MONEY MARKET FUND
SEMI-ANNUAL REPORT
May 31, 1997
Where Leading Money Managers Converge
MANAGERS MONEY MARKET FUND
SEMI-ANNUAL REPORT
MAY 31, 1997
(UNAUDITED)
TABLE OF CONTENTS
Page
PRESIDENT'S MESSAGE 1
THE MANAGERS FUNDS PERFORMANCE 3
Complete performance table for all of The Managers Funds
as of June 30, 1997
MANAGERS MONEY MARKET FUND
Statement of Assets and Liabilities 4
Fund balance sheet and Net Asset Value (NAV) per share
computation
Statement of Operations 4
Detail of sources of income and fund level expenses
Statement of Changes in Net Changes 5
Detail of changes in fund assets and distributions to
shareholders for
the last two periods
Financial Highlights 6
Historical net asset values, distributions, total
returns, expense ratios
and net assets
Notes to Financial Statements 7
Accounting and distribution policies, details of
agreements and transactions
with fund management and description of certain
investment risks
THE PRIME MONEY MARKET PORTFOLIO (The commingled investment
pool
which holds all investable assets of the Fund.)
Schedule of Investments 10
Detailed portfolio listings by security type, as valued
at May 31, 1997,
of which Managers Money Market Fund owns a pro rata
share
Statement of Assets and Liabilities 13
Portfolio's balance sheet
Statement of Operations 13
Detail of the Portfolio's sources of income, expenses,
and realized
and unrealized gains (losses) during the period
Statement of Changes in Net Assets 14
Detail of changes in the Portfolio's assets during the
past two periods
Supplementary Data 14
Historical ratios of the Portfolio's expenses, net
investment income
and impact of expense reimbursements on the expense
ratios
Notes to Financial Statements 15
The Portfolio's accounting policies and details of
agreements and
transactions with Portfolio management
Investments in Managers Money Market Fund are not
deposits or obligations
of, or guaranteed or endorsed by, Morgan Guaranty trust
Company of New York or
any other bank. Shares of the Fund are not federally insured
by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any
other governmental agency.
Although the Fund seeks to maintain a stable net asset value
of $1.00 per share, there
can be no assurance that it will be able to continue to do
so.
PRESIDENT'S MESSAGE
Dear Fellow Shareholder:
The U.S. Economy continued to grow vigorously in the first
half of 1997. Although economic growth often induces an
increase in inflation and thus interest rates, so far in
1997, inflation has remained tame and interest rates have
remained stable. In fact, the Producer Price Index (PPI)
which tracks wholesale price levels, fell for five months in
a row through May, the first five-month decline since the
early 195Os. The Consumer Price Index (CPI), which tracks
retail prices has continued to rise, although at an
extremely low rate. Regardless, the Federal Reserve Board
raised the Fed Funds rate by 0.25% in late March in order to
pre-empt an increase in inflation, and has implied that it
is likely to tighten again if any evidence of inflationary
pressures arises. Interest rates rose from November through
March, but have fallen across the maturity spectrum since
the Fed's action. This is likely due to evidence that
prices are stable leading to conclusions that the Fed will
not need to raise rates in the near future.
While anticipation of short-term moves in interest rates,
and the actions of the Federal Reserve Board should not be
an important aspect of long-term investing, it is extremely
important to investors in money market securities.
Management of the average maturity of the Fund's investment
portfolio to achieve high yields is an important part of the
management of this Fund. The portfolio manager reduced the
portfolio's average maturity from near 62 days at the end of
November, to 55 days at the end of May, and expects to
maintain an average portfolio maturity between 50 and 60
days in this environment.
Managers Money Market Fund performed well during the first
half of its fiscal year, as measured by both relative total
return and yield. For the six months ended May 31, 1997,
the Fund provided a total return of + 2.63 %. For this same
time period, the average return for all taxable first tier
money market funds, as reported by IBC Financial Data Inc.,
was 2.43 %.
The Fund's relative good performance was due to timely
investment decisions made by the Portfolio's investment
manager, the growth in the Fund's assets and the continued
expense reimbursements made by the Fund's administrator,
which have reduced the Fund's expenses and provided for
higher yields.
In May, the Portfolio's name was changed to The Prime Money
Market Portfolio in an attempt to better describe the types
of high quality money market instruments in which it
invests. In conjunction with this, the Portfolio recently
applied for and received the highest ratings by Moody's
Investor's Service (Aaa), Standard & Poor's Rating Group
(AAAm), and Dulf & Phelps (AAA).
Regarding the operations of the Fund, effective mid-June,
the daily deadlines for accepting certain trades has been
extended so that requests for wire redemptions received by
the Fund prior to 4:00 p.m. Eastern time can be wired out
that day. In addition, good funds received for purchases
prior to 4:00 p.m. will receive that day's income dividend.
We hope that these expanded trading times are beneficial to
you.
On the following page you'll find a performance summary for
all of The Managers Funds as of June 30, 1997. Please
contact us at the number below if you'd like to receive a
prospectus and additional information on any of the other
funds in our family, and remember you have the option of
making free telephone exchanges into any of our other funds.
Thank you for your continued investment in The Managers
Funds, and please feel free to contact us at (800)835-3879
should you have any questions on this report or the Fund.
Sincerely,
/s/Robert P. Watson
Robert P. Watson
President
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 Fund 5.09% 11.97% 18.28%
15.22% 12.79% 15.28% Jun. '84 ***
Special Equity Fund 9.93% 16.25% 24.57% 20.27%
15.84% 16.63% Jun. '84 ****
International Equity Fund 12.79% 19.38% 14.70%
15.64% 10.47% 14.83% Dec. '85 ****
Income Funds:
Short Government Fund 2.34% 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 Fund 3.09% 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 Fund 2.61%
5.35%
5.11%
4.11%
5.45%
5.89%
Jun.
'84
NA
Past performance is no guarantee of future results. Investme
nt
retum
s and
share
price
will
fluct
uate.
The redemption price of a mutual fund may be more or less
than the purchase price. For additional or more recent
information on Managers Money Market Fund, or for a
prospectus for the Equity Funds or the Income Funds, 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.
MANAGERS MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1997 (unaudited)
- ------------------------------------------------------------
- -----------------------------------------
ASSETS:
Investment in The Prime Money Market Portfolio
("Portfolio") $45,460,501
Prepaid expenses 21,859
---------------
Total assets 45,482,360
---------------
LIABILITIES:
Dividends payable to shareholders 25,852
Other accrued expenses 27,275
---------------
Total liabilities 53,127
---------------
NET ASSETS: $45,429,233
=========
Shares outstanding 45,429,233
=========
Net asset value, offering and redemption price per share
$1.00
====
NET ASSETS REPRESENT:
Paid-in capital $45,429,233
=========
STATEMENT OF OPERATIONS
For the six months ended May 31, 1997 (unaudited)
- ------------------------------------------------------------
- -----------------------------------------
INVESTMENT INCOME FROM PORTFOLIO:
Interest income $1,232,717
EXPENSES:
Administration fees $ 55,810
Transfer agent fees 20,019
Registration fees 17,710
Reports to shareholders 8,017
Audit fees 7,137
Custodian fees 2,992
Trustee fees 1,273
Legal fees $58
Miscellaneous expenses 4,994
Allocated Portfolio expenses 40,417
-----------
Total expenses 158,927
Less: Waiver of administration fees(55,810)
Reimbursement of expenses (33,051)
-----------
Net expenses 70,066
-------------
NET INVESTMENT INCOME $1,162,651
========
The accompanying notes are an integral part of these
financial statements.
MANAGERS MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------
- ----------------------------------------------
For the
six monthsended For the
May 31, 997 year ended
(unaudited) November 30, 1996
--------------------- ----------
- --------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income $1,162,651 $ 1,527,309
----------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income(1,162,651)(1,527,309)
----------------------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares138,632,058113,145,027
Net asset value of shares issued
in connection with reinvestment
of dividends 882,675 999,707
Cost of shares repurchased(130,176,444)(89,126,200)
--------------------------------
Net increase from capital
share transactions 9,338,289 25,018,534
--------------------------------
Total increase in net assets9,338,28925,018,534
--------------------------------
NET ASSETS:
Beginning of period 36,090,944 11,072,410
--------------------------------
End of period $ 45,429,233 36,090,944
========== =========
The accompanying notes are an integral part of these
financial statements.
MANAGERS MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout each
period May 31, 1997 (unaudited)
- ------------------------------------------------------------
- ------------------------------------------------
Six months
ended For the year Eleven
months
May 31, ended ended
1997 November 30, November 30,
Year ended December 31,
-------------------------------
(unaudited) 1996 1995 1994 1993
1992*
------------------------------------------
- ------- ------ ------ --------
NET ASSET VALUE,
BEGINNING OF PERIOD$1.000$1.000 $1.000 $1.000$1.000$1.000
--------------------------------------------
- ----
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income0.0260.054 0.044 0.0350.022 0.030
LESS DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income(0.026)(0.054)(0.044)(0.035)(0.022)(
0.030)
-------------------------------------------
- ---------
NET ASSET VALUE.
END OF PERIOD $1.000 $1.000 $1.000 $1.000$1.000$1.000
===== ===== ===== ========== =====
- ------------------------------------------------------------
- ------------------------------------------------------------
- -----
Total Return (c) 5.26%(b) 5.53% 4.51%(b)3.61%2.48% 3.12%
============================================================
==============
Ratio of net expense to
average net assets0.31%(b)0.12% 1.13%(b)0.73%0.74% 0.67%
Ratio of net investment
income to average
net assets 5.22%(b) 5.35% 4.85%(b)3.84%2.48% 3.05%
Net assets at end of period
(000's omitted) $45,429$36,091 $11,072$17,269$7,368$9,320
============================================================
==============
Expense Waiver (a)
Ratio of total expenses to
average net assets0.71%(b)0.75% 1.18%(b)1.03%0.99% 0.98%
Ratio of total investment
income to average
net assets 4.82%(b) 4.71% 4.80%(b)3.54%2.23% 2.74%
============================================================
==============
(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) The total returns would have been lower had certain
expenses not been reduced during the periods
shown.
* Audited by prior auditors.
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------
MANAGERS MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1997 (unaudited)
- ------------------------------------------------------------
- ------------------------------------------------------------
- -----
Managers Money Market Fund (the "Fund") is a series of The
Managers Funds (the "Trust"), a no-load, open-end,
management investments company, organized as a Massachusetts
business trust, and registered under the Investment Company
Act of 1940, as amended (the "1940 Act"). Currently the
Trust is comprised of 10 investment series, (collectively
the "Funds").
The Fund invests all of its investable assets in The Prime
Money Market Portfolio (the "Portfolio") (formerly The Money
Market Portfolio), a diversified, open-end management
investment company having the same investment objective as
the Fund. The value of such investment reflects the Fund's
proportionate interest in the net assets of the Portfolio
(1.2% at May 31, 1997). The performance of the Fund is
directly affected by the performance of the Portfolio. The
financial statements of the Portfolio, including the
schedule of investments, are included elsewhere in this
report and should be read in conjunction with the Fund's
financial statements.
(1) SUMMARY OF SINGIFIICANT ACCOUNTING POLICIES
The Fund's financial statements are prepared in accordance
with generally accepted accounting principals, which require
the use of management's estimates. The following is a
summary of significant accounting policies followed by the
Fund:
(a) VALUATION OF INVESTMENTS
Valuation of securities by the Portfolio is discussed in
Note I of the Portfolio's Notes to Financial Statements
which are included elsewhere in this report.
(b) SECURITY TRANSACTIONS
The Fund records its share of interest income, expenses and
realized gains and losses and adjusts its investment in the
Portfolio each day.
(c) INVESTMENT INCOME AND EXPENSES
All the net investment income and realized gains and losses
of the Portfolio are allocated pro rata among the Fund and
other investors in the Portfolio at the time of such
determination. Expenses incurred by the Trust with respect
to one or more funds in the Trust are allocated in
proportion to the net assets of each fund in the Trust,
except where allocations of direct expenses to each fund can
otherwise be made fairly. Expenses directly attributable to
a fund are charged to that fund.
(d) DIVIDENDS AND DISTRIBUTIONS
Dividends resulting from net investment income normally will
be declared daily, payable on the third to the last business
day of the month.
Distributions classified as capital gains for federal income
tax purposes, if any, will be made on an annual basis and
when required for federal excise tax purposes. Income and
capital gain distributions are determined in accordance with
income tax regulations which may differ from generally
accepted accounting principles. Permanent book and tax
differences, if any, relating to shareholder distributions
will result in reclassifications to capital stock.
(e) FEDERAL TAXES
The Fund intends to comply with the requirements under
Subchapter M of the Internal Revenue Code of 1986, as
amended, and to distribute substantially all of its taxable
income and gains, if any, to its shareholders and to meet
certain diversification and income requirements with respect
to investment companies. Therefore, no federal income or
excise tax provision is included in the accompanying
financial statements.
(f) CAPITAL STOCK
The Trust's Declaration of Trust authorizes the issuance of
an unlimited number of shares of beneficial interest,
without par value. The Fund records sales and repurchases
of its capital stock on the trade date. Dividends and
distributions to shareholders are recorded as of the ex-
dividend date.
At May 31, 1997, one unaffiliated shareholder, which is an
omnibus account, held 21 % of the outstanding shares of the
Fund.
(2) AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
The Trust has adopted an Administrative and Shareholder
Servicing Agreement under which The Managers Funds, L.P.
serves as the Fund's administrator (the "Administrator") and
is responsible for all aspects of managing the Fund's
operations, including administration and shareholder
services to the Fund, its shareholders, and certain
institutions, such as bank trust departments, dealers and
registered investment advisers, that advise or act as an
intermediary with the Fund's shareholders.
Effective December 1, 1995, the Trustees approved a fee for
these services, payable to the Administrator, of 0.25% per
annum, all of which has been voluntarily waived during the
six months ended May 31, 1997. In addition, over this time
period, the Administrator has voluntarily limited total
expenses to between 0.24% and 0.38% of average daily net
assets by reimbursing the Fund for varying amounts of Fund
expenses.
These waivers and expense limitations may be modified or
terminated at any time at the sole discretion of the
Administrator.
An aggregate annual fee of $10,000 is paid to each outside
Trustee for serving as a Trustee of the Trust. In addition,
these Trustees receive meeting fees of $750 for each in-
person meeting attended, and $200 for participation in any
telephonic meetings. The Trustee fee expense shown in the
financial statements represents the Fund's allocated portion
of the total fees.
(3) 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 a pre-determined
percentage of class members participating in the settlement
and 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 lawsuif'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.
THE PRIME MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
May 31, 1997(unaudited)
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------
Principal Yield to
Amount Maturity/
(in thousands) Security Description
Maturity Dates Rate Value
- ----------------- -----------------------------
- ------------------------ ------------------ ------
- --------------
CERTIFICATES OF DEPOSIT - DOMESTIC (6.2%)
$31,500 Bank of America, Chicago
11/07/97 5.570%$31,447,887
49,400 Republic National Bank
06/30/97 5.59049,400,792
40,000 Bankers Trust Co
12/10/97 5.50039,979,813
119,000 Harris Trust & Savings Bank
06/05/97-06/27/97 5.540-5.550118,999,764
---------
- ------
Total Certificates of Deposit Domestic
239,828,256
---------
- ------
CERRIFICATES OF DEPOSIT - FOREIGN (35.5%)
44,000 ABN AMRO Bank Yankee CD
06/23/97 5.53044,000,268
25,000 Bank of Nova Scotia
08/08/97 5.72025,000,000
76,000Bank of Tokyo Mitsubishi 06/06/97-
07/15/97 5.580-5.850 76,000,098
166,000 Bayedsche Landesbank 06/25/97-
11/21/97 5.500-5.530 165,994,397
125,000Bayerische Vereinsbank AG, New York06/24/97-
10/28/97 5.510-5.680 124,990,698
135,790Canadian Imperial Bank of Commerce 06/30/97-8/20/97
5.590-5.740 135,789,777
50,500 Commerzbank Agency, New
York 07/10/97 5.68050,498,1
87
400Creditanstalt Bankverein 07/03/97 5.570 400,004
56,100Dai-Ichi Kangyo Bank 06/13/97-
07/28/975.570-5.860 56,101,365
48,000 Dai-Ichi Kangyo Yankee CD
06/26/97 5.80048,000,000
139,500 Deutsche Bank, New York07/02/97-
02/06/98 5.550-5.760139,469,379
62,000 Industrial Bank of Japan
Ltd 06/06/97 5.75062,000,2
57
75,000 Landesbank Hessen
Thuringen 07/18/97 6.01075,030,4
32
12,000 National Westminster Bank, PLC10/02/97-
05/26/98 5.660-6.06011,998,125
10,000 Rabobank Nederland Inst.
CTF 03/24/98 5.9909,996,126
50,000 Rabobank Nederland N.V
06/23/97 5.53050,000,304
23,00 Royal Bank of Canada, New
York 05/12/98 6.14022,993,7
77
116,000 Societe Generale, New York06/02/97-
08/06/97 5.420-5.720116,000,903
38,000 Societe Generale Bank
Yankee CD 10/06/97 5.84037,996,2
05
28,000 Sumitomo Bank Yankee CD
07/01/97 5.68028,000,423
50,000 Swiss Bank Corp., New
York 03/19/98 5.98049,992,3
80
35,000 Westpac Banking Corp.
Yankee CD 03/23/98 5.97034,978,3
37
---------
--------
Total Certificates of Deposit - Foreign
1,365,231,442
---------
- --------
COMMERCIAL PAPER - DOMESTIC (9.7%)
25,476 AIG Funding 06/10/97
5.510 25,440,907
35,000 AT&T Corp 06/24/97
5.480 34,877,461
9,100 Chase Manhattan Bank
06/19/97 5.6009,074,520
20,000 Chevron Transport Corp
07/07/97 5.50019,890,000
191,500 General Electric Capital Corp06/05/97-
10/27/97 5.530-5.720190,457,424
79,636 Koch Industries Inc
06/02/97 5.61079,623,590
16,000 NationsBank Corp
08/01/97 5.63015,847,364
---------
- -------
Total Commercial Paper - Domestic
375,211,266
---------
- -------
COMMERCIAL PAPER - FOREIGN (22.7%)
$ 16,780 ABN AMRO06/19/97-
08/19/97 5.340-5.615$16,600,072
161,000 Abbey National North America07/08/97-
08/12/97 5.300-5.620159,360,925
33,400 BBL North America Inc07/01/97 5.620
33,243,577
52,249 Bank of Montreal06/05/97-
06/06/97 5.520-5.54352,212,258
50,000 Bank of Nova Scotia06/12/97 5.365
49,918,035
90,000 Caisse DAmortissement06/06/97 5.290
89,933,875
52,500 Cregem North America Inc06/11/97-
06/13/97 5.29052,413,303
50,000 Electricite de France06/23/97 5.480
49,832,555
47,000 KFW International Finance, Inc06/10/97 5.500
46,935,375
193,820 Korea Development Bank06/09/97-
08/22/97 5.580-5.650191,874,050
35,500 Lloyds Bank PLC08/22/97 5.650
35,043,135
25,000 Province de Quebec10/28/97 5.730
24,407,104
25,000 Royal Bank of Scotland, PLC07/28/97 5.640
24,776,750
47,000 San Paolo U.S. Finance Co08/21/97 5.670
46,400,397
3,352 UBS Finance Delaware Inc06/02/97 5.580
3,351,480
---------
- ------
Total Commercial Paper - Foreign 876,302,
891
---------
- ------
CORPORATEOBLIGATIONS (1.5%)
34,000Abbey National Treasury Services, PLC11/26/97-
02/05/98 5.500-5.75033,958,024
25,000 John Deere Capital Corp07/03/97 5.850
24,998,466
---------
- ------
Total Corporate Obligations 58,956,4
90
---------
- ------
FLOATING RATE NOTES (11.9%) (a)
72,500 Asset Backed Securities Investment
Trust, Series 1996-M, (resets monthly
to one month LIBOR, due 10/15/97)
(144A) 06/13/97(b) 5.68872,500,0
00
60,000 Bankers Rust, (resets daily to Prime
rate -281 basis points, due 04/23/98)06/02/97(b)5.690 59,974,063
20,000Federal National Morgage Association,
(resets weektf to six month Reasury
- - Bill rate + 10 basis points, due
06/11/97) 06/03/97(b) 5.58019,999,5
76
20,000 First Union Bank of North Carolina,
(resets monthly to one month LIBOR,
due 12/19/97) 06/19/97(b) 5.72020,000,0
00
150,000Liquid Asset Backed Securities Rust,
Series 1997-2, (resets monthly to one
month LIBOR, due 06/30/98) (144A)06/28/97(b)5.688150,
000,000
94,622 Natwest Asset Trust Securities,
Series R-13/14A, (resets monthly to
one month LIBOR + 2 basis points,
due 09/15/03)(144A) 06/16/97(b) 5.70894,622,0
00
40,000 Society National Bank of Cleveland,
(resets daily to the Fed Funds rate
+8 basis points, due 07/08/97)06/02/97(b)5.640% 39,
997,239
---------
- ------
Total Floating Rate Notes
457,092,878
---------
- ------
GOVERNMENT OBLIGATIONS (1.3%)
50,000 Canadian Treasury Bills 07/08/97 5.26049,729,694
TIME DEPOSITS - DOMESTIC (0.9%)
33,429 Wachovia Bank &ftust, Grand Cayman06/02/97 5.620
33,429,000
TIME DEPOSITS - FOREIGN (5.2%)
40,000 Bank of Nova Scotia 06/02/97 5.62540,000,000
100,000 Bank of Tokyo Mitsubishi 06/02/97 5.750
100,000,000
30,000 Societe Generale, Grand Cayman 06/02/97 5.625
30,000,000
30,000 Westdeutsche Landesbank 06/02/97 5.687
30,000,000
---------
- -----
Total Time Deposits - Foreign
200,000,000
---------
- ------
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.4%)
16,155 Federal Home Loan Banks 06/02/97 5.550
16,152,509
25,000 Federal Home Loan Banks 06/05/97 5.460
24,984,833
16,000 Federal Home Loan Mortgage Corp 04/08/98 5.840
15,971,139
75,000 Federal National Morgage Association 06/06/97 5.370
74,944,063,
---------
- ------
Total U.S. Government
Agency Obligations 132,052,
544
---------
- ------
U.S. TREASURY OBLIGATIONS (0.2%)
8,000 United States Treasury Notes 02/28/98 5.125
7,958,103
---------
- ------
REPURCHASE AGREEMENT (0.9%)
3 3,705 State Street Repurchase Agreement,
dated 5/30/97, proceeds $33,720,364
(collateralized by $33,440,000
U.S. Treasury Notes 6.250%, due
05/31/00 valued at $34,379,965) 06/02/97 5.470
33,705,000
---------
- -------
TOTAL INVESTMENTS AT AMORTIZED COST AND VALUE
(99.4%) 3,829,497,564
OTHER ASSETS IN EXCESS OF LIABILITIES (0.6%)21,522,4
17
------------------
NET ASSETS (100.0%) $3,851,019,981
===========
(a) The coupon rate shown on floating or adjustable rate
securities represents the rate at the end of the
reporting period. The due date in the security
description reflects the final maturity date.
(b) Reflects the next interest rate reset date.
144A-Securities restricted for resale to Qualified
Institutional Buyers.
The accompanying notes are an integral part of these
financial statements.
THE PRIME MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1997(unaudited)
- ------------------------------------------------------------
- ------------------------------------------------
ASSETS:
Investments at amortized cost and value$3,829,497,564
Interest receivable 22,202,128
Prepaid trustees' fees 13,141
Prepaid expenses and other assets 3,651
-------------------
Total assets 3,851,716,484
-------------------
LIABILITIES:
Advisory fee payable 424,864
Custody fee payable 117,046
Administrative services fee payable 106,368
Administration fee payable 11,638
Fund services fee payable 2,780
Accrued expenses 33,807
-------------------
Total liabilities 696,503
-------------------
NET ASSETS:
Applicable to investors' beneficial interests$
3,851,019,981
============
STATEMENT OF OPERATIONS
For the six months ended May 31, 1997 (unaudited)
- ------------------------------------------------------------
- ------------------------------------------------
INVESTMENT INCOME:
Interest income $111,885,340
EXPENSES:
Advisory fee $2,523,337
Administrative services fee 636,014
Custodian fees and expenses 315,508
Fund services fee 68,278
Administration fee 50,720
Professional fees and expenses33,619
Trustees' fees and expenses 30,589
Miscellaneous 13,793
-------------
Total expenses 3,671,858
-----------------
NET INVESTMENT INCOME 108,213,482
NET REALIZED LOSS ON INVESTMENTS (72,774)
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$108,140,708
==========
The accompanying notes are an integral part of these
financial statements.
THE PRIME MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------
- ------------------------------------------
For the six For the fiscal
months ended year ended
May 31, 1997 November 30,
(unaudited) 1996
-----------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income $108,213,482$ 18S,209,978
Net realized gain (loss) on investments(72,774) 267,432
------------------------------------
Net increase in net assets resulting
from operations 108,140,708 185,477,410
-
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS:
Contributions 10,393,686,66918,847,392,256
Withdrawals (10,499,057,313)(18,519,57S,165)
---------------------------------------------
Net increase (decrease) from
investors' transactions(105,370,644)327,817,091
---------------------------------------------
Total increase in net assets2,770,064513,294,501
NET ASSETS:
Beginning of period 3,848,249,917 3,334,955,416
End of period $3,851,019,981 $3,848,249,917
- ------------------------------------------------------------
- ---------------------------------------------
Supplementary Data
- ------------------------------------------------------------
- ---------------------------------------------
For the six For the period
months ended For the fiscal year ended July 12,
19931
November 30,
May 31 , 1997 to November 30,
(unaudited) 1996 1995 1994 1993
Ratios to Average
Net Assets:
Expenses 0.18%(a)0.19%0.19%0.20%0.19 %(a)
Net investment income5.34%5.29%5.77%3.90% 2.98%(a)
Decrease reflected in
expense ratio due to
expense reimbursement--0.00%(b)--0.00%(b) --
- -----------------
(a) Annualized.
(b) Less than 0.01%
*Commencement of operations.
The accompanying notes are an integral part of these
financial statements.
THE PRIME MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1997 (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Prime Money Market Portfolio (the "Portfolio") is
registered under the Investment Company Act of 1940, as
amended (the "Act"), as a no-load, diversified, open-end
management investment company which was organized as a trust
under the laws of the State of New York. The Portfolio's
investment objective is to maximize current income and
maintain a high level of liquidity. The Portfolio
cornmenced operations on July 12, 1993. The Declaration of
Trust permits the Trustees to issue an unlimited number of
beneficial interests in the Portfolio. Prior to May 12,
1997, the Portfolio's name was The Money Market Portfolio.
The preparation of financial statements in accordance with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts and disclosures. Actual amounts could differ from
those estimates. The following is a summary of the
significant accounting policies of the Portfolio:
a) Investments are valued at amor tized cost which
approximates market value. The amortized cost method of
valuation values a security at its cost at the time of
purchase and thereafter assumes a constant amortization to
maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of
the instruments.
The Portfolio's custodian or designated subcustodians, as
the case may be under tri-party repurchase agreements, take
possession of the collateral pledged for investments in
repurchase agreements on behalf of the Portfolio. It is the
policy of the Portfolio to value the underlying collateral
daily on a mark-to-market basis to determine that the value,
including accrued interest, is at least equal to the
repurchase price plus accrued interest. In the event of
default of the obligation to repurchase, the Portfolio has
the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. Under certain
circumstances, in the event of default or bankruptcy by the
other party to the agreement, realization and/or retention
of the collateral or proceeds may be subject to legal
proceedings.
b) Securities transactions are recorded on a trade date
basis. Investment income consists of interest income, which
includes the amortization of premiums and discounts, is
recorded on an accrual basis. For financial and tax
reporting purposes, realized gains and losses are determined
on the basis of specific lot identification.
c) The Portfolio intends to be treated as a partnership for
federal income tax purposes. As such, each investor in the
Portfolio will be subject to taxation on its share of the
Portfolio's ordinary income and capital gains. It is
intended that the Portfolio's assets will be managed in such
a way that an investor in the Portfolio will be able to
satisfy the requirements of Subchapter M of the Internal
Revenue Code. The cost of securities is the same for book
and tax purposes.
2. TRANSACTIONS WITH AFFILIATES
a) The Portfolio has an Investment Advisory Agreement with
Morgan Guaranty Trust Company of New York ("Morgan"). Under
the terms of the agreement, the Portfolio pays Morgan at an
annual rate of 0.20% of the Portfolio's average daily net
assets up to $1 billion and 0.10% on any excess over $1
billion. For the six months ended May 31, 1997, this fee
amounted to $2,523,337.
b) The Portfolio has retained Funds Distributor, Inc.
("FDI"), a registered broker-dealer, to serve as the co-
administrator and exclusive placement agent. Under a
CoAdministration Agreement between FDI and the Portfolio,
FDI provides administrative services necessary for the
operations of the Portfolio, furnishes office space and
facilities required for conducting the business of the
Portfolio and pays the compensation of the officers
affiliated with FDI. The Portfolio has agreed to pay FDI
fees equal to its allocable share of an annual complex-wide
charge of $425,000 plus FDI's out-of-pocket expenses. The
amount allocable to the Portfolio is based on the ratio of
the Portfolio's net assets to the aggregate net assets of
The JPM Pierpont Funds, The JPM Institutional Funds, the
Portfolio and other portfolios (the "Master Portfolios") in
which The JPM Pierpont Funds, and The JPM Institutional
Funds invest, JPM Series Trust and JPM Series Trust II. For
the six months ended May 31, 1997, the fee for these
services amounted to $50,720.
c) The Portfolio has an Administrative Services Agreement
(the "Services Agreement") with Morgan under which Morgan
is responsible for overseeing certain aspects of the
administration and operation of the Portfolio. Under the
Services Agreement, the Portfolio has agreed to pay Morgan
a fee equal to its allocable share of an annual complex-
wide charge. This charge is calculated daily based on the
aggregate net assets of the Master Portfolios and JPM
Series Trust in accordance with the following annual
schedule: 0.09% on the first $7 billion of their aggregate
average daily net assets and 0.04% of their aggregate
average daily net assets in excess of $7 billion less the
complex-wide fees payable to FDI. The portion of this
charge payable by the Portfolio is determined by the
proportionate share that its net assets bear to the net
assets of the Master Portfolios, investors in the Master
Portfolios for which Morgan provides similar services, The
JPM Pierpont Funds, The JPM Institutional Funds and JPM
Series Trust. For the six months ended May 31, 1997, the
fee for these services amounted to $636,014.
In addition, Morgan has agreed to reimburse the Portfolio to
the extent necessary to maintain the total operating
expenses of the Portfolio at no more than 0.20% of the
average daily net assets of the Portfolio through March 31,
1998. For the six months ended May 31, 1997, there was no
reimbursement necessary for expenses under this agreement.
d) The Portfolio has a Fund Services Agreement with
Pierpont Group, Inc. ("Group") to assist the Trustees in
exercising their overall supervisory responsibilities for
the Portfolio's affairs. The Trustees of the Portfolio
represent al1 the existing shareholders of Group. The
Portfolio's allocated portion of Group's costs in performing
its services amounted to $68,278 for the six months ended
May 31, 1997.
e) An aggregate annual fee of $75,000 is paid to each
Trustee for serving as a Trustee of The JPM Pierpont Funds,
The JPM Institutional Funds, the Master Portfolios and JPM
Series Trust. The Trustees' Fees and Expenses shown in the
financial statements represents the Portfolio's allocated
portion of the total fees and expenses. Prior to April 1,
1997, the aggregate annual Trustee Fee was $65,000. The
Portfolio's Chairman and Chief Executive Officer also serves
as Chairman of Group and receives compensation and employee
benefits from Group in his role as Group's Chairman. The
allocated portion of such compensation and benefits included
in the Fund Services Fee shown in the financial statements
was $13,800.
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 by an effective prospectus.
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
