<PAGE>
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SEMI-ANNUAL REPORT
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February 29, 1996
NEUBERGER&BERMAN
EQUITY FUNDS -Registered Trademark-
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
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TABLE OF CONTENTS
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<CAPTION>
<S> <C>
THE FUNDS
CHAIRMAN'S LETTER 4
PERFORMANCE
HIGHLIGHTS 6
PORTFOLIO MANAGERS'
COMMENTARY
Focus Fund 7
Genesis Fund 9
Guardian Fund 11
Manhattan Fund 13
Partners Fund 16
Socially Responsive Fund 18
FINANCIAL STATEMENTS 20
FINANCIAL HIGHLIGHTS
PER SHARE DATA
Focus Fund 31
Genesis Fund 32
Guardian Fund 33
Manhattan Fund 34
Partners Fund 35
Socially Responsive Fund 36
THE PORTFOLIOS
SCHEDULE OF
INVESTMENTS
TOP TEN EQUITY
HOLDINGS
Focus Portfolio 41
Genesis Portfolio 43
Guardian Portfolio 45
Manhattan Portfolio 48
Partners Portfolio 51
Socially Responsive
Portfolio 54
FINANCIAL STATEMENTS 58
FINANCIAL HIGHLIGHTS 70
DIRECTORY 73
OFFICERS AND
TRUSTEES 74
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CHAIRMAN'S LETTER April 12, 1996
Dear Shareholder,
Over the six months ended February 29, 1996, the Dow Jones Industrial Average
surged from 4611 on August 31, 1995, to 5486 on February 29, 1996, an overall
rise topping 20%. Other leading indicators, including the S&P "500" Index, also
followed suit. Performance in overseas markets paled in comparison to the
strength of the U.S. stock market.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
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<CAPTION>
S&P "500" RUSSELL 2000
<S> <C> <C>
Mar-95 2.95% 1.72%
Apr-95 2.94% 2.22%
May-95 4.00% 1.72%
Jun-95 2.32% 5.19%
Jul-95 3.32% 5.76%
Aug-95 0.25% 2.07%
Sep-95 4.22% 1.79%
Oct-95 -0.36% -4.47%
Nov-95 4.39% 4.20%
Dec-95 1.93% 2.64%
Jan-96 3.40% -0.11%
Feb-96 0.93% 3.12%
</TABLE>
SOURCE: BLOOMBERG FINANCIAL SERVICES
Despite events such as the government office shutdowns and related budget
impasse, the aging equity bull market in the U.S. continued to take its cues
from non-political events. Stock fund investors, primarily baby boomers saving
for retirement, poured record amounts into mutual funds, including a
single-month milestone of $28.9 billion set in January. Continued low interest
rates kept stocks attractive to investors -- the Federal Reserve Board even
elected to lower interest rates another quarter point in January, amidst a
powerful rally.
By the end of the six-month period, however, the market environment became
more turbulent. This was primarily caused by a growing degree of individual
sector volatility -- especially among technology-related stocks.
4
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A number of bearish indicators surfaced towards the end of the six-month
period even though the stock market continued on an upward track overall. These
included: rising consumer debt, shrinking stock dividends and waning capital
goods orders. During most of the first quarter of this year, each new piece of
economic data contributed to volatile intra-day trading and more erratic stock
performance results than we witnessed in 1995. However, we will continue
building our portfolios as we always have -- with what we believe are
high-quality, solid companies whose stocks are good long-term investments.
Please read the following interviews to find out what factors affected your
portfolio manager's strategy over this report period. 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 Russell "2000" Index is an unmanaged index of U.S. stocks which have
market capitalizations ranging from $13 million to $275 million, and is a
popular measure of the stock price performance of small-cap companies.
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. Each Portfolio invests in many
securities not included in any of the above-described indices. Past performance
does not guarantee future results.
5
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PERFORMANCE HIGHLIGHTS
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<CAPTION>
FOR PERIODS
ENDED 3/31/96
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SIX MONTH
PERIOD AVERAGE ANNUAL TOTAL
NEUBERGER&BERMAN INCEPTION ENDED RETURNS(1)
EQUITY FUNDS DATE 2/29/96 1 YR 5 YR 10 YR
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<S> <C> <C> <C> <C> <C>
FOCUS FUND(2) 10/19/55 +4.39% +28.28% +17.23% +14.36%
GUARDIAN FUND 6/1/50 +4.74% +24.64% +16.49% +13.99%
MANHATTAN FUND 3/1/79(3) +3.52% +25.58% +14.60% +12.33%
PARTNERS FUND 1/20/75(3) +11.86% +33.88% +16.45% +13.05%
SOCIALLY RESPONSIVE FUND(4) 3/16/94 +17.51% +34.66% +17.81%(5) N/A
S&P "500"(6) N/A +15.32% +32.00% +14.62% +13.92%
GENESIS FUND(4) 9/27/88 +8.87% +32.46% +14.96% +13.27% (5)
RUSSELL 2000(6) N/A +7.12% +29.09% +16.01% N/A
</TABLE>
1) Average annual total returns for periods ended March 31, 1996. Includes
reinvestment of all dividends and capital gain distributions. The
Neuberger&Berman Equity Funds (except Socially Responsive Fund) were
reorganized in August, 1993. Performance and information for periods prior to
August, 1993 refer to the predecessors of the Funds. 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.
2) This 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 policies.
3) These dates reflect when Neuberger&Berman Management Inc. took over
management of the predecessors of these Funds.
4) Neuberger&Berman Management Inc. voluntarily bears certain operating expenses
in excess of 1.50% of average daily net assets of Neuberger&Berman Socially
Responsive Fund until December 31, 1996. Neuberger&Berman Management Inc. has
voluntarily agreed to waive a portion of the management fee borne directly by
Neuberger&Berman Genesis Portfolio and indirectly by Neuberger&Berman Genesis
Fund to reduce that fee by 0.10% of the Portfolio's average daily net assets.
Absent such reimbursement and waiver, the total returns for Socially
Responsive Fund and Genesis Fund for the above stated periods would have been
lower.
5) From inception.
6) The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. The Russell 2000 Index is an
unmanaged index consisting of the securities 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. The risks involved in seeking
capital appreciation from investments principally in companies with small
market capitalization are set forth in the prospectus. These data are derived
by Neuberger&Berman Management Inc. and include reinvestment of all dividends
and capital gain distributions. 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.
6
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PORTFOLIO MANAGERS' COMMENTARY
Neuberger&Berman
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Focus Fund
KENT SIMONS AND LAWRENCE MARX III -- PORTFOLIO CO-MANAGERS
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<S> <C>
Q. WHAT WAS YOUR INVESTMENT STRATEGY DURING THIS PERIOD?
A. During this six-month period, as in the past, we continued
our search for companies that were undervalued for reasons
we felt were temporary. We invested with those companies
that we identified as industry leaders. We say "companies"
as opposed to "stocks" because we consider the quality of
company management as important as the financial soundness
represented on the balance sheets. As a result, we met with
the managements of many of the companies in our Portfolio
over the period, and will continue to do so in the future.
Q. WHAT INDUSTRY SECTORS AND STOCKS HAD A SIGNIFICANT IMPACT ON
THE FUND'S PERFORMANCE?
A. Our financial and health care sectors did well because
investors feared a slowing economy would cause the corporate
earnings in other sectors to decline. Investors purchased
consumer non-durable stocks (such as food, health care, and
drug concerns) whose futures were less influenced by the
economy. Among those, our positions in U.S. Healthcare and
Humana did well. Moreover, the slowing economy led to lower
interest rates, which caused financial stocks to outperform
many other stocks. Federal National Mortgage Association
(FNMA), Travelers, and Penncorp Financial are examples of
financial issues which recorded strong share price
appreciation over this period.
Conversely, holdings in sectors such as electronics and
paper/forest products underperformed as investors became
concerned that the slowing economy might lead to earnings
disappointments. We felt that any such disappointments were
more than discounted in those companies' stock prices at the
end of the period. Nonetheless, our stock positions in these
sectors, such as National Semiconductor and Stone Container,
also declined in value.
</TABLE>
7
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Focus Fund (Cont'd)
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Q. WHAT IS AN EXAMPLE OF A STOCK YOU PURCHASED DURING THIS
PERIOD?
A. We bought PartnerRe for our financial sector weighting
because its price-to-earnings (P/E) ratio of 6 to 1 seemed
to us unusually low. This opinion was apparently shared by
the company, which announced a stock buyback of 10% of its
outstanding shares shortly after we added it to our
portfolio.
Q. WHAT ARE EXAMPLES OF STOCKS YOU SOLD DURING THIS PERIOD?
A. We sold Tenneco -- a diversified company with interests in
natural pipeline operations, auto parts, construction and
farm equipment, packaging products and
shipbuilding -- because we felt its earnings would come in
below generally-held expectations (which they did).
Tenneco's operations were affected by an increasingly less-
profitable energy business and weak paper prices.
We also sold our position in Intel, the top computer
processor manufacturer, after a long run-up in share price
through the first three quarters of 1995.
We initially bought First Fidelity Bancorp as a cheaper way
to buy First Union Corp. At the time of our purchase, North
Carolina-based First Union Corp. was in the process of
acquiring New Jersey-based First Fidelity. On January 2,
1996, their merger created the sixth largest bank in the
U.S. In the process, we got First Union Corp. stock in
exchange for our less-expensive First Fidelity shares. We
sold our position later that month, profitably.
</TABLE>
8
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PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
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Genesis Fund
JUDITH VALE -- PORTFOLIO MANAGER
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<S> <C>
Q. WHAT WAS YOUR INVESTMENT STRATEGY DURING THIS PERIOD?
A. The investment strategy continued to be a bottom-up, stock-
picking approach. That is, stocks were selected one by one,
based on their individual business characteristics and
valuation. We focused on buying what we believed were good
businesses, with favorable growth outlooks and above-average
financial returns, but whose stocks were selling at low
valuations.
Through the six-month period we witnessed significant
volatility and rapid sector rotation in the small-cap
universe. The Fund's strong performance was driven by
individual stock selection rather than overall sector
allocation.
Q. WHAT ARE SOME EXAMPLES OF STOCKS THAT HAD A SIGNIFICANT
IMPACT ON THE FUND'S PERFORMANCE?
A. Generally, stocks that produced good earnings gains also led
in performance contributions. Among the strong performers
were NN Ball & Roller, a niche manufacturer of precision
balls used in ball bearings, which benefited from increased
earnings and expanding market share. Reynolds & Reynolds, a
rapidly growing information systems company which sells
computer systems and forms to automotive dealers and health
care suppliers, was another top performer over the period.
Oakwood Homes, a highly successful provider of manufactured
housing, appreciated dramatically as investors realized its
increased earnings potential.
Two investments that lost value were the stocks of Harmon
Industries, which manufactures rail equipment for freight
railroads, and Material Sciences, which develops and
produces coated materials such as laminates and disc brake
noise dampers. Both companies showed declines due to
weaker-than-anticipated earnings.
</TABLE>
9
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Genesis Fund (Cont'd)
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<S> <C>
Q. WHAT ARE SOME EXAMPLES OF STOCKS YOU PURCHASED DURING THIS
PERIOD?
A. We instituted a new position in Lincoln Electric Class A, a
worldwide leader in arc welding products and integral
horsepower industrial electric motors. We were able to
purchase the shares at a very modest valuation because
cyclical stocks, that is, companies generally considered to
be negatively affected by a weakening economy, were out of
favor at the end of 1995. We also established positions in
Webster Financial, an inexpensive Connecticut thrift, and
Bush Boake Allen, a growing manufacturer of flavors and
fragrances.
Q. WHAT ARE SOME EXAMPLES OF STOCKS YOU SOLD DURING THIS
PERIOD?
A. Over the period, stocks such as Mid-South Insurance and
Megatest were profitably sold. Mid-South Insurance, a North
Carolina-based company that markets, underwrites and
services health, accident and life insurance policies, was
the object of a takeover. Megatest, a company that designs,
manufactures, markets, and services automatic test equipment
for the integrated circuit industry, was also sold during
the fall, when it agreed to be acquired by Teradyne. We also
eliminated our position in Kellwood Co., a global
manufacturer and marketer of apparel and recreational
camping products, due to ongoing disappointments in its core
business.
</TABLE>
10
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PORTFOLIO MANAGERS' COMMENTARY
Neuberger&Berman
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Guardian Fund
KENT SIMONS AND LAWRENCE MARX III -- PORTFOLIO CO-MANAGERS
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<S> <C>
Q. WHAT WAS YOUR INVESTMENT STRATEGY DURING THIS PERIOD?
A. Our investment strategy remained unchanged. We continued to
seek above-average companies whose stocks were selling at
below-average valuations. Since this was most likely to
occur in industries that had fallen out of favor with the
majority of investors, it was our job to make sure that the
factors which had caused the undervaluation were either
misperceptions or, at least, temporary. To do this we
utilized those analysts, both at N&B and elsewhere, that we
felt had the highest knowledge of the companies we were
interested in, as well as the information gained in our own
meetings with company managements.
Q. WHAT INDUSTRY SECTORS AND STOCKS HAD A SIGNIFICANT IMPACT ON
THE FUND'S PERFORMANCE?
A. Finance stocks benefited from a significant decline in
interest rates. Lower rates increased activity in the
mortgage markets, which benefited Federal National Mortgage
Association and Federal Home Loan Mortgage Corporation,
while Travelers Corp., with its wholly-owned subsidiary
Smith Barney, benefited from a rising stock market.
Our positions in health care, primarily HMO stocks, enjoyed
good appreciation as cost pressures in the first half of the
year subsided. Their improving earnings outlook was in
contrast to the overall market, where earnings prospects
diminished as the year progressed.
Paper and technology stocks, in contrast, were hurt by
investors' perceptions of a slowing economy's effect on
their earnings prospects. In this atmosphere Micron
Technology, Integrated Device and Applied Materials
suffered, while Champion International and Stone Container
in the paper industry also declined in value.
</TABLE>
11
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Guardian Fund (Cont'd)
<TABLE>
<S> <C>
Q. WHAT ARE EXAMPLES OF STOCKS YOU BOUGHT DURING THIS PERIOD?
A. We increased our position in First USA (one of the largest
credit card companies in the U.S.) because we felt the
weakness in the stock, brought on by fears of rising credit
delinquencies, was unjustified and ignored the company's
potential for long-term growth. First USA focuses
exclusively on credit cards, which has been one of the
fastest growing and most profitable segments of the
financial services industry. Similarly, we purchased more
Countrywide Credit because we believed that the company's
stock price did not reflect its dominant position in its
industry.
We also bought Tele-Communications Inc., a leading cable
company, as we believed it was well positioned to take
advantage of expanding worldwide communications, especially
now that potentially troubling regulatory issues have been
resolved.
Q. WHAT ARE EXAMPLES OF STOCKS YOU SOLD OVER THIS PERIOD?
A. We sold Times Mirror, a major information company. After
recovering from a 50% drop in the spring, the stock was
close to its 52 week high when we sold it. While we believe
Times Mirror under its new management will be a much
improved company, the stock, in our opinion, is no longer
undervalued.
We also sold Goodyear Tire & Rubber simply because we felt
we could obtain better earnings prospects at a similar price
earnings ratio, from other companies.
</TABLE>
12
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PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
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Manhattan Fund
MARK R. GOLDSTEIN -- PORTFOLIO MANAGER
<TABLE>
<S> <C>
Q. WHAT WAS YOUR INVESTMENT STRATEGY DURING THE PERIOD?
A. As always, we searched for growth at a reasonable price, but
only
paid that price if a company had strong growth,
above-average return on equity, excess cash flow generation,
a strong balance sheet (modest debt), and what we felt was
exceptional entrepreneurial management. We also had
managements of at least 10 companies come into our offices
each week to discuss their business strategies. We looked at
their operations, plans for the future, integrity, and
commitment to products and services that gave them a special
competitive advantage or a product that made their stocks
attractive.
Sector rotation continued to add to the market's volatility
over the past six months. Very slight variations from
earnings expectations could cause a specific sector to be
out of favor for several months. We tried to take advantage
of these apparently temporary disappointments in otherwise
rapidly-growing companies to initiate or add to existing
positions.
Going forward, we believe there may be a slowdown in
corporate earnings over the next year to a 5-10% growth
rate. Our major portfolio concentrations are in the
financial, health care, technology, communications and
entertainment sectors. We think the best growth versus
valuation equations are available in these industries.
Q. WHAT ARE SOME EXAMPLES OF SECTORS AND STOCKS THAT HAD A
SIGNIFICANT IMPACT ON THE FUND'S PERFORMANCE?
A. Our investments in the HMO industry began to deliver
superior returns over the past six months, as worries
regarding rising medical costs proved overdone. Early in
1995, the HMO industry suffered 20-35% declines in value due
to these concerns. Humana, PacifiCare and United HealthCare
were our major investments in
</TABLE>
13
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Manhattan Fund (Cont'd)
<TABLE>
<S> <C>
the HMO industry. Going forward, we think these companies
have growth potential for several years due to strong
subscriber increases, excellent cost control and industry
consolidation.
The financial sector was also an important contributor to
Portfolio returns, as the market began to recognize many
rapidly-growing companies with relatively low valuations.
Some of our best performers included Finova, a company in
the commercial finance business that we believe is
well-managed and entrepreneurial, ACE Ltd., a Bermuda-based
liability insurance company, and CITICORP, a capital-rich
worldwide financial powerhouse.
The two major areas of underperformance over the past six
months were technology and cellular telephones. Initially,
technology suffered from a pullback from its very strong
returns during the first nine months of 1995, then, from
worries regarding a slowdown in personal computer demand and
falling memory (such as RAM chips found in PCs) prices. Our
investments in Micron Technology and Texas Instruments
suffered the worst declines. We believe that Micron is one
of the world's most efficient producers of computer memory
with future growth potential. Texas Instruments has added
several proprietary product lines, such as digital
micromirror technology, which we expect will favorably
affect its valuation over time.
Cellular valuations have suffered recently due to a decline
in phone prices in the U.S. market and a slowdown in the
growth of demand from very high levels. Our major cellular
investments are Airtouch Communications and Vodafone, which
are operators of cellular systems and in our view, should
benefit from lower phone prices. Both companies had cash
flow growth of more than 25%, as well as foreign assets that
we believe are substantially undervalued.
</TABLE>
14
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Manhattan Fund (Cont'd)
<TABLE>
<S> <C>
Q. WHAT ARE SOME EXAMPLES OF STOCKS THAT YOU BOUGHT AND SOLD
DURING THIS PERIOD?
A. We initiated new positions in KLA Instruments, a
manufacturer of semiconductor equipment that has improved
factory output. Another new position is CKE Restaurants, the
operators of Carl Jr.'s, a West Coast-based fast food chain,
which has been experiencing a strong rebound in
profitability.
We eliminated positions in Circuit City, H & R Block, and
Jones Apparel since their stock prices appreciated to our
target levels. We sold Sensormatic because its growth
outlook had deteriorated.
</TABLE>
15
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PORTFOLIO MANAGERS' COMMENTARY
Neuberger&Berman
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Partners Fund
MICHAEL M. KASSEN AND ROBERT GENDELMAN -- PORTFOLIO CO-MANAGERS
<TABLE>
<S> <C>
Q. WHAT WAS YOUR INVESTMENT STRATEGY DURING THIS PERIOD?
A. Our investment strategy remained consistent during this
period as we attempted to identify strong companies whose
stock prices had come under selling pressure. We believe
that through exhaustive research we can identify these
undervalued stocks and be rewarded over time. We approach
new purchases as if we were buying a piece of the business,
not just a piece of paper. So as always, we focused our
attention on underlying business values. We did not employ
any market timing or sector rotation techniques, measures we
feel are counter-productive to our quest for long-term
growth.
Q. WHAT ARE SOME EXAMPLES OF STOCKS THAT HAD A SIGNIFICANT
IMPACT ON THE FUND'S PERFORMANCE?
A. Financial stocks fared well during this period due to a
strengthening bond market. Moreover, in the banking sector,
many companies were vastly overcapitalized and aggressively
repurchased their own stock. Our CITICORP holding was a
primary beneficiary of this trend, as was Bank of New York.
Health care stock performance was mixed as various proposals
out of Washington were publicized. In general, the need for
Medicare and Medicaid reform became the focus of investors'
attentions. Those companies that were able to demonstrate an
understanding of the pricing environment and cut overall
medical spending did well. Columbia/HCA Healthcare, the
nation's largest provider of health care services, profited
nicely from this focus and consolidation; it also benefited
from merger-related synergies. Other health care holdings in
the Portfolio, such as Humana and Ornda Healthcorp, showed
similar strength during the six-month period.
One sector that performed quite poorly during this period
was technology. Not only had many stocks appreciated
handsomely over the preceeding period, but pricing pressures
became evident. Specifically, memory pricing began to
decline for the first time in
</TABLE>
16
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Partners Fund (Cont'd)
<TABLE>
<S> <C>
years. This set off a chain reaction of negative news and
downgrades. Our holdings in Texas Instruments and Advanced
Micro Devices were affected. We sold the latter due to
specific company disappointments but took advantage of lower
prices to add to our Texas Instruments holdings.
Q. WHAT ARE SOME EXAMPLES OF STOCKS THAT YOU HAVE BOUGHT AND
SOLD DURING THIS PERIOD?
A. American Express was added during this period. The company
enjoys many characteristics that we look for in an
investment. In our judgment, it has excellent management and
significant market share, and is constantly attempting to
increase returns to shareholders (including a sizable share
repurchase over the period). American Express came under
some pressure as investors and analysts focused on potential
credit exposure in a weakening economy. We became confident
that steps were being taken to manage this exposure and, in
addition, leverage its very strong market position into new
product areas.
Viacom Inc. was also added to the Portfolio as investors'
concerns over closely-tied Blockbusters' results depressed
the stock price. We believe that many of the conditions that
caused the underperformance were "one time" in nature and
will improve as the year goes on. Moreover, other segments
of the company continued to do well and increased in value.
BankAmerica Corp. (the second largest U.S. bank holding
company) and Ralston-Purina Group (the world's largest
producer of dry dog and cat food, as well as dry cell
battery products such as Eveready and Energizer) were sold
from the Portfolio as their stocks reached their respective
target prices.
</TABLE>
17
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PORTFOLIO MANAGER'S COMMENTARY
Neuberger&Berman
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Socially Responsive Fund
JANET PRINDLE -- PORTFOLIO MANAGER
<TABLE>
<S> <C>
Q. WHAT HAS YOUR STRATEGY BEEN FOR THE LAST 6 MONTHS?
A. Over this period, we were faithful to our financial and
social
criteria, and our shareholders were amply rewarded. Our
financial strategy consisted of building the Portfolio one
stock at a time. We look for the stocks of companies whose
values are not yet recognized in the market, and will hold
them until we feel they are no longer undervalued or
something has changed in the fundamentals or the outlook.
Q. WHAT ARE SOME EXAMPLES OF STOCKS THAT HAVE POSITIVELY
AFFECTED THE PORTFOLIO'S PERFORMANCE?
A. When we analyzed the stocks that fared well over this
period, we noticed that many of them had been in our
Portfolio for some time. One case in point is Johnson &
Johnson, the health care conglomerate. It has continued to
appreciate, and we remain confident in management's ability
to deliver solid returns to shareholders. We will continue
to hold J&J as long as we are still positive about its
prospects. In addition to its excellent financial fundamen-
tals, J&J boasts an admirable social record. It is a good
example of a company that has increased productivity and
sales per employee, without resorting to massive layoffs.
Our Portfolio also benefited from the strong performance of
Perkin-Elmer, an important producer of electronic analytical
instruments for process industries and life sciences.
Perkin-Elmer had been delivering lackluster financial
results for years. When we purchased the stock in early
1995, we believed that the company was capable of delivering
better results and that the board and management had finally
focused on the need to do so. Last fall, new management was
installed. Very soon, the potential of welcome change became
clearer to other investors, thereby driving up
Perkin-Elmer's stock price. This is just one example of how
we invest in companies whose values are not recognized and
then wait patiently for Wall Street to notice.
</TABLE>
18
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Socially Responsive Fund (Cont'd)
<TABLE>
<S> <C>
From a social perspective, Perkin-Elmer has undertaken
several programs in environmental management and community
assistance. In addition to installing an extensive recycling
program, the company finds alternative uses for its
packaging, conserves energy with its popular car pooling
program, and promotes science education by donating
instruments to schools and universities.
Q. WHAT ARE SOME FACTORS THAT NEGATIVELY AFFECTED YOUR
PORTFOLIO?
A. Our exposure to technology stocks such as Arrow Electronics
depressed the Portfolio's performance, as did our exposure
to cyclical issues such as the major paper recyclers.
Nonetheless, we are still optimistic about the prospects of
these issues because we believe their stock prices still do
not reflect their true value.
Q. WHAT ARE SOME EXAMPLES OF STOCKS THAT YOU BOUGHT DURING THIS
PERIOD?
A. We recently bought Dexter, a specialty chemical company that
we believe is a financial turnaround situation. It is
selling its under-performing businesses and has initiated a
share buyback. On the environmental side, a large fine a few
years ago was taken as a wake-up call, and the company hired
a respected executive who has revamped its environmental
practices.
Over the period, we also purchased Stolt-Nielson, one of the
world's leading providers of transportation services for
bulk liquid chemicals. We believe the stock is very
reasonably priced, particularly in light of favorable
industry dynamics. This market segment has been
characterized by higher growth of demand versus supply and
the company has responded by increasing the number of
vessels it owns. On the social front, we were attracted to
Stolt-Nielson's strict adherence to environmental standards.
It has constantly exceeded legal requirements -- instead of
using just double-BOTTOMED tankers (as most shippers do),
for example, Stolt-Nielson employs double-SIDED tankers that
are far less vulnerable to spills.
</TABLE>
19
<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) $ 1,109,001 $127,716
Deferred organization costs (Note A) -- --
Prepaid expenses 27 3
Receivable for Trust shares sold 3,610 670
-----------------------
1,112,638 128,389
-----------------------
LIABILITIES
Payable for Trust shares redeemed 12,849 322
Payable to administrator -- net (Note B) 229 25
Accrued expenses 258 74
-----------------------
13,336 421
-----------------------
NET ASSETS at value $ 1,099,302 $127,968
-----------------------
NET ASSETS consist of:
Par value $ 38 $ 13
Paid-in capital in excess of par value 749,215 90,399
Accumulated undistributed net investment
income (loss) 2,598 (167)
Accumulated net realized gains on investment 17,060 852
Net unrealized appreciation in value of
investment 330,391 36,871
-----------------------
NET ASSETS at value $ 1,099,302 $127,968
-----------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 38,372 13,074
-----------------------
NET ASSET VALUE, offering and redemption price per
share $28.65 $9.79
-----------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
February 29, 1996 (Unaudited)
- ----------------------------------------------------------------------
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) $ 4,819,644 $ 614,506 $ 1,793,000 $ 16,049
Deferred organization costs (Note A) -- -- -- 48
Prepaid expenses 133 7 27 1
Receivable for Trust shares sold 19,474 1,991 2,970 72
-------------------------------------------------------------
4,839,251 616,504 1,795,997 16,170
-------------------------------------------------------------
LIABILITIES
Payable for Trust shares redeemed 13,425 513 724 --
Payable to administrator -- net (Note B) 988 128 368 4
Accrued expenses 1,039 327 403 30
-------------------------------------------------------------
15,452 968 1,495 34
-------------------------------------------------------------
NET ASSETS at value $ 4,823,799 $ 615,536 $ 1,794,502 $ 16,136
-------------------------------------------------------------
NET ASSETS consist of:
Par value $ 203 $ 48 $ 76 $ 1
Paid-in capital in excess of par value 3,622,831 451,679 1,413,254 13,480
Accumulated undistributed net investment
income (loss) 8,712 (638) 2,965 (1)
Accumulated net realized gains on investment 90,788 35,277 47,264 377
Net unrealized appreciation in value of
investment 1,101,265 129,170 330,943 2,279
-------------------------------------------------------------
NET ASSETS at value $ 4,823,799 $ 615,536 $ 1,794,502 $ 16,136
-------------------------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 203,055 48,359 76,491 1,189
-------------------------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $23.76 $12.73 $23.46 $13.57
-------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<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) $ 7,312 $ 597
-------------------------
Expenses:
Administration fee (Note B) 1,325 149
Amortization of deferred organization and
initial offering expenses (Note A) -- --
Auditing fees 4 4
Custodian fees 5 5
Legal fees 13 11
Registration and filing fees 85 21
Shareholder reports 71 21
Shareholder servicing agent fees 287 55
Trustees' fees and expenses 11 3
Miscellaneous 9 2
Expenses from corresponding Portfolio (Note
A) 2,759 493
-------------------------
Total expenses 4,569 764
Deduct -- expenses reimbursed by
administrator (Note B) -- --
-------------------------
Total net expenses 4,569 764
-------------------------
Net investment income (loss) 2,743 (167)
-------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND OPTION CONTRACTS WRITTEN FROM CORRESPONDING
PORTFOLIO (NOTE A)
Net realized gain on investments 17,863 1,870
Net realized loss on option contracts written (362) --
Change in net unrealized appreciation of
investments 24,187 8,314
-------------------------
Net gain on investments and option
contracts written from corresponding
Portfolio (Note A) 41,688 10,184
-------------------------
Net increase in net assets resulting from
operations $ 44,431 $ 10,017
-------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
For the Six Months Ended February 29, 1996 (Unaudited)
- ----------------------------------------------------------------------
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) $ 45,397 $ 2,305 $ 14,425 $ 90
--------------------------------------------------------------
Expenses:
Administration fee (Note B) 5,621 790 2,120 15
Amortization of deferred organization and
initial offering expenses (Note A) -- -- -- 7
Auditing fees 4 5 4 3
Custodian fees 5 5 5 5
Legal fees 12 11 12 9
Registration and filing fees 389 22 32 17
Shareholder reports 239 81 102 10
Shareholder servicing agent fees 1,525 328 440 7
Trustees' fees and expenses 27 6 13 --
Miscellaneous 30 8 15 1
Expenses from corresponding Portfolio (Note
A) 10,021 1,741 4,167 37
--------------------------------------------------------------
Total expenses 17,873 2,997 6,910 111
Deduct -- expenses reimbursed by
administrator (Note B) -- -- -- (26)
--------------------------------------------------------------
Total net expenses 17,873 2,997 6,910 85
--------------------------------------------------------------
Net investment income (loss) 27,524 (692) 7,515 5
--------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND OPTION CONTRACTS WRITTEN FROM CORRESPONDING
PORTFOLIO (NOTE A)
Net realized gain on investments 125,653 43,074 98,946 514
Net realized loss on option contracts written (3,308) -- -- --
Change in net unrealized appreciation of
investments 57,385 (21,659) 80,284 1,262
--------------------------------------------------------------
Net gain on investments and option
contracts written from corresponding
Portfolio (Note A) 179,730 21,415 179,230 1,776
--------------------------------------------------------------
Net increase in net assets resulting from
operations $ 207,254 $ 20,723 $ 186,745 $ 1,781
--------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
FOCUS FUND GENESIS FUND
Six Months Six Months
Ended Year Ended Year
February 29, Ended February 29, Ended
1996 August 31, 1996 August 31,
(000'S OMITTED) (UNAUDITED) 1995 (UNAUDITED) 1995
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 2,743 $ 5,295 $ (167) $ (183)
Net realized gain on investments
sold and option contracts written
from corresponding Portfolio (Note
A) 17,501 50,620 1,870 6,185
Change in net unrealized
appreciation of investments from
corresponding Portfolio (Note A) 24,187 138,207 8,314 12,511
-------------------------------------------------------------
Net increase in net assets resulting
from operations 44,431 194,122 10,017 18,513
-------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (3,873) (5,224) -- --
Net realized gain on investments (47,524) (38,655) (6,609) (4,105)
-------------------------------------------------------------
Total distributions to shareholders (51,397) (43,879) (6,609) (4,105)
-------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 212,189 209,593 27,092 29,275
Proceeds from reinvestment of
dividends and distributions 44,882 37,993 5,892 3,647
Payments for shares redeemed (106,842) (85,655) (19,945) (71,413)
-------------------------------------------------------------
Net increase (decrease) from Trust
share transactions 150,229 161,931 13,039 (38,491)
-------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 143,263 312,174 16,447 (24,083)
NET ASSETS:
Beginning of period 956,039 643,865 111,521 135,604
-------------------------------------------------------------
End of period $ 1,099,302 $ 956,039 $ 127,968 $ 111,521
-------------------------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
period $ 2,598 $ 3,728 $ (167) $ --
-------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 7,385 8,507 2,836 3,551
Issued on reinvestment of dividends
and distributions 1,607 1,761 628 467
Redeemed (3,724) (3,534) (2,110) (8,690)
-------------------------------------------------------------
Net increase (decrease) in shares
outstanding 5,268 6,734 1,354 (4,672)
-------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
GUARDIAN FUND MANHATTAN FUND PARTNERS FUND
Six Months Six Months Six Months
Ended Year Ended Year Ended Year
February 29, Ended February 29, Ended February 29, Ended
1996 August 31, 1996 August 31, 1996 August 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 27,524 $ 39,864 $ (692) $ 165 $ 7,515 $ 11,137
Net realized gain on investments
sold and option contracts written
from corresponding Portfolio (Note
A) 122,345 119,369 43,074 43,765 98,946 162,141
Change in net unrealized
appreciation of investments from
corresponding Portfolio (Note A) 57,385 539,076 (21,659) 80,224 80,284 101,941
----------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 207,254 698,309 20,723 124,154 186,745 275,219
----------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (32,575) (34,262) -- (434) (13,359) (6,799)
Net realized gain on investments (139,951) (30,092) (43,799) (30,398) (180,347) (98,890)
----------------------------------------------------------------------------------------
Total distributions to shareholders (172,526) (64,354) (43,799) (30,832) (193,706) (105,689)
----------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 1,070,053 1,313,150 71,530 124,949 180,697 199,058
Proceeds from reinvestment of
dividends and distributions 156,977 57,644 40,616 28,495 181,767 101,349
Payments for shares redeemed (385,479) (473,776) (85,502) (145,126) (124,961) (241,908)
----------------------------------------------------------------------------------------
Net increase (decrease) from Trust
share transactions 841,551 897,018 26,644 8,318 237,503 58,499
----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 876,279 1,530,973 3,568 101,640 230,542 228,029
NET ASSETS:
Beginning of period 3,947,520 2,416,547 611,968 510,328 1,563,960 1,335,931
----------------------------------------------------------------------------------------
End of period $ 4,823,799 $ 3,947,520 $ 615,536 $ 611,968 $ 1,794,502 $ 1,563,960
----------------------------------------------------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
period $ 8,712 $ 13,763 $ (638) $ 54 $ 2,965 $ 8,809
----------------------------------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 45,362 64,070 5,532 11,050 7,729 9,597
Issued on reinvestment of dividends
and distributions 6,801 3,056 3,346 2,847 8,210 5,472
Redeemed (16,329) (23,714) (6,623) (13,048) (5,378) (11,807)
----------------------------------------------------------------------------------------
Net increase (decrease) in shares
outstanding 35,834 43,412 2,255 849 10,561 3,262
----------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS(Cont'd)
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
SOCIALLY RESPONSIVE FUND
Six Months
Ended Year
February 29, Ended
1996 August 31,
(000'S OMITTED) (UNAUDITED) 1995
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 5 $ 18
Net realized gain on investments
sold and option contracts written
from corresponding Portfolio (Note
A) 514 137
Change in net unrealized
appreciation of investments from
corresponding Portfolio (Note A) 1,262 936
-----------------------------
Net increase in net assets resulting
from operations 1,781 1,091
-----------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (17) (9)
Net realized gain on investments (268) --
-----------------------------
Total distributions to shareholders (285) (9)
-----------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 7,033 5,547
Proceeds from reinvestment of
dividends and distributions 254 8
Payments for shares redeemed (870) (691)
-----------------------------
Net increase (decrease) from Trust
share transactions 6,417 4,864
-----------------------------
NET INCREASE (DECREASE) IN NET ASSETS 7,913 5,946
NET ASSETS:
Beginning of period 8,223 2,277
-----------------------------
End of period $ 16,136 $ 8,223
-----------------------------
Accumulated undistributed net
investment income (loss) at end of
period $ (1) $ 11
-----------------------------
NUMBER OF TRUST SHARES:
Sold 542 534
Issued on reinvestment of dividends
and distributions 20 1
Redeemed (67) (67)
-----------------------------
Net increase (decrease) in shares
outstanding 495 468
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger&Berman February 29, 1996 (Unaudited)
- ----------------------------------------------------------------------
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 operating 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, and its shares are registered under the
Securities Act of 1933, as amended. The trustees of the Trust changed the
name of Neuberger&Berman Selected Sectors Fund to Neuberger&Berman Focus
Fund, effective January 1, 1995. 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 (96.76%, 77.86%, 81.82%, 92.86%, 95.65%, and 12.49%, for Focus,
Genesis, Guardian, Manhattan, Partners, and Socially Responsive,
respectively, at February 29, 1996). 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.
2) PORTFOLIO VALUATION: Each Fund records its investment in its corresponding
Portfolio at value. Investment securities of each Portfolio of Equity
Managers Trust are valued by Equity Managers Trust as indicated in the notes
following the Portfolios' schedule of investments.
27
<PAGE>
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 distributions from 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 February 29, 1996, the unamortized balance of
such expenses amounted to $47,513.
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 a 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.
NOTE B -- ADMINISTRATION FEES, DISTRIBUTION ARRANGEMENTS 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
28
<PAGE>
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 six months ended February 29, 1996.
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 December 31, 1996. For
the six months ended February 29, 1996, such excess expenses amounted to
$26,407. 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. 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.
29
<PAGE>
NOTE C -- INVESTMENT TRANSACTIONS:
During the six months ended February 29, 1996, additions and reductions in
each Fund's investment in its corresponding Portfolio were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
- -------------------------------------------------------------
<S> <C> <C>
FOCUS $136,952,793 $28,938,483
GENESIS 18,340,189 12,447,487
GUARDIAN 705,129,743 32,879,989
MANHATTAN 28,115,570 45,495,834
PARTNERS 95,484,306 54,253,727
SOCIALLY RESPONSIVE 6,385,734 354,039
</TABLE>
NOTE D -- UNAUDITED FINANCIAL INFORMATION:
The financial information included in this interim report is taken from the
records of each Fund without audit by independent accountants/auditors. Annual
reports contain audited financial statements.
30
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Focus Fund(1)
The following table includes selected data for a share outstanding throughout
each period 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>
Six Months Period from
Ended October 1,
February 29, 1992 to Year Ended September
1996 Year Ended August 31, August 31, 30,
(UNAUDITED)(2) 1995(2) 1994(2) 1993(2) 1992 1991
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 28.88 $ 24.42 $ 24.00 $ 19.31 $ 18.91 $ 16.66
---------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .07 .17 .21 .23 .29 .38
Net Gains or Losses on
Securities (both realized and
unrealized) 1.16 5.97 2.16 4.65 2.62 2.96
---------------------------------------------------------------------------
Total From Investment
Operations 1.23 6.14 2.37 4.88 2.91 3.34
---------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.11) (.20) (.25) (.04) (.31) (.37)
Distributions (from capital
gains) (1.35) (1.48) (1.70) (.15) (2.20) (.72)
---------------------------------------------------------------------------
Total Distributions (1.46) (1.68) (1.95) (.19) (2.51) (1.09)
---------------------------------------------------------------------------
Net Asset Value, End of Period $ 28.65 $ 28.88 $ 24.42 $ 24.00 $ 19.31 $ 18.91
---------------------------------------------------------------------------
Total Return+ +4.39%(3) +27.47% +10.35% +25.39%(3) +15.51% +20.20%
---------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $1,099.3 $ 956.0 $ 643.9 $ 573.9 $ 439.2 $ 399.2
---------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets .89%(4) .87% .85% .92%(4) .91% .93%
---------------------------------------------------------------------------
Ratio of Net Investment Income
to Average Net Assets .54%(4) .75% .89% 1.18%(4) 1.46% 2.01%
---------------------------------------------------------------------------
Portfolio Turnover Rate(5) -- -- -- 52% 77% 60%
---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
31
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Genesis Fund
The following table includes selected data for a share outstanding throughout
each period 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>
Six Months
Ended Period from
February August 1,
29, 1993 to
1996 Year Ended August 31, August 31, Year Ended July 31,
(UNAUDITED)(2) 1995(2) 1994(2) 1993(2) 1993 1992 1991
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $9.52 $8.27 $8.62 $8.30 $7.10 $6.41 $5.78
-------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment
Income (Loss) (.01) -- (.01) -- .01 (.01) .03
Net Gains or Losses
on Securities
(both realized and
unrealized) .83 1.56 .42 .32 1.19 .80 .64
-------------------------------------------------------------------------------------------
Total From
Investment
Operations .82 1.56 .41 .32 1.20 .79 .67
-------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) -- -- (.01) -- -- (.01) (.04)
Distributions (from
capital gains) (.55) (.31) (.75) -- -- (.09) --
-------------------------------------------------------------------------------------------
Total
Distributions (.55) (.31) (.76) -- -- (.10) (.04)
-------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $9.79 $9.52 $8.27 $8.62 $8.30 $7.10 $6.41
-------------------------------------------------------------------------------------------
Total Return+ +8.87%(3) +19.69% +4.77% +3.86%(3) +16.90% +12.38% +11.80%
-------------------------------------------------------------------------------------------
Ratios/Supplemental
Data
Net Assets, End of
Period (in
millions) $128.0 $111.5 $135.6 $118.5 $113.5 $72.2 $27.8
-------------------------------------------------------------------------------------------
Ratio of Expenses
to Average Net
Assets 1.33%(4,6) 1.35%(6) 1.36% 1.51%(4) 1.65% 2.00%(6) 2.00%(6)
-------------------------------------------------------------------------------------------
Ratio of Net
Investment Income
(Loss) to Average
Net Assets (.29%)(4,6) (.16%)(6) (.20%) (.08%)(4) .15% (.14%)(6) .60%(6)
-------------------------------------------------------------------------------------------
Portfolio Turnover
Rate(5) -- -- -- -- 54% 23% 46%
-------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
32
<PAGE>
FINANCIAL HIGHLIGHTS(7)
Neuberger&Berman
- --------------------------------------------------------------------------------
Guardian Fund
The following table includes selected data for a share outstanding throughout
each period 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>
Six Months
Ended
February 29,
1996 Year Ended August 31,
(UNAUDITED)(2) 1995(2) 1994(2) 1993(2) 1992 1991
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 23.61 $ 19.52 $ 18.57 $ 15.73 $ 14.90 $ 11.90
------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .14 .27 .24 .30 .29 .32
Net Gains or Losses on
Securities (both realized
and unrealized) .95 4.30 1.41 3.45 1.71 3.20
------------------------------------------------------------------------
Total From Investment
Operations 1.09 4.57 1.65 3.75 2.00 3.52
------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.18) (.25) (.30) (.25) (.26) (.35)
Distributions (from
capital gains) (.76) (.23) (.40) (.66) (.91) (.17)
------------------------------------------------------------------------
Total Distributions (.94) (.48) (.70) (.91) (1.17) (.52)
------------------------------------------------------------------------
Net Asset Value, End of Period $ 23.76 $ 23.61 $ 19.52 $ 18.57 $ 15.73 $ 14.90
------------------------------------------------------------------------
Total Return+ +4.74%(3) +24.06% +9.12% +24.43% +13.88% +30.48%
------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period
(in millions) $4,823.8 $ 3,947.5 $ 2,416.5 $ 1,787.0 $ 802.9 $ 628.6
------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets .82%(4) .80% .80% .81% .82% .84%
------------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets 1.27%(4) 1.40% 1.36% 2.01% 1.90% 2.46%
------------------------------------------------------------------------
Portfolio Turnover Rate(5) -- -- -- 27% 41% 59%
------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
33
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Manhattan Fund
The following table includes selected data for a share outstanding throughout
each period 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>
Six Months
Ended
February 29,
1996 Year Ended August 31,
(UNAUDITED)(2) 1995(2) 1994(2) 1993(2) 1992 1991
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $13.27 $11.28 $12.94 $11.59 $ 11.55 $ 9.46
-------------------------------------------------------------------
Income From Investment Operations
Net Investment Income (Loss) (.01) -- .02 .02 .06 .13
Net Gains or Losses on
Securities (both realized and
unrealized) .43 2.70 .40 3.06 .49 2.27
-------------------------------------------------------------------
Total From Investment
Operations .42 2.70 .42 3.08 .55 2.40
-------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) -- (.01) (.02) (.05) (.11) (.16)
Distributions (from capital
gains) (.96) (.70) (2.06) (1.68) (.40) (.15)
-------------------------------------------------------------------
Total Distributions (.96) (.71) (2.08) (1.73) (.51) (.31)
-------------------------------------------------------------------
Net Asset Value, End of Period $12.73 $13.27 $11.28 $12.94 $ 11.59 $ 11.55
-------------------------------------------------------------------
Total Return+ +3.52%(3) +26.00% +3.49% +27.76% +4.74% +26.17%
-------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $615.5 $612.0 $510.3 $537.6 $ 400.7 $ 429.0
-------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets .98%(4) .98% .96% 1.04% 1.07% 1.09%
-------------------------------------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets (.23%)(4) .03% .16% .20% .57% 1.28%
-------------------------------------------------------------------
Portfolio Turnover Rate(5) -- -- -- 76%(4) 83% 78%
-------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
34
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Partners Fund
The following table includes selected data for a share outstanding throughout
each period 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>
Six Months Period from
Ended July 1, 1993
February 29, to
1996 Year Ended August 31, August 31, Year Ended June 30,
(UNAUDITED)(2) 1995(2) 1994(2) 1993(2) 1993 1992 1991
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 23.72 $ 21.32 $ 22.46 $ 20.98 $ 18.96 $ 17.80 $ 18.11
-----------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .11 .17 .10 .02 .16 .23 .50
Net Gains or Losses on
Securities (both realized
and unrealized) 2.53 3.94 1.07 1.46 3.84 2.05 .27
-----------------------------------------------------------------------------------
Total From Investment
Operations 2.64 4.11 1.17 1.48 4.00 2.28 .77
-----------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.20) (.11) (.11) -- (.19) (.34) (.74)
Distributions (from
capital gains) (2.70) (1.60) (2.20) -- (1.79) (.78) (.34)
-----------------------------------------------------------------------------------
Total Distributions (2.90) (1.71) (2.31) -- (1.98) (1.12) (1.08)
-----------------------------------------------------------------------------------
Net Asset Value, End of Period $ 23.46 $ 23.72 $ 21.32 $ 22.46 $ 20.98 $ 18.96 $ 17.80
-----------------------------------------------------------------------------------
Total Return+ +11.86%(3) +21.53% +5.56% +7.05%(3) +21.78% +13.23% +5.14%
-----------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period
(in millions) $1,794.5 $1,564.0 $1,335.9 $1,185.1 $1,085.6 $852.9 $823.5
-----------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets .85%(4) .83% .81% .84%(4) .86% .86% .88%
-----------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets .92%(4) .83% .48% .59%(4) .83% 1.23% 2.84%
-----------------------------------------------------------------------------------
Portfolio Turnover Rate(5) -- -- -- 6% 82% 97% 161%
-----------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
35
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Socially Responsive Fund
The following table includes selected data for a share outstanding throughout
each period 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>
Six Months Period from
Ended Year March 16,
February Ended 1994(8)
29, August to August
1996 31, 31,
(UNAUDITED) 1995 1994
--------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.84 $ 10.07 $ 10.00
--------------------------------------
Income From Investment Operations
Net Investment Income -- .03 .01
Net Gains or Losses on Securities
(both realized and unrealized) 2.06 1.76 .06
--------------------------------------
Total From Investment Operations 2.06 1.79 .07
--------------------------------------
Less Distributions
Dividends (from net investment
income) (.02) (.02) --
Distributions (from capital gains) (.31) -- --
--------------------------------------
Total Distributions (.33) (.02) --
--------------------------------------
Net Asset Value, End of Period $ 13.57 $ 11.84 $ 10.07
--------------------------------------
Total Return+ +17.51%(3) +17.82% +0.70%(3)
--------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $16.1 $8.2 $2.3
--------------------------------------
Ratio of Expenses to Average Net
Assets(6) 1.50%(4) 1.51% 1.50%(4)
--------------------------------------
Ratio of Net Investment Income to
Average Net Assets(6) .09%(4) .36% .50%(4)
--------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
36
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger&Berman February 29, 1996 (Unaudited)
- ----------------------------------------------------------------------
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)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>
YEAR ENDED
JULY 31,
GENESIS 1991
- -------------------------------------------------
<S> <C>
Expenses 2.16%
------------
Net Investment Income .44%
------------
</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>
37
<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>
SIX MONTHS
ENDED YEAR ENDED
FEBRUARY AUGUST 31,
29, 1996 1995
- ------------------------------------------------------------
<S> <C> <C>
Expenses 1.43% 1.38%
-----------------------
Net Investment Loss (.39%) (.19%)
-----------------------
</TABLE>
After reimbursement of expenses by Management as described in Note B of Notes
to Financial Statements. Had Management not undertaken such action the
annualized ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS MARCH 16,
ENDED YEAR ENDED 1994 TO
FEBRUARY 29, AUGUST 31, AUGUST 31,
SOCIALLY RESPONSIVE 1996 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Expenses 1.98% 2.50% 2.50%
------------------------------------------
Net Investment Loss (.39%) (.63%) (.50%)
------------------------------------------
</TABLE>
7)Adjusted for a 200% stock dividend effective January 20, 1993.
8)The date investment operations commenced.
+ 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 period
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.
38
<PAGE>
(This page has been left blank intentionally.)
39
<PAGE>
(This page has been left blank intentionally.)
40
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Focus Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. CITICORP 3.4%
2. Chrysler Corp. 2.9%
3. General Motors 2.9%
4. Federal National Mortgage Association 2.7%
5. Neiman-Marcus Group 2.7%
6. Compaq Computer 2.7%
7. Travelers Group 2.4%
8. Foundation Health 2.3%
9. Federal Home Loan Mortgage 2.3%
10. Wells Fargo 2.1%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (93.7%)
AUTOMOTIVE (5.8%)
600,000 Chrysler Corp. $ 33,825
645,000 General Motors 33,056
------------
66,881
------------
FINANCIAL SERVICES (31.3%)
231,700 Allmerica Property & Casualty 5,966
225,000 American International Group 21,741
300,000 Bank of Boston 14,588
690,000 Capital One Financial 18,457
495,000 CITICORP 38,610
1,000,000 Countrywide Credit Industries 21,000
275,000 Dean Witter, Discover 14,781
315,000 Federal Home Loan Mortgage 25,987
992,000 Federal National Mortgage
Association 31,372
270,000 First Union Corp. 16,335
390,000 First USA 19,549
220,000 Horace Mann Educators 7,233
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
157,500 MBNA Corp. $ 4,449
250,000 Merrill Lynch 14,406
259,000 National Re 8,094
495,000 PartnerRe Ltd. 15,036
450,000 Penncorp Financial Group 14,737
340,000 Signet Banking 8,840
526,400 Sphere Drake Holdings 5,790
410,000 Travelers Group 27,419
96,700 Wells Fargo 23,849
------------
358,239
------------
HEALTH CARE (9.1%)
705,000 FHP International 23,089
680,000 Foundation Health 26,520
670,000 Humana Inc. 16,415
320,000 U.S. Healthcare 15,600
200,000 United Healthcare 13,050 (2)
272,800 Wellpoint Health Networks 9,241
------------
103,915
------------
HEAVY INDUSTRY (10.6%)
150,000 Aluminum Co. of America 8,513
233,600 American Standard 6,599
300,000 Canadian National Railway 5,175
225,000 Caraustar Industries 4,950
300,000 Champion International 12,000
205,000 Cleveland-Cliffs 9,122
550,000 LTV Corp. 7,012
150,000 Mead Corp. 7,500
99,500 Riverwood International 1,978
1,011,900 Rollins Truck Leasing 11,131
675,000 Stone Container 9,281
154,500 Temple-Inland 6,219
170,000 TNT Freightways 3,527
65,000 UCAR International 2,308
150,000 Union Camp 6,994
278,800 Varity Corp. 10,525
175,000 Willamette Industries 9,187
------------
122,021
------------
</TABLE>
41
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Focus Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
MEDIA & ENTERTAINMENT (11.4%)
178,000 A.H. Belo $ 6,230
520,000 Bell Cablemedia ADR 7,930
25,000 Comcast Corp. Class A 481
915,000 Comcast Corp. Class A Special 17,957
490,000 Comcast UK Cable Partners
Limited 6,125
325,000 Harcourt General 14,097
400,000 International CableTel 10,000
450,000 Jones Intercable Inc. Class A 6,188
310,000 Scandinavian Broadcasting
System 6,510
500,000 U.S. West Media Group 10,437
500,000 United International Holdings 8,438
250,000 Viacom Inc. Class B 9,812
276,600 Vodafone Group ADR 9,785
256,000 Walt Disney 16,768
------------
130,758
------------
RETAIL (2.7%)
1,577,800 Neiman-Marcus Group 31,359
------------
TECHNOLOGY (20.9%)
275,000 Airtouch Communications 8,525
200,000 Applied Materials 7,150
330,000 Arrow Electronics 16,253
250,000 Avnet, Inc. 12,469
600,000 Compaq Computer 30,375
260,000 Digital Equipment 18,720
33,200 Eaton Corp. 1,921
110,000 IBM 13,489
200,000 MEMC Electronic Materials 6,800
230,000 Micron Technology 7,360
649,000 National Semiconductor 10,141
350,000 Nokia Corp. ADR 12,206
200,000 Palmer Wireless 4,150
250,000 Philips Electronics 10,344
625,000 PriCellular Corp. 8,984
175,000 Rockwell International 9,975
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
255,000 Seagate Technology $ 16,639
410,000 Sequent Computer Systems 4,817
250,000 Tele-Communications
International 5,375
500,000 Tele-Communications, Inc.
Class A 10,500
350,000 Texas Instruments 17,456
500,000 VLSI Technology 6,000
------------
239,649
------------
UTILITIES (1.9%)
340,000 AT&T Corp. 21,632
------------
TOTAL COMMON STOCKS (COST
$741,531) 1,074,454
------------
<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) 1,021
------------
U.S. TREASURY SECURITIES (4.0%)
$46,430,000 U.S. Treasury Bills, 4.68% -
5.31%, due 3/7/96 - 8/15/96
(COST $45,756) 45,756
------------
SHORT-TERM CORPORATE NOTES (1.5%)
$16,700,000 General Electric Capital
Corp., 5.20%, due 3/1/96
(COST $16,700) 16,700 (3)
------------
TOTAL INVESTMENTS (99.3%)
(COST $804,987) 1,137,931 (4)
Cash, receivables and other
assets, less liabilities
(0.7%) 8,170
------------
TOTAL NET ASSETS (100.0%) $ 1,146,101
------------
</TABLE>
42
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. BMC Industries 5.0%
2. Texas Industries 4.1%
3. DH Technology 3.5%
4. Alumax Inc. 3.2%
5. Wolverine Tube 3.2%
6. Reynolds & Reynolds 2.5%
7. NN Ball & Roller 2.5%
8. W.H. Brady 2.2%
9. Dallas Semiconductor 2.2%
10. Coho Energy 2.1%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
COMMON STOCKS (96.9%)
AGRICULTURE (1.2%)
43,233 Delta & Pine Land $ 2,032
-------------
AUTOMOTIVE (1.5%)
47,700 Donaldson Co. 1,294
67,800 Monaco Coach 619
86,200 TBC Corp. 614
-------------
2,527
-------------
BANKING & FINANCE (5.5%)
63,000 Charter One Financial 2,158
60,000 First Commerce 1,957
45,250 Mark Twain Bancshares 1,742
42,777 ONBANCorp, Inc. 1,444
57,900 Webster Financial 1,730
-------------
9,031
-------------
BUILDING, CONSTRUCTION & FURNISHINGS (5.5%)
50,000 Oakwood Homes 2,231
110,000 Texas Industries 6,793
-------------
9,024
-------------
CHEMICALS (3.1%)
20,000 Bush Boake Allen 580
85,000 Lawter International 914
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
182,000 Lilly Industries $ 2,298
85,400 McWhorter Technologies 1,366
-------------
5,158
-------------
COMMUNICATIONS (1.2%)
111,300 Black Box 1,920
-------------
CONSUMER PRODUCTS & SERVICES (3.6%)
92,000 Alltrista Corp. 2,001
12,300 Coachmen Industries 337
253,600 Prime Hospitality 2,884
24,000 Richfood Holdings 660
-------------
5,882
-------------
DIAGNOSTIC EQUIPMENT (0.7%)
75,700 ADAC Laboratories 1,164
-------------
DIVERSIFIED (2.7%)
24,000 Marcus Corp. 621
107,000 Pentair, Inc. 2,836
55,200 Raven Industries 966
-------------
4,423
-------------
ELECTRONICS (13.6%)
358,400 BMC Industries 8,243
133,600 Continental Circuits 2,071
180,300 Dallas Semiconductor 3,651
58,000 Lincoln Electric Class A 1,435
44,000 Oak Industries 1,051
225,000 Pioneer Standard Electronics 3,150
74,000 SCI Systems 2,743
-------------
22,344
-------------
ENERGY (7.2%)
133,000 Aquila Gas Pipeline 1,496
628,000 Coho Energy 3,375
81,200 Cross Timbers Oil 1,350
247,000 Offshore Logistics 3,088
79,900 Smith International 1,628
56,000 Zeigler Coal Holding 784
-------------
11,721
-------------
ENTERTAINMENT (2.5%)
115,500 Bally Entertainment 1,790
126,375 Casino Data Systems 2,243
-------------
4,033
-------------
</TABLE>
43
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
INDUSTRIAL & COMMERCIAL PRODUCTS & SERVICES (21.5%)
105,000 Alamo Group $ 1,680
100,000 AMTROL, Inc. 1,700
78,200 Dionex Corp. 2,933
135,350 Holophane Corp. 2,470
47,000 Kaydon Corp. 1,551
70,900 Libbey Inc. 1,595
127,400 Material Sciences 1,831
191,700 NN Ball & Roller 4,074
109,000 Reynolds & Reynolds 4,128
28,000 Roper Industries 1,264
72,900 U.S. Can 1,221
147,300 W.H. Brady 3,664
133,500 Wolverine Tube 5,190
145,750 Woodhead Industries 2,004
-------------
35,305
-------------
INSURANCE (3.0%)
63,300 American Heritage Life 1,345
90,000 Gryphon Holdings 1,688
40,000 Orion Capital 1,890
-------------
4,923
-------------
MACHINERY & EQUIPMENT (1.8%)
59,000 Allied Products 1,416
72,450 Graco Inc. 1,449
-------------
2,865
-------------
METALS (6.6%)
145,000 Alumax Inc. 5,238
16,900 Cleveland-Cliffs 752
92,800 Commonwealth Aluminum 1,554
128,500 Kentucky Electric Steel 916
105,000 Steel of West Virginia 1,037
54,700 Varlen Corp. 1,299
-------------
10,796
-------------
OFFICE EQUIPMENT (3.5%)
261,600 DH Technology 5,755
-------------
OIL & GAS (2.6%)
78,500 Cairn Energy USA 853
84,800 Nabors Industries 1,092
182,100 Oceaneering International 2,208
20,000 Tejas Power 170
-------------
4,323
-------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
PUBLISHING & BROADCASTING (4.7%)
86,000 Central Newspapers $ 3,150
40,000 Houghton Mifflin 1,770
65,000 McClatchy Newspapers 1,495
26,250 Pulitzer Publishing 1,325
-------------
7,740
-------------
RETAILING (1.2%)
8,551 Carr-Gottstein Foods 38
119,000 Schultz Sav-O Stores 1,964
-------------
2,002
-------------
TEXTILES & APPAREL (1.2%)
33,000 St. John Knits 1,918
-------------
TRANSPORTATION, SHIPPING &
FREIGHT (2.5%)
52,250 Air Express International 1,280
120,000 Harmon Industries 1,635
213,600 Maritrans Inc. 1,148
-------------
4,063
-------------
TOTAL COMMON STOCKS (COST
$114,568) 158,949
-------------
<CAPTION>
Principal
Amount
- ---------
<C> <S> <C>
SHORT-TERM CORPORATE NOTES (3.8%)
$6,200,000 Exxon Credit Corp., 5.10%, due
3/1/96 (COST $6,200) 6,200(3)
-------------
TOTAL INVESTMENTS (100.7%)
(COST $120,768) 165,149(4)
Liabilities, less cash,
receivables and other assets
[(0.7%)] (1,116)
-------------
TOTAL NET ASSETS (100.0%) $ 164,033
-------------
</TABLE>
44
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Guardian Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. CITICORP 2.4%
2. General Motors 2.0%
3. Compaq Computer 1.9%
4. Federal National Mortgage Association 1.9%
5. Chrysler Corp. 1.9%
6. AT&T Corp. 1.7%
7. Foundation Health 1.6%
8. Texas Instruments 1.4%
9. Digital Equipment 1.4%
10. Wells Fargo 1.4%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (82.6%)
AUTOMOTIVE (4.4%)
1,950,000 Chrysler Corp. $ 109,931
1,076,000 Ford Motor 33,625
2,270,000 General Motors 116,337
------------
259,893
------------
BANKING (6.4%)
1,265,000 Bank of Boston 61,511
1,800,000 CITICORP 140,400
504,000 First Tennessee National 15,876
877,500 First Union Corp. 53,089
900,000 Signet Banking 23,400
325,000 Wells Fargo 80,153
------------
374,429
------------
CHEMICALS (0.6%)
865,500 IMC Global 35,702
------------
CONSUMER GOODS & SERVICES (1.4%)
590,000 Kellwood Co. 8,924
437,500 Mattel Inc. 14,547
230,000 Nike, Inc. 14,921 (2)
2,636,900 Owens-Illinois 42,850
------------
81,242
------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
DRUGS (0.9%)
109,500 Johnson & Johnson $ 10,238 (2)
205,000 Pfizer, Inc. 13,504 (2)
500,000 Zeneca Group ADR 28,750
------------
52,492
------------
FINANCIAL SERVICES (10.7%)
212,241 Alleghany Corp. 41,811
2,250,000 Capital One Financial 60,187
3,450,000 Countrywide Credit Industries 72,450
419,200 CWM Mortgage Holdings 6,602
849,600 Dean Witter, Discover 45,666
700,000 Federal Home Loan Mortgage 57,750
3,520,000 Federal National Mortgage
Association 111,320
1,375,000 First USA 68,922
270,000 Household International 18,158
1,117,650 MBNA Corp. 31,574
835,000 Merrill Lynch 48,117
492,300 MGIC Investment 28,676
510,000 Security Capital Industrial
Trust 9,116
1,040,000 Spieker Properties 26,910
------------
627,259
------------
FOREST PRODUCTS & PAPER (4.7%)
390,000 Caraustar Industries 8,580
1,400,000 Champion International 56,000
600,000 Mead Corp. 30,000
676,300 Rayonier Inc. 23,163
315,000 Riverwood International 6,261
2,200,000 Stone Container 30,250
765,000 Temple-Inland 30,791
900,000 Union Camp 41,962
897,000 Willamette Industries 47,093
------------
274,100
------------
HEALTH CARE (4.0%)
2,410,000 Foundation Health 93,990
4,500 Transport Holdings 199
1,380,000 U.S. Healthcare 67,275
</TABLE>
45
<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 $ 39,150
1,022,000 Wellpoint Health Networks 34,620
------------
235,234
------------
HEAVY INDUSTRY (3.8%)
40,000 Asea AB ADR 4,020
11,830 Asea Brown Boveri (Ordinary
Shares) 14,170
4,122,200 Coltec Industries 56,680 (5)
700,000 Rockwell International 39,900
900,000 Tenneco Inc. 50,287
1,471,000 Varity Corp. 55,530
------------
220,587
------------
INDUSTRIAL GOODS & SERVICES (1.6%)
1,600,000 American Standard 45,200
888,400 Eaton Corp. 51,416
------------
96,616
------------
INSURANCE (5.5%)
520,000 American International Group 50,245
292,500 Chubb Corp. 28,409
1,412,900 FHP International 46,272
207,000 General Re 29,782
2,675,000 Humana Inc. 65,537
763,000 National Re 23,844
263,500 Transatlantic Holdings 18,511
955,000 Travelers Group 63,866
------------
326,466
------------
MEDIA & ENTERTAINMENT (6.9%)
870,000 A.H. Belo 30,450
300,000 Comcast Corp. Class A 5,775
3,075,000 Comcast Corp. Class A Special 60,347
1,450,000 Harcourt General 62,894
730,900 Jones Intercable Inc. Class A 10,050
389,600 Omnicom Group 15,925
401,700 R.R. Donnelley 14,461
1,350,000 Time Warner 57,712
1,352,000 United International Holdings 22,815
800,000 Viacom Inc. Class B 31,400
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
1,530,000 Vodafone Group ADR $ 54,124
640,000 Walt Disney 41,920
------------
407,873
------------
MISCELLANEOUS (0.4%)
1,000,000 Cyprus Amax Minerals 25,875
------------
OIL & GAS (5.5%)
263,158 British Petroleum ADS 26,414
219,200 Coastal Corp. 8,056
491,000 Kerr-McGee 29,276
900,000 Murphy Oil 37,575
880,500 Norsk Hydro ADS 37,531
1,100,000 Parker & Parsley Petroleum 23,650
832,900 Seagull Energy 15,721
621,900 Union Pacific Resources Group 16,014
1,500,000 Unocal Corp. 45,000
1,550,000 Vastar Resources 49,019
498,600 Western Atlas 26,239
707,200 Zeigler Coal Holding 9,901
------------
324,396
------------
RETAIL (2.2%)
140,000 Barnes & Noble 4,042
1,840,200 Fingerhut Cos. 25,533
515,000 Gap Inc. 27,617
510,000 May Department Stores 23,779
1,055,300 Toys "R" Us 25,195
1,150,000 Wal-Mart Stores 24,438
------------
130,604
------------
STEEL (0.3%)
553,100 AK Steel Holding 19,981
------------
TECHNOLOGY (14.6%)
1,400,000 Applied Materials 50,050
1,450,000 Arrow Electronics 71,412
1,250,000 Avnet, Inc. 62,344
2,250,000 Compaq Computer 113,906
595,000 Dell Computer 20,453
1,150,000 Digital Equipment 82,800
500,000 IBM 61,312
875,000 Integrated Device Technology 10,500
575,000 Intel Corp. 33,817
1,130,000 Komag, Inc. 35,454
</TABLE>
46
<PAGE>
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Guardian Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
1,100,000 Micron Technology $ 35,200
2,700,000 National Semiconductor 42,188
349,000 Perkin-Elmer 16,054
1,350,000 Philips Electronics 55,856
970,000 Seagate Technology 63,293
1,675,000 Sequent Computer Systems 19,681(5)
1,700,000 Texas Instruments 84,788
------------
859,108
------------
TELECOMMUNICATIONS (4.0%)
1,900,000 Airtouch Communications 58,900
1,050,000 Cellular Communications Class
A 54,075
802,900 Frontier Corp. 24,087
520,492 IntelCom Group 8,393
1,275,000 Nokia Corp. ADR 44,466
2,200,000 Tele-Communications, Inc.
Class A 46,200
------------
236,121
------------
TELEPHONE UTILITIES (1.7%)
1,590,000 AT&T Corp. 101,164
------------
TRANSPORTATION (3.0%)
800,000 Canadian Pacific 15,800
575,300 Consolidated Freightways 14,095
980,000 CSX Corp. 43,977
400,000 Delta Air Lines 31,200 (2)
1,257,000 TNT Freightways 26,083
650,000 Union Pacific 42,900
------------
174,055
------------
TOTAL COMMON STOCKS (COST
$3,652,334) 4,863,197
------------
PREFERRED STOCKS (0.4%)
250,000 FHP International, 5% 7,344
250,000 Philippine Long Distance Cv.,
7%, GDS 14,125
------------
TOTAL PREFERRED STOCKS (COST
$18,149) 21,469
------------
<CAPTION>
Market
Value(1)
Principal (000's
Amount omitted)
- ----------- ------------
<C> <S> <C>
CONVERTIBLE BONDS (0.4%)
$ 8,750,000 AMR Corp., Cv. Deb., 6.125%,
due 11/1/24 $ 9,975
15,000,000 International CableTel Inc.,
Cv. Sub. Notes, 7.25%, due
4/15/05 16,538
------------
TOTAL CONVERTIBLE BONDS (COST
$22,085) 26,513
------------
U.S. TREASURY SECURITIES (16.2%)
$949,710,000 U.S. Treasury Bills, 4.68% -
5.375%, due 3/7/96 - 8/15/96 936,809
15,000,000 U.S. Treasury Notes, 8.00%,
due 5/15/01 16,474
------------
TOTAL U.S. TREASURY SECURITIES
(COST $951,516) 953,283
------------
SHORT-TERM CORPORATE NOTES (1.1%)
$65,260,000 Chevron Oil Finance Co.,
5.053% & 5.199%, due 3/1/96 &
3/6/96 65,260
750,000 General Electric Capital
Corp., 5.20%, due 3/1/96 750
------------
TOTAL SHORT-TERM CORPORATE
NOTES (COST $66,010) 66,010 (3)
------------
TOTAL INVESTMENTS (100.7%)
(COST $4,710,094) 5,930,472 (4)
Liabilities, less cash,
receivables and other assets
[(0.7%)] (39,683 )
------------
TOTAL NET ASSETS (100.0%) $ 5,890,789
------------
</TABLE>
47
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Manhattan Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. CITICORP 3.3%
2. Harrah's Entertainment 2.8%
3. GTECH Holdings 2.6%
4. Texas Instruments 2.5%
5. Wells Fargo 2.4%
6. United Healthcare 2.4%
7. First USA 2.2%
8. Intel Corp. 2.2%
9. SAP AG 2.2%
10. General Nutrition 2.1%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
COMMON STOCKS (99.2%)
CHEMICALS (1.0%)
110,000 Hercules Inc. $ 6,600
-------------
COMMUNICATIONS (12.2%)
420,000 Airtouch Communications 13,020
6,140,000 Australis Media 4,224
450,000 Comcast Corp. Class A Special 8,831
150,000 Comcast UK Cable Partners
Limited 1,875
341,000 International CableTel 8,525
25,000 Mannesmann AG ADR 8,939
345,000 Tele-Communications, Inc.
Class A 7,245
87,500 Tele-Communications, Inc.
Class A Liberty Media Group 2,417
120,000 Time Warner 5,130
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
65,000 Vanguard Cellular Systems $ 1,430
170,000 Viacom Inc. Class B 6,673
345,000 Vodafone Group ADR 12,204
-------------
80,513
-------------
CONSUMER GOODS & SERVICES (8.3%)
342,300 Authentic Fitness 9,541
280,000 CUC International 9,065
255,000 Franklin Quest 5,100
140,000 Industrie Natuzzi ADR 7,000
120,000 Luxottica S.p.A. ADR 8,430
268,000 Nine West 10,519
50,000 Nu-Kote Holding 825
465,000 Supercuts Inc. 2,383
95,000 Timberland Co. 1,924
-------------
54,787
-------------
DRUGS & HEALTH CARE (10.9%)
495,000 Coventry Corp. 8,786
440,000 Humana Inc. 10,780
95,000 i-STAT Corp. 3,610
90,000 PacifiCare Health Systems
Class B 8,460
165,000 R.P. Scherer 7,260
185,000 Teva Pharmaceutical ADR 8,001
200,000 U.S. Healthcare 9,750
240,000 United Healthcare 15,660
-------------
72,307
-------------
ENTERTAINMENT (11.6%)
358,000 Argosy Gaming 3,222
225,000 Circus Circus Enterprises 7,172
530,000 GTECH Holdings 17,225
685,000 Harrah's Entertainment 18,581
720,000 Players International 7,020
390,000 Promus Hotel 10,140
570,000 Showboat, Inc. 13,680
-------------
77,040
-------------
</TABLE>
48
<PAGE>
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Manhattan Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
FINANCIAL SERVICES (16.0%)
305,000 Bear Stearns $ 7,396
480,000 Capital One Financial 12,840
280,000 CITICORP 21,840
205,000 Finova Group 10,942
295,000 First USA 14,787
375,000 MBNA Corp. 10,594
250,000 Morgan Stanley Group 11,719
65,000 Wells Fargo 16,030
-------------
106,148
-------------
HOME BUILDERS (0.5%)
390,000 Schuler Homes 3,022
-------------
INSURANCE (6.6%)
100,000 ACE Ltd. 4,675
40,000 American International Group 3,865
80,000 EXEL Ltd. 5,580
25,000 Highlands Insurance 510
475,000 Life Partners Group 7,303
380,000 Penncorp Financial Group 12,445
275,000 Sphere Drake Holdings 3,025
85,000 Transatlantic Holdings 5,971
-------------
43,374
-------------
PAPER (1.5%)
690,000 Abitibi-Price 9,660
-------------
REAL ESTATE (0.1%)
25,000 JDN Realty 556
-------------
RESTAURANTS (7.7%)
320,000 Au Bon Pain 2,405
455,000 Cheesecake Factory 11,318
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
416,000 CKE Restaurants $ 6,760
506,800 HomeTown Buffet 5,892
440,000 IHOP Corp. 11,935
525,000 Sonic Corp. 10,697
404,000 Spaghetti Warehouse 1,969(5)
-------------
50,976
-------------
SPECIALTY RETAIL (8.6%)
625,000 General Nutrition 14,141
460,000 Lechters Inc. 2,300
335,000 Office Depot 6,993
175,000 Revco D.S. 4,856
265,000 Rite Aid 8,348
330,000 Sports & Recreation 2,351
325,000 Staples Inc. 8,410
295,000 Tops Appliance City 811
150,000 Viking Office Products 8,531
-------------
56,741
-------------
TECHNOLOGY (13.4%)
120,000 Applied Materials 4,290
245,000 Intel Corp. 14,409
335,000 KLA Instruments 8,040
425,000 Micron Technology 13,600
220,000 Motorola, Inc. 11,935
170,000 Nokia Corp. ADR 5,929
92,200 SAP AG 14,330
330,000 Texas Instruments 16,459
-------------
88,992
-------------
TRANSPORTATION (0.8%)
250,000 RailTex Inc. 5,625
-------------
TOTAL COMMON STOCKS (COST
$521,438) 656,341
-------------
</TABLE>
49
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Manhattan Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Principal (000's
Amount omitted)
- --------- -------------
<C> <S> <C>
CONVERTIBLE BONDS (0.1%)
$1,300,000 Australis Media, Cv. Deb.
(COST $984) $ 875
-------------
U.S. TREASURY SECURITIES (0.8%)
$5,675,000 U.S. Treasury Bills, 4.90% -
5.24%, due 4/18/96 - 6/20/96
(COST $5,598) 5,599
-------------
<CAPTION>
Market
Value(1)
Principal (000's
Amount omitted)
- --------- -------------
<C> <S> <C>
SHORT-TERM CORPORATE NOTES (0.5%)
$3,100,000 Exxon Credit Corp., 5.10%, due
3/1/96 (COST $3,100) $ 3,100 (3)
-------------
TOTAL INVESTMENTS (100.6%)
(COST $531,120) 665,915 (4)
Liabilities, less cash,
receivables and other assets
[(0.6%)] (4,148 )
-------------
TOTAL NET ASSETS (100.0%) $ 661,767
-------------
</TABLE>
50
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. EXEL Ltd. 2.6%
2. CITICORP 2.5%
3. Time Warner 2.4%
4. W.R. Grace 2.2%
5. Comcast Corp. Class A Special 2.1%
6. American Express 2.0%
7. Price/Costco 2.0%
8. Progressive Corp. 2.0%
9. duPont 1.9%
10. Revco D.S. 1.9%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (95.4%)
AEROSPACE (2.0%)
360,300 Litton Industries $ 18,195
256,100 Lockheed Martin 19,528
------------
37,723
------------
AUTOMOBILE MANUFACTURING (1.3%)
420,000 Chrysler Corp. 23,677
------------
BANKING & FINANCIAL SERVICES (11.9%)
828,900 American Express 38,129
350,000 Bank of New York 18,156
732,300 Capital One Financial 19,589
591,200 CITICORP 46,114
1,162,900 Countrywide Credit Industries 24,421
177,700 First Interstate Bancorp 29,032
344,800 First USA 17,283
199,600 Franklin Resources 11,502
398,300 State Street Boston 18,023
------------
222,249
------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
BUILDING, CONSTRUCTION &
REFURNISHING (2.1%)
293,500 Lennar Corp. $ 7,044
1,200,000 USG Corp. 31,800
------------
38,844
------------
CHEMICALS (4.1%)
467,000 duPont 35,725
600,000 W.R. Grace 41,400
------------
77,125
------------
COMMUNICATIONS (0.9%)
500,000 Vodafone Group ADR 17,687
------------
DIVERSIFIED (4.7%)
800,000 Harley-Davidson 28,700
90,000 Mannesmann AG ADR 32,180
200,000 Monsanto Co. 26,925
------------
87,805
------------
ELECTRONICS (3.1%)
625,900 Loral Corp. 29,496
286,900 Raychem Corp. 18,613
181,000 Varian Associates 9,412
------------
57,521
------------
ENTERTAINMENT (5.9%)
420,000 Circus Circus Enterprises 13,387
700,000 Mirage Resorts 32,463
783,200 Royal Caribbean Cruises 18,307
1,066,600 Time Warner 45,597
------------
109,754
------------
FOOD & DRUG STORES (1.9%)
1,271,400 Revco D.S. 35,281
------------
FOOD & TOBACCO (4.7%)
392,100 American Brands 17,792
970,000 IBP, Inc. 24,250
</TABLE>
51
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
849,280 RJR Nabisco Holdings $ 28,557
823,200 Tyson Foods 18,522
------------
89,121
------------
HEALTH CARE (4.2%)
150,000 Alza Corp. 4,987
641,900 Columbia/HCA Healthcare 35,144
975,000 Humana Inc. 23,888
597,000 Value Health 15,447
------------
79,466
------------
INDUSTRIAL GOODS & SERVICES (8.8%)
600,000 AK Steel Holding 21,675
666,100 Crown Cork & Seal 31,390
311,900 Eaton Corp. 18,051
600,000 Goodyear Tire & Rubber 28,500
1,387,500 LTV Corp. 17,691
1,455,000 Owens-Illinois 23,644
292,900 Westinghouse Electric 5,419
440,000 XTRA Corp. 19,195
------------
165,565
------------
INSURANCE (8.3%)
123,800 CIGNA Corp. 14,670
1,000,000 Equitable Cos. 25,250
700,000 EXEL Ltd. 48,825
641,775 Orion Capital 30,324
800,000 Progressive Corp. 36,800
------------
155,869
------------
MEDIA (5.8%)
534,700 American Media 2,139
7,874,550 Australis Media 5,418
2,000,000 Comcast Corp. Class A Special 39,250
430,000 Infinity Broadcasting 17,737
130,000 Knight-Ridder 9,003
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
524,500 United International Holdings $ 8,851
656,600 Viacom Inc. Class B 25,772
------------
108,170
------------
MINING (0.4%)
175,000 Freeport-McMoRan 7,459
------------
OIL & GAS (4.0%)
700,900 Apache Corp. 18,223
536,300 Noble Affiliates 16,424
487,000 Tejas Gas 23,254
600,000 Unocal Corp. 18,000
------------
75,901
------------
PAPER & FOREST PRODUCTS (1.9%)
300,000 Consolidated Papers 15,338
901,000 Fort Howard 20,723
------------
36,061
------------
PHARMACEUTICAL (1.5%)
280,000 Warner-Lambert 27,685
------------
PUBLISHING & BROADCASTING (1.1%)
300,000 Gannett Co. 20,400
------------
REAL ESTATE (6.2%)
500,000 Beacon Properties 13,125
350,700 CBL & Associates Properties 7,233
460,000 Crescent Real Estate Equities 15,123
40,000 Del Webb 720
492,300 Hospitality Properties Trust 13,661
1,307,700 Host Marriott 17,000
111,460 Host Marriott Services 738
316,700 Irvine Apartment Communities 6,374
377,000 Macerich Co. 7,304
360,000 Simon Property Group 8,415
</TABLE>
52
<PAGE>
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
300,000 Starwood Lodging Trust $ 10,313
423,100 Vornado Realty Trust 15,919
------------
115,925
------------
RETAILING (1.6%)
628,200 Harcourt General 27,248
200,000 Woolworth Corp. 2,400
------------
29,648
------------
RETAILING & APPAREL (3.1%)
2,200,000 Price/Costco 37,950
906,300 Stop & Shop 20,845
------------
58,795
------------
TECHNOLOGY (5.9%)
300,000 Applied Materials 10,725
200,000 Autodesk, Inc. 7,075
505,000 Cypress Semiconductor 6,439
600,000 Texas Instruments 29,925
1,000,000 Western Digital 20,875
270,800 Xerox Corp. 35,272
------------
110,311
------------
TOTAL COMMON STOCKS (COST
$1,444,805) 1,788,042
------------
PREFERRED STOCKS (1.1%)
3,000,000 RJR Nabisco, Ser. C, Dep.
Shares (COST $20,141) 20,625
------------
WARRANTS (0.0%)
180,000 American Media, Expire May 1,
1997 (COST $0) 2
------------
<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) $ 310
------------
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
CONVERTIBLE BONDS (0.7%)
$13,301,205 Australis Media, Cv. Deb. 8,948
4,500,000 Apache Corp., Cv. Sub. Deb.,
6.00%, due 1/15/02 4,883(6)
------------
TOTAL CONVERTIBLE BONDS (COST
$14,711) 13,831
------------
U.S. TREASURY SECURITIES (3.8%)
$71,580,000 U.S. Treasury Bills, 4.74% -
5.33%, due 4/18/96 - 8/15/96
(COST $70,375) 70,362
------------
SHORT-TERM CORPORATE NOTES (0.1%)
$2,700,000 Exxon Credit Corp., 5.10%, due
3/1/96 (COST $2,700) 2,700 (3)
------------
TOTAL INVESTMENTS (101.1%)
(COST $1,552,938) 1,895,872 (4)
Liabilities, less cash,
receivables and other assets
[(1.1%)] (21,263 )
------------
TOTAL NET ASSETS (100.0%) $ 1,874,609
------------
</TABLE>
53
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Socially Responsive Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. CITICORP 2.7%
2. Louisiana Land & Exploration 2.6%
3. ReliaStar Financial 2.5%
4. General Signal 2.3%
5. Travelers Group 2.1%
6. Brooklyn Union Gas 2.1%
7. Illinois Central 2.0%
8. Equitable Cos. 2.0%
9. Dun & Bradstreet 2.0%
10. Whitman Corp. 1.9%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
COMMON STOCKS (98.2%)
ADVERTISING (1.6%)
50,000 Omnicom Group $ 2,044
-------------
AGRICULTURE (1.3%)
83,500 Mycogen Corp. 1,628
-------------
BANKING (5.7%)
45,000 CITICORP 3,510
45,100 Mercantile Bancorporation 2,029
34,700 Meridian Bancorp 1,787
-------------
7,326
-------------
BUSINESS SERVICES (3.1%)
35,000 Banta Corp. 1,470
40,000 Dun & Bradstreet 2,530
-------------
4,000
-------------
CHEMICALS (11.7%)
30,000 Air Products & Chemicals 1,597
41,000 Cabot Corp. 2,480
90,000 Dexter Corp. 2,115
55,000 Minerals Technologies 1,987
65,000 Morton International 2,462
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
50,000 Perkin-Elmer $ 2,300
89,900 Wellman, Inc. 2,034
-------------
14,975
-------------
CONSUMER GOODS & SERVICES (2.6%)
57,000 Marcus Corp. 1,475
23,000 Procter & Gamble 1,886
-------------
3,361
-------------
CONSUMER PRODUCTS & SERVICES (1.8%)
30,000 Kimberly-Clark 2,291
-------------
DIVERSIFIED (2.5%)
77,000 CasTech Aluminum Group 1,078
60,000 Tyco International 2,168
-------------
3,246
-------------
ELECTRONICS (1.7%)
45,000 Arrow Electronics 2,216
-------------
ENERGY (3.0%)
65,000 Noble Affiliates 1,991
55,000 Tidewater Inc. 1,877
-------------
3,868
-------------
FINANCIAL SERVICES (3.3%)
48,000 Federal National Mortgage
Association 1,518
40,000 Travelers Group 2,675
-------------
4,193
-------------
FOOD & BEVERAGE (1.9%)
107,000 Whitman Corp. 2,488
-------------
FURNISHINGS (1.6%)
90,000 Leggett & Platt 2,104
-------------
HEALTH CARE (5.5%)
40,000 Columbia/HCA Healthcare 2,190
25,000 Johnson & Johnson 2,337
25,000 Warner-Lambert 2,472
-------------
6,999
-------------
INDUSTRIAL & COMMERCIAL
PRODUCTS (4.0%)
80,000 General Signal 2,910
35,000 Raychem Corp. 2,271
-------------
5,181
-------------
</TABLE>
54
<PAGE>
February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Socially Responsive Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
INSURANCE (7.3%)
76,800 Allmerica Property & Casualty $ 1,977
17,000 Chubb Corp. 1,651
101,600 Equitable Cos. 2,565
67,000 ReliaStar Financial 3,216
-------------
9,409
-------------
OIL & GAS (3.8%)
100,000 ENSERCH Corp. 1,513
80,000 Louisiana Land & Exploration 3,340
-------------
4,853
-------------
PACKAGING & CONTAINERS (2.3%)
70,000 Rock-Tenn 1,173
63,000 Sonoco Products 1,725
-------------
2,898
-------------
PAPER & FOREST PRODUCTS (1.2%)
32,000 Mead Corp. 1,600
-------------
PUBLISHING & BROADCASTING (1.7%)
78,900 Cadmus Communications 2,170
-------------
RAILROADS (2.0%)
70,000 Illinois Central 2,608
-------------
RECYCLING (1.2%)
67,700 IMCO Recycling 1,472
-------------
RETAIL STORES (4.5%)
43,000 May Department Stores 2,005
130,000 Price/Costco 2,242
50,000 Rite Aid 1,575
-------------
5,822
-------------
TECHNOLOGY (6.7%)
40,000 Compaq Computer 2,025
30,000 Digital Equipment 2,160
20,000 Hewlett-Packard 2,015
41,500 Intel Corp. 2,441
-------------
8,641
-------------
TELECOMMUNICATIONS (12.6%)
66,000 Airtouch Communications 2,046
32,500 AT&T Corp. 2,068
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
167,500 Jones Intercable Inc. Class A $ 2,303
48,000 Southern New England
Telecommunications 1,962
90,000 Tele-Communications
International 1,935
100,000 Tele-Communications, Inc.
Class A 2,100
60,000 Tele-Communications, Inc.
Class A Liberty Media Group 1,657
55,000 WorldCom Inc. 2,166
-------------
16,237
-------------
TRANSPORTATION (1.5%)
103,700 Stolt-Nielsen ADR 1,867
-------------
UTILITIES (2.1%)
101,300 Brooklyn Union Gas 2,646
-------------
TOTAL COMMON STOCKS (COST
$99,795) 126,143
-------------
<CAPTION>
Principal
Amount
- ---------
<C> <S> <C>
U.S. TREASURY SECURITIES (5.4%)
$6,980,000 U.S. Treasury Bills, 4.50% -
5.02%, due 3/7/96 - 4/18/96
(COST $6,955) 6,955(3)
-------------
TOTAL INVESTMENTS (103.6%)
(COST $106,750) 133,098(4)
Liabilities, less cash,
receivables and other assets
[(3.6%)] (4,568)
-------------
TOTAL NET ASSETS (100.0%) $ 128,530
-------------
</TABLE>
55
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
February 29, 1996 (Unaudited)
- ----------------------------------------------------------------------
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. The Portfolios
value all other securities by a method that the trustees of Equity Managers
Trust believe accurately reflects fair value.
2)The following securities were held in escrow at February 29, 1996 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 50,000 United $ 3,262,500 $ 73,498 $ 75,000
Healthcare
March 1996 @ 65
GUARDIAN PORTFOLIO 200,000 Delta Air Lines $15,600,000 $ 743,975 $ 625,000
July 1996 @ 85
109,500 Johnson & $10,238,250 $ 465,808 $ 1,053,938
Johnson
April 1996 @ 85
200,000 Nike, Inc. $12,975,000 $ 818,973 $ 1,400,000
April 1996 @ 60
205,000 Pfizer, Inc. $13,504,375 $ 506,333 $ 1,230,000
March 1996 @ 60
</TABLE>
3)At cost, which approximates market value.
4)At February 29, 1996, 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 $ 805,381,000 $ 361,718,000 $ 29,168,000 $ 332,550,000
GENESIS 120,831,000 47,339,000 3,021,000 44,318,000
GUARDIAN 4,710,418,000 1,323,622,000 103,568,000 1,220,054,000
MANHATTAN 531,120,000 176,654,000 41,859,000 134,795,000
PARTNERS 1,555,024,000 356,846,000 15,998,000 340,848,000
SOCIALLY RESPONSIVE 106,750,000 26,589,000 241,000 26,348,000
</TABLE>
5)Affiliated Issuer (see Note E of Notes to Financial Statements).
6)Security exempt from registration under the Securities Act of 1933. This
security may be resold in transactions exempt from registration, normally to
qualified institutional buyers under Rule 144A. At February 29, 1996, this
security amounted to $4,882,500 or .3% of net assets for Neuberger&Berman
Partners Portfolio.
SEE NOTES TO FINANCIAL STATEMENTS
56
<PAGE>
(This page has been left blank intentionally.)
57
<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 $ 1,137,931 $ 165,149
Non-controlled affiliated issuers -- --
----------------------------
1,137,931 165,149
Cash 245 10
Deferred organization costs (Note A) 21 5
Dividends and interest receivable 1,328 70
Prepaid expenses and other assets 23 16
Receivable for option contracts written 74 --
Receivable for securities sold 10,140 228
----------------------------
1,149,762 165,478
----------------------------
LIABILITIES
Option contracts written, at market value
(Note A) 75 --
Payable for collateral on securities loaned
(Note A) 676 --
Payable for securities purchased 2,349 1,319
Payable to investment manager (Note B) 457 93
Accrued expenses 104 33
----------------------------
3,661 1,445
----------------------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL
INTERESTS $ 1,146,101 $ 164,033
----------------------------
NET ASSETS consist of:
Paid-in capital $ 813,159 $ 119,652
Net unrealized appreciation in value of
investments and option contracts written 332,942 44,381
----------------------------
NET ASSETS $ 1,146,101 $ 164,033
----------------------------
*Cost of investments:
Unaffiliated issuers $ 804,987 $ 120,768
Non-controlled affiliated issuers -- --
----------------------------
Total cost of investments $ 804,987 $ 120,768
----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
58
<PAGE>
February 29, 1996 (Unaudited)
- ----------------------------------------------------------------------
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 $ 5,854,111 $ 663,946 $ 1,895,872 $ 133,098
Non-controlled affiliated issuers 76,361 1,969 -- --
----------------------------------------------------------
5,930,472 665,915 1,895,872 133,098
Cash 93 93 57 8
Deferred organization costs (Note A) 62 24 43 21
Dividends and interest receivable 7,284 214 2,285 152
Prepaid expenses and other assets 107 17 51 1
Receivable for option contracts written -- -- -- --
Receivable for securities sold 66,434 5,473 4,861 --
----------------------------------------------------------
6,004,452 671,736 1,903,169 133,280
----------------------------------------------------------
LIABILITIES
Option contracts written, at market value
(Note A) 4,309 -- -- --
Payable for collateral on securities loaned
(Note A) 36,048 2,918 -- --
Payable for securities purchased 70,863 6,700 27,765 4,670
Payable to investment manager (Note B) 2,045 279 707 55
Accrued expenses 398 72 88 25
----------------------------------------------------------
113,663 9,969 28,560 4,750
----------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL
INTERESTS $ 5,890,789 $ 661,767 $ 1,874,609 $ 128,530
----------------------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 4,672,185 $ 526,972 $ 1,531,675 $ 102,182
Net unrealized appreciation in value of
investments and option contracts written 1,218,604 134,795 342,934 26,348
----------------------------------------------------------
NET ASSETS $ 5,890,789 $ 661,767 $ 1,874,609 $ 128,530
----------------------------------------------------------
*Cost of investments:
Unaffiliated issuers $ 4,625,106 $ 525,603 $ 1,552,938 $ 106,750
Non-controlled affiliated issuers 84,988 5,517 -- --
----------------------------------------------------------
Total cost of investments $ 4,710,094 $ 531,120 $ 1,552,938 $ 106,750
----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
59
<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 $ 6,495 $ 721
Interest income 1,009 45
Foreign taxes withheld (Note A) (15 ) --
------------------------
Total income 7,489 766
------------------------
Expenses:
Investment management fee (Note B) 2,652 624
Accounting fees 5 5
Amortization of deferred organization and
initial offering expenses (Note A) 4 1
Auditing fees 20 11
Custodian fees 108 41
Insurance expense 12 2
Legal fees 11 9
Trustees' fees and expenses 12 3
Miscellaneous -- 10
------------------------
Total expenses 2,824 706
Fee waived by the investment manager (Note
B) -- (73 )
------------------------
Total net expenses 2,824 633
------------------------
Net investment income 4,665 133
------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND OPTION CONTRACTS WRITTEN
Net realized gain on investments sold in
unaffiliated issuers 17,826 2,362
Net realized loss on option contracts written
(Note A) (372 ) --
Change in net unrealized appreciation of
investments and option contracts written 25,124 10,795
------------------------
Net gain on investments and option
contracts written 42,578 13,157
------------------------
Net increase in net assets resulting from
operations $ 47,243 $ 13,290
------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
60
<PAGE>
For the Six Months Ended February 29, 1996 (Unaudited)
- ----------------------------------------------------------------------
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 $ 32,710 $ 2,281 $ 13,809 $ 747
Interest income 22,185 208 1,257 129
Foreign taxes withheld (Note A) (319 ) (33) (33 ) --
-----------------------------------------------------------
Total income 54,576 2,456 15,033 876
-----------------------------------------------------------
Expenses:
Investment management fee (Note B) 11,500 1,710 4,105 304
Accounting fees 5 5 5 5
Amortization of deferred organization and
initial offering expenses (Note A) 13 4 9 3
Auditing fees 24 22 21 8
Custodian fees 395 90 158 33
Insurance expense 56 9 21 1
Legal fees 9 9 9 9
Trustees' fees and expenses 40 7 14 3
Miscellaneous -- -- -- --
-----------------------------------------------------------
Total expenses 12,042 1,856 4,342 366
Fee waived by the investment manager (Note
B) -- -- -- --
-----------------------------------------------------------
Total net expenses 12,042 1,856 4,342 366
-----------------------------------------------------------
Net investment income 42,534 600 10,691 510
-----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND OPTION CONTRACTS WRITTEN
Net realized gain on investments sold in
unaffiliated issuers 137,253 44,990 102,166 5,651
Net realized loss on option contracts written
(Note A) (3,767 ) -- -- --
Change in net unrealized appreciation of
investments and option contracts written 82,392 (22,008) 84,761 12,140
-----------------------------------------------------------
Net gain on investments and option
contracts written 215,878 22,982 186,927 17,791
-----------------------------------------------------------
Net increase in net assets resulting from
operations $ 258,412 $ 23,582 $ 197,618 $ 18,301
-----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
61
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
FOCUS PORTFOLIO GENESIS PORTFOLIO
Six Months Six Months
Ended Year Ended Year
February 29, Ended February 29, Ended
1996 August 31, 1996 August 31,
(000'S OMITTED) (UNAUDITED) 1995 (UNAUDITED) 1995
------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 4,665 $ 7,496 $ 133 $ 335
Net realized gain on investments
sold and option contracts written 17,454 50,732 2,362 6,666
Change in net unrealized
appreciation of investments and
option contracts written 25,124 139,750 10,795 17,448
------------------------------------------------------
Net increase in net assets resulting
from operations 47,243 197,978 13,290 24,449
------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 164,967 157,842 21,533 34,636
Reductions (35,282 ) (31,658 ) (12,950 ) (55,494 )
------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 129,685 126,184 8,583 (20,858 )
------------------------------------------------------
NET INCREASE IN NET ASSETS 176,928 324,162 21,873 3,591
NET ASSETS:
Beginning of period 969,173 645,011 142,160 138,569
------------------------------------------------------
End of period $ 1,146,101 $ 969,173 $ 164,033 $ 142,160
------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
62
<PAGE>
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
GUARDIAN PORTFOLIO MANHATTAN PORTFOLIO PARTNERS PORTFOLIO
Six Months Six Months Six Months
Ended Year Ended Year Ended Year
February 29, Ended February 29, Ended February 29, Ended
1996 August 31, 1996 August 31, 1996 August 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 42,534 $ 53,790 $ 600 $ 2,206 $ 10,691 $ 15,524
Net realized gain on investments
sold and option contracts written 133,486 124,394 44,990 44,742 102,166 165,254
Change in net unrealized
appreciation of investments and
option contracts written 82,392 627,968 (22,008 ) 85,917 84,761 109,257
----------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 258,412 806,152 23,582 132,865 197,618 290,035
----------------------------------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 1,065,364 1,413,464 40,173 75,821 110,700 100,895
Reductions (46,183 ) (86,756) (47,394 ) (85,015 ) (57,235 ) (107,688)
----------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 1,019,181 1,326,708 (7,221 ) (9,194 ) 53,465 (6,793)
----------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS 1,277,593 2,132,860 16,361 123,671 251,083 283,242
NET ASSETS:
Beginning of period 4,613,196 2,480,336 645,406 521,735 1,623,526 1,340,284
----------------------------------------------------------------------------------
End of period $ 5,890,789 $ 4,613,196 $ 661,767 $ 645,406 $ 1,874,609 $ 1,623,526
----------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
63
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS(Cont'd)
- ----------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
SOCIALLY RESPONSIVE
PORTFOLIO
Six Months
Ended Year
February 29, Ended
1996 August 31,
(000'S OMITTED) (UNAUDITED) 1995
--------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 510 $ 925
Net realized gain on investments
sold and option contracts written 5,651 1,842
Change in net unrealized
appreciation of investments and
option contracts written 12,140 12,075
--------------------------
Net increase in net assets resulting
from operations 18,301 14,842
--------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 16,465 21,008
Reductions (2,983 ) (9,789 )
--------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 13,482 11,219
--------------------------
NET INCREASE IN NET ASSETS 31,783 26,061
NET ASSETS:
Beginning of period 96,747 70,686
--------------------------
End of period $ 128,530 $ 96,747
--------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
64
<PAGE>
NOTES TO FINANCIAL STATEMENTS
February 29, 1996 (Unaudited)
- ----------------------------------------------------------------------
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 operating 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. 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: Investment securities 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
65
<PAGE>
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.
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 February 29, 1996, the
unamortized balance of such expenses amounted to $21,130, $4,656, $61,987,
$23,589, $42,969, and $20,501, 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 a
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 Six Months Ended February 29, 1996:
<TABLE>
<CAPTION>
VALUE
WHEN
FOCUS NUMBER WRITTEN
- ------------------------------------------------------------
<S> <C> <C>
CONTRACTS OUTSTANDING 8/31/95 850 $ 737,316
CONTRACTS WRITTEN 3,800 1,705,364
CONTRACTS EXPIRED (1,800 ) (208,343)
CONTRACTS EXERCISED (500 ) (154,745)
CONTRACTS CLOSED (1,850 ) (2,006,094)
-----------------------
CONTRACTS OUTSTANDING 2/29/96 500 $ 73,498
-----------------------
</TABLE>
66
<PAGE>
<TABLE>
<CAPTION>
VALUE
GUARDIAN NUMBER WHEN WRITTEN
- ------------------------------------------------------------------
<S> <C> <C>
CONTRACTS OUTSTANDING 8/31/95 8,650 $ 7,625,995
CONTRACTS WRITTEN 16,150 9,878,556
CONTRACTS EXPIRED 0 0
CONTRACTS EXERCISED (4,005) (1,393,627)
CONTRACTS CLOSED (13,650) (13,575,835)
-----------------------------
CONTRACTS OUTSTANDING 2/29/96 7,145 $ 2,535,089
-----------------------------
</TABLE>
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 six months ended February 29, 1996, Focus, Guardian,
Manhattan, and Partners lent securities to Neuberger. At February 29, 1996,
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
67
<PAGE>
$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 annual 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.
Each Portfolio has an expense offset arrangement included in its custodian
contract. The impact of this arrangement on each Portfolio's custodian expense,
reflected in the Statement of Operations, is less than .01% of the Portfolio's
average daily net assets.
NOTE C -- SECURITIES TRANSACTIONS:
During the six months ended February 29, 1996, there were purchase and sale
transactions (excluding short-term securities and option contracts written) as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- ---------------------------------------------------------------------
<S> <C> <C>
FOCUS $ 228,810,346 $ 135,496,240
GENESIS 22,937,196 19,144,438
GUARDIAN 1,346,566,189 609,297,720
MANHATTAN 149,189,792 160,224,355
PARTNERS 706,255,512 656,698,687
SOCIALLY RESPONSIVE 42,770,966 27,772,693
</TABLE>
During the six months ended February 29, 1996, 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 $ 271,188 $ 138,046 $ 409,234
GENESIS 28,086 49,559 77,645
GUARDIAN 1,375,158 1,042,052 2,417,210
MANHATTAN 219,162 143,373 362,535
PARTNERS 1,266,090 832,921 2,099,011
SOCIALLY RESPONSIVE 44,724 39,961 84,685
</TABLE>
In addition, Neuberger's share of the total interest income earned for the
six months ended February 29, 1996, from the collateralization of securities
loaned to or through Neuberger was $237,518, $1,128,624, $92,149, and $65,477,
for Focus, Guardian, Manhattan, and Partners, respectively.
68
<PAGE>
NOTE D -- LINE OF CREDIT:
At February 29, 1996, 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 an annual 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 February 29, 1996, nor
has Genesis utilized the line of credit at anytime to date.
NOTE E -- INVESTMENTS IN NON-CONTROLLED AFFILIATES*:
<TABLE>
<CAPTION>
GUARDIAN
BALANCE OF GROSS BALANCE OF
SHARES HELD PURCHASES GROSS SALES SHARES HELD VALUE
AUGUST 31, AND AND FEBRUARY 29, FEBRUARY 29,
NAME OF ISSUER: 1995 ADDITIONS REDUCTIONS 1996 1996
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Coltec Industries 2,765,000 1,357,200 0 4,122,200 $56,680,000
Sequent Computer
Systems 1,100,000 575,000 0 1,675,000 19,681,000
</TABLE>
<TABLE>
<CAPTION>
MANHATTAN
BALANCE OF GROSS BALANCE OF
SHARES HELD PURCHASES GROSS SALES SHARES HELD VALUE
AUGUST 31, AND AND FEBRUARY 29, FEBRUARY 29,
NAME OF ISSUER: 1995 ADDITIONS REDUCTIONS 1996 1996
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Spaghetti Warehouse 404,000 0 0 404,000 $ 1,969,000
</TABLE>
*Affiliated issuers, as defined in the 1940 Act, include issuers in which the
Portfolio held 5% or more of the outstanding voting securities.
NOTE F -- UNAUDITED FINANCIAL INFORMATION:
The financial information included in this interim report is taken from the
records of each Portfolio without audit by independent accountants/auditors.
Annual reports contain audited financial statements.
69
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
FOCUS GENESIS
PORTFOLIO PORTFOLIO
Period Period
Six Months from Six Months from
Ended August 2, Ended August 2,
February 29, Year Ended 1993 to February 29, Year Ended 1993 to
1996 August 31, August 31, 1996 August 31, August 31,
(UNAUDITED) 1995 1994 1993 (UNAUDITED) 1995 1994 1993
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET
ASSETS:
Expenses .54%(1) .57% .58% .58%(1) .86%(1,2) .94%(2) .98% 1.07%(1)
-------------------------------------------------------------------------------------------------
Net Investment
Income .89%(1) 1.05% 1.16% 1.46%(1) .18%(1,2) .25%(2) .18% .37%(1)
-------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 13% 36% 52% 4% 13% 37% 63% 3%
-------------------------------------------------------------------------------------------------
Average Commission Rate
Paid $0.0571 -- -- -- $0.0576 -- -- --
-------------------------------------------------------------------------------------------------
Net Assets, End of
Period (in millions) $1,146.1 $969.2 $645.0 $574.0 $164.0 $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>
SIX MONTHS ENDED
FEBRUARY 29, YEAR ENDED
GENESIS 1996 AUGUST 31, 1995
- -------------------------------------------------------
<S> <C> <C>
Expenses .96% .97%
Net Investment
Income .08% .22%
</TABLE>
70
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
GUARDIAN MANHATTAN
PORTFOLIO PORTFOLIO
Six Months
Six Months Period from Ended Period from
Ended August 2, February August 2,
February 29, Year Ended 1993 to 29, Year Ended 1993 to
1996 August 31, August 31, 1996 August 31, August 31,
(UNAUDITED) 1995 1994 1993 (UNAUDITED) 1995 1994 1993
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET
ASSETS:
Expenses .46%(1) .48% .50% .51%(1) .57%(1) .59% .59% .59%(1)
-----------------------------------------------------------------------------------------------------
Net Investment
Income 1.64%(1) 1.72% 1.66% 2.45%(1) .19%(1) .42% .53% .55%(1)
-----------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 14% 26% 24% 3% 23% 44% 50% 3%
-----------------------------------------------------------------------------------------------------
Average Commission Rate
Paid $0.0573 -- -- -- $0.0561 -- -- --
-----------------------------------------------------------------------------------------------------
Net Assets, End of
Period (in millions) $5,890.8 $4,613.2 $2,480.3 $1,777.6 $661.8 $645.4 $521.7 $536.8
-----------------------------------------------------------------------------------------------------
</TABLE>
1) Annualized.
71
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Equity Managers Trust
<TABLE>
<CAPTION>
PARTNERS SOCIALLY RESPONSIVE
PORTFOLIO PORTFOLIO
Period from
March 14,
1994
Six Months (Commencement
Six Months Period from Ended Year of
Ended August 2, February Ended Operations)
February 29, Year Ended 1993 to 29, August to
1996 August 31, August 31, 1996 31, August 31,
(UNAUDITED) 1995 1994 1993 (UNAUDITED) 1995 1994
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET
ASSETS:
Expenses .51%(1) .53% .54% .54%(1) .66%(1) .68% .69%(1)
------------------------------------------------------------------------------------------
Net Investment Income 1.26%(1) 1.13% .75% 1.19%(1) .92%(1) 1.18% 1.33%(1)
------------------------------------------------------------------------------------------
Portfolio Turnover Rate 39% 98% 75% 8% 26% 58% 14%
------------------------------------------------------------------------------------------
Average Commission Rate
Paid $0.0584 -- -- -- $0.0592 -- --
------------------------------------------------------------------------------------------
Net Assets, End of Period
(in millions) $1,874.6 $1,623.5 $1,340.3 $1,182.1 $128.5 $96.7 $70.7
------------------------------------------------------------------------------------------
</TABLE>
1) Annualized.
72
<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 Massachusetts Avenue, NW
2nd Floor
Washington, DC 20036-1800
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- 1996 Neuberger&Berman Management Inc.
73
<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
74
<PAGE>
NEUBERGER&BERMAN MANAGEMENT INC. -Registered Trademark-
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
212.476.8848 FAX
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
information 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.
(recycle PRINTED ON RECYCLED PAPER
logo) WITH SOY BASED INKS NBESAR020296
<PAGE>
