MANAGERS BOND FUND
MANAGERS GLOBAL BOND FUND
Semi-Annual Report
June 30, 1997 (unaudited)
TABLE OF CONTENTS
Begins
on Page
----------
PRESIDENT'S MESSAGE 1
THE MANAGERS FUNDS PERFORMANCE 3
Complete performance table for all of The Managers Funds
as of June 30, 1997
SCHEDULES OF PORTFOLIO INVESTMENTS 4
Detailed portfolio listings by security type and industry
sector,
as valued at June 30, 1997
STATEMENTS OF ASSETS AND LIABILITIES 9
Fund balance sheets, Net Asset Value (NAV) per share
computation
and cumulative undistributed amounts
STATEMENTS OF OPERATIONS 10
Detail of sources of income, fund expenses, and realized
and unrealized
gains (losses) during the period
STATEMENTS OF CHANGES IN NET ASSETS 11
Detail of changes in fund assets and distributions to
shareholders for the
past two periods
FINANCIAL HIGHLIGHTS 12
Historical net asset values, distributions, total returns,
expense ratios,
turnover ratios and net assets
NOTES TO FINANCIAL STATEMENTS 14
Accounting and distribution policies, details of agreements
and transactions
with fund management and description of certain investment
risks
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 Corp., the Federal Reserve Board, or any
governmental agency.
PRESIDENT'S MESSAGE
DEAR FELLOW SHAREHOLDER:
Despite a brief pause in late March and early April, the
financial markets charged to record levels in the first half
of 1997. The primary driver continues to be strong economic
growth without evidence of inflation. Domestic stocks turned
in an extremely strong performance, with most of the broad
domestic stock indices hitting all time highs during the
second quarter. European stocks were strong for the six
months while Far Eastern bourses were mixed. Foreign bonds
turned in mildly positive results although the U.S. Dollar
rose against most foreign currencies with the notable
exception of the Yen, which rebounded sharply in May.
The economy accelerated in the first quarter, with Gross
Domestic Product rising at a revised annualized rate of
4.9%, then cooled to a 2.2% annual rate in the second
quarter as consumer spending slowed down. The key concern
during such relative healthy growth continues to be
inflationary pressures, however, they have yet to make any
real impact. The Consumer Price Index, which measures retail
prices, rose only slightly (0.69%) for the first six months
of the year, while the Producer Price Index, which measures
wholesale prices, dropped for six consecutive months for the
first time ever. Capacity utilization is at an historically
high 83.7%, and unemployment is at an historically low 4.8%,
which would reasonably suggest that both producers and labor
could afford to raise prices. However, business leaders have
been reluctant to raise prices for fear of losing market
share, and they are not likely to increase prices until
their true capacity is stretched. Labor rates have risen
only slightly, probably because the labor force is expanding
as many workers which had long given up on working are now
re-entering the workforce. The proven willingness of
businesses to slash jobs has also made labor groups
reluctant to demand higher fees. Most jobs are requiring
more skill, and increases in labor costs going forward are
likely to come as much from training expenses, as from wage
increases. For now, however, inflation is dormant.
1
Domestic bonds offered more stability than stocks during
the first quarter, but no meaningful returns as bond yields
rose across all maturities and the first quarter culminated
with the Federal Reserve Board raising the discount rate by
25 basis points (0.25%). The healthy economic environment
served the domestic bond markets well during the second
quarter. The Fed's decision to hold rates steady, along with
the afore-mentioned lack of inflationary evidence, gave
investors confidence that interest rates were appropriately
positioned. Rates dropped moderately across all maturity
ranges, and corporate bond and mortgage spreads continued to
tighten slightly toward Treasury yields during the second
quarter. The Lehman Brothers Government/Corporate Index
returned 2.7% for the first half of 1997.
Foreign bond returns were meager during the first quarter,
impaired by the rising U.S. Dollar. With the exception of
Japanese bonds, foreign bonds performed well in their local
currencies although the strength of the U.S. Dollar had a
negative effect for U.S. investors. Japanese bonds, which
were relatively strong per-formers in the first quarter,
were flat for the second quarter, but the 8% rise in the Yen
made them the best performing market in U.S. Dollar terms.
The Salomon Brothers World Government Bond Index returned
- -1.2%, in U.S. Dollars, for the six months.
Looking forward, we urge you to remember that the strength
of the financial markets has been the result of a near
perfect economic environment. We continue to believe that
diversification into several asset classes is prudent, and
that it is particularly important to evaluate and rebalance
investment portfolios based on future prospects rather than
relying on past performance.
We at THE MANAGERS FUNDS continue to believe that active
port-folio management by experienced investment
professionals with the resources to research and evaluate
individual issues is the best strategy in the long run.
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
2
THE MANAGERS FUNDS PERFORMANCE (UNAUDITED)
All periods ending June 30, 1997
Average Annual Total Returns*
- ----------------------------------------------------------------------
- -
Since Inception
Morningstar
6 Months 1 Year 3 Years 5 Years 10 Years
Inception Date Rating**
------------ -------- ---------- ----------
- ----------- ------------ ---------- ------------
Equity Funds:
Income Equity 15.06%27.21%23.00%17.10%12.22%15.23%Oct. '84
****
Capital Appreciation Fund5.09%11.97%18.28%15.22%12.79%15.28%
Jun. '84 ***
Special Equity Fund9.93%16.25%24.57%20.27%15.84%16.63%Jun.
'84 ****
International Equity Fund12.79%19.38%14.70%15.64%10.47%1
4.83% Dec. '85 ****
Income Funds:
Short Government Fund2.34%5.55%5.62%2.86% -5.18%Oct. '87
**
Short & Intermediate
Bond Fund 2.35%6.22%6.41%5.31%7.19% 8.42%Jun. '84****
Intermediate Mortgage Fund3.09%7.78%6.41%2.23%6.68%7.09%
May '86 *
Bond Fund 3.96%13.31%12.26%9.15%9.88%11.24%Jun. '84
*****
Global Bond Fund-1.64%4.31%6.27% - - 5.75%Mar. '94 *
Money Market Fund2.61%5.35%5.11%4.11%5.45%5.89%Jun. '84NA
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, or for a current prospectus for any Fund(s),
please call The Managers Funds at (800) 835-3879, or your
investment adviser.
*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 risk-adjusted
performance through 6/30/97 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 other than the
International Equity Fund was rated against 2,016, 1,153 and
637 equity funds, the International Equity Fund was rated
against 535, 245 and 94 international equity funds, and each
of the Income Funds was rated against 1,258, 687 and 293
fixed-income funds. Ten percent of the funds in each asset
class receive five stars, 22.5% receive 4 stars, 35% receive
3 stars, 22.5% receive 2 stars and 10% receive 1 star.
3
MANAGERS BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
June 30, 1997 (unaudited)
- ------------------------------------------------------------
- ---------------------------------------------------------
Principal
Amount Value
- ------------------------------------------------------------
- ---------------------------------------------------------
CORPORATE DEBT SECURITIES - 58.7%
Banks and Finance - 4.2%
Bangkok Bank, Sub. Notes, 8.375%, 01/15/27 (a)$ 300,000
$ 286,854
Pan Pacific Industries, Notes, 0.000%**, 04/28/07 (a)
2,000,000 905,800
U.S. West Capital Funding, Inc., 7.790%, 02/01/27250,000
252,550
-------------
Total Banks and Finance 1,445,204
-------------
Convertible Bonds - 14.1%
Banpu Public Company Ltd., Euro-dollar,
2.750%, 04/10/03 250,000 233,125
Burns Philp & Co., Euro-dollar, 5.500%, 04/30/041,100,000
946,000
Federal Realty Investment Trust, Euro-dollar,
Sub. Notes, 5.250%, 10/28/031,280,000 1,142,400
Loxley Public Co., Euro-dollar, 2.500%, 04/04/01400,000
348,000
Meditrust, Deb., 7.500%, 03/01/01500,000+ 546,875
Ogden Corp., Euro-dollar, Sub. Notes, 5.750%, 10/20/02
950,000 881,125
Ogden Corp., Euro-dollar, Sub. Notes, 6.000%, 06/01/02
250,000 233,750
Samsung Corp., Euro-dollar, 0.250%, 06/26/06250,000
251,250
Worldway Corp., Sub. Deb., 6.250%, 04/15/11 500,000
300,000
--------------
Total Convertible Bonds 4,882,525
--------------
Industrials - 33.2%
Borden, Inc., Deb., 7.875%, 02/15/23650,000 590,388
Champion International Corp., Deb., 7.350%, 11/01/25
550,000 519,958
Georgia Pacific Corp., Deb., 7.375%, 12/01/251,200,000
1,138,956
Kmart Corp., Series K-2, Pass-through Certificate,
9.780%, 01/05/20 275,000 275,000
Mead Corp. Deb., 7.125%, 08/01/25200,000 184,478
NGC Corp. Capital Trust, 8.316%, 06/01/27 (a)250,000
258,525
Pioneer-Standard Electronics, Inc., Senior Notes,
8.500%, 08/01/06 250,000 259,062
RJR Nabisco, Inc., Notes, 7.625%, 09/15/03 700,000
689,472
RJR Nabisco, Inc., Notes, 9.250%, 08/15/13 700,000
718,809
Seagate Technology, Inc., Deb., 7.875%, 03/01/17250,000
249,862
TCI Communications, Inc., Deb., 7.875%, 08/01/13125,000
122,044
TCI Communications, Inc., Deb., 7.875%, 02/15/261,600,000
1,537,600
Time Warner Entertainment L.P., Sr. Deb.,
8.375%, 03/15/23 900,000 924,291
Time Warner, Inc., Deb., 8.050%, 01/15/16 500,000
506,715
USX Marathon Group, Deb., 8.125%, 07/15/231,200,000
1,229,544
Westinghouse Electric Corp., Deb., 7.875%, 09/01/23
1,350,000 1,251,126
Westvaco Corp., Deb., 7.000%, 08/15/23 250,000
228,318
Woolworth Corp., Deb., 8.500%, 01/15/22 750,000
787,268
--------------
Total Industrials 11,471,416
--------------
Real Estate - 2.2%
Camden Property Trust, Notes, 7.000%, 11/15/06250,000
241,177
Security Capital Industrial Trust, Notes, 8.650%, 05/15/16
500,000 535,020
--------------
Total Real Estate 776,197
--------------
Utilities - 5.0%
Boston Edison Co., Deb., 7.800%, 03/15/23 400,000
388,332
GGIB Funding Corp., System Energy Resources,
7.430%, 01/15/11 1,392,906 1,350,185
--------------
Total Utilities 1,738,517
--------------
Total Corporate Debt Securities (cost $19,978,287)
20,313,859
--------------
FOREIGN GOVERNMENT/AGENCY OBLIGATIONS - 16.1%
British Columbia Province, Canada, Generic Residual,
Deb., 0.000%**, 08/23/24 CAD 15,000,000$ 1,583,692
Government of Canada, Deb., 8.000%, 06/01/23 CAD500,000
410,768
Government of Canada, Principal Strip, Series JN21,
06/01/21** CAD 1,500,000 207,900
Government of Poland, Bearer Past Due Interest
Brady Bonds, Stepup, 4.000%*, 10/27/14 USD1,375,000
1,173,906
Government of Poland, Registered Past Due Interest
Brady Bonds, Stepup, 4.000%*, 10/27/14 USD250,000
213,438
Manitoba Province, Canada, Bonds, 7.750%,
12/22/25 CAD 350,000 276,809
Ontario Hydro, Series FV6, 8.900%, 08/18/22 CAD1,000,000
878,886
Republic of South Africa, 8.500%, 06/23/17 USD825,000
819,481
---------------
Total Foreign Government/Agency Obligations (cost
$4,927,344) 5,564,880
---------------
FOREIGN CORPORATE OBLIGATIONS - 3.6%
MacMillan Bloedel Ltd., Deb., 7.700%, 02/15/26
(cost $1,277,579) USD 1,350,000 1,257,565
---------------
U.S GOVERNMENT AND AGENCY OBLIGATIONS - 10.9%
College & University Facilities Loan Trust, Series 2,
Class D, 4.000%, 06/01/18$1,000,000 $ 770,000
Federal National Mortgage Association REMIC
Series 93-212, Class Z, 6.000%, 11/25/08 300,568
267,130
REMIC Series 94-30, Class JA, 5.000%, 08/15/232,000,000
1,686,240
U.S. Treasury Bonds, 0.000%**, 08/15/23 6,200,000
1,045,816
---------------
Total U.S. Government and Agency Obligations (cost
$3,972,071) 3,769,186
---------------
- ------------------------------------------------------------
- --------------------------------------------------
Shares
- ------------------------------------------------------------
- --------------------------------------------------
Preferred Stocks - 6.3%
Aluminum Co. of America, 3.750% 8,125 512,383
BankAmerica Corp., Series B, Adjustable Rate 6.000%* 1,200
115,950
Citicorp, Series 2, Adjustable Rate 6.000%* 11,250
1,088,437
Connecticut Light & Power Co., Series 47, $2.006,655
149,738
Entergy Louisiana, Inc., 4.440% 226 14,916
Entergy New Orleans, Inc., 4.750% 482 32,927
Niagara Mohawk Power Corp., Series B,
Adjustable Rate 7.525%* 4,200 91,612
Union Electric Co., 3.500% 100 5,125
West Pennsylvania Power Co., 4.500%200 13,400
Wisconsin Electric Power Co., 3.600%2,748 142,896
-------------
Total Preferred Stocks (cost $1,997,540)
2,167,384
-------------
SHORT-TERM INVESTMENTS - 3.1%
SSgA Money Market Fund (cost $1,074,069) 1,074,069
1,074,069
-------------
Total Investments - 98.7% (cost $33,226,890)
34,146,943
Other Assets, less Liabilities - 1.3%
457,101
--------------
Net Assets - 100.0% $34,604,044
---------------
Note: Based on the cost of investments of $33,226,890 for
federal income tax purposes at June 30, 1997, the aggregate
gross unrealized appreciation and depreciation of
investments was $1,516,943 and $596,890, respectively,
resulting in net unrealized appreciation of investments of
$920,053.
* Stated rate is the last quarterly dividend rate
annualized.
** Zero coupon security.
+ Some or all of these bonds, amounting to $472,687, or 1.4%
of net assets, were out on loan to various brokers as of
June 30, 1997.
(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 June 30, 1997, the value of theses
securities amounted to $1,451,179, or 4.2% of net assets.
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 14%
AA 9
A 8
BBB 61
BB 7
B 1
----
100%
----
The accompanying notes are an integral part of these
financial statements.
MANAGERS BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
June 30, 1997 (unaudited)
- ------------------------------------------------------------
- ---------------------------------------------------------
Principal
Amount Value
- ------------------------------------------------------------
- ---------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 39.0%
U.S. Treasury Notes - 31.6%
7.500%, 11/15/01 $ 530,000 $ 552,276
6.500%, 05/31/01 390,000 392,133
6.375%, 08/15/02 640,000 639,802
6.375%, 05/15/00 3,750,000 3,763,462
--------------
Total U.S. Treasury Notes 5,347,673
--------------
U.S. Treasury Bonds - 5.2%
7.875%, 02/15/21 313,000 348,995
6.500%, 11/15/26 554,000 531,319
---------------
Total U.S. Treasury Bonds 880,314
---------------
U.S. Treasury Note Principal Strip - 2.3%
0.000%, 05/15/04 594,000 382,079
---------------
Total U.S. Treasury Obligations (cost $6,568,507)
6,610,066
---------------
FOREIGN GOVERNMENT/AGENCY OBLIGATIONS - 35.1%
Australia - 1.1%
Australian Government, Series 1007, 10.000%,
10/15/07 AUD 210,000 191,901
--------------
Denmark - 5.3%
Kingdom of Denmark, 9.000%, 11/15/00 DKK 2,600,000
445,648
Kingdom of Denmark, 7.000%, 11/15/07 DKK 2,880,000
455,646
---------------
Total Denmark 901,294
---------------
Canada - 2.4%
Government of Canada, Deb., 8.000%, 06/01/23 CAD492,000
404,195
---------------
Finland - 0.6%
Republic of Finland, Yankee, Deb., 9.625%, 04/01/28 USD
100,000 106,273
---------------
Italy - 2.3%
Republic of Italy, 10.500%, 04/01/05 ITL100,000,000
71,400
Republic of Italy, 9.500%, 02/01/99 ITL 500,000,000
308,049
----------------
Total Italy 379,449
----------------
Norway - 2.0%
Kingdom of Norway, 6.750%, 01/15/07 NOK 2,400,000
345,959
-----------------
Supra-National - 0.5%
African Development Bank, Yankee Sub. Notes,
6.875%, 10/15/15 USD 80,000 77,132
-----------------
Sweden - 5.8%
Kingdom of Sweden, Series 1037, 8.000%,
08/15/07 SEK 2,500,000 355,245
Kingdom of Sweden, 6.500%, 10/25/06 SEK 4,900,000
629,712
-----------------
Total Sweden 984,957
-----------------
United Kingdom - 15.1%
United Kingdom Treasury, 8.500%, 12/07/05 GBP354,000
641,836
United Kingdom Treasury, 8.000%, 09/27/13 GBP291,331
523,511
United Kingdom Treasury, 7.500%, 12/07/06 GBP805,000
1,382,025
------------------
Total United Kingdom 2,547,372
------------------
Total Foreign Government/Agency Obligations (cost
$5,836,043) 5,938,532
CORPORATE DEBT SECURITIES - 4.5%
Banks and Finance - 3.9%
American Re Corp., Series B, Senior Notes, 7.450%,
12/15/26 USD 100,000 99,020
Associated Corp. of N.A., Senior Notes, 6.625%,
05/15/01 USD 100,000 99,801
Bayerische Landesbank New York, Deposit Notes,
6.800%, 9/28/01 USD 75,000 75,381
Bear Sterns Co., Senior Notes, 6.500%, 07/05/00 USD
100,000 99,818
FNMA, Senior Notes., 6.500%, 07/10/02 AUD 180,000
135,549
Railcar Leasing LLC, Senior Notes, 7.125%,
01/15/13 (a) USD 80,000 79,706
Toronto-Dominion Bank New York, Sub. Notes,
Adjustable Rate 6.500%, 01/15/07 USD 75,000
74,064
--------------
Total Banks and Finance 663,339
--------------
Utility - 0.6%
Cajun Electric Power, U.S. Government Guarantee,
9.520%, 03/15/19 USD 100,000 106,819
--------------
Total Corporate Debt Securities (cost $768,711)
770,158
--------------
- ------------------------------------------------------------
- --------------------------------------------------
Shares
- ------------------------------------------------------------
- --------------------------------------------------
SHORT-TERM INVESTMENTS - 13.0%
Other Investment Companies - 9.6%
Calvert Cash Reserves Institutional Prime Fund610,685
610,685
Landmark Institutional Liquid Reserves 700,000
700,000
SSgA Money Market Fund 310,488 310,488
--------------
Total Other Investment Companies 1,621,173
--------------
Repurchase Agreement - 3.4%
State Street Bank & Trust Co., dated 06/30/97, due
07/01/97, 5.000%, total to be received $571,079
(secured by $595,000 FHLB 6.420%, due 11/18/99,
market value $583,100), at cost571,000 571,000
---------------
Total Short-Term Investments (cost $2,192,173)
2,192,173
---------------
Total Investments - 91.6% (cost $15,365,434)
$15,510,929
Other Assets, less Liabilities - 8.4%
1,419,904
---------------
Net Assets - 100.0% $16,930,833
---------------
Note: Based on the cost of investments of $15,365,434 for
federal income tax purposes at June 30, 1997, the aggregate
gross unrealized appreciation and depreciation of
investments was $246,205 and $100,710, respectively,
resulting in net unrealized appreciation of investments of
$145,495.
(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 June 30, 1997, the value of theses
securities amounted to $79,706, or 0.5% of net assets.
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
DKK: Danish Krone
GBP: British Pound
ITL: Italian Lira
NOK: Norwegian Krone
SEK: Swedish Krona
Investment Abbreviations:
FNMA: Federal National Mortgage Association
FHLB: Federal Home Loan Bank
The accompanying notes are an integral part of these
financial statements.
THE MANAGERS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1997 (unaudited)
MANAGERS
MANAGERS GLOBAL
BOND BOND
FUND FUND
--------------------------------
ASSETS:
Investments at value* $33,072,874$13,318,756
Short-term investments at cost and value1,074,069
2,192,173
Cash - 183
Receivable for Fund shares sold 23,471 3,910
Receivable for investments sold -1,444,886
Dividends, interest and other receivables594,241 247,187
Unrealized gain on foreign currency contracts - 140,150
Deferred organization expense - 4,358
Prepaid expenses 10,978 11,364
-----------------------------------
Total assets 34,775,63317,362,967
-----------------------------------
LIABILITIES:
Payable for Fund shares repurchased103,33362,892
Payable for investments purchased - 235,457
Unrealized loss on foreign currency contracts 30,451
Payable for closed forward foreign currency contracts, net
- - 48,205
Accrued expenses:
Investment advisory and management fees 17,457 9,363
Administrative fees 6,983 2,675
Other 43,816 43,091
-----------------------------------
Total liabilities 171,589 432,134
-----------------------------------
NET ASSETS $34,604,044$16,930,833
-----------------------------------
-----------------------------------
Shares outstanding 1,505,377 804,412
-----------------------------------
-----------------------------------
Net asset value, offering and redemption price per share
$22.99 $21.05
-----------------
-----------------
NET ASSETS REPRESENT:
Paid-in capital $34,192,877$16,752,952
Undistributed net investment income6,293545,742
Accumulated net realized loss from investments and
foreign currency transactions(515,179)(622,211)
Net unrealized appreciation of investments and foreign
currency contracts and translations920,053254,350
NET ASSETS $34,604,044$16,930,833
------------------------------
------------------------------
*Investments at cost 32,152,82113,173,261
------------------------------
The accompanying notes are an integral part of these
financial statements.
THE MANAGERS FUNDS
STATEMENTS OF OPERATIONS
For the six months ended June 30, 1997 (unaudited)
- ------------------------------------------------------------
- ------------------------------------------------------------
Managers
Manage Global
rs
Bond Bond
Fund Fund
------ --------
------ --------
- -
INVESTMENT INCOME:
Interest income $ 1,154, $ 532,427
844
Dividend income 71,804 --
Stock loan fees 786 --
------ --------
------ --------
- -
Total 1,227, 532,427
investment income 434
------ --------
------ --------
- -
EXPENSES:
Investment advisory and 100,45 55,555
management fees 3
Administrative fees 40,181 15,873
Custodian fees 16,810 18,003
Audit fees 11,665 15,236
Transfer agent fees 14,419 8,643
Reports to shareholder 10,836 7,639
Registration fees 9,799 9,599
Amortization of organization -- 1,247
expense
Miscellaneous expenses 6,425 3,505
------ --------
------ --------
- -
Total 210,58 135,300
expenses 8
------ --------
------ --------
- -
Net investment income 1,016, 397,127
846
------ --------
------ --------
- -
NET REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain on investment 32,688 54,346
transactions
Net realized loss on foreign
currency
contracts and translations (5,618 (868,412
) )
Net realized loss on options -- (4,428)
Net unrealized appreciation 254,31 (115,644
(depreciation) of investments 6 )
Net unrealized appreciation
from
foreign currency contracts 212 243,335
and translations
------ --------
------ --------
- -
Net 281,59 (690,803
realized and unrealized 8 )
gain(loss)
------ --------
------ --------
- -
NET INCREASE (DECREASE) IN NET $ 1,298, $ (293,676
ASSETS RESULTING FROM 444 )
OPERATIONS
====== ========
== ==
The accompanying notes are an integral part of these
financial statements.
The Managers Funds
Statements of Changes in Nets Assets
- ------------------------------------------------------------
- ------------------------------------------------------------
- --------
Managers Global
Bond Bond
Fund Fund
For the For the
six months For the six months For the
ended ended
June 30, year ended June 30, 1997 year ended
1997
(unaudited December 31, (unaudited) December
) 1996 31, 1996
Increase (Decrease) in Net
Assets
From Operations:
Net investment income $1,016,846 $1,767,973 $397,127 $911,546
Net realized gain (loss) on
investments
and foreign currency 27,070 486,867 (818,494) 652,952
transactions
Net unrealized appreciation
(depreciation) of
investments and foreign 254,528 (732,438) 127,691 (820,553)
currency translations
Net increase
(decrease) in net assets
1,298,444 1,522,402 (293,676) 743,945
resulting from operations
Distributions to
Shareholders:
From net investment income (1,037,046 (1,776,139) --- (678,250)
)
From net realized gain on --- --- --- (308,091)
investments
Total (1,037,046 (1,776,139) --- (986,341)
distributions to )
shareholders
From Capital Share
Transactions:
Proceeds from sale of shares 8,650,973 17,350,976 4,562,317 9,371,671
Net asset value of shares
issued in connection
with reinvestment of 931,002 1,450,259 --- 938,767
dividends
Cost of shares repurchased (7,057,890 (13,105,056) (4,190,181) (12,038,199
) )
Net increase
(decrease) from
capital 2,524,085 5,696,179 372,136 (1,727,761)
share transactions
Total increase (decrease) in 2,785,483 5,442,442 78,460 (1,970,157)
net assets
Net Assets:
Beginning of period 31,818,561 26,376,119 16,852,373 18,822,530
End of period $34,604,04 $31,818,561 $16,930,833 $16,852,373
4
End of period undistributed
$6,293 $26,493 $545,742 $148,615
Share Transactions:
Sale of shares 381,303 779,223 219,653 433,754
Shares issued in connection
with reinvestment
of dividends 41,251 65,848 --- 43,898
Shares repurchased (310,802) (591,669) (202,737) (556,056)
Net 111,752 253,402 16,916 (78,404)
increase (decrease) in
shares
Managers Bond Fund
Financial Highlights
For a share of capital stock outstanding throughout each
period
For the
six
months
ended
June Year
30, ende
1997 d
Dece
mber
31,
(unaudi 1996 1995 1994 1993 1992
ted) *
Net Asset Value, $22.83 $23. $18. $22. $21. $22.
Beginning of Period 13 92 18 88 60
Income from Investment
Operations:
Net investment income 0.71 1.35 1.44 1.59 1.49 1.48
Net realized and
unrealized gain (loss)
on investments 0.17 (0.2 4.23 (3.1 0.98 0.23
9) 6)
Total from investment 0.88 1.06 5.67 (1.5 2.47 1.71
operations 7)
Less Distributions to
Shareholders:
From net investment (0.72) (1.3 (1.4 (1.5 (1.5 (1.4
income 6) 6) 5) 0) 8)
From net realized gain --- --- --- (0.1 (0.6 (0.9
on investments 4) 7) 5)
Total distributions to (0.72) (1.3 (1.4 (1.6 (2.1 (2.4
shareholders 6) 6) 9) 7) 3)
Net Asset Value, End of $22.99 $22. $23. $18. $22. $21.
Period 83 13 92 18 88
Total Return 3.96% (b 4.97 30.9 (7.2 11.5 7.88
) % 1% 5)% 6% %
Ratio of net expenses 1.31% (a 1.36 1.34 1.20 1.15 0.93
to average net assets ) % % % % %
Ratio of net investment
income to average
net assets 6.33% (a 6.13 6.84 7.28 6.65 6.61
) % % % % %
Portfolio turnover 8% (b 72% 46% 84% 373% 292%
)
Net assets at end of $34,604 $31, $26, $30, $44, $39,
period (000's omitted) 819 376 760 038 117
(a) Annualized.
(b) Not annualized.
* Audited by prior
auditors.
Managers Global Bond
Fund
Financial Highlights
For a share of capital stock outstanding throughout each
period
For the period
For the March 25, 1994
six months (commencement
ended
June 30, Year of
1997 ended operations
Decembe ) to
r 31,
(unaudited 1996 1995 December 31,
) 1994
Net Asset Value, $21.40 $21.74 $19. $20.00
Beginning of 10
Period
Income from
Investment
Operations:
Net investment 0.49 1.21 0.95 0.48
income
Net realized and
unrealized gain
(loss)
on investments (0.84) (0.27) 2.66 (0.77)
Total from (0.35) 0.94 3.61 (0.29)
investment
operations
Less
Distributions to
Shareholders:
From net --- (0.87) (0.9 (0.50)
investment income 3)
From net realized --- (0.41) --- ---
gain on
investments
In excess of net --- --- (0.0 (0.11)
investment income 4)
Total --- (1.28) (0.9 (0.61)
distributions to 7)
shareholders
Net Asset Value, $21.05 $21.40 $21. $19.10
End of Period 74
Total Return + (1.64)% (c 4.39% 19.0 (1.52)% (
) 8% c
)
Ratio of net 1.70% (b 1.57% 1.55 1.73% (
expenses to ) % b
average net )
assets
Ratio of net
investment income
to average
net assets 5.00% (b 4.98% 5.07 4.19% (
) % b
)
Portfolio 131% 202% 214% 266% (
turnover c
)
Net assets at end $16,931 (c $16,852 $18, $9,520
of period (000's ) 823
omitted)
Expense Waiver
(a)
Ratio of total N/A 1.60% 1.69 2.03% (
expenses to % b
average net )
assets
Ratio of net
investment income
to average
net assets N/A 4.95% 4.93 3.89% (
% b
)
(a) Ratio information assuming no waiver of investment
advisory and management fees and/or administrative fees in
effect for the periods presented, if applicable. (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, if
applicable.
Managers Bond Fund and Managers Global Bond Fund
Notes to Financial Statements
June 30, 1997 (unaudited)
(1) Summary of Significant Accounting Policies
The Managers Funds (the "Trust") is a no-load, 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 ("Bond") and Managers Global
Bond Fund ("Global Bond"), 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 avail-able 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. Dividend income is recorded on the ex-dividend
date. 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 Bond and quarterly for Global Bond.
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
trans-actions. Permanent book and tax basis differences, if
any, relating to shareholder distributions will result in
reclassifications to paid-in capital.
(e) Organization Costs (Global Bond 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 June 30, 1997, Bond 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.
Capital Loss
Fund Amount Expires
- ------- -------------- -------------
Bond $323,175 2002
219,073 2003
(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, 1997, one unaffiliated shareholder, which is an
omnibus account, individually held greater than 12% of the
outstanding shares of Bond.
(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 differ-
ence 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 Bond and Global Bond, 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 share-holder
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, 1997, Bond and Global
Bond each paid a fee to the Administrator at the annual
rates of 0.25% and 0.20%, respectively, of such Fund's
average daily net assets.
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, 1997, were as follows:
- ------------------------------------------------------------
- ------------------------------------------------------------
- --
U.S. Government Securities
Long-term Securities Only
--------------------------------------------------------------
- ----
Fund PurchasesSales Purchases Sales
- ------- ------------ ------- ------------
- --------
Bond $ 4,175,922 $ 2,474,024 - $ 231,594
Global Bond18,227,12517,730,360 $7,398,426 4,035,633
(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 temporarily invested in 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, 1997, Global Bond
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 con-tracts
having the same settlement date, amount and counterparty is
realized on the date of offset, other-wise 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,
1997 were as follows:
Contract Current Unrealized
Amount (in Value Gain (Loss)
local currency)(in U.S. Dollars) (in
U.S. Dollars)
------------------- --------------------
- ----------------------
All contracts expire August 19, 1997
Buy Contracts
Deutsche Mark 3,638,908$2,094,101 $(28,061)
Pound Sterling 3,457 5,749 117
Japanese Yen 509,977,0714,482,136 46,094
-----------------------------------------------
Total Buy Contracts $6,581,986 $ 18,150
(Payable amount $6,563,836) ========== =======
Sell Contracts
Canadian Dollar 1,231,121$ 891,503 $ (226)
Deutsche Mark 3,151,7091,813,730 48,982
Danish Krone 2,632,809 397,675 10,446
Italian Lira 680,501,388 399,757 5,371
Japanese Yen 173,175,7311,522,024 26,976
------------------------
Total Sell Contracts $2,319,456 $91,549
(Receivable amount $2,362,249)
(6) Risks Associated with Collateral Mortgage Obligations
("CMOs")
The net asset value of Bond 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. During the six months ended June 30, 1997, Global
Bond entered into the following options transactions as
currency hedges:
Principal
Amount of
Contracts Premiums
----------------------------
- ----
Outstanding, beginning of period - -
Options written $1,640,000 $ 5,822
Options expired - -
Options exercised (1,640,000) (5,822)
----------------------------
- -----
Outstanding, end of period $ - $ -
====================
(8) Contingency Two lawsuits seeking class action status
have been filed against Managers Intermediate Mortgage Fund,
Managers Short Government Fund, the Investment Manager and
the Trust, among other defendants. In both of these cases,
the plaintiffs seek unspecified damages based upon losses
alleged in the two funds named above. In the suit relating
to Managers Short Government Fund, the court has
preliminarily approved the parties' agreement to settle all
claims by the purported class. However, the settlement is
subject to certain conditions such as final court approval.
For these and other reasons, there can be no assurance that
the settlement will be consummated. In addition, a non-class
action lawsuit based on similar allegations has been filed
by a customer against certain of the defendants named in the
class action lawsuits, as well as Managers Short and
Intermediate Bond Fund. Certain other customers, who are
potentially members of the plaintiff class in each of the
two class action lawsuits referred to above, have asserted
that they may file similar lawsuits based on similar claims,
but have not done so. Management continues to believe that
it has meritorious defenses and, if the cases are not
settled, Management 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
The Managers Funds
Equity Funds:
INCOME EQUITY FUND
Scudder, Stevens & Clark, Inc.
Spare, Kaplan, Bischel & Associates
CAPITAL APPRECIATION FUND
Essex Investment Management Company, Inc.
Husic Capital Management
SPECIAL EQUITY FUND
Liberty Investment Management
Pilgrim Baxter & Associates
Westport Asset Management, Inc.
INTERNATIONAL EQUITY FUND
Scudder, Stevens & Clark, Inc.
Lazard, Freres Asset Management Co.
Income Funds:
MONEY MARKET FUND
J.P. Morgan
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
This report is prepared for the information of shareholders.
It is authorized for distribution to prospective investors
only when preceded by an effective prospectus.
