<PAGE>
As filed with the Securities and Exchange Commission on May 3, 1996
File Nos. 2-84012; 811-3752
-----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 37 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 39 /X/
------------------------
THE MANAGERS FUNDS
(Exact name of Registrant as Specified in Charter)
40 Richards Avenue, Norwalk, Connecticut 06854
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (203) 857-5321
copy to:
Donald S. Rumery Joel H. Goldberg, Esq.
The Managers Funds, L.P. Shereff, Friedman, Hoffman & Goodman, LLP
40 Richards Avenue 919 Third Avenue
Norwalk, Connecticut 06854 New York, New York 10022
(Name and Address of Agent for Service of Process)
It is proposed that this filing will become effective (check appropriate box)
/X/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment
<PAGE>
Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
Registrant has previously elected to register an indefinite number of its
shares of beneficial interest. The Registrant filed a notice under such Rule
for its fiscal year ended December 31, 1995 (November 30, 1995 with respect
to Managers Money Market Fund) on February 26, 1996.
The Money Market Portfolio has also executed this Registration Statement.
<PAGE>
THE MANAGERS FUNDS
POST-EFFECTIVE AMENDMENT NO. 37
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 481(A))
<TABLE>
<CAPTION>
Form N-1A Item Location
- --------------------------------------------- --------
<S> <C>
PART A -- PROSPECTUS
Item 1. Cover Page. . . . . . . . . . Cover Page
Item 2. Synopsis. . . . . . . . . . . Illustrative Expense Information;
Summary
Item 3. Condensed Financial
Information . . . . . . . . . Illustrative Expense Information;
Financial Highlights
Item 4. General Description of
Registrant. . . . . . . . . . Summary; Investment Objectives,
Policies and Restrictions (Equity
Funds, Income Funds); Investment Objectives and Policies
(Money Market Fund); Certain
Investment Techniques and
Associated Risks; Additional Investment Information and
Risk Factors (Money Maket Fund); Investment Restrictions
(Money Market Fund); Portfolio Turnover
Item 5. Management of the Fund. . . . Management of the Funds (Equity Funds and Income Funds);
Management of the Fund and Portfolio (Money Market Fund);
Portfolio Transactions and Brokerage; Special Information
Concerning Hub and Spoke (Money Market Fund)
Item 5A. Management's Discussion of
Fund Performance. . . . . . . Not Applicable
Item 6. Capital Stock and
Other Securities. . . . . . . Purchase and Redemption of Fund
Shares; Description of Shares,
Voting Rights and Liabilities; Tax
Information
Item 7. Purchase of Securities
Being Offered . . . . . . . . Purchase and Redemption of Fund
Shares
Item 8. Redemption or Repurchase. . . Purchase and Redemption of Fund
Shares
Item 9. Pending Legal Proceedings . . Description of Shares, Voting Rights and Liabilities
<PAGE>
Form N-1A Item Location
- --------------------------------------------- --------
PART B -- STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page. . . . . . . . . . Cover Page
Item 11. Table of Contents . . . . . . Table of Contents
Item 12. General Information and
History . . . . . . . . . . . Other Information
Item 13. Investment Objectives
and Policies. . . . . . . . . Investment Restrictions; Investment Objectives and Policies
(Money Market Fund); Portfolio
Turnover; Other Information
Item 14. Management of the Fund. . . . Trustees and Officers
Item 15. Control Persons and
Principal Holders
of Securities . . . . . . . . Trustees and Officers; Control
Persons and Principal Holders of
Securities
Item 16. Investment Advisory
and Other Services. . . . . . Management of the Funds; Fund Management
Agreement; Asset Manager Profiles; Investment Advisor
(Money Market Fund)
Item 17. Brokerage Allocation and
Other Practices . . . . . . . Portfolio Securities Transactions
Item 18. Capital Stock and
Other Securities. . . . . . . Control Persons and Principal
Holders of Securities
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered . . . . . . . . Net Asset Value
Item 20. Tax Status. . . . . . . . . . Tax Information
Item 21. Underwriters. . . . . . . . . Administrative Services; Distribution
Agreements; Portfolio Administrator and Distributor
(Money Market Fund)
Item 22. Calculation of Performance
Data . . . . . . . . . . . . Performance Information; Performance Data (Money
Market Fund)
Item 23. Financial Statements. . . . . Financial Statements
</TABLE>
<PAGE>
The following are incorporated by reference to Post Effective Amendment #36
of the Registrant as filed with the Securities and Exchange Commission on
March 29, 1996 (File Nos. 2-84012; 811-3752):
The Managers Funds Equity Funds Prospectus, dated April 1, 1996
The Managers Funds Income Funds Prospectus, dated April 1, 1996
The Managers Funds Statement of Additional Information, dated April 1, 1996
<PAGE>
THE MANAGERS FUNDS
MONEY MARKET FUND PROSPECTUS
DATED MAY 1, 1996
MANAGERS MONEY MARKET FUND -- (the "Money Market Fund" or the "Fund") seeks
to maximize current income and maintain a high level of liquidity. It is
designed for investors who seek to preserve capital and earn current income from
a portfolio of high quality money market instruments.
UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIO OF SECURITIES, THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY
INVESTING ALL OF ITS INVESTABLE ASSETS IN THE MONEY MARKET PORTFOLIO (THE
"PORTFOLIO"), A DIVERSIFIED OPEN-END MANAGEMENT INVESTMENT COMPANY HAVING THE
SAME INVESTMENT OBJECTIVE AS THE FUND. THE FUND INVESTS IN THE PORTFOLIO THROUGH
A TWO-TIER MASTER/FEEDER STRUCTURE, SOMETIMES KNOWN AS HUB AND SPOKE-REGISTERED
TRADEMARK-. HUB AND SPOKE IS A REGISTERED SERVICE MARK OF SIGNATURE FINANCIAL
GROUP, INC. ("SIGNATURE"). SEE SPECIAL INFORMATION CONCERNING HUB AND SPOKE ON
PAGE 6.
This Prospectus sets forth concisely the information concerning the Fund that
a prospective investor ought to know before investing. It should be retained for
future reference. The Trust has filed with the Securities and Exchange
Commission a Statement of Additional Information ("SAI"), dated April 1, 1996,
which contains more detailed information about the Trust and the Fund and is
incorporated into this Prospectus by reference. A copy of the SAI may be
obtained without charge by contacting the Trust at 40 Richards Avenue, Norwalk,
Connecticut 06854, (800) 835-3879 or (203) 857-5321.
INVESTMENTS IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, THE U.S. GOVERNMENT, MORGAN GUARANTY TRUST COMPANY OF NEW YORK
("MORGAN") OR ANY OTHER BANK. SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN THE FUND IS SUBJECT TO RISK THAT MAY
CAUSE THE VALUE OF THE INVESTMENT TO FLUCTUATE, AND WHEN THE INVESTMENT IS
REDEEMED, THE VALUE MAY BE HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY INVESTED
BY THE INVESTOR. ALTHOUGH THE FUND SEEKS TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE, THERE CAN BE NO ASSURANCE THAT IT WILL BE ABLE TO CONTINUE TO
DO SO.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
ILLUSTRATIVE EXPENSE INFORMATION
The following tables provide the investor with information concerning the
aggregate annual operating expenses of the Money Market Fund and the Portfolio.
Investors incur no sales load on purchases of shares or on reinvested dividends
and distributions, nor any deferred sales load upon redemption. There are no
redemption fees or Rule 12b-1 fees.
The Trustees of the Trust believe that at current asset levels the aggregate
per share expenses of the Fund and the Portfolio will be approximately equal to
and may be less than the expenses that the Fund would incur if it retained the
services of an investment adviser and invested its assets directly in portfolio
securities.
ANNUAL OPERATING EXPENSES*:
Total
Management Other Operating
Fee Expenses Expenses
---------- -------- ---------
0.13% 0.11% 0.24%**
* EXPENSES ARE EXPRESSED AS A PERCENTAGE OF AVERAGE NET ASSETS OF THE FUND
FOR ITS MOST RECENT FISCAL YEAR, ADJUSTED ASSUMING (i) THE FUND HAD
INVESTED ALL OF ITS ASSETS IN THE PORTFOLIO FOR THE ENTIRE YEAR AND (ii)
THE FUND ADMINISTRATOR HAD LIMITED FUND LEVEL EXPENSES TO 0.05% AFTER ANY
APPLICABLE EXPENSE REIMBURSEMENTS. SEE "MANAGEMENT OF THE FUND AND THE
PORTFOLIO."
** TOTAL OPERATING EXPENSES REFLECT THE WAIVER OF ALL OF THE FUND'S
ADMINISTRATIVE FEES AND AN UNDERTAKING BY THE MANAGERS FUNDS, L.P. (THE
"FUND ADMINISTRATOR") TO ABSORB ALL FUND LEVEL EXPENSES IN EXCESS OF 0.05%
OF THE FUND'S AVERAGE DAILY NET ASSETS AT LEAST THROUGH MAY 31, 1996. IN
THE ABSENCE OF SUCH WAIVER AND REIMBURSEMENTS, OTHER EXPENSES AND TOTAL
OPERATING EXPENSES, BASED ON FISCAL 1995 FUND AVERAGE NET ASSETS OF $13
MILLION AND PORTFOLIO AVERAGE NET ASSETS OF $2.9 BILLION, WOULD BE 0.80%
AND 0.93%, RESPECTIVELY.
THESE FEE WAIVERS AND EXPENSE LIMITATIONS MAY BE MODIFIED OR TERMINATED AT
ANY TIME AFTER MAY 31, 1996 AT THE SOLE DISCRETION OF THE FUND ADMINISTRATOR.
SHAREHOLDERS WILL BE NOTIFIED OF ANY SUCH MODIFICATION OR TERMINATION ON OR
ABOUT THE TIME IT BECOMES EFFECTIVE.
EXAMPLES
An investor would pay the following expenses on a $1,000 investment in the
Fund over various time periods assuming (1) a 5% annual rate of return, (2)
redemption at the end of each time period, and (3) continuation of any currently
applicable waivers of management fees. As noted above, the Fund does not charge
any redemption fees or deferred sales loads of any kind.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
1 year 3 years 5 years 10 years
------ ------- ------- --------
Money Market Fund . . . $3 $8 $14 $32
The above expense table is designed to assist investors in understanding the
various direct and indirect costs and expenses that investors in the Fund bear.
The fees and expenses included in Other Expenses include the fees paid to the
2
<PAGE>
Fund Administrator under the Administration and Shareholder Services Agreement,
the fees paid to Morgan under the Portfolio's Administrative Services Agreement,
the fees paid to Signature Broker-Dealer Services Inc. ("SBDS") under the
Portfolio's Administration Agreement, the fees paid to Pierpont Group, Inc.
under the Portfolio Fund Services Agreement, the fees paid to State Street Bank
and Trust Company as custodian and transfer agent, and other usual and customary
expenses of the Fund and the Portfolio. For a more detailed description of
contractual fee arrangements and of the fees and expenses included in Other
Expenses, see "Management of the Fund and the Portfolio" and "Administration and
Shareholder Servicing; Distributor; Transfer Agent."
SUMMARY
GENERAL DESCRIPTION OF THE TRUST AND THE FUNDS
The Managers Funds (the "Trust") is a no-load, open-end, management
investment company organized as a Massachusetts business trust, currently
composed of the following ten separate series:
MANAGERS CAPITAL APPRECIATION FUND MANAGERS SHORT AND INTERMEDIATE BOND FUND
MANAGERS SPECIAL EQUITY FUND MANAGERS INTERMEDIATE MORTGAGE FUND
MANAGERS INCOME EQUITY FUND MANAGERS GLOBAL BOND FUND
MANAGERS INTERNATIONAL EQUITY FUND MANAGERS BOND FUND
MANAGERS SHORT GOVERNMENT FUND MANAGERS MONEY MARKET FUND
This Prospectus relates only to the Money Market Fund. A Prospectus for the
other series (the "Equity Funds" and the "Income Funds") can be obtained by
calling (800) 835-3879 or (203) 857-5321.
Each of the Funds has distinct investment objectives and strategies. There
is, of course, no assurance that a Fund will achieve its investment objectives.
PURCHASE AND REDEMPTION OF SHARES
The minimum initial investment in the Fund is $2,000 ($500 for IRAs and IRA
rollovers, $250 for spousal IRAs). For information on eligible investors and how
to purchase and redeem shares of the Fund, see "Purchase and Redemption of Fund
Shares."
FINANCIAL HIGHLIGHTS
The following table presents financial highlights for the Money Market Fund,
for the last eleven fiscal periods, through November 30, 1995. The information
has been derived from the financial statements of the Trust which have been
audited by independent public accountants Coopers & Lybrand L.L.P. for the years
ended December 31, 1993 and December 31, 1994, and the period January 1, 1995 to
November 30, 1995, and by other accountants prior to 1993, and should be read in
conjunction with such financial statements. See "Financial Statements" in the
SAI.
3
<PAGE>
<TABLE>
<CAPTION>
Managers Money Market Fund
Financial Highlights
For a share of beneficial interest outstanding throughout each period
Eleven months
ended Year ended December 31,
November 30, --------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- -------- -------- -------
Income from Investment
Operations:
Net investment income(d) 0.044 0.035 0.022 0.030 0.054 0.081 0.90 0.075
Net realized and unrealized
gain on investments -- -- -- -- 0.003 -- -- 0.010
-------- -------- -------- -------- -------- -------- -------- ------
Total from investment
operations 0.044 0.035 0.022 0.030 0.057 0.081 (0.090) 0.085
-------- -------- -------- -------- -------- -------- ------- ------
Less Distributions to
Shareholders from:
Net investment income (0.044) (0.035) (0.022) (0.030) (0.054) (0.081) (0.090) (0.075)
Net realized gain on
investments -- -- -- -- (0.003) -- -- (0.010)
-------- -------- -------- -------- -------- -------- -------- -------
Total distributions
to shareholders (0.044) (0.035) (0.022) (0.030) (0.057) (0.081) (0.090) (0.085)
-------- -------- -------- -------- -------- -------- -------------------
Net Asset Value, End
of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- --------
- -------------------------------------------------------------------------------------------------------------------
Total Return (c) 4.51% 3.61% 2.48% 3.12% 5.35% 7.66% 8.73% 7.25%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Ratio of net expenses to
average net assets(d) 1.13%(b) 0.73% 0.74% 0.67% 0.57% 0.27% 0.16% 0.16%
Ratio of net investment income
to average net assets(d) 4.85%(b) 3.84% 2.48% 3.05% 5.69% 8.09% 9.12% 7.35%
Net assets at end of period
(000's omitted) $11,072 $17,269 $7,368 $9,320 $4,868 $14,944 $83,743 $86,567
- -------------------------------------------------------------------------------------------------------------------
Expense Waiver(a)
- --------------
Ratio of total expenses to
average net assets 1.18%(b) 1.03% 0.99% 0.98% 1.06% 0.32% N/A N/A
Ratio of net investment income
to average net assets 4.80%(b) 3.54% 2.23% 2.74% 5.21% 8.04% N/A N/A
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
4
<PAGE>
Seven months
ended Year ended May 31,
December 31, ------------------------
1987 1987 1986
Net Asset Value, Beginning --------- -------- -------
of Period $ 1.000 $ 1.000 $ 1.000
--------- -------- -------
Income from Investment
Operations:
Net investment income(d) 0.042 0.063 0.070
Net realized and unrealized
gain on investments 0.001 0.001 --
-------- -------- -------
Total from investment
operations .043 0.064 0.070
-------- -------- -------
Less Distributions to
Shareholders from:
Net investment income (0.42) (0.63) (0.070)
Net realized gain on
investments (0.001) (0.001) --
------- -------- ------
Total distributions
to shareholders (0.043) (0.064) (0.070)
-------- -------- --------
Net Asset Value, End
of Period $ 1.000 $ 1.000 $ 1.000
-------- -------- --------
-------- -------- --------
- --------------------------------------------------------------------------
Total Return (c) 3.81% 5.83% 7.25%
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Ratio of net expenses to
average net assets(d) 0.17%(b) 0.15% 0.18%
Ratio of net investment income
to average net assets(d) 6.99% 6.19% 7.67%
Net assets at end of period
(000's omitted) $103,041 $105,594 $70,869
- --------------------------------------------------------------------------
Expense Waiver(a)
- --------------
Ratio of total expenses to
average net assets N/A N/A N/A
Ratio of net investment income
to average net assets N/A N/A N/A
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
</TABLE>
(a) Ratio information assuming no waiver of investment advisory and management
fees and/or administrative fees in effect for the period presented, if
applicable.
(b) Annualized.
(c) The total returns would have been lower had certain expenses not been
reduced during the periods shown.
(d) Does not reflect investment advisory and management fees paid directly to
the Manager for periods prior to May 1990.
5
<PAGE>
SPECIAL INFORMATION CONCERNING HUB AND SPOKE-REGISTERED TRADEMARK-
The Portfolio uses certain proprietary rights, know-how and financial services
referred to as Hub and Spoke. Hub and Spoke is a registered service mark of
Signature.
Unlike other mutual funds which directly acquire and manage their own
portfolio of securities, the Fund is an open-end management investment company
which seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, a separate registered investment company
with the same investment objective as the Fund. The investment objective of the
Fund or Portfolio may be changed only with the approval of the respective
holders of the outstanding voting securities of the Fund and the Portfolio, as
the case may be. Shareholders of the Fund shall receive 30 days prior written
notice before any such change. The use of Hub and Spoke has been approved by the
shareholders of the Fund. The Hub and Spoke investment fund structure has been
developed relatively recently, so shareholders should carefully consider this
investment approach.
In addition to selling a beneficial interest to the Fund, the Portfolio may
sell beneficial interests to other mutual funds or institutional investors. Such
investors will invest in the Portfolio on the same terms and conditions and will
pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio may sell shares of their own using a
different pricing structure than the Fund. Such different pricing structures may
result in differences in returns experienced by investors in other funds that
invest in the Portfolio. Such differences in returns are not uncommon and are
present in other mutual fund structures. Information concerning other holders of
interests in the Portfolio is available from the Fund Administrator at (800)835-
3879.
The Trust may withdraw the investment of the Fund from the Portfolio at any
time if the Board of Trustees of the Trust determines that it is in the best
interests of the Fund to do so. Upon any such withdrawal, the Board of Trustees
would consider what action might be taken, including the investment of all the
assets of the Fund in another pooled investment entity having the same
investment objective and restrictions as the Fund or the retaining of an
investment adviser to manage the Fund's assets in accordance with the investment
policies described below with respect to the Portfolio.
Certain changes in the Portfolio's investment objective, policies or
restrictions, or a failure by the Fund's shareholders to approve a change in the
Portfolio's investment objective or restrictions, may require withdrawal of the
Fund's interest in the Portfolio. Any such withdrawal could result in a
distribution in kind of portfolio securities (as opposed to a cash distribution)
from the Portfolio, which may or may not be readily marketable. The distribution
in kind may result in the Fund having a less diversified portfolio of
investments or adversely affect the Fund's liquidity, and the Fund could incur
brokerage, tax or other charges in converting the securities to cash.
Notwithstanding the above, there are other means for meeting shareholder
redemption requests, such as borrowing.
6
<PAGE>
Smaller funds investing in the Portfolio may be materially affected by the
actions of larger funds investing in the Portfolio. For example if a large fund
withdraws from the Portfolio, the remaining funds may subsequently experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, because the Portfolio would become smaller, it may become less
diversified, resulting in potentially increased portfolio risk (however, these
possibilities also exist for traditionally structured funds which have large or
institutional investors who withdraw from a fund). Also, funds with a greater
pro rata ownership in the Portfolio could have effective voting control of the
operations of the Portfolio. Except as permitted by the Securities and Exchange
Commission, whenever the Fund is requested to vote on matters pertaining to the
Portfolio, the Trust will hold a meeting of shareholders of the Fund and will
cast all of its votes proportionately as instructed by the Fund's shareholders.
The Trust will vote the shares held by Fund shareholders who do not give voting
instructions in the same proportion as the shares of Fund shareholders who do
give voting instructions. Shareholders of the Fund who do not vote will have no
impact on the outcome of such matters.
For more information about the Portfolio's investment objective, policies and
restrictions, see "Investment Objective and Policies," "Additional Information
and Risk Factors," and "Investment Restrictions." For more information about the
Portfolio's management and expenses, see "Management of the Fund and the
Portfolio."
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of each of the Fund and the Portfolio is described
below, together with the policies each employs in its efforts to achieve this
objective. Additional information about the investment policies of the Fund and
the Portfolio appears in the SAI under "Investment Objective and Policies."
There can be no assurance that the objective of the Fund or the Portfolio will
be achieved.
The Fund's investment objective is to maximize current income and maintain a
high level of liquidity. The Fund is designed for investors who seek to preserve
capital and earn current income from a portfolio of high quality money market
instruments. The Fund attempts to achieve its objective by investing all of its
investable assets in The Money Market Portfolio, a diversified open-end
management investment company having the same investment objective as the Fund.
The Portfolio seeks to achieve its investment objective by maintaining a
dollar-weighted average portfolio maturity of not more than 90 days and by
investing in high quality U.S. dollar-denominated securities which have
effective maturities of not more than thirteen months. The Portfolio's ability
to achieve its objective is affected by its high quality standards (discussed
below).
UNITED STATES GOVERNMENT OBLIGATIONS. The Portfolio may invest in obligations
issued or guaranteed by the U.S. Government and backed by the full faith and
credit of the United States. These securities include Treasury securities,
obligations of the Government National Mortgage Association, the Farmers
7
<PAGE>
Home Administration and the Export Import Bank. The Portfolio may also invest in
obligations issued or guaranteed by U.S. Government agencies or
instrumentalities where the Portfolio must look principally to the issuing or
guaranteeing agency for ultimate repayment; some examples of agencies or
instrumentalities issuing these obligations are the Federal Farm Credit System,
the Federal Home Loan Banks and the Federal National Mortgage Association.
BANK OBLIGATIONS. The Portfolio may invest in high quality U.S.
dollar-denominated negotiable certificates of deposit, time deposits and
bankers' acceptances of (i) banks, savings and loan associations and savings
banks which have more than $2 billion in total assets and are organized under
U.S. federal or state law, (ii) foreign branches of these banks or of foreign
banks of equivalent size (Euros) and (iii) U.S. branches of foreign banks of
equivalent size (Yankees). The Portfolio may also invest in obligations of
international banking institutions designated or supported by national
governments to promote economic reconstruction, development or trade between
nations (e.g., the European Investment Bank, the Inter-American Development
Bank, or the World Bank). These obligations may be supported by appropriated
but unpaid commitments of their member countries, and there is no assurance
these commitments will be undertaken or met in the future.
COMMERCIAL PAPER; BONDS. The Portfolio may invest in high quality commercial
paper and corporate bonds issued by U.S. corporations. The Portfolio may also
invest in bonds and commercial paper of foreign issuers if the obligation is
U.S. dollar-denominated and is not subject to foreign withholding tax.
ASSET-BACKED SECURITIES. The Portfolio may also invest in securities
generally referred to as asset-backed securities, which directly or indirectly
represent a participation interest in, or are secured by and payable from, a
stream of payments generated by particular assets such as motor vehicle or
credit card receivables. Asset-backed securities provide periodic payments that
generally consist of both interest and principal payments. Consequently, the
life of an asset-backed security varies with the prepayment experience of the
underlying debt instruments.
QUALITY INFORMATION. The Portfolio will limit its investments to those
securities which, in accordance with guidelines adopted by the Portfolio's
Trustees, present minimal credit risk. In addition, the Portfolio will not
purchase any security (other than a U.S. Government security) unless (i) it is
rated with the highest rating assigned to short-term debt by at least two
nationally recognized statistical rating organizations such as Moody's Investors
Services, Inc. ("Moody's") or Standard & Poor's Corporation ("Standard &
Poor's"), (ii) it is rated by only one agency with the highest such rating, or
(iii) it is not rated and is determined to be of comparable quality.
Determinations of comparable quality shall be made in accordance with procedures
established by the Portfolio's Trustees. For a more detailed discussion of
applicable quality requirements, see "Investment Objective and Policies" in the
SAI. These standards must be satisfied at the time an investment is made. If the
quality of the investment later declines
8
<PAGE>
below the quality required for purchase, the Portfolio shall dispose of the
investment, subject in certain circumstances to a finding by the Portfolio's
Trustees that disposing of the investment would not be in the Portfolio's best
interest.
The Portfolio may also invest in securities on a when-issued or delayed
delivery basis and in certain privately placed securities. The Portfolio may
also enter into repurchase and reverse repurchase agreements and loan its
portfolio securities.
ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Portfolio may
purchase securities on a when-issued or delayed delivery basis. Delivery of and
payment for these securities may take as long as a month or more after the date
of the purchase commitment. The value of these securities is subject to market
fluctuation during this period and no interest accrues to the Portfolio until
settlement. At the time of settlement, a when-issued security may be valued
at less than its purchase price. The Portfolio maintains with the custodian a
separate account with a segregated portfolio of securities in an amount at least
equal to these commitments. When entering into a when-issued or delayed delivery
transaction, the Portfolio will rely on the other party to consummate the
transaction; if the other party fails to do so, the Portfolio may be
disadvantaged. It is currently the policy of the Portfolio not to enter into
when-issued commitments exceeding in the aggregate 15% of the market value of
the Portfolio's total assets less liabilities other than the obligations created
by these commitments.
REPURCHASE AGREEMENTS. The Portfolio may engage in repurchase agreement
transactions with brokers, dealers or banks that meet the credit guidelines
established by the Portfolio's Trustees. In a repurchase agreement, the
Portfolio buys a security from a seller that has agreed to repurchase it at a
mutually agreed upon date and price, reflecting the interest rate effective for
the term of the agreement. The term of the agreement usually ranges from
overnight to one week. A repurchase agreement may be viewed as a fully
collateralized loan of money by the Portfolio to the seller. The Portfolio
always receives as collateral securities with a market value at least equal to
the purchase price plus accrued interest, and this value is maintained during
the term of the agreement. If the seller defaults and the collateral value
declines, the Portfolio might incur a loss. If bankruptcy proceedings are
commenced with respect to the seller, the Portfolio's realization upon the
disposition of collateral may be delayed or limited. Investments in certain
repurchase agreements and certain other investments which may be considered
illiquid are limited. See "Illiquid Investments; Privately Placed and other
Unregistered Securities" below.
SECURITIES LENDING. Subject to applicable investment restrictions, the
Portfolio is permitted to lend its securities in an amount up to 331/3% of the
value of the Portfolio's net assets. The Portfolio may lend its securities if
such loans are secured continuously by cash or equivalent collateral or by a
letter of credit in favor of the Portfolio at least equal at all times to 100%
of the market value of the securities loaned, plus accrued interest. While such
securities are on loan,
9
<PAGE>
the borrower will pay the Portfolio any income accruing thereon. Loans will be
subject to termination by the Portfolio in the normal settlement time, generally
three business days after notice, or by the borrower on one day's notice.
Borrowed securities must be returned when the loan is terminated. Any gain or
loss in the market price of the borrowed securities which occurs during the term
of the loan inures to the Portfolio and its respective investors. The Portfolio
may pay reasonable finders' and custodial fees in connection with a loan. In
addition, the Portfolio will consider all facts and circumstances, including the
creditworthiness of the borrowing financial institution, and the Portfolio will
not make any loans in excess of one year. The Portfolio will not lend its
securities to any officer, Trustee, Director, employee or other affiliate of the
Fund or Portfolio, Morgan, the Portfolio Administrator or the Distributor (each
as defined below under "Management of the Fund and the Portfolio"), unless
otherwise permitted by applicable law.
REVERSE REPURCHASE AGREEMENTS. The Portfolio is permitted to enter into
reverse repurchase agreements. In a reverse repurchase agreement, the Portfolio
sells a security and agrees to repurchase it at a mutually agreed upon date and
price, reflecting the interest rate effective for the term of the agreement. For
purposes of the Investment Company Act of 1940, it is considered a form of
borrowing by the Portfolio and, therefore, is a form of leverage. Leverage may
cause any gains or losses of the Portfolio to be magnified. For more
information, see "Investment Objective and Policies" in the SAI.
FOREIGN INVESTMENT INFORMATION. The Portfolio may invest in certain U.S.
dollar-denominated foreign securities. Investment in securities of foreign
issuers and in obligations of foreign branches of domestic banks involves
somewhat different investment risks from those affecting securities of U.S.
domestic issuers. There may be limited publicly available information with
respect to foreign issuers, and foreign issuers are not generally subject to
uniform accounting, auditing and financial standards and requirements comparable
to those applicable to domestic companies. The Portfolio may only invest in
foreign securities that are not subject to foreign withholding tax.
Investors should realize that the value of the Portfolio's investments in
foreign securities may be adversely affected by changes in political or social
conditions, diplomatic relations, confiscatory taxation, expropriation,
nationalization, limitation on the removal of funds or assets, or imposition of
(or change in) exchange control or tax regulations in those foreign countries.
In addition, changes in government administrations or economic or monetary
policies in the United States or abroad could result in appreciation or
depreciation of portfolio securities and could favorably or unfavorably affect
the Portfolio's operations. Furthermore, the economies of individual foreign
nations may differ from the U.S. economy, whether favorably or unfavorably, in
areas such as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payments position; it may
also be more difficult to obtain and enforce a judgment against a foreign
issuer. Any foreign
10
<PAGE>
investments made by the Portfolio must be made in compliance with U.S. and
foreign currency restrictions and tax laws restricting the amounts and types of
foreign investments.
ILLIQUID INVESTMENTS; PRIVATELY PLACED AND OTHER UNREGISTERED SECURITIES. The
Portfolio may not acquire any illiquid securities if, as a result thereof, more
than 10% of the market value of the Portfolio's net assets would be in illiquid
investments. Subject to this fundamental policy limitation, the Portfolio may
acquire investments that are illiquid or have limited liquidity, such as private
placements or investments that are not registered under the Securities Act of
1933 (the "1933 Act") and cannot be offered for public sale in the United States
without first being registered under the 1933 Act. An illiquid investment is any
investment that cannot be disposed of within seven days in the normal course of
business at approximately the amount at which it is valued by the Portfolio. The
price the Portfolio pays for illiquid securities or receives upon resale may be
lower than the price paid or received for similar securities with a more liquid
market. Accordingly the valuation of these securities will reflect any
limitations on their liquidity.
The Portfolio may also purchase Rule 144A securities sold to institutional
investors without registration under the 1933 Act. These securities may be
determined to be liquid in accordance with guidelines established by Morgan and
approved by the Trustees of the Portfolio. The Trustees of the Portfolio will
monitor Morgan's implementation of these guidelines on a periodic basis.
INVESTMENT RESTRICTIONS
The investment objective of the Fund and the Portfolio, together with the
investment restrictions described below and in the SAI, except as noted,
are deemed fundamental policies, i.e., they may be changed only by a "vote of
the holders of a majority of the outstanding voting securities" (as defined in
the 1940 Act) of the Fund and the Portfolio. The Fund has the same invest-
ment restrictions as the Portfolio, except that the Fund may invest all of its
investable assets in another open-end investment company with the same
investment objective and restrictions (such as the Portfolio). References below
to the Fund's investment restrictions also include the Portfolio's investment
restrictions.
As a diversified investment company, 75% of the assets of the Fund are subject
to the following fundamental limitations: (a) the Fund may not invest more than
5% of its total assets in the securities of any one issuer, except U.S.
Government securities, and (b) the Fund may not own more than 10% of the
outstanding voting securities of any one issuer. The Fund is subject to
additional non-fundamental requirements governing non-tax exempt money market
funds. These non-fundamental requirements generally prohibit the Fund from
investing more than 5% of its total assets in the securities of any single
issuer, except obligations of the U.S. Government, its agencies and
instrumentalities.
The Fund may not (i) acquire any illiquid securities if as a result more than
11
<PAGE>
10% of the market value of its net assets would be in investments which are
illiquid, (ii) enter into reverse repurchase agreements exceeding, together with
any permitted borrowings, one-third of the market value of its total assets,
less certain liabilities, (iii) borrow money, except from banks for
extraordinary or emergency purposes and then only in amounts up to 10% of the
value of the Fund's total assets, taken at cost at the time of borrowing, or
purchase securities while borrowings exceed 5% of its total assets; or mortgage,
pledge or hypothecate any assets except in connection with any such borrowings
in amounts up to 10% of the value of the Fund's net assets at the time of
borrowing; or (iv) invest more than 25% of its assets in any one industry,
except there is no percentage limitation with respect to investments in U.S.
Government securities, negotiable certificates of deposit, time deposits, and
bankers' acceptances of U.S. branches of U.S. banks.
For a more detailed discussion of the above investment restrictions, as well
as a description of certain other investment restrictions, see "Investment
Restrictions" in the SAI.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
TRUSTEES. Information concerning the Trustees of the Fund and the Portfolio,
including their names, positions, and principal occupations during the past five
years, is contained in the SAI.
The Portfolio has entered into a Portfolio Fund Services Agreement with
Pierpont Group, Inc. to assist the Trustees of the Portfolio in exercising their
overall supervisory responsibilities for the Portfolio's affairs. The fees to be
paid under the agreement approximate the reasonable cost of Pierpont Group, Inc.
in providing these services. Pierpont Group, Inc. was organized in 1989 at the
request of the Trustees of The Pierpont Family of Funds for the purpose of
providing those services at cost to those funds. See "Trustees and Officers" in
the SAI. The principal offices of Pierpont Group, Inc. are located at 461 Fifth
Avenue, New York, New York 10017. See "Administration; Custodian and Transfer
Agent; and Distributor."
ADVISER. The Fund has not retained the services of an investment adviser
because the Fund seeks to achieve its investment objective by investing all of
its investable assets in the Portfolio. The Portfolio has retained the services
of Morgan as Investment Adviser. Morgan, with principal offices at 60 Wall
Street, New York, New York 10260, is a New York trust company which conducts a
general banking and trust business. Morgan is a wholly-owned subsidiary of J.P.
Morgan & Co. Incorporated ("J.P. Morgan"), a bank holding company organized
under the laws of Delaware. Through offices in New York City and abroad, J.P.
Morgan, through Morgan and other subsidiaries, offers a wide range of services
to governmental, institutional, corporate and individual customers and acts as
investment adviser to individual and institutional clients with combined assets
under management of over $179 billion (of which Morgan advises over $28
billion). Morgan provides investment advice and portfolio management services to
the Portfolio. Subject to the supervision of the Portfolio's Trustees, Morgan
makes
12
<PAGE>
the Portfolio's day-to-day investment decisions, arranges for the execution of
portfolio transactions and generally manages the Portfolio's investments. See
"Portfolio Investment Adviser and Administrative Services Agent" in the SAI.
Morgan uses a sophisticated, disciplined, collaborative process for managing
all asset classes. The following persons are primarily responsible for the
day-to-day management and implementation of Morgan's process for the Portfolio
(the inception date of each person's responsibility for the Portfolio and his
business experience for the past five years is indicated parenthetically):
Robert R. Johnson, Vice President (since June, 1988, employed by Morgan since
prior to 1991) and Daniel B. Mulvey, Vice President (since January, 1995,
employed by Morgan since September, 1991, previously securities trader,
Equitable Life Insurance Company).
As compensation for the services rendered and related expenses borne by Morgan
under the Investment Advisory Agreement with the Portfolio, the Portfolio has
agreed to pay Morgan a fee, which is computed daily and may be paid monthly,
at the annual rate of 0.20% of the Portfolio's average daily net assets up to
$1 billion, and 0.10% of average daily net assets in excess of $1 billion.
Under a separate agreement, Morgan also provides financial, fund accounting
and administrative services to the Portfolio, including services related to tax
returns and financial reports. See "Portfolio Investment Adviser and
Administrative Services Agent" in the SAI.
ADMINISTRATION; CUSTODIAN AND TRANSFER AGENT; AND DISTRIBUTOR
PORTFOLIO ADMINISTRATOR. Under an Administration Agreement with the Portfolio,
Signature Broker-Dealer Services, Inc. ("SBDS") serves as the administrator for
the Portfolio (the "Portfolio Administrator"). In this capacity, SBDS
administers and manages all aspects of the Portfolio's day-to-day operations
subject "Adviser" and "Custodian." In connection with its responsibilities as
Portfolio Administrator, SBDS (i) furnishes ordinary clerical and related
services for day-to-day operations including certain recordkeeping
responsibilities; (ii) takes responsibility for compliance with all applicable
federal and state securities and other regulatory requirements; and (iii)
performs such administrative and managerial oversight of the activities of the
Portfolio's custodian as the Trustees may direct from time to time.
FUND ADMINISTRATOR. The Managers Funds, L.P. serves as the Fund's
administrator and shareholder servicing agent (the "Fund Administrator") and has
overall responsibility, subject to the review of the Trustees of the Trust, for
all aspects of managing the Fund's operations, including administration and
shareholder services to the Fund, its shareholders and certain institutions,
such as bank trust departments, dealers and registered investment advisers, that
advise or act as an intermediary with the Fund's shareholders ("Shareholder
Representatives"). At the date of this Prospectus, the Fund has agreed to pay a
13
<PAGE>
fee to the Fund Administrator at the rate of 0.25% per annum of the Fund's
average daily net assets; however, the Fund Administrator has agreed to a
voluntary waiver of its fees until at least May 31, 1996.
Administrative services include (i) preparation of Fund performance
information; (ii) responding to telephone and in-person inquiries from
shareholders and shareholder representatives regarding matters such as account
or transaction status, net asset value of Fund shares, Fund performance, Fund
services, plans and options, Fund investment policies and Fund distributions and
the taxation thereof; (iii) preparing, soliciting and gathering shareholder
proxies and otherwise communicating with shareholders in connection with
shareholder meetings; (iv) maintaining the Trust's registration with federal and
state securities regulators; (v) dealing with complaints and correspondence from
shareholders directed to or brought to the attention of the Fund Administrator;
(vi) supervising the operations of the Fund's Transfer Agent; and (vii) such
other administrative, shareholder and shareholder-related services as the
parties may from time to time agree to in writing.
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company ("State
Street Bank"), 225 Franklin Street, Boston, Massachusetts 02101, serves as the
Fund's and the Portfolio's Custodian and the Fund's Transfer and Dividend
Disbursing Agent.
DISTRIBUTOR. The Managers Funds, L.P. serves as distributor of the shares of
the Fund. Its address is 40 Richards Avenue, Norwalk, Connecticut 06854.
PURCHASE AND REDEMPTION OF FUND SHARES
HOW TO PURCHASE FUND SHARES
Initial purchases of shares of the Fund may be made in a minimum amount of
$2,000 ($500 for IRAs and IRA rollovers, $250 for Spousal IRAs). Lower
minimum initial investments with accompanying automatic investment plans or
letters of intent may be accepted at the discretion of the Administrator. There
is no minimum for additional investments.
Investors may purchase shares of the Fund through their financial planner or
other investment professional who is (or who is associated with) an investment
adviser registered with the Securities and Exchange Commission (a "Registered
Investment Adviser") or directly from the Fund as indicated below. Shares may
also be purchased by bank trust departments on behalf of their clients, other
institutional investors such as corporations, endowment funds and charitable
foundations, and tax-exempt employee welfare, pension and profit-sharing plans.
The following shows the various methods for purchasing the Fund's shares. For
more complete instructions, see the account application.
14
<PAGE>
<TABLE>
<CAPTION>
INITIAL INVESTMENT ADDITIONAL INVESTMENTS
- --------------------------------------------------------------------------------
<S> <C> <C>
MINIMUMS
Regular accounts: $2,000 No minimum
IRAs, IRA rollovers: $ 500 No minimum
Spousal IRAs $ 250 No minimum
METHOD
Through your Contact your investment Send additional funds to
investment adviser, bank or other your investment profess-
professional investment professional ional at the address ap-
pearing on your account
statement
Directly by mail Send your account applica- Send letter of instruction
tion and check (payable to and check (payable to
The Managers Funds) The Managers Funds)
to the address indicated on to The Managers Funds
the application c/o Boston Financial
Data Services, Inc.
P.O. Box 8517
Boston, MA 02266-8517
Please include your
account # on your check
Direct Federal Call (800)252-0682 to Call the Transfer Agent at
Funds or Bank Wire notify the Transfer Agent, (800) 252-0682 prior to
and instruct your bank to wiring additional funds
wire funds to:
ABA #011000028
State Street Bank &
Trust Company
Boston, MA 02101
BFN-The Managers Funds
AC 9905-001-5
FBO-Shareholder Name
By Telephone Only for established Call the Transfer Agent
accounts with ACH at (800) 252-0682.
privileges. Call Minimum investment: $100
(800) 252-0682 with
instructions for the
Transfer Agent.
Minimum investment: $100
</TABLE>
15
<PAGE>
The employees and their families of The Managers Funds, L.P. and selected
dealers and their authorized representatives who are engaged in the sale of Fund
shares, may purchase shares of the Fund without regard to a minimum initial
investment.
Certain states may require Registered Investment Advisers that purchase Fund
shares for customers in those states to register as broker-dealers.
Fund shares are offered and orders accepted on each business day (a day on
which the New York Stock Exchange ("NYSE") is open for trading). The Fund may
limit or suspend the offering of shares of the Fund at any time and may refuse,
in whole or in part, any order for the purchase of shares.
Purchase orders received by the Fund, c/o Boston Financial Data Services, Inc.
(the "Transfer Agent") at the address listed on the back cover of this
prospectus, prior to 4:00 p.m., New York Time, on any business day will receive
the offering price computed that day. See "Income, Dividends and Capital Gains
Distributions." The broker-dealer, omnibus processor or investment professional
is responsible for promptly transmitting orders to the Fund. The Fund cannot
accept orders transmitted to it at the address indicated on the cover page of
this prospectus, but will use its best efforts to promptly forward such orders
to the Transfer Agent for receipt no later than the next business day.
Federal funds or bank wires used to pay for purchase orders of the Fund must
be received in advance, except for certain processing organizations which have
entered into special arrangements with the Fund.
Purchases made by check are effected when the check is received, but
are accepted subject to collection at full face value in U.S. funds and must be
drawn in U.S. dollars on a U.S. bank. Third party checks which are payable to an
existing shareholder who is a natural person (as opposed to a corporation or
partnership) and endorsed over to the Fund or State Street Bank and Trust
Company will be accepted. To ensure that checks are collected by the Fund,
redemptions of shares purchased by check are not effected until 15 days after
the date of purchase.
If the check accompanying any purchase order does not clear, or if there are
insufficient funds in your bank account to enable an ACH, the transaction will
be canceled and you will be responsible for any loss the Fund incurs. For
current shareholders, the Fund can redeem shares from any identically registered
account in the Fund or any other series of the Trust as reimbursement for any
loss incurred. The Trust may prohibit or restrict all future purchases in the
Fund in the event of any nonpayment for shares.
In the interest of economy and convenience, share certificates will not be
issued. All share purchases are confirmed to the record holder and credited to
such holder's account on the Fund's books maintained by the Transfer Agent.
REDEEMING SHARES
Any redemption orders received by the Fund as indicated below before 4:00
16
<PAGE>
p.m. New York time on any business day will receive the net asset value
determined at the close of trading on the NYSE on that day. Payments for wire
redemption orders received prior to 1:00 p.m. will be sent out that day. The
Trust cannot accept redemption orders transmitted to it at the address indicated
on the cover page of the prospectus, but will use its best efforts to promptly
forward such orders to the Transfer Agent for receipt by the next business day.
If you are trading through a broker-dealer or investment adviser, such
investment professional is responsible for promptly transmitting orders. There
is no redemption charge. The Fund reserves the right to redeem shareholder
accounts (after 60 days notice) when the value of the Fund shares in the account
falls below $500 due to redemptions. Whether the Fund will exercise its right to
redeem shareholder accounts will be determined by the Fund Administrator on a
case-by-case basis.
METHOD INSTRUCTIONS
- -------------------------------------------------------------------------------
By mail-write to The Managers Funds, Send a letter of instruction which
c/o Boston Financial Data Services, Inc. specifies the name of the Fund,
P.O. Box 8517 dollar amount or number of shares to
Boston, MA 02266-8517 be sold, your name and account
number. This letter must be signed
by all owners of the shares in the
exact manner in which they appear on
the account. In the case of estates,
trusts, guardianships,
custodianships, corporations and
pension and profit sharing plans,
other supporting legal documentation
is required.
By telephone For shareholders who have elected
telephone redemption privileges on
their applications, telephone the
Fund at (800)252-0682.
By contacting
your investment professional
By writing a check For shareholders who have elected
to have this option, using special
checks provided by State Street Bank
and Trust Company, as discussed
under "Investor Services-
Checkwriting Privilege."
INVESTOR SERVICES
AUTOMATIC REINVESTMENT PLAN allows dividends or capital gains distributions to
be reinvested in additional shares, unless you elect to receive cash.
AUTOMATIC INVESTMENTS of preauthorized amounts from private checking accounts
can be made monthly, quarterly or annually. Your account will normally be
charged on the day you specify.
SYSTEMATIC WITHDRAWALS of $100 or more from the Fund can be made
monthly by shareholders.
DOLLAR COST AVERAGING allows for regular automatic exchanges from any
17
<PAGE>
Fund to one or more other series of the Trust. Before investing in the Trust's
Equity Funds or Income Funds, shareholders must obtain a prospectus from the
Trust describing those funds.
INDIVIDUAL RETIREMENT ACCOUNTS, including SEP/IRAs and IRA rollovers, are
available to shareholders at no additional cost.
CHECKWRITING PRIVILEGE is available to shareholders of the Fund. Participating
shareholders must return a completed signature card and authorization form, and
will be provided a supply of checks. Checks may be drawn for amounts between
$500 and $500,000. When such a check is presented to State Street Bank for
payment, a sufficient number of full and fractional shares will be redeemed from
the shareholder's account to cover the amount of the check.
The check redemption privilege for withdrawal enables a shareholder to receive
dividends declared on the shares to be redeemed (up to and including the day of
redemption) until such time as the check is processed. Because of this, the
check redemption privilege is not appropriate for a complete liquidation of a
shareholder's account. If the amount of a withdrawal check is greater than the
value of the shares held in the shareholder's account the check will be returned
unpaid, and the shareholder may be subject to additional charges.
The Fund and State Street Bank each reserve the right at any time to suspend
or limit the procedure permitting withdrawals by check.
DIRECT DEPOSIT PURCHASE PLAN allows for Social Security or payroll checks, as
well as any other preauthorized recurring payment, to be automatically invested
in your account.
EXCHANGE PRIVILEGE permits shareholders of the Fund to exchange their shares
for shares of any of the other series of the Trust at the relative net asset
value per share. Exchange transactions may be made by writing to the Fund
(see "Redeeming Shares"), by contacting your investment professional, via the
Telephone Exchange Privilege (unless you have declined this option) or on your
signed account application. Call Investors Services at (800)252-0682 to utilize
the Telephone Exchange Privilege. Shareholders must receive a prospectus
describing the Equity Funds or Income Funds of the Trust before requesting an
exchange into one or more of those series. By requesting an exchange into one of
those series, shareholders are deemed to confirm receipt of the prospectus
describing the Trust's Equity Funds and/or Income Funds.
The exchange privilege is offered to shareholders for their convenience and
use consistent with their investment objectives. It is not offered as a
short-term market timing service. The Trust reserves the right to refuse
exchange orders from shareholders who have previously been advised that their
frequent use of the exchange privilege is, in the opinion of the Fund
Administrator, inconsistent with the orderly management of the Funds'
portfolios.
THE FUND AND ITS TRANSFER AGENT WILL EMPLOY REASONABLE PROCEDURES TO VERIFY
THE GENUINENESS OF TELEPHONIC REDEMPTION OR EXCHANGE REQUESTS. IF SUCH
18
<PAGE>
PROCEDURES ARE NOT FOLLOWED, THE FUND OR ITS TRANSFER AGENT MAY BE LIABLE FOR
ANY LOSSES DUE TO UNAUTHORIZED OR FRAUDULENT INSTRUCTIONS. THESE PROCEDURES
INVOLVE REQUIRING CERTAIN PERSONAL IDENTIFICATION INFORMATION.
THE ABOVE SERVICES ARE AVAILABLE ONLY IN STATES WHERE THE FUND MAY BE LEGALLY
OFFERED, AND MAY BE TERMINATED OR MODIFIED BY THE FUND AT ANY TIME UPON 60 DAYS
WRITTEN NOTICE TO SHAREHOLDERS. NEITHER THE FUND, THE DISTRIBUTOR, THE FUND'S
CUSTODIAN, THE TRANSFER AGENT, NOR THEIR RESPECTIVE OFFICERS AND EMPLOYEES, WILL
BE LIABLE FOR ANY LOSS, EXPENSE OR COST ARISING OUT OF A TRANSACTION EFFECTED IN
ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THIS PROSPECTUS EVEN IF
SUCH TRANSACTION RESULTS FROM ANY FRAUDULENT OR UNAUTHORIZED INSTRUCTIONS.
INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Income dividends and distributions of short-term capital gains or losses will
normally be declared daily on all settled shares (including purchases made with
immediately available funds prior to 3:00 p.m. on that day) and paid monthly on
the third business day prior to month end. Distributions of any long term
capital gains will normally be declared annually in December.
All dividends and distributions declared by the Fund will be reinvested in
additional shares of the Fund (unless the shareholder has elected to receive
dividends or distributions in cash) at net asset value. An election may be
changed by delivering written notice to the Fund at least ten business days
prior to the payment date.
In connection with the intention to maintain a constant $1.00 net asset value
per share, the Trustees of the Trust have approved the following procedures in
the event the Fund has a negative amount of net investment income on any day.
Such a negative amount could occur, for instance, upon default by an issuer of a
security held by The Money Market Portfolio. In such event, the Fund would first
offset the negative amount with respect to each shareholder account from the
dividends declared but unpaid during the month with respect to such account. If
and to the extent that such negative amount exceeds such declared but unpaid
dividends, the Trustees of the Trust would consider what other action might be
taken, including reducing the number of its outstanding shares by treating each
shareholder as having contributed to the capital of the Fund that number of full
and fractional shares in the account of such shareholder which represents its
proportion of the amount of such excess. Each shareholder will be deemed to have
agreed to such contribution in these circumstances by its investment in the
Fund.
NET ASSET VALUE
Net asset value per share for the Fund is determined by subtracting from the
value of the Fund's total assets (i.e., the value of its investment in the
Portfolio and other assets) the amount of its liabilities and dividing the
remainder by the number of its outstanding shares, rounded to the nearest cent.
Expenses are accrued daily. The Portfolio values all portfolio securities by the
amortized cost
19
<PAGE>
method. This method attempts to maintain for the Fund a constant net asset value
per share of $1.00. No assurances can be given that this goal can be attained.
The Fund's net asset value is computed at 4:00 p.m., New York Time. See "Net
Asset Value" in the SAI for more information on valuation of portfolio
securities for the Portfolio.
PERFORMANCE INFORMATION
From time to time the Fund may advertise "yield" and/or "total return." THESE
FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE
PERFORMANCE.
YIELD
The Fund may advertise "current yield" and "effective yield." "Current yield"
refers to the income generated by an investment in the Fund over a seven-day
period (which period will be stated in the advertisement). This income is then
"annualized," that is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "current yield" because of the compounding effect of this assumed
reinvestment.
TOTAL RETURN
The Fund may include total return figures in its advertisements. In
calculating total return, the net asset value per share at the beginning of the
period is subtracted from the net asset value per share at the end of the period
(after assuming and adjusting for the reinvestment of any income dividends and
capital gains distributions), and the result is divided by the net asset value
per share at the beginning of the period to ascertain the total return
percentage.
The Fund also may include comparative performance information in advertising
or marketing the Fund's shares. Such performance information may include data
from industry publications, business periodicals, rating services and market
indices. For more detailed information on performance calculations and
comparisons, see "Performance Information" in the SAI.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust offers a single class of shares of beneficial interest, without par
value, and currently offers ten series of its shares as described in the Trust's
prospectuses. The Trustees have the authority to create new series of shares in
addition to the existing ten series without the requirement of a vote of
shareholders of the Trust.
Shares of each series are entitled to one vote per share. Shareholders
have the right to vote on all matters on which, by law or the provisions of
the Trust's Declaration of Trust or by-laws, they may be entitled to vote. On
matters relating to all series and affecting all series in the same manner,
shareholders of all series are entitled to vote. On any matters affecting
only one series, only the
20
<PAGE>
shareholders of that series are entitled to vote. On matters relating to all the
series but affecting the series differently, separate votes by series are
required.
The Trust and its series are not required, and do not intend, to hold annual
meetings of shareholders, under normal circumstances. The Trustees or the
shareholders may call special meetings of the shareholders for action by
shareholder vote, including the removal of any or all of the Trustees. The
Trustees will call a special meeting of shareholders of the Fund upon written
request of the holders of at least 10% of the Fund's shares.
Under Massachusetts law, the shareholders and trustees of a business trust
may, in certain circumstances, be personally liable for the trust's obligations
to third parties. However, the Declaration of Trust provides, in substance, that
no shareholder or Trustee shall be personally liable for the Trust's obligations
to third parties, and that every written contract made by the Trust shall
contain a provision to that effect. The Declaration of Trust also requires the
Fund to indemnify shareholders and Trustees against such liabilities and any
related claims and expenses. The Trust will not indemnify a Trustee when the
loss is due to willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the Trustee's office.
Two lawsuits seeking class action status have been filed against the Managers
Intermediate Mortgage Fund and the Managers Short Government Fund, respectively,
The Managers Funds, L.P. and other defendants including the Trust. The
Intermediate Mortgage Fund suit was filed in the United States District Court
for the District of Connecticut in September, 1994, and names the Fund, the
Trust, The Managers Funds, L.P., Robert P. Watson, Piper Capital Management,
Inc., its parent company and Worth Bruntjen as defendants. A motion has been
filed to dismiss this action and there has been no decision yet from the court.
The Short Government Fund suit was filed in the United States District Court for
the District of Minnesota in November, 1994 and names that Fund, each of the
defendants in the Intermediate Mortgage Fund suit (with the exception of the
Intermediate Mortgage Fund), the Trustees and one officer of the Trust as
defendants. On November 24, 1995, the defendants' motion to dismiss was granted,
in part and denied, in part, and the plaintiff was granted leave to file an
amended complaint. The plaintiff filed an amended complaint on December 14, 1995
and the defendants have filed another motion to dismiss this action. In both of
these cases the plaintiffs seek unspecified damages based upon losses alleged in
the two series named above. Another non-class action lawsuit has been filed
against certain of the defendants, among others, and Managers Short and
Intermediate Bond Fund based on similar allegations. Management believes that
the cases are without merit and intends to defend vigorously against these
actions.
As of March 1, 1996, Resource Bank and Trust Company owned more than 25% of
the shares of the Fund.
TAX INFORMATION
The Fund has qualified and intends to continue to qualify as a regulated
investment company under the provisions of the Internal Revenue Code of 1986,
21
<PAGE>
as amended, under which the Fund is regarded as a separate regulated
investment company. The Portfolio intends to qualify as an association
treated as a partnership for federal income tax purposes. As such, the
Portfolio should not be subject to tax. The Fund's status as a regulated
investment company is dependent on, among other things, the Portfolio's
continued qualification as a partnership for federal income tax purposes.
All dividends and distributions designated as capital gains are generally
taxable to shareholders whether received in cash or additional shares.
Although distributions are generally taxable to a shareholder in the
taxable year in which the distribution is made, dividends declared in
October, November or December of a taxable year with a record date in such a
month and actually received during the following January, will be taxed as
though received by the shareholder on December 31 of such year.
Generally, the Fund is required to back-up withhold 31% of distributions
paid to a shareholder who fails to provide a social security or taxpayer
identification number and certify that such number is correct and that such
shareholder is not subject to, or is otherwise exempt from, back-up
withholding.
A shareholder should consult its own tax advisers for more information
regarding the Federal, foreign, state, and local tax treatment of such
shareholder with respect to its own tax situation. For more information
concerning taxes, see "Tax Information" in the SAI.
SHAREHOLDER REPORTS
Shareholders will receive annual and semi-annual reports which include
financial statements showing the results of operations, investment portfolio
and other information of the Fund and Portfolio. Shareholders will also
receive annual tax statements indicating the tax status of distributions made
during the year. Confirmations of transactions will be sent to shareholders
following purchases, redemptions or exchanges by the shareholder, and
quarterly statements of account will be sent to all shareholders.
22
<PAGE>
THE MANAGERS FUNDS
MONEY MARKET FUND
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 1996
40 Richards Avenue, Norwalk, Connecticut 06854
Investor Services: (800) 835-3879
This Statement of Additional Information relates to the Managers Money
Market Fund (the "Money Market Fund"), one series of The Managers Funds, a
no-load, open-end management investment company organized as a Massachusetts
business trust (the "Trust"). Information about the other nine series of the
Trust is contained in the prospectuses for the Equity Funds and Income Funds,
and in a separate Statement of Additional Information for those Funds, copies of
which may be obtained without charge by contacting the Trust at 40 Richards
Avenue, Norwalk, CT 06854 (800) 835-3879 or (203) 857-5321.
This Statement of Additional Information is not a prospectus; it should be
read in conjunction with the Money Market Fund Prospectus of the Trust, dated
April 1, 1996, copies of which may be obtained without charge by contacting the
Trust at 40 Richards Avenue, Norwalk, CT 06854 (800) 835-3879 or (203) 857-5321.
This Statement of Additional Information is authorized for distribution to
prospective investors only if preceded or accompanied by an effective prospectus
for the Money Market Fund.
1
<PAGE>
TABLE OF CONTENTS
I. INVESTMENT OBJECTIVE AND POLICIES 1
II. INVESTMENT RESTRICTIONS 5
III. TRUSTEES AND OFFICERS 7
IV. MANAGEMENT OF THE FUND AND THE PORTFOLIO 11
V. CUSTODIAN, TRANSFER AGENT AND
INDEPENDENT PUBLIC ACCOUNTANTS 15
VI. EXPENSES 15
VII. CODE OF ETHICS 16
VIII. NET ASSET VALUE 16
IX. CONTROL PERSONS AND PRINCIPAL HOLDERS OF
SECURITIES 17
X. PERFORMANCE DATA 17
XI. ORGANIZATION OF THE PORTFOLIO 18
XII. PORTFOLIO TRANSACTIONS 18
XIII. TAX INFORMATION 19
XIV. FINANCIAL STATEMENTS 20
1
<PAGE>
This Statement of Additional Information describes the financial history,
investment objectives and policies, management and operation of the Managers
Money Market Fund. The Fund operates through a two-tiered structure sometimes
referred to as Hub and Spoke-Registered Trademark-. Prior to December 1, 1995,
the Fund operated as a free-standing mutual fund and not through Hub and Spoke.
Where indicated in this Statement of Additional Information, historical
information for the Fund includes information from the period prior to
commencement of operations in the Hub and Spoke structure.
INVESTMENT OBJECTIVE AND POLICIES
The Managers Money Market Fund (the "Money Market Fund" or the "Fund") has
an investment objective of maximizing current income and maintaining a high
level of liquidity. The Fund attempts to achieve this objective by investing
all of its investable assets in The Money Market Portfolio (the "Portfolio"), an
open-end, diversified management investment company having the same investment
objective as the Money Market Fund. The Portfolio is advised by Morgan Guaranty
Trust Company of New York ("Morgan" or the "Advisor").
The Portfolio seeks to achieve its investment objective by maintaining a
dollar-weighted average portfolio maturity of not more than 90 days and by
investing in U.S. dollar-denominated securities described in the Prospectus and
this Statement of Additional Information that meet certain rating criteria,
present minimal credit risk and have effective maturities of not more than
thirteen months. The Portfolio's ability to achieve maximum current income is
affected by its high quality standards. See "Quality and Diversification
Requirements."
The following discussion supplements the information regarding the
investment objective of the Fund and the policies to be employed to achieve this
objective by the Portfolio as set forth above and in the Prospectus. The
investment objective of the Fund and of the Portfolio are identical.
Accordingly, references below to the Fund also include the Portfolio, and
references to the Portfolio also include the Fund, unless the context requires
otherwise.
MONEY MARKET INSTRUMENTS
As discussed in the Prospectus, the Fund, through the Portfolio, invests in
money market instruments. A description of the various types of money market
instruments that may be purchased by the Portfolio appears below. See "Quality
and Diversification Requirements."
U.S. TREASURY SECURITIES. The Portfolio may invest in direct obligations
of the U.S. Treasury, including Treasury bills, notes and bonds, all of which
are backed as to principal and interest payments by the full faith and credit of
the United States.
ADDITIONAL U.S. GOVERNMENT OBLIGATIONS. The Portfolio may invest in
obligations issued or guaranteed by U.S. Government agencies or
instrumentalities. These obligations may or may not be backed by the "full
faith and credit" of the United States. In the case of securities not backed by
the full faith and credit of the United States, the Portfolio must look
principally to the federal agency issuing or guaranteeing the obligation for
ultimate repayment, and may not be able to assert a claim against the United
States itself in the event the agency or instrumentality does not meet its
commitments. Securities in which the Portfolio may invest that are not backed
by the full faith and credit of the United States include, but are not limited
to, obligations of the Tennessee Valley Authority, the Federal Home Loan
Mortgage Association and the U.S. Postal Service, each of which has the right to
borrow from the U.S. Treasury to meet its obligations, and obligations of the
Federal Farm Credit System and the Federal Home Loan Banks, both of whose
obligations may be satisfied only by the individual credits of each issuing
agency. Securities which are backed
<PAGE>
by the full faith and credit of the United States include obligations of the
Government National Mortgage Association, the Farmers Home Administration, and
the Export-Import Bank.
FOREIGN GOVERNMENT OBLIGATIONS. The Portfolio may also invest in U.S.
dollar denominated short-term obligations of foreign sovereign governments or
of their agencies, instrumentalities, authorities or political subdivisions.
BANK OBLIGATIONS. The Portfolio may invest in negotiable certificates of
deposit, time deposits and bankers' acceptances of (i) banks, savings and loan
associations and savings banks which have more than $2 billion in total assets
(the "Asset Limitation") and are organized under laws of the United States or
any state, (ii) foreign branches of these banks or of foreign banks of
equivalent size (Euros) and (iii) U.S. branches of foreign banks of equivalent
size (Yankees). The Portfolio will not invest in obligations for which the
Advisor, or any of its affiliated persons, is the ultimate obligor or accepting
bank. The Portfolio may also invest in obligations of international banking
institutions designated or supported by national governments to promote economic
reconstruction, development or trade between nations (e.g., the European
Investment Bank, the Inter-American Development Bank, or the World Bank).
COMMERCIAL PAPER. The Portfolio may invest in commercial paper, including
master demand obligations. Master demand obligations are obligations that
provide for a periodic adjustment in the interest rate paid and permit daily
changes in the amount borrowed. Master demand obligations are governed by
agreements between the issuer and Morgan acting as agent, for no additional fee,
in its capacity as investment advisor to the Portfolio and as fiduciary for
other clients for whom it exercises investment discretion. The monies loaned to
the borrower come from accounts managed by the Advisor or its affiliates,
pursuant to arrangements with such accounts. Interest and principal payments
are credited to such accounts. The Advisor, acting as a fiduciary on behalf of
its clients, has the right to increase or decrease the amount provided to the
borrower under an obligation. The borrower has the right to pay without penalty
all or any part of the principal amount then outstanding on an obligation
together with interest to the date of payment. Since these obligations
typically provide that the interest rate is tied to the Federal Reserve
commercial paper composite rate, the rate on master demand obligations is
subject to change. Repayment of a master demand obligation to participating
accounts depends on the ability of the borrower to pay the accrued interest and
principal of the obligation on demand which is continuously monitored by the
Portfolio's Advisor. Since master demand obligations typically are not rated by
credit rating agencies, the Portfolio may invest in such unrated obligations
only if at the time of an investment the obligation is determined by the Advisor
to have a credit quality which satisfies the Portfolio's quality restrictions.
See "Quality and Diversification Requirements." Although there is no secondary
market for master demand obligations, such obligations are considered by the
Portfolio to be liquid because they are payable upon demand. The Portfolio does
not have any specific percentage limitation on investments in master demand
obligations.
REPURCHASE AGREEMENTS. The Portfolio may enter into repurchase agreements
with brokers, dealers or banks that meet the credit guidelines approved by the
Portfolio's Trustees. In a repurchase agreement, the Portfolio buys a security
from a seller that has agreed to repurchase it at a mutually agreed upon date
and price, reflecting an agreed upon interest rate. The interest rate is
effective for the period of time the Portfolio is invested in the agreement and
is not related to the coupon rate on the underlying security. A repurchase
agreement may be viewed as a fully collateralized loan of money by the Portfolio
to the seller. The period of these repurchase agreements will usually be short,
from overnight to one week, and at no time may the Portfolio invest in
repurchase agreements maturing in more than thirteen months. The securities
which are subject to repurchase agreements, however, may have maturity dates in
excess of thirteen months from the effective date. The Portfolio will always
receive securities as collateral whose market value is, and during the entire
term of the agreement remains, at least equal to 100% of the dollar amount
invested by the Portfolio in the agreement plus accrued interest, and the
Portfolio will make
2
<PAGE>
payment for such securities only upon the physical delivery or upon evidence of
book entry transfer to the account of the Custodian. The Portfolio will be
fully collateralized within the meaning of paragraph (a) (3) of Rule 2a-7 under
the Investment Company Act of 1940, as amended (the "1940 Act"). If the seller
defaults, the Portfolio might incur a loss if the value of the collateral
securing the repurchase agreement declines and might incur disposition costs in
connection with liquidating the collateral. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization upon the disposition of the collateral by the Portfolio may be
delayed or limited.
The Portfolio may make investments in other debt securities with remaining
effective maturities of not more than thirteen months, including without
limitation corporate and foreign bonds, asset-backed securities and other
obligations described in the Prospectus or this Statement of Additional
Information.
ADDITIONAL INVESTMENTS
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Portfolio may purchase
securities on a when-issued or delayed delivery basis. For example, delivery of
and payment for these securities can take place a month or more after the date
of the purchase commitment. The purchase price and interest rate payable, if
any, on the securities are fixed on the purchase commitment date or at the time
the settlement date is fixed. The value of such securities is subject to market
fluctuation and no interest accrues to the Portfolio until settlement takes
place. At the time the Portfolio makes the commitment to purchase securities on
a when-issued or delayed delivery basis, it will record the transaction, reflect
the value each day of the securities in determining its net asset value and
calculate the maturity for the purposes of average maturity from that date. At
the time of settlement, a when-issued security may be valued at less than the
purchase price. To facilitate such acquisitions, the Portfolio will maintain
with the Custodian a segregated account with liquid assets consisting of cash,
U.S. Government securities or other appropriate securities, in an amount at
least equal to such commitments. On delivery dates for such transactions, the
Portfolio will meet its obligations from maturities or sales of the securities
held in the segregated account and/or from cash flow. If the Portfolio chooses
to dispose of the right to acquire a when-issued security prior to its
acquisition, it could, as with the disposition of any other portfolio
obligation, incur a gain or loss due to market fluctuation. It is currently the
policy of the Portfolio not to enter into when-issued commitments exceeding in
the aggregate 15% of the market value of the Portfolio's total assets less
liabilities other than the obligations created by when-issued commitments.
INVESTMENT COMPANY SECURITIES. Securities of other investment companies
may be acquired by the Fund to the extent permitted under the 1940 Act. These
limits require that, as determined immediately after a purchase is made, (i) not
more than 5% of the value of the Portfolio's total assets will be invested in
the securities of any one investment company, (ii) not more than 10% of the
value of its total assets will be invested in the aggregate in securities of
investment companies as a group, and (iii) not more than 3% of the outstanding
voting stock of any one investment company will be owned by the Portfolio,
provided however, that the Fund may invest all of its investable assets in an
open-end investment company that has the same investment objective as the Fund
(e.g., the Portfolio). As a shareholder of another investment company, the
Portfolio would bear, along with other shareholders, its pro rata portion of the
other investment company's expenses, including advisory fees. These expenses
would be in addition to the advisory and other expenses that the Portfolio bears
directly in connection with its operations.
REVERSE REPURCHASE AGREEMENTS. The Portfolio may enter into reverse
repurchase agreements. In a reverse repurchase agreement, the Portfolio sells a
security and agrees to repurchase the same security at a mutually agreed upon
date and price. For purposes of the 1940 Act, a reverse repurchase agreement is
also considered as the borrowing of money by the
3
<PAGE>
Portfolio, and, therefore, a form of leverage. The Portfolio will invest the
proceeds of the borrowings under reverse repurchase agreements. In addition,
the Portfolio will enter into a reverse repurchase agreement only when the
interest income to be earned from the investment of the proceeds is greater than
the interest expense of the transaction. The Portfolio will not invest the
proceeds of a reverse repurchase agreement for a period which exceeds the
duration of the reverse repurchase agreement. The Portfolio may not enter into
reverse repurchase agreements exceeding in the aggregate one-third of the market
value of its total assets, less liabilities other than the obligations created
by reverse repurchase agreements. The Portfolio will establish and maintain
with the Custodian a separate account with a segregated portfolio of securities
in an amount at least equal to its purchase obligations under its reverse
repurchase agreements. If interest rates rise during the term of a reverse
repurchase agreement, entering into the reverse repurchase agreement may have a
negative impact on the Money Market Fund's ability to maintain a net asset value
of $1.00 per share. See "Investment Restrictions."
LOANS OF PORTFOLIO SECURITIES. The Portfolio may lend its securities in an
amount up to 33 1/3% of the value of its net assets if such loans are secured
continuously by cash or equivalent collateral or by a letter of credit in favor
of the Portfolio at least equal at all times to 100% of the market value of the
securities loaned, plus accrued interest. While such securities are on loan,
the borrower will pay the Portfolio any income accruing thereon. Loans will be
subject to termination by the Portfolio in the normal settlement time, generally
three business days after notice, or by the borrower on one day's notice.
Borrowed securities must be returned when the loan is terminated. Any gain or
loss in the market price of the borrowed securities which occurs during the term
of the loan inures to the Portfolio and its respective investors. The Portfolio
may pay reasonable finders' and custodial fees in connection with a loan. In
addition, the Portfolio will consider all facts and circumstances, including the
creditworthiness of the borrowing financial institution, and the Portfolio will
not make any loans in excess of one year. The Portfolio will not lend its
securities to any officer, Trustee, Director, employee, or other affiliate of
the Fund, the Portfolio, the Advisor, the Portfolio Administrator or the
Distributor, unless otherwise permitted by applicable law.
PRIVATELY PLACED AND CERTAIN UNREGISTERED SECURITIES. The Portfolio may
invest in privately placed, restricted, Rule 144A or other unregistered
securities as described in the Prospectus.
As to illiquid investments, the Portfolio is subject to a risk that should
the Portfolio decide to sell them when a ready buyer is not available at a price
the Portfolio deems representative of their value, the value of the Portfolio's
net assets could be adversely affected. Where an illiquid security must be
registered under the Securities Act of 1933, as amended, (the "1933 Act") before
it may be sold, the Portfolio may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Portfolio may be permitted to sell a
security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Portfolio might obtain a less
favorable price than prevailed when it decided to sell.
FOREIGN INVESTMENTS. The Portfolio may invest in certain foreign
securities. All investments of the Portfolio must, however, be U.S. dollar
denominated, and any foreign commercial paper must not be subject to foreign
withholding tax at the time of purchase.
For a description of the risks associated with investing in foreign
securities, see "Foreign Investment Information" in the Prospectus.
QUALITY AND DIVERSIFICATION REQUIREMENTS
The Portfolio intends to meet the diversification requirements of the 1940
Act. To meet these requirements, 75% of the assets of the Portfolio are subject
to the following fundamental
4
<PAGE>
limitations: (1) the Portfolio may not invest more than 5% of its total assets
in the securities of any one issuer, except obligations of the U.S. Government,
its agencies and instrumentalities, and (2) the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer. As for the other
25% of the Portfolio's assets not subject to the limitation described above,
there is no limitation on investment of these assets under the 1940 Act, so that
all of such assets may be invested in the securities of any one issuer, subject
to the limitation of any applicable state securities laws, or as described
below. Investments not subject to the limitations described above could involve
an increased risk to the Portfolio should an issuer be unable to make interest
or principal payments or should the market value of such securities decline.
In order to attain the Fund's objective of maintaining a stable net asset
value, the Portfolio will (i) limit its investment in the securities (other than
U.S. Government securities) of any one issuer to no more than 5% of its assets,
measured at the time of purchase, except for investments held for not more than
three business days (subject, however, to the investment restriction No. 4 set
forth under "Investment Restrictions" below); and (ii) limit investments to
securities that present minimal credit risks and securities (other than U.S.
Government securities) that are rated within the highest short-term rating
category by at least two nationally recognized statistical rating organizations
("NRSROs") or by the only NRSRO that has rated the security. Securities which
originally had a maturity of over one year are subject to more complicated, but
generally similar rating requirements. A description of illustrative credit
ratings is set forth in Appendix A attached to this Statement of Additional
Information. The Portfolio may also purchase unrated securities that are of
comparable quality to the rated securities described above. Additionally, if
the issuer of a particular security has issued other securities of comparable
priority and security and which have been rated in accordance with (ii) above,
that security will be deemed to have the same rating as such other rated
securities.
In addition, the Board of Trustees of the Portfolio has adopted procedures
which (i) require the Board of Trustees to approve or ratify purchases by the
Portfolio of securities (other than U.S. Government securities) that are rated
by only one NRSRO or that are unrated; (ii) require the Portfolio to maintain a
dollar-weighted average portfolio maturity of not more than 90 days and to
invest only in securities with a remaining maturity of not more than thirteen
months; and (iii) require the Portfolio, in the event of certain downgradings of
or defaults on portfolio holdings, to dispose of the holding, subject in certain
circumstances to a finding by the Trustees that disposing of the holding would
not be in the Portfolio's best interest.
INVESTMENT RESTRICTIONS
The investment restrictions below have been adopted by the Trust with
respect to the Fund and by the Portfolio. Except where otherwise noted, these
investment restrictions are "fundamental" policies which under the 1940 Act, may
not be changed without the vote of a majority of the outstanding voting
securities of the Fund or Portfolio, respectively. A "majority of the
outstanding voting securities" is defined in the 1940 Act as the lesser of (a)
67% or more of the voting securities present at a meeting if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy, or (b) more than 50% of the outstanding voting securities. The
percentage limitations contained in the restrictions below apply at the time of
the purchase of securities. If the Fund is requested to vote on a change in the
fundamental investment restrictions of the Portfolio, the Trust will hold a
meeting of Fund shareholders and cast its votes as instructed by the
shareholders.
The investment restrictions of the Fund and the Portfolio are identical,
unless as otherwise specified. Accordingly, references below to the Fund also
include the Portfolio unless the context requires otherwise; similarly,
references to the Portfolio also include the Fund unless the context requires
otherwise.
5
<PAGE>
The Fund and Portfolio may not:
1. Issue senior securities, except as permitted under the 1940 Act or any
rule, order or interpretation thereunder. (This is a non-fundamental policy
with respect to the Portfolio).
2. Enter into reverse repurchase agreements, which together with any
other borrowing exceeds in the aggregate one-third of the market value of the
Fund's total assets, less liabilities other than obligations created by reverse
repurchase agreements.
3. Borrow money (not including reverse repurchase agreements), except
from banks for temporary or extraordinary or emergency purposes and then only in
amounts up to 10% of the value of the Fund's total assets, taken at cost, at the
time of such borrowing (and provided that such borrowings and reverse repurchase
agreements do not exceed in the aggregate one-third of the market value of the
Fund's total assets less liabilities other than the obligations represented by
the bank borrowings and reverse repurchase agreements). Mortgage, pledge, or
hypothecate any assets except in connection with any such borrowing and in
amounts up to 10% of the value of the Fund's net assets at the time of such
borrowing. The Fund will not purchase securities while borrowings exceed 5% of
the Fund's total assets; provided, however, that the Fund may increase its
interest in an open-end management investment company with the same investment
objective and restrictions as the Fund while such borrowings are outstanding.
This borrowing provision is included to facilitate the orderly sale of portfolio
securities, for example, in the event of abnormally heavy redemption requests,
and is not for investment purposes.
4. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of the Fund's total
assets would be invested in securities or other obligations of any one such
issuer; provided, however, that the Fund may invest all or part of its
investable assets in an open-end management investment company with the same
investment objective and restrictions as the Fund. This limitation shall not
apply to issues of the U.S. Government, its agencies or instrumentalities and to
permitted investments of up to 25% of the Fund's total assets.
5. Purchase the securities or other obligations of issuers conducting
their principal business activity in the same industry if, immediately after
such purchase, the value of its investment in such industry would exceed 25% of
the value of the Fund's total assets; provided, however, that the Fund may
invest all or part of its investable assets in an open-end management investment
company with the same investment objective and restrictions as the Fund. For
purposes of industry concentration, there is no percentage limitation with
respect to investments in U.S. Government securities, negotiable certificates of
deposit, time deposits, and bankers' acceptances of U.S. branches of U.S. banks.
6. Make loans, except through purchasing or holding debt obligations, or
entering into repurchase agreements, or loans of portfolio securities in
accordance with the Fund's investment objective and policies.
7. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof, real estate, commodities, or commodity contracts or interests in oil,
gas, or mineral exploration or development programs. However, the Fund may
purchase bonds or commercial paper issued by companies which invest in real
estate or interests therein including real estate investment trusts.
8. Purchase securities on margin, make short sales of securities, or
maintain a short position, provided that this restrictions shall not be deemed
to be applicable to the purchase or sale of when-issued securities or of
securities for delivery at a future date.
6
<PAGE>
9. Acquire securities of other investment companies, except as permitted
by the 1940 Act.
10. Act as an underwriter of securities.
11. Acquire any illiquid securities, such as repurchase agreements with
more than seven days to maturity or fixed time deposits with a duration of over
seven calendar days if, as a result thereof, more than 10% of the market value
of the Fund's net assets would be in investments that are illiquid. (This is a
non-fundamental policy with respect to the Fund; in the case of the Portfolio,
the percentage limitation is applicable to the Portfolio's total assets).
TRUSTEES AND OFFICERS
The Trust and the Portfolio are governed by two separate Boards of
Trustees. The Trust, which has ten separate investment portfolios, including
the Money Market Fund, is governed by the Trustees of the Trust, who provide
broad supervision over the affairs of the Trust and the Fund. The Trustees and
officers of the Trust are listed below together with their principal occupations
during at least the past five years, as well as the Trustees' dates of birth.
References to The Managers Funds, L.P., the Fund Administrator, should be read
to apply to Evaluation Associates Investment Management Company, the predecessor
of The Managers Funds, L.P., for periods prior to August 17, 1990.
NAME, ADDRESS AND POSITION WITH TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- --------------------------------------------------------------------------------
ROBERT P. WATSON(1) President and Trustee of The Managers
40 Richards Avenue Funds; Chairman and Chief Executive
Norwalk, CT 06854 Officer, Evaluation Associates
Chief Executive Officer, President, Investment Management Company
Trustee (predecessor of The Managers Funds,
Date of birth: 1/21/34 L.P.) (prior to June 1988 and from
August 1989 to August 1990); Partner,
The Managers Funds, L.P. (since August
1990); Executive Vice President,
Evaluation Associates, Inc. (June 1988
to August 1989).
- --------------------------------------------------------------------------------
WILLIAM W. GRAULTY Practicing Attorney (1977 to present);
65 LaSalle Road Executive Vice President and Head of
West Hartford, CT 06107 Trust Division, The Connecticut Bank and
Trustee Trust Company, N.A. (1956 to 1976);
President, American Bankers Association,
Date of birth: 12/30/23 Trust Division (1974 to 1975); President
Connecticut Bankers Association, Trust
Division (1966 to 1968).
--------------------------
(1)Trustee who is an "interested person" of the Trust (as defined in Section
2(a)(19) of the 1940 Act).
7
<PAGE>
NAME, ADDRESS AND POSITION WITH TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- --------------------------------------------------------------------------------
MADELINE H. McWHINNEY President, Dale, Elliott & Company
24 Blossom Cove (management consultants) (1977 to
Middletown, NJ 07701 present); Assistant Vice President and
Trustee Financial Economist, Federal Reserve
Bank of New York (1943 to 1973); Trustee
Date of birth: 3/11/22 and Treasurer, Institute of
International Education (since 1975);
Assistant Director, Operations, Whitney
Museum of American Art (1983 to 1986);
Member, Advisory Committee on
Professional Ethics, New Jersey Supreme
Court (March 1983 to present).
- --------------------------------------------------------------------------------
STEVEN J. PAGGIOLI Executive Vice President and Director,
479 West 22nd Street Wadsworth & Associates, Inc. (1986 to
New York, NY 10011 present); Vice President, Secretary and
Trustee Director, First Fund Distributors, Inc.
Date of birth: 4/3/50 (1991 to present); Vice President,
Secretary and Director; Investment
Company Administration Corporation (1990
to present); President and Director,
Southampton Investment Management
Company, Inc. (1991 to present); Trustee
of Professionally Managed Portfolios
(1991 to present).
- --------------------------------------------------------------------------------
THOMAS R. SCHNEEWEIS Professor of Finance (1985 to present),
University of Massachusetts School of Associate Professor of Finance
Management (1980-1985), Ph.D. Director (Acting)
Amherst, MA 01003 (1985 to 1986), Chairman (Acting)
Trustee Department of General Business and
Date of birth: 5/10/47 Finance (1981-1982), and Assistant
Professor of Finance (1977-1980),
University of Massachusetts; Teaching
Assistant, University of Iowa Principal
Occupation (1973-1977); Financial
Consultant, Ehlers and Associates
(1970-1973).
- --------------------------------------------------------------------------------
PETER M. LEBOVITZ Director of Marketing, The Managers
40 Richards Avenue Funds, L.P. (September 1994 to present);
Norwalk, CT 06854 Director of Marketing, Hyperion Capital
Vice President Management, Inc. (June 1993 to June
1994); Senior Vice President and Chief
Investment Officer, Greenwich Asset
Management, Inc. (April 1989 to June
1993)
- --------------------------------------------------------------------------------
DONALD S. RUMERY Director of Operations, The Managers
40 Richards Avenue Funds, L.P. (December 1994 to present)
Norwalk, CT 06854 Vice President, Signature Financial
Treasurer (Principal Financial and Group (March 1990 to December 1994)
Accounting Officer) Vice President, The Putnam Companies
(August 1980 to March 1990).
- --------------------------------------------------------------------------------
KATHLEEN WOOD Vice President (July 1992 to present)
40 Richards Avenue and Assistant Vice President (August
Norwalk, CT 06854 1989 to June 1992), The Managers Funds,
Secretary and Assistant Treasurer L.P.; Analyst, Evaluation Associates,
Inc. (May 1986 to August 1989).
- --------------------------------------------------------------------------------
8
<PAGE>
NAME, ADDRESS AND POSITION WITH TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- --------------------------------------------------------------------------------
GIANCARLO (JOHN) E. ROSATI Vice President (July 1992 to Present)
40 Richards Avenue and Assistant Vice President (July 1986
Norwalk, CT 06854 to June 1992), The Managers Funds, L.P.;
Assistant Treasurer/Assistant Accountant, Gintel Co. (June 1980 to
Secretary June 1986).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION:
The Trust's Disinterested Trustees receive an annual retainer of $10,000,
and meeting fees of $750 for each in-person meeting attended and $200 for
participating in each telephonic meeting. There are no pension or retirement
benefits provided by the Trust or any affiliate of the Trust to the Trustees.
The Trust does not pay compensation to its officers. The following chart sets
forth the aggregate compensation paid to each Disinterested Trustee for the year
ended December 31, 1995:
<TABLE>
<CAPTION>
Aggregate Total Compensation from
Compensation Registrant and Fund Complex
Name of Trustee from Fund Paid to Trustees
- --------------- ------------ ---------------------------
<S> <C> <C>
William W. Graulty $350 $13,000
Madeline H. McWhinney 356 13,200
Steven J. Paggioli 370 13,750
Thomas R. Schneeweis 370 13,750
</TABLE>
As indicated above, certain of the Trust's officers also hold positions
with The Managers Funds, L.P., the Fund Administrator. All Trustees and
officers as a group owned less than 1% of the shares of the Fund outstanding as
of the date of this Statement of Additional Information.
The Trustees of the Portfolio, their business addresses, and their
principal occupations during the past five years are set forth below.
FREDERICK S. ADDY - Trustee; Retired; Executive Vice President and Chief
Financial Officer from January 1990 to April 1994, Amoco Corporation. His
address is 5300 Arbutus Cove, Austin, TX 78746. Birthdate January 1, 1932.
WILLIAM G. BURNS - Trustee; Retired; Limited Partner, Galen Partners L.P.
and Vice Chairman, Galen Associates, since 1990; Chief Executive Officer, Galen
Associates and General Partner, Galen Partners L.P., until 1991. His address is
2200 Alaqua Drive, Longwood, FL 32779. Birthdate November 2, 1932.
ARTHUR C. ESCHENLAUER - Trustee; Retired: Senior Vice President, Morgan
Guaranty Trust Company of New York until 1987. His address is 14 Alta Vista
Drive, RD #2, Princeton, NJ 08540. Birthdate May 23, 1934.
MATTHEW HEALEY (1) - Trustee, Chairman and Chief Executive Officer;
Chairman, Pierpont Group, Inc., since 1989; Chairman and Chief Executive
Officer, Execution Services, Inc. until October 1991. His address is Pine Tree
Club Estates, 10286 Saint Andrews Road, Boynton Beach, FL 33436. Birthdate
August 23, 1937.
MICHAEL P. MALLARDI - Trustee; Senior Vice President, Capital Cities/ABC,
Inc., President, Broadcast Group, since 1986. His address is 77 West 66 Street,
New York, NY 10017. Birthdate March 17, 1934.
(1) Mr. Healey is an "interested person" of the Portfolio as that term is
defined in the 1940 Act.
9
<PAGE>
Each Trustee of the Portfolio is paid an annual fee as follows for serving
as Trustee of the Portfolio as well as other investment companies which are
affiliated with the Advisor and is reimbursed for expenses incurred in
connection with service as a Trustee. The compensation paid to these Trustees
in calendar 1995 is set forth below. The Trustees may hold various other
directorships unrelated to these funds.
<TABLE>
<CAPTION>
Total Compensa-
Estimated tion From Port-
Aggregate Annual folios, Pierpont
Compensation Pension or Benefits and JPM Insti-
from the Portfolio Retirement Upon tutional Funds
during 1995 Benefits Retirement during 1995
- -------------------------- ----------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Frederick S. Addy, Trustee $11,605 None None $62,500
William G. Burns, Trustee $11,605 None None $62,500
Arthur C. Eschenlauer, Trustee $11,605 None None $62,500
Matthew Healey, Trustee $11,605 None None $62,500
Chairman and Chief Executive
Officer*
Michael P. Mallardi, Trustee $11,605 None None $62,500
- ----------------------------------------------------------------------------------------------------------
</TABLE>
*During 1995, Pierpont Group, Inc. paid Mr. Healey, in his role as Chairman of
Pierpont Group, Inc., compensation in the amount of $140,000, contributed
$21,000 to a defined contribution plan on his behalf and paid $20,000 in
insurance premiums for his benefit.
As of April 1, 1995, the annual fee paid to each Trustee for serving as a
Trustee of the Portfolio and other investment companies affiliated with the
Advisor was adjusted to $65,000.
The Trustees of the Portfolio, in addition to reviewing actions of the
Portfolio's various service providers, decide upon matters of general policy.
On January 15, 1994 the Portfolio entered into a Fund Services Agreement with
Pierpont Group, Inc. to assist the Trustees in exercising their overall
supervisory responsibilities over the affairs of the Portfolio. Pierpont Group,
Inc. was organized in July 1989 to provide services for The Pierpont Family of
Funds, and the Trustees of the Portfolio are the equal and sole shareholders of
Pierpont Group, Inc. The Portfolio has agreed to pay Pierpont Group, Inc. a fee
in an amount representing its reasonable costs in performing these services.
These costs are periodically reviewed by the Trustees.
The aggregate fees paid to Pierpont Group, Inc. by the Portfolio during the
period January 15, 1994 to November 30, 1994 and for the fiscal year ended
November 30, 1995 were $246,089 and $261,045, respectively.
The Portfolio's executive officers (listed below), other than the Chief
Executive Officer, are provided and compensated by Signature Broker-Dealer
Services, Inc. ("SBDS"), a wholly-owned subsidiary of Signature Financial Group,
Inc. ("Signature"). The Portfolio's officers conduct and supervise the business
operations of the Portfolio. The Portfolio has no employees.
OFFICERS OF THE PORTFOLIO
The officers of the Portfolio and their principal occupations during the
past five years are set forth below. The business address of each of the
officers unless otherwise noted is Signature Broker-Dealer Services, Inc., 6 St.
James Avenue, Boston, Massachusetts 02116.
MATTHEW HEALEY; Chief Executive Officer; Chairman, Pierpont Group, Inc.,
since 1989; Chairman and Chief Executive Officer, Execution Services, Inc. until
October 1991. His address is Pine Tree Club Estates, 10286 Saint Andrews Road,
Boynton Beach, FL 33436.
10
<PAGE>
PHILIP W. COOLIDGE; President; Chairman, Chief Executive Officer and
President, Signature since December 1988 and SBDS since April 1989.
JOHN R. ELDER; Treasurer; Vice President, Signature since April 1995;
Treasurer, Phoenix Family of Mutual Funds prior to April 1995.
THOMAS M. LENZ; Secretary; Vice President and Associate General Counsel,
Signature since November 1989; Assistant Secretary, SBDS since February 1991.
JAMES E. HOOLAHAN; Vice President; Senior Vice President, Signature since
December 1989.
DAVID G. DANIELSON; Assistant Treasurer; Assistant Manager, Signature since
May 1991; Graduate Student, Northeastern University from April 1990 to March
1991.
LINDA T. GIBSON; Assistant Secretary; Legal Counsel and Assistant
Secretary, Signature since June 1991; Assistant Secretary SBDS since November
1992; Law Student, Boston University School of Law prior to May 1992.
MOLLY S. MUGLER; Assistant Secretary; Legal Counsel and Assistant
Secretary, Signature since December 1988; Assistant Secretary, SBDS since April
1989.
SUSAN JAKUBOSKI; Assistant Secretary and Assistant Treasurer; Manager and
Senior Fund Administrator, Signature and Signature (Cayman) (since August 1994);
Assistant Treasurer, SBDS (since September 1994); Fund Compliance Administrator,
Concord Financial Group, Inc. (from November 1990 to August 1994); Senior Fund
Accountant, Neuberger & Berman Management Incorporated (since prior to 1990).
Her address is P.O. Box 2494, Elizabethan Square, George Town, Grand Cayman,
Cayman Islands, B.W.I.
ANDRES E. SALDANA; Assistant Secretary; Legal Counsel and Assistant
Secretary, Signature since November 1992; Assistant Secretary, SBDS since
September 1993; Attorney, Ropes & Gray from September 1990 to November 1992.
DANIEL E. SHEA; Assistant Treasurer; Assistant Manager of Fund
Administration, Signature since November 1993; Supervisor and Senior Technical
Advisor, Putnam Investments since prior to 1990.
Mssrs. Coolidge, Elder, Hoolahan, Lenz, Daniels, Saldana and Shea and Mss.
Gibson, Mugler and Jakuboski hold similar positions for other investment
companies for which SBDS or an affiliate serves as principal underwriter.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
INVESTMENT ADVISOR AND ADMINISTRATIVE SERVICES AGENT
The investment advisor to the Portfolio is Morgan Guaranty Trust Company of
New York, a wholly-owned subsidiary of J.P. Morgan & Co. Incorporated, a bank
holding company organized under the laws of the State of Delaware. Morgan,
whose principal offices are at 60 Wall Street, New York, New York 10260, is a
New York trust company which conducts a general banking and trust business.
Morgan is subject to regulation by the New York State Banking Department and is
a member bank of the Federal Reserve System. Through offices in New York City
and abroad, Morgan offers a wide range of services, primarily to governmental,
institutional, corporate and individual customers in the United States and
throughout the world.
11
<PAGE>
The investment advisory services Morgan provides to the Portfolio are not
exclusive under the terms of the Advisory Agreement. Morgan is free to and does
render similar investment advisory services to others. Morgan serves as
investment advisor to personal investors and other investment companies and acts
as fiduciary for trusts, estates and employee benefit plans. Certain of the
assets of trusts and estates under management are invested in common trust funds
for which Morgan serves as trustee. The accounts which are managed or advised
by Morgan have varying investment objectives and Morgan invests assets of
certain of such accounts in investments substantially similar to, or the same
as, those which are expected to constitute the principal investments of the
Portfolio. Such accounts are supervised by officers and employees of Morgan who
may also be acting in similar capacities for the Portfolio. See "Portfolio
Transactions."
J. P. Morgan & Co. Incorporated ("J.P. Morgan"), through the Advisor and
other subsidiaries, acts as investment advisor to individuals, governments,
corporations, employee benefit plans, mutual funds and other institutional
investors with combined assets under management of $179 billion (of which the
Advisor advises over $28 billion).
The basis of the Advisor's investment process is fundamental investment
research, as the firm believes that fundamentals should determine an asset's
value over the long term. Morgan currently employs 104 full-time research
analysts devoted to equity, fixed income, capital market, credit and economic
research in investment management divisions located in New York, London, Tokyo,
Frankfurt, Melbourne and Singapore to cover countries, industries and companies
on site. Morgan's fixed income investment process is based on analysis of real
rates, sector diversification and quantitative and credit analysis.
Sector weightings are generally similar to a fund's benchmark with the
emphasis on security selection as the method to achieve investment performance
superior to the benchmark. The benchmark for the Portfolio in which the Fund
invests is currently IBC/Donoghue's Money Fund Average.
J. P. Morgan Investment Management Inc., a wholly-owned subsidiary of J. P.
Morgan, is a registered investment adviser under the Investment Advisers Act of
1940, as amended, which manages employee benefit funds of corporations, labor
unions and state and local governments and the accounts of other institutional
investors, including investment companies. Certain of the assets of employee
benefit accounts under its management are invested in commingled pension trust
funds for which Morgan serves as trustee. J. P. Morgan Investment Management
Inc. advises Morgan on investment of the commingled pension trust funds.
The Portfolio is managed by officers of Morgan who, in acting for their
customers, including the Portfolio, do not discuss their investment decisions
with any personnel of J. P. Morgan or any personnel of other divisions of Morgan
or with any of its affiliated persons, with the exception of J. P. Morgan
Investment Management Inc. See "Portfolio Transactions" below for a description
of services provided to the Portfolio by J. P. Morgan Investment Management Inc.
As compensation for the services rendered and related expenses such as
salaries of advisory personnel borne by Morgan under the Advisory Agreement, the
Portfolio has agreed to pay Morgan a fee, which is computed daily and may be
paid monthly, equal to the annual rates of 0.20% of the Portfolio's average
daily of net assets up to $1 billion and 0.10% of net assets in excess of $1
billion.
12
<PAGE>
The advisory fees paid by the Portfolio to Morgan since the Portfolio's
commencement of operations in 1993 are as follows: For the period July 12, 1993
(commencement of operations) through November 30, 1993: $1,370,552. For the
fiscal year ended November 30, 1994: $3,423,576. For the fiscal year ended
November 30, 1995: $3,913,479.
Prior to December 1, 1995, the Money Market Fund invested directly in
portfolio securities and paid advisory fees to its own investment adviser. For
the eleven months ended November 30, 1995 and for the fiscal years ended
December 31, 1994 and 1993, fees paid to such adviser were $42,050, $15,126 and
$6,297, respectively.
The Glass-Steagall Act and other applicable laws generally prohibit banks
such as Morgan from engaging in the business of underwriting or distributing
securities, and the Board of Governors of the Federal Reserve System has issued
an interpretation to the effect that under these laws a bank holding company
registered under the federal Bank Holding Company Act or certain subsidiaries
thereof may not sponsor, organize, or control a registered open-end investment
company continuously engaged in the issuance of its shares. The interpretation
does not prohibit a holding company or a subsidiary thereof from acting as
investment advisor and custodian to such an investment company. Morgan believes
that it may perform the services for the Portfolio contemplated by the Advisory
Agreement without violation of the Glass-Steagall Act or other applicable
banking laws or regulations. State laws on this issue may differ from the
interpretation of relevant federal law, and banks and financial institutions may
be required to register as dealers pursuant to state securities laws. However,
is possible that future changes in either federal or state statutes and
regulations concerning the permissible activities of banks or trust companies,
as well as further judicial or administrative decisions and interpretations of
present and future statutes and regulations, might prevent Morgan from
continuing to perform such services for the Portfolio.
If Morgan were prohibited from acting as investment advisor to the
Portfolio, it is expected that the Trustees of the Portfolio would recommend to
shareholders that they approve the Portfolio entering into a new investment
advisory agreement with another qualified investment advisor selected by the
Trustees.
Morgan also provides other services to the Portfolio outside the scope of
the Advisory Agreement. The Portfolio has entered into an Administrative
Services Agreement with Morgan effective December 29, 1995, pursuant to which
Morgan is responsible for certain financial, fund accounting and administrative
services provided to the Portfolio. The services provided by Morgan as services
agent under the agreement include, but are not limited to, monitoring the
accounting activities of the Portfolio's custodian, preparing tax returns and
financial reports, coordinating annual audits, developing budgets, calculating
the daily partnership allocation, and providing related services.
Under the Administrative Services Agreement, the Portfolio has agreed to
pay Morgan a fee equal to its proportionate share of an annual complex-wide
charge. This charge is calculated daily based on the aggregate net assets of
the Portfolio and other registered investment companies for which Morgan acts as
Advisor (collectively the "Master Portfolios") in accordance with the following
annual schedule: 0.06% of the first $7 billion of the Master Portfolios'
aggregate average daily net assets and 0.03% of the Master Portfolios' aggregate
average daily net assets in excess of $7 billion. The portion of this charge
payable by the Portfolio is determined by the proportionate share that its net
assets bear to the total net assets of the Master Portfolios and the investors
in the Master Portfolios for which Morgan provides similar services. Under the
agreement, Morgan may delegate one or more of its responsibilities to other
entities, including SBDS, at Morgan's expense. The agreement may be terminated
at any time, without penalty, by the Portfolio's Trustees or Morgan, in each
case on not more than 60 days' nor less than 30 days' written notice to the
other party.
13
<PAGE>
Prior to December 29, 1995, the Portfolio had entered into a Financial and
Fund Accounting Services Agreement with Morgan, the provisions of which included
the non-investment advisory activities described above and, prior to September
1, 1995, also included reimbursement of the Portfolio's usual and customary
expenses. The services fees paid by the Portfolio to Morgan since the
Portfolio's commencement of operations are as follows: For the period July 12,
1993 (commencement of operations) through November 30, 1993: $193,980. For the
fiscal year ended November 30, 1994: $385,012. For the fiscal year ended
November 30, 1995: $373,077.
PORTFOLIO ADMINISTRATOR AND EXCLUSIVE PLACEMENT AGENT
SBDS serves as the Portfolio's Administrator and in that capacity
administers and manages all aspects of the Portfolio's day-to-day operations
subject to the supervision of the Trustees of the Portfolio, except as set forth
under "Investment Advisor and Administrative Services Agent" and "Custodian."
In connection with its responsibilities as Administrator, SBDS (i) furnishes
ordinary clerical and related services for day-to-day operations including
certain record keeping responsibilities; (ii) takes responsibility for
compliance with all applicable federal and state securities and other regulatory
requirements including, without limitation, preparing and mailing and filing
(but not paying for) registration statements and proxy statements for the
Portfolio and all required reports on behalf of the Portfolio; (iii) performs
such administrative and managerial oversight of the activities of the
Portfolio's custodian as the Portfolio's Trustees may direct from time to time.
Under the Portfolio's Administration Agreement, the Portfolio has agreed to
pay SBDS a fee equal to its proportionate share of an annual complex-wide
charge. This charge is calculated daily based on the aggregate net assets of
the Master Portfolios in accordance with the following annual schedule: 0.03%
of the first $7 billion of the Master Portfolios' aggregate average daily net
assets and 0.01% of the Master Portfolios' aggregate average daily net assets in
excess of $7 billion. The portion of this charge payable by the Portfolio is
determined by the proportionate share that its net assets bear to the total net
assets of the Master Portfolios and the investors in the Master Portfolios for
which SBDS provides similar related services.
The administrative fees paid to SBDS since the Portfolio's commencement of
operations are as follows: For the period July 12, 1993 (commencement of
operations) through November 30, 1993: $32,869. For the fiscal year ended
November 30, 1994: $165,519. For the fiscal year ended November 30, 1995:
$176,717.
The Administration Agreement may be renewed or amended by the Portfolio's
Trustees without a shareholder vote. The Administration Agreement is terminable
at any time without penalty by a vote of a majority of the Trustees of the
Portfolio on not more than 60 days' written notice nor less than 30 days'
written notice to the other party. SBDS may subcontract for the performance of
its obligations under the Administration Agreement only if the Trustees approve
such subcontract and find the subcontracting party to be qualified to perform
the obligations sought to be subcontracted, provided, however, that unless the
Portfolio expressly agrees in writing, SBDS shall be fully responsible for the
acts and omissions of any subcontractor as it would for its own acts or
omissions.
FUND ADMINISTRATOR
The Trust has separately retained the services of The Managers Funds, L.P.
as administrator (the "Fund Administrator"). The Fund has agreed to pay the
Fund Administrator and shareholder servicing agent for the Fund a fee of 0.25%
of the Fund's average daily net assets for these services. The Fund
Administrator is currently waiving all of this fee through at least May 31,
14
<PAGE>
1996. See "Management of the Fund and the Portfolio-Fund Administrator" in the
Prospectus and "Expenses" below.
DISTRIBUTOR
The Managers Funds, L.P. also serves as distributor (the "Distributor") in
connection with the offering of the Money Market Fund's shares on a no-load
basis. The Distributor bears certain expenses associated with the distribution
and sale of shares of the Fund. The Distributor acts as agent in arranging for
the sale of the Fund's shares without sales commission or other compensation and
bears all advertising and promotion expenses incurred in the sale of shares.
The Distribution Agreement between the Trust, on behalf of the Fund, and
the Distributor may be terminated by either party under certain specified
circumstances and will automatically terminate on assignment. The Distribution
Agreement may be continued annually if specifically approved by the Trust's
Trustees or by a vote of the Fund's outstanding shares, including a majority of
the Trustees who are not "interested persons" of the Trust or the Distributor,
as such term is defined in the 1940 Act, cast in person at a meeting called for
the purpose of voting such approval.
CUSTODIAN, TRANSFER AGENT AND INDEPENDENT PUBLIC ACCOUNTANTS
State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, Massachusetts 02101, serves as the Trust's and the Portfolio's
Custodian. Pursuant to the Custodian Contract with the Portfolio, the Custodian
is responsible for maintaining the books and records of portfolio transactions
and holding portfolio securities and cash.
Boston Financial Data Services, Inc. serves as the Transfer Agent for the
Fund. The independent accountants of the Fund are Coopers & Lybrand L.L.P., One
Post Office Square, Boston, Massachusetts 02109.
The independent accountants of the Portfolio are Price Waterhouse LLP, 1177
Avenue of the Americas, New York, New York 10036. Price Waterhouse LLP conducts
an annual audit of the financial statements of the Portfolio.
EXPENSES
From time to time, the Fund Administrator may agree voluntarily to waive
all or a portion of the fee it would otherwise be entitled to receive from the
Fund. The Fund Administrator may decide to waive all or a portion of its fees
from the Fund for such reasons as attempting to make the Fund's performance more
competitive as compared to similar funds. The effect of the fee waivers in
effect at the date of this Statement of Additional Information on the fees
payable by the Fund is reflected in the Illustrative Expense Information located
in the front of the Fund's Prospectus. Existing voluntary fee waivers by the
Fund Administrator may be terminated or reduced in amount at any time after May
31, 1996, and solely at the discretion of the Fund Administrator. Shareholders
will be notified of any change at the time that it becomes effective.
In addition to the fees payable to Pierpont Group, Inc., Morgan and SBDS
under the various agreements discussed above, the Portfolio is responsible for
usual and customary expenses associated with its operations. Such expenses
include organization expenses, legal fees, accounting expenses, insurance costs,
the compensation and expenses of the Portfolio's Trustees, registration fees
under federal and foreign securities laws, extraordinary expenses, custodian
fees and brokerage expenses. Under fee arrangements prior to September 1, 1995,
Morgan was
15
<PAGE>
responsible for reimbursements to the Portfolio for SBDS's fees as Portfolio
Administrator and the Portfolio's usual customary expenses described above
(excluding organization and extraordinary expenses, custodian fees and brokerage
expenses).
CODE OF ETHICS
The Board of Trustees and the Fund Administrator have adopted a joint Code
of Ethics under Rule 17j-1 of the 1940 Act. The Code of Ethics requires
generally that all employees of the Fund Administrator preclear any personal
securities investment (with limited exceptions such as government securities).
The preclearance requirement and associated procedures are designed to identify
any substantive prohibition or limitation applicable to the proposed investment.
The substantive restrictions applicable to all employees of the Fund
Administrator include a ban on trading securities based on information about the
Fund's trading. Morgan's personal trading rules require its employees to
pre-clear all securities trades (with limited exceptions) for the account of the
employee and certain persons associated with the employee and to arrange for
duplicate confirmations and statements to be sent to Morgan.
NET ASSET VALUE
It is anticipated that the net asset value of each share of the Money
Market Fund will remain constant at $1.00. Although no assurance can be given
that it will be able to maintain such value on a continuing basis, the Portfolio
will, as described below, employ specific investment policies and procedures to
accomplish this result.
The Portfolio relies on Rule 2a-7 under the 1940 Act to use the amortized
cost valuation method to value its securities, which the Trustees of the
Portfolio have determined constitutes fair value for purposes of complying with
the 1940 Act. The amortized cost method of valuation involves valuing portfolio
securities at their cost at the time of purchase and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of interest rate fluctuations on the market value of the securities. If
fluctuating interest rates cause the market value of the securities held by the
Portfolio to deviate more than 1/2 of 1% from their value determined on the
basis of amortized cost, the Trustees will consider whether any action should be
initiated to eliminate or reduce material dilution or other unfair results to
the Fund's shareholders. Such action may include withdrawal in kind, selling
securities prior to maturity and utilizing a net asset value as determined by
using available market quotations. Although the amortized cost method provides
certainty in valuation, it may result in periods during which the stated value
of an instrument is higher or lower than the price the Portfolio would receive
if the instrument were sold.
The Fund computes its net asset value once daily on Monday through Friday.
The net asset value will not be computed on the day the following legal holidays
are observed: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. On days when
U.S. trading markets close early in observance of these holidays, the Fund and
the Portfolio would expect to close for purchases and redemptions at the same
time. The days on which net asset value is determined are the Fund's business
days.
The net asset value of the Fund is equal to the net asset value of the
Fund's investment in the Portfolio, which is equal to the Fund's pro rata share
of the total investment of the Fund and of any other investors in the Portfolio
less the Fund's pro rata share of the Portfolio's liabilities, plus any other
Fund assets less Fund liabilities.
16
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of March 1, 1996, Resource Bank "controlled" (within the meaning of the
1940 Act i.e., owned in excess of 25% of the shares of) the Fund. An entity
which "controls" a particular Fund or Portfolio could have effective voting
control over the operations of that fund.
The following chart identifies those shareholders of record on March 1,
1996 holding 5% or more of the outstanding shares of the Fund. Certain of these
shareholders are omnibus processing organizations.
Resource Bank, Minneapolis, Minnesota (45%)
Benefits Resource, Bridgeport, Connecticut (6%)
Idaho Trust Company, Boise, Idaho (6%)
PERFORMANCE DATA
From time to time, the Fund may quote performance in terms of yield, actual
distributions, total return, or capital appreciation in reports, sales
literature, and advertisements published by the Fund. Current performance
information for the Fund may be obtained by calling the number provided on the
cover page of this Statement of Additional Information. See "Performance
Information" in the Prospectus.
YIELD QUOTATIONS. As required by regulation of the SEC, current yield for
the Money Market Fund is computed by determining the net change exclusion of
capital changes in the value of a hypothetical pre-existing account having a
balance of one share at the beginning of a seven day calendar period, dividing
the net change in account value of the account at the beginning of the period,
and multiplying the return over the seven-day period by 365/7. For purposes of
the calculation, net change in account value reflects the value of additional
shares purchased with dividends from the original share and dividends declared
on both the original share and any such additional shares, but does not reflect
realized gains or losses or unrealized appreciation or depreciation. Effective
yield for the Money Market Fund is computed by annualizing the seven-day return
with all dividends reinvested in additional Fund shares.
For the seven calendar days ended November 30, 1995, the current yield and
effective yield of the Money Market Fund were 3.94% and 4.02%, respectively.
These figures reflect fee waivers in effect during the relevant time period. In
the absense of such waivers, these figures would have been 3.74% and 3.81%,
respectively.
TOTAL RETURN QUOTATIONS. As required by regulations of the SEC, the
annualized total return of the Fund for a period is computed by assuming a
hypothetical initial payment of $1,000. It is then assumed that all of the
dividends and distributions by the Fund over the period are reinvested. It is
then assumed that at the end of the period, the entire amount is redeemed. The
annualized total return is then calculated by determining the annual rate
required for the initial payment to grow to the amount which would have been
received upon redemption. As of November 30, 1995, the Money Market Fund's
annualized one, five and ten year total returns were 4.92%, 3.93% and 5.58%,
respectively.
Aggregate total returns, reflecting the cumulative percentage change over a
measuring period, may also be calculated.
GENERAL. The Fund's performance will vary from time to time depending upon
market conditions, the composition of the Portfolio, and its total operating
expenses. Consequently, any given performance quotation should not be
considered representative of the Fund's performance for any specified period in
the future. In addition, because performance will fluctuate, it may not
17
<PAGE>
provide a basis for comparing an investment in the Fund with certain bank
deposits or other investments that pay a fixed yield or return for a stated
period of time.
Comparative performance information may be used from time to time in
advertising the Fund's shares, including data from Lipper Analytical Services,
Inc., Micropal, Inc., Ibbotson Associates, IBC/Donoghue and Morningstar Inc.
ORGANIZATION OF THE PORTFOLIO
The Portfolio, in which all of the assets of the Fund are invested, is
organized as a trust under the laws of the State of New York. The Portfolio's
Declaration of Trust provides that the Fund and other entities investing in the
Portfolio (e.g., other investment companies, insurance company separate accounts
and common and commingled trust funds) will each be liable for all obligations
of the Portfolio. However, the risk of the Fund incurring financial loss on
account of such liability is limited to circumstances in which both inadequate
insurance existed and the Portfolio itself was unable to meet its obligations.
PORTFOLIO TRANSACTIONS
J. P. Morgan Investment Management Inc., acting as agent for Morgan, places
orders for the Portfolio for all purchases and sales of portfolio securities.
Morgan enters into repurchase agreements and reverse repurchase agreements and
executes loans of portfolio securities on behalf of the Portfolio. See
"Investment Objective and Policies."
Fixed income and debt securities are generally traded at a net price with
dealers acting as principal for their own accounts without a stated commission.
The price of the security usually includes profit to the dealers. In
underwritten offerings, securities are purchased at a fixed price which includes
an amount of compensation to the underwriter, generally referred to as the
underwriter's concession or discount. On occasion, certain securities may be
purchased directly from an issuer, in which case no commissions or discounts are
paid.
Portfolio transactions will be undertaken principally to accomplish the
Fund's objective in relation to expected movements in the general level of
interest rates. The Portfolio may engage in short-term trading consistent with
its objective.
In connection with portfolio transactions for the Portfolio, J.P. Morgan
Investment Management Inc. intends to seek best price and execution on a
competitive basis for both purchases and sales of securities.
The Portfolio has a policy of investing only in securities with maturities
of less than thirteen months, which policy will result in high portfolio
turnovers. Since brokerage commissions are not normally paid on investments
which the Portfolio makes, turnover resulting from such investments should not
adversely affect the net asset value or net income of the Portfolio.
Portfolio securities will not be purchased from or through or sold to or
through the Portfolio's Administrator or Advisor or the Fund's Administrator or
Distributor or any "affiliated person" as defined in the 1940 Act, of the
Administrators, Distributor or Advisor when such entities are acting as
principals, except to the extent permitted by law. In addition, the Portfolio
will not purchase securities during the existence of any underwriting group
relating thereto of which the Advisor or an affiliate of the Advisor is a
member, except to the extent permitted by law.
18
<PAGE>
On those occasions when Morgan deems the purchase or sale of a security to
be in the best interests of the Portfolio as well as other customers including
other investment companies managed by Morgan, J.P. Morgan Investment Management
Inc. to the extent permitted by applicable laws and regulations, may, but is not
obligated to, aggregate the securities to be sold or purchased for the Portfolio
with those to be sold or purchased for other customers in order to obtain best
execution, including lower brokerage commissions if appropriate. In such event,
allocation of the securities so purchased or sold, as well as any expense
incurred in the transaction, will be made by J. P. Morgan Investment Management
Inc. in the manner it considers to be most equitable and consistent with
Morgan's fiduciary obligations to the Portfolio. In some instances, this
procedure might adversely affect the Portfolio.
TAX INFORMATION
The Fund intends to qualify each year as a regulated investment company
("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). In order to so qualify, a RIC must, among other things, (i) derive at
least 90% of its gross income from dividends, interest, payments with respect to
certain securities loans, gains from the sale of securities, certain gains from
foreign currencies, or other income (including but not limited to gains from
options, futures or forward contracts) derived with respect to its business of
investing in such stock, securities or currencies; (ii) derive less than 30% of
its gross income from gains from the sale or other disposition of securities,
options, futures, forward contracts and certain investments in foreign
currencies held for less than three months; (iii) distribute at least 90% of its
dividend, interest and certain other taxable income ("Investment Company Taxable
Income") each year, (iv) at the end of each fiscal quarter maintain at least 50%
of the value of its total assets in cash, government securities, securities of
other regulated investment companies, and other securities of issuers which
represent, with respect to each issuer, no more than 5% of the value of the
RIC's total assets and 10% of the outstanding voting securities of such issuer;
and (v) at the end of each fiscal quarter have no more than 25% of its assets
invested in the securities (other than those of the U.S. Government or other
RICs) of any one issuer or of two or more issuers which the RIC controls and
which are engaged in the same, similar or related trades and businesses. In any
year in which a RIC distributes 90% of its Investment Company Taxable Income, it
will not be subject to corporate income tax on amounts distributed to its
shareholders.
If for any taxable year the Fund does not qualify as a RIC, all of its
taxable income (including its net capital gain) will be subject to taxation at
regular corporate rates without any deduction for distributions to shareholders,
and such distributions will be taxable as ordinary dividend income to the extent
of the Fund's current and accumulated earnings and profits. Such distributions
generally will be eligible for the dividends-received deduction in the case of
corporate shareholders.
Ordinary income distributions and distributions of net realized short-term
capital gains to shareholders who are liable for federal income taxes will be
taxed as ordinary dividend income to such shareholders. Distributions of net
long-term capital gains to such shareholders are taxable as long-term capital
gains regardless of how long such shareholders have held shares of the Fund.
These provisions apply whether the dividends and distributions are received in
cash or accepted in shares. Any loss realized upon the redemption of shares
within 6 months from the date of their purchase will be treated as a long term
capital loss to the extent of any distribution of net long-term capital gains
during such 6-month period. No loss will be allowed on the sale of shares of
the Fund to the extent the shareholder acquired other Fund shares within 30 days
prior to the sale of the loss shares or 30 days after such sale.
Dividends and other distributions by the Fund may also be subject to state
and/or local taxes. Shareholders should consult with their own tax advisers
concerning the foregoing state and local tax consequences of investing in the
Fund. Additionally, shareholders who are foreign
19
<PAGE>
persons should consult with their own tax advisers concerning the foreign tax
consequences of investing in the Fund.
Under the federal income tax law, the Fund will be required to report to
the Internal Revenue Service all distributions of taxable income and capital
gains as well as gross proceeds from all redemptions of the shares except in the
case of certain exempt shareholders. Under the backup withholding provisions of
the Code, such distributions and redemption proceeds may be subject to the
withholding of federal income tax at the rate of 31% in the case of non-exempt
shareholders who fail to furnish the Fund with their correct taxpayer
identification numbers and with required certifications regarding their status
under the federal income tax law, or with respect to those shareholders whom the
Internal Revenue Service notifies the Fund of certain of the non-compliance. If
these withholding provisions are applicable, any distributions to, and proceeds
received by, shareholders, whether taken in cash or reinvested in shares, will
be reduced by the amounts required to be withheld.
The Code imposes a four percent nondeductible excise tax on each RIC with
respect to the amount, if any, by which it does not meet distribution
requirements specified under such tax law. The Fund intends to comply with such
distribution requirements and thus does not expect to incur the four percent
nondeductible excise tax although it may not be possible for the Fund to avoid
this tax in all instances.
The foregoing discussion relates solely to U.S. federal income tax law.
Non-U.S. investors should consult their tax advisers concerning the tax
consequences of ownership of shares of the Fund, including the possibility that
distributions may be subject to a 30% U.S. withholding tax (or a reduced rate of
withholding provided by treaty).
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury Regulations currently in effect. For the
complete provisions, reference would be made to the pertinent Code sections and
the Treasury Regulations promulgated thereunder. The above discussion covers
only federal income tax considerations with respect to the Fund and its
shareholders. Foreign, state and local tax laws vary greatly. Shareholders
should consult their own tax advisers for more information regarding the
federal, foreign, state, and local tax treatment of the Fund's distributions to
shareholders and with respect to their own tax situation.
FINANCIAL STATEMENTS
The audited Financial Statements and the Notes thereto for the Fund, and
the auditor's report of Coopers & Lybrand L.L.P., independent public
accountants, are herein incorporated by reference from the Managers Money Market
Fund Annual Report dated November 30, 1995 and December 31, 1994.
The Portfolio's audited Financial Statements and the Notes thereto at
November 30, 1995, and the report of Price Waterhouse LLP, independent
accountants, are herein incorporated by reference from the Portfolio's Annual
Report as filed with the SEC pursuant to Section 30(b) of the 1940 Act and Rule
30b2-1.
20
<PAGE>
APPENDIX A
Description of the highest commercial paper and other short-term rating
category assigned by Standard & Poor's Corporation ("S&P"), Moody's Investors
Service, Inc. ("Moody's"), Fitch Investors Service, Inc. ("Fitch") and Duff and
Phelps, Inc. ("Duff").
Commercial Paper and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues determined
to possess overwhelming safety characteristics are denoted with a plus sign (+)
designation.
The rating Prime-1 (P-1) is the highest commercial paper rating assigned by
Moody's. Issuers of P-1 paper must have a superior capacity for repayment of
short-term promissory obligations and ordinarily will be evidenced by leading
market positions in well established industries, high rates of return of funds
employed, conservative capitalization structures with moderate reliance on debt
and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternative liquidity.
The rating Fitch-1 (Highest Grade) is the highest commercial paper rating
assigned by Fitch. Paper rated Fitch-1 is regarded as having the strongest
degree of assurance for timely payment.
The rating Duff-1 is the highest commercial paper rating assigned by Duff.
Paper rated Duff-1 is regarded as having very high certainty of a timely payment
with excellent liquidity factors which are supported by ample asset protection.
Risk factors are minor.
21
<PAGE>
THE MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL AMOUNT MATURITY/
(IN THOUSANDS) SECURITY DESCRIPTION MATURITY DATES RATE VALUE
- -------------------- ---------------------------------------- ------------------- ------------- --------------
<C> <S> <C> <C> <C>
ASSET-BACKED SECURITY (0.1%)
$ 3,573 Bank One Auto Trust, Series 1995-A,
Class A-1............................. 04/15/96 6.362% $ 3,572,937
--------------
CERTIFICATE OF DEPOSIT -- DOMESTIC (0.7%)
25,000 Wachovia Bank & Trust Co., N.A.......... 02/09/96 7.070 25,000,906
--------------
CERTIFICATES OF DEPOSIT -- FOREIGN (30.7%)
39,500 Bank of Montreal (Chicago).............. 12/05/95 5.770 39,500,043
101,891 Bank of Montreal (New York)............. 12/01/95 5.937 101,891,000
31,000 Bank of Nova Scotia..................... 02/06/96 5.750 31,000,000
160,000 Banque National de Paris Ltd............ 12/07/95 - 03/25/96 5.740 - 5.790 160,000,000
29,000 Commerzbank U.S. Finance Inc............ 12/01/95 5.760 29,000,000
125,000 Dai-ichi Kangyo Bank Ltd................ 12/05/95 - 02/02/96 5.990 - 6.260 125,016,993
150,000 Fuji Bank Ltd........................... 12/06/95 - 01/12/96 6.000 - 6.180 150,000,935
112,000 Industrial Bank of Japan Ltd............ 01/16/96 - 02/14/96 6.120 - 6.310 112,005,520
110,000 Mitsubishi Bank Ltd..................... 12/27/95 5.900 110,000,000
21,000 National Bank, Australia................ 10/02/96 5.750 20,978,104
7,000 Sanwa Bank Ltd.......................... 01/16/96 6.080 7,000,000
86,000 Societe Generale N.Y.................... 12/18/95 - 04/12/96 5.750 - 6.600 86,010,561
50,000 Sumitomo Bank Ltd....................... 01/26/96 6.100 50,000,000
--------------
Total Certificates of Deposit - Foreign 1,022,403,156
--------------
COMMERCIAL PAPER -- DOMESTIC (19.1%)
31,000 Ameritech Corp.......................... 12/28/95 5.590 30,870,033
86,400 AT&T Corp............................... 12/01/95 5.620 86,400,000
25,000 Associate Corp. of North America........ 12/01/95 5.910 25,000,000
32,000 Bankers Trust Corp...................... 03/13/96 5.670 31,480,880
50,000 C.I.T. Group Holdings Inc............... 03/18/96 5.620 49,157,000
21,215 Campbell Soup Co........................ 02/01/96 5.900 20,999,432
39,775 Chevron Transportation Corp............. 12/06/95 - 12/19/95 5.700 - 5.730 39,700,761
17,200 Dupont (E.I.) de Nemours & Co., Inc..... 07/24/96 5.500 16,579,844
29,200 Exxon Asset Management.................. 12/08/95 5.710 29,167,580
50,000 First Chicago Corp...................... 12/05/95 5.770 49,967,944
85,500 Ford Motor Corp......................... 12/15/95 5.620 85,313,135
153,000 General Electric Capital Corp........... 12/04/95 - 12/29/95 5.710 - 5.760 152,698,789
3,755 Georgia Municipal Electric Co........... 12/08/95 5.710 3,750,831
4,720 Koch Industries Inc..................... 12/01/95 5.900 4,720,000
7,160 Lilly, Eli & Co......................... 12/04/95 5.620 7,156,647
5,000 Raytheon Co............................. 12/12/95 5.750 4,991,215
--------------
Total Commercial Paper - Domestic 637,954,091
--------------
COMMERCIAL PAPER -- FOREIGN (17.5%)
56,737 ABN - AMRO Bank N.V..................... 12/05/95 5.700 56,701,067
97,000 Abbey National, North America........... 12/22/95 5.610 96,682,568
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
22
<PAGE>
THE MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL AMOUNT MATURITY/
(IN THOUSANDS) SECURITY DESCRIPTION MATURITY DATES RATE VALUE
- -------------------- ---------------------------------------- ------------------- ------------- --------------
COMMERCIAL PAPER -- FOREIGN (CONTINUED)
<C> <S> <C> <C> <C>
$ 70,985 Bayerische Vereinsbank.................. 12/01/95 5.930% $ 70,985,000
4,500 BFCE U.S. Finance Corp.................. 02/20/96 5.690 4,442,389
82,000 Commonwealth Bank of Australia.......... 12/20/95 5.600 81,757,644
127,500 Deutsche Bank Financial, Inc............ 12/05/95 - 02/02/96 5.665 - 5.750 127,163,964
20,000 Electricite De France................... 04/04/96 5.610 19,610,417
23,000 Ontario Hydro........................... 04/09/96 5.620 22,533,228
40,000 Royal Bank of Canada.................... 03/28/96 5.654 39,258,698
62,828 UBS Finance (Delaware), Inc............. 12/05/95 5.750 62,787,860
--------------
Total Commercial Paper - Foreign 581,922,835
--------------
CORPORATE BONDS (2.0%)
15,000 Abbey National Treasury Services PLC.... 12/20/95 7.350 14,998,777
52,000 Ford Motor Credit Co.................... 12/11/95 - 03/25/96 5.000 - 6.125 51,931,711
--------------
Total Corporate Bonds 66,930,488
--------------
EURO DOLLAR CERTIFICATES OF DEPOSIT (0.1%)
4,000 Mitsubishi Trust & Banking Corp......... 01/16/96 6.140 4,000,051
--------------
FLOATING RATE NOTES (12.1%) (a)
25,000 Boatmens First National Bank, (resets
monthly to one month LIBOR Rate -1
basis point).......................... 06/12/96 5.802 25,000,000
15,000 Colorado National Bank, (resets monthly
to one month LIBOR Rate -2 basis
points)............................... 04/17/96 5.792 14,998,859
175,000 Federal National Mortgage Association,
(resets daily to one month LIBOR Rate
-19 basis points)..................... 10/11/96 5.622 174,835,927
50,000 First Bank N.A., (resets monthly to one
month LIBOR Rate -3 basis points)..... 03/08/96 5.782 49,998,736
140,000 Student Loan Marketing Association,
(resets monthly to one month LIBOR
Rate -17 basis points)................ 07/01/96 5.662 139,941,677
--------------
Total Floating Rate Notes 404,775,199
--------------
TIME DEPOSITS -- FOREIGN (3.0%)
100,000 Dresdner Bank, Grand Cayman............. 12/01/95 5.937 100,000,000
--------------
U.S. TREASURY OBLIGATIONS (1.7%)
6,772 United States Treasury Bills............ 12/14/95 - 03/21/96 5.160 - 5.590 6,708,660
50,000 United States Treasury Notes............ 04/15/96 - 05/15/96 7.375 - 9.375 50,513,279
--------------
Total U.S. Treasury Obligations 57,221,939
--------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
23
<PAGE>
THE MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL AMOUNT MATURITY/
(IN THOUSANDS) SECURITY DESCRIPTION MATURITY DATES RATE VALUE
- -------------------- ---------------------------------------- ------------------- ------------- --------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (17.3%)
$ 36,941 Federal Farm Credit Bank................ 12/02/96 5.400% $ 36,940,800
5,000 Federal Home Loan Bank.................. 04/24/96 6.420 5,007,303
139,923 Federal Home Loan Mortgage Corp......... 12/01/95 - 12/20/95 5.690 - 5.800 139,820,551
394,970 Federal National Mortgage Association... 12/05/95 - 12/06/96 5.390 - 6.460 393,432,114
--------------
Total U.S. Government Agency Obligations 575,200,768
--------------
REPURCHASE AGREEMENT (0.1%)
2,470 Goldman Sachs Repurchase Agreement dated
11/30/95 due 12/01/95, proceeds
$2,470,401 (collateralized by
$2,263,000 U.S. Treasury Notes 9.125%,
due 05/15/99 valued at $2,519,872)
(cost $2,470,000)..................... 12/01/95 5.850 2,470,000
--------------
TOTAL INVESTMENTS (104.4%)
3,481,452,370
LIABILITIES IN EXCESS OF OTHER ASSETS (-4.4%)
(146,496,954)
--------------
NET ASSETS (100.0%) $3,334,955,416
--------------
--------------
</TABLE>
(a) The coupon rate shown on floating or adjustable rate securities represents
the rate at the end of the reporting period. The due date on these types of
securities reflects the final maturity date.
The Accompanying Notes are an Integral Part of the Financial Statements.
24
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Amortized Cost and Value $3,481,452,370
Cash 1,788
Receivable for Investments Sold 29,211,142
Interest Receivable 11,598,272
Prepaid Expenses 24,736
--------------
Total Assets 3,522,288,308
--------------
LIABILITIES
Payable for Investments Purchased 186,732,650
Advisory Fee Payable 420,879
Custody Fee Payable 83,329
Administration Fee Payable 15,676
Fund Services Fee Payable 12,892
Accrued Expenses 67,466
--------------
Total Liabilities 187,332,892
--------------
NET ASSETS
Applicable to Investors' Beneficial Interests $3,334,955,416
--------------
--------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
25
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
$173,636,796
Interest
EXPENSES
Advisory Fee $ 3,913,479
Custodian Fees and Expenses 545,910
Financial and Fund Accounting Services Fee 373,077
Fund Services Fee 261,045
Administration Fee 176,717
Professional Fees and Expenses 71,200
Trustees' Fees and Expenses 66,978
Miscellaneous 47,677
------------
(5,456,083)
Total Expenses
------------
168,180,713
NET INVESTMENT INCOME
1,573,477
NET REALIZED GAIN ON INVESTMENTS
------------
$169,754,190
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS
------------
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
26
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED NOVEMBER
30,
-----------------------------------
1995 1994
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 168,180,713 $ 94,288,128
Net Realized Gain (Loss) on Investments 1,573,477 (57,650)
---------------- ----------------
Net Increase in Net Assets Resulting from
Operations 169,754,190 94,230,478
---------------- ----------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS
Contributions 17,654,676,133 13,334,979,866
Withdrawals (17,137,148,786) (13,481,612,327)
---------------- ----------------
Net Increase (Decrease) from Investors'
Transactions 517,527,347 (146,632,461)
---------------- ----------------
Total Increase (Decrease) in Net Assets 687,281,537 (52,401,983)
NET ASSETS
Beginning of Fiscal Year 2,647,673,879 2,700,075,862
---------------- ----------------
End of Fiscal Year $ 3,334,955,416 $ 2,647,673,879
---------------- ----------------
---------------- ----------------
- ----------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- ----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 12, 1993
FOR THE FISCAL YEAR ENDED NOVEMBER 30, (COMMENCEMENT
--------------------------------------- OF OPERATIONS) THROUGH
1995 1994 NOVEMBER 30, 1993
------------------ ------------------ -----------------------
<S> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS
Expenses 0.19% 0.20% 0.19%(a)
Net Investment Income 5.77% 3.90% 2.98%(a)
Decrease Reflected in Expense Ratio due to
Expense Reimbursements by Morgan - 0.00%(b) -
</TABLE>
- ------------------------
(a) Annualized
(b) Less than 0.01%
The Accompanying Notes are an Integral Part of the Financial Statements.
27
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Money Market Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940, as amended, (the "Act") as a no-load, diversified, open-end
management investment company which was organized as a trust under the laws of
the State of New York. The Portfolio commenced operations on July 12, 1993. The
Declaration of Trust permits the Trustees to issue an unlimited number of
beneficial interests in the Portfolio.
The following is a summary of the significant accounting policies of the
Portfolio:
a)Investments are valued at amortized cost which approximates market value.
The amortized cost method of valuation values a security at its cost at
the time of purchase and thereafter assumes a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instruments.
The Portfolio's custodian or designated subcustodians, as the case may be
under triparty repurchase agreements, takes possession of the collateral
pledged for investments in repurchase agreements on behalf of the
Portfolio. It is the policy of the Portfolio to value the underlying
collateral daily on a mark-to-market basis to determine that the value,
including accrued interest, is at least equal to the repurchase price plus
accrued interest. In the event of default of the obligation to repurchase,
the Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances,
in the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
b)Securities transactions are recorded on a trade date basis. Investment
income consists of interest income, which includes the amortization of
premiums and discounts. For financial and tax reporting purposes, realized
gains and losses are determined on the basis of specific lot
identification.
c)The Portfolio intends to be treated as a partnership for federal income
tax purposes. As such, each investor in the Portfolio will be subject to
taxation on its share of the Portfolio's ordinary income and capital
gains. It is intended that the Portfolio's assets will be managed in such
a way that an investor in the Portfolio will be able to satisfy the
requirements of Subchapter M of the Internal Revenue Code. The cost of
securities is the same for book and tax purposes.
2. TRANSACTIONS WITH AFFILIATES
a)The Portfolio has an investment advisory agreement with Morgan Guaranty
Trust Company of New York ("Morgan"). Under the terms of the investment
advisory agreement, the Portfolio pays Morgan at an annual rate of 0.20%
of the Portfolio's average daily net assets up to $1 billion and 0.10% on
any excess over $1 billion. For the fiscal year ended November 30, 1995,
this fee amounted to $3,913,479.
28
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
b)The Portfolio has retained Signature Broker - Dealer Services, Inc.
("Signature") to serve as Administrator and exclusive placement agent.
Signature provides administrative services necessary for the operations of
the Portfolio, furnishes office space and facilities required for
conducting the business of the Portfolio and pays the compensation of the
Portfolio's officers affiliated with Signature. The agreement provides for
a fee to be paid to Signature at an annual fee rate determined by the
following schedule: 0.01% of the first $1 billion of the aggregate average
daily net assets of the Portfolio and the other portfolios subject to the
Administration Agreement, 0.008% of the next $2 billion of such net
assets, 0.006% of the next $2 billion of such net assets, and 0.004% of
such net assets in excess of $5 billion. The daily equivalent of the fee
rate is applied each day to the net assets of the Portfolio. For the
fiscal year ended November 30, 1995, Signature's fee for these services
amounted to $176,717.
Effective December 29, 1995, the Administration Agreement was amended such
that the fee charged would be equal to the Portfolio's proportionate share
of a complex-wide fee based on the following annual schedule: 0.03% on the
first $7 billion of the aggregate average daily net assets of the
Portfolio and the other portfolios subject to this agreement (the "Master
Portfolios") and 0.01% on the aggregate average daily net assets of the
Master Portfolios in excess of $7 billion. The portion of this charge
payable by the Portfolio is determined by the proportionate share its net
assets bear to the total net assets of The Pierpont Funds, The JPM
Institutional Funds, The JPM Advisor Funds and the Master Portfolios.
c)Until August 31, 1995, the Portfolio had a Financial and Fund Accounting
Services Agreement with Morgan under which Morgan received a fee for
overseeing certain aspects of the administration and operation of the
Portfolio and which was also designed to provide an expense limit for
certain expenses of the Portfolio. This fee was calculated at 0.03% of the
Portfolio's average daily net assets. For the nine month period ended
August 31, 1995, the fee for these services amounted to $373,077. From
September 1, 1995 until December 28, 1995, an interim agreement between
the Portfolio and Morgan provided for the continuation of the oversight
functions that were outlined under the prior agreement and that Morgan
should bear all of its expenses incurred in connection with these
services.
Effective December 29, 1995, the Portfolio entered into an Administrative
Services Agreement with Morgan under which Morgan is responsible for
overseeing certain aspects of the administration and operation of the
Portfolio. Under the Agreement, the Portfolio has agreed to pay Morgan a
fee equal to its proportionate share of an annual complex-wide charge.
This charge is calculated daily based on the aggregate net assets of the
Master Portfolios in accordance with the following annual schedule: 0.06%
on the first $7 billion of the Master Portfolios' aggregate net assets and
0.03% of the aggregate net assets in excess of $7 billion. The portion of
this charge payable by the Portfolio is determined by the proportionate
share that the Portfolio's net assets bear to the net assets of the Master
Portfolios and other investors in the Master Portfolios for which Morgan
provides similar services.
d)The Portfolio has a Fund Services Agreement with Pierpont Group, Inc.
("Group") to assist the Trustees in exercising their overall supervisory
responsibilities for the Portfolio's affairs. The
29
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 1995
- --------------------------------------------------------------------------------
Trustees of the Portfolio represent all the existing shareholders of
Group. The Portfolio's allocated portion of Group's costs in performing
its services amounted to $261,045 for the fiscal year ended November 30,
1995.
e)An aggregate annual fee of $65,000 is paid to each Trustee for serving as
a Trustee of The Pierpont Funds, The JPM Institutional Funds and their
corresponding Portfolios. The Trustees' Fees and Expenses shown in the
financial statements represent the Portfolio's allocated portion of the
total fees and expenses. Prior to April 1, 1995, the aggregate annual
Trustee Fee was $55,000. The Trustee who serves as Chairman and Chief
Executive Officer of these Funds and Portfolios also serves as Chairman of
Group and received compensation and employee benefits from Group in his
role as Group's Chairman. The allocated portion of such compensation and
benefits included in the Fund Services Fee shown in the financial
statements was $33,500.
30
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Investors of
The Money Market Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the supplementary data present fairly, in all material
respects, the financial position of The Money Market Portfolio (the "Portfolio")
at November 30, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the supplementary data for each of the two years in the period then ended and
for the period July 12, 1993 (commencement of operations) through November 30,
1993, in conformity with generally accepted accounting principles. These
financial statements and supplementary data (hereafter referred to as "financial
statements") are the responsibility of the Portfolio's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
November 30, 1995 by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from brokers
were not received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
January 23, 1996
31
<PAGE>
THE MANAGERS FUNDS POST-EFFECTIVE
AMENDMENT NO. 37 TO REGISTRATION STATEMENT
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements
Part A:
With reference to each of The Managers:
Capital Appreciation Fund
Income Equity Fund
Special Equity Fund
International Equity Fund
Short Government Fund
Short and Intermediate Bond Fund
Intermediate Mortgage Fund
Bond Fund
Global Bond Fund
Money Market Fund
FINANCIAL HIGHLIGHTS
For the fiscal years (or portions thereof) (audited) from
commencement of operations to December 31, 1995 (November 30,
1995, with respect to Managers Money Market Fund).
Part B:
With reference to each of The Managers:
Capital Appreciation Fund
Income Equity Fund
Special Equity Fund
International Equity Fund
Short Government Fund
Short and Intermediate Bond Fund
Intermediate Mortgage Fund
Bond Fund
Global Bond Fund
Money Market Fund
1
<PAGE>
At December 31, 1995 (audited) and with respect to Managers Money
Market Fund, at November 30, 1995 (audited):
Schedule of Investments
Statement of Assets and Liabilities
For the fiscal year ended December 31, 1995 (audited) and with
respect to Managers Money Market Fund, at November 30, 1995
(audited):
Statement of Changes in Net Assets
For the fiscal years ended December 31, 1995 (audited) and
December 31, 1994 (audited), and with respect to Managers Money
Market Fund, for the eleven months ended November 30, 1995
(audited):
Statement of Operations
Notes to Financial Statements
For the fiscal years (or portions thereof) from commencement of
operations to December 31, 1995 (audited) and with respect to
Managers Money Market Fund, for the eleven months ended November
30, 1995 (audited):
Statements of Finical Highlights
With respect to The Money Market Portfolio:
At November 30, 1995 (audited):
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Supplementary Data
Notes to Financial Statements
(b) Exhibits
1. (A) Declaration of Trust dated November 23, 1987.
Incorporated by reference to PEA 20.
1. (B) Amendment to Declaration of Trust dated May 12, 1993.
Incorporated by reference to PEA 32.
1. (C) Amendment to Declaration of Trust dated June 30, 1993.
Incorporated by reference to PEA 32.
2
<PAGE>
2. By-Laws of the Trust.
Incorporated by reference to PEA 20.
3. Not Applicable.
4. Instruments Defining Rights of Shareholders
Incorporated by reference to PEA 34.
5.(A) Fund Management Agreement dated August 17, 1990 between
EAIMC Partners, L.P. (now "The Managers Funds, L.P.") and
the Trust.
Incorporated by reference to PEA 32.
(B) Asset Management Agreements between The Managers Funds, L.P.
and each of the Asset Managers identified in the
Registration Statement. Incorporated by reference to PEA
32.
6. Form of Distribution Agreement between The Managers Funds
and The Managers Funds, L.P. Incorporated by reference to
PEA 28.
7. Not Applicable.
8. Form of Custodian Agreement with State Street Bank and
Trust. Incorporated by reference to PEA 28.
9.(A) Transfer Agency Agreement between The Managers Funds and
State Street Bank and Trust Company. Incorporated by
reference to PEA 33.
(B) Form of Administration and Shareholder Servicing Agreement
between the Trust and The Managers Funds, L.P. Incorporated
by reference to PEA 28.
(C) Form of License Agreement Relating to Use of Name between
The Managers Funds and The Managers Funds, L.P.
Incorporated by reference to PEA 28.
10. Opinion and Consent of Shereff, Friedman, Hoffman & Goodman,
L.L.P. Incorporated by reference to PEA 36
11. Consents of Independent Accountants.*
(A) Consent of Coopers & Lybrand L.L.P.
(B) Consent of Price Waterhouse LLP
12. Not Applicable.
3
<PAGE>
13. Not Applicable.
14. Not Applicable.
15. Not Applicable.
16. Computation of Performance Quotations.
Incorporated by reference to PEA 19.
18. (1) Powers of Attorney for:
William W. Graulty
Madeline H. McWhinney
Steven J. Paggioli
Thomas R. Schneeweis
Robert P. Watson
Donald S. Rumery
Kathleen Wood
Incorporated by reference to PEA 31.
(2) Powers of Attorney for the Trustees and Officers
of The Money Market Portfolio:*
Michael P. Mallardi
Frederick S. Addy
William G. Burns
Matthew Healey
Arthur C. Eschenlauer
John R. Elder
27. Financial Data Schedules*
- -------------
* Included as an exhibit to this filing.
ITEM 25. Persons Controlled by or under Common Control with Registrant
None.
ITEM 26. Number of Holders of Securities
As of April 29, 1996, the shares of beneficial interest of each Fund were
held of record by the number of holders indicated below:
NUMBER OF
FUND NAME RECORD HOLDERS
- -----------------------------------------------------------
Capital Appreciation Fund................. 1,574
Income Equity Fund........................ 1,186
Special Equity Fund....................... 1,742
International Equity Fund................. 2,794
Short Government Fund..................... 477
Short and Intermediate Bond Fund.......... 1,040
4
<PAGE>
Intermediate Mortgage Fund................ 1,484
Bond Fund................................. 981
Global Bond Fund.......................... 915
Money Market Fund......................... 808
ITEM 27. Indemnification
The following sections of the Registrant's Declaration of Trust, dated
November 23, 1987, which relate to indemnification of Trustees, officers and
others by the Trust and to exemption from personal liability of Trustees,
officers and others, also relate to indemnification:
Sections 2.9(d),(f)
Sections 4.1 - 4.3
Section 8.3(b)
These Sections are reproduced below.
SECTION 2.9. MISCELLANEOUS POWERS. The Trustee shall have the power to:
(d) purchase, and pay for out of Trust Property, insurance policies insuring the
Shareholders, Trustees, officers, employees, agents, Investment Advisers,
Distributors, selected dealers or independent contractors of the Trust against
all claims arising by reason of holding any such position or by reason of any
action taken or omitted by any such Person in such capacity, whether or not
constituting negligence, or whether or not the Trust would have the power to
indemnify such Person against such liability; . . . (f) to the extent permitted
by law, indemnify any person with whom the Trust has dealings, including the
Investment Adviser, Distributor, Transfer Agent and selected dealers, to such
extent as the Trustees shall determine;
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
-------------------------------------
SECTION 4.1. NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, ETC. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust. No Trustee, officer, employee or agent of the Trust shall be subject to
any personal liability whatsoever to any Person, other than to the Trust or its
Shareholders, in connection with the Trust Property or the affairs of the Trust,
save only that arising from bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties with respect to such Person, and all such
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer, employee, or agent, as such, of the Trust, is
made a party to any suit or proceeding to enforce any such liability of the
Trust or any Series, he shall not, on account thereof, be held to any personal
liability. The Trust or
5
<PAGE>
Series shall indemnify and hold each Shareholder harmless from and against all
claims and liabilities, to which such Shareholder may become subject by reason
of his being or having been a Shareholder, and shall reimburse such Shareholder
for all legal and other expenses reasonably incurred by him in connection with
any such claim or liability. The rights accruing to a Shareholder under this
Section 4.1 shall not exclude any other right to which such Shareholder may be
lawfully entitled, nor shall anything herein contained restrict the right of the
Trust to indemnify or reimburse a Shareholder in any appropriate situation even
though not specifically provided herein.
SECTION 4.2. NON-LIABILITY OF TRUSTEES, ETC. No Trustee, officer,
employee or agent of the Trust shall be liable to the Trust or to any
Shareholder, Trustee, officer, employee, or agent thereof for any action or
failure to act (including without limitation the failure to compel in any way
any former or acting Trustee to redress any breach of trust) except for his own
bad faith, willful misfeasance, gross negligence or reckless disregard of the
duties involved in the conduct of his office or for his failure to act in good
faith in the reasonable belief that his action was in the best interests of the
Trust. Notwithstanding anything in this Article IV or elsewhere in this
Declaration to the contrary and without in any way increasing the liability of
the Trustees beyond that otherwise provided in this Declaration, no Trustee
shall be liable to the Trust or to any Shareholder, Trustee, officer, employee
or agent for monetary damages for breach of fiduciary duty as a Trustee;
provided that such provision shall not eliminate or limit the liability of a
Trustee (i) for any breach of the Trustee's duty of loyalty to the Trust or its
Shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, or (iii) for any transaction
from which the Trustee derived an improper personal benefit.
SECTION 4.3. MANDATORY INDEMNIFICATION. (a) Subject to the exceptions and
limitations contained in paragraph (b) below:
(i) every person who is, or has been, a Trustee or officer of
the Trust shall be indemnified by the Trust or any Series to the
fullest extent permitted by law against all liability and against all
expenses reasonably incurred or paid by him in connection with any
claim, action, suit or proceeding in which he became involved as a
party or otherwise by virtue of his being or having been a Trustee or
officer and against amounts paid or incurred by him in the settlement
thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal,
or other, including appeals), actual or threatened; the words
"liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
6
<PAGE>
(b) No indemnification shall be provided hereunder to a Trustee
or officer:
(i) against any liability to the Trust or the Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office;
(ii) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust;
(iii) in the event of a settlement involving a final
adjudication as provided in paragraph (b)(i) resulting in a payment by
a Trustee or officer, unless there has been a determination that such
Trustee or officer did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his office:
(A) by the court or other body approving the settlement or other
disposition; or
(B) based upon a review of readily available facts (as opposed
to a full trial-type inquiry) by (x) vote of a majority of the
Disinterested Trustees acting on the matter (provided that a
majority of the Disinterested Trustees then in office act on the
matter) or (y) written opinion of independent legal counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter by
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors, administrators
and assigns of such a person. Nothing contained herein shall affect any rights
to indemnification to which personnel of the Trust other than Trustees and
officers may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any
claim, action, suit or proceeding of the character described in paragraph (a) of
this Section 4.3 may be advanced by the Trust or any Series prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Section 4.3, provided that either
(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the
7
<PAGE>
recipient, or the Trust shall be insured against losses arising out of
any such advances; or
(ii) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees act on
the matter), or an independent legal counsel in a written opinion,
shall determine, based upon a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe
that the recipient ultimately will be found entitled to
indemnification.
As used in this Section 4.3, a "Disinterested Trustee" is one who is not
(i) an "Interested Person" of the Trust (including anyone who has been exempted
from being an "Interested Person" by any rule, regulation or order of the
Commission), or (ii) involved in the claim, action, suit or proceeding.
SECTION 8.3. AMENDMENT PROCEDURE. (b) No amendment may be made under
this Section 8.3 which would change any rights with respect to any Shares of the
Trust or of any Series by reducing the amount payable thereon upon liquidation
of the Trust or by diminishing or eliminating any voting rights pertaining
thereto, except with the vote or consent of the holders of two-thirds of the
Shares outstanding and entitled to vote, or by such other vote as may be
established by the Trustees with respect to any Series of Shares. Nothing
contained in this Declaration shall permit the amendment of this Declaration to
impair the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or to permit assessments upon
Shareholders.
ITEM 28. Business and Other Connections of Investment Advisers
The business and other connections of the officers and directors of
The Managers Funds, L.P. (the Registrant's Manager), and the asset managers of
the Registrant are listed in schedules A and D of their respective ADV Forms as
currently on file with the Commission, the texts of which Schedules are hereby
incorporated herein by reference. The file numbers of said ADV Forms are as
follows:
The Managers Funds, L.P. -- 801-19215
Dietche & Field Advisers, Inc. -- 801-20033
Liberty Investment Management -- 801-21343
Hudson Capital Advisers -- 801-31427
Jennison Associates Capital Corp. -- 801-5608
Lazard Freres Asset Management -- 801-6568
Loomis, Sayles & Company, Inc. -- 801-17000
Pilgrim Baxter Associates -- 801-19165RC
Rogge Global Partners, Inc. -- 801-25482
Scudder, Stevens & Clark, Inc. -- 801-252
Spare, Kaplan, Bischel & Associates -- 801-35258
Standish, Ayer & Wood Inc. -- 801-584
Westport Asset Management, Inc. -- 801-21845
8
<PAGE>
ITEM 29. Principal Underwriter
(a) The Managers Funds, L.P. ("TMF") acts as principal underwriter for the
Registrant. TMF does not currently act as principal underwriter
for any other investment company. TMF's address is 40 Richards
Avenue, Norwalk, Connecticut 06854.
(b) The business and other connections of the officers and directors
of The Managers Funds, L.P. (formerly EAIMC Partners, L.P.) (the
Registrant's Manager), are listed in Schedules A and D of its ADV
Form as currently on file with the Commission, the text of which
Schedules are hereby incorporated herein by reference. The file
number of said ADV Form is 801-19215.
(c) Not Applicable.
ITEM 30. Location of Accounts and Records
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder
are maintained in the following locations:
RULE 31A-1
(a) Records forming the basis for financial statements of Registrant are
kept at the principal offices of SSB, Managers, Adviser & AM (see legend below).
Legend: Managers -- The Managers Funds
40 Richards Avenue
Norwalk, Connecticut 06854
SSB -- State Street Bank
and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Adviser -- The Managers Funds, L.P.
40 Richards Avenue
Norwalk, Connecticut 06854
AM -- Asset Managers (see
Statement of Additional
Information section
entitled "Asset Manager
Profiles" for the name,
address and a description
of the asset managers of
each Fund)
9
<PAGE>
(b) Managers Records:
(1) SSB -- Journals containing daily record of securities transactions,
receipts and deliveries of securities and receipts and
disbursements of cash.
(2) SSB -- General and auxiliary ledgers
(3) Not Applicable
(4) Managers -- Corporate Documents
(5) AM -- Brokerage orders
(6) AM -- Other portfolio purchase orders
(7) SSB -- Contractual commitments
(8) SSB and Managers -- Trial balances
(9) AM -- Reasons for brokerage allocations
(10) AM -- Persons authorizing purchases and sales
(11) Managers and AM -- Files of advisory material
(c) Not applicable
(d) Adviser -- Broker/dealer records, to the extent applicable
(e) Not applicable
(f) Adviser and AM -- Investment adviser records
ITEM 31. Management Services
Not Applicable.
ITEM 32. Undertakings
(a) Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to Trustees, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a Trustee, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
10
<PAGE>
Trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(b) The Registrant shall furnish to each person to whom a prospectus is
delivered a copy of the Registrant's latest annual report to shareholders, upon
request and without charge.
(c) If requested to do so by the holders of at least 10% of the
Registrant's outstanding shares, the Registrant will call a meeting of
shareholders for the purpose of voting upon the removal of a trustee or trustees
and the Registrant will assist communications with other shareholders as
required by Section 16(c) of the Investment Company Act of 1940.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant certifies that it meets all of the
requirements for effectiveness of this Amendment to its Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amendment to its Registration Statement on Form N-1A to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Norwalk,
and the State of Connecticut on this 30th day of April, 1996.
THE MANAGERS FUNDS
By:/s/Robert P. Watson
-------------------
Robert P. Watson
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registrant's Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
/s/ Robert P. Watson Trustee and April 30, 1996
- --------------------
Robert P. Watson President (Principal
Executive Officer)
/s/ Donald S. Rumery Principal Financial April 30, 1996
- --------------------
Donald S. Rumery and Accounting
Officer
/s/ William W. Graulty Trustee April 30, 1996
- ----------------------
William W. Graulty
/s/ Madeline H. McWhinney Trustee April 30, 1996
- -------------------------
Madeline H. McWhinney
/s/ Steven J. Paggioli Trustee April 30, 1996
- ----------------------
Steven J. Paggioli
/s/ Thomas R. Schneeweis Trustee April 30, 1996
- ------------------------
Thomas R. Schneeweis
12
<PAGE>
SIGNATURES
The Money Market Portfolio has duly caused this Post-Effective Amendment to
the Registration Statement on Form N1-A ("Registration Statement") of The
Managers Funds (the "Trust") to be signed on its behalf by the undersigned,
thereto duly authorized, in George Town, Grand Cayman, Cayman Islands, on
the 3rd day of May, 1996.
THE MONEY MARKET PORTFOLIO
By:
/s/ Susan Jakuboski
- ----------------------------------------------------------------
Susan Jakuboski, Assistant Secretary and Assistant Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Trust's Registration Statement has been signed below by the following
persons in the capacities indicated on the 3rd day of May, 1996.
JOHN R. ELDER*
John R. Elder, Treasurer of the Portfolio
MATTHEW HEALEY*
Matthew Healey, Chairman and Chief Executive Officer of the Portfolio
F.S. ADDY*
F.S. Addy, Trustee of the Portfolio
WILLIAM G. BURNS*
William G. Burns, Trustee of the Portfolio
ARTHUR C. ESCHENLAUER*
Arthur C. Eschenlauer, Trustee of the Portfolio
MICHAEL P. MALLARDI*
Michael P. Mallardi, Trustee of the Portfolio
- ------------------------------------
*By /s/ Susan Jakuboski
-------------------
Susan Jakuboski, as attorney-in-fact pursuant to a power of attorney filed
herewith.
<PAGE>
Number Exhibit Index
- ------ -------------
11 Consents of Independent Accountants:
(A) Consent of Coopers & Lybrand L.L.P.
(B) Consent of Price Waterhouse LLP
18 (2) Powers of Attorney for the Trustees and
Officers of The Money Market Portfolio
27 Financial Data Schedules
<PAGE>
EXHIBIT 11(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
The Managers Funds:
We consent to the inclusion in Post-Effective Amendment No. 37 to the
Registration Statement of the The Managers Funds on Form N-1A (Securities Act
of 1933 File No. 2-84012) of our report dated December 18, 1995 on our audit
of the financial statements and the financial highlights of: Managers Money
Market Fund, which report is included in the Annual Report to shareholders
for the fiscal year ended November 30, 1995 and which report is also
incorporated by reference in the Registration Statement. We also consent to
the reference to our Firm under the captions "Financial Highlights,"
"Custodian, Transfer Agent and Independent Public Accountants," and "Financial
Statements" in the Registration Statement.
/s/ Coopers & Lybrand L.L.P.
----------------------------
Coopers & Lybrand L.L.P.
Boston, Massachusetts
May 1, 1996
<PAGE>
EXHIBIT 11(B)
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post Effective
Amendment No. 37 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated January 23, 1996, relating to the financial
statements and supplementary data of The Money Market Portfolio appearing in the
November 30, 1995 Annual Report, which are also incorporated by reference into
this Registration Statement. We also consent to the reference to us under the
headings "Custodian, Transfer Agent and Independent Public Accountants" and
"Financial Statements" in the Statement of Additional Information.
/s/Price Waterhouse LLP
- -----------------------
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
May 2, 1996
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Philip W. Coolidge,
John R. Elder, James E. Hoolahan, Susan Jakuboski, Thomas M. Lenz, Molly S.
Mugler, Linda T. Gibson, Andres E. Saldana, David G. Danielson and Daniel E.
Shea, and each of them, with full powers of substitution as his true and
lawful attorneys and agents to execute in his name and on his behalf in any
and all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, filed by The Pierpont Funds, The JPM Institutional Funds
or The JPM Advisor Funds (each a "Trust"), or the Registration Statement(s),
and any and all amendments thereto, filed by any other investor in any
registered investment company in which any of the Trusts invest, with the
Securities and Exchange Commission under the Investment Company Act of 1940,
as amended, and the Securities Act of 1933, as amended, and any and all
instruments which such attorneys and agents, or any of them, deem necessary
or advisable to enable each Trust to comply with such Acts, the rules,
regulations and requirements of the Securities and Exchange Commission, and
the securities or Blue Sky laws of any state or other jurisdiction, and the
undersigned hereby ratifies and confirms as his own act and deed any and all
acts that such attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof. Any one of such attorneys and agents have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of April, 1996, in Paget, Bermuda.
/s/ FREDERICK S. ADDY
----------------------------------------
Frederick S. Addy
JPM451B
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Philip W. Coolidge,
John R. Elder, James E. Hoolahan, Susan Jakuboski, Thomas M. Lenz, Molly S.
Mugler, Linda T. Gibson, Andres E. Saldana, David G. Danielson and Daniel E.
Shea, and each of them, with full powers of substitution as his true and
lawful attorneys and agents to execute in his name and on his behalf in any
and all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, filed by The Pierpont Funds, The JPM Institutional Funds
or The JPM Advisor Funds (each a "Trust"), or the Registration Statement(s),
and any and all amendments thereto, filed by any other investor in any
registered investment company in which any of the Trusts invest, with the
Securities and Exchange Commission under the Investment Company Act of 1940,
as amended, and the Securities Act of 1933, as amended, and any and all
instruments which such attorneys and agents, or any of them, deem necessary
or advisable to enable each Trust to comply with such Acts, the rules,
regulations and requirements of the Securities and Exchange Commission, and
the securities or Blue Sky laws of any state or other jurisdiction, and the
undersigned hereby ratifies and confirms as his own act and deed any and all
acts that such attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof. Any one of such attorneys and agents have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of April, 1996, in Paget, Bermuda.
/s/ WILLIAM G. BURNS
----------------------------------------
William G. Burns
JPM451B
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Philip W. Coolidge,
John R. Elder, James E. Hoolahan, Susan Jakuboski, Thomas M. Lenz, Molly S.
Mugler, Linda T. Gibson, Andres E. Saldana, David G. Danielson and Daniel E.
Shea, and each of them, with full powers of substitution as his true and
lawful attorneys and agents to execute in his name and on his behalf in any
and all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, filed by The Pierpont Funds, The JPM Institutional Funds
or The JPM Advisor Funds (each a "Trust"), or the Registration Statement(s),
and any and all amendments thereto, filed by any other investor in any
registered investment company in which any of the Trusts invest, with the
Securities and Exchange Commission under the Investment Company Act of 1940,
as amended, and the Securities Act of 1933, as amended, and any and all
instruments which such attorneys and agents, or any of them, deem necessary
or advisable to enable each Trust to comply with such Acts, the rules,
regulations and requirements of the Securities and Exchange Commission, and
the securities or Blue Sky laws of any state or other jurisdiction, and the
undersigned hereby ratifies and confirms as his own act and deed any and all
acts that such attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof. Any one of such attorneys and agents have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of April, 1996, in Paget, Bermuda.
/s/ ARTHUR C. ESCHENLAUER
----------------------------------------
Arthur C. Eschenlauer
JPM451B
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Philip W. Coolidge,
John R. Elder, James E. Hoolahan, Susan Jakuboski, Thomas M. Lenz, Molly S.
Mugler, Linda T. Gibson, Andres E. Saldana, David G. Danielson and Daniel E.
Shea, and each of them, with full powers of substitution as his true and
lawful attorneys and agents to execute in his name and on his behalf in any
and all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, filed by The Pierpont Funds, The JPM Institutional Funds
or The JPM Advisor Funds (each a "Trust"), or the Registration Statement(s),
and any and all amendments thereto, filed by any other investor in any
registered investment company in which any of the Trusts invest, with the
Securities and Exchange Commission under the Investment Company Act of 1940,
as amended, and the Securities Act of 1933, as amended, and any and all
instruments which such attorneys and agents, or any of them, deem necessary
or advisable to enable each Trust to comply with such Acts, the rules,
regulations and requirements of the Securities and Exchange Commission, and
the securities or Blue Sky laws of any state or other jurisdiction, and the
undersigned hereby ratifies and confirms as his own act and deed any and all
acts that such attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof. Any one of such attorneys and agents have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of April, 1996, in Paget, Bermuda.
/s/ MATTHEW HEALEY
----------------------------------------
Matthew Healey
JPM451B
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Philip W. Coolidge,
John R. Elder, James E. Hoolahan, Susan Jakuboski, Thomas M. Lenz, Molly S.
Mugler, Linda T. Gibson, Andres E. Saldana, David G. Danielson and Daniel E.
Shea, and each of them, with full powers of substitution as his true and
lawful attorneys and agents to execute in his name and on his behalf in any
and all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, filed by The Pierpont Funds, The JPM Institutional Funds
or The JPM Advisor Funds (each a "Trust"), or the Registration Statement(s),
and any and all amendments thereto, filed by any other investor in any
registered investment company in which any of the Trusts invest, with the
Securities and Exchange Commission under the Investment Company Act of 1940,
as amended, and the Securities Act of 1933, as amended, and any and all
instruments which such attorneys and agents, or any of them, deem necessary
or advisable to enable each Trust to comply with such Acts, the rules,
regulations and requirements of the Securities and Exchange Commission, and
the securities or Blue Sky laws of any state or other jurisdiction, and the
undersigned hereby ratifies and confirms as his own act and deed any and all
acts that such attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof. Any one of such attorneys and agents have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of April, 1996, in Paget, Bermuda.
/s/ MICHAEL P. MALLARDI
----------------------------------------
Michael P. Mallardi
JPM451B
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Philip W. Coolidge,
John R. Elder, James E. Hoolahan, Susan Jakuboski, Thomas M. Lenz, Molly S.
Mugler, Linda T. Gibson, Andres E. Saldana, David G. Danielson and Daniel E.
Shea, and each of them, with full powers of substitution as his true and
lawful attorneys and agents to execute in his name and on his behalf in any
and all capacities the Registration Statements on Form N-1A, and any and all
amendments thereto, filed by The Pierpont Funds, The JPM Institutional Funds
or The JPM Advisor Funds (each a "Trust"), or the Registration Statement(s),
and any and all amendments thereto, filed by any other investor in any
registered investment company in which any of the Trusts invest, with the
Securities and Exchange Commission under the Investment Company Act of 1940,
as amended, and the Securities Act of 1933, as amended, and any and all
instruments which such attorneys and agents, or any of them, deem necessary
or advisable to enable each Trust to comply with such Acts, the rules,
regulations and requirements of the Securities and Exchange Commission, and
the securities or Blue Sky laws of any state or other jurisdiction, and the
undersigned hereby ratifies and confirms as his own act and deed any and all
acts that such attorneys and agents, or any of them, shall do or cause to be
done by virtue hereof. Any one of such attorneys and agents have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th
day of April, 1996, in Paget, Bermuda.
/s/ JOHN R. ELDER
----------------------------------------
John R. Elder
JPM451B
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> MANAGERS CAPITAL APPRECIATION FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 73657
<INVESTMENTS-AT-VALUE> 85415
<RECEIVABLES> 1545
<ASSETS-OTHER> 2258
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 89218
<PAYABLE-FOR-SECURITIES> 367
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5498
<TOTAL-LIABILITIES> 5865
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 68725
<SHARES-COMMON-STOCK> 3071
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 43
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2827
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11758
<NET-ASSETS> 83353
<DIVIDEND-INCOME> 771
<INTEREST-INCOME> 541
<OTHER-INCOME> 12
<EXPENSES-NET> 1078
<NET-INVESTMENT-INCOME> 246
<REALIZED-GAINS-CURRENT> 13171
<APPREC-INCREASE-CURRENT> 8970
<NET-CHANGE-FROM-OPS> 22386
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 224
<DISTRIBUTIONS-OF-GAINS> 10213
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 36618
<NUMBER-OF-SHARES-REDEEMED> 59636
<SHARES-REINVESTED> 8380
<NET-CHANGE-IN-ASSETS> 2689
<ACCUMULATED-NII-PRIOR> 22
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 636
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1078
<AVERAGE-NET-ASSETS> 79448549
<PER-SHARE-NAV-BEGIN> 23.25
<PER-SHARE-NII> .09
<PER-SHARE-GAIN-APPREC> 7.62
<PER-SHARE-DIVIDEND> .08
<PER-SHARE-DISTRIBUTIONS> 3.74
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 27.14
<EXPENSE-RATIO> 1.36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> MANAGERS SPECIAL EQUITY FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 96135
<INVESTMENTS-AT-VALUE> 120593
<RECEIVABLES> 1988
<ASSETS-OTHER> 5441
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 127752
<PAYABLE-FOR-SECURITIES> 150
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9241
<TOTAL-LIABILITIES> 9391
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 90223
<SHARES-COMMON-STOCK> 2731
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3680503
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 24458
<NET-ASSETS> 118362
<DIVIDEND-INCOME> 964
<INTEREST-INCOME> 397
<OTHER-INCOME> 30
<EXPENSES-NET> 1568
<NET-INVESTMENT-INCOME> (177)
<REALIZED-GAINS-CURRENT> 12657
<APPREC-INCREASE-CURRENT> 18944
<NET-CHANGE-FROM-OPS> 31423
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 14466
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 47782
<NUMBER-OF-SHARES-REDEEMED> 66730
<SHARES-REINVESTED> 8768
<NET-CHANGE-IN-ASSETS> 6778
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 978
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1568
<AVERAGE-NET-ASSETS> 108652
<PER-SHARE-NAV-BEGIN> 36.79
<PER-SHARE-NII> (0.07)
<PER-SHARE-GAIN-APPREC> 12.28
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 5.66
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 43.34
<EXPENSE-RATIO> 1.44
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> MANAGERS INCOME EQUITY FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 31880
<INVESTMENTS-AT-VALUE> 38870
<RECEIVABLES> 553
<ASSETS-OTHER> 606
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40038
<PAYABLE-FOR-SECURITIES> 491
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1739
<TOTAL-LIABILITIES> 2230
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29794
<SHARES-COMMON-STOCK> 1330
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 42
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 982
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6990
<NET-ASSETS> 37807
<DIVIDEND-INCOME> 1663
<INTEREST-INCOME> 63
<OTHER-INCOME> (10)
<EXPENSES-NET> 578
<NET-INVESTMENT-INCOME> 1138
<REALIZED-GAINS-CURRENT> 5082
<APPREC-INCREASE-CURRENT> 5771
<NET-CHANGE-FROM-OPS> 10853
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1144
<DISTRIBUTIONS-OF-GAINS> 4742
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12025
<NUMBER-OF-SHARES-REDEEMED> 33508
<SHARES-REINVESTED> 4311
<NET-CHANGE-IN-ASSETS> (11067)
<ACCUMULATED-NII-PRIOR> 47
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 300
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 578
<AVERAGE-NET-ASSETS> 39977
<PER-SHARE-NAV-BEGIN> 24.90
<PER-SHARE-NII> 0.87
<PER-SHARE-GAIN-APPREC> 7.47
<PER-SHARE-DIVIDEND> 0.86
<PER-SHARE-DISTRIBUTIONS> 3.95
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 28.43
<EXPENSE-RATIO> 1.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> MANAGERS INTERNATIONAL EQUITY FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 123314
<INVESTMENTS-AT-VALUE> 142625
<RECEIVABLES> 1532
<ASSETS-OTHER> 161
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 144317
<PAYABLE-FOR-SECURITIES> 1066
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2763
<TOTAL-LIABILITIES> 3829
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 121037
<SHARES-COMMON-STOCK> 3515
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 26
<ACCUMULATED-NET-GAINS> 171
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 19307
<NET-ASSETS> 140488
<DIVIDEND-INCOME> 2255
<INTEREST-INCOME> 505
<OTHER-INCOME> (257)
<EXPENSES-NET> 1663
<NET-INVESTMENT-INCOME> 840
<REALIZED-GAINS-CURRENT> 7273
<APPREC-INCREASE-CURRENT> 7273
<NET-CHANGE-FROM-OPS> 15385
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 435
<DISTRIBUTIONS-OF-GAINS> 7196
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 67067
<NUMBER-OF-SHARES-REDEEMED> 42910
<SHARES-REINVESTED> 365
<NET-CHANGE-IN-ASSETS> 24651
<ACCUMULATED-NII-PRIOR> 186
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 949
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1663
<AVERAGE-NET-ASSETS> 105390
<PER-SHARE-NAV-BEGIN> 36.35
<PER-SHARE-NII> 0.31
<PER-SHARE-GAIN-APPREC> 5.59
<PER-SHARE-DIVIDEND> 0.13
<PER-SHARE-DISTRIBUTIONS> 2.15
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 39.97
<EXPENSE-RATIO> 1.58
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> MANAGERS BOND FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 25498
<INVESTMENTS-AT-VALUE> 26896
<RECEIVABLES> 726
<ASSETS-OTHER> 225
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27847
<PAYABLE-FOR-SECURITIES> 1065
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 406
<TOTAL-LIABILITIES> 1471
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25973
<SHARES-COMMON-STOCK> 1140
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 32
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1026)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1398
<NET-ASSETS> 26376
<DIVIDEND-INCOME> 106
<INTEREST-INCOME> 2022
<OTHER-INCOME> 0
<EXPENSES-NET> 349
<NET-INVESTMENT-INCOME> 1779
<REALIZED-GAINS-CURRENT> (177)
<APPREC-INCREASE-CURRENT> 5729
<NET-CHANGE-FROM-OPS> 7331
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1792
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13247
<NUMBER-OF-SHARES-REDEEMED> 24125
<SHARES-REINVESTED> 953
<NET-CHANGE-IN-ASSETS> (4384)
<ACCUMULATED-NII-PRIOR> 73
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 163
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 349
<AVERAGE-NET-ASSETS> 26015
<PER-SHARE-NAV-BEGIN> 18.92
<PER-SHARE-NII> 1.44
<PER-SHARE-GAIN-APPREC> 4.23
<PER-SHARE-DIVIDEND> 1.46
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.13
<EXPENSE-RATIO> 1.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> MANAGERS SHORT GOVERNMENT FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 5711
<INVESTMENTS-AT-VALUE> 5746
<RECEIVABLES> 110
<ASSETS-OTHER> 9
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5866
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 30
<TOTAL-LIABILITIES> 30
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19146
<SHARES-COMMON-STOCK> 329
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (13354)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 45
<NET-ASSETS> 5836
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 544
<OTHER-INCOME> 0
<EXPENSES-NET> 99
<NET-INVESTMENT-INCOME> 445
<REALIZED-GAINS-CURRENT> 193
<APPREC-INCREASE-CURRENT> 112
<NET-CHANGE-FROM-OPS> 750
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 228
<DISTRIBUTIONS-OF-GAINS> 142
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3538
<NUMBER-OF-SHARES-REDEEMED> 8548
<SHARES-REINVESTED> 203
<NET-CHANGE-IN-ASSETS> (4427)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 219
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 36
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 131
<AVERAGE-NET-ASSETS> 7917
<PER-SHARE-NAV-BEGIN> 16.96
<PER-SHARE-NII> 0.98
<PER-SHARE-GAIN-APPREC> 0.63
<PER-SHARE-DIVIDEND> 0.50
<PER-SHARE-DISTRIBUTIONS> 0.31
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.76
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> MANAGERS SHORT AND INTERMEDIATE BOND FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 24914
<INVESTMENTS-AT-VALUE> 25001
<RECEIVABLES> 596
<ASSETS-OTHER> 13
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 25611
<PAYABLE-FOR-SECURITIES> 241
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 129
<TOTAL-LIABILITIES> 370
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 39996
<SHARES-COMMON-STOCK> 1283
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 42
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (14801)
<ACCUM-APPREC-OR-DEPREC> 88
<NET-ASSETS> 25241
<DIVIDEND-INCOME> 25
<INTEREST-INCOME> 2032
<OTHER-INCOME> 0
<EXPENSES-NET> 385
<NET-INVESTMENT-INCOME> 1671
<REALIZED-GAINS-CURRENT> (777)
<APPREC-INCREASE-CURRENT> 2833
<NET-CHANGE-FROM-OPS> 3727
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1480
<DISTRIBUTIONS-OF-GAINS> 36
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9665
<NUMBER-OF-SHARES-REDEEMED> 18442
<SHARES-REINVESTED> 852
<NET-CHANGE-IN-ASSETS> (5715)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (328)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 128
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 385
<AVERAGE-NET-ASSETS> 25651
<PER-SHARE-NAV-BEGIN> 18.06
<PER-SHARE-NII> 1.28
<PER-SHARE-GAIN-APPREC> 1.45
<PER-SHARE-DIVIDEND> 1.09
<PER-SHARE-DISTRIBUTIONS> 0.03
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.67
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> MANAGERS INTERMEDIATE MORTGAGE FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 46211
<INVESTMENTS-AT-VALUE> 47060
<RECEIVABLES> 360
<ASSETS-OTHER> 17
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 47437
<PAYABLE-FOR-SECURITIES> 7039
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 376
<TOTAL-LIABILITIES> 7415
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 119240
<SHARES-COMMON-STOCK> 2575
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 19
<ACCUMULATED-NET-GAINS> (80098)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 899
<NET-ASSETS> 40022
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3568
<OTHER-INCOME> 0
<EXPENSES-NET> 555
<NET-INVESTMENT-INCOME> 3013
<REALIZED-GAINS-CURRENT> 2259
<APPREC-INCREASE-CURRENT> 2503
<NET-CHANGE-FROM-OPS> 7775
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3253
<DISTRIBUTIONS-OF-GAINS> 19
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3468
<NUMBER-OF-SHARES-REDEEMED> 25457
<SHARES-REINVESTED> 1522
<NET-CHANGE-IN-ASSETS> (15964)
<ACCUMULATED-NII-PRIOR> 419
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 214
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 555
<AVERAGE-NET-ASSETS> 47587
<PER-SHARE-NAV-BEGIN> 14.20
<PER-SHARE-NII> 0.93
<PER-SHARE-GAIN-APPREC> 1.45
<PER-SHARE-DIVIDEND> 1.04
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.54
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> MANAGERS GLOBAL BOND FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 17256
<INVESTMENTS-AT-VALUE> 18227
<RECEIVABLES> 716
<ASSETS-OTHER> 26
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18969
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 146
<TOTAL-LIABILITIES> 146
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 18107
<SHARES-COMMON-STOCK> 866
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 132
<ACCUMULATED-NET-GAINS> (99)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 947
<NET-ASSETS> 18823
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 818
<OTHER-INCOME> 0
<EXPENSES-NET> 191
<NET-INVESTMENT-INCOME> 627
<REALIZED-GAINS-CURRENT> 211
<APPREC-INCREASE-CURRENT> 1062
<NET-CHANGE-FROM-OPS> 1900
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 628
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12840
<NUMBER-OF-SHARES-REDEEMED> 5243
<SHARES-REINVESTED> 425
<NET-CHANGE-IN-ASSETS> 9303
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 67
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 86
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 209
<AVERAGE-NET-ASSETS> 12355
<PER-SHARE-NAV-BEGIN> 19.10
<PER-SHARE-NII> 0.95
<PER-SHARE-GAIN-APPREC> 2.66
<PER-SHARE-DIVIDEND> 0.93
<PER-SHARE-DISTRIBUTIONS> 0.04
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.74
<EXPENSE-RATIO> 1.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 10
<NAME> MANAGERS MUNICIPAL BOND FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> NOV-30-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 6
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6
<TOTAL-LIABILITIES> 6
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> (528)
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (59)
<ACCUMULATED-NET-GAINS> 587
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 394
<OTHER-INCOME> 0
<EXPENSES-NET> 79
<NET-INVESTMENT-INCOME> 315
<REALIZED-GAINS-CURRENT> 928
<APPREC-INCREASE-CURRENT> (398)
<NET-CHANGE-FROM-OPS> 845
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 316
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 271
<NUMBER-OF-SHARES-REDEEMED> 12270
<SHARES-REINVESTED> 44
<NET-CHANGE-IN-ASSETS> (11426)
<ACCUMULATED-NII-PRIOR> 17
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 44
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12
<AVERAGE-NET-ASSETS> 6115
<PER-SHARE-NAV-BEGIN> 21.63
<PER-SHARE-NII> 1.00
<PER-SHARE-GAIN-APPREC> 1.07
<PER-SHARE-DIVIDEND> 1.03
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 22.67
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> MANAGERS SHORT MUNICIPAL FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 34
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 34
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 34
<TOTAL-LIABILITIES> 34
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1549
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 16
<ACCUMULATED-NET-GAINS> (1533)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 30
<OTHER-INCOME> 0
<EXPENSES-NET> 27
<NET-INVESTMENT-INCOME> 3
<REALIZED-GAINS-CURRENT> (22)
<APPREC-INCREASE-CURRENT> 49
<NET-CHANGE-FROM-OPS> 30
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 20
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 78
<NUMBER-OF-SHARES-REDEEMED> 2541
<SHARES-REINVESTED> 7
<NET-CHANGE-IN-ASSETS> 2447
<ACCUMULATED-NII-PRIOR> 939
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 27
<AVERAGE-NET-ASSETS> 1505
<PER-SHARE-NAV-BEGIN> 19.41
<PER-SHARE-NII> 0.22
<PER-SHARE-GAIN-APPREC> 0.03
<PER-SHARE-DIVIDEND> 0.23
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 19.43
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 1.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
