THE MANAGERS FUNDS
Semi-Annual Report
May 31, 2000
(unaudited)
MONEY MARKET FUND
MANAGERS MONEY MARKET FUND
Semi-Annual Report
May 31, 2000
(unaudited)
TABLE OF CONTENTS
Page
Letter to Shareholders 1
The Managers Funds Performance 3
Complete performance table for all of The Managers Funds as of June
30, 2000
Managers Money Market Fund
Statement of Assets and Liabilities 4
Fund balance sheet
Statement of Operations 4
Detail of sources of income and fund level expenses during
the period
Statement of Changes in Net Assets 5
Detail of changes in fund assets and distributions to
shareholders during the past two periods
Financial Highlights 6
Historical distributions, total returns, expense ratios and net
assets
Notes to Financial Statements 7
The Fund's accounting and distribution policies, details of
agreements and
transactions with fund management and description of certain
investment risks
The Prime Money Market Portfolio (The commingled investment pool
which
holds all investable assets of the Fund.)
Schedule of Portfolio Investments 9
Detailed portfolio listing by security type, as valued at May 31,
2000, of which
Managers Money Market Fund owns a pro rata share
Statement of Assets and Liabilities 13
Portfolio's balance sheet
Statement of Operations 13
Detail of the Portfolio's sources of income, expenses, and
realized gains
(losses) during the period
Statement of Changes in Net Assets 14
Detail of changes in the Portfolio's assets during the past
two years
Supplemental Data 14
Historical ratios of the Portfolio's expenses,
net investment income and impact of
expense reimbursements on the expense
ratios
Notes to Financial Statements 15
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, any bank. Shares of
the Fund are not federally insured by the Federal Deposit
Insurance Corp., the Federal Reserve Board, or any 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.
Dear Fellow Shareholder:
Although the turn of the calendar over to the year 2000 went
rather smoothly for most of the world, the financial markets have
been anything but smooth throughout the first half of 2000.
Uncertainty about the rate of inflation, the sustainability of
corporate profit growth and the actions of the Federal Reserve
Board to slow the economy and tame the stock markets have all
contributed to creating one of the most volatile market
environments ever. As we should expect, Managers Money Market
Fund provided a stable net asset value and a modest return from
income throughout the period.
During the six months ended May 31, 2000, short-term interest
rates rose by about three quarters of a percent due to increasing
evidence of inflation and the Federal Reserve Board's effort to
control it. In a continuation of its 1999 tightening policy, the
Fed raised the Fed Funds Target and Discount Rates three times
for a total of one full percentage point during the first half of
2000.
Meanwhile, the Federal government proceeded to buy back 30-year
U.S. Treasury bonds, which drove the price of those securities
higher and thus the effective yields lower. The Treasury also
announced that it will reduce the amount of debt it issues in the
future. As a result, the yield curve for Treasury securities has
moved into what is known as an inverted shape where short-term
Treasuries provide a higher yield than long-term securities. For
example, as of May 31, 2000, the yield on 2-year Treasury notes
was 6.67% while the yield on 30-year Treasury bonds was 6.01%.
Just six months earlier, the 2-year note was yielding 6.01% while
the 30-year bond was yielding 6.29%.
In addition to the Federal government's monetary policy actions,
Congress began to debate whether or not the Federal government
should continue to guarantee debt issued by Government Sponsored
Entities (GSEs) such as GNMA. Although the debate is unlikely
to yield any decisions soon, the uncertainty weakened confidence
in agency securities, which also spread to other investment grade
debt.
What all of this meant for investors during the period was that
short-term debt securities performed well because, as they
matured, investors were able to reinvest at higher rates. Long-
term Treasury securities also performed well because their
coupons remained stable while their prices rose. Meanwhile,
investors holding medium-term securities, particularly corporate
issues, realized no benefit from rising rates while the prices of
their securities were flat or drifted lower.
Within this context, Managers Money Market Fund performed well,
as its 30-day yield increased from 5.17% at the end of November
to 5.87% on May 31, 2000. For the six months ended May 31, 2000,
the Fund provided a total return of 2.81%, while the iMoneyNet
Taxable Money Fund Average (formerly named IBC All Taxable Money
Fund Average) returned 2.76%.
Throughout the period, the portfolio management team at J.P.
Morgan Investment Management maintained a bar belled maturity
structure within the context of a money market portfolio. This
enabled them to take advantage of higher yielding paper while at
the same time remaining very flexible as their ultra short
positions matured and were reinvested at increasingly higher
rates. They maintained an average maturity which revolved around
50 days, increasing from the year-end maturity of 45 days to a
peak of 55 days in late February. As they became increasingly
bearish and more certain that the Fed would remain on a
tightening program, they reduced the duration to 45 days in late
April. Throughout May they let the maturity extend and the
Portfolio ended the period with an average maturity of 49 days.
This is roughly similar to the average maturity of the iMoneyNet
Taxable Money Fund Average, which ended the period at 50 days.
The managers accomplished the barbell structure primarily through
the use of commercial paper and floating rate notes. The
Portfolio's composition summary as of May 31, 2000, is only
slightly changed from the previous six months, and is displayed
in the following chart.
Portfolio Composition
Time Deposits 3.2%
Foreign Time Deposit 5.2%
Other 2.9%
Taxable Municipals 0.3%
Certificate of Deposit 1.9%
Foreign Certificate of Deposit 14.0%
Commercial Paper 25.1%
Foreign Commercial Paper 4.4%
Floating Rate Notes 43.0%
As of May 31, 2000, the average 7-day simple yield for the Fund
was 6.02% and the average 7-day compound yield was 6.20%. In
comparison, the average 7-day simple yield for the iMoneyNet
Taxable Money Fund Average for the same period was 5.76% and the
compound yield was 5.93%.
In addition to Managers Money Market Fund, we are very pleased
with the recent and long-term performance of many of our Funds.
Please refer to page 3 for the performance results of all of our
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 and CEO
/s/Thomas G. Hoffman
Thomas G. Hoffman
Director of Research
The Managers Funds LLC
2
The Managers Funds Performance (unaudited)
All periods ended June 30, 2000
Average Annual Total Returns (a)
Six Since Inception Morningstar
Equity Funds: Months 1 Year 3
Years 5 Years 10 Years Inception
Date Rating (b)
Income Equity (0.18)% (6.42)% 0.00%
8.69% 0.00% 14.84% 0.00% 12.83% 0.00% 13.95% Oct. '84 PPP
Capital Appreciation 0.00% 59.97% 0.00%
50.76% 0.00% 35.61% 0.00% 23.97% 0.00% 21.23%
Jun. '84 PPPPP
Small Company (c) __ __ __
__ __ (0.20)% Jun. '00
N/A
Special Equity 12.72% 55.37% 0.00%
25.38% 0.00% 26.23% 0.00% 20.47% 0.00% 18.30%
Jun. '84 PPPPP
International Equity (3.53)% 13.82%
0.00% 10.80% 0.00% 13.30% 0.00% 11.68% 0.00%
13.99% Dec. '85 PPPP
Emerging Markets Equity (8.17)% 27.32%
__ __ __ 13.41%
Feb. '98 N/A
Income Funds:
Short & Intermediate
Bond 1.99% 3.23% 0.00% 4.33% 0.00% 5.13% 0.00% 6.26%
0.00% 7.67% Jun. '84 PPPP
Bond 4.97% 4.12% 0.00% 6.08% 0.00% 7.27% 0.00%
9.02% 0.00% 10.27% Jun. '84 PPPP
Global Bond (2.98)% (3.42)% 1.99%
0.00% 2.02% __ 3.99% Mar. '94 P
Money Market 2.86% 5.49% 0.00% 5.25% 0.00%
5.27% 0.00% 4.71% 0.00% 5.82% Jun. '84 N/A
Past performance is not a guarantee of future results. The
investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed may be more
or less than the original cost. For a Prospectus including fees
and expenses, please visit our website at www.managersfunds.com, or
call The Managers Funds LLC at (800) 835-3879 or your investment
adviser. Read the prospectus carefully before you invest. The
Managers Funds are distributed by The Managers Funds LLC, a NASD
member.
(a) 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.
(b) Morningstar proprietary ratings reflect historical risk-
adjusted performance as of 06/30/00 and are subject to change every
month. The ratings are calculated from the Funds' three-, five- and
ten-year average annual returns (if applicable) in excess of 90-day
Treasury bill returns with appropriate fee adjustments, 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 rated against 3,642, 2,328 and 783 equity funds, the
International Equity Fund was rated against 1,148, 701 and 141
international equity funds, and each of the Income Funds was rated
against 1,684, 1,287 and 381 taxable fixed-income funds. The top
ten percent of the funds in an investment class receive five stars,
the next 22.5% receive 4 stars, the next 35% receive 3 stars, the
next 22.5% receive 2 stars and the bottom 10% receive 1 star.
(c) Small Company's return is since inception (06/19/00).
3
Managers Money Market Fund
Statement of Assets and Liabilities
May 31, 2000 (unaudited)
Assets:
Investment in The Prime Money Market Portfolio ("Portfolio")
45,208,028
Prepaid expenses 17,200
Total assets 45,225,228
Liabilities:
Dividends payable to shareholders 47,000
Administration fee payable 7,443
Other accrued expenses 28,654
Total liabilities 83,097
Net Assets 45,142,131
Shares outstanding 45,142,131
Net asset value, offering and redemption price per share
1.00
Net Assets Represent:
Paid-in capital 45,142,131
Statement of Operations
For the six months ended May 31, 2000 (unaudited)
Investment Income Allocated from Portfolio:
Interest income 1,635,942
Expenses:
Administration fees 53,772
Transfer agent fees 28,595
Reports to shareholders 7,551
Registration fees 6,857
Professional fees 4,582
Accounting fees 2,999
Trustees' fees 2,716
Miscellaneous expenses 2,511
Allocated Portfolio expenses 38,419
Total expenses 148,002
Less: Waiver of administration fees (13,308)
Net expenses 134,694
Net investment income 1,501,248
The Accompanying notes are an integral part of these financial
statements.
4
Managers Money Market Fund
Statement of Changes in Net Assets
For the
six months ended For the
May 31, 2000 year ended
(unaudited) November 30, 1999
Increase (Decrease) in Net Assets
From Operations:
Net investment income 1,501,248 2,271,349
Distributions to Shareholders:
From net investment income (1,501,248) (2,271,349)
From Capital Share Transactions
(at a constant $1.00 per share):
Proceeds from sale of shares 414,446,551 1,003,865,434
Net asset value of shares issued
In connection with reinvestment of
dividends 1,394,975 1,928,925
Cost of shares repurchased (424,326,510) (997,448,861)
Net increase (decrease) from capital
share transactions (8,484,984) 8,345,498
Total increase (decrease) in net assets (8,484,984) 8,345,498
Net Assets:
Beginning of period 53,627,115 45,281,617
End of period 45,142,131 53,627,115
The accompanying notes are an integral part of these financial
statements.
5
Managers Money Market Fund
Financial Highlights
For a share of capital stock outstanding throughout each period
For the six Eleven months
months ended ended
May 31, 2000 Year ended November 30, November 30,
(unaudited) 1999 1998 1997 1996 1995
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 0.028 0.047 0.052 0.052
0.054 0.044
Less Distributions to
Shareholders from:
Net investment income (0.028) (0.047) (0.052) (0.052)
(0.054) (0.044)
Net Asset Value,
End of Period $1.000 $1.000 $1.000 $1.000
$1.000 $1.000
Total Return (a) 2.81% (b) 4.84% 5.30% 5.35% 5.53% 4.92% (c)
Ratio of net expenses to
average net assets 0.50%(c) 0.48% 0.50% 0.40% 0.12% 1.13% (c)
Ratio of net investment
income to average net assets 5.57%(c) 4.74% 5.17% 5.22% 5.35%
4.85% (c)
Net assets at end of period
(000's omitted) $45,142 $53,627 $45,282 $36,544
$36,091 $11,072
Expense Waiver/Reimbursement (d)
Ratio of total expenses to
average net assets 0.55% (c) 0.63% 0.70% 0.74% 0.75% 1.18%(c)
Ratio of net investment
income to average net assets 5.52% (c) 4.59% 4.97% 4.88% 4.71%
4.80% (c)
(a) The total returns would have been lower had certain expenses
not been reduced during the periods shown.
(b)Not annualized.
(c)Annualized.
(d) Ratio information assuming no waiver or reimbursement of
investment advisory and management fees and/or administrative
fees in effect for the periods presented, if applicable.
6
MANAGERS MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
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 (0.25% at
May 31, 2000). The performance of the Fund is directly affected by
the performance of the Portfolio. The financial statements of the
Portfolio, including the Schedule of Portfolio 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
accounting principles generally accepted in the United States,
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:
(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.
7
NOTES TO FINANCIAL STATEMENTS (concluded)
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 entered into an Administrative and Shareholder Servicing
Agreement under which The Managers Funds LLC, 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 advise or act as an
intermediary with the Fund's shareholders.
Effective March 3, 2000, the Board of Trustees approved an
amendment to the agreement whereby the fee required to be paid to
the administrator by the Trust is 0.15% of the Fund's average daily
net assets per annum. Prior to March 3, 2000, the Trust was
required to pay the Administrator 0.25% of the Fund's average daily
net assets per annum. The Administrator voluntarily waived 0.10%
of its fee for the period beginning December 1, 1999 and ending
March 2, 2000, amounting to $13,308. Currently the Administrator is
not waiving any portion of its 0.15% fee.
The aggregate annual fee paid to each outside Trustee for serving
as a Trustee of the Trust is $16,000. In addition, the in-person
and telephonic meeting fees the Trustees receive are $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.
8
THE PRIME MONEY MARKET PORTFOLIO
SCHEDULE OF PORTFOLIO INVESTMENTS
May 31, 2000 (unaudited)
CERTIFICATES OF DEPOSIT-DOMESTIC (1.9%)
216,000 Bank America Corp. 06/20/00-08/17/00 6.180-
6.750 216,000,000
133,000 SunTrust Bank Atlanta 06/22/00-04/18/01 6.520-
6.770 133,011,891
Total Certificates of Deposit-Domestic 349,011,891
CERTIFICATE OF DEPOSIT - FOREIGN (14.0%)
300,000 Abbey National PLC, (MTN, Series 1A) 01/08/01
6.450 299,913,639
452,000 Bayerische Landesbank 08/04/00-10/02/00 5.875-
5.930 451,815,672
170,000 Credit Communal De Belgique 02/22/01-05/03/01
6.760-7.055 169,943,817
350,000 Deutsche Bank 12/01/00-02/22/01 6.190-6.755
349,881,810
205,000 Landesbank Hessen-Thueringen 05/08/01 7.143
204,986,428
381,000 Rabobank Nederland 02/15/01-05/02/01 6.660-
7.050 380,888,169
526,500 Union Bank of Switzerland 07/03/00-04/30/01
5.760-6.880 526,408,902
149,000 Westdeutsche Landesbank Girozentra 06/06/00-06/21/00
6.030-6.190 149,000,000
Total Certificates of Deposit-Foreign 2,532,838,437
COMMERCIAL PAPER - DOMESTIC (25.1%) (y)
600,714 Alpine Securitization Corp. 06/01/00-06/20/00
6.104-6.533 599,524,574
93,000 Asset Securitization Corp. 06/05/00-06/07/00
5.687-6.510 92,930,875
147,100 Bavaria Trust Corp. 06/02/00-06/27/00 5.510-
6.161 146,912,417
197,500 BBL North America Funding Corp. 06/07/00-08/23/00
6.522-6.624 195,905,286
207,500 Citibank Capital Markets Corp. 06/01/00-08/22/00
6.184-6.621 205,630,960
85,000 CXC, Inc. 08/17/00 6.541 83,789,175
136,763 Enterprise Funding Corp. 06/07/00-06/30/00
5.535-6.578 139,139,784
100,000 Eureka Securitization Corp. 06/08/00-06/27/00
6.226-6.523 99,704,694
155,000 General Electric Capital Corp. 06/09/00-06/20/00
6.524-6.549 154,710,403
150,000 General Motors Acceptance Corp. 06/02/00-06/14/00
6.510-6.530 149,822,979
181,902 HD Real Estate Funding Corp. 11/21/00 6.831
175,957,847
25,000 Merrill Lynch & Co. 06/01/00 6.512
25,000,000
154,409 Monte Rosa Capital Corp. 06/05/00-08/21/00
6.520-6.621 152,788,782
402,000 Morgan Stanley Dean Witter & Co. 06/01/00-06/19/00
6.523-6.546 401,499,296
50,000 Newport Funding Corp. 06/07/00 6.522
49,950,417
119,687 Parthenon Receivable Funding LLC 06/19/00-07/05/00
6.141-6.584 119,181,445
30,000 Private Export Funding Corp. 06/01/00 6.512
30,000,000
258,097 Receivable Capital Corp. 06/08/00-06/26/00
5.866-6.523 257,307,181
50,000 SBC Communications, Inc. 06/16/00-08/21/00
6.001-6.551 123,747,875
160,000 Salomon Smith Barney, Inc. 06/01/00-06/07/00
6.520-6.667 159,915,278
52,000 Southern California Edison Corp. 06/02/00
6.510 51,991,406
471,650 Trident Capital, Inc. 06/16/00-06/23/00 6.001-
6.147 470,118,029
430,744 Windmill Funding Corp. 06/05/00-07/05/00 6.184-
6.520 429,299,021
230,000 Wisconsin Energy Corp. 06/01/00-06/29/00 6.102-
6.180 229,219,223
Total Commercial Paper-Domestic 4,544,046,947
COMMERCIAL PAPER - FOREIGN (4.4%) (y)
100,000 Bank of Nova Scotia 06/30/00 6.504
99,470,428
46,500 CDC Commercial Paper Corp. 06/12/00 5.895
46,407,646
The accompanying notes are an integral part of these financial
statements
9
THE PRIME MONEY MARKET PORTFOLIO
SCHEDULE OF PORTFOLIO INVESTMENTS(continued)
COMMERCIAL PAPER - FOREIGN (continued)
66,500 CS First Boston, Inc. 06/16/00-08/21/00 6.521-
6.551 66,211,869
335,101 France Telecommunication 06/08/00-06/20/00
6.085-6.524 334,231,358
25,000 Halifax Building Society 06/06/00 6.521
24,979,410
95,000 Lloyds Bank PLC 06/02/00 6.510 94,984,325
161,000 Province of Quebec 06/01/00-06/16/00 6.512-
6.537 70,849,279
52,000 Royal Bank of Scotland Group 06/08/00 5.687
51,934,076
Total Commercial Paper-Foreign 789,068,391
CORPORATE BOND - DOMESTIC (0.5%)
85,000 General Electric Capital Corp. (MTN, Series A)
05/23/01 7.380 85,000,000
CORPORATE BOND - FOREIGN (0.5%)
79,389 Inter-American Development Bank 02/22/01 5.125
78,572,055
20,625 Ontario Province 06/28/00 6.125 20,623,714
Total Corportate Bond-Foreign 99,195,769
FLOATING RATE NOTES (43.0%) (v)
100,000 American Express Centurion Bank,
(due 03/06/01) 06/01/00 (a) 6.670 100,000,000
150,000 American Express Centurion Bank,
(due 02/09/01) 06/09/00 (a) 6.400 149,989,839
25,000 American Express Centurion Bank,
(due 04/12/01) 06/12/00 (a) 6.455 24,997,837
25,000 American Express Centurion Bank,
(due 02/14/01) 06/14/00 (a) 6.483 24,996,475
202,500 American Express Centurion Bank 06/12/00-07/12/00
6.720-6.750 202,500,241
25,000 AT&T Corp., (due 03/08/01) 06/08/00 (a) 6.366
24,996,274
25,000 AT&T Capital Corp., (MTN, Series F) 06/14/00 7.594
25,012,540
21,500 AT&T Capital Corp., (MTN, Series G,
due 12/01/00) 07/07/00 (a) 6.971 21,574,065
56,300 AT&T Capital Corp., (MTN, Series G,
due 04/09/01) 07/10/00 (a) 6.441 56,391,856
25,000 BankBoston Corp., (MTN, due 03/09/01) 06/09/00
(a) 6.197 25,009,029
470,000 Bank of America NA, (due 04/03/01) 06/01/00 (a)
6.670 470,000,000
500,000 Bank of Austria, (Series CD, due 02/16/01)
06/16/00 (a) 6.450 499,826,952
384,500 Bank of Scotland Treasury, (MTN,
due 03/05/01) (144A) 06/05/00 (a) 6.079 384,484,994
139,500 Bayerische Landesbank New York, (Series CD,
due 12/15/00) 06/15/00 (a) 6.447 139,441,315
270,000 Bayerische Landesbank New York, (Series CD,
due 02/22/01) 08/22/00 (a) 6.625 269,894,213
175,000 CIT Group, Inc., MTN 08/14/00 6.750
174,965,864
142,000 CIT Group, Inc., (MTN, due 01/19/01) 07/19/00
(a) 6.660 141,942,555
200,000 CIT Group, Inc., (MTN, due 02/14/01) 08/14/00
(a) 6.600 199,876,228
16,590 Caterpillar Financial Services Corp., (MTN,
Series F, due 10/12/00) 06/12/00 (a) 6.170 16,595,310
The accompanying notes are an integral part of these financial
statements
10
THE PRIME MONEY MARKET PORTFOLIO
SCHEDULE OF PORTFOLIO INVESTMENTS(continued)
FLOATING RATE NOTES (continued)
10,000 Caterpillar Financial Services Corp., (MTN,
Series F, due 09/15/00) 06/15/00 (a) 6.150 10,001,228
325,000 Chasers-00-1, (due 01/04/01) (144A) 07/05/00 (a)
6.700 325,000,000
228,000 Citicorp, (MTN, Series F, due 08/02/00) 06/02/00
(a) 6.227 228,000,000
8,000 Citicorp, (MTN, Series C, due 02/08/01) 02/08/01
(a) 6.923 8,016,616
140,000 Citigroup, Inc., (MTN, Series A, due 04/04/01)
06/05/00 (a) 6.315 140,000,000
150,000 Citigroup, Inc., (MTN, Series A, due 06/06/01)
06/10/00 (a) 6.431 150,000,000
5,000 Comerica Bank 06/12/00 6.660 4,999,859
53,000 Comerica Bank, (due 02/14/01) 06/14/00 (a) 6.437
52,979,067
500,000 Commerzbank, (Series CD, due 04/26/01) 06/26/00
(a) 6.560 499,911,746
10,000 Commerzbank, (Series CD, due 03/01/01) 06/28/00
(a) 6.531 9,996,352
400,000 CS First Boston, Inc. LINCS, (Series 1998-4,
Class 1, due 08/18/00) (144A) 06/19/00 (a) 6.584
400,000,000
550,000 CS First Boston, Inc. SPARCS, (Series 2000,
Class 1, due 07/24/00) 07/24/00 (a) 6.360 550,000,000
364,000 Deutsche Bank, (Series CD, due 02/16/01) 06/16/00
(a) 6.445 363,870,378
20,000 Deutsche Bank 12/13/00 (a) 6.452 19,996,286
10,000 First Union National Bank, (due 02/13/01) 08/14/00
(a) 6.780 10,006,267
36,500 First Union National Bank, (due 11/13/00) 08/16/00(a)
6.960 36,537,623
81,000 Fleet Financial Group, (MTN, Series P,
due 03/13/01) 06/13/00 (a) 6.037 80,922,676
40,000 Fleet Financial Group, (MTN, Series N,
due 10/13/00) 07/13/00 (a) 6.343 40,011,220
163,000 Fleet Financial Group, (MTN, Series N) 07/28/00
6.445 163,025,057
350,000 General Electric Capital Corp., (due 01/02/01)
07/07/00 (a) 6.221 350,000,000
6,000 Household Finance Corp., (MTN,
due 09/27/00) 06/27/00 (a) 6.378 6,004,041
5,000 Household Finance Corp., (due 04/03/01) 07/03/00(a)
6.440 5,005,745
15,000 Household Finance Corp., (due 04/09/01) 07/10/00(a)
6.617 15,022,114
75,000 Key Bank NA, (due 09/07/00) 06/07/00 (a) 6.150
75,009,016
24,500 Key Bank NA, (due 11/02/00) 08/02/00 (a) 6.641
24,528,874
220,000 Lehman RACERS 1998-MM-7-1,
(due 8/11/00) (144A) 06/19/00 (a) 6.620 220,000,000
292,000 Lehman RACERS 1999-25-MM-MBS,
(due 09/06/00) (144A) 06/06/00 (a) 6.506 292,000,000
165,000 Lehman RACERS 1999-35-MM, (Class A-1,
due 12/15/00) (144A) 06/15/00 (a) 6.622 165,000,000
34,775 NationsBank NA, (due 02/26/01) 08/29/00 (a)
6.870 34,799,973
52,000 Toyota Motor Credit Corp., (MTN,
due 01/09/01) 07/10/00 (a) 6.181 51,971,967
75,000 US Bank NA Minnesota, (due 04/04/01) 07/05/00(a)
6.625 74,972,711
100,000 US Bank NA North Dakota, (due 04/04/01) 07/05/00(a)
6.645 99,971,663
342,000 Westdeutsche Landesbank New York,
(Series CD, due 03/23/01) 06/23/00 (a) 6.530 341,865,213
Total Floating Rate Notes 7,801,921,279
The accompanying notes are an integral part of these financial
Statements
11
THE PRIME MONEY MARKET PORTFOLIO
SCHEDULE OF PORTFOLIO INVESTMENTS(concluded)
REPURCHASE AGREEMENT (1.3%)
232,533 Lehman Brothers Repurchase Agreement,
proceeds $232,574,791 (collateralized by
$239,647,908 Federal Home Loan Mortgage
Corp., 6.500%-12.220% due 06/15/06 -
02/15/29, valued at $87,827,762;
$329,486,717 Federal National Mortgage
Association, 6.500%-8.000% due
12/25/04 - 04/25/29 valued at
$85,113,896; $135,336,660 Government
National Mortgage Association,
7.500%-8.000% due 02/16/26 - 08/16/29
valued at $64,244,462) 06/01/00 6.470 232,533,000
TAXABLE MUNICIPALS (0.3%) (v)
41,145 Sacramento County, (Series A, due 08/15/14),
MBIA Insured 08/15/00 (a) 6.770 41,142,342
6,200 Wake Forest University, (Series 1997, due
07/01/17), LOC-Wachovia Bank 06/07/00 (a) 6.640
6,200,000
Total Taxable Municipals 47,342,342
TIME DEPOSIT - DOMESTIC (3.2%)
575,000 SunTrust Bank Cayman 06/01/00 6.813-6.875
575,000,000
TIME DEPOSIT - FOREIGN (5.2%)
100,000 Bank of America Grand Cayman 06/01/00 6.813
100,000,000
273,379 Banque Nationale De Paris Georgeto 06/01/00
6.813 273,379,000
319,000 Chase Nassau 06/01/00 6.813 319,000,000
250,000 Credit Suisse Grand Cayman 06/01/00 6.781
250,000,000
Total Time Deposits-Foreign 942,379,000
TOTAL INVESTMENTS AT AMORTIZED COST AND VALUE (99.4%)
17,998,337,056
OTHER ASSETS IN EXCESS OF LIABILITIES (0.6%) 107,236,609
NET ASSETS (100.0%) 18,105,573,665
(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.
(y) Yield to Maturity
144A- Securities restricted for resale to Qualified Institutional
Buyers.
LOC - Letter of Credit.
MBIA - Municipal Bond Investors Assurance Corp.
MTN - Medium Term Note.
RACERS - Restructured Asset Certificates.
SPARCS - Structured Product Asset Return.
STEERS - Structured Enhanced Return Trust.
The accompanying notes are an integral part of these financial
Statements
12
THE PRIME MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000 (unaudited)
Assets
Investments at amortized cost and value 17,998,337,056
Interest receivable 114,573,578
Prepaid trustees' fees 36,579
Prepaid expenses and other assets 34,376
Total assets 18,112,981,589
Liabilities
Payable to custodian 5,273,919
Advisory fee payable 1,594,099
Administrative services fee payable 355,145
Fund services fee payable 14,558
Accrued expenses 170,203
Total liabilities 7,407,924
Net Assets
Applicable to Investors' Beneficial Interests 18,105,573,665
STATEMENT OF OPERATIONS
For the six months ended May 31, 2000 (unaudited)
Investment Income
Interest income 519,977,465
Expenses
Advisory fee 9,078,499
Administrative services fee 2,010,483
Custodian fees and expenses 764,557
Fund services fee 139,027
Trustees' fees and expenses 67,111
Administration fee 64,660
Miscellaneous 73,636
Total Expenses 12,197,973
Net Investment Income 507,779,492
Net Realized Loss on Investments (49,875)
Net Increase in Net Assets Resulting from Operations 507,729,617
The accompanying notes are an integral part of these financial
statements
13
THE PRIME MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six
months ended For the fiscal
May 31, 2000 year ended
(unaudited) November 30, 1999
Increase in Net Assets
From Operations
Net investment income 507,779,492 620,496,096
Net realized loss on investments (49,875) (502,599)
Net increase in net assets resulting
from operations 507,729,617 619,993,497
Transactions in Investors'
Beneficial Interests
Contributions 55,908,757,325 108,543,399,809
Withdrawals (53,736,623,250) (101,517,907,239)
Net increase from investors'
transactions 2,172,134,075 7,025,492,570
Total increase in net assets 2,679,863,692 7,645,486,067
Net Assets
Beginning of Period 15,425,709,973 7,780,223,906
End of Period 18,105,573,665 15,425,709,973
SUPPLEMENTAL DATA
For the
six months
ended
May 31,2000 For the fiscal year ended November 30,
(unaudited) 1999 1998 1997 1996 1995
Ratios to Average Net Assets
Expenses 0.14% (a) 0.15% 0.17% 0.18% 0.19% 0.19%
Net Investment Income 5.90% (a) 5.07%
5.48% 5.43% 5.29% 5.77%
Expenses without
reimbursement -- -- -- -- 0.19% --
(a) Annualized
The accompanying notes are an integral part of the financial
statements.
14
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
diversified, 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 consistent with the preservation of capital
and same-day 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.
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, 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.
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
15
NOTES TO FINANCIAL STATEMENTS (continued)
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, 2000, such fees amounted to $9,078,499.
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, 2000, the fee for these services amounted to
$64,660.
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 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, 2000, the fee for these services amounted to
$2,010,483.
d) The portfolio has a Fund Services Agreement with Pierpont Group,
Inc. ("Group'') to assist the trustees in exercising their overall
Supervisory
16
NOTES TO FINANCIAL STATEMENTS (concluded)
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 $139,027 for the six months
ended May 31, 2000.
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 $26,400.
17
Investment Manager,
Administrator and 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
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109-2881
Transfer Agent
Boston Financial Data Services, Inc.
attn: The Managers Funds
P.O. Box 8517
Boston, Massachusetts 02266-8517
(800) 252-0682
For ManagersChoice Only
PFPC Brokerage Services, Inc.
P.O. Box 61487
King of Prussia, PA 19406-0897
(800) 358-7668
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
* Interested Person.
This report is prepared for the information of shareholders. It is
authorized for distribution to prospective investors only when
preceded or accompanied by an effective Prospectus.
The Managers Funds
Equity Funds:
INCOME EQUITY FUND
Armstrong Shaw Associates Inc.
Chartwell Investment Partners, L.P.
CAPITAL APPRECIATION FUND
Essex Investment Management
Company, LLC
Roxbury Capital Management, LLC
SMALL COMPANY
Kalmar Investment Advisers, Inc.
HLM Management Co., Inc.
SPECIAL EQUITY FUND
Goldman Sachs Asset Management
Pilgrim Baxter & Associates, Ltd.
Westport Asset Management, Inc.
Kern Capital Management LLC
INTERNATIONAL EQUITY FUND
Scudder Kemper Investments, Inc.
Lazard Asset Management
Mastholm Asset Management, L.L.C.
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, plc.
www.managersfunds.com
