MANAGERS BOND FUND
MANAGERS GLOBAL BOND FUND
________________________________
SEMI- ANNUAL REPORT
JUNE 30, 1996
________________________________
Where Leading Money Managers Converge
MANAGERS BOND FUND
MANAGERS GLOBAL BOND FUND
SEMI-ANNUAL REPORT
JUNE 30, 1996 (UNAUDITED)
TABLE OF CONTENTS
Page
President's Message 1
The Managers Funds Performance 3
Schedule of Portfolio Investments:
Managers Bond Fund 4
Managers Global Bond Fund 7
Statements of Assets and Liabilities 9
Statements of Operations 10
Statements of Changes in Net Assets 11
Financial Highlights:
Managers Bond Fund 12
Managers Global Bond Fund 13
Notes to Financial Statements 14
Investments in The Managers Funds are not deposits or obligations of,
or guaranteed or endorsed by, any bank. Shares of the funds are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other governmental agency.
PRESIDENT'S MESSAGE
DEAR FELLOW SHAREHOLDER:
As the U.S. economy continued to show strength in the first half of 1996,
stocks again climbed higher while bonds traded lower (and interest rates
rose) due to fears that inflation would follow closely behind strong
economic growth. International stock markets also moved higher in general
while foreign bond markets were mixed, and the U.S. Dollar appreciated
versus most foreign currencies.
Gross Domestic Product (GDP) adjusted for inflation grew at a 2.2% rate
in the first quarter, up from 0.5% in the fourth quarter of 1995. Although
the consensus clearly was that second quarter growth was even stronger,
signals of continued growth are mixed, particularly as corporations begin
to announce their quarterly earnings. Although fiscal expenditures, real
capital spending, residential construction and most notably consumer
spending, which accounts for two-thirds of GDP, all continued to increase
in the first half, consumer debt has reached record levels. Interest
payments as a percentage of disposable personal income and loan
delinquencies are high and rising, and personal bankruptcies are also near
record highs, suggesting that consumers must soon take a pause. In
addition, it is clearly the Federal Reserve Bank's (the "Fed") priority to
maintain price stability rather than to induce economic growth.
Interest rates rose aggressively during the first five months of the year
before stabilizing somewhat in June. In aggregate, domestic bonds lost
value for the six month period, although shorter term issues provided
slightly positive returns. After falling 2.25 percentage points in 1995,
the yield on 10-year Treasury notes quickly rebounded, rising
1.14 percentage points despite the Fed's lowering of the Fed Funds and
Discount rates by 0.25% on January 31st. Shorter term rates rose less, and
three-month rates remained virtually the same.
On average, corporate bonds, government bonds and mortgage-backed bonds
all performed similarly, however there were notable differences within
sectors. Given the steepening yield curve, short-term securities performed
much better than long-term bonds, even on a duration adjusted basis.
High yield bond returns far exceeded those of investment grade bonds,
with the lowest credit quality bonds performing the best on average.
In the mortgage arena, high- coupon mortgage pools outperformed the
lower coupon securities. Asset-backed bonds, which typically have
relatively short durations, performed well on average. For the first six
months, the Lehman Brothers Aggregate Bond Index returned -1.21%.
The U.S. Dollar (USD) rose against most foreign currencies, continuing a
trend started in mid-1995. Over the past twelve months, the USD has
appreciated +28.2% versus the Yen from 85 to 109, and +9.3% versus the
Deutsche Mark. This is especially impressive given the very low level of
inflation abroad, and partly diminishes reasons for a Fed rate hike.
With a few exceptions, foreign bonds provided meager returns which were
diminished by the strength of the USD. The Salomon Brothers World
Government Bond Index returned -1.5% in USD for the year to date. Latin
American government bonds, however, performed very well as measured by the
Lehman Brothers Emerging Americas Index, which rose +13.3% for the
six-month period.
Looking forward, we expect the markets to continue to be volatile and
short-term oriented as investors react to the daily flow of news and
statistics about the economy, inflation, and political events. As the
financial markets become ever more complex and fast-paced, we believe that
The Managers Funds philosophy of selecting some of the best investment
managers, each with a specific, well-defined investment discipline, becomes
ever more advantageous.
This report provides you with a listing of the investment portfolios and
financial statements for Managers Bond Fund and Managers Global Bond Fund,
as well as the performance results of all the funds in The Managers Funds
family as of June 30, 1996.
We are pleased to announce that The Managers Funds, L.P. has recently
retained the services of Towers Perrin as our consultant to assist us in
the selection and monitoring of the portfolio managers utilized by The
Managers Funds. As always, should you have any questions on this report,
please feel free to contact us at (800) 835-3879, or your financial
advisor.
We thank you for your continued investment in The Managers Funds.
Sincerely,
Robert P. Watson
President
THE MANAGERS FUNDS PERFORMANCE (UNAUDITED)
All periods ending June 30, 1996
Total Returns*
Since Incep Morning
6 1 3 5 10 Incep tion star
Months Year Years Years Years tion Date Rating**
Equity
Funds:
Income 5.89% 22.27% 15.00% 14.93% 11.57% 14.26% Oct.'84 ####
Equity
Fund
Capital 6.74 19.59 15.84 15.95 13.05 15.56 Jun.'84 ####
Appreciat
ion Fund
Special 17.97 39.91 19.49 20.77 15.21 16.67 Jun.'84 #####
Equity
Fund
Internation 6.55 14.97 15.42 14.97 11.70 14.41 Dec.'85 ###
al Equity
Fund
Income
Funds:
Short 0.78 4.38 1.81 3.45 _ 5.15 Oct.'87 #
Governmen
t Fund
Short & 0.41 6.46 3.17 6.99 7.07 8.60 Jun.'84 ####
Intermedi
ate Bond
Fund
Intermediat-1.16 3.99 -4.29 3.76 6.77 7.02 May'86 ##
e
Mortgage
Fund
Bond Fund -3.69 4.98 6.91 9.54 9.11 11.07 Jun.'84 ####
Global Bond-1.56 -0.11 - - - 6.40 Mar.'94 NA
Fund
Money 2.72 5.22 4.20 3.86 5.50 5.93 Jun.'84 NA
Market
Fund
Past performance is no guarantee of future results. Investment returns and
share price will fluctuate. The redemption price of a mutual fund may be
more or less than the purchase price. For additional or more recent
information on The Managers Funds, or for a prospectus, call The Managers
Funds at (800) 835-3879.
* Total return equals income yield plus share price change and assumes
reinvestment of all dividends and capital gain distributions. No adjustment
has been made for taxes payable by shareholders on their
reinvested dividends and capital gain distributions. Returns for periods
greater than one year are annualized.
** Morningstar proprietary ratings reflect historical risk-adjusted
performance through 6/30/96 and are subject to change every month. The
ratings are by asset class and are calculated from the funds' three-,
five-, and ten-year returns (with fee adjustments) in excess of 90-day
Treasury bill returns, and a risk factor that reflects fund
performance below 90-day T-bill returns. For the three-, five-, and
ten-year periods, respectively, each of the Equity Funds was
rated against 1,583, 997 and 539 equity funds, and each of the Income Funds
was rated against 889, 464 and 176 fixed income funds. Ten percent of
the funds in each asset class receive five stars, 22.5% receive 4 stars,
35% receive 3 stars, 22.5% receive 2 stars and 10% receive 1 star.
MANAGERS BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
June 30, 1996 (unaudited)
Principal Value
Amount
CORPORATE DEBT SECURITIES - 41.3%
BANKS AND FINANCIAL SERVICES - 1.8%
Security Capital Industrial Trust, Notes, 8.650%, 05/15/16 $500,000 $497,765
INDUSTRIALS - 34.3%
Borden, Inc., Deb., 7.875%, 02/15/23 650,000 531,908
Champion International Corp., Deb., 7.350%, 11/01/25 1,000,000 912,180
Georgia Pacific Corp., Deb., 7.375%, 12/01/25 1,000,000 911,080
K Mart Corp., Series K-2, Pass-through Certificate,
9.780%, 01/05/20 275,000 228,250
RJR Nabisco Inc., Notes,
9.250%, 08/15/13 700,000 702,499
7.625%, 09/15/03 700,000 666,946
TCI Communications, Inc., Deb., 7.875%, 02/15/26 1,450,000 1,277,073
Time Warner Entertainment L.P., Sr. Deb., 8.375%, 03/15/23 900,000 876,258
Time Warner Inc., Deb., 8.050%, 01/15/16 500,000 475,255
USX Marathon Group, Deb., 8.125%, 07/15/23 1,200,000 1,176,696
Westinghouse Electric Corp., Deb., 7.875%, 09/01/23 1,350,000 1,148,107
Woolworth Corp., Deb., 8.500%, 01/15/22 500,000 481,950
Total Industrials 9,388,202
UTILITIES - 5.2%
GGIB Funding Corp., Secured Lease Obligation Bonds,
7.430%, 01/15/11 1,231,656 1,172,499
Northeast Utilities, Notes, 8.380%, 03/01/05 257,920 244,397
Total Utilities 1,416,896
Total Corporate Debt Securities(cost $10,429,530) 11,302,863
FOREIGN OBLIGATIONS - 18.8%
British Columbia Province, Generic Residual Strips,
Deb., 0.000%**, 08/23/24 CAD 15,000,000 1,082,180
Government of Canada, Deb., 8.000%, 06/01/23 CAD 500,000 361,642
Government of Poland, Bearer Past Due Interest Brady
Bonds, Stepup, 3.750%, 10/27/14 USD 1,375,000 1,055,312
Government of Poland, Registered Past Due Interest Brady
Bonds, Stepup, 3.750%, 10/27/14 USD 250,000 191,875
MacMillan Bloedel Ltd., Deb., 7.700%, 02/15/26 USD 1,350,000 1,223,397
Manitoba Province, Canada, Bonds, 7.750%, 12/22/25 CAD 350,000 240,265
Ontario Hydro, Series FV6, 8.900%, 08/18/22 CAD 1,275,000 982,421
Total Foreign Obligations(cost $5,398,879) 5,137,092
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 13.%
COLLATERALIZED MORTGAGE OBLIGATIONS
College & University Facilities Loan Trust, Series 2,
Class D, 4.000%, 06/01/18 1,000,000 760,000
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 6.8%
FNMA REMIC Series 93-212, Class Z, 6.000%, 11/25/08 284,523 241,753
FNMA REMIC Series 94-30, Class JA, 5.000%, 08/15/23 2,000,000 1,609,360
Total Federal National Mortgage Association (FNMA) 1,851,113
U.S. TREASURY BONDS - 3.4%
0.000%**, 08/15/23 6,200,000 938,122
Total U.S. Government and Agency
Obligations(cost $5,038,162) 3,549,235
CONVERTIBLE BONDS - 9.9%
Burns Philp & Co., Euro-dollar, Sub. Notes,
5.500%, 04/30/04 100,000 85,125
Federal Realty Investment Trust, Euro-dollar,
Sub. Notes, 5.250%, 10/28/03 530,000 453,150
Meditrust, Deb., 7.500%, 03/01/01 500,000 502,500
Ogden Corp., Euro-dollar, Sub. Notes,
6.000%, 06/01/02 250,000 228,125
5.750%, 10/20/02 700,000 635,250
Price/Costco Inc., Sub. Deb., 5.750%, 05/15/02 500,000 464,375
Worldway Corp., Sub. Deb., 6.250%, 04/15/11 500,000 340,000
Total Convertible Bonds(cost $2,790,411) 2,708,525
Shares
PREFERRED STOCKS - 7.7%
Aluminum Co. of America, 3.750% 8,125 524,062
Appalachian Power Co., 4.500% 540 31,590
BankAmerica Corp., Series B, Adjustable Rate 6.000%* 1,200 101,100
Citicorp, Series 2, Adjustable Rate 6.000%* 11,250 949,219
Connecticut Light & Power Co., Series 1947, $2.00 6,655 155,561
Entergy Louisiana Inc., 4.440% 226 12,515
Entergy New Orleans Inc., 4.750% 482 29,824
Metropolitan Edison Co., 3.850% 891 42,768
Niagara Mohawk Power Corp., Series B,
Adjustable Rate 7.875%* 4,200 73,500
Texas Utilities Electric Co., $4.24 725 40,781
Union Electric Co., 3.500% 100 4,913
West Pennsylvania Power Co., 4.500% 200 13,400
Wisconsin Electric Power Co., 3.600% 2,748 137,400
Total Preferred Stocks(cost $2,119,235) 2,116,633
Principal
Amount
REPURCHASE AGREEMENT - 2.6%
State Street Bank & Trust Co., dated 06/28/96,
due 07/01/96, 4.900%, total to be received
$710,290 (secured by $710,000 U.S. Treasury Bonds,
7.125%, due 02/15/23, market value $728,034), at cost $710,000 710,000
Total Investments - 93.3%(cost $26,486,217) 25,524,348
Other Assets, less Liabilities - 6.7% 1,825,137
Net Assets - 100.0% $27,349,485
Note:Based on the cost of investments of $26,486,217 for Federal
income tax purposes at June 30, 1996, the aggregate gross unrealized
appreciation and depreciation of investments was $244,737 and
$1,206,606, respectively, resulting in net unrealized depreciation of
investments of $961,869.
* Stated rate is the last quarterly dividend rate annualized.
** Zero coupon security.
Abbreviations have been used throughout this portfolio to indicate amounts
shown in currencies other than the U.S. Dollar (USD):
CAD: Canadian Dollar
OTHER INFORMATION (UNAUDITED):
The composition of long-term debt holdings as a percentage of the total
value of investments is as follows:
S&P'S/MOODY'S
RATINGS
Gov't/AAA 15%
AA 6
A 1
BBB 59
BB 19
100%
MANAGERS GLOBAL BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
June 30, 1996 (unaudited)
Principal
Amount
(in Value
thousands)
FOREIGN GOVERNMENT/AGENCY OBLIGATIONS - 66.0%
AUSTRALIA - 2.7%
Australian Government, 6.750%, 11/15/06 AUD 690 $465,046
AUSTRIA - 1.7%
Austria Republic of Austria, 4.500%, 09/28/05 JPY 30,000 302,085
CANADA - 6.7%
Canada Government, 7.500%, 03/01/01 CAD 1,550 1,158,498
DENMARK - 5.7%
Denmark Kingdom of Denmark,
8.000%, 03/15/06 DKK 3,018 535,755
7.000%, 12/15/04 DKK 2,720 459,408
Total Denmark 995,163
GERMANY - 24.2%
Bundes, 5.875%, 05/15/00 DEM 1,155 776,482
German Federated Republic, 6.500%, 07/15/03 DEM 1,400 933,732
German Unity Fund, 8.000%, 01/21/02 DEM 830 600,297
Treuhandanstalt,
7.750%, 10/01/02 DEM 1,315 939,483
7.125%, 01/29/03 DEM 1,390 962,716
Total Germany 4,212,710
ITALY - 11.6%
Republic of Italy,
10.500%, 04/01/05 ITL 210,000 147,840
10.500%, 09/01/05 ITL 2,185,000 1,535,101
9.500%, 02/01/99 ITL 500,000 335,282
Total Italy 2,018,223
NETHERLANDS - 4.5%
Dutch Government, 8.500%, 03/15/01 NLG 1,190 785,309
SWEDEN - 3.9%
Kingdom of Sweden, 6.000%, 02/09/05 SEK 5,200 680,875
UNITED KINGDOM - 5.0%
United Kingdom Treasury,
8.500%, 12/07/05 GBP 274 443,750
7.500%, 12/07/06 GBP 285 430,720
Total United Kingdom 874,470
Total Foreign Government/Agency Obligations
(cost $11,513,839) 11,492,379
U.S. TREASURY NOTES - 19.8%
7.500%, 11/15/01 $ 860 897,763
6.500%, 05/31/01 860 860,404
6.375%, 08/15/02 1,710 1,696,371
Total U.S. Treasury Notes(cost $3,441,612) 3,454,538
REPURCHASE AGREEMENT - 3.3%
State Street Bank & Trust Co., dated 06/28/96,
due 07/01/96, 4.900%, total to be received
$570,233 (secured by $570,000 U.S. Treasury Bonds,
7.125%, due 02/15/23, market value $584,478),
at cost 570 570,000
Total Investments - 89.1%(cost $15,525,451) 15,516,917
Other Assets, less Liabilities - 10.9% 1,902,742
Net Assets - 100.0% $17,419,659
Note:Based on the cost of investments of $15,525,451 for Federal income
tax purposes at June 30, 1996, the aggregate gross unrealized
appreciation and depreciation of investments was $200,720 and
$209,254, respectively, resulting in net unrealized depreciation of
investments of $8,534.
Abbreviations have been used throughout this portfolio to indicate amounts
shown in currencies other than the U.S. Dollar (USD):
AUD: Australian Dollar
CAD: Canadian Dollar
DEM: Deutsche Mark
DKK: Danish Krone
GBP: British Pound
ITL: Italian Lira
JPY: Japanese Yen
NLG: Netherlands Guilder
SEK: Swedish Krona
THE MANAGERS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1996 (unaudited)
Managers Managers
Bond Global
Fund Bond
Fund
ASSETS:
Investments at value* $24,814,348 $14,946,917
Repurchase agreements at cost and value 710,000 570,000
Cash 1,991 1,675
Foreign currency (cost $24,819 and $596,641) 24,757 601,301
Receivable for Fund shares sold 10,821 64,493
Receivable for investments sold 2,427,547 838,247
Dividends and interest receivable 489,524 385,392
Receivable for open forward foreign currency
contracts, net - 20,554
Foreign withholding tax receivable _ 19,075
Deferred organization expense _ 6,874
Prepaid expenses 10,291 8,352
Total assets 28,489,279 17,462,880
LIABILITIES:
Payable for Fund shares repurchased 856,898 3,361
Payable for investments purchased 237,487 _
Accrued expenses:
Investment advisory and management fees 14,429 9,721
Administrative fees 5,772 2,778
Other 25,208 27,361
Total liabilities 1,139,794 43,221
NET ASSETS $27,349,485 $17,419,659
Shares outstanding 1,267,655 816,710
Net asset value, offering and redemption price per
share $21.57 $21.57
NET ASSETS REPRESENT:
Paid-in capital $28,897,098 $17,080,878
Undistributed net investment income 69,290 271,661
Accumulated net realized gain (loss) from
investments and foreign currency transactions (654,989) 49,203
Net unrealized appreciation (depreciation) of
investments and foreign currency contracts and
translations (961,914) 17,917
NET ASSETS $27,349,485 $17,419,659
* Investments at cost $25,776,217 $14,955,451
The accompanying notes are an integral part of these financial statements.
THE MANAGERS FUNDS
STATEMENTS OF OPERATIONS
For the six months ended June 30, 1996 (unaudited)
Managers Managers
Bond Global
Fund Bond
Fund
INVESTMENT INCOME:
Interest income $1,058,294 $613,344
Dividend income 77,632 _
Foreign withholding tax (3,801) (384)
Stock loan fees 94 _
Total investment income 1,132,219 612,960
EXPENSES:
Investment advisory and management fees 86,278 65,642
Administrative fees 34,511 18,858
Custodian fees 22,166 22,431
Audit fees 12,489 16,156
Transfer agent fees 18,348 13,614
Registration fees 10,479 9,217
Legal fees 1,986 1,411
Trustee fees 1,376 959
Amortization of organization expense _ 1,254
Miscellaneous expenses 6,444 5,594
Total expenses 194,077 155,136
Less: waiver of administrative fees _ (5,035)
Net expenses 194,077 150,101
Net investment income 938,142 462,859
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investment transactions 372,989 404,895
Net realized loss on foreign currency contracts and
translations (1,940) (256,172)
Net unrealized depreciation of investments (2,360,377) (979,443)
Net unrealized appreciation from foreign currency
contracts and translations 500 50,148
Net realized and unrealized loss (1,988,828) (780,572)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS($1,050,686)($317,713)
The accompanying notes are an integral part of these financial statements.
THE MANAGERS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
Managers Bond Fund Managers Global Bond Fund
For the For the For the For the
six months year ended six months year ended
ended December 31, ended December 31,
June 30, 1995 June 30, 1995
1996 1996
(unaudited) (unaudited)
INCREASE
(DECREASE) IN
NET ASSETS
FROM OPERATIONS:
Net investment
income $938,142 $1,778,861 $462,859 $626,739
Net realized
gain (loss) on
investments and
foreign currency
transaction 371,049 (177,163) 148,723 211,365
Net unrealized
appreciation
(depreciation)
of investments
and foreign
currency
translation (2,359,877) 5,729,478 (929,295) 1,061,579
Net increase
(decrease) in
net assets
resulting from
operations (1,050,686) 7,331,176 (317,713) 1,899,683
DISTRIBUTIONS TO
SHAREHOLDERS:
From net (900,433) (1,791,715) (59,045) (603,096)
investment
income
In excess of net _ _ _ (25,339)
investment
income
Total
distributions
to (900,433) (1,791,715) (59,045) (628,435)
shareholders
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from 8,063,383 13,247,361 5,735,995 12,839,824
sale of shares
Net asset value
of shares issued
in connection 682,772 953,475 49,616 434,993
with
reinvestment of
dividends
Cost of shares (5,821,670) (24,124,674) (6,811,724) (5,243,182)
repurchased
Net increase
(decrease) from
capital share 2,924,485 (9,923,838) (1,026,113) 8,031,635
transactions
Total increase
(decrease) in 973,366 (4,384,377) (1,402,871) 9,302,883
net assets
NET ASSETS:
Beginning of 26,376,119 30,760,496 18,822,530 9,519,647
period
End of period $27,349,485 $26,376,119 $17,419,659 $18,822,530
End of period
undistributed
(overdistributed) $69,290 $31,581 $271,661 ($132,153)
net investment
income
SHARE
TRANSACTIONS:
Sale of shares 361,046 622,053 268,286 597,647
Shares issued in
connection with
reinvestment of 31,109 44,651 2,338 20,203
dividends
Shares repurchased (264,723) (1,152,262) (319,814) (250,241)
Net increase
(decrease) in 127,432 (485,558) (49,190) 367,609
shares
The accompanying notes are an integral part of these financial statements.
MANAGERS BOND FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout each period
For the
six months
ended
June 30,
1996 Year ended December 31,
(unaudited) 1995 1994 1993 1992* 1991*
NET ASSET VALUE,
BEGINNING OF PERIOD $23.13 $18.92 $22.18 $21.88 $22.60 $20.95
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment 0.74 1.44 1.59 1.49 1.48 1.70
income
Net realized and
unrealized gain (1.59) 4.23 (3.16) 0.98 0.23 2.12
(loss) on
investments
Total from (0.85) 5.67 (1.57) 2.47 1.71 3.82
investment
operations
LESS DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment (0.71) (1.46) (1.55) (1.50) (1.48) (1.72)
income
From net realized _ _ (0.14) (0.67) (0.95) (0.45)
gain on investment
Total (0.71) (1.46) (1.69) (2.17) (2.43) (2.17)
distributions to
shareholders
NET ASSET VALUE, END
OF PERIOD $21.57 $23.13 $18.92 $22.18 $21.88 $22.60
Total Return (3.69)%(a) 30.91% (7.25)% 11.56% 7.88% 19.04%
Ratio of net expenses
to average net 1.40%(b) 1.34% 1.20% 1.15% 0.93% 1.02%
assets
Ratio of net
investment income 6.76%(b) 6.84% 7.28% 6.65% 6.61% 7.82%
to average net
assets
Portfolio turnover 59%(a) 46% 84% 373% 292% 182%
Net assets at end of
period $27,349 $26,376 $30,760 $44,038 $39,117 $36,659
(000's omitted)
* Audited by prior auditors.
(a) Not annualized.
(b) Annualized.
MANAGERS GLOBAL BOND FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout the period
For the For the For the period
six months year ended March 25, 1994
ended December 3 (commencement
June 30, 1, of operations)
1996 1995 to
(unaudited) December 31,
1994
NET ASSET VALUE, BEGINNING OF PERIOD $21.74 $19.10 $20.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.56 0.95 0.48
Net realized and unrealized gain (0.90) 2.66 (0.77)
(loss) on investments
Total from investment operations (0.34) 3.61 (0.29)
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.07) (0.93) (0.50)
In excess of net investment income _ (0.04) (0.11)
Total distributions to (0.07) (0.97) (0.61)
shareholders
NET ASSET VALUE, END OF PERIOD $21.33 $21.74 $19.10
Total Return (1.56)%(c) 19.08% (1.52)%(c)
Ratio of net expenses to average net 1.59%(b) 1.55% 1.73%(b)
assets
Ratio of net investment income to 4.91%(b) 5.07% 4.19%(b)
average net assets
Portfolio turnover 110%(c) 214% 266%(c)
Net assets at end of period (000's $17,420 $18,823 $9,520
omitted)
Expense Waiver (a)
Ratio of total expenses to average 1.65%(b) 1.69% 2.03%(b)
net assets
Ratio of net investment income to 4.86%(b) 4.93% 3.89%(b)
average net assets
(a) Ratio information assuming no waiver of investment advisory and
management fees and/or administrative fees in effect for the periods
presented. (see Note 2).
(b) Annualized.
(c) Not annualized.
The total return would have been lower had certain expenses not been
reduced during the periods shown.
MANAGERS BOND FUND AND MANAGERS GLOBAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (unaudited)
(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 (the "1940 Act"),
as amended. Currently the Trust is comprised of 10 investment series.
Included in this report are Managers Bond Fund and Managers Global Bond
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
Fixed income securities are valued based upon 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. 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. 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.
Investments in certain mortgage-backed, stripped mortgage-backed, preferred
stocks, convertible securities and other debt securities not traded on an
organized market, are valued on the basis of valuations provided by dealers
or by a pricing service which uses information with respect to transactions
in such securities, various relationships between securities and yield to
maturity in determining value.
(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
Interest income is determined on the basis of interest accrued. Discounts
and premiums are amortized using the effective interest method 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 normally will be declared
monthly for Managers Bond Fund and quarterly for Managers Global Bond Fund.
These dividends normally will be payable on the third to the last business
day of the month. 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 income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for
mortgage-backed securities, option transactions, market discount and
foreign currency transactions. Permanent book and tax basis differences, if
any, relating to shareholder distributions will result in reclassifications
to paid-in capital.
(e) ORGANIZATION COSTS (MANAGERS GLOBAL BOND FUND ONLY)
Organization and registration related costs of $12,577 have been deferred
and are being amortized over a period of time not to exceed 60 months from
the commencement of operations on March 25, 1994.
(f) 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.
(g) 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 federal income or excise tax provision is included
in the accompanying financial statements.
(h) CAPITAL LOSS CARRYOVERS
As of December 31, 1995, the Funds had accumulated net realized capital
loss carryovers from securities transactions for federal income tax
purposes as shown in the following chart.
These amounts may be used to offset realized capital gains, if any, through
December 31, 2003.
Fund Capital Loss Expires
Amount
Managers-
Bond Fund $806,965 2002
402,814 2003
Global Bond Fund 69,585 2002
(i) CAPITAL STOCK
The Trust's Declaration of Trust authorizes each series of the Trust 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 as
of the ex- dividend date.
At June 30, 1996, one unaffiliated shareholder, which is an omnibus
account, individually held greater than 10% of the outstanding shares of
Managers Bond Fund.
(j) FOREIGN CURRENCY TRANSLATION
The books and records of each Fund 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.
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
operations 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
manager(s) for each Fund (subject to Trustee approval), allocates assets
among portfolio managers, if applicable, and monitors the portfolio
managers' investment programs and results. Each Fund's investment portfolio
is currently managed by a single portfolio manager who serves pursuant to a
Portfolio Management Agreement 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 each Fund's average daily net assets at
the rates of 0.625% and 0.70% for Managers Bond Fund and Managers Global
Bond Fund, respectively.
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.
For the six months ending June 30, 1996, Managers Bond Fund paid a fee to
the Administrator at the annual rate of 0.25% of the Fund's average daily
net assets. Prior to April 1, 1996, the Administrator was waiving 0.10% of
its 0.20% fee for Managers Global Bond Fund.
An aggregate annual fee of $10,000 is paid to each outside Trustee for
serving as a Trustee of the Trust. In addition, these Trustees receive
meeting fees of $750 for each in-person meeting attended, and $200 for
participation in any telephonic meetings. The Trustee fee expense shown in
the financial statements represents each Fund's allocated portion of the
total fees.
(3) PURCHASES AND SALES OF SECURITIES
Portfolio purchases and sales of investments, excluding short-term
securities, and of U.S. government securities, for the six months ended
June 30, 1996, were as follows:
Long-term Securities
Fund Purchases Sales
Managers-
Bond Fund $16,391,345 $15,491,514
Global Bond Fund 17,087,455 17,620,294
U.S. Government
Securities Only
Purchases Sales
Managers-
Bond Fund $5,272,128 $5,707,254
Global Bond Fund 3,790,363 2,650,170
(4) PORTFOLIO SECURITIES LOANED
Each 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 in temporary money market investments 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
During the six months ended June 30, 1996, Managers Global Bond Fund
invested in forward foreign currency exchange contracts to manage currency
exposure. These investments may involve greater market risk than the
amounts disclosed in the Funds' financial statements.
A forward foreign currency exchange contract is an agreement between a 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 Funds 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 to 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 unanticipated movements in the value
of a foreign currency relative to the U.S. dollar.
Open forward foreign currency exchange and cross currency exchange
contracts for Managers Global Bond Fund at June 30, 1996 were as follows:
FOREIGN CURRENCY Contract Current Unrealized
Amount Value Gain/Loss
BUY CONTRACTS
Australian Dollar expiring 07/15/96 $170,000 $169,472 $(528)
Deutsche Mark expiring 07/02/96 6,690,740 6,735,376 44,636
Deutsche Mark expiring 07/15/96 914,771 923,255 8,484
Japanese Yen expiring 07/02/96 805,161 805,110 (51)
Japanese Yen expiring 07/15/96 3,349,399 3,324,025 (25,374)
Netherlands Guilder expiring 07/02/96 637,625 638,003 378
SELL CONTRACTS
Deutsche Mark expiring 07/02/96 6,656,041 6,735,376 (79,335)
Deutsche Mark expiring 07/15/96 3,282,613 3,286,741 (4,128)
Danish Krone expiring 07/15/96 710,240 714,588 (4,348)
Japanese Yen expiring 07/02/96 825,515 805,109 20,406
Japanese Yen expiring 07/15/96 978,153 974,880 3,273
Netherlands Guilder expiring 07/02/96 632,442 638,003 (5,561)
Netherlands Guilder expiring 07/15/96 638,193 638,601 (408)
(42,556)
CROSS CURRENCY
BUY CONTRACTS
Deutsche Marks in exchange
for Japanese Yen expiring 07/02/96 1,643,831 1,664,657 20,826
Deutsche Marks in exchange
for Japanese Yen expiring 07/15/96 2,948,200 2,973,231 25,031
Italian Lira in exchange
for Japanese Yen expiring 07/15/96 338,053 344,084 6,031
Japanese Yen in exchange
for Deutsche Mark expiring 07/15/96 1,539,430 1,541,664 2,234
Japanese Yen in exchange
for Deutsche Mark expiring 07/02/96 1,614,913 1,603,701 (11,212)
SELL CONTRACTS
Deutsche Mark in exchange
for Japanese Yen expiring 07/02/96 1,614,913 1,635,481 (20,568)
Deutsche Mark in exchange
for Japanese Yen expiring 07/15/96 1,539,431 1,555,145 (15,714)
Japanese Yen in exchange
for Deutsche Mark expiring 07/02/96 1,643,832 1,603,701 40,131
Japanese Yen in exchange
for Deustche Mark expiring 07/15/96 2,948,200 2,939,317 8,883
Japanese Yen in exchange
for Italian Lire expiring 07/15/96 338,053 330,585 7,468
63,110
Total unrealized gain on forward foreign currency contracts, net $20,554
(6) RISKS ASSOCIATED WITH COLLATERAL MORTGAGE OBLIGATIONS ("CMOS")
The net asset value of Managers Bond Fund may be sensitive to interest rate
fluctuations because the Fund may hold several instruments, including CMOs
and other derivatives, whose values can be significantly impacted by
interest rate movements. CMOs are obligations collateralized by a portfolio
of mortgages or mortgage-related securities. Payments of principal and
interest on the mortgage are passed through to the holder of the CMOs on
the same schedule as they are received, although certain classes of CMOs
have priority over others with respect to the receipt of prepayments on the
mortgages.
Therefore, the investment in CMOs may be subject to a greater or lesser
risk of prepayment than other types of mortgage-related securities. CMOs
may have a fixed or variable rate of interest.
(7) OPTIONS
The Funds may write covered put and covered call options for which premiums
are received and are recorded as liabilities, and are subsequently adjusted
to the current value of the options written. Premiums received from writing
options which expire are treated as realized gains. Premiums received from
writing options which are exercised or closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain
or loss. If a put option is exercised, the premium reduces the cost basis
of the securities purchased by the Fund. The Fund, as a writer of an
option, may have no control over whether the underlying securities may be
sold (call) or purchased (put) and, as a result, bears the market risk of
an unfavorable change in the price of the securities underlying the written
option. The Funds did not enter into any options transactions during the
six months ended June 30, 1996.
(8) 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.
The plaintiff has since filed an amended complaint and the defendants have
moved to dismiss the 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 has been filed against
certain of the defendants mentioned above, 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.
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
North Quincy, Massachusetts 02171
LEGAL COUNSEL
Shereff, Friedman, Hoffman &
Goodman, LLP
919 Third Avenue
New York, New York 10022
TRANSFER AGENT
Boston Financial Data Services, Inc.
attn: The Managers Funds
P.O. Box 8517
Boston, Massachusetts 02266-8517
(800) 252-0682
This report is prepared for the information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by an effective prospectus.
THE MANAGERS FUNDS
EQUITY FUNDS:
INCOME EQUITY FUND
Scudder, Stevens & Clark, Inc.
Spare, Kaplan, Bischel & Associates
CAPITAL APPRECIATION FUND
Dietche & Field Advisers, Inc.
Hudson Capital Advisers
SPECIAL EQUITY FUND
Liberty Investment Management
Pilgrim Baxter & Associates
Westport Asset Management, Inc.
INTERNATIONAL EQUITY
FUND
Scudder, Stevens & Clark, Inc.
Lazard, Freres & Co.
FIXED INCOME FUNDS:
MONEY MARKET FUND
Morgan Guaranty Trust Company
of New York
SHORT GOVERNMENT FUND
Jennison Associates Capital Corp.
SHORT AND INTERMEDIATE
BOND FUND
Standish, Ayer & Wood, Inc.
INTERMEDIATE MORTGAGE
FUND
Jennison Associates Capital Corp.
BOND FUND
Loomis, Sayles & Company, Inc.
GLOBAL BOND FUND
Rogge Global Partners
