.9)
on the Securities System's accounting system, internal
accounting control and procedures for safeguarding
securities deposited in the Securities System;
5) The Custodian shall have received from the Fund on behalf
of the Portfolio the certificate required by Article 14
hereof;
6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Fund for the benefit of the Portfolio for any loss or
damage to the Portfolio resulting from use of the
Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the
Securities System; at the election of the Fund, it shall
be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the
Securities System or any other person which the Custodian
may have as a consequence of any such loss or damage if
and to the extent that the Portfolio has not been made
whole for any such loss or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper System. The
Custodian may deposit and/or maintain securities owned by a
Portfolio in the Direct Paper System of the Custodian subject to
the following provisions:
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1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions from the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are
represented in an account ("Account") of the Custodian in
the Direct Paper System which shall not include any
assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities
of the Portfolio which are maintained in the Direct Paper
System shall identify by book-entry those securities
belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on
the records of the Custodian to reflect such payment and
transfer of securities to the account of the Portfolio.
The Custodian shall transfer securities sold for the
account of the Portfolio upon the making of an entry on
the records of the Custodian to reflect such transfer and
receipt of payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the
account of the Portfolio, in the form of a written advice
or notice, of Direct Paper on the next business day
following such transfer and shall furnish to the Fund on
behalf of the Portfolio copies of daily transaction
sheets reflecting each day's transaction in the
Securities System for the account of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on the Custodian's system of
internal accounting control as the Fund may reasonably
request from time to time.
2.12 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and
on behalf of each such Portfolio, into which account or accounts
may be transferred cash and/or securities, including securities
maintained in an account by the Custodian pursuant to Section
2.10 hereof, (i) in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Exchange Act
and a member of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and
of any registered national securities exchange (or the Commodity
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Futures Trading Commission or any registered contract market), or
of any similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written
by the Portfolio or commodity futures contracts or options
thereon purchased or sold by the Portfolio, (iii) for the
purposes of compliance by the Portfolio with the procedures
required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper
corporate purposes, but only, in the case of clause (iv), upon
receipt of, in addition to Proper Instructions from the Fund on
behalf of the applicable Portfolio, a certified copy of a
resolution of the Board of Trustees or of the Executive Committee
signed by an officer of the Fund and certified by the Secretary
or an Assistant Secretary, setting forth the purpose or purposes
of such segregated account and declaring such purposes to be
proper corporate purposes.
2.13 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of
income or other payments with respect to domestic securities of
each Portfolio held by it and in connection with transfers of
securities.
2.14 Proxies. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the
registered holder of such securities, if the securities are
registered otherwise than in the name of the Portfolio or a
nominee of the Portfolio, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly
deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.15 Communications Relating to Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly
to the Fund for each Portfolio all written information
(including, without limitation, pendency of calls and maturities
of domestic securities and expirations of rights in connection
therewith and notices of exercise of call and put options written
by the Fund on behalf of the Portfolio and the maturity of
futures contracts purchased or sold by the Portfolio) received by
the Custodian from issuers of the securities being held for the
Portfolio. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Portfolio all written
information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer. If the
Portfolio desires to take action with respect to any tender
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offer, exchange offer or any other similar transaction, the
Portfolio shall when reasonably possible notify the Custodian at
least three business days prior to the date on which the
Custodian is to take such action.
3. Duties of the Custodian with Respect to Property of the Fund Held
Outside of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby
authorizes and instructs the Custodian to employ as
sub-custodians for each Portfolio's securities and other assets
maintained outside the United States the foreign banking
institutions and foreign securities depositories designated on
Schedule A hereto ("foreign sub-custodians"). Upon receipt of
"Proper Instructions", as defined in Section 5 of this Contract,
together with a certified resolution of the Fund's Board of
Trustees, the Custodian and the Fund may agree to amend Schedule
A hereto from time to time to designate additional foreign
banking institutions and foreign securities depositories to act
as sub-custodian. Upon receipt of Proper Instructions, the Fund
may instruct the Custodian to cease the employment of any one or
more such sub-custodians for maintaining custody of a Portfolio's
assets.
3.2 Assets to be Held. The Custodian shall limit the securities and
other assets maintained in the custody of the foreign
sub-custodians to: (a) "foreign securities", as defined in
paragraph (c)(1) of Rule 17f-5 under the Investment Company Act
of 1940, and (b) cash and cash equivalents in such amounts as
the Custodian or the Fund may determine to be reasonably
necessary to effect a Portfolio's foreign securities
transactions. The Custodian shall identify on its books as
belonging to each Portfolio, the foreign securities of the
Portfolio held by each foreign sub-custodian.
3.3 Foreign Securities Depositories. Except as may otherwise be
agreed upon in writing by the Custodian and the Fund, assets of
each Portfolio shall be maintained in foreign securities
depositories only through arrangements implemented by the foreign
banking institutions serving as sub-custodians pursuant to the
terms hereof. Where possible, such arrangements shall include
entry into agreements containing the provisions set forth in
Section 3.4 hereof.
3.4 Agreements with Foreign Banking Institutions. Each agreement
with a foreign banking institution shall be substantially in the
form set forth in Exhibit 1 hereto and shall provide that: (a)
the assets of each Portfolio will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of
the foreign banking institution or its creditors or agent, except
a claim of payment for their safe custody or administration; (b)
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beneficial ownership for the assets of each Portfolio will be
freely transferable without the payment of money or value other
than for custody or administration; (c) adequate records will be
maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent
permitted under applicable law the independent public accountants
for the Fund, will be given access to the books and records of
the foreign banking institution relating to its actions under its
agreement with the Custodian; and (e) assets of each Portfolio
held by the foreign sub-custodian will be subject only to the
instructions of the Custodian or its agents.
3.5 Access of Independent Accountants of the Fund. Upon request of
the Fund, the Custodian will use its best efforts to arrange for
the independent accountants of the Fund to be afforded access to
the books and records of any foreign banking institution employed
as a foreign sub-custodian insofar as such books and records
relate to the performance of such foreign banking institution
under its agreement with the Custodian.
3.6 Reports by Custodian. The Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of
the securities and other assets of each Portfolio held by foreign
sub-custodians, including but not limited to an identification of
entities having possession of each Portfolio's securities and
other assets and advices or notifications of any transfers of
securities to or from each custodial account maintained by a
foreign banking institution for the Custodian on behalf of each
applicable Portfolio indicating, as to securities acquired for a
Portfolio, the identity of the entity having physical possession
of such securities.
3.7 Transactions in Foreign Custody Account. (a) Except as otherwise
provided in paragraph (b) of this Section 3.7, the provision of
Sections 2.2 and 2.7 of this Contract shall apply, mutatis
mutandis to the foreign securities of the Fund held outside the
United States by foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the
contrary, settlement and payment for securities received for the
account of each applicable Portfolio and delivery of securities
maintained for the account of each applicable Portfolio may be
effected in accordance with the customary established securities
trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the
purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of
receiving later payment for such securities from such purchaser
or dealer.
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(c) Securities maintained in the custody of a foreign
sub-custodian may be maintained in the name of such entity's
nominee to the same extent as set forth in Section 2.3 of this
Contract, and the Fund agrees to hold any such nominee harmless
from any liability as a holder of record of such securities.
3.8 Liability of Foreign Sub-Custodians. Each agreement pursuant to
which the Custodian employs a foreign banking institution as a
foreign sub-custodian shall require the institution to exercise
reasonable care in the performance of its duties and to
indemnify, and hold harmless, the Custodian and the Fund from and
against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it
shall be entitled to be subrogated to the rights of the Custodian
with respect to any claims against a foreign banking institution
as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not
been made whole for any such loss, damage, cost, expense,
liability or claim.
3.9 Liability of Custodian. The Custodian shall be liable for the
acts or omissions of a foreign banking institution to the same
extent as set forth with respect to sub-custodians generally in
this Contract and, regardless of whether assets are maintained in
the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank as contemplated
by paragraph 3.12 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting
from nationalization, expropriation, currency restrictions, or
acts of war or terrorism or any loss where the sub-custodian has
otherwise exercised reasonable care. Notwithstanding the
foregoing provisions of this paragraph 3.9, in delegating custody
duties to State Street London Ltd., the Custodian shall not be
relieved of any responsibility to the Fund for any loss due to
such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other
losses (excluding a bankruptcy or insolvency of State Street
London Ltd. not caused by political risk) due to Acts of God,
nuclear incident or the like, in each case under circumstances
where the Custodian and State Street London Ltd. have exercised
reasonable care.
3.10 Reimbursement for Advances. If the Fund requires the Custodian
to advance cash or securities for any purpose for the benefit of
a Portfolio including the purchase or sale of foreign exchange or
of contracts for foreign exchange ("Advance"), or in the event
that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as
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may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct ("Liability") then
in such event property equal in value to not more than 125% of
such Advance and accrued interest on the Advance or the
anticipated amount of such Liability, held at any time for the
account of the appropriate Portfolio by the Custodian or sub-
custodian may be held as security for such Liability or for such
Advance and accrued interest on the Advance. The Custodian shall
designate the security or securities constituting security for an
Advance or Liability (the "Designated Securities") by notice in
writing to the Fund (which may be sent by tested telefax or
telex). In the event the value of the Designated Securities shall
decline to less than 110% of the amount of such Advance and
accrued interest on the Advance or the anticipated amount of such
Liability, then the Custodian may designate in the same manner an
additional security for such obligation ("Additional
Securities"), but the aggregate value of the Designated
Securities and Additional Securities shall not be in excess of
125% of the amount of such Advance and the accrued interest on
the Advance or the anticipated amount of such Liability. At the
request of the Fund, on behalf of a Portfolio, the Custodian
shall agree to substitution of a security or securities which
have a value equal to the value of the Designated or Additional
Securities which the Fund desires be released from their status
as security, and such release from status as security shall be
effective upon the Custodian and the Fund agreeing in writing as
to the identity of the substituted security or securities, which
shall thereupon become Designated Securities.
Notwithstanding the above, the Custodian shall, at the request of
the Fund, on behalf of a Portfolio, immediately release from
their status as security any or all of the Designated Securities
or Additional Securities upon the Custodian's receipt from such
of Portfolio cash or cash equivalents in an amount equal to 100%
of the value of the Designated Securities or Additional
Securities that the Fund desires to be released from their status
as security pursuant to this Section. The applicable Portfolio
shall reimburse or indemnify the Custodian in respect of a
Liability and shall pay any Advances upon demand; provided,
however, that the Custodian first notified the Fund on behalf of
the Portfolio of such demand for repayment, reimbursement or
indemnification. If, upon notification, the Portfolio shall fail
to pay such Advance or interest when due or shall fail to
reimburse or indemnify the Custodian promptly in respect of a
Liability, the Custodian shall be entitled to dispose of the
Designated Securities and Additional Securities to the extent
necessary to obtain repayment, reimbursement or indemnification.
Interest, dividends and other distributions paid or received on
the Designated Securities and Additional Securities, other than
payments of principal or payments upon retirement, redemption or
repurchase, shall remain the property of the Portfolio, and shall
not be subject to this Section. To the extent that the
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disposition of the Portfolio's property, designated as security
for such Advance or Liability, results in an amount less than
necessary to obtain repayment, reimbursement or indemnification,
the Portfolio shall continue to be liable to the Custodian for
the differences between the proceeds of the disposition of the
Portfolio's property, designated as security for such Advance or
Liability, and the amount of the repayment, reimbursement or
indemnification due to the Custodian and the Custodian shall have
the right to designate in the same manner described above an
additional security for such obligation which shall constitute
Additional Securities hereunder.
3.11 Monitoring Responsibilities. The Custodian shall furnish
annually to the Fund, during the month of June, information
concerning the foreign sub-custodians employed by the Custodian.
Such information shall be similar in kind and scope to that
furnished to the Fund in connection with the initial approval of
this Contract. In addition, the Custodian will promptly inform
the Fund in the event that the Custodian learns of a material
adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or
in the case of any foreign sub-custodian not the subject of an
exemptive order from the Securities and Exchange Commission is
notified by such foreign sub-custodian that there appears to be a
substantial likelihood that its shareholders' equity will decline
below $200 million (U.S. dollars or the equivalent thereof) or
that its shareholders' equity has declined below $200 million (in
each case computed in accordance with generally accepted U.S.
accounting principles).
3.12 Branches of U.S. Banks. (a) Except as otherwise set forth in
this Contract, the provisions hereof shall not apply where the
custody of a Portfolio's assets are maintained in a foreign
branch of a banking institution which is a "bank" as defined by
Section 2(a)(5) of the Investment Company Act of 1940 meeting the
qualification set forth in Section 26(a) of said Act. The
appointment of any such branch as a sub-custodian shall be
governed by paragraph 1 of this Contract.
(b) Cash held for each Portfolio of the Fund in the United
Kingdom shall be maintained in an interest bearing account
established for the Fund with the Custodian's London branch,
which account shall be subject to the direction of the Custodian,
State Street London Ltd. or both.
3.13 Foreign Exchange Transactions. (a) Upon receipt of Proper
Instructions, the Custodian shall settle foreign exchange
contracts or options to purchase and sell foreign currencies for
spot and future delivery on behalf of and for the account of a
Portfolio with such brokers, banks or trust companies other than
the Custodian ("Currency Brokers") as the Fund may determine and
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direct pursuant to Proper Instructions or as the Custodian may
select ("Transactions Other Than As Principal").
(b) The Custodian shall not be obligated to enter into foreign
exchange transactions as principal ("Transactions As Principal").
However, if the Custodian has made available to the Fund its
services as a principal in foreign exchange transactions and
subject to any separate agreement between the parties relating to
such transactions, the Custodian shall enter into foreign
exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf of and for the
account of a Portfolio, with the Custodian as principal.
(c) If, in a Transaction Other Than As Principal, a Currency
Broker is selected by the Fund, on behalf of a Portfolio, the
Custodian shall have no duty with respect to the selection of the
Currency Broker, or, so long as the Custodian acts in accordance
with Proper Instructions, for the failure of such Currency Broker
to comply with the terms of any contract or option. If, in a
Transaction Other Than As Principal, the Currency Broker is
selected by the Custodian or if the Custodian enters into a
Transaction As Principal, the Custodian shall be responsible for
the selection of the Currency Broker and the failure of such
Currency Broker to comply with the terms of nay contract or
option.
(d) In Transactions Other Than As Principal and Transactions
As Principal, the Custodian shall be responsible for any transfer
of cash, the transmission of instructions to and from a Currency
Broker, if any, the safekeeping of all certificates and other
documents and agreements evidencing or relating to such foreign
exchange transactions and the maintenance of proper records as
set forth in Section 9 of this Contract.
3.14 Tax Law. Except to the extent that imposition of any tax
liability arises from State Street's failure to perform in
accordance with the terms of this Section 3.14 or from the
failure of any sub-custodian to perform in accordance with the
terms of the applicable subcustody agreement, State Street shall
have no responsibility or liability for any obligations now or
hereafter imposed on each Portfolio by the tax law of the
domicile of each Portfolio or of any jurisdiction in which each
Portfolio is invested or any political subdivision thereof. It
shall be the responsibility of State Street to use due care to
perform such steps as are required to collect any tax refund, to
ascertain the appropriate rate of tax withholding and to provide
such information and documents as may be required to enable each
Portfolio to receive appropriate tax treatment under applicable
tax laws and any applicable treaty provisions. Unless otherwise
informed by each Portfolio, State Street, in performance of its
duties under this Section, shall be entitled to apply categorical
treatment of each Portfolio according to the nationality of each
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Portfolio, the particulars of its organization and other relevant
details that shall be supplied by each Portfolio. State Street
shall be entitled to rely on any information supplied by each
Portfolio. State Street may engage reasonable professional
advisors disclosed to each Portfolio by State Street, which may
include attorneys, accountants or financial institutions in the
regular business of investment administration and may rely upon
advice received therefrom. It shall be the duty of each
Portfolio to inform State Street of any change in the
organization, domicile or other relevant fact concerning tax
treatment of each Portfolio and further to inform State Street if
each Portfolio is or becomes the beneficiary of any special
ruling or treatment not applicable to the general nationality and
category of entity of which each Portfolio is a part under
general laws and treaty provisions.
4. Payments for Sales or Repurchases or Redemptions of Shares of the
Fund
The Custodian shall receive from the distributor for the Shares
or from the Transfer Agent of the Fund and deposit into the account of the
appropriate Portfolio such payments as are received for Shares of that
Portfolio issued or sold from time to time by the Fund. The Custodian
will provide timely notification to the Fund on behalf of each such
Portfolio and the Transfer Agent of any receipt by it of payments for
Shares of such Portfolio.
From such funds as may be available for the purpose but subject
to the limitations of the Trust Instrument and any applicable votes of the
Board of Trustees of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a
request for redemption or repurchase of their Shares. In connection with
the redemption or repurchase of Shares of a Portfolio, the Custodian is
authorized upon receipt of instructions from the Transfer Agent to wire
funds to or through a commercial bank designated by the redeeming
shareholders. In connection with the redemption or repurchase of Shares
of the Fund, the Custodian shall honor checks drawn on the Custodian by a
holder of Shares, which checks have been furnished by the Fund to the
holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
5. Proper Instructions
Proper Instructions as used throughout this Contract means a
writing signed or initialled by two or more person or persons as the Board
of Trustees shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction involved,
including a specific statement of the purpose for which such action is
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requested. Oral instructions will be considered Proper Instructions if
the Custodian reasonably believes them to have been given by a person
authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in
writing. Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by the Board of Trustees of the Fund
accompanied by a detailed description of procedures approved by the Board
of Trustees, Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that
the Fund and the Custodian are satisfied that such procedures afford
adequate safeguards for the Portfolios' assets. For purposes of this
Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any three - party agreement which requires a
segregated asset account in accordance with Section 2.12.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority
from the Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to
its duties under this Contract, provided that all such
payments shall be accounted for to the Fund on behalf of
the Portfolio;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Portfolio,
checks, drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the securities
and property of the Portfolio except as otherwise
directed by the Board of Trustees of the Fund.
7. Evidence of Authority
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper
believed by it to be genuine and to have been properly executed by or on
behalf of the Fund. The Custodian may receive and accept a certified copy
of a vote of the Board of Trustees of the Fund as conclusive evidence (a)
of the authority of any person to act in accordance with such vote or (b)
of any determination or of any action by the Board of Trustees pursuant to
the Trust Instrument as described in such vote, and such vote may be
considered as in full force and effect until receipt by the Custodian of
written notice to the contrary.
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8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
If, and to the extent requested by the Fund, the Custodian shall
cooperate with and supply necessary information to the entity or entities
appointed by the Board of Trustees of the Fund to keep the books of
account of each Portfolio and/or compute the net asset value per share of
the outstanding shares of each Portfolio or, if directed in writing to do
so by the Fund on behalf of the Portfolio, shall itself keep such books of
account and/or compute such net asset value per share. If so directed,
the Custodian shall also calculate daily the net income of the Portfolio
as described in the Fund's currently effective prospectus related to such
Portfolio and shall advise the Fund and the Transfer Agent daily of the
total amounts of such net income and, if instructed in writing by an
officer of the Fund to do so, shall advise the Transfer Agent periodically
of the division of such net income among its various components. The
calculations of the net asset value per share and the daily income of each
Portfolio shall be made at the time or times described from time to time
in the Fund's currently effective prospectus related to such Portfolio.
9. Records
The Custodian shall with respect to each Portfolio create and
maintain all records relating to its activities and obligations under this
Contract in such manner as will meet the obligations of the Fund under the
Investment Company Act of 1940, with particular attention to Section 31
thereof and Rules 31a-1 and 31a-2 thereunder. All such records shall be
the property of the Fund and shall at all times during the regular
business hours of the Custodian be open for inspection by duly authorized
officers, employees or agents of the Fund and employees and agents of the
Securities and Exchange Commission. The Custodian shall, at the Fund's
request, supply the Fund with a tabulation of securities owned by each
Portfolio and held by the Custodian and shall, when requested to do so by
the Fund and for such compensation as shall be agreed upon between the
Fund and the Custodian, include certificate numbers in such tabulations.
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund on
behalf of each applicable Portfolio may from time to time request, to
obtain from year to year favorable opinions from the Fund's independent
accountants with respect to its activities hereunder in connection with
the preparation of the Fund's Form N-1A, and Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
20
<PAGE>
The Custodian shall provide the Fund, on behalf of each Portfolio
at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal
accounting control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including securities deposited
and/or maintained in a Securities System, relating to the services
provided by the Custodian under this Contract; such reports, shall be of
sufficient scope and in sufficient detail, as may reasonably be required
by the Fund to provide reasonable assurance that any material inadequacies
would be disclosed by such examination, and, if there are no such
inadequacies, the reports shall so state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for
its services and expenses as Custodian, as agreed upon from time to time
between the Fund on behalf of each applicable Portfolio and the Custodian.
13. Responsibility of Custodian
So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the title,
validity or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Contract and shall be
held harmless in acting upon any notice, request, consent, certificate or
other instrument reasonably believed by it to be genuine and to be signed
by the proper party or parties, including any futures commission merchant
acting pursuant to the terms of a three-party futures or options
agreement. The Custodian shall be held to the exercise of reasonable care
in carrying out the provisions of this Contract, but shall be kept
indemnified by and shall be without liability to the Fund for any action
taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be
counsel for the Fund) on all matters, and shall be without liability for
any action reasonably taken or omitted pursuant to such advice.
As a condition to the indemnification provided for in this
Section 13, if in any case the indemnifying party is asked to indemnify
and hold the indemnified party harmless, the indemnified party shall fully
and promptly advise the indemnifying party of all pertinent facts
concerning the situation in question, and shall use all reasonable care to
identify, and promptly notify the indemnifying party of, any situation
which presents or appears likely to present the probability of such a
claim for indemnification against the indemnifying party. The
indemnifying party shall be entitled, at its own expense, to participate
in the investigation and to be consulted as to the defense of any such
claim, and in such event, the indemnified party shall keep the
indemnifying party fully and currently informed of all developments
relating to such investigation or defense. At any time, the indemnifying
21
<PAGE>
party shall be entitled at its own expense to conduct the defense of any
such claim, provided that the indemnifying party: (a) reasonably
demonstrates to the other party its ability to pay the full amount of
potential liability in connection with such claim and (b) first admits in
writing to the other party that such claim is one in respect of which the
indemnifying party is obligated to indemnify the other party hereunder.
Upon satisfaction of the foregoing conditions, the indemnifying party
shall take over complete defense of the claim, and the indemnified party
shall initiate no further legal or other expenses for which it shall seek
indemnification. The indemnified party shall in no case confess any claim
or make any compromise in any case in which the indemnifying party may be
asked to indemnify the indemnified party, except with the indemnifying
party's prior written consent.
If the Fund on behalf of a Portfolio requires the Custodian to
take any action with respect to securities, which action involves the
payment of money or which action may, in the opinion of the Custodian,
result in the Custodian or its nominee assigned to the Fund or the
Portfolio being liable for the payment of money or incurring liability of
some other form, the Fund on behalf of the Portfolio, as a prerequisite to
requiring the Custodian to take such action, shall provide indemnity to
the Custodian in an amount and form satisfactory to it.
14. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall
continue in full force and effect with respect to each Portfolio until
terminated as hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either party by
an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than thirty (30) days
after the date of such delivery or mailing; provided, however that the
Custodian shall not with respect to a Portfolio act under Section 2.10
hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the
Fund has approved the use of a particular Securities System by such
Portfolio as required by Rule 17f-4 under the Investment Company Act of
1940, as amended and that the Custodian shall not with respect to a
Portfolio act under Section 2.11 hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees has approved the initial use of the Direct Paper System
by such Portfolio and the receipt of an annual certificate of the
Secretary or an Assistant Secretary that the Board of Trustees has
reviewed the use by such Portfolio of the Direct Paper System; provided
further, however, that the Fund shall not amend or terminate this Contract
in contravention of any applicable federal or state regulations, or any
provision of the Trust Instrument, and further provided, that the Fund on
behalf of one or more of the Portfolios may at any time by action of its
Board of Trustees (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
22
<PAGE>
conservator or receiver for the Custodian by the Comptroller of the
Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may
be due as of the date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements. Termination of the
Contract with respect to one Portfolio (but less than all of the
Portfolios) will not constitute termination of the Contract, and the terms
of the Contract continue to apply to the other Portfolios.
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the
Portfolios shall be appointed by the Board of Trustees of the Fund, the
Custodian shall, upon termination, deliver to such successor custodian at
the office of the Custodian, duly endorsed and in the form for transfer,
all securities of each applicable Portfolio then held by it hereunder and
shall transfer to an account of the successor custodian all of the
securities of each such Portfolio held in a Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the
Board of Trustees of the Fund, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance with
such vote.
In the event that no written order designating a successor
custodian or certified copy of a vote of the Board of Trustees shall have
been delivered to the Custodian on or before the date when such
termination shall become effective, then the Custodian shall have the
right to deliver to a bank or trust company, which is a "bank" as defined
in the Investment Company Act of 1940, doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital, surplus,
and undivided profits, as shown by its last published report, of not less
than $25,000,000, all securities, funds and other properties held by the
Custodian on behalf of each applicable Portfolio and all instruments held
by the Custodian relative thereto and all other property held by it under
this Contract on behalf of each applicable Portfolio and to transfer to an
account of such successor custodian all of the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust
company shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain
in the possession of the Custodian after the date of termination hereof
owing to failure of the Fund to procure the certified copy of the vote
referred to or of the Board of Trustees to appoint a successor custodian,
the Custodian shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of such securities,
funds and other properties and the provisions of this Contract relating to
23
<PAGE>
the duties and obligations of the Custodian shall remain in full force and
effect.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian
and the Fund on behalf of each of the Portfolios, may from time to time
agree on such provisions interpretive of or in addition to the provisions
of this Contract as may in their joint opinion be consistent with the
general tenor of this Contract. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional
provisions shall contravene any applicable federal or state regulations or
any provision of the Trust Instrument of the Fund. No interpretive or
additional provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Contract.
17. Additional Funds
In the event that the Fund establishes one or more series of
Shares in addition to Neuberger & Berman Genesis Fund, Neuberger & Berman
Guardian Fund, Neuberger & Berman Partners Fund, Neuberger & Berman
Manhattan Fund, and Neuberger & Berman Selected Sectors Fund with respect
to which it desires to have the Custodian render services as custodian
under the terms hereof, it shall so notify the Custodian in writing, and
if the Custodian agrees in writing to provide such services, such series
of Shares shall become a Portfolio hereunder.
18. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.
19. Limitation of Trustee, Officer and Shareholder Liability
It is expressly agreed that the obligations of the Fund and each
Portfolio hereunder shall not be binding upon any of the Trustees,
officers, agents or employees of the Fund or upon the shareholders of any
Portfolio personally, but shall only bind the assets and property of the
Fund, as provided in its Trust Instrument. The execution and delivery of
this Contract have been authorized by the Trustees of the Fund, and this
Contract has been executed and delivered by an authorized officer of the
Fund acting as such; neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made
by any of them individually or to impose any liability on any of them
personally, but shall bind only the assets and property of the Fund, as
provided in its Trust Instrument.
24
<PAGE>
20. No Liability of Other Portfolios
Notwithstanding any other provision of this Contract, the parties
agree that the assets and liabilities of each Portfolio are separate and
distinct from the assets and liabilities of each other Portfolio and that
no Portfolio shall be liable or shall be charged for any debt, obligation
or liability of any other Portfolio, whether arising under this Contract
or otherwise.
21. Confidentiality
The Custodian agrees that all books, records, information and
data pertaining to the business of the Fund which are exchanged or
received pursuant to the negotiation or carrying out of this Contract
shall remain confidential, shall not be voluntarily disclosed to any
other person, except as may be required by law, and shall not be used by
the Custodian for any purpose not directly related to the business of the
Fund, except with the Fund's written consent.
22. Assignment
Neither the Fund nor the Custodian shall have the right to assign
any of its rights or obligations under this Contract without the prior
written consent of the other party.
23. Severability
If any provision of this Contract is held to be unenforceable as
a matter of law, the other terms and provisions hereof shall not be
affected thereby and shall remain in full force and effect.
24. Prior Contracts
This Contract supersedes and terminates, as of the date hereof,
all prior contracts between the Fund on behalf of each of the Portfolios,
or any predecessor(s) thereto, and the Custodian relating to the custody
of the Fund's assets.
25. Shareholder Communications Election
Securities and Exchange Commission Rule 14b-2 requires banks
which hold securities for the account of customers to respond to requests
by issuers of securities for the names, addresses and holdings of
beneficial owners of securities of that issuer held by the bank unless the
beneficial owner has expressly objected to disclosure of this information.
In order to comply with the rule, the Custodian needs the Fund to indicate
25
<PAGE>
whether it authorizes the Custodian to provide the Fund's name, address,
and share position to requesting companies whose securities the Fund owns.
If the Fund tells the Custodian "no", the Custodian will not provide this
information to requesting companies. If the Fund tells the Custodian
"yes" or does not check either "yes" or "no" below, the Custodian is
required by the rule to treat the Fund as consenting to disclosure of this
information for all securities owned by the Fund or any funds or accounts
established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any
purpose other than corporate communications. Please indicate below
whether the Fund consents or objects by checking one of the alternatives
below.
YES [ ] The Custodian is authorized to release the Fund's
name, address, and share positions.
NO [x] The Custodian is not authorized to release the
Fund's name, address, and share positions.
26
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed as of the 2nd day of
August 1993.
ATTEST NEUBERGER & BERMAN EQUITY FUNDS
/s/ Stanley Egener
/s/ Claudia A. Brandon --------------------------
---------------------- By Stanley Egener
Claudia A. Brandon CEO
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Officer /s/ Ronald E. Logue
---------------------- ---------------------------
By Ronald E. Logue
Executive Vice President
27
<PAGE>
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" in the Prospectus and "Reports to Shareholders", "Independent
Auditors/Accountants" and "Financial Statements" in the Statement of
Additional Information in Post-Effective Amendment Number 74 to the
Registration Statement (Form N-1A No. 2-11357) of Neuberger & Berman
Equity Funds, and to the incorporation by reference of our reports dated
September 29, 1995 and October 6, 1995 on the Neuberger & Berman Genesis
Fund, Neuberger & Berman Focus Fund, Neuberger & Berman Guardian Fund,
Neuberger & Berman Partners Fund and Neuberger & Berman International
Fund, five of the series comprising Neuberger & Berman Equity Funds, and
on Neuberger & Berman Genesis Portfolio, Neuberger & Berman Focus
Portfolio, Neuberger & Berman Guardian Portfolio and Neuberger & Berman
Partners Portfolio, four of the series comprising Equity Managers Trust,
included in the 1995 Annual Reports to Shareholders of Neuberger & Berman
Equity Funds and Neuberger & Berman International Fund.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Boston, Massachusetts
December 15, 1995
<PAGE>
<PAGE>
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" in the Prospectus and "Reports to Shareholders", "Independent
Auditors/Accountants" and "Financial Statements" in the Statement of
Additional Information in Post-Effective Amendment Number 74 to the
Registration Statement (Form N-1A No. 2-11357) of Neuberger & Berman
Equity Funds, and to the incorporation by reference to our report dated
October 6, 1995 on the Neuberger & Berman International Portfolio (a
separate series of Global Managers Trust) included in the 1995 Annual
Report to Shareholders of Neuberger & Berman International Fund.
/s/ Ernst & Young
ERNST & YOUNG
Grand Cayman,
Cayman Islands
December 15, 1995
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Boards of Trustees of
Neuberger & Berman Equity Funds and Equity Managers Trust:
We consent to the incorporation by reference in Part B. Statement of
Additional Information, in Post-Effective amendment No. 74 to the
Registration Statement on Form N-1A of Neuberger & Berman Manhattan Fund
and Neuberger & Berman Socially Responsive Fund of our reports dated
October 6, 1995, on our audits of the financial statements and financial
highlights of the Neuberger & Berman Manhattan Fund and Portfolio and
Neuberger & Berman Socially Responsive Fund and Portfolio which reports
are included in the Annual Reports to Shareholders for the fiscal year
ended August 31, 1995, which is incorporated by reference in Part B of the
Registration Statement.
We also consent to the reference to our Firm which respect to the
Neuberger & Berman Manhattan Fund and Portfolio and Neuberger & Berman
Socially Responsive Fund and Portfolio under the captions "Independent
Auditors/Accountants" and "Financial Statements" in Part B of the
Registration Statement.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
December 15, 1995
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Focus Fund Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000044402
<NAME> NEUBERGER&BERMAN EQUITY FUNDS
<SERIES>
<NUMBER> 04
<NAME> NEUBERGER&BERMAN FOCUS FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 954,746
<RECEIVABLES> 1,909
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 956,655
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 616
<TOTAL-LIABILITIES> 616
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 599,024
<SHARES-COMMON-STOCK> 33,104
<SHARES-COMMON-PRIOR> 26,370
<ACCUMULATED-NII-CURRENT> 3,728
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 47,083
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 306,204
<NET-ASSETS> 956,039
<DIVIDEND-INCOME> 10,386
<INTEREST-INCOME> 1,089
<OTHER-INCOME> 0
<EXPENSES-NET> (6,180)
<NET-INVESTMENT-INCOME> 5,295
<REALIZED-GAINS-CURRENT> 50,620
<APPREC-INCREASE-CURRENT> 138,207
<NET-CHANGE-FROM-OPS> 194,122
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,224)
<DISTRIBUTIONS-OF-GAINS> (38,655)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,507
<NUMBER-OF-SHARES-REDEEMED> (3,534)
<SHARES-REINVESTED> 1,761
<NET-CHANGE-IN-ASSETS> 312,174
<ACCUMULATED-NII-PRIOR> 3,657
<ACCUMULATED-GAINS-PRIOR> 35,124
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,180
<AVERAGE-NET-ASSETS> 710,463
<PER-SHARE-NAV-BEGIN> 24.42
<PER-SHARE-NII> .17
<PER-SHARE-GAIN-APPREC> 5.97
<PER-SHARE-DIVIDEND> (.20)
<PER-SHARE-DISTRIBUTIONS> (1.48)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 28.88
<EXPENSE-RATIO> .87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Genesis Fund Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000044402
<NAME> NEUBERGER&BERMAN EQUITY FUNDS
<SERIES>
<NUMBER> 03
<NAME> NEUBERGER&BERMAN GENESIS FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 111,535
<RECEIVABLES> 573
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 112,108
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 587
<TOTAL-LIABILITIES> 587
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 77,373
<SHARES-COMMON-STOCK> 11,720
<SHARES-COMMON-PRIOR> 16,392
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5,591
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 28,557
<NET-ASSETS> 111,521
<DIVIDEND-INCOME> 1,261
<INTEREST-INCOME> 65
<OTHER-INCOME> 0
<EXPENSES-NET> (1509)
<NET-INVESTMENT-INCOME> (183)
<REALIZED-GAINS-CURRENT> 6,185
<APPREC-INCREASE-CURRENT> 12,511
<NET-CHANGE-FROM-OPS> 18,513
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (4,105)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,551
<NUMBER-OF-SHARES-REDEEMED> (8,690)
<SHARES-REINVESTED> 467
<NET-CHANGE-IN-ASSETS> (24,083)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,612
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,509
<AVERAGE-NET-ASSETS> 111,639
<PER-SHARE-NAV-BEGIN> 8.27
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 1.56
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.31)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.52
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Socially Responsive Fund Annual Report and is qualified
in its entirety by reference to such document.
</LEGEND>
<CIK> 0000044402
<NAME> NEUBERGER&BERMAN EQUITY FUNDS
<SERIES>
<NUMBER> 06
<NAME> NEUBERGER&BERMAN SOCIALLY RESPONSIVE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 8,188
<RECEIVABLES> 7
<ASSETS-OTHER> 55
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,250
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 27
<TOTAL-LIABILITIES> 27
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,065
<SHARES-COMMON-STOCK> 694
<SHARES-COMMON-PRIOR> 226
<ACCUMULATED-NII-CURRENT> 11
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 130
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,017
<NET-ASSETS> 8,223
<DIVIDEND-INCOME> 75
<INTEREST-INCOME> 18
<OTHER-INCOME> 0
<EXPENSES-NET> (75)
<NET-INVESTMENT-INCOME> 18
<REALIZED-GAINS-CURRENT> 137
<APPREC-INCREASE-CURRENT> 936
<NET-CHANGE-FROM-OPS> 1,091
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (9)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 534
<NUMBER-OF-SHARES-REDEEMED> (67)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 5,946
<ACCUMULATED-NII-PRIOR> 2
<ACCUMULATED-GAINS-PRIOR> (7)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 154
<AVERAGE-NET-ASSETS> 4,963
<PER-SHARE-NAV-BEGIN> 10.07
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 1.76
<PER-SHARE-DIVIDEND> (.02)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.84
<EXPENSE-RATIO> 1.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Guardian Fund Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000044402
<NAME> NEUBERGER&BERMAN EQUITY FUNDS
<SERIES>
<NUMBER> 01
<NAME> NEUBERGER&BERMAN GUARDIAN FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 3,933,627
<RECEIVABLES> 18,340
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,951,967
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,447
<TOTAL-LIABILITIES> 4,447
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,781,483
<SHARES-COMMON-STOCK> 167,221
<SHARES-COMMON-PRIOR> 123,809
<ACCUMULATED-NII-CURRENT> 13,763
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 108,394
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,043,880
<NET-ASSETS> 3,947,520
<DIVIDEND-INCOME> 47,298
<INTEREST-INCOME> 15,261
<OTHER-INCOME> 0
<EXPENSES-NET> (22,695)
<NET-INVESTMENT-INCOME> 39,864
<REALIZED-GAINS-CURRENT> 119,369
<APPREC-INCREASE-CURRENT> 539,076
<NET-CHANGE-FROM-OPS> 698,309
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (34,262)
<DISTRIBUTIONS-OF-GAINS> (30,092)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 64,070
<NUMBER-OF-SHARES-REDEEMED> (23,714)
<SHARES-REINVESTED> 3,056
<NET-CHANGE-IN-ASSETS> 1,530,973
<ACCUMULATED-NII-PRIOR> 8,161
<ACCUMULATED-GAINS-PRIOR> 20,376
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 22,695
<AVERAGE-NET-ASSETS> 2,848,441
<PER-SHARE-NAV-BEGIN> 19.52
<PER-SHARE-NII> .27
<PER-SHARE-GAIN-APPREC> 4.30
<PER-SHARE-DIVIDEND> (.25)
<PER-SHARE-DISTRIBUTIONS> (.23)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.61
<EXPENSE-RATIO> .80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Manhattan Fund Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000044402
<NAME> NEUBERGER&BERMAN EQUITY FUNDS
<SERIES>
<NUMBER> 02
<NAME> NEUBERGER&BERMAN MANHATTAN FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 609,914
<RECEIVABLES> 2,864
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 612,778
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 810
<TOTAL-LIABILITIES> 810
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 425,083
<SHARES-COMMON-STOCK> 46,104
<SHARES-COMMON-PRIOR> 45,255
<ACCUMULATED-NII-CURRENT> 54
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 36,002
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 150,829
<NET-ASSETS> 611,968
<DIVIDEND-INCOME> 4,786
<INTEREST-INCOME> 328
<OTHER-INCOME> 0
<EXPENSES-NET> (4,949)
<NET-INVESTMENT-INCOME> 165
<REALIZED-GAINS-CURRENT> 43,765
<APPREC-INCREASE-CURRENT> 80,224
<NET-CHANGE-FROM-OPS> 124,154
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (434)
<DISTRIBUTIONS-OF-GAINS> (30,398)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,050
<NUMBER-OF-SHARES-REDEEMED> (13,048)
<SHARES-REINVESTED> 2,847
<NET-CHANGE-IN-ASSETS> 101,640
<ACCUMULATED-NII-PRIOR> 323
<ACCUMULATED-GAINS-PRIOR> 22,624
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,949
<AVERAGE-NET-ASSETS> 507,420
<PER-SHARE-NAV-BEGIN> 11.28
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 2.70
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> (.70)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.27
<EXPENSE-RATIO> .98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Partners Fund Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000044402
<NAME> NEUBERGER&BERMAN EQUITY FUNDS
<SERIES>
<NUMBER> 05
<NAME> NEUBERGER&BERMAN PARTNERS FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 1,562,281
<RECEIVABLES> 3,003
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,565,284
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,324
<TOTAL-LIABILITIES> 1,324
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,175,827
<SHARES-COMMON-STOCK> 65,930
<SHARES-COMMON-PRIOR> 62,668
<ACCUMULATED-NII-CURRENT> 8,809
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 128,665
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 250,659
<NET-ASSETS> 1,563,960
<DIVIDEND-INCOME> 19,559
<INTEREST-INCOME> 2,708
<OTHER-INCOME> 0
<EXPENSES-NET> (11,130)
<NET-INVESTMENT-INCOME> 11,137
<REALIZED-GAINS-CURRENT> 162,141
<APPREC-INCREASE-CURRENT> 101,941
<NET-CHANGE-FROM-OPS> 275,219
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (6,799)
<DISTRIBUTIONS-OF-GAINS> (98,890)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,597
<NUMBER-OF-SHARES-REDEEMED> (11,807)
<SHARES-REINVESTED> 5,472
<NET-CHANGE-IN-ASSETS> 228,029
<ACCUMULATED-NII-PRIOR> 4,471
<ACCUMULATED-GAINS-PRIOR> 65,405
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,130
<AVERAGE-NET-ASSETS> 1,346,882
<PER-SHARE-NAV-BEGIN> 21.32
<PER-SHARE-NII> .17
<PER-SHARE-GAIN-APPREC> 3.94
<PER-SHARE-DIVIDEND> (.11)
<PER-SHARE-DISTRIBUTIONS> (1.60)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.72
<EXPENSE-RATIO> .83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman International Fund Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000044402
<NAME> NEUBERGER&BERMAN EQUITY FUNDS
<SERIES>
<NUMBER> 07
<NAME> NEUBERGER&BERMAN INTERNATIONAL FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 26,406
<RECEIVABLES> 27
<ASSETS-OTHER> 76
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 26,509
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 73
<TOTAL-LIABILITIES> 73
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24,910
<SHARES-COMMON-STOCK> 2,471
<SHARES-COMMON-PRIOR> 591
<ACCUMULATED-NII-CURRENT> 99
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,253)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,680
<NET-ASSETS> 26,436
<DIVIDEND-INCOME> 295
<INTEREST-INCOME> 166
<OTHER-INCOME> 0
<EXPENSES-NET> (323)
<NET-INVESTMENT-INCOME> 138
<REALIZED-GAINS-CURRENT> (1,230)
<APPREC-INCREASE-CURRENT> 2,468
<NET-CHANGE-FROM-OPS> 1,376
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (53)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,705
<NUMBER-OF-SHARES-REDEEMED> (830)
<SHARES-REINVESTED> 5
<NET-CHANGE-IN-ASSETS> 20,256
<ACCUMULATED-NII-PRIOR> 5
<ACCUMULATED-GAINS-PRIOR> (14)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 439
<AVERAGE-NET-ASSETS> 18,941
<PER-SHARE-NAV-BEGIN> 10.46
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> .21
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.70
<EXPENSE-RATIO> 1.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Focus Portfolio Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 04
<NAME> NEUBERGER&BERMAN FOCUS PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 674,465
<INVESTMENTS-AT-VALUE> 984,159
<RECEIVABLES> 6,693
<ASSETS-OTHER> 36
<OTHER-ITEMS-ASSETS> 96
<TOTAL-ASSETS> 990,984
<PAYABLE-FOR-SECURITIES> 17,447
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,364
<TOTAL-LIABILITIES> 21,811
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 557,907
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 15,139
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 88,309
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 307,818
<NET-ASSETS> 969,173
<DIVIDEND-INCOME> 10,454
<INTEREST-INCOME> 1,097
<OTHER-INCOME> 0
<EXPENSES-NET> (4,055)
<NET-INVESTMENT-INCOME> 7,496
<REALIZED-GAINS-CURRENT> 50,732
<APPREC-INCREASE-CURRENT> 139,750
<NET-CHANGE-FROM-OPS> 197,978
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 324,162
<ACCUMULATED-NII-PRIOR> 7,643
<ACCUMULATED-GAINS-PRIOR> 37,577
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,758
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,055
<AVERAGE-NET-ASSETS> 714,153
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Guardian Portfolio Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 01
<NAME> NEUBERGER&BERMAN GUARDIAN PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 3,590,685
<INVESTMENTS-AT-VALUE> 4,736,345
<RECEIVABLES> 25,961
<ASSETS-OTHER> 125
<OTHER-ITEMS-ASSETS> 32
<TOTAL-ASSETS> 4,762,463
<PAYABLE-FOR-SECURITIES> 61,722
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 87,545
<TOTAL-LIABILITIES> 149,267
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,237,636
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 91,725
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 147,623
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,136,212
<NET-ASSETS> 4,613,196
<DIVIDEND-INCOME> 51,765
<INTEREST-INCOME> 17,135
<OTHER-INCOME> 0
<EXPENSES-NET> (15,110)
<NET-INVESTMENT-INCOME> 53,790
<REALIZED-GAINS-CURRENT> 124,394
<APPREC-INCREASE-CURRENT> 627,968
<NET-CHANGE-FROM-OPS> 806,152
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,132,860
<ACCUMULATED-NII-PRIOR> 37,935
<ACCUMULATED-GAINS-PRIOR> 23,229
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14,274
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,110
<AVERAGE-NET-ASSETS> 3,123,421
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .48
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Manhattan Portfolio Annual Report and is qualified in
its entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> NEUBERGER&BERMAN MANHATTAN PORTFOLIO
<SERIES>
<NUMBER> 02
<NAME> EQUITY MANAGERS TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 502,959
<INVESTMENTS-AT-VALUE> 659,762
<RECEIVABLES> 1,833
<ASSETS-OTHER> 37
<OTHER-ITEMS-ASSETS> 1,047
<TOTAL-ASSETS> 662,679
<PAYABLE-FOR-SECURITIES> 2,583
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,690
<TOTAL-LIABILITIES> 17,273
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 406,837
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 5,190
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 76,576
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 156,803
<NET-ASSETS> 645,406
<DIVIDEND-INCOME> 4,992
<INTEREST-INCOME> 344
<OTHER-INCOME> 0
<EXPENSES-NET> (3,130)
<NET-INVESTMENT-INCOME> 2,206
<REALIZED-GAINS-CURRENT> 44,742
<APPREC-INCREASE-CURRENT> 85,917
<NET-CHANGE-FROM-OPS> 132,865
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 123,671
<ACCUMULATED-NII-PRIOR> 2,984
<ACCUMULATED-GAINS-PRIOR> 31,834
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,832
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,130
<AVERAGE-NET-ASSETS> 528,830
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Partners Portfolio Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 05
<NAME> NEUBERGER&BERMAN PARTNERS PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 1,358,401
<INVESTMENTS-AT-VALUE> 1,616,574
<RECEIVABLES> 20,084
<ASSETS-OTHER> 81
<OTHER-ITEMS-ASSETS> 6
<TOTAL-ASSETS> 1,636,745
<PAYABLE-FOR-SECURITIES> 12,439
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 780
<TOTAL-LIABILITIES> 13,219
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,069,830
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 26,044
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 269,479
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 258,173
<NET-ASSETS> 1,623,526
<DIVIDEND-INCOME> 20,063
<INTEREST-INCOME> 2,770
<OTHER-INCOME> 0
<EXPENSES-NET> (7,309)
<NET-INVESTMENT-INCOME> 15,524
<REALIZED-GAINS-CURRENT> 165,254
<APPREC-INCREASE-CURRENT> 109,257
<NET-CHANGE-FROM-OPS> 290,035
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 283,242
<ACCUMULATED-NII-PRIOR> 10,520
<ACCUMULATED-GAINS-PRIOR> 104,225
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,830
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,309
<AVERAGE-NET-ASSETS> 1,378,999
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Genesis Portfolio Annual Report and is qualified in
its entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 03
<NAME> NEUBERGER&BERMAN GENESIS PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 108,413
<INVESTMENTS-AT-VALUE> 141,999
<RECEIVABLES> 487
<ASSETS-OTHER> 11
<OTHER-ITEMS-ASSETS> 178
<TOTAL-ASSETS> 142,675
<PAYABLE-FOR-SECURITIES> 385
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 129
<TOTAL-LIABILITIES> 515
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 95,366
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 601
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12,607
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,586
<NET-ASSETS> 142,160
<DIVIDEND-INCOME> 1,508
<INTEREST-INCOME> 77
<OTHER-INCOME> 0
<EXPENSES-NET> (1,250)
<NET-INVESTMENT-INCOME> 335
<REALIZED-GAINS-CURRENT> 6,666
<APPREC-INCREASE-CURRENT> 17,448
<NET-CHANGE-FROM-OPS> 24,449
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,591
<ACCUMULATED-NII-PRIOR> 266
<ACCUMULATED-GAINS-PRIOR> 5,941
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,135
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,295
<AVERAGE-NET-ASSETS> 133,493
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Neuberger&Berman Socially Repsonsive Portfolio Annual Report and is
qualified in its entirety by reference to such document.
</LEGEND>
<CIK> 0000910055
<NAME> EQUITY MANAGERS TRUST
<SERIES>
<NUMBER> 06
<NAME> NEUBERGER&BERMAN SOCIALLY RESPONSIVE PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 83,395
<INVESTMENTS-AT-VALUE> 97,603
<RECEIVABLES> 135
<ASSETS-OTHER> 24
<OTHER-ITEMS-ASSETS> 56
<TOTAL-ASSETS> 97,818
<PAYABLE-FOR-SECURITIES> 998
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 73
<TOTAL-LIABILITIES> 1,071
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 80,146
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 1,330
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,063
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,208
<NET-ASSETS> 96,747
<DIVIDEND-INCOME> 1,189
<INTEREST-INCOME> 269
<OTHER-INCOME> 0
<EXPENSES-NET> (533)
<NET-INVESTMENT-INCOME> 925
<REALIZED-GAINS-CURRENT> 1,842
<APPREC-INCREASE-CURRENT> 12,075
<NET-CHANGE-FROM-OPS> 14,842
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 283,242
<ACCUMULATED-NII-PRIOR> 405
<ACCUMULATED-GAINS-PRIOR> (779)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 431
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 533
<AVERAGE-NET-ASSETS> 78,399
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
International Portfolio Annual Report and is qualified in its entirety
by reference to such document.
</LEGEND>
<CIK> 0000922246
<NAME> GLOBAL MANAGERS TRUST
<SERIES>
<NUMBER> 01
<NAME> INTERNATIONAL PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 23,412
<INVESTMENTS-AT-VALUE> 25,918
<RECEIVABLES> 1,043
<ASSETS-OTHER> 44
<OTHER-ITEMS-ASSETS> 6
<TOTAL-ASSETS> 27,011
<PAYABLE-FOR-SECURITIES> 528
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 77
<TOTAL-LIABILITIES> 605
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24,628
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 342
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,244)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,680
<NET-ASSETS> 26,406
<DIVIDEND-INCOME> 295
<INTEREST-INCOME> 166
<OTHER-INCOME> 0
<EXPENSES-NET> (133)
<NET-INVESTMENT-INCOME> 328
<REALIZED-GAINS-CURRENT> (1,230)
<APPREC-INCREASE-CURRENT> 2,468
<NET-CHANGE-FROM-OPS> 1,566
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 20,354
<ACCUMULATED-NII-PRIOR> 4
<ACCUMULATED-GAINS-PRIOR> (14)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 94
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 423
<AVERAGE-NET-ASSETS> 18,885
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
</TABLE>
