<PAGE> File No.2-84012
811-3752
Rule 30d
MONEY MARKET FUND
- -----------------------------------
SEMI-ANNUAL REPORT
MAY 31, 1996
- -----------------------------------
WHERE LEADING MONEY MANAGERS CONVERGE
<PAGE>
MANAGERS MONEY MARKET FUND
SEMI-ANNUAL REPORT
MAY 31,1996(UNAUDITED)
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S>
<C>
President's Message....................................... 1
The Managers Funds Performance............................ 3
Managers Money Market Fund
Statement of Assets and Liabilities.................... 4
Statement of Operations................................ 4
Statement of Changes in Net Assets..................... 5
Financial Highlights................................... 6
Notes to Financial Statements.......................... 7
The Money Market Portfolio
Schedule of Investments................................ 10
Statement of Assets and Liabilities.................... 12
Statement of Operations................................ 12
Statement of Changes in Net Assets..................... 13
Supplementary Data..................................... 13
Notes to Financial Statements.......................... 14
</TABLE>
INVESTMENTS IN MANAGERS MONEY MARKET FUND ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, MORGAN GUARANTY TRUST COMPANY OF NEW YORK 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. 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.
<PAGE>
PRESIDENT'S MESSAGE
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<TABLE>
<S> <C>
</TABLE>
DEAR FELLOW SHAREHOLDER:
As you may recall, six months ago, on December
1, 1995, we changed the structure and investment
manager of Managers Money Market Fund in order to
more broadly diversify the portfolio, take advantage
of economies of scale, reduce the operating expenses
of the fund, and thus improve the rate of return
while maintaining a relatively low risk profile which
is appropriate for a money market fund. After the
first six months, I am pleased to report that the
fund and the new structure has lived up to our high
expectations, and has been one of the top performing
money market funds for each of the last six months.
The seven day average yield of the Fund as of May 31,
1996 was 5.24%, while the seven day yield for the
IBC's Money Fund Report all Taxable Fund
Average("IBC's Average Fund") was 4.88%, and the
current yield on 3-month Treasury bills was 5.04%.
Shareholders of the Fund who reinvested dividends
earned a total of 2.79% for the six months ended May
31, while IBC's Average Fund returned 2.46%.
The improved performance came from a number of
sources. First, the larger size of the portfolio into
which the Fund invests, along with J.P. Morgan's
resources, enabled the manager, Skip Johnson, to
diversify into higher yielding investments such as
high quality Japanese bank notes, while maintaining
high quality and liquidity through investment in U.S.
Treasury and agency securities (27% of portfolio at
period end). Second, the master feeder structure did
reduce the overall expense ratio of the fund. Third,
The Managers Funds not only waived its administration
fees, but also subsidized most of the operating
expenses of the fund, thereby saving the shareholders
money and thus increasing the return. The Managers
Funds will continue to waive fees and subsidize some
portion of the expenses at least through November 30,
1996.
1
<PAGE>
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After dropping significantly throughout December
and into January, short-term interest rates edged
upward slightly throughout the remainder of the first
half of the fiscal year. Johnson managed the average
maturity of the portfolio to between 50 and 63 days,
which tended to be slightly longer than the average
money fund maturity, and the Fund benefited from the
higher yields of the longer term paper. On May 31st,
the average maturity for the portfolio was 56 days,
compared to 52 days for IBC's Average Fund. The
average quality of the securities in the portfolio
was A1/P1.
The portfolio was 32% invested in commercial
paper, 23% invested in U.S. government agency
securities, 17% invested in certificates of deposit,
11% invested in foreign time deposits, 8% invested in
floating rate notes and 4% invested in U.S. Treasury
securities. Looking forward, Johnson is working to
decrease the average maturity back into the 50 day
range, and adding to floating rate notes, commercial
paper and agency securities while continuing to
reduce the position in U.S. Treasuries. Johnson
expects that a Fed tightening before the end of the
summer will be successful in moderating economic
growth and controlling inflation.
As always, please feel free to contact us should
you have any questions on this report or the Fund.
We thank you for your continued investment in
The Managers Funds.
Sincerely,
/s/Robert P. Watson
Robert P. Watson
President
2
<PAGE>
EF
THE MANAGERS FUNDS PERFORMANCE (UNAUDITED)
All periods ending June 30, 1996
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<TABLE>
<CAPTION>
TOTAL RETURNS*
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SINCE INCEPTION MORNINGSTAR
6 MONTHS 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION DATE RATING**
- -------- ------ ------- ------- -------- --------- --------- -----------
<S><C> <C> <C> <C> <C> <C> <C> <C>
Equity Funds:
Income Equity Fund
5.89% 22.27% 15.00% 14.93% 11.57% 14.26% Oct. '84 ####
Capital Appreciation Fund
6.71 19.55 15.83 15.94 13.05 15.56 Jun. '84 ####
Special Equity Fund
17.97 39.91 19.49 20.77 15.21 16.67 Jun. '84 #####
International Equity Fund
6.55 14.97 15.42 14.97 11.70 14.41 Dec. '85 ###
Income Funds:
Short Government Fund
0.72 4.32 1.79 3.44 -- 5.14 Oct. '87 #
Short & Intermediate Bond Fund
0.41 6.46 3.17 6.99 7.07 8.60 Jun. '84 ####
Intermediate Mortgage Fund
-1.16 3.99 -4.29 3.76 6.77 7.02 May '86 ##
Bond Fund
-3.69 4.98 6.91 9.54 9.11 11.07 Jun. '84 ####
Global Bond Fund
-1.56 -0.11 -- -- -- 6.40 Mar. '94 NA
Money Market Fund
2.72 5.22 4.20 3.86 5.50 5.93 Jun. '84 NA
</TABLE>
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PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
INVESTMENT RETURNS AND SHARE PRICE WILL FLUCTUATE.
THE REDEMPTION PRICE OF A MUTUAL FUND MAY BE MORE OR
LESS THAN THE PURCHASE PRICE. FOR ADDITIONAL OR MORE
RECENT INFORMATION ON MANAGERS MONEY MARKET FUND, OR
FOR A PROSPECTUS FOR THE EQUITY FUNDS OR THE INCOME
FUNDS, CALL THE MANAGERS FUNDS AT (800) 835-3879.
* Total return equals income yield plus share price
change and assumes reinvestment of all dividends and
capital gain distributions. No adjustment has been
made for taxes payable by shareholders on their
reinvested dividends and capital gain distributions.
Returns for periods greater than one year are
annualized.
** Morningstar proprietary ratings reflect historical
risk-adjusted performance through 6/30/96 and are
subject to change every month. The ratings are by
asset class and are calculated from the funds' three-
, five-, and ten-year returns (with fee adjustments)
in excess of 90-day Treasury bill returns, and a risk
factor that reflects fund performance below 90-day T-
bill returns. For the three-, five-, and ten-year
periods, respectively, each of the Equity Funds were
rated against 1,583, 997 and 539 equity funds, and
each of the Income Funds were rated against 889, 464
and 176 fixed income funds. Ten percent of the funds
in each asset class receive five stars, 22.5% receive
4 stars, 35% receive 3 stars, 22.5% receive 2 stars
and 10% receive 1 star.
3
<PAGE>
MANAGERS MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1996 (unaudited)
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<TABLE>
<S> <C>
ASSETS:
Investment in The Money Market Portfolio("Portfolio") $34,995,788
Receivable from Administrator 37,078
Prepaid expenses 12,613
-----------
Total assets 35,045,479
-----------
LIABILITIES:
Dividends payable to shareholders 18,973
Other accrued expenses 14,226
-----------
Total liabilities 33,199
-----------
NET ASSETS: 35,012,280
-----------
-----------
Shares outstanding 35,012,280
-----------
-----------
Net asset value, offering and redemption price per share $1.00
-----
-----
NET ASSETS REPRESENT:
Paid-in capital $35,012,280
-----------
-----------
</TABLE>
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STATEMENT OF OPERATIONS
For the six months ended May 31, 1996 (unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME FROM PORTFOLIO:
Interest income $597,755
EXPENSES:
Administration fees $27,132
Transfer agent fees 13,547
Registration fees 11,730
Custodian fees 3,359
Reports to shareholders 3,053
Audit fees 2,697
Legal fees 1,646
Trustee fees 934
Miscellaneous expenses 1,539
Allocated Portfolio expenses, net 21,101
-------
Total expenses 86,738
Less: Waiver of administration fees (27,132)
Reimbursement of expenses (56,347)
-------
Net expenses 3,259
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NET INVESTMENT INCOME $594,496
--------
--------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
MANAGERS MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
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<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED FOR THE
MAY 31, 1996 ELEVEN MONTHS ENDED
(UNAUDITED) NOVEMBER 30, 1995
---------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income $ 594,496 $ 582,501
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (594,496) (582,501)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 57,486,457 45,741,592
Net asset value of shares issued
in connection with reinvestment
of dividends 361,601 541,365
Cost of shares repurchased (33,908,188) (52,479,096)
----------- -----------
Net increase (decrease) from
capital share transactions 23,939,870 (6,196,139)
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Total increase (decrease) in net
assets 23,939,870 (6,196,139)
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NET ASSETS:
Beginning of period 11,072,410 17,268,549
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End of period $35,012,280 $11,072,410
----------- -----------
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</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
MANAGERS MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout each period
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED ELEVEN MONTHS
MAY 31, ENDED YEAR ENDED DECEMBER 31,
1996 NOVEMBER 30, -------------------------------
(UNAUDITED) 1995, 1994 1993 1992* 1991*
----------- ------------- ------ ------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
-------- --------- ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.028 0.044 0.035 0.022 0.030 0.054
Net realized and
unrealized gain on
investments -- -- -- -- -- 0.003
-------- --------- ------- ------- ------- ------
Total from investment
operations 0.028 0.044 0.035 0.022 0.030 0.057
-------- --------- ------- ------- ------- -------
LESS DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investments income (0.028) (0.044) (0.035) (0.022) (0.030) (0.054)
Net realized gain on
investments -- -- -- -- -- (0.003)
-------- -------- ------- ------- ------- -------
Total distributions
to shareholders (0.028) (0.044) (0.035) (0.022) (0.030) (0.057)
-------- -------- ------- ------- ------- -------
NET ASSET VALUE, END
OF PERIOD $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
-------- -------- ------- ------- ------- -------
-------- -------- ------- ------- ------- -------
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Total Return (c) 5.66%(b) 4.51%(b) 3.61% 2.48% 3.12% 5.35%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Ratio of net expenses to average net
assets 0.03%(b) 1.13%(b) 0.73% 0.74% 0.67% 0.57%
Ratio of net investment income to
average net assets 5.47%(b) 4.85%(b) 3.84% 2.48% 3.05% 5.69%
Net assets at end of period (000's
omitted) $35,012 $11,072 $17,269 $7,368 $9,320 $4,868
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- -------------------------------------------------------------------------------
Expense Waiver (a)
Ratio of total expenses to average net
assets 0.80%(b) 1.18%(b) 1.03% 0.99% 0.98% 1.06%
Ratio of total investment income to
average net assets 4.70%(b) 4.80%(b) 3.54% 2.23% 2.74% 5.21%
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- -------------------------------------------------------------------------------
</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. (See Note 2).
(b) Annualized.
(c) The total returns would have been lower had certain expenses not been
reduced during the periods shown.
* Audited by prior auditors.
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6
<PAGE>
MANAGERS MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1996 (unaudited)
- ------------------------------------------------------------------------------
Managers Money Market Fund (the "Fund") is a series
of The Managers Funds (the "Trust"), a no-load,
diversified, open-end, management investment company,
organized as a Massachusetts business trust, and
registered under the Investment Company Act of 1940,
as amended (the "1940 Act"). Currently the Trust is
comprised of 10 investment series, (collectively the
"Funds").
The Fund invests all of its investable assets in The
Money Market Portfolio (the "Portfolio"), a
diversified, open-end management investment company
having the same investment objectives as the Fund.
The value of such investment reflects the Fund's
proportionate interest in the net assets of the
Portfolio (1.0% at May 31, 1996). The performance of
the Fund is directly affected by the performance of
the Portfolio. The financial statements of the
Portfolio, including the schedule of investments, are
included elsewhere in this report and should be read
in conjunction with the Fund's financial statements.
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting
policies followed by the Fund:
(A) VALUATION OF INVESTMENTS
Valuation of securities by the Portfolio is discussed
in Note 1 of the Portfolio's Notes to Financial
Statements which are included elsewhere in this
report.
(B) SECURITY TRANSACTIONS
The Fund records its share of net investment income,
realized gain and loss and adjusts its investment in
the Portfolio each day.
(C) INVESTMENT INCOME AND EXPENSES
All the net investment income and realized gain and
loss of the Portfolio is allocated pro rata among the
Fund and other investors in the Portfolio at the time
of such determination. Expenses incurred by the Trust
with respect to one or more funds in the Trust are
allocated in proportion to the net assets of each
fund in the Trust, except where allocations of direct
expenses to each fund can otherwise be made fairly.
Expenses directly attributable to a fund are charged
to that fund.
(D) DIVIDENDS AND DISTRIBUTIONS
Dividends resulting from net investment income
normally will be declared daily, payable on the third
to the last business day of the month.
Distributions classified as capital gains for federal
income tax purposes, if any, will be made on an
annual basis and when required for federal excise tax
purposes. Income and capital gain distributions are
determined in accordance with income tax regulations
which may differ from generally accepted accounting
principles. Permanent book and tax differences, if
any,
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
relating to shareholder distributions will result in
reclassifications to capital stock.
(E) FEDERAL TAXES
The Fund intends to comply with the requirements
under Subchapter M of the Internal Revenue Code of
1986, as amended, and to distribute substantially all
of its taxable income and gains, if any, to its
shareholders and to meet certain diversification and
income requirements with respect to investment
companies. Therefore, no federal income or excise tax
provision is included in the accompanying financial
statements.
(F) CAPITAL STOCK
The Trust's Declaration of Trust authorizes the
issuance of an unlimited number of shares of
beneficial interest, without par value. The Fund
records sales and repurchases of its capital stock on
the trade date. Dividends and distributions to
shareholders are recorded as of the ex-dividend date.
At May 31, 1996, two unaffiliated shareholders, which
are omnibus accounts, held 45% of the outstanding
shares of the Fund.
(2) AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
The Trust has adopted an Administrative and
Shareholder Servicing Agreement under which The
Managers Funds, L.P. serves as the Fund's
administrator (the "Administrator") and is
responsible 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.
Effective December 1, 1995, the Trustees have
approved a fee for these services, payable to the
Administrator, of 0.25% per annum, all of which has
been voluntarily waived for the six months ended May
31, 1996. In addition, since December 1, 1995, the
Administrator has voluntarily limited total expenses
to between 0.00% and 0.10% of average daily net
assets by reimbursing the Fund for varying amounts of
Fund and Portfolio level expenses.
These waivers and expense limitations may be modified
or terminated at anytime at the sole discretion of
the Administrator.
An aggregate annual fee of $10,000 is paid to each
outside Trustee for serving as a Trustee of the
Trust. In addition, these Trustees receive meeting
fees of $750 for each in-person meeting attended, and
$200 for participation in any telephonic meetings.
The Trustee fee expense shown in the financial
statements represents the Fund's allocated portion of
the total fees.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
(3) CONTINGENCY
Two lawsuits seeking class action status have been
filed against Managers Intermediate Mortgage Fund,
Managers Short Government Fund, and the Investment
Manager, among other defendants including the Trust.
A motion has been filed to dismiss the suit relating
to Managers Intermediate Mortgage Fund and there has
been no decision yet from the court. On November 24,
1995, the defendant's motion to dismiss the suit
against Managers Short Government Fund was granted,
in part and denied, in part, and the plaintiff was
granted leave to file an amended complaint. In both
of these cases the plaintiffs seek unspecified
damages based upon losses alleged in the two funds
named above. Another nonclass action lawsuit and an
arbitration have been filed against certain of the
defendants, among others, and Managers Short and
Intermediate Bond Fund based on similar allegations.
Certain individual customers, who are potentially
members of the class of plaintiffs in the two class
action lawsuits referred to above, have asserted that
they may file similar lawsuits against certain of the
defendants based on similar claims but have not done
so. Management believes that the cases are without
merit and intends to defend vigorously against these
actions.
9
<PAGE>
THE MONEY MARKET PORTFOLIO
Schedule of Investments (unaudited)
May 31, 1996
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
YIELD TO
(IN
MATURITY/
THOUSANDS) SECURITY DESCRIPTION MATURITYDATES RATE VALUE
- --------- -------------------------- ---------------- -------- -----------
<C> <S> <C> <C> <C>
CERTIFICATES OF DEPOSIT -- DOMESTIC (2.6%)
$25,000 Bank of America National Trust &
Savings Association.... 02/12/97 4.900% $24,991,537
15,000 Bank of New York........ 04/01/97 5.550 14,991,296
50,000 National Bank of
Detroit................ 01/03/97 5.200 49,971,299
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TOTAL CERTIFICATES OF DEPOSIT --
DOMESTIC............... 89,954,132
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CERTIFICATES OF DEPOSIT -- FOREIGN (12.5%)
100,000 Bank of Tokyo, Ltd...... 08/07/96 5.480 100,000,000
95,000 Banque Nationale de
Paris Ltd.............. 07/15/96-04/11/97 5.330-5.750 94,992,584
24,500 Bayerische Vereinsbank,
New York............... 07/23/96 5.320 24,500,000
50,000 Canadian Imperial Bank
of Commerce............ 07/29/96 5.320 50,000,000
4,000 Commerzbank U.S.
Finance Inc............ 09/16/96 5.330 3,998,719
21,000 National Bank,
Australia.............. 10/02/96 5.750 20,991,199
25,000 Royal Bank of Canada,
New York............... 05/13/97 5.810 24,997,731
114,500 Societe Generale....... 07/08/96-04/03/97 5.330-5.610 114,495,922
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TOTAL CERTIFICATES OF DEPOSIT --
FOREIGN............... 433,976,155
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COMMERCIAL PAPER -- DOMESTIC (26.8%)
6,200 A I Credit Corp........ 09/05/96 5.270 6,112,869
63,500 A I G Funding Corp..... 06/04/96-06/06/96 5.230-5.280 63,469,052
120,000 American Express
Credit Corp........... 06/07/96-07/01/96 5.280-5.290 119,823,833
15,000 Chevron Transportation
Corp.................. 06/26/96 5.300 14,944,792
51,467 Coca Cola Co........... 06/06/96-06/10/96 5.250-5.280 51,413,639
17,200 Dupont (E.I.) de
Nemours & Co., Inc.... 07/24/96 5.500 17,060,728
91,500 Exxon Asset Management. 06/05/96 5.260 91,446,523
122,500 Ford Motor Corp........ 06/06/96-10/01/96 5.090-5.290 121,831,981
101,820 General Electric
Capital Corp.......... 06/11/96-06/18/96 5.260-5.320 101,633,743
4,000 John Deere Capital
Corp.................. 06/14/96 5.290 3,992,359
72,813 Koch Industries........ 06/06/96-06/18/96 5.280-5.380 72,712,237
40,750 Motorola Credit Corp... 06/06/96 5.250 40,720,287
45,000 Norwest Corp........... 06/17/96 5.270 44,894,600
45,000 Pfizer Inc............. 07/18/96 5.300 44,688,625
30,700 Procter & Gamble Co.... 06/05/96 5.280 30,681,989
20,000 Raytheon Co............ 06/11/96 5.300 19,970,555
49,500 Seagram, Joseph E. &
Sons Inc.............. 06/19/96-06/26/96 5.270-5.280 49,346,871
37,500 Walt Disney Co......... 08/05/96 5.280 37,142,500
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TOTAL COMMERCIAL PAPER --
DOMESTIC.............. 931,887,183
-----------
COMMERCIAL PAPER -- FOREIGN (5.7%)
43,000 Barclays U.S. Funding,
Inc................... 06/19/96 5.290 42,886,265
39,000 Bayerische Vereinsbank. 06/12/96 5.270 38,937,199
3,850 Commerzbank U.S.
Finance, Inc.......... 06/03/96 5.280 3,848,871
21,000 Export Development
Corp.................. 06/04/96 5.290 20,990,743
52,000 KFW International
Finance, Inc.......... 06/25/96-07/15/96 5.280-5.340 51,735,780
38,312 UBS Finance
(Delaware), Inc........ 06/03/96 5.410 38,300,485
-----------
TOTAL COMMERCIAL PAPER --
FOREIGN............... 196,699,343
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
THE MONEY MARKET PORTFOLIO
Schedule of Investments (unaudited) (continued)
May 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT
YIELD TO
(IN
MATURITY/
THOUSANDS) SECURITY DESCRIPTION MATURITYDATES RATE VALUE
- --------- -------------------------- ---------------- -------- -----------
<C> <S> <C> <C> <C>
CORPORATE BONDS (1.4%)
$40,000 General Electric
Capital Corp........... 09/09/96-01/31/97 5.080-5.680% $40,011,947
9,000 Old Kent Bank &
Trust Co............... 01/15/97 5.125 9,000,000
------------
TOTAL CORPORATE BONDS... $40,011,947
------------
EURODOLLAR CERTIFICATES OF DEPOSIT (1.9%)
66,000 Abbey National,
North America.......... 07/26/96 5.240 66,002,947
------------
FLOATING RATE NOTES (8.4%) (A)
11,000 Bayerische Landesbank, (resets
monthly to one month LIBOR Rate
-13 basis points)....... 01/15/97 5.300 10,995,658
25,000 Boatmens First National Bank, (resets
monthly to one month LIBOR Rate
-1 basis point)........ 06/12/96 5.427 25,000,000
150,000 Federal National Mortgage Association,
(resets daily to one month LIBOR Rate
-19 basis points)...... 10/11/96 5.247 149,941,068
40,000 Federal National Mortgage Association,
(resets weekly to the Fed Funds Flat
Rate).................. 11/15/96 5.220 39,984,514
67,000 Student Loan Marketing Association,
(resets monthly to one month LIBOR Rate
-17 basis points)....... 07/01/96 5.267 66,996,069
------------
TOTAL FLOATING RATE
NOTES.................. 292,917,309
------------
GOVERNMENT OBLIGATIONS -- FOREIGN (2.5%)
88,000 Canadian Treasury Bills. 06/03/96-06/27/96 5.190-5.250 87,841,500
------------
TIME DEPOSITS -- FOREIGN (11.1%)
74,686 Chemical Bank, Nassau... 06/03/96 5.375 74,686,000
160,000 Deutsche Bank, Grand
Cayman................. 06/03/96 5.375 160,000,000
150,000 Sumitomo Bank, Grand
Cayman................. 06/03/96 5.437 150,000,000
------------
TOTAL TIME DEPOSITS --
FOREIGN................ 384,686,000
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (23.3%)
30,000 Federal Farm Credit
Bank................... 12/02/96 5.400 29,975,736
158,990 Federal Home Loan
Bank................... 06/03/96-07/16/96 5.000-5.260 158,464,260
305,955 Federal Home Loan
Mortgage Corp.......... 06/03/96-07/12/96 5.200-5.250 305,236,608
316,725 Federal National
Mortgage Association... 06/11/96-12/18/96 5.170-5.620 315,963,182
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS............ 809,639,786
------------
U.S. TREASURY OBLIGATIONS (4.1%)
2,484 United States Treasury
Bills................. 06/20/96-07/25/96 4.920-5.005 2,468,600
136,500 United States Treasury
Notes................. 01/31/97-06/30/97 5.625-7.500 138,140,718
------------
TOTAL U.S. TREASURY
OBLIGATIONS........... 140,609,318
------------
TOTAL INVESTMENTS
(AMORTIZED COST $3,483,225,620)
(100.3%) 3,483,225,620
LIABILITIES IN EXCESS
OF OTHER ASSETS (-0.3%) (11,637,610)
--------------
NET ASSETS (100.0%) $3,471,588,010
--------------
--------------
<FN>
(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.
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1996 (unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at amortized cost and value $3,483,225,620
Interest receivable 14,510,071
Receivable for expense reimbursement 8,847
Prepaid trustees' fees 4,551
Prepaid expenses and other assets 3,545
--------------
Total assets 3,497,752,634
--------------
LIABILITIES:
Payable for investments purchased 25,533,386
Advisory fee payable 350,661
Custody fee payable 121,093
Administrative services fee payable 65,485
Administration fee payable 34,924
Fund services fee payable 7,121
Accrued expenses 51,954
--------------
Total liabilities 26,164,624
--------------
NET ASSETS:
Applicable to investors' beneficial interests $3,471,588,010
--------------
--------------
</TABLE>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended May 31, 1996 (unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest income $91,846,156
EXPENSES:
Advisory fee $2,163,802
Administrative services fee 350,175
Custodian fees and expenses 282,117
Administration fee 198,762
Fund services fee 92,706
Trustees' fees and expenses 32,224
Professional fees 30,528
Miscellaneous 22,590
----------
Total expenses 3,172,904
Less: reimbursement of expenses (9,994)
----------
Net expenses (3,162,910)
-----------
NET INVESTMENT INCOME 88,683,246
NET REALIZED GAIN ON INVESTMENTS 165,967
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $88,849,213
-----------
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE FISCAL
MAY 31, 1996 YEAR ENDED
UNAUDITED) NOVEMBER 30, 1995
----------------- -----------------
<S> <C> <C>
INCREASE IN NET ASSETS:
FROM OPERATIONS:
Net investment income $88,683,246 $168,180,713
Net realized gain on investments 165,967 1,573,477
----------------- ------------------
Net increase in net assets resulting
from operations 88,849,213 169,754,190
----------------- ------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Contributions 10,348,816,259 17,654,676,133
Withdrawals (10,301,032,878) (17,137,148,786)
----------------- ------------------
Net increase from investors'
transactions 47,783,381 517,527,347
----------------- ------------------
Total increase in net assets 136,632,594 687,281,537
NET ASSETS:
Beginning of period 3,334,955,416 2,647,673,879
----------------- ------------------
End of period $3,471,588,010 $3,334,955,416
----------------- ------------------
---------------- ------------------
</TABLE>
- -------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FOR THE JULY 12, 1993
SIX MONTHS FISCAL YEAR ENDED (COMMENCEMENT
ENDED NOVEMBER 30, OF OPERATIONS)
MAY 31,1996 ----------------- THROUGH
(UNAUDITED) 1995 1994 NOVEMBER 30, 1993
------------ ------ ------- -----------------
<S> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.19%(a) 0.19% 0.20% 0.19%(a)
Net investment income 5.33%(a) 5.77% 3.90% 2.98%(a)
Decrease reflected in expense
ratio due to expense
reimbursements 0.00%(a),(b) -- 0.00%(b) --
</TABLE>
- ------------------------
(a) Annualized
(b) Less than 0.01%
The accompanying notes are an integral part of thesefinancial statements.
13
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (unaudited)
May 31, 1996
- -------------------------------------------------------------------------------
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's investment objective is to
maximize current income and maintain a high level of
liquidity. 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 preparation of financial statements in accordance
with generally accepted accounting principles
requires management to make estimates and assumptions
that affect the reported amounts and disclosures.
Actual amounts could differ from those estimates. 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
14
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
May 31, 1996
- -------------------------------------------------------------------------------
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 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 six months ended May 31, 1996, this fee amounted
to $2,163,802.
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. Until December 28, 1995, the
Administration Agreement provided 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 period from December 1,
1995, through December 28, 1995, Signature's fee for
these services amounted to $14,797.
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. For the period from December 29,
1995, through May 31, 1996, Signature's fee for these
services amounted to $183,965.
15
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
May 31, 1996
- -------------------------------------------------------------------------------
Effective August 1, 1996, administrative functions
provided by Signature will be provided by Funds
Distributor, Inc. ("FDI"), a registered broker-
dealer, and by Morgan. FDI will also become the
Portfolio's exclusive placement agent. Under a Co-
Administration Agreement between FDI and the
Portfolio, FDI's fees are to be paid by the
Portfolio. (See Note 2c).
c) Until August 31, 1995, the Portfolio had a
Financial and Fund Accounting Services Agreement with
Morgan under which Morgan received a fee, based on
the percentage described below, for overseeing
certain aspects of the administration and operation
of the Portfolio and was also designed to provide an
expense limit for certain expenses of the Portfolio.
This fee was calculated exclusive of the advisory
fee, custody expenses and fund services fee at 0.03%
of the Portfolio's average daily net assets. 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 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 (the
"Services Agreement") with Morgan under which Morgan
is responsible for overseeing certain aspects of the
administration and operation of the Portfolio. Under
the 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 Master Portfolios in accordance with the
following annual schedule: 0.06% on the first $7
billion of the Master Portfolios' aggregate average
daily net assets and 0.03% of the 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 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. For the period from December 29, 1995,
through May 31, 1996, the fee for these services
amounted to $350,175.
Effective August 1, 1996, the Services Agreement will
be amended such that the aggregate complex-wide fees
to be paid by the Portfolio under both the amended
Services Agreement and the CoAdministration Agreement
(see Note 2b) will be calculated daily based on the
aggregate net assets of the Master Portfolios in
accordance with the following annual schedule: 0.09%
on the first $7 billion of the Master Portfolios'
aggregate average
16
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
May 31, 1996
- -------------------------------------------------------------------------------
daily net assets and 0.04% of the aggregate average
daily net assets in excess of $7 billion.
In addition, Morgan has agreed to reimburse the
Portfolio to the extent necessary to maintain the
total operating expenses of the Portfolio at no more
than 0.20% of the average daily net assets of the
Portfolio through March 31, 1997. For the six months
ended May 31, 1996, Morgan has agreed to reimburse
the Portfolio $9,994 for expenses under this
agreement.
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
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 $92,706 for the six months ended May 31,
1996.
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 the Master
Portfolios. The Trustees' Fees and Expenses shown in
the financial statements represent the Portfolio's
allocated portion of the total fees and expenses. The
Trustee who serves as Chairman and Chief Executive
Officer of the Portfolio 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 $11,900.
17
<PAGE>
EF
WHERE LEADING MONEY MANAGERS CONVERGE
FUND DISTRIBUTOR
THE MANAGERS FUNDS, L.P.
40 Richards Avenue
Norwalk, Connecticut 06854-2325
(203) 857-5321 or (800) 835-3879
CUSTODIAN
State Street Bank and Trust
Company
1776 Heritage Drive A2N
North Quincy, Massachusetts
02171
LEGAL COUNSEL
Shereff, Friedman, Hoffman &
Goodman, LLP
919 Third Avenue
New York, New York 10022
TRANSFER AGENT
Boston Financial Data Services, Inc.
attn: The Managers Funds
P.O. Box 8517
Boston, Massachusetts 02266-8517
(800) 252-0682
This report is prepared for the information of
shareholders. It is authorized for distribution to
prospective investors only when preceded by an
effective prospectus.
THE MANAGERS FUNDS
EQUITY FUNDS:
- -------------
INCOME EQUITY FUND
Scudder, Stevens & Clark, Inc.
Spare, Kaplan, Bischel & Associates
CAPITAL APPRECIATION FUND
Dietche & Field Advisers, Inc.
Hudson Capital Advisers
SPECIAL EQUITY FUND
Liberty Investment Management
Pilgrim Baxter & Associates
Westport Asset Management, Inc.
INTERNATIONAL EQUITY FUND
Scudder, Stevens & Clark, Inc.
Lazard, Freres & Co.
FIXED INCOME FUNDS:
- -------------------
MONEY MARKET FUND
Morgan Guaranty Trust Company
of New York
SHORT GOVERNMENT FUND
Jennison Associates Capital Corp.
SHORT AND INTERMEDIATE
BOND FUND
Standish, Ayer & Wood, Inc.
INTERMEDIATE MORTGAGE FUND
Jennison Associates Capital Corp.
BOND FUND
Loomis, Sayles & Company, Inc.
GLOBAL BOND FUND
Rogge Global Partners
