<PAGE>
MANAGERS SHORT AND INTERMEDIATE BOND FUND
MANAGERS BOND FUND
MANAGERS GLOBAL BOND FUND
- ---------------------------------------------------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 1998
- ---------------------------------------------------------------------------
WHERE LEADING MONEY MANAGERS CONVERGE
<PAGE>
MANAGERS SHORT AND INTERMEDIATE BOND FUND
MANAGERS BOND FUND
MANAGERS GLOBAL BOND FUND
SEMI-ANNUAL REPORT
JUNE 30, 1998
(unaudited)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
BEGINS
ON PAGE
-------
<S> <C>
President's Message....................................... 2
The Managers Funds Performance............................ 4
Complete performance table for all of The Managers
Funds as of June 30, 1998
Schedules of Portfolio Investments........................ 5
Detailed portfolio listings by security type and
industry sector, as valued at June 30, 1998
Statements of Assets and Liabilities...................... 16
Fund balance sheets, Net Asset Value (NAV) per share
computation and cumulative undistributed amounts
Statements of Operations.................................. 17
Detail of sources of income, fund expenses, and
realized and unrealized gains (losses) during
the period
Statements of Changes in Net Assets....................... 18
Detail of changes in fund assets and distributions to
shareholders for the past two periods
Financial Highlights...................................... 20
Historical net asset values, distributions, total
returns, expense ratios, turnover ratios and net assets
Notes to Financial Statements............................. 23
Accounting and distribution policies, details of
agreements and transactions with fund management and
description of certain investment risks
</TABLE>
[FN]
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.
</FN>
1
<PAGE>
President's Message
- ---------------------------------------------------------------------------
[PHOTO OF PRESIDENT]
Dear Fellow Shareholder:
The first half of 1998 was again a prosperous period for the U.S.
economy and most financial assets. Despite continuing economic and
financial upheaval in the Far East, the U.S. economy has continued to grow
and has even accelerated in 1998. Gross domestic product (GDP) grew at an
annual rate of 5.5% in the first quarter, having accelerated from a 3.7%
rate of growth during the fourth quarter of 1997. Statistics indicate that
second quarter growth may be stronger. Consumer spending, which makes up
approximately two thirds of the nation's economic activity and is thus an
important driver of GDP, grew at an annual rate of 6% during the first
quarter and continued increasing through May. Unemployment remains
extremely low at 4.3%, the annual rate of inflation is holding steady below
2% and personal income continues to rise. In his testimony to U.S.
Congress, Federal Reserve Chairman Alan Greenspan declared that "the
current economic performance is as impressive as any I have witnessed in
my near half-century of daily observation of the American Economy." Thus,
it is not surprising that the Conference Board's Consumer Confidence Index
has risen to its highest level since 1969.
Because inflation has remained extremely moderate, and there is no
hard evidence to indicate any acceleration going forward, interest rates
have gradually fallen over the past six months. While short-term interest
rates have dropped slightly, long-term interest rates have fallen even more,
causing what financial practitioners refer to as a flattening of the yield
curve. What this means is that the difference (spread) in income yield
between long-term bonds, which generally pay a higher income yield than do
short-term securities, is much less than it has been in the recent past.
In fact, on June 30, 1998 the yield on 10-year Treasury bonds was only
0.08% higher than the yield on one-year Treasury bills. For comparison,
the difference between 10-year and one-year Treasury yields in June 1997
was 0.84%, and in June 1994 the spread was 1.83%. The extremely flat yield
curve is the result of investors' expectations that the rate of inflation
will remain stable.
The historically low interest rates, the flat yield curve and
relatively tight yield spreads between investment grade bonds have made it
very challenging for portfolio managers to add measurable value above the
benchmark. The true value added during these periods is in the positioning
2
<PAGE>
- ---------------------------------------------------------------------------
of the portfolios for the inevitable changes in the environment going
forward. Of the three Funds presented in this report, only the Managers
Bond Fund outperformed its benchmark and peers during the six months ended
June 30, 1998.
Managers Short & Intermediate Bond Fund underperformed its primary
benchmark (Merrill Lynch 1-4.99 year Government/Corporate Index) during the
first quarter due in part to a low allocation in mortgage-related securities
which performed well during the quarter. In the second quarter, the Fund
performed better, trading virtually even with the benchmark through the
period. For the six months ended June 30, 1998, the Managers Short &
Intermediate Bond Fund returned 2.5%, while the Merrill Lynch 1-4.99 year
Government/Corporate Index returned 3.2%.
Managers Bond Fund significantly outperformed its benchmark index,
the Lehman Government Corporate Bond Index, during the first quarter due
primarily to its allocation in U.S. Dollar-denominated foreign corporate
bonds ("Yankee bonds"). Yankee bonds of companies domiciled in the Far
East performed very well in the first quarter but reversed during the
second quarter as investors' perceptions of improvement in Far Eastern
economies diminished. Although this detracted from the Fund's performance
in the second quarter, the Fund's performance for the six-month period
remained ahead of the benchmark and among the top quartile of its peers.
For the six months ending June 30, 1998, the Managers Bond Fund returned
4.8%, while the Lehman Government Corporate Bond Index returned 4.2%.
Managers Global Bond Fund continued to exhibit performance very
similar to its benchmark, the Salomon Brothers World Government Bond Index.
During the first quarter, the Fund's heavy emphasis on British Gilts along
with its avoidance of Japanese bonds resulted in slight outperformance.
Although avoidance of Japanese bonds continued to benefit the Fund in the
second quarter, the British Pound underperformed causing the Fund to do the
same. For the six months ending June 30, 1998, Managers Global Bond Fund
returned 2.7%, while the Salomon Brothers World Government Bond Index
returned 2.8%.
As always, should you have any questions on this report, please feel
free to contact us at 1-800-835-3879.
We thank you for your continued investment in The Managers Funds.
Sincerely,
/S/ Robert P. Watson
Robert P. Watson
President
3
<PAGE>
THE MANAGERS FUNS PERFORMANCE (unaudited)
All periods ending June 30, 1998
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS*
----------------------------
MORNING-
SIX 1 3 5 10 SINCE INCEPTION STAR
MONTHS YEAR YEARS YEARS YEARS INCEPTION DATE RATING
------ ----- ----- ----- ----- -------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Equity Funds:
Income Equity Fund 10.99% 22.39% 24.03% 18.87% 15.20% 15.76% Oct. '84 ****
Capital
Appreciation Fund 33.40% 43.11% 24.19% 20.02% 16.85% 17.07% Jun. '84 ****
Special
Equity Fund 5.85% 19.85% 24.91% 18.90% 17.94% 16.86% Jun. '84 ****
International
Equity Fund 17.38% 15.33% 16.54% 16.18% 12.86% 14.87% Dec. '85 ****
Emerging Markets
Equity Fund -- -- -- -- -- (15.50%)Feb. '98 NA
Income Funds:
Short
Government Fund 2.40% 5.62% 5.16% 3.29% 5.15% 5.23% Oct. '87 **
Short & Intermediate
Bond Fund 2.49% 6.02% 6.23% 4.34% 6.97% 8.24% Jun. '84 ***
Intermediate
Mortgage Fund 2.81% 7.94% 6.55% 0.39% 6.60% 7.16% May '86 *
Bond Fund 4.83% 11.34% 9.82% 9.04% 10.18% 11.25% Jun. '84 ****
Global Bond Fund 2.68% 4.55% 2.90% -- -- 5.47% Mar. '94 *
Money Market Fund 2.60% 5.33% 5.31% 4.66% 5.31% 5.85% Jun. '84 NA
</TABLE>
- ----------------------------------------------------------------------------
[FN]
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 ANY OF THE MANAGERS FUNDS, PLEASE CALL (800) 835-3879, OR
YOUR INVESTMENT ADVISOR. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.
* Total returns equals income yield plus share price change and assumes
reinvestment of all dividends and capital gain distributions. Returns
are net of fees and may reflect fee waivers or the reimbursement of
fund expenses as described in the prospectus. 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 6/30/98 and are subject to change every month. The ratings are
by asset class and are calculated rom 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 againt 2,564, 1,481 and 726 equity funds, the
International Equity Fund was rated against 788, 348 and 110
international equity funds, and each of the Income Funds was rated
against 1,478, 900 and 347 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.
</FN>
4
<PAGE>
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MANAGERS SHORT AND INTERMEDIATE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
June 30, 1998 (unaudited)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
CORPORATE DEBT SECURITIES - 49.6%
ASSET-BACKED SECURITIES - 18.7%
Advanta Mortgage Loan Trust,
Series 97-4, Class A4, AMBAC
insured, 6.660% , 03/25/22 $125,000 $126,367
AFC Home Equity Loan Trust,
Series 93-1, Class A, 5.900%,
05/20/08 66,248 65,357
AFC Home Equity Loan Trust,
Series 96-3, Class 1A2, 7.220%,
02/25/27 147,407 147,084
Citicorp Mortgage Securities Inc.,
Series 97-5, PAC, 6.500%, 11/25/27 150,000 150,563
Compass Auto Receivables Trust,
Series 98-A, Class A3, 5.990%,
05/15/04 300,000 299,625
Contimortgage Home Equity Loan
Trust, Series 94-3, Class A4, MBIA
insured, 7.850%, 07/15/24 186,360 191,485
Contimortgage Home Equity Loan Trust,
Series 94-4, Class A6, MBIA insured,
8.270%, 12/15/24 123,636 128,020
Equicredit Funding Trust, Series 96-A,
Class A3, FGIC insured, 7.350%,
11/15/19 250,000 255,783
EquiCredit Home Equity Loan Trust,
Series 93-4, Class A, FGIC insured,
5.725%, 12/15/08 52,552 51,829
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
ASSET-BACKED SECURITIES (continued)
Green Tree Financial Corp.,
Series 98-1, Class A3, 5.950%,
04/01/13 150,000 149,718
HFC Home Equity Trust, Series
92-2A, Class A, MBIA insured,
6.650%, 11/20/12 27,866 28,143
IMC Home Equity Loan Trust, Series
98-1, Class A3, 6.410%, 04/20/18 200,000 200,624
Independent National Mortgage Corp.,
Series 96-A, Class A3, 6.960%,
09/25/26 436,659 439,248
Money Store Home Equity Loan Trust
The, Series 95-C, Class A3, MBIA
insured, 6.550%, 06/15/17 475,000 477,969
Oakwood Mortgage Investors Inc.,
Series 97-A, Class A3, 6.650%,
05/15/27 300,000 303,000
Old Stone Credit Corp. Home Equity
Loan Trust, Series 92-4, Class A,
FGIC insured, 6.550%, 11/25/07 32,004 31,954
Remodelers Home Improvement Loan
Asset-Backed Certificates, Series
95-3, Class A2, 6.800%, 12/20/07 (a) 44,783 44,694
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
5
<PAGE>
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MANAGERS SHORT AND INTERMEDIATE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
June 30, 1998 (unaudited)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
ASSET-BACKED SECURITIES(continued)
Residential Funding Mortgage
Securities II, Series 97-HS5,
Class A2, 6.560%, 5/25/27 70,514 70,271
UCFC Loan Trust, Series 93-B1,
Class A1, FGIC insured, 6.075%,
07/25/14 169,056 166,696
World Omni Automobile Lease
Securitization Trust, Series 96-B,
Class B, 6.850%, 11/15/02 1,277 1,281
--------
TOTAL ASSET-BACKED SECURITIES 3,329,711
--------
BANKS AND FINANCE - 17.9%
Aames Financial Corp., Senior
Notes, 9.125%, 11/01/03 50,000 50,000
American Health Properties, Inc.,
Notes, 7.050%, 01/15/02 350,000 357,591
Chelsea GCA Realty Partners,
Notes, 7.750%, 01/26/01 225,000 230,378
Conseco Inc., 6.400%, 02/10/03 300,000 298,734
EOP Operating LP, Senior Notes,
6.375% , 02/15/03 (a) 150,000 149,362
First Interstate Bancorp., Sub.
Notes, 9.900%, 11/15/01 225,000 250,470
Franchise Finance Corp. of America,
Senior Notes, 7.000%, 11/30/00 200,000 202,960
Lehman Brothers Holdings Inc.,
6.000%, 02/26/01 300,000 299,421
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
BANKS AND FINANCE (continued)
Merrill Lynch & Co., Inc. Medium-Term
Notes, Series B, Adjustable Rate,
03/25/02** 525,000 538,445
Norwest Financial, Inc., Senior
Notes, 6.375%, 09/15/02 250,000 252,553
Salomon, Inc., 3 Year CMT, Adjustable
Rate, 6.299% , 04/05/99** 180,000 178,650
United Companies Financial Corp.,
Senior Notes, 7.000%, 07/15/98 100,000 100,018
Wharf Capital International Ltd.,
8.875%, 11/01/04 300,000 270,795
--------
TOTAL BANKS AND FINANCE 3,179,377
--------
INDUSTRIALS - 12.2%
Crescent Real Estate Equities
Co., 6.625%, 09/15/02 (a) 375,000 370,230
Kaufman & Broad Home Corp., Senior
Notes, 7.750%, 10/15/04 150,000 149,625
Kern River Funding Corp., Series B,
Senior Notes, 6.720%, 09/30/01 (a) 200,000 204,062
Royal Caribbean Cruises Ltd., Senior
Notes, 8.125%, 07/28/04 325,000 347,302
TCI Communications, Inc., Senior
Notes, 8.650%, 09/15/04 300,000 335,535
Tyco International Group SA,
Yankee, 6.125%, 06/15/01 300,000 300,246
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
6
<PAGE>
- ---------------------------------------------------------------------------
MANAGERS SHORT AND INTERMEDIATE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
June 30, 1998 (unaudited)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIALS (continued)
USA Waste Services, Inc.,
Notes, 6.500%, 12/15/02 175,000 175,707
Videotron Holdings, Senior Notes,
11.125%, 07/01/04 300,000 294,756
--------
TOTAL INDUSTRIALS 2,177,463
--------
UTILITIES - 0.8%
Niagara Mohawk Power Corp.,
Series E, 7.375%, 07/01/03 150,000 151,119
--------
TOTAL CORPORATE DEBT SECURITIES
(cost $8,853,017) 8,837,670
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 6.2%
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 0.3%
8.750%, 04/01/01 through 10/01/01 44,178 46,073
--------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION(FNMA) - 2.7%
8.000%, 12/01/12 229,397 237,282
Series 94-85, Class E,
6.000%, 11/25/06 250,000 249,687
--------
TOTAL FNMAs 486,969
--------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 1.9%
8.000%, 11/15/17 314,685 329,632
RESOLUTION TRUST CORPORATION - 1.3%
Series 92-7, Class A1, 6.825%,
03/25/22 238,047 239,163
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(cost $1,107,883) 1,101,837
--------
<CAPTION>
- -------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------
U.S. TREASURY NOTES - 17.5%
6.625%, 04/30/02 1,350,000 1,399,572
6.250%, 04/30/01 375,000 381,971
5.750%, 08/15/03 1,100,000 1,111,682
5.625%, 11/30/00 225,000 225,493
--------
TOTAL U.S. TREASURY NOTES
(cost $3,108,659) 3,118,718
--------
FOREIGN CORPORATE OBLIGATIONS - 2.7%
Banco Latinomericano S.A., 6.500%,
04/02/01 (a) 250,000 253,292
Brascan Ltd., 7.375%, 10/01/02 225,000 231,363
--------
TOTAL FOREIGN CORPORATE OBLIGATIONS
(cost $480,294) 484,655
--------
<CAPTION>
- ---------------------------------------------------------------------------
SHARES
- ---------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 22.8%
OTHER INVESTMENT COMPANIES - 4.6%
JPM Prime Money Market Fund, 5.58%*** 825,581 825,581
--------
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT
- ---------------------------------------------------------------------------
COMMERCIAL PAPER - 7.9%
Daimler-Benz AG, 6.050%, 07/01/98 $350,000 350,000
Ford Motor Credit Corp.,
5.850%, 07/02/98 350,000 349,943
Goldman Sachs Group L.P., 5.750%,
07/10/98 350,000 349,497
Xerox Corp., 6.000%, 07/01/98 350,000 350,000
--------
TOTAL COMMERCIAL PAPER 1,399,440
--------
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
7
<PAGE>
- ---------------------------------------------------------------------------
MANAGERS SHORT AND INTERMEDIATE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (concluded)
June 30, 1998 (unaudited)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT - 10.3%
State Street Bank & Trust Co., dated
06/30/98, due 07/01/98,
5.000%, total to be received
$1,830,254 (secured by
$1,835,000 FHLB 5.700%, due 02/18/00,
market value $1,870,335),
at cost 1,830,000 $ 1,830,000
----------
TOTAL SHORT-TERM INVESTMENTS
(cost $4,055,021) 4,055,021
----------
TOTAL INVESTMENTS - 98.8%
(cost $17,604,874) 17,597,901
OTHER ASSETS, LESS LIABILITIES - 1.2% 206,223
----------
NET ASSETS - 100.0% $17,804,124
==========
</TABLE>
[FN]
Note: Based on the cost of investments of $17,604,874 for federal income
tax purposes at June 30, 1998, the aggregate gross unrealized
appreciation and depreciation was $77,955 and $84,928, respectively,
resulting in net unrealized depreciation of investments of $6,973.
- ---------------------------------------------------------------------------
OTHER INFORMATION (UNAUDITED):
The composition of long-term debt holdings as a percentage of the total
value of investments in securities is as follows:
</FN>
<TABLE>
<CAPTION>
S&P'S/MOODY'S RATING
<S> <C>
Gov't/AAA 64%
AA 6
A 7
BBB 20
BB 3
----
100%
====
</TABLE>
[FN]
** Variable rate security. Coupon or dividend rate disclosed is that in
effect at June 30, 1998.
*** Yield shown for this investment company represents the June 30, 1998
seven-day average yield, which refers to the sum of the previous seven
days' dividends paid, expressed as an annual percentage.
(a) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At June 30, 1998, the
value of these securities amounted to 1,021,640, or 5.7% of net assets.
ABBREVIATIONS:
AMBAC: Ambac Assurance Corp.
CMT: Constant Maturity Treasury Index
FGIC: Financial Guaranty Insurance Co.
MBIA: Municipal Bond Investors Assurance Corp.
The accompanying notes are an integral part of these financial statements.
</FN>
8
<PAGE>
- ---------------------------------------------------------------------------
MANAGERS BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
June 30, 1998 (unaudited)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
CORPORATE DEBT SECURITIES - 57.3%
BANKS AND FINANCE - 12.3%
Bangkok Bank, Sub. Notes, 8.250%,
03/15/16 $500,000 $374,305
Bangkok Bank, Sub. Notes, 8.375%,
01/15/27 800,000 585,112
First Industrial L.P., Medium Term
Notes, 7.500%, 12/01/17 1,000,000 1,017,990
Highwoods/Forsyth L.P., Senior
Notes, 7.500%, 04/15/98 2,250,000 2,294,460
KN Capital Trust III, 7.630,
04/15/98 500,000 512,290
Meditrust, 7.000%, 08/15/07 500,000 486,980
Pan Pacific Industries, Yankee,
Notes, 0.000%*, 04/28/07 2,000,000 769,480
---------
TOTAL BANKS AND FINANCE 6,040,617
---------
CONVERTIBLE BONDS - 13.4%
Banpu Public Company Ltd.,
Euro-dollar, Bonds, 2.750%, 04/10/03 250,000 171,250
Burns Philp & Co., Euro-dollar, Deb.,
5.500%, 04/30/04 1,100,000 627,000
Federal Realty Investment Trust,
Euro-dollar, Sub. Notes,
5.250%, 10/28/03 1,280,000 1,196,800
Loxley Public Co., Euro-dollar,
2.500%, 04/04/01 400,000 128,000
Noram Energy, Sub., 6.000%, 03/15/12 475,000 451,250
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
CONVERTIBLE BONDS (continued)
Ogden Corp., Euro-dollar, Sub.
Notes, 5.750%, 10/20/02 950,000 933,375
Ogden Corp., Euro-dollar, Sub.
Notes, 6.000%, 06/01/02 250,000 247,500
Samsung Corp., Euro-dollar, Bonds,
0.250%, 06/26/06 250,000 230,000
Scholastic Corp., Sub. Notes, 5.000%,
08/15/05 1,400,000 1,286,250
Thermo Terratech Inc., Sub. Notes,
4.625%, 05/01/03 325,000 291,281
Thermo Terratech, Inc., Euro-dollar,
Sub., 4.625%, 05/01/03 450,000 421,875
Total Access Communications,
Registered Bonds, 2.000%, 05/31/06 250,000 190,000
Worldway Corp., Sub. Deb., 6.250%,
04/15/11 500,000 415,000
----------
TOTAL CONVERTIBLE BONDS 6,589,581
----------
INDUSTRIALS - 28.6%
APL Ltd., Deb., 8.000%, 01/15/24 250,000 202,402
Atlas Air, Inc., Notes, 7.680%,
01/02/14 1,000,000 1,013,640
Burlington Industries, Inc., Deb.,
7.250%, 08/01/27 250,000 257,910
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
9
<PAGE>
- ---------------------------------------------------------------------------
MANAGERS BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
June 30, 1998 (unaudited)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIALS (continued)
Compania De Transporte Energia,
Senior Notes, 9.250%, 04/01/08 700,000 682,500
Kellwood Co., Deb., 7.625%, 10/15/17 250,000 264,882
Mead Corp. Deb., 7.125%, 08/01/25 200,000 201,212
Philip Morris Cos., Inc., Deb.,
7.750%, 01/15/27 500,000 534,830
Pioneer-Standard Electronics, Inc.,
Senior Notes, 8.500%, 08/01/06 250,000 268,899
Pulte Corp., 7.625%, 10/15/17 500,000 525,970
RJR Nabisco, Inc., Notes, 7.625%,
09/15/03 650,000 646,263
RJR Nabisco, Inc., Notes, 9.250%,
08/15/13 700,000 755,062
R&B Falcon Corp., Senior Notes,
7.375%, 04/15/18 900,000 930,758
Samsung Electronics Ltd., Sinking
Fund, Deb., 7.700%, 10/01/27 500,000 325,000
Seagate Technology, Inc., Deb.,
7.875%, 03/01/17 250,000 241,712
Tata Electric Co., 8.500%, 08/19/17 (a) 400,000 336,000
TCI Communications, Inc., 7.125%,
02/15/28 325,000 341,842
TCI Communications, Inc., 7.875%,
02/15/26 1,600,000 1,818,816
TCI Communications, Inc., Deb.,
7.875%, 08/01/13 125,000 139,504
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
INDUSTRIALS (continued)
Time Warner, Inc., 6.875%,
06/15/18 560,000 562,184
Time Warner, Inc., 7.570%,
02/01/24 1,235,000 1,328,391
Trinet Corporate Realty Trust,
Inc., Senior Notes, 7.700%, 07/15/17 500,000 519,655
Union Texas Petroleum Holdings, Inc.,
Variable Rate, 04/15/08 1,000,000 1,047,240
Westvaco Corp., Deb.,
7.000%, 08/15/23 250,000 249,278
Woolworth Corp., Deb.,
8.500%, 01/15/22 750,000 827,228
---------
TOTAL INDUSTRIALS 14,021,178
---------
REAL ESTATE - 2.1%
Camden Property Trust, Notes, 7.000%,
11/15/06 250,000 254,552
Security Capital Industrial Trust,
7.700%, 06/15/28 (a) 750,000 758,775
---------
TOTAL REAL ESTATE 1,013,327
---------
UTILITIES - 0.9%
Boston Edison Co., Deb., 7.800%,
03/15/23 400,000 423,992
---------
TOTAL CORPORATE DEBT SECURITIES
(cost $28,520,755) 28,088,695
----------
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
10
<PAGE>
- ---------------------------------------------------------------------------
MANAGERS BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
June 30, 1998 (unaudited)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
FOREIGN CORPORATE OBLIGATIONS - 7.6%
MacMillan Bloedel Ltd.,
Deb., 7.700%, 02/15/26 USD 1,350,000 1,356,210
PDVSA Finance Ltd, Series 98-1,
7.500%, 11/15/28 (a) USD 1,000,000 1,029,170
Telekom Malaysia Berhad,
7.875%, 08/01/25 USD 500,000 373,393
Telekom Malaysia Berhad,
Convertible, 4.000%,
10/03/04 USD 300,000 219,750
Tenaga Nasional Berhad,
7.500%, 11/01/25 (a) USD 1,000,000 747,060
---------
TOTAL FOREIGN CORPORATE OBLIGATIONS
(cost $3,692,636) 3,725,583
---------
FOREIGN GOVERNMENT OBLIGATIONS - 13.9%
British Columbia Province,
Generic Residual, Canada,
Deb., 0.000% *, 08/23/24 CAD 15,000,000 2,181,373
Canadian Government,
Principal Strip,
Series JN21, 0.000%*,
06/01/21 CAD 1,500,000 287,523
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS (continued)
Government of Poland,
Bearer Past Due Interest
Brady Bonds, Stepup,
4.000%, 10/27/14 USD 1,375,000 1,228,975
Government of Poland,
Registered Past Due
Interest Brady Bonds,
Stepup, 4.000%,
10/27/14 USD 250,000 223,450
Manitoba Province,
Canada, Medium Term
Notes, 6.500%,
09/22/17 CAD 1,800,000 1,336,958
Province of Alberta,
Series CS, Sinking
Fund, 5.930%,
09/16/16 CAD 271,880 190,485
Republic of South
Africa, Yankee, Notes,
8.500%, 06/23/17 USD 1,075,000 1,024,239
South Australia
Government Finance
Authority, Deb., 0.000%, *
12/21/15 AUD 1,600,000 350,724
---------
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS
(cost $5,785,898) 6,823,727
---------
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
11
<PAGE>
- ---------------------------------------------------------------------------
MANAGERS BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
June 30, 1998 (unaudited)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AND
AGENCY OBLIGATIONS - 13.0%
COLLATERALIZED MORTGAGE
OBLIGATIONS - 1.7%
College & University Facilities
Loan Trust, Series 2, Class D,
4.000%, 06/01/18 $1,000,000 865,610
Federal National Mortgage
Association (FNMA) - 4.4%
FNMA REMIC Series 93-212,
Class Z, 6.000%, 11/25/08 320,702 310,578
FNMA REMIC Series 94-30,
Class JA, 5.000%, 08/15/23 2,000,000 1,832,500
-----------
TOTAL FNMA 2,143,078
-----------
U.S. Treasury Bonds - 6.9%
0.000% *, 08/15/23 6,200,000 1,503,190
6.000% , 02/15/26 1,800,000 1,872,558
-----------
TOTAL U.S. TREASURY BONDS 3,375,748
-----------
TOTAL U.S. G0VERNMENT AND AGENCY
OBLIGATIONS
(cost $5,916,698) 6,384,436
-----------
<CAPTION>
- ------------------------------------------------------------------------
SHARES
- ------------------------------------------------------------------------
PREFERRED STOCKS - 2.2%
Aluminum Co. of America, 3.750% 8,125 606,328
Connecticut Light & Power Co.,
Series 47, $2.00 6,655 178,437
Entergy Louisiana, Inc., 4.440% 226 16,696
Entergy New Orleans, Inc., 4.750% 482 38,680
Union Electric Co., 3.500% 250 14,625
<CAPTION>
- ------------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------------
PREFERRED STOCKS (continued)
West Pennsylvania Power Co.,
4.500% 200 14,900
Wisconsin Electric Power Co., 3.600% 3,298 186,337
--------
TOTAL PREFERRED STOCKS
(cost $891,824) 1,056,003
--------
SHORT-TERM INVESTMENTS - 6.4%
Other Investment Companies - 4.8%
JPM Prime Money Market Fund, 5.58%** 2,362,351 2,362,351
<CAPTION>
- ------------------------------------------------------------------------
PRINCIPAL
AMOUNT
- ------------------------------------------------------------------------
REPURCHASE AGREEMENT - 1.6%
State Street Bank & Trust Co., dated
06/30/98, due 07/01/98,
5.000%, total to be received
$761,106 (secured by
$770,000 FHLB 5.905%, due 05/05/00
market value $777,187),
at cost $761,000 761,000
--------
TOTAL SHORT-TERM INVESTMENTS
(cost $3,123,351) 3,123,351
--------
TOTAL INVESTMENTS - 100.4%
(cost $47,931,162) 49,201,795
OTHER ASSETS, LESS LIABILITIES - (0.4)% (196,113)
--------
NET ASSETS - 100.0% $49,005,682
=========
</TABLE>
[FN]
Note: Based on the cost of investments of $47,931,162 for federal income
tax purposes at June 30, 1998, the aggregate gross unrealized
appreciation and depreciation of investments was $2,979,046 and
$1,708,413, respectively, resulting in net unrealized appreciation
of investments of $1,270,633.
The accompanying notes are an integral part of these financial statements.
</FN>
12
<PAGE>
- ---------------------------------------------------------------------------
MANAGERS BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (concluded)
June 30, 1998 (unaudited)
- ---------------------------------------------------------------------------
- --------------------------
* Zero coupon security.
** Yield shown for this investment company represents the June 30, 1998,
seven-day average yield, which refers to the sum of the previous seven
days' dividends paid, expressed as an annual percentage.
Abbreviations have been used throughout this portfolio to indicate amounts
shown in currencies other than the U.S. Dollar (USD):
CAD: Canadian Dollar
AUD: Australian Dollar
OTHER INFORMATION (UNAUDITED):
The composition of long-term debt holdings as a percentage of the total
value of investments in these securities is as follows:
</FN>
<TABLE>
<CAPTION>
S&P'S/MOODY'S RATINGS
<S> <C>
Gov't/AAA 25%
AA 5
A 7
BBB 56
BB 3
Not Rated 4
----
100%
====
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
13
<PAGE>
- --------------------------------------------------------------------------
MANAGERS GLOBAL BOND FUND
SCHEDULE OF PORTFLIO INVESTMENTS
June 30, 1998 (unaudited)
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
FOREIGN GOVERNMENT/AGENCY
OBLIGATIONS - 50.9%
CANADA - 0.4%
Province of Ontario, Global
Bond, 5.930%, 09/16/16 USD 75,000 $ 79,646
---------
DENMARK - 2.0%
Kingdom of Denmark,
7.000%, 11/15/07 DKK 2,171,000 363,914
---------
GERMANY - 19.5%
Bundes, Series 93,
6.500%, 07/15/03 DEM 1,063,000 643,181
Bundes, Series 97,
6.500%, 07/04/27 DEM 694,000 449,083
Bundes, Series 97,
6.000%, 07/04/07 DEM 2,919,000 1,761,484
Bundes, Series 97,
5.625%, 01/04/28 DEM 1,186,000 682,618
---------
TOTAL GERMANY 3,536,366
---------
NETHERLANDS - 1.5%
Dutch Government,
0.250%, 07/15/08 NLG 543,000 275,674
---------
NORWAY - 0.4%
Den Norske Stats
Oljeselskap, Yankee,
7.375%, 05/01/16 (a) USD 60,000 65,748
---------
<CAPTION>
- --------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------
SWEDEN - 8.2%
Kingdom of Sweden,
Series 1037, 8.000%,
08/15/07 SEK 5,200,000 796,273
Kingdom of Sweden,
Series 1038, 6.500%,
10/25/06 SEK 4,900,000 679,727
---------
TOTAL SWEDEN 1,476,000
---------
UNITED KINGDOM - 18.9%
United Kingdom Treasury,
8.000%, 12/07/05 GBP 450,000 941,789
United Kingdom Treasury,
8.000%, 09/27/13 GBP 83,331 170,139
United Kingdom Treasury,
7.250%, 12/07/07 GBP 1,262,025 2,320,558
---------
TOTAL UNITED KINGDOM 3,432,486
---------
TOTAL FOREIGN GOVERNMENT/
AGENCY OBLIGATIONS
(cost $8,750,654) 9,229,834
---------
U.S. TREASURY OBLIGATIONS - 31.9%
U.S. TREASURY BONDS - 8.7%
6.625% , 02/15/27 $302,000 341,025
6.500% , 11/15/26 200,000 222,094
6.125% , 11/15/27 938,000 1,005,123
---------
TOTAL U.S. TREASURY BONDS 1,568,242
---------
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
14
<PAGE>
- --------------------------------------------------------------------------
MANAGERS GLOBAL BOND FUND
SCHEDULE OF PORTFLIO INVESTMENTS (continued)
June 30, 1998 (unaudited)
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES - 23.2%
7.500%, 11/15/01 230,000 243,620
6.500%, 05/31/01 1,157,000 1,186,642
5.375%, 02/15/01 2,785,000 2,775,420
---------
TOTAL U.S. TREASURY NOTES 4,205,682
---------
TOTAL U.S. TREASURY OBLIGATIONS
(cost $5,694,632) 5,773,924
---------
CORPORATE DEBT SECURITIES - 1.7%
BANKS AND FINANCE - 1.1%
National Westminster Bank,
9.45%, 05/01/01 100,000 108,551
Railcar Leasing LLC, 7.125%,
01/15/13 (a) 80,000 85,147
---------
TOTAL BANKS AND FINANCE 193,698
---------
UTILITY - 0.6%
Cajun Electric Power,
U.S. Government Guaranteed,
9.520%, 03/15/19 100,000 104,949
---------
TOTAL CORPORATE DEBT
SECURITIES
(cost $295,588) 298,647
---------
<CAPTION>
- ------------------------------------------------------------------------
SHARES
- ------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 11.1%
Other Investment Companies - 8.3%
JPM Prime Money Market
Fund, 5.47%*** 1,506,243 1,506,243
---------
<CAPTION>
- ------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.8%
State Street Bank & Trust Co., dated
06/30/98, due 07/01/98,
5.000%, total to be received
$512,071 (secured by
$520,000 Fed. Home Loan
Bank Bond 5.705%, due 03/23/00,
market value $527,079),
at cost $512,000 512,000
---------
TOTAL SHORT-TERM INVESTMENS
(cost $2,018,243) 2,018,243
---------
TOTAL INVESTMENTS - 95.6%
(cost $16,759,117) 17,320,648
OTHER ASSETS, LESS LIABILITIES - 4.4% 802,319
---------
NET ASSETS - 100.0% $18,122,967
=========
</TABLE>
[FN]
Note: Based on the cost of investments of $16,759,182 for federal income
tax purposes at June 30, 1998, the aggregate gross unrealized
appreciation and depreciation of investments was $570,117 and
$8,651, respectively, resulting in net unrealized appreciation of
investments of $561,466.
*** Yield shown for this investment company represents the June 30, 1998
seven-day average yield, which refers to the sum of the previous seven
days' dividends paid, expressed as an annual percentage.
(a) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registrations, normally to qualified buyers. At June 30, 1998,
the value of these securities amounted to $150,895, or 0.8% of net
assets.
Abbreviations have been used throughout this portfolio to indicate amounts
shown in currencies other than the U.S. Dollar (USD):
DKK: Danish Krona
DEM: Deutsche Mark
GBP: British Pound
NLG: Netherland Guilder
SEK: Swedish Krona
The accompanying notes are an integral part of these financial statements.
</FN>
15
<PAGE>
- ---------------------------------------------------------------------------
THE MANAGERS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1998 (unaudited)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGERS MANAGERS
SHORT AND MANAGERS GLOBAL
INTERMEDIATE BOND BOND
BOND FUND FUND FUND
----------- ---------- ---------
<S> <C> <C> <C>
ASSETS:
Investments at value* $ 15,767,901 $ 48,440,795 $ 16,808,648
Repurchase agreements at cost
and value 1,830,000 761,000 512,000
Cash -- 504 500
Foreign currency
(cost $5,630 and $427,386) -- 5,487 424,451
Receivable for investments sold 299,684 -- 876,089
Receivable for Fund shares sold 68,924 218,484 52,538
Receivable for open forward
foreign currency contracts -- -- 5,180,323
Payable for closed forward
foreign currency contracts, net -- -- 6,424
Dividends, interest and
other receivables 185,806 734,388 396,462
Deferred organization expense -- -- 1,731
Prepaid expenses 7,943 12,489 8,925
---------- ---------- ----------
Total assets 18,160,258 50,173,147 24,268,091
---------- ---------- ----------
LIABILITIES:
Payable to Custodian 6,022 -- --
Payable for investments purchased 299,625 1,059,856 906,645
Payable for Fund shares repurchased 6,660 32,006 17,439
Payable for open forward foreign
currency contracts -- -- 5,170,951
Accrued expenses:
Investment advisory and
management fees 6,601 23,887 9,577
Administrative fees 3,300 9,555 2,736
Other 33,926 42,161 37,776
---------- ---------- ----------
Total liabilities 356,134 1,167,465 6,145,124
---------- ---------- ----------
NET ASSETS $ 17,804,124 $ 49,005,682 $ 18,122,967
========== ========== ==========
Shares outstanding 914,412 2,026,146 843,484
========== ========== ==========
Net asset value, offering and
redemption price per share $ 19.47 $ 24.19 $ 21.49
======= ======= =======
NET ASSETS REPRESENT:
Paid-in capital $ 30,899,467 $ 46,662,436 $ 17,599,643
Undistributed net investment
income 6,485 48,888 76,584
Accumulated net realized gain
(loss) from investments and
foreign currency transactions (13,094,855) 1,023,868 (117,607)
Net unrealized appreciation
(depreciation) of investments
and foreign currency translations (6,973) 1,270,490 564,347
---------- ---------- ----------
NET ASSETS $ 17,804,124 $ 49,005,682 $ 18,122,967
========== ========== ==========
* Investments at cost $ 15,774,874 $ 47,170,162 $ 16,759,117
========== ========== ==========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
16
<PAGE>
- --------------------------------------------------------------------------
THE MANAGERS FUNDS
STATEMENTS OF OPERATIONS
For the six months ended June 30, 1998 (unaudited)
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGERS MANAGERS
SHORT AND MANAGERS GLOBAL
INTERMEDIATE BOND BOND
BOND FUND FUND FUND
------------ --------- --------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 501,244 $ 1,527,919 $ 510,316
Dividend income -- 29,821 --
Foreign withholding tax -- (2,461) --
Other income 125 146 --
------- --------- -------
Total investment income 501,369 1,555,425 510,316
------- --------- -------
EXPENSES:
Investment advisory and
management fees 37,030 138,551 59,466
Administrative fees 18,515 55,420 16,990
Custodian fees 10,132 16,845 10,490
Audit fees 14,625 10,866 14,131
Transfer agent fees 13,996 32,523 22,503
Registration fees 5,960 8,987 6,571
Insurance 853 1,668 789
Legal fees 401 1,279 474
Trustee fees 196 660 240
Amortization of organization
expense -- -- 1,341
Miscellaneous expenses 1,897 1,835 1,607
------- --------- -------
Total expenses before reduction 103,605 268,634 134,602
Expense reduction (262) (782) (3703)
------- --------- -------
Net expenses 103,343 267,852 130,899
------- --------- -------
Net investment income 398,026 1,287,573 379,417
------- --------- -------
NET REALIZED AND UNREALIZED
GAIN (LOSS) :
Net realized gain on investment
transactions 47,570 470,449 416,391
Net realized gain (loss) on
foreign currency contracts
and translations 10 (11,879) (643,392)
Net unrealized appreciation
(deprecation) of investments (65,606) 329,298 219,238
Net unrealized appreciation of
foreign currency contracts
and translations -- -- 90,060
------- --------- -------
Net realized and unrealized
gain (loss) (18,026) 787,868 82,297
------- --------- -------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 380,000 $ 2,075,441 $ 461,714
======= ========= =======
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
17
<PAGE>
- --------------------------------------------------------------------------
THE MANAGERS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGERS SHORT AND
INTERMEDIATE BOND FUND
------------------------------------
FOR THE
SIX MONTHS FOR THE
ENDED YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
-------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income $ 398,026 $ 984,163
Net realized gain (loss) on
investments and foreign
currency transactions 47,580 (177,477)
Net unrealized appreciation
(depreciation) of investments
and foreign currency translations (65,606) 156,158
---------- -----------
Net increase (decrease) in
net assets resulting from
operations 380,000 962,844
---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (405,456) (954,428)
In excess of net investment income -- --
---------- -----------
Total distributions to
shareholders (405,456) (954,428)
---------- -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 5,496,060 6,970,193
Net asset value of shares issued
in connection with reinvestment
of dividends 323,037 770,320
Cost of shares repurchased (3,071,485) (15,046,564)
---------- ----------
Net increase (decrease) from
capital share transactions 2,747,612 (7,306,051)
---------- ----------
Total increase (decrease)
in net assets 2,722,156 (7,297,635)
NET ASSETS
Beginning of period 15,081,968 22,379,603
---------- -----------
End of period $ 17,804,124 $ 15,081,968
========== ===========
End of period undistributed
(overdistributed) net
investment income $ 6,485 $ 13,915
========== ===========
- --------------------------------------------------------------------------
SHARE TRANSACTIONS:
Sale of shares 282,144 357,625
Shares issued in connection
with reinvestment of dividends 16,619 39,627
Shares repurchased (157,198) (774,840)
---------- -----------
Net increase (decrease) in shares 141,565 (377,588)
========== ===========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
18
<PAGE>
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGERS BOND FUND MANAGERS GLOBAL BOND FUND
- --------------------------------- --------------------------------
FOR THE FOR THE
SIX MONTHS ENDED FOR THE SIX MONTHS ENDED FOR THE
JUNE 30, 1998 YEAR ENDED JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998 (UNAUDITED) DECEMBER 31, 1998
- --------------- ----------------- ---------------- ----------------
<C> <C> <C> <C>
$ 1,287,573 $ 2,173,081 $ 379,417 $ 786,814
458,570 1,060,667 (227,001) (918,810)
329,298 275,667 309,298 128,390
---------- ----------- ---------- ----------
2,075,441 3,509,415 461,714 (3,606)
---------- ----------- ---------- ----------
(1,250,517) (2,140,862) -- (138,962)
-- -- -- (277,649)
---------- ----------- ---------- ----------
(1,250,517) (2,140,862) -- (416,611)
14,664,331 19,635,395 4,571,721 8,504,428
1,118,242 1,907,220 -- 410,786
(8,900,044) (13,431,500) (4,375,956) (7,881,882)
6,882,529 8,111,115 195,765 1,033,332
---------- ----------- ---------- ----------
7,707,453 9,479,668 657,479 613,115
41,298,229 31,818,561 17,465,488 16,852,273
---------- ----------- ---------- ----------
$ 49,005,682 $ 41,298,229 $ 18,122,967 $ 17,465,488
========== =========== ========== ==========
$ 48,888 $ 11,832 $ 76,584 $ (302,833)
========== =========== ========== ==========
- ---------------------------------------------------------------------------
608,285 843,064 213,582 403,828
46,734 82,422 -- 19,423
(369,790) (578,194) (204,544) (376,301)
----------- ----------- ---------- ----------
285,229 347,292 9,038 46,950
=========== =========== ========== ===========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
</FN>
19
<PAGE>
- ---------------------------------------------------------------------------
MANAGERS SHORT AND INTERMEDIATE BOND FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout each period
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
---------- ---- ----- ----- ---- ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $19.51 $19.45 $19.67 $18.06 $21.23 $20.89
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.52 1.08 1.03 1.28 1.45 1.38
Net realized and
unrealized gain (loss)
on investments (0.03) 0.03 (0.24) 1.45 (3.17) 0.34
---- ---- ---- ---- ---- ----
Total from investment
operations 0.49 1.11 0.79 2.73 (1.72) 1.72
---- ---- ---- ---- ---- ----
LESS DISTRIBUTIONS
TO SHAREHOLDERS:
From net investment
income (0.53) (1.05) (1.01) (1.09) (1.37) (1.38)
In excess of net
investment income --- --- --- (0.03) (0.08) ---
---- ----- ---- ----- ---- -----
Total distributions
to shareholders (0.53) (1.05) (1.01) (1.12) (1.45) (1.38)
---- ---- ---- ---- ---- -----
NET ASSET VALUE,
END OF PERIOD $19.47 $19.51 $19.45 $19.67 $18.06 $21.23
====== ====== ====== ====== ====== ======
- ---------------------------------------------------------------------------
Total Return 2.49%(b) 5.87% 4.15% 15.57% (8.37%) 8.49%
===========================================================================
Ratio of expenses to
average net assets 1.40%(a)(c) 1.40% 1.45% 1.50% 1.05% 0.94%
Ratio of net investment
income to average
net assets 5.37%(c) 5.54% 5.43% 6.52% 7.11% 6.58%
Portfolio turnover 56%(b) 91% 96% 131% 57% 126%
Net assets at end
of period (000's omitted) $17,804 $15,082 $22,380 $25,241 $30,956 $112,228
===========================================================================
</TABLE>
[FN]
(a) The Fund has received credits against its custodian expense for
uninvested overnight cash balances. Absent this expense reduction, the
ratio of expenses to average net assets for the period ended
June 30, 1998, would have been 1.40%. (See Note 1c of Notes to
Financial Statements).
(b) Not annualized.
(c) Annualized.
</FN>
20
<PAGE>
- ---------------------------------------------------------------------------
MANAGERS BOND FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout each period
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
---------- ---- ----- ----- ---- ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 23.72 $22.83 $23.13 $18.92 $22.18 $21.88
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.67 1.39 1.35 1.44 1.59 1.49
Net realized and
unrealized gain (loss)
on investments 0.47 0.90 (0.29) 4.23 (3.16) 0.98
------ ----- ----- ----- ------ -----
Total from investment
operations 1.14 2.29 1.06 5.67 (1.57) 2.47
------ ----- ----- ----- ------ ------
LESS DISTRIBUTIONS
TO SHAREHOLDERS:
From net investment income (0.67) (1.40) (1.36) (1.46) (1.55) (1.50)
From net realized gain on
investments --- --- --- --- (0.14) (0.67)
------ ----- ----- ----- ------ ------
Total distributions to
shareholders (0.67) (1.40) (1.36) (1.46) (1.69) (2.17)
------ ----- ----- ----- ------ ------
NET ASSET VALUE,
END OF PERIOD $ 24.19 $23.72 $22.83 $23.13 $18.92 $22.18
====== ====== ====== ====== ====== ======
- ---------------------------------------------------------------------------
Total Return 4.83%(b) 10.42% 4.97% 30.91% (7.25)% 11.56%
===========================================================================
Ratio of expenses to
average net assets 1.21%(a)(c) 1.27% 1.36% 1.34% 1.20% 1.15%
Ratio of net investment
income to average
net assets 5.81%(c) 6.14% 6.13% 6.84% 7.28% 6.65%
Portfolio turnover 29%(b) 35% 72% 46% 84% 373%
Net assets at end
of period (000's omitted) $49,006 $41,298 $31,819 $26,376 $30,760 $44,038
===========================================================================
</TABLE>
[FN]
(a) The Fund has received credits against its custodian expense for
uninvested overnight cash balances. Absent this expense reduction, the
ratio of expenses to average net assets for the period ended
June 30, 1998 would have been 1.21%. (See Note 1c of Notes to
Financial Statements).
(b) Not annualized.
(c) Annualized.
</FN>
21
<PAGE>
- ---------------------------------------------------------------------------
MANAGERS GLOBAL BOND FUND
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout each period
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE PERIOD
SIX MONTHS MARCH 25, 1994
ENDED (COMMENCEMENT OF
JUNE 30, 1998 YEAR ENDED DECEMBER 31, OPERATIONS) TO
(UNAUDITED) 1997 1996 1995 DECEMBER 31, 1994
----------- ---- ---- ---- ----------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $20.93 $21.40 $21.74 $19.10 $20.00
------ ------ ------ ------ ------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income --- 0.97 1.21 0.95 0.48
Net realized and
unrealized gain
(loss) on investments 0.56 (0.93) (0.27) 2.66 (0.77)
------ ------ ------ ------ ------
Total from investment
operations 0.56 0.04 0.94 3.61 (0.29)
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
TO SHAREHOLDERS:
From net investment
income --- (0.17) (0.87) (0.93) (0.50)
From net realized gain
on investments --- (0.34) (0.41) --- ---
In excess of net
investment income --- --- --- (0.04) (0.11)
------ ------ ------ ------ ------
Total distributions
to shareholders --- (0.51) (1.28) (0.97) (0.61)
------ ------ ------ ------ ------
NET ASSET VALUE,
END OF PERIOD $21.49 $20.93 $21.40 $21.74 $19.10
====== ====== ====== ====== ======
- ---------------------------------------------------------------------------
Total Return 2.68%(c)(d) 0.16% 4.39%(d) 19.08%(d) (1.52)%(c)(d)
===========================================================================
Ratio of net expenses
to average net assets 1.54%(b) 1.63% 1.57% 1.55% 1.73%(b)
Ratio of net investment
income to average
net assets 4.47%(b) 4.75% 4.98% 5.07% 4.19%(b)
Portfolio turnover 65%(c) 197% 202% 214% 266%(c)
Net assets at end of
period (000's omitted) $18,123 $17,465 $16,852 $18,823 $9,520
===========================================================================
Expense Waiver (a)
Ratio of total expenses
to average net assets 1.58%(b) N/A 1.60% 1.69% 2.03%(b)
Ratio of net investment
income to average
net assets 4.42%(b) N/A 4.95% 4.93% 3.89%(b)
===========================================================================
</TABLE>
[FN]
(a) Ratio information assuming no waiver of investment advisory and
management fees and/or administrative fees and no reduction of
custodian expenses in effect for the periods presented, if applicable.
(See Note 1c and Note 2 of Notes to Financial Statements).
(b) Annualized.
(c) Not annualized.
(d) The total return would have been lower had certain expenses not been
reduced during the periods.
</FN>
22
<PAGE>
- --------------------------------------------------------------------------
THE MANAGERS FUNDS
NOTES TO FINANCIAL STATEMENTS
June 30, 1998 (unaudited)
- --------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Managers Funds (the "Trust") is a no-load, open-end, management
investment company, organized as a Massachusetts business trust, and
registered under the Investment Company Act of 1940 (the "1940 Act"), as
amended. Currently the Trust is comprised of 11 investment series.
Included in this report are Managers Short and Intermediate Bond Fund
("Short and Intermediate Bond"), 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 to
make estimates and assumptions that affect the reported amount of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of income and
expenses during the reporting periods. Actual results could differ from
those estimates.. The following is a summary of significant accounting
policies followed by the Funds in the preparation of their financial
statements:
(a) VALUATION OF INVESTMENTS
Fixed income securities are valued based upon valuations furnished by
independent pricing services that utilize matrix systems which reflect such
factors as security prices, yields, maturities, and ratings, and are
supplemented by dealer and exchange quotations. Equity securities traded on
a domestic or international securities exchange are valued at the last
quoted sales price, or, lacking any sales, on the basis of the last quoted
bid price. Over-the-counter securities for which market quotations are
readily available are valued at the last quoted bid price. Short-term
investments having a remaining maturity of 60 days or less are valued at
amortized cost which approximates market. Securities for which market
quotations are not readily available are valued at fair value, as determined
in good faith and pursuant to procedures establishedadopted by the Board of
Trustees.
Investments in certain mortgage-backed, stripped mortgage-backed, preferred
stocks, convertible securities and other debt securities not traded on an
organized market, are valued on the basis of valuations provided by dealers
or by a pricing service which uses information with respect to transactions
in such securities, various relationships between securities and yield to
maturity in determining value.
(b) SECURITY TRANSACTIONS
Security transactions are accounted for as of trade date. Gains and losses
on securities sold are determined on the basis of identified cost.
23
<PAGE>
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------
(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. Non-cash dividends included in dividend income, if
any, are recorded at the fair market value of the securities received.
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 relative net assets.
Each of the Funds has a "balance credit" arrangement with the custodian
bank whereby each Fund is credited with an interest factor equal to 0.75%
of the nightly Fed Funds rate for account balances left uninvested overnight.
These credits serve to reduce custody expenses that would otherwise be
charged to the Funds. For the six months ended June 30, 1998, the Short
and Intermediate, Bond and Global Bond Funds' custody expenses were
reduced by $, $ and $, respectively, under these arrangements.
(d) DIVIDENDS AND DISTRIBUTIONS
Dividends resulting from net investment income normally will be declared
monthly for Managers Short and Intermediate Bond and Bond Fund and quarterly
for Managers Global Bond Fund. These dividends normally will be payable on
the third to the last business day of the month. Distributions of capital
gains, if any, will be made on an annual basis and when required for federal
excise tax purposes. Income and capital gain distributions are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for mortgage-backed securities, option transactions,
market discount and foreign currency transactions. Permanent book and tax
basis differences, if any, relating to shareholder distributions will
result in reclassifications to paid-in capital.
(e) ORGANIZATION COSTS (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,
24
<PAGE>
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------
realization of the collateral by the Fund may be delayed or limited.
(g) FEDERAL TAXES
Each Fund intends to comply with the requirements under Subchapter M of the
Internal Revenue Code of 1986, as amended, and to distribute substantially
all of its taxable income and gains to its shareholders and to meet certain
diversification and income requirements with respect to investment
companies. Therefore, no federal income or excise tax provision is included
in the accompanying financial statements.
(h) CAPITAL LOSS CARRYOVERS
As of June 30, 1998, Short and Intermediate 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, 2005.
<TABLE>
<CAPTION>
CAPITAL LOSS
FUND AMOUNT EXPIRES
- ---- ------------ -------
<S> <C> <C>
Short and
Intermediate $ 2,885,440 1998
Bond 2,344,832 2002
7,662,253 2003
70,518 2004
179,401 2005
</TABLE>
(i) CAPITAL STOCK
The Trust's Declaration of Trust authorizes each series of the Trust the
issuance of an unlimited number of shares of beneficial interest, without
par value. Each Fund records sales and repurchases of its capital stock on
the trade date. Dividends and distributions to shareholders are recorded as
of the ex-dividend date.
At June 30, 1998, one unaffiliated shareholder, which is an omnibus
account, individually held greater than 160% of the outstanding shares of
Managers Bond Fund.
(j) FOREIGN CURRENCY TRANSLATION
The books and records of each Fund are maintained in U.S. dollars. The
value of investments, assets and liabilities denominated in currencies
other than U.S. dollars are translated into U.S. dollars based upon current
foreign exchange rates. Purchases and sales of foreign investments and
income and expenses are converted into U.S. dollars based on currency
exchange rates prevailing on the respective dates of such transactions.
Net realized and unrealized gain (loss) on foreign currency transactions
represent: (1) foreign exchange gains and losses from the sale and holdings
of foreign currencies, (2) gains and losses between trade date and
settlement date on investment securities transactions and forward foreign
currency exchange contracts, and (3) gains and losses from the difference
between amounts of interest and dividends recorded and the amounts actually
received.
In addition, the Funds do not isolate that portion of the results of
operations resulting from changes in exchange rates from the fluctuations
25
<PAGE>
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------
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") p rovides or oversees
investment advisory and management services to the Funds under Management
Agreements with each Fund. The Investment Manager selects a 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 accrued daily and paid monthly
by each Fund to The Managers Funds, L.P. based on each Fund's average daily
net assets. The annual investment advisory and management fee rates, as a
percentage of average daily net assets for the six months ended
June 30, 1998 were as follows:
<TABLE>
<CAPTION>
INVESTMENT ADVISORY
FUND AND MANAGEMENT FEE
---- -------------------
<S> <C>
Short and
Intermediate Bond 0.50%
Bond 0.625%
Global Bond 0.70%
</TABLE>
The Trust has adopted an Administration and Shareholder Servicing Agreement.
The Managers Funds, L.P. serves as each Fund's administrator (the
"Administrator") and is responsible for all aspects of managing the Funds'
operations, including administration and shareholder services to each Fund,
its shareholders, and certain institutions, such as bank trust departments,
broker-dealers and registered investment advisers, that advise or act as
an intermediary with the Funds' shareholders.
For the six months ended 6June 30, 1998, Managers Bond Fund paid a fee to
the Administrator was paid a fee based on each Fund's average daily net
assets of at the annual rate of 0.25% for Short and Intermediate Bond and
Bond, and 0.20% for Global Bond. of the Fund's average daily net assets.
Prior to April 1, 1996, the Administrator was waiving 0.10% of its 0.20%
fee for Managers Global Bond Fund.
An aggregate annual fee of $10,000 is paid to each outside Trustee for
serving as a Trustee of the Trust. In addition, these Trustees receive
meeting fees of $750 for each in-person meeting attended, and $200 for
participation in any telephonic meetings. The Trustee fee expense shown in
the financial statements represents each Fund's allocated portion of the
total fees.
26
<PAGE>
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------
(3) PURCHASES AND SALES OF SECURITIES
Portfolio purchases and sales of investments, excluding short-term
securities, and of U.S. government securities, for the six months ended
June 30, 1998, were as follows:
<TABLE>
<CAPTION>
LONG-TERM SECURITIES U.S. GOVERNMENT SECURITIES ONLY
-------------------- -------------------------------
FUND PURCHASES SALES PURCHASES SALES
- ---- --------- ----- --------- -----
<S> <C> <C> <C> <C>
Short and
Intermediate
Bond $ 7,862,604 $ 8,286,848 $2,155,584 $1,503,209
Bond 17,916,505 12,595,355 4,828,031 8,002,762
Global Bond 10,219,216 11,609,685 5,825,349 5,582,041
</TABLE>
(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 temporary money market investments by the
custodian. Earnings of such temporary cash investments are divided between
the custodian, as a fee for its services under the program, and the Fund,
according to agreed-upon rates.
(5) FORWARD FOREIGN CURRENCY CONTRACTS
During the six months ended6 June 30, 1998, Managers Global Bond Fund
invested in forward foreign currency exchange contracts to manage currency
exposure. These investments may involve greater market risk than the
amounts disclosed in the Funds' financial statements.
A forward foreign currency exchange contract is an agreement between a
Fund and another party to buy or sell a currency at a set price at a future
date. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is marked-to-market daily, and the
change in market value is recorded as an unrealized gain or loss. Gain or
loss on the purchase or sale of contracts having the same settlement date,
amount and counterparty is realized on the date of offset, otherwise gain
or loss is realized on settlement date.
The Funds may invest in non-U.S. dollar denominated instruments subject to
limitations, and enter into forward foreign currency exchange contracts to
facilitate transactions in foreign securities and to protect against a
possible loss resulting from an adverse change in the relationship
27
<PAGE>
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------
between the U.S. dollar and such foreign currency. Risks may arise upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts and from unanticipated movements in
the value of a foreign currency relative to the U.S. dollar.
Open forward foreign currency exchange contracts for Managers Global Bond
Fund at June 30, 1998 were as follows:
<TABLE>
<CAPTION>
CONTRACT CURRENT UNREALIZED
AMOUNT (IN VALUE (IN GAIN/LOSS
FOREIGN CURRENCY LOCAL CURRENCY) US DOLLARS) (IN US DOLLARS)
- ---------------- -------------- ---------- -------------
<S> <C> <C> <C>
All contracts expire August 14, 1998
BUY CONTRACTS
Deutsche Mark 2,323,559 $1,291,915 ($20,830)
Pound Sterling 195,838 326,185 7,360
Japanese Yen 502,675,199 3,659,726 52,386
---------- --------
TOTAL BUY CONTRACTS
(Payable amount $5,238,910) $5,277,826 $38,916
========== ========
SELL CONTRACTS
Deutsche Mark 70,000 $ 38,921 $ 298
Japanese Yen 146,063,840 1,063,418 (23,418)
---------- --------
TOTAL SELL CONTRACTS
(Receivable amount $1,992,182) $1,102,339 ($23,120)
========== ========
</TABLE>
(6) RISKS ASSOCIATED WITH COLLATERAL MORTGAGE OBLIGATIONS ("CMOs")
The net asset value of Managers Bond Fund may be sensitive to interest rate
fluctuations because the Fund may hold several instruments, including CMOs
and other derivatives, whose values can be significantly impacted by
interest rate movements. CMOs are obligations collateralized by a portfolio
of mortgages or mortgage-related securities. Payments of principal and
interest on the mortgage are passed through to the holder of the CMOs on
the same schedule as they are received, although certain classes of CMOs
have priority over others with respect to the receipt of prepayments on the
mortgages.
Therefore, the investment in CMOs may be subject to a greater or lesser
risk of prepayment than other types of mortgage-related securities. CMOs
may have a fixed or variable rate of interest.
28
<PAGE>
[LOGO]
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, Kemper Investments, Inc.
Chartwell Investment Partners, L.P.
CAPITAL APPRECIATION FUND
Essex Investment Management
Company, LLC
Husic Capital Management
SPECIAL EQUITY FUND
Liberty Investment Management
Pilgrim Baxter & Associates, Ltd.
Westport Asset Management, Inc.
Kern Capital Management, LLC
INTERNATIONAL EQUITY FUND
Scudder, Kemper Investments, Inc.
Lazard Asset Management Co.
EMERGING MARKETS EQUITY FUND
Montgomery Asset Management LLC
King Street Advisors, Limited
FIXED INCOME FUNDS:
MONEY MARKET FUND
J.P. Morgan
SHORT AND INTERMEDIATE
BOND FUND
Standish, Ayer & Wood, Inc.
BOND FUND
Loomis, Sayles & Company, L.P.
GLOBAL BOND FUND
Rogge Global Partners
<PAGE>
