<PAGE>
<PAGE>
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ANNUAL REPORT
August 31, 1995
Neuberger&Berman
Equity Funds -SM-
Neuberger&Berman
FOCUS FUND
Neuberger&Berman
GENESIS FUND
Neuberger&Berman
GUARDIAN FUND
Neuberger&Berman
MANHATTAN FUND
Neuberger&Berman
PARTNERS FUND
Neuberger&Berman
SOCIALLY RESPONSIVE FUND
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
THE FUNDS
CHAIRMAN'S LETTER 4
PORTFOLIO MANAGER'S
COMMENTARY
Focus Fund 6
Genesis Fund 8
Guardian Fund 10
Manhattan Fund 12
Partners Fund 14
Socially Responsive Fund 16
GROWTH OF A DOLLAR
CHARTS
COMPARISON OF A
$10,000 INVESTMENT
Focus Fund 18
Genesis Fund 19
Guardian Fund 20
Manhattan Fund 21
Partners Fund 22
Socially Responsive Fund 23
FINANCIAL STATEMENTS 24
FINANCIAL HIGHLIGHTS
PER SHARE DATA
Focus Fund 35
Genesis Fund 36
Guardian Fund 37
Manhattan Fund 38
Partners Fund 39
Socially Responsive Fund 40
REPORT OF
INDEPENDENT
ACCOUNTANTS/AUDITORS 43
THE PORTFOLIOS
SCHEDULE OF
INVESTMENTS
TOP TEN HOLDINGS
Focus Portfolio 45
Genesis Portfolio 47
Guardian Portfolio 49
Manhattan Portfolio 52
Partners Portfolio 54
Socially Responsive
Portfolio 57
FINANCIAL STATEMENTS 60
FINANCIAL HIGHLIGHTS 71
REPORT OF
INDEPENDENT
ACCOUNTANTS/AUDITORS 74
DIRECTORY 76
OFFICERS AND
TRUSTEES 77
</TABLE>
3
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CHAIRMAN'S LETTER October 11, 1995
Dear Shareholder,
Over the last six months, the strong performance of both the stock and bond
markets more than compensated for the lackluster results of 1994, when stocks
struggled to stay even and bonds had their worst year since 1926.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 INDEX* MSCI EAFE (INTERNATIONAL)* MERRILL LYNCH INDEX*
<S> <C> <C> <C>
Sep-94 -2.44% -3.15% -2.045%
Oct-94 -0.24% 0.08% -2.486%
Nov-94 -3.88% -4.74% -2.717%
Dec-94 -2.45% -4.14% -1.772%
Jan-95 0.07% -7.82% 0.447%
Feb-95 3.98% -8.08% 2.274%
Mar-95 7.04% -2.35% 3.942%
Apr-95 10.19% 1.32% 5.637%
May-95 14.60% 0.12% 11.020%
Jun-95 17.26% -1.65% 11.978%
Jul-95 21.15% 4.48% 11.196%
Aug-95 21.45% 0.50% 12.606%
</TABLE>
SOURCE: BLOOMBERG FINANCIAL SERVICES
It now appears that the U.S. economy has reached the long-discussed "soft
landing." The term "soft landing" is often used to describe an economy slowing
sufficiently to keep inflation in check, but not stalling into a recession.
While the market continues to reach new highs, some investors are tempted to
try their hands at "market timing." It seldom works and shareholders are best
served by simply focusing on their long-term objectives. We feel that through
careful security selection, opportunities still exist for growth to occur.
Internationally, we see good opportunities in markets such as Southeast Asia,
and in certain Latin American countries.
Long term, we believe the market holds opportunity for shareholders that have
the discipline to demand value as well as strong growth. The performance of our
Portfolios has been aided by several sectors
4
<PAGE>
including the Technology and Finance areas. We are now looking for value in the
stocks of laggard groups such as Retail, Energy and Insurance.
Please read the interviews with our portfolio managers and their discussions
of their investment strategies over the past fiscal year ended August 31st. If
you have any questions, please call us at 800-877-9700. As always, we remain
committed to serving your investment needs.
Sincerely,
/s/ Stanley Egener
Stanley Egener
Chairman of the Board
Neuberger&Berman Equity Funds
*The S&P "500" Index is an unmanaged index generally considered to be
representative of U.S. stock market activity.
The MSCI EAFE Index is an unmanaged index generally considered to be
representative of international stock market activity.
The Merrill Lynch 7-10 year Treasury Index is an unmanaged total return market
value index consisting of all coupon-bearing U.S. Treasury publicly placed debt
securities with maturities between 7 to 10 years.
Please note that indices do not take into account any fees or expenses of
investing in the individual securities that they track, and that individuals
cannot invest directly in any index. Data about these indices are prepared or
obtained by Neuberger&Berman Management Inc. and include reinvestment of all
dividends and capital gain distributions. Past performance does not guarantee
future results.
5
<PAGE>
PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
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Focus Fund
KENT SIMONS AND LARRY MARX -- CO-PORTFOLIO MANAGERS
Q WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER THE
PAST FISCAL YEAR?
A One of the major reasons for our overall success has been investors'
passion for large-cap, cyclical companies, whose export earnings
benefited from a weak dollar. The Portfolio was also positively
influenced by lower interest rates and a surge in the Technology sector.
As of August 31, our top five sectors were Financial Services (29.8%),
Technology (19.4%), Media and Entertainment (15.0%), Heavy Industry (12.1%)
and Health Care (8.2%).
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS POSITIVELY AFFECTED YOUR
PORTFOLIO'S PERFORMANCE?
A One of our more recent purchases, Stone Container, has appreciated 9.3%
from our original purchase price, through August 31, 1995. This growth
occurred despite concerns over rapidly increasing paper prices. We view
Stone Container, and the Paper industry in general, similar to the
Technology area last fall.
The general consensus for the Technology area at that time was that the
industry's growth rate was slowing down. However, the attractive valuations
of the stocks in our opinion more than offset any possible slow-down in
potential earnings growth. Currently, we are witnessing a slowdown in the
Paper industry, yet the industry stock valuations are still attractive. In
Stone Container's case, the company is reducing leverage, re-purchasing
stock, and product sales overseas remain strong, aided by a weak U.S. dollar.
6
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Focus Fund (Cont'd)
Q WHAT IS AN EXAMPLE OF A STOCK THAT HAS NEGATIVELY AFFECTED YOUR
PORTFOLIO'S PERFORMANCE?
A General Motors' ("GM") stock has lagged the markets as investors have
become concerned with the outlook for overall car sales. We believe
that: 1) the trend in car sales is extremely difficult to predict with
any degree of accuracy and 2) that is not why we own GM anyway. The case
for GM is that we feel the company is improving its North American Auto
operations, and if the profitability of these changes reaches targeted
levels, the overall earnings of GM will be substantially higher.
Q
WHAT IS AN EXAMPLE OF A STOCK THAT YOU HAVE BOUGHT DURING THIS
PERIOD?
A The addition of Neiman-Marcus Group is based on our experience with its
controlling shareholder, Harcourt General. We believe that Harcourt's
efforts to improve this high-end department store, which have been
ongoing for several years, are now reaching fruition.
7
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PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Genesis Fund
JUDITH VALE -- PORTFOLIO MANAGER
Q WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER THE
PAST FISCAL YEAR?
A Throughout this reporting period, we continued to evaluate existing and
prospective holdings according to their individual business
characteristics and market fundamentals.
With the potential threat of higher interest rates removed, investors were
able to focus on the growth potential of stocks. Initially, the major
beneficiary of this was the more liquid large-cap stocks. We were glad to see
the emphasis finally shift to small-cap stocks. Since there had been a
significant lag in performance among smaller-cap stocks, coupled with their
low price-to-earnings ratios, we found a lot of small-cap stocks that we
believe to be very undervalued and that had not participated in the earlier
parts of the equity market's rally. At the end of this fiscal year we began
to see an upturn in the small-cap markets. We are hopeful that this trend
will carry forward through the end of 1995.
The increased valuations of large-cap stocks, given the 1995 rally, simply
make the argument for small-cap stocks more compelling. After all, "two
innings do not make the game."
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS POSITIVELY AFFECTED YOUR
PORTFOLIO'S PERFORMANCE?
A Small stock performance has been propelled in large part by the
Technology and Financial sectors. The Portfolio has a number of
positions in companies which use "applied technology." These companies
typically piggyback off some of the explosive growth trends of
Technology stocks, but apparently with less of the risk.
For example, the Portfolio has a large position in a company called DH
Technology, which is a manufacturer of highly specialized printers. The
company receives little Wall Street research coverage,
8
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Genesis Fund (Cont'd)
and the stock appears undervalued to us. DH Technology generates a high
return on assets, has a pristine balance sheet, and throws off a healthy cash
flow. If you owned a business, you'd really like to own and run this one. The
stock has performed well this year and is still very modestly priced relative
to the growth and return characteristics of the printer business.
Q
WHAT ARE SOME STOCKS THAT HAVE NEGATIVELY AFFECTED YOUR PORTFO-
LIO'S PERFORMANCE?
A The Portfolio's performance was negatively affected by its holding in
Lilly Industries, a manufacturer of industrial coatings. The company
experienced weakened demand trends and margin pressure due to raw
material price pressures.
Another company, Kellwood, saw its stock prices decline due to a continued
decrease in demand for woven shirts, combined with a costly phase-out of an
underperforming subsidiary. Unfortunately, these factors overshadowed
otherwise healthy gains in other company divisions.
9
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PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
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Guardian Fund
KENT SIMONS & LAWRENCE MARX III -- CO-PORTFOLIO MANAGERS
Q WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER THE
PAST FISCAL YEAR?
A Two factors that influenced performance during this time were the
decline in interest rates and the strengthening of corporate earnings.
These conditions contributed to Guardian's strong performance over this
reporting period. We believe, however, that our commitment to a
value-oriented investment approach was the dominant contributor to our
performance.
We continue to purchase securities with lower price-to-earnings multiples
than the stock market. Some industries are consistently measured on a
price-to-cash-flow basis, like Cable, Media and Cellular, so we use that
measure to determine value for those industries. However, other industries,
including Automobiles, Paper, Finance and Technology, are mostly evaluated on
a price-to-earnings basis. Overall, we are more instinctively drawn to buying
what we believe is the best company in an industry that's out-of-favor rather
than buying, say, the low multiple company in an industry that's in favor.
Q
WHAT ARE SOME EXAMPLES OF STOCKS THAT HAVE POSITIVELY AFFECTED
YOUR PORTFOLIO'S PERFORMANCE?
A The Portfolio's largest concentration (14.0%) was in Technology stocks,
an area that performed very well during the period. We were able to
profit from the Technology surge by buying many of these stocks ahead of
the crowd. An example of a Technology stock we purchased based on a low
valuation was Texas Instruments. Texas Instruments has appreciated 94%
during the twelve month period from September 1, 1994 to August 31,
1995. Although we have trimmed our position in this stock, we believe it
still represents an attractive value based on its strong earnings.
Another stock that performed well for us was Xerox Corp. The company now
sells a broad range of black & white and color copiers
10
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Guardian Fund (Cont'd)
and duplicators. They have also introduced a line of digital products,
including their DocuTech digital publishing system, which scans hard copy and
converts it into a digital format directly on a networked personal computer.
The company's overall sales growth was spurred by increased worldwide demand
for their digital products and color copiers and printers.
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS NEGATIVELY AFFECTED YOUR
PORTFOLIO'S PERFORMANCE?
A The stocks we own in the HMO division of the Health Care sector have not
performed up to our expectations, although we believe the long-term
outlook for this sector is bullish because rising health-care costs
means the trend is away from traditional health insurance coverage and
toward HMO's. Besides, the Government can't pass a law against getting
older, or sick, so demand for health care services will always be there.
An example of a stock we own in managed health care is Humana. Humana's share
price declined in late June, along with other HMO stocks, as the Wall Street
community projected lower-than-expected earnings for the industry and as
Florida unveiled new Medicaid reimbursement rates. However, we are impressed
by Humana's chief operating officer, who had the vision to reduce his
company's exposure to the hospital business when he adeptly realized that new
plans to set prices for specific groups of medical problems would be
detrimental to future company profits. At Humana's current price ($18.25 as
of August 31), we believe any positive trends in this industry are not
reflected in the stock's price, representing a good long-term value
opportunity.
11
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PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
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Manhattan Fund
MARK R. GOLDSTEIN -- PORTFOLIO MANAGER
Q WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER THE
PAST FISCAL YEAR?
A During this period, we believe the patience and discipline we displayed
throughout 1994 was rewarded. Specifically, because many of our
Portfolio's holdings are sensitive to interest rates, we looked for any
one of the following market changes:
1) inflation fears to steady
2) bond yields to fall
3) slow-down of economic growth, or
4) improved corporate earnings growth
All four occurred and our returns have outpaced the market.
Interest rates aside, the earnings growth of the companies we own remains the
most important factor influencing the appreciation of securities. We continue
to be committed to paying a reasonable price for the stocks we believe have
growth potential. As an example, the type of stocks we buy represent
companies that have had earnings growth in the 15% - 20% range, have had a
high level of profitability, have generated excess cash flow, and have
entrepreneurial managements that are owners of company stock and seem to have
shareholder interest at heart.
Q
WHAT ARE SOME EXAMPLES OF STOCKS THAT HAVE POSITIVELY AFFECTED
YOUR PORTFOLIO'S PERFORMANCE?
A Among the strongest industry groups in the Portfolio were Technology,
Financial Services and Consumer Goods. An example of an excellent
Technology stock in our Portfolio is Intel, one of the
largest producers of microprocessors. Its stock has positively affected the
Portfolio's performance, as strong demand for personal computers and greater
processing capacity for the individual units improved the overall demand for
microprocessors. The stock of one of our Financial Services holdings,
CITICORP, has also continued to
12
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Manhattan Fund (Cont'd)
show growth as the company builds upon the strength of its global consumer
franchise. Furthermore, the company announced a stock buyback in the second
quarter of 1995, showing its renewed emphasis on enhancing shareholder value.
In the consumer area, Luxottica has been an extremely strong holding. This
low-cost producer of designer and non-designer eyeglass frames has
experienced strong double digit growth in both the U.S. and international
markets led by strong performance of the Giorgio Armani line of frames. The
company's purchase of the Lenscrafters division of U.S. Shoe offers them a
strong distribution arm in the U.S. and the opportunity to benefit in the
retail markup of their product. General Nutrition Centers was another strong
contributor to the Portfolio's positive performance. Demand for this
company's vitamins and nutritional products has been quite robust. The
company has also benefited from greater sales of its manufactured products
through its own stores.
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS NEGATIVELY AFFECTED YOUR
PORTFOLIO'S PERFORMANCE?
A For us, the worst performing group of stocks was in the HMO area.
Concerns about declining pricing and higher than anticipated use of
medical sources caused many of the stocks in this area to underperform.
For example, U.S. Healthcare suffered increased competition from the
local Blue Cross plan, which became more aggressive in going after
market share.
Overall, we have been pleased with the quality and returns of our holdings.
Further, there is no shortage of buying opportunities, even in this somewhat
lofty equity market. By investing in fast-growing companies with
entrepreneurial management and pristine balance sheets, we hope to be able to
continue to provide the shareholder with excellent long-term returns.
13
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PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Partners Fund
MICHAEL KASSEN AND ROBERT GENDELMAN -- CO-PORTFOLIO MANAGERS
Q WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER THE
PAST FISCAL YEAR?
A The cautious optimism we showed for the equity markets coming into 1995
has been met by one of the greatest short-term rallies in stock market
history. We, like other managers, have benefited from this run-up. This
was accomplished, in part, from securities we purchased for the
Portfolio over the last year. We have not been chasing the market, but
rather watching some of the value selections we made in months past
become recognized by the market.
Q
WHAT ARE SOME EXAMPLES OF STOCKS THAT HAVE POSITIVELY AFFECTED
YOUR PORTFOLIO'S PERFORMANCE?
A Two sectors of the market in particular led to our strong positive
performance: Technology and Financial Services. While the Portfolio was
not overweighted in Technology, we maintained a significant position in
a number of excellent stocks. In the Financial Services sector, leading
stocks included the following: Exel Ltd., a specialty property casualty
underwriter based in Bermuda; First USA, a rapidly growing credit card
issuer and processor; Countrywide Credit, a leading mortgage originator;
and CITICORP, whose international positioning and growth prospects
distinguish it, in our opinion, from the average bank. While Financial
Services stocks have obviously benefited from the strong bond market, we
continue to believe this is an area that offers many interesting and
reasonably priced securities.
Q
WHAT IS AN EXAMPLE OF A STOCK THAT HAS NEGATIVELY AFFECTED YOUR
PORTFOLIO'S PERFORMANCE?
A An example of a stock which performed poorly during the past fiscal year
was Royal Caribbean. We have owned Royal Caribbean since its public
offering in 1993. We continue to like the fundamen-
14
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Partners Fund (Cont'd)
tals of the cruise ship industry in general and Royal Caribbean in
particular. Nonetheless, earnings estimates have drifted down for Royal
Caribbean in recent months, reflecting a somewhat more promotional industry
pricing environment. We have taken advantage of the ensuing weakness in the
stock to add to our positions and feel very good about the position over the
next year or two.
Q
WHAT IS AN EXAMPLE OF A STOCK THAT YOU HAVE BOUGHT DURING THIS
PERIOD?
A We initiated a position in Harley-Davidson within the last couple of
months which is a stock we've owned in the past and sold and have now
come back to. Even though we bought it at a price that is higher than we
previously sold it at, we feel that it is a good value today. Why? Most
importantly, their core business, motorcycles, is doing great. We've
been told it's so hard to get a Harley, that if you were to place an
order today, you'd probably have to wait six or eight months for one.
So why is it a "value"? The problem is the motorcycle business is three
quarters of the company's sales and about 98 percent of their earnings. They
also own a business called Holiday Rambler, which is in the recreational
vehicles business, which even in the best of times did not contribute very
much to the bottom line. Analysts that follow Harley are preoccupied, for
some reason, with the fortunes of this business, which hasn't done so well
lately. And we honestly think if this business went away totally, the stock
would be significantly higher because people could then devote their
attention to what a really wonderful business the motorcycle business appears
to be. You know, you have to say that very few businesses have their
customers tattooing their company's name on their body. That's a sign of
great loyalty.
15
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PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
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Socially Responsive Fund
JANET PRINDLE -- PORTFOLIO MANAGER
Q WHAT FACTORS INFLUENCED YOUR PORTFOLIO'S PERFORMANCE OVER THE
PAST FISCAL YEAR?
A During this period, we continued to follow our bottom-up strategy,
building the portfolio one stock at a time, with no particular bias in
any one sector. We took advantage of the strength to sell stocks that
had appreciated to meet our expectations, reinvesting the proceeds into
issues we felt still represented good value. From a financial
perspective, our focus remained on companies with strong balance sheets
and good cash flow characteristics.
Q
WHAT ARE SOME EXAMPLES OF STOCKS THAT HAVE POSITIVELY AFFECTED
YOUR PORTFOLIO'S PERFORMANCE?
A We were particularly happy to note that some of our best performing
stocks were industrial companies with outstanding environmental records.
One of these is Cabot, a specialty chemical company involved primarily
in carbon black, a "dirty" business almost by definition. New management
took over five years ago and implemented a leading edge process
re-engineering program which has improved both environmental performance
and plant efficiency. The payoff has been evident in the past six
months. Sales are up and costs are down, and with major capital
expenditures behind it, cash flow has increased and given an added boost
to earnings. Cabot is one of the first companies we point to when asked
about our belief that good corporate citizenship is good business.
Another good example is IMCO, one of the major independent recyclers of
aluminum in the U.S. With excellent processes, IMCO has been providing better
yields than the do-it-yourself alternative. Earnings growth has been in
excess of 30% and good cash flow and a solid balance sheet have enabled the
company to finance growth internally. IMCO is actively pursuing a "closed
loop" production system in which virtually all materials would be either
consumed or
16
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Socially Responsive Fund (Cont'd)
reclaimed. In the meantime, it has constructed state-of-the-art landfills.
These have turned into a real plus as its customers have become extremely
sensitive to the final disposal of their waste streams.
Q
WHAT ARE SOME FACTORS THAT HAVE NEGATIVELY AFFECTED YOUR PORTFO-
LIO'S PERFORMANCE?
A Our performance was adversely affected because we did not have an
overweighted position in technology. These stocks tend to have higher
P/E's than the Portfolio's value system is comfortable with, in most
market conditions. Over the past fiscal year, those issues we did hold
performed quite well and we have already sold some. Our retail positions
lagged a bit during the period, but we remain happy with the stocks we
own and believe that their near-term and long- term prospects are good.
Their recent performance seems to support our view.
Q
WHAT ARE SOME EXAMPLES OF STOCKS THAT YOU HAVE BOUGHT DURING
THIS PERIOD?
A During the period, we purchased shares of Dun & Bradstreet, a leading
supplier of business information. The company has a new CEO with an
entrepreneurial background and an attractive strategy for re-energizing
its world class brand franchises. Wall Street has not yet focused on
these changes, which means that the price is still at a level we find
attractive. We also like the company because it consistently rates high
on diversity with women and minorities heading a number of major
divisions.
We also added to our position in Air Touch, the leading global wireless
communication company, with interests in cellular telephone, paging and
personal communication services. The company serves over four million
customers in the U.S. and 11 foreign countries. We believe that these markets
will continue to grow, and Air Touch's technical abilities and financial
strengths will lead to further appreciation in the stock's price.
17
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Focus Fund
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Focus S&P "500"
<S> <C> <C>
1 Year +27.47% +21.42%
5 Year +18.52% +15.13%
10 Year +14.77% +15.17%
Life of Fund +11.97% +10.78%
</TABLE>
<TABLE>
<CAPTION>
Focus Fund S&P "500"
<S> <C> <C>
1985 10000 10000
1986 11685 13914
1987 15430 18734
1988 13102 15365
1989 17603 21390
1990 16947 20294
1991 19651 25771
1992 21972 27816
1993 28177 32043
1994 31095 33808
1995 39637 41051
</TABLE>
Life of Focus Fund is from 10/19/55. The Fund's name prior to January 1, 1995
was Neuberger&Berman Selected Sectors Fund. Prior to November 1, 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 may be expected under the Fund's current
investment policies.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Fund and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. 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. These
data are derived by Neuberger&Berman Management Inc. and include reinvestment of
all dividends and capital gain distributions.
18
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Genesis Fund
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Genesis Russell 2000
<S> <C> <C>
1 Year +19.69% +20.83%
5 Year +17.25% +19.01%
Life of Fund +12.54% +12.91%
</TABLE>
<TABLE>
<CAPTION>
Genesis Fund Russell 2000
<S> <C> <C>
1988 10000 10000
1989 13045 12113
1990 10236 9714
1991 13856 12749
1992 14562 13680
1993 18087 18130
1994 18949 19193
1995 22680 23191
</TABLE>
Life of Genesis Fund is from 9/27/88.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Fund and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
During the period May 1, 1995 through August 31, 1995, Neuberger&Berman
Management Inc. waived a portion of its management fee for providing investment
advisory and other services. Had Neuberger&Berman Management Inc. not waived
these fees, total returns would have been less.
The Russell 2000 Index is an unmanaged index generally considered to be
representative of the 2,000 issuers having the smallest capitalization in the
Russell 3000 Index, representing approximately 7% of the Russell 3000 total
market capitalization. The smallest company's market capitalization is roughly
$13 million. These data are derived by Neuberger&Berman Management Inc. and
include reinvestment of all dividends and capital gain distributions. The risks
involved in seeking capital appreciation from investments principally in
companies with small market capitalization are set forth in the prospectus.
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.
19
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Guardian Fund
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Guardian S&P "500"
<S> <C> <C>
1 Year +24.06% +21.42%
5 Year +20.14% +15.13%
10 Year +15.66% +15.17%
Life of Fund +13.10% +12.17%
</TABLE>
<TABLE>
<CAPTION>
Guardian Fund S&P "500"
<S> <C> <C>
1985 10000 10000
1986 12908 13914
1987 16350 18734
1988 14602 15365
1989 19552 21390
1990 17110 20294
1991 22325 25771
1992 25425 27816
1993 31638 32043
1994 34522 33808
1995 42828 41051
</TABLE>
Life of Guardian Fund is from 6/1/50.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Fund and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. 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. These
data are derived by Neuberger&Berman Management Inc. and include reinvestment of
all dividends and capital gain distributions.
20
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Manhattan Fund
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Manhattan S&P "500"
<S> <C> <C>
1 Year +26.00% +21.42%
5 Year +17.10% +15.13%
10 Year +15.01% +15.17%
Life of Fund +17.69% +15.73%
</TABLE>
<TABLE>
<CAPTION>
Manhattan Fund S&P "500"
<S> <C> <C>
1985 10000 10000
1986 13696 13914
1987 18401 18734
1988 14760 15365
1989 21020 21390
1990 18400 20294
1991 23215 25771
1992 24315 27816
1993 31064 32043
1994 32149 33808
1995 40506 41051
</TABLE>
Life of Manhattan Fund is from 3/1/79 when Neuberger&Berman Management Inc.
became investment adviser.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Fund and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. 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. These
data are derived by Neuberger&Berman Management Inc. and include reinvestment of
all dividends and capital gain distributions.
21
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Partners Fund
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Partners S&P "500"
<S> <C> <C>
1 Year +21.53% +21.42%
5 Year +16.05% +15.13%
10 Year +14.43% +15.17%
Life of Fund +17.70% +15.08%
</TABLE>
<TABLE>
<CAPTION>
Partners Fund S&P "500"
<S> <C> <C>
1985 10000 10000
1986 13396 13914
1987 16903 18734
1988 14909 15365
1989 19633 21390
1990 18294 20294
1991 21593 25771
1992 23428 27816
1993 30020 32043
1994 31689 33808
1995 38512 41051
</TABLE>
Life of Partners Fund is from 1/20/75 when Neuberger&Berman Management Inc.
became investment adviser.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Fund and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. 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. These
data are derived by Neuberger&Berman Management Inc. and include reinvestment of
all dividends and capital gain distributions.
22
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Socially Responsive Fund
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
Socially Responsive S&P "500"
<S> <C> <C>
1 Year +17.82% +21.42%
Life of Fund +12.42% +16.79%
</TABLE>
<TABLE>
<CAPTION>
Socially Responsive Fund S&P "500"
<S> <C> <C>
3/16/94 10000 10000
8/31/94 10,070 10,329
8/31/95 11,865 12,542
</TABLE>
Neuberger&Berman Management Inc. voluntarily bears certain operating expenses
of Socially Responsive Fund in excess of 1.50% of average daily net assets. This
arrangement will be in effect until March 15, 1996. Absent such reimbursement,
average annual total returns of Socially Responsive Fund for the one year ended
8/31/95 and for the period from 3/16/94 to 8/31/95 would have been +17.36% and
+11.98%, respectively.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Fund and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. 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. These
data are derived by Neuberger&Berman Management Inc. and include reinvestment of
all dividends and capital gain distributions.
23
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
FOCUS GENESIS
(000'S OMITTED EXCEPT PER SHARE AMOUNTS) FUND FUND
-------------------------------
<S> <C> <C>
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 954,746 $ 111,535
Deferred organization costs (Note A) -- --
Receivable for Trust shares sold 1,909 573
-------------------------------
956,655 112,108
-------------------------------
LIABILITIES
Payable for Trust shares redeemed 291 519
Payable to administrator -- net (Note B) 205 25
Accrued expenses 120 43
-------------------------------
616 587
-------------------------------
NET ASSETS at value $ 956,039 $ 111,521
-------------------------------
NET ASSETS consist of:
Par value $ 33 $ 12
Paid-in capital in excess of par value 598,991 77,361
Accumulated undistributed net investment
income 3,728 --
Accumulated net realized gains on investment 47,083 5,591
Net unrealized appreciation in value of
investment 306,204 28,557
-------------------------------
NET ASSETS at value $ 956,039 $ 111,521
-------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 33,104 11,720
-------------------------------
NET ASSET VALUE, offering and redemption price per
share $28.88 $9.52
-------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
August 31, 1995
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
SOCIALLY
GUARDIAN MANHATTAN PARTNERS RESPONSIVE
FUND FUND FUND FUND
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 3,933,627 $ 609,914 $ 1,562,281 $ 8,188
Deferred organization costs (Note A) -- -- -- 55
Receivable for Trust shares sold 18,340 2,864 3,003 7
-----------------------------------------------------------------
3,951,967 612,778 1,565,284 8,250
-----------------------------------------------------------------
LIABILITIES
Payable for Trust shares redeemed 3,014 497 756 --
Payable to administrator -- net (Note B) 842 132 339 11
Accrued expenses 591 181 229 16
-----------------------------------------------------------------
4,447 810 1,324 27
-----------------------------------------------------------------
NET ASSETS at value $ 3,947,520 $ 611,968 $ 1,563,960 $ 8,223
-----------------------------------------------------------------
NET ASSETS consist of:
Par value $ 167 $ 46 $ 66 $ 1
Paid-in capital in excess of par value 2,781,316 425,037 1,175,761 7,063
Accumulated undistributed net investment
income 13,763 54 8,809 11
Accumulated net realized gains on investment 108,394 36,002 128,665 131
Net unrealized appreciation in value of
investment 1,043,880 150,829 250,659 1,017
-----------------------------------------------------------------
NET ASSETS at value $ 3,947,520 $ 611,968 $ 1,563,960 $ 8,223
-----------------------------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 167,221 46,104 65,930 694
-----------------------------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $23.61 $13.27 $23.72 $11.84
-----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
STATEMENTS OF OPERATIONS
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
FOCUS GENESIS
(000'S OMITTED) FUND FUND
---------------------------
<S> <C> <C>
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 11,475 $ 1,326
---------------------------
Expenses:
Administration fee (Note B) 1,381 208
Amortization of deferred organization and
initial offering expenses (Note A) -- --
Auditing fees 10 8
Custodian fees 10 10
Legal fees 11 12
Registration and filing fees 41 33
Service fees (Note B) 169 30
Shareholder reports 109 42
Shareholder servicing agent fees 390 112
Trustees' fees and expenses 20 7
Miscellaneous 10 1
Expenses from corresponding Portfolio (Note
A) 4,029 1,046
---------------------------
Total expenses 6,180 1,509
Deduct -- expenses reimbursed by
administrator (Note B) -- --
---------------------------
Total net expenses 6,180 1,509
---------------------------
Net investment income (loss) 5,295 (183)
---------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
OPTION CONTRACTS WRITTEN FROM CORRESPONDING
PORTFOLIO (NOTE A)
Net realized gain on investments 50,391 6,185
Net realized gain on option contracts written 229 --
Change in net unrealized appreciation of
investments 138,207 12,511
---------------------------
Net gain on investments and option
contracts written from corresponding
Portfolio (Note A) 188,827 18,696
---------------------------
Net increase in net assets resulting from
operations $ 194,122 $ 18,513
---------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
For the Year Ended August 31, 1995
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
SOCIALLY
GUARDIAN MANHATTAN PARTNERS RESPONSIVE
FUND FUND FUND FUND
----------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 62,559 $ 5,114 $ 22,267 $ 93
----------------------------------------------------------------
Expenses:
Administration fee (Note B) 5,562 970 2,565 10
Amortization of deferred organization and
initial offering expenses (Note A) -- -- -- 15
Auditing fees 17 12 12 5
Custodian fees 10 10 10 10
Legal fees 13 12 12 12
Registration and filing fees 188 39 57 25
Service fees (Note B) 671 127 341 1
Shareholder reports 355 137 181 30
Shareholder servicing agent fees 2,021 608 761 10
Trustees' fees and expenses 83 18 40 1
Miscellaneous 24 15 15 1
Expenses from corresponding Portfolio (Note
A) 13,751 3,001 7,136 34
----------------------------------------------------------------
Total expenses 22,695 4,949 11,130 154
Deduct -- expenses reimbursed by
administrator (Note B) -- -- -- (79)
----------------------------------------------------------------
Total net expenses 22,695 4,949 11,130 75
----------------------------------------------------------------
Net investment income (loss) 39,864 165 11,137 18
----------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
OPTION CONTRACTS WRITTEN FROM CORRESPONDING
PORTFOLIO (NOTE A)
Net realized gain on investments 119,050 43,765 162,141 137
Net realized gain on option contracts written 319 -- -- --
Change in net unrealized appreciation of
investments 539,076 80,224 101,941 936
----------------------------------------------------------------
Net gain on investments and option
contracts written from corresponding
Portfolio (Note A) 658,445 123,989 264,082 1,073
----------------------------------------------------------------
Net increase in net assets resulting from
operations $ 698,309 $ 124,154 $ 275,219 $ 1,091
----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
FOCUS FUND GENESIS FUND
Year Year
Ended Ended
August 31, August 31,
(000'S OMITTED) 1995 1994 1995 1994
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 5,295 $ 5,293 $ (183) $ (246)
Net realized gain (loss) on
investments sold and option
contracts written from
corresponding Portfolio (Note A) 50,620 38,656 6,185 5,501
Change in net unrealized
appreciation of investments from
corresponding Portfolio (Note A) 138,207 14,853 12,511 764
-------------------------------------------------------------
Net increase in net assets resulting
from operations 194,122 58,802 18,513 6,019
-------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (5,224) (5,972) -- (120)
Net realized gain on investments (38,655) (40,613) (4,105) (10,487)
-------------------------------------------------------------
Total distributions to shareholders (43,879) (46,585) (4,105) (10,607)
-------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 209,593 116,063 29,275 62,565
Proceeds from reinvestment of
dividends and distributions 37,993 40,288 3,647 9,655
Payments for shares redeemed (85,655) (98,643) (71,413) (50,523)
-------------------------------------------------------------
Net increase (decrease) from Trust
share transactions 161,931 57,708 (38,491) 21,697
-------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 312,174 69,925 (24,083) 17,109
NET ASSETS:
Beginning of year 643,865 573,940 135,604 118,495
-------------------------------------------------------------
End of year $ 956,039 $ 643,865 $ 111,521 $ 135,604
-------------------------------------------------------------
Accumulated undistributed net
investment income at end of year $ 3,728 $ 3,657 $ -- $ --
-------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 8,507 4,958 3,551 7,616
Issued on reinvestment of dividends
and distributions 1,761 1,747 467 1,169
Redeemed (3,534) (4,249) (8,690) (6,138)
-------------------------------------------------------------
Net increase (decrease) in shares
outstanding 6,734 2,456 (4,672) 2,647
-------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
28
<PAGE>
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
GUARDIAN FUND MANHATTAN FUND PARTNERS FUND
Year Year Year
Ended Ended Ended
August 31, August 31, August 31,
1995 1994 1995 1994 1995 1994
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
FROM OPERATIONS:
Net investment income
(loss) $ 39,864 $ 27,912 $ 165 $ 804 $ 11,137 $ 5,971
Net realized gain (loss)
on investments sold and
option contracts written
from corresponding
Portfolio (Note A) 119,369 26,584 43,765 25,388 162,141 87,613
Change in net unrealized
appreciation of
investments from
corresponding Portfolio
(Note A) 539,076 132,759 80,224 (9,399) 101,941 (24,296)
---------------------------------------------------------------------------------------------
Net increase in net assets
resulting from
operations 698,309 187,255 124,154 16,793 275,219 69,288
---------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income (34,262) (32,226) (434) (801) (6,799) (6,012)
Net realized gain on
investments (30,092) (41,934) (30,398) (82,538) (98,890) (120,239)
---------------------------------------------------------------------------------------------
Total distributions to
shareholders (64,354) (74,160) (30,832) (83,339) (105,689) (126,251)
---------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 1,313,150 978,666 124,949 121,815 199,058 283,148
Proceeds from reinvestment
of dividends and
distributions 57,644 65,733 28,495 77,614 101,349 120,556
Payments for shares
redeemed (473,776) (527,905) (145,126) (160,139) (241,908) (195,869)
---------------------------------------------------------------------------------------------
Net increase (decrease)
from Trust share
transactions 897,018 516,494 8,318 39,290 58,499 207,835
---------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS 1,530,973 629,589 101,640 (27,256) 228,029 150,872
NET ASSETS:
Beginning of year 2,416,547 1,786,958 510,328 537,584 1,335,931 1,185,059
---------------------------------------------------------------------------------------------
End of year $ 3,947,520 $ 2,416,547 $ 611,968 $ 510,328 $ 1,563,960 $ 1,335,931
---------------------------------------------------------------------------------------------
Accumulated undistributed
net investment income at
end of year $ 13,763 $ 8,161 $ 54 $ 323 $ 8,809 $ 4,471
---------------------------------------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 64,070 52,412 11,050 10,530 9,597 13,418
Issued on reinvestment of
dividends and
distributions 3,056 3,550 2,847 6,986 5,472 5,847
Redeemed (23,714) (28,405) (13,048) (13,814) (11,807) (9,367)
---------------------------------------------------------------------------------------------
Net increase (decrease) in
shares outstanding 43,412 27,557 849 3,702 3,262 9,898
---------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS(Cont'd)
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
SOCIALLY RESPONSIVE FUND
Period from
March 16,
1994
(Commencement
of
Year Operations)
Ended to
August 31, August 31,
(000'S OMITTED) 1995 1994
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 18 $ 2
Net realized gain (loss) on
investments sold and option
contracts written from
corresponding Portfolio (Note A) 137 (7)
Change in net unrealized
appreciation of investments from
corresponding Portfolio (Note A) 936 81
-----------------------------
Net increase in net assets resulting
from operations 1,091 76
-----------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (9) --
Net realized gain on investments -- --
-----------------------------
Total distributions to shareholders (9) --
-----------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 5,547 2,290
Proceeds from reinvestment of
dividends and distributions 8 --
Payments for shares redeemed (691) (89)
-----------------------------
Net increase (decrease) from Trust
share transactions 4,864 2,201
-----------------------------
NET INCREASE (DECREASE) IN NET ASSETS 5,946 2,277
NET ASSETS:
Beginning of year 2,277 --
-----------------------------
End of year $ 8,223 $ 2,277
-----------------------------
Accumulated undistributed net
investment income at end of year $ 11 $ 2
-----------------------------
NUMBER OF TRUST SHARES:
Sold 534 235
Issued on reinvestment of dividends
and distributions 1 --
Redeemed (67) (9)
-----------------------------
Net increase (decrease) in shares
outstanding 468 226
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Equity Funds
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Focus Fund ("Focus," formerly Neuberger& Berman
Selected Sectors Fund), Neuberger&Berman Genesis Fund ("Genesis"),
Neuberger&Berman Guardian Fund ("Guardian"), Neuberger&Berman Manhattan Fund
("Manhattan"), Neuberger&Berman Partners Fund ("Partners"), and
Neuberger&Berman Socially Responsive Fund ("Socially Responsive")
(collectively, the "Funds") are separate series of Neuberger&Berman Equity
Funds (the "Trust"), a Delaware business trust organized pursuant to a Trust
Instrument dated December 23, 1992. The Trust is registered as a diversified,
open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), and its shares are registered under the
Securities Act of 1933, as amended (the "1933 Act"). The trustees of the
Trust changed the name of Neuberger&Berman Selected Sectors Fund to
Neuberger&Berman Focus Fund, effective January 1, 1995. Socially Responsive
had no operations until March 16, 1994 other than matters relating to its
organization and registration as a diversified, open-end management
investment company under the 1940 Act, and registration of its shares under
the 1933 Act and state law. 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.
Each Fund seeks to achieve its investment objective by investing all of
its net investable assets in its corresponding Portfolio of Equity Managers
Trust (the "Portfolio") having the same investment objective and policies as
the Fund. The value of each Fund's investment in its corresponding Portfolio
reflects that Fund's proportionate interest in the net assets of that
Portfolio (98.51%, 78.46%, 85.27%, 94.50%, 96.23%, and 8.46%, for Focus,
Genesis, Guardian, Manhattan, Partners, and Socially Responsive,
respectively, at August 31, 1995). Another regulated investment company,
which has only a single shareholder and is sponsored by Neuberger&Berman
Management Incorporated ("Management"), also invests in Neuberger&Berman
Socially Responsive Portfolio. The performance of each Fund is directly
affected by the performance of its corresponding Portfolio. The financial
statements of each Portfolio, including the schedule of investments, are
included elsewhere in this report and should be read in conjunction with each
Fund's financial statements.
31
<PAGE>
2) PORTFOLIO VALUATION: Investments in each Portfolio of Equity Managers Trust
are valued by Equity Managers Trust as indicated in the notes following the
Portfolios' schedule of investments.
3) FEDERAL INCOME TAXES: Each series of the Trust is treated as a separate
entity for Federal income tax purposes. It is the policy of each Fund of the
Trust to continue to qualify as a regulated investment company by complying
with the provisions available to certain investment companies, as defined in
applicable sections of the Internal Revenue Code, and to make distributions
of taxable income (after reduction for any amounts available for Federal
income tax purposes as capital loss carryforwards) sufficient to relieve it
from all, or substantially all, Federal income taxes. Accordingly, each Fund
paid no Federal income taxes and no provision for Federal income taxes was
required.
4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Each Fund earns income, net of
Portfolio expenses, daily on its investment in its corresponding Portfolio.
Dividends and net realized capital gains, if any, are normally distributed in
December. Guardian generally distributes substantially all of its net
investment income at the end of each calendar quarter. Income dividends and
capital gain distributions to shareholders are recorded on the ex-dividend
date. To the extent that each Fund's net realized capital gains, if any, can
be offset by capital loss carryforwards, it is the policy of each Fund not to
distribute such gains.
Each Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains.
5) ORGANIZATION EXPENSES: Expenses incurred by Socially Responsive in connection
with its organization are being amortized on a straight-line basis over a
five-year period. At August 31, 1995, the unamortized balance of such
expenses amounted to $55,297.
6) EXPENSE ALLOCATION: The Funds bear all costs of operations. Expenses incurred
by the Trust with respect to any two or more Funds are allocated in
proportion to the net assets of such Funds, except where another more
appropriate allocation of expenses to each Fund can otherwise be made fairly.
Expenses directly attributable to a Fund are charged to that Fund.
7) OTHER: All net investment income and realized and unrealized capital gains
and losses of each Portfolio are allocated pro rata among its respective
Funds and any other investors in the Portfolio.
32
<PAGE>
NOTE B -- ADMINISTRATION AND DISTRIBUTION FEES AND OTHER TRANSACTIONS WITH
AFFILIATES:
Each Fund retains Management as its administrator under an Administration
Agreement ("Agreement") dated as of May 1, 1995. Pursuant to this Agreement each
Fund pays Management an administration fee at the annual rate of .26% (.15%
prior to May 1, 1995) of that Fund's average daily net assets and indirectly
pays for investment management services through its investment in its
corresponding Portfolio. (See Note B of Notes to Financial Statements of the
Portfolios.) The Agreement provides that if with respect to any fiscal year of
each Fund, its total operating expenses plus its pro rata portion of its
corresponding Portfolio's operating expenses (including the fees payable to
Management but excluding interest, taxes, brokerage commissions, and
extraordinary expenses) ("Operating Expenses") exceed the most restrictive of
the expense limitations imposed by securities laws of the states in which such
Fund's shares are qualified for sale, the administration fees for that fiscal
year will be reduced by the amount of such excess, provided that Management has
no obligation to reimburse the Fund for any such expenses that exceed the
administration fee. The most restrictive expense limitation to which each Fund
is currently subject is 2 1/2% of the first $30 million of average daily net
assets, 2% of the next $70 million of average daily net assets, and 1 1/2% of
any additional average daily net assets. No reduction in the administration fee
as a result of the state expense limitation was required for the year ended
August 31, 1995.
In addition, Management has voluntarily undertaken to reimburse Socially
Responsive for its Operating Expenses which exceed, in the aggregate, 1.50% per
annum of its average daily net assets (the "Expense Limitation"). This
undertaking is subject to termination by Management after March 14, 1996. For
the year ended August 31, 1995, such excess expenses amounted to $78,940.
Socially Responsive has agreed to repay Management through March 14, 1998, for
its excess Operating Expenses previously reimbursed by Management, so long as
its annual Operating Expenses during that period do not exceed the Expense
Limitation.
All of the capital stock of Management is owned by individuals who are also
general partners of Neuberger&Berman, L.P. ("Neuberger"), a member firm of The
New York Stock Exchange and the sub-adviser to each Portfolio. Several
individuals who are officers and/or trustees of the Trust are also partners of
Neuberger and/or officers and/or directors of Management.
Under a service agreement, which was in effect through April 30, 1995, each
Fund had retained Management to provide certain shareholder, shareholder-related
and other services not furnished by the shareholder servicing agent. Pursuant to
the service agreement each Fund paid Management a monthly fee at the annual rate
of .04% of the average daily net assets of the Fund as compensation for such
services. For the period from September 1, 1994 to April 30, 1995, Focus,
Genesis, Guardian, Manhattan, Partners, and Socially Responsive accrued
$169,437, $29,930, $670,627,
33
<PAGE>
$127,079, $340,751, and $1,085, respectively, for such services. As of May 1,
1995, the service agreement and the administration agreement were combined into
a single agreement with an increase in combined fees from .19% to .26%.
Each Fund also has a distribution agreement with Management, which receives
no compensation therefor and no commissions for sales or redemptions of shares
of beneficial interest of each Fund.
NOTE C -- INVESTMENT TRANSACTIONS:
During the year ended August 31, 1995, additions and reductions in each
Fund's investment in its corresponding Portfolio were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
<S> <C> <C>
------------ ------------
FOCUS $145,443,125 $ 30,464,335
GENESIS 11,563,796 54,566,254
GUARDIAN 849,986,889 28,416,219
MANHATTAN 54,071,149 79,992,457
PARTNERS 51,346,342 103,876,309
SOCIALLY RESPONSIVE 5,330,255 377,846
</TABLE>
34
<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 AUGUST 1992 TO
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
35
<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
AUGUST 1, PERIOD FROM
YEAR ENDED 1993 TO SEPTEMBER 27,
AUGUST 31, AUGUST 31, YEAR ENDED JULY 31, 1988(6) TO
1995(2) 1994(2) 1993(2) 1993 1992 1991 1990 JULY 31, 1989
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 8.27 $ 8.62 $ 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
36
<PAGE>
FINANCIAL HIGHLIGHTS(8)
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. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
PERIOD
FROM
NOVEMBER
1, 1989
YEAR ENDED AUGUST 31, TO AUGUST YEAR ENDED OCTOBER 31,
1995(2) 1994(2) 1993(2) 1992 1991 31, 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
37
<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
38
<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
JULY 1,
YEAR ENDED 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
39
<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 PERIOD FROM
ENDED MARCH 16,
AUGUST 1994(6)
31, TO AUGUST
1995 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
40
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger&Berman August 31, 1995
- ----------------------------------------------------------------------
Equity Funds
1) Prior to January 1, 1995, its name 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 Socially Responsive) transferred all of its investment
securities into its respective Portfolio on August 2, 1993. After that date
each Fund invested only in its corresponding Portfolio, and that Portfolio,
rather than the Fund, engaged in securities transactions. Therefore, after
that date no Fund had a portfolio turnover rate. Portfolio turnover rates for
periods ending after August 2, 1993 are included elsewhere in
Neuberger&Berman Focus Portfolio's, Neuberger&Berman Genesis Portfolio's,
Neuberger&Berman Guardian Portfolio's, Neuberger&Berman Manhattan
Portfolio's, and Neuberger&Berman Partners Portfolio's Financial Highlights.
6) The date investment operations commenced.
7) After reimbursement of expenses by Management. Had Management not undertaken
such action the annualized ratios to average daily net assets would have
been:
<TABLE>
<CAPTION>
PERIOD FROM
SEPTEMBER 27,
YEAR ENDED JULY 1988
31, TO JULY 31,
GENESIS 1991 1990 1989
------- ------- -----
<S> <C> <C> <C>
Expenses 2.16% 2.40% 3.79%
------- ------- -----
Net Investment Income (Loss) .44% .01% (1.28%)
------- ------- -----
</TABLE>
Had Genesis not reimbursed 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>
41
<PAGE>
Had Management not waived a portion of the management fee borne directly
by Neuberger&Berman Genesis Portfolio (See Note B of Notes to Financial
Statements of the Portfolios) 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>
After reimbursement of expenses by the administrator as described in Note B
of Notes to Financial Statements. Had the administrator not undertaken such
action the annualized ratios to average net assets would have been:
<TABLE>
<CAPTION>
PERIOD FROM
MARCH 16,
YEAR ENDED 1994
AUGUST 31, TO AUGUST
SOCIALLY RESPONSIVE 1995 31, 1994
--- ---
<S> <C> <C>
Expenses 2.50% 2.50%
--- ---
Net Investment 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.
+ 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 capital gain 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 cost. For Socially Responsive, total return
would have been lower if Management had not reimbursed certain expenses. For
Genesis, total return would have been lower if Management had not waived a
portion of the management fee.
42
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Neuberger&Berman Equity Funds and
Shareholders of Neuberger&Berman Manhattan Fund and
Neuberger&Berman Socially Responsive Fund
We have audited the accompanying statements of assets and liabilities of
Neuberger&Berman Manhattan Fund and Neuberger&Berman Socially Responsive Fund,
as of August 31, 1995, and the related statements of operations for the year
then ended, and the statements of changes in net assets and the financial
highlights for each of the periods indicated. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Neuberger&Berman Manhattan Fund and Neuberger&Berman Socially Responsive Fund as
of August 31, 1995, the results of their operations for the year then ended, and
the changes in their net assets and the financial highlights for each of the
periods indicated, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 6, 1995
43
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees
Neuberger&Berman Equity Funds and
Shareholders of Neuberger&Berman Focus Fund
Shareholders of Neuberger&Berman Genesis Fund
Shareholders of Neuberger&Berman Guardian Fund and
Shareholders of Neuberger&Berman Partners Fund
We have audited the accompanying statements of assets and liabilities
of the Neuberger&Berman Focus Fund, Neuberger&Berman Genesis Fund,
Neuberger&Berman Guardian Fund, and Neuberger&Berman Partners Fund, four of the
series comprising Neuberger&Berman Equity Funds (the "Trust"), as of August 31,
1995, the related statements of operations for the year then ended and the
statements of changes in net assets and financial highlights for each of the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above mentioned series of Neuberger&Berman Equity Funds at August 31,
1995, the results of their operations for the year then ended, and the changes
in their net assets and financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting principles.
[SIGNATURE]
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
September 29, 1995
44
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Focus Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. CITICORP 3.4%
2. Chrysler Corp. 3.3%
3. Neiman-Marcus Group 2.4%
4. Federal National Mortgage Association 2.4%
5. Foundation Health 2.4%
6. Texas Instruments 2.2%
7. Federal Home Loan Mortgage 2.1%
8. Ford Motor 2.1%
9. Travelers Group 2.0%
10. Countrywide Credit Industries 2.0%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
COMMON STOCKS (98.1%)
AUTOMOTIVE (7.2%)
600,000 Chrysler Corp. $ 32,325
650,000 Ford Motor 19,906
380,000 General Motors 17,860
-------------
70,091
-------------
DEFENSE & AEROSPACE (0.7%)
100,000 Boeing Co. 6,375
-------------
FINANCIAL SERVICES (29.8%)
231,700 Allmerica Property &
Casualty 5,590
225,000 American
International Group 18,141
300,000 Bank of Boston 13,200
678,000 Capital One
Financial 17,628
495,000 CITICORP 32,856
875,000 Countrywide Credit
Industries 19,250
295,000 Dean Witter,
Discover 15,045
315,000 Federal Home Loan
Mortgage 20,239
248,000 Federal National
Mortgage
Association 23,653
200,000 First Fidelity
Bancorporation 13,075
230,700 First USA 10,612
220,000 Horace Mann
Educators 6,242
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
250,000 MBNA Corp. $ 8,875
250,000 Merrill Lynch 14,406
259,000 National Re 8,223
340,000 Penncorp Financial
Group 7,735
340,000 Signet Banking 8,883
526,400 Sphere Drake
Holdings 8,949
410,000 Travelers Group 19,680
88,500 Wells Fargo 16,494
-------------
288,776
-------------
HEALTH CARE (8.2%)
705,000 FHP International 17,449 (2)
680,000 Foundation Health 23,545 (2)
525,000 Humana Inc. 9,581 (2)
320,000 U.S. Healthcare 10,240
250,000 United Healthcare 10,562
272,800 Wellpoint Health
Networks 8,116 (2)
-------------
79,493
-------------
HEAVY INDUSTRY (13.7%)
150,000 Aluminum Co. of
America 8,569
350,000 American Power
Conversion 5,862 (2)
233,600 American Standard 6,453 (2)
200,000 Boise Cascade 8,575
225,000 Caraustar Industries 4,880
205,000 Cleveland-Cliffs 9,276
500,000 Coltec Industries 7,500 (2)
550,000 LTV Corp. 8,594 (2)
150,000 Mead Corp. 9,206
300,000 Riverwood
International 7,800
785,000 Rollins Truck
Leasing 8,537
675,000 Stone Container 14,681
160,000 Temple-Inland 8,280
176,500 Tenneco Inc. 8,560
170,000 TNT Freightways 3,528
175,000 Willamette
Industries 12,031
-------------
132,332
-------------
MEDIA & ENTERTAINMENT (15.0%)
178,000 A.H. Belo 6,252
430,000 Bell Cablemedia ADR 8,170 (2)
</TABLE>
45
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Focus Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
156,000 Capital Cities/ABC $ 17,940
865,000 Comcast Corp. Class
A Special 18,489
160,000 Comcast UK Cable
Partners Limited 2,510(2)
325,000 Harcourt General 13,528
400,000 International
CableTel 10,800(2)
450,000 Jones Intercable
Inc. Class A 6,356
120,000 King World
Productions 4,560(2)
200,000 Multimedia Inc. 8,500(2)
275,000 Scandinavian
Broadcasting System 7,459
350,000 Time Warner 14,744
500,000 United International
Holdings 8,938(2)
276,600 Vodafone Group ADR 11,583
100,000 Walt Disney 5,613
-------------
145,442
-------------
RETAIL (2.4%)
1,577,800 Neiman-Marcus Group 23,667
-------------
TECHNOLOGY (19.4%)
275,000 Airtouch
Communications 8,938 (2)
85,000 Applied Materials 8,840 (2,3)
173,200 Arrow Electronics 9,396 (2)
173,000 Avnet, Inc. 8,910
300,000 Compaq Computer 14,325 (2)
225,000 Digital Equipment 9,394 (2)
150,000 EchoStar
Communications 2,400 (2)
100,000 Integrated Device
Technology 5,763
270,000 Intel Corp. 16,571
230,000 Micron Technology 17,681
465,000 National
Semiconductor 13,136 (2)
200,000 Palmer Wireless 4,600 (2)
156,400 Philips Electronics 7,038
625,000 PriCellular Corp. 7,891 (2)
200,000 QUALCOMM Inc. 9,750 (2)
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
175,000 Rockwell
International $ 7,831
225,000 Seagate Technology 9,956(2)
250,000 Tele-Communications
International 3,906(2)
286,000 Texas Instruments 21,414
-------------
187,740
-------------
UTILITIES (1.7%)
290,000 AT&T Corp. 16,385
-------------
TOTAL COMMON STOCKS
(COST $640,701) 950,301
-------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
CONVERTIBLE BONDS (0.1%)
$1,000,000 Scandinavian
Broadcasting
System SA, Cv.
Sub. Deb., 7.25%,
due 8/1/05 (COST
$1,000) 1,087
-------------
U.S. TREASURY SECURITIES (3.1%)
$31,010,000 U.S. Treasury
Bills, 5.33% -
5.61%, due
9/21/95 - 2/8/96
(COST $30,464) 30,471
-------------
SHORT-TERM CORPORATE NOTES (0.2%)
$2,300,000 General Electric
Capital Corp.,
5.60%, due 9/1/95
(COST $2,300) 2,300 (4)
-------------
TOTAL INVESTMENTS
(101.5%) (COST
$674,465) 984,159 (5)
Liabilities, less
cash, receivables
and other assets
[(1.5%)] (14,986 )
-------------
TOTAL NET ASSETS
(100.0%) $ 969,173
-------------
</TABLE>
46
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. BMC Industries 4.8%
2. Texas Industries 3.8%
3. DH Technology 3.5%
4. Alumax Inc. 3.2%
5. Coho Energy 2.7%
6. Pioneer Standard Electronics 2.7%
7. W.H. Brady 2.5%
8. Reynolds & Reynolds 2.5%
9. Offshore Logistics 2.4%
10. Houghton Mifflin 2.1%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
COMMON STOCKS (99.9%)
AGRICULTURE (0.9%)
38,500 Delta & Pine Land $ 1,271
-------------
AUTOMOTIVE (3.4%)
47,700 Donaldson Co. 1,210
67,800 Monaco Coach 915 (2)
160,000 TBC Corp. 1,520 (2)
65,000 Thor Industries 1,178
-------------
4,823
-------------
BANKING & FINANCE (4.7%)
63,000 Charter One
Financial 1,898
60,000 First Commerce 1,935
45,250 Mark Twain
Bancshares 1,584
42,777 ONBANCorp, Inc. 1,224
-------------
6,641
-------------
BUILDING, CONSTRUCTION &
FURNISHINGS (5.0%)
50,000 Oakwood Homes 1,600
110,000 Texas Industries 5,431
-------------
7,031
-------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
CHEMICALS (3.2%)
85,000 Lawter International $ 999
182,000 Lilly Industries 2,207
85,400 McWhorter
Technologies 1,270 (2)
-------------
4,476
-------------
CONSUMER PRODUCTS & SERVICES (3.6%)
92,000 Alltrista Corp. 1,840 (2)
253,600 Prime Hospitality 2,726 (2)
24,000 Richfood Holdings 581
-------------
5,147
-------------
DIAGNOSTIC EQUIPMENT (0.6%)
75,700 ADAC Laboratories 871
-------------
DIVERSIFIED (2.9%)
16,000 Marcus Corp. 504
53,500 Pentair, Inc. 2,434
65,200 Raven Industries 1,239
-------------
4,177
-------------
ELECTRONICS (12.6%)
184,200 BMC Industries 6,815
77,200 Dallas Semiconductor 1,834
108,000 Megatest Corp. 2,606 (2)
23,000 Oak Industries 681 (2)
22,500 Orbit Semiconductor 436 (2)
150,000 Pioneer Standard
Electronics 3,863
52,000 SCI Systems 1,612 (2)
-------------
17,847
-------------
ENERGY (8.3%)
188,000 Aquila Gas Pipeline 1,809
800,000 Coho Energy 3,900 (2)
134,200 Cross Timbers Oil 1,963
247,000 Offshore Logistics 3,396 (2)
56,000 Zeigler Coal Holding 707
-------------
11,775
-------------
ENTERTAINMENT (2.0%)
115,000 Bally Entertainment 1,394 (2)
60,300 Casino Data Systems 1,508
-------------
2,902
-------------
</TABLE>
47
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
INDUSTRIAL & COMMERCIAL
PRODUCTS & SERVICES (21.2%)
105,000 Alamo Group $ 1,877
125,000 AMTROL, Inc. 2,094
42,100 Dionex Corp. 2,137 (2)
72,100 Holophane Corp. 1,983 (2)
33,200 Juno Lighting 583
47,000 Kaydon Corp. 1,434
40,000 Libbey Inc. 910
127,400 Material Sciences 2,452 (2)
127,800 NN Ball & Roller 2,428
109,000 Reynolds & Reynolds 3,502
28,000 Roper Industries 952
72,900 U.S. Can 929 (2)
49,100 W.H. Brady 3,584
45,600 Watts Industries 1,129
55,000 Wolverine Tube 2,145 (2)
145,750 Woodhead Industries 2,059
-------------
30,198
-------------
INSURANCE (5.4%)
66,000 American Heritage
Life 1,328
120,000 Gryphon Holdings 1,740 (2)
46,000 Guaranty National 811
150,200 Mid-South Insurance 2,103
40,000 Orion Capital 1,680
-------------
7,662
-------------
MACHINERY & EQUIPMENT (1.6%)
39,600 Allied Products 856
48,300 Graco Inc. 1,479
-------------
2,335
-------------
METALS (7.4%)
135,000 Alumax Inc. 4,607 (2)
29,900 Cleveland-Cliffs 1,353
92,800 Commonwealth
Aluminum 2,250
128,500 Kentucky Electric
Steel 1,269 (2)
105,000 Steel of West
Virginia 971 (2)
-------------
10,450
-------------
MINING (0.5%)
40,000 INDRESCO Inc. 670 (2)
-------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
OFFICE EQUIPMENT (3.5%)
174,400 DH Technology $ 5,014 (2)
-------------
PUBLISHING & BROADCASTING
(5.7%)
86,000 Central Newspapers 2,440
60,000 Houghton Mifflin 2,933
65,000 McClatchy Newspapers 1,454
26,250 Pulitzer Publishing 1,273
-------------
8,100
-------------
RETAILING (1.8%)
135,000 Carr-Gottstein Foods 894 (2)
59,500 Schultz Sav-O Stores 1,733
-------------
2,627
-------------
TEXTILES & APPAREL (1.8%)
51,050 Kellwood Co. 1,072
33,000 St. John Knits 1,460
-------------
2,532
-------------
TRANSPORTATION, SHIPPING &
FREIGHT (3.8%)
52,250 Air Express
International 1,189
120,000 Harmon Industries 2,385
233,600 Maritrans Inc. 1,372
24,300 TNT Freightways 504
-------------
5,450
-------------
TOTAL COMMON STOCKS
(COST $108,413) 141,999
-------------
TOTAL INVESTMENTS
(99.9%) (COST
$108,413) 141,999 (5)
Cash, receivables
and other assets,
less liabilities
(0.1%) 161
-------------
TOTAL NET ASSETS
(100.0%) $ 142,160
-------------
</TABLE>
48
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Guardian Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. CITICORP 2.3%
2. Texas Instruments 2.2%
3. Chrysler Corp. 2.1%
4. Micron Technology 1.8%
5. Federal National Mortgage Association 1.8%
6. Foundation Health 1.7%
7. AT&T Corp. 1.6%
8. Capital Cities/ABC 1.5%
9. Comcast Corp. Class A Special 1.4%
10. Intel Corp. 1.3%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (85.5%)
AEROSPACE (0.6%)
400,000 Boeing Co. $ 25,500
------------
AUTOMOTIVE (4.1%)
1,800,000 Chrysler Corp. 96,975
1,446,000 Ford Motor 44,284
992,000 General Motors 46,624
------------
187,883
------------
BANKING (6.2%)
982,600 Bank of Boston 43,235
1,600,000 CITICORP 106,200
680,000 First Fidelity
Bancorporation 44,455
252,000 First Tennessee
National 13,356
880,000 Signet Banking 22,990
307,000 Wells Fargo 57,217
------------
287,453
------------
CONSUMER GOODS & SERVICES
(3.6%)
213,300 Anheuser Busch 12,185
1,082,200 Fruit of the Loom 25,432 (2)
590,000 Kellwood Co. 12,390
437,500 Mattel Inc. 12,687
318,000 Nike, Inc. 29,455
2,205,600 Owens-Illinois 30,051 (2)
1,000,000 PepsiCo, Inc. 45,250
------------
167,450
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
DRUGS (2.2%)
430,000 Johnson & Johnson $ 29,670
496,000 Pfizer, Inc. 24,490
470,000 Schering-Plough 21,914
500,000 Zeneca Group ADR 25,875
------------
101,949
------------
FINANCIAL SERVICES (11.2%)
212,241 Alleghany Corp. 35,922 (2)
1,409,000 Capital One
Financial 36,634
2,292,800 Countrywide
Credit
Industries 50,441
849,600 Dean Witter,
Discover 43,329
700,000 Federal Home Loan
Mortgage 44,975
880,000 Federal National
Mortgage
Association 83,930
979,800 First USA 45,071
1,100,500 MBNA Corp. 39,068
835,000 Merrill Lynch 48,117
652,300 MGIC Investment 36,529
400,000 Reuters Holdings
ADR 20,950
510,000 Security Capital
Industrial Trust 8,160
1,040,000 Spieker
Properties 22,360
------------
515,486
------------
FOREST PRODUCTS & PAPER (6.2%)
390,000 Caraustar
Industries 8,458
550,000 Georgia-Pacific 49,500
503,700 Mead Corp. 30,914
676,300 Rayonier Inc. 25,953
315,000 Riverwood
International 8,190
2,200,000 Stone Container 47,850
825,000 Temple-Inland 42,694
400,000 Union Camp 22,750
737,000 Willamette
Industries 50,669
------------
286,978
------------
HEALTH CARE (4.6%)
2,230,000 Foundation Health 77,213 (2)
2,515,000 Humana Inc. 45,899 (2)
1,175,000 U.S. Healthcare 37,600
</TABLE>
49
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Guardian Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
600,000 United Healthcare $ 25,350
849,000 Wellpoint Health
Networks 25,258(2)
------------
211,320
------------
HEAVY INDUSTRY (3.3%)
40,000 Asea AB ADR 3,535
11,830 Asea Brown Boveri
(Ordinary
Shares) 12,478
2,765,000 Coltec Industries 41,475 (2)
700,000 Rockwell
International 31,325
872,600 Tenneco Inc. 42,321
450,000 Varity Corp. 20,475 (2)
------------
151,609
------------
INDUSTRIAL GOODS & SERVICES
(1.9%)
1,250,200 American Standard 34,537 (2)
629,100 Eaton Corp. 34,050
515,000 Goodyear Tire &
Rubber 20,600
------------
89,187
------------
INSURANCE (4.6%)
520,000 American
International
Group 41,925
292,500 Chubb Corp. 26,690
930,900 FHP International 23,040 (2)
233,000 General Re 34,630
763,000 National Re 24,225
263,500 Transatlantic
Holdings 18,445
880,000 Travelers Group 42,240
------------
211,195
------------
MEDIA & ENTERTAINMENT (8.2%)
870,000 A.H. Belo 30,559
608,500 Capital
Cities/ABC 69,977
100,000 Comcast Corp.
Class A 2,125
3,000,000 Comcast Corp.
Class A Special 64,125
400,000 Gannett Co. 21,400
173,400 Gaylord
Entertainment 4,812
820,000 Harcourt General 34,132
563,400 Jones Intercable
Inc. Class A 7,958 (2)
194,800 Omnicom Group 12,224
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
401,700 R.R. Donnelley $ 15,265
1,050,000 Time Warner 44,231
750,000 Times Mirror 22,969
682,000 United
International
Holdings 12,191(2)
900,000 Vodafone Group
ADR 37,687
------------
379,655
------------
MISCELLANEOUS (1.0%)
935,000 Cyprus Amax
Minerals 26,180
60,200 Fleetwood
Enterprises 1,181
360,000 Minnesota Mining
& Manufacturing 19,665
------------
47,026
------------
OIL & GAS (5.6%)
258,008 British Petroleum
ADS 23,253
219,200 Coastal Corp. 7,179
491,000 Kerr-McGee 27,005
360,000 MAPCO Inc. 19,215
750,500 Norsk Hydro ADS 31,709
1,100,000 Parker & Parsley
Petroleum 23,512
832,900 Seagull Energy 16,762 (2)
1,500,000 Unocal Corp. 43,687
950,000 Vastar Resources 29,688
600,000 Western Atlas 27,225 (2)
565,500 Zeigler Coal
Holding 7,139
------------
256,374
------------
RETAIL (2.0%)
1,465,000 Fingerhut Cos. 22,891
470,000 Gap Inc. 15,099
29,400 Limited, Inc. 544
510,000 May Department
Stores 21,611
1,252,700 Toys "R" Us 32,570 (2)
------------
92,715
------------
STEEL (0.8%)
553,100 AK Steel Holding 17,630 (2)
600,000 USX-U.S. Steel 19,650
------------
37,280
------------
</TABLE>
50
<PAGE>
August 31, 1995
- --------------------------------------------------------------------------------
Guardian Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
TECHNOLOGY (14.0%)
465,000 Applied Materials $ 48,360 (2,3)
700,000 Arrow Electronics 37,975 (2)
460,000 Avnet, Inc. 23,690
250,000 Bay Networks 11,875 (2)
1,075,000 Compaq Computer 51,331 (2)
1,150,000 Digital Equipment 48,013 (2)
107,000 Hewlett-Packard 8,560
950,000 Intel Corp. 58,306
1,100,000 Micron Technology 84,563
1,719,900 National
Semiconductor 48,587 (2)
675,000 Perkin-Elmer 23,034
900,000 Philips
Electronics 40,500
1,100,000 Sequent Computer
Systems 25,988 (2)
788,500 Stratus Computer 22,078 (2)
1,360,000 Texas Instruments 101,830
100,000 Xerox Corp. 12,075 (3)
------------
646,765
------------
TELECOMMUNICATIONS (0.8%)
1,100,000 Airtouch
Communications 35,750 (2)
------------
TELEPHONE UTILITIES (1.6%)
1,340,000 AT&T Corp. 75,710
------------
TRANSPORTATION (3.0%)
800,000 Canadian Pacific 13,500
63,400 Conrail Inc. 4,264
524,700 Consolidated
Freightways 13,576
490,000 CSX Corp. 40,425
328,000 Delta Air Lines 24,395 (3)
650,000 Union Pacific 42,575
------------
138,735
------------
TOTAL COMMON
STOCKS (COST
$2,807,276) 3,946,020
------------
PREFERRED STOCKS (0.5%)
250,000 FHP
International,
5% 6,094
250,000 Philippine Long
Distance Cv.,
7%, GDS 14,500
------------
TOTAL PREFERRED
STOCKS (COST
$18,149) 20,594
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Principal (000's
Amount omitted)
- ----------- ------------
<C> <S> <C>
CONVERTIBLE BONDS (0.9%)
$ 8,750,000 AMR Corp., Cv.
Deb., 6.125%,
due 11/1/24 $ 8,816
7,840,000 IntelCom Group,
Cv. Sub. Notes,
8.00%, due
9/17/98 6,795 (6)
15,000,000 International
CableTel Inc.,
Cv. Sub. Notes,
7.25%, due
4/15/05 17,250
5,649,000 Time Warner, Sub.
Cv. Deb., 8.75%,
due 1/10/15 5,868
------------
TOTAL CONVERTIBLE
BONDS (COST
$35,871) 38,729
------------
U.S. TREASURY SECURITIES (15.8%)
$ 725,210,000 U.S. Treasury
Bills, 5.25% -
5.72%, due
9/7/95 - 2/22/96 713,171
15,000,000 U.S. Treasury
Notes, 8.00%,
due 5/15/01 16,331
------------
TOTAL U.S.
TREASURY
SECURITIES (COST
$727,889) 729,502
------------
SHORT-TERM CORPORATE NOTES (0.0%)
$ 1,500,000 General Electric
Capital Corp.,
5.60%, due
9/1/95 (COST
$1,500) 1,500 (4)
------------
TOTAL INVESTMENTS
(102.7%) (COST
$3,590,685) 4,736,345 (5)
Liabilities, less
cash,
receivables and
other assets
[(2.7%)] (123,149 )
------------
TOTAL NET ASSETS
(100.0%) $ 4,613,196
------------
</TABLE>
51
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Manhattan Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. Micron Technology 3.0%
2. Harrah's Entertainment 2.7%
3. CITICORP 2.7%
4. Wells Fargo 2.6%
5. Texas Instruments 2.3%
6. Motorola, Inc. 2.2%
7. United Healthcare 2.2%
8. GTECH Holdings 2.2%
9. SAP AG 2.0%
10. Intel Corp. 1.9%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (100.0%)
BUSINESS SERVICES (2.2%)
225,000 Staples Inc. $ 5,766 (2)
230,000 Viking Office
Products 8,280 (2)
-------------
14,046
-------------
CHEMICALS (1.0%)
114,000 Hercules Inc. 6,341
-------------
COMMUNICATIONS (9.9%)
220,000 Airtouch
Communications 7,150 (2)
5,720,000 Australis Media 3,354 (2)
245,000 CIDCO Inc. 8,575 (2)
490,000 Comcast Corp. Class
A Special 10,474
35,000 Mannesmann AG ADR 11,043
330,000 Tele-Communications,
Inc. Class A 6,105 (2)
82,500 Tele-Communications,
Inc. Class A
Liberty Media
Group 2,191 (2)
130,000 Time Warner 5,476
230,000 Vodafone Group ADR 9,631
-------------
63,999
-------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
CONSUMER GOODS & SERVICES (11.8%)
450,000 Authentic Fitness $ 9,956
260,000 CUC International 8,872 (2)
185,000 Franklin Quest 4,278 (2)
310,000 Industrie Natuzzi
ADR 10,850
130,000 Jones Apparel Group 4,517 (2)
250,000 Luxottica S.p.A.
ADR 11,438
249,000 Nine West 10,614 (2)
90,000 Philip Morris 6,716
465,000 Supercuts Inc. 4,447 (2)
150,000 Timberland Co. 4,369 (2)
-------------
76,057
-------------
DRUGS & HEALTH CARE (9.9%)
60,000 Columbia/HCA
Healthcare 2,820
490,000 Coventry Corp. 9,739 (2)
130,000 Foundation Health 4,501 (2)
460,000 Humana Inc. 8,395 (2)
125,000 PacifiCare Health
Systems Class B 7,156 (2)
110,000 R.P. Scherer 4,730 (2)
155,000 Teva Pharmaceutical
ADR 5,871
210,000 U.S. Healthcare 6,720
335,000 United Healthcare 14,154
-------------
64,086
-------------
ENTERTAINMENT (10.7%)
358,000 Argosy Gaming 5,101 (2)
200,000 Circus Circus
Enterprises 6,550 (2)
480,000 GTECH Holdings 13,920 (2)
555,000 Harrah's
Entertainment 17,691 (2)
367,500 Players
International 7,763 (2)
390,000 Promus Hotel 8,044 (2)
440,000 Showboat, Inc. 10,120
-------------
69,189
-------------
FINANCIAL SERVICES (16.1%)
120,000 Bankers Trust New
York 8,265
300,000 Bear Stearns 6,187
430,000 Capital One
Financial 11,180
265,000 CITICORP 17,589
</TABLE>
52
<PAGE>
August 31, 1995
- --------------------------------------------------------------------------------
Manhattan Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
205,000 Finova Group $ 8,354
225,000 First USA 10,350
250,000 MBNA Corp. 8,875
125,000 Morgan Stanley
Group 10,859
220,000 Signet Banking 5,747
90,000 Wells Fargo 16,774
-------------
104,180
-------------
HOME BUILDERS (0.7%)
368,000 Schuler Homes 4,370 (2)
-------------
INSURANCE (8.5%)
190,000 ACE Ltd. 5,843
67,500 American
International
Group 5,442
155,000 Delphi Financial
Group 2,790 (2)
100,000 EXEL Ltd. 5,500
36,000 General Re 5,351
420,000 Life Partners Group 7,507
380,000 Penncorp Financial
Group 8,645
275,000 Sphere Drake
Holdings 4,675
129,400 Transatlantic
Holdings 9,058
-------------
54,811
-------------
PAPER (1.5%)
565,000 Abitibi-Price 9,464
-------------
RESTAURANTS (6.1%)
320,000 Au Bon Pain 2,880 (2)
350,000 Cheesecake Factory 10,019 (2)
425,000 HomeTown Buffet 5,047 (2)
395,000 IHOP Corp. 10,122 (2)
430,000 Sonic Corp. 8,815 (2)
404,000 Spaghetti Warehouse 2,172 (2,7)
-------------
39,055
-------------
RETAILING (7.9%)
220,000 Circuit City Stores 7,590
265,000 General Nutrition 11,064 (2)
350,000 Lechters Inc. 3,675 (2)
305,000 Price/Costco 5,147 (2)
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
440,000 Revco D.S. $ 8,690(2)
230,000 Rite Aid 6,440
330,000 Sports & Recreation 3,919(2)
295,000 Tops Appliance City 1,327(2)
180,000 Waban Inc. 3,397(2)
-------------
51,249
-------------
TECHNOLOGY (13.5%)
165,000 H & R Block 6,435
200,000 Intel Corp. 12,275
250,000 Micron Technology 19,219
190,000 Motorola, Inc. 14,203
86,000 SAP AG 13,098
340,000 Sensormatic
Electronics 7,140
200,000 Texas Instruments 14,975
-------------
87,345
-------------
TRANSPORTATION (0.2%)
50,000 RailTex Inc. 1,075 (2)
-------------
TOTAL COMMON STOCKS
(COST $488,468) 645,267
-------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
U.S. TREASURY SECURITIES (2.2%)
$14,684,000 U.S. Treasury
Bills, 5.27% -
5.63%, due 9/7/95
- 2/15/96 (COST
$14,491) 14,495
-------------
TOTAL INVESTMENTS
(102.2%) (COST
$502,959) 659,762 (5)
Liabilities, less
cash, receivables
and other assets
[(2.2%)] (14,356 )
-------------
TOTAL NET ASSETS
(100.0%) $ 645,406
-------------
</TABLE>
53
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. Progressive Corp. 2.8%
2. EXEL Ltd. 2.7%
3. Georgia-Pacific 2.5%
4. Time Warner 2.5%
5. Comcast Corp. Class A Special 2.4%
6. Revco D.S. 2.4%
7. Texas Instruments 2.3%
8. W.R. Grace 2.1%
9. CITICORP 2.0%
10. Columbia/HCA Healthcare 2.0%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (95.9%)
AEROSPACE (1.6%)
425,000 Lockheed Martin $ 25,872
------------
AUTOMOBILE MANUFACTURING (1.7%)
500,000 Chrysler Corp. 26,938
------------
BANKING & FINANCIAL SERVICES (8.0%)
38,800 Bank of New York 1,688
300,000 BankAmerica Corp. 16,950
700,000 Capital One
Financial 18,200
500,000 CITICORP 33,187
900,000 Countrywide Credit
Industries 19,800
400,000 First USA 18,400
301,000 Household
International 16,894
101,500 Unidanmark A/S 4,633
------------
129,752
------------
BUILDING, CONSTRUCTION &
REFURNISHING (2.8%)
679,600 Lennar Corp. 13,167
1,180,000 USG Corp. 32,008 (2)
------------
45,175
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
CHEMICALS (3.8%)
445,000 duPont $ 29,092
500,000 W.R. Grace 33,312
------------
62,404
------------
COMMUNICATIONS (0.9%)
350,000 Vodafone Group ADR 14,656
------------
DIVERSIFIED (5.3%)
770,000 Harley-Davidson 21,368
230,800 Kansas City
Southern
Industries 10,155
99,700 Mannesmann AG ADR 31,455
253,000 Monsanto Co. 24,003
------------
86,981
------------
ELECTRONICS (3.0%)
40,000 Advanced Micro
Devices 1,350
509,000 Loral Corp. 27,867
450,000 Raychem Corp. 19,744
------------
48,961
------------
ENTERTAINMENT (7.2%)
570,000 Harrah's
Entertainment 18,169 (2)
300,000 King World
Productions 11,400 (2)
900,000 Mirage Resorts 30,938 (2)
750,300 Royal Caribbean
Cruises 16,225
955,400 Time Warner 40,246
------------
116,978
------------
FOOD & DRUG STORES (2.4%)
1,940,000 Revco D.S. 38,315 (2)
------------
FOOD & TOBACCO (4.3%)
500,000 American Brands 21,000
265,000 Ralston-Purina
Group 13,780
</TABLE>
54
<PAGE>
August 31, 1995
- --------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
774,280 RJR Nabisco
Holdings $ 22,067
500,000 Tyson Foods 12,875
------------
69,722
------------
HEALTH CARE (5.3%)
736,700 Alza Corp. 17,497 (2)
350,000 Biogen, Inc. 19,162 (2)
700,000 Columbia/HCA
Healthcare 32,900
925,000 Humana Inc. 16,881 (2)
------------
86,440
------------
INDUSTRIAL GOODS & SERVICES (6.8%)
642,500 AK Steel Holding 20,480 (2)
125,000 Crown Cork & Seal 5,625 (2)
500,000 Goodyear Tire &
Rubber 20,000
1,700,000 LTV Corp. 26,562 (2)
1,425,000 Owens-Illinois 19,416 (2)
400,000 XTRA Corp. 17,700
------------
109,783
------------
INSURANCE (9.0%)
97,800 20th Century
Industries 1,540 (2)
1,091,700 Equitable Cos. 28,111
800,000 EXEL Ltd. 44,000
624,875 Orion Capital 26,245
1,036,500 Progressive Corp. 45,995
------------
145,891
------------
MEDIA (3.1%)
519,700 American Media 3,118
7,107,000 Australis Media 4,168 (2)
1,800,000 Comcast Corp.
Class A Special 38,475
306,000 Videotron Holdings
ADS 4,475 (2)
------------
50,236
------------
MINING (1.0%)
2,800,000 Freeport-McMoRan 15,750
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
OIL & GAS (6.5%)
525,000 Apache Corp. $ 15,291
400,000 Noble Affiliates 11,050
400,000 Occidental
Petroleum 8,700
635,300 Reading & Bates 7,703(2)
340,000 Sonat Offshore
Drilling 11,645
462,000 Tejas Gas 22,984(2)
78,200 Triton Energy 4,145(2)
450,000 Unocal Corp. 13,106
600,000 YPF Sociedad
Anonima ADS 10,575
------------
105,199
------------
PAPER & FOREST PRODUCTS (5.5%)
555,800 Asia Pacific
Resources
International 4,933 (2)
1,036,100 Fort Howard 16,318 (2)
450,000 Georgia-Pacific 40,500
300,000 Louisiana Pacific 7,125
450,000 Scott Paper 20,869
------------
89,745
------------
PUBLISHING & BROADCASTING (1.2%)
378,500 Gannett Co. 20,250
------------
RAILROADS (0.8%)
200,000 Burlington
Northern 13,850
------------
REAL ESTATE (6.6%)
519,500 Beacon Properties 11,169
415,500 Crescent Real
Estate Equities 12,829
285,000 Glimcher Realty
Trust 5,985
467,300 Hospitality
Properties Trust 11,682
1,941,200 Host Marriott 22,324 (2)
316,700 Irvine Apartment
Communities 5,740
106,900 Security Capital
Pacific Trust 1,978
360,000 Simon Property
Group 8,865
</TABLE>
55
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
376,800 Starwood Lodging
Trust $ 10,032(2)
423,100 Vornado Realty
Trust 15,708
------------
106,312
------------
RETAILING (0.2%)
75,000 Harcourt General 3,122
------------
RETAILING & APPAREL (5.0%)
515,000 Ann Taylor Stores 9,978 (2)
1,750,000 Price/Costco 29,531 (2)
400,400 Sears, Roebuck 12,963
736,300 Stop & Shop 17,856 (2)
400,000 Toys "R" Us 10,400 (2)
------------
80,728
------------
TECHNOLOGY (3.9%)
150,000 Compaq Computer 7,163 (2)
500,000 Texas Instruments 37,437
920,000 Western Digital 18,975 (2)
------------
63,575
------------
TOTAL COMMON
STOCKS (COST
$1,296,136) 1,556,635
------------
PREFERRED STOCKS (1.1%)
3,000,000 RJR Nabisco, Ser.
C, Dep. Shares
(COST $20,141) 18,000
------------
WARRANTS (0.0%)
180,000 American Media,
Expire May 1,
1997 (COST $0) 11 (2)
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Units omitted)
- ---------- ------------
<C> <S> <C>
UNITS (0.0%)
34,000 Therapeutic
Discovery (Each
Unit consists of
1 share of
Therapeutic
Discovery and 1
Alza Corp.
Warrant) (COST
$206) $ 234 (2)
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
CONVERTIBLE BONDS (0.7%)
$9,301,205 Australis Media,
Cv. Deb. 6,293 (2)
4,500,000 Apache Corp., Cv.
Sub. Deb., 6.00%,
due 1/15/02 5,164 (6)
------------
TOTAL CONVERTIBLE
BONDS (COST
$11,683) 11,457
------------
U.S. TREASURY SECURITIES (1.4%)
$ 22,930,000 U.S. Treasury
Bills, 5.35% -
5.42%, due
9/28/95 - 1/11/96
(COST $22,635) 22,637
------------
SHORT-TERM CORPORATE NOTES (0.5%)
$7,600,000 General Electric
Capital Corp.,
5.60%, due 9/1/95
(COST $7,600) 7,600 (4)
------------
TOTAL INVESTMENTS
(99.6%) (COST
$1,358,401) 1,616,574 (5)
Cash, receivables
and other assets,
less liabilities
(0.4%) 6,952
------------
TOTAL NET ASSETS
(100.0%) $ 1,623,526
------------
</TABLE>
56
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Socially Responsive Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
HOLDING PERCENTAGE
<C> <S> <C>
1. Scott Paper 3.1%
2. CITICORP 3.1%
3. Tyco International 2.4%
4. Dun & Bradstreet 2.4%
5. Johnson & Johnson 2.4%
6. Raychem Corp. 2.3%
7. Procter & Gamble 2.2%
8. Morton International 2.1%
9. Price/Costco 2.1%
10. Cabot Corp. 2.0%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
COMMON STOCKS (96.5%)
ADVERTISING (2.0%)
30,000 Omnicom Group $ 1,882
-------------
AGRICULTURE (0.6%)
58,500 Mycogen Corp. 600 (2)
-------------
BANKING (5.7%)
45,000 CITICORP 2,987
60,000 Hawkeye
Bancorporation 1,504
24,700 Meridian Bancorp 991
-------------
5,482
-------------
BUSINESS SERVICES (4.1%)
42,000 Banta Corp. 1,648
40,000 Dun & Bradstreet 2,315
-------------
3,963
-------------
CHEMICALS (9.6%)
30,000 Air Products &
Chemicals 1,609
41,000 Cabot Corp. 1,973
47,000 Minerals
Technologies 1,704
64,000 Morton
International 2,080
57,100 Perkin-Elmer 1,948
-------------
9,314
-------------
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
CONSUMER GOODS & SERVICES (5.9%)
18,000 Marcus Corp. $ 567
30,500 Procter & Gamble 2,116
65,200 Scott Paper 3,024
-------------
5,707
-------------
DIVERSIFIED (2.4%)
39,800 Tyco International 2,353
-------------
ELECTRONICS (1.9%)
34,000 Arrow Electronics 1,844 (2)
-------------
ENERGY (3.4%)
65,000 Noble Affiliates 1,796
59,000 Tidewater Inc. 1,460
-------------
3,256
-------------
FINANCIAL SERVICES (4.9%)
20,000 Federal National
Mortgage
Association 1,907
20,000 First USA 920
40,000 Travelers Group 1,920
-------------
4,747
-------------
FOOD & BEVERAGE (2.0%)
97,000 Whitman Corp. 1,952
-------------
FURNISHINGS (2.0%)
40,000 Leggett & Platt 1,935
-------------
HEALTH CARE (5.7%)
30,000 Columbia/HCA
Healthcare 1,410
33,000 Johnson & Johnson 2,277
20,000 Warner-Lambert 1,807
-------------
5,494
-------------
INDUSTRIAL & COMMERCIAL
PRODUCTS (4.2%)
165,000 Intermet Corp. 1,836 (2)
51,100 Raychem Corp. 2,242
-------------
4,078
-------------
INSURANCE (7.2%)
63,000 Allmerica Property
& Casualty 1,520
17,000 Chubb Corp. 1,551
</TABLE>
57
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1995
- --------------------------------------------------------------------------------
Socially Responsive Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
76,600 Equitable Cos. $ 1,973
51,000 ReliaStar Financial 1,938
-------------
6,982
-------------
OIL & GAS (0.8%)
33,600 Enron Oil & Gas 781
-------------
PACKAGING & CONTAINERS (3.0%)
70,000 Rock-Tenn 1,234
63,000 Sonoco Products 1,693
-------------
2,927
-------------
PAPER & FOREST PRODUCTS (2.0%)
32,000 Mead Corp. 1,964
-------------
RECYCLING (1.2%)
58,000 IMCO Recycling 1,175
-------------
RESTAURANTS (1.5%)
80,000 Bob Evans Farms 1,430
-------------
RETAIL STORES (7.4%)
43,000 May Department
Stores 1,822
120,000 Price/Costco 2,025 (2)
70,000 Rite Aid 1,960
52,000 Toys "R" Us 1,352 (2)
-------------
7,159
-------------
TECHNOLOGY (5.3%)
40,000 Compaq Computer 1,910 (2)
24,000 Hewlett-Packard 1,920
21,000 Intel Corp. 1,289
-------------
5,119
-------------
TELECOMMUNICATIONS (12.7%)
50,000 Airtouch
Communications 1,625 (2)
32,500 AT&T Corp. 1,836
50,000 Globalstar
Telecommunication 775 (2)
40,000 Jones Intercable
Inc. Class A 565 (2)
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
77,000 MCI Communications $ 1,853
48,000 Southern New
England
Telecommunications 1,614
115,000 Tele-Communications
International 1,797(2)
69,000 Tele-Communications,
Inc. Class A 1,277(2)
17,250 Tele-Communications,
Inc. Class A
Liberty Media
Group 458(2)
15,000 WorldCom Inc. 505(2)
-------------
12,305
-------------
UTILITIES (1.0%)
36,000 Brooklyn Union Gas 905
-------------
TOTAL COMMON STOCKS
(COST $79,146) 93,354
-------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
- ---------
<C> <S> <C>
U.S. TREASURY SECURITIES (4.4%)
$4,270,000 U.S. Treasury
Bills, 5.18% -
5.42%, due 9/7/95
- 10/26/95 (COST
$4,249) 4,249 (4)
-------------
TOTAL INVESTMENTS
(100.9%) (COST
$83,395) 97,603 (5)
Liabilities, less
cash, receivables
and other assets
[(0.9%)] (856 )
-------------
TOTAL NET ASSETS
(100.0%) $ 96,747
-------------
</TABLE>
58
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
August 31, 1995
- ----------------------------------------------------------------------
Equity Managers Trust
1) Investment securities of each Portfolio are valued at the latest sales price;
securities for which no sales were reported, unless otherwise noted, are
valued at the mean between the closing bid and asked prices.
2) Non-income producing security.
3) The following securities were held in escrow at August 31, 1995 to cover
outstanding call options written:
<TABLE>
<CAPTION>
SECURITIES AND MARKET VALUE PREMIUM ON MARKET VALUE
NEUBERGER&BERMAN SHARES OPTIONS OF SECURITIES OPTIONS OF OPTIONS
----------- --------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
FOCUS PORTFOLIO 85,000 Applied $ 8,840,000 $ 737,316 $ 2,613,750
Materials
October 1995 @
75
GUARDIAN PORTFOLIO 465,000 Applied $48,360,000 $4,033,554 $14,298,750
Materials
October 1995 @
75
300,000 Delta Air Lines $22,312,500 $2,095,491 $ 1,650,000
October 1995 @
70
100,000 Xerox Corp. $12,075,000 $1,496,950 $ 1,125,000
January 1996 @
115
</TABLE>
4) At cost, which approximates market value.
5) At August 31, 1995, selected Portfolio information on a Federal income tax
basis was as follows:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
NEUBERGER&BERMAN COST APPRECIATION DEPRECIATION APPRECIATION
-------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
FOCUS PORTFOLIO $ 674,859,000 $ 311,258,000 $ 1,958,000 $ 309,300,000
GENESIS PORTFOLIO 108,476,000 35,617,000 2,094,000 33,523,000
GUARDIAN PORTFOLIO 3,591,009,000 1,166,002,000 20,666,000 1,145,336,000
MANHATTAN PORTFOLIO 502,959,000 182,546,000 25,743,000 156,803,000
PARTNERS PORTFOLIO 1,360,859,000 271,322,000 15,607,000 255,715,000
SOCIALLY RESPONSIVE PORTFOLIO 83,395,000 15,062,000 854,000 14,208,000
</TABLE>
6) Security exempt from registration under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration, normally
to qualified institutional buyers under Rule 144A. At August 31, 1995, these
securities amounted to $6,795,000 or .1% of net assets for Neuberger&Berman
Guardian Portfolio and $5,164,000 or .3% of net assets for Neuberger&Berman
Partners Portfolio.
7) Affiliated Issuer (see Note E of Notes to Financial Statements).
SEE NOTES TO FINANCIAL STATEMENTS
59
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
FOCUS GENESIS
(000'S OMITTED) PORTFOLIO PORTFOLIO
-------------------------------
<S> <C> <C>
ASSETS
Investments in securities, at market value*
(Notes A & E) -- see Schedule of
Investments:
Unaffiliated issuers $ 984,159 $ 141,999
Non-controlled affiliated issuers -- --
-------------------------------
984,159 141,999
Cash 96 178
Deferred organization costs (Note A) 25 6
Dividends and interest receivable 946 98
Other assets 11 5
Receivable for securities sold 5,747 389
-------------------------------
990,984 142,675
-------------------------------
LIABILITIES
Option contracts written, at market value
(Note A) 2,614 --
Payable for collateral on securities loaned
(Note A) 1,125 --
Payable for securities purchased 17,447 385
Payable to investment manager (Note B) 414 91
Accrued expenses 211 39
-------------------------------
21,811 515
-------------------------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL
INTERESTS $ 969,173 $ 142,160
-------------------------------
NET ASSETS consist of:
Paid-in capital $ 661,355 $ 108,574
Net unrealized appreciation in value of
investments 307,818 33,586
-------------------------------
NET ASSETS $ 969,173 $ 142,160
-------------------------------
*Cost of investments:
Unaffiliated issuers $ 674,465 $ 108,413
Non-controlled affiliated issuers -- --
-------------------------------
Total cost of investments $ 674,465 $ 108,413
-------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
60
<PAGE>
August 31, 1995
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
SOCIALLY
GUARDIAN MANHATTAN PARTNERS RESPONSIVE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments in securities, at market value*
(Notes A & E) -- see Schedule of
Investments:
Unaffiliated issuers $ 4,736,345 $ 657,590 $ 1,616,574 $ 97,603
Non-controlled affiliated issuers -- 2,172 -- --
-----------------------------------------------------------------
4,736,345 659,762 1,616,574 97,603
Cash 32 1,047 6 56
Deferred organization costs (Note A) 75 28 52 24
Dividends and interest receivable 6,930 241 2,742 135
Other assets 50 9 29 --
Receivable for securities sold 19,031 1,592 17,342 --
-----------------------------------------------------------------
4,762,463 662,679 1,636,745 97,818
-----------------------------------------------------------------
LIABILITIES
Option contracts written, at market value
(Note A) 17,074 -- -- --
Payable for collateral on securities loaned
(Note A) 68,061 14,254 -- --
Payable for securities purchased 61,722 2,583 12,439 998
Payable to investment manager (Note B) 1,692 284 663 44
Accrued expenses 718 152 117 29
-----------------------------------------------------------------
149,267 17,273 13,219 1,071
-----------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL
INTERESTS $ 4,613,196 $ 645,406 $ 1,623,526 $ 96,747
-----------------------------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 3,476,984 $ 488,603 $ 1,365,353 $ 82,539
Net unrealized appreciation in value of
investments 1,136,212 156,803 258,173 14,208
-----------------------------------------------------------------
NET ASSETS $ 4,613,196 $ 645,406 $ 1,623,526 $ 96,747
-----------------------------------------------------------------
*Cost of investments:
Unaffiliated issuers $ 3,590,685 $ 497,442 $ 1,358,401 $ 83,395
Non-controlled affiliated issuers -- 5,517 -- --
-----------------------------------------------------------------
Total cost of investments $ 3,590,685 $ 502,959 $ 1,358,401 $ 83,395
-----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
61
<PAGE>
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
FOCUS GENESIS
(000'S OMITTED) PORTFOLIO PORTFOLIO
---------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated issuers $ 10,468 $ 1,508
Interest income 1,097 77
Foreign taxes withheld (Note A) (14) --
---------------------------
Total income 11,551 1,585
---------------------------
Expenses:
Investment management fee (Note B) 3,758 1,135
Accounting fees 10 10
Amortization of deferred organization and
initial offering expenses (Note A) 9 2
Auditing fees 42 23
Custodian fees 172 79
Insurance expense 29 6
Legal fees 12 12
Trustees' fees and expenses 22 8
Miscellaneous 1 20
---------------------------
Total expenses 4,055 1,295
Fee waived by the investment manager (Note
B) -- (45)
---------------------------
Total net expenses 4,055 1,250
---------------------------
Net investment income 7,496 335
---------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
OPTION CONTRACTS WRITTEN
Net realized gain on investments sold in
unaffiliated issuers 50,502 6,666
Net realized gain on option contracts written
(Note A) 230 --
Change in net unrealized appreciation of
investments 139,750 17,448
---------------------------
Net gain on investments and option
contracts written 190,482 24,114
---------------------------
Net increase in net assets resulting from
operations $ 197,978 $ 24,449
---------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
62
<PAGE>
For the Year Ended August 31, 1995
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
SOCIALLY
GUARDIAN MANHATTAN PARTNERS RESPONSIVE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated issuers $ 51,872 $ 5,058 $ 20,126 $ 1,189
Interest income 17,135 344 2,770 269
Foreign taxes withheld (Note A) (107) (66) (63) --
----------------------------------------------------------------
Total income 68,900 5,336 22,833 1,458
----------------------------------------------------------------
Expenses:
Investment management fee (Note B) 14,274 2,832 6,830 431
Accounting fees 10 10 10 10
Amortization of deferred organization and
initial offering expenses (Note A) 26 10 18 7
Auditing fees 48 46 44 20
Custodian fees 533 178 292 42
Insurance expense 109 23 60 3
Legal fees 18 12 12 13
Trustees' fees and expenses 88 19 42 7
Miscellaneous 4 -- 1 --
----------------------------------------------------------------
Total expenses 15,110 3,130 7,309 533
Fee waived by the investment manager (Note
B) -- -- -- --
----------------------------------------------------------------
Total net expenses 15,110 3,130 7,309 533
----------------------------------------------------------------
Net investment income 53,790 2,206 15,524 925
----------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
OPTION CONTRACTS WRITTEN
Net realized gain on investments sold in
unaffiliated issuers 124,066 44,742 165,254 1,842
Net realized gain on option contracts written
(Note A) 328 -- -- --
Change in net unrealized appreciation of
investments 627,968 85,917 109,257 12,075
----------------------------------------------------------------
Net gain on investments and option
contracts written 752,362 130,659 274,511 13,917
----------------------------------------------------------------
Net increase in net assets resulting from
operations $ 806,152 $ 132,865 $ 290,035 $ 14,842
----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
63
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
FOCUS PORTFOLIO GENESIS PORTFOLIO
Year Year
Ended Ended
August 31, August 31,
(000'S OMITTED) 1995 1994 1995 1994
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 7,496 $ 6,947 $ 335 $ 229
Net realized gain (loss) on
investments sold and option
contracts written 50,732 38,653 6,666 5,489
Change in net unrealized
appreciation of investments 139,750 14,924 17,448 856
-------------------------------------------------------------
Net increase in net assets resulting
from operations 197,978 60,524 24,449 6,574
-------------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 157,842 74,559 34,636 38,613
Reductions (31,658) (64,027) (55,494) (25,172)
-------------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 126,184 10,532 (20,858) 13,441
-------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 324,162 71,056 3,591 20,015
NET ASSETS:
Beginning of year 645,011 573,955 138,569 118,554
-------------------------------------------------------------
End of year $ 969,173 $ 645,011 $ 142,160 $ 138,569
-------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
64
<PAGE>
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
GUARDIAN PORTFOLIO MANHATTAN PORTFOLIO PARTNERS PORTFOLIO
Year Year Year
Ended Ended Ended
August 31, August 31, August 31,
1995 1994 1995 1994 1995 1994
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 53,790 $ 34,374 $ 2,206 $ 2,739 $ 15,524 $ 9,370
Net realized gain (loss) on
investments sold and option
contracts written 124,394 26,444 44,742 25,341 165,254 87,647
Change in net unrealized
appreciation of investments 627,968 136,195 85,917 (9,119) 109,257 (24,098)
---------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 806,152 197,013 132,865 18,961 290,035 72,919
---------------------------------------------------------------------------------------------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS:
Additions 1,413,464 643,507 75,821 64,429 100,895 145,614
Reductions (86,756) (137,817) (85,015) (98,489) (107,688) (60,347)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
transactions in investors'
beneficial interests 1,326,708 505,690 (9,194) (34,060) (6,793) 85,267
---------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS 2,132,860 702,703 123,671 (15,099) 283,242 158,186
NET ASSETS:
Beginning of year 2,480,336 1,777,633 521,735 536,834 1,340,284 1,182,098
---------------------------------------------------------------------------------------------
End of year $ 4,613,196 $ 2,480,336 $ 645,406 $ 521,735 $ 1,623,526 $ 1,340,284
---------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
65
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS(Cont'd)
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
SOCIALLY RESPONSIVE
PORTFOLIO
Period from
March 14,
1994
(Commencement
of
Year Operations)
Ended to
August 31, August 31,
(000'S OMITTED) 1995 1994
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 925 $ 405
Net realized gain (loss) on
investments sold and option
contracts written 1,842 (779)
Change in net unrealized
appreciation of investments 12,075 2,133
-----------------------------
Net increase in net assets
resulting from operations 14,842 1,759
-----------------------------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS:
Additions 21,008 73,340
Reductions (9,789) (4,413)
-----------------------------
Net increase (decrease) in net
assets resulting from
transactions in investors'
beneficial interests 11,219 68,927
-----------------------------
NET INCREASE (DECREASE) IN NET
ASSETS 26,061 70,686
NET ASSETS:
Beginning of year 70,686 --
-----------------------------
End of year $ 96,747 $ 70,686
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
66
<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
- ----------------------------------------------------------------------
Equity Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Focus Portfolio ("Focus," formerly Neuberger&
Berman Selected Sectors Portfolio), Neuberger&Berman Genesis Portfolio
("Genesis"), Neuberger&Berman Guardian Portfolio ("Guardian"), Neuberger&
Berman Manhattan Portfolio ("Manhattan"), Neuberger&Berman Partners Portfolio
("Partners"), and Neuberger&Berman Socially Responsive Portfolio ("Socially
Responsive") (collectively, the "Portfolios") are separate series of Equity
Managers Trust ("Managers Trust"), a New York common law trust organized as
of December 1, 1992. Managers Trust is registered as a diversified, open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The trustees of Managers Trust changed the name of
Neuberger&Berman Selected Sectors Portfolio to Neuberger&Berman Focus
Portfolio, effective January 1, 1995. Socially Responsive commenced
operations on March 14, 1994. Other regulated investment companies sponsored
by Neuberger&Berman Management Incorporated ("Management"), whose financial
statements are not presented herein, also invest in Managers Trust.
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.
2) PORTFOLIO VALUATION: Investments are valued as indicated in the notes
following the Portfolios' schedule of investments.
3) FOREIGN CURRENCY TRANSLATION: The accounting records of the Portfolios are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars at the current rate of exchange of such currency against the U.S.
dollar to determine the value of investments, other assets and liabilities.
Purchase and sale prices of securities, and income and expenses are
translated into U.S. dollars at the prevailing rate of exchange on the
respective dates of such transactions.
4) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date and interest income, including accretion of discount on
short-term investments (adjusted for original issue discount, where
applicable), is recorded on the accrual basis. Realized gains and losses from
securities transactions are recorded on the basis of identified cost.
5) FEDERAL INCOME TAXES: Managers Trust intends to comply with the requirements
of the Internal Revenue Code of 1986, as amended. Each Portfolio of Managers
Trust also intends to conduct its operations so that each of its investors
will be able to qualify as a regulated investment company. Each Portfolio
will be treated as a partnership for Federal income tax purposes and is
therefore not subject to Federal income tax.
67
<PAGE>
6) FOREIGN TAXES: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
7) ORGANIZATION EXPENSES: Expenses incurred by each Portfolio in connection with
its organization are being amortized by each Portfolio on a straight-line
basis over a five-year period. At August 31, 1995, the unamortized balance of
such expenses amounted to $25,483, $5,616, $74,763, $28,451, $51,827, and
$23,870, for Focus, Genesis, Guardian, Manhattan, Partners, and Socially
Responsive, respectively.
8) EXPENSE ALLOCATION: The Portfolios bear all costs of operations. Expenses
incurred by Managers Trust with respect to any two or more Portfolios are
allocated in proportion to the net assets of such Portfolios, except where
another more appropriate allocation of expenses to each Portfolio can
otherwise be made fairly. Expenses directly attributable to a Portfolio are
charged to that Portfolio.
9) CALL OPTIONS: Premiums received by each Portfolio upon writing a covered call
option are recorded in the liability section of each Portfolio's Statement of
Assets and Liabilities and are subsequently adjusted to the current market
value. When an option expires, is exercised or is closed, the Portfolio
realizes a gain or loss and the liability is eliminated. A Portfolio
continues to bear the risk of a decline in the price of the security during
the period, although any potential loss during the period would be reduced by
the amount of the option premium received. In general, written call options
may serve as a partial hedge against decreases in value in the underlying
securities to the extent of the premium received. All securities covering
outstanding options are held in escrow by the custodian bank.
Summary of Option Transactions for the Year Ended August 31, 1995:
<TABLE>
<CAPTION>
VALUE WHEN
FOCUS NUMBER WRITTEN
- --------------------------------------------------------------------------------------
<S> <C> <C>
CONTRACTS OUTSTANDING 8/31/94 1,300 $ 229,822
CONTRACTS WRITTEN 850 737,316
CONTRACTS EXPIRED (1,300) (229,822)
CONTRACTS EXERCISED 0 0
CONTRACTS CLOSED 0 0
-----------------------
CONTRACTS OUTSTANDING 8/31/95 850 $ 737,316
-----------------------
</TABLE>
<TABLE>
<CAPTION>
VALUE WHEN
GUARDIAN NUMBER WRITTEN
- --------------------------------------------------------------------------------------
<S> <C> <C>
CONTRACTS OUTSTANDING 8/31/94 0 $ 0
CONTRACTS WRITTEN 14,900 9,316,065
CONTRACTS EXPIRED (1,500) (145,495)
CONTRACTS EXERCISED (2,800) (1,191,304)
CONTRACTS CLOSED (1,950) (353,271)
-----------------------
CONTRACTS OUTSTANDING 8/31/95 8,650 $7,625,995
-----------------------
</TABLE>
68
<PAGE>
10) SECURITY LENDING: Portfolio securities loans involve certain risks in the
event a borrower should fail financially, including delays or inability to
recover the lent securities or foreclose against the collateral. The
investment manager, under the supervision of Managers Trust's Board of
Trustees, monitors the creditworthiness of the parties to whom the
Portfolios make security loans. The Portfolios will not lend securities on
which covered call options have been written, or lend securities on terms
which would prevent each of their investors from qualifying as a regulated
investment company. Portfolio securities loans to Neuberger& Berman, L.P.
("Neuberger"), the Portfolios' principal broker, are made in accordance with
an exemptive order issued by the Securities and Exchange Commission under
the 1940 Act. The Portfolios receive cash as collateral against the lent
securities, which must be maintained at not less than 100% of the market
value of the lent securities during the period of the loan. The Portfolios
receive income earned on the lent securities and a portion of the income
earned on the cash collateral. During the year ended August 31, 1995, Focus,
Guardian, Manhattan, and Partners lent securities to Neuberger. At August
31, 1995, cash collateral received by Focus, Guardian, and Manhattan was
equal to or in excess of 100% of the market value of the loaned securities.
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
Each Portfolio retains Management as its investment manager under a
Management Agreement ("Agreement") dated as of August 2, 1993 (March 11, 1994
with respect to Socially Responsive). For such investment management services,
each Portfolio (except Genesis) pays 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. Genesis pays 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. Management has
voluntarily agreed to waive a portion of the management fee borne directly by
Genesis and indirectly by Neuberger&Berman Genesis Fund to reduce the fee by
0.10% per annum of average daily net assets of Genesis, effective May 1, 1995.
All of the capital stock of Management is owned by individuals who are also
general partners of Neuberger, a member firm of The New York Stock Exchange and
the sub-adviser to each Portfolio. Neuberger is retained by Management to
furnish it with investment recommendations and research information without cost
to each Portfolio. Several individuals who are officers and/or trustees of
Managers Trust are also partners of Neuberger and/or officers and/or directors
of Management.
69
<PAGE>
NOTE C -- SECURITIES TRANSACTIONS:
During the year ended August 31, 1995, there were purchase and sale
transactions (excluding short-term securities and option contracts written) as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- ---------------------------------------------------------------------
<S> <C> <C>
FOCUS $ 384,209,095 $ 257,077,856
GENESIS 48,526,111 66,075,856
GUARDIAN 1,670,608,244 761,251,870
MANHATTAN 234,114,169 240,387,171
PARTNERS 1,336,254,587 1,308,885,496
SOCIALLY RESPONSIVE 54,730,386 43,432,765
</TABLE>
During the year ended August 31, 1995, there were brokerage commissions on
securities paid to Neuberger and other brokers as follows:
<TABLE>
<CAPTION>
NEUBERGER OTHER BROKERS TOTAL
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
FOCUS $ 617,957 $ 413,288 $ 1,031,245
GENESIS 118,014 81,704 199,718
GUARDIAN 2,521,523 1,229,683 3,751,206
MANHATTAN 436,568 218,414 654,982
PARTNERS 3,092,789 1,515,367 4,608,156
SOCIALLY RESPONSIVE 95,964 42,414 138,378
</TABLE>
In addition, Neuberger's share of the total interest income earned for the
year ended August 31, 1995, from the collateralization of securities loaned to
or through Neuberger was $291,207, $1,252,190, $270,594, and $48,736, for Focus,
Guardian, Manhattan, and Partners, respectively.
NOTE D -- LINE OF CREDIT:
At August 31, 1995, Genesis had an unsecured $10,000,000 bank line of credit
with Morgan Guaranty Trust Company of New York ("Morgan") to be used only as a
temporary measure for extraordinary or emergency purposes. Borrowings under this
agreement bear interest at a rate based on the Morgan Bid Rate Program. For this
line of credit, Genesis has been assessed a facility fee of .2% of the available
line of credit. No compensating balances are required. There were no loans
outstanding pursuant to this line of credit at August 31, 1995, nor has Genesis
utilized the line of credit at anytime to date.
NOTE E -- MANHATTAN PORTFOLIO -- INVESTMENTS IN NON-CONTROLLED AFFILIATES*:
<TABLE>
<CAPTION>
BALANCE OF BALANCE OF
SHARES HELD SHARES HELD VALUE
AUGUST 31, GROSS PURCHASES GROSS SALES AUGUST 31, AUGUST 31,
NAME OF ISSUER: 1994 AND ADDITIONS AND REDUCTIONS 1995 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Spaghetti Warehouse 404,000 0 0 404,000 $2,172,000
*Affiliated issuers, as defined in the 1940 Act, include issuers in which the Portfolio held 5% or more of
the outstanding voting securities.
</TABLE>
70
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
FOCUS GENESIS
PORTFOLIO PORTFOLIO
Period from Period from
August 2, August 2,
1993 1993
Year Ended to August Year Ended to August
August 31, 31, August 31, 31,
1995 1994 1993 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .57% .58% .58%(1) %.94(2) .98% 1.07%(1)
------------------------------------------------------------------------
Net Investment Income 1.05% 1.16% 1.46%(1) %.25(2) .18% .37%(1)
------------------------------------------------------------------------
Portfolio Turnover Rate 36% 52% 4% % 37 63% 3%
------------------------------------------------------------------------
Net Assets, End of Year (in
millions) $969.2 $645.0 $574.0 $142.2 $138.6 $118.6
------------------------------------------------------------------------
</TABLE>
1) Annualized.
2) Had Management not waived a portion of the management fee, the annualized
ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
YEAR ENDED
GENESIS AUGUST 31, 1995
- -------------------------------------
<S> <C>
Expenses .97%
Net Investment
Income .22%
</TABLE>
71
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
GUARDIAN MANHATTAN
PORTFOLIO PORTFOLIO
Period from Period from
August 2, August 2,
1993 1993
Year Ended August to August Year Ended to August
31, 31, August 31, 31,
1995 1994 1993 1995 1994 1993
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .48% .50% .51%(1) .59% .59% .59%(1)
---------------------------------------------------------------------
Net Investment Income 1.72% 1.66% 2.45%(1) .42% .53% .55%(1)
---------------------------------------------------------------------
Portfolio Turnover Rate 26% 24% 3% 44% 50% 3%
---------------------------------------------------------------------
Net Assets, End of Year (in
millions) $4,613.2 $2,480.3 $1,777.6 $645.4 $521.7 $536.8
---------------------------------------------------------------------
</TABLE>
1) Annualized.
72
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
PARTNERS SOCIALLY RESPONSIVE
PORTFOLIO PORTFOLIO
Period from
March 14,
1994
Period from (Commencement
August 2, Year of
1993 Ended Operations)
Year Ended August to August August to
31, 31, 31, August 31,
1995 1994 1993 1995 1994
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .53% .54% .54%(1) .68% .69%(1)
----------------------------------------------------------
Net Investment Income 1.13% .75% 1.19%(1) 1.18% 1.33%(1)
----------------------------------------------------------
Portfolio Turnover Rate 98% 75% 8% 58% 14%
----------------------------------------------------------
Net Assets, End of Year (in
millions) $1,623.5 $1,340.3 $1,182.1 $96.7 $70.7
----------------------------------------------------------
</TABLE>
1) Annualized.
73
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Equity Managers Trust and
Owners of Beneficial Interest of
Neuberger&Berman Manhattan Portfolio and
Neuberger&Berman Socially Responsive Portfolio
We have audited the accompanying statements of assets and liabilities of
Neuberger&Berman Manhattan Portfolio and Neuberger&Berman Socially Responsive
Portfolio, including the schedules of investments, as of August 31, 1995, and
the related statements of operations for the year then ended, and the statements
of changes in net assets and the financial highlights for each of the periods
indicated. These financial statements and financial highlights are the
responsibility of the Portfolios' management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Neuberger&Berman Manhattan Portfolio and Neuberger&Berman Socially Responsive
Portfolio as of August 31, 1995, the results of their operations for the year
then ended, and the changes in their net assets and the financial highlights for
each of the periods indicated, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 6, 1995
74
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees
Equity Managers Trust and
Owners of Beneficial Interest of
Neuberger&Berman Focus Portfolio
Neuberger&Berman Genesis Portfolio
Neuberger&Berman Guardian Portfolio and
Neuberger&Berman Partners Portfolio
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the Neuberger&Berman Focus Portfolio,
Neuberger&Berman Genesis Portfolio, Neuberger&Berman Guardian Portfolio, and
Neuberger&Berman Partners Portfolio, four of the series comprising Equity
Managers Trust (the "Trust"), as of August 31, 1995, the related statements of
operations for the year then ended and the statements of changes in net assets
and financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995, by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above mentioned series of Equity Managers Trust at August 31, 1995, the
results of their operations for the year then ended and the changes in their net
assets and financial highlights for each of the periods indicated therein, in
conformity with generally accepted accounting principles.
[SIGNATURE]
Boston, Massachusetts /s/ ERNST & YOUNG LLP
September 29, 1995
75
<PAGE>
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
INDEPENDENT ACCOUNTANTS/AUDITORS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
Neuberger&Berman Management Inc., Neuberger&Berman Focus Fund, Neuberger&Berman
Genesis Fund, Neuberger&Berman Guardian Fund, Neuberger&Berman Manhattan Fund,
Neuberger&Berman Partners Fund, and Neuberger&Berman Socially Responsive Fund
are service marks of Neuberger&Berman Management Inc.
- -C- 1995 Neuberger&Berman Management Inc.
76
<PAGE>
OFFICERS AND TRUSTEES
Stanley Egener
CHAIRMAN OF THE BOARD AND TRUSTEE
Lawrence Zicklin
PRESIDENT AND TRUSTEE
Faith Colish
TRUSTEE
Donald M. Cox
TRUSTEE
Alan R. Gruber
TRUSTEE
Howard A. Mileaf
TRUSTEE
Edward I. O'Brien
TRUSTEE
John T. Patterson, Jr.
TRUSTEE
John P. Rosenthal
TRUSTEE
Cornelius T. Ryan
TRUSTEE
Gustave H. Shubert
TRUSTEE
Daniel J. Sullivan
VICE PRESIDENT
Michael J. Weiner
VICE PRESIDENT
Richard Russell
TREASURER
Claudia A. Brandon
SECRETARY
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
C. Carl Randolph
ASSISTANT SECRETARY
77
<PAGE>
Notice to Shareholders (Unaudited)
For Neuberger&Berman Guardian Fund 56% of the dividends distributed during
the fiscal year ended August 31, 1995 qualifies for the dividend received
deduction for corporate shareholders. The Fund will notify shareholders in
January 1996 of the applicable percentage of qualifying dividends for corporate
shareholders for use in preparing 1995 income tax returns.
78
<PAGE>
Neuberger&Berman Management Inc.
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
INSTITUTIONAL SERVICES
800.366.6264
Statistics and projections in this report are derived from sources
deemed to be reliable but cannot be regarded as a representation of
future results of the Funds. This report is prepared for the general infor-
mation of shareholders and is not an offer of shares of the Funds.
Shares are sold only through the currently effective prospectus, which
must precede or accompany this report.
PRINTED ON RECYCLED PAPER
(recycle logo) NBEFAR010895
WITH SOY BASED INKS
<PAGE>
