<PAGE>
PROSPECTUS
- -----------------------------------------
December 15, 1997, as amended May 4, 1998
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
No Sales Charges
No Redemption Fees
No 12b - 1 Fees
<PAGE>
Neuberger&Berman
EQUITY FUNDS
No-Load Equity Funds
- ----------------------------------------------------------------------
Neuberger&Berman FOCUS Neuberger&Berman MANHATTAN
FUND-REGISTERED TRADEMARK- FUND-REGISTERED TRADEMARK-
Neuberger&Berman GENESIS Neuberger&Berman PARTNERS
FUND-REGISTERED TRADEMARK- FUND-REGISTERED TRADEMARK-
Neuberger&Berman GUARDIAN FUND-SM- Neuberger&Berman SOCIALLY
Neuberger&Berman INTERNATIONAL RESPONSIVE
FUND-REGISTERED TRADEMARK- FUND-REGISTERED TRADEMARK-
INITIAL PURCHASE -- $1,000 MINIMUM
AUTOMATIC INVESTING -- $100 MINIMUM PER MONTH
GIFT PROGRAMS AND IRAS -- $250 MINIMUM
CALL 800-877-9700
- ----------------------------------------------------------------------
Each of the above-named funds (a "Fund") invests all of its net investable
assets in its corresponding portfolio of Equity Managers Trust or, in the case
of Neuberger& Berman International Fund, in the corresponding portfolio of
Global Managers Trust (each a "Portfolio"). Equity Managers Trust and Global
Managers Trust ("Managers Trusts") are open-end management investment companies
managed by Neuberger& Berman Management Incorporated ("N&B Management"). Each
Portfolio invests in securities in accordance with an investment objective,
policies, and limitations identical to those of its corresponding Fund. The
investment performance of each Fund directly corresponds with the investment
performance of its corresponding Portfolio. This "master/feeder fund" structure
is different from that of many other investment companies which directly acquire
and manage their own portfolios of securities. For more information on this
structure that you should consider, see "Summary" on page 3, and "Information
Regarding Organization, Capitalization, and Other Matters" on page 52.
Please read this Prospectus before investing in any of the Funds and keep it
for future reference. It contains information about the Funds that a prospective
investor should know before investing. A Statement of Additional Information
("SAI") about the Funds and Portfolios, dated December 15, 1997, is on file with
the Securities and Exchange Commission ("SEC"). The SAI is incorporated herein
by reference (so it is legally considered a part of this Prospectus). You can
obtain a free copy of the SAI by calling N&B Management at 800-877-9700.
THE SEC MAINTAINS A WEBSITE (http://www.sec.gov) THAT CONTAINS THE SAI,
MATERIAL INCORPORATED BY REFERENCE, AND OTHER INFORMATION REGARDING THE FUNDS
AND PORTFOLIOS.
PROSPECTUS DATED DECEMBER 15, 1997, AS AMENDED MAY 4, 1998
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
SUMMARY 3
The Funds and Portfolios;
Risk Factors 3
Management 5
The Neuberger&Berman Investment Approach 5
EXPENSE INFORMATION 7
Shareholder Transaction Expenses for Each Fund 7
Annual Fund Operating Expenses 7
Example 8
FINANCIAL HIGHLIGHTS 9
Selected Per Share Data and Ratios 9
Focus Fund 10
Genesis Fund 11
Guardian Fund 12
International Fund 13
Manhattan Fund 14
Partners Fund 15
Socially Responsive Fund 16
INVESTMENT PROGRAMS 21
Focus Portfolio 21
Genesis Portfolio 22
Guardian Portfolio 23
International Portfolio 23
Manhattan Portfolio 24
Partners Portfolio 25
Socially Responsive Portfolio 25
Special Considerations of Small-and Mid-Cap
Company Stocks 27
Short-Term Trading;
Portfolio Turnover 28
Borrowings 28
Other Investments 29
PERFORMANCE INFORMATION 30
Total Return Information 32
HOW TO BUY SHARES 33
By Mail 33
By Wire 33
By Telephone 34
By Exchanging Shares 34
Other Information 34
HOW TO SELL SHARES 36
By Mail or Facsimile Transmission (Fax) 36
By Telephone 37
Other Information 38
ADDITIONAL INFORMATION ON TELEPHONE
TRANSACTIONS 39
SHAREHOLDER SERVICES 40
Automatic Investing and Dollar Cost Averaging 40
Exchange Privilege 40
Systematic Withdrawal Plans 41
Retirement Plans 41
Electronic Bank Transfers 42
Internet Access 42
SHARE PRICES AND
NET ASSET VALUE 43
DIVIDENDS, OTHER DISTRIBUTIONS, AND TAXES 44
Distribution Options 44
Taxes 44
MANAGEMENT AND ADMINISTRATION 47
Trustees and Officers 47
Investment Manager, Administrator,
Distributor, and Sub-Adviser 47
Expenses 50
Transfer and Shareholder Servicing Arrangements 51
INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 52
The Funds 52
The Portfolios 52
DESCRIPTION OF INVESTMENTS 55
USE OF JOINT PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION 63
DIRECTORY 64
FUNDS ELIGIBLE FOR EXCHANGE 65
<PAGE>
SUMMARY
The Funds and Portfolios; Risk Factors
- ----------------------------------------------------------------------
Each Fund is a series of Neuberger&Berman Equity Funds (the "Trust") and
invests in its corresponding Portfolio which, in turn, invests in securities in
accordance with an investment objective, policies, and limitations that are
identical to those of the Fund. This is sometimes called a master/feeder fund
structure, because each Fund "feeds" shareholders' investments into its
corresponding Portfolio, a "master" fund. The structure looks like this:
--------------------------
SHAREHOLDERS
--------------------------
BUY SHARES IN
--------------------------
FUNDS
--------------------------
INVEST IN
--------------------------
PORTFOLIOS
--------------------------
INVEST IN
--------------------------
STOCKS & OTHER SECURITIES
--------------------------
The trustees who oversee the Funds believe that this structure may benefit
shareholders; investment in a Portfolio by investors in addition to a Fund may
enable the Portfolio to achieve economies of scale that could reduce expenses.
For more information about the organization of the Funds and the Portfolios,
including certain features of the master/feeder fund structure, see "Information
Regarding Organization, Capitalization, and Other Matters" on page 52. An
investment in any Fund involves certain risks, depending upon the types of
investments made by its corresponding Portfolio. For more details about each
Portfolio, its investments and their risks, see "Investment Programs" on page 21
and "Description of Investments" on page 55.
The following table is a summary highlighting features of the Funds and their
corresponding Portfolios. You may want to invest in a variety of Funds to fit
your particular investment needs. Of course, there can be no assurance that a
Fund will meet its investment objective.
3
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PORTFOLIO
EQUITY FUNDS STYLE CHARACTERISTICS
- ------------------------------------------------------------------------------------
<S> <C> <C>
GUARDIAN FUND Broadly diversified, A growth and income fund that invests
large-cap value fund. primarily in stocks of established,
high-quality companies that are not well
followed on Wall Street or are
temporarily out of favor.
FOCUS FUND Large-cap value fund, Invests principally in common stocks
more concentrated selected from 13 multi-industry sectors
portfolio than of the economy. To maximize potential
Guardian. return, the Portfolio normally makes at
least 90% of its investments in not more
than six sectors of the economy believed
by the portfolio managers to be
undervalued.
GENESIS FUND Broadly diversified, Invests primarily in stocks of companies
(CLOSED TO MOST small-cap value fund. with small market capitalizations (up to
NEW INVESTORS. FOR $1.5 billion at the time of the
MORE INFORMATION, Portfolio's investment). Portfolio
SEE PAGE 35.) managers seek to buy the stocks of
strong companies with a history of solid
performance and a proven management
team, which are selling at attractive
prices.
INTERNATIONAL FUND Broadly diversified, Seeks long-term capital appreciation by
medium- to large-cap investing primarily in foreign stocks,
international equity both in developed economies and in
fund. Capitalization emerging markets. Portfolio manager
is determined in seeks undervalued companies in countries
relation to the with strong potential for growth.
principal market in
which securities are
traded.
MANHATTAN FUND Broadly diversified, Invests in securities believed to have
medium-cap growth the maximum potential for long-term
fund. capital appreciation. Portfolio managers
seek stocks of companies that are
projected to grow at above-average rates
and that appear to the managers poised
for a period of accelerated earnings.
PARTNERS FUND Broadly diversified, Seeks capital growth through an approach
medium- to large-cap that is intended to increase capital
value fund. with reasonable risk. Portfolio managers
look at fundamentals, focusing
particularly on cash flow, return on
capital, and asset values.
SOCIALLY Broadly diversified, Seeks long-term capital appreciation by
RESPONSIVE FUND medium- to large-cap investing in common stocks of companies
value fund. that meet both financial and social
criteria.
</TABLE>
4
<PAGE>
Management
- ----------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman, LLC
("Neuberger&Berman") as sub-adviser, selects investments for the Portfolios. N&B
Management also provides administrative services to the Portfolios and the Funds
and acts as distributor of Fund shares. See "Management and Administration" on
page 47. If you want to know how to buy and sell shares of the Funds or exchange
them for shares of other Neuberger&Berman Funds-Registered Trademark-, see "How
to Buy Shares" on page 33, "How to Sell Shares" on page 36, and "Shareholder
Services -- Exchange Privilege" on page 40.
The Neuberger&Berman Investment Approach
- ----------------------------------------------------------------------
While each Portfolio has its own investment objective, policies, and
limitations, each Portfolio is managed using one of two basic investment
approaches -- value or growth.
A value-oriented portfolio manager buys stocks that are selling for a price
that is lower than what the manager believes they are worth. These include
stocks that are currently under-researched or are temporarily out of favor on
Wall Street.
Portfolio managers identify value stocks in several ways. One of the most
common identifiers is a low price-to-earnings ratio -- that is, stocks selling
at multiples of earnings per share that are lower than that of the market as a
whole. Other criteria are high dividend yield, a strong balance sheet and
financial position, a recent company restructuring with the potential to realize
hidden values, strong management, and low price-to-book value (net value of the
company's assets). A value-oriented manager believes that, over time, securities
that are undervalued are more likely to appreciate in price and be subject to
less risk of price decline than securities whose market prices have already
reached their perceived economic values. This approach also contemplates selling
portfolio securities when N&B Management believes they have reached their
potential.
While a value approach concentrates on securities that are undervalued in
relation to their fundamental economic values, a growth approach seeks stocks of
companies that N&B Management projects will grow at above-average rates and
faster than others expect. While a growth portfolio manager may be willing to
pay a higher multiple of earnings per share than a value manager, the multiple
tends to be reasonable relative to the manager's expectation of the company's
earnings growth rate.
In general, Neuberger&Berman FOCUS, Neuberger&Berman GENESIS,
Neuberger&Berman GUARDIAN, Neuberger&Berman PARTNERS and Neuberger& Berman
SOCIALLY RESPONSIVE Portfolios adhere to a value-oriented investment approach.
Neuberger&Berman MANHATTAN Portfolio adheres to a growth-oriented investment
approach. Neuberger&Berman MANHATTAN Portfolio is therefore willing
5
<PAGE>
to invest in securities with prices that are higher multiples of earnings than
securities likely to be purchased by the other Portfolios, but generally buys
companies that are projected by N&B Management to have higher earnings growth
rates.
Neuberger&Berman INTERNATIONAL Portfolio uses an investment process that
includes a combination of country selection and individual security selection
primarily based on a value-oriented investment approach.
6
<PAGE>
EXPENSE INFORMATION
This section gives you certain information about the expenses of each Fund
and its corresponding Portfolio. See "Performance Information" for important
facts about the investment performance of each Fund, after taking expenses into
account.
Shareholder Transaction Expenses for Each Fund
- ----------------------------------------------------------------------
As shown by this table, the Funds impose no transaction charges when you buy
or sell Fund shares.
<TABLE>
<S> <C>
Sales Charge Imposed on Purchases NONE
Sales Charge Imposed on Reinvested Dividends NONE
Deferred Sales Charges NONE
Redemption Fees NONE
Exchange Fees NONE
</TABLE>
If you want to redeem shares by wire transfer, the Funds' transfer agent
charges a fee (currently $8.00) for each wire redemption. Shareholders who have
one or more accounts in the Neuberger&Berman Funds aggregating $200,000 or more
in value are not charged for wire redemptions; the $8.00 fee is borne by N&B
Management.
Annual Fund Operating Expenses
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
The following table shows annual operating expenses for each Fund which are
paid out of the assets of the Fund and which include the Fund's pro rata portion
of the operating expenses of its corresponding Portfolio ("Total Operating
Expenses"). "Total Operating Expenses" exclude interest, taxes, brokerage
commissions, and extraordinary expenses.
Each Fund pays N&B Management an administration fee based on the Fund's
average daily net assets. Each Portfolio pays N&B Management a management fee
based on the Portfolio's average daily net assets; a pro rata portion of this
fee is borne indirectly by the corresponding Fund. "Management and
Administration Fees" in the following table (except with respect to
Neuberger&Berman GENESIS Fund) are based upon administration fees incurred by
each Fund and management fees incurred by its corresponding Portfolio during the
past fiscal year. Management and Administration Fees for Neuberger&Berman
GENESIS Fund have been restated based on current fee rates. For more
information, see "Management and Administration" and the SAI.
The Funds and Portfolios incur other expenses for things such as accounting
and legal fees, transfer agency fees, custodial fees, printing and furnishing
shareholder statements and Fund reports and compensating trustees who are not
affiliated with N&B Management ("Other Expenses"). Other Expenses in the
following table (except with respect to Neuberger&Berman SOCIALLY RESPONSIVE
Fund) are based on
7
<PAGE>
each Fund's and Portfolio's expenses for the past fiscal year. Other Expenses
for Neuberger&Berman SOCIALLY RESPONSIVE Fund have been restated based on
current expense levels. All expenses are factored into the Funds' share prices
and dividends and are not charged directly to Fund shareholders.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN MANAGEMENT AND 12b-1 OTHER TOTAL OPERATING
EQUITY FUNDS ADMINISTRATION FEES FEES EXPENSES EXPENSES
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOCUS FUND 0.76% None 0.10% 0.86%
GENESIS FUND 1.07% None 0.19% 1.26%
GUARDIAN FUND 0.70% None 0.10% 0.80%
INTERNATIONAL FUND 1.11% None 0.59% 1.70%
MANHATTAN FUND 0.79% None 0.19% 0.98%
PARTNERS FUND 0.72% None 0.09% 0.81%
SOCIALLY RESPONSIVE FUND 0.81% None 0.39% 1.20%
</TABLE>
For more information, see "Expenses" on page 50.
Example
- ----------------------------------------------------------------------
To illustrate the effect of Total Operating Expenses, let's assume that each
Fund's annual return is 5% and that it had Total Operating Expenses described in
the table above. For every $1,000 you invested in each Fund, you would have paid
the following amounts of total expenses if you closed your account at the end of
each of the following time periods:
<TABLE>
<CAPTION>
NEUBERGER&BERMAN
EQUITY FUNDS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOCUS FUND $ 9 $27 $48 $106
GENESIS FUND $13 $40 $69 $152
GUARDIAN FUND $ 8 $26 $44 $ 99
INTERNATIONAL FUND $17 $54 $92 $201
MANHATTAN FUND $10 $31 $54 $120
PARTNERS FUND $ 8 $26 $45 $100
SOCIALLY RESPONSIVE FUND $12 $38 $66 $145
</TABLE>
The assumption in this example of a 5% annual return is required by
regulations of the SEC applicable to all mutual funds. THE INFORMATION IN THE
PREVIOUS TABLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATES OF RETURN; ACTUAL EXPENSES OR RETURNS MAY BE GREATER OR LESS
THAN THOSE SHOWN, AND MAY CHANGE IF EXPENSE REIMBURSEMENTS CHANGE.
8
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- ----------------------------------------------------------------------
The financial information in the following tables is for each Fund as of
August 31, 1997 and includes data related to each Fund (except Neuberger&Berman
INTERNATIONAL Fund and Neuberger&Berman SOCIALLY RESPONSIVE Fund) before it was
converted into a series of the Trust on August 2, 1993. Neuberger&Berman
SOCIALLY RESPONSIVE Fund commenced operations on March 16, 1994.
Neuberger&Berman INTERNATIONAL Fund commenced operations on June 15, 1994. This
information has been audited by the Funds' respective independent
auditors/accountants. You may obtain, at no cost, further information about the
performance of the Funds in their annual report to shareholders. The
auditors'/accountants' reports are incorporated in the SAI by reference to the
annual report. Please call 800-877-9700 for a free copy of the annual report and
for up-to-date information. Also, see "Performance Information."
9
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Focus Fund(1)
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
October 1, 1992
Year Ended August 31, to August 31, Year Ended September 30,
1997(2) 1996(2) 1995(2) 1994(2) 1993(2) 1992 1991 1990 1989 1988
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year $ 28.46 $ 28.88 $24.42 $24.00 $19.31 $18.91 $16.66 $19.01 $16.60 $20.10
-------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .08 .19 .17 .21 .23 .29 .38 .44 .46 .46
Net Gains or Losses on
Securities
(both realized and
unrealized) 12.00 .85 5.97 2.16 4.65 2.62 2.96 (1.84) 4.83 (2.98)
-------------------------------------------------------------------------------------------------
Total From Investment
Operations 12.08 1.04 6.14 2.37 4.88 2.91 3.34 (1.40) 5.29 (2.52)
-------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.22) (.11) (.20) (.25) (.04) (.31) (.37) (.39) (.49) (.47)
Distributions (from net
capital gains) (1.43) (1.35) (1.48) (1.70) (.15) (2.20) (.72) (.56) (2.39) (.51)
-------------------------------------------------------------------------------------------------
Total Distributions (1.65) (1.46) (1.68) (1.95) (.19) (2.51) (1.09) (.95) (2.88) (.98)
-------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 38.89 $ 28.46 $28.88 $24.42 $24.00 $19.31 $18.91 $16.66 $19.01 $16.60
-------------------------------------------------------------------------------------------------
Total Return(3) +43.92% +3.70% +27.47% +10.35% +25.39%(4) +15.51% +20.20% -7.54% +32.23% -12.44%
-------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $1,411.9 $1,071.4 $956.0 $643.9 $573.9 $439.2 $399.2 $368.6 $441.3 $375.2
-------------------------------------------------------------------------------------------------
Ratio of Gross Expenses to
Average
Net Assets(5) .86% .89% -- -- -- -- -- -- -- --
-------------------------------------------------------------------------------------------------
Ratio of Net Expenses to
Average
Net Assets .86% .89% .87% .85% .92%(6) .91% .93% .92% .99% 1.01%
-------------------------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets .21% .69% .75% .89% 1.18%(6) 1.46% 2.01% 2.34% 2.39% 2.64%
-------------------------------------------------------------------------------------------------
Portfolio Turnover Rate(7) -- -- -- -- 52% 77% 60% 66% 60% 66%
-------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
10
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Genesis Fund
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
August 1, 1993
Year Ended August 31, to August 31,
1997(2) 1996(2) 1995(2) 1994(2) 1993(2)
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 10.91 $ 9.52 $ 8.27 $ 8.62 $ 8.30
------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income (Loss) (.01) (.01) -- (.01) --
Net Gains or Losses on Securities
(both realized and unrealized) 4.80 1.95 1.56 .42 .32
------------------------------------------------------------------------
Total From Investment Operations 4.79 1.94 1.56 .41 .32
------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) -- -- -- (.01) --
Distributions (from net capital
gains) (.15) (.55) (.31) (.75) --
------------------------------------------------------------------------
Total Distributions (.15) (.55) (.31) (.76) --
------------------------------------------------------------------------
Net Asset Value, End of Year $ 15.55 $ 10.91 $ 9.52 $ 8.27 $ 8.62
------------------------------------------------------------------------
Total Return(3) +44.32% +21.32% +19.69% +4.77% +3.86%(4)
------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $ 718.1 $ 195.4 $ 111.5 $ 135.6 $118.5
------------------------------------------------------------------------
Ratio of Gross Expenses to Average
Net Assets(5) 1.17% 1.28% -- -- --
------------------------------------------------------------------------
Ratio of Net Expenses to Average
Net Assets 1.16%(8) 1.28%(8) 1.35%(8) 1.36% 1.51%(6)
------------------------------------------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets (.08%)(8) (.18%)(8) (.16%)(8) (.20%) (.08%)(6)
------------------------------------------------------------------------
Portfolio Turnover Rate(7) -- -- -- -- --
------------------------------------------------------------------------
<CAPTION>
Period From
September 27,
1988(10) to
Year Ended July 31, July 31,
1993 1992 1991 1990 1989
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 7.10 $ 6.41 $ 5.78 $ 6.25 $ 5.00
-------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income (Loss) .01 (.01) .03 .02 .02
Net Gains or Losses on Securities
(both realized and unrealized) 1.19 .80 .64 (.35) 1.24
-------------------------------------------------------------------------
Total From Investment Operations 1.20 .79 .67 (.33) 1.26
-------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) -- (.01) (.04) (.02) (.01)
Distributions (from net capital
gains) -- (.09) -- (.12) --
-------------------------------------------------------------------------
Total Distributions -- (.10) (.04) (.14) (.01)
-------------------------------------------------------------------------
Net Asset Value, End of Year $ 8.30 $ 7.10 $ 6.41 $ 5.78 $ 6.25
-------------------------------------------------------------------------
Total Return(3) +16.90% +12.38% +11.80% -5.33% +25.24%(4)
-------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $ 113.5 $ 72.2 $ 27.8 $ 20.8 $ 18.1
-------------------------------------------------------------------------
Ratio of Gross Expenses to Average
Net Assets(5) -- -- -- -- --
-------------------------------------------------------------------------
Ratio of Net Expenses to Average
Net Assets 1.65% 2.00%(8) 2.00%(8) 2.00%(8) 2.00%(6)(8)
-------------------------------------------------------------------------
Ratio of Net Investment Income
(Loss) to Average Net Assets .15% (.14%)(8) .60%(8) .41%(8) .51%(6)(8)
-------------------------------------------------------------------------
Portfolio Turnover Rate(7) 54% %23 %46 %37 10%
-------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
11
<PAGE>
FINANCIAL HIGHLIGHTS(9)
Neuberger&Berman
Guardian Fund
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
November 1, 1989 Year Ended
Year Ended August 31, to August 31, October 31,
1997(2) 1996(2) 1995(2) 1994(2) 1993(2) 1992 1991 1990 1989 1988
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year $ 23.78 $ 23.61 $ 19.52 $ 18.57 $ 15.73 $14.90 $11.90 $13.20 $12.31 $11.08
---------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .15 .31 .27 .24 .30 .29 .32 .31 .35 .35
Net Gains or Losses on
Securities (both realized
and unrealized) 8.96 .90 4.30 1.41 3.45 1.71 3.20 (1.36) 2.08 2.55
---------------------------------------------------------------------------------------------------
Total From Investment
Operations 9.11 1.21 4.57 1.65 3.75 2.00 3.52 (1.05) 2.43 2.90
---------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.24 ) (.28 ) (.25 ) (.30 ) (.25 ) (.26) (.35) (.25) (.36) (.36)
Distributions (from net
capital gains) (1.24 ) (.76 ) (.23 ) (.40 ) (.66 ) (.91) (.17) -- (1.18) (1.31)
---------------------------------------------------------------------------------------------------
Total Distributions (1.48 ) (1.04 ) (.48 ) (.70 ) (.91 ) (1.17) (.52) (.25) (1.54) (1.67)
---------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 31.41 $ 23.78 $ 23.61 $ 19.52 $ 18.57 $15.73 $14.90 $11.90 $13.20 $12.31
---------------------------------------------------------------------------------------------------
Total Return(3) +39.69% +5.27% +24.06% +9.12% +24.43% +13.88% +30.48% -8.08%(4) +19.91% +26.79%
---------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $6,475.1 $4,905.2 $3,947.5 $2,416.5 $1,787.0 $802.9 $628.6 $496.3 $569.3 $539.1
---------------------------------------------------------------------------------------------------
Ratio of Gross Expenses to
Average Net Assets(5) .80% .82% -- -- -- -- -- -- -- --
---------------------------------------------------------------------------------------------------
Ratio of Net Expenses to
Average Net Assets .80% .82% .80% .80% .81% .82% .84% .86%(6) .84% .84%
---------------------------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets .55% 1.37% 1.40% 1.36% 2.01% 1.90% 2.46% 2.89%(6) 2.59% 2.80%
---------------------------------------------------------------------------------------------------
Portfolio Turnover Rate(7) -- -- -- -- 27% 41% 59% 58% 52% 73%
---------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
12
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
International Fund
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of 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
June 15, 1994(10)
Year Ended August 31, to August 31,
1997 1996 1995 1994
-----------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $11.91 $10.70 $10.46 $10.00
-----------------------------------------------
Income From Investment Operations
Net Investment Income -- .01 .06 .01
Net Gains or Losses on Securities (both realized and unrealized) 2.94 1.24 .21 .45
-----------------------------------------------
Total From Investment Operations 2.94 1.25 .27 .46
-----------------------------------------------
Less Distributions
Dividends (from net investment income) (.02) (.04) (.03) --
-----------------------------------------------
Net Asset Value, End of Year $14.83 $11.91 $10.70 $10.46
-----------------------------------------------
Total Return(3) +24.71% +11.73% +2.60% +4.60%(4)
-----------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $115.4 $ 57.0 $ 26.4 $ 6.2
-----------------------------------------------
Ratio of Gross Expenses to Average Net Assets(5) 1.70% 1.70% -- --
-----------------------------------------------
Ratio of Net Expenses to Average Net Assets(8) 1.70% 1.70% 1.70% 1.70%(6)
-----------------------------------------------
Ratio of Net Investment Income (Loss) to Average Net Assets(8) (.02%) .24% .73% .57%(6)
-----------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
13
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Manhattan Fund
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Year Ended
Year Ended August 31, December 31,
1997(2) 1996(2) 1995(2) 1994(2) 1993(2) 1992 1991 1990(11) 1989 1988
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $11.94 $13.27 $11.28 $12.94 $11.59 $11.55 $ 9.46 $10.44 $ 9.04 $ 7.81
----------------------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income (Loss) (.03) (.04) -- .02 .02 .06 .13 .10 .18 .17
Net Gains or Losses on
Securities
(both realized and unrealized) 4.26 (.33) 2.70 .40 3.06 .49 2.27 (1.08) 2.45 1.26
----------------------------------------------------------------------------------------------
Total From Investment
Operations 4.23 (.37) 2.70 .42 3.08 .55 2.40 (.98) 2.63 1.43
----------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) -- -- (.01) (.02) (.05) (.11) (.16) -- (.18) (.16)
Distributions (from net capital
gains) (1.66) (.96) (.70) (2.06) (1.68) (.40) (.15) -- (1.05) (.04)
----------------------------------------------------------------------------------------------
Total Distributions (1.66) (.96) (.71) (2.08) (1.73) (.51) (.31) -- (1.23) (.20)
----------------------------------------------------------------------------------------------
Net Asset Value, End of Year $14.51 $11.94 $13.27 $11.28 $12.94 $11.59 $11.55 $ 9.46 $10.44 $ 9.04
----------------------------------------------------------------------------------------------
Total Return(3) +38.75% -2.91% +26.00% +3.49% +27.76% +4.74% +26.17% -9.39%(4) +29.09% +18.31%
----------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $570.4 $516.2 $612.0 $510.3 $537.6 $400.7 $429.0 $355.6 $404.7 $341.7
----------------------------------------------------------------------------------------------
Ratio of Gross Expenses to
Average
Net Assets(5) .99% .98% -- -- -- -- -- -- -- --
----------------------------------------------------------------------------------------------
Ratio of Net Expenses to
Average
Net Assets .98% .98% .98% .96% 1.04% 1.07% 1.09% 1.14%(6) 1.12% 1.18%
----------------------------------------------------------------------------------------------
Ratio of Net Investment Income
(Loss)
to Average Net Assets (.20%) (.27%) .03% .16% .20% .57% 1.28% 1.44%(6) 1.60% 1.55%
----------------------------------------------------------------------------------------------
Portfolio Turnover Rate(7) -- -- -- -- 76%(6) 83% 78% 91%(6) 77% 70%
----------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
14
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Partners Fund
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
July 1, 1993
Year Ended August 31, to August 31, Year Ended June 30,
1997(2) 1996(2) 1995(2) 1994(2) 1993(2) 1993 1992 1991 1990 1989 1988
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 23.88 $ 23.72 $ 21.32 $ 22.46 $ 20.98 $ 18.96 $17.80 $18.11 $19.04 $16.84 $20.83
--------------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .19 .22 .17 .10 .02 .16 .23 .50 .83 .71 .55
Net Gains or Losses
on Securities (both
realized and
unrealized) 10.36 2.84 3.94 1.07 1.46 3.84 2.05 .27 .68 2.14 (1.05)
--------------------------------------------------------------------------------------------------------
Total From
Investment
Operations 10.55 3.06 4.11 1.17 1.48 4.00 2.28 .77 1.51 2.85 (.50)
--------------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.22) (.20) (.11) (.11) -- (.19) (.34) (.74) (.76) (.65) (.70)
Distributions (from
net capital gains) (2.61) (2.70) (1.60) (2.20) -- (1.79) (.78) (.34) (1.68) -- (2.79)
--------------------------------------------------------------------------------------------------------
Total Distributions (2.83) (2.90) (1.71) (2.31) -- (1.98) (1.12) (1.08) (2.44) (.65) (3.49)
--------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Year $ 31.60 $ 23.88 $ 23.72 $ 21.32 $ 22.46 $ 20.98 $18.96 $17.80 $18.11 $19.04 $16.84
--------------------------------------------------------------------------------------------------------
Total Return(3) +47.11% +13.86% +21.53% +5.56% +7.05%(4) +21.78% +13.23% +5.14% +8.11% +17.59% -2.73%
--------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of
Year
(in millions) $3,103.7 $1,871.9 $1,564.0 $1,335.9 $1,185.1 $1,085.6 $852.9 $823.5 $793.8 $743.0 $718.8
--------------------------------------------------------------------------------------------------------
Ratio of Gross
Expenses to
Average Net
Assets(5) .81% .84% -- -- -- -- -- -- -- -- --
--------------------------------------------------------------------------------------------------------
Ratio of Net Expenses
to
Average Net Assets .81% .84% .83% .81% .84%(6) .86% .86% .88% .91% .97% .95%
--------------------------------------------------------------------------------------------------------
Ratio of Net
Investment Income
to Average Net
Assets .72% .93% .83% .48% .59%(6) .83% 1.23% 2.84% 4.53% 3.96% 3.28%
--------------------------------------------------------------------------------------------------------
Portfolio Turnover
Rate(7) -- -- -- -- 6% 82% 97% 161% 136% 157% 210%
--------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
15
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
Socially Responsive Fund
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of its corresponding
Portfolio's income and expenses. It should be read in conjunction with its
corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
March 16, 1994(10)
Year Ended August 31, to August 31,
1997 1996 1995 1994
------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $13.88 $11.84 $10.07 $10.00
------------------------------------------------
Income From Investment Operations
Net Investment Income .03 .02 .03 .01
Net Gains or Losses on Securities (both realized and unrealized) 4.33 2.35 1.76 .06
------------------------------------------------
Total From Investment Operations 4.36 2.37 1.79 .07
------------------------------------------------
Less Distributions
Dividends (from net investment income) (.03) (.02) (.02) --
Distributions (from net capital gains) (.42) (.31) -- --
------------------------------------------------
Total Distributions (.45) (.33) (.02) --
------------------------------------------------
Net Asset Value, End of Year $17.79 $13.88 $11.84 $10.07
------------------------------------------------
Total Return(3) +31.96% +20.19% +17.82% +0.70%(4)
------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 59.7 $ 32.9 $ 8.2 $ 2.3
------------------------------------------------
Ratio of Gross Expenses to Average Net Assets(5) 1.49% 1.50% -- --
------------------------------------------------
Ratio of Net Expenses to Average Net Assets(8) 1.48% 1.50% 1.51% 1.50%(6)
------------------------------------------------
Ratio of Net Investment Income to Average Net Assets(8) .23% .19% .36% .50%(6)
------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
16
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
1) Prior to January 1, 1995, the name of Neuberger&Berman Focus Fund was
Neuberger&Berman Selected Sectors Fund.
2) The per share amounts and ratios which are shown reflect income and expenses,
including each Fund's proportionate share of its corresponding Portfolio's
income and expenses.
3) 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 Neuberger&Berman
INTERNATIONAL Fund and Neuberger&Berman SOCIALLY RESPONSIVE Fund, total
return would have been lower if N&B Management had not reimbursed certain
expenses. For Neuberger&Berman GENESIS Fund, total return would have been
lower if N&B Management had not waived a portion of the management fee.
4) Not annualized.
5) For fiscal periods ending after September 1, 1995, the Fund is required to
calculate an expense ratio without taking into consideration any expense
reductions related to expense offset arrangements. For Neuberger&Berman
GENESIS Fund, Neuberger&Berman INTERNATIONAL Fund, and Neuberger&Berman
SOCIALLY RESPONSIVE Fund, these ratios reflect the reimbursement of certain
expenses or the waiver of a portion of the management fee.
6) Annualized.
7) Each Fund (except Neuberger&Berman INTERNATIONAL Fund and Neuberger& Berman
SOCIALLY RESPONSIVE Fund) transferred all of its investment securities into
its corresponding Portfolio on August 2, 1993. After that date each Fund has
invested only in its corresponding Portfolio, and that Portfolio, rather than
the Fund, has engaged in securities transactions. Therefore, after that date
no Fund has calculated a portfolio turnover rate or paid any brokerage
commissions. The portfolio turnover rates for each Portfolio were as follows:
<TABLE>
<CAPTION>
Period from
August 2, 1993
Year Ended August 31, to August 31,
1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Neuberger&Berman FOCUS Portfolio 63% 39% 36% 52% 4%
Neuberger&Berman GENESIS Portfolio 18% 21% 37% 63% 3%
Neuberger&Berman GUARDIAN Portfolio 50% 37% 26% 24% 3%
Neuberger&Berman MANHATTAN Portfolio 89% 53% 44% 50% 3%
Neuberger&Berman PARTNERS Portfolio 77% 96% 98% 75% 8%
</TABLE>
17
<PAGE>
The portfolio turnover rates for Neuberger&Berman INTERNATIONAL Portfolio
for the period June 15, 1994 (commencement of operations) to August 31, 1994
and the years ended August 31, 1995, 1996, and 1997 were 5%, 41%, 45%, and
37%, respectively. The portfolio turnover rates for Neuberger&Berman SOCIALLY
RESPONSIVE Portfolio for the period March 14, 1994 (commencement of
operations) to August 31, 1994 and the years ended August 31, 1995, 1996, and
1997 were 14%, 58%, 53%, and 51%, respectively.
The average commission rates paid by each Portfolio were as follows:
<TABLE>
<CAPTION>
Year Ended August 31,
1997 1996
- ------------------------------------------------------------------------------------
<S> <C> <C>
Neuberger&Berman FOCUS Portfolio $ 0.0555 $ 0.0578
Neuberger&Berman GENESIS Portfolio $ 0.0565 $ 0.0576
Neuberger&Berman GUARDIAN Portfolio $ 0.0538 $ 0.0580
Neuberger&Berman INTERNATIONAL Portfolio $ 0.0161 $ 0.0150
Neuberger&Berman MANHATTAN Portfolio $ 0.0573 $ 0.0373
Neuberger&Berman PARTNERS Portfolio $ 0.0522 $ 0.0494
Neuberger&Berman SOCIALLY RESPONSIVE Portfolio $ 0.0568 $ 0.0587
</TABLE>
8) After reimbursement of expenses by N&B Management. Had N&B Management not
undertaken such action the annualized ratios of net expenses and net
investment income (loss) to average daily net assets would have been:
<TABLE>
<CAPTION>
Period from
Year Ended September 27, 1988
July 31, to July 31,
NEUBERGER&BERMAN GENESIS FUND 1991 1990 1989
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Expenses 2.16% 2.40% 3.79%
-------------------------------------------
Net Investment Income (Loss) .44% .01% (1.28%)
-------------------------------------------
</TABLE>
Had Neuberger&Berman GENESIS Fund not reimbursed N&B Management, the
annualized ratios of net expenses and net investment income to average daily
net assets would have been:
<TABLE>
<CAPTION>
Year Ended
July 31,
1992
- ------------------------------------------------------------
<S> <C>
Net Expenses 1.65%
-----
Net Investment Income .21%
-----
</TABLE>
18
<PAGE>
Had N&B Management not waived a portion of the management fee borne
directly by Neuberger&Berman GENESIS Portfolio, the annualized ratios of net
expenses and net investment income (loss) to average daily net assets would
have been:
<TABLE>
<CAPTION>
Year Ended
August 31,
1997 1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Net Expenses 1.26% 1.38% 1.38%
----------------------------
Net Investment Loss (.18%) (.28%) (.19%)
----------------------------
</TABLE>
After reimbursement of expenses by N&B Management. Had N&B Management not
undertaken such action, the annualized ratios of net expenses and net
investment income (loss) to average daily net assets would have been:
<TABLE>
<CAPTION>
Period from
Year Ended June 15, 1994
August 31, to August 31,
NEUBERGER&BERMAN INTERNATIONAL FUND 1996 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Expenses 2.28% 2.31% 2.50%
------------------------------------
Net Investment Income (Loss) (.34%) .12% (.23%)
------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Period from
Year Ended March 16, 1994
August 31, to August 31,
NEUBERGER&BERMAN SOCIALLY RESPONSIVE FUND 1996 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Expenses 1.69% 2.50% 2.50%
------------------------------------
Net Investment Income (Loss) .00% (.63%) (.50%)
------------------------------------
</TABLE>
Had Neuberger&Berman INTERNATIONAL Fund not repaid N&B Management for
certain expenses previously reimbursed by N&B Management, the annualized
ratios of net expenses and net investment income (loss) to average daily net
assets would have been:
<TABLE>
<CAPTION>
Year Ended
August 31,
1997
- ------------------------------------------------------------
<S> <C>
Net Expenses 1.69%
-----
Net Investment Loss (.01%)
-----
</TABLE>
19
<PAGE>
Had Neuberger&Berman SOCIALLY RESPONSIVE Fund not repaid N&B Management
for certain expenses previously reimbursed by N&B Management, the annualized
ratios of net expenses and net investment income to average daily net assets
would have been:
<TABLE>
<CAPTION>
Year Ended
August 31,
1997
- ------------------------------------------------------------
<S> <C>
Net Expenses 1.20%
-----
Net Investment Income .51%
-----
</TABLE>
9) Adjusted for a 200% stock dividend effective January 20, 1993.
10) The date investment operations commenced.
11) For the eight-month period ended August 31, 1990.
20
<PAGE>
INVESTMENT PROGRAMS
The investment policies and limitations of each Fund are identical to those
of its corresponding Portfolio. Each Fund invests only in its corresponding
Portfolio. Therefore, the following shows you the kinds of securities in which
each Portfolio invests. For an explanation of some types of investments, see
"Description of Investments" on page 55.
Investment policies and limitations of the Funds and Portfolios are not
fundamental unless otherwise specified in this Prospectus or the SAI.
Fundamental policies may not be changed without shareholder approval. A
non-fundamental policy or limitation may be changed by the trustees of the Trust
or of the corresponding Managers Trust without shareholder approval.
The investment objectives of the Funds and Portfolios are not fundamental.
There can be no assurance that the Funds or Portfolios will achieve their
objectives. Each Fund, by itself, does not represent a comprehensive investment
program.
Additional investment techniques, features, and limitations concerning the
Portfolios' investment programs are described in the SAI.
Neuberger&Berman Focus Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman FOCUS Portfolio and
Neuberger&Berman FOCUS Fund is to seek long-term capital appreciation.
Neuberger&Berman FOCUS Portfolio invests principally in common stocks
selected from the following 13 multi-industry sectors of the economy:
/ / Autos & Housing / / Health Care / / Technology
/ / Consumer Goods & Services / / Heavy Industry / / Transportation
/ / Defense & Aerospace / / Machinery & Equipment / / Utilities
/ / Energy / / Media & Entertainment
/ / Financial Services / / Retailing
To maximize potential return, the Portfolio normally makes at least 90% of
its investments in not more than six sectors it identifies as undervalued. Where
a particular industry may fall within more than one sector, N&B Management uses
its judgment and experience to determine the placement of that industry within a
sector. The Portfolio uses the value-oriented investment approach to identify
stocks believed to be undervalued, including stocks that are temporarily out of
favor in the market. The Portfolio then focuses its investments in the sectors
in which the undervalued stocks are clustered. These sectors are believed to
offer the greatest potential for capital growth. This investment approach is
different from that of most other mutual funds that emphasize sector investment.
Those funds either invest in only a single economic sector or choose a number of
sectors by analyzing general economic trends. Further information on the
Portfolio's securities holdings and their allocation by sector as of
21
<PAGE>
the end of the Fund's most recent fiscal year is included in the Fund's annual
report to shareholders, which is available at no cost upon request. The sectors
are more fully described in the SAI.
The Portfolio may be affected more by any single economic, political, or
regulatory development than a more diversified mutual fund. The risk of decline
in the Portfolio's asset value due to an adverse development may be partially
offset by the value-oriented investment approach. To further reduce this risk,
the Portfolio may not purchase any security if, as a result, (1) more than 50%
of its total assets would be invested in any one sector, or (2) 25% or more of
its total assets would be invested in the securities of companies having their
principal business activities in any one industry (this policy is fundamental).
Neuberger&Berman Genesis Portfolio
- ----------------------------------------------------------------------
(CLOSED TO MOST NEW INVESTORS. FOR MORE INFORMATION, SEE PAGE 35.)
The investment objective of Neuberger&Berman GENESIS Portfolio and
Neuberger&Berman GENESIS Fund is to seek capital appreciation.
Neuberger&Berman GENESIS Portfolio invests primarily in common stocks of
companies with small market capitalizations ("small-cap companies"). Market
capitalization means the total market value of a company's outstanding common
stock. The Portfolio regards companies with market capitalizations of up to $1.5
billion at the time of the Portfolio's investment as small-cap companies.
Companies whose market capitalizations exceed $1.5 billion after purchase
continue to be considered small-cap companies for purposes of the Portfolio's
investment policies. There is no necessary correlation between market
capitalization and the financial attributes -- such as levels of assets,
revenues or income -- commonly used to measure the size of a company.
Studies indicate that the market values of small-cap company stocks, such as
those included in the Russell 2000 Index and the Wilshire 1750 Index or quoted
on Nasdaq, are out-of-sync with larger capitalization stocks. Over the last 30
years, small-cap company stocks have outperformed larger capitalization stocks
about two-thirds of the time, even though small-cap stocks have usually declined
more than larger capitalization stocks in declining markets. There can be no
assurance that this pattern will continue.
The Portfolio tries to enhance the potential for appreciation and limit the
risk of decline in the value of its securities by employing the value-oriented
investment approach. The Portfolio seeks securities that appear to be
underpriced and are issued by companies with proven management, sound finances,
and strong potential for market growth. To reduce risk, the Portfolio
diversifies its holdings among many companies and industries. The Portfolio
focuses on the fundamentals of each small-cap company, instead of trying to
anticipate what changes might occur in the stock market, the economy, or the
political environment. This approach differs from that
22
<PAGE>
used by many other funds investing in small-cap company stocks. Those funds
often buy stocks of companies they believe will have above-average earnings
growth, based on anticipated future developments. In contrast, the Portfolio's
securities are generally selected with the belief that they are currently
undervalued, based on EXISTING conditions.
For more information, see "Special Considerations of Small- and Mid-Cap
Company Stocks" on page 27.
Neuberger&Berman Guardian Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman GUARDIAN Portfolio and
Neuberger&Berman GUARDIAN Fund is to seek capital appreciation and, secondarily,
current income.
Neuberger&Berman GUARDIAN Portfolio invests primarily in common stocks of
long-established, high-quality companies. The Portfolio uses the value-oriented
investment approach in selecting securities. Thus, N&B Management looks for such
factors as low price-to-earnings ratios, strong balance sheets, solid
managements, and consistent earnings.
The Fund has paid its shareholders an income dividend every quarter and a
capital gain distribution every year since its inception in 1950. Of course,
this past record does not necessarily predict the Fund's future practices.
Neuberger&Berman International Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman INTERNATIONAL Portfolio and
Neuberger&Berman INTERNATIONAL Fund is to seek long-term capital appreciation by
investing primarily in a diversified portfolio of equity securities of foreign
issuers. Foreign issuers are issuers organized and doing business principally
outside the United States and include non-U.S. governments, their agencies, and
instrumentalities.
Neuberger&Berman INTERNATIONAL Portfolio invests primarily in equity
securities of medium- to large-capitalization companies traded on foreign
exchanges. A company's capitalization is determined in relation to the principal
market in which its securities are traded. The strategy of N&B Management is to
select attractive investment opportunities outside the United States, allocating
the Portfolio's assets among investments in economically mature countries and
emerging industrialized countries. The criteria for security selection focus on
companies with leadership in specific markets or with niches in specific
industries that appear to exhibit positive fundamentals and seem undervalued
relative to their earnings potential or the worth of their assets. At least 65%
of the Portfolio's total assets normally are invested in equity securities of
foreign issuers. The Portfolio may invest more heavily in certain countries than
in others. From time to time, the Portfolio may invest a significant portion of
its assets in Japan.
23
<PAGE>
The Portfolio may invest in foreign securities in the form of American
Depositary Receipts (ADRs), European Depositary Receipts (EDRs), Global
Depositary Receipts (GDRs), International Depositary Receipts (IDRs) or other
similar securities representing an interest in securities of foreign issuers.
Because the Portfolio invests primarily in foreign securities, it may be
subject to greater risks and higher expenses than equity funds that invest
primarily in securities of U.S. issuers. Such risks may be even greater in
emerging industrialized and less developed countries. Most of the securities
held by the Portfolio are denominated in foreign currencies, and the value of
these investments can be adversely affected by fluctuations in foreign currency
values.
The Portfolio may use techniques such as options, futures, forward foreign
currency exchange contracts ("forward contracts"), swaps, and short selling for
hedging purposes and in an attempt to realize income. The Portfolio may use
leverage to facilitate transactions it enters into for hedging purposes. The use
of these strategies may entail special risks.
For more information, see "Special Considerations of Small- and Mid-Cap
Company Stocks" on page 27 and "Description of Investments" on page 55.
Neuberger&Berman Manhattan Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman MANHATTAN Portfolio and
Neuberger&Berman MANHATTAN Fund is to seek capital appreciation without regard
to income.
Neuberger&Berman MANHATTAN Portfolio currently intends to focus primarily on
the securities of medium-capitalization companies ("mid-cap companies") believed
by N&B Management to have the maximum potential for long-term capital
appreciation. However, the Portfolio can invest in the securities of companies
from any capitalization level. The Portfolio regards mid-cap companies to be
those companies with market capitalizations that, at the time of investment,
fall within the capitalization range of the Russell Midcap-TM- Index as last
announced by the Frank Russell Company before the date of this Prospectus. For
purposes of this Prospectus, that range was approximately $1.1 billion to $8
billion. Companies whose market capitalizations move out of the mid-cap range
after purchase continue to be considered mid-cap companies for purposes of the
Portfolio's investment program.
The Portfolio uses a growth-oriented investment approach. When N&B Management
believes that particular securities have greater potential for long-term capital
appreciation, the Portfolio may purchase such securities at prices with
relatively higher multiples to measures of economic value (such as earnings or
cash flow) than securities likely to be purchased by other Portfolios. In
selecting stocks, N&B Management considers, among other factors, a company's
financial strength, competitive
24
<PAGE>
position, projected future earnings, management strength and experience,
reasonable valuation and other investment criteria. The Portfolio also
diversifies its investments among companies and industries.
The Portfolio's growth investment program involves greater risks and share
price volatility than programs that invest in more undervalued securities.
Moreover, the Portfolio does not follow a policy of active trading for
short-term profits. Accordingly, the Portfolio may be more appropriate for
investors with a longer-range perspective.
For more information, see "Special Considerations of Small- and Mid-Cap
Company Stocks" on page 27.
Neuberger&Berman Partners Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman PARTNERS Portfolio and
Neuberger&Berman PARTNERS Fund is to seek capital growth.
Neuberger&Berman PARTNERS Portfolio invests principally in common stocks of
medium- to large-capitalization established companies, using the value-oriented
investment approach. The Portfolio seeks capital growth through an investment
approach that is designed to increase capital with reasonable risk. N&B
Management looks for securities believed to be undervalued based on strong
fundamentals, including a low price-to-earnings ratio, consistent cash flow, and
the company's track record through all parts of the market cycle.
The Portfolio considers additional factors when selecting securities,
including ownership by a company's management of the company's stock and the
dominance of a company in its particular field.
For more information, see "Special Considerations of Small- and Mid-Cap
Company Stocks" on page 27.
Neuberger&Berman Socially Responsive Portfolio
- ----------------------------------------------------------------------
The investment objective of Neuberger&Berman SOCIALLY RESPONSIVE Portfolio
and Neuberger&Berman SOCIALLY RESPONSIVE Fund is to seek long-term capital
appreciation by investing primarily in securities of companies that meet both
financial criteria and the Social Policy.
The Portfolio invests primarily in the stocks of medium- to
large-capitalization companies. In seeking capital appreciation, the Portfolio
generally follows a value-oriented investment approach to the selection of
individual securities. Prospective investments are first subjected to detailed
financial analysis and are not studied further unless N&B Management believes
that they are currently undervalued relative to the issuer's assets and
potential earning power.
The Portfolio expects to be nearly fully invested at all times, primarily in
common stock. It may also invest in convertible securities and preferred stock
and in foreign securities and ADRs of foreign companies that meet the Social
Policy. On occasion,
25
<PAGE>
deposits with community banks and credit unions may be considered for
investment. Under normal conditions, at least 65% of the Portfolio's total
assets are invested in accordance with the Social Policy, and at least 65% of
its total assets are invested in equity securities. The Portfolio expects that
substantially all of its equity securities will be selected in accordance with
the Social Policy.
The Portfolio may also engage in portfolio management techniques that are not
subject to the Social Policy, such as lending securities and purchasing and
selling put and call options on securities and currencies, futures contracts,
options on futures contracts, and forward contracts.
For more information, see "Special Considerations of Small- and Mid-Cap
Company Stocks" on page 27.
SOCIAL POLICY. Companies deemed acceptable from a financial standpoint are
evaluated by N&B Management using a database that Neuberger&Berman has designed
to develop and monitor information on companies in various categories of social
criteria. N&B Management seeks to invest in issuers that show leadership in the
following major areas of social impact: environment, and workplace diversity and
employment. N&B Management also evaluates investments based on companies'
records in other areas of concern: public health, type of products, and
corporate citizenship.
The Portfolio's social orientation is predicated in part on the belief that
good corporate citizenship is good business; that is, good policies with respect
to such social criteria as employment and environmental practices may often have
a positive impact on the company's "bottom line." N&B Management recognizes,
however, that many social criteria represent goals rather than achievements and
that goals are often difficult to quantify. In each area, N&B Management seeks
to elicit and understand management's vision of the company's social role and,
in making investment decisions, gives weight to enlightened, progressive
policies. The information used by N&B Management in evaluating prospective
investments for conformity with the Social Policy is obtained primarily from
services that specialize in reporting information from issuers or from agencies
that oversee issuers' activities or compliance with laws and regulations.
Additionally, the information may come from public interest groups and from N&B
Management's discussions with company representatives. N&B Management attempts
to assess the objectivity of all information that it receives. However,
decisions made by N&B Management inevitably involve some level of subjective
judgment.
The Portfolio seeks to invest in companies that show leadership in addressing
environmental problems effectively and in promoting progressive workplace
policies, especially as they affect women and minorities. N&B Management seeks
to identify companies committed to improving their environmental performance by
examining their policies and programs in such areas as energy conservation,
pollution reduction
26
<PAGE>
and control, waste management, recycling, and careful stewardship of natural
resources. In a similar manner, N&B Management seeks to identify companies whose
policies and practices recognize the importance of human resources to corporate
productivity and the centrality of the work experience to the quality of life of
all employees. The Portfolio seeks to invest in companies that demonstrate
leadership in such areas as providing and promoting equal opportunity, investing
in the training and re-training of workers, promoting a safe working
environment, providing family-oriented flexible benefits, and involving workers
in job and workflow engineering.
In making investment decisions, N&B Management takes into account a company's
record as a member of the various communities of which it is a part and its
commitment to product quality and value. Currently, the Social Policy screens
out any company that derives more than 5% of its total annual revenue from (i)
manufacturing and selling alcohol and/or tobacco, (ii) sales in or services
related to gambling, or (iii) the manufacturing of weapons systems.
Additionally, the Portfolio does not invest in any company that derives its
total annual revenue primarily from non-consumer sales to the military or that
owns or operates one or more nuclear power facilities or is a major supplier of
nuclear power services.
Not every issuer selected by N&B Management will demonstrate leadership in
each category of the Social Policy. The social records of most companies are
written in shades of gray. For example, a company may have a progressive record
in employee relations and community affairs but a poor one on product marketing
issues. Another company may have a mixed record within a single area. Finally,
it is often difficult to distinguish between substantive commitment and public
relations. This principle works both ways: there are many companies with
excellent records on social issues that maintain a low profile for one reason or
another. Taking these factors into consideration, N&B Management emphasizes the
overall approach that companies take toward the areas of social impact and pays
particular attention to progress achieved toward the goals of the Social Policy.
If securities held by the Portfolio no longer satisfy the Social Policy, the
Portfolio will seek to dispose of the securities as soon as reasonably
practicable, which may cause the Portfolio to sell the securities at a time not
desirable from a purely financial standpoint.
Special Considerations of Small-
and Mid-Cap Company Stocks
- ----------------------------------------------------------------------
Investments in small- and mid-cap company stocks may present greater
opportunities for capital appreciation than investments in stocks of
large-capitalization companies ("large-cap companies"). However, small- and
mid-cap company stocks may have higher risk and volatility. These stocks
generally are not as broadly traded as large-cap company stocks and their prices
thus may fluctuate more widely and
27
<PAGE>
abruptly. Any such movements in stocks held by a Portfolio would be reflected in
the corresponding Fund's net asset value. Small- and mid-cap company stocks also
are less researched than large-cap company stocks and are often overlooked in
the market.
Short-Term Trading; Portfolio Turnover
- ----------------------------------------------------------------------
Although none of the Portfolios purchases securities with the intention of
profiting from short-term trading, each Portfolio may sell portfolio securities
when N&B Management believes that such action is advisable. See "Notes to
Financial Highlights" for more information about the portfolio turnover rate of
each Portfolio. It is anticipated that the annual turnover rate of
Neuberger&Berman MANHATTAN Portfolio and of Neuberger&Berman PARTNERS Portfolio
may exceed 100% in some fiscal years. Turnover rates in excess of 100% generally
result in higher transaction costs (which are borne directly by the Portfolio
and indirectly by the corresponding Fund) and a possible increase in realized
short-term capital gains or losses. See "Dividends, Other Distributions, and
Taxes" on page 44 and the SAI.
Borrowings
- ----------------------------------------------------------------------
Each Portfolio, except Neuberger&Berman INTERNATIONAL Portfolio, has a
fundamental policy that it may not borrow money, except that it may (1) borrow
money from banks for temporary or emergency purposes and not for leveraging or
investment and (2) enter into reverse repurchase agreements for any purpose, so
long as the aggregate amount of borrowings and reverse repurchase agreements
does not exceed one-third of the Portfolio's total assets (including the amount
borrowed) less liabilities (other than borrowings). None of these Portfolios
expects to borrow money or to enter into reverse repurchase agreements. As a
non-fundamental policy, none of these Portfolios may purchase portfolio
securities if its outstanding borrowings, including reverse repurchase
agreements, exceed 5% of its total assets.
Neuberger&Berman INTERNATIONAL Portfolio has a fundamental policy that it may
not borrow money, except that it may (1) borrow money from banks for temporary
or emergency purposes and for leveraging or investment and (2) enter into
reverse repurchase agreements for any purpose, so long as the aggregate amount
of borrowings and reverse repurchase agreements does not exceed one-third of the
Portfolio's total assets (including the amount borrowed) less liabilities (other
than borrowings).
Neuberger&Berman INTERNATIONAL Portfolio may borrow money from banks to
facilitate transactions that it enters into for hedging purposes, which is a
form of leverage. This leverage may amplify the gains and losses on the
Portfolio's investments and changes in the net asset value of its corresponding
Fund's shares. Leverage also creates interest expenses; if those expenses exceed
the return on the transactions that the borrowings facilitate, the Portfolio
will be in a worse position than if it had not
28
<PAGE>
borrowed. The use of derivatives in connection with leverage may create the
potential for significant losses. The Portfolio may pledge assets in connection
with permitted borrowings.
Other Investments
- ----------------------------------------------------------------------
For temporary defensive purposes, each Portfolio (except Neuberger&Berman
SOCIALLY RESPONSIVE Portfolio and Neuberger&Berman INTERNATIONAL Portfolio) may
invest up to 100% of its total assets in cash and cash equivalents, U.S.
Government and Agency Securities, commercial paper and certain other money
market instruments, as well as repurchase agreements collateralized by the
foregoing.
Any part of Neuberger&Berman SOCIALLY RESPONSIVE Portfolio's assets may be
retained temporarily in investment grade fixed income securities of
non-governmental issuers, U.S. Government and Agency Securities, repurchase
agreements, money market instruments, commercial paper, and cash and cash
equivalents when N&B Management believes that significant adverse market,
economic, political, or other circumstances require prompt action to avoid
losses. In addition, the feeder funds that invest in Neuberger&Berman SOCIALLY
RESPONSIVE Portfolio deal with large institutional investors, and the Portfolio
may hold such instruments pending investment or payout when the Portfolio has
received a large influx of cash due to sales of Neuberger&Berman SOCIALLY
RESPONSIVE Fund shares, or shares of another fund which invests in the
Portfolio, or when it anticipates a substantial redemption. Generally, the
foregoing temporary investments for Neuberger&Berman SOCIALLY RESPONSIVE
Portfolio are selected with a concern for the social impact of each investment.
For temporary defensive purposes, Neuberger&Berman INTERNATIONAL Portfolio
may invest up to 100% of its total assets in short-term foreign and U.S.
investments, such as cash or cash equivalents, commercial paper, short-term bank
obligations, government and agency securities, and repurchase agreements.
Neuberger&Berman INTERNATIONAL Portfolio may also invest in such instruments to
increase liquidity or to provide collateral to be held in segregated accounts.
29
<PAGE>
PERFORMANCE INFORMATION
The performance of the Funds is commonly measured as TOTAL RETURN. TOTAL
RETURN is the change in value of an investment in a fund over a particular
period, assuming that all distributions have been reinvested. Thus, total return
reflects dividends, other distributions, and variations in share prices from the
beginning to the end of a period.
An average annual total return is a hypothetical rate of return that, if
achieved annually, would result in the same cumulative total return as was
actually achieved for the period. This evens out year-to-year variations in
actual performance. Past results do not, of course, guarantee future
performance. Share prices may vary, and your shares when redeemed may be worth
more or less than your original purchase price.
The following table shows the average annual total returns of each Fund for
the 1-year, 5-year, 10-year and since inception periods ended August 31, 1997.
The table also shows a comparison with the S&P "500" Index for each Fund except
Neuberger&Berman GENESIS Fund, which is compared with the Russell
2000-Registered Trademark- Index, Neuberger&Berman INTERNATIONAL Fund, which is
compared with the EAFE-Registered Trademark- Index and Neuberger&Berman
MANHATTAN Fund, which is compared with the Russell Midcap Growth Index. The S&P
"500" Index is the Standard & Poor's 500 Composite Stock Price Index, an
unmanaged index generally considered to be representative of overall stock
market activity. The Russell 2000 is an unmanaged index of the securities of the
2,000 issuers having the smallest capitalization in the Russell
3000-Registered Trademark- Index, representing about 10% of the Russell 3000's
total market capitalization. The EAFE-Registered Trademark- Index is the Morgan
Stanley Capital International Europe, Australasia, Far East Index, an unmanaged
index of non-U.S. equity market performance. The Russell Midcap Growth-TM- Index
measures the performance of those Russell Midcap Index companies with higher
price-to-book ratios and higher forecasted growth values. The Russell Midcap-TM-
Index measures the performance of the 800 smallest companies in the Russell
1000-Registered Trademark- Index, which represents approximately 35% of the
total market capitalization of the Russell 1000 Index (which in turn consists of
the 1,000 largest U.S. companies based on market capitalization). Please note
that indices do not take into account any fees or expenses of investing in the
individual securities that they track. Further information regarding the Funds'
performance is presented in their annual report to shareholders, which is
available without charge by calling 800-877-9700.
30
<PAGE>
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS
ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
NEUBERGER&BERMAN 10 SINCE INCEPTION
EQUITY FUNDS 1 YEAR 5 YEARS YEARS INCEPTION DATE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOCUS FUND +43.92% +21.91% +14.38% +12.43% 10/19/55
GUARDIAN FUND +39.69 +19.89 +14.44 +13.43 6/1/50
PARTNERS FUND +47.11 +22.46 +14.33 +18.67 1/20/75*
SOCIALLY RESPONSIVE FUND +31.96 N/A N/A +20.03 3/16/94
S&P "500" INDEX +40.73 +19.78 +13.85 N/A N/A
MANHATTAN FUND +38.75 +17.55 +11.48 +17.50 3/1/79*
RUSSELL MIDCAP GROWTH INDEX +31.23 +18.56 +13.18 N/A N/A
GENESIS FUND +44.32 +22.22 N/A +16.69 9/27/88
RUSSELL 2000 INDEX +28.96 +19.36 N/A +14.57** N/A
INTERNATIONAL FUND +24.71 N/A N/A +13.33 6/15/94
EAFE-REGISTERED TRADEMARK- INDEX +9.36 N/A N/A +6.82** N/A
</TABLE>
*THE DATES WHEN N&B MANAGEMENT BECAME INVESTMENT ADVISER TO THESE FUNDS.
**FROM INCEPTION DATE OF THE FUND LISTED IMMEDIATELY ABOVE.
Prior to November 1991, the investment policies of Neuberger&Berman FOCUS
Fund required that a substantial percentage of its assets be invested in the
energy field; accordingly, performance results prior to that time do not
necessarily reflect the level of performance that might have been achieved had
the Fund's current policies been in effect during that period. Neuberger&Berman
MANHATTAN Portfolio has the ability to invest in the stocks of small-, medium-
and large-capitalization companies. Prior to July 1997, Neuberger&Berman
MANHATTAN Portfolio invested in the stocks of companies from each of these
capitalization levels. In July 1997, Neuberger&Berman MANHATTAN Portfolio
changed its focus to the stocks of medium-capitalization companies. Therefore,
performance results for Neuberger&Berman MANHATTAN Fund prior to July 1997 may
be more appropriately compared to the S&P "500" Index. Had N&B Management not
reimbursed certain expenses or waived certain fees, the total returns of
Neuberger&Berman INTERNATIONAL Fund, Neuberger&Berman SOCIALLY RESPONSIVE Fund,
and Neuberger&Berman GENESIS Fund would have been lower.
The following table lets you take a closer look at how each Fund (except
Neuberger&Berman SOCIALLY RESPONSIVE Fund and Neuberger&Berman INTERNATIONAL
Fund) performed year by year, in terms of an annual per share total return for
each of the last ten calendar years (ending December 31). Please note that the
previous chart reflects information for periods ended on the Funds' last fiscal
year-end (that is, as of August 31, 1997).
31
<PAGE>
TOTAL RETURNS FOR CALENDAR YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
NEUBERGER&BERMAN
EQUITY FUNDS 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOCUS FUND +0.6 % +16.5 % +29.8 % -5.9 % +24.7 % +21.1 % +16.3 % +0.9 % +36.2 % +16.2 %
GUARDIAN FUND -1.0 +28.0 +21.5 -4.7 +34.3 +19.0 +14.5 +0.6 +32.1 +17.9
MANHATTAN FUND +0.4 +18.3 +29.1 -8.1 +30.9 +17.8 +10.0 -3.6 +31.0 +9.9
PARTNERS FUND +4.3 +15.5 +22.8 -5.1 +22.4 +17.5 +16.5 -1.9 +35.2 +26.5
SOCIALLY RESPONSIVE FUND N/A N/A N/A N/A N/A N/A N/A N/A +38.9 +18.5
S&P "500" INDEX +5.2 +16.5 +31.6 -3.1 +30.3 +7.6 +10.0 +1.4 +37.5 +22.9
GENESIS FUND N/A N/A +17.3 -16.2 +41.6 +15.6 +13.9 -1.8 +27.3 +29.9
RUSSELL 2000 INDEX N/A N/A +16.3 -19.5 +46.0 +18.4 +18.9 -1.8 +28.5 +16.5
INTERNATIONAL FUND N/A N/A N/A N/A N/A N/A N/A N/A +7.9 +23.7
EAFE-REGISTERED TRADEMARK-
INDEX N/A N/A N/A N/A N/A N/A N/A N/A +11.6 +6.4
</TABLE>
TOTAL RETURN INFORMATION. You can obtain current performance information
about each Fund by calling N&B Management at 800-877-9700.
32
<PAGE>
HOW TO BUY SHARES
You can buy shares of any Fund (except, in most cases, Neuberger&Berman
GENESIS Fund; for more information, see page 35), directly by mail, wire, or
telephone or through an exchange of shares of another Neuberger&Berman Fund (see
"Funds Eligible for Exchange"). Shares are purchased at the next price
calculated on a day the New York Stock Exchange ("NYSE") is open, after your
purchase order is received and accepted. Prices for shares of all Funds are
calculated as of the close of regular trading on the NYSE, usually 4 p.m.
Eastern time.
Minimum investment requirements are shown below. In addition, you can invest
as little as $100 each month under an automatic investing plan (see "Automatic
Investing and Dollar Cost Averaging").
N&B Management, in its discretion, may accept or reject purchase orders or
waive the minimum investment requirements.
By Mail
- ----------------------------------------------------------------------
Send your check payable to "Neuberger&Berman Funds" by mail to:
Neuberger&Berman Funds
Boston Service Center
P.O. Box 8403
Boston, MA 02266-8403
or by overnight courier, U.S. Express Mail, or registered or certified mail to:
Neuberger&Berman Funds
c/o State Street Bank and Trust Company
2 Heritage Drive
North Quincy, MA 02171
Be sure to specify the name of the Fund whose shares you want to buy. If this
is your FIRST PURCHASE of shares of a Fund, please complete and sign an
application for a new Fund account and send it along with a check for a minimum
of $1,000. For each ADDITIONAL PURCHASE, please send at least $100 for shares of
any Fund. YOUR CHECK TO OPEN A NEW ACCOUNT MUST BE MADE PAYABLE ON ITS FACE TO
"NEUBERGER& BERMAN FUNDS." GENERALLY, CHECKS ARE NOT ACCEPTED UNLESS MADE
PAYABLE TO "NEUBERGER&BERMAN FUNDS." N&B MANAGEMENT RESERVES THE RIGHT TO ACCEPT
CERTAIN CHECKS FOR SUBSEQUENT INVESTMENTS MADE PAYABLE TO THE REGISTERED
OWNER(S) OF THOSE ACCOUNTS.
By Wire
- ----------------------------------------------------------------------
Call 800-877-9700 for instructions on how to wire money to buy shares. Your
wire goes to State Street Bank and Trust Company ("State Street") and must
include
33
<PAGE>
your name, the name of the Fund whose shares you want to buy, and your account
number. The minimum for a FIRST PURCHASE and for each ADDITIONAL PURCHASE of
shares of any Fund by wire is $1,000.
By Telephone
- ----------------------------------------------------------------------
Call 800-877-9700 to buy shares of any Fund (except, in most cases,
Neuberger& Berman GENESIS Fund; for more information, see page 35). The minimum
for a FIRST PURCHASE and for each ADDITIONAL PURCHASE of shares of any Fund by
telephone is $1,000. Your order may be canceled if your payment is not received
by the third business day after your order is placed. In that case you could be
liable for any resulting losses or fees a Fund or its agents have incurred. To
recover those losses or fees, a Fund has the right to bill you or to redeem
shares from your account. To meet the three-day deadline, you can wire payment,
send a check through overnight mail, or call 800-877-9700 for information on how
to make an electronic transfer through your bank. Please refer to "Additional
Information on Telephone Transactions."
By Exchanging Shares
- ----------------------------------------------------------------------
Call 800-877-9700 for instructions on how to invest by exchanging shares of
another Neuberger&Berman Fund for shares of a Fund. To buy Fund shares through
an exchange, both fund accounts must be registered in the same name, address,
and taxpayer ID number. The minimum for a FIRST PURCHASE and for each ADDITIONAL
PURCHASE of shares of any Fund by an exchange is $1,000 worth of shares of the
other fund. For more details, see "Shareholder Services -- Exchange Privilege"
and "Funds Eligible for Exchange."
Other Information
- ----------------------------------------------------------------------
/ / You must pay for your shares in U.S. dollars by check (drawn on a U.S.
bank), by bank or federal funds wire transfer, or by electronic bank
transfer; cash cannot be accepted.
/ / Each Fund has the right to suspend the offering of its shares for a
period of time. Each Fund also has the right to accept or reject a
purchase order in its sole discretion, including certain purchase orders
using the exchange privilege. See "Shareholder Services -- Exchange
Privilege."
/ / If you pay by check and your check does not clear, or if you order shares
by telephone and fail to pay for them, your purchase will be canceled and
you could be liable for any resulting losses or fees a Fund or its agents
have incurred. To recover those losses or fees, a Fund has the right to
bill you or to redeem shares from your account.
34
<PAGE>
/ / When you sign your application for a new Fund account, you are certifying
that your Social Security or other taxpayer ID number is correct and that
you are not subject to backup withholding. If you violate certain federal
income tax provisions, the Internal Revenue Service can require the Funds
to withhold 31% of your distributions and redemptions.
/ / You can also buy shares of the Funds indirectly through certain
stockbrokers, banks, and other financial institutions, some of which may
charge you a fee. These institutions may have additional requirements to
buy shares. Some of these institutions (or their designees) may be
authorized to accept purchase orders on behalf of the Funds. A Fund will
be deemed to have received your purchase order when an authorized
institution (or its designee) accepts the order. Your order will receive
the next price calculated after the order has been accepted by the
authorized institution (or its designee). You should consult your
institution to determine the time by which it must receive your order for
you to purchase Fund shares at that day's price.
/ / The Funds will not issue a certificate for your shares unless you write
to State Street and request one. Most shareholders do not want a
certificate because you must present the certificate to sell or exchange
the shares it represents. This means that you would be able to sell or
exchange those shares only by mail, and not by telephone or fax. If you
lose your certificate, you will have to pay the expense of replacing it.
NEUBERGER&BERMAN GENESIS FUND IS CLOSED TO PURCHASES BY NEW INVESTORS EXCEPT
FOR PURCHASES BY ELIGIBLE INVESTORS AS DESCRIBED BELOW.
If you are already a shareholder of Neuberger&Berman GENESIS Fund, you may
continue to add to your Fund account. If you own shares of the Fund through a
401(k) plan, you may continue to add to your investment.
In addition, you may purchase shares of Neuberger&Berman GENESIS Fund:
/ / if you are a participant in a 401(k) plan that has the Fund as an
investment option; or
/ / if you purchase shares under an asset allocation program sponsored by a
financial adviser who has one or more clients who are Fund shareholders.
35
<PAGE>
HOW TO SELL SHARES
You can sell (redeem) all or some of your shares at any time by mail, fax, or
telephone. HOWEVER, IF YOU HAVE A CERTIFICATE FOR YOUR SHARES (INCLUDING SHARES
OF A FUND'S PREDECESSOR), YOU CAN REDEEM THOSE SHARES ONLY BY SENDING THE
CERTIFICATE BY MAIL. You can also sell shares by exchanging them for shares of
other Neuberger&Berman Funds; see "Shareholder Services -- Exchange Privilege"
for details.
TO SELL SHARES HELD IN A RETIREMENT ACCOUNT OR BY A TRUST, ESTATE, GUARDIAN,
OR BUSINESS ORGANIZATION, PLEASE CALL 800-877-9700 FOR INSTRUCTIONS.
Shares are sold at the next price calculated on a day the NYSE is open, after
your sales order is received and accepted. Prices for shares of all Funds are
calculated as of the close of regular trading on the NYSE, usually 4 p.m.
Eastern time.
Unless otherwise instructed, the Fund will mail a check for your sales
proceeds, payable to the owner(s) shown on your account ("record owner"), to the
address shown on your account ("record address"). You may designate in your Fund
application a bank account to which, at your request, State Street will transfer
your sales proceeds electronically (at no charge to you) or will wire your sales
proceeds. State Street currently charges a fee of $8.00 for each wire. However,
if you have one or more accounts in the Neuberger&Berman Funds aggregating
$200,000 or more in value, you will not be charged for wire redemptions; your
$8.00 fee will be paid by N&B Management.
If you purchased shares indirectly through certain stockbrokers, banks, or
other financial institutions, you may sell those shares only through those
organizations, some of which may charge you a fee. These institutions may have
additional requirements to sell shares. Some of these institutions (or their
designees) may be authorized to accept redemption orders on behalf of the Funds.
A Fund will be deemed to have received your redemption order when an authorized
institution (or its designee) accepts the order. Your order will receive the
next price calculated after the order has been accepted by the authorized
institution (or its designee). You should consult your institution to determine
the time by which it must receive your order for you to sell Fund shares at that
day's price.
By Mail or Facsimile Transmission (Fax)
- ----------------------------------------------------------------------
Write a redemption request letter with your name and account number, the
Fund's name, and the dollar amount or number of shares of the Fund you want to
sell, together with any other instructions, and send it by mail to:
Neuberger&Berman Funds
Boston Service Center
P.O. Box 8403
Boston, MA 02266-8403
36
<PAGE>
or by overnight courier, U.S. Express Mail, or registered or certified mail to:
Neuberger&Berman Funds
c/o State Street Bank and Trust Company
2 Heritage Drive
North Quincy, MA 02171
or by fax, to redeem up to $50,000 worth of shares, to 212-476-8848. Be sure to
have all owners sign the request exactly as their names appear on the account
and include the certificate for your shares if you have one. If shares are
issued in certificate form, they are not eligible to be redeemed by fax. If you
have changed the record address by telephone or fax, shares may not be redeemed
by fax for 15 days after receipt of the address change. Please call 800-877-9700
to confirm receipt and acceptance of any order submitted by fax.
To protect you and the Fund against fraud, your signature on a redemption
request must have a SIGNATURE GUARANTEE if (1) you want to sell more than
$50,000 worth of shares, (2) you want the redemption check to be made out to
someone other than the record owner, (3) you want the check to be mailed
somewhere other than the record address, or (4) you want the proceeds to be
wired or transferred electronically to a bank account not named in your
application or in your prior written instruction with a signature guarantee. You
can obtain a signature guarantee from most banks, stockbrokers and dealers,
credit unions, and other financial institutions, but not from a notary public. A
redemption request that requires a signature guarantee should be sent by mail.
For a redemption request sent by FAX, limited to not more than $50,000, the
redemption check may be made out only to the record owner and mailed to the
record address or the proceeds wired or transferred electronically to a bank
account named in your application or in a written instruction from the record
owner with a signature guarantee.
Please call 800-877-9700 for more information about the signature guarantee
requirement.
By Telephone
- ----------------------------------------------------------------------
To sell shares worth at least $500, call 800-877-9700, giving your name and
account number, the name of the Fund, and the dollar amount or number of shares
you want to sell.
You can sell shares by telephone unless (1) you have declined this service
either in your application or later by writing or by submitting an appropriate
form to N&B Management or State Street, (2) you have a certificate for such
shares, or (3) you want to sell shares from a retirement account. In addition,
if you have changed the record address by telephone or fax, shares may not be
redeemed by telephone for 15 days after receipt of the address change.
Please refer to "Additional Information on Telephone Transactions."
37
<PAGE>
Other Information
- ----------------------------------------------------------------------
/ / Usually, redemption proceeds will be mailed on the next business day
following the receipt of a proper redemption request, but in any case
within three business days of such receipt (under unusual circumstances
the Funds may take longer, as permitted by law). You may also call
800-877-9700 for information on how to receive electronic transfers
through your bank.
/ / Each Fund may delay paying for any redemption until it is reasonably
satisfied that the check used to buy shares has cleared, which may take
up to 15 days after the purchase date. So if you plan to sell shares
shortly after buying them, you may want to pay for the purchase with a
certified check or by wire transfer.
/ / Each Fund may suspend redemptions or postpone payments on days when the
NYSE is closed, when trading on the NYSE is restricted, or as permitted
by the SEC.
/ / If, because you sold shares, your account balance with any Fund falls
below $1,000, the Fund has the right to close your account after giving
you at least 60 days' written notice to reestablish the minimum balance.
If you do not do so, the Fund may redeem your remaining shares at their
price on the date of redemption and will send the redemption proceeds to
you.
/ / No interest will accrue on amounts represented by uncashed redemption
checks.
38
<PAGE>
ADDITIONAL INFORMATION ON TELEPHONE TRANSACTIONS
A Fund at any time can limit the number of its shares you can buy by
telephone or can stop accepting telephone orders. You can sell or exchange
shares by telephone, unless (1) you have declined these services in your
application or by written notice to N&B Management or State Street, or (2) you
have a certificate for such shares. Each Fund or its agent follows reasonable
procedures -- requiring you to provide a form of personal identification when
you telephone, recording your telephone call, and sending you a written
confirmation of each telephone transaction -- designed to confirm that telephone
instructions are genuine. However, no Fund or its agent is responsible for the
authenticity of telephone instructions or for any losses caused by fraudulent or
unauthorized telephone instructions if the Fund or its agent reasonably believed
that the instructions were genuine.
If you are unable to reach N&B Management by telephone (which might be the
case, for example, during periods of unusual market activity), consider sending
your transaction instructions by fax, overnight courier, or U.S. Express Mail.
You can buy, sell or exchange shares using an automated telephone service
that is available 24 hours a day, every day, to investors using a touch-tone
phone. Further information regarding this service, including use of a Personal
Identification Number (PIN) and a menu of features, is available from N&B
Management by calling 800-877-9700.
39
<PAGE>
SHAREHOLDER SERVICES
Several services are available to assist you in making and managing your
investment in the Funds.
Automatic Investing and Dollar Cost Averaging
- ----------------------------------------------------------------------
If you want to invest regularly, you may participate in a plan that lets you
automatically buy a minimum of $100 worth of shares in any Fund each month using
dollar cost averaging. Under this plan, you buy a fixed dollar amount of shares
in any of the Funds at pre-set intervals. You may pay for the shares by
automatic transfers from your account in any Neuberger&Berman money market fund
or by pre-authorized checks or electronic transfers drawn on your bank account.
You buy more shares when a Fund's share price is relatively low and fewer shares
when a Fund's share price is relatively high. Thus, under this plan your average
cost of shares would generally be lower than if you bought a fixed number of
shares at the same intervals. To benefit from dollar cost averaging, you should
be financially prepared to continue your participation for a long enough period
to include times when Fund share prices are lower. Of course, the plan does not
guarantee a profit and will not protect you against losses in a declining
market. For further information, call 800-877-9700.
Exchange Privilege
- ----------------------------------------------------------------------
To exchange your shares in a Fund for shares in another Neuberger&Berman
Fund, call 800-877-9700 between 8 a.m. and 4 p.m., Eastern time, on any Monday
through Friday (unless the NYSE is closed). See "Funds Eligible for Exchange."
You may also effect an exchange by sending a letter to Neuberger&Berman
Management Incorporated, 605 Third Avenue, 2nd Floor, New York, NY 10158-0180,
Attention: [Name of Fund], or by submitting the letter by fax to 212-476-8848,
giving your name and account number, the name of the Fund, the dollar amount or
number of shares you want to sell, and the name of the Neuberger&Berman Fund
whose shares you want to buy. Please call 800-877-9700 to confirm receipt and
acceptance of any order submitted by fax. If you have a certificate for your
shares, you can exchange them only by mailing the certificate with your letter
requesting the exchange. You can use the telephone exchange privilege unless (1)
you have declined it in your application or by later writing to N&B Management
or State Street, or (2) you have a certificate for such shares. An exchange must
be for at least $1,000 worth of shares, and, if the exchange is your FIRST
PURCHASE in another Neuberger&Berman Fund, it must be for at least the minimum
initial investment amount for that fund. Shares are exchanged at the next price
calculated on a day the NYSE is open, after your exchange order is received and
accepted.
40
<PAGE>
Please note the following about the exchange privilege:
/ / You can exchange shares ONLY between accounts registered in the same
name, address, and taxpayer ID number.
/ / An exchange order cannot be modified or canceled.
/ / You can exchange only into a fund whose shares are eligible for sale in
your state under applicable state securities laws.
/ / An exchange may have tax consequences for you.
/ / Because excessive trading (including short-term "market timing" trading)
can hurt a Fund's performance, each Fund may refuse any exchange orders
(1) if they appear to the Fund to be market-timing transactions involving
significant portions of the Fund's assets or (2) from any shareholder
account if the shareholder previously has been notified by the Fund that
the shareholder's use of the exchange privilege was considered excessive.
Accounts under common ownership or control, including those with the same
taxpayer ID number, will be considered one account for this purpose.
/ / Each Fund may impose other restrictions on the exchange privilege, or
modify or terminate the privilege, but will try to give you advance
notice whenever it can reasonably do so.
Please refer to "Additional Information on Telephone Transactions."
Systematic Withdrawal Plans
- ----------------------------------------------------------------------
If you own shares of a Fund worth at least $5,000, you can open a Systematic
Withdrawal Plan. Under such a plan, you arrange to withdraw a specific amount
(at least $50) on a monthly, quarterly, semi-annual, or annual basis, or you can
have your account completely paid out over a specified period of time. You can
also arrange for periodic cash withdrawals from your Fund account to pay fees to
your financial planner or investment adviser. Because the price of shares of
each Fund fluctuates, you may incur capital gains or losses when you redeem
shares of the Funds through a Systematic Withdrawal Plan or by other methods.
Call 800-877-9700 for more information.
Retirement Plans
- ----------------------------------------------------------------------
Retirement plans permit you to defer paying taxes on investment income and
capital gains. Contributions to these plans may also be tax deductible, although
distributions from these plans generally are taxable. In the case of so-called
"Roth IRAs," available to certain taxpayers beginning in 1998, contributions are
not tax deductible but distributions from the plan may be tax-free. Please call
800-877-9700 for information on a variety of retirement plans offered by N&B
Management, including individual retirement accounts, simplified employee
pension plans, self-employed individual retirement plans (so-called "Keogh
Plans"), corporate profit-
41
<PAGE>
sharing and money purchase pension plans, section 401(k) plans, section
403(b)(7) accounts, and savings incentive match plans for employees (SIMPLE
Retirement Plans) -- IRA version only. The assets of these plans may be invested
in any of the Funds.
Electronic Bank Transfers
- ----------------------------------------------------------------------
You may designate, either in your application or later by writing or by
submitting an appropriate form to State Street, a bank account through which
State Street will electronically transfer monies to you or from you at pre-set
intervals (such as under a Systematic Withdrawal Plan or automatic investing
plan or for payment of cash distributions) or upon your request. Please include
a voided check with your application. This service is not available for
retirement accounts.
State Street does not charge a fee for this service; however, you should
contact your bank to ensure that it is able to process electronic transfers.
Please call 800-877-9700 for more information. If you wish to terminate this
service, you must call at least 10 calendar days before the next scheduled
electronic transfer.
Internet Access
- ----------------------------------------------------------------------
N&B Management now maintains an Internet site on the World Wide Web at
http://www.nbfunds.com. You can access fund prices, informative articles and
interactive worksheets to assist you in financial planning, and the prospectuses
of certain other Neuberger&Berman Funds.
42
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Fund's shares are bought or sold at a price that is the Fund's net asset
value ("NAV") per share. The NAVs for each Fund and its corresponding Portfolio
are calculated by subtracting liabilities from total assets (in the case of a
Portfolio, the market value of the securities the Portfolio holds plus cash and
other assets; in the case of a Fund, its percentage interest in its
corresponding Portfolio, multiplied by the Portfolio's NAV, plus any other
assets). Each Fund's per share NAV is calculated by dividing its NAV by the
number of Fund shares outstanding and rounding the result to the nearest full
cent. Each Fund and its corresponding Portfolio calculate their NAVs as of the
close of regular trading on the NYSE, usually 4 p.m. Eastern time, on each day
the NYSE is open.
Each Portfolio (except Neuberger&Berman INTERNATIONAL Portfolio) values
securities (including options) listed on the NYSE, the American Stock Exchange
or other national securities exchanges or quoted on Nasdaq, and other securities
for which market quotations are readily available, at the last sale price on the
day the securities are being valued. If there is no reported sale of such a
security on that day, the security is valued at the mean between its closing bid
and asked prices on that day. These Portfolios value all other securities and
assets, including restricted securities, by a method that the trustees of Equity
Managers Trust believe accurately reflects fair value.
Neuberger&Berman INTERNATIONAL Portfolio values equity securities at the last
sale price on the principal exchange or in the principal over-the-counter market
in which such securities are traded, as of the close of regular trading on the
NYSE on the day the securities are being valued or, if there are no sales, at
the last available bid price on that day. Debt obligations are valued at the
last available bid price for such securities or, if such prices are not
available, at prices for securities of comparable maturity, quality, and type.
Foreign securities are translated from the local currency into U.S. dollars
using current exchange rates. The Portfolio values all other types of securities
and assets, including restricted securities and securities for which market
quotations are not readily available, by a method that the trustees of Global
Managers Trust believe accurately reflects fair value.
Neuberger&Berman INTERNATIONAL Portfolio's portfolio securities are traded
primarily in foreign markets which may be open on days when the NYSE is closed.
As a result, the NAV of Neuberger&Berman INTERNATIONAL Fund may be significantly
affected on days when shareholders have no access to that Fund.
If N&B Management believes that the price of a security obtained under a
Portfolio's valuation procedures (as described above) does not represent the
amount that the Portfolio reasonably expects to receive on a current sale of the
security, the Portfolio will value the security based on a method that the
trustees of the corresponding Managers Trust believe accurately reflects fair
value.
43
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS,
AND TAXES
Each Fund distributes, normally in December, substantially all of its share
of any net investment income (net of the Fund's expenses), any net capital gains
from investment transactions, and any net gains from foreign currency
transactions earned or realized by its corresponding Portfolio. In addition,
Neuberger&Berman GUARDIAN Fund distributes substantially all of its share of
Neuberger&Berman GUARDIAN Portfolio's net investment income, if any, near the
end of each other calendar quarter.
Distribution Options
- ----------------------------------------------------------------------
REINVESTMENT IN SHARES. All dividends and other distributions paid on shares
of a Fund are automatically reinvested in additional shares of that Fund, unless
you elect to receive them in cash. Dividends and other distributions are
reinvested at the Fund's per share NAV, usually as of the date the dividend or
other distribution is payable. For RETIREMENT ACCOUNTS, all distributions are
automatically reinvested in shares; when you are at least 59 1/2 years old, you
can elect to receive distributions in cash without incurring a premature
distribution penalty tax.
DIVIDENDS IN CASH. You may elect to receive dividends in cash, with other
distributions being reinvested in additional Fund shares, by checking that
election box on your Fund application.
ALL DISTRIBUTIONS IN CASH. You may elect to receive all dividends and other
distributions in cash, by checking that election box on your Fund application.
Checks for cash dividends and other distributions usually will be mailed no
later than seven days after the payable date. However, if you purchased your
shares with a check, distributions on those shares may not be paid in cash until
the Fund is reasonably satisfied that your check has cleared, which may take up
to 15 days after the purchase date. No interest will accrue on amounts
represented by uncashed dividend or other distribution checks. Cash dividends
and other distributions also may be paid through an electronic transfer to a
bank account designated in your Fund application. Call 800-877-9700 for more
information. You can change any distribution election by writing to State
Street, the Funds' shareholder servicing agent.
Taxes
- ----------------------------------------------------------------------
Your investment has certain tax consequences, depending on the type of your
account. If you have a qualified RETIREMENT ACCOUNT, taxes are deferred.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax and
generally also are subject to state and local income taxes. Your distributions
are taxable when they are paid, whether in cash or by reinvestment in additional
Fund shares, except that distributions declared in December to shareholders of
record on a date in
44
<PAGE>
that month and paid in the following January are taxable as if they were paid on
December 31 of the year in which the distributions were declared. If you buy
Fund shares just before a Fund deducts a dividend or other distribution from its
NAV, you will pay the full price for the shares and then receive a portion of
the price back in the form of a taxable distribution. Investors who are
considering the purchase of Fund shares in December (or, in the case of
Neuberger&Berman GUARDIAN Fund, near the end of any other calendar quarter)
should take this into account.
For federal income tax purposes, dividends and distributions of net
short-term capital gain and net gains from certain foreign currency transactions
are taxed as ordinary income. Distributions of net capital gain (the excess of
net long-term capital gain over net short-term capital loss), when designated as
such, are generally taxed as long-term capital gain, no matter how long you have
owned your shares. Distributions of net capital gain may include gains from the
sale of portfolio securities that appreciated in value before you bought your
shares. Under the Taxpayer Relief Act of 1997, different maximum tax rates apply
to a Fund's distributions of net capital gain depending on its corresponding
Portfolio's holding period.
Every January, your Fund will send you a statement showing the amount of
distributions paid in cash or reinvested in Fund shares for the previous year.
You will also receive information showing (1) the portion, if any, of those
distributions that generally is not subject to state and local income taxes in
certain states and (2) capital gain distributions broken down in a manner that
will enable you or your tax adviser to determine the appropriate rate of capital
gains tax on such distributions.
TAXES ON REDEMPTIONS. Capital gains realized on redemptions of Fund shares,
including redemptions in connection with exchanges to other Neuberger&Berman
Funds, are subject to tax. A capital gain or loss generally is the difference
between the amount you paid for the shares (including the amount of any
dividends and other distributions that were reinvested) and the amount you
receive when you sell them. Capital gain on shares held for more than one year
will be long-term capital gain, in which event it will be subject to federal
income tax at the capital gains rates applicable to your holding period and tax
bracket.
When you sell Fund shares, you will receive a confirmation statement showing
the number of shares you sold and the price.
OTHER. Every January, you will receive a consolidated transaction statement
for the previous year. Be sure to keep your statements; they will be useful to
you and your tax preparer in determining the capital gains and losses from your
redemptions.
Each Fund intends to continue to qualify for treatment as a regulated
investment company for federal income tax purposes so that it will not have to
pay federal income tax on that part of its taxable income and realized gains
that it distributes to its shareholders.
45
<PAGE>
The foregoing is only a summary of some of the important income tax
considerations affecting each Fund and its shareholders. See the SAI for
additional tax information. There may be other federal, state, local, or foreign
tax considerations applicable to a particular investor. Therefore, you should
consult your tax adviser.
46
<PAGE>
MANAGEMENT AND ADMINISTRATION
Trustees and Officers
- ----------------------------------------------------------------------
The trustees of the Trust and the trustees of the Managers Trusts have
oversight responsibility for the operations of each Fund and each Portfolio,
respectively. The SAI contains general background information about each trustee
and officer of the Trust and of the Managers Trusts. The trustees and officers
of the Trust and of the Managers Trusts who are officers and/or directors of N&B
Management and/or principals of Neuberger&Berman serve without compensation from
the Funds or the Portfolios. All trustees of the Managers Trusts also serve as
trustees of the Trust.
Investment Manager, Administrator,
Distributor, and Sub-Adviser
- ----------------------------------------------------------------------
N&B Management serves as the investment manager of each Portfolio, as
administrator of each Fund, and as distributor of the shares of each Fund. N&B
Management and its predecessor firms have specialized in the management of
no-load mutual funds since 1950. In addition to serving the Portfolios, N&B
Management currently serves as investment manager of other mutual funds.
Neuberger&Berman acts as sub-adviser for the Portfolios and other mutual funds
managed by N&B Management. The mutual funds managed by N&B Management and
Neuberger&Berman had aggregate net assets of approximately $21.2 billion as of
September 30, 1997.
As sub-adviser, Neuberger&Berman furnishes N&B Management with investment
recommendations and research without added cost to the Portfolios. N&B
Management compensates Neuberger&Berman for its costs in connection with those
services. Neuberger&Berman is a member firm of the NYSE and other principal
exchanges and may act as the Portfolios' broker in the purchase and sale of
their securities. Neuberger&Berman and its affiliates, including N&B Management,
manage securities accounts that had approximately $54.1 billion of assets as of
September 30, 1997. All of the voting stock of N&B Management is owned by
individuals who are principals of Neuberger&Berman.
State Street Cayman Trust Company, Ltd., located in George Town, Grand
Cayman, Cayman Islands, British West Indies, provides certain administrative,
fund accounting and transfer agency services for Neuberger&Berman INTERNATIONAL
Portfolio, which has its principal offices in the Cayman Islands.
Unless otherwise indicated, the following is five-year information about the
individuals who are primarily responsible for the day-to-day management of the
Portfolios.
Neuberger&Berman FOCUS Portfolio and Neuberger&Berman GUARDIAN
Portfolio -- Kent C. Simons and Kevin L. Risen are co-managers of the
Portfolios. Mr.
47
<PAGE>
Simons and Mr. Risen are Vice Presidents of N&B Management and principals of
Neuberger&Berman. Mr. Simons has had responsibility for Neuberger&Berman FOCUS
Portfolio and Neuberger&Berman FOCUS Fund since 1988, and for Neuberger&Berman
GUARDIAN Portfolio and Neuberger&Berman GUARDIAN Fund since 1981. Mr. Risen has
had those responsibilities since 1996, and during the year prior thereto, he was
a portfolio manager for Neuberger&Berman. He was a research analyst at
Neuberger&Berman from 1992 to 1995.
Neuberger&Berman GENESIS Portfolio -- Judith M. Vale and Robert W. D'Alelio
are co-managers of the Portfolio. Ms. Vale and Mr. D'Alelio have been senior
members of Neuberger&Berman's Small Cap Group since 1992 and 1996, respectively,
and are both Vice Presidents of N&B Management. Ms. Vale is a principal of
Neuberger&Berman. Ms. Vale and Mr. D'Alelio have been primarily responsible for
the day-to-day management of Neuberger&Berman GENESIS Portfolio since February
1994 and July 1997, respectively. Mr. D'Alelio was a senior portfolio manager
for another investment management group from 1992 to 1996.
Neuberger&Berman INTERNATIONAL Portfolio -- Valerie Chang is manager of the
Portfolio. Ms. Chang, an Assistant Vice President of N&B Management and an
assistant portfolio manager for Neuberger&Berman INTERNATIONAL Portfolio from
December 1996 until June 1997, has been responsible for the management of
Neuberger&Berman INTERNATIONAL Portfolio since June 1997. She served in the
investment banking division of Salomon Brothers and Morgan Stanley & Co., Inc.
from 1993 until 1995 and as a senior securities analyst for TIAA/CREF from 1995
until December 1996.
Neuberger&Berman MANHATTAN Portfolio -- Jennifer K. Silver and Brooke A. Cobb
are co-managers of the Portfolio. Ms. Silver is Director of the Neuberger&
Berman Growth Equity Group, and both she and Mr. Cobb are Vice Presidents of N&B
Management. Ms. Silver is a principal of Neuberger&Berman. Ms. Silver and Mr.
Cobb have had responsibility for Neuberger&Berman MANHATTAN Portfolio since July
1997. Previously, Ms. Silver was a portfolio manager for several large mutual
funds managed by a prominent investment adviser. Mr. Cobb was the chief
investment officer for an investment advisory firm managing individual accounts
from 1995 to 1997 and, from 1992 to 1995, a portfolio manager of a large mutual
fund managed by a prominent investment adviser.
Neuberger&Berman PARTNERS Portfolio -- Michael M. Kassen and Robert I.
Gendelman are co-managers of the Portfolio. Mr. Kassen and Mr. Gendelman are
Vice Presidents of N&B Management and principals of Neuberger&Berman. Mr. Kassen
and Mr. Gendelman have had responsibility for Neuberger&Berman PARTNERS
Portfolio and Neuberger&Berman PARTNERS Fund since June 1990 and October
48
<PAGE>
1994, respectively. Mr. Kassen has been an employee of N&B Management since
1990. Mr. Gendelman was a portfolio manager for another mutual fund manager from
1992 to 1993.
Neuberger&Berman SOCIALLY RESPONSIVE Portfolio -- Janet Prindle is manager of
the Portfolio and Robert Ladd and Ingrid Saukaitis are associate managers of the
Portfolio. Ms. Prindle, a Vice President of N&B Management since November 1993,
has been a principal of Neuberger&Berman since 1983. Ms. Prindle has been
responsible for Neuberger&Berman SOCIALLY RESPONSIVE Portfolio since its
inception in March 1994. Ms. Prindle is Director of Socially Responsive
Investment Services at Neuberger&Berman, and has been researching and developing
corporate responsibility criteria as they apply to investments since 1989. She
has been managing money using these criteria since 1990. Mr. Ladd and Ms.
Saukaitis have had responsibility for Neuberger&Berman SOCIALLY RESPONSIVE
Portfolio since December 1997. During the five years prior thereto, Mr. Ladd was
a portfolio manager for Neuberger& Berman. Ms. Saukaitis has been Director of
Social Research for Neuberger&Berman since February 1997. From 1995 to January
1997 she was a project director for a non-profit group that provided social
research on companies to the investment industry. Both Mr. Ladd and Ms.
Saukaitis are Assistant Vice Presidents of N&B Management.
Neuberger&Berman acts as the principal broker for the Portfolios (except
Neuberger&Berman INTERNATIONAL Portfolio), and may act as broker for
Neuberger&Berman INTERNATIONAL Portfolio, in the purchase and sale of portfolio
securities and in the purchase and sale of options, and for those services
receives brokerage commissions. In effecting securities transactions, each
Portfolio seeks to obtain the best price and execution of orders. For more
information, see the SAI.
The principals and employees of Neuberger&Berman and officers and employees
of N&B Management, together with their families, have invested over $100 million
of their own money in Neuberger&Berman Funds.
To mitigate the possibility that a Portfolio will be adversely affected by
employees' personal trading, the Trust, the Managers Trusts, N&B Management, and
Neuberger&Berman have adopted policies that restrict securities trading in the
personal accounts of the portfolio managers and others who normally come into
possession of information on portfolio transactions.
YEAR 2000. Like other financial and business organizations, the Funds and
Portfolios could be adversely affected if computer systems they rely on do not
properly process date-related information and data involving the years 2000 and
after. N&B Management and Neuberger&Berman are taking steps that they believe
are reasonable to address this problem in their own computer systems and to
obtain assurances that comparable steps are being taken by the Funds' and
Portfolios' other major service providers. N&B Management also attempts to
evaluate the potential impact of
49
<PAGE>
this problem on the issuers of investment securities that the Portfolios
purchase. At this time, however, there can be no assurance that these steps will
be sufficient to avoid any adverse impact on the Funds and Portfolios.
Expenses
- ----------------------------------------------------------------------
N&B Management provides investment management services to each Portfolio that
include, among other things, making and implementing investment decisions and
providing facilities and personnel necessary to operate the Portfolio. For
investment management services, each Portfolio (except Neuberger&Berman GENESIS
Portfolio and Neuberger&Berman INTERNATIONAL Portfolio) pays N&B Management a
fee at the annual rate of 0.55% of the first $250 million of that Portfolio's
average daily net assets, 0.525% of the next $250 million, 0.50% of the next
$250 million, 0.475% of the next $250 million, 0.45% of the next $500 million,
and 0.425% of average daily net assets in excess of $1.5 billion.
Neuberger&Berman GENESIS Portfolio pays N&B Management a fee for investment
management services at the annual rate of 0.85% of the first $250 million of the
Portfolio's average daily net assets, 0.80% of the next $250 million, 0.75% of
the next $250 million, 0.70% of the next $250 million, and 0.65% of average
daily net assets in excess of $1 billion. Neuberger&Berman INTERNATIONAL
Portfolio pays N&B Management a fee for investment management services at the
annual rate of 0.85% of the first $250 million of the Portfolio's average daily
net assets, 0.825% of the next $250 million, 0.80% of the next $250 million,
0.775% of the next $250 million, 0.75% of the next $500 million, and 0.725% of
average daily net assets in excess of $1.5 billion.
N&B Management provides administrative services to each Fund that include
furnishing facilities and personnel for the Fund and performing certain
shareholder, shareholder-related, and other services. For such administrative
services, each Fund pays N&B Management a fee at the annual rate of 0.26% of
that Fund's average daily net assets. With a Fund's consent, N&B Management may
subcontract to third parties some of its responsibilities to that Fund under the
administration agreement. In addition, a Fund may compensate such third parties
for accounting and other services.
Each Fund bears all expenses of its operations other than those borne by N&B
Management as administrator of the Fund and as distributor of its shares. Each
Portfolio bears all expenses of its operations other than those borne by N&B
Management as investment manager of the Portfolio. These expenses include the
"Other Expenses" described on page 7.
See "Expense Information -- Annual Fund Operating Expenses" for information
about how these fees and expenses may affect the value of your investment.
50
<PAGE>
During its 1997 fiscal year, each Fund accrued administration fees and a pro
rata portion of the corresponding Portfolio's management fees (prior to any
expense reimbursement or fee waiver), as a percentage of the Fund's average
daily net assets, as follows:
<TABLE>
<S> <C>
Neuberger&Berman FOCUS Fund 0.76%
Neuberger&Berman GENESIS Fund 1.07%
Neuberger&Berman GUARDIAN Fund 0.70%
Neuberger&Berman INTERNATIONAL Fund 1.11%
Neuberger&Berman MANHATTAN Fund 0.79%
Neuberger&Berman PARTNERS Fund 0.72%
Neuberger&Berman SOCIALLY RESPONSIVE Fund 0.81%
</TABLE>
N&B Management has voluntarily undertaken to reimburse Neuberger&Berman
INTERNATIONAL Fund for its Total Operating Expenses which exceed 1.70% per annum
of the Fund's average daily net assets. The Fund has in turn agreed to repay N&B
Management through December 31, 1998, for the excess Total Operating Expenses
that N&B Management reimbursed to the Fund through December 31, 1996, so long as
the Fund's Total Operating Expenses during that period do not exceed the above
expense limitation. N&B Management may terminate its undertaking by giving at
least sixty days' prior written notice to the Fund. The effect of reimbursement
by N&B Management is to reduce a Fund's expenses and thereby increase its total
return.
During its 1997 fiscal year, each Fund bore aggregate expenses as a
percentage of its average daily net assets as follows:
<TABLE>
<S> <C>
Neuberger&Berman FOCUS Fund 0.86%
Neuberger&Berman GENESIS Fund 1.16%*
Neuberger&Berman GUARDIAN Fund 0.80%
Neuberger&Berman INTERNATIONAL Fund 1.70%**
Neuberger&Berman MANHATTAN Fund 0.98%
Neuberger&Berman PARTNERS Fund 0.81%
Neuberger&Berman SOCIALLY RESPONSIVE Fund 1.48%**
</TABLE>
*REFLECTS THE THEN CURRENT FEE WAIVER.
**REFLECTS RECOUPMENT OF REIMBURSED FEES AS DESCRIBED ABOVE OR IN THE SAI.
Transfer and Shareholder Servicing Arrangements
- ----------------------------------------------------------------------
The Funds' transfer and shareholder servicing agent is State Street. State
Street administers purchases, redemptions, and transfers of Fund shares and the
payment of dividends and other distributions through its Boston Service Center,
P.O. Box 8403, Boston, MA 02266-8403.
51
<PAGE>
INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Funds
- ----------------------------------------------------------------------
Each Fund is a separate operating series of the Trust, a Delaware business
trust organized pursuant to a Trust Instrument dated as of December 23, 1992.
The Trust is registered under the Investment Company Act of 1940 (the "1940
Act") as a diversified, open-end management investment company, commonly known
as a mutual fund. The Trust has seven separate operating series. Each Fund
invests all of its net investable assets in its corresponding Portfolio, in each
case receiving a beneficial interest in that Portfolio. The trustees of the
Trust may establish additional series or classes of shares without the approval
of shareholders. The assets of each series belong only to that series, and the
liabilities of each series are borne solely by that series and no other.
DESCRIPTION OF SHARES. Each Fund is authorized to issue an unlimited number
of shares of beneficial interest (par value $0.001 per share). Shares of each
Fund represent equal proportionate interests in the assets of that Fund only and
have identical voting, dividend, redemption, liquidation, and other rights. All
shares issued are fully paid and non-assessable, and shareholders have no
preemptive or other rights to subscribe to any additional shares.
SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to hold annual
meetings of shareholders of the Funds. The trustees will call special meetings
of shareholders of a Fund only if required under the 1940 Act or in their
discretion or upon the written request of holders of 10% or more of the
outstanding shares of that Fund entitled to vote.
CERTAIN PROVISIONS OF TRUST INSTRUMENT. Under Delaware law, the shareholders
of a Fund will not be personally liable for the obligations of any Fund; a
shareholder is entitled to the same limitation of personal liability extended to
shareholders of a corporation. To guard against the risk that Delaware law might
not be applied in other states, the Trust Instrument requires that every written
obligation of the Trust or a Fund contain a statement that such obligation may
be enforced only against the assets of the Trust or Fund and provides for
indemnification out of Trust or Fund property of any shareholder nevertheless
held personally liable for Trust or Fund obligations, respectively.
The Portfolios
- ----------------------------------------------------------------------
Each Portfolio (except Neuberger&Berman INTERNATIONAL Portfolio) is a
separate operating series of Equity Managers Trust, a New York common law trust
organized as of December 1, 1992. Neuberger&Berman INTERNATIONAL Portfolio is a
52
<PAGE>
separate operating series of Global Managers Trust, a New York common law trust
organized as of March 18, 1994. The Managers Trusts are registered under the
1940 Act as diversified, open-end management investment companies. Equity
Managers Trust has six separate Portfolios. Global Managers Trust currently has
one operating Portfolio. The assets of each Portfolio belong only to that
Portfolio, and the liabilities of each Portfolio are borne solely by that
Portfolio and no other.
FUNDS' INVESTMENTS IN PORTFOLIOS. Each Fund is a "feeder fund" that seeks to
achieve its investment objective by investing all of its net investable assets
in its corresponding Portfolio, which is a "master fund." The Portfolio, which
has the same investment objective, policies, and limitations as the Fund, in
turn invests in securities; the Fund thus acquires an indirect interest in those
securities.
Each Fund's investment in its corresponding Portfolio is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in a Portfolio. Series of two other investment
companies, Neuberger& Berman Equity Trust ("N&B Equity Trust") and
Neuberger&Berman Equity Assets ("N&B Equity Assets"), invest all of their
respective net assets in corresponding Portfolios of Equity Managers Trust. N&B
Equity Trust and N&B Equity Assets do not sell their shares directly to members
of the general public.
Each Portfolio may also permit other investment companies and/or other
institutional investors to invest in the Portfolio. All investors will invest in
a Portfolio on the same terms and conditions as a Fund and will pay a
proportionate share of the Portfolio's expenses. Other investors in a Portfolio
are not required to sell their shares at the same public offering price as a
Fund, could have a different administration fee and expenses than a Fund, and
(except N&B Equity Trust and N&B Equity Assets) might charge a sales commission.
Therefore, Fund shareholders may have different returns than shareholders in
another investment company that invests exclusively in the Portfolio. There is
currently no such other investment company that offers its shares directly to
members of the general public. Information regarding any fund that invests in a
Portfolio is available from N&B Management by calling 800-877-9700.
The trustees of the Trust believe that investment in a Portfolio by a series
of N&B Equity Trust or N&B Equity Assets or by other potential investors in
addition to a Fund may enable the Portfolio to realize economies of scale that
could reduce its operating expenses, thereby producing higher returns and
benefitting all shareholders. However, a Fund's investment in its corresponding
Portfolio may be affected by the actions of other large investors in the
Portfolio, if any. For example, if a large investor in a Portfolio (other than a
Fund) redeemed its interest in the Portfolio, the Portfolio's remaining
investors (including the Fund) might, as a result, experience higher pro rata
operating expenses, thereby producing lower returns.
Each Fund may withdraw its entire investment from its corresponding Portfolio
at any time, if the trustees of the Trust determine that it is in the best
interests of the
53
<PAGE>
Fund and its shareholders to do so. A Fund might withdraw, for example, if there
were other investors in a Portfolio with power to, and who did by a vote of all
investors (including the Fund), change the investment objective, policies, or
limitations of the Portfolio in a manner not acceptable to the trustees of the
Trust. A withdrawal could result in a distribution in kind of portfolio
securities (as opposed to a cash distribution) by the Portfolio to the Fund.
That distribution could result in a less diversified portfolio of investments
for the Fund and could affect adversely the liquidity of the Fund's investment
portfolio. If the Fund decided to convert those securities to cash, it usually
would incur brokerage fees or other transaction costs. If a Fund withdrew its
investment from a Portfolio, the trustees of the Trust would consider what
actions might be taken, including the investment of all of the Fund's net
investable assets in another pooled investment entity having substantially the
same investment objective as the Fund or the retention by the Fund of its own
investment manager to manage its assets in accordance with its investment
objective, policies, and limitations. The inability of the Fund to find a
suitable replacement could have a significant impact on shareholders.
INVESTOR MEETINGS AND VOTING. Each Portfolio normally will not hold meetings
of investors except as required by the 1940 Act. Each investor in a Portfolio
will be entitled to vote in proportion to its relative beneficial interest in
the Portfolio. On most issues subjected to a vote of investors, a Fund will
solicit proxies from its shareholders and will vote its interest in the
Portfolio in proportion to the votes cast by the Fund's shareholders. If there
are other investors in a Portfolio, there can be no assurance that any issue
that receives a majority of the votes cast by Fund shareholders will receive a
majority of votes cast by all Portfolio investors; indeed, if other investors
hold a majority interest in a Portfolio, they could have voting control of the
Portfolio.
CERTAIN PROVISIONS. Each investor in a Portfolio, including a Fund, will be
liable for all obligations of the Portfolio. However, the risk of an investor in
a Portfolio incurring financial loss beyond the amount of its investment on
account of such liability would be limited to circumstances in which the
Portfolio had inadequate insurance and was unable to meet its obligations out of
its assets. Upon liquidation of a Portfolio, investors would be entitled to
share pro rata in the net assets of the Portfolio available for distribution to
investors.
54
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to common stocks and other securities referred to in "Investment
Programs" herein, each Portfolio may make the following investments, among
others, individually or in combination, although it may not necessarily buy all
of the types of securities or use all of the investment techniques that are
described. For additional information on the following investments and on other
types of investments which the Portfolios may make, see the SAI.
ILLIQUID, RESTRICTED AND RULE 144A SECURITIES. Each Portfolio may invest up
to 15% of its net assets in illiquid securities, which are securities that
cannot be expected to be sold within seven days at approximately the price at
which they are valued. These may include unregistered or other restricted
securities and repurchase agreements maturing in greater than seven days.
Illiquid securities may also include commercial paper under section 4(2) of the
Securities Act of 1933, as amended, and Rule 144A securities (restricted
securities that may be traded freely among qualified institutional buyers
pursuant to an exemption from the registration requirements of the securities
laws); these securities are considered illiquid unless N&B Management, acting
pursuant to guidelines established by the trustees of the Managers Trusts,
determines they are liquid. Generally, foreign securities freely tradable in
their principal market are not considered restricted or illiquid. Illiquid
securities may be difficult for a Portfolio to value or dispose of due to the
absence of an active trading market. The sale of some illiquid securities by the
Portfolios may be subject to legal restrictions which could be costly to the
Portfolios.
FOREIGN SECURITIES. Foreign securities are those of issuers organized and
doing business principally outside the United States, including non-U.S.
governments, their agencies, and instrumentalities. Each Portfolio (except
Neuberger&Berman INTERNATIONAL Portfolio) may invest up to 10% of the value of
its total assets in foreign securities. The 10% limitation does not apply to
foreign securities that are denominated in U.S. dollars, including ADRs.
Neuberger&Berman INTERNATIONAL Portfolio invests primarily in foreign
securities. The Portfolio may invest in ADRs, EDRs, GDRs, and IDRs. ADRs
(sponsored or unsponsored) are receipts typically issued by a U.S. bank or trust
company evidencing its ownership of the underlying foreign securities. Most ADRs
are denominated in U.S. dollars and are traded on a U.S. stock exchange. Issuers
of the securities underlying sponsored ADRs, but not unsponsored ADRs, are
contractually obligated to disclose material information in the United States.
Therefore, the market value of unsponsored ADRs may not reflect the effect of
such information. EDRs and IDRs are receipts typically issued by a European bank
or trust company evidencing its ownership of the underlying foreign securities.
GDRs are receipts issued by either a U.S. or non-U.S. banking institution
evidencing its ownership of the underlying foreign securities and are often
denominated in U.S. dollars.
55
<PAGE>
Factors affecting investments in foreign securities include, but are not
limited to, varying custody, brokerage and settlement practices, which may cause
delays and expose a Portfolio to the creditworthiness of a foreign broker;
difficulty in pricing some foreign securities; less public information about
issuers of securities; less governmental regulation and supervision of issuance
and trading of securities; the unavailability of financial information or the
difficulty of interpreting financial information prepared under foreign
accounting standards; less liquidity and more volatility in foreign securities
markets; the possibility of expropriation, nationalization, or confiscatory
taxation; the imposition of foreign withholding and other taxes; potentially
adverse local political, economic, social, or diplomatic developments;
limitations on the movement of funds or other assets of a Portfolio between
different countries; difficulties in invoking legal process and enforcing
contractual obligations abroad; and the difficulty of assessing economic trends
in foreign countries. Investment in foreign securities also may involve higher
brokerage and custodial expenses than investment in domestic securities.
In addition, investing in foreign securities may involve other risks which
are not ordinarily associated with investing in domestic securities. These risks
include changes in currency exchange rates and currency exchange control
regulations (or other foreign or U.S. laws or restrictions applicable to such
investments) and devaluations of foreign currencies. Some foreign currencies may
be volatile. A decline in the exchange rate between the U.S. dollar and another
currency will reduce the value of portfolio securities denominated in that
currency irrespective of the performance of the underlying investment. In
addition, a Portfolio generally will incur costs in connection with conversion
between various currencies. Investments in depositary receipts (whether or not
denominated in U.S. dollars) may be subject to exchange controls and changes in
rates of exchange with the U.S. dollar because the underlying security is
usually denominated in foreign currency.
All of the foregoing risks may be intensified in emerging industrialized and
less developed countries.
JAPANESE INVESTMENTS. As noted above, all of the Portfolios may invest in
foreign securities, including securities of Japanese issuers. From time to time,
Neuberger& Berman INTERNATIONAL Portfolio may invest a significant portion of
its assets in securities of Japanese issuers. The performance of the Portfolio
may therefore be significantly affected by events influencing the Japanese
economy and the exchange rate between the Japanese yen and the U.S. dollar.
Japan has experienced a severe recession, including a decline in real estate
values and other events that adversely affected the balance sheets of many
financial institutions and indicate that there may be structural weaknesses in
the Japanese financial system. The effects of this economic downturn may be felt
for a considerable period and are being exacerbated by the currency exchange
rate. Japan is heavily dependent on foreign oil. Japan is located in a
56
<PAGE>
seismically active area, and severe earthquakes may damage important elements of
the country's infrastructure. Japan's economic prospects may be affected by the
political and military situations of its near neighbors, notably North and South
Korea, China and Russia.
OTHER INVESTMENT COMPANIES. Neuberger&Berman INTERNATIONAL Portfolio may
invest up to 10% of its total assets in the shares of other investment
companies. Such investment may be the most practical or only manner in which the
Portfolio can participate in certain foreign markets because of the expenses
involved or because other vehicles for investing in those countries may not be
available at the time the Portfolio is ready to make an investment. As a
shareholder in an investment company, the Portfolio would bear its pro rata
share of that investment company's expenses. Investment in other funds may
involve the payment of substantial premiums above the value of such issuers'
portfolio securities. Neuberger&Berman INTERNATIONAL Portfolio does not intend
to invest in such funds unless, in the judgment of N&B Management, the potential
benefits of such investment justify the payment of any applicable premium or
sales charge.
COVERED CALL OPTIONS. Each Portfolio may try to reduce the risk of
securities price changes (hedge) or generate income by writing (selling) covered
call options against portfolio securities and may purchase call options in
related closing transactions. When a Portfolio writes a covered call option
against a security, the Portfolio is obligated to sell that security to the
purchaser of the option at a fixed price at any time during a specified period
if the purchaser decides to exercise the option. The maximum price the Portfolio
may realize on the security during the option period is the fixed price; the
Portfolio continues to bear the risk of a decline in the security's price,
although this risk is reduced, at least in part, by the premium received for
writing the option.
FOREIGN CURRENCY TRANSACTIONS. Neuberger&Berman INTERNATIONAL Portfolio may
enter into forward contracts in order to protect against adverse changes in
foreign currency exchange rates. The Portfolio may enter into contracts to
purchase foreign currencies to protect against an anticipated rise in the U.S.
dollar price of securities it intends to purchase. The Portfolio may also enter
into contracts to sell foreign currencies to protect against a decline in the
value of its foreign currency denominated portfolio securities due to a decline
in the value of foreign currencies against the U.S. dollar.
Neuberger&Berman INTERNATIONAL Portfolio may also enter into forward
contracts for non-hedging purposes when N&B Management anticipates that a
foreign currency will appreciate or depreciate in value, but securities
denominated in that currency do not present attractive investment opportunities
and are not held in the Portfolio. The Portfolio may also engage in
proxy-hedging by using forward contracts in one currency to hedge against
fluctuations in the value of securities denominated in
57
<PAGE>
a different currency if N&B Management believes that there is a pattern of
correlation between the two currencies. Proxy-hedges may result in losses if the
currency used to hedge does not perform similarly to the currency in which the
securities are denominated.
PUT AND CALL OPTIONS ON FOREIGN CURRENCIES, SECURITIES, AND SECURITIES
INDICES. Neuberger&Berman INTERNATIONAL Portfolio may purchase and write put and
call options on foreign currencies to protect against declines in the dollar
value of foreign portfolio securities and against increases in the U.S. dollar
cost of foreign securities to be acquired. The Portfolio may also use options on
foreign currencies to proxy-hedge. In addition, the Portfolio may purchase put
and call options on currencies for non-hedging purposes when N&B Management
expects that a currency will appreciate or depreciate in value, but securities
denominated in that currency do not present attractive investment opportunities
and are not held in the Portfolio. Options on foreign currencies may be traded
on U.S. or foreign exchanges or over-the-counter. Options on foreign currencies
which are traded in the over-the-counter market may be considered illiquid and
subject to the restriction on illiquid securities.
To realize greater income than would be realized on portfolio securities
transactions alone, Neuberger&Berman INTERNATIONAL Portfolio may purchase and
write put and call options on any securities in which it may invest or options
on any securities index based on securities in which the Portfolio may invest.
The Portfolio will not write a call option on a security or currency unless
it owns the underlying security or currency or has the right to obtain it at no
additional cost. The Portfolio pays brokerage commissions or spreads in
connection with its options transactions, as well as for purchases and sales of
underlying securities or currencies. The use of options could result in
significant increases in the Portfolio's turnover rate.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. Neuberger&Berman
INTERNATIONAL Portfolio may enter into futures contracts on currencies, debt
securities, interest rates, and securities indices and may purchase and sell
options on such contracts on both U.S. and foreign exchanges. The Portfolio may
engage in such transactions for hedging or non-hedging purposes. When the
Portfolio purchases or sells a futures contract it generally becomes obligated
to accept or make delivery of the currencies or securities underlying the
contract at a specified price at a specified future time. The obligations of the
parties under a futures contract are often closed out before the delivery date.
GENERAL RISKS OF OPTIONS, FUTURES AND FORWARD CONTRACTS. The primary risks
in using put and call options, futures contracts, options on futures contracts,
and forward contracts ("Financial Instruments") are (1) imperfect correlation or
no correlation between changes in market value of the securities or currencies
held by a Portfolio and the prices of Financial Instruments; (2) possible lack
of a liquid secondary market for Financial Instruments and the resulting
inability to close out Financial
58
<PAGE>
Instruments when desired; (3) the fact that use of Financial Instruments is a
highly specialized activity that involves skills, techniques, and risks
(including price volatility and a high degree of leverage) different from those
associated with selection of a Portfolio's securities; and (4) the fact that,
although use of Financial Instruments for hedging purposes can reduce the risk
of loss, they also can reduce the opportunity for gain, or even result in
losses, by offsetting favorable price movements in hedged investments. When a
Portfolio uses Financial Instruments, the Portfolio will place cash or
appropriate liquid securities in a segregated account, or will "cover" its
position, to the extent required by SEC staff policy. Another risk of Financial
Instruments is the possible inability of a Portfolio to purchase or sell a
security at a time that would otherwise be favorable for it to do so, or the
possible need for a Portfolio to sell
a security at a disadvantageous time, due to its need to maintain cover or to
segregate securities in connection with its use of Financial Instruments. Losses
that may arise from certain futures transactions are potentially unlimited.
SHORT SALES. Neuberger&Berman INTERNATIONAL Portfolio may attempt to limit
exposure to a possible decline in the market value of portfolio securities
through short sales of securities that N&B Management believes possess
volatility characteristics similar to those being hedged. The Portfolio also may
use short sales in an attempt to realize gain. To effect a short sale, the
Portfolio borrows a security from a brokerage firm to make delivery to the
buyer. The Portfolio then is obligated to replace the borrowed security by
purchasing it at the market price at the time of replacement. Until the security
is replaced, the Portfolio is required to pay the lender any dividends and may
be required to pay a premium or interest.
Neuberger&Berman INTERNATIONAL Portfolio will realize a gain if the security
declines in price between the date of the short sale and the date on which the
Portfolio replaces the borrowed security. The Portfolio will incur a loss if the
price of the security increases between those dates. The amount of any gain will
be decreased, and the amount of any loss increased, by the amount of any premium
or interest the Portfolio is required to pay in connection with a short sale. A
short position may be adversely affected by imperfect correlation between
movements in the price of the securities sold short and the securities being
hedged.
Neuberger&Berman INTERNATIONAL Portfolio also may make short sales against-
the-box, in which it sells securities short only if it owns or has the right to
obtain without payment of additional consideration an equal amount of the same
type of securities sold.
FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. In a when-issued or forward
commitment transaction, Neuberger&Berman INTERNATIONAL Portfolio commits to
purchase securities at a future date (generally within two months) and pays for
the securities when they are delivered. If the seller fails to complete the
sale, the Portfolio may lose the opportunity to obtain a favorable price.
When-issued securities
59
<PAGE>
or securities subject to a forward commitment may decline or increase in value
during the period from the Portfolio's investment commitment to the settlement
of the purchase, which may magnify fluctuations in the Fund's NAV.
REPURCHASE AGREEMENTS/SECURITIES LOANS. In a repurchase agreement, a
Portfolio buys a security from a Federal Reserve member bank (or, in the case of
Neuberger&Berman INTERNATIONAL Portfolio, also a foreign bank or a U.S. branch
or agency of a foreign bank) or a securities dealer and simultaneously agrees to
sell it back at a higher price, at a specified date, usually less than a week
later. The underlying securities must fall within the Portfolio's investment
policies and limitations. Each Portfolio also may lend portfolio securities to
banks, brokerage firms, or institutional investors to earn income. Costs,
delays, or losses could result if the selling party to a repurchase agreement or
the borrower of portfolio securities becomes bankrupt or otherwise defaults. N&B
Management monitors the creditworthiness of sellers and borrowers.
REVERSE REPURCHASE AGREEMENTS. Neuberger&Berman INTERNATIONAL Portfolio may
enter into reverse repurchase agreements. In such a transaction, the Portfolio
sells a security to a bank or securities dealer and simultaneously agrees to
repurchase it at a higher price on a specific date. The Portfolio will place
cash or appropriate liquid securities in a segregated account to cover its
obligations under reverse repurchase agreements. Such transactions may increase
fluctuations in the Fund's NAV and may be viewed as a form of leverage.
OTHER INVESTMENTS. Although each Portfolio invests primarily in common
stocks, when market conditions warrant it may invest in preferred stocks,
securities convertible into or exchangeable for common stocks, U.S. Government
and Agency Securities, investment grade debt securities, or money market
instruments, or may retain assets in cash or cash equivalents.
"Investment grade" debt securities are those receiving one of the four
highest ratings from Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's ("S&P"), or another nationally recognized statistical rating organization
("NRSRO") or, if unrated by any NRSRO, deemed comparable by N&B Management to
such rated securities ("Comparable Unrated Securities"). Securities rated by
Moody's in its fourth highest category (Baa) or Comparable Unrated Securities
may be deemed to have speculative characteristics. The value of the fixed income
securities in which a Portfolio may invest is likely to decline in times of
rising market interest rates. Conversely, when rates fall, the value of a
Portfolio's fixed income investments is likely to rise.
U.S. Government Securities are obligations of the U.S. Treasury backed by the
full faith and credit of the United States. U.S. Government Agency Securities
are issued or
60
<PAGE>
guaranteed by U.S. Government agencies or by instrumentalities of the U.S.
Government, such as the Government National Mortgage Association, Fannie Mae
(formerly, Federal National Mortgage Association), Freddie Mac (formerly,
Federal Home Loan Mortgage Corporation), Student Loan Marketing Association
(commonly known as "Sallie Mae"), and Tennessee Valley Authority. Some U.S.
Government Agency Securities are supported by the full faith and credit of the
United States, while others may be supported by the issuer's ability to borrow
from the U.S. Treasury, subject to the Treasury's discretion in certain cases,
or only by the credit of the issuer. U.S. Government Agency Securities include
U.S. Government Agency mortgage-backed securities. The market prices of U.S.
Government and Agency Securities are not guaranteed by the Government.
Neuberger&Berman SOCIALLY RESPONSIVE Portfolio may invest up to 20% of its
net assets in convertible securities. A convertible security is a bond,
debenture, note, preferred stock, or other security that may be converted into
or exchanged for a prescribed amount of common stock of the same or a different
issuer within a particular period of time at a specified price or formula.
Convertible securities generally have features of both common stocks and debt
securities. Neuberger& Berman SOCIALLY RESPONSIVE Portfolio does not intend to
purchase any convertible securities that are not investment grade.
Neuberger&Berman INTERNATIONAL Portfolio may invest in domestic and foreign
debt securities of any rating, including those rated below investment grade and
Comparable Unrated Securities. Neuberger&Berman PARTNERS Portfolio may invest up
to 15% of its net assets in debt securities rated below investment grade and
Comparable Unrated Securities. Such securities may be considered predominantly
speculative, although, as debt securities, they generally have priority over
equity securities of the same issuer and are generally better secured. Debt
securities in the lowest rating categories may involve a substantial risk of
default or may be in default. Changes in economic conditions or developments
regarding the individual issuer are more likely to cause price volatility and
weaken the capacity of the issuer of such securities to make principal and
interest payments than is the case for higher-grade debt securities. An economic
downturn affecting the issuer may result in an increased incidence of default.
The market for lower-rated securities may be thinner and less active than for
higher-rated securities. Neuberger&Berman INTERNATIONAL Portfolio and
Neuberger&Berman PARTNERS Portfolio will invest in such securities only when N&B
Management concludes that the anticipated return to the Portfolio on such an
investment warrants exposure to the additional level of risk. A further
description of Moody's and S&P's ratings is included in the Appendix to the SAI.
Neuberger&Berman INTERNATIONAL Portfolio may invest in indexed securities
whose values are linked to currencies, interest rates, commodities, indices, or
other financial indicators. Most indexed securities are short- to
intermediate-term fixed
61
<PAGE>
income securities whose values at maturity or interest rates rise or fall
according to the change in one or more specified underlying instruments. The
value of indexed securities may increase or decrease if the underlying
instrument appreciates, and they may have return characteristics similar to
direct investment in the underlying instrument or to one or more options on the
underlying instrument. Indexed securities may be more volatile than the
underlying instrument itself.
62
<PAGE>
USE OF JOINT PROSPECTUS AND STATEMENT
OF ADDITIONAL INFORMATION
Each Fund and its corresponding Portfolio acknowledges that it is solely
responsible for all information or lack of information about that Fund and
Portfolio in this Prospectus or in the SAI, and no other Fund or Portfolio is
responsible therefor. The trustees of the Trust and of the Managers Trusts have
considered this factor in approving each Fund's use of a single combined
Prospectus and combined SAI.
63
<PAGE>
DIRECTORY
INVESTMENT MANAGER, ADMINISTRATOR,
AND DISTRIBUTOR
Neuberger&Berman Management Incorporated
605 Third Avenue 2nd Floor
New York, NY 10158-0180
800-877-9700
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
64
<PAGE>
FUNDS ELIGIBLE FOR EXCHANGE
EQUITY FUNDS
Neuberger&Berman Focus Fund
Neuberger&Berman Guardian Fund
Neuberger&Berman International Fund
Neuberger&Berman Manhattan Fund
Neuberger&Berman Partners Fund
Neuberger&Berman Socially Responsive Fund
MONEY MARKET FUNDS
Neuberger&Berman Government Money Fund
Neuberger&Berman Cash Reserves
BOND FUNDS
Neuberger&Berman Limited Maturity Bond Fund
Neuberger&Berman High Yield Bond Fund
MUNICIPAL FUNDS
Neuberger&Berman Municipal Money Fund
Neuberger&Berman Municipal Securities Trust
Neuberger&Berman, Neuberger&Berman Management Inc., and the above-named Funds
are registered trademarks or service marks of Neuberger&Berman, LLC or
Neuberger&Berman Management Inc.
- -C- 1997 Neuberger&Berman Management Incorporated.
65
<PAGE>
NEUBERGER&BERMAN MANAGEMENT INC.-Registered Trademark-
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
www.nbfunds.com
This wrapper is not part of the Prospectus.
[LOGO] PRINTED ON RECYCLED PAPER NBEP00030398
<PAGE>
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
Second Floor
Washington, D.C. 20036-1800
(202) 778-9000
April 28, 1998
EDGAR FILING
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Neuberger & Berman Equity Funds:
Neuberger & Berman Focus Fund
Neuberger & Berman Genesis Fund
Neuberger & Berman Guardian Fund
Neuberger & Berman International Fund
Neuberger & Berman Manhattan Fund
Neuberger & Berman Partners Fund
Neuberger & Berman Socially Responsive Fund
1933 Act File No. 002-11357
1940 Act File No. 811-00582
---------------------------
Dear Sir or Madam:
Transmitted herewith for filing pursuant to Rule 497(e) under the
Securities Act of 1933, as amended, is a supplement dated May 4, 1998 to the
current prospectus of the above-referenced series of Neuberger & Berman Equity
Funds (each a "Fund"), dated December 15, 1997. This supplement contains
disclosure regarding the closing of Neuberger & Berman Genesis Fund to new
investors, the investment program of Neuberger & Berman Manhattan Portfolio and
computer systems in the Year 2000. A supplement containing identical disclosure
was previously filed on March 12, 1998. The purpose of this filing is to
incorporate the previously filed supplement into the text of the Funds'
prospectus and to make certain other clarifying changes.
Please contact me at (202) 778-9342 if you have any questions about
this filing.
Sincerely,
/s/ Beth A. Stekler
-----------------------
Beth A. Stekler
Enclosures
