<PAGE>
SEMI-ANNUAL REPORT
------------------------
February 28, 1997
NEUBERGER&BERMAN
EQUITY FUNDS-Registered Trademark-
Neuberger&Berman
FOCUS FUND
Neuberger&Berman
GENESIS FUND
Neuberger&Berman
GUARDIAN FUND
Neuberger&Berman
INTERNATIONAL FUND
Neuberger&Berman
MANHATTAN FUND
Neuberger&Berman
PARTNERS FUND
Neuberger&Berman
SOCIALLY RESPONSIVE FUND
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
THE FUNDS
<S> <C>
CHAIRMAN'S LETTER 4
PERFORMANCE HIGHLIGHTS 5
PORTFOLIO COMMENTARY
Focus Fund 6
Genesis Fund 8
Guardian Fund 11
International Fund 14
Manhattan Fund 16
Partners Fund 19
Socially Responsive Fund 21
FINANCIAL STATEMENTS 24
FINANCIAL HIGHLIGHTS
PER SHARE DATA
Focus Fund 35
Genesis Fund 36
Guardian Fund 37
International Fund 38
Manhattan Fund 39
Partners Fund 40
Socially Responsive Fund 41
THE PORTFOLIOS
SCHEDULE OF INVESTMENTS
TOP TEN EQUITY HOLDINGS
Focus Portfolio 45
Genesis Portfolio 47
Guardian Portfolio 50
International Portfolio 54
Manhattan Portfolio 60
Partners Portfolio 62
Socially Responsive Portfolio 65
FINANCIAL STATEMENTS 70
FINANCIAL HIGHLIGHTS 85
DIRECTORY 89
OFFICERS AND TRUSTEES 90
</TABLE>
3
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CHAIRMAN'S LETTER April 11, 1997
Dear Fellow Shareholder:
During the six months ended February 28, 1997, we witnessed one of the most
explosive rallies in stock market history with the Dow Jones Industrial Average
and Standard & Poor's 500 Index gaining 23.82% and 22.60%, respectively. High
multiple blue chip stocks (particularly branded consumer goods companies),
continued to lead the market parade. Not left out of the rally were technology,
financial services, and health care stocks, which rebounded as well, helping our
funds achieve solid gains.
With the Dow and S&P "500" near record levels and equities valuations well
above historic norms, we are comforted by our conviction that our portfolios are
comprised of high quality companies trading at reasonable fundamental valuations
relative to the market and their long term growth prospects. We have a talented
and experienced group of analysts and portfolio managers who, in keeping with
our firm's heritage, focus primarily on value.
If the economy continues to provide low inflation, relatively low interest
rates and reasonable corporate earnings, stocks can continue to progress. We
believe well managed, financially sound companies in out-of-favor industries
will participate more fully in a market advance. We have faith investors will
ultimately see the folly in chasing a relative handful of blue-chip growth
stocks simply because they are going up in price. Sooner or later, money will
gravitate to equally high-quality companies selling at much more reasonable
fundamental valuations.
Whatever the market holds in store for us over the next six months and beyond,
we will continue to do what we have always done -- focus on quality and
value -- the two most important ingredients in the recipe for long term
investment success.
Sincerely,
/s/ Stanley Egener
Stanley Egener
Chairman of the Board
Neuberger&Berman Equity Funds
4
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PERFORMANCE HIGHLIGHTS
<TABLE>
<CAPTION>
FOR PERIODS
ENDED 3/31/97
------------------------------
SIX MONTH
PERIOD AVERAGE ANNUAL TOTAL
NEUBERGER&BERMAN INCEPTION ENDED RETURNS(1)
EQUITY FUNDS DATE 2/28/97(1) 1 YR 5 YR 10 YR
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOCUS FUND(2) 10/19/55 +22.01% +13.20% +17.17% +13.03%
GUARDIAN FUND 6/1/50 +20.29% +14.36% +15.88% +13.31%
MANHATTAN FUND 3/1/79(3) +20.49% +6.72% +13.72% +10.85%
PARTNERS FUND 1/20/75(3) +23.56% +18.92% +17.53% +13.22%
SOCIALLY RESPONSIVE FUND(4) 3/16/94 +15.42% +11.42% +15.71%(5) N/A
S&P "500"(6) N/A +22.60% +19.79% +16.39% +13.33%
GENESIS FUND(4) 9/27/88 +11.93% +18.48% +13.87% +13.87%(5)
RUSSELL 2000(6) N/A +8.79% +5.08% +12.78% N/A
INTERNATIONAL FUND(4) 6/15/94 +17.14% +22.07% +12.43%(5) N/A
EAFE-REGISTERED TRADEMARK- INDEX(6) N/A +2.44% +1.75% N/A N/A
</TABLE>
1) Includes reinvestment of all dividends and capital gain distributions.
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) Prior to November 1, 1991, the investment policies of Neuberger&Berman Focus
Fund-Registered Trademark- required that it invest a substantial portion of
its assets in the energy field.
3) These dates reflect when Neuberger&Berman Management
Inc.-Registered Trademark- first became investment adviser to these Funds.
4) Neuberger&Berman Management Inc. voluntarily bears certain operating expenses
that exceed, in the aggregate, 1.50% of average daily net assets per annum
for Neuberger&Berman Socially Responsive Fund-Registered Trademark- and 1.70%
of average daily net assets per annum for Neuberger&Berman International
Fund-Registered Trademark-, until December 31, 1997. Neuberger&Berman
Management Inc. has voluntarily agreed to waive a portion of the management
fee borne directly by Neuberger&Berman Genesis Portfolio-SM- and indirectly
by Neuberger&Berman Genesis Fund-Registered Trademark- to reduce that fee by
0.10% of the Portfolio's average daily net assets per annum. Absent such
arrangements, the average annual total returns for Socially Responsive Fund
and Genesis Fund would have been less, and the average annual total returns
for International Fund for the periods stated would have been +17.11%,
+21.96% and +12.12%, respectively.
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
11% 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 primarily in companies with small
market capitalization are set forth in the prospectus. The
EAFE-Registered Trademark- Index, also known as the Morgan Stanley Capital
International Europe, Australia, Far East Index, is an unmanaged index of
over 1,000 foreign stock prices. The index is translated into U.S. dollars
and includes reinvestment of all dividends and capital gain distributions.
The risks involved in seeking capital appreciation from investments primarily
in companies based outside the United States are set forth in the prospectus.
Please note that indices do not take into account any fees and expenses of
investing in the individual securities that they track, and that individuals
cannot invest directly in any index. Data about the performance of these
indices are prepared or obtained by Neuberger&Berman Management Inc. and
include reinvestment of all dividends and capital gain distributions. The
Portfolios invest in many securities not included in any of the
above-described indices.
5
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PORTFOLIO COMMENTARY
Neuberger&Berman
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Focus Fund
PORTFOLIO CO-MANAGERS KENT SIMONS AND KEVIN RISEN EMPLOY A SECTOR-SPECIFIC
APPROACH TO MANAGING THE PORTFOLIO. FIRST, THEY IDENTIFY SIX ECONOMIC
SECTORS (OUT OF A POSSIBLE 13) THEY BELIEVE TO BE MOST UNDERVALUED. THEY
THEN FOCUS ON WELL MANAGED, FINANCIALLY SOUND INDUSTRY LEADERS IN EACH
CHOSEN ECONOMIC SECTOR. THE PORTFOLIO MANAGEMENT TEAM FAVORS COMPANIES
WITH ABOVE MARKET AVERAGE EARNINGS GROWTH POTENTIAL TRADING AT BELOW
MARKET AVERAGE PRICE/ EARNINGS MULTIPLES.
For the six months ended February 28, 1997, the fund returned 22.01% in line
with the Standard & Poor's 500 Index's 22.60% gain (see page 5 for the average
annual total returns, as of March 31, 1997).
Over the last six months, our substantial commitment to financial stocks
(37.6% of the portfolio at the close of the first half of fiscal 1997) was
particularly productive, with bank, insurance, credit and finance company
holdings returning 39% on average. Technology investments, subdivided into
electronics companies and computer and office equipment companies (13.8% of the
portfolio at the close of the first half of fiscal 1997) gained 28% and 37%,
respectively. Media and entertainment were among our worst performing groups,
with our holdings down 6.2% over the period.
Despite the group's stellar performance, we believe selected financial stocks
remain fundamentally undervalued. Travelers Group and Capital One Financial,
still trade at well below market average price/earnings multiples. Why are these
stocks still cheap? Conventional wisdom seems to be that rising interest rates
will hurt earnings. We believe that concern has been overblown and that top
quality financial companies can continue to increase earnings even if interest
rates trend modestly higher. The managements of many financial companies seem to
agree that their stocks are still under-valued, as is evidenced by ongoing share
repurchase activity.
We continue to favor selected technology companies like Compaq Computer and
Seagate Technology. Compaq's product line is selling
6
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Focus Fund (Cont'd)
well, manufacturing costs are lower, and its product mix is more profitable. In
our view, Seagate is well positioned in the highest growth segment of the
computer disk drive market. Prices have firmed, costs have been reduced and
sales volume has risen. Disciplined value investors like ourselves periodically
get the opportunity to buy high-quality technology companies at below market
average multiples. When we do, we add these securities to our portfolio.
Value investing demands patience. For example, take Exide Corp., the world's
largest manufacturer of automotive, marine and specialty batteries. Exide is
focused on improving profitability in Europe where it is one of the market
leaders. Weather patterns can cause sharp swings in the demand for batteries.
Severely cold weather provokes high levels of battery failures, while unusually
mild winters or cool summers depress demand.
Exide's sales and earnings have been weak in recent periods, due to mild
weather conditions in Europe and restructuring charges. However, we are
encouraged by the improved gross margins seen in the first nine months of fiscal
year 1997 (started March 1996), and we will carefully monitor whether this trend
continues in the future.
In the first half of fiscal 1997, our value discipline once again rewarded
shareholders. We remain committed to the investment strategy -- buying great
companies when they are opportunistically priced -- that has been responsible
for the fund's superior long-term performance record.
The composition, industries and holdings of the portfolio are subject to change.
Focus Fund's portfolio is invested in a wide array of stocks, and no single
holding makes up more than a small fraction of the portfolio's total assets.
While the value-oriented approach is intended to limit risks, the
portfolio -- with its concentration in sectors -- may be more greatly affected
by any single economic, political or regulatory development than a more
diversified mutual fund.
Please remember that past performance is not indicative of future results.
7
<PAGE>
PORTFOLIO COMMENTARY
Neuberger&Berman
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Genesis Fund
PORTFOLIO MANAGER JUDITH VALE FOCUSES ON "EASY-TO-UNDERSTAND" COMPANIES IN
THE LESS GLAMOROUS SECTORS OF THE SMALL-CAPITALIZATION STOCK UNIVERSE. BY
AVOIDING THE CUTTING EDGE TECHNOLOGY COMPANIES THAT ATTRACT SO MUCH
SPECULATIVE ATTENTION IN THE SMALL-CAP MARKET, SHE IS BETTER ABLE TO
IDENTIFY FUNDAMENTALLY UNDERVALUED STOCKS WITH PROMISING GROWTH POTENTIAL.
WE HAVE FOUND THAT THIS VALUE-ORIENTED APPROACH TO SMALL-CAP INVESTING CAN
TRANSLATE INTO A PORTFOLIO WITH FAVORABLE RISK/REWARD CHARACTERISTICS.
For the six months ended February 28, 1997, the fund returned 11.93% versus
the Russell 2000 Index's 8.79% advance (see page 5 for the average annual total
returns, as of March 31, 1997).
A big part of our strategy over the last six months has been to limit the
portfolio's exposure to cyclical companies, which generally depend on a rapidly
expanding economy to grow sales and earnings. Although the cyclicals are
fundamentally attractive, they can perform poorly during periods of economic
uncertainty. Instead, we focused on contra-cyclical industries (industries that
have their own cycles largely independent of the main business cycle); "Steady
Eddie" companies that do not depend on broad-based economic momentum to grow
earnings; and special situations we believe can buck economic and industry
trends.
Our best performing contra-cyclical investments were aerospace component
manufacturers and oil and gas exploration and service companies. Both industries
are recovering from deep and lengthy down-cycles, which eliminated competition
and reduced capacity. Demand is now strong, and there is tremendous pricing
flexibility, which has the potential to expand margins and accelerate earnings.
After a lengthy recession in the aerospace industry, some signs indicate that
we are currently in the relatively early stages of what, in our view, could be
an enormous commercial aerospace boom fueled by the rapid expansion of airline
fleets here and abroad. As small-cap investors, we can't own Boeing, but we can
buy small component manufacturers that supply parts to this giant and its
arch-rival Airbus. One of our
8
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Genesis Fund (Cont'd)
current favorites is Thiokol, which is best known for supplying rocket boosters
for the space shuttle, but, through its Huck fasteners business and 49%
ownership of Howmet Casting, is also a major supplier to commercial aerospace
companies. In our opinion, Thiokol's market position is not adequately reflected
in its stock price.
Due to higher energy prices (as we write, West Texas Crude Oil was priced at
around $20.50 per barrel, up from $17.50 from the summer of 1995 and well above
the $13.00 per barrel low reached in the 1980's) and new technology that reduces
costs, the economics of drilling for oil and natural gas have improved
dramatically in the last eighteen months. We expect the economics to remain
favorable even if energy prices decline modestly over the next several years.
This could result in rising earnings for exploration companies and drilling
equipment and service suppliers. We hit a few gushers over the last six months,
with Offshore Logistics, Dreco Energy, and Pride Petroleum all making our top
performing stock list.
We hit some dry holes as well. For example, DH Technology, a specialty printer
company, ran into inventory problems at the customer level that hurt earnings.
AptarGroup, a company that makes specialty packaging for the food and
pharmaceutical industries, is a good example of our "Steady Eddie" investment
strategy. Aptar has had an above market average earnings growth rate. More
importantly, because it serves the food and drug industries, earnings have not
been dependent on broad-based economic momentum. The market is rewarding
large-cap brand-name consumer goods and drug companies with price/earnings
multiples well above annual earnings growth rates. We believe little AptarGroup
is much more reasonably priced.
We are proud to have delivered good absolute and relative returns in what has
been a challenging small-cap stock market. By avoiding the
9
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Genesis Fund (Cont'd)
high priced glamour stocks and focusing on real fundamental values in the
small-cap stock universe, we are confident that we have served our shareholder
well.
The risks involved in seeking capital appreciation from investments principally
in companies with small market capitalization are set forth in the prospectus.
The composition, industries and holdings of the portfolio are subject to change.
Genesis Fund's portfolio is invested in a wide array of stocks, and no single
holding makes up more than a small fraction of the portfolio's total assets.
Please remember that past performance is not indicative of future results.
10
<PAGE>
PORTFOLIO COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Guardian Fund
PORTFOLIO CO-MANAGERS KENT SIMONS AND KEVIN RISEN FOCUS ON "FIRST RATE"
COMPANIES IN INDUSTRIES THAT ARE CURRENTLY OUT-OF-FAVOR. RECOGNIZING THAT
"CHEAP" STOCKS ARE NOT NECESSARILY UNDERVALUED, THEY SEEK WELL MANAGED,
FINANCIALLY SOUND COMPANIES TRADING AT FUNDAMENTALLY ATTRACTIVE
PRICE/EARNINGS MULTIPLES RELATIVE TO THE MARKET AND THEIR LONG-TERM
EARNINGS GROWTH POTENTIAL. BY CONCENTRATING THE PORTFOLIO IN WHAT THEY
BELIEVE ARE HIGH-QUALITY WALL STREET "ORPHANS," THE PORTFOLIO MANAGEMENT
TEAM ATTEMPTS TO TAKE CONSISTENT ADVANTAGE OF OPPORTUNITIES CREATED BY
INVESTORS' OVERREACTION TO REAL OR PERCEIVED PROBLEMS.
For the six months ended February 28, 1997, the fund advanced 20.29% versus
the Standard & Poor's 500 Index's 22.60% return (see page 5 for the average
annual total returns, as of March 31, 1997).
Over this six-month period, the portfolio's concentration in banking,
insurance, credit and finance stocks, including real estate investment trusts,
(collectively, 31.5% at the close of the first half of fiscal 1997) generated
average returns of approximately 37.0%. Technology investments (our second
largest group weighting at 16.8%) also contributed to performance with
electronics company holdings gaining 48.9% and computer and office equipment
stocks returning 31.6%. Our automotive and auto parts holdings modestly
under-performed the market. Returns from our health care investments were mixed.
As is evidenced by their heavy weighting in the portfolio, we continue to like
selected financial stocks. Wall Street seems to believe rising interest rates
will disrupt financial companies' earnings progress. That may not be the case.
We think financial stocks like CITICORP, Travelers Group, Fannie Mae, and
Merrill Lynch, to name just a few of our holdings, have the capacity to grow
earnings at an above market average pace, even if interest rates move modestly
higher. The stocks still trade at well below market average multiples. That is
our definition of value.
One doesn't generally associate technology stocks with value investing.
However, the technology group's volatility actually lends itself to our
discipline of buying first rate companies at discounted multiples. In
11
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Guardian Fund (Cont'd)
mid-summer 1996, tech stocks got hit hard. The market's overreaction to some
modest earnings disappointments gave us the opportunity to buy some seemingly
great companies quite cheaply. Seagate Technology, an example of this, was one
of our best performing stocks over the past six months. In our view, Seagate is
well positioned in the highest growth segment of the computer disk drive market.
Prices have firmed, costs have been reduced and sales volume has risen. We had
the opportunity to purchase shares at what we viewed as bargain prices. We
continually monitor the valuations of all the industry groups and individual
stocks in our research universe. When technology stocks are out of favor, we
consider adding them to the portfolio.
The media and entertainment and energy groups (collectively, about 8.6% of our
portfolio) under-performed over the reporting period. Most of our media and
entertainment holdings reported relatively good free cash flow growth -- the
best barometer of progress in these businesses -- but it was largely overlooked
by investors fixated on net earnings growth. In addition, we think investors
have overreacted to energy prices retreating from their 1996 highs. Going
forward, we believe energy prices will stabilize around current levels, and
energy company earnings could then trend higher.
Fertilizer company IMC Global and specialty chemical producer Cabot Corp. were
among our poorer performing stocks over the last six months as both recorded
major earnings disappointments. A weather-induced late start to the planting
season hurt IMC's sales and earnings. However, in our judgment, low worldwide
grain inventories may indicate better times ahead for the fertilizer industry.
Cabot was burdened by weak demand for its core carbon black product and high
expenses associated with new specialty chemical product development. Short-term
earnings may continue to disappoint. In the longer term, however, the company's
recently expanded share repurchase program will leverage returns.
With the sale of its property-casualty unit and its acquisition of U.S.
Healthcare, we believe Aetna (currently our fourth largest holding) has
12
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Guardian Fund (Cont'd)
transformed itself from a relatively slow-growth insurance company to a dominant
player in the faster-growing managed health care business. Aetna's goal is now
to extend U.S. Healthcare's base from small companies to large corporate
customers. The stock has done well, but still trades at a multiple discount to
the market.
In the first half of fiscal 1997, value stocks performed much better than a
year ago. However, the market is still favoring high multiple blue-chip growth
companies. We don't know how long this will last or when the speculative
excesses will be wrung out of the market. We are confident that our portfolio is
comprised of quality companies trading at very reasonable fundamental
valuations.
The composition, industries and holdings of the portfolio are subject to change.
Guardian Fund's portfolio is invested in a wide array of stocks, and no single
holding makes up more than a small fraction of the portfolio's total assets.
Please remember that past performance is not indicative of future results.
13
<PAGE>
PORTFOLIO COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
International Fund
PORTFOLIO MANAGER FELIX ROVELLI TAKES A VALUE APPROACH TO THE
INTERNATIONAL EQUITIES MARKETS. AFTER ANALYZING THE POLITICAL, SOCIAL,
ECONOMIC, AND STOCK MARKET ENVIRONMENTS OF COUNTRIES AROUND THE GLOBE, HE
SELECTS THOSE INTERNATIONAL INVESTMENT ARENAS HE BELIEVES OFFER THE BEST
FUNDAMENTAL VALUES. THE STOCK SELECTION PROCESS IS RESEARCH-INTENSIVE AND
FEATURES FREQUENT MEETINGS WITH CORPORATE MANAGEMENTS AND THEIR
COMPETITORS IN ADDITION TO THE ANALYSIS OF INCOME STATEMENTS AND BALANCE
SHEETS. THE GOAL IS TO LOOK BEYOND "THE NUMBERS" TO FIND THOSE
INTERNATIONAL COMPANIES WITH THE BEST LONG-TERM INVESTMENT PROSPECTS.
During the six months ended February 28, 1997, the fund returned 17.14%
compared to the benchmark EAFE-Registered Trademark- Index's 2.44% gain (see
page 5 for the average annual returns, as of March 31, 1997).
Our over-weighting in the strong Scandinavian markets (approximately 19% of
the portfolio compared to about 4% for the EAFE-Registered Trademark- Index) and
under-weighting in the weak Japanese market (about 7% versus
EAFE-Registered Trademark-'s 40%) helped us achieve favorable relative returns.
Our allocation in other developed European markets (an additional 38% of the
portfolio) was productive as these markets generated percentage gains in the mid
to high teens over the last six months. The portfolio's 14% position in Pacific
Rim markets, excluding Japan, proved somewhat disappointing with strong gains in
Hong Kong largely offset by flat to negative returns in other emerging markets
in the region.
Favorable country allocation was not solely responsible for the fund's
excellent performance this fiscal half. Quantitative analysis reveals
approximately half the fund's gain in the period could be attributed to our
value-oriented stock selection. For example, the prices of two of our best
performing stocks, Datacraft Asia and Fuji Photo, more than doubled in
relatively uninspiring stock markets. Of course, we did make some mistakes. The
strong Italian lira restrained earnings for export driven Fila Holding ADR and
SAES Getters ADR, two of our worst performing stocks. Also, the deteriorating
political/economic/stock market climate in Thailand hurt our investment in Thai
Farmers Bank.
14
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International Fund (Cont'd)
We are not currently considering any major changes in the portfolio's country
allocation. Looking ahead, with investment bargains becoming more difficult to
find in the Scandinavian and other developed European markets, we anticipate
that we may be devoting a little more attention to emerging markets in the
Pacific Rim, Latin America, and Eastern Europe.
Our recent investment in Hong Kong's Vanda Systems & Communications Holdings
demonstrates the kind of values we are seeking. Vanda provides information
processing software and systems for banks in the Pacific Rim including China. In
our opinion, it is one of the best positioned players in what we see as an
excellent growth industry as banks throughout the region modernize their
antiquated information processing systems. Vanda Systems, which we believe is a
financially sound, well managed company trading at a price/earnings multiple
well below its annual earnings growth rate, is our kind of investment
opportunity.
We are pleased with the results we were able to achieve in the first half of
fiscal 1997 and remain confident our value oriented approach to international
equities has served our shareholders well.
The composition, industries and holdings of the portfolio are subject to change.
International Fund's portfolio is invested in a wide array of stocks, and no
single holding makes up more than a small fraction of the portfolio's total
assets.
Investing in foreign securities involves greater risks than investing in
securities of U.S. issuers, including currency fluctuation.
Please remember that past performance is not indicative of future results.
15
<PAGE>
PORTFOLIO COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Manhattan Fund
PORTFOLIO MANAGER MARK GOLDSTEIN EMPLOYS A "GROWTH AT A REASONABLE PRICE"
(GARP) APPROACH TO THE EQUITIES MARKET. HE SEEKS WELL-MANAGED COMPANIES
WITH STRONG BALANCE SHEETS, CONSISTENT EARNINGS GROWTH RECORDS,
ABOVE-AVERAGE RETURNS ON EQUITY, HIGH FREE CASH FLOW, AND MOST
IMPORTANTLY, REASONABLE FUNDAMENTAL VALUATIONS. BY SHUNNING "HIGH FLYING"
WALL STREET FAVORITES, HE ATTEMPTS TO AVOID ONE OF THE MOST COMMON AND
COSTLY INVESTMENT ERRORS -- PAYING TOO MUCH FOR GOOD COMPANIES.
For the six months ended February 28, 1997, the fund returned 20.49% compared
to the Standard & Poor's 500 Index's 22.60% gain (see page 5 for the average
annual total returns, as of March 31, 1997).
During the first half of fiscal 1997, value re-asserted itself. Our
portfolio's over-weighting in the financial services and technology industries
paid off handsomely. Returns from our investments in retailers and
communications companies were less productive.
Our positions in bank stocks like CITICORP and Wells Fargo had a very positive
impact on performance, but the real stars of our show were credit card companies
like MBNA and Capital One Financial. We took the opportunity to sell some shares
of these stocks to take advantage of their price appreciation. We still believe,
however, some of these stocks offer a good value. Why are credit card companies
so under-loved? Rising consumer debt and credit card delinquency rates have
spooked investors. This is a problem, but, in our opinion, not nearly as big a
one as most investors perceive. Revenues have been growing rapidly. Despite
heated competition, there has been enough pricing flexibility in the industry to
maintain attractive profit margins. Capital One Financial and MBNA are still
trading at below market average price/earnings multiples. Ironically, even
though most credit card companies were originally sold by or spun-off from bank
holding companies, strong free cash flows could make some of them attractive
acquisition candidates for banks looking to add cash-generating subsidiaries, as
is apparently the case in Banc One's pending acquisition of First USA at 20
times earnings.
16
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Manhattan Fund (Cont'd)
We have had some disappointments. Poor performance from stocks like Nu-Kote
Holding, Coventry, and a handful of others was a direct result of unanticipated
earnings shortfalls. Other underperformers like cellular telephone giant
Airtouch Communications actually posted relatively good results, but sold off
due to concern over prospects for future competition from Personal
Communications Services (PCS) operators. We think the market is vastly
underestimating the value of Airtouch's extensive foreign operations via
partnerships with cellular operators in Germany, Italy, Spain and elsewhere. We
believe Airtouch's international operations alone are worth two-thirds of its
current stock price and the whole company is trading at about half its true
value.
Recently, we've taken a bite of Lone Star Steakhouse & Saloon, a restaurant
chain that has been growing rapidly. We like what's been on the menu, notably
25% profit margins, among the highest in the industry, and about a 40% cash
return on investment. Lone Star currently has 205 outlets and plans to expand
this number by 20% annually over the next few years. The stock is trading at a
price/earnings multiple well below its annual earnings growth rate.
We have also bought Merrill Lynch, one of the great names in the financial
services industry. In our view, Merrill already has what the Morgan Stanley/Dean
Witter combination is hoping to create -- a dominant global franchise in the
brokerage and asset management businesses. The demographics are in Merrill's
favor with the baby boomers in the early stages of their prime
earnings/savings/investment years. Over 50% of Merrill's compensation expense,
always the largest cost component in this business, is incentive oriented. We
believe this is simply a terrific organization in a historically good long-term
growth industry, yet it trades at a significant multiple discount to the market.
17
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Manhattan Fund (Cont'd)
We are pleased with the fund's performance over the last six months,
particularly in view of the fact that it was achieved without stretching our
guiding philosophy of growth at a reasonable price. We believe by sticking to
our fundamental discipline, we can continue to deliver favorable risk adjusted
returns.
The composition, industries and holdings of the portfolio are subject to change.
Manhattan Fund's portfolio is invested in a wide array of stocks, and no single
holding makes up more than a small fraction of the portfolio's total assets.
Please remember that past performance is not indicative of future results.
18
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PORTFOLIO COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Partners Fund
PORTFOLIO CO-MANAGERS MICHAEL KASSEN AND ROBERT GENDELMAN FOCUS ON
OUT-OF-FAVOR LARGE-CAP STOCKS AND MID-SIZED COMPANIES LESS WIDELY FOLLOWED
BY WALL STREET ANALYSTS. THEY ARE PARTICULARLY PARTIAL TO "FALLEN
ANGELS" -- STOCKS OF GROWING COMPANIES THAT HAVE EXPERIENCED TEMPORARY
SETBACKS, BUT WHOSE LONGER-TERM FUNDAMENTAL OUTLOOK REMAINS STRONG. THE
PORTFOLIO MANAGEMENT TEAM VIEWS STOCKS AS PIECES OF BUSINESSES THEY WOULD
LIKE TO OWN, RATHER THAN PIECES OF PAPER TO TRADE BASED ON SHORT-TERM
PRICE FLUCTUATIONS. THEIR GOAL IS TO FIND QUALITY COMPANIES TRADING AT A
DISCOUNT TO THEIR INTRINSIC ECONOMIC VALUE.
For the six months ended February 28, 1997, the fund returned 23.56% compared
to the Standard & Poor's 500 Index's 22.60% gain (see page 5 for the average
annual total returns, as of March 31, 1997).
We build the portfolio from the ground up, stock by stock, but generally end
up over-weighting several industry groups that we believe offer attractive
fundamental values. Over the last six months, our focus on the banking,
insurance, and technology industries has helped us achieve strong absolute and
relative returns. We have been penalized by our limited exposure to drug stocks,
a group we like, but one in which we couldn't find many true fundamental
bargains.
Going forward, we continue to favor selected bank stocks. Wells Fargo is a
good example. Management has extended the franchise through what, in our
opinion, are economically sensible strategic acquisitions. They have found
creative low cost methods, including the Internet, to attract new customers. The
company has moved to penetrate the small business market in a very targeted
fashion. Free cash flow has grown, and management has been using this cash to
buy back stock. Despite the stock's excellent performance, Wells Fargo still
trades at a significant discount to our appraisal of its economic value.
We also would like to highlight Capital One Financial. Capital One is one of
the largest issuers of Visa and Mastercard credit cards. Despite its solid
earnings performance and a history of consistently high return on equity, we
believe Capital One still trades below the market average
19
<PAGE>
- ----------------------------------------------------------------------
Partners Fund (Cont'd)
price/earnings multiple. Credit cards have continued to gain share as a
percentage of personal consumption expenditures, leading to what we perceive as
favorable industry growth trends. Furthermore, the company's conservative credit
line policy, which includes low average credit lines and balances, should keep
charge-offs below industry averages.
On the other side of the ledger, our investments in deep cyclical industries,
such as steel and non-ferrous metals underperfomed the rest of the portfolio.
The industries were hurt as investors had anticipated a slowing economy.
In order to buy quality companies at bargain prices, value managers like
ourselves often have to buy during periods of real or perceived crisis. Our goal
is to analyze a company's problems to see if there is light at the end of the
tunnel. For instance, we recently bought McDonald's. McDonald's stock has been
under a lot of pressure due to slower growth in its domestic restaurant
business. However, internationally McDonald's has boomed. It is one of the most
recognized brand names in the world and international expansion has been the
real growth engine for the company -- a factor overlooked by the market.
The portfolio's strong performance in the first half of fiscal 1997 reaffirms
our faith in the value discipline. We are confident that buying great companies
when they are cheap will continue to reward our shareholders.
The composition, industries and holdings of the portfolio are subject to change.
Partners Fund's portfolio is invested in a wide array of stocks, and no single
holding makes up more than a small fraction of the portfolio's total assets.
Please remember that past performance is not indicative of future results.
20
<PAGE>
PORTFOLIO COMMENTARY
Neuberger&Berman
- ----------------------------------------------------------------------
Socially Responsive Fund
PORTFOLIO MANAGER JANET PRINDLE BELIEVES DOING GOOD IS GOOD BUSINESS AND
HAS THE POTENTIAL TO PRODUCE SOLID INVESTMENT RESULTS. SHE FOCUSES ON
COMPANIES THAT ARE AGENTS OF FAVORABLE CHANGE IN WORKPLACE POLICIES
(PARTICULARLY FOR WOMEN AND MINORITIES); THOSE THAT ARE GOOD CORPORATE
CITIZENS; AND THOSE THAT ARE RESPONSIVE TO ENVIRONMENTAL ISSUES. BUT,
SOCIAL RESPONSIBILITY ALONE DOES NOT QUALIFY A COMPANY AS A GOOD
INVESTMENT. TRUE TO NEUBERGER&BERMAN'S VALUE-ORIENTED INVESTMENT
PHILOSOPHY, SHE FIRST DETERMINES WHETHER PORTFOLIO CANDIDATES MEET
FUNDAMENTAL VALUES. HER AIM IS SIMPLE AND STRAIGHTFORWARD -- TO SERVE BOTH
SOCIETY AND HER SHAREHOLDERS.
For the six months ended February 28, 1997, the fund returned 15.42% compared
to the Standard & Poor's 500 Index's 22.60% gain (see page 5 for the average
annual returns, as of March 31, 1997).
During the first half of fiscal 1997, our investments in the banking,
insurance, technology, and specialty chemical industries worked quite well. We
believe our portfolio holdings in these groups continue to represent solid
fundamental values. Investments in the telecommunications and energy sectors did
not perform up to our expectations. Pending further clarification of competitive
issues in the telecommunications industry, we have pared our holdings. Despite
this year's decline in oil and natural gas prices, we believe selected energy
stocks have excellent earnings and appreciation potential.
In our opinion, banks and insurance companies are no longer as interest rate
sensitive as many investors perceive. We don't believe the bank stocks in our
portfolio need lower interest rates to improve earnings and cash flows. Banks
like CITICORP, National City, Mercantile, and CoreStates have the capacity to
post the kind of fundamental progress that can change investors' perceptions. In
addition, we think that even with the good gains of the last six months,
insurance companies like Chubb, Equitable and ReliaStar remain good values
relative to their peer group and the broad market. Our social screens revealed
that these companies have positive aspects about them as well. ReliaStar has a
goal of donating 2% of pre-tax earnings to charity. CoreStates has
21
<PAGE>
- ----------------------------------------------------------------------
Socially Responsive Fund (Cont'd)
excellent work-family programs, including on-site childcare. And Chubb has a
superb diversity record, with females representing 50% of officials and
managers.
Despite poor relative performance over the last few months, we remain fully
committed to energy stocks like Louisiana Land & Exploration, Noble Affiliates,
and Tidewater. The decline in oil prices did not surprise us. In fact, we
thought that oil's $24 per barrel price was unsustainable. We are not in the
price collapse camp either, believing the supply projections for non-OPEC
producers are dramatically over-estimated. If oil and natural gas prices
stabilize around current levels, earnings from the group could trend higher.
This appears to be a classic case of the stock market over-reacting to a little
bad news.
We are currently seeking to take advantage of the sell-off of some
high-quality companies in the retail industry. Wal-Mart Stores which has been a
truly great company from the growth perspective, drifted down into the value
range as earnings momentum investors abandoned the stock due to lower annual
earnings growth projections. We were delighted to put it in our shopping basket
at what we see as a bargain price. We are also proud to own stock in a firm that
has been applauded for its employee relations and workplace policies and which
offers cash profit sharing at virtually all levels, including part-time
personnel.
22
<PAGE>
- ----------------------------------------------------------------------
Socially Responsive Fund (Cont'd)
We enjoy the challenge of earning good returns from investments in companies
that are responsive to society and their employees needs. By so doing, we hope
to reward our collective consciences and our shareholders.
The composition, industries and holdings of the portfolio are subject to change.
Socially Responsive Fund's portfolio is invested in a wide array of stocks, and
no single holding makes up more than a small fraction of the portfolio's total
assets.
Please remember that past performance is not indicative of future results.
23
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
FOCUS GENESIS GUARDIAN
(000'S OMITTED EXCEPT PER SHARE AMOUNTS) FUND FUND FUND
------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 1,231,605 $ 375,054 $ 5,777,779
Deferred organization costs (Note A) -- -- --
Receivable for Trust shares sold 1,458 4,395 13,146
------------------------------------------------
1,233,063 379,449 5,790,925
------------------------------------------------
LIABILITIES
Payable for Trust shares redeemed 976 712 3,554
Payable to administrator -- net (Note B) 249 74 1,172
Accrued expenses 251 106 1,086
------------------------------------------------
1,476 892 5,812
------------------------------------------------
NET ASSETS at value $ 1,231,587 $ 378,557 $ 5,785,113
------------------------------------------------
NET ASSETS consist of:
Par value $ 37 $ 31 $ 213
Paid-in capital in excess of par value 720,470 303,156 3,886,016
Accumulated undistributed net investment
income (loss) 532 (214) 4,872
Accumulated net realized gains on investment 109,758 2,000 199,085
Net unrealized appreciation in value of
investment 400,790 73,584 1,694,927
------------------------------------------------
NET ASSETS at value $ 1,231,587 $ 378,557 $ 5,785,113
------------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 37,349 31,397 213,325
------------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $32.97 $12.06 $27.12
------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
February 28, 1997 (Unaudited)
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
SOCIALLY
INTERNATIONAL MANHATTAN PARTNERS RESPONSIVE
FUND FUND FUND FUND
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 91,362 $ 538,433 $ 2,413,597 $ 47,861
Deferred organization costs (Note A) 46 -- -- 32
Receivable for Trust shares sold 503 701 23,443 180
-----------------------------------------------------------------
91,911 539,134 2,437,040 48,073
-----------------------------------------------------------------
LIABILITIES
Payable for Trust shares redeemed 469 4,669 1,100 8
Payable to administrator -- net (Note B) 8 110 482 35
Accrued expenses 44 258 398 52
-----------------------------------------------------------------
521 5,037 1,980 95
-----------------------------------------------------------------
NET ASSETS at value $ 91,390 $ 534,097 $ 2,435,060 $ 47,978
-----------------------------------------------------------------
NET ASSETS consist of:
Par value $ 7 $ 42 $ 92 $ 3
Paid-in capital in excess of par value 74,225 371,357 1,803,608 40,673
Accumulated undistributed net investment
income (loss) (575) (1,054) 1,429 2
Accumulated net realized gains on investment 785 43,083 115,834 17
Net unrealized appreciation in value of
investment 16,948 120,669 514,097 7,283
-----------------------------------------------------------------
NET ASSETS at value $ 91,390 $ 534,097 $ 2,435,060 $ 47,978
-----------------------------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 6,561 42,383 91,760 3,084
-----------------------------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $13.93 $12.60 $26.54 $15.56
-----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
STATEMENTS OF OPERATIONS
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
FOCUS GENESIS GUARDIAN
(000'S OMITTED) FUND FUND FUND
------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 6,387 $ 1,448 $ 36,805
------------------------------------------
Expenses:
Administration fee (Note B) 1,504 358 6,998
Amortization of deferred organization and
initial offering expenses (Note A) -- -- --
Auditing fees 4 4 4
Custodian fees 5 5 5
Legal fees 14 14 14
Registration and filing fees 29 43 159
Reimbursement of expenses assumed by
administrator (Note B) -- -- --
Shareholder reports 83 36 349
Shareholder servicing agent fees (Note B) 265 110 1,693
Trustees' fees and expenses 7 3 28
Miscellaneous 8 2 32
Expenses from corresponding Portfolio (Notes
A & B) 3,081 1,087 12,329
------------------------------------------
Total expenses 5,000 1,662 21,611
Deduct -- expenses reimbursed by
administrator (Note B) -- -- --
------------------------------------------
Total net expenses 5,000 1,662 21,611
------------------------------------------
Net investment income (loss) 1,387 (214) 15,194
------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM CORRESPONDING PORTFOLIO (NOTE A)
Net realized gain on investment securities 110,960 2,415 204,353
Net realized loss on option contracts written (608) -- (2,329)
Net realized loss on financial futures
contracts -- -- --
Net realized gain on foreign currency
transactions -- -- --
Change in net unrealized appreciation of
investment securities, option contracts
written, translation of assets and
liabilities in foreign currencies, and
foreign currency contracts 116,801 23,910 768,195
Change in net unrealized depreciation of
financial futures contracts -- -- --
------------------------------------------
Net gain on investments from corresponding
Portfolio (Note A) 227,153 26,325 970,219
------------------------------------------
Net increase in net assets resulting from
operations $ 228,540 $ 26,111 $ 985,413
------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
For the Six Months Ended February 28, 1997 (Unaudited)
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
SOCIALLY
INTERNATIONAL MANHATTAN PARTNERS RESPONSIVE
FUND FUND FUND FUND
----------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 334 $ 1,623 $ 15,799 $ 358
----------------------------------------------------------------
Expenses:
Administration fee (Note B) 90 694 2,786 52
Amortization of deferred organization and
initial offering expenses (Note A) 10 -- -- 8
Auditing fees 4 5 4 2
Custodian fees 5 5 5 5
Legal fees 23 14 14 15
Registration and filing fees 26 37 73 33
Reimbursement of expenses assumed by
administrator (Note B) -- -- -- 25
Shareholder reports 9 70 153 9
Shareholder servicing agent fees (Note B) 22 256 432 23
Trustees' fees and expenses 3 5 12 1
Miscellaneous 1 10 13 1
Expenses from corresponding Portfolio (Notes
A & B) 423 1,581 5,261 128
----------------------------------------------------------------
Total expenses 616 2,677 8,753 302
Deduct -- expenses reimbursed by
administrator (Note B) (23) -- -- --
----------------------------------------------------------------
Total net expenses 593 2,677 8,753 302
----------------------------------------------------------------
Net investment income (loss) (259) (1,054) 7,046 56
----------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM CORRESPONDING PORTFOLIO (NOTE A)
Net realized gain on investment securities 1,102 60,614 142,861 218
Net realized loss on option contracts written -- -- -- --
Net realized loss on financial futures
contracts (107) -- -- --
Net realized gain on foreign currency
transactions 158 -- -- --
Change in net unrealized appreciation of
investment securities, option contracts
written, translation of assets and
liabilities in foreign currencies, and
foreign currency contracts 10,509 40,584 293,866 5,304
Change in net unrealized depreciation of
financial futures contracts (205) -- -- --
----------------------------------------------------------------
Net gain on investments from corresponding
Portfolio (Note A) 11,457 101,198 436,727 5,522
----------------------------------------------------------------
Net increase in net assets resulting from
operations $ 11,198 $ 100,144 $ 443,773 $ 5,578
----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
27
<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 28, Ended February 28, Ended
1997 August 31, 1997 August 31,
(000'S OMITTED) (UNAUDITED) 1996 (UNAUDITED) 1996
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 1,387 $ 7,300 $ (214) $ (244)
Net realized gain on investments
from corresponding Portfolio (Note
A) 110,352 52,014 2,415 4,476
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) 116,801 (22,215) 23,910 21,117
-------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 228,540 37,099 26,111 25,349
-------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (8,010) (3,873) -- --
Net realized gain on investments (52,068) (47,524) (3,645) (6,609)
-------------------------------------------------------------
Total distributions to shareholders (60,078) (51,397) (3,645) (6,609)
-------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 117,073 349,715 199,664 112,606
Proceeds from reinvestment of
dividends and distributions 53,238 44,921 3,333 5,892
Payments for shares redeemed (178,566) (264,997) (42,285) (53,380)
-------------------------------------------------------------
Net increase (decrease) from Trust
share transactions (8,255) 129,639 160,712 65,118
-------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 160,207 115,341 183,178 83,858
NET ASSETS:
Beginning of period 1,071,380 956,039 195,379 111,521
-------------------------------------------------------------
End of period $ 1,231,587 $ 1,071,380 $ 378,557 $ 195,379
-------------------------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
period $ 532 $ 7,155 $ (214) $ --
-------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 3,708 12,148 16,762 10,855
Issued on reinvestment of dividends
and distributions 1,717 1,608 279 628
Redeemed (5,717) (9,219) (3,552) (5,295)
-------------------------------------------------------------
Net increase (decrease) in shares
outstanding (292) 4,537 13,489 6,188
-------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
28
<PAGE>
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
MANHATTAN
GUARDIAN FUND INTERNATIONAL FUND FUND
Six Months Six Months Six Months
Ended Year Ended Year Ended
February 28, Ended February 28, Ended February 28,
1997 August 31, 1997 August 31, 1997
(UNAUDITED) 1996 (UNAUDITED) 1996 (UNAUDITED)
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 15,194 $ 63,499 $ (259) $ 97 $ (1,054)
Net realized gain on investments
from corresponding Portfolio (Note
A) 202,024 283,379 1,153 609 60,614
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) 768,195 (119,590) 10,304 3,964 40,584
-----------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 985,413 227,288 11,198 4,670 100,144
-----------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (34,751) (53,306) (111) (125) --
Net realized gain on investments (252,628) (139,952) -- -- (67,073)
-----------------------------------------------------------------------------
Total distributions to shareholders (287,379) (193,258) (111) (125) (67,073)
-----------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 519,110 1,770,255 41,540 39,066 60,947
Proceeds from reinvestment of
dividends and distributions 266,203 175,356 96 106 61,282
Payments for shares redeemed (603,403) (1,021,992) (18,321) (13,165) (137,442)
-----------------------------------------------------------------------------
Net increase (decrease) from Trust
share transactions 181,910 923,619 23,315 26,007 (15,213)
-----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 879,944 957,649 34,402 30,552 17,858
NET ASSETS:
Beginning of period 4,905,169 3,947,520 56,988 26,436 516,239
-----------------------------------------------------------------------------
End of period $ 5,785,113 $ 4,905,169 $ 91,390 $ 56,988 $ 534,097
-----------------------------------------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
period $ 4,872 $ 24,429 $ (575) $ 26 $ (1,054)
-----------------------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 19,853 74,621 3,168 3,475 4,815
Issued on reinvestment of dividends
and distributions 10,325 7,570 8 10 5,233
Redeemed (23,137) (43,128) (1,399) (1,172) (10,895)
-----------------------------------------------------------------------------
Net increase (decrease) in shares
outstanding 7,041 39,063 1,777 2,313 (847)
-----------------------------------------------------------------------------
<CAPTION>
Year
Ended
August 31,
1996
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ (1,623)
Net realized gain on investments
from corresponding Portfolio (Note
A) 57,804
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) (70,811)
Net increase (decrease) in net
assets resulting from operations (14,630)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income --
Net realized gain on investments (43,799)
Total distributions to shareholders (43,799)
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 136,492
Proceeds from reinvestment of
dividends and distributions 40,659
Payments for shares redeemed (214,451)
Net increase (decrease) from Trust
share transactions (37,300)
NET INCREASE (DECREASE) IN NET ASSETS (95,729)
NET ASSETS:
Beginning of period 611,968
End of period $ 516,239
Accumulated undistributed net
investment income (loss) at end of
period $ --
NUMBER OF TRUST SHARES:
Sold 10,683
Issued on reinvestment of dividends
and distributions 3,349
Redeemed (16,906)
Net increase (decrease) in shares
outstanding (2,874)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS(Cont'd)
Neuberger&Berman
- ----------------------------------------------------------------------
Equity Funds
<TABLE>
<CAPTION>
SOCIALLY
PARTNERS FUND RESPONSIVE FUND
Six Months Six Months
Ended Year Ended Year
February 28, Ended February 28, Ended
1997 August 31, 1997 August 31,
(000'S OMITTED) (UNAUDITED) 1996 (UNAUDITED) 1996
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 7,046 $ 16,484 $ 56 $ 34
Net realized gain on investments
from corresponding Portfolio (Note
A) 142,861 232,938 218 1,075
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) 293,866 (30,428) 5,304 962
-------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 443,773 218,994 5,578 2,071
-------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (17,551) (13,359) (82) (17)
Net realized gain on investments (208,212) (180,347) (1,152) (268)
-------------------------------------------------------------
Total distributions to shareholders (225,763) (193,706) (1,234) (285)
-------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 365,784 457,620 13,570 25,132
Proceeds from reinvestment of
dividends and distributions 214,031 181,772 1,124 254
Payments for shares redeemed (234,709) (356,696) (3,984) (2,471)
-------------------------------------------------------------
Net increase (decrease) from Trust
share transactions 345,106 282,696 10,710 22,915
-------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 563,116 307,984 15,054 24,701
NET ASSETS:
Beginning of period 1,871,944 1,563,960 32,924 8,223
-------------------------------------------------------------
End of period $ 2,435,060 $ 1,871,944 $ 47,978 $ 32,924
-------------------------------------------------------------
Accumulated undistributed net
investment income (loss) at end of
period $ 1,429 $ 11,934 $ 2 $ 28
-------------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 13,982 19,230 901 1,843
Issued on reinvestment of dividends
and distributions 8,450 8,210 74 19
Redeemed (9,052) (14,990) (263) (184)
-------------------------------------------------------------
Net increase (decrease) in shares
outstanding 13,380 12,450 712 1,678
-------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger&Berman February 28, 1997 (Unaudited)
- ----------------------------------------------------------------------
Equity Funds
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Focus Fund ("Focus"), Neuberger&Berman Genesis Fund
("Genesis"), Neuberger&Berman Guardian Fund ("Guardian"), Neuberger&Berman
International Fund ("International"), 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 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 (Global Managers Trust with respect to International) (each a
"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
(91.96%, 73.41%, 76.56%, 100.00%, 92.66%, 90.01%, and 23.61%, for Focus,
Genesis, Guardian, International, Manhattan, Partners, and Socially
Responsive, respectively, at February 28, 1997). 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 the corresponding Fund's financial statements.
2) PORTFOLIO VALUATION: Each Fund records its investment in its corresponding
Portfolio at value. Investment securities held by each Portfolio are valued
as indicated in the notes following the Portfolios' Schedule of Investments.
3) FEDERAL INCOME TAXES: Each series of the Trust is treated as a separate
entity for Federal income tax purposes. It is the policy of each Fund to
continue to qualify as a regulated investment company by complying with the
provisions available to
31
<PAGE>
certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of investment company
taxable income and net capital gains (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, if any, 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 each Fund's
net realized capital gains, if any, can be offset by capital loss
carryforwards ($15,585 and $758,366 expiring in 2003 and 2004, respectively,
for International, determined as of August 31, 1996), 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 International and Socially
Responsive in connection with their organization are being amortized on a
straight-line basis over a five-year period. At February 28, 1997, the
unamortized balance of such expenses amounted to $45,905 and $31,902, for
International and Socially Responsive, respectively.
6) EXPENSE ALLOCATION: Each Fund bears all costs of its 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"). Pursuant to this Agreement each Fund pays Management an
administration fee at the annual rate of .26% (.67% for International prior to
32
<PAGE>
November 1, 1995) of that Fund's average daily net assets. Each Fund 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 applicable during
the six months ended February 28, 1997, to which each Fund was subject, was
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 any state
expense limitation was required for the six months ended February 28, 1997.
Currently, there are no state limitations applicable to any Fund.
Management has voluntarily undertaken to reimburse each of International and
Socially Responsive for its Operating Expenses which exceed, in the aggregate,
1.70% and 1.50%, respectively, per annum of its average daily net assets (the
"Expense Limitation"). Each undertaking is subject to termination by Management
after December 31, 1997. For the six months ended February 28, 1997, such excess
expenses amounted to $23,428 for International. International and Socially
Responsive have each agreed to repay Management through December 31, 1998 and
March 14, 1998, respectively, 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. For the six months ended February
28, 1997, the reimbursed expenses repaid to Management amounted to $25,365 for
Socially Responsive.
All of the capital stock of Management is owned by individuals who are also
principals of Neuberger&Berman, LLC ("Neuberger"), a member firm of The New York
Stock Exchange and sub-adviser to each Portfolio. Several individuals who are
officers and/or trustees of the Trust are also principals of Neuberger and/or
officers and/or directors of Management.
Each Fund also has a distribution agreement with Management. Management
receives no compensation therefor and no commissions for sales or redemptions of
shares of beneficial interest of each Fund.
Each Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statements
of Operations under the caption Expenses from corresponding Portfolio, was a
reduction of $876,
33
<PAGE>
$3,072, $1,238, $731, $826, and $64 for Focus, Genesis, Guardian, International,
Partners, and Socially Responsive, respectively, which is less than .01% of each
Fund's average daily net assets.
Each Fund has an expense offset arrangement in connection with its
shareholder servicing agent contract. The impact of this arrangement, reflected
in the Statements of Operations under the caption Shareholder servicing agent
fees, was a reduction of $30,382, $11,832, $100,506, $2,894, $30,895, $47,375,
and $1,732 for Focus, Genesis, Guardian, International, Manhattan, Partners, and
Socially Responsive, respectively, which is less than .01% of each Fund's
average daily net assets.
NOTE C -- INVESTMENT TRANSACTIONS:
During the six months ended February 28, 1997, additions and reductions in
each Fund's investment in its corresponding Portfolio were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
- --------------------------------------------------------------------------------
<S> <C> <C>
FOCUS $ 44,743,701 $ 111,803,708
GENESIS 157,328,174 3,637,340
GUARDIAN 88,786,098 203,631,496
INTERNATIONAL 29,278,940 6,267,780
MANHATTAN 21,780,744 101,801,930
PARTNERS 183,146,844 87,802,045
SOCIALLY RESPONSIVE 9,899,549 647,364
</TABLE>
At February 28, 1997, Neuberger&Berman International Portfolio's cost of
investments for U.S. Federal income tax purposes was $75,768,000. Gross
unrealized appreciation of investments was $19,143,000 and gross unrealized
depreciation of investments was $2,369,000, resulting in net unrealized
appreciation of $16,774,000, based on cost for U.S. Federal income tax purposes.
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.
34
<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>
Period from
Six Months October 1,
Ended 1992
February 28, to August
1997 Year Ended August 31, 31,
(UNAUDITED)(2) 1996(2) 1995(2) 1994(2) 1993(2)
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 28.46 $ 28.88 $24.42 $24.00 $ 19.31
----------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .04 .19 .17 .21 .23
Net Gains or Losses on Securities
(both realized and unrealized) 6.12 .85 5.97 2.16 4.65
----------------------------------------------------------------------
Total From Investment Operations 6.16 1.04 6.14 2.37 4.88
----------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.22) (.11) (.20) (.25) (.04)
Distributions (from capital gains) (1.43) (1.35) (1.48) (1.70) (.15)
----------------------------------------------------------------------
Total Distributions (1.65) (1.46) (1.68) (1.95) (.19)
----------------------------------------------------------------------
Net Asset Value, End of Period $ 32.97 $ 28.46 $28.88 $24.42 $ 24.00
----------------------------------------------------------------------
Total Return(3) +22.01%(4) +3.70% +27.47% +10.35% +25.39%(4)
----------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $ 1,231.6 $ 1,071.4 $956.0 $643.9 $ 573.9
----------------------------------------------------------------------
Ratio of Expenses to Average Net
Assets .86%(5) .89% .87% .85% .92%(5)
----------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets .24%(5) .69% .75% .89% 1.18%(5)
----------------------------------------------------------------------
Portfolio Turnover Rate(6) -- -- -- -- 52%
----------------------------------------------------------------------
<CAPTION>
Year Ended
September 30,
1992
<S> <C>
Net Asset Value, Beginning of Period $ 18.91
Income From Investment Operations
Net Investment Income .29
Net Gains or Losses on Securities
(both realized and unrealized) 2.62
Total From Investment Operations 2.91
Less Distributions
Dividends (from net investment
income) (.31)
Distributions (from capital gains) (2.20)
Total Distributions (2.51)
Net Asset Value, End of Period $ 19.31
Total Return(3) +15.51%
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $ 439.2
Ratio of Expenses to Average Net
Assets .91%
Ratio of Net Investment Income to
Average Net Assets 1.46%
Portfolio Turnover Rate(6) 77%
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
35
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Genesis Fund
The following table includes selected data for a share outstanding throughout
each 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>
Period
Six from
Months August
Ended 1, 1993
February to
28, August Year Ended
1997 Year Ended August 31, 31, July 31,
(UNAUDITED)(2) 1996(2) 1995(2) 1994(2) 1993(2) 1993 1992
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.91 $ 9.52 $ 8.27 $ 8.62 $ 8.30 $ 7.10 $ 6.41
-------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income (Loss) (.01) (.01) -- (.01) -- .01 (.01)
Net Gains or Losses on Securities
(both realized and unrealized) 1.31 1.95 1.56 .42 .32 1.19 .80
-------------------------------------------------------------------------------
Total From Investment Operations 1.30 1.94 1.56 .41 .32 1.20 .79
-------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) -- -- -- (.01) -- -- (.01)
Distributions (from capital gains) (.15) (.55) (.31) (.75) -- -- (.09)
-------------------------------------------------------------------------------
Total Distributions (.15) (.55) (.31) (.76) -- -- (.10)
-------------------------------------------------------------------------------
Net Asset Value, End of Period $12.06 $10.91 $ 9.52 $ 8.27 $ 8.62 $ 8.30 $ 7.10
-------------------------------------------------------------------------------
Total Return(3) +11.93%(4) +21.32% +19.69% +4.77% +3.86%(4) +16.90% +12.38%
-------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $378.6 $195.4 $111.5 $135.6 $118.5 $ 113.5 $ 72.2
-------------------------------------------------------------------------------
Ratio of Expenses to Average Net
Assets 1.21%(5)(7) 1.28%(7) 1.35%(7) 1.36% 1.51%(5) 1.65% 2.00%(7)
-------------------------------------------------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets (.15%)(5)(7) (.18%)(7) (.16%)(7) (.20%) (.08%)(5) .15% (.14%)(7)
-------------------------------------------------------------------------------
Portfolio Turnover Rate(6) -- -- -- -- -- 54% 23%
-------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
36
<PAGE>
FINANCIAL HIGHLIGHTS(8)
Neuberger&Berman
- --------------------------------------------------------------------------------
Guardian Fund
The following table includes selected data for a share outstanding throughout
each 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
28,
1997 Year Ended August 31,
(UNAUDITED)(2) 1996(2) 1995(2) 1994(2) 1993(2) 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 23.78 $ 23.61 $ 19.52 $ 18.57 $ 15.73 $ 14.90
-----------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .07 .31 .27 .24 .30 .29
Net Gains or Losses on Securities
(both realized and unrealized) 4.68 .90 4.30 1.41 3.45 1.71
-----------------------------------------------------------------------------
Total From Investment Operations 4.75 1.21 4.57 1.65 3.75 2.00
-----------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.17) (.28) (.25) (.30) (.25) (.26)
Distributions (from capital gains) (1.24) (.76) (.23) (.40) (.66) (.91)
-----------------------------------------------------------------------------
Total Distributions (1.41) (1.04) (.48) (.70) (.91) (1.17)
-----------------------------------------------------------------------------
Net Asset Value, End of Period $ 27.12 $ 23.78 $ 23.61 $ 19.52 $ 18.57 $ 15.73
-----------------------------------------------------------------------------
Total Return(3) +20.29%(4) +5.27% +24.06% +9.12% +24.43% +13.88%
-----------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $5,785.1 $ 4,905.2 $ 3,947.5 $ 2,416.5 $ 1,787.0 $ 802.9
-----------------------------------------------------------------------------
Ratio of Expenses to Average Net
Assets .80%(5) .82% .80% .80% .81% .82%
-----------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets .56%(5) 1.37% 1.40% 1.36% 2.01% 1.90%
-----------------------------------------------------------------------------
Portfolio Turnover Rate(6) -- -- -- -- 27% 41%
-----------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
37
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
International 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>
Period
from
Six June
Months 15,
Ended 1994(9)
February to
28, Year Ended August
1997 August 31, 31,
(UNAUDITED) 1996 1995 1994
-------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $11.91 $ 10.70 $ 10.46 $10.00
-------------------------------------------
Income From Investment Operations
Net Investment Income (Loss) (.07) .01 .06 .01
Net Gains or Losses on Securities
(both realized and unrealized) 2.11 1.24 .21 .45
-------------------------------------------
Total From Investment Operations 2.04 1.25 .27 .46
-------------------------------------------
Less Distributions
Dividends (from net investment
income) (.02) (.04) (.03) --
-------------------------------------------
Net Asset Value, End of Period $13.93 $ 11.91 $ 10.70 $10.46
-------------------------------------------
Total Return(3) +17.14%(4) +11.73% +2.60% +4.60%(4)
-------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $ 91.4 $ 57.0 $ 26.4 $ 6.2
-------------------------------------------
Ratio of Expenses to Average Net
Assets(7) 1.70%(5) 1.70% 1.70% 1.70%(5)
-------------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets(7) (.74%)(5) .24% .73% .57%(5)
-------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
38
<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
28,
1997 Year Ended August 31,
(UNAUDITED)(2) 1996(2) 1995(2) 1994(2) 1993(2) 1992
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $11.94 $13.27 $11.28 $12.94 $11.59 $ 11.55
-------------------------------------------------------------------
Income From Investment Operations
Net Investment Income (Loss) (.02) (.04) -- .02 .02 .06
Net Gains or Losses on Securities
(both realized and unrealized) 2.34 (.33) 2.70 .40 3.06 .49
-------------------------------------------------------------------
Total From Investment Operations 2.32 (.37) 2.70 .42 3.08 .55
-------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) -- -- (.01) (.02) (.05) (.11)
Distributions (from capital gains) (1.66) (.96) (.70) (2.06) (1.68) (.40)
-------------------------------------------------------------------
Total Distributions (1.66) (.96) (.71) (2.08) (1.73) (.51)
-------------------------------------------------------------------
Net Asset Value, End of Period $12.60 $11.94 $13.27 $11.28 $12.94 $ 11.59
-------------------------------------------------------------------
Total Return(3) +20.49%(4) -2.91% +26.00% +3.49% +27.76% +4.74%
-------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $534.1 $516.2 $612.0 $510.3 $537.6 $ 400.7
-------------------------------------------------------------------
Ratio of Expenses to Average Net
Assets 1.00%(5) .98% .98% .96% 1.04% 1.07%
-------------------------------------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets (.40%)(5) (.27%) .03% .16% .20% .57%
-------------------------------------------------------------------
Portfolio Turnover Rate(6) -- -- -- -- 76%(5) 83%
-------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
39
<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 Period
Months from
Ended July 1,
February 1993 Year
28, to August Ended
1997 Year Ended August 31, 31, June 30,
(UNAUDITED)(2) 1996(2) 1995(2) 1994(2) 1993(2) 1993
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 23.88 $ 23.72 $ 21.32 $ 22.46 $ 20.98 $ 18.96
-------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .08 .22 .17 .10 .02 .16
Net Gains or Losses on Securities
(both realized and unrealized) 5.41 2.84 3.94 1.07 1.46 3.84
-------------------------------------------------------------------------------
Total From Investment Operations 5.49 3.06 4.11 1.17 1.48 4.00
-------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.22) (.20) (.11) (.11) -- (.19)
Distributions (from capital gains) (2.61) (2.70) (1.60) (2.20) -- (1.79)
-------------------------------------------------------------------------------
Total Distributions (2.83) (2.90) (1.71) (2.31) -- (1.98)
-------------------------------------------------------------------------------
Net Asset Value, End of Period $ 26.54 $ 23.88 $ 23.72 $ 21.32 $ 22.46 $ 20.98
-------------------------------------------------------------------------------
Total Return(3) +23.56%(4) +13.86% +21.53% +5.56% +7.05%(4) +21.78%
-------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $2,435.1 $ 1,871.9 $ 1,564.0 $ 1,335.9 $1,185.1 $ 1,085.6
-------------------------------------------------------------------------------
Ratio of Expenses to Average Net
Assets .82%(5) .84% .83% .81% .84%(5) .86%
-------------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets .66%(5) .93% .83% .48% .59%(5) .83%
-------------------------------------------------------------------------------
Portfolio Turnover Rate(6) -- -- -- -- 6% 82%
-------------------------------------------------------------------------------
<CAPTION>
1992
<S> <C>
Net Asset Value, Beginning of Period $ 17.80
Income From Investment Operations
Net Investment Income .23
Net Gains or Losses on Securities
(both realized and unrealized) 2.05
Total From Investment Operations 2.28
Less Distributions
Dividends (from net investment
income) (.34)
Distributions (from capital gains) (.78)
Total Distributions (1.12)
Net Asset Value, End of Period $ 18.96
Total Return(3) +13.23%
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $ 852.9
Ratio of Expenses to Average Net
Assets .86%
Ratio of Net Investment Income to
Average Net Assets 1.23%
Portfolio Turnover Rate(6) 97%
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
40
<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>
Period
from
Six March
Months 16,
Ended 1994(9)
February to
28, Year Ended August
1997 August 31, 31,
(UNAUDITED) 1996 1995 1994
-------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $13.88 $ 11.84 $ 10.07 $10.00
-------------------------------------------
Income From Investment Operations
Net Investment Income .02 .02 .03 .01
Net Gains or Losses on Securities
(both realized and unrealized) 2.11 2.35 1.76 .06
-------------------------------------------
Total From Investment Operations 2.13 2.37 1.79 .07
-------------------------------------------
Less Distributions
Dividends (from net investment
income) (.03) (.02) (.02) --
Distributions (from capital gains) (.42) (.31) -- --
-------------------------------------------
Total Distributions (.45) (.33) (.02) --
-------------------------------------------
Net Asset Value, End of Period $15.56 $ 13.88 $ 11.84 $10.07
-------------------------------------------
Total Return(3) +15.42%(4) +20.19% +17.82% +0.70%(4)
-------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (in
millions) $ 48.0 $ 32.9 $ 8.2 $ 2.3
-------------------------------------------
Ratio of Expenses to Average Net
Assets(7) 1.50%(5) 1.50% 1.51% 1.50%(5)
-------------------------------------------
Ratio of Net Investment Income to
Average Net Assets(7) .28%(5) .19% .36% .50%(5)
-------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
41
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger&Berman February 28, 1997 (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) 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 fiscal
period and assumes dividends and other distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Investment returns and principal may fluctuate and shares when
redeemed may be worth more or less than original cost. For International and
Socially Responsive, total return would have been lower if Management and/or
BNP-N&B Global Asset Management L.P. had not reimbursed certain expenses. For
Genesis, total return would have been lower if Management had not waived a
portion of the management fee.
4) Not annualized.
5) Annualized.
6) Each Fund (except International and 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.
7) 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>
42
<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 28, August 31,
1997 1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expenses 1.31% 1.38% 1.38%
----------------------------------------
Net Investment Income (Loss) (.25%) (.28%) (.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>
Six Months Period from
Ended Year Ended June 15, 1994
February 28, August 31, to August 31,
INTERNATIONAL 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses 1.77% 2.28% 2.31% 2.50%
--------------------------------------------------
Net Investment Income (Loss) (.81%) (.34%) .12% (.23%)
--------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Period from
Year Ended March 16, 1994
August 31, to August 31,
SOCIALLY RESPONSIVE 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Expenses 1.69% 2.50% 2.50%
----------------------------------
Net Investment Income (Loss) .00% (.63%) (.50%)
----------------------------------
</TABLE>
Had Socially Responsive not reimbursed Management, the annualized ratios
to average daily net assets would have been:
<TABLE>
<CAPTION>
Six Months Ended
February 28,
1997
- -----------------------------------------------------------------
<S> <C>
Expenses 1.37%
-----
Net Investment Income .41%
-----
</TABLE>
8) Adjusted for a 200% stock dividend effective January 20, 1993.
9) The date investment operations commenced.
43
<PAGE>
(This page has been left blank intentionally.)
44
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Focus Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. CITICORP 4.1%
2. General Motors 3.8%
3. Compaq Computer 3.6%
4. Travelers Group 3.3%
5. Aetna Inc. 3.2%
6. Chrysler Corp. 3.2%
7. Neiman-Marcus Group 3.1%
8. Fannie Mae 3.0%
9. Wellpoint Health Networks 2.8%
10. First USA 2.8%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (99.1%)
AUTOMOTIVE (10.5%)
445,900 Cabot Corp. $ 10,479
1,246,000 Chrysler Corp. 42,208
723,000 Exide Corp. 14,189
880,000 General Motors 50,930
675,920 LucasVarity PLC ADR 22,136
------------
139,942
------------
FINANCIAL SERVICES (37.6%)
472,800 ACE Ltd. 30,732
655,000 ADVANTA Corp. Class B 26,282
365,200 Bank of Boston 27,527
735,000 Capital One Financial 29,216
475,000 CITICORP 55,456
1,100,000 Countrywide Credit Industries 32,037
525,000 Dean Witter, Discover 20,147
285,000 EXEL Ltd. 12,576
1,260,000 Federal Home Loan Mortgage 37,485
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
992,000 Fannie Mae $ 39,680
780,500 First USA 37,952
232,200 ITT Hartford Group 17,415
285,000 Merrill Lynch 27,360
495,000 PartnerRe Ltd. 16,335
253,800 St. Paul Cos. 17,131
820,000 Travelers Group 43,973
105,000 Wells Fargo 31,946
------------
503,250
------------
HEALTH CARE (13.9%)
517,000 Aetna Inc. 42,846
390,000 Coventry Corp. 2,852
802,000 Foundation Health 30,276
590,000 Health Systems International 17,331
220,000 Mid Atlantic Medical Services 3,245
25,200 PacifiCare Health Systems
Class A 2,016
183,700 PacifiCare Health Systems
Class B 15,385
691,000 Sierra Health Services 18,225
326,300 United Healthcare 16,274
888,000 Wellpoint Health Networks 38,073
------------
186,523
------------
HEAVY INDUSTRY (10.4%)
1,030,000 AGCO Corp. 29,226
230,700 Cleveland-Cliffs 9,920
640,000 DT Industries 18,880 (2)
450,100 Harnischfeger Industries 19,748
367,200 IMC Global 12,806
1,013,600 Rollins Truck Leasing 14,191
804,600 UCAR International 34,598
------------
139,369
------------
</TABLE>
45
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Focus Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
MEDIA & ENTERTAINMENT (2.5%)
620,000 Cabletron Systems $ 18,600
310,000 Harcourt General 14,609
63,900 Scandinavian Broadcasting
System 855
------------
34,064
------------
RETAIL (9.1%)
300,000 Barnes & Noble 9,900
240,000 Dillard Department Stores 7,230
1,850,000 Furniture Brands International 27,288
860,000 Intimate Brands 16,770
1,565,000 Neiman-Marcus Group 42,059
429,800 Payless ShoeSource 18,481
------------
121,728
------------
TECHNOLOGY (13.8%)
410,000 3Com Corp. 13,575
350,000 Applied Materials 17,719
338,000 Arrow Electronics 18,970
590,000 Atmel Corp. 22,051
600,000 Compaq Computer 47,550 (3)
293,000 Komag, Inc. 8,790
650,000 Seagate Technology 30,713
385,000 Silicon Valley Group 8,229
222,500 Texas Instruments 17,160
------------
184,757
------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- ------------
<C> <S> <C>
TRANSPORTATION (1.3%)
629,400 Continental Airlines Class B $ 18,017
------------
TOTAL COMMON STOCKS (COST
$910,278) 1,327,650
------------
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
U.S. TREASURY SECURITIES (3.4%)
$46,055,000 U.S. Treasury Bills, 4.85% -
4.935%, due 3/27/97 - 4/24/97
(COST $45,825) 45,835
------------
SHORT-TERM CORPORATE NOTES (0.8%)
10,370,000 General Electric Capital
Corp., 5.22%, due 3/3/97
(COST $10,370) 10,370 (4)
------------
TOTAL INVESTMENTS (103.3%)
(COST $966,473) 1,383,855 (5)
Liabilities, less cash,
receivables and other assets
[(3.3%)] (44,573 )
------------
TOTAL NET ASSETS (100.0%) $ 1,339,282
------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
46
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Thiokol Corp. 3.2%
2. BMC Industries 2.7%
3. Texas Industries 2.4%
4. Bank United 2.1%
5. Dallas Semiconductor 2.0%
6. Pride Petroleum Services 1.9%
7. AAR Corp. 1.8%
8. AptarGroup Inc. 1.7%
9. Glendale Federal Bank 1.5%
10. Richfood Holdings 1.5%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (95.3%)
AEROSPACE (9.7%)
368,800 AAR Corp. $ 9,404
663,800 Aviall Inc. 7,385
154,700 BE Aerospace 3,751
128,100 DONCASTERS PLC ADR 2,546
199,900 Ducommun Inc. 4,798
79,300 Moog, Inc. Class A 1,883
207,000 Orbital Sciences 3,571
290,700 Thiokol Corp. 16,207
-------------
49,545
-------------
AGRICULTURE (0.5%)
68,149 Delta & Pine Land 2,530
-------------
AUTOMOTIVE (1.9%)
118,400 Donaldson Co. 3,981
67,800 Monaco Coach 1,356
115,900 Tower Automotive 4,448
-------------
9,785
-------------
BANKING & FINANCIAL (14.4%)
321,500 Bank United 10,529
76,150 Charter One Financial 3,627
180,000 Cullen/Frost Bankers 6,424
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
174,600 Dime Community Bancorp $ 3,230
156,700 First Commerce 6,503
290,400 Glendale Federal Bank 7,732
65,000 Long Island Bancorp 2,381
104,700 Ocean Financial 3,180
65,377 ONBANCorp, Inc. 2,917
95,000 Peoples Heritage Financial
Group 2,981
46,300 Queens County Bancorp 2,627
182,600 Reliance Bancorp 4,063
55,200 Roslyn Bancorp 862
423,450 Sterling Bancshares 6,352
105,200 Texas Regional Bancshares 3,432
170,900 Webster Financial 6,708
-------------
73,548
-------------
BUILDING, CONSTRUCTION & FURNISHINGS (4.3%)
367,200 Apogee Enterprises 7,298
73,000 Lincoln Electric Class A 2,391
208,700 Texas Industries 12,157
-------------
21,846
-------------
CHEMICALS (1.7%)
214,300 Lawter International 2,491
232,000 Lilly Industries 4,495
78,300 McWhorter Technologies 1,684
-------------
8,670
-------------
COMMUNICATIONS (1.0%)
170,300 Black Box 5,152
-------------
CONSUMER PRODUCTS & SERVICES (6.3%)
92,000 Alltrista Corp. 1,955
120,073 Block Drug 5,584
123,800 Bush Boake Allen 3,111
133,500 Coachmen Industries 2,703
137,000 First Brands 3,408
24,000 Marcus Corp. 522
392,800 Prime Hospitality 6,481
</TABLE>
47
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
351,100 Richfood Holdings $ 7,417
75,000 The First Years 1,256
-------------
32,437
-------------
DIAGNOSTIC EQUIPMENT (0.7%)
172,700 ADAC Laboratories 3,670
-------------
ELECTRONICS (6.1%)
224,800 Continental Circuits 3,007
401,700 Dallas Semiconductor 10,444
70,500 Fusion Systems 1,921
160,200 Kent Electronics 4,406
70,000 Nu Horizons 647
326,800 Pioneer Standard Electronics 4,575
119,000 SCI Systems 6,367
-------------
31,367
-------------
ENERGY (4.8%)
164,700 Apache Corp. 5,332
127,300 Aquila Gas Pipeline 1,671
182,500 Cairn Energy USA 1,779
623,000 Coho Energy 4,906
81,200 Cross Timbers Oil 2,192
54,200 Flores & Rucks 2,439
243,800 Offshore Energy Development 2,987
409,600 Unit Corp. 3,226
-------------
24,532
-------------
ENTERTAINMENT (0.1%)
115,575 Casino Data Systems 664
-------------
HEALTH CARE (3.9%)
123,100 Ballard Medical Products 2,416
101,600 EmCare Holdings 2,794
195,100 Kinetic Concepts 2,902
88,100 Patterson Dental 2,995
91,900 Sofamor Danek Group 3,642
151,200 Universal Health Services
Class B 5,160
-------------
19,909
-------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
INDUSTRIAL & COMMERCIAL
PRODUCTS & SERVICES (11.7%)
115,000 Alamo Group $ 1,768
481,800 BMC Industries 13,792
96,500 Dionex Corp. 4,342
108,000 Hexcel Corp. 2,079
142,850 Holophane Corp. 3,089
85,600 Kaydon Corp. 3,702
134,100 Libbey Inc. 4,023
191,700 NN Ball & Roller 2,157
202,400 Peak Technologies Group 2,176
107,000 Pentair, Inc. 3,357
40,000 Roper Industries 1,610
139,900 SOS Staffing Services 1,731
149,800 W.H. Brady 3,988
94,200 Wallace Computer Services 3,191
168,100 Wolverine Tube 6,178
155,750 Woodhead Industries 2,414
-------------
59,597
-------------
INSURANCE (1.5%)
37,900 American Heritage Life 986
165,300 FBL Financial Group 3,843
2,600 MMI Cos. 59
40,000 Orion Capital 2,560
-------------
7,448
-------------
MACHINERY & EQUIPMENT (1.4%)
59,000 Allied Products 1,725
199,800 Stewart & Stevenson Services 5,220
-------------
6,945
-------------
METALS (0.3%)
92,800 Commonwealth Aluminum 1,670
-------------
OFFICE EQUIPMENT (0.8%)
261,600 DH Technology 4,382
-------------
OIL SERVICES (13.1%)
50,300 Cliffs Drilling 2,333
138,800 Dawson Production Services 1,613
</TABLE>
48
<PAGE>
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
185,400 Dreco Energy Services $ 6,628
153,900 Drilex International 1,751
161,000 Falcon Drilling 5,454
116,700 Global Industries 2,130
88,500 Hvide Marine 1,836
373,200 Nabors Industries 5,738
183,800 National-Oilwell 5,652
409,900 Oceaneering International 6,507
311,400 Offshore Logistics 5,683
587,000 Pride Petroleum Services 9,832
104,700 Production Operators 5,117
127,400 Smith International 5,176
105,100 Tuboscope VETCO 1,366
-------------
66,816
-------------
PACKING & CONTAINERS (1.7%)
214,200 AptarGroup Inc. 8,514
-------------
PUBLISHING & BROADCASTING (1.6%)
86,000 Central Newspapers 3,956
87,500 McClatchy Newspapers 2,089
45,666 Pulitzer Publishing 2,198
-------------
8,243
-------------
RECREATIONAL EQUIPMENT (0.1%)
23,000 RockShox, Inc. 385
-------------
RETAILING (0.7%)
90,000 99 Cents Only Stores 1,620
119,000 Schultz Sav-O Stores 1,889
-------------
3,509
-------------
TECHNOLOGY (5.9%)
43,800 Analysts International 1,183
527,600 Auspex Systems 6,133
474,100 Borland International 3,852
192,600 CACI International 3,250
121,900 Computer Data Systems 3,627
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
84,400 Logicon, Inc. $ 3,186
131,300 Methode Electronics Class A 2,084
250,000 Reynolds & Reynolds 7,000
-------------
30,315
-------------
TEXTILES & APPAREL (0.5%)
66,000 St. John Knits 2,706
-------------
TRANSPORTATION, SHIPPING & FREIGHT (0.6%)
52,250 Air Express International 1,620
213,600 Maritrans Inc. 1,308
-------------
2,928
-------------
TOTAL COMMON STOCKS (COST
$393,287) 487,113
-------------
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
U.S. TREASURY SECURITIES (3.6%)
$18,385,000 U.S. Treasury Bills, 4.91% -
4.975%, due 3/13/97 - 4/3/97
(COST $18,304) 18,309
-------------
CORPORATE COMMERCIAL PAPER (0.2%)
1,150,000 General Electric Capital
Corp., 5.22%, due 3/3/97
(COST $1,150) 1,150 (4)
-------------
TOTAL INVESTMENTS (99.1%)
(COST $412,741) 506,572 (5)
Cash, receivables and other
assets, less liabilities
(0.9%) 4,348
-------------
TOTAL NET ASSETS (100.0%) $ 510,920
-------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
49
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Guardian Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. General Motors 3.2%
2. First USA 2.8%
3. CITICORP 2.8%
4. Aetna Inc. 2.7%
5. Chrysler Corp. 2.7%
6. Compaq Computer 2.4%
7. Foundation Health 2.3%
8. Fannie Mae 2.2%
9. Merrill Lynch 2.0%
10. Travelers Group 1.9%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (97.0%)
AGRICULTURE (3.0%)
3,093,500 AGCO Corp. $ 87,778
3,960,000 IMC Global 138,105
------------
225,883
------------
AUTOMOTIVE (10.7%)
2,541,400 Cabot Corp. 59,723
6,000,000 Chrysler Corp. 203,250
4,852,400 Coltec Industries 88,556 (2)
4,201,500 General Motors 243,162
3,852,486 LucasVarity PLC ADR 126,169
883,500 Magna International Class A 46,384
1,587,697 Mark IV Industries 36,914
------------
804,158
------------
BANKING (6.9%)
1,554,600 Bank of Boston 117,178
1,820,000 CITICORP 212,485
504,000 First Tennessee National 23,562
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
720,000 Signet Banking $ 22,860
470,000 Wells Fargo 142,997
------------
519,082
------------
DRUGS (0.6%)
480,000 Zeneca Group ADR 42,240
------------
ELECTRONICS (1.9%)
2,210,000 Atmel Corp. 82,599
2,200,000 Teradyne, Inc. 59,950
------------
142,549
------------
ENERGY (4.2%)
3,028,500 Chesapeake Energy 62,841
2,062,500 Enron Oil & Gas 41,766
61,000 Norsk Hydro ADR 3,050
2,297,414 Union Pacific Resources Group 55,999
1,670,000 Unocal Corp. 64,504
1,617,500 Vastar Resources 46,908
1,702,000 Zeigler Coal Holding 43,188 (2)
------------
318,256
------------
FINANCIAL SERVICES (16.9%)
30,000 ADVANTA Corp. Class A 1,241
3,400,000 ADVANTA Corp. Class B 136,425 (2)
216,485 Alleghany Corp. 46,192
2,644,500 Capital One Financial 105,119
4,800,000 Countrywide Credit Industries 139,800
2,900,000 Dean Witter, Discover 111,288
3,100,000 Federal Home Loan Mortgage 92,225
4,080,000 Fannie Mae 163,200
4,388,600 First USA 213,396
1,121,475 MBNA Corp. 35,887
1,600,000 Merrill Lynch 153,600
390,000 MGIC Investment 30,664
</TABLE>
50
<PAGE>
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Guardian Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
510,000 Security Capital Industrial
Trust $ 11,220
1,040,000 Spieker Properties 37,830
------------
1,278,087
------------
FOOD PRODUCTS (1.0%)
3,335,700 IBP, Inc. 77,555
------------
FOREST PRODUCTS & PAPER (2.8%)
1,105,000 Champion International 48,758
1,200,000 Fort Howard 35,700
470,200 Mead Corp. 27,389
717,400 Temple-Inland 39,547
101,400 Union Camp 4,892
907,000 Willamette Industries 58,048
------------
214,334
------------
HEALTH CARE (6.2%)
4,580,000 Foundation Health 172,895 (2)
1,875,000 Health Systems International 55,078
4,140,400 Humana Inc. 81,255
1,901,800 Mid Atlantic Medical Services 28,052
85,842 PacifiCare Health Systems
Class A 6,867
357,790 PacifiCare Health Systems
Class B 29,965
2,126,396 Wellpoint Health Networks 91,169
------------
465,281
------------
HEAVY INDUSTRY (2.5%)
1,080,000 Aluminum Co. of America 76,950
2,671,900 UCAR International 114,892 (2)
------------
191,842
------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
INDUSTRIAL GOODS & SERVICES (2.6%)
1,655,200 American Standard $ 74,484
763,800 Phelps Dodge 54,612
2,002,500 USG Corp. 70,588
------------
199,684
------------
INSURANCE (7.1%)
2,500,000 Aetna Inc. 207,188
507,500 American International Group 61,407
508,600 Chubb Corp. 29,817
691,600 ITT Hartford Group 51,870
300,000 St. Paul Cos. 20,250
263,500 Transatlantic Holdings 22,233
2,726,666 Travelers Group 146,217
------------
538,982
------------
MEDIA & ENTERTAINMENT (4.4%)
1,100,000 Comcast Corp. Class A 19,181
2,700,000 Comcast Corp. Class A Special 48,262
1,550,000 Harcourt General 73,044
710,000 Jones Intercable Inc. Class A 6,834
1,700,000 Time Warner 69,700
280,000 United International Holdings 2,870
1,300,000 Viacom Inc. Class B 45,825
1,405,000 Vodafone Group ADR 66,738
------------
332,454
------------
PACKAGING & CONTAINERS (0.9%)
2,668,700 Owens-Illinois 64,382
------------
</TABLE>
51
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Guardian Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUSTS (0.6%)
1,405,000 CWM Mortgage Holdings $ 32,491
430,400 Hospitality Properties Trust 13,934 (2)
------------
46,425
------------
RETAIL (1.8%)
885,000 Barnes & Noble 29,205
1,906,500 Fingerhut Cos. 27,883 (2)
2,860,000 Wal-Mart Stores 75,432
------------
132,520
------------
TECHNOLOGY (16.8%)
2,411,800 3Com Corp. 79,853
1,550,000 Applied Materials 78,469
1,475,000 Arrow Electronics 82,784
1,367,500 Avnet, Inc. 85,469
2,864,500 Cabletron Systems 85,935
2,270,000 Compaq Computer 179,898
2,250,000 Digital Equipment 73,687
575,000 Intel Corp. 81,578
2,200,000 KLA Instruments 91,712
1,752,000 Komag, Inc. 52,560
1,208,000 Linear Technology 54,964
1,043,300 LSI Logic 35,994 (3)
203,717 Lucent Technologies 10,975
1,435,200 National Semiconductor 37,495
2,570,000 Seagate Technology 121,433
1,525,000 Texas Instruments 117,616
------------
1,270,422
------------
TELECOMMUNICATIONS (3.1%)
2,280,000 360 Communications 49,305
2,825,000 Airtouch Communications 76,981
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
2,212,000 Tele-Communications
International $ 29,862
450,000 Tele-Communications,
Inc. Class A 5,344
3,975,000 U.S. West Media Group 73,040
------------
234,532
------------
TRANSPORTATION (3.0%)
816,100 Continental Airlines Class B 23,361
855,000 Delta Air Lines 68,828
2,000,000 Ryder System 63,000
650,000 Union Pacific 39,162
1,257,000 USFreightways Corp. 30,325 (2)
------------
224,676
------------
TOTAL COMMON STOCKS (COST
$5,289,213) 7,323,344
------------
PREFERRED STOCKS (0.6%)
52,430 Aetna Inc., Ser. C, Cv., 6.25% 4,227
605,700 Airtouch Communications, Ser.
B, Cv., 6.00% 17,792
388,994 Airtouch Communications, Ser.
C, Cv., 4.25% 18,769
125,000 PacifiCare Health Systems,
Ser. C, Cv., $1.00 4,063
------------
TOTAL PREFERRED STOCKS (COST
$35,476) 44,851
------------
</TABLE>
52
<PAGE>
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Guardian Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Principal (000's
Amount omitted)
- ----------- ------------
<C> <S> <C>
CONVERTIBLE BONDS (0.2%)
$15,000,000 International CableTel Inc.,
Cv. Sub. Notes, 7.25%, due
4/15/05 (COST $14,997) $ 14,156(6)
------------
U.S. TREASURY SECURITIES (4.7%)
338,545,000 U.S. Treasury Bills, 4.86% -
5.29%, due 3/6/97 - 4/24/97 337,743
15,000,000 U.S. Treasury Notes, 8.00%,
due 5/15/01 15,905
------------
TOTAL U.S. TREASURY SECURITIES
(COST $352,509) 353,648
------------
<CAPTION>
Market
Value(1)
Principal (000's
Amount omitted)
- ----------- ------------
<C> <S> <C>
SHORT-TERM CORPORATE NOTES (1.2%)
$89,240,000 General Electric Capital
Corp., 5.22% - 5.26%, due
3/3/97 - 3/13/97 (COST
$89,240) $ 89,240(4)
------------
TOTAL INVESTMENTS (103.7%)
(COST $5,781,435) 7,825,239(5)
Liabilities, less cash,
receivables and other assets
[(3.7%)] (278,340)
------------
TOTAL NET ASSETS (100.0%) $7,546,899
------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
53
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
International Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------------------------------------------------
HOLDING COUNTRY INDUSTRY PERCENTAGE
<C> <S> <C> <C> <C>
1. Dassault Systemes ADR France Technology 1.4%
2. Datacraft Asia Singapore Telecommunications 1.4%
3. Bure Investment Sweden Banking & Financial 1.2%
4. Venture Manufacturing Singapore Electronics 1.1%
5. TT Tieto "B" Finland Technology 1.0%
6. Bang & Olufsen Holding "B" Denmark Electronics 0.9%
7. SGL Carbon Germany Industrial Goods & 0.9%
Services
8. Vanda Systems & Communication Holdings Hong Kong Technology 0.9%
9. Medical Invest Svenska "B" Sweden Hospital Supplies 0.8%
10. Adidas AG Germany Retailing 0.8%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
COMMON STOCKS (90.2%)
ARGENTINA (0.7%)
6,500 IRSA Inversiones y
Representaciones GDR $ 235
10,000 Telefonica de Argentina ADR 316
5,000 YPF SA ADR 134
-------------
685
-------------
AUSTRALIA (0.2%)
37,500 QBE Insurance Group 188
-------------
AUSTRIA (0.5%)
2,300 OMV AG 271
1,836 Wolford AG 218
-------------
489
-------------
BELGIUM (1.1%)
2,000 Barco Industries 341
8,060 Telinfo SA 382
100 UCB SA 271
-------------
994
-------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
BRAZIL (0.7%)
7,000 Telecomunicacoes Brasileiras
ADR $ 679
-------------
CHILE (0.4%)
8,500 Compania de Telecomunicaciones
de Chile ADR 249
5,000 Santa Isabel ADR 150
-------------
399
-------------
CZECH REPUBLIC (0.3%)
8,000 Czech Republic Fund 122
3,650 Komercni Banka GDR 128
-------------
250
-------------
DENMARK (2.1%)
15,000 Bang & Olufsen Holding "B" 849
8,840 Carli Gry International 461
1,250 Falck AS 346
5,000 Unidanmark AS "A" 263
-------------
1,919
-------------
</TABLE>
54
<PAGE>
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
International Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
FINLAND (4.4%)
10,300 Aamulehti Group II $ 348
15,000 Amer Group 313
25,000 Hansabank Ltd. 373
4,000 Hartwall AB 186
12,200 Pohjola Insurance Group "B" 374
7,500 Raision Tehtaat 687
46,000 Tamro AB 306
11,000 TT Tieto "B" 943
27,000 Valmet Corp. 492
-------------
4,022
-------------
FRANCE (7.2%)
2,220 Cardif SA 318
3,990 Chargeurs International 202
2,800 Compagnie Generale des Eaux 390
2,600 Credit Local de France 260
21,000 Dassault Systemes ADR 1,310
1,562 Europe 1 Communication 370
4,000 Grand Optical Photoservice 597
1,700 Group Axime 218
1,750 Groupe Danone 265
16,720 Lagardere SCA 493
6,300 Michelin "B" 395
2,190 Pathe SA 549
7,000 Scor SA ADR 292
2,800 SGS-Thomson Microelectronics-
New York 185
3,600 Societe Generale 417
2,500 Unilog SA 327
-------------
6,588
-------------
GERMANY (4.1%)
7,800 Adidas AG 747 (6)
700 Altana AG 594
8,000 Hoechst AG 340
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
527 Mannesmann AG $ 208
14,000 Rofin-Sinar Technologies 196
6,000 SGL Carbon 818
25,000 Tarkett AG 445(6)
900 Volkswagen AG 437
-------------
3,785
-------------
HONG KONG (4.2%)
27,000 Cheung Kong Holdings 258
1,070,000 Climax International 134
150,000 First Pacific 210
700,000 Founder Hong Kong 375
22,000 HSBC Holdings 537
34,000 Hutchison Whampoa 259
1,250,000 Joyce Boutique Holdings 297
374,000 Manhattan Card 145
29,500 Swire Pacific "A" 254
1,960,000 Vanda Systems & Communication
Holdings 810
100,000 Varitronix International 165
204,400 VTech Holdings 355
-------------
3,799
-------------
HUNGARY (0.7%)
3,260 EGIS Rt. EDR 189
15,850 OTP Bank GDR 337
1,950 Richter Gedeon GDR 133 (6)
-------------
659
-------------
INDIA (0.2%)
6,000 Bajaj Auto GDR 216 (6)
-------------
INDONESIA (1.2%)
40,000 Hanjaya Mandala
Sampoerna-Foreign 199
6,000 Indosat ADR 173
82,500 Matahari Putra Prima-Foreign 126
</TABLE>
55
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
International Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
357,000 Steady Safe-Foreign $ 469
4,000 Telekomunikasi Indonesia ADR 137
-------------
1,104
-------------
IRELAND (1.5%)
30,000 Adare Printing Group 308
30,000 CRH PLC 308
70,272 Greencore Group 433
30,000 Powerscreen International 304
-------------
1,353
-------------
ISRAEL (3.6%)
30,000 Bio-Technology General 488
19,500 Formula Systems 305
12,500 Matav-Cable Systems Media ADR 180
20,000 Memco Software 355
20,000 NICE-Systems ADR 435
15,000 Orbotech, Ltd. 266
29,000 Tecnomatix Technologies 714
30,000 Zag Industries 510
-------------
3,253
-------------
ITALY (2.9%)
22,000 Brembo SpA 274
50,000 Ente Nazionale Idrocarburi 247
7,500 Esaote Biomedica ADR 214 (6)
4,000 Fila Holding ADR 240
200,000 Finanziaria Autogrill 277
35,000 IFI Istituto Finanziario 429
3,000 Luxottica Group ADR 175
42,500 SAES Getters ADR 473
160,000 Telecom Italia 321
-------------
2,650
-------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
JAPAN (6.6%)
5,600 Acom Co. $ 219
12,000 Arcland Sakamoto 120
1,000 Autobacs Seven 71
18,000 Banyu Pharmaceutical 263
10,000 Calsonic Corp. 55
5,000 Fanuc 156
14,000 Fuji Photo Film 470
9,100 Fujimi Inc. 525
2,000 Ito-Yokado 91
9,000 JACCS 52
6,000 Kyocera Corp. 356
6,000 Matsushita Electric Industrial 93
5,000 Mitsubishi Trust & Banking 55
18,000 NEC Corp. 209
20,000 Nikon Corp. 294
5,500 Nintendo Corp. 389
10,000 Noritsu Koki 523
13,000 Sankyo Co. 363
2,000 Sega Enterprises 56
10,350 Shin-Etsu Chemical 200
375 Shinkawa 7
2,000 SMC 137
10,100 Sony Corp. 731
10,000 Taisho Pharmaceutical 231
13,000 Takeda Chemical Industries 261
4,000 Tokyo Ohka Kogyo 89
-------------
6,016
-------------
KOREA (0.3%)
2,200 Korea Electric Power 63
1,690 Samsung Electronics 114
1,473 Shinsegae Department Store 59
-------------
236
-------------
MALAYSIA (1.5%)
24,000 Ekran Berhad 86
16,000 Genting Berhad 109
21,000 Malayan Banking 249
</TABLE>
56
<PAGE>
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
International Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
34,000 Malaysian Assurance Alliance $ 214
48,000 New Straits Times Press 305
34,000 Sime Darby 129
12,000 Telekom Malaysia 97
30,000 YTL Corp. 174(6)
-------------
1,363
-------------
MEXICO (3.1%)
76,859 ALFA, SA "A" 437
65,000 Cemex SA "B" 282
16,000 Coca-Cola FEMSA ADR 524
14,500 Desc SA ADR 382
83,000 Fomento Economico Mexicano "B" 355
80,000 Gruma SA "B" 393
9,000 Panamerican Beverages "A" 507
-------------
2,880
-------------
NETHERLANDS (3.6%)
4,500 Aegon NV-American 301
6,400 ASM Lithography Holding 426
12,520 Elsevier NV 200
20,148 Getronics NV 658
8,300 Gucci Group-New York 536
6,000 Hunter Douglas 454
14,000 Koninklijke Nedlloyd Groep 412
14,000 VNU Verenigd Bezit 290
-------------
3,277
-------------
NEW ZEALAND (0.3%)
4,000 Telecom of New Zealand ADR 289
-------------
NORWAY (2.7%)
9,000 Hafslund ASA "B" 60
20,000 Merkantildata ASA 453
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
7,800 Nera ASA $ 380
10,000 Petroleum Geo-Services ADR 420
21,800 Schibsted ASA 428
24,000 Tomra Systems 455
50,000 VISMA ASA 275
-------------
2,471
-------------
PERU (0.7%)
297,000 Telefonica del Peru "B" 660
-------------
PHILIPPINES (1.0%)
980,000 Bankard, Inc. 320
669,000 International Container
Terminal Services 406
550,000 JG Summit Holding "B" 155
-------------
881
-------------
RUSSIA (2.5%)
30,000 Gazprom ADR 522 (6)
4,000 Lukoil Holding ADR 236
3,500 Mosenergo ADR 143 (6)
7,000 Tatneft ADR 518 (6)
5,500 Trade House GUM ADR 308
15,000 Vimpel-Communications ADR 516
-------------
2,243
-------------
SINGAPORE (4.2%)
588,000 Datacraft Asia 1,294
84,000 Elec & Eltek International 415
14,000 Singapore Press
Holdings-Foreign 273
147,000 Singapore Technologies
Industrial 394
</TABLE>
57
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
International Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
39,000 United Overseas Bank-Foreign $ 443
365,000 Venture Manufacturing 983
-------------
3,802
-------------
SPAIN (1.1%)
1,300 Empresa Nacional de
Electricidad ADR 80
7,000 Tele Pizza 317
8,500 Telefonica de Espana ADR 586
-------------
983
-------------
SWEDEN (9.7%)
18,500 Atle AB 243
11,460 Autoliv AB 521
37,500 Biacore International ADR 689
85,000 Bure Investment 1,139
38,500 Caran AB "B" 349
30,000 Dahl International 640
8,400 Enator AB 214
36,200 Frontec AB 480
17,000 Getinge Industrier "B" 323
4,000 Incentive AB "A" 278
12,200 Kinnevik AB "B" 346
22,600 L.M. Ericsson Telephone ADR 713
20,000 Medical Invest Svenska "B" 773
12,200 NetCom Systems "B" 189
28,000 Nobel Biocare 500
5,270 Pricer AB 214
8,400 Skandia Forsakrings 255
24,000 Skandinaviska Enskilda Banken
"A" 253
15,000 Tornet Fastighets 182
6,000 WM-Data "B" 546
-------------
8,847
-------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
SWITZERLAND (2.4%)
595 Ares-Serono Group "B" $ 613
125 Lindt & Spruengli 190
1,300 Logitech International 221
500 Novartis AG 572
1,100 Schweizerischer Bankverein 209
624 SMH AG 356
-------------
2,161
-------------
THAILAND (0.6%)
6,200 Bangkok Bank-Foreign 54
25,900 K.R. Precision-Foreign 200
2,800 Siam Cement-Foreign 75
32,000 Thai Farmers Bank-Foreign 189
-------------
518
-------------
UNITED KINGDOM (13.3%)
29,000 Azlan Group 296
38,800 Barclays PLC 701
3,000 British Petroleum ADR 397
63,000 Capita Group 670
50,625 Carlton Communications 431
73,000 Christies International 378
35,900 Dorling Kindersley Holdings 206
30,000 EMAP PLC 377
47,000 FirstBus PLC 175
890,000 Freepages Group 703
16,500 GKN PLC 252
50,000 Inchcape PLC 217
38,000 J.D. Wetherspoon 707
60,000 JBA Holdings 714
40,000 Johnson Matthey 349
15,000 LucasVarity PLC ADR 491
30,000 Misys PLC 601
100,000 Orange PLC 346
</TABLE>
58
<PAGE>
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
International Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
75,000 PPL Therapeutics $ 650
48,000 Rentokil Initial 353
40,000 Sage Group 404
35,000 SEMA Group 731
20,000 Stagecoach Holdings 231
22,500 TI Group 193
81,186 Tomkins PLC 377
40,900 United Utilities 442
100,000 WPP Group 424
4,000 Zeneca Group ADR 352
-------------
12,168
-------------
VENEZUELA (0.6%)
17,000 Compania Anonima Nacional
Telefonos de Venezuela ADR 540
-------------
TOTAL COMMON STOCKS (COST
$66,248) 82,367
-------------
PREFERRED STOCKS (2.2%)
300 Bayerische Motoren Werke,
Germany 140
2,100 Fresenius AG, Germany 453
6,000 Moebel Walther, Germany 334
9,000 Nokia Corp. ADR, Finland 527
2,500 SAP AG, Germany 386
80,000 Village Roadshow, Australia 187
-------------
TOTAL PREFERRED STOCKS (COST
$1,461) 2,027
-------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- --------- -------------
<C> <S> <C>
RIGHTS (0.0%)
500 Ciba Specialty Chemicals
Holding, Expire 3/12/97,
Switzerland (COST $0) $ 31
-------------
WARRANTS (0.0%)
2,750 Thai Farmers Bank, Expire
9/15/02, Thailand (COST $3) 2
-------------
<CAPTION>
Principal
Amount
- ---------
<C> <S> <C>
CONVERTIBLE BONDS (0.5%)
$ 291,000 United Micro Electronics, Cv.
Unsub. Notes, 1.25%, due
6/8/04 (COST $357) 416(6)
-------------
U.S. TREASURY SECURITIES (8.4%)
7,735,000 U.S. Treasury Bills, 4.85% -
5.02%, due 3/6/97 - 4/24/97
(COST $7,699) 7,699 (4)
-------------
TOTAL INVESTMENTS (101.3%)
(COST $75,768) 92,542
Liabilities, less cash,
receivables and other assets
[(1.3%)] (1,180 )
-------------
TOTAL NET ASSETS (100.0%) $ 91,362
-------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
59
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Manhattan Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. General Nutrition 3.1%
2. CITICORP 3.0%
3. Wells Fargo 2.7%
4. GTECH Holdings 2.6%
5. Harrah's Entertainment 2.4%
6. Capital One Financial 2.4%
7. United Healthcare 2.4%
8. First USA 2.2%
9. KLA Instruments 2.1%
10. Staples Inc. 2.1%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
- ---------- ---------------
<C> <S> <C>
COMMON STOCKS (99.4%)
CHEMICALS (1.7%)
5,000 SGL Carbon (Ordinary Shares) $ 682
65,000 SGL Carbon ADR 2,958
145,000 UCAR International 6,235
---------------
9,875
---------------
COMMUNICATIONS (7.6%)
395,000 Airtouch Communications 10,764
585,000 Comcast Corp. Class A Special 10,457
680,000 Comcast UK Cable Partners
Limited 7,990
290,000 ECI Telecommunications 6,887
415,000 International CableTel 8,041
---------------
44,139
---------------
CONSUMER GOODS & SERVICES (8.2%)
510,000 Authentic Fitness 7,395
490,000 CUC International 11,699
175,000 Luxottica Group ADR 10,194
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
- ---------- ---------------
<C> <S> <C>
480,000 Nu-Kote Holding $ 2,700
80,000 Philip Morris 10,810
315,000 Regis Corp. 5,158
---------------
47,956
---------------
DRUGS & HEALTH CARE (12.2%)
510,000 Coventry Corp. 3,729
285,000 Healthsource Inc. 5,949
260,000 Nellcor Puritan Bennett 4,518
110,000 Novartis AG ADR 6,298
100,000 PacifiCare Health Systems
Class B 8,375
95,000 R.P. Scherer 5,486
115,000 Sierra Health Services 3,033
280,000 United Healthcare 13,965
70,300 Warner-Lambert 5,905
190,000 Watson Pharmaceuticals 8,289
120,000 Wellpoint Health Networks 5,145
---------------
70,692
---------------
ENTERTAINMENT (9.7%)
150,000 Circus Circus Enterprises 4,687
475,000 GTECH Holdings 14,903
760,000 Harrah's Entertainment 14,060
750,000 Players International 4,031
215,000 Promus Hotel 7,606
545,000 Showboat, Inc. 11,173
---------------
56,460
---------------
FINANCIAL SERVICES (18.5%)
210,000 Bear Stearns 6,300
352,400 Capital One Financial 14,008
150,000 CITICORP 17,512
140,000 Finova Group 10,692
257,000 First USA 12,497
360,000 MBNA Corp. 11,520
80,000 Merrill Lynch 7,680
</TABLE>
60
<PAGE>
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Manhattan Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
- ---------- ---------------
<C> <S> <C>
185,000 Morgan Stanley Group $ 11,678
51,000 Wells Fargo 15,517
---------------
107,404
---------------
INSURANCE (8.6%)
165,000 ACE Ltd. 10,725
160,000 EXEL Ltd. 7,060
295,000 Highlands Insurance 6,637
85,000 Loews Corp. 8,681
155,000 PennCorp Financial Group 5,425
215,333 Travelers Group 11,547
---------------
50,075
---------------
OIL & GAS (0.3%)
35,000 Enron Oil & Gas 709
30,000 Noble Affiliates 1,170
---------------
1,879
---------------
RESTAURANTS (6.9%)
659,450 Buffets Inc. 4,740
420,000 Cheesecake Factory 8,925
610,000 CKE Restaurants 11,819
170,000 IHOP Corp. 4,398
223,500 Lone Star Steakhouse & Saloon 5,923
230,000 Sonic Corp. 4,169
---------------
39,974
---------------
SPECIALTY RETAIL (11.3%)
168,000 Federated Department Stores 5,838
985,000 General Nutrition 17,730
345,000 Intimate Brands 6,727
190,000 Lowe's Cos. 6,935
140,000 Office Depot 2,660
560,000 Staples Inc. 12,110
240,000 Viking Office Products 5,670
295,000 Wal-Mart Stores 7,781
---------------
65,451
---------------
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
- ---------- ---------------
<C> <S> <C>
TECHNOLOGY (13.6%)
335,000 Informix Corp. $ 5,821
75,000 Intel Corp. 10,641
295,000 KLA Instruments 12,298
250,000 LSI Logic 8,625
305,000 Micron Technology 11,437
110,000 Nokia Corp. ADR 6,435
55,000 SAP AG (Ordinary Shares) 8,465
125,000 Seagate Technology 5,906
110,000 Texas Instruments 8,484
100,000 Xeikon N.V. ADR 901
---------------
79,013
---------------
TRANSPORTATION (0.8%)
250,000 RailTex Inc. 4,531
---------------
TOTAL COMMON STOCKS (COST
$449,499) 577,449
---------------
RIGHTS (0.0%)
3,500 Ciba Specialty Chemicals
Holding, Expire 3/12/97 (COST
$0) 220
---------------
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
U.S. TREASURY SECURITIES (3.9%)
$22,960,000 U.S. Treasury Bills, 4.89% -
4.935%, due 3/6/97 - 4/17/97
(COST $22,896) 22,903
---------------
TOTAL INVESTMENTS (103.3%)
(COST $472,395) 600,572(5)
Liabilities, less cash,
receivables and other assets
[(3.3%)] (19,468)
---------------
TOTAL NET ASSETS (100.0%) $581,104
---------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
61
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Columbia/HCA Healthcare 2.6%
2. Costco Cos. 2.5%
3. Wells Fargo 2.5%
4. Texas Instruments 2.1%
5. EXEL Ltd. 2.1%
6. duPont 2.0%
7. Allstate Corp. 1.9%
8. Wal-Mart Stores 1.9%
9. Knight-Ridder 1.8%
10. American Express 1.8%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (94.0%)
AIRLINES (0.6%)
570,300 Continental Airlines Class B $ 16,325
------------
AUTOMOTIVE (0.4%)
290,800 Chrysler Corp. 9,851
------------
BANKING & FINANCIAL SERVICES (8.6%)
725,000 American Express 47,397
989,500 Capital One Financial 39,333
331,400 CITICORP 38,691
1,303,400 Countrywide Credit Industries 37,961
217,800 Wells Fargo 66,266
------------
229,648
------------
BUILDING, CONSTRUCTION & REFURNISHING (1.7%)
1,300,000 USG Corp. 45,825
------------
CHEMICALS (4.7%)
500,000 duPont 53,625
398,500 Great Lakes Chemical 18,480
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
947,700 Morton International $ 39,093
273,500 W.R. Grace 14,496
------------
125,694
------------
COMMUNICATIONS (1.5%)
1,450,500 Airtouch Communications 39,526
------------
CONSUMER GOODS & SERVICES (3.0%)
1,535,000 Fort Howard 45,666
756,900 Tupperware Corp. 33,872
------------
79,538
------------
ELECTRONICS (3.5%)
364,500 Analog Devices 8,474
858,500 KLA Instruments 35,789
1,443,100 Loral Space & Communications 23,270
469,700 Varian Associates 27,125
------------
94,658
------------
ENTERTAINMENT (5.1%)
965,200 Evergreen Media 28,956
1,674,100 Mirage Resorts 41,643
760,300 Royal Caribbean Cruises 22,239
1,100,000 Time Warner 45,100
------------
137,938
------------
FOOD & DRUG STORES (1.0%)
632,600 Revco D.S. 25,858
------------
FOOD & TOBACCO (3.2%)
1,350,200 IBP, Inc. 31,392
305,100 Philip Morris 41,227
350,000 RJR Nabisco Holdings 12,819
------------
85,438
------------
HEALTH CARE (4.3%)
1,690,550 Columbia/HCA Healthcare 71,003
798,642 Novartis AG ADR 45,722
------------
116,725
------------
</TABLE>
62
<PAGE>
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
INDUSTRIAL GOODS & SERVICES (6.0%)
931,400 AK Steel Holding $ 33,531
695,400 Goodyear Tire & Rubber 36,682
875,764 LucasVarity PLC ADR 28,681
1,783,300 Owens-Illinois 43,022
450,000 XTRA Corp. 18,253
------------
160,169
------------
INSURANCE (11.3%)
790,800 Allstate Corp. 50,117
1,255,400 Equitable Cos. 39,388
1,270,100 EXEL Ltd. 56,043
273,500 MBIA, Inc. 26,700
641,775 Orion Capital 41,074
669,200 Progressive Corp. 44,251
852,200 Travelers Group 45,699
------------
303,272
------------
MEDIA (3.9%)
2,540,281 Comcast Corp. Class A Special 45,407
269,500 E.W. Scripps 9,702
1,245,000 Knight-Ridder 49,489
------------
104,598
------------
OIL & GAS (6.1%)
800,000 Cabot Corp. 18,800
2,957,500 Gulf Canada Resources 20,702
695,500 Noble Affiliates 27,124
269,800 Schlumberger, Ltd. 27,149
780,950 Tejas Gas 34,167
1,495,055 Union Pacific Resources Group 36,442
------------
164,384
------------
OIL SERVICES (1.0%)
629,900 Tidewater Inc. 27,086
------------
PUBLISHING & BROADCASTING (0.4%)
1,208,800 Hollinger International 12,239
------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
RAILROADS (2.6%)
465,000 Burlington Northern Santa Fe $ 38,711
500,000 Union Pacific 30,125
------------
68,836
------------
REAL ESTATE (3.6%)
200,700 CBL & Associates Properties 4,992
600,000 Del Webb 9,675
1,900,000 Host Marriott 34,200
200,000 Macerich Co. 5,525
873,500 Security Capital Industrial
Trust 19,217
1,607,700 Security Capital U.S. Realty 22,508 (6)
------------
96,117
------------
RESTAURANTS (1.6%)
978,600 McDonald's Corp. 42,324
------------
RETAILING (4.7%)
800,000 Harcourt General 37,700
699,000 Home Depot 38,095
1,881,400 Wal-Mart Stores 49,622
------------
125,417
------------
RETAILING & APPAREL (3.3%)
2,600,000 Costco Cos. 66,625
600,000 Nordstrom, Inc. 22,050
------------
88,675
------------
SPECIALTY CHEMICAL (1.3%)
832,000 Millipore Corp. 35,880
------------
TECHNOLOGY (10.6%)
530,000 Applied Materials 26,831
474,700 Autodesk, Inc. 16,081
533,100 Cabletron Systems 15,993
1,030,000 Komag, Inc. 30,900
774,100 NCR Corp. 25,545
952,900 Seagate Technology 45,025
761,200 Sundstrand Corp. 33,207
</TABLE>
63
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
734,600 Texas Instruments $ 56,656
554,300 Xerox Corp. 34,644
------------
284,882
------------
TOTAL COMMON STOCKS (COST
$1,976,161) 2,520,903
------------
PREFERRED STOCKS (0.7%)
566,700 Fresenius National Medical
Care, Class D 57
280,000 Loral Space & Communications,
Cv., 6.00% 14,210 (6)
550,000 RJR Nabisco, Ser. C, Dep.
Shares 3,919
------------
TOTAL PREFERRED STOCKS (COST
$17,784) 18,186
------------
RIGHTS (0.1%)
39,932 Ciba Specialty Chemicals
Holding, Expire 3/12/97 (COST
$0) 2,516
------------
<CAPTION>
Market
Value(1)
Principal (000's
Amount omitted)
- ----------- ------------
<C> <S> <C>
U.S. TREASURY SECURITIES (5.0%)
$134,580,000 U.S. Treasury Bills, 4.88% -
5.00%, due 3/6/97 - 4/24/97
(COST $134,244) $ 134,284
------------
SHORT-TERM CORPORATE NOTES (1.7%)
46,500,000 General Electric Capital
Corp., 5.22%, due 3/3/97
(COST $46,500) 46,500 (4)
------------
TOTAL INVESTMENTS (101.5%)
(COST $2,174,689) 2,722,389 (5)
Liabilities, less cash,
receivables and other assets
[(1.5%)] (40,996 )
------------
TOTAL NET ASSETS (100.0%) $ 2,681,393
------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
64
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Socially Responsive Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Intel Corp. 2.7%
2. ReliaStar Financial 2.4%
3. Warner-Lambert 2.3%
4. National City 2.2%
5. Travelers Group 2.1%
6. A.G. Edwards 2.1%
7. Hewlett-Packard 2.1%
8. CoreStates Financial 2.1%
9. Morton International 2.0%
10. Equitable Cos. 2.0%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (96.0%)
AGRICULTURE (1.1%)
83,500 Mycogen Corp. $ 2,181
-------------
AUTOMOTIVE (2.0%)
103,000 Borg-Warner Automotive 4,068
-------------
BANKING (10.1%)
32,000 CITICORP 3,736
80,007 CoreStates Financial 4,211
230,000 Dime Bancorp 4,025
70,000 Mercantile Bancorporation 4,051
90,000 National City 4,545
-------------
20,568
-------------
BUSINESS SERVICES (3.4%)
120,000 Dun & Bradstreet 2,940
130,000 John H. Harland 3,932
-------------
6,872
-------------
CHEMICALS (8.1%)
45,000 Air Products & Chemicals 3,336
110,000 Dexter Corp. 3,245
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
60,000 Minerals Technologies $ 2,272
100,000 Morton International 4,125
50,000 Perkin-Elmer 3,550
-------------
16,528
-------------
COMMUNICATIONS (1.0%)
141,700 Matav-Cable Systems Media ADR 2,037
-------------
CONSUMER GOODS & SERVICES (5.0%)
30,000 Kimberly-Clark 3,180
29,400 Procter & Gamble 3,532
100,000 Viacom Inc. Class B 3,525
-------------
10,237
-------------
DIVERSIFIED (1.7%)
60,000 Tyco International 3,540
-------------
ENERGY (1.5%)
80,000 Noble Affiliates 3,120
-------------
FINANCIAL SERVICES (7.9%)
120,000 A.G. Edwards 4,260
20,000 ADVANTA Corp. Class A 828
64,000 ADVANTA Corp. Class B 2,568
100,000 Fannie Mae 4,000
80,000 Travelers Group 4,290
-------------
15,946
-------------
FOOD & BEVERAGE (3.7%)
85,200 McDonald's Corp. 3,685
160,000 Whitman Corp. 3,760
-------------
7,445
-------------
FURNISHINGS (1.8%)
100,000 Leggett & Platt 3,587
-------------
HEALTH CARE (7.4%)
70,000 Johnson & Johnson 4,034
50,000 McKesson Corp. 3,312
</TABLE>
65
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Socially Responsive Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
40,000 SmithKline Beecham ADR $ 2,970
55,000 Warner-Lambert 4,620
-------------
14,936
-------------
INDUSTRIAL & COMMERCIAL PRODUCTS (1.7%)
40,000 Raychem Corp. 3,405
-------------
INSURANCE (7.8%)
102,600 Allmerica Property & Casualty 3,219
60,000 Chubb Corp. 3,517
130,000 Equitable Cos. 4,079
80,000 ReliaStar Financial 4,960
-------------
15,775
-------------
OIL & GAS (3.9%)
100,000 ENSERCH Corp. 2,100
200,000 Enserch Exploration 1,925
80,000 Louisiana Land & Exploration 3,820
-------------
7,845
-------------
OIL SERVICES (1.0%)
50,000 Tidewater Inc. 2,150
-------------
PAPER & FOREST PRODUCTS (1.4%)
50,000 Mead Corp. 2,912
-------------
RAILROADS (1.8%)
104,600 Illinois Central 3,596
-------------
RECYCLING (1.2%)
150,000 IMCO Recycling 2,363
-------------
RETAIL STORES (1.6%)
90,000 Nordstrom, Inc. 3,308
-------------
RETAILING (3.8%)
145,000 Costco Cos. 3,716
150,000 Wal-Mart Stores 3,956
-------------
7,672
-------------
TECHNOLOGY (8.2%)
85,000 AMP, Inc. 3,305
120,000 Cabletron Systems 3,600
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ---------- -------------
<C> <S> <C>
76,000 Hewlett-Packard $ 4,256
38,000 Intel Corp. 5,391
-------------
16,552
-------------
TELECOMMUNICATIONS (7.3%)
70,000 AT&T Corp. 2,791
167,500 Jones Intercable Inc. Class A 1,612
250,000 Metromedia International Group 2,485
52,000 Southern New England
Telecommunications 1,885
50,000 Telephone & Data Systems 2,000
150,000 WorldCom Inc. 3,994
-------------
14,767
-------------
UTILITIES (1.6%)
115,000 Brooklyn Union Gas 3,277
-------------
TOTAL COMMON STOCKS (COST
$149,589) 194,687
-------------
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
U.S. TREASURY SECURITIES (5.4%)
$10,985,000 U.S. Treasury Bills, 4.87% -
5.02%, due 3/6/97 - 4/24/97
(COST $10,933) 10,933(4)
-------------
TOTAL INVESTMENTS (101.4%)
(COST $160,522) 205,620(5)
Liabilities, less cash,
receivables and other assets
[(1.4%)] (2,904)
-------------
TOTAL NET ASSETS (100.0%) $ 202,716
-------------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
66
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
February 28, 1997 (Unaudited)
- ----------------------------------------------------------------------
Equity Managers Trust and Global 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, with the
exception of securities held by Neuberger&Berman International Portfolio
which are valued at the last available bid price. The Portfolios value all
other securities by a method that the trustees of Equity Managers Trust and
Global Managers Trust believe accurately reflects fair value. Foreign
security prices are furnished by independent quotation services expressed in
local currency values. Foreign security prices are translated from the local
currency into U.S. dollars using current exchange rates. Short-term debt
securities with less than 60 days until maturity may be valued at cost which,
when combined with interest earned, approximates market value.
2) Affiliated Issuer (see Note E of Notes to Financial Statements).
3) The following securities were held in escrow at February 28, 1997 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 60,000 Compaq Computer $ 4,755,000 $ 125,696 $ 22,500
March 1997 @ 90
GUARDIAN PORTFOLIO 500,000 LSI Logic $ 17,250,000 $1,147,461 $1,281,250
April 1997 @ 35
</TABLE>
4) At cost, which approximates market value.
5) At February 28, 1997, selected Portfolio information on a Federal income tax
basis was as follows:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
NEUBERGER&BERMAN COST APPRECIATION DEPRECIATION APPRECIATION
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOCUS PORTFOLIO $ 966,867,000 $ 438,296,000 $ 21,308,000 $ 416,988,000
GENESIS PORTFOLIO 412,741,000 99,877,000 6,046,000 93,831,000
GUARDIAN PORTFOLIO 5,782,750,000 2,165,388,000 122,899,000 2,042,489,000
MANHATTAN PORTFOLIO 472,452,000 158,383,000 30,263,000 128,120,000
PARTNERS PORTFOLIO 2,179,284,000 561,414,000 18,309,000 543,105,000
SOCIALLY RESPONSIVE PORTFOLIO 160,550,000 48,652,000 3,582,000 45,070,000
</TABLE>
6) Security exempt from registration under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration, normally
to qualified institutional buyers under Rule 144A. At February 28, 1997,
these securities
67
<PAGE>
amounted to $14,156,000 or .2% of net assets for Neuberger&Berman Guardian
Portfolio, $3,528,000 or 3.9% of net assets for Neuberger&Berman
International Portfolio, and $36,718,000 or 1.4% of net assets for
Neuberger&Berman Partners Portfolio.
SEE NOTES TO FINANCIAL STATEMENTS
68
<PAGE>
(This page has been left blank intentionally.)
69
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS TRUST
------------------------------------------------
FOCUS GENESIS GUARDIAN
(000'S OMITTED) PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at market value*
(Notes A & E) -- see Schedule of
Investments:
Unaffiliated issuers $ 1,364,975 $ 506,572 $ 7,269,283
Non-controlled affiliated issuers 18,880 -- 555,956
------------------------------------------------
1,383,855 506,572 7,825,239
Cash 3,050 5 42
Deferred organization costs (Note A) 12 3 36
Dividends and interest receivable 807 293 5,786
Net receivable for forward currency exchange
contracts sold (Note C) -- -- --
Prepaid expenses and other assets 23 7 116
Receivable for securities sold 9,893 4,960 32,321
------------------------------------------------
1,397,640 511,840 7,863,540
------------------------------------------------
LIABILITIES
Option contracts written, at market value
(Note A) 23 -- 1,281
Payable for collateral on securities loaned
(Note A) 37,879 -- 200,188
Payable for securities purchased 19,736 592 111,780
Payable for variation margin (Note A) -- -- --
Payable to investment manager (Note B) 518 280 2,569
Accrued expenses 202 48 823
------------------------------------------------
58,358 920 316,641
------------------------------------------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 1,339,282 $ 510,920 $ 7,546,899
------------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 921,797 $ 417,089 $ 5,503,228
Net unrealized appreciation in value of
investment securities, option contracts
written, financial futures contracts,
translation of assets and liabilities in
foreign currencies, and foreign currency
contracts 417,485 93,831 2,043,671
------------------------------------------------
NET ASSETS $ 1,339,282 $ 510,920 $ 7,546,899
------------------------------------------------
*Cost of investments:
Unaffiliated issuers $ 944,686 $ 412,741 $ 5,289,254
Non-controlled affiliated issuers 21,787 -- 492,181
------------------------------------------------
Total cost of investments $ 966,473 $ 412,741 $ 5,781,435
------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
70
<PAGE>
February 28, 1997 (Unaudited)
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
MANAGERS EQUITY MANAGERS TRUST
TRUST ------------------------------------------------
-------------- SOCIALLY
INTERNATIONAL 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 $ 92,542 $ 600,572 $ 2,722,389 $ 205,620
Non-controlled affiliated issuers -- -- -- --
-----------------------------------------------------------------
92,542 600,572 2,722,389 205,620
Cash 16 2,497 1 1
Deferred organization costs (Note A) 27 14 25 14
Dividends and interest receivable 54 120 1,797 224
Net receivable for forward currency exchange
contracts sold (Note C) 522 -- -- --
Prepaid expenses and other assets 1 15 51 2
Receivable for securities sold -- 3,065 12,676 --
-----------------------------------------------------------------
93,162 606,283 2,736,939 205,861
-----------------------------------------------------------------
LIABILITIES
Option contracts written, at market value
(Note A) -- -- -- --
Payable for collateral on securities loaned
(Note A) -- 21,345 6,849 2,200
Payable for securities purchased 1,585 3,485 47,593 827
Payable for variation margin (Note A) 111 -- -- --
Payable to investment manager (Note B) 57 243 945 85
Accrued expenses 47 106 159 33
-----------------------------------------------------------------
1,800 25,179 55,546 3,145
-----------------------------------------------------------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 91,362 $ 581,104 $ 2,681,393 $ 202,716
-----------------------------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 74,414 $ 452,927 $ 2,133,693 $ 157,618
Net unrealized appreciation in value of
investment securities, option contracts
written, financial futures contracts,
translation of assets and liabilities in
foreign currencies, and foreign currency
contracts 16,948 128,177 547,700 45,098
-----------------------------------------------------------------
NET ASSETS $ 91,362 $ 581,104 $ 2,681,393 $ 202,716
-----------------------------------------------------------------
*Cost of investments:
Unaffiliated issuers $ 75,768 $ 472,395 $ 2,174,689 $ 160,522
Non-controlled affiliated issuers -- -- -- --
-----------------------------------------------------------------
Total cost of investments $ 75,768 $ 472,395 $ 2,174,689 $ 160,522
-----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
71
<PAGE>
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS TRUST
------------------------------------------
FOCUS GENESIS GUARDIAN
(000'S OMITTED) PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated issuers $ 6,257 $ 1,444 $ 38,991
Dividend income -- non-controlled affiliated
issuers 12 -- 888
Interest income 611 517 7,768
Foreign taxes withheld (Note A) (28) -- (239)
------------------------------------------
Total income 6,852 1,961 47,408
------------------------------------------
Expenses:
Investment management fee (Note B) 3,096 1,538 15,220
Accounting fees 5 5 5
Amortization of deferred organization and
initial offering expenses (Note A) 5 1 13
Auditing fees 21 11 25
Custodian fees (Note B) 148 64 512
Insurance expense 12 2 64
Legal fees 8 19 9
Trustees' fees and expenses 9 5 37
Miscellaneous -- 10 --
------------------------------------------
Total expenses 3,304 1,655 15,885
Fee waived by the investment manager (Note
B) -- (184) --
------------------------------------------
Total net expenses 3,304 1,471 15,885
------------------------------------------
Net investment income (loss) 3,548 490 31,523
------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment securities
sold in unaffiliated issuers 112,150 2,792 278,687
Net realized loss on investment securities
sold in non-controlled affiliated issuers -- -- (48,143)
Net realized loss on option contracts written
(Note A) (643) -- (2,991)
Net realized loss on financial futures
contracts (Note A) -- -- --
Net realized gain on foreign currency
transactions (Note A) -- -- --
Change in net unrealized appreciation of
investment securities, option contracts
written, translation of assets and
liabilities in foreign currencies, and
foreign currency contracts 131,395 32,610 1,018,651
Change in net unrealized depreciation of
financial futures contracts (Note A) -- -- --
------------------------------------------
Net gain on investments 242,902 35,402 1,246,204
------------------------------------------
Net increase in net assets resulting from
operations $ 246,450 $ 35,892 $ 1,277,727
------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
72
<PAGE>
For the Six Months Ended February 28, 1997 (Unaudited)
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
MANAGERS EQUITY MANAGERS TRUST
TRUST -------------------------------------------------
------------ SOCIALLY
INTERNATIONAL MANHATTAN PARTNERS RESPONSIVE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated issuers $ 245 $ 1,577 $ 14,625 $ 1,358
Dividend income -- non-controlled affiliated
issuers -- -- -- --
Interest income 119 191 2,544 252
Foreign taxes withheld (Note A) (30) (14) (39) (2)
----------------------------------------------------------------
Total income 334 1,754 17,130 1,608
----------------------------------------------------------------
Expenses:
Investment management fee (Note B) 295 1,536 5,424 497
Accounting fees 5 5 5 5
Amortization of deferred organization and
initial offering expenses (Note A) 5 5 9 3
Auditing fees 15 17 22 10
Custodian fees (Note B) 79 121 199 42
Insurance expense 1 7 22 2
Legal fees 16 13 9 10
Trustees' fees and expenses 6 5 14 4
Miscellaneous 1 -- -- --
----------------------------------------------------------------
Total expenses 423 1,709 5,704 573
Fee waived by the investment manager (Note
B) -- -- -- --
----------------------------------------------------------------
Total net expenses 423 1,709 5,704 573
----------------------------------------------------------------
Net investment income (loss) (89) 45 11,426 1,035
----------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment securities
sold in unaffiliated issuers 1,102 64,034 151,459 3,304
Net realized loss on investment securities
sold in non-controlled affiliated issuers -- -- -- --
Net realized loss on option contracts written
(Note A) -- -- -- --
Net realized loss on financial futures
contracts (Note A) (107) -- -- --
Net realized gain on foreign currency
transactions (Note A) 158 -- -- --
Change in net unrealized appreciation of
investment securities, option contracts
written, translation of assets and
liabilities in foreign currencies, and
foreign currency contracts 10,509 45,541 319,744 21,855
Change in net unrealized depreciation of
financial futures contracts (Note A) (205) -- -- --
----------------------------------------------------------------
Net gain on investments 11,457 109,575 471,203 25,159
----------------------------------------------------------------
Net increase in net assets resulting from
operations $ 11,368 $ 109,620 $ 482,629 $ 26,194
----------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
73
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS
TRUST
FOCUS GENESIS
PORTFOLIO PORTFOLIO
Six Months Six Months
Ended Year Ended Year
February 28, Ended February 28, Ended
1997 August 31, 1997 August 31,
(000'S OMITTED) (UNAUDITED) 1996 (UNAUDITED) 1996
------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 3,548 $ 11,390 $ 490 $ 471
Net realized gain on investments 111,507 51,701 2,792 5,660
Change in net unrealized
appreciation (depreciation) of
investments 131,395 (21,728) 32,610 27,635
------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 246,450 41,363 35,892 33,766
------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 96,472 231,514 222,919 110,968
Reductions (126,011 ) (119,679) (7,755 ) (27,030 )
------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests (29,539 ) 111,835 215,164 83,938
------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 216,911 153,198 251,056 117,704
NET ASSETS:
Beginning of period 1,122,371 969,173 259,864 142,160
------------------------------------------------------
End of period $ 1,339,282 $ 1,122,371 $ 510,920 $ 259,864
------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
74
<PAGE>
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS GLOBAL MANAGERS EQUITY MANAGERS
TRUST TRUST TRUST
GUARDIAN INTERNATIONAL MANHATTAN
PORTFOLIO PORTFOLIO PORTFOLIO
Six Months Six Months Six Months
Ended Year Ended Year Ended Year
February 28, Ended February 28, Ended February 28, Ended
1997 August 31, 1997 August 31, 1997 August 31,
(UNAUDITED) 1996 (UNAUDITED) 1996 (UNAUDITED) 1996
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 31,523 $ 97,934 $ (89 ) $ 233 $ 45 $ 829
Net realized gain on investments 227,553 307,410 1,153 609 64,034 59,509
Change in net unrealized
appreciation (depreciation) of
investments 1,018,651 (111,192) 10,304 3,964 45,541 (74,167 )
----------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 1,277,727 294,152 11,368 4,806 109,620 (13,829 )
----------------------------------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 284,106 1,540,028 29,279 30,618 26,138 70,833
Reductions (247,476 ) (214,834) (6,268 ) (4,847 ) (122,080 ) (134,984 )
----------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 36,630 1,325,194 23,011 25,771 (95,942 ) (64,151 )
----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 1,314,357 1,619,346 34,379 30,577 13,678 (77,980 )
NET ASSETS:
Beginning of period 6,232,542 4,613,196 56,983 26,406 567,426 645,406
----------------------------------------------------------------------------------
End of period $ 7,546,899 $ 6,232,542 $ 91,362 $ 56,983 $ 581,104 $ 567,426
----------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
75
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS(Cont'd)
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS
TRUST
SOCIALLY
PARTNERS RESPONSIVE
PORTFOLIO PORTFOLIO
Six Months Six Months
Ended Year Ended Year
February 28, Ended February 28, Ended
1997 August 31, 1997 August 31,
(000'S OMITTED) (UNAUDITED) 1996 (UNAUDITED) 1996
------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 11,426 $ 23,394 $ 1,035 $ 1,307
Net realized gain on investments 151,459 240,765 3,304 11,385
Change in net unrealized
appreciation (depreciation) of
investments 319,744 (30,217) 21,855 9,035
------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 482,629 233,942 26,194 21,727
------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 291,119 309,196 23,082 45,974
Reductions (91,958 ) (167,061) (5,045 ) (5,963 )
------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 199,161 142,135 18,037 40,011
------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 681,790 376,077 44,231 61,738
NET ASSETS:
Beginning of period 1,999,603 1,623,526 158,485 96,747
------------------------------------------------------
End of period $ 2,681,393 $ 1,999,603 $ 202,716 $ 158,485
------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
76
<PAGE>
NOTES TO FINANCIAL STATEMENTS
February 28, 1997 (Unaudited)
- ----------------------------------------------------------------------
Equity Managers Trust and Global Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Focus Portfolio ("Focus"), 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") are separate operating series of Equity
Managers Trust ("Managers Trust"), a New York common law trust organized as
of December 1, 1992. Neuberger&Berman International Portfolio
("International," formerly International Portfolio) is a separate operating
series of Global Managers Trust ("Global"), a New York common law trust
organized as of March 18, 1994, with its principal office in the Cayman
Islands. These seven aforementioned series are collectively referred to as
the "Portfolios." Managers Trust and Global (collectively the "Trusts") are
registered as diversified, open-end management investment companies under the
Investment Company Act of 1940, as amended (the "1940 Act"). The trustees of
Global changed the name of International Portfolio to Neuberger&Berman
International Portfolio, effective November 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. Global currently has only one Portfolio.
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 or, for certain foreign dividends, as soon as the Portfolio
becomes aware of
77
<PAGE>
the dividends. Interest income, accretion of original issue discount, where
applicable, and accretion of discount on short-term investments is recorded
on the accrual basis. Realized gains and losses from securities transactions
and foreign currency transactions are recorded on the basis of identified
cost.
5) FORWARD FOREIGN CURRENCY CONTRACTS: The Portfolios may enter into forward
foreign currency contracts ("contracts") in connection with planned purchases
or sales of securities, or to hedge the U.S. dollar value of portfolio
securities denominated in a foreign currency. International may also enter
into such contracts to increase or decrease its exposure to a currency other
than U.S. dollars. The gain or loss arising from the difference between the
original contract price and the closing price of such contract is included in
net realized gains or losses on foreign currency transactions. Fluctuations
in the value of forward foreign currency contracts are recorded for financial
reporting purposes as unrealized gains or losses by each Portfolio. The
Portfolios, with the exception of International which has no specific
limitation, have restrictions limiting the portion of their net assets which
may be committed to these types of contracts to 5% of their net assets. The
Portfolios could be exposed to risks if a counterparty to a contract were
unable to meet the terms of its contract or if the value of the foreign
currency changes unfavorably. The U.S. dollar value of foreign currency
underlying all contractual commitments held by each Portfolio is determined
using forward foreign currency exchange rates supplied by an independent
pricing service.
6) TAXES: Managers Trust intends to comply with the requirements of the Internal
Revenue Code of 1986, as amended. Each Portfolio of Managers Trust and Global
also intends to conduct its operations so that each of its investors (in the
case of Global, its U.S. investors) will be able to qualify as a regulated
investment company. Each Portfolio will be treated as a partnership for U.S.
Federal income tax purposes and is therefore not subject to U.S. Federal
income tax. There is, at present, no direct taxation in the Cayman Islands,
and therefore interest, dividends and capital gains derived by Global are not
subject to taxes in that jurisdiction.
7) FOREIGN TAXES: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
8) ORGANIZATION EXPENSES: Expenses incurred by each Portfolio in connection with
its organization are being amortized by that Portfolio on a straight-line
basis over a five-year period. At February 28, 1997, the unamortized balance
of such expenses amounted to $12,399, $2,733, $36,364, $26,648, $13,840,
$25,205, and $13,745, for Focus, Genesis, Guardian, International, Manhattan,
Partners, and Socially Responsive, respectively.
9) EXPENSE ALLOCATION: Each Portfolio bears all costs of its operations.
Expenses incurred by each of the Trusts with respect to any two or more
Portfolios are
78
<PAGE>
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.
10) 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 is exercised, closed, or expired, the
Portfolio realizes a gain or loss and the liability is eliminated. A
Portfolio bears 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 covered
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 28, 1997:
<TABLE>
<CAPTION>
VALUE WHEN
FOCUS NUMBER WRITTEN
- ------------------------------------------------------------
<S> <C> <C>
CONTRACTS OUTSTANDING 8/31/96 0 $ 0
CONTRACTS WRITTEN 4,100 1,346,615
CONTRACTS EXPIRED 0 0
CONTRACTS EXERCISED (1,000 ) (313,679)
CONTRACTS CLOSED (2,500 ) (907,240)
-----------------------
CONTRACTS OUTSTANDING 2/28/97 600 $ 125,696
-----------------------
</TABLE>
<TABLE>
<CAPTION>
VALUE WHEN
GUARDIAN NUMBER WRITTEN
- ------------------------------------------------------------------
<S> <C> <C>
CONTRACTS OUTSTANDING 8/31/96 0 $ 0
CONTRACTS WRITTEN 15,000 4,499,828
CONTRACTS EXPIRED 0 0
CONTRACTS EXERCISED (5,000) (1,568,397)
CONTRACTS CLOSED (5,000) (1,783,970)
-----------------------------
CONTRACTS OUTSTANDING 2/28/97 5,000 $ 1,147,461
-----------------------------
</TABLE>
11) FINANCIAL FUTURES CONTRACTS: International may buy and sell financial
futures contracts for hedging and non-hedging purposes; Socially Responsive
may buy and sell financial futures contracts for hedging purposes only. At
the time a Portfolio enters into a financial futures contract, it is
required to deposit with its custodian a specified amount of cash or liquid
securities, known as "initial margin," ranging upward from 1.1% of the value
of the financial futures contract being traded. Each day, the futures
contract is valued at the official settlement price of the board of trade or
U.S. commodity exchange on which such futures
79
<PAGE>
contract is traded. Subsequent payments, known as "variation margin," to and
from the broker are made on a daily basis as the market price of the
financial futures contract fluctuates. Daily variation margin adjustments,
arising from this "mark to market," are recorded by the Portfolio as
unrealized gains or losses.
Although some financial futures contracts by their terms call for actual
delivery or acceptance of financial instruments, in most cases the contracts
are closed out prior to delivery by offsetting purchases or sales of
matching financial futures contracts. When the contracts are closed, a
Portfolio recognizes a gain or loss. Risks of entering into futures
contracts include the possibility there may be an illiquid market and/or
that a change in the value of the contract may not correlate with changes in
the value of the underlying securities.
For U.S. Federal income tax purposes, the futures transactions undertaken
by a Portfolio may cause that Portfolio to recognize gains or losses from
marking to market even though its positions have not been sold or
terminated, may affect the character of the gains or losses recognized as
long-term or short-term and may affect the timing of some capital gains and
losses realized by the Portfolio. Also, a Portfolio's losses on transactions
involving futures contracts may be deferred rather than being taken into
account currently in calculating such Portfolio's taxable income.
At February 28, 1997, open positions in financial futures contracts for
International were as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION OPEN CONTRACTS POSITION DEPRECIATION
- ---------------------------------------------------------------------
<S> <C> <C> <C>
45 Nikkei
March 1997 Futures Long $ 348,475
</TABLE>
At February 28, 1997, International had deposited $305,000 U.S. Treasury
Bills, 4.85% - 4.96%, due 3/20/97 and 3/27/97, respectively, in a segregated
account to cover margin requirements on open financial futures contracts.
12) 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 general supervision of the Trusts' Boards 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, LLC
("Neuberger"), the Portfolios' principal broker and sub-adviser, 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
80
<PAGE>
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
28, 1997, Focus, Guardian, Manhattan, Partners, and Socially Responsive lent
securities to Neuberger. At February 28, 1997, cash collateral received by
Focus, Guardian, Manhattan, Partners, and Socially Responsive was equal to
or in excess of 100% of the market value of the loaned securities.
13) REPURCHASE AGREEMENTS: Each Portfolio may enter into repurchase agreements
with institutions that each Portfolio's investment manager has determined
are creditworthy. Each repurchase agreement is recorded at cost. A Portfolio
requires that the securities purchased in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable a Portfolio to
obtain those securities in the event of a default under the repurchase
agreement. A Portfolio monitors, on a daily basis, the value of the
securities transferred to ensure that their value, including accrued
interest, is greater than amounts owed to a Portfolio under each such
repurchase agreement.
NOTE B -- ADMINISTRATION AND ADVISORY/MANAGEMENT FEES AND OTHER TRANSACTIONS
WITH AFFILIATES:
Each Portfolio retains Management as its investment manager under a
Management Agreement. For such investment management services, each Portfolio
(except Genesis and International) 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 has contracted to pay Management a
fee for investment management services at the annual rate of 0.85% of the first
$250 million of that Portfolio's average daily net assets, 0.80% of the next
$250 million, 0.75% of the next $250 million, 0.70% of the next $250 million,
and 0.65% of average daily net assets in excess of $1 billion. Management has
voluntarily agreed to waive a portion of the management fee borne directly by
Genesis and indirectly by Neuberger&Berman Genesis Fund to reduce the annual fee
by 0.10% per annum of average daily net assets of Genesis, effective May 1,
1995. International 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, 0.825% of the next $250 million, 0.80% of the next $250
million, 0.775% of the next $250 million, 0.75% of the next $500 million, and
0.725% of average daily net assets in excess of $1.5 billion.
Prior to November 1, 1995, International had retained BNP-N&B Global Asset
Management L.P. ("BNP-N&B Global"), a partnership jointly owned by Banque
Nationale de Paris ("BNP") and Neuberger, as its investment adviser. For such
investment advisory services, International paid BNP-N&B Global a fee at the
annual rate of 0.50% of the first $250 million of that Portfolio's average daily
net assets, 0.475% of the next $250 million, 0.45% of the next $250 million, and
0.425% of
81
<PAGE>
average daily net assets in excess of $750 million. Additionally, under a
separate Administration Agreement (the "Portfolio Administration Agreement"),
which was in effect through October 31, 1995, International had retained
Management to provide certain administrative services. Pursuant to the Portfolio
Administration Agreement, International paid Management a fee at the annual rate
of 0.10% of the first $250 million of that Portfolio's average daily net assets,
0.08% of the next $250 million, 0.06% of the next $250 million, and 0.04% of
average daily net assets in excess of $750 million. The minimum administration
fee was $100,000 per annum.
Prior to November 1, 1995, BNP-N&B Global had voluntarily undertaken to
reimburse International for its operating expenses (excluding interest, taxes,
brokerage commissions, and extraordinary expenses) ("Operating Expenses") that
exceeded 0.70% per annum of that Portfolio's average daily net assets. Effective
November 1, 1995, the above expense limitation was terminated.
All of the capital stock of Management is owned by individuals who are also
principals of Neuberger, a member firm of The New York Stock Exchange and sub-
adviser to each Portfolio. Neuberger is retained by Management to furnish it
with investment recommendations and research information without added cost to
each Portfolio. Several individuals who are officers and/or trustees of the
Trusts are also principals of Neuberger and/or officers and/or directors of
Management.
Each Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statements
of Operations under the caption Custodian fees was a reduction of $939, $4,158,
$1,595, $731, $895, and $287 for Focus, Genesis, Guardian, International,
Partners, and Socially Responsive, respectively, which is less than .01% of each
Portfolio's average daily net assets.
NOTE C -- SECURITIES TRANSACTIONS:
During the six months ended February 28, 1997, there were purchase and sale
transactions (excluding short-term securities, forward foreign currency
contracts, financial futures contracts, and option contracts written) as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- ---------------------------------------------------------------------
<S> <C> <C>
FOCUS $ 530,416,045 $ 518,273,318
GENESIS 237,149,179 35,908,529
GUARDIAN 1,616,370,266 1,397,631,626
INTERNATIONAL 29,891,527 8,375,590
MANHATTAN 126,828,594 227,455,028
PARTNERS 1,006,818,489 742,840,515
SOCIALLY RESPONSIVE 60,285,463 40,655,492
</TABLE>
82
<PAGE>
At February 28, 1997, International had entered into various contracts to
deliver currencies at specified future dates. Open contracts were as follows:
<TABLE>
<CAPTION>
NET
CONTRACTS TO IN EXCHANGE SETTLEMENT UNREALIZED
SALES DELIVER FOR DATE VALUE APPRECIATION
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
German Mark 1,545,900 $ 1,000,000 4/4/97 $ 918,766 $ 81,234
French Franc 5,244,500 1,000,000 4/4/97 922,818 77,182
Swiss Franc 1,361,000 1,000,000 5/14/97 930,480 69,520
German Mark 1,573,600 1,000,000 5/14/97 937,615 62,385
French Franc 5,313,000 1,000,000 5/14/97 937,167 62,833
Swedish Krona 14,112,000 2,000,000 5/22/97 1,886,998 113,002
German Mark 2,450,550 1,500,000 5/30/97 1,461,610 38,390
French Franc 5,177,800 916,425 6/18/97 915,317 1,108
Italian Lira 1,543,000 924,229 6/18/97 907,409 16,820
--------------- --------------- ---------------
$ 10,340,654 $ 9,818,180 $ 522,474
--------------- --------------- ---------------
</TABLE>
During the six months ended February 28, 1997, 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 $ 643,449 $ 552,787 $ 1,196,236
GENESIS 216,560 129,043 345,603
GUARDIAN 2,261,803 1,712,015 3,973,818
INTERNATIONAL 2,657 101,578 104,235
MANHATTAN 274,937 119,821 394,758
PARTNERS 1,782,038 612,466 2,394,504
SOCIALLY RESPONSIVE 101,505 32,828 134,333
</TABLE>
In addition, Neuberger's share of the total interest income earned for the
six months ended February 28, 1997 from the collateralization of securities
loaned to or through Neuberger was $242,525, $1,338,584, $336,304, $214,684, and
$11,117, for Focus, Guardian, Manhattan, Partners, and Socially Responsive,
respectively.
NOTE D -- LINE OF CREDIT:
Genesis has an unsecured $20,000,000 bank line of credit with State Street
Bank and Trust Company to be used only as a temporary measure for extraordinary
or emergency purposes. Borrowings under this agreement bear interest at the
overnight Federal Funds Rate plus .75% per annum. For this line of credit,
Genesis has been assessed a facility fee of .1% annually of the available line
of credit paid quarterly in arrears. No compensating balances are required.
There were no loans outstanding pursuant to this line of credit at February 28,
1997, nor has Genesis utilized this line of credit at anytime to date.
83
<PAGE>
NOTE E -- INVESTMENTS IN NON-CONTROLLED AFFILIATES*:
FOCUS
<TABLE>
<CAPTION>
BALANCE OF GROSS BALANCE OF
SHARES HELD PURCHASES GROSS SALES SHARES HELD VALUE
AUGUST 31, AND AND FEBRUARY 28, FEBRUARY 28,
NAME OF ISSUER: 1996 ADDITIONS REDUCTIONS 1997 1997
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DT Industries 0 640,000 0 640,000 $18,880,000
</TABLE>
GUARDIAN
<TABLE>
<CAPTION>
BALANCE OF GROSS GROSS BALANCE OF
SHARES HELD PURCHASES SALES SHARES HELD VALUE
AUGUST 31, AND AND FEBRUARY 28, FEBRUARY 28,
NAME OF ISSUER: 1996 ADDITIONS REDUCTIONS 1997 1997
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADVANTA Corp. Class B 857,000 2,543,000 0 3,400,000 $136,425,000
Coltec Industries 4,778,900 73,500 0 4,852,400 88,556,300
Fingerhut Cos.** 3,241,700 0 1,335,200 1,906,500 27,882,563
Foundation Health 3,020,000 1,560,000 0 4,580,000 172,895,000
Healthsource Inc. 4,190,000 0 4,190,000 0 0
Hospitality Properties Trust** 1,442,600 0 1,012,200 430,400 13,934,200
J & L Specialty Steel 3,278,200 10,000 3,288,200 0 0
USFreightways Corp.** 1,257,000 0 0 1,257,000 30,325,125
UCAR International 0 2,671,900 0 2,671,900 114,891,700
Zeigler Coal Holding 1,702,000 0 0 1,702,000 43,188,250
</TABLE>
*AFFILIATED ISSUERS, AS DEFINED IN THE 1940 ACT, INCLUDE ISSUERS IN WHICH THE
PORTFOLIO HELD 5% OR MORE OF THE OUTSTANDING VOTING SECURITIES.
**AT FEBRUARY 28, 1997, THESE SECURITIES WERE NO LONGER AFFILIATED ISSUERS.
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.
84
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS TRUST
FOCUS GENESIS
PORTFOLIO PORTFOLIO
Period
from
Six August Six
Months 2, Months
Ended 1993(1) Ended
February to February
28, August 28,
1997 Year Ended August 31, 31, 1997 Year Ended August 31,
(UNAUDITED) 1996 1995 1994 1993 (UNAUDITED) 1996 1995 1994
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET
ASSETS:
Expenses .53%(2) .54% .57% .58% .58%(2) .80%(2)(3) .85%(3) .94%(3) .98%
-------------------------------------------------------------------------------------------------------
Net Investment
Income .57%(2) 1.04% 1.05% 1.16% 1.46%(2) .27%(2)(3) .27%(3) .25%(3) .18%
-------------------------------------------------------------------------------------------------------
Portfolio Turnover
Rate 42% 39% 36% 52% 4% 10% 21% 37% 63%
-------------------------------------------------------------------------------------------------------
Average Commission
Rate Paid $0.0569 $0.0578 -- -- -- $0.0577 $0.0576 -- --
-------------------------------------------------------------------------------------------------------
Net Assets, End of
Period (in millions) $1,339.3 $1,122.4 $969.2 $645.0 $574.0 $510.9 $259.9 $142.2 $138.6
-------------------------------------------------------------------------------------------------------
<CAPTION>
Period
from
August
2,
1993(1)
to
August
31,
1993
<S> <C>
RATIOS TO AVERAGE NET
ASSETS:
Expenses 1.07%(2)
Net Investment
Income .37%(2)
Portfolio Turnover
Rate 3%
Average Commission
Rate Paid --
Net Assets, End of
Period (in millions) $118.6
</TABLE>
1) The date investment operations commenced.
2) Annualized.
3) 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 Year Ended
February 28, August 31,
GENESIS 1997 1996 1995
- -------------------------------------------------------
<S> <C> <C> <C>
Expenses .90% .95% .97%
Net Investment Income .17% .17% .22%
</TABLE>
85
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS TRUST GLOBAL MANAGERS TRUST
GUARDIAN INTERNATIONAL
PORTFOLIO PORTFOLIO
Period
from
Six August Six
Months 2, Months
Ended 1993(1) Ended Year
February to February Ended
28, August 28, August
1997 Year Ended August 31, 31, 1997 31,
(UNAUDITED) 1996 1995 1994 1993 (UNAUDITED) 1996
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .46%(2) .46% .48% .50% .51%(2) 1.22%(2) 1.37%(3)
-------------------------------------------------------------------------------
Net Investment Income (Loss) .91%(2) 1.72% 1.72% 1.66% 2.45%(2) (.26%)(2) .58%(3)
-------------------------------------------------------------------------------
Portfolio Turnover Rate 20% 37% 26% 24% 3% 13% 45%
-------------------------------------------------------------------------------
Average Commission Rate Paid $0.0538 $0.0580 -- -- -- $0.0162 $0.0150
-------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $7,546.9 $6,232.5 $4,613.2 $2,480.3 $1,777.6 $91.4 $57.0
-------------------------------------------------------------------------------
<CAPTION>
Period
from
June
15,
1994(1)
to
August
31,
1995 1994
<S> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .70%(3) .70%(2)(3)
Net Investment Income (Loss) 1.74%(3) 1.63%(2)(3)
Portfolio Turnover Rate 41% 5%
Average Commission Rate Paid -- --
Net Assets, End of Period (in millions) $26.4 $6.1
</TABLE>
1) The date investment operations commenced.
2) Annualized.
3) After reimbursement of expenses by BNP-N&B Global as described in Note B of
Notes to Financial Statements. Had BNP-N&B Global not undertaken such action,
the annualized ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
Period from
June 15,
Year Ended 1994(1)
August 31, to August 31,
INTERNATIONAL 1996 1995 1994
- ---------------------------------------------------------
<S> <C> <C> <C>
Expenses 1.49% 2.24% 2.50%
Net Investment Income .46% .20% (.17% )
</TABLE>
86
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS TRUST
MANHATTAN PARTNERS
PORTFOLIO PORTFOLIO
Period
from
Six August Six
Months 2, Months
Ended 1993(1) Ended Year
February to February Ended
28, August 28, August
1997 Year Ended August 31, 31, 1997 31,
(UNAUDITED) 1996 1995 1994 1993 (UNAUDITED) 1996
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .59%(2) .58% .59% .59% .59%(2) .49%(2) .51%
-------------------------------------------------------------------------------
Net Investment Income .02%(2) .13% .42% .53% .55%(2) .99%(2) 1.26%
-------------------------------------------------------------------------------
Portfolio Turnover Rate 22% 53% 44% 50% 3% 33% 96%
-------------------------------------------------------------------------------
Average Commission Rate Paid $0.0587 $0.0373 -- -- -- $0.0480 $0.0494
-------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $581.1 $567.4 $645.4 $521.7 $536.8 $2,681.4 $1,999.6
-------------------------------------------------------------------------------
<CAPTION>
Period
from
August
2,
1993(1)
to
August
31,
1995 1994 1993
<S> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .53% .54% .54%(2)
Net Investment Income 1.13% .75% 1.19%(2)
Portfolio Turnover Rate 98% 75% 8%
Average Commission Rate Paid -- -- --
Net Assets, End of Period (in millions) $1,623.5 $1,340.3 $1,182.1
</TABLE>
1) The date investment operations commenced.
2) Annualized.
87
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY MANAGERS TRUST
SOCIALLY RESPONSIVE
PORTFOLIO
Period
from
Six March
Months 14,
Ended 1994(1)
February to
28, Year Ended August August
1997 31, 31,
(UNAUDITED) 1996 1995 1994
-------------------------------------------
<S> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .63%(2) .65% .68% .69%(2)
-------------------------------------------
Net Investment Income 1.15%(2) 1.02% 1.18% 1.33%(2)
-------------------------------------------
Portfolio Turnover Rate 23% 53% 58% 14%
-------------------------------------------
Average Commission Rate Paid $0.0575 $0.0587 -- --
-------------------------------------------
Net Assets, End of Period (in millions) $202.7 $158.5 $96.7 $70.7
-------------------------------------------
</TABLE>
1) The date investment operations commenced.
2) Annualized.
88
<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, LLC
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
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 International
Fund, Neuberger&Berman Manhattan Fund, Neuberger&Berman Partners Fund, and
Neuberger&Berman Socially Responsive Fund are registered service marks of
Neuberger&Berman Management Inc.
- -C- 1997 Neuberger&Berman Management Inc.
89
<PAGE>
OFFICERS AND TRUSTEES
EQUITY MANAGERS TRUST/
NEUBERGER&BERMAN EQUITY FUNDS
Stanley Egener GLOBAL MANAGERS TRUST
CHAIRMAN OF THE BOARD AND TRUSTEE Stanley Egener
Lawrence Zicklin CHAIRMAN OF THE BOARD AND TRUSTEE
PRESIDENT AND TRUSTEE Lawrence Zicklin
Faith Colish PRESIDENT
TRUSTEE Howard A. Mileaf
Donald M. Cox TRUSTEE
TRUSTEE John T. Patterson, Jr.
Alan R. Gruber TRUSTEE
TRUSTEE John P. Rosenthal
Howard A. Mileaf TRUSTEE
TRUSTEE Daniel J. Sullivan
Edward I. O'Brien VICE PRESIDENT
TRUSTEE Michael J. Weiner
John T. Patterson, Jr. VICE PRESIDENT
TRUSTEE Richard Russell
John P. Rosenthal TREASURER
TRUSTEE Claudia A. Brandon
Cornelius T. Ryan SECRETARY
TRUSTEE Barbara DiGiorgio
Gustave H. Shubert ASSISTANT TREASURER
TRUSTEE Jacqueline Henning
Daniel J. Sullivan ASSISTANT TREASURER
VICE PRESIDENT Celeste Wischerth
Michael J. Weiner ASSISTANT TREASURER
VICE PRESIDENT Stacy Cooper-Shugrue
Richard Russell ASSISTANT SECRETARY
TREASURER Lenore Joan McCabe
Claudia A. Brandon ASSISTANT SECRETARY
SECRETARY C. Carl Randolph
Barbara DiGiorgio ASSISTANT SECRETARY
ASSISTANT TREASURER
Celeste Wischerth
ASSISTANT TREASURER
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
C. Carl Randolph
ASSISTANT SECRETARY
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NEUBERGER&BERMAN MANAGEMENT INC.-Registered Trademark-
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
INSTITUTIONAL SERVICES
800.366.6264
Statistics and projections in this report are derived from sources deemed to be
reliable but cannot be regarded as a representation of future results of the
Funds. This report is prepared for the general 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.
[LOGO] PRINTED ON RECYCLED PAPER
NBESAR020297
