MANAGERS MONEY MARKET FUND
Semi-Annual Report
May 31, 1999
(unaudited)
TABLE OF CONTENTS
Page
President's Message..................................................... 1
The Managers Funds Performance............................................ 3
Complete performance table for all of The Managers Funds as of June 30, 1999
Managers Money Market Fund
Statement of Assets and Liabilities...................................... 4
Fund balance sheet and Net Asset Value (NAV) per share computation
Statement of Operations.................................................. 4
Detail of sources of income and fund level expenses
Statement of Changes in Net Assets..................................... 5
Detail of changes in fund assets and distributions to shareholders for the
last two periods
Financial Highlights................................................... 6
Historical net asset values, distributions, total returns, expense ratios and
net assets
Notes to Financial Statements.......................................... 7
Accounting and distribution policies, details of agreements and transactions
with fund
management and description of certain investment risks
Supplemental Data........................................................ 10
Results from the Special Meeting of Shareholders held on March 31, 1999
The Prime Money Market Portfolio (The commingled investment pool which
holds all investable assets of the Fund.)
Schedule of Investments................................................ 11
Detailed portfolio listings by security type, as valued at May 31, 1999, of
which
Managers Money Market Fund owns a pro rata share
Statement of Assets and Liabilities..................................... 16
Portfolio's balance sheet
Statement of Operations................................................. 16
Detail of the Portfolio's sources of income, expenses, and realized gains
(losses) during the
period
Statement of Changes in Net Assets...................................... 17
Detail of changes in the Portfolio's assets during the past two periods
Supplemental Data....................................................... 17
Historical ratios of the Portfolio's expenses, net investment income and
impact of expense
reimbursements on the expense ratios
Notes to Financial Statements......................................... 18
The Portfolio's accounting policies and details of agreements and
transactions with
Portfolio management
Investments in Managers Money Market Fund are not deposits or obligations
of, or guaranteed or endorsed by, Morgan Guaranty Trust Company of New York
or any other bank. Shares of the Fund are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other governmental agency. Although the Fund seeks to maintain a stable net
asset value of $1.00 per share, there can be no assurance that it will be
able to continue to do so.
President's Message
Dear Fellow Shareholder:
The 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
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%.
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
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.
The accompanying chart provides a breakdown of the portfolio as of May
31, 1999.
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
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.
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.
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.
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.
We thank you for your continued investment in The Managers Funds.
Sincerely,
/s/ Peter M. Lebovitz
Peter M. Lebovitz
President
The Managers Funds Performance (unaudited)
All Periods Ended June 30, 1999
Average Annual Total Returns*
Six Since Inception Morningstar
Equity Funds: Months+ 1 Year 3 Years 5 Years 10 Years Inception Date
Rating**
Income Equity Fund 11.10% 11.84% 20.40% 20.62% 14.05% 15.48% Oct. '84
PPPP
Capital Appreciation Fund 26.91% 49.68% 33.86% 28.80% 19.66% 19.01%
Jun. '84 PPPPP
Special Equity Fund 11.81% 5.84% 13.82% 19.64% 15.30% 16.17% Jun. '84
PPP
International Equity Fund 6.18% 3.61% 12.57% 12.52% 12.43% 14.00%
Dec. '85 PPPP
Emerging Markets
Equity Fund 37.08% 25.56% __ __ __ 4.36% Feb. '98 N/A
Income Funds:
Short & Intermediate
Bond Fund 0.98% 3.75% 5.32% 5.80% 6.61% 7.97% Jun. '84 PPPP
Bond Fund 4.51% 2.98% 9.12% 10.16% 9.47% 10.70% Jun. '84 PPPP
Global Bond Fund (9.56)% 5.05% 4.64% 5.68% __ 5.47% Mar. '94 P
Money Market Fund 2.28% 4.92% 5.21% 5.12% 4.98% 5.84% Jun. '84 N/A
Past performance is not a guarantee of future results. Investment returns
and principal value of mutual fund shares will fluctuate so that the
redemption price may be more or less than the original purchase price. For a
prospectus including fees and expenses, please visit our website at
www.managersfunds.com, or call The Managers Funds at (800)835-3879 or your
investment adviser. Read the prospectus carefully before you invest.
+ Not annualized.
* Total return 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
06/30/99 and are subject to change every month. The ratings are by asset
class and are calculated from the funds' three-, five- and ten-year returns
(with fee adjustments) in excess of 90-day Treasury bill returns, and a risk
factor that reflects fund performance below 90-day Treasury bill returns.
For the three-, five- and ten-year periods, respectively, each of the Equity
Funds rated other than the International Equity Fund was
Managers Money Market Fund
Statement of Assets and Liabilities
May 31, 1999 (unaudited)
Assets:
nagers Money Market Fund
Statement of Assets and Liabilities
May 31, 1999 (unaudited)
Assets:
Investment in The Prime Money Market Portfolio ("Portfolio") $56,051,943
Prepaid expenses 11,729
Total assets 56,063,672
Liabilities:
Dividends payable to shareholders 29,093
Other accrued expenses 27,995
Total liabilities 57,088
Net Assets $56,006,584
Shares outstanding 56,006,584
Net asset value, offering and redemption price per share $1.00
Net Assets Represent:
Paid-in capital $56,006,584
Statement of Operations
For the six months ended May 31, 1999 (unaudited)
Investment Income from Portfolio:
Interest income $1,152,710
Expenses:
Administration fees $ 56,273
Transfer agent fees 25,178
Registration fees 10,500
Reports to shareholders 7,874
Audit fees 4,098
Accounting fees 2,994
Legal fees 1,175
Trustees' fees 650
Miscellaneous expenses 4,404
Allocated Portfolio expenses 33,783
Total expenses 146,929
Less: Waiver of administration fees (33,737)
Net expenses 113,192
Net investment income $1,039,518
Managers Money Market Fund
Statement of Changes in Net Assets
For the
six months ended For the
May 31, 1999 year ended
(unaudited) November 30, 1998
Increase (Decrease) in Net Assets
From Operations:
Net investment income $ 1,039,518 $ 1,894,525
Distributions to Shareholders:
From net investment income (1,039,518) (1,894,525)
From Capital Share Transactions
(at a constant $1.00 per share):
Proceeds from sale of shares 632,408,506 601,974,751
Net asset value of shares issued in
connection with reinvestment of
dividends 868,560 1,674,537
Cost of shares repurchased (622,552,099) (594,911,842)
Net increase from capital share
transactions 10,724,967 8,737,446
Total increase in net assets 10,724,967 8,737,446
Net Assets:
Beginning of period 45,281,617 36,544,171
End of period $ 56,006,584 $ 45,281,617
Managers Money Market Fund
Financial Highlights
For a share of capital stock outstanding throughout each period
Six months Eleven months
ended ended Year ended
May 31, 1999 Year ended November 30, November 30, December 31,
(unaudited) 1998 1997 1996 1995 1994
Net Asset Value,
Beginning of Period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Income from Investment
Operations:
Net investment income 0.023 0.052 0.052 0.054 0.044 0.035
Less Distributions to
Shareholders from:
Net investments income (0.023) (0.052) (0.052) (0.054) (0.044)
(0.035)
Net Asset Value,
End of Period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Total Return (c) 4.69% (b) 5.30% 5.35% 5.53% 4.51% (b) 3.61%
Ratio of net expenses to
average net assets 0.50% (b) 0.50% 0.40% 0.12% 1.13% (b) 0.73%
Ratio of net investment
income to average net assets 4.62% (b) 5.17% 5.22% 5.35% 4.85% (b)
3.84%
Net assets at end of period
(000's omitted) $56,007 $45,282 $36,544 $36,091 $11,072
$17,269
Expense Waiver (a)
Ratio of total expenses to
average net assets 0.65% (b) 0.70% 0.74% 0.75% 1.18% (b) 1.03%
Ratio of total investment
income to average net assets 4.47% (b) 4.97% 4.88% 4.71% 4.80% (b)
3.54%
(a) Ratio information assuming no waiver of investment advisory and
management fees and/or
administrative fees in effect for the periods presented, if applicable.
(See Note 2).
(b) Annualized.
(c) The total returns would have been lower had certain expenses not been
reduced during the
periods shown.
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").
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 P
investments, are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements.
(1) Summary of Significant
Accounting Policies
The Fund's financial statements are prepared in accordance with generally
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 follow
on of its financial statements:
(a) Valuation of Investments
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.
(b) Security Transactions
The Fund records its share of interest income, expenses and realized gains
and losses and adjusts its investment in the Portfolio each day.
(c) Investment Income
and Expenses
All the net investment income and realized gains and losses of the Portfolio
are allocated pro rata among the Fund and other investors in the Portfolio
at the time of such determination. Expenses incurred by the Trust with
respect to one or more funds in the Trust are allocated in proportion to the
net assets of each fund in the Trust, except where allocations of direct
expenses to each fund can otherwise be made fairly. Expenses directly
attributable to a fund are charged to that fund.
(d) Dividends and Distributions
Dividends resulting from net investment income normally will be declared
daily, payable on the third to the last business day of the month.
Distributions classified as capital gains for federal income tax purposes, if
any, will be made on an annual basis and when required for federal excise
tax purposes. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles. Permanent book and tax differences, if any,
relating to shareholder distributions will result in reclassifications to
paid-in capital.
(e) Federal Taxes
The Fund intends to comply with the requirements under Subchapter M of the
Internal Revenue Code of 1986, as amended, and to distribute substantially
all of its taxable income and gains, if any, to its shareholders and to meet
certain diversification and income requirements with respect to investment
companies. Therefore, no federal income or excise tax provision is included
in the accompanying financial statements.
(f) Capital Stock
The Trust's Declaration of Trust authorizes the issuance of an unlimited
number of shares of beneficial interest, without par value. The Fund
records sales and repurchases of its capital stock on the trade date.
Dividends and distributions to shareholders are recorded as of the
ex-dividend date.
(2) Agreements and Transactions
with Affiliates
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 investment advisers, that
ry with the Fund's shareholders.
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.
This waiver may be modified or terminated at any time at the sole discretion
of the Administrator.
Effective April 1, 1999, the aggregate 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.
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:
Proposal 3 - Expansion of the Board of Trustees
Shares For 27,615,606
Shares Against 779,508
Shares Abstained 1,274,411
Proposal 4 - Election of Trustees
Trustee Votes For Withheld
Madeline H. McWhinney 28,736,727 932,799
Steven J. Paggioli 28,736,727 932,799
Thomas R. Schneeweis 28,736,727 932,799
Robert P. Watson 28,736,727 932,799
Sean M. Healey 28,736,727 932,799
Jack W. Aber 28,736,727 932,799
William E. Chapman, II 28,736,727 932,799
Edward J. Kaier 28,736,727 932,799
Eric Rakowski 28,736,727 932,799
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.
CERTIFICATES OF DEPOSIT-DOMESTIC (1.9%)
$ 171,000 Nationsbank Corp. 01/05/00 5.000% $ 170,980,293
59,000 State Street Bank & Trust Co. 06/16/99 4.810 59,000,000
Total Certificates of Deposit-Domestic 229,980,293
CERTIFICATES OF DEPOSIT-FOREIGN (16.9%)
350,000 Abbey National PLC 06/11/99-05/11/00 5.220-5.720 349,902,455
110,000 Bank of Nova Scotia 02/25/00 5.160 109,981,482
285,000 Barclays Bank PLC 01/10/00 4.980 284,980,802
325,000 Bayerische Hypo Vereinsbank 02/22/00-04/25/00 5.130-5.150
324,887,861
50,000 Bayerische Landesbank 07/22/99 5.645 49,994,979
100,000 Canadian Imperial Bank 02/07/00 5.010 99,980,106
124,500 Commerzbank 01/10/00-02/08/00 5.010-5.050 124,471,526
150,000 Credit Suisse First Boston 07/20/99 5.710 150,000,000
125,000 Deutsche Bank 01/11/00-02/02/00 4.970-5.020 124,973,676
100,000 Norddeutsche Landesbank Girozentra 02/18/00 5.090 99,972,332
75,000 Rabobank Nederland 01/10/00 4.980 74,973,487
300,000 Union Bank of Switzerland 01/13/00-05/19/00 5.080-5.285
299,900,126
Total Certificates of Deposit-Foreign 2,094,018,832
COMMERCIAL PAPER-DOMESTIC (28.7%)
542,078 Alpine Securitization Corp. 06/01/99-07/09/99 4.820-4.950
541,830,483
120,000 Aspen Funding Corp. 06/01/99 4.930 120,000,000
180,000 Asset Securitization Corp. 06/23/99 4.810 179,470,900
374,700 Bavaria Trust 06/14/99-07/23/99 4.820-4.830 373,869,047
191,622 Citibank Capital Market 06/11/99-06/14/99 4.870 191,338,022
505,839 CXC, Inc. 06/01/99-06/23/99 4.800-4.930 505,575,657
42,000 General Electric Capital Corp. 06/14/99 4.790 41,927,352
224,695 Monte Rosa Capital 06/16/99-07/07/99 4.830-4.950 223,831,919
273,000 Morgan Stanley Dean Witter & Co. 06/09/99-06/10/99 4.810-4.830
272,705,005
300,000 Newport Funding Corp. 06/01/99-06/17/99 4.820-4.930 299,785,778
175,842 Receivable Capital Corp. 06/09/99-06/18/99 4.810 175,511,405
60,000 Suntrust Bank, Inc. 06/09/99 4.790 59,936,133
118,479 Trident Capital, Inc. 06/03/99-06/11/99 4.810-4.840 118,373,573
459,296 Windmill Funding Corp. 06/04/99-06/18/99 4.810 458,610,797
Total Commercial Paper-Domestic 3,562,766,071
COMMERCIAL PAPER-FOREIGN (0.3%)
37,000 Halifax PLC 07/13/99 4.730 36,795,822
CORPORATE BONDS (0.4%)
50,000 IBM Credit Corp. 08/10/99 5.625 49,991,082
FLOATING RATE NOTES (40.0%) (v)
$ 50,000 American Express Centurion Bank, (resets monthly to one month
LIBOR-6 basis points) 06/18/99 4.840% $ 50,000,000
50,000 Asset Backed Securities Investment Trust, Series 1997-E, Class N,
(resets monthly to one month LIBOR, due 10/15/03) (144A) 06/15/99(a) 4.903
50,000,000
60,000 Banc One Corp., (resets monthly to one month LIBOR -6 basis points,
due 10/01/99) 06/01/99(a) 4.841 59,992,621
150,000 Bankers Trust Co., (resets quarterly to one month LIBOR - 2.5 basis
points, due 04/14/00) 7/14/99(a) 4.975 149,936,139
75,000 Barclays Bank PLC, (resets daily to Prime rate -296 basis points,
due 08/24/99) 06/01/99(a) 4.790 74,987,918
98,000 Bayerische Hypo Vereinsbank, (resets monthly to one month LIBOR-8
basis points, due 05/15/00) 06/15/99(a) 4.823 97,938,417
51,000 CIT Group, Inc., (resets daily to Prime rate -280 basis points, due
10/20/99) 06/01/99(a) 4.950 51,001,911
25,000 CIT Group, Inc., (resets daily to Prime rate -282 basis points, due
11/02/99) 06/01/99(a) 4.930 24,995,716
62,000 CIT Group, Inc., (resets quarterly to three month LIBOR-2.5 basis
points, due 01/14/00) 7/14/99(a) 4.975 61,989,947
50,000 CIT Group, Inc., (resets daily to Prime rate -275 basis points,
due 02/14/00) 06/01/99(a) 5.000 49,986,108
200,000 CIT Group, Inc., (resets daily to Prime rate -285 basis points,
due 03/14/00) 06/01/99(a) 4.900 199,938,190
22,500 Citigroup, Inc., (resets quarterly to one month LIBOR +10 basis
points, due 02/03/00) 08/03/99(a) 5.095 22,520,625
125,000 Comerica Bank, (resets monthly to one month LIBOR -6 basis points,
due 01/20/00) 06/21/99(a) 4.861 124,968,082
100,000 Comerica Bank, (resets monthly to one month LIBOR -4.5 basis
points, due 02/14/00) 06/14/99(a) 4.855 99,982,567
$ 148,500 Comerica Bank, (resets daily to Prime rate -285 basis points,
due 03/22/00) 06/01/99(a) 4.900% $ 148,454,852
200,000 Commerzbank, (resets daily to Prime rate -284.5 basis points, due
02/11/00) 06/01/99(a) 4.905 199,952,493
66,000 Commerzbank, (resets daily to Prime rate -285 basis points, due
02/23/00) 06/01/99(a) 4.900 65,980,897
100,000 Crestar Bank, (resets daily to Prime rate -276 basis points, due
03/01/00) 06/01/99(a) 4.990 99,993,779
200,000 Deutsche Bank, (resets daily to Prime rate -284 basis points, due
02/11/00) 06/01/99(a) 4.910 199,959,479
350,000 First Union National Bank, (resets quarterly to three month
LIBOR-5.5 basis points, due 03/10/00) 08/18/99(a) 4.973 349,977,259
25,000 General Electric Capital Corp., Series A, (resets quarterly to
three month LIBOR-5 basis points, due 04/13/00) 07/13/99(a) 4.950
25,000,000
200,000 General Electric Capital Corp., Series A, (resets quarterly to
three month LIBOR-5 basis points, due 05/03/00) 08/03/99(a) 4.945
200,000,000
100,000 IBM Corp., (resets quarterly to three month LIBOR -3.5 basis points,
due 10/22/99) 07/22/99(a) 4.965 99,978,805
48,000 Key Bank NA, (resets daily to Prime rate -291.5 basis points, due
09/03/99) 06/01/99(a) 4.835 47,996,975
25,000 Key Bank NA, (resets daily to Prime rate -287 basis points, due
10/13/99) 06/01/99(a) 4.880 24,998,820
401,000 LINCS, Series 1998-3, (resets monthly to one month LIBOR, due
02/15/00) 06/11/99(a) 4.904 401,000,000
325,000 LINCS, Series 1998-4, Class 1, (resets monthly to one month LIBOR,
due 02/18/00) (144A) 06/18/99(a) 4.903 325,000,000
191,870 Liquid Asset Backed Securities Trust, Series 1998-2, Class A,
(resets monthly to one month LIBOR, due 11/26/99) (144A) 06/26/99(a) 4.921
191,831,549
110,000 National City Bank, (resets daily to Prime rate -285 basis points,
due 02/10/00) 06/01/99(a) 4.900 109,962,492 109,962,492
200,000 National City Bank, (resets daily to Prime rate -286 basis points,
due
03/10/00) 06/01/99(a) 4.890 199,916,468
$ 150,000 Pepsico, Inc., (resets quarterly to three month LIBOR -19 basis
points) 08/19/99 4.838% $ 149,963,366
220,000 RACERS 1998-MM-7-1, (resets monthly to one month LIBOR -1 basis
point, due 08/13/99) (144A) 06/17/99(a) 4.893 220,000,000
200,000 RACERS 1998-MM-8-5, (resets monthly to one month LIBOR -1 basis
point, due 09/02/99) (144A) 06/02/99(a) 4.891 200,000,000
248,500 Royal Bank of Canada, (resets daily to Prime rate -285.5 basis
points, due 02/17/00) 06/01/99(a) 4.895 248,421,478
103,387 Steers, (resets monthly to one month LIBOR +3 basis points, due
11/15/99) 06/17/99(a) 4.933 103,387,190
100,957 Steers, Series 1997-A 36, (resets monthly to one month LIBOR + 3
basis points, due 11/15/99) 06/17/99(a) 4.933 100,957,519
100,000 Toyota Motor Credit Corp., (resets quarterly to three month LIBOR
+ 4 basis points, due 10/22/99) 07/22/99(a) 5.040 100,000,000
21,000 Wells Fargo Co., Series J, (resets quarterly to three month LIBOR
- 11 basis points, due 03/10/00) 06/10/99(a) 4.981 20,990,122
Total Floating Rate Notes 4,951,961,784
TAXABLE MUNICIPALS (0.7%) (v)
43,690 Jacksonville Health Facilities Authority Hospital Revenue, (resets
weekly, due 08/15/19) 06/02/99(a) 4.900 43,690,000
41,145 Sacramento County, Series A, (resets quarterly to three month
LIBOR + 5 basis points, due 08/15/14) 08/17/99(a) 5.100 41,142,155
6,200 Wake Forest University, (resets weekly, due 07/01/17) 06/02/99(a)
4.920 6,200,000
Total Taxable Municipals 91,032,155
TIME DEPOSITS - DOMESTIC (3.3%)
414,343 Suntrust Bank Cayman 06/01/99 4.750 414,343,000
TIME DEPOSITS - FOREIGN (7.3%)
$ 100,000 Bank of Nova Scotia Toronto 06/01/99 4.844% $ 100,000,000
200,000 Bayerische Hypo Vereinsbank 06/01/99 4.875 200,000,000
200,000 Dresdner Bank Grand Cayman 06/01/99 4.813 200,000,000
400,000 Westdeutsche Landesbank 06/01/99 4.875 400,000,000
Total Time Deposits-Foreign 900,000,000
TOTAL INVESTMENTS AT AMORTIZED COST AND VALUE (99.5%) 12,330,889,039
OTHERS ASSETS IN EXCESS OF LIABILITIES (0.5%) 60,647,786
NET ASSETS (100.0%) $12,391,536,825
(a) The date listed under the heading maturity date represents an optional
tender date or the next interest
rate reset date. The final maturity date is indicated in the security
description.
(v) Rate shown reflects current rate on variable or floating rate instrument
or instrument with step
coupon rate.
144A- Securities restricted for resale to Qualified Institutional Buyers.
LIBOR - London Interbank Offered Rate.
The Prime Money Market Portfolio
Statement of Assets and Liabilities
May 31, 1999 (unaudited)
Assets
Investments at amortized cost and value $12,330,889,039
Interest receivable 63,927,462
Receivable for investments sold 439,827
Prepaid trustees' fees 3,203
Prepaid expenses and other assets 38,430
Total assets 12,395,297,961
Liabilities
Due to custodian 2,257,255
Advisory fee payable 1,120,087
Administrative services fee payable 267,496
Administration fee payable 12,628
Fund services fee payable 9,665
Accrued expenses 94,005
Total liabilities 3,761,136
Net Assets
Applicable to Investors' Beneficial Interests $12,391,536,825
The Prime Money Market Portfolio
Statement of Operations
For the Six Months Ended May 31, 1999 (unaudited)
Investment Income
Interest income $287,830,786
Expenses
Advisory fee $6,141,104
Administrative services fee 1,469,698
Custodian fees and expenses 514,294
Fund services fee 114,876
Administration fee 71,722
Trustees' fees and expenses 47,007
Miscellaneous 69,858
Total Expenses 8,428,559
Net Investment Income 279,402,227
Net Realized Loss on Investments (524,332)
Net Increase in Net Assets Resulting from Operations $278,877,895
The Prime Money Market Portfolio
Statement of Changes in Net Assets
For the Six
Months Ended For the Fiscal
May 31, 1999 Year Ended
(unaudited) November 30, 1998
Increase in Net Assets
From Operations
Net investment income $ 279,402,227 $ 339,699,391
Net realized loss on investments (524,332) (55,967)
Net increase in net assets resulting
from operations 278,877,895 339,643,424
Transactions in Investors' Beneficial Interests
Contributions 55,639,729,840 48,705,487,837
Withdrawals (51,307,294,816) (45,584,553,162)
Net increase from investors' transactions 4,332,435,024 3,120,934,675
Total increase in net assets 4,611,312,919 3,460,578,099
Net Assets
Beginning of period 7,780,223,906 4,319,645,807
End of period $ 12,391,536,825 $ 7,780,223,906
Supplemental Data
For the
Six Months
Ended
May 31, 1999 For the Fiscal Year Ended November 30,
(unaudited) 1998 1997 1996 1995 1994
Ratios to Average Net Assets
Net expenses 0.15%(a) 0.17% 0.18% 0.19% 0.19% 0.20% a
Net investment income 4.95%(a) 5.48% 5.43% 5.29% 5.77% 3.90% a
Expenses without
reimbursement -- -- -- 0.19% -- 0.20%
(a) Annualized
1. Organization and Significant
Accounting Policies
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
.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual
amounts could differ from those estimates. The following is a summary of the
significant accounting policies of the portfolio:
a) Investments are valued at amortized cost, which approximates market
value. The amortized cost method of valuation values a security at its
cost at the time of purchase and thereafter assumes a constant amortization
to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instruments.
The portfolio's custodian or designated subcustodians, as the case may be
under 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,
t
iquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or
bankruptcy by the other party to the agreement, realization and/or retention
of the collateral or proceeds may be subject to legal proceedings.
b) Securities transactions are recorded on a trade date basis. 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.
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.
2. Transactions with Affiliates
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 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
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 affiliate
d with FDI. The portfolio has agreed to pay FDI fees equal to
al 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.
c) The portfolio has an Administrative Services Agreement (the "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 (th
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
For the six months ended May 31, 1999, the fee for these services amounted
to $1,469,698.
d) The portfolio has a Fund Services Agreement with Pierpont Group, Inc.
("Group'') to assist the trustees in exercising their overall supervisory
responsibilities for the portfolio's affairs. The trustees of the portfolio
represent 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.
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
ro
ocated portion of such
compensation and benefits included in the Fund Services Fee shown
in the financial statements was $24,100.
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
Swidler Berlin Shereff
Friedman, 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
Co., LLC
Roxbury Capital Management, LLC
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
Rexiter Capital Management Limited
INCOME FUNDS:
- ------------------------
MONEY MARKET FUND
J.P. Morgan Investment Management Inc.
SHORT AND INTERMEDIATE
BOND FUND
Standish, Ayer & Wood, Inc.
BOND FUND
Loomis, Sayles & Company, L.P.
GLOBAL BOND FUND
Rogge Global Partners
www.managersfunds.com
