BOND FUND
GLOBAL BOND FUND
____________________
ANNUAL REPORT
DECEMBER 31, 1996
__________________
Where Leading Money Managers Converge
MANAGERS BOND FUND
MANAGERS GLOBAL BOND FUND
Annual Report
December 31, 1996
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
December 31, 1996
Investment Manager's Comments 4
Discussion of Funds' investment results during the year
and
cumulative total return graphs versus relevant index
Schedules of Portfolio Investments 8
Detailed portfolio listings by security type and industry
sector, as
valued at December 31, 1996
Statements of Assets and Liabilities 13
Fund balance sheets, Net Asset Value (NAV) per share
computation
and cumulative undistributed amounts
Statements of Operations 14
Detail of sources of income, fund expenses, and realized
and unrealized
gains (losses) during the year
Statements of Changes in Net Assets 15
Detail of changes in fund assets and distributions to
shareholders for
the past two years
Financial Highlights 16
Historical net asset values, distributions, total
returns, expense ratios,
turnover ratios and net assets
Notes to Financial Statements 18
Accounting and distribution policies, details of
agreements and
transactions with fund management and description of
certain
investment risks
Report of Independent Accountants 25
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:
Although 1996 was a very prosperous year for equity
investments, it was less so for fixed-income securities.
Two factors influencing the exceptional performance of the
stock market over the past two years have been low
inflation, and low interest rates. While low inflation is
indeed good for the financial markets in general and fixed-
income securities in particular, the low level of interest
rates merely means that available bond yields, and thus
prospective bond returns, are meager. In addition, when
viewed in a total return context, even a slight rise in
rates from low levels can reduce the prices of fixed-income
securities and mitigate some or all of the return garnered
from the yield, especially for longer term securities.
This is exactly what happened in the first half of 1996. As
signs that the inflation rate might have been rising gave
the market reason to believe the Federal Reserve might
tighten, interest rates for most maturity horizons rose by
more than one full percentage point. The total returns of
intermediate and longterm securities were negative for the
first six months of the year. Shorter term securities,
however, remained in positive territory. The benefit of the
increased rates was that income could be reinvested in
higher yielding securities. During the second half of the
year, as it became clear that the inflation rate was not
rising, and that the Fed was not taking action, interest
rates moved lower, although not back to the earlier levels,
and prices rebounded.
Thus, for the full year, short-term securities outperformed
longer maturity securities, in general. With tightening
yield spreads during the second half of the year, corporate
bonds outperformed U.S. Government and Treasury issues for
the year. High yield bonds, which are effected by the
financial soundness of the underlying companies as well as
interest rates, performed extremely well in the first half
of the year, and thus substantially outperformed investment
grade securities for the year. In the investment grade
sectors, bonds of financial institutions performed slightly
better than other corporate bonds. The market for asset
backed securities flourished as these relatively short
maturity bonds performed well, and a record $154 billion in
new securities was issued with an ever broadening variety of
underlying assets. Although the durations on mortgage
securities extended with the backup in interest rates in the
first half of the year, the spreads over Treasuries
continued to tighten and giving mortgages higher total
returns for the year.
While foreign bonds, as represented by the Salomon Brothers
World Government Bond Index, underperformed domestic bonds
for the full year, there were some areas of strength. Of
note were Italy, Australia and U.K. government issues which
were up 27.5%, 19.4% and 18.4%, respectively, in U.S. Dollar
terms. Emerging markets also had a strong year, as measured
by the Salomon Brothers Brady Bond Index which was up 34.6%
during 1996.
Within this context, we are pleased with the performance of
Managers Bond Fund and Managers Global Bond Fund. As
discussed in detail in the following pages, both Dan Fuss
and Olaf Rogge achieved returns for the year which surpassed
those of the benchmark indexes for their respective Funds.
In addition to discussions of 1996 Fund performance, this
report provides you with a listing of each Fund's investment
portfolio as of December 31, 1996, audited financial
statements and the financial highlights. Please feel free
to contact us or your financial advisor should you have any
questions on this report or any of our Funds.
Thank you for your continued interest in The Managers Funds.
Sincerely,
/s/Robert P. Watson
Robert P. Watson
President
THE MANAGERS FUNDS PERFORMANCE (UNAUDITED)
All periods ending December 31, 1996
Average Annualized Total Returns*
---------------------------------------
Since Inception Morningstar
1Year 3Years 5Years 10Years Inception Date Rating**
Equity Funds:
Income Equity Fund 17.08%16.67% 14.45% 12.46% 14.57% Oct. '84 ****
Capital Appreciation
Fund 13.73%14.32% 14.04% 14.66% 15.48% Jun. '84 ****
Special Equity Fund 24.75%17.87% 17.42% 17.60% 16.47% Jun. '84 *****
International Equity
Fund 12.77%10.17% 14.02% 10.62% 14.30% Dec. '85 ****
Income Funds:
Short Government
Fund 3.89% 2.27% 2.90% -- 5.21% Oct. '87 **
Short & Intermediate
Bond Fund 4.15% 3.32% 5.94% 6.97% 8.56% Jun. '84 ***
Intermediate Mortgage
Fund 3.33%-3.15% 2.27% 6.36% 7.13% May. '86 *
Bond Fund 4.97% 8.42% 8.94% 9.36% 11.37% Jun. '84 ****
Global Bond Fund 4.39% - - - 7.48% Mar. '94 NA
Money Market Fund 5.47% 4.70% 3.93% 5.48% 5.91% Jun. '84 NA
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 Income Funds, or for a
prospectus for the Equity Funds or the Money Market Fund,
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 December 31, 1996 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 1,826, 1,058 and 598 equity funds, the International
Equity Fund was rated against 383, 185 and 60 international
equity funds, and each of the Income Funds was rated against
1,104, 597 and 242 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
Investment Manager's Comments
MANAGERS BOND FUND, managed by The Managers Funds, L-P
since its inception in 1984, seeks current income by
investing in a portfolio of fixed-income securities. The
Managers Funds currently utilizes a single independent sub-
advisor, Dan Fuss of Loomis Sayles & Company, to manage the
portfolio. Dan has managed a portion of the Fund since its
inception, and the entire Fund since April 1993.
THE PORTFOLIO MANAGER
Dan Fuss is a contrarian bond investor who focuses on
individual issues which will provide the highest return over
long periods of time. Dan and his team of credit analysts
at Loomis Sayles research debt offerings in the same way
equity analysts research stocks, looking for undervalued
bonds where they see either a yield premium, the potential
for price appreciation, or both. They analyze the company's
financial condition in detail, as well as the terms of
specific bond offerings. Price appreciation can come from a
variety of catalysts induding improving company
fundamentals; which would lead to credit upgrades, changing
market supply and demand forces, improving sector or
economic trends.
Given the typical shape of the yield curve, longer term
bonds generally yield more than shorter term bonds, and Dan
is willing to take the added interest rate risk in order to
gain higher yields. In addition, price improvements as a
result of credit upgrades are more meaningful for longer
term bonds, thus Dan's portfolios tend to be relatively long
in duration. In order to mitigate some of the interest rate
risk, Dan structures his portfolio with counter cyclical
elements. In doing so, Dan will utilize convertible bonds,
municipal bonds, preferred stocks and foreign corporate and
government bonds, in addition to the domestic corporate
bonds which make up the majority of the portfolio. In
addition, Dan seeks bonds with call protection, either
through the terms of the bond structure or through deep
price discounts relative to the call price.
THE YEAR IN REVIEW
During the final six months of 1996, Managers Bond Fund
provided a total return of 9.0%, which brought the return or
the fuil year to 5.0%. For the same periods, the Lehman
Brothers Government/Corporate Bond Index, returned 4.9% and
2.9%, respectively.
Throughout 1996, the portfolio's duration was long, roughly
twice that of the index. Given this configuration, the Fund
underperformed in the first half of the year, when interest
rates rose and shorter maturity bonds outperformed longer
term issues. Adjusted for duration, however, the portfolio
performed well, particularly as a result of a heavy
weighting in lower credit investment grade industrial bonds,
which performed well under a scenario of continuing economic
expansion and strong corporate profits.
During the second half of 1996, in an environment of very
tight domestic yield spreads, the Fund performed very well,
benefiting from its foreign holdings. Canadian and Polish
government bonds in particular, added value during the year.
At year end, foreign government obligations made up 19% of
the portfolio. At December 31, 1996, the Fund's 30-day SEC
yield was 6.39% and its yield to maturity was 7.67%.
Managers Bond Fund
Cumulative Total Return Performance
The Managers Bond Fund's cumulative total return is based on
the monthly change in net asset value (NAV), and assumes
that all distributions were reinvested.
The Lehman Brothers Government/Corporate Bond Index is
comprised of 5,400 government securities and investment
grade corporate securities. The Index assumes reinvestment
of all dividends.
This chart compares a hypothetical $10,000 investment made
in Managers Bond Fund on December 31, 1986, to a $10,000
investment made in the Lehman Brothers Government/Corporate
Bond Index for the same time period. Past performance is
not indicative of future.
This table shows the average annual total returns for
Managers Bond Fund for the oneyear, five-year and ten-year
periods through December 31, 1996, and comparable returns
for the Lehman Brothers Government/Corporate Bond Index.
Average Annual Total Returns
Annualized
----------------------------------
One Five Ten
Year Years Years
------ ------- -------
Managers Bond Fund 5.0% 8.9 9.4%
Lehman Brothers Government/Corporate Bond
Index 2.9 7.2 8.4
Managers Global Bond Fund
Investment Manager's Comments
Managers Global Bond Fund, managed by The Managers Funds,
L.P since its inception in 1994, seeks both income and
capital appreciation by investing in domestic and foreign
fixed income securities. The Managers Funds has utilized a
single independent sub-advisor, Olaf Rogge of Rogge Global
Partners, to manage the portfolio since the Fund's
inception.
The Portfolio Manager
Olaf's investment strategy begins with an assessment of each
country's economic outlook and currency strength. His
investment philosophy is that healthy countries, with sound
finances, produce the highest bond and currency returns.
His portfolios consist primarily of highly liquid government
issues of developed market countries, with no more than 10%
in AAA rated corporate bonds.
The Year in Review
During the final six months of 1996, Managers Global Bond
Fund provided a total return of 6.1%, which brought the
return for the full year to 4.4%. For the same periods, the
Salomon Brothers World Government Index, returned 5.2% and
3.67o, respectively.
While the global bond markets, as measured by the Salomon
Brothers World Government Bond Index, provided a total
return for the year slightly above comparable maturity
domestic bond market averages, there were some areas of
individual strength abroad. Italian, Australian and U.K.
government bonds were up 27.5%, 19.4% and 18.4%,
respectively, during 1996. The two largest components of
the Index however, the United States and Japan (which
represent over 50% of the Index), had disappointing returns
of + 1.7% and - 6.0%, respectively.
Areas of strength in the Fund included timely positions in
Italian, Canadian, Swedish and Spanish bonds, which all
performed well during the year. The benefit of Olaf's
decision to avoid Japanese bonds was offset somewhat by the
Fund's long positions in Yen forward contracts, which were a
drag on performance. An overweighting in British Gilts in
the fourth quarter also helped the Fund's performance due to
the strengthening of the British Pound.
While Rogge steadily reduced the Fund's investment in German
bonds throughout the year, the Fund remained overweighted in
Germany, which had a flat return during 1996. Consistent
with Rogge's investment philosophy which concentrates on
highly liquid, developed markets, the Fund had no exposure
to emerging markets, many of which outperformed developed
bond markets during the year.
At year end, the Fund was concentrated in U.S., German and
U.K. bonds, with comparable currency exposures in those
countries. The Fund's duration was 5.2 years, its average
maturity was 7.6 years, its 30-day SEC yield was 4.66% and
its yield to maturity was 5.00%.
Looking Forward
Olaf is currently keeping a close eye on the U.S. budget
plans in determining the attractiveness of U.S. Treasuries.
In a longer view, Olaf sees the possibility that an extended
period of continued low inflation across world markets will
allow the market to reduce the inflation risk premium and
reward bonds of healthy growing economies.
Managers Global Bond Fund
Cumulative Total Return Performance
The Managers Global Bond Fund's cumulative total return is
based on the monthly change in net asset value (NAV), and
assumes that all distributions were reinvested.
The Salomon Brothers World Government Bond Index is priced
in U.S. dollars, and includes 14 international government
bond markets. The index assumes reinvestment of all
dividends. $15,000
This chart compares a hypothetical $10,000 investment made
in Managers Global Bond Fund at its inception on March 25,
1994, to a $10,000 investment made in the Salomon Brothers
World Government Bond Index for the same time period. Past
performance is not indicative of future results.
This table shows the average annual total returns for
Managers Global Bond Fund for the one-year and since
inception periods through December 31, 1996, and comparable
returns for the Salomon Brothers World Government Bond
Index.
Average Annual Total Returns
Annualized
----------------------------------------
One Since the Fund's Inception
Year March 25, 1994
------ -------------------------
- -------
Managers Global
Bond Fund 4.4% 7.5%
Salomon Brothers World
Government Bond Index 3.6 8.8*
*Since March 31, 1994
MANAGERS BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1996
Principal
Amount Value
Corporate Debt
Securities - 54.8%
Convertible Obligations - 15.4%
Banpu Public
Company Ltd.,
Euro-dollar,
Bonds, 2.750%,
04/10/03 $ 250,000$ 250,000
Burns Philp & Co.,
Euro-dollar,
5.500%, 04/30/041,100,000 973,500
Federal Realty
Investment Trust,
Euro-dollar, Sub.
Notes, 5.250%,
10/28/03 1,280,0001,171,200
Loxley Public Co.,
Euro-dollar,
Bonds, 2.500%,
04/04/01 250,000247,50n
Meditrust, Deb.,
7.500%, 03/01/01500,000+ 549,375
Ogden Corp., Euro-
dollar, Sub. Notes,
5.750%, 10/20/02950,000 922,687
Ogden Corp., Euro-
dollar, Sub. Notes,
6.000%, 06/01/02250,000 238,750
Samsung Corp.,
Euro-dollar,
Bonds, 0.250%,
06/26/06 250,000249,063
Worldway Corp.,
Sub. Deb.,
6.250%, 04/15/11500,000 300,000
-----------
Total Convertible Obligations 4,902,075
-----------
Industrials - 31.6%
Borden, Inc., Deb.,
7.875%, 02/15/23650,000 577,219
Champion
International
Corp., Deb.,
7.350%, 11/01/25550,000 528,217
Georgia Pacific
Corp., Deb.,
7.375%, 12,/01/251,000,000 943,410
Kmart Corp., Series
K-2, Pass-through
Certificate,
9.780%, 01/05/20$ 275,000 $ 243,375
Pioneer-Standard
Electronics Inc.,
Senior Notes,
8.500%, 08/01/06250,000 253,125
RJR Nabisco Inc.,
Notes, 7.625%,
09/15/03 700,000+671,076,
RJR Nabisco Inc.,
Notes, 9.250%,
08/15/13 700,000715,232
TCI Communications,
Inc., Deb., 7.875%,
02./15/261,600,0001,431,136
Time Warner
Entertainment
L.P., Sr. Deb.,
8.375%, 03/15/23900,000 912,483
Time Warner Inc.,
Deb., 8.050%,
01/15/16 500,000498,385
USX Marathon
Group, Deb.,
8.125%, 07/15/231,200,000 1,244
Westinghouse
Electric Corp.,
Deb, 7.875%,
09/01/23 1,350,0001,235,837
Woolworth Corp.,
Deb., 8.500%,
01/15/22 750,000790,838
--------------
Total Industrials 10,044,681
--------------
Real Estate - 2.4%
Camden Property
Trust, Notes,
7.000%, 11/15/06250,000 242,547
Security Capital
Industrial Trust,
Notes, 8.650%,
05/15/16 500,000520,720
-----------
Total Real Estate 763,267
-----------
Utilities - 5.4%
Boston Edison Co.,
Deb., 7.800%,
03/15/23 400,000379,819
Managers Bond Fund
Schedule of Portfolio Investments (continued)
December 31, 1996
Principal Principal
Amount Value Amount Value
Utilities (continued) Foreign
Government/Agency
GGIB Funding Obligations (continued)
Corp., System Republic of
South
Energy Resources, Africa,
8.375%,
7.430%, 01/15/11 $ 1,392,906$ 1,349,740
10/17/06 USD 500,000 $ 503,125
Total Utilities1,729,559 Total Foreign Government/Agency
Total Corporate Debt Securities
Obligations
(cost $17,174,685)17,439,582 (cost $5,570,816)
6,045,956
Foreign Corporate Obligations - 4.0% U.S Government and
Agency
MacMillan Bloedel Obligations - 12.5%
Ltd., Deb,, Collateralized Mortgage
Obligations - 2.5%
7.700%, 02/15/26 College & University
(cost $1,276,444) USD 1,350,000 1,276,412
Facilities Loan
Trust, Series 2
Foreign Government/Agency, Class D, 4.000%,
Obligations - 19.0% 06/01/18$ 1,000,000791,251
British Columbia
Province, Generic Federal National Mortgage
Association
Residual Strips, (FNMA) - 6.0%
Canada, Deb., FNMA REMIC Series
0.000% * *, 08/23/24 CAD 15,000,000 1,409,844 93-212,
Class Z,
6.000%, 11/25/08 293,166
253,679
Government of
Canada, Deb., FNMA REMIC Series
8.000%, 06/01/23CAD500,000 406,59494-30, Class JA,
Government of 5.000%, 08/15/232,000,000
1,666,860
Poland, Bearer Total FNMAs
1,920,539
Past Due Interest U.S. Treasury Bonds - 4.0%
Brady Bonds, 0.000% **, 08/15/236,200,000
1,032,176
Stepup, 4.000%, 6.250%, 08/15/23250,000
234,609
10/27/14 USD1,375,0001,161,875
Government of Total U.S. Treasury Bonds
1,266,785
Poland, Total U.S. Government and
Agency
Registered Past Obligations
Due Interest (cost $4,156,232)
3,978,575
Brady Bonds,
Stepup, 4.000%, Shares
10/27/14 USD250,000211,250
Manitoba Province, Preferred Stocks -
6.9%
Canada,Bonds, Aluminum Co. of
7.750%, 12/22/25CAD350,000 271,100 America, 3.750%
8,125 499,687
Ontario Hydro, Appalachian Power
Series FV6, Co., 4.500%
540 33,885
8.900%, 08/18/22CAD1,000,000 860,293BankAmerica
Corp.,
Republic of Series B,
Colombia, 7.250%, Adjustable Rate
02/23/04 USD1,250,0001,221,875 6.000%* 1,200
112,500
Managers Bond Fund
Schedule of Portfolio Investments (continued)
December 31, 1996
Shares Value
Preferred Stocks (continued) Note: Based on the
cost of investments of
Citicorp, Series 2, $30,541,080 for federal
income tax purposes
Adjustable Rate at December 31, 1996, the
aggregate gross
6.000% * 11,250$ 1,056,094 unrealized appreciation and
depreciation of
Connecticut Light & investments was
$1,322,183 and $656,444,
Power Co., Series respectively, resulting in
net unrealized
47, $2.00 6,655148,074 appreciation of investments
of $665,739.
Entergy Louisiana
Inc., 4.440% 22613,277 *Stated rate is the last
quarterly dividend rate
Entergy New annualized.
Orleans Inc.,
4.750% 48229,884 **Zero coupon security.
Niagara Mohawk + Some or all of these bonds,
amounting to,
Power Corp., $1,139,127, or 3.6% of net
assets, were out on
Series B, loan to various brokers as of
December 31,
Adjustable Rate 1996.
7.500% * 4,20081,900
Texas Utilities Abbreviations have been used
throughout this
Electric Co., $4.24 725 41,234 portfolio to indicate
amounts shown in currencies
Union Electric Co., other than the U.S. Dollar
(USD):
3.500% 100 4,800
West Pennsylvania CAD: Canadian Dollar
Power Co.,
4.500% 20012,200 Other Information (unaudited):
Wisconsin Electric The composition of long-term debt
holdings as a
Power Co., percentage of the total value of
investments in
3.600% 2,748142,759 securities is as follows:
Total Preferred Stocks S&P's/Moody's
Ratings
(cost $2,072,903) 2,176,294
Principal Gov't/@ 14%
Amount AA 3
A 6
Repurchase Agreement- 0.9% BBB 61
State Street Bank & Trust BB 9
Co., dated 1ZI31/96, due Not Rated 7
Ol/OZt97, 6.000%, total to 100%
be received $290,097
(secured by $305,000
FHLMC 5.000%, due
04/15/11), at cost$290,000 290,000
Total Investments - 98.1%
(cost $30,541,080) 31,206,819
Other Assets, less Liabilities- 1.9% 611,742
Net Assets - 100.0% $31,818,561
The accompanying notes are an integral part of these
finanical statements.
Managers Global Bond Fund
Schedule of Portfolio Investments
December 31, 1996
Principal
Amount Value
Corporate Debt
Securities - 1.1%
American Express Credit
Account Master Trust,
Series 96-1, Class A,
6.800%, 12/15/03 (cost
$181,519) $180,000 $182,587
Foreign Government/Agency
Obligations - 56.4%
Australia - 7.3%
Australian
Government,
Series 1007,
10.000%, 10/15/07 AUD 840,000 790,893
Australian
Government,
Series 808,
Bonds, 8.750%,
08/15/08 AUD507,000441,071
Total Australia 1,231,964
Canada - 5.3%
Canadian
Government,
7.250%, 06/01/07CAD689,000 532,134
Canadian
Government,
Real Return,
Series L256,
Deb., 4.250%,
12/01/21 CAD470,000353,023
Total Canada 885,157
Denmark - 2.0%
Kingdom of
Denmark,
Bonds, 7.000%,
11/10/24 DKK2,106,000338,916
Germany - 20.8%
Bundes, 5.875%,
05/15/00 DEM1,888,0001,289,994
Bundes, Series 94,
Bonds, 6.250%,
01/04/24 DEM780,000481,088
Bundes, Series 96,
Bonds, 6.250%
04/26/06 DEM570,000382,864
Principal
AmountValue
Germany (continued)
German Unity
Fund, 8.000%,
01/21/02 DEM830,000$ 614,086
Treuhandanstalt,
7.125%, 01/29/03DEM396,000 282,486
Treuhandanstalt,
7.750%, 10/01/02DEM630,000 462,347
Total Germany 3,512,865
Italy - 5.2%
Republic of Italy,
10.500%, 04/01/05ITL210,000,000 165,218
Republic of Italy,
10.500%, 09/01/05ITL455,000,000 358,421
Republic of Italy,
9.500%, 02/01/99ITL500,000,000 349,275
Total Italy 872,914
Netherlands - 4.7%
Dutch Government,
8.500%, 03/15/01NLG1,190,000 792,299
Sweden - 3.5%
Kingdom of
Sweden,
Inflation Linked,
Series 3001,
Bonds, 0.000%*
04/01/14 SEK2,500,000 196,191
Kingdom of
Sweden, Series
1037, 8.000%,
08/15/07 SEK2,500,000 400,273
Total Sweden 596,464
United Kingdom- 7.6%
United Kingdom
Treasury, 7.500%,
12/07/06 GBP635,0001,088,567
United Kingdom
Treasury, 8.500%,
12/07/05 GBP104,000189,811
Total United Kingdom 1,278,378
Total Foreign Government/Agency
Obligations
(cost $9,329,339) 9,508,957
The accompanying notes are an integral part of these
finanical statements.
Managers Global Bond Fund
Schedule of Portfolio Investments (continued)
December 31, 1996
Principal
AmountValue
U.S. Treasury Note: Based on the cost of
investments oi
Obligations - 23.2% $16,215,733 for federal
income tax purpose-
U.S. Treasury Bonds - 1.2% at December 31,
1996, the aggregate gross
6.500%, 11/15/26$200,000 $196,282 unrealized
appreciation and depreciation
U.S. Treasury Notes - 22.0% of investments
was $395,058 and $133,919,
6.375%, 08/15/021,710,000 1,721,218 respectively,
resulting in net unrealized
6.500%, 05/31/01210,000212,297 appreciation of
investments of $261,139.
7.000%, 07/15/061,023,000 1,062,805
7.500%, 11/15/01680,000715,809 *Zero coupon security.
Total U.S. Treasury Notes 3,712,129 Abbreviations have
been used throughout this
portfolio to indicate amounts
shown in currencies,
Total U.S. Treasury Obligations other than the U.S.
Dollar (USD):
(cost $3,839,905)3,908,411 AUD: Australian Dollar
Time Deposits - 8.6% CAD: Canadian Dollar
State Street Bank & DEM: Deutsche Mark
Trust Co., DKK: Danish Krone
London, 2.875%, GBP: British Pound
01/03/97 CAD720,733526,351 ITL: Italian Lira
State Street Bank & NLG: Netherlands Guilder
Trust Co., SEK: Swedish Krona
London, 5.688%,
01/03/97 GBP537,335920,566
Total Time Deposits
(cost $1,434,970) 1,446,917
Repurchase Agreement - 8.5L7o
State Street Bank & Trust
Co., dated 12/31/96, due
Ol/O2/97, 6.000%, total to
be received $1,430,477
(secured by $1,490,000
FNMA 6.750%, due
04/25/19), at cost$1,430,000 1,430,000
Total Investments - 97.8%
(cost $16,215,733) 16,476,872
Other Assets, less Liabilities - 2.2% 375,501
Net Assets - 100.0% $16,852,373
The accompanying notes are an integral part of these
finanical statements.
The Managers Funds
Statements of Assets and Liabilities
December 31, 1996
Managers
ManagersGlobal
Bond Bond
Fund Fund
Assets:
Investments at value* $30,916,819$15,046,872
Repurchase agreements at cost and value290,0001,430,000
Cash 831 4,526
Foreign currency (cost $109,405) -110,457
Collateral from brokers on securities loaned1,167,800 -
Receivable for Fund shares sold 83,81742,647
Receivable for investments sold 244,729 -
Unrealized gain on foreign currency contracts - 86,345
Dividends, interest and other receivables572,890 392,315
Deferred organization expense - 5,606
Prepaid expenses 19,60619,224
Total assets 33,296,49217,137,992
Liabilities:
Payable for Fund shares repurchased 2,880 1,180
Payable upon return of securities loaned1,167,800 -
Payable for investments purchased 2,40,596 -
Unrealized loss on foreign currency contracts - 218,467
Payable for closed forward foreign currency contracts, net
- - 10,271
Accrued expenses:
Investment advisory and management fees17,0849,986
Administrative fees 6,834 2,853
Other 42,73742,862
Total liabilities 1,477,931285,619
Net Assets $31,818,561$16,852,373
Shares outstanding 1,393,625787,496
Net asset value, offering and redemption price per share
$22.83 $21.40
Net Assets Represent:
Paid-in capital $31,668,792$16,380,816
Undistributed net investment income 26,493148,615
Accumulated net realized gain (loss) from investments and
foreign
currency transactions (542,249)196,283
Net unrealized appreciation of investments and foreign
currency
contracts and translations 665,525126,659
Net Assets $31,818,561$16,852,373
Investments at cost $30,251,080$14,785,733
The accompanying notes are an integral part of these
financial statements.
13
The Managers Funds
Statements of Operations
For the year ended December 31, 1996
Managers
ManagersGlobal
Bond Bond
Fund Fund
Investment Income:
Interest income $2,007,221$1,199,644
Dividend income 152,690
Stock loan fees 530 -
Total investment income 2,160,4411,199,644
Expenses:
Investment advisory and management fees180,197126,043
Administrative fees 72,07936,606
Custodian fees 38,31638,958
Audit fees 24,58531,355
Transfer agent fees 34,21227,939
Registration fees 16,09712,158
Legal fees 2,388 1,496
Trustee fees 2,629 1,820
Amortization of organization expense - 2,522
Miscellaneous expenses 21,96514,134
Total expenses 392,468293,031
Less: Waiver of administrative fees -(4,933)
Net expenses 392,468288,098
Net investment income 1,767,973911,546
Net Realized and Unrealized Gain (Loss):
Net realized gain on investment transactions487,995
913,397
Net realized loss on foreign currency contracts and
translations (1,128)(263,822)
Net realized gain on options - 3,377
Net unrealized depreciation of investments(732,769)
(721,717)
Net unrealized appreciation (depreciation) from foreign
currency
contracts and translations 331(98,836)
Net realized and unrealized loss(245,571)(167,601)
Net Increase in Net Assets Resulting from Operations
$1,522,402 $ 743,945
The accompanying notes are an integral part of these
financial statements.
14
The Managers Funds
Statements of Changes in Net Assets
Managers Bond Fund Managers Global Bond
Fund
For the For the For the
For the
year ended year ended year ended
year ended
December 31, 1996 December 31, 1995 December
31, 1996 December 31, 1995
Increase (Decrease) in Net Assets From
Operations:
Net investment income$ 1,767,973$ 1,778,861$911,546
$626,739
Net realized gain (loss) on
investments, options and foreign
currency transactions486,867(177,163)652,952211,365
Net unrealized appreciation
(depreciation) of investments and
foreign currency translations(732,438)5,729,478 (820,553)
1,061,579
Net increase in net assets
resulting from operations1,522,4027,331,176743,945
1,899,683
Distributions to Shareholders:
From net investment income(1,776,139)(1,791,715) (678,250)
(603,096)
In excess of net investment income
(25,339)
From net realized gain on
investments (308,091)
Total distributions to
shareholders(1,776,139)(1,791,715)(986,341)(628,435)
From Capital Share Transactions:
Proceeds from sale of shares17,350,97613,247,361 9,371,671
12,839,824
Net asset value of shares issued in
connection with reinvestment of
dividends and distributions1,450,259953,475938,767
434,993
Cost of shares repurchased(13,105,056)(24,lZ4,674)
(12,038,199) (5,243,182)
Net increase (decrease) from
capital share transactions5,696,179(9,923,838)
(1,727,761) 8,031,635
Total increase (decrease) in net
assets 5,442,442(4,384,377)(1,970,157) 9,302,883
Net Assets:
Beginning of year26,376,11930,760,49618,822,530 9,519,647
End of year $31,818,561$26,376,119$16,852,373 $
18,822,530
End of year undistributed
(overdistributed) net investment
income $26,493$31,581$148,615$ (132,153)
Share Transactions:
Sale of shares 779,223622,053 433,754597,647
Shares issued in connection with
reinvestment of dividends and
distributions 65,848 44,651 43,898 20,203
Shares repurchased(591,669)(1,152,262)(556,056) (250,241)
Net increase (decrease) in shares253,402(485,558)
(78,404) 367,609
The accompanying notes are an integral part of these
financial statements.
15
Managers Bond Fund
Financial Highlights
For a share of capital stock outstanding throughout each
year
Year ended December 31,
1996 1995 1994 19931992*
Net Asset Value, Beginning of Year$23.13$18.92$22.18
$21.88 $22.60
Income from Investment Operations:
Net investment income 1.35 1.44 1.59 1.49 1.48
Net realized and unrealized gain (loss) on
investments (0.29) 4.23(3.16)0.98 0.23
Total from investment operations1.06 5.67(1.57) 2.47 1.71
Less Distributions to Shareholders:
From net investment income(1.36)(1.46)(1.55)(1.50)
(1.48)
From net realized gain on investments (0.14)
(0.67) (0.95)
Total distributions to shareholders(1.36)(1.46) (1.69)
(2.17) (2.43)
Net Asset Value, End of Year$22.83$23.13$18.92$22.18
$21.88
Total Return 4.97%30.91%(7.25)%11.56%7.88%
Ratio of expenses to average net assets1.36%1.34% 1.20%
1.15% 0.93%
Ratio of net investment income to average
net assets 6.13% 6.84%7.28%6.65%6.61%
Portfolio turnover 72% 46% 84% 373% 292%
Net assets at end of year (000's omitted)$31,819 $26,376
$30,760 $44,038$39,117
*Audited by prior auditors.
16
Managers Global Bond Fund
Financial Highlights
For a share of capital stock outstanding throughout each
period
For the period
Year ended March 25, 1994
December 31, (commencement
of operations) to
1996 1995 December 31, 1994
Net Asset Value, Beginning of Period $21.74 $19.10
$20.00
Income from Investment Operations:
Net investment income 1.21 0.95 0.48
Net realized and unrealized gain (loss)
on investments (0.27) 2.66 (0.77)
Total from investment operations0.94 3.61 (0.29)
Less Distributions to Shareholders:
From net investment income(0.87)(0.93) (0.50)
In excess of net investment income (0.04) (0.11)
From net realized gain on investments (0.41) -
Total distributions to shareholders (1.28) (0.97)
(0.61)
Net Asset Value, End of Period$21.40 $21.74 $19.10
Total Return+ 4.39% 19.08% (1.52)%(c)
Ratio of net expenses to average net assets1.57% 1.55%
1.73%(b)
Ratio of net investment income to average
net assets 4.98% 5.07% 4.19%(b)
Portfolio turnover 202% 214% 266%(c)
Net assets at end of period (000's omitted)$16,852
$18,823 $9,520
Expense Waiver(a)
Ratio of total expenses to average net assets1.60% 1.69%
2.03%(b)
Ratio of net investment income to average
net assets 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. (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.
The Managers Funds
Notes to Financial Statements
December 31, 1996
(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-thecounter 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 mortgagebacked, 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 transactions. 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 December 31, 1996, the Bond Fund 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 AmountExpires
Bond Fund........$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 December 31, 1996, one unaffiliated shareholder, which is
an omnibus account, individually held greater than 10% 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
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 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 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 fiscal year ending December 31, 1996, Bond 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
Global Bond.
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
inperson 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 fiscal year ended December 31, 1996, were as
follows:
Long-term U.S. Government
Securities Securities Only
Fund Purchases SalesPurchasesSales
Bond $24,962,745$19,725,837$ 7,323,391 $
7,775,941
Global Bond 31,913,57234,609,1585,505,3583,997,131
(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 fiscal year ended December 31, 1996, 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 Fund's
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-tomarket 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 foreign currency exchange contracts for Global Bond at
December 31, 1996 were as follows:
All contracts expire January 10, 1997 Contract
Current Unrealized
Amount Value Gain/Loss
(in local currency) (in US
dollars) (in US dollars)
Buy Contracts
Canadian Dollar 767,536 $ 560,911 $ (17,053)
Deutsche Mark2,311,663 1,503,264 (41,201)
Deutsche Mark1,306,343 849,510 560
Japanese Yen373,547,148 3,230,236 (154,177)
Total Buy Contracts
(Payable amount $6,355,792) $6,143,921
$(211,871)
Sell Contracts
Australian Dollar638,128 $ 507,143 $8,385
Canadian Dollar 690,091 504,314 12,616
Deutsche Mark 774,772 2,311,857 47,037
Deutsche Mark 592,810 385,502 (5,502)
Danish Krone 1,003,313 170,411 4,230
Italian Lira1,417,657,766 933,990 (534)
Netherlands Guilder 769,139 445,794 13,517
Total Sell Contracts
(Receivable Amount $5,338,760) $5,259,011
$79,749
(6) Risks Associated with Collateral Mortgage Obligations
("CMOs")
The net asset value of 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 mortgagerelated securities.
Payments of principal and interest on the mortgages 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 year ended December 31, 1996, Global
Bond entered into the following options transactions as
currency hedges:
Principal
Amount of
ContiractsPremiums
Outstandin&
beginning of
year $ - -
Options written553,302 $ 3,377
Options expired(553,302) (3,377)
Options exercised -
Outstanding, end
of year $$ -
(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. After plaintiff amended the
complaint, a second motion to dismiss was filed in the suit
relating to Managers Short Government Fund. In that action,
the parties have now entered into a preliminary agreement to
settle all claims by the purported class. However, the
parties have not finalized their settlement nor have they
obtained the required court approvals. 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.
Report of Independent Accountants
To the Trustees of The Managers
Funds and the Shareholders of
Managers Bond Fund and
Managers Global Bond Fund:
We have.audited the accompanying statements of assets and
liabilities of Managers Bond Fund and Managers Global Bond
Fund, including the schedules of portfolio investments, as
of December 31, 1996 and the related statements of
operations for the year then ended, and the statements of
changes in net assets for each of the two years in the
period then ended and the financial highlights for each of
the four years
in the period then ended for Managers Bond Fund, and each of
the two years in the period ended December 31, 1996 an the
period March 25, 1994 (commencement of operations) to
December 31, 1994 for Managers Global Bond Fund. These
financial statements and financial highlights are the
responsibility o the Funds' management. Our responsibility
is to express an opinion on these financial statements and
financial highlights based on our audits. The financial
highlights for the year ended December 31, 1992, for
Managers Bond Fund presented herein, were audited by other
auditors whose report dated February 26, 1993,-expressed an
unqualified opinion on such financial highlights.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial
highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of
December 31, 1996, by correspondence with the custodian and
brokers. An audit also includes assessin the accounting
principles used and significant estimates made management,
as well as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of Managers Bond Fund and
Managers Global Bond Fund as of December 31, 1996, the
results of their operations for the year then ended;the
changes in their net assets for each of the two years in the
period then ended and the financial highlights for each of
the four ears in the period then ended for Managers Bond
Fund and the financial highlights for each of the two years
in the period ended December 31, 1996 and the period March
25, 1994 (commencement of operations) to December 31, 1994
for Managers Global Bond Fund, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P
Boston, Massachusetts
February 14, 1997
Where Leading Money Managers Converge
Fund Distributor
The Managers Funds, L.P.
40 Richards Avenue
Norwalk, Connecticut 06854-2325
(203) 857-5321 or (800) 835-3879
Custodian
State Street Bank and Trust
Company
1776 Heritage Drive A2N
North Quincy, Massachusetts
02171
Legal Counsel
Shereff, Friedman, Hoffman &
Goodman, LLP
919 Third Avenue
New York, New York 10022
Transfer Agent
Boston Financial Data Services, Inc.
attn: The Managers Funds
PO. Box 8517
Boston, Massachusetts 02266-8517
(800) 252-0682
The Managers Funds
Equity Funds:
INCOME EQUITY FUND
Scudder, Stevens & Clark, Inc.
Spare, Kaplan, Bischel & Associates
CAPITAL APPRECIATION FUND
Dietche & Field Advisers, Inc.
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.
Fixed Income Funds:
MONEY MARKET FUND
Morgan Guaranty Trust Company
of New York
SHORT GOVERNMENT FUND
Jennison Associates Capital Corp.
SHORT AND INTERMEDIATE
BONDFUND
Standish, Ayer & Wood, Inc.
INTERMEDIATE MORTGAGE
FUND
Jennison Associates Capital Corp.
BONDFUND
Loomis, Sayles & Company, Inc.
GLOBAL BOND FUND
Rogge Global Partners
