THE MANAGERS FUNDS
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MANAGERS MONEY MARKET FUND
PROSPECTUS
DATED APRIL 1,1999
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as supplemented January 21, 2000
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WHERE LEADING MONEY MANAGERS CONVERGE
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this
Prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
KEY INFORMATION ABOUT THE MONEY MARKET FUND
<S> <C> <C>
Risk/Return Goals and Principal Strategies of the Fund 1
Summary Risk Summary 1
Performance Summary 3
Fees and Expenses of the Fund 4
THE MANAGERS FUNDS
The Management Team 6
Master/Feeder Structure 6
The Year 2000 Issue 7
____________________________________________________________________
Summary of MONEY MARKET FUND
the Objective 8
Fund Principal Investment Strategies 8
Principal Risk Factors 8
Should I Invest In This Fund? 9
Fees and Expenses 9
Portfolio Management of the Fund 10
___________________________________________________________________
Additional OTHER RISK FACTORS
Risks of A Few Words About Risk 11
Investing
____________________________________________________________________
Information FINANCIAL HIGHLIGHTS
About your Financial Information for the Fund 15
Investment
YOUR ACCOUNT
Minimum Investments in the Fund 17
How to Purchase Shares 18
How to Sell Shares 19
INVESTOR SERVICES
General Fund Policies 21
ACCOUNT POLICIES, DIVIDENDS AND TAXES
Account Statements 22
Dividends and Distributions 22
Tax Information 22
____________________________________________________________________
FOR MORE INFORMATION Back Cover
</TABLE>
<PAGE>
Key Information about the Money Market Fund
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This Prospectus contains important information for anyone
interested in investing in Managers Money Market Fund.
Please read this document carefully before you invest and
keep it for future reference.
You should base your purchase of this Fund on your own
goals, risk preferences and investment time horizons.
GOALS AND PRINCIPAL STRATEGIES OF THE FUND
Managers Money Market Fund seeks to maximize current
income and maintain a high level of liquidity. In seeking to
achieve this goal, the Fund invests in a broad spectrum of
money market securities, such as U.S. Government securities,
commercial paper and corporate debt, by investing all of its
assets in a master portfolio (another fund with the same goal).
For more information on this structure, see Master/Feeder
Structure.
RISK SUMMARY
[graphic]
All investments involve some type and level of risk. Risk is
the possibility that you will lose money or not make any
additional money by investing in this Fund.
Before you invest, please make sure that you have read, and
understand, the risk factors that apply to the Fund.
The issuer or guarantor of a portfolio security or the
counterparty to a contract could default on its obligation.
Also, an unexpected rise in interest rates could lead to a loss in
share price if the Fund is near the maximum allowable average
weighted maturity at the time. The Fund's investment process
and management policies, however, are designed to minimize
the likelihood and impact of these risks.
Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by
investing in the Fund. Please keep in mind that shares of the
Fund:
* Are not deposits or obligations of any bank
* Are not guaranteed or endorsed by any bank
1
<PAGE>
Risk/Return Summary
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* Are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other
federal agency
The following are the Principal Risk Factors associated with
the Money Market Fund. For more information regarding
these and other risk factors, see OTHER RISK FACTORS.
Credit Risk
[graphic]
The likelihood that a debtor will be unable to pay interest or
principal payments as planned is typically referred to as
default risk. Default risk for most debt securities is constantly
monitored by nationally recognized statistical rating agencies
such as Moody's Investor Services, Inc. and Standard &
Poor's Corporation. Even if the likelihood of default is remote,
changes in the perception of an institution's financial health
will affect the valuation of its debt securities. This extension
of default risk is typically known as credit risk.
Inflation Risk
This is the risk that the price of an asset, or the income
generated by the asset, will not keep up with the cost of living.
Almost all financial assets have some inflation risk.
Interest Rate Risk
Changes in interest rates can impact stock and bond prices in several ways.
As interest rates rise, the fixed coupon payments of debt securities become
less competitive with the market and thus the price of the securities will fall
Similarly, the expected earnings and dividend payments for equity securities
become relatively less competitive as interest rates rise. Conversely, prices
will rise as available interest rates fall. The longer into the future that
these
cash flows are expected, the greater will be the effect on the price of the
security. Interest rate risk is thus measured by analyzing the length of time
or
"duration" over which the return on the investment is expected. The longer
the duration the higher the interest rate risk.
[TEXT BOX: Duration is the weighted average time (typically quoted in years) to
the receipt of cash flows (principal + interest) for a bond or portfolio. It is
used to evaluate interest rate sensitivity.]
2
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Risk/Return Summary
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While this is typically measured for debt securities, it also applies to equity
securities. A company which has high current earnings, is paying dividends
and is valued based on a slower expectation of growth has a shorter duration
than a rapidly growing company in which the bulk of its earnings are
expected farther off into the future.
PERFORMANCE SUMMARY
The following bar chart illustrates the Fund's year-by-year
total return and how performance of the Fund has varied over
the past ten years. The chart assumes that all dividend and
capital gain distributions have been reinvested. Past
performance does not guarantee future results.
The following table compares the Fund's performance to that
of a 3 month Treasury Bill. Again, the table assumes that
dividends and capital gains distributions have been reinvested
for both the Fund and the security. As always, the past
performance of the Fund is not an indication of how the Fund
will perform in the future.
<TABLE>
<CAPTION>
Annual Returns - Last Ten Years
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fund 8.7% 7.7% 5.3% 3.1% 2.5% 3.6% 5.0% 5.5% 5.4% 5.2%
<FN>
*For the Money Market Fund over this period, the highest
quarterly return was 2.23% and the lowest quarterly return was 0.55%.
</FN>
</TABLE>
3
<PAGE>
Risk/Return Summary
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<TABLE>
<CAPTION>
Average Annual Total Return (as a percentage) as of 12/31/98
Fund 1 Year 5 Years 10 Years
<S> <C> <C> <C>
Money Market Fund* 5.14% 4.92% 5.18%
3 Mo. Treasury Bill 5.01% 5.12% 5.64%
</TABLE>
[FN]
*For information on the yields of the Fund, please call (800) 835-3879.
</FN>
[TEXT BOX]
Total Return is used by all mutual funds to calculate the hypothetical
change in value of a share over a specified period of time, assuming
reinvestment of all dividends and distributions.
FEES AND EXPENSES OF THE FUND
As an investor, you pay certain fees and expenses in connection with
buying and holding shares of the Funds. The following table illustrates
those fees and expenses. Keep in mind that the Fund, which has a master/
feeder structure as described on page 6, has no sales charge (load).
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
<S> <C>
Minimum Sales Charge (Load)
Imposed on Purchases (as a percentage of offering price) None
Maximum Deferred Sales Charge (Load) None
Minimum Sales Charge (Load) Imposed on
Reinvested Dividends and Other Distributions None
Redemption Fee None
Exchange fee None
Maximum Account Fee None
</TABLE>
4
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Annual Fund Operating Expenses*(unaudited) (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
<S> <C>
Management Fee 0.12%
Distribution (12b-1) Fees 0.00%
Other Expenses 0.51% (a)
Total Annual Fund Operating
Expenses 0.63% (b)
<FN>
*This table shows the expenses for both the Fund and its share of its master
portfolio, The Prime Money Market Portfolio, for the fiscal year ended 1999.
(a) The Fund's Other Expenses are 0.41%, which reflects a voluntary waiver of a
portion of the administration fee by The Managers Funds LLC, the Administrator
of the Fund. This waiver is expected to continue, but may be modified or
terminated at the sole discretion of the Administrator.
(b) Total Annual Fund Operating Expenses are currently 0.53%, which reflects all
waivers in effect.
</FN>
</TABLE>
[TEXT BOX]
The Management Fee is the fee paid to The Managers Funds, L.P. and in turn,
a portion of which is paid to the external asset managers who manage the
Fund's portfolios.
Distribution (12b-1) Fees are those expenses charged by some mutual funds
for the cost of marketing and advertising. These Funds do not have any
12b-1 fees.
<PAGE>
Risk/Return Summary
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Example
The following Example will help you
compare the costs of investing in various
funds. It assumes that you invest $10,000
as an initial investment in the Fund for
the time periods indicated and then redeem
all of your shares at the end of those
periods. It also assumes that your
investment has a 5% total return each year
and the Fund's operating expenses remain
the same. Although your actual costs may
be higher or lower, based on the above
assumptions, your costs would be:
<TABLE>
<CAPTION>
Fund 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Money Market Fund* $64(a) $202(b) $351(c) $786(d)
<FN>
*This Example shows the expenses for both the Fund and its share of its
master portfolio for the fiscal year ended 1999.
(a) Your costs, including all waivers currently in effect, would be $54.
(b) Your costs, including all waivers currently in effect, would be $170.
(c) Your costs, including all waivers currently in effect, would be $296.
(d) Your costs, including all waivers currently in effect, would be $665.
</TABLE>
5
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The Managers Funds
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THE MANAGEMENT TEAM
[graphic]
The Managers Funds (referred to in this Prospectus as "We"
and "Us") is a no-load mutual fund family currently comprised
of ten different Funds, each having distinct investment
management objectives, strategies, risks and policies. Many of
our Funds employ a multi-manager investment approach
which can provide added diversification within each portfolio.
The Managers Funds LLC, a subsidiary of Affiliated
Managers Group, Inc., serves as the administrator and
distributor of the shares of the Fund. The Fund invests all of
its assets in The Prime Money Market Portfolio. The
investment manager of the Portfolio is J.P. Morgan Investment
Management, Inc. ("JPMIM"), formerly Morgan Guaranty
Trust Company of New York. JPMIM, subject to the
supervision of the Trustees of the Portfolio, makes the
Portfolio's day-to-day investment decisions, arranges for the
execution of the Portfolio transactions, and generally manages
the Portfolio's investments. The Fund has invested in this
Portfolio through a master/feeder arrangement since
December 1, 1995.
MASTER/FEEDER STRUCTURE
As noted earlier, the Fund is a "feeder" fund that invests in a
master portfolio. (Except where indicated, this prospectus
uses the term "the Fund" to mean the feeder fund and its
master portfolio taken together.)
The master portfolio accepts investments from other feeder
funds, and the feeder funds bear the master portfolio's
expenses in proportion to their assets. However, each feeder
can set its own transaction minimums, fund-specific expenses
and other conditions. This means that one feeder could offer
access to the same master portfolio on more attractive terms,
or could experience better performance, than any other feeder.
Generally when a master portfolio seeks a vote, its feeder fund
will hold a shareholder meeting and cast its vote
proportionately, as instructed by its shareholders. Fund
shareholders are entitled to one vote per Fund share.
6
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The Managers Funds
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The Fund and its master portfolio, The Prime Money Market
Portfolio, expect to maintain consistent goals. If they do not,
the Fund will withdraw from the master portfolio, receiving its
assets either in cash or securities. The Board of Trustees of
the Fund would then consider whether the Fund should hire its
own asset manager, invest in a different master portfolio, or
take other appropriate action.
THE YEAR 2000 ISSUE
[graphic]
The "Year 2000 problem," a date-related computer issue,
could have an adverse impact on the nature and quality of the
services provided to the Fund and its shareholders. In addition
to verifying that all internal systems are able to handle dates
past 1999 (otherwise known as "Year 2000 compliant"), we
are taking steps to address the problem by working with all of
our sub-advisers and outside vendors. We have obtained
assurances from each of our key service providers that they
are taking steps within their organizations to make their
systems and products Year 2000 compliant. However, we
cannot be completely certain that all sub-advisers and vendors
will be fully Year 2000 compliant. We are unable to predict
the impact of this problem on the portfolio companies in
which the Fund invests. We will continue to monitor
developments relating to this issue.
7
<PAGE>
Managers Money Market Fund Ticker Symbol: MGMXX
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OBJECTIVE
The Fund's objective is to maximize current income and
maintain a high level of liquidity.
PRINCIPAL INVESTMENT STRATEGIES
[graphic]
The Fund looks for investments across a broad spectrum of
U.S. dollar-denominated money market securities. It typically
emphasizes different types of securities at different times in
order to take advantage of changing yield differentials. The
Fund's investments may include obligations issued by the U.S.
Treasury, government agencies, domestic and foreign banks
and corporations, foreign governments, repurchase
agreements, as well as asset-backed securities, taxable
municipal obligations, and other money market instruments.
Some of these investments may be purchased on a when-
issued or delayed delivery basis.
This Fund, like other money market funds, is subject to a
range of federal regulations which are designed to promote
stability. For example, it must maintain a weighted average
maturity of no more than 90 days, and generally may not
invest in any securities with a remaining maturity of more than
13 months. Keeping the weighted average maturity this short
helps the Fund in its pursuit of a stable $1.00 share price.
Additionally, money market funds take steps to protect
investors against credit risk. This Fund maintains stricter
standards than federal law when it comes to securities
selection.
PRINCIPAL RISK FACTORS
[graphic]
The Fund's yield will vary in response to changes in interest
rates. How well the Fund's yield compares to the yields of
similar money market funds will depend on the success of the
investment process, as described above.
As with all money market funds, the Fund's investments are
subject to various risks, which, while generally considered to
be minimal, could cause its share price to fall below $1.00.
For example, the issuer or guarantor of a portfolio security or
8
<PAGE>
Managers Money Market Fund Ticker Symbol: MGMXX
- -----------------------------------------------------------------------
the counterparty to a contract could default on its obligation.
An unexpected rise in interest rates could also lead to a loss in
share price if the Fund is near the maximum allowable average
weighted maturity at the time. However, the Fund's
investment process and management policies are designed to
minimize the likelihood and impact of these risks.
SHOULD I INVEST IN THIS FUND?
This Fund may be suitable if you:
Are seeking an opportunity to preserve capital in your
investment portfolio
Are uncomfortable with risk
Are investing with a shorter time horizon in mind
This Fund may not be suitable if you:
Are investing for high current income
Are seeking a moderate or high risk investment
Are investing with a longer time horizon in mind
FEES AND EXPENSES
Annual Fund Operating Expenses* (unaudited) (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
<S>
<C>
Management Fee......................................... 0.12%
Distribution (12b-1) Fees.............................. 0.00%
Other Expenses......................................... 0.51%(a)
Total Annual Fund Operating Expenses................... 0.63%(b)
<FN>
*This table shows the expenses for both the Fund and its share of its master
portfolio, The Prime Money Market Portfolio, for the fiscal year ended 1999.
(a)The Fund's Other Expenses are 0.41%, which reflects a voluntary waiver of the
administration fee by The Managers Funds LLC, the Administrator to the Fund.
This waiver is expected to continue throughout fiscal 2000, but may be modified
or terminated at the sole discretion of the Administrator.
(b)The Total Annual Fund Operating Expenses are currently 0.53%, which reflects
all waivers in effect.
</FN>
</TABLE>
9
<PAGE>
Managers Money Market Fund Ticker Symbol: MGMXX
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J.P. Morgan Investment Management Inc. ("JPMIM") is the
investment manager to The Prime Money Market Portfolio,
the portfolio in which the Fund invests all of its assets. JPMIM
has managed the Portfolio since October 1, 1998. Prior to that
date, Morgan Guaranty Trust Company of New York was the
investment advisor. JPMIM, located at 522 Fifth Avenue, New
York, New York 10036, was founded in 1913. As of
December 31, 1998, JPMIM had assets under management of
$316 billion. Mark Settles, Vice President, and John Donohue, Vice President,
lead the portfolio management team. Mr. Settles
and Mr. Donohue has each held various positions with
JPMIM since 1994 and 1997, respectively. Prior to
joining JPMIM, Mr. Donohue was an Institutional Money
Market Portfolio Manager at Goldman, Sachs & Co.
The Fund pays an annual management fee to JPMIM,
indirectly through its investment in the master fund. The
master fund pays a management fee of 0.20% of the first $1
billion of the average daily net assets of the master fund and
0.10% of the average daily net assets in excess of $1 billion.
10
<PAGE>
A Few Words About Risk
In the normal course of every day life, each of us takes risk. What
is risk? Risk can be thought of as the likelihood of an event
turning out differently than planned and the consequences of that
outcome.
[GRAPHIC]
If you drive to work each day, you do so with the plan of arriving
safely with time to accomplish your tasks. There is a possibility,
however, that some unforeseen factor such as bad weather or a
careless driver will disrupt your plan. The likelihood of your being
delayed or even injured will depend upon a number of factors
including the route you take, your driving ability, the type and
condition of your vehicle, the geographic location, or the time of
day.
The consequences of something going wrong can range from a short
delay to serious injury or death. If you wanted, you could try to
quantitatively estimate the risk of driving to work, which, along
with your expectations about the benefits of getting to work, will
help you determine whether or not you will be willing to drive each
day. A person who works in a city may find the risk of driving very
high and the relative rewards minimal in that he or she could more
easily walk or ride a train. Conversely, a person who works in the
country may find the risk of driving minimal and the reward great in
that it is the only way he or she could get to work. Fortunately,
most people do not need to quantitatively analyze most of their
everyday actions.
[GRAPHIC]
The point is that everyone takes risks, and subconsciously or
otherwise, everyone compares the benefit that they expect from
taking risk with the cost of not taking risk, to determine their
actions. In addition, there are a few principles from this example
which are applicable to investing as well.
o Despite statistics, the risks of any action are different for
every person and may change as a person's circumstances change.
o Everybody's perception of reward is different.
o High risk does not in itself imply high reward.
11
<PAGE>
Other Risk Factors
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While higher risk does not imply higher reward, proficient investors
demand a higher return when they take higher risks. This is often
referred to as the risk premium.
U.S. investors often consider the yield for short-term U.S. Treasury
securities to be as close as they can get to a risk-free return
since the principal and interest are guaranteed by the U.S.
Government. Investors get paid only for taking risks, and successful
investors are those who have been able to correctly estimate and
diversify the risks to which they expose their portfolios along with
the risk premium they expect to earn.
In order to better understand and quantify the risks investors take
versus the rewards they expect, investors separate and estimate the
individual risks to their portfolio. By diversifying the risks in an
investment portfolio, an investor can often lower the overall risk,
while maintaining a reasonable return expectation.
The following are descriptions of many of the risks that asset
managers of our Funds take to earn investment returns. Investors
should keep in mind that each of the Equity Funds is subject to the
following risks. This is not a comprehensive list and the risks
discussed below are only some of the primary risks to which your
investments are exposed.
[GRAPHIC]
Market Risk. This is also called systematic risk. It typically
refers to the basic variability that stocks exhibit as a result of
stock market fluctuations. Despite the unique influences on
individual companies, all stock prices rise and fall as a result of
investors' perceptions of the market as a whole. Many of the risks
described below contribute to market risk. Other types of securities
such as corporate bonds can also have some market risk; their prices
can be affected by changing perceptions of the stock market.
Since foreign securities trade on different markets, which have
differing supply and demand characteristics, their prices are not as
closely linked to the U.S. markets. Foreign securities markets have
their own market risks and they may be more or less volatile than
U.S. markets, and may move in different directions. However, as all
markets become more open to global trading, and as communications
between investors improves, international stock and bond markets
have become more closely linked with U.S. markets.
[TEXT BOX: The risk premium for any investment is the extra return, over the
available risk-free return, that an investor expects for the risk
that he or she takes. The risk-free return is a return that one
could expect with absolute certainty.]
12
<PAGE>
Other Risk Factors
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The consequences of market risk are that if the stock market drops
in value, the value of each Fund's portfolio of investments are also
likely to drop in value. The increase or decrease in the value of a
Fund's investments, in percentage terms, may be more or less than
the increase or decrease in the value of the market. Most
international markets do not move together with U.S. markets, or
with other international markets.
[GRAPHIC]
Specific Risk. This is the risk that any particular security will
drop in price due to adverse effects on a specific business.
Specific risk can be reduced through diversification. It can be
measured by calculating how much of a portfolio is concentrated into
the few largest holdings and by estimating the individual business
risks which these companies face.
An extension of specific risk is Sector (Industry) Risk. Companies
that are in similar businesses may be similarly affected by
particular economic or market events. To measure sector (industry)
risk, one would group the holdings of a portfolio into sectors or
industries and observe the amounts invested in each. Again,
diversification among industry groups will reduce sector (industry)
risk but may also dilute potential returns.
Price Risk. As investors perceive and forecast good business
prospects, they are willing to pay higher prices for securities.
Higher prices therefore reflect higher expectations. If expectations
are not met, or if expectations are lowered, the prices of the
securities will drop. This happens with individual securities or
with the financial markets overall. For stocks, price risk is often
measured by comparing the price of any security or portfolio to the
book value, earnings or cash flow of the underlying company or
companies. A higher ratio denotes higher expectations and higher
risk that the expectations will not be sustained. This is likely the
clearest difference between "growth" and "value" styles of
investing.
Liquidity Risk. This is the risk that a Fund cannot sell a security
at a reasonable price within a reasonable time frame when it wants
or needs to due to a lack of buyers for the security. This risk
applies to all assets. However, it is higher for
small-capitalization stocks and stocks of foreign com
[TEXT BOX: Value vs. Growth Investors
Growth investors are typically willing to take more price risk in
order to own companies which are performing well and are expected
to
continue to perform well.Value investors prefer to take less price
risk by avoiding situations where current expectations, and thus
prices, are high.]
13
<PAGE>
Other Risk Factors
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panies than it typically is for large-capitalization domestic
stocks. For example, an asset such as a house has reasonably high
liquidity risk because it is unique and has a limited number of
potential buyers. Thus, it often takes a significant effort to
market, and a takes at least a few days and often a few months to
sell.
On the other hand, a U.S. Treasury note is one of thousands of
identical notes with virtually unlimited potential buyers and can
thus be sold very quickly and easily. The liquidity of financial
securities in orderly markets can be approximated by observing the
amount of daily or weekly trading in the security, the prices at
which the security trades and the difference between the price
buyers offer to pay and the price sellers want to get. However,
estimating the liquidity of securities during market upheavals is
very difficult.
[GRAPHIC]
Credit Risk. The likelihood that a debtor will be unable to pay
interest or principal payments as planned is typically referred to
as default risk. Default risk for most debt securities is constantly
monitored by several nationally recognized statistical rating
agencies such as Moody's Investor Services, Inc. and Standard &
Poor's Corporation. Even if the likelihood of default is remote,
changes in the perception of an institution's financial health will
affect the valuation of its debt securities. This extension of
default risk is typically known as credit risk.
Inflation Risk. This is the risk that the price of an asset, or the
income generated by an asset, will not keep up with an increase in
the general cost of living. Almost all financial assets have some
inflation risk, but most particularly fixed-income securities.
Interest Rate Risk. Changes in interest rates can impact stock and
bond prices in several ways. As interest rates rise, the coupon
payments of debt securities may become less competitive with the
market and thus the price of the securities may fall. Similarly, the
expected earnings and dividend payments for equity securities become
relatively less competitive as interest rates rise. Conversely,
prices typically rise as available interest rates fall. The longer
into the future that these cash flows are expected, the greater the
effect on the price of the security. Interest rate risk is thus
13
<PAGE>
Other Risk Factors
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[TEXT BOX: Duration is the weighted average time (typically quoted in years)
to
the receipt of cash flows (principal + interest) for a bond or
portfolio. It is used to evaluate the interest rate sensitivity.]
measured by analyzing the length of time or "duration" over which
the return on the investment is expected. The longer the duration
the higher the interest rate risk.
While this is typically measured for debt securities, it also
applies to equity securities. A company which has high current
earnings, is paying dividends and is valued based on a slower
expectation of growth has a shorter duration than a rapidly growing
company in which the bulk of its earnings are expected further into
the future.
Reinvestment Risk. As debtors pay interest or return capital to
investors, there is no guarantee that investors will be able to
reinvest these payments and receive rates equal to or better than
their original investment. If interest rates fall, the rate of
return available to reinvested money will also fall. Purchasers of
a 30-year, 8% coupon bond can be reasonably assured that they will
receive an 8% return on their original capital, but unless they can
reinvest all of the interest receipts at or above 8%, the total
return over 30 years will be below 8%. The higher the coupon and
prepayment risk, the higher the reinvestment risk.
Here is a good example of how consequences differ for various
investors. An investor who plans on spending (as opposed to
reinvesting) the income generated by his portfolio is likely less to
be concerned with reinvestment risk and more likely to be concerned
with inflation and interest rate risk than is an investor who will
be reinvesting all income.
[gr
APHIC] Political Risk. Changes in the political status of any country can
have profound effects on the value of securities within that country
as well as the credit quality of the debt securities. Related risk
factors are the regulatory environment within any country or
industry and the sovereign health of the country. These risks can
only be reduced by carefully monitoring the economic, political and
regulatory atmosphere within countries and diversifying across
countries.
[GRAPHIC] Currency Risk. The value of foreign securities in an investor's
home
currency depends both upon the price of the securities and the
exchange rate of the currency. Thus, the value of an investment in a
foreign security will drop if
the price for the foreign currency drops in relation to the U.S.
Dollar. Adverse currency fluctuations are an added risk to foreign
investments. Currency risk can be reduced through diversification
among currencies or through hedging with the use of foreign currency
contracts.
Economic Risk. Obviously, the prevailing economic environment is
important to the health of all businesses, however, some companies
are more sensitive to changes in the domestic and/or global economy
than others. These types of companies are often referred to as
cyclical businesses. Countries in which a large portion of
businesses are in cyclical industries are thus also very
economically sensitive, and carry a higher amount of economic risk.
[GRAPHIC] Intelligence Risk. Intelligence risk is a term created by The
Managers Funds LLC to describe the risks taken by mutual fund
investors in hiring professional asset managers to invest assets.
Asset managers evaluate investments relative to all of the above
risks, among others, and allocate accordingly. To the extent that
they are intelligent and make accurate projections about the future
of individual businesses and markets, they will make money for
investors. While most managers diversify many of these risks, their
portfolios are constructed based upon central underlying assumptions
and investment philosophies which proliferate through their
management organizations and are reflected in their portfolios.
Intelligence risk can be defined as the risk that investment
managers may make poor decisions or use investment philosophies that
turn out to be wrong. The Managers Funds LLC believes that
intelligence risk can be reduced through diversification of
investment managers from differing organizations and with differing
investment philosophies.
There are many ways of summarizing these risks, but keep in mind
that summarization can lead one to overlook some important factors.
Life insurance companies do not attempt to estimate the individual
risks that each of its policy holders intends to take throughout
life. Not only would this be impossible from a data collection
standpoint, but the sheer number of estimates involved would
compound to make the final life expectancy estimate very imprecise.
Instead,
14
life insurance companies use historical data to make broad estimates
about the life expectancy of people and then adjust them based on
some other broad measures such as sex, general health, heredity, and
lifestyle factors such as smoking and flying. The circumstance in
which this model falters is when any significant factor, which is
not represented in the historical results, becomes relevant.
Nuclear
war, plague or climactic shifts could detrimentally affect the life
insurers' results, while a cure for cancer and improving health
habits could incrementally affect life expectancies.
<PAGE>
FINANCIAL INFORMATION FOR THE FUND
The following Financial Highlights tables are intended to
help you understand the Fund's financial performance for the
past five years. Certain information reflects financial
results for a single Fund share. The total returns in each
table represent the rate that an investor would have earned
or lost on an investment in that Fund. It assumes
reinvestment of all dividends and distributions. This
information, extracted from the Fund's Financial Statements,
has been audited by PricewaterhouseCoopers LLP, whose report
is included in the Fund's Annual Report, which is available
upon request.
MANAGERS MONEY MARKET FUND
- -----------------------------------------------------------
<TABLE>
<CAPTION>
Eleven Year
Months ended
ended Decemb
Novembe er 31,
For the years ended 1998 1997 1996 r 30, 1994
November 30 1995
<S> <C> <C> <C> <C> <C>
Net Asset Value, $1.000 $1.000 $1.000 $1.000 $1.000
Beginning of Year
Income From Investment
Operations
Net Investment 0.052 0.052 0.054 0.044 0.035
Income
Net Gains or Losses
on Securities (both ---- --- ---- ---- ----
realized and
unrealized)
Total From 0.052 0.052 0.054 0.044 0.035
Investment Operations
Less Distributions
Dividends (from net
investment income) (0.052) (0.052) (0.054) (0.044) (0.035)
Distributions (from ------ ----- ------ ---- ----
capital gains)
Returns of Capital ----- ---- ---- ---- ----
Total (0.052) (0.052) (0.054) (0.044) (0.035)
Distributions
Net Asset Value, End of $1.000 $1.000 $1.000 $1.000 $1.000
Year
Total Return (b) 5.30% 5.35% 5.53% 4.51%(a) 3.61%
Ratios/Supplemental
Data
Net Assets, End of Year $45,282 $36,544 $36,091 $11,072 $17,269
(000's omitted)
Ratio of Net Expenses
to Average Net Assets 0.50% 0.40% 0.12% 1.13%(a) 0.73%
Ratio of Net Income to
Average Net Assets 5.17% 5.22% 5.35% 4.85%(a) 3.84%
Expense
Waiver/Reimbursement(c)
Ratio of Total Expenses
to Average Net Assets 0.70% 0.74% 0.75% 1.18%(a) 1.03%
Ratio of Net Income to
Average Net Assets 4.97% 4.88% 4.71% 4.80%(a) 3.54%
<FN>
(a) Annualized.
(b) Total Returns would have been lower had certain
expenses not been reduced during the periods shown.
(c ) Ratio information assuming no fee waivers or
reimbursements of investment advisory and management fees
and/or administrative fees in effect for the periods
presented, if applicable.
</FN>
</TABLE>
16
<PAGE>
Your Account
- ---------------------------------------------------------------------
As an investor, you pay no sales charges to invest in our
Funds. Furthermore, you pay no charges to transfer within the Fund
family or even to redeem out of our Funds. The price at which you
purchase and redeem your shares is equal to the net asset value per
share (NAV) next determined after your purchase or redemption order
is received on each day the New York Stock Exchange (NYSE) is open
for trading. The NAV is equal to the Fund's net worth (assets minus
liabilities) divided by the number of shares outstanding. Each
Fund's NAV is calculated at the close of regular business of the
NYSE, usually 4:00 p.m. New York Time.
Securities traded in foreign markets may trade when the NYSE is
closed. Those securities are generally valued at the closing of the
exchange where they are primarily traded. Therefore, a Fund's NAV
may change on days when investors may not be able to purchase or
redeem Fund shares.
Each Fund's investments are valued based on market values. If a
particular event would materially affect a Fund's NAV or if market
quotations are not readily available, then the Pricing Committee of
the Board of Trustees may value the Fund's investments based on an
evaluation of fair value.
MINIMUM INVESTMENTS IN OUR FUNDS
All investments in our Funds must be in U.S. Dollars. Third-party
checks which are payable to an existing shareholder who is a
natural
person (as opposed to a corporation or partnership) and endorsed
over to a Fund or State Street Bank and Trust Company will be
accepted.
<TABLE>
<CAPTION>
INITIAL INVESTMENT ADDITIONAL INVESTMENT
<S> <C> <C>
Regular accounts* $2,000 $100
Education IRA 500 N/A
Traditional IRA 500 100
SEP IRA 500 100
SIMPLE IRA 500 100
ROTH IRA 500 100
<FN>
*For Regular accounts, arrangements can be made to open accounts with less
than the required initial investment. Call (800) 835-3879 for more details.
</FN>
</TABLE>
[Text Box]
A Traditional IRA is an individual retirement account. Assets are tax-
deferred while your withdrawals and distributions are taxable in the year
that they are made
An Education IRA is an IRA with a non-deductible contributions and tax-free
growth of assets and distributions. The account must be used to pay qualified
educational expenses.
A SEP IRA is an IRA that allows employers to make contributions to an
employee's account.
A Simple IRA is an employer plan and a series of IRAs that allows contributions
by and for amployees.
A ROTH IRA is an IRA with non-deductible contributions and tax-free growth of
assets and distributions. The account must be held for five years and
certain other consitions must be met.
YOU SHOULD CONSULT YOUR TAX PROFESSIONAL FOR MORE INFORMATION ON IRA
ACCOUNTS.
17
<PAGE>
- ----------------------------------------------------------------------
HOW TO PURCHASE SHARES
<TABLE>
<CAPTION>
Initial Purchase* Additional Purchases*
<S> <C> <C>
Through your Investment Advisor Contact your investment advisor
or other investment professional
Send any additional funds to your
investment professional at the address
appearing on your account statement
Advisors, Bank Trust and 401(k)
agents only Call (800) 358-7668 for further
instructions
Call (800) 358-7668 for further instructions
Direct Shareholders:
[GRAPHIC]By Mail Complete the account application.
Mail the application and a check
payable to The Managers Funds to:
The Managers Funds
c/o Boston Financial
Data Services, Inc.
P.O. Box 8517
Boston, MA 02266-8517
Write a letter of instruction and a check
payable to The Managers Funds to:
The Managers Funds
c/o Boston Financial
Data Services, Inc.
P.O. Box 8517
Boston, MA 02266-8517
Include your account # on your check.
[GRAPHIC} By Telephone Call (800) 358-7668 Call the Transfer Agent at (800) 252-0682.
The minimum additional investment
is $100
</TABLE>
*All purchases by check are subject to a 15-day holding period.
**For Bank Wires: Please call and notify the Fund at (800) 358-7668. Then
instruct your bank to wire the money to State Street Bank and Trust Company,
Boston, MA 02101; ABA #011000028; BFN - The Managers Funds. Please be aware
that your bank may charge you a fee for this service.
18
<PAGE>
- ---------------------------------------------------------------------
HOW TO SELL SHARES
You may sell your shares at any time. Your shares will be sold at the NAV
calculated after the Fund's Transfer Agent accepts your order. Orders
received after 4:00 p.m. New York Time will receive the NAV per share
determined at the close of trading on the next NYSE trading day.
<TABLE>
<CAPTION>
Instructions
<S> <C>
Through your Investment Advisor Contact your investment advisor
Advisor, Bank Trust and 401(k) agents only Call (800) 358-7668 for further instructions
Direct Shareholders:
[GRAPHIC]By Mail Write a letter of instruction containing:
* the name of the Fund
* dollar amount or number of shares to be sold
* your name
* your account number
* signatures of all owners on account
Mail letter to:
The Managers Funds
c/o Boston Financial Data
Services, Inc.
P.O. Box 8517
Boston, MA 02266-8517
[GRAPHIC] By Telephone If you elected telephone redemption privileges
on your account application,
call us at (800) 252-0682
</TABLE>
It is important to keep in mind that if you invest through a third party
such as a bank, broker-dealer or financial supermarket rather than directly
with us, the policies and fees may be different than those described in this
material.
[TEXT BOX]
Redemptions $25,000 and over require a signature guarantee. A signature
guarantee
helps to protect against fraud. You can obtain one from most banks and
securities dealers. A notary public cannot provide a signature guarantee.
In joint accounts, both signatures must be guaranteed.
Telephone redemptions are available only for redemptions which are
below $25,000.
19
<PAGE>
Investor Services
- ------------------------------------------------------------------------
Automatic Reinvestment Plan allows your dividends and capital gain
distributions to be reinvested in additional shares of your Fund or another
Fund. You can elect to receive cash.
Automatic Investments allows you to make automatic deductions from a
designated bank account.
[GRAPHIC]
Systematic Withdrawals allows you to make automatic monthly withdrawals of
$100 or more per Fund. Withdrawals are normally completed on the 25th
Business day of each month. If the 25th business day is a Sunday or a
holiday, the withdrawal will be completed on the next business day.
Dollar Cost Averaging allows you to make automatic monthly exchanges from one
Fund to another. Exchanges are completed on the 15th business day of each
month. Be sure to read the current Prospectus for any Fund that you are
exchanging into. There is no fee associated with this service. If the 15th
business day is a Sunday or a holiday, the exchange will be completed on the
next business day.
Individual Retirement Accounts are available to you at no additional cost.
Call us at (800) 835-3879 for more information and an IRA kit.
Exchange Privilege allows you to exchange your shares of one Fund for shares
of another of our Funds. There is no cost associated with this service. Be
sure to read the Prospectus of any Fund that you wish to exchange into. You
can request your exchange in writing, by telephone (if elected on the
application) or through your investment advisor, bank or investment
professional.
20
<PAGE>
Investor Services
- ---------------------------------------------------------------------
GENERAL FUND POLICIES
We reserve the right to:
* redeem an account if the value of the account falls below
$500 due to redemptions
* Suspend redemptions or postpone payments when the NYSE is closed for
any reason other than its usual weekend or holiday closings or when trading
is restricted by the SEC
* Change our minimum investment amounts
* Delay sending out redemption proceeds for up to seven days
(this usually applies to very large redemptions without notice, excessive
trading or during unusual market conditions)
* Make a redemption-in-kind (a payment in portfolio securities instead of in
cash) if we determine that a redemption is too large and/or may cause harm to
the Fund and its shareholders
* Refuse any purchase or exchange request if we determine that such request
could adversely affect the Fund's NAV, including if such person or group has
engaged in excessive trading (to be determined in our discretion)
* After prior warning and notification, close an account due to excessive
trading
21
<PAGE>
Account Policies, Dividends and Taxes
- -------------------------------------------------------------------------------
ACCOUNT STATEMENTS
You will receive quarterly statements detailing your account activity. All
investors will also receive a yearly statement, including a Form 1099-DIV,
detailing the tax
characteristics of any dividends and distributions that you have received in
your account. You will also receive confirmations after each trade executed
in your account.
DIVIDENDS AND DISTRIBUTIONS
Income dividends and net capital gain distributions, if any are normally
paid annually in December for each of the Equity Funds, with the exception of
the Income Equity Fund. The Income Equity Fund distributes any income
dividends monthly and normally makes capital gain distributions yearly in
August and December.
We will automatically reinvest your distributions of dividends and capital
gains unless you tell us otherwise. You may change your election by writing
to us at least 10 days prior to the scheduled payment date.
TAX INFORMATION
[GRAPHIC]
Please be aware that the following tax information is general and refers to the
provisions of the Internal Revenue Code of 1986, as amended, which are in
effect as of the date of this Prospectus. You should consult a tax adviser
about the status of your distributions from your Funds.
All dividends and short-term capital gains distributions are generally
taxable to you as ordinary income, whether you receive the distribution in
cash or reinvest it for additional shares. An exchange of one Fund's shares
for shares of another Fund will be treated as a sale of the Fund's shares and
any gain on the transaction may be subject to federal income tax.
Keep in mind that distributions may be taxable to you at different rates
depending on the length of time the Fund held the applicable investment not
the length of time that you held your Fund shares. When you do sell your
Fund shares, a capital gain may be realized, except for certain tax-
deferred accounts, such as IRA accounts.
22
<PAGE>
Account Policies, Dividends and Taxes
- ----------------------------------------------------------------------------
Federal law requires a Fund to withhold taxes on distributions paid to
shareholders who:
* fail to provide a social security number or taxpayer identification number
* fail to certify that their social security number or taxpayer
identification number is correct
* fail to certify that they are exempt from withholding
23
<PAGE>
[COMMON INSIDE BACK COVER TO ALL PROSPECTUSES]
[THE MANAGERS FUNDS LOGO]
Where Leading Money Managers Converge
Fund Distributor
The Managers Funds LLC
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
TRUSTEES
Jack W. Aber
William E. Chapman, II
Sean M. Healey
Edward J. Kaier
Madeline H. McWhinney
Steven J. Paggioli
Eric Rakowski
Thomas R. Schneeweis
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
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
EMERGING MARKETS EQUITY FUND
King Street Advisors, Limited
INCOME FUNDS:
- ----------------
MONEY MARKET FUND
J.P. Morgan Investment Management Inc.
SHORT AND INTERMEDIATE BOND FUND
Standish, Ayer & Wood, Inc.
INTERMEDIATE MORTGAGE FUND
Standish, Ayer & Wood, Inc.
BOND FUND
Loomis, Sayles & Co., L.P.
GLOBAL BOND FUND
Rogge Global Partners
<PAGE>
[BACK COVER OF PROSPECTUS - COMMON TO ALL]
For More Information
- ------------------------------------------------------------------
Additional Information for these Funds, including the
Statement of Additional Information and the Annual and Semi-
Annual Reports, is available to you free upon request. In
the Annual Report for each of the Funds, you will find a
discussion of the market conditions and investment
strategies that significantly affected the Fund's
performance during the last fiscal year.
[GRAPHIC]By telephone Call 1-800-835-3879
[GRAPHIC]By Mail Write to: The Managers Funds
40 Richards Avenue
Norwalk, CT 06854
[GRAPHIC]On the Internet Electronic copies are available on ur
website at http://www.managersfunds.com
Text-only copies of these documents are also available on the SEC's website
at http://www.sec.gov, by sending a request and a duplication fee to the SEC's
Public Reference Section, Washington, D.C. 20549-6009, or by visiting the SEC's
Public Reference Room in Washington, DC (1-800-SEC-0330)
Investment Company Act Registration Number 811-3752.
<PAGE>
