THE MANAGERS FUNDS
[GRAPHIC OMITTED]
INCOME EQUITY FUND
CAPITAL APPRECIATION FUND
SPECIAL EQUITY FUND
INTERNATIONAL EQUITY FUND
- -----------------
ANNUAL REPORT
December 31, 1995
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Where Leading Money Managers Converge
<PAGE>
THE MANAGERS FUNDS
[GRAPHIC OMITTED]
Dear Fellow Shareholder:
A confluence of economic and financial events in 1995 led to a great year for
stocks, bonds and The Managers Funds. Moderate economic growth with low
inflation allowed the Federal Reserve to ease monetary policy and led to falling
interest rates. Restructuring, cost cutting and application of technology
contributed to increase corporate profits by 20% on average. By some measures,
it was the best year for U.S. stocks since 1958, with the S&P 500 index
providing a total return of 37.6%, and the Dow Jones Industrial Average
finishing up 1,283 points at 5,117 for a return of +37.1%. International equity
markets also benefited from lower interest rates and rising corporate profits,
however these markets only provided returns of approximately one third of the
U.S. markets' returns.
Although broad domestic equity averages seemed to rise smoothly and steadily
throughout the year with only a few mild corrections, there was a dramatic
rotation of leadership throughout the year. In the First quarter, stocks of
financial institutions, which had suffered in 1994 with the rise in interest
rates, rebounded as it became evident that the rising interest rate tide was
peaking. These were followed closely by technology stocks, which with strong
earnings reports and rising demand for computer hardware, software and services,
went on to dominate the second quarter by climbing more than twice as much as
the broad averages. Throughout the first five months, large capitalization
stocks clearly outperformed small-cap stocks, as a weak U.S. Dollar was
advantageous for companies with substantial export revenues. In June, however,
the U.S. Dollar stabilized and the technology wave broadened causing small-cap
stocks to surge and outperform throughout the summer.
In the third quarter, the technology sector became extremely volatile, as
companies with earnings reports which did not live up to expectations were
punished. As the year proceeded, investors started gravitating back toward large
blue chip stocks with more predictable earnings. Financial stocks continued to
ascend, driven by a wave of consolidation in the banking industry. Utility
stocks, which had trailed markedly during the first half, outperformed in both
the third and fourth quarters, while energy stocks, which had lagged the market
for ten months, picked up in November and December. Non-cyclical stocks,
particularly those in the healthcare industry, steadily kept pace with the
market for most of the year, and were among the best performing stocks in the
fourth quarter. Conversely, technology shares corrected in the last quarter,
having peaked in mid-September.
Although virtually all sectors produced strong returns for the year, given
the rotation, it would have been easy for undisciplined investors to get
whipped-sawed, and only near perfect sector rotation could have added value. Our
philosophy at The Managers Funds is to select and combine investment managers
who have well defined investment disciplines from which they do not stray. This
philosophy proved successful in 1995, as all of the Managers Equity Funds
performed well, with each fund outperforming the Lipper Fund Index in its
respective category.
More importantly, each fund is ahead of its category average for longer time
periods (5 and 10 years). All of the investment managers performed well and
remain invested appropriately according to their respective disciplines. Aside
from adding a manager to the International Equity Fund at the beginning of the
year, there were no manager changes within the equity funds during 1995.
This report provides you with a discussion of our funds' performances, a
listing of the investment portfolios, financial statements and the report of
independent accountants. As always, should you have any questions on this
report, please feel free to contact us or your financial advisor.
We thank you for your continued investment in The Managers Funds.
Sincerely,
/s/ Robert P. Watson
Robert P. Watson
President
1
<PAGE>
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MANAGERS CAPITAL APPRECIATION FUND
Investment Manager's Comments
- -------------------------------------------------------------------------------
MANAGERS CAPITAL APPRECIATION FUND is a growth oriented stock fund which is
currently co-managed by Howard Shaun at Hudson Capital Advisors, and the
portfolio management team at Dietche & Field Advisors, Inc. Both these firms
were hired in December, 1986.
During the final six months of 1995, MANAGERS CAPITAL APPRECIATION FUND
provided a total return of +12.0% which brought the return for the full year to
+33.4%. For the same periods, the Standard & Poors 500 Stock Index returned
+14.5% and +37.6%, respectively.
Despite a market in which it was clearly most advantageous to own the largest
capitalization stocks, the fund, which typically invests most of its assets in
medium sized companies, performed well throughout 1995. In the Standard & Poors
500, the 116 companies with market capitalizations greater than $10 billion
appreciated 46.2%, while the remaining 384 companies appreciated 34.3% on
average for the year. The S&P Mid-Cap index returned only 31.0% for the year.
Not surprisingly, many of the portfolio's best performing stocks were the
larger companies, and the fund benefited from Hudson Capital's move into large
capitalization companies early in the year. At the start of 1995, the average
market capitalization of the companies in the portfolio was $8.8 billion. By
mid-year this had risen to $12.4 billion, where it held through the third
quarter, and was reduced back to $10.9 billion by year end.
Likewise, the emphasis on technology companies by both managers, particularly
in the first three quarters of the year, enhanced returns. Intel, IBM, Hewlett
Packard, and Cisco Systems were all among the fund's top holdings for much of
the year, and each provided solid gains before being trimmed back.
In the 4th quarter, the technology holdings hindered the performance, however
damage to the fund was less severe due to the managers' trimming of holdings in
the technology sector through the 3rd and 4th quarters. Some holdings, such as
Micron Technology corrected sharply due to perceived weakness in future demand
for computer chips. At year end, 20% of the fund was invested in the technology
sector, down from 26% at mid-year.
Otherwise, strong performance came from a variety of sectors. Tommy Hilfiger,
a clothing designer/manufacturer, Tyco International, a diversified
manufacturing company, Staples, an office supply retailer, and Federal Express,
all showed strong earnings growth leading to strong stock performance.
Low exposure to financial stocks hindered performance, as this sector was a
steady outperformer all year, due to low interest rates, excellent profits and
merger activity. The fund did participate somewhat, however, with holdings in
Countrywide Credit, Green Tree Financial and Michigan National, among others.
Conversely, low weightings in utilities and energy stocks was generally helpful.
These three sectors were increased in the 4th quarter with cash generated from
sales of technology stocks, which proved to be a beneficial move. At year end,
the finance, utility, and energy weightings were 8%, 3% and 5%, respectively.
The fund remains oriented toward growth, with an average price to earnings
ratio and earnings growth rate higher than those of the S&P 500.
2
<PAGE>
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MANAGERS CAPITAL APPRECIATION FUND
Cumulative Total Return Performance
- -------------------------------------------------------------------------------
The Managers Capital Appreciation Fund cumulative total return is based on
the monthly change in net asset value (NAV), and assumes that all distributions
were reinvested.
The S&P500 Index is an unmanaged capitalization weighted index of 500
commonly traded stocks designed to measure performance of the broad domestic
economy through changes in the aggregate market value of those stocks. The index
assumes reinvestment of dividends.
The Standard & Poor's Midcap 400 is a capitalization-weighted index that
measures the performance of the mid-range sector of the U.S. stock market where
the median market capitalization is approximately $700 million.
The S&P 400 was developed on December 31, 1990. S&P 400 returns previous to
1991 are based on a proforma index of stocks similar to the S&P 400.
This chart compares a hypothetical $10,000 investment made in the Managers
Capital Appreciation Fund on December 31, 1985, to a $10,000 investment made in
the S&P 500 and the S&P 400 for the same time period. Past performance is not
indicative of future results.
MANAGERS CAPITAL APPRECIATION FUND CHART
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Managers S&P 500 Index S&P 500 Index
<S> <C> <C> <C> <C>
PLOT POINTS: 1985 10,000 10,000 10,000
1986 11,105 11,847 11,621
1987 12,015 12,467 11,385
1988 14,326 14,562 13,760
1989 17,341 19,148 18,651
1990 16,997 18,541 17,697
1991 22,432 24,205 26,214
1992 24,787 26,061 28,711
1993 28,847 28,665 32,076
1994 28,407 29,030 30,925
1995 37,893 39,939 40,501
</TABLE>
This table shows the average annual total returns for the Managers Capital
Appreciation Fund for the one-year, five-year, and ten-year periods through
December 31, 1995, and comparable returns for the S&P 500 Index and the S&P 400
Index.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
ANNUALIZED
-----------------------------------------
ONE FIVE TEN
YEAR YEARS YEARS
------ ------ ------
<S> <C> <C> <C>
Managers Capital
Appreciation Fund 33.4% 17.4% 14.3%
S&P 500 Index 37.6 16.6 14.9
S&P 400 Index 31.0 18.0 15.0
</TABLE>
3
<PAGE>
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MANAGERS INCOME EQUITY FUND
Investment Manager's Comments
- -------------------------------------------------------------------------------
MANAGERS INCOME EQUITY FUND is an income oriented stock fund which is
currently co-managed by portfolio management teams at Spare, Kaplan, Bischel &
Associates, hired in August 1990, and Scudder, Stevens & Clark, Inc., hired in
August 1991.
During the final six months of 1995, MANAGERS INCOME EQUITY FUND provided a
total return of +15.5% which brought the return for the full year to +34.4%. For
the same periods, the Standard & Poors 500 Stock Index returned +14.4% and
+37.6%, respectively.
Although the fund's low exposure to the technology sector hindered
performance in the first six months of the year, the negative impact for the
full 12 months was minor, and the fund was spared considerable volatility,
particularly in the 4th quarter. Because of the high dividend yield levels which
both managers require, the technology stocks that the fund owns are mostly of
the aerospace/defense variety as opposed to the computer related industries.
These holdings, such as United Technologies, Lockheed Martin and Rockwell
International were strong contributors, returning +55%, +56%, and +52%
respectively, for the year.
The primary drag on the portfolio throughout the entire year were the
international holdings (ADRs). Since the foreign equity markets did not perform
nearly as well as the U.S. markets, these issues continue to offer compelling
values. At year end, 4.7% of the portfolio was in foreign equities, which may
increase modestly going forward. Energy holdings (some of which are foreign)
were also a drag on performance until late in the year.
The fund continues to be heavily invested in financial stocks, which, having
begun the year at extremely low valuations, performed very well in 1995. J.P.
Morgan and Lincoln National, the two largest financial positions, are held by
both portfolio managers, and returned +49% and +60% for the year, respectively.
Student Loan Marketing, which is successfully restructuring its business, rose
103% during the year. Both portfolio managers are gradually trimming exposure to
the financial sector, which comprised 16% of the portfolio at year end.
Healthcare stocks comprised another area of concentration for the fund, which
after outperforming for more than a year were trimmed throughout the second half
of 1995. Holdings in major pharmaceutical companies Bristol Myers Squibb, Eli
Lilly, Schering Plough and Smithkline Beecham returned +53%, +77%, +52%, and
+59%, respectively. The sector which currently makes up 7% of the total
portfolio is likely to be stable going forward, however the selection emphasis
will be on identifying strong product lines as opposed to the focus on
restructuring benefits which was so important over the past two years.
Another beneficial strategy during the year was an increase in the exposure
to utility stocks, which performed especially well in the 4th quarter. Telephone
holdings GTE, Nynex and US West, appreciated 28%, 34%, and 44%, respectively
over the final six months of the year. A diverse portfolio of electric utilities
also performed well over the second half of the year. The portfolio is currently
19% invested in utility stocks.
Even after the surge in stock prices during 1995, the valuations of the
stocks in the portfolio remain attractive. The weighted average price to
earnings ratio for the total portfolio is currently 15.5, and the weighted
average dividend yield is 3.81%. The 30 day annualized SEC yield for the Fund at
December 31, 1995 was 2.74%.
4
<PAGE>
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MANAGERS INCOME EQUITY FUND
Cumulative Total Return Performance
- -------------------------------------------------------------------------------
The Managers Income Equity Fund cumulative total return is based on the
monthly change in net asset value (NAV), and assumes that all distributions were
reinvested.
The S&P 500 Index is an unmanaged capitalization weighted index of 500
commonly traded stocks designed to measure performance of the broad domestic
economy through changes in the aggregate market value of those stocks. The index
assumes reinvestment of dividends.
This chart compares a hypothetical $10,000 investment made in the Managers
Income Equity Fund on December 31, 1985, to a $10,000 investment made in the S&P
500 for the same time period. Past performance is not indicative of future
results.
MANAGERS INCOME EQUITY FUND CHART
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Manager's S&P 500 Index
Income Equity
Fund
<S> <C> <C> <C>
PLOT POINTS: 1985 10,000 10,000
1986 12,192 11,847
1987 11,554 12,467
1988 14,570 14,562
1989 17,810 19,148
1990 15,488 18,541
1991 20,030 24,205
1992 21,993 26,061
1993 24,719 28,665
1994 24,955 29,030
1995 33,529 39,939
</TABLE>
This table shows the average annual total returns for the Managers Income Equity
Fund for the one-year, five-year, and ten-year periods through December 31,
1995, and comparable returns for the S&P 500 Index.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
ANNUALIZED
--------------------------------------
ONE FIVE TEN
YEAR YEARS YEARS
----- ----- -----
<S> <C> <C> <C>
Managers Income
Equity Fund 34.4% 16.7% 12.9%
S&P 500 Index 37.6 16.6 14.9
</TABLE>
5
<PAGE>
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MANAGERS SPECIAL EQUITY FUND
Investment Manager's Comments
- -------------------------------------------------------------------------------
MANAGERS SPECIAL EQUITY FUND is a growth oriented equity fund which
primarily invest in the stocks of small capitalization companies. The Fund is
currently co-managed by three independent investment managers: Andrew Knuth of
Westport Asset Management, Timothy Ebright of Liberty Investment Management,
each of whom has been managing a portion of the fund since December, 1985, and
Gary Pilgrim of Pilgrim Baxter & Associates, who has been managing a portion of
the fund since October, 1994.
During the final six months of 1995, MANAGERS SPECIAL EQUITY FUND provided a
total return of +18.6% which brought the return for the full year to +33.9%. For
the same periods, the Russell 2000, a broad index of small capitalization
stocks, returned +12.2% and +27.9%, respectively.
While they were not as strong as large capitalization stocks in 1995, which
benefited from a weaker U.S. Dollar and large inflows into mutual funds, small-
cap stocks provided excellent gains. The three manager structure of the Fund
worked extremely well this year, by taking advantage of a number of successful
investment areas without over exposing the fund to any one theme or sector.
In the small cap arena, there were three primary areas of success in 1995.
Computer technology companies, both large and small, experienced extraordinary
gains in sales and earnings as demand for computer equipment, software and
on-line services soared. Among other influences, technology stock prices surged
in anticipation of Microsoft's much awaited release of a new operating system,
Windows 95, which would make computers more friendly, and thus more marketable
to the general public. The release was successful, Windows 95 became the largest
selling computer program ever, and the tech rally lasted until late in the 3rd
quarter.
While successful on average, individual technology stocks were extremely
volatile in 1995, and the portfolio managers confronted this by remaining well
diversified in the technology sector. The fund began the year with 40 holdings,
amounting to 16% of the total portfolio, and finished with 35 holdings amounting
to 16% of the portfolio. Although this was an average weighting relative to
small-cap indices such as the Russell 2000 Index and the Wilshire Small-Cap
Index, the individual holdings well outperformed the averages. As an example,
holdings in software developers Jack Henry & Associates, Cambridge Technology,
and McAfee Associates each appreciated more than 125% during the year.
A second area of success in 1995 was in financial stocks, which rebounded
from a poor showing in 1994, with an average return of +50%. Not only did lower
interest rates contribute to higher earnings for most financial institutions,
but an environment of aggressive merger activity expanded the price/earnings
multiples of their stocks. The fund benefited with a 15% weighting in financial
stocks, several of which were acquired by other institutions. First Fed Michigan
was purchased by Charter One Financial, Shawmut Bank was acquired by Fleet
Financial, and at year end, Premier Bancorp was being acquired by Banc One.
The third area of success was in healthcare related companies. A continuing
rebound out of the pessimism caused by uncertainty about government imposed
healthcare reforms, coupled with cost cutting and earnings growth propelled
healthcare stocks in 1995. Among the best holdings in this area were Phycor, a
medical clinic management company which rose 183% for the year, a position in
Orthodontic Centers of America appreciated 100% since purchase, and Universal
Health Services, a hospital and clinic operator which appreciated 81% for the
year. The fund remains 14% invested in healthcare related stocks.
Additional areas where the fund has and
will continue to focus its investments include wireless and long distance
communications, radio and TV broadcasting, and transportation.
The fund remains oriented toward capital appreciation of small companies. The
average market capitalization of companies in the portfolio is $666 million.
6
<PAGE>
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MANAGERS SPECIAL EQUITY FUND
Cumulative Total Return Performance
- -------------------------------------------------------------------------------
The Managers Special Equity Fund cumulative total return is based on the
monthly change in net asset value (NAV), and assumes that all distributions were
reinvested.
The Russell 2000 Index is comprised of the smallest 2000 companies in the
Russell 3000 Index, representing approximately 11% of the Russell 3000 total
market capitalization.
The Russell 3000 Index is composed of 3000 large U.S. Companies, as
determined by market capitalization.This portfolio of Securities represents
approximately 98% of the investable U.S. equity market.
The Index was developed on December 31, 1986. Index returns previous to 1987
are based on a proforma index of stocks similar to the Russell 2000.
This chart compares a hypothetical $10,000 investment made in the Managers
Special Equity Fund on December 31, 1985, to a $10,000 investment made in the
Russell 2000 for the same time period. Past performance is not indicative of
future results.
MANAGERS SPECIAL EQUITY FUND CHART
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Managers Russell 2000 Index
Special
Equity Fund
<S> <C> <C> <C>
PLOT POINTS: 1985 10,000 10,000
1986 10,673 10,568
1987 11,534 9,642
1988 14,447 12,042
1989 19,181 13,998
1990 16,103 11,267
1991 24,036 16,456
1992 27,794 19,486
1993 32,533 23,169
1994 31,885 22,747
1995 42,705 29,104
</TABLE>
This table shows the average annual total returns for the Managers Special
Equity Fund for the one-year, five-year, and ten-year periods through December
31, 1995, and comparable returns for the Russell 2000 Index.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
ANNUALIZED
------------------------------------------
ONE FIVE TEN
YEAR YEARS YEARS
----- ----- -----
<S> <C> <C> <C>
Managers Special
Equity Fund 33.9% 21.5% 15.6%
Russell 2000 Index 28.0 20.9 11.3
</TABLE>
7
<PAGE>
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MANAGERS INTERNATIONAL EQUITY FUND
Investment Manager's Comments
- -------------------------------------------------------------------------------
MANAGERS INTERNATIONAL EQUITY FUND seeks long term capital appreciation
through investment in non-U.S. equity securities. The fund is currently
co-managed by William Holzer of Scudder, Stevens & Clark, Inc., hired in
December 1989, and John Reinsberg, of Lazard Freres Asset Management, who was
hired in January 1995.
During the final six months of 1995, MANAGERS INTERNATIONAL EQUITY FUND
provided a total return of +7.9% which brought the return for the full year to
+16.2%. For the same periods, the Morgan Stanley Capital International - Europe
Australia Far East Index (EAFE) returned +8.4% and +11.2%, respectively.
Although the total returns for foreign stock markets were far less than the
return on U.S. stocks in 1995, from a top down perspective, the trends were
similar. Computer technology and consumer electronics companies fared well,
falling interest rates provided fertile ground for financial institutions, and
pharmaceutical/healthcare companies continued to restructure and consolidate
which boosted values. In addition, global companies, those who finance, produce
and market on a global scale, performed better than companies which only operate
locally. Economic growth was not nearly as healthy abroad as in the U.S. so that
economically sensitive industries such as auto manufacturing, energy, steel and
mining companies did poorly.
The fund benefited by having a large percentage of assets invested in
financial stocks, and low exposure to utility, energy and consumer non-durables.
Conversely, a large investment in mining & metal manufacturers was not timely in
1995, while low exposure in technology companies was a minus.
Early in the year, the portfolio's substantial underweighting of Japanese
holdings was very beneficial, as Japanese stocks dropped 22% in local terms by
mid-year. As some individual issues' valuations became attractive, the managers
added, taking the allocation from 13% at the beginning of the year, to 18% by
year end. This was also beneficial, as the Japanese market rebounded by 31% in
the second half. The fund, however, remains well underinvested in Japan relative
to the EAFE Index, which was a source of underperformance over the last six
months of the year.
Where the fund gained, was in individual security selection over a broad
range of industries and countries. Chemical manufacturers Ciba Geigy
(Switzerland), Hoechst (Germany), and Sekisui Chemical (Japan), were each up
more than 24% in U.S. Dollars, while Cheil Foods & Chemicals (Korea) rose more
than 26%. One of the fund's only technology holdings, SAP, a German software
company, appreciated 118% due to 70% growth in earnings. Aegon, a Dutch life,
health and accident insurance company, rose +60%, and Swiss Re, a Swiss
Re-insurance company returned +93% for the year.
Going forward, the fund continues to be oriented toward capital appreciation,
from two vastly different perspectives. John Reinsberg, at Lazard Freres,
continues to search for individual companies which are "financially productive
and are inexpensively priced." Very important in the search are strong
managements which are making appropriate changes within their companies in order
to unlock value and realize profits. Conversely, William Holzer, of Scudder,
Stevens & Clark , builds a portfolio by first formulating broad investment
themes derived from his understanding of trends in the global marketplace. He
then searches for the companies which will benefit most from the culmination of
the themes.
Current themes in the portfolio include; a focus on life insurers which are
providing individuals with private pension savings; a focus on companies which
cater to and profit from an aging population; a focus on companies which are
restructuring and joining the global capital markets; a focus on reinsurance
companies which continue to demonstrate high profitability; a focus on companies
with new technologies which set standards to which their competitors must
conform.
Where the managers converge is in maintaining a thorough understanding of the
fundamentals of the companies in which they invest. To date, this has put a
limit on the portfolio's exposure to companies in the emerging markets, since
emerging markets have varrying accounting and disclosure policies.
At year end, 56% of the portfolio was invested in European domiciled
companies, 27% was invested in the developed Pacific Rim, 6% was invested in
companies considered to be in the emerging markets, and 4% in North American
companies.
8
<PAGE>
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MANAGERS INTERNATIONAL EQUITY FUND
Cumulative Total Return Performance
- -------------------------------------------------------------------------------
The Managers International Equity Fund cumulative total return is based on
the monthly change in net asset value (NAV), and assumes that all distributions
were reinvested.
The MSCI EAFE Index (EAFE) is compiled by Morgan Stanley Capital
International.It consists of over 1000 large, publicly traded stocks from 20
countries of Europe, Australia and the Far East. The index assumes reinvestment
of dividends.
This chart compares a hypothetical $10,000 investment made in the Managers
International Equity Fund at the inception on December 31, 1985, to a $10,000
investment made in the EAFE for the same time period. Past performance is not
indicative of future results.
INTERNATIONAL EQUITY FUND CHART
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Managers MSCI EAFE
International Index
Equity Fund
<S> <C> <C> <C>
PLOT POINTS: 1985 10,000 10,000
1986 15,853 16,994
1987 16,896 21,231
1988 18,397 27,300
1989 21,175 30,248
1990 19,125 23,233
1991 22,593 26,135
1992 23,555 23,038
1993 32,553 30,628
1994 33,204 33,009
1995 38,596 36,709
</TABLE>
This table shows the average annual total returns for the Managers International
Equity Fund for the one-year, five-year and ten-year periods through December
31, 1995, and comparable returns for the MSCI EAFE Index.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
ANNUALIZED
------------------------------------------
ONE FIVE TEN
YEAR YEARS YEARS
----- ----- -----
<S> <C> <C> <C>
Managers International
Equity Fund 16.2% 15.1% 14.5%
MSCI EAFE Index 11.2 9.6 13.9
</TABLE>
9
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS FUNDS PERFORMANCE
All periods ending December 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUALIZED TOTAL RETURNS*
- -----------------------------------------------------------------------------------------------
SINCE INCEPTION
EQUITY FUNDS 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION DATE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Managers Income Equity 34.36% 15.09% 16.70% 12.86% 14.30% Oct. 84
Managers Capital Appreciation 33.39% 15.20% 17.39% 14.25% 15.52% June 84
Managers Special Equity 33.94% 15.39% 21.54% 15.62% 15.64% June 84
Managers International Equity 16.24% 17.89% 15.08% 14.46% 14.46% Dec. 85
FIXED INCOME FUNDS
- -----------------------------------------------------------------------------------------------
Managers Short Government 9.71% 2.25% 4.24% -- 5.37% Oct. 87
Managers Short & Intermediate 15.57% 4.73% 7.64% 7.69% 8.96% June 84
Managers Intermediate Mortgage 17.27% -0.68% 5.05% -- 7.53% May 86
Managers Bond Fund 30.91% 10.64% 11.71% 10.52% 11.94% June 84
Managers Global Bond 19.08% -- -- -- 9.28% Mar. 94
===============================================================================================
<FN>
* 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.
Past performance is no guarantee of future results. The investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. For
additional or more recent information on The Managers Funds, including a
prospectus, call (800)835-3879. Please read the prospectus carefully before you
invest or send money.
</FN>
</TABLE>
10
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS CAPITAL APPRECIATION FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1995
- --------------------------------------------------
SHARES VALUE
- --------------------------------------------------
COMMON STOCKS -- 87.5%
BASIC INDUSTRIES -- 6.8%
AK Steel Holding Corp. 10,600 $ 363,050
Avery Dennison Corp. 9,600 481,200
FMC Corp.* 14,300 967,038
Freeport McMoran Inc. 16,666 616,643
Kimberly-Clark Corp. 17,160 1,419,990
Monsanto Co. 1,400 171,500
Olin Corp. 9,800 727,650
Pentair, Inc. 10,700 532,325
Texas Industries, Inc. 7,000 371,000
----------
TOTAL BASIC INDUSTRIES 5,650,396
----------
CAPITAL GOODS -- 5.6%
Anixter International Inc.* 80,400 1,497,450
Boeing Co. 9,700 760,238
Castle & Cooke, Inc.* 2,100 37,799
Lear Seating Corp.* 9,400 272,600
Navistar International Corp.* 20,400 214,200
Rauma Oy ADR* 32,300 609,662
Sensormatic Electronics Corp. 4,900 85,138
Tyco International Ltd. 5,700 203,062
Westinghouse Electric Corp. 36,100 595,650
York International Corp. 8,100 380,700
----------
TOTAL CAPITAL GOODS 4,656,499
----------
CONSUMER BASICS -- 4.8%
Dole Food Co., Inc. 11,100 388,500
Gillette Co. 20,200 1,052,925
Perrigo Co.* 75,000 890,625
Premark International Inc. 8,500 430,312
RJR Nabisco Holdings Corp. 17,500 540,313
Scherer RP Corp.* 14,400 707,400
----------
TOTAL CONSUMER BASICS 4,010,075
----------
CONSUMER NON-DURABLES -- 5.4%
Blyth Industries, Inc.* 40,000 1,180,000
Consolidated Stores Corp.* 20,600 448,050
Donnkenny, Inc.* 22,000 396,000
Eastman Kodak Co. 9,000 603,000
Mercantile Stores Co., Inc. 19,000 878,750
Quiksilver, Inc.* 15,000 511,875
Tommy Hilfiger Corp.* 12,200 516,975
----------
TOTAL CONSUMER NON-DURABLES 4,534,650
----------
- --------------------------------------------------
SHARES VALUE
- --------------------------------------------------
CONSUMER SERVICES -- 1.2%
Boston Chicken, Inc.* 7,800** $ 249,600
Pep Boys (Manny, Moe & Jack) 30,400 779,000
----------
TOTAL CONSUMER SERVICES 1,028,600
----------
ENERGY -- 4.9%
Apache Corp. 15,400 454,300
Columbia Gas Systems, Inc.* 4,500 197,438
Compagnie Francaise de
Petroleum Total ADR 22,500 765,000
Enron Corp. 22,100 842,562
Petroleum Geo-Services
A/S ADR* 18,500** 460,188
Triton Energy Corp.* 24,300 1,394,212
----------
TOTAL ENERGY 4,113,700
----------
ENTERTAINMENT AND LEISURE -- 11.3%
Acclaim Entertainment, Inc.* 20,300** 251,212
America Online, Inc.* 11,400** 424,650
Brunswick Corp. 32,500 780,000
Carnival Corp. 38,800 945,750
Comcast Corp. Special Class A 41,700 755,812
Electronic Arts* 21,400 559,075
Infinity Broadcasting Corp.* 25,100 934,975
News Corp. Ltd. ADR 34,300 660,275
Tele-Communications, Inc.
Liberty Media Group,
Class A* 24,650 659,388
Tele-Communications, Inc.
TCI, Class A* 40,800 810,900
U.S. West Media Group* 49,100 932,900
Viacom, Inc., Class B* 36,200 1,714,975
----------
TOTAL ENTERTAINMENT AND LEISURE 9,429,912
----------
FINANCE AND INSURANCE -- 8.4%
Advanta Corp., Class B 4,700 170,375
AFLAC, Inc. 16,200 702,675
Allmerica Financial Corp.* 50,000 1,350,000
Countrywide Credit
Industries, Inc. 53,700 1,167,975
JSB Financial, Inc. 11,600 366,850
Penncorp Financial Group,
Inc. 10,000 293,750
PNC Bank Corp. 42,200** 1,360,950
Signet Banking Corp. 42,100 999,875
Western National Corp. 34,000 548,250
----------
TOTAL FINANCE AND INSURANCE 6,960,700
----------
11
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS CAPITAL APPRECIATION FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
December 31, 1995
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
GENERAL BUSINESS -- 4.6%
Circuit City Stores, Inc. 4,800 $ 132,600
CUC International, Inc.* 23,150 789,993
R.R. Donnelley & Sons Co. 12,000 472,500
Octel Communications Corp.* 6,800 219,300
PHH Corp. 8,900 416,075
Reynolds & Reynolds Co.,
Class A 10,200 396,525
Staples, Inc.* 23,500 572,812
U.S. Filter Corp.* 16,000 426,000
Winstar Communications, Inc.* 25,000** 428,125
-----------
TOTAL GENERAL BUSINESS 3,853,930
-----------
HEALTH CARE -- 8.6%
Johnson & Johnson 9,700 830,563
Merck & Co., Inc. 18,000 1,183,500
OrNda Healthcorp* 19,300 448,725
Pharmacia & Upjohn Inc.* 50,000 1,937,500
Pyxis Corp.* 24,400 356,849
SmithKline Beecham Unit ADR 18,400 1,021,200
U.S. Healthcare, Inc. 9,950 461,431
Value Health, Inc.* 14,100 387,750
Wellpoint Health Networks,
Inc., Class A* 16,400 526,850
-----------
TOTAL HEALTH CARE 7,154,368
-----------
TECHNOLOGY -- 19.5%
Adobe Systems, Inc. 9,000 558,000
American Telephone &
Telegraph Co. 18,900 1,223,775
Applied Materials, Inc.* 6,900 270,825
BMC Software, Inc.* 5,100 216,750
Bay Networks, Inc.* 18,900 774,900
Cadence Design Systems, Inc.* 20,100 844,200
Cisco Systems, Inc.* 3,000 223,875
Computer Sciences Corp.* 13,000 913,250
Comsat Corp. 24,200 450,725
DSC Communications Corp.* 14,500 534,688
First Data Corp. 19,900 1,330,813
Hewlett-Packard Co. 8,900 745,375
Informix Corp.* 3,400 102,000
International Business
Machines Corp. 17,000 1,559,750
KLA Instruments Corp.* 15,700 408,200
Lockheed Martin Corp. 11,400 900,600
Micron Technology, Inc. 7,100 281,338
Newbridge Networks Corp.* 1,600 66,200
- -------------------------------------------------
SHARES VALUE
- -------------------------------------------------
TECHNOLOGY (continued)
Paging Network, Inc.* 36,500 $ 866,875
Parametric Technology Corp.* 7,900 523,375
Perkin-Elmer Corp. 19,700 743,675
Quantum Corp.* 24,200 390,225
Shiva Corp.* 7,500 545,625
Silicon Graphics Inc.* 14,200 390,500
Telefonaktiebolaget LM
Ericsson ADR 41,600 806,000
Xerox Corp. 4,300 589,100
-----------
TOTAL TECHNOLOGY 16,260,639
-----------
TRANSPORTATION-- 3.8%
Canadian Pacific Ltd. 35,400 641,625
Federal Express Corp.* 9,700 716,588
Fritz Companies, Inc.* 15,600 647,400
Kansas City Southern
Industries 17,500 800,625
Kirby Corp.* 22,900 372,125
-----------
TOTAL TRANSPORTATION 3,178,363
-----------
UTILITIES -- 2.5%
American Electric Power
Company 26,400 1,069,200
ENSCO International, Inc.* 21,600 496,800
Duke Power Co. 11,600 549,550
-----------
TOTAL UTILITIES 2,115,550
-----------
TOTAL COMMON STOCKS
(cost $61,235,301) 72,947,382
-----------
- ------------------------------------------------
PRINCIPAL
AMOUNT
- ------------------------------------------------
U.S. TREASURY NOTES -- 3.1%
U.S. Treasury Notes
7.250%, 11/30/96 $2,500,000 2,542,575
-----------
TOTAL U.S. TREASURY NOTES
(cost $2,496,815) 2,542,575
-----------
REPURCHASE AGREEMENT -- 11.9%
State Street Bank, dated
12/29/95, due 01/02/96,
5.000%, total to be received
$9,930,513 (secured by
$10,330,000 U.S. Treasury
Bills, due 05/16/96,
market value $10,132,966),
at cost 9,925,000 9,925,000
-----------
12
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS CAPITAL APPRECIATION FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (concluded)
December 31, 1995
- -----------------------------------------------------
VALUE
- -----------------------------------------------------
TOTAL INVESTMENTS -- 102.5%
(cost $73,657,116) $85,414,957
OTHER ASSETS, LESS LIABILITIES -- (2.5%) (2,062,196)
-----------
NET ASSETS -- 100.0% $83,352,761
===========
Note: Based on the cost of investments of $73,933,868 for Federal income tax
purposes at December 31, 1995, the aggregate gross unrealized appreciation
and depreciation was $12,972,131 and $1,491,042, respectively, resulting
in an unrealized appreciation of investments of $11,481,089.
- -------------------------------------------------------------------------------
* Non-income-producing security
** Some or all of these shares, amounting to $2,183,034, were out on loan to
various brokers as of December 31, 1995.
INVESTMENT ABBREVIATIONS:
ADR: Securities whose value is determined or significantly influenced by
trading on exchanges not located in the United States or Canada. ADR
after the name of a holding stands for American Depositary Receipt,
representing ownership of foreign securities on deposit with a domestic
custodian bank.
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1995
- --------------------------------------------------
SHARES VALUE
- --------------------------------------------------
COMMON STOCKS -- 90.0%
BASIC INDUSTRIES -- 6.8%
Betz Laboratories, Inc. 5,000 $ 205,000
Dow Chemical Co. 9,500 668,562
E.I. duPont de Nemours &
Co., Inc. 4,200 293,475
Freeport, McMoran Copper &
Gold, Inc., Class A 8,500 238,000
Kimberly-Clark Corp. 4,100 339,275
Lubrizol Corp. 1,800 50,175
Olin Corp. 2,600 193,050
Oregon Steel Mills, Inc. 13,300 186,200
Union Camp Corp. 1,000 47,625
Witco Chemical Corp. 12,200 356,850
----------
TOTAL BASIC INDUSTRIES 2,578,212
----------
CAPITAL GOODS -- 0.6%
Cooper Industries, Inc. 1,400 51,450
General Signal Corp. 1,300 42,087
PACCAR, Inc. 200 8,400
Timken Company 3,000 114,750
----------
TOTAL CAPITAL GOODS 216,687
----------
CONSUMER BASICS -- 12.7%
American Brands, Inc. 7,200 321,300
American Home Products Corp. 7,400 717,800
Anheuser-Busch Co., Inc. 3,100 207,313
Bausch & Lomb, Inc. 7,300 289,263
Clorox Co. 2,400 171,900
General Mills, Inc. 3,600 207,900
Hanson PLC ADR 10,000* 152,500
Heinz (H.J.) Co. 9,700 321,313
Intimate Brands, Inc. 4,700 70,500
Philip Morris Cos., Inc. 9,200 832,600
Quaker Oats Co. 4,200 144,900
RJR Nabisco Holdings Corp. 6,940 214,273
Tambrands, Inc. 10,300 491,825
UST, Inc. 7,900 263,663
Warner Lambert Co. 2,500 242,813
Zeneca Group PLC 2,500 145,938
----------
TOTAL CONSUMER BASICS 4,795,801
----------
CONSUMER DURABLE GOODS -- 0.3%
Dana Corp. 3,700 108,225
----------
- --------------------------------------------------
SHARES VALUE
- --------------------------------------------------
CONSUMER NON-DURABLES-- 3.9%
Avon Products, Inc. 2,400 $ 180,900
Colgate-Palmolive Company 900 63,225
J.C. Penney Co., Inc. 15,500 738,187
May Department Stores Co. 500 21,125
Melville Corp. 3,900 119,925
Rite Aid Corp. 5,800 198,650
Sears, Roebuck & Co. 4,100 159,900
----------
TOTAL CONSUMER NON-DURABLES 1,481,912
----------
ENERGY -- 11.7%
Amoco Corp. 700 50,313
Atlantic Richfield Co. 4,600 509,450
Chevron Corp. 8,600 451,500
Dresser Industries, Inc. 10,700 260,813
Elf Aquitaine ADR 5,441 199,957
Exxon Corp. 8,100 649,013
Halliburton Company 4,500 227,812
Lyondell Petrochemical Co. 8,400 192,150
Murphy Oil Corp. 5,300 219,950
Pennzoil Co. 3,500 147,875
Phillips Petroleum Co. 2,900 98,962
Repsol SA ADR 3,700 121,637
Royal Dutch Petroleum Co. ADR 1,500 211,687
Texaco, Inc. 8,900 698,650
Total SA ADR 5,305 180,370
YPF Sociedad Anonima,
Class D ADR 10,300 222,737
----------
TOTAL ENERGY 4,442,876
----------
FINANCE AND INSURANCE -- 16.1%
H.F. Ahmanson & Co. 3,200 84,800
Allstate Corp. 2,830 116,384
American General Corp. 8,700 303,413
Banc One Corp. 8,500 320,875
Bankers Trust New York Corp. 3,600 239,400
Boatmens Bancshares, Inc. 4,100 167,588
Chemical Banking Corp. 3,700 217,375
CoreStates Financial Corp. 9,900 374,963
Exel, Ltd. 3,100 189,100
Federal National Mortgage
Association 1,900 235,837
First Bank Systems, Inc. 5,700 282,862
First Union Corp. 5,300 294,812
Great Western Financial Corp. 5,300 135,150
14
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
December 31, 1995
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
FINANCE (continued)
Hartford Steam Boiler Inspection
& Insurance Co. 2,200 $ 110,000
Lincoln National Corp. 10,000 537,500
Marsh and McLennan
Companies, Inc. 2,400 213,000
Mellon Bank Corp. 9,150 491,812
J.P. Morgan & Co., Inc. 10,100 810,525
PNC Bank Corp. 13,100* 422,475
Student Loan Marketing
Association 6,800 447,950
U.S. Bancorp 1,400 46,900
Wachovia Corp. 1,100 50,325
----------
TOTAL FINANCE AND INSURANCE 6,093,046
----------
GENERAL BUSINESS -- 4.7%
H & R Block, Inc. 7,500 303,750
Deluxe Corp. 16,900 490,100
Dun & Bradstreet Corp. 9,600 621,600
Royal PTT Nederland NV ADR 7,300 264,625
Reader's Digest Association,
Inc., Class A 2,200 112,750
----------
TOTAL GENERAL BUSINESS 1,792,825
----------
HEALTH CARE RELATED -- 7.3%
Baxter International, Inc. 7,500 314,063
Bristol-Myers Squibb Co. 9,500 815,812
Health Care Property
Investment, Inc. 6,600 231,825
Eli Lilly & Co. 7,000 393,750
Meditrust 7,700 268,537
Nationwide Health
Properties, Inc. 6,600 277,200
Schering-Plough Corp. 5,200 284,700
SmithKline Beecham Unit
PLC ADR 2,800 155,400
----------
TOTAL HEALTH CARE 2,741,287
----------
SHELTER -- 0.2%
Weyerhaeuser Co. 1,600 69,200
----------
TECHNOLOGY -- 5.5%
Lockheed Martin Corp. 4,442 350,918
Rockwell International Corp. 5,200 274,950
TRW, Inc. 5,000 387,500
Thiokol Corp. 600 20,325
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
TECHNOLOGY (continued)
Thomas & Betts Corp. 2,800 $ 206,500
United Technologies Corp. 4,700 445,912
Xerox Corp. 3,000 411,000
----------
TOTAL TECHNOLOGY 2,097,105
----------
TRANSPORTATION -- 0.3%
Canadian National
Railway, Co.(a) 7,300 109,500
----------
UTILITIES -- 18.6%
ALLTEL Corp. 8,700 256,650
Baltimore Gas & Electric Co. 14,100 401,850
Bell Atlantic Corp. 6,600 441,375
Central & South West Corp. 11,800 328,925
Cinergy Corp. 4,800 147,000
Consolidated Natural Gas Co. 3,100 140,663
GTE Corp. 17,800 783,200
Hong Kong Telecommunications
ADR 7,900 140,225
National Power PLC ADR 6,000 55,500
NICOR, Inc. 7,200 198,000
Northeast Utilities 11,900 290,063
NYNEX Corp. 10,900 588,600
PECO Energy Co. 2,600 78,325
PP & L Resources, Inc. 6,800 170,000
Pacific Gas & Electric Co. 1,500 42,563
Pacific Telesis Group 16,300 548,087
Pacificorp 3,700 78,625
Powergen PLC ADR 5,400 70,200
Public Service Enterprise
Group 10,400 318,500
Southern Co. 7,400 182,225
Sprint Corp. 4,700 187,412
Texas Utilities Co. 9,600 394,800
Unicom Corp. 6,800 222,700
Union Electric Corp. 7,500 313,125
U.S. West Communications
Group 10,700 382,525
Wisconsin Energy Corp. 8,300 254,187
----------
TOTAL UTILITIES 7,015,325
----------
MISCELLANEOUS -- 1.3%
S&P 500 Depositary Receipt 7,800 479,578
----------
TOTAL COMMON STOCKS
(cost $27,014,176) 34,021,579
----------
15
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (concluded)
December 31, 1995
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
PREFERRED STOCKS -- 0.8%
Basic Industries -- 0.2%
Boise Cascade Corp.
Series G, $1.58 3,100 $ 88,738
----------
CONSUMER BASICS -- 0.6%
FHP International Corp.,
Series A, $1.25** 8,200 217,300
----------
TOTAL PREFERRED STOCKS
(cost $301,301) 306,038
----------
- ------------------------------------------------
PRINCIPAL
AMOUNT
- ------------------------------------------------
CONVERTIBLE BONDS -- 0.6%
VLSI Technology, Inc.,
Sub. Notes,
8.250%, 10/01/05
(cost $270,000) $ 270,000 247,725
----------
- ------------------------------------------------
REPURCHASE AGREEMENT -- 11.4%
State Street Bank, dated
12/29/95, due 01/02/96,
5.000%, total to be
received $4,297,386
(secured by $4,470,000
U.S. Treasury Bills, due
05/16/96, market value
$4,384,739), at cost 4,295,000 4,295,000
----------
TOTAL INVESTMENTS -- 102.8%
(cost $31,880,477) 38,870,342
OTHER ASSETS, LESS LIABILITIES --
(2.8%) (1,062,845)
----------
NET ASSETS-- 100.0% $37,807,497
===========
Note: Based on the cost of investments of $31,955,802 for Federal income tax
purposes at December 31, 1995, the aggregate gross unrealized
appreciation and depreciation was $7,147,405 and $232,865, respectively,
resulting in net unrealized appreciation of $6,914,540.
- -------------------------------------------------------------------------------
* These shares, amounting to $574,950, were out on loan to various brokers as
of December 31, 1995.
** Stated rate is annualized based on the last quarterly dividend paid.
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registrations, normally to qualified buyers. At December 31, 1995, the
value of these securities amounted to $109,500 or 0.3% of net assets.
INVESTMENT ABBREVIATIONS:
ADR: Securities whose value is determined or significantly influenced by
trading on exchanges not located in the United States or Canada. ADR
after the name of a holding stands for American Depositary Receipt,
representing ownership of foreign securities on deposit with a
domestic custodian bank.
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS SPECIAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1995
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
COMMON STOCKS -- 93.0%
BASIC INDUSTRIES -- 0.3%
Michael Anthony Jewelers,
Inc.* 135,200 $ 354,900
----------
CAPITAL GOODS -- 4.4%
AAR Corp. 34,800 765,600
Altron, Inc.* 12,300 362,850
Aspect Telecommunications
Corp.* 12,600 418,950
Automated Security Holdings,
PLC ADR* 334,157 250,618
Cable Design Technologies
Corp.* 19,100 840,400
HADCO Corp.* 6,700 188,438
Kent Electronics Corp.* 6,500 379,437
MSC Industrial Direct Co.,
Class A* 5,100 140,250
Rogers Corp.* 37,000 804,750
Scotsman Industries, Inc. 29,200 514,650
Wolverine Tube, Inc.* 15,900 596,250
----------
TOTAL CAPITAL GOODS 5,262,193
----------
CONSUMER BASICS -- 0.8%
Acme United Corp.* 73,600 285,200
Midwest Grain Products, Inc. 20,800 291,200
Pan American Beverages, Inc.,
Class A 11,700** 374,400
----------
TOTAL CONSUMER BASICS 950,800
----------
CONSUMER DURABLE GOODS -- 0.6%
Aaron Rents, Inc., Class B 34,000 612,000
Craftmade International, Inc. 24,200 160,325
----------
TOTAL CONSUMER DURABLE GOODS 772,325
----------
CONSUMER NON-DURABLES -- 9.7%
American Safety Razor Co.* 43,900 345,713
Blyth Industries, Inc.* 25,000 737,500
Boise Cascade Office
Products Corp.* 5,400 230,850
CDW Computer Centers, Inc.* 5,900 234,525
Cash America International,
Inc. 65,900 362,450
Catherine's Stores Corp.* 54,300 434,400
Corporate Express, Inc.* 18,750 560,156
Discount Auto Parts, Inc.* 21,300 662,963
Freds, Inc., Class A 51,600 387,000
Glacier Water Services, Inc.* 26,300** 486,550
Global DirectMail Corp.* 15,100 415,250
Mac Frugals Bargains
Close-Outs, Inc.* 100,000 1,400,000
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
CONSUMER NON-DURABLES (continued)
The Mens Wearhouse, Inc.* 14,600 $ 375,950
Micro Warehouse, Inc.* 10,900 471,425
Nautica Enterprises, Inc.* 8,200 352,600
Parlux Fragrances, Inc.* 43,200** 356,400
Sunglass Hut International,
Inc.* 18,700 439,450
Sylvan, Inc.* 52,100 612,175
TJX Companies, Inc. 20,000 377,500
Tandycrafts, Inc.* 11,000 86,625
Todhunter International,
Inc.* 40,100 310,775
Helen of Troy Ltd.* 30,300 617,362
Tommy Hilfiger Corp.* 27,600 1,169,550
----------
TOTAL CONSUMER NON-DURABLES 11,427,169
----------
CONSUMER SERVICES -- 3.3%
Associated Group, Inc.,
Class A* 8,400 151,200
Associated Group, Inc.,
Class B* 13,500 239,625
Acxiom Corp.* 23,700 645,825
Cellular Communications, Inc.,
Class A* 900 44,775
Cellular Communications
Puerto Rico, Inc.* 19,000 508,250
Davel Communications
Group, Inc.* 40,500 516,375
Jones Intercable, Inc.,
Class A* 56,900 697,025
Protection One, Inc.* 5,000** 50,000
Roto-Rooter, Inc. 17,200 550,400
TPI Enterprises, Inc.* 60,100 172,788
----------
TOTAL CONSUMER SERVICES 3,576,263
----------
ENERGY -- 2.2%
Berry Petroleum Co., Class A 37,500 379,688
Input/Output, Inc.* 18,900 1,091,475
Tosco Corp. 30,000 1,143,750
----------
TOTAL ENERGY 2,614,913
----------
ENTERTAINMENT AND LEISURE -- 3.3%
Clear Channel
Communications, Inc.* 10,800 476,550
Granite Broadcasting Corp.* 35,800** 366,950
Harveys Casino Resorts 30,100 541,800
Heftel Broadcasting Corp.,
Class A* 27,000 472,500
Houghton Mifflin Co. 25,000 1,075,000
Osborn Communications Corp.* 55,500 444,000
Scientific Games Holdings
Corp.* 13,100 494,525
----------
TOTAL ENTERTAINMENT AND LEISURE 3,871,325
----------
17
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS SPECIAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
December 31, 1995
- --------------------------------------------------
SHARES VALUE
- --------------------------------------------------
FINANCE AND INSURANCE -- 14.7%
AT&T Capital Corp. 57,600 $ 2,203,200
Alabama National
Bancorporation 63,000 850,500
Allied Capital Commercial
Corp. 73,832 1,448,953
Allied Capital Corp. 31,000 519,250
Allied Capital Lending Corp. 38,993 492,287
American Travellers Corp.* 40,100** 1,122,800
Charter One Financial, Inc. 81,000 2,460,375
Equity Inns, Inc. 45,600 524,400
First Republic Bancorp, Inc.* 39,556 519,173
First Savings Bank of
Washington Bancorp, Inc. 50,000 650,000
National Western Life
Insurance Co., Class A* 12,000 666,000
Oxford Resources Corp.,
Class A* 16,200 364,500
PMC Capital, Inc. 700 8,838
Premier Bancorp, Inc. 85,700 1,981,813
Presidential Realty Corp.,
Class B 64,458 378,690
ROC Communities, Inc. 22,000 528,000
Roosevelt Financial Group,
Inc. 55,000 1,051,875
The Money Store, Inc. 34,250 530,875
Washington Mutual, Inc. 22,500 644,062
Western National Corp. 27,700 446,662
----------
TOTAL FINANCE AND INSURANCE 17,392,253
----------
GENERAL BUSINESS-- 15.6%
ABM Industries, Inc. 20,900 579,975
ACC Corp. 27,800 625,500
AccuStaff, Inc.* 15,400 666,050
Alternative Resources Corp.* 14,900 439,550
American Business Information* 33,000 618,750
Amplicon, Inc. 34,300 488,775
Brandon Systems Corp. 23,200 594,500
Ciber, Inc.* 14,700 338,100
Concord EFS, Inc.* 15,900 655,875
Electro Rent Corp.* 73,350 1,522,013
Fair, Issac & Co., Inc. 15,300 378,675
Gartner Group, Inc., Class A* 17,800 849,950
Jack Henry & Associates, Inc. 22,200 549,450
Kinder Care Learning
Centers, Inc.* 77,500 968,750
Manpower, Inc. 46,500 1,307,813
National Education Corp.* 316,600 2,572,375
Robert Half International,
Inc.* 11,700 489,937
Sanifill, Inc.* 13,500 450,562
Steck Vaughn Publishing
Corp.* 125,000 921,875
Tetra Tech, Inc.* 35,375 804,781
United Waste Systems, Inc.* 25,600** 940,800
- --------------------------------------------------
SHARES VALUE
- --------------------------------------------------
GENERAL BUSINESS (continued)
URS Corp.* 67,000 $ 469,000
U.S. Filter Corp.* 19,000 505,875
WorldCom, Inc.* 13,000 458,250
U.S. Office Products Co.* 12,000 268,500
----------
TOTAL GENERAL BUSINESS 18,465,681
----------
HEALTH CARE RELATED -- 13.6%
Advocat, Inc.* 49,700 552,913
Chemed Corp. 19,100 742,513
Circon Corp.* 11,600 233,450
Compdent Corp.* 13,300 551,950
Community Health
Systems, Inc.* 12,900 459,563
Daig Corp.* 13,800 317,400
Gulf South Medical Supply,
Inc.* 10,700 318,325
Health Care Property
Investors, Inc. 16,100 565,512
Health Management
Systems, Inc.* 4,000 154,000
Healthsource, Inc.* 22,800 820,800
Idexx Laboratories, Inc.* 13,800 641,700
Living Centers of America,
Inc.* 14,000 490,000
Medpartners/Mullikin, Inc.* 16,700** 546,925
Omnicare, Inc. 15,600** 698,100
OrNda Healthcorp.* 19,500 453,375
Orthodontic Centers of
America, Inc.* 12,200** 585,600
Owen Healthcare, Inc.* 21,750 570,937
Owens & Minor, Inc.
Holding Co. 110,000 1,402,500
Phycor, Inc.* 6,700 338,350
Physician Reliance
Network, Inc.* 11,600 461,100
Physician Sales & Service,
Inc.* 23,400 655,200
Quintiles Transnational Corp.* 12,800 518,400
Quorum Health Group, Inc.* 16,500 358,875
Renal Treatment Centers, Inc.* 16,700 734,800
Retirement Care Associates,
Inc.* 19,650 198,956
Summit Care Corp.* 21,600 486,000
Unilab Corp.* 69,500 182,437
Universal Health Services, Inc.,
Class B* 30,000 1,331,250
Vitalink Pharmacy Services,
Inc.* 34,000 765,000
----------
TOTAL HEALTH CARE 16,135,931
----------
TECHNOLOGY -- 15.6%
ALANTEC Corp.* 12,900 748,200
ASTEC Industries, Inc.* 17,500 170,625
18
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS SPECIAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (concluded)
December 31, 1995
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
TECHNOLOGY (continued)
Alpha Industries, Inc.* 37,700 $ 532,513
Astea International, Inc.* 15,700 357,175
Cambridge Technology
Partners* 19,300 1,090,450
Checkpoint Systems, Inc.* 34,450** 1,287,569
Cognex Corp.* 36,000 1,251,000
Computron Software, Inc.* 21,000** 372,750
Comverse Technology, Inc.* 24,700 494,000
Dialogic Corp.* 8,800 338,800
Diamond Multimedia
Systems, Inc.* 10,300 369,512
Electronics for Imaging,
Inc.* 21,100 907,300
GaSonics International Corp.* 19,500 263,250
Hyperion Software Corp.* 27,800 583,800
ILC Technology, Inc.* 50,000 462,500
In Focus Systems, Inc.* 1,700 60,775
Inso Corp.* 9,400** 399,500
Integrated Systems, Inc.* 9,100 350,350
Kemet Corp.* 24,500 581,875
McAfee Associates, Inc.* 22,800 974,700
National Computer Systems,
Inc. 28,500 520,125
NetManage, Inc.* 22,300** 512,900
Optical Data Systems, Inc.* 14,800 362,600
Picturetel Corp.* 18,600 797,475
Project Software &
Development, Inc.* 10,300 359,212
Remedy Corp.* 9,600 554,400
Richardson Electronics, Ltd. 14,100 148,050
Shiva Corp.* 5,600 407,400
Sierra Semiconductor Corp.* 18,600 258,075
Telxon Corp. 17,200 382,700
Tencor Instruments* 17,800 431,650
Ultratech Stepper, Inc.* 23,700 607,312
VTEL Corp.* 16,000 296,000
Veritas Software Corp.* 8,000 296,000
Zebra Technologies Corp.,
Class A* 26,400 897,600
----------
TOTAL TECHNOLOGY 18,428,143
----------
TRANSPORTATION -- 7.9%
Air Express International
Corp. 45,000 1,012,500
Airborne Freight Corp. 64,000 1,704,000
Consolidated Freightways,
Inc. 68,100 1,804,650
Fritz Companies, Inc.* 19,400 805,100
Harper Group, Inc. 109,900 1,950,725
Pittston Services Group 40,000 1,255,000
Sea Containers, Ltd.,
Class B 13,890 239,603
Wisconsin Central
Transportation Corp.* 9,700 634,137
----------
TOTAL TRANSPORTATION 9,405,715
----------
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
UTILITIES -- 1.3%
Centennial Cellular Corp.,
Class A* 44,650 $ 764,631
Pronet, Inc.* 24,500 719,687
-----------
TOTAL UTILITIES 1,484,318
-----------
TOTAL COMMON STOCKS
(cost $85,787,856) 110,141,929
-----------
PREFERRED STOCKS -- 0.3%
CONSUMER SERVICES -- 0.3%
Cellular Communications, Inc.*
non-cumulative, participating
preferred (cost $227,090) 6,714 330,665
-----------
- ------------------------------------------------
PRINCIPAL
AMOUNT
- ------------------------------------------------
REPURCHASE AGREEMENT -- 8.6%
State Street Bank, dated
12/29/95, due 01/02/96,
5.000%, total to be
received $10,125,622
(secured by $10,525,000
U.S. Treasury Bills, due
05/16/96, market value
$10,324,246), at cost $10,120,000 10,120,000
------------
TOTAL INVESTMENTS -- 101.9%
(cost $96,134,948) 120,592,594
OTHER ASSETS, LESS LIABILITIES
-- (1.9%) (2,231,006)
------------
NET ASSETS -- 100.0% $118,361,588
============
- -------------------------------------------------------------------------------
Note: Based on the cost of investments of $96,238,628 for Federal income tax
purposes at December 31, 1995, the aggregate gross unrealized
appreciation and depreciation was $29,659,057 and $5,305,091,
respectively, resulting in net unrealized appreciation of investments of
$24,353,966.
- -------------------------------------------------------------------------------
* Non-income-producing security.
** Some or all of these shares, amounting to $5,287,096, were out on loan to
various brokers as of December 31, 1995.
INVESTMENT ABBREVIATIONS:
ADR: Securities whose value is determined or significantly influenced by
trading on exchanges not located in the United States or Canada. ADR
after the name of a foreign holding stands for American Depositary
Receipt, representing ownership of foreign securities on deposit with
a domestic custodian bank.
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1995
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
COMMON STOCKS -- 92.6%
ARGENTINA -- 0.2%
ENERGY -- 0.2%
YPF Sociedad Anonima,
Class D ADR 10,500 $ 227,063
----------
AUSTRALIA -- 5.0%
CONSUMER BASICS -- 0.7%
Coca Cola Amatil Ltd. 75,000 598,149
Fosters Brewing GP 197,160 323,862
----------
TOTAL CONSUMER BASICS 922,011
----------
ENERGY -- 1.6%
Ampolex Ltd.* 61,000 133,299
Broken Hill Proprietary Co.
Ltd. 69,694 984,232
Woodside Petroleum Ltd.* 231,050 1,181,525
----------
TOTAL ENERGY 2,299,056
----------
ENTERTAINMENT AND LEISURE -- 1.0%
News Corporation Ltd. ADR 69,100 1,330,175
----------
FINANCE -- 1.1%
Westpac Banking
Corporation Ltd. 360,600 1,597,425
----------
UTILITIES -- 0.6%
Australian Gas & Light Co.
Ltd. 231,440 868,717
----------
TOTAL AUSTRALIA 7,017,384
----------
AUSTRIA -- 0.1%
GENERAL BUSINESS -- 0.1%
Flughafen Wien AG (a) 2,955 199,375
----------
BRAZIL -- 0.8%
ENERGY -- 0.3%
CESP CIA Energy
Sao Paulo ADR* 31,600 275,934
CESP CIA Energy
Sao Paulo ADR (a)* 14,000 122,249
----------
TOTAL ENERGY 398,183
----------
UTILITIES -- 0.5%
Centrais Eletricas
Brasileiras ADR 53,500 723,844
----------
TOTAL BRAZIL 1,122,027
----------
CANADA -- 2.0%
BASIC INDUSTRIES -- 1.3%
Alcan Aluminium Ltd. 9,796 304,015
Barrick Gold Corp. 11,300 298,038
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
BASIC INDUSTRIES (continued)
Cambior, Inc. 18,600 $ 200,915
Placer Dome, Inc. 42,000 1,007,323
----------
TOTAL BASIC INDUSTRIES 1,810,291
----------
TRANSPORTATION -- 0.7%
Canadian Pacific Ltd. 57,000 1,038,356
----------
TOTAL CANADA 2,848,647
----------
CHINA -- 0.4%
UTILITIES -- 0.4%
Huaneng Power
International, Inc. ADR* 42,000 603,750
----------
DENMARK -- 1.2%
CAPITAL GOODS -- 0.5%
FLS Industries, Series B 9,900 766,682
----------
FINANCE -- 0.7%
Unidanmark A/S, Class A 19,200 950,923
----------
TOTAL DENMARK 1,717,605
----------
FINLAND -- 0.9%
BASIC INDUSTRIES -- 0.9%
Kymmene OY 46,200 1,221,548
----------
FRANCE -- 6.0%
CAPITAL GOODS -- 2.4%
Alcatel Alsthom 25,500 2,198,509
Compagnie De Saint-Gobain 10,300 1,123,177
----------
TOTAL CAPITAL GOODS 3,321,686
----------
CONSUMER BASICS -- 0.6%
Roussel-Uclaf ADR (a)* 10,240 868,972
----------
ENERGY -- 0.8%
Total Francaise Petroleum 15,831 1,068,439
----------
ENTERTAINMENT AND LEISURE -- 0.6%
Accor SA 6,157 797,128
----------
FINANCE -- 0.7%
Banque Nationale de Paris 23,100 1,042,024
----------
GENERAL BUSINESS -- 0.9%
CIE Generale Des Eaux 13,200 1,317,844
----------
TOTAL FRANCE 8,416,093
----------
20
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
December 31, 1995
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
GERMANY -- 11.1%
BASIC INDUSTRIES -- 2.1%
Hoechst AG 9,612 $ 2,606,530
Viag AG 950 380,795
-----------
TOTAL BASIC INDUSTRIES 2,987,325
-----------
CAPITAL GOODS -- 3.0%
Mannesmann AG 7,897 2,514,158
Siemens AG 3,030 1,658,104
-----------
TOTAL CAPITAL GOODS 4,172,262
-----------
CONSUMER BASICS-- 0.5%
Schering AG 9,200 609,464
-----------
CONSUMER DURABLE GOODS -- 0.4%
Daimler-Benz AG 1,170 588,874
-----------
CONSUMER NON-DURABLES -- 0.3%
Spar Handels AG 1,900 407,947
-----------
FINANCE -- 1.3%
Bayerische Vereinsbank AG 28,480 845,764
Munchener Rueckvericherungs-
Gesellschaft 457 993,963
-----------
TOTAL FINANCE 1,839,727
-----------
GENERAL BUSINESS-- 1.5%
SAP AG 13,800 2,087,557
-----------
UTILITIES -- 2.0%
RWE AG 2,140 596,723
Veba AG 52,900 2,245,807
-----------
TOTAL UTILITIES 2,842,530
-----------
TOTAL GERMANY 15,535,686
-----------
HONG KONG -- 1.9%
BASIC INDUSTRIES -- 0.8%
Hutchison Whampoa Ltd. 189,000 1,151,232
-----------
FINANCE -- 1.1%
HSBC Holdings PLC,
UK registered 86,625 1,310,718
Peregrine Investment
Holdings Ltd. 176,000 227,610
-----------
TOTAL FINANCE 1,538,328
-----------
TOTAL HONG KONG 2,689,560
-----------
INDONESIA -- 0.5%
GENERAL BUSINESS -- 0.5%
PT Indosat ADR 17,300 631,450
-----------
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
ITALY -- 0.7%
CONSUMER DURABLE GOODS -- 0.7%
Fiat SpA 521,600 $ 952,469
-----------
JAPAN -- 18.5%
BASIC INDUSTRIES -- 2.4%
Bridgestone Corp. 27,000 428,862
Hitachi Metals Ltd. 6,000 70,315
Nisshin Steel Co. 92,000 371,564
Sekisui Chemical Co. 87,000 1,280,775
Sumitomo Metal Industries* 48,000 145,511
Sumitomo Metal Mining Co. 116,000 1,042,595
-----------
TOTAL BASIC INDUSTRIES 3,339,622
-----------
CAPITAL GOODS -- 4.0%
Hitachi 224,000 2,256,271
Mitsubishi Heavy Industries
Ltd. 198,000 1,578,247
NSK 58,000 421,308
Omron Corp. 50,000 1,152,542
SMC Corp. 2,000 144,697
-----------
TOTAL CAPITAL GOODS 5,553,065
-----------
CONSUMER DURABLE GOODS -- 4.8%
Matsushita Electric
Industries 144,000 2,343,051
Mazda Motor Corp.* 244,000 1,037,443
Sony Corp. 30,000 1,798,547
Toyota Motor Corp. 74,000 1,569,589
-----------
TOTAL CONSUMER DURABLE GOODS 6,748,630
-----------
CONSUMER NON-DURABLES -- 0.9%
Canon, Inc. 67,000 1,213,462
---------------
ENTERTAINMENT AND LEISURE -- 0.7%
Nintendo Corp. Ltd. 13,000 988,378
---------------
FINANCE -- 2.8%
Nichiei Co. 8,000 596,610
Orix Corp. Ltd. 33,000 1,358,354
Promise Co. 10,800 519,864
Sumitomo Trust and
Banking Co. 107,000 1,513,027
-----------
TOTAL FINANCE 3,987,855
-----------
GENERAL BUSINESS -- 0.4%
Dai Nippon Printing Co. Ltd. 37,000 627,119
-----------
21
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
December 31, 1995
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
TECHNOLOGY -- 1.6%
Kyocera Corp. 6,000 $ 445,714
Ricoh Company Ltd. 32,000 350,218
Rohm Company 25,000 1,411,622
-----------
TOTAL TECHNOLOGY 2,207,554
-----------
UTILITIES -- 0.9%
DDI Corporation 169 1,309,443
-----------
TOTAL JAPAN 25,975,128
-----------
NETHERLANDS -- 6.4%
CONSUMER NON-DURABLES -- 1.1%
Heineken NV 8,660 1,536,426
-----------
ENERGY -- 1.9%
Royal Dutch Petroleum Co. ADR 14,100 1,989,862
Royal Dutch Petroleum Co. 4,650 649,673
-----------
TOTAL ENERGY 2,639,535
-----------
FINANCE -- 3.1%
Aegon NV 38,342 1,696,443
International Nederlanden
Groep NV 39,221 2,620,110
-----------
TOTAL FINANCE 4,316,553
-----------
TRANSPORTATION -- 0.3%
Nedlloyd Groep NV 21,900 496,766
-----------
TOTAL NETHERLANDS 8,989,280
-----------
NEW ZEALAND -- 0.9%
CONSUMER BASICS -- 0.5%
Lion Nathan Ltd. 307,400 733,532
-----------
SHELTER -- 0.4%
Fletcher Challenge Ltd. 236,400 545,562
-----------
TOTAL NEW ZEALAND 1,279,094
-----------
NORWAY -- 0.8%
BUILDING MATERIALS -- 0.5%
Aker AS 48,400 641,859
-----------
CAPITAL GOODS -- 0.3%
Kvaerner AS 14,000 495,098
-----------
TOTAL NORWAY 1,136,957
-----------
PANAMA -- 0.4%
FINANCE -- 0.4%
Banco Latinamericano de
Exportaciones SA, E Shares 12,100 562,650
-----------
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
SINGAPORE -- 0.7%
BASIC INDUSTRIES -- 0.4%
Jardine Matheson Holdings
Ltd. 83,435 $ 571,530
-----------
MISCELLANEOUS -- 0.3%
Jardine Strategic Holdings
Ltd. 118,000 361,080
-----------
TOTAL SINGAPORE 932,610
-----------
SOUTH AFRICA -- 0.9%
BASIC INDUSTRIES -- 0.7%
Impala Platinum Holdings ADR 24,300 443,280
Rustenburg Platinum
Holdings Ltd. ADR 30,917 508,857
-----------
TOTAL BASIC INDUSTRIES 952,137
-----------
CONSUMER BASICS -- 0.2%
Malbak Ltd. GDR* 12,900 83,850
Malbak Ltd. GDR (a)* 31,400 217,489
-----------
TOTAL CONSUMER BASICS 301,339
-----------
TOTAL SOUTH AFRICA 1,253,476
-----------
SOUTH KOREA -- 2.8%
CAPITAL GOODS -- 1.4%
Daewoo Heavy Industries 26,214 285,541
L.G. Electronics, Inc. GDR* 24,000 267,617
L.G. Electronics, Inc.
GDR (a)* 1,398 15,589
Samsung Electronics Ltd. GDR
representing 1/2 voting
share* 262 25,348
Samsung Electronics Ltd. (a) 17,500 1,050,000
Samsung Electronics Ltd.
Sponsored GDR (a)* 334 32,314
Samsung Electronics Ltd.
Non-Voting GDR (a)* 3,463 207,780
Samsung Electronics Ltd.
GDR (a)* 66 6,386
-----------
TOTAL CAPITAL GOODS 1,890,575
-----------
CONSUMER BASICS -- 0.5%
Cheil Foods & Chemicals, Inc. 16,000 558,943
Cheil Foods & Chemicals, Inc.,
Preferred 2,607 178,785
-----------
TOTAL CONSUMER BASICS 737,728
-----------
MISCELLANEOUS -- 0.5%
Pang Rim Spinning 11,200 744,982
-----------
UTILITIES -- 0.4%
Korea Electric Power Co. ADR 20,000 520,000
-----------
TOTAL SOUTH KOREA 3,893,285
-----------
22
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
December 31, 1995
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
SPAIN -- 1.1%
FINANCE -- 0.4%
Banco Santander SA 9,700 $ 486,999
-----------
UTILITIES -- 0.7%
Empresa Nacional de
Electricidad SA 18,400 1,042,111
-----------
TOTAL SPAIN 1,529,110
-----------
SWEDEN -- 5.2%
CAPITAL GOODS -- 1.3%
Autoliv AB 16,000 934,982
SKF AB 49,800 952,543
-----------
TOTAL CAPITAL GOODS 1,887,525
-----------
CONSUMER BASICS -- 2.2%
Astra AB, Series A 46,700 1,863,864
Astra AB, Series B 29,800 1,180,385
-----------
TOTAL CONSUMER BASICS 3,044,249
-----------
CONSUMER DURABLE GOODS -- 1.0%
Electrolux AB, Series B 19,600 804,404
Volvo AB 29,900 612,437
-----------
TOTAL CONSUMER DURABLE GOODS 1,416,841
-----------
FINANCE -- 0.7%
Skandia Foersaekrings AB 37,200 1,005,678
-----------
TOTAL SWEDEN 7,354,293
-----------
SWITZERLAND -- 10.2%
BASIC INDUSTRIES -- 1.7%
CIBA Geigy AG, Bearer 1,115 976,290
CIBA Geigy AG, Registered 1,610 1,416,688
-----------
TOTAL BASIC INDUSTRIES 2,392,978
-----------
CAPITAL GOODS -- 1.8%
BBC Brown Boveri AG 1,120 1,301,084
Schindler Holding AG PC 340 352,233
Sulzer, Registered GDR 1,240 709,493
Sulzer AG PC 300 159,948
-----------
TOTAL CAPITAL GOODS 2,522,758
-----------
CONSUMER BASICS -- 2.5%
Nestle SA, Registered 2,091 2,313,061
Sandoz AG 1,330 1,217,581
-----------
TOTAL CONSUMER BASICS 3,530,642
-----------
- ------------------------------------------------
SHARES VALUE
- ------------------------------------------------
FINANCE -- 3.2%
Baloise Holdings 424 $ 882,185
Schweizerischer Bankverein 2,724 1,112,270
Schweizerische
Rueckversicherungs 1,145 1,332,111
Zurich Versicherun Registered 3,925 1,173,927
-----------
TOTAL FINANCE 4,500,493
-----------
GENERAL BUSINESS -- 1.0%
SGS Societe Generale de
Surveillance Holding SA 718 1,425,418
-----------
TOTAL SWITZERLAND 14,372,289
-----------
UNITED KINGDOM -- 11.7%
BASIC INDUSTRIES -- 0.7%
RTZ Corp. PLC 71,265 1,035,938
-----------
CONSUMER BASICS -- 2.2%
Allied Domecq PLC ADR 89,600 729,157
Cadbury Schweppes PLC 167,980 1,386,572
Grand Metropolitan PLC 72,300 520,439
Great Universal Stores PLC 49,100 521,959
-----------
TOTAL CONSUMER BASICS 3,158,127
-----------
CONSUMER NON-DURABLES -- 1.9%
Sears PLC 719,700 1,162,429
Thorn EMI PLC 61,300 1,443,725
-----------
TOTAL CONSUMER NON-DURABLES 2,606,154
-----------
ENERGY -- 0.1%
Lasmo PLC 67,626 182,745
-----------
ENTERTAINMENT AND LEISURE -- 1.8%
Rank Organisation PLC 183,600 1,328,740
Reuters Holdings PLC 126,600 1,159,042
-----------
TOTAL ENTERTAINMENT AND LEISURE 2,487,782
-----------
FINANCE -- 0.6%
Lloyds Abbey Life PLC 82,300 575,167
St. Jame's Place Capital PLC 124,000 199,317
-----------
TOTAL FINANCE 774,484
-----------
GENERAL BUSINESS -- 0.9%
Mirror Group PLC 287,500 785,836
Waste Management
International PLC * 100,000 528,032
-----------
TOTAL GENERAL BUSINESS 1,313,868
-----------
23
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
December 31, 1995
- -------------------------------------------------
SHARES VALUE
- -------------------------------------------------
TECHNOLOGY -- 1.1%
British Aerospace PLC,
Capital Warrants * 3,220 $ 15,602
British Aerospace PLC 124,451 1,538,122
------------
TOTAL TECHNOLOGY 1,553,724
------------
TRANSPORTATION -- 0.3%
London & Overseas
Freighters ADR 34,400 395,600
------------
UTILITIES -- 2.1%
Midlands Electricity PLC 70,500 832,117
National Grid Group* 57,034 176,266
National Power PLC 108,000 753,937
National Power PLC,
partially paid*(b) 56,700 135,608
Powergen PLC 125,426 1,036,288
------------
TOTAL UTILITIES 2,934,216
------------
TOTAL UNITED KINGDOM 16,442,638
------------
UNITED STATES -- 2.2%
BASIC INDUSTRIES -- 0.3%
Homestake Mining Co. 27,400 428,125
------------
CONSUMER BASICS -- 0.5%
Pharmacia & Upjohn, Inc.* 18,900 732,375
------------
CONSUMER NON-DURABLES -- 0.2%
Amway Asia Pacific Ltd. 10,000 356,250
------------
FINANCE -- 0.9%
EXEL Ltd. 8,500 518,500
Rouse Company 720 14,670
UNUM Corp. 12,100 665,500
------------
TOTAL FINANCE 1,198,670
------------
SHELTER -- 0.3%
Lafarge Corp. 23,600 442,500
------------
TOTAL UNITED STATES 3,157,920
------------
VENEZUELA -- 0.0%
ENERGY -- 0.0%
Venezolana De Prerredicidos
GDR (a)* 10,780 43,120
------------
TOTAL COMMON STOCKS
(cost $110,872,201) 130,104,507
------------
- -------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------
FOREIGN CORPORATE OBLIGATION -- 0.3%
Teck Corp., Convertible Bonds,
3.750%, 07/15/06 $ 469,000 $ 468,414
------------
TOTAL FOREIGN CORPORATE OBLIGATION
(cost $390,560) 468,414
------------
- -------------------------------------------------
COMMERCIAL PAPER -- 2.1%
Federal Home Loan Mortgage
Discount Notes,
5.600%, 01/02/96 405,000 404,937
Federal National Mortgage
Association Discount Notes,
5.450%, 01/03/96 2,615,000 2,614,208
------------
TOTAL COMMERCIAL PAPER
(cost $3,019,145) 3,019,145
------------
- -------------------------------------------------
U.S. TREASURY BILLS -- 0.3%
U.S. Treasury Bills
4.500%, 01/11/96 175,000 174,781
5.080%, 01/11/96 195,000 194,725
------------
Total U.S. Treasury Bills
(cost $369,506) 369,506
------------
REPURCHASE AGREEEMENT -- 6.2%
Donaldson, Lufkin, Jenrette,
dated 12/29/95, due
01/02/96, 5.850%, total
to be received at maturity
$8,668,631 (secured by
$5,226,000 U.S. Treasury
Bonds, 14.000%, due
11/15/11, market value
$8,751,674), at cost 8,663,000 8,663,000
------------
TOTAL INVESTMENTS -- 101.5%
(cost $123,314,412) 142,624,572
OTHER ASSETS, LESS LIABILITIES
-- (1.5%) (2,136,667)
------------
NET ASSETS -- 100.0% $140,487,905
============
24
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (concluded)
December 31, 1995
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Note: Based on the cost of investments of $123,581,100 for Federal income tax
purposes at December 31, 1995, the aggregate gross unrealized
appreciation and depreciation was $22,380,851 and $3,337,379,
respectively, resulting in net unrealized appreciation of investments
of $19,043,472.
- -------------------------------------------------------------------------------
* Non-income-producing security.
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1995, the value of these securities amounted to $2,987,772 or 2.1% of net
assets.
(b) Purchased on an installment basis. Market value reflects only the first of
three payments made through December 31, 1995.
INVESTMENT ABBREVIATIONS:
ADR/GDR: Securities whose value is determined or significantly influenced
by trading on exchanges not located in the United States or Canada.
ADR after the name of a foreign holding stands for American
Depositary Receipt, representing ownership of foreign securities
on deposit with a domestic custodian bank; a GDR (Global
Depositary Receipt) is comparable, but foreign securities are held
on deposit in a non-U.S. bank.
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGERS MANAGERS MANAGERS MANAGERS
CAPITAL INCOME SPECIAL INTERNATIONAL
APPRECIATION EQUITY EQUITY EQUITY
FUND FUND FUND FUND
------------ ----------- ------------ -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at value* $75,489,957 $34,575,342 $110,472,594 $133,961,572
Repurchase agreements at cost and value 9,925,000 4,295,000 10,120,000 8,663,000
Cash 7,317 8,435 2,975 4,806
Foreign currency (cost $119,982) -- -- -- 118,411
Collateral from brokers on securities loaned 2,227,600 592,300 5,406,026 --
Receivable for investments sold 893,593 76,130 865,840 55,382
Receivable for Fund shares sold 573,641 329,971 695,992 1,287,659
Dividends, interest and other receivables 77,901 137,419 156,277 85,182
Foreign withholding tax receivable -- 9,200 -- 103,423
Prepaid expenses 23,150 14,098 32,447 37,657
----------- ----------- ------------ ------------
Total assets 89,218,159 40,037,895 127,752,151 144,317,092
----------- ----------- ------------ ------------
LIABILITIES:
Dividends and distributions payable 1,958,365 1,045,603 3,398,433 2,300,045
Payable for Fund shares repurchased 1,189,990 30,883 264,711 65,254
Payable upon return of securities loaned 2,227,600 592,300 5,406,026 --
Payable for investments purchased 366,998 491,171 150,060 1,066,472
Payable for closed forward foreign currency contracts -- -- -- 172,096
Accrued expenses:
Investment advisory and management fees 56,719 23,895 89,966 106,054
Administrative fees 17,725 7,965 24,990 29,459
Other 48,001 38,581 56,377 89,807
----------- ----------- ------------ ------------
Total liabilities 5,865,398 2,230,398 9,390,563 3,829,187
----------- ----------- ------------ ------------
NET ASSETS $83,352,761 $37,807,497 $118,361,588 $140,487,905
=========== =========== ============ ============
Shares outstanding 3,070,997 1,329,830 2,731,100 3,514,558
=========== =========== ============ ============
Net asset value, offering and redemption price
per share $27.14 $28.43 $43.34 $39.97
=========== =========== ============ ============
NET ASSETS REPRESENT:
Paid-in capital $68,724,643 $29,793,979 $ 90,223,439 $121,036,512
Distributions in excess of net investment income -- -- -- (26,468)
Undistributed net investment income 43,118 41,649 -- --
Accumulated net realized gain from investments 2,827,1639 82,004 3,680,503 170,506
Net unrealized appreciation of investments and
foreign currency contracts and translations 11,757,837 6,989,865 24,457,646 19,307,355
----------- ----------- ------------ ------------
NET ASSETS $83,352,761 $37,807,497 $118,361,588 $140,487,905
=========== =========== ============ ============
*Investments at cost $63,732,116 $27,585,477 $ 86,014,948 $114,651,412
=========== =========== ============ ============
</TABLE>
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS FUNDS
STATEMENTS OF OPERATIONS
For the year ended December 31, 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGERS MANAGERS MANAGERS MANAGERS
CAPITAL INCOME SPECIAL INTERNATIONAL
APPRECIATION EQUITY EQUITY EQUITY
FUND FUND FUND FUND
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income $771,152 $1,662,744 $963,824 $2,255,175
Interest income 540,561 63,070 397,289 505,254
Foreign withholding tax (3,062) (10,669) (3,319) (257,398)
Stock loan fees 15,296 903 33,057 --
------------ ----------- ----------- -----------
Total investment income 1,323,947 1,716,048 1,390,851 2,503,031
------------ ----------- ----------- -----------
EXPENSES:
Investment advisory and management fees 635,588 299,824 977,869 948,514
Administrative fees 191,815 95,949 262,781 256,822
Custodian fees 84,994 69,329 123,133 249,499
Audit fees 39,550 35,193 41,728 47,939
Transfer agent fees 50,945 30,209 63,432 67,525
Registration fees 18,430 14,011 20,979 21,119
Legal fees 17,871 9,174 24,279 22,382
Trustee fees 7,655 4,321 10,372 8,626
Miscellaneous expenses 31,150 19,769 43,644 40,792
------------ ----------- ----------- -----------
Total expenses 1,077,998 577,779 1,568,217 1,663,218
------------ ----------- ----------- -----------
Net investment income (loss) 245,949 1,138,269 (177,366) 839,813
------------ ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investment transactions 13,170,596 5,081,595 12,656,992 6,097,160
Net realized gain on foreign currency contracts
and translations -- -- -- 1,175,765
Net unrealized appreciation of investments 8,969,556 5,771,575 18,943,704 7,094,772
Net unrealized appreciation from foreign
currency translations -- -- -- 177,937
------------ ----------- ----------- -----------
Net realized and unrealized gain 22,140,152 10,853,170 31,600,696 14,545,634
------------ ----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $22,386,101 $11,991,439 $31,423,330 $15,385,447
============ =========== =========== ===========
</TABLE>
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS FUNDS
STATEMENTS OF NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGERS MANAGERS
CAPITAL INCOME
APPRECIATION EQUITY
FUND FUND
---------------------------- ---------------------------
For the For the For the For the
year ended year ended year ended year ended
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) $ 245,949 $ 440,244 $ 1,138,269 $ 1,384,029
Net realized gain (loss) on investments
and foreign currency transactions 13,170,596 3,379,027 5,081,595 3,018,045
Net unrealized appreciation (depreciation) of investments
and foreign currency translations 8,969,556 (5,341,454) 5,771,575 (4,319,633)
----------- ----------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations 22,386,101 (1,522,183) 11,991,439 82,441
----------- ----------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (224,395) (430,309) (1,143,791) (1,410,879)
From net realized gain on investments (10,213,381) (5,064,938) (4,742,480) (4,334,127)
In excess of net realized gain on investments -- (130,052) -- --
----------- ----------- ------------ -----------
Total distributions to shareholders (10,437,776) (5,625,299) (5,886,271) (5,745,006)
----------- ----------- ------------ -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 36,618,267 52,618,997 12,024,698 31,106,019
Net asset value of shares issued in connection
with reinvestment of dividends and distributions 8,380,359 2,662,532 4,310,681 2,314,577
Cost of shares repurchased (59,635,994) (31,450,462) (33,508,044) (19,847,798)
----------- ----------- ------------ -----------
Net increase (decrease) from capital share transactions (14,637,368) 23,831,067 (17,172,665) (13,572,798)
----------- ----------- ------------ -----------
Total increase (decrease) in net assets (2,689,043) 16,683,585 (11,067,497) 7,910,233
NET ASSETS:
Beginning of year 86,041,804 69,358,219 48,874,994 40,964,761
----------- ----------- ------------ -----------
End of year $83,352,761 $86,041,804 $37,807,497 $48,874,994
=========== =========== ============ ===========
End of year undistributed (overdistributed)
net investment income $ 43,118 $ 21,564 $ 41,649 $ 47,171
=========== =========== ============ ===========
- ---------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Sale of shares 1,353,077 2,106,641 429,990 1,137,838
Shares issued in connection with reinvestment of dividends
and distributions 312,566 111,802 152,259 89,199
Shares repurchased (2,295,146) (1,273,955) (1,215,109) (733,056)
----------- ----------- ------------ -----------
Net increase (decrease) in shares (629,503) 944,488 (632,860) 493,981
=========== =========== ============ ===========
</TABLE>
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGERS MANAGERS
SPECIAL INTERNATIONAL
EQUITY EQUITY
FUND FUND
---------------------------- ----------------------------
For the For the For the For the
year ended year ended year ended year ended
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) $ (177,366) $ (66,425) $ 839,813 $ 488,584
Net realized gain (loss) on investments
and foreign currency transactions 12,656,992 9,061,110 7,272,925 (75,178)
Net unrealized appreciation (depreciation) of investments
and foreign currency translations 18,943,704 (11,840,995) 7,272,709 402,678
------------ ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations 31,423,330 (2,846,310) 15,385,447 816,084
------------ ------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -- -- (435,148) (187,912)
From net realized gain on investments (14,466,123) (4,010,027) (7,196,327) --
In excess of net realized gain on investments -- -- -- (499,821)
------------ ------------ ------------ -----------
Total distributions to shareholders (14,466,123) (4,010,027) (7,631,475) (687,733)
------------ ------------ ------------ -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 47,782,200 63,812,011 89,559,295 67,067,271
Net asset value of shares issued in connection
with reinvestment of dividends and distributions 8,768,064 2,002,667 5,331,247 364,438
Cost of shares repurchased (66,729,768) (46,406,545) (49,080,381) (42,909,507)
------------ ------------ ------------ -----------
Net increase (decrease) from capital share transactions (10,179,504) 19,408,133 45,810,161 24,522,202
------------ ------------ ------------ -----------
Total increase (decrease) in net assets 6,777,703 12,551,796 53,564,133 24,650,553
NET ASSETS:
Beginning of year 111,583,885 99,032,089 86,923,772 62,273,219
------------ ------------ ------------ -----------
End of year $118,361,588 $111,583,885 $140,487,905 $86,923,772
============ ============ ============ ===========
End of year undistributed (overdistributed)
net investment income $ -- $ -- $ (26,468) $ 185,739
============ ============ ============ ===========
- --------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Sale of shares 1,148,916 1,670,908 2,289,835 1,819,828
Shares issued in connection with reinvestment of dividends
and distributions 205,619 53,991 133,582 9,985
Shares repurchased (1,656,412) (1,237,640) (1,300,117) (1,172,023)
============ ============ ============ ===========
Net increase (decrease) in shares (301,877) 487,259 1,123,300 657,790
============ ============ ============ ===========
</TABLE>
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
- -------------------------------------------------------------------------------
MANAGERS CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock oustanding throughout each year
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1995 1994 1993 1992* 1991*
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $23.25 $25.17 $24.67 $23.46 $19.99
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.09 0.12 0.19 0.08 0.25
Net realized and unrealized gain
(loss) on investments 7.62 (0.49) 3.80 2.39 6.10
------ ------ ------ ------ ------
Total from investment operations 7.71 (0.37) 3.99 2.47 6.35
------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.08) (0.12) (0.19) (0.07) (0.27)
From net realized gain on investments (3.74) (1.39) (3.30) (1.19) (2.61)
In excess of net realized gain
on investments -- (0.04) -- -- --
------ ------ ------ ------ ------
Total distributions to
shareholders (3.82) (1.55) (3.49) (1.26) (2.88)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $27.14 $23.25 $25.17 $24.67 $23.46
====== ====== ====== ====== ======
- --------------------------------------------------------------------------------------------
Total Return 33.39% (1.50)% 16.38% 10.50% 31.97%
=============================================================================================
Ratio of expenses to average
net assets 1.36% 1.29% 1.18% 1.05% 1.31%
Ratio of net investment income
to average net assets 0.31% 0.53% 0.74% 0.33% 1.07%
Portfolio turnover 134% 122% 131% 175% 259%
Net assets at end of year
(000's omitted) $83,353 $86,042 $69,358 $56,196 $53,246
=============================================================================================
<FN>
* Audited by prior auditors.
</FN>
</TABLE>
30
<PAGE>
- -------------------------------------------------------------------------------
MANAGERS INCOME EQUITY FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock oustanding throughout each year
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1995 1994 1993 1992* 1991*
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $24.90 $27.89 $27.38 $28.62 $24.06
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.87 0.80 0.81 0.99 1.11
Net realized and unrealized gain
(loss) on investments 7.47 (0.50) 2.54 1.72 5.82
------ ------ ------ ------ ------
Total from investment operations 8.34 0.30 3.35 2.71 6.93
------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income (0.86) (0.83) (0.76) (0.98) (1.20)
Net realized gain on investments (3.95) (2.46) (2.08) (2.97) (1.17)
------ ------ ------ ------ ------
Total distributions to
shareholders (4.81) (3.29) (2.84) (3.95) (2.37)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $28.43 $24.90 $27.89 $27.38 $28.62
====== ====== ====== ====== ======
- ---------------------------------------------------------------------------------------------
Total Return 34.36% 0.99% 12.40% 9.80% 29.33%
=============================================================================================
Ratio of expenses to average
net assets 1.45% 1.33% 1.32% 1.20% 1.16%
Ratio of net investment income
to average net assets 2.85% 3.06% 2.75% 3.52% 4.00%
Portfolio turnover 36% 46% 41% 41% 64%
Net assets at end of year
(000's omitted) $37,807 $48,875 $40,965 $49,648 $70,077
=============================================================================================
<FN>
* Audited by prior auditors.
</FN>
</TABLE>
31
<PAGE>
- -------------------------------------------------------------------------------
MANAGERS SPECIAL EQUITY FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock oustanding throughout each year
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1995(a) 1994 1993 1992* 1991*
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $36.79 $38.90 $36.14 $34.49 $24.46
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.07) (0.01) 0.02 0.05 0.22
Net realized and unrealized gain
(loss) on investments 12.28 (0.76) 6.12 5.35 11.78
------ ------ ------ ------ ------
Total from investment operations 12.21 (0.77) 6.14 5.40 12.00
------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income -- -- (0.01) (0.05) (0.23)
Net realized gain on investments (5.66) (1.34) (3.37) (3.70) (1.74)
------ ------ ------ ------ ------
Total distributions to
shareholders (5.66) (1.34) (3.38) (3.75) (1.97)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $43.34 $36.79 $38.90 $36.14 $34.49
====== ====== ====== ====== ======
- ---------------------------------------------------------------------------------------------
Total Return 33.94% (1.99)% 17.05% 15.64% 49.26%
=============================================================================================
Ratio of expenses to average
net assets 1.44% 1.37% 1.26% 1.29% 1.30%
Ratio of net investment income
(loss) to average net assets (0.16)% (0.06)% 0.07% 0.14% 0.73%
Portfolio turnover 65% 66% 45% 54% 70%
Net assets at end of year
(000's omitted) $118,362 $111,584 $99,032 $53,641 $40,616
=============================================================================================
<FN>
(a) Calculated using the weighted average shares outstanding during the year.
* Audited by prior auditors.
</FN>
</TABLE>
32
<PAGE>
- -------------------------------------------------------------------------------
MANAGERS INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock oustanding throughout each year
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1995(a) 1994 1993 1992* 1991*
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $36.35 $35.92 $26.52 $25.66 $22.09
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.31 0.16 0.22 0.23 0.36
Net realized and unrealized gain
(loss) on investments 5.59 0.56 9.88 0.85 3.64
------ ------ ------ ------ ------
Total from investment operations 5.90 0.72 10.10 1.08 4.00
------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.13) (0.08) (0.29) (0.22) (0.36)
In excess of net investment income -- -- (0.11) -- --
From net realized gain on investments (2.15) -- (0.30) -- (0.07)
In excess of net realized gain
on investments -- (0.21) -- -- --
------ ------ ------ ------ ------
Total distributions to
shareholders (2.28) (0.29) (0.70) (0.22) (0.43)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $39.97 $36.35 $35.92 $26.52 $25.66
====== ====== ====== ====== ======
- ---------------------------------------------------------------------------------------------
Total Return 16.24% 2.00% 38.20% 4.25% 18.14%
=============================================================================================
Ratio of expenses to average
net assets 1.58% 1.49% 1.47% 1.45% 1.69%
Ratio of net investment income
to average net assets 0.80% 0.60% 0.78% 0.97% 1.50%
Portfolio turnover 73% 22% 46% 51% 158%
Net assets at end of year
(000's omitted) $140,488 $86,924 $62,273 $23,129 $14,222
=============================================================================================
<FN>
(a) Calculated using the weighted average shares outstanding during the year.
* Audited by prior auditors.
</FN>
</TABLE>
33
<PAGE>
- -------------------------------------------------------------------------------
THE MANAGERS FUNDS
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
- -------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Managers Funds (the "Trust") is 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. Included in this report are
Managers Capital Appreciation Fund, Managers Income Equity Fund, Managers
Special Equity Fund and Managers International Equity Fund, collectively the
"Funds." The Funds' financial statements are prepared in accordance with
generally accepted accounting principles, which require the use of management's
estimates. The following is a summary of significant accounting policies
followed by the Funds:
(A) VALUATION OF INVESTMENTS
Equity securities traded on a domestic or international securities exchange are
valued at the last quoted sales price, or, lacking any sales, on the basis of
the last quoted bid price. Over-the-counter securities for which market
quotations are readily available are valued at the last quoted bid price. Fixed
income securities are valued based on valuations furnished by independent
pricing services that utilize matrix systems which reflect such factors as
security prices, yields, maturities, and ratings, and are supplemented by dealer
and exchange quotations. Short-term investments, having a remaining maturity of
60 days or less, are valued at amortized cost which approximates market.
Securities for which market quotations are not readily available are valued at
fair value, as determined in good faith and pursuant to procedures established
by the Board of Trustees.
(B) SECURITY TRANSACTIONS
Security transactions are accounted for as of trade date. Gains and losses on
securities sold are determined on the basis of identified cost.
(C) INVESTMENT INCOME AND EXPENSES
Dividend income is recorded on the ex-dividend date, except certain dividends
from foreign securities where the ex-dividend date may have passed are recorded
as soon as the Trust is informed of the ex-dividend date. Dividend income on
foreign securities is recorded net of withholding tax. Interest income is
recorded on the accrual basis and includes amortization of discounts and
premiums when required for federal income tax purposes. Other income and
expenses are recorded on an accrual basis. Expenses which cannot be directly
attributed to a particular fund are apportioned among the funds in the Trust
based upon their average net assets.
(D) DIVIDENDS AND DISTRIBUTIONS
Dividends resulting from net investment income, if any, normally will be
declared and paid monthly for Managers Income Equity Fund and annually for
Managers Capital Appreciation Fund, Managers Special Equity Fund and Managers
34
<PAGE>
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- -------------------------------------------------------------------------------
International Equity Fund. Distributions of capital gains, 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 Federal income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for foreign currency
related transactions, losses deferred due to wash sales and equalization
accounting for tax purposes. Permanent book and tax basis differences, if any,
relating to shareholder distributions will result in reclassifications to
paid-in capital.
(E) REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements provided that the value of the
underlying collateral, including accrued interest, will be equal to or exceed
the value of the repurchase agreement during the term of the agreement. The
underlying collateral for all repurchase agreements is held in safekeeping by
the Fund's custodian or at the Federal Reserve Bank.
If the seller defaults and the value of the collateral declines, or if
bankruptcy proceedings commence with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
(F) FEDERAL TAXES
Each 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 to its shareholders and to meet certain
diversification and income requirements with respect to investment companies.
Therefore, no provision for federal income or excise tax is included in the
accompanying financial statements.
(G) CAPITAL STOCK
The Trust's Declaration of Trust authorizes for each series the issuance of an
unlimited number of shares of beneficial interest, without par value. Each Fund
records sales and repurchases of its capital stock on the trade date. Dividends
and distributions to shareholders are recorded on the ex-dividend date.
At December 31, 1995, certain unaffiliated shareholders, including omnibus
accounts, individually held greater than 10% of the outstanding shares of the
Funds: Managers Capital Appreciation Fund-one owns 34%; Managers Income Equity
Fund-one owns 19%; Managers Special Equity Fund-two own 55%; and Managers
International Equity Fund-four own 65%.
(H) FOREIGN CURRENCY TRANSLATION
The books and records of each of the Funds are maintained in U.S. dollars. The
value of investments, assets and liabilities denominated in currencies other
than U.S. dollars are translated into U.S. dollars based upon current foreign
exchange rates. Purchases and sales of foreign investments and income and
expenses are converted into U.S. dollars based on currency exchange rates
prevailing on the respective dates of such transactions.
35
<PAGE>
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- -------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on foreign currency transactions
represent: (1) foreign exchange gains and losses from the sale and holdings of
foreign currencies; (2) gains and losses between trade date and settlement date
on investment securities transactions and forward foreign currency exchange
contracts; and (3) gains and losses from the difference between amounts of
interest and dividends recorded and the amounts actually received.
In addition, the Funds do not isolate that portion of the results of operation
resulting from changes in exchange rates from the fluctuations resulting from
changes in market prices of securities held. Such fluctuations are included with
the net realized and unrealized gain or loss on investments.
(2) AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
The Managers Funds, L.P. (the "Investment Manager") provides or oversees
investment advisory and management services to the Funds under Management
Agreements with each Fund. The Investment Manager selects portfolio managers for
each Fund (subject to Trustee approval), allocates assets among portfolio
managers and monitors the portfolio managers' investment programs and results.
Each Fund's investment portfolio is managed by portfolio managers who serve
pursuant to Portfolio Management Agreements with the Investment Manager and the
Fund. Certain trustees and officers of the Funds are officers of the Investment
Manager.
Investment advisory and management fees are paid directly by each Fund to The
Managers Funds, L.P. based on average daily net assets. The annual investment
advisory and management fee rates, as a percentage of average daily net assets
for the year ended December 31, 1995, were as follows:
INVESTMENT ADVISORY
FUND AND MANAGEMENT FEE
- ------------------------ -------------------
Managers--
Capital Appreciation 0.80%
Income Equity 0.75
Special Equity 0.90
International Equity 0.90
The Trust has adopted an Administrative and Shareholder Servicing Agreement. The
Managers Funds, L.P. serves as each Fund's administrator (the "Administrator")
and is responsible for all aspects of managing the Funds' operations, including
administration and shareholder services to each Fund, its shareholders, and
certain institutions, such as bank trust departments, broker-dealers and
registered investment advisers, that advise or act as an intermediary with the
Funds' shareholders. Since March 1, 1995, each of the Funds paid a fee to the
Administrator at the rate of 0.25% per annum of the Fund's average daily net
assets. Prior to March 1, 1995, this fee was at the rate of 0.20% per annum.
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
36
<PAGE>
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- -------------------------------------------------------------------------------
participation in any telephonic meetings. The Trustee fee expense shown in the
financial statements represents each Fund's allocated portion of the total fees.
(3) PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, excluding short-term securities, for the year
ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ----------------------- ----------- ------------
<S> <C> <C>
Managers--
Capital Appreciation $97,215,924 $133,163,046
Income Equity 13,784,905 42,274,899
Special Equity 65,952,633 100,565,010
International Equity 94,729,989 71,913,485
<FN>
There were no purchases or sales of U.S. Government securities, except in
Managers Capital Appreciation Fund and Managers International Equity Fund which
had sales of $504,375 and $8,117,500, respectively.
</FN>
</TABLE>
(4) PORTFOLIO SECURITIES LOANED
Certain of the Funds may participate in a securities lending program providing
for the lending of corporate bonds, equity and government securities to
qualified brokers. Collateral on all securities loaned except for government
securities loaned is accepted only in cash. Collateral on government securities
loaned is in the form of other similar securities. Collateral is maintained at a
minimum level of 100% of the market value, plus interest, if applicable, of
investments on loan. Collateral received in the form of cash is invested
temporarily in money market funds by the custodian. Earnings of such temporary
cash investments are divided between the custodian, as a fee for its services
under the program, and the Fund, according to agreed-upon rates.
(5) FORWARD FOREIGN CURRENCY CONTRACTS (MANAGERS INTERNATIONAL EQUITY FUND ONLY)
During the year ended December 31, 1995, Managers International Equity Fund
invested in forward foreign currency exchange contracts. These investments may
involve greater market risk than the amounts disclosed in the Fund's financial
statements.
A forward foreign currency exchange contract is an agreement between the Fund
and another party to buy or sell a currency at a set price at a future date. The
market value of the contract will fluctuate with changes in currency exchange
rates. The contract is marked-to-market daily, and the change in market value is
recorded as an unrealized gain or loss. Gain or loss on the purchase or sale of
contracts having the same settlement date, amount and counterparty is realized
on the date of offset, otherwise gain or loss is realized on settlement date.
The Fund may invest in non-U.S. dollar denominated instruments subject to
limitations, and enter into forward foreign currency exchange contracts to
facilitate transactions in foreign securities and protect against a possible
loss resulting from an adverse change in the relationship between the U.S.
dollar and such foreign currency. Risks may arise upon entering into these
contracts from the potential inability of counterparties to meet the terms of
their contracts and from
37
<PAGE>
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (concluded)
- -------------------------------------------------------------------------------
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar.
There were no open forward foreign currency exchange contracts at December 31,
1995.
(6) 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
non-class 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.
- -------------------------------------------------------------------------------
Important Tax Information
(unaudited)
Pursuant to Section 853 of the Internal Revenue Code, Managers International
Equity Fund designates 79.01% of gross income included in net investment income
as being from foreign sources during the taxable year ended December 31, 1995.
38
<PAGE>
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
To the Trustees of The Managers Funds and the Shareholders of Managers Capital
Appreciation Fund, Managers Income Equity Fund, Managers Special Equity Fund and
Managers International Equity Fund:
We have audited the accompanying statements of assets and liabilities of
Managers Capital Appreciation Fund, Managers Income Equity Fund, Managers
Special Equity Fund and Managers International Equity Fund, including the
schedules of portfolio investments, as of December 31, 1995, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended and the financial
highlights for each of the three years in the period then ended. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights for the years ended December 31, 1991 through 1992, presented herein,
were audited by other auditors whose report dated February 26, 1993, expressed
an unqualified opinion on such financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Managers Capital Appreciation Fund, Managers Income Equity Fund, Managers
Special Equity Fund and Managers International Equity Fund as of December 31,
1995, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended and the
financial highlights for each of the three years in the period then ended, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 16, 1996
39
<PAGE>
THE MANAGERS FUNDS
[GRAPHIC OMITTED]
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
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
