MANAGERS MONEY MARKET FUND
Annual Report
November 30, 1999
TABLE OF CONTENTS
Page
President's Message..................................................... 1
The Managers Funds Performance............................................ 4
Complete performance table for all of The Managers Funds as of December 31,
1999
Managers Money Market Fund
Statement of Assets and Liabilities...................................... 5
Fund balance sheet and Net Asset Value (NAV) per share computation
Statement of Operations.................................................. 5
Detail of sources of income and fund level expenses
Statement of Changes in Net Assets..................................... 6
Detail of changes in fund assets and distributions to shareholders for the
last two years
Financial Highlights................................................... 7
Historical net asset values, distributions, total returns, expense ratios and
net assets
Notes to Financial Statements.......................................... 8
Accounting and distribution policies, details of agreements and transactions
with fund
management and description of certain investment risks
Report of Independent Accountants........................................10
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 November 30,
1999, of
which Managers Money Market Fund owns a pro rata share
Statement of Assets and Liabilities.....................................15
Portfolio's balance sheet
Statement of Operations.................................................15
Detail of the Portfolio's sources of income, expenses, and realized gains
(losses) during the
year
Statement of Changes in Net Assets...................................... 16
Detail of changes in the Portfolio's assets during the past two years
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......................................... 17
The Portfolio's accounting policies and details
of agreements and
transactions with
Portfolio management
Report of Independent Accountants............................. 20
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 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.
Dear Fellow Shareholder:
From an investment standpoint, 1999 was among the
most diverse
years of the century. While the NASDAQ Composite Index
returned more
than 86% for the year, the largest ever calendar year
return for any
broad U.S. stock index, there were significant portions of
the
financial markets that actually diminished in value during
the year.
For example, the S&P 500 and the Russell 2000 indices
soared to record
highs despite the fact that a majority of the stocks in
those indices
lost value during the year. Medium and long-term domestic
bonds also
went down in price in 1999 due to a steady rise in interest
rates. For
the first time in several years, individual security
selection was an
extremely important factor in the success of any investment
portfolio.
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. 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. More than
anything else,
the swiftly expanding development of the internet
invigorated almost
all parts of the U.S. economy. While these factors drove
stock prices
higher, they have also raised the specter 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
changed its policy bias from neutral to tightening, citing
"the
persistent strength in domestic demand, the reduced risks
of economic
weakness abroad, and the recovery in U.S. financial
markets." As a
result, the Federal Open Market Committee (FOMC) voted to
increase
short-term rates by 25 basis points at the end of June,
again in
August, and a third time in mid-November. Given all these
factors,
interest rates for all maturity horizons rose throughout
the year, and
thus, bond prices moved lower in general. The yield on 5-
year treasury
notes rose more than one and a half percentage points
during the year
ended November 30th, 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 year ended
November 30, 1999, the Managers Money Market Fund returned
4.84%.
Meanwhile, an index of 3-month U.S. Treasury Bills returned
4.80%, 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 4.70%.
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 Investment Management, Inc. ("JPMIM")
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, they utilized a bar-bell maturity
structure and also
increased their position in floating rate notes. From
mid-year
forward, the manager targeted a maturity of 50 days while
retaining the
bar-bell structure in order to maintain both liquidity and
duration.
Throughout the year, the manager's heavy allocation in
floating rate
notes enabled the portfolio to benefit from the steady rise
in interest
rates. For a short period during the fourth quarter there
was a
premium yield available for securities with maturities
beyond the year-
end, however a flood of cash into money instruments as
January 1, 2000,
approached sent yields dramatically lower late in the year.
As of November 30, 1999, the 30-day average
annualized yield for
the Fund was 5.17%. For comparison, the 30-day average
yield for the
IBC All Taxable Money Fund Average for the same period was
4.88%. The
average seven-day simple yield for the IBC All Taxable
Money Fund
Average was 5.15% on December 31, 1999, and the seven-day
compound
yield was 5.28%. The simple and compound yields for the
Managers Money
Market Fund for the same period were 5.41%, and 5.55%,
respectively.
The accompanying chart provides a breakdown of the
portfolio as
of November 30, 1999.
Looking forward, the management team expects the
rising rate environment to continue, with a quarter
percentage point hike from the Federal Reserve at its
February meeting. Eventually, these incremental steps will
bring about the desired slow down and "soft landing." The
current strength in oil prices may translate into
increasing headline inflation, noticeable as early as the
first quarter of 2000. Global synchronized growth and the
central bank activity in response will be a significant
theme for 2000. As such, the manager currently intends to
keep the Fund bar-belled to maintain liquidity, yet
opportunistically capture higher yields along the yield
curve.
In addition to the Managers Money Market Fund, we
were very pleased with the performance of many of our
fixed-income and equity mutual funds during the past year.
Please see page 4 for the performance results of all of our
funds.
Finally, we at The Managers Funds would like to thank
Robert (Skip) Johnson of JPMIM for his excellent service as
one of the portfolio managers of the Fund. After more than
ten years managing short-term fixed income portfolios at
JPMIM, Skip is retiring. Going forward the management team
will be headed by former co-manager John Donohue and Mark
Settles.
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 ending December 31, 1999
Average Annual Total Returns*
Since Inception Morningstar
Equity Funds: 1 Year 3 Years
5 Years 10 Years Inception
Date Rating**
Income Equity 4.15% 0.00% 13.96% 0.00%
18.41% 0.00% 12.61% 0.00% 14.45%
Oct. '84 PPP
Capital Appreciation 103.02% 0.00%
53.28% 0.00% 40.43% 0.00% 24.65% 0.00%
21.98% Jun. '84 PPPPP
Special Equity 54.11% 0.00% 24.33%
0.00% 26.28% 0.00% 18.39% 0.00% 18.02%
Jun. '84 PPPP
International Equity 25.28% 0.00%
16.72% 0.00% 15.83% 0.00% 12.57% 0.00%
14.81% Dec. '85 PPPP
Emerging Markets
Equity 90.06% __ __
__ 22.64% Feb. '98 N/A
Income Funds:
Short & Intermediate
Bond 2.21% 0.00% 4.45% 0.00% 6.53% 0.00% 6.28%
0.00% 7.79% Jun. '84 PPPP
Bond 3.66% 0.00% 5.74% 0.00% 10.19% 0.00%
8.79% 0.00% 10.28% Jun. '84 PPPP
Global Bond (9.97)% 2.46% 0.00% 5.97%
__ 4.90% Mar. '94 P
Money Market 4.89% 0.00% 5.16% 0.00% 5.28%
0.00% 4.81% 0.00% 5.82% 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.
* 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 12/31/99 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 rated against 3,487, 2,198 and 788 equity funds,
the International Equity Fund was rated against 1,114, 648
and 133 international equity funds, and each of the Income
Funds was rated against 1,628, 1,232 and 397 taxable fixed-
income funds. Ten percent of the funds in each asset class
receive five stars, 22.5% receive 4 stars, 35% receive 3
stars, 22.5% receive 2 stars and 10% receive 1 star.
Managers Money Market Fund
Statement of Assets and Liabilities
November 30, 1999
Assets:
Investment in The Prime Money Market Portfolio
("Portfolio") 53,672,495
Prepaid expenses 11,128
Total assets 53,683,623
Liabilities:
Dividends payable to shareholders
27,269
Administration fee payable 4,050
Other accrued expenses 25,189
Total liabilities 56,508
Net Assets 53,627,115
Shares outstanding 53,627,115
Net asset value, offering and redemption price per
share 1.00
Net Assets Represent:
Paid-in capital 53,627,115
Statement of Operations
For the year ended November 30, 1999
Investment Income from Portfolio:
Investment Income Allocated from Portfolio:
Interest income 2,501,849
Expenses:
Administration fees 119,680
Transfer agent fees 43,097
Registration fees 22,564
Reports to shareholders 16,244
Audit fees 9,164
Accounting fees 6,000
Trustees' fees 3,436
Legal fees 2,004
Miscellaneous expenses 7,619
Allocated Portfolio expenses 72,500
Total expenses 302,308
Less: Waiver of administration fees (71,808)
Net expenses 230,500
Net investment income 2,271,349
Managers Money Market Fund
Statement of Changes in Net Assets
For the For the
year ended year ended
November 30, 1999 November 30, 1998
Increase (Decrease) in Net Assets
From Operations:
Net investment income 2,271,349 1,894,525
Distributions to Shareholders:
From net investment income (2,271,349) (1,894,525)
From Capital Share Transactions
(at a constant $1.00 per share):
Proceeds from sale of shares 1,003,865,434
601,974,751
Net asset value of shares issued in
connection with reinvestment of
dividends 1,928,925 1,674,537
Cost of shares repurchased (997,448,861)(594,911,842)
Net increase from capital share
transactions 8,345,498 8,737,446
Total increase in net assets 8,345,498 8,737,446
Net Assets:
Beginning of year 45,281,617 36,544,171
End of year 53,627,115 45,281,617
Managers Money Market Fund
Financial Highlights
For a share of capital stock outstanding throughout each period Eleven months
ended Year ended
Year ended November 30, November 30,
December 31,
1999 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 0.047 0.052 0.052
0.054 0.044 0.035
Less Distributions to
Shareholders from:
Net investments income (0.047) (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) 4.84% 5.30% 5.35% 5.53%
4.92% (b) 3.61%
Ratio of net expenses to
average net assets 0.48% 0.50% 0.40%
0.12% 1.13% (b) 0.73%
Ratio of net investment
income to average net assets 4.74% 5.17% 5.22%
5.35% 4.85% (b) 3.84%
Net assets at end of period
(000's omitted) $53,627 $45,282
$36,544 $36,091 $11,072 $17,269
Expense Waiver/Reimbursement (a)
Ratio of total expenses to
average net assets 0.63% 0.70% 0.74% 0.75% 1.18% (b)
1.03%
Ratio of net investment
income to average net assets 4.59% 4.97% 4.88% 4.71% 4.80%
(b) 3.54%
(a) 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. (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 9 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 (0.35% at
November 30, 1999). The performance of the Fund is
directly affected by the performance of the Portfolio.
The financial statements of the Portfolio, including the
schedule of investments, are included elsewhere in this
report and should be read in conjunction with the Fund's
financial statements.
(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.
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
Effective April 1, 1999, the Trust entered into 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 advise or act as an intermediary with the Fund's
shareholders.
Under the terms of the Agreement, the Trust is required
to pay the Administrator 0.25% of the Fund's average
daily net assets per annum. The Administrator
voluntarily waived 0.15% of its fee for the year ended
November 30, 1999, reducing the effective fee to 0.10%
of the Fund's average daily net assets. (Effective
December 1, 1999, the Administrator has elected to
voluntarily waive 0.10% of its fees, which makes its
effective fee 0.15% of the Fund's average daily net
assets). 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 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.
Report of Independent Accountants
To the Trustees of The Managers Funds and the Shareholders of
Managers Money Market Fund
In our opinion, the accompanying statement of assets and liabilities
and the related statements of operations and of changes in net assets
and the financial highlights present fairly, in all material respects, the
financial position of Managers Money Market Fund (the "Fund"), a
series of The Managers Funds, at November 30, 1999, and the results
of its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with accounting
principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted
in the United States, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 17, 2000
CERTIFICATES OF DEPOSIT-DOMESTIC (1.1%)
171,000 Nationsbank Corp., (Series 1) 01/05/00
5.000 170,996,836
CERTIFICATES OF DEPOSIT-FOREIGN (16.0%)
200,000 Abbey National PLC, (MTN, Series 1A)
05/11/00 5.220 199,957,288
50,000 Bank of Nova Scotia 02/25/00
5.160 49,994,327
50,000 Barclays Bank PLC 01/10/00 4.980
49,996,830
325,000 Bayerische Hypo Vereinsbank 02/22/00-
04/25/00 5.130-5.150 324,953,011
452,000 Bayerische Landesbank 08/04/00-10/02/00
5.875-5.930 451,530,943
100,000 Canadian Imperial Bank 02/07/00
5.010 99,994,610
124,500 Commerzbank 01/10/00-02/08/00 5.050-
5.010 124,493,949
375,000 Deutsche Bank 01/11/00-12/1/00
4.970-6.190 374,826,960
75,000 Dresdner Bank 01/07/00 6.350
75,000,000
100,000 Norddeutsche Landesbank Girozentra 02/18/00
5.090 99,991,657
75,000 Rabobank Nederland 01/10/00
4.980 74,995,245
500,000 Union Bank of Switzerland 01/13/00-
07/03/00 5.080-5.760 499,915,330
50,000 Westdeutsche Landesbank Girozentra 01/26/00
6.030 50,000,000
Total Certificates of Deposit-Foreign 2,475,650,150
COMMERCIAL PAPER-DOMESTIC (33.8%)
675,847 Alpine Securitization Corp. 12/14/99-
02/29/00 5.490-6.753 670,005,360
397,450 Aspen Funding Corp. 12/01/99-01/19/00
5.490-6.430 396,989,569
230,000 Asset Securitization Corp. 12/03/99-
01/28/00 5.597-6.446 228,259,425
106,643 Associates Corp. 12/01/99 5.600
106,643,000
250,000 Associates First Capital Corp. 12/01/99
5.600 250,000,000
50,000 BankAmerica Corp. 01/25/00 6.442
49,546,250
65,750 Bavaria Trust Corp. 03/17/00
6.140 64,591,138
83,000 BBL North America Funding Corp.
12/07/99-01/21/00 5.608-6.438 82,360,878
440,000 Citibank Capital Markets Corp.
12/07/99-02/10/00 5.608-6.435 436,146,951
417,000 CXC, Inc. 12/02/99-02/22/00 5.597-
6.442 414,582,981
188,846 Enterprise Funding Corp. 12/02/99-
12/15/99 5.598-5.667 188,601,374
100,000 General Electric Capital Corp. 02/23/00
6.156 98,665,334
43,562 General Electric Co. 12/01/99
5.600 43,562,000
451,000 General Motors Acceptance Corp.
02/16/00-03/17/00 6.140-6.149 444,255,887
59,905 Gillette Co. 12/01/99 5.600
59,905,000
117,763 Monte Rosa Capital Corp. 12/07/99-
01/18/00 5.608-6.434 117,174,099
555,150 Newport Funding Corp. 12/01/99-02/04/00
5.600-6.436 553,917,258
10,598 Parthenon Receivable Funding LLC 01/26/00
6.443 10,499,580
386,557 Receivable Capital Corp. 12/01/99-
01/27/00 5.600-6.445 384,195,040
263,700 Trident Capital, Inc. 12/10/99-01/21/00
5.490-6.112 262,760,038
346,848 Windmill Funding Corp. 12/01/99-02/01/00
5.489-6.443 345,404,975
Total Commercial Paper-Domestic 5,208,066,137
COMMERCIAL PAPER-FOREIGN (1.8%)
150,000 CS First Boston, Inc. 02/11/00-02/16/00
6.149-6.183 148,179,444
123,516 France Telecommunication 01/27/00-
02/10/00 6.202-6.445 122,187,091
Total Commercial Paper-Foreign 270,366,535
FLOATING RATE NOTES (35.9%) (v)
200,000 American Express Centurion Bank,
(due 06/12/00) 12/13/99 (a) 5.720 200,000,000
25,000 AT&T Capital Corp., (due 06/14/00) 12/14/99
(a) 6.963 25,187,833
16,500 AT&T Capital Corp., (Series G, due 12/01/00)
01/07/00 (a) 6.830 16,610,037
150,000 Bankers Trust Co., (due 04/14/00) 01/14/00
(a) 6.149 149,972,889
98,000 Bayerische Hypo Vereinsbank, (due 05/15/00)
12/15/99 (a) 5.348 97,970,708
62,000 CIT Group, Inc. 01/14/00 6.149
61,998,052
200,000 CIT Group, Inc. 02/14/00 5.750
199,977,604
50,000 CIT Group, Inc., (due 03/14/00) 12/14/99
(a) 5.650 49,995,962
175,000 CIT Group, Inc., (MTN, due 08/14/00)
02/15/00 (a) 5.750 174,880,230
228,000 Citicorp, (due 08/02/00) 12/02/99
12/02/99 (a) 5.439 228,000,000
22,500 Citigroup, Inc. 02/03/00 6.261
22,505,344
125,000 Comerica Bank, (due 01/20/00) 12/20/99
(a) 5.533 124,993,150
100,000 Comerica Bank, (due 02/14/00) 12/14/99
(a) 5.383 99,994,932
148,500 Comerica Bank, (due 03/22/00) 02/22/00
(a) 5.650 148,482,860
266,000 Commerzbank 02/11/00-02/23/00 5.650-
5.655 265,980,578
100,000 Crestar Bank, (due 03/01/00) 02/03/00
(a) 5.740 99,997,934
401,000 CS First Boston, Inc. LINCS, (Series 1998-3,
due 02/15/00) 12/11/99 (a) 5.478 401,000,000
350,000 CS First Boston, Inc. LINCS, (Series 1998-4,
Class 1, due 02/18/00) (144A) 12/17/00 (a)
5.493 349,998,388
375,000 CS First Boston, Inc. SPARCS, (Series 1999,
Class 4, due 01/24/00) 01/23/00 (a) 6.220
375,000,000
200,000 Deutsche Bank 02/11/00 5.660
199,988,560
350,000 First Union National Bank, (due 03/10/00)
02/17/00 (a) 6.015 349,991,964
163,000 Fleet Financial Group, (MTN, Series N,
due 07/28/00) 01/28/00 (a) 6.274 163,105,519
25,000 General Electric Capital Corp., (due
04/13/00) 01/13/00 (a) 6.124 25,000,000
200,000 General Electric Capital Corp., (due
05/03/00) 02/03/00 (a) 6.111 200,000,000
75,000 Key Bank NA, (due 09/07/00) 12/07/99
(a) 5.551 75,025,852
180,000 Key Bank NA, (due 05/19/00) 12/20/99
(a) 5.693 179,982,298
220,000 Lehman RACERS 1998-MM-7-1,
(due 08/11/00) (144A) 12/18/99 (a) 5.509
220,000,000
292,000 Lehman RACERS 1999-25-MM-MBS,
(due 09/06/00) (144A) 12/06/99 (a) 5.485
292,000,000
25,497 Merrill Lynch STEERS, (Series 1998, Class A,
due 01/15/00) 12/15/99 (a) 5.538 25,497,358
200,000 National City Bank, (due 03/10/00) 12/10/99
(a) 5.640 199,970,484
110,000 National City Bank 02/10/00
5.650 109,989,515
248,500 Royal Bank of Canada 02/17/00
5.645 248,476,532
138,000 Southtrust Bank NA, (due 05/17/00) 02/17/00
(a) 5.640 137,942,207
21,000 Wells Fargo Co., (Series J, MTN, due
03/10/00) 12/10/99 (a) 5.409 20,996,508
Total Floating Rate Notes 5,540,513,298
REPURCHASE AGREEMENT (5.3%)
820,000 Goldman Sachs Repurchase Agreement,
proceeds $820,128,694 (collateralized by
$284,525,780 Federal Home Loan Mortgage
Corp., 5.500% - 16.000% due 12/15/99 -
11/01/29, valued at $28,464,638;
$1,116,667,088 Federal National Mortgage
Association, 5.50% - 12.50% due
12/25/99 - 12/01/29 valued at $807,935,363) 12/01/99
5.650 820,000,000
TAXABLE MUNICIPALS (0.3%) (v)
41,145 Sacramento County, (Series A, due 08/15/14),
MBIA Insured 02/13/00 (a) 5.503 41,142,249
6,200 Wake Forest University, (Series 1997,
due 07/01/17), LOC-Wachovia Bank 12/01/99 (a)
5.590 6,200,000
Total Taxable Municipals 47,342,249
TIME DEPOSITS - DOMESTIC (2.8%)
436,639 Suntrust Bank Cayman 12/01/99
5.438-5.563 436,639,000
TIME DEPOSITS - FOREIGN (4.0%)
150,000 Bank of Montreal 12/01/99 5.500
150,000,000
356,529 Chase Nassau 12/01/99 5.500-
5.625 356,529,000
100,000 Dresdner Bank Grand Cayman 12/01/99
5.500 100,000,000
Total Time Deposits-Foreign 606,529,000
TOTAL INVESTMENTS AT AMORTIZED COST AND VALUE (101.0)%
15,576,103,205
OTHERS LIABILITIES IN EXCESS OF ASSETS (-1.0%)
(150,393,232)
NET ASSETS (100.0%) 15,425,709,973
(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.
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 Prime Money Market Portfolio
Statement of Assets and Liabilities
November 30, 1999
Assets
Investments at Amortized Cost and Value $15,576,103,205
Cash 1,160
Interest Receivable 101,273,087
Prepaid Expenses and Other Assets 39,625
Prepaid Trustees' Fees 7,258
Total Assets 15,677,424,335
Liabilities
Payable for Investments Purchased 249,832,729
Advisory Fee Payable 1,252,710
Administrative Services Fee Payable 285,605
Administration Fee Payable 12,480
Fund Services Fee Payable 7,663
Accrued Expenses 323,175
Total Liabilities 251,714,362
Net Assets
Applicable to Investors' Beneficial Interests $15,425,709,973
The Prime Money Market Portfolio
Statement of Operations
For the Fiscal Year Ended November 30, 1999
Investment Income
Interest Income $638,947,545
Expenses
Advisory Fee $13,226,942
Administrative Services Fee 3,127,566
Custodian Fees and Expenses 1,467,725
Fund Services Fee 228,080
Administration Fee 147,749
Trustees' Fees and Expenses 93,415
Miscellaneous 159,972
Total Expenses 18,451,449
Net Investment Income 620,496,096
Net Realized Loss on Investments (502,599)
Net Increase in Net Assets Resulting from Operations
$619,993,497
The Prime Money Market Portfolio
Statement of Changes in Net Assets
For the Fiscal For the Fiscal
Year Ended Year Ended
November 30, 1999 November 30, 1998
Increase in Net Assets
From Operations
Net Investment Income 620,496,096
339,699,391
Net Realized Loss on Investments (502,599) (55,967)
Net Increase in Net Assets Resulting from Operations
619,993,497 339,643,424
Transactions in Investors' Beneficial Interests
Contributions 108,558,000,202 48,705,487,837
Withdrawals (101,532,507,632)
(45,584,553,162)
Net Increase from Investors' Transactions
7,025,492,570 3,120,934,675
Total Increase in Net Assets
7,645,486,067 3,460,578,099
Net Assets
Beginning of Year 7,780,223,906
4,319,645,807
End of Year 15,425,709,973
7,780,223,906
For the Fiscal Year Ended November 30,
1999 1998 1997 1996 1995
Ratios to Average Net Assets
Net expenses 0.15% 0.17%
0.18% 0.19% 0.19%
Net investment income 5.07%
5.48% 5.43% 5.29% 5.77%
Expenses without
reimbursement -- -- --
0.19% --
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 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 fiscal year ended November 30, 1999
such fees amounted to $13,226,942.
b) The portfolio has retained Funds Distributor, Inc.
("FDI"), a registered broker-dealer, to serve as the co-
administrator and exclusive placement agent. Under a Co-
Administration Agreement between FDI and the portfolio,
FDI provides administrative services necessary for the
operations of the portfolio, furnishes office space and
facilities required for conducting the business of the
portfolio and pays the compensation of the officers
affiliated with FDI. The portfolio has agreed to pay
FDI fees equal to its allocable share of an annual
complex-wide charge of $425,000 plus FDI's out-of-pocket
expenses. The amount allocable to the portfolio is based
on the ratio of the portfolio's net assets to the
aggregate net assets of the portfolio and certain other
investment companies subject to similar agreements with
FDI. For the fiscal year ended November 30, 1999, the
fee for these services amounted to $147,749.
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 fiscal
year ended November 30, 1999, the fee for these services
amounted to $3,127,566.
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 $228,328
for the fiscal year ended November 30, 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 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 $43,400.
To the Trustees and Investors of
The Prime Money Market Portfolio
In our opinion, the accompanying statement of assets
and liabilities, including the schedule of investments,
and the related statements of operations and of changes
in net assets and the supplementary data present
fairly, in all material respects, the financial
position of The Prime Money Market Portfolio (the
"portfolio") at November 30, 1999, and the results of
its operations for the year then ended, the changes in
its net assets for each of the two years in the period
then ended and the supplementary data for each of the
five years in the period then ended, in conformity with
accounting principles generally accepted in the United
States. These financial statements and supplementary
data (hereafter referred to as "financial statements")
are the responsibility of the portfolio's management;
our responsibility is to express an opinion on these
financial statements based on our audits. We conducted
our audits of these financial statements in accordance
with auditing standards generally accepted in the
United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether
the financial statements are free of material
misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting
principles used and significant estimates made by
management, and evaluating the overall financial
statement presentation. We believe that our audits,
which included confirmation of securities at November
30, 1999 by correspondence with the custodian, provide
a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
January 14, 2000
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
TRUSTEES
Jack W. Aber
William E. Chapmann, II
Sean Healey
Edward J. Kaier
Madeline H. McWhinney
Steven J. Paggioli
Eric Rakowski
Thomas R. Schneeweis
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
