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<P><B>President's Message</B>
<P>
<P>
<P>
<P>
<P>
<P>
<P>
</H6>
<P>
<H6>
<B>Dear Fellow Shareholder</B>:
<P> The first half of 1999 was an active period for both the financial markets
and The Managers Funds. The U.S. economy continued to grow as low levels
of unemployment and healthy stock market returns have enabled consumers to
expand their spending habits. This is a major factor in the economy's
strength.
In addition, a rebound in some of the emerging economies, particularly in the
Far East has had a positive effect on U.S. businesses prospects for export
growth.
While these factors have driven stock prices higher so far this year, they
have also raised the probability of price inflation. Early in the year,
Federal Reserve Chairman Alan Greenspan noted the strength and publicly
questioned the suitability of the third interest rate cut in late 1998. Then,
at its May meeting, the Federal Reserve Board (the "Fed") changed
its policy bias from neutral
to tightening, sighting "the persistent strength in domestic demand, the
reduced risks of economic weakness abroad, and the recovery in U.S. financial
markets."
Finally, in a widely anticipated move at the end of June, the Fed voted to
increase
</H6>
<H6>
short-term rates by 25 basis points (0.25%) to 5.0%. As a result of all
of these factors, interest rates rose throughout the first half, and thus, bond
prices moved lower in general. The yield on 5-year treasury notes rose more
than
one full percentage point during the six months ended May 31, 1999.
Although prices for below investment grade bonds bucked this trend as investors
confidence in the respective companies improved with the perceived improvement
in
the global economy, many high quality and government bonds had negative
total returns for the period. Short-term bonds, treasury bills and commercial
paper, however, are far less interest rate
sensitive and thus provided steady returns throughout the period. For the
six months
ended May 31, 1999, the Managers Money Market Fund returned 2.32%.
Meanwhile, an index of 3-month treasury bills returned 2.22%, and the return
for
the IBC All Taxable Money Fund Average (an index compiled by IBC
Financial Data Corp. which serves as an appropriate benchmark for the Fund)
was 2.17%.
<P> Changes in the portfolio's maturity positioning along with the
manager's changes in asset mix added marginally
to the overall performance during the period. Early in the year the
management team at J.P. Morgan maintained the Fund's average maturity near the
maximum target range of 60 days in order to take advantage of a steep yield
curve
and in the belief that the Fed would wait until mid-year before raising rates.
In
case there was an increase in rates, they utilized a bar-bell maturity
structure
and
</H6>
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<H6>
maintained a large position in floating rate notes. Throughout the
second quarter the manager reduced the portfolio's average maturity in
anticipation of the Fed's rate hike. On May 31, 1999, the Fund's average
maturity was
54 days while the average maturity for the IBC All Taxable Money Fund
Average was 60 days. The manager continued shortening the average maturity
throughout June and plans to maintain this position (in the low to mid 40-day
range) for the near future. The portfolio continues to hold a large portion
of floating rate notes and domestic commercial paper.
<P> The accompanying chart provides a breakdown of the portfolio as of May
31, 1999.
<P>
<P>
<P>
<P>
<P>
<P>
<P>
<P>
<P>
<P>
<P>
<P>
<P> As of May 31, 1999, the 30-day average annualized yield for the
Fund was 4.50%. For comparison, the 30-day average yield for the IBC All
Taxable Money Fund Average for the same period was 4.29%. The average
seven-day simple yield for the IBC All Taxable Money Fund Average was 4.35% on
June 30, 1999, and the seven-day compound
</H6>
<H6>
yield was 4.44%. The simple and compound yields for the
Managers Money Market Fund for the same period were 4.61%, and 4.71%,
respectively.
<P> Not only has the Managers Money Market Fund performed within
expectations, many of our fixed-income and equity mutual funds have had a
successful first half of 1999. Please see page 3
for the performance results of all of our funds.
<P> Last but certainly not least, Robert Watson, our founder and president
retired from The Managers Funds on April 1, 1999. I would like to take this
opportunity to personally thank Bob for creating a first rate product for our
shareholders
as well as assembling a top quality team of people to support our shareholders
in
The Managers Funds. Importantly, Bob will remain on the Funds' Board of
Trustees and will thus continue to be involved
with The Managers Funds.
<P> As always, should you have any questions on this report, please feel
free to contact us at 1-800-835-3879, or visit our website at
www.managersfunds.com.
<P> We thank you for your continued investment in The Managers Funds.
<P>
<P>Sincerely,
<P>
<P>
<P>
<P>Peter M. Lebovitz
</H6>
<HR>
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<P
ALIGN="CENTER">The accompanying notes are an integral part of these financial
statements.
<
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The accompanying notes are an integral part of these financial
statements.
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<P><B>Managers Money Market Fund
<P>Notes to Financial Statements</B>
<P>May 31, 1999 (unaudited)
<P>Managers Money Market Fund (the "Fund") is a series of The
Managers Funds (the "Trust"), a no-load, diversified, open-end
management investment company, organized as a Massachusetts business trust,
and registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). Currently the Trust is comprised of 10
investment series, (collectively the "Funds").
<H6>
<P>The Fund invests all of its investable assets in The Prime
Money Market Portfolio (the "Portfolio"),
a diversified, open-end management investment company having
the same investment objectives as the Fund. The value of such
investment included in the statement of assets and liabilities reflects the
Fund's proportionate interest in the net assets of the Portfolio (0.45%
at May 31, 1999). The performance of the Fund is directly affected by
the performance of the Portfolio. The financial statements of the
Portfolio, including the schedule of investments, are included elsewhere
in this report and should be read in conjunction with the Fund's
financial statements.
<P>
<P><B>(1) Summary of Significant</B>
<P> <B>Accounting Policies</B>
<P>The Fund's financial statements are prepared in accordance with
gener
</H6>
<H6>
ally accepted accounting principles, which requires management 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 reported period. Actual amounts could
differ from those estimates. The following is a summary of
significant accounting policies followed by the Fund in the preparation of
its financial statements:
<P>
<P> <B>(a) Valuation of Investments</B>
<P>Valuation of securities by the Portfolio is discussed in Note
1(a) of the Portfolio's Notes to Financial Statements, which are
included elsewhere in this report.
<P>
<P> <B>(b) Security Transactions</B>
<P>The Fund records its share of interest income, expenses
and realized gains and losses and adjusts its investment in the Portfolio
each day.
<P>
<P> <B>(c) Investment Income
<P> and Expenses</B>
<P>All the net investment income and realized gains and losses of
the Portfolio are allocated pro rata among the Fund and other
investors in the Portfolio at the time of such
</H6>
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<P><B>Notes to Financial Statements
</B>(continued)
<HR>
<H6>
determination. Expenses incurred by the Trust with respect to one or
more funds in the Trust are allocated in proportion to the net assets of
each fund in the Trust, except where allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly attributable to
a fund are charged to that fund.
<P>
<P> <B>(d) Dividends and Distributions</B>
<P>Dividends resulting from net investment income normally will
be declared daily, payable on the third to the last business day of the month.
<P>
<P>Distributions classified as capital gains for federal income tax
purposes, if any, will be made on an annual basis and when required
for federal excise tax purposes. Income and capital gain distributions
are determined in accordance with income tax regulations, which
may differ from generally accepted accounting principles.
Permanent book and tax differences, if any, relating to shareholder
distributions will result in reclassifications to
paid-in capital.
<P>
<P> <B>(e) Federal Taxes</B>
<P>The Fund intends to comply with the requirements under Subchapter M
of the Internal Revenue Code of 1986, as amended, and to distribute
sub
</H6>
<H6>
stantially all of its taxable income and gains, if any, to its
shareholders and to meet certain diversification and income requirements
with respect to investment companies. Therefore, no federal income
or excise tax provision is included in the accompanying financial statements.
<P>
<P> <B>(f) Capital Stock</B>
<P>The Trust's Declaration of Trust authorizes the issuance of an
unlimited number of shares of beneficial interest, without par value. The
Fund records sales and repurchases of its capital stock on the trade date.
Dividends and distributions to shareholders are recorded as of
the ex-dividend date.
<P>
<P><B>(2) Agreements and Transactions
<P> with Affiliates</B>
<P>The Trust has adopted an Administrative and Shareholder
Servicing Agreement under which The Managers Funds, LLC (formerly
The Managers Funds, L.P.), a subsidiary of Affiliated Managers Group,
Inc., serves as the Fund's administrator (the "Administrator") and is
responsible for all aspects of managing the Fund's operations, including
administration and shareholder services to the Fund, its shareholders,
and certain institutions, such as bank trust departments, dealers and
registered
</H6>
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<P><B>Notes to Financial Statements
</B>(concluded)
<H6>
investment advisers, that advise or act as an intermediary with
the Fund's shareholders.
<P>
<P>As amended on April 1, 1999, the Trustees approved a fee for
these services, payable to the Administrator, of 0.25% of the Fund's
average daily net assets per annum, 0.15% of which has been
voluntarily waived for the six months ended May 31, 1999.
<P>Effective April 1, 1999, the aggre
</H6>
<H6>
gate annual fee paid to each outside Trustee for serving as a Trustee
of the Trust has been increased to $16,000. In addition, the
in-person and telephonic meeting fees the Trustees receive have been
increased to $1,000 and $500 per meeting, respectively. The
Trustee fee expense shown in the financial statements represents the
Fund's allocated portion of the total fees paid by the Trust.
</H6>
<H6>
This waiver may be modified or terminated at any time at the
sole discretion of the Administrator.
</H6>
<HR>
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>
<P><B>Supplemental Data
<P>Proxy Result Information </B>(unaudited)
At the Special Meeting of Shareholders of the Trust held on March 31,
1999, the following votes were recorded for Managers Money Market Fund
(the "Fund"). The proposals, which shareholders were asked to vote
on,
are explained in further detail in the proxy statement dated February 2, 1999.
Only proposals three and four related to the Fund:
<P>
<P>
<P> <U>Proposal 3 _ Expansion of the Board of Trustees</U>
<P> Shares For 27,615,606
<P> Shares Against 779,508
<P> Shares Abstained 1,274,411
<P>
<P>
<P> <U>Proposal 4 _ Election of Trustees</U>
<P> <U>Trustee</U> <U>Votes For</U>
<U>Withheld</U>
<P> Madeline H. McWhinney 28,736,727 932,799
<P> Steven J. Paggioli 28,736,727 932,799
<P> Thomas R. Schneeweis 28,736,727 932,799
<P> Robert P. Watson 28,736,727 932,799
<P> Sean M. Healey 28,736,727 932,799
<P> Jack W. Aber 28,736,727 932,799
<P> William E. Chapman, II 28,736,727 932,799
<P> Edward J. Kaier 28,736,727 932,799
<P> Eric Rakowski 28,736,727 932,799
<P>
<P>
<P>Pursuant to Article III, Section 1 of the By-Laws of the Trust and the
1940 Act, such
total votes on each proposal represents a quorum of the outstanding shares of
the Fund.
</H6>
<HR>
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<P><B>The Prime Money Market Portfolio
<P>Schedule of Investments</B>
<P>May 31, 1999 (unaudited)
<HR>
<B>Prinicpal
<P >Amount
<P >(in thousands)</B>
<P><B>Yield to
<P >Maturity/Rate</B>
<P ><B>Security Description</B>
<P ><B>Maturity Dates</B>
<P ><B>Value</B>
<P >The accompanying notes are an integral part of these financial
statements.
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<P><B>The Prime Money Market Portfolio
<P>Schedule of Investments</B> (continued)
<P>May 31, 1999 (unaudited)
<P ><B>Prinicpal
<P >Amount
<P >(in thousands)</B>
<P ><B>Yield to
<P >Maturity/Rate</B>
<P ><B>Security Description</B>
<P ><B>Maturity Dates</B>
<P ><B>Value</B>
<P >The accompanying notes are an integral part of these financial
statements.
<HR>
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<P><B>The Prime Money Market Portfolio
<P>Schedule of Investments</B> (continued)
<P>May 31, 1999 (unaudited)
<P ><B>Prinicpal
<P >Amount
<P >(in thousands)</B>
<P ><B>Yield to
<P >Maturity/Rate</B>
<P ><B>Security Description</B>
<P ><B>Maturity Dates</B>
<P ><B>Value</B>
<P >The accompanying notes are an integral part of these
financial statements.
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<P><B>The Prime Money Market Portfolio
<P>Schedule of Investments</B> (continued)
<P>May 31, 1999 (unaudited)
<P ><B>Prinicpal
<P >Amount
<P >(in thousands)</B>
<P ><B>Yield to
<P >Maturity/Rate</B>
<P ><B>Security Description</B>
<P ><B>Maturity Dates</B>
<P ><B>Value</B>
<P><B>FLOATING RATE NOTES (continued)</B>
The accompanying notes are an integral part of these financial
statements.
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<P><B>The Prime Money Market Portfolio
<P>Schedule of Investments</B> (concluded)
<P>May 31, 1999 (unaudited)
<B>Prinicpal
<P >Amount
<P >(in thousands)</B>
<P ><B>Yield to
<P >Maturity/Rate</B>
<P ><B>Security Description</B>
<P ><B>Maturity Dates</B>
<P ><B>Value</B>
<P >The accompanying notes are an integral part of these financial
statements.
<P >
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<P >The accompanying notes are an integral part of these financial
statements.
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<P><B>The Prime Money Market Portfolio
<P>Notes to Financial Statements</B>
<P>May 31, 1999 (unaudited)
<B>1. Organization and Significant</B>
<P> <B>Accounting Policies</B>
<P>
<P>The Prime Money Market Portfolio (the "portfolio'') is registered
under the Investment Company Act of 1940, as amended, as a
no-load, open-end management investment company which was organized as
a trust under the laws of the State of New York on November 4, 1992.
The portfolio's investment objective is to maximize current
income consist with the preservation of capital and same daily liquidity.
The portfolio commenced operations on July 12, 1993. The
Declaration of Trust permits the trustees to issue an unlimited number
of beneficial interests in the portfolio.
<P>
<P>The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
and disclosures. Actual amounts could differ from those estimates.
The following is a summary of the significant accounting policies
of the portfolio:
<P>
</H6>
<P> a) Investments are valued at amortized cost, which
approximates market value. The amortized cost
<P>method of valuation values a security at its cost at the time
of purchase and thereafter assumes a constant amortization to maturity
of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instruments.
<H6>
</H6>
<P>The portfolio's custodian or designated subcustodians, as the
case may be under the tri-party repurchase agreements, takes
possession of the collateral pledged for investments in repurchase agreements
on behalf of the portfolio. It is the policy of the portfolio to value
the underlying collateral daily on a mark-to-market basis to
determine that the value, including accrued interest, is at least equal to
the repurchase price plus accrued interest. In the event of default
of the obligation to repurchase, the portfolio has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation.
Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of
the collateral or proceeds may be subject to legal proceedings.
<H6>
</H6>
<P> b) Securities transactions are recorded on a trade date
basis.
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<P><B>The Prime Money Market Portfolio
<P>Notes to Financial Statements </B>(continued)
<P>May 31, 1999 (unaudited)
<P>Interest income, which includes
the amortization of premiums and discounts, if any, is recorded on
an accrual basis. For financial and tax reporting purposes, realized
gains and losses are determined on the basis of specific lot identification.
<P>
<P> c) The portfolio intends to be treated as a partnership for
federal income tax purposes. As such, each investor in the portfolio will
be taxed on its share of the portfolio's ordinary income and capital gains.
It is intended that the portfolio's assets will be managed in such
a way that an investor in the portfolio will be able to satisfy the
requirements of Subchapter M of the Internal Revenue Code. The cost
of securities is substantially the same for book and tax purposes.
<P>
<P><B>2. Transactions with Affiliates</B>
<P>
<P> a) The portfolio has an Investment Advisory Agreement with
J.P. Morgan Investment Management Inc. ("JPMIM"), an affiliate
of Morgan Guaranty Trust Company of New York ("Morgan'') and a
wholly owned subsidiary of J.P. Morgan & Co. Incorporated ("J.P.
Morgan"). Under the terms of the agreement, the portfolio pays JPMIM at
an annual rate of 0.20% of the
<P>portfolio's average daily net
assets up to $1 billion and 0.10% on any excess over $1 billion. For the
six months ended May 31, 1999, such fees amounted to $6,141,104.
<P>
<P> b) The portfolio has retained Funds Distributor, Inc. ("FDI"),
a registered broker-dealer, to serve as the co-administrator and
exclusive placement agent. Under a Co-Administration Agreement
between FDI and the portfolio, FDI provides administrative services necessary
for the operations of the portfolio, furnishes office space and
facilities required for conducting the business of the portfolio and pays the
compensation of the officers affiliated with FDI. The portfolio has
agreed to pay FDI fees equal to its allocable share of an annual
complex-wide charge of $425,000 plus FDI's out-of-pocket expenses. The
amount allocable to the portfolio is based on the ratio of the portfolio's net
assets to the aggregate net assets of the portfolio and certain other
investment companies subject to similar agreements with FDI. For the
six months ended May 31, 1999, the fee for these services amounted
to $71,722.
<P>
<P> c) The portfolio has an Administrative Services Agreement
(the
<HR>
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<P><B>The Prime Money Market Portfolio
<P>Notes to Financial Statements </B>(concluded)
<P>May 31, 1999 (unaudited)
<P>"Services Agreement'') with Morgan under which Morgan
is responsible for certain aspects of the administration and operation of
the portfolio. Under the Services Agreement, the portfolio has
agreed to pay Morgan a fee equal to its allocable share of an annual
complex-wide charge. This charge is calculated based on the
aggregate average daily net assets of the portfolio and certain other
portfolios for which JPMIM acts as investment advisor (the "master
portfolios")
and J.P. Morgan Series Trust in accordance with the following
annual schedule: 0.09% on the first $7 billion of their aggregate
average daily net assets and 0.04% of their aggregate average daily net assets
in excess of $7 billion less the complex-wide fees payable to FDI.
The portion of this charge payable by the portfolio is determined by
the proportionate share that its net assets bear to the net assets of the
master portfolios, other investors in the master portfolios for which
Morgan provides similar services, and J.P. Morgan Series Trust. For the
six months ended May 31, 1999, the fee for these services amounted
to $1,469,698.
<P>
<P> d) The portfolio has a Fund Services Agreement with
Pierpont
<P>Group, Inc. ("Group'') to assist
the trustees in exercising their overall supervisory responsibilities for
the portfolio's affairs. The trustees of the portfolio represent all
the existing shareholders of Group. The portfolio's allocated portion
of Group's costs in performing its services amounted to $114,876
for the six months ended May 31, 1999.
<P>
<P> e) An aggregate annual fee of $75,000 is paid to each trustee
for serving as a trustee of the trust, the J.P. Morgan Funds, the J.P.
Morgan Institutional Funds, the master portfolios and J.P. Morgan
Series Trust. The Trustees' Fees and Expenses shown in the
financial statements represents the portfolio's allocated portion of the total
fees and expenses. The portfolio's Chairman and Chief
Executive Officer also serves as Chairman of Group and receives
compensation and employee benefits from Group in his role as Group's Chairman.
The allocated portion of such compensation and benefits
included in the Fund Services Fee shown in the financial statements
was
<HR>
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>Fund Distributor
<P >he Managers Funds LLC</FONT></B>
<P><FONT COLOR="#07376f">40 Richards Avenue
<P>Norwalk, Connecticut 06854-2325
<P>(203) 857-5321 or (800) 835-3879
<P ><B>Custodian</B>
<P>State Street Bank and Trust
<P>Company<BR>
1776 Heritage Drive
<P>North Quincy, Massachusetts 02171
<P ><B>Legal Counsel</B>
<P>Swidler Berlin Shereff Friedman, LLP
<P>919 Third Avenue
<P>New York, New York 10022
<P ALIGN="JUSTIFY"><B>Transfer Agent</B>
<P>Boston Financial Data Services, Inc.
<P>attn: The Managers Funds
<P>P.O. Box 8517
<P>Boston, Massachusetts 02266-8517
<P>(800) 252-0682 </FONT>
<TD COLSPAN=2>
<TD COLSPAN=3 ROWSPAN=5 HEIGHT=399 WIDTH=153 VALIGN="TOP">
<P >
<P ><B><FONT COLOR="#07376f">The Managers Funds</FONT></B><FONT
COLOR="#07376f">
<P ><B>Equity Funds:</B>
<P>INCOME EQUITY FUND
<P> Scudder Kemper Investments, Inc.
<P> Chartwell Investment Partners, L.P.
<P>CAPITAL APPRECIATION FUND
<P> Essex Investment Management
<P> Company, LLC
<P> Roxbury Capital Management, LLC
<P>SPECIAL EQUITY FUND
<P> Liberty Investment Management
<P> Pilgrim Baxter & Associates, Ltd.
<P> Westport Asset Management, Inc.
<P> Kern Capital Management LLC
<P>INTERNATIONAL EQUITY FUND
<P> Scudder Kemper Investments, Inc.
<P> Lazard Asset Management
<P>EMERGING MARKETS
<P> EQUITY FUND
<P> Rexiter Capital Management<BR>
Limited
<P ALIGN="JUSTIFY"><B>Income Funds:</B>
<P>MONEY MARKET FUND
<P> J.P. Morgan Investment
<P> Management Inc.
<P>SHORT AND INTERMEDIATE<BR>
BOND FUND
<P> Standish, Ayer & Wood, Inc. <BR>
BOND FUND
<P> Loomis, Sayles & Company, L.P.
<P>GLOBAL BOND FUND
<P> Rogge Global Partners, plc. </FONT>
<HR>
>This report is prepared for the information of shareholders.
It
is authorized for distribution to prospective invetsors only when preceded
by an effective prospectus.</FONT>
www.managersfunds.com</FONT></B>
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