MANAGERS FUNDS, 497, 2000-06-19

MANAGERS FUNDS
497, 2000-06-19

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THE MANAGERS FUNDS

Income Equity Fund
Capital Appreciation Fund
Small Company Fund
Special Equity Fund
International Equity Fund
Emerging Markets Equity Fund
Short and Intermediate Bond Fund
Bond Fund
Global Bond Fund
_______________________________________

PROSPECTUS

DATED MAY 1, 2000

We pick the talent. You reap the results.

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.

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TABLE OF CONTENTS

<S> <C>
RISK/RETURN SUMMARY
Key Information 3
Performance Summary 8
Fees and Expenses 13

SUMMARY OF THE FUNDS
The Managers Funds 16
Income Equity Fund 17
Capital Appreciation 19
Small Company Fund 21
Special Equity Fund 23
International Equity Fund 25
Emerging Markets Equity Fund 27
Short and Intermediate Bond Fund 29
Bond Fund 30
Global Bond Fund 32
Money Market Fund 34

MANAGERSCHOICE
The ManagersChoice Program 35

ADDITIONAL PRACTICES/RISKS
Other Securities and Investment Practices 36
A Few Words About Risk 38

ABOUT YOUR INVESTMENT
Financial Highlights 40
Your Account 46
How To Purchase Shares 47
How To Redeem Shares 48
Investor Services 50
The Funds and Their Policies 51
Accounts Statements 51
Dividends and Distributions 51
Tax Information 52

FOR MORE INFORMATION
For More Information Back Cover
</TABLE>

Founded in 1983, The Managers Funds offers individual and institutional
investors the experience and discipline of some of the world's most highly
regarded investment professionals.

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RISK/RETURN SUMMARY

KEY INFORMATION
This Prospectus contains important information for anyone interested in
investing in Managers Income Equity Fund, Managers Capital Appreciation
Fund, Managers Small Company Fund, Managers Special Equity Fund, Managers
International Equity Fund, Managers Emerging Markets Equity Fund, Managers
Short and Intermediate Bond Fund, Managers Bond Fund, Managers Global Bond
Fund and/or Managers Money Market Fund (each a "Fund" and collectively the
"Funds"), each a series of The Managers Funds no-load mutual fund family.
Please read this document carefully before you invest and keep it for
future reference. You should base your purchase of shares of these Funds
on your own goals, risk preferences and investment time horizons.

<TABLE>
<CAPTION>
Summary of the Goals, Principal Strategies and Principal Risk Factors of
the Funds

Fund Goal Principal Strategies Principal Risk Factors
<S> <C> <C> <C>
Income Equity Fund High current income Invests principally in income- Economic Risk
from income-producing producing equity Market Risk
equity securities securities of medium and large Sector (Industry) Risk
U.S. companies

Seeks undervalued investments

Capital Appreciation Long-term capital Invests principally in equity Economic Risk
Fund appreciation from securities of medium Market Risk
equity securities; and large U.S. companies
income is the Price Risk
secondary objective Sector (Industry) Risk
Seeks investments in companies
with the potential for long-term
growth as well as companies
expected to exhibit rapid growth
over shorter periods

Small Company Fund Long-term capital Invests principally in the equity Liquidity Risk
appreciation from securities of small companies Market Risk
equity securities of Price Risk
small companies Seeks investments with the potential Small-Capitalization
for capital
appreciation as a result of Stock Risk
earnings growth and/or improvements
in equity valuation

Special Equity Fund Long-term capital Invests principally in equity securities Liquidity Risk
appreciation from equity of small to medium companies Market Risk
securities of small- and Price Risk
medium-capitalization Seeks investments with the potential Small-Capitalization
companies for capital appreciation as a result of Stock Risk
earnings growth and/or improvements
in equity valuation

International Equity Long-term capital Invests principally in equity securities Currency Risk
appreciation from foreign of medium and large non-U.S. Economic Risk
equity securities; income is companies Liquidity Risk
the secondary objective Market Risk
Seeks to achieve returns from capital Political Risk
appreciation due to price multiple
expansion and earnings growth

Emerging Markets Long-term capital Invests principally in equity securities Currency Risk
Equity Fund appreciation from emerging of companies in emerging market Economic Risk
market equity securities and developing countries Liquidity Risk

Market Risk
Seeks to achieve returns from capital Political Risk
appreciation due to
price multiple
expansion and earnings growth

Short and Intermediate High current income by Invests principally in investment Credit Risk
Bond Fund investing in a portfolio of grade debt securities with shortEconomic Risk
fixed-income securities with and intermediate maturities Interest Rate Risk
an average maturity of between one to five years

Seeks to achieve incremental return
through analysis of relative credit
and valuation of debt securities

Bond Fund High current income by Invests principally in investment Credit Risk
investing primarily in fixed- grade debt securities of any maturity Economic Risk
income securities Interest Rate Risk
Seeks to achieve incremental return Liquidity Risk
through analysis of relative credit
and valuation of debt securities

Global Bond Fund High total return, both Invests principally in high quality Currency Risk
through income and
capital debt securities of government, Economic Risk
appreciation, by investing corporate and supranational Interest Rate Risk
primarily in domestic and organizations Non-Diversified Fund
foreign fixed-income Risk
securities Seeks to achieve incremental return Political Risk
through credit analysis and
anticipation of changes in interest
rates within and among various countries

Money Market Fund Maximize current income Invests in a broad spectrum of Credit Risk
and maintain a high
level of money market securities, such Inflation Risk
liquidity as U.S. Government securities, Interest Rate Risk
commercial paper and corporate
debt

Invests all of its assets in a master
portfolio
Principal Risk Factors

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 the Funds. Before you invest, please make sure that you have
read and understand the risk factors that apply to the Fund in which you
are investing. An investment in the Money Market Fund is not a deposit in
a bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. Although the Money Market
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.

The following is a discussion of the principal risk factors of investing in
the Funds.

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 Investors
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.

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 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.

Inflation Risk Inflation risk is the risk that the price of an asset, or
the income generated by an 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 bond prices in
several ways. As interest rates rise, the fixed coupon
payments (cash flows) of debt securities become less
competitive with the market and thus the price of the
securities will fall. Conversely, prices will 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
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.

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 such bond or portfolio's interest rate sensitivity.

Liquidity Risk This is the risk that the 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
thinly traded longer term debt instruments 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 it 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 measured 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.

Market Risk Market risk 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, stock prices in general
rise and fall as a result of investors' perceptions of the
market as a whole. The consequences of market risk are
that if the stock market drops in value, the value of each
Fund's portfolio of investments is also likely to decrease
in value. The decrease in the value of a Fund's
investments, in percentage terms, may be more or less than
the decrease in the value of the market.

Since foreign securities trade on different markets,
which have different 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.

Non-Diversified Fund
Risk A Fund which is "non-diversified" can invest more of its
assets in a single issuer than that of a diversified fund.
To the extent that the Global Bond Fund may invest
significant portions of the portfolio in securities of a
single issuer, such as a corporate or government entity,
the Fund is subject to specific risk. Specific risk is the
risk that a particular security will drop in price due to
adverse effects on a specific issuer. 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
risks that these issuers face.

Political Risk Changes in the political status of any country can have
profound effects on the value of securities within that
country. 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.

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 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.

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.

Sector
(Industry) Risk Companies that are in similar businesses may be
similarly affected by particular economic or market events,
which may, in certain circumstances, cause the value of
securities in all companies in that sector or industry to
decrease. To the extent a Fund has substantial holdings
within a particular sector or industry, the risks associated
with that sector or industry increase. Diversification
among groups may reduce sector (industry) risk but may also
dilute potential returns.

Small-Capitalization
Stock Risk Small-capitalization companies often have greater price
volatility, lower trading volume and less liquidity than
larger, more established companies. These companies tend to
have smaller revenues, narrower product lines, less
management depth and experience, smaller shares of their
product or service markets, fewer financial resources and
less competitive strength than larger companies. For these
and other reasons, a Fund with investments in small-
capitalization companies carries more risk than a Fund with
investments in large-capitalization companies.

PERFORMANCE SUMMARY
The following bar charts illustrate the risks of investing in each Fund by
showing each Fund's year-by-year total returns and how the performance of
each of the Funds has varied over the past ten years (or since the Fund's
inception). Each chart assumes that all dividend and capital gain
distributions have been reinvested. Past performance does not guarantee
future results. Because the Small Company Fund had not commenced
operations as of the date of this Prospectus, there is no "Performance
Summary" for the Fund.

Annual Total Returns - Last Ten Calendar Years
Managers Income Equity Fund

1990 -13.0%
1991 29.7%
1992 9.9%
1993 12.5%
1994 1.0%
1995 34.4%
1996 17.1%
1997 27.1%
1998 11.8%
1999 4.2%

Best Quarter: 14.4% (4th Q. 1998)
Worst Quarter: -16.5% (3rd Q. 1990)

Annual Total Returns - Last Ten Calendar Years
Managers Capital Appreciation Fund
1990 -1.9%
1991 32.9%
1992 10.6%
1993 16.7%
1994 -1.5%
1995 33.4%
1996 13.7%
1997 12.6%
1998 57.4%
1999 103.0%

Best Quarter: 58.4% (4th Q. 1999)
Worst Quarter: -14.2% (3rd Q. 1990)

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Annual Total Returns - Last Ten Calendar Years
Managers Special Equity Fund

1990 -15.8%
1991 49.8%
1992 16.1%
1993 17.4%
1994 -2.0%
1995 33.9%
1996 24.8%
1997 24.5%
1998 0.2%
1999 54.1%

Best Quarter: 35.9% (4th Q. 1999)
Worst Quarter: -21.0% (3rd Q. 1998)

Annual Total Returns - Last Ten Calendar Years
Managers International Equity Fund
1990 -9.8%
1991 18.2%
1992 4.3%
1993 38.2%
1994 2.0%
1995 16.2%
1996 12.8%
1997 10.8%
1998 14.5%
1999 25.3%

Best Quarter: 13.9% (4th Q. 1998)
Worst Quarter: -16.2% (3rd Q. 1990)

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Annual Total Returns - Since Inception February 9, 1998
Managers Emerging Markets Equity Fund
1998 -22.6%
1999 89.9%

Best Quarter: 43.7% (4th Q. 1999)
Worst Quarter: -20.6% (3rd Q. 1998)

Annual Total Returns - Last Ten Calendar Years
Managers Short and Intermediate Bond Fund
1990 7.2%
1991 12.8%
1992 11.6%
1993 8.4%
1994 -8.4%
1995 15.6%
1996 4.2%
1997 5.9%
1998 5.4%
1999 2.2%

Best Quarter: 4.9% (2nd Q. 1995)
Worst Quarter: -4.8% (2nd Q. 1994)
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Annual Total Returns - Last Ten Calendar Years
Managers Bond Fund
1990 7.5%
1991 19.1%
1992 7.9%
1993 11.6%
1994 -7.3%
1995 30.9%
1996 5.0%
1997 10.4%
1998 3.3%
1999 3.6%

Best Quarter: 9.7% (2nd Q. 1995)
Worst Quarter: -3.6% (2nd Q. 1994)

Annual Total Returns - Since Inception March 25, 1995
Managers Global Bond Fund
1995 19.1%
1996 4.4%
1997 0.2%
1998 19.3%
1999 -10.0%

Best Quarter: 12.5% (1st Q. 1995)
Worst Quarter: -5.5% (3rd Q. 1999)
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Annual Total Returns - Last Ten Calendar Years
Managers Money Market Fund
1990 7.7%
1991 5.3%
1992 3.1%
1993 2.5%
1994 3.2%
1995 5.4%
1996 5.5%
1997 5.4%
1998 5.2%
1999 4.9%

Best Quarter: 1.90% (1st Q. 1990)
Worst Quarter: 0.05% (4th Q. 1993)

The following table compares each Fund's performance to that of a broadly
based securities market index. Again, the table assumes that dividends and
capital gain distributions have been reinvested for both the Fund and the
applicable Index. As always, the past performance of a Fund is not an
indication of how the Fund will perform in the future.

Because the Small Company Fund had not commenced operations as of the date
of this Prospectus, there are no "Average Annual Total Returns" presented
for the Fund.

Average Annual Total Returns
(as a percentage) as of 12/31/99

Since
1 Year 5 Years 10 Years Inception

Income Equity Fund 4.15% 18.41% 12.61% 14.45% (10/84)
S&P 500 Index 21.04% 28.56% 18.21% 18.05%

Capital Appreciation Fund103.02%40.43% 24.65% 21.98% (6/84)
S&P 500 Index 21.04% 28.56% 18.21% 19.11%

Special Equity Fund 54.11% 26.28% 18.39% 18.02% (6/84)
Russell 2000 Index 21.26% 16.69% 13.40% 12.22%

International Equity Fund25.28%15.83% 12.57% 14.81% (12/85)
MSCI EAFE Index (a) 26.96% 12.83% 7.01% 12.47%

Emerging Markets Equity Fund (b) 89.93% N/A N/A 22.64% (2/98)
MSCI Emerging Markets
Free Index (c) 66.41% 2.00% 11.04% 4.63%

Short and Intermediate Bond Fund2.21% 6.53% 6.28% 7.79% (6/84)
Merrill Lynch 1-5 Yr.
Govt/Corp Index 2.19% 6.86% 7.00% N/A

Bond Fund 3.66% 10.19% 8.79 10.28% (6/84)
Lehman Bros. Govt/Corp Index -2.15% 7.61% 7.65% 9.73%

Global Bond Fund (d) -9.97% 5.97% N/A 4.90% (3/94)
Salomon World Govt Bond Index -4.27% 6.42% 8.03% 5.16%

Money Market Fund 4.89% 5.28% 4.81% 5.82% (6/84)
3-Month Treasury Bill 4.81% 5.35% 5.28% 6.21%

(a) Net dividends are reinvested.
(b) The Fund commenced operations on February 9, 1998.
(c) Gross dividends are reinvested.
(d) The Fund commenced operations on March 25, 1995.

Total Return is used by mutual funds to calculate the hypothetical change
in value of an investment over a specified period of time, assuming
reinvestment of all dividends and distributions.

For more information on the current yields of the Money Market Fund, please
call (800) 835-3879.

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FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and
hold shares of the Funds.

Shareholder Fees (fees paid directly from your investment)

Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of the offering price) None (0%)
Maximum Deferred Sales Charge (Load) None (0%)
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends and Other Distributions None (0%)
Redemption Fee None (0%)
Exchange Fee None (0%)
Maximum Account Fee None (0%)

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)

Management Distribution Other Total Annual Fund
Fee (12b-1) Fees Expenses Operating Expenses

Income Equity Fund 0.750% 0.00% 0.60% 1.35%
Capital Appreciation Fund 0.800% 0.00% 0.50% 1.30% (a)
Small Company Fund 0.900% 0.00% 0.40% (b) 1.30% (c)
Special Equity Fund 0.900% 0.00% 0.41% 1.31%
International Equity Fund 0.900% 0.00% 0.51% 1.41% (a)
Emerging Markets Equity Fund 1.150% (d) 0.00% 1.37% 2.52% (e)
Short and Intermediate Bond
Fund 0.500% 0.00% 0.79% 1.29%
Bond Fund 0.625% 0.00% 0.64% 1.26% (a)
Global Bond Fund 0.700% 0.00% 0.84% 1.54%
Money Market Fund 0.120% 0.00% 0.41% (f) 0.53%

(a) The Funds have entered into arrangements with one or more third-party
broker/dealers who may have paid a portion of the Fund's custodian
expenses. In addition, the Funds have received credits against their
custodian expenses for uninvested overnight cash balances. Including
these expense reductions, the "Total Annual Fund Operating Expenses" for
the Funds for the fiscal year ended December 31, 1999 was 1.26%, 1.40%
and 1.25% for the Capital Appreciation Fund, the International Equity
Fund and the Bond Fund, respectively.

(b) Because the Fund had not commenced operations as of the date of this
Prospectus, the "Other Expenses" of the Fund are based on annualized
projected expenses and average net assets for the fiscal year ending
December 31, 2000.

(c) The Managers Funds LLC has contractually agreed, through at least
December 31, 2000, to limit "Total Annual Fund Operating Expenses" to
1.30% subject to later reimbursement by the Fund in certain
circumstances. See "The Managers Funds."

(d) The "Management Fee" currently being charged is 0.75%, which reflects
a voluntary waiver of 0.40% by The Managers Funds LLC. The waiver is
expected to continue throughout fiscal 2000, but may be modified or
terminated at the sole discretion of The Managers Funds LLC.

(e) The actual "Total Annual Fund Operating Expenses" for the fiscal year
ended December 31, 1999 was actually 1.85%. After giving effect to the
waivers currently in effect, this ratio would have been 2.10%.

(f) The Fund's "Other Expenses" reflect a modification in the contractual
Administration Fee received by The Managers Funds LLC. The above expenses
have been restated as if the fee had been in effect throughout fiscal 1999.

10
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Example*

This Example will help you compare the cost of investing in the Funds to
the cost of investing in other mutual funds. The Example makes certain
assumptions. It assumes that you invest $10,000 as an initial investment
in a 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 each 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:

1 Year 3 Years 5 Years 10 Years

Income Equity Fund $137 $428 $ 739 $1,624
Capital Appreciation Fund (a) $132 $412 $ 713 $1,568
Small Company Fund $132 $412 $ 713 $1,568
Special Equity Fund $133 $415 $ 718 $1,579
International Equity Fund (b) $144 $446 $ 771 $1,691
Emerging Markets Equity Fund (c) $255 $785 $ 1,340 $2,856
Short and Intermediate Bond Fund $131 $409 $ 708 $1,556
Bond Fund (d) $128 $400 $ 692 $1,523
Global Bond Fund $157 $486 $ 839 $1,834
Money Market Fund (e) $ 54 $170 $ 296 $ 665

(a) Your costs for the Capital Appreciation Fund, including all expense
reductions currently in effect, would be $128, $400, $692 and $1,523, for 1
Year, 3 Years, 5 Years and 10 Years, respectively.

(b) Your costs for the International Equity Fund, including all expense
reductions currently in effect, would be $143, $443, $766 and $1,680, for 1
Year, 3 Years, 5 Years and 10 Years, respectively.

(c) Your costs for the Emerging Markets Equity Fund, including all
temporary fee waivers and expense reductions currently in effect, would be
$213, $658, $1,129 and $2,431, for 1 Year, 3 Years, 5 Years and 10 Years,
respectively.

(d) Your costs for the Bond Fund, including all expense reductions
currently in effect, would be $127, $397, $686 and $1,511, for 1 Year, 3
Years, 5 Years and 10 Years, respectively.

(e) The Example reflects a modification in the contractual Administration
Fee received by The Managers Funds LLC. The above expenses have been
restated as if such fee had been in effect throughout fiscal 1999. The
Example shows the expenses for both the Fund and its share of the expenses
of the master portfolio in which it invests, The Prime Money Market
Portfolio, for the fiscal year ended November 30, 1999.

*The Example should not be considered a representation of past or future
expenses, as actual expenses may be greater or lower than those shown.

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SUMMARY OF THE FUNDS

THE MANAGERS FUNDS

The Managers Funds is a no-load mutual fund family comprised of different
Funds, each having distinct investment management objectives, strategies,
risks and policies. Many of the Funds employ a multi-manager investment
approach which can provide added diversification within each portfolio.

The Managers Funds LLC (the "Investment Manager"), a subsidiary of
Affiliated Managers Group, Inc., serves as the investment manager to the
Funds (with the exception of the Money Market Fund) and is responsible for
the Funds' overall administration and distribution. It selects and
recommends, subject to the approval of the Board of Trustees, one or more
asset managers to manage each Fund's investment portfolio. It also
allocates assets to the asset managers based on certain evolving targets,
monitors the performance, security holdings and investment strategies of
these external asset managers and, when appropriate, researches any
potential new asset managers for the Fund family. The Securities and
Exchange Commission has given the Funds an exemptive order permitting them
to change asset managers without the need for shareholder approval.

The Managers Funds LLC serves as administrator and distributor of the
shares of the Money Market Fund. The Fund invests all of its assets in The
Prime Money Market Portfolio (the "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.

More information on each Fund's investment strategies and holdings can be
found in the current Semi-Annual and Annual Reports, in the Statement of
Additional Information, or on our website at www.managersfunds.com.

What am I investing in? You are buying shares of a pooled investment known
as a mutual fund. It is professionally managed and gives you the
opportunity to invest in a variety of companies, industries and markets.
Each Fund is not a complete investment program, and there is no guarantee
that a Fund will reach its stated goals.

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INCOME EQUITY FUND

FUND FACTS

Objective: High current income

Investment Focus: Income-producing equity securities

Benchmark: S&P 500 Index

Ticker Symbol: MGIEX

Objective

The Fund's objective is to achieve a high level of current income from a
diversified portfolio of income-producing equity securities.

Principal Investment Strategies

Under normal market conditions, the Fund invests at least 65% of its total
assets in income-producing equity securities of U.S. companies, such as
common and preferred stocks. The Fund generally invests in medium and
large companies, that is, companies with capitalizations similar to
companies which are represented in the S&P 500 Index.

The Fund's assets currently are allocated between two asset managers, each
of which acts independently of the other and uses its own methodology in
selecting portfolio investments. One asset manager utilizes a dividend
yield oriented value approach whereby it identifies securities with
attractive valuations that yield more than the S&P 500 Index. The other
asset manager emphasizes a value approach whereby it seeks to identify
companies whose shares are available for at least 30% less than what it
considers to be their intrinsic value. Both asset managers examine the
underlying businesses, financial statements, competitive environment and
company managements in order to assess the future profitability of each
company. Both asset managers expect to generate returns from dividend
income as well as capital appreciation as a result of improvements to the
valuations of the securities. Growth in earnings and dividends may also
drive the price of stocks higher. A stock is typically sold if the asset
manager believes that the future profitability of a company does not
support its current stock price.

For temporary and defensive purposes, the Fund may invest, without limit,
in cash or quality short-term debt securities including repurchase
agreements. To the extent that the Fund is invested in these instruments,
the Fund will not be pursuing its investment objective.

Should I invest in this Fund?

This Fund may be suitable if you:

Are seeking income from current dividends

Are seeking an opportunity for additional
returns through medium- to large-
capitalization equities in your investment
portfolio

Are willing to accept a moderate risk investment

Have an investment time horizon of five years or more

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This Fund may not be suitable if you:

Are seeking stability of principal

Are investing with a shorter time horizon in mind

Are uncomfortable with stock market risk

Portfolio Management of the Fund

Armstrong Shaw Associates Inc. ("Armstrong Shaw") and Chartwell Investment
Partners, L.P. ("Chartwell") each manage a portion of the Fund.

Armstrong Shaw has managed a portion of the Fund since March 2000.
Armstrong Shaw, located at 32 Threadneedle Lane, Stamford, Connecticut, was
founded in 1984. As of December 31, 1999, Armstrong Shaw had assets under
management of over $750 million. Jeffrey Shaw is the lead portfolio
manager for the portion of the Fund managed by Armstrong Shaw. He has been
the Chairman and President of Armstrong Shaw since 1999 and 1988,
respectively, and is a co-founder of the firm.

Chartwell has managed a portion of the Fund since September 1997.
Chartwell, located at 1235 Westlakes Drive, Suite 330, Berwyn,
Pennsylvania, was formed in 1997. As of December 31, 1999, Chartwell had
assets under management of approximately $3.5 billion. Harold Ofstie leads
a team of portfolio managers for the portion of the Fund managed by
Chartwell. Mr. Ofstie has been a Partner at Chartwell since its formation.
Prior to that time, he was a Portfolio Manager with Delaware Investment
Advisers.

The Fund is obligated by its investment management contract to pay an
annual management fee to The Managers Funds LLC of 0.75% of the average
daily net assets of the Fund. The Managers Funds LLC, in turn, pays a
portion of this fee to Armstrong Shaw and Chartwell.

14
<PAGE>

CAPITAL APPRECIATION FUND

FUND FACTS

Objective: Long-term capital appreciation; income is the secondary
objective

Investment Focus: Equity securities of medium to large U.S. companies

Benchmark: S&P 500 Index

Ticker Symbol: S&P 500 Index

Objective

The Fund's objective is to achieve long-term capital appreciation through a
diversified portfolio of equity securities. Income is the Fund's secondary
objective.

Principal Investment Strategies

Under normal market conditions, the Fund invests at least 65% of its total
assets in equity securities of U.S. companies, such as common and preferred
stocks. The Fund generally invests in medium and large companies, that is,
companies with capitalizations similar to companies which are represented
in the S&P 500 Index.

The Fund's assets currently are allocated between two asset managers, each
of which acts independently of the other and uses its own methodology in
selecting portfolio investments. Both asset managers emphasize a growth
approach to investing, that is, each selects stocks of companies that it
believes can generate strong earnings and/or cash flow growth. One asset
manager is typically, though not exclusively, attempting to identify
companies expected to exhibit rapid earnings growth in the near term while
the other asset manager is typically, though not exclusively, attempting to
identify companies with the ability to generate and sustain growth in
earnings and/or cash flow over longer periods. Both asset managers examine
the underlying businesses, financial statements, competitive environment
and company managements in order to assess the future profitability of each
company. Both asset managers expect to generate returns almost exclusively
from capital appreciation due to earnings growth. A stock is typically
sold if the asset manager believes that the future profitability of a
company does not support its current stock price.

Should I invest in this Fund?

This Fund may be suitable if you:

Are seeking an opportunity for some
additional returns through medium- to large-
capitalization equities in your investment
portfolio

Are willing to accept a higher degree of risk
for the opportunity for higher potential
returns

Have an investment time horizon of five years or more

15
<PAGE>

This Fund may not be suitable if you:

Are seeking stability of principal

Are investing with a shorter time horizon in mind

Are uncomfortable with stock market risk

Portfolio Management of the Fund

Essex Investment Management Company, LLC ("Essex") and Roxbury Capital
Management, LLC ("Roxbury") each manage a portion of the Fund.

Essex has managed a portion of the Fund since March 1997. Essex, located
at 125 High Street, Boston, Massachusetts, was founded in 1976. Affiliated
Managers Group, Inc. owns a majority interest in Essex. As of December 31,
1999, Essex had assets under management of approximately $13.8 billion.
Joseph C. McNay and Daniel Beckham are the portfolio managers for the
portion of the Fund managed by Essex. Mr. McNay is the Chairman and CIO of
Essex, a position he has held since the firm's formation. Mr. Beckham is a
Principal Vice President of Essex, a position he has held since 1995.

Roxbury has managed a portion of the Fund since October 1998. Roxbury,
located at 100 Wilshire Boulevard, Suite 600, Santa Monica, California, was
formed in 1986. As of December 31, 1999, Roxbury had assets under
management of approximately $12 billion. Kevin P. Riley is the portfolio
manager for the portion of the Fund managed by Roxbury. Mr. Riley is
currently a Senior Managing Director, Senior Portfolio Manager and
Investment Officer of Roxbury, and has held various other positions with
the firm since 1987.

The Fund is obligated by its investment management contract to pay an
annual management fee to The Managers Funds LLC of 0.80% of the average
daily net assets of the Fund. The Managers Funds LLC, in turn, pays a
portion of this fee to Essex and Roxbury.

16
<PAGE>

SMALL COMPANY FUND

FUND FACTS

Objective: Long-term capital appreciation

Investment Focus: Equity securities of small companies

Benchmark: Russell 2000 Index

Ticker Symbol: Not Issued

Objective

The Fund's objective is to achieve long-term capital appreciation by
investing in the equity securities of small companies.

Principal Investment Strategies

Under normal market conditions, the Fund invests at least 65% of its total
assets in equity securities of companies with the potential for long-term
capital appreciation, such as common and preferred stocks. The Fund
generally invests in small companies, that is, companies with
capitalizations similar to companies which are represented in the Russell
2000 Index. The Fund may retain securities that it already has purchased
even if the specific company outgrows the Fund's capitalization limits.

The Fund's assets currently are allocated between two asset managers, each
of which acts independently of the other and uses its own methodology in
selecting portfolio investments. Both asset managers focus exclusively on
stocks of small companies whose businesses are expanding. One asset
manager seeks to identify companies expected to exhibit rapid earnings
growth in the near to medium term while the other asset manger seeks to
invest in healthy, growing businesses whose stocks are selling at
valuations less than should be expected. Both asset managers examine the
underlying businesses, financial statements, competitive environment and
company managements in order to assess the future profitability of each
company. The asset managers, thus, expect to generate returns from
capital appreciation due to earnings growth along with improvements in the
valuations of the stocks. A stock is typically sold if the asset manager
believes that the future profitability of a company does not support its
current stock price.

Should I invest in this Fund?

This Fund may be suitable if you:

Are seeking an opportunity for additional
returns through small company equities in
your investment portfolio
Are willing to accept a higher degree of risk
for the opportunity of higher potential
returns

Have an investment time horizon of five years or more

17
<PAGE>

This Fund may not be suitable if you:

Are seeking stability of principal

Are investing with a shorter time horizon
in mind

Are uncomfortable with stock market risk

Are seeking current income

Portfolio Management of the Fund

HLM Management Co., Inc. ("HLM") and Kalmar Investment Advisers, Inc.
("Kalmar") each manage a portion of the Fund.

HLM has managed a portion of the Fund since its inception in May 2000.
HLM, located at 222 Berkeley Street, 21st Floor, Boston, Massachusetts, was
founded in 1983. As of December 31, 1999, HLM had assets under management
of approximately $955 million. HLM utilizes a team approach to manage its
portion of the Fund. The portfolio management team is comprised of Buck
Haberkorn, Judy Lawrie, Peter Grua and Ann Hutchins, all Principals of HLM
with 17, 17, 8 and 3 years at the firm, respectively.

Kalmar has managed a portion of the Fund since its inception in May 2000.
Kalmar, located at Barley Mill House, 3701 Kennett Pike, Greenville,
Delaware, is a Delaware Business Trust formed in 1996 as a sister asset
management organization to Kalmar Investments, Inc. which was founded in
1982. As of December 31, 1999, the two Kalmar organizations had assets
under management totaling approximately $800 million in small company
stocks. Ford B. Draper, Jr. leads the portfolio management team for the
portion of the Fund managed by Kalmar. Mr. Draper is the President and
Chief Investment Officer of Kalmar, a position he has held since 1982.

The Fund is obligated by its investment management contract to pay an
annual management fee to The Managers Funds LLC of 0.90% of the average
daily net assets of the Fund. The Managers Funds LLC, in turn, pays a
portion of this fee to HLM and Kalmar.

The Investment Manager has contractually agreed, through at least December
31, 2000, to waive fees and pay or reimburse the Fund to the extent that
the total expenses of the Fund exceed 1.30% of the Fund's average daily net
assets. The Fund is obligated to repay the Investment Manager such amounts
waived, paid or reimbursed in future years provided that the repayment
occurs within three (3) years after the waiver or reimbursement and that
such repayment would not cause the Fund's expenses in any such future year
to exceed 1.30% of the Fund's average daily net assets. In addition to any
other waiver or reimbursement agreed to by the Investment Manager, an asset
manager, from time to time, may waive all or a portion of its fee. In such
an event, the Investment Manager will, subject to certain conditions, waive
an equal amount of the Management Fee.

18
<PAGE>

SPECIAL EQUITY FUND

FUND FACTS

Objective: Long-term capital appreciation

Investment Focus: Equity securities of small- and medium-
capitalization U.S. companies

Benchmark: Russell 2000 Index

Ticker Symbol: MGSEX

Objective

The Fund's objective is to achieve long-term capital appreciation through a
diversified portfolio of equity securities of small- and medium-
capitalization companies.

Principal Investment Strategies

Under normal market conditions, the Fund invests at least 65% of its total
assets in equity securities of U.S. companies, such as common and preferred
stocks. Although the Fund is permitted to purchase securities of both
small- and medium-capitalization companies, the Fund has historically
invested substantially all of its assets in the securities of small-
capitalization companies, that is, companies with capitalizations similar
to companies which are represented in the Russell 2000 Index. The Fund may
retain securities that it already has purchased even if the company
outgrows the Fund's capitalization limits.

The Fund's assets are currently allocated among four asset managers, each
of which act independently of the other and uses its own methodology to
select portfolio investments. Two asset managers utilize a value approach
to investing whereby they seek to identify companies whose improving
businesses are for some reason not being fully recognized by others and
which are thus selling at valuations less than should be expected. The
other two asset managers utilize a growth approach to investing whereby
they seek to identify companies which are exhibiting rapid growth in their
businesses. All four asset managers examine the underlying businesses,
financial statements, competitive environment and company managements in
order to assess the future profitability of each company. The asset
managers, thus, expect to generate returns from capital appreciation due to
earnings growth along with improvements in the valuations of the stocks. A
stock is typically sold if the asset manager believes that the future
profitability of a company does not support its current stock price.

Should I invest in this Fund?

This Fund may be suitable if you:

Are seeking an opportunity for additional
returns through small- and medium-
capitalization equities in your investment
portfolio

Are willing to accept a higher degree of risk
for the opportunity of higher potential
returns

Have an investment time horizon of five years or more

19
<PAGE>

This Fund may not be suitable if you:

Are seeking stability of principal

Are investing with a shorter time horizon
in mind

Are uncomfortable with stock market risk

Are seeking current income

Portfolio Management of the Fund

Goldman Sachs Asset Management ("GSAM"), Kern Capital Management LLC
("Kern"), Pilgrim, Baxter & Associates, Ltd. ("Pilgrim, Baxter") and
Westport Asset Management, Inc. ("Westport") each manage a portion of the
Fund.
GSAM has managed a portion of the Fund since December 1985. GSAM is
located at 2502 Rocky Point Drive, Suite 500, Tampa, Florida. As of
September 1, 1999, the Investment Management Division ("IMD") was
established as a new operating division of Goldman Sachs & Co. ("Goldman
Sachs"). This newly created entity includes GSAM. As of December 31,
1999, GSAM, along with other units of IMD, had assets under management of
approximately $258.5 billion. Timothy J. Ebright is the Senior portfolio
manager for the portion of the Fund managed by GSAM. Mr. Ebright is a Vice
President of Goldman Sachs, a position he has held since 1988.

Kern has managed a portion of the Fund since September 1997. Kern, located
at 114 West 47th Street, Suite 1926, New York, New York, was formed in
1997. As of December 31, 1999, Kern had assets under management of
approximately $1.6 billion. Robert E. Kern, Jr. is the portfolio manager
for the portion of the Fund managed by Kern. Mr. Kern is the Managing
Member, Chairman and CEO of Kern, a position he has held since the firm's
formation. Prior to that time, he was Senior Vice President of Freemont
Investment Advisers in 1997 and a Director of Morgan Grenfell Capital
Management from 1986 to 1997.

Pilgrim, Baxter has managed a portion of the Fund since October 1994.
Pilgrim, Baxter, located at 825 Duportail Road, Wayne, Pennsylvania, was
formed in 1982. As of December 31, 1999, Pilgrim, Baxter had assets under
management of approximately $18 billion. Gary L. Pilgrim and Jeffrey A.
Wrona are the portfolio managers for the portion of the Fund managed by
Pilgrim, Baxter. Mr. Pilgrim is Director, President and CIO of Pilgrim,
Baxter and has been with the firm since its formation. Mr. Wrona is Vice
President-Portfolio Manager of Pilgrim, Baxter, a position he has held
since 1997. Prior to that, he was a Senior Portfolio Manager with Munder
Capital Management for seven years.

Westport has managed a portion of the Fund since December 1985. Westport,
located at 253 Riverside Avenue, Westport, Connecticut, was formed in 1983.
As of December 31, 1999, Westport had assets under management of
approximately $2.7 billion. Andrew J. Knuth and Edward Nicklin are the
portfolio managers for the portion of the Fund managed by Westport. Mr.
Knuth is the Chairman of Westport and has been with the firm since its
formation. Mr. Nicklin has been a Portfolio Manager of the firm since
1997.

20
<PAGE>

INTERNATIONAL EQUITY FUND

FUND FACTS

Objective: Long-term capital appreciation; income is the
secondary objective

Investment Focus: Equity securities of non-U.S. companies

Benchmark: MSCI EAFE Index

Ticker Symbol: MGITX

Objective

The Fund's objective is to achieve long-term capital appreciation through a
diversified portfolio of equity securities of non-U.S. companies. Income
is the Fund's secondary objective.

Principal Investment Strategies

Under normal market conditions, the Fund invests at least 65% of its total
assets in equity securities of non-U.S. companies, such as common and
preferred stocks. The Fund generally invests in medium and large
companies, that is, companies with capitalizations similar to companies
which are domiciled in the countries represented in the MSCI EAFE Index.

The Fund's assets currently are allocated among three asset managers, each
of which acts independently of the other and uses its own methodology in
selecting portfolio investments. One asset manager utilizes a value
approach whereby it seeks to identify companies whose shares are available
for less than what it considers to be intrinsic value. Another asset
manager generally seeks to identify long-term investment themes which may
affect the profitability of companies in particular industries, regions or
countries. The third asset manager utilizes a growth approach to investing
whereby it seeks to identify companies which improving fundamentals and
accelerating earnings. Each asset manager examines the underlying
businesses, financial statements, competitive environment, and company
managements in order to assess the future profitability of each company.
With the combination of these strategies, the Fund expects to generate
returns from capital appreciation due to earnings growth along with
improvements in the valuations of the stocks. A stock is typically sold if
an asset manager believes that the current stock price is higher than
should be expected given the expectations for future profitability of the
company, if the applicable investment theme has matured, or if the asset
manager believes that the key drivers of earnings are generally recognized
and discounted into the price of the security.

Should I invest in this Fund?

This Fund may be suitable if you:

Are seeking an opportunity for additional
returns through international equities in
your investment portfolio

Are willing to accept a moderate risk
investment

Have an investment time horizon of five years or more

21
<PAGE>

This Fund may not be suitable if you:

Are seeking stability of principal

Are investing with a shorter time horizon in mind

Are uncomfortable with stock market risk

Are seeking current income

Portfolio Management of the Fund

Scudder Kemper Investments, Inc. ("Scudder Kemper"), Lazard Asset
Management ("Lazard") and Mastholm Asset Management, L.L.C. ("Mastholm")
each manage a portion of the Fund.

Scudder Kemper has managed a portion of the Fund since December 1989.
Scudder Kemper, located at 345 Park Avenue, New York, New York, was founded
in 1919. As of December 31, 1999, Scudder Kemper had assets under
management in excess of $295 billion. William E. Holzer is the portfolio
manager for the portion of the Fund managed by Scudder Kemper. He is a
Managing Director of Scudder Kemper, a position he has held with the firm
since 1980.

Lazard has managed a portion of the Fund since January 1995. Lazard,
located at 30 Rockefeller Plaza, New York, New York, was first organized in
1848. As of December 31, 1999, Lazard had assets under management of
approximately $74 billion. Herbert W. Guillquist and John R. Reinsberg are
the portfolio managers of the portion of the Fund managed by Lazard. Mr.
Guillquist is a General Member, Vice President and CIO of Lazard. He
joined Lazard in 1982. Mr. Reinsberg is a Managing Director of Lazard, a
position he has held with the firm since 1992.

Mastholm has managed a portion of the Fund since March 2000. Mastholm,
located at 10500 N.E. 8th Street, Bellevue, Washington, was founded in
1997. As of December 31, 1999, Mastholm had assets under management of
approximately $829 million. Mastholm uses a team approach to manage its
portion of the Fund. The team is headed by Theodore J. Tyson, and includes
Joseph Jordan and Douglas Allen. Mr. Tyson is a Managing Director of
Masthom, a position he has held since 1997. Mr. Jordan is a Director and
Portfolio Manager of Mastholm, a position he has held since 1997. Mr.
Allen is a Director and Portfolio Manager of Mastholm, a position he has
held since 1999.

EMERGING MARKETS EQUITY FUND

FUND FACTS

Objective: Long-term capital appreciation

Investment Focus: Equity securities of emerging market or
developing companies

Benchmark: MSCI Emerging Market Free Index

Ticker Symbol: MEMEX

Objective

The Fund's objective is to achieve long-term capital appreciation through a
diversified portfolio of equity securities of companies located in
countries designated by the World Bank or the United Nations to be a
developing country or an emerging market.

Principal Investment Strategies

Under normal market conditions, the Fund invests at least 65% of its total
assets in equity securities, such as common and preferred stocks, of
companies located in countries designated by the World Bank or the United
Nations to be a developing country or an emerging market, such as most
countries in Africa, Asia, Latin America and the Middle East. The Fund may
invest in companies of any size.

Currently, the asset manager of the Fund seeks to keep the Fund diversified
across a variety of markets, countries and regions. In addition, within
these guidelines, it selects stocks that it believes can generate and
maintain strong earnings growth. First, the asset manager assesses the
political, economic and financial health of each of the countries within
which it invests in order to determine target country allocation for the
portfolio. The asset manager then seeks to identify companies with quality
management, strong finances and established market positions across a
diversity of companies and industries within the targeted countries. A
stock is typically sold if the asset manager believes that the future
profitability of a company does not support its current stock price or if
the political, economic or financial health of the country changes.

Should I invest in this Fund?

This Fund may be suitable if you:

Are willing to accept a higher degree of
risk and volatility for the opportunity
of higher potential returns

Have an investment time horizon of seven
years or more

23
<PAGE>

This Fund may not be suitable if you:

Are a conservative investor

Are investing with a shorter time horizon in mind

Are seeking stability of principal or current income

Portfolio Management of the Fund

Rexiter Capital Management Limited ("Rexiter") manages the Fund. Rexiter
and its corporate predecessors have managed a portion of the Fund since
February 1998, and Rexiter has managed the entire Fund since January 1999.

Rexiter, located at 21 St. James's Square, London, England, was founded in
1997. As of December 31, 1999, Rexiter had assets under management of
approximately $805 million. Kenneth King and Murray Davey are the
portfolio managers for the Fund. Mr. King is the CIO of Rexiter, a
position he has held since the firm's formation. Mr. Davey is a Senior
Portfolio Manager of Rexiter, a position he has held since the firm's
formation.

The Fund is obligated by its investment management contract to pay an
annual management fee to The Managers Funds LLC of 1.15% of the average
daily net assets of the Fund. The Managers Funds LLC is currently waiving
0.40% of this fee, which makes the effective management fee 0.75%. The
Managers Funds LLC, in turn pays a portion of this fee to Rexiter.

24
<PAGE>

SHORT AND INTERMEDIATE BOND FUND

FUND FACTS

Objective: High current income

Investment Focus: Fixed-income securities with an average portfolio
maturity from one to five years

Benchmark: Merrill Lynch 1-5 Yr. Govt/Corp Index

Ticker Symbol: MGSIX

Objective

The Fund's objective is to achieve high current income through a
diversified portfolio of fixed-income securities with an average portfolio
maturity between one to five years.

Principal Investment Strategies

Under normal market conditions, the Fund invests at least 65% of its total
assets in securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and in investment grade corporate bonds and
mortgage-related securities. Investment grade securities are rated at
least in the BBB/Baa major rating category by Standard & Poor's Corporation
or Moody's Investors Services, Inc. (or a similar rating from any
nationally recognized statistical rating organization). From time to time,
the Fund may invest in unrated bonds, which are considered by the asset
manager to be of comparable quality. Occasionally, the Fund may purchase
only the interest or principal component of a mortgage-related security.
Up to 10% of the total assets of the Fund may be invested in non-U.S.
dollar-denominated instruments, including eurodollar-denominated
instruments.

The Fund's assets currently are managed by a single asset manager. The
asset manager primarily selects investments with the goal of enhancing the
Fund's overall yield and total return, and lowering volatility, relative to
the benchmark. It uses credit analysis and internally developed investment
techniques to evaluate numerous financial criteria relating to debt
securities. By doing this, the asset manager attempts to capitalize on
inefficiencies in the corporate and U.S. Government securities markets. As
a result, the Fund may, at times, emphasize one type of debt security
rather than another.

To the extent consistent with the Fund's investment objective, the asset
manager manages this Fund to maintain an average duration similar to that
of an appropriate benchmark, currently the Merrill Lynch 1-5 Year
Government/Corporate Index. A security is typically sold if the asset
manager believes the security is overvalued based on its credit, sector and
duration, or in order to rebalance the portfolio relative to sector
diversification targets.

Should I invest in this Fund?

This Fund may be suitable if you:

Are seeking an opportunity for additional
returns through fixed-income securities in
your investment portfolio

Are willing to accept a conservative risk
investment

Have an investment time horizon of three
years or more

25
<PAGE>

This Fund may not be suitable if you:

Are seeking absolute stability of principal

Are seeking an aggressive investment

Portfolio Management of the Fund

Standish, Ayer & Wood, Inc. ("Standish") manages the entire Fund and has
managed the Fund since August 1991.

Standish, located at One Financial Center, Boston, Massachusetts, was
founded in 1933. As of December 31, 1999, Standish had assets under
management of approximately $44.7 billion. Howard B. Rubin is the
portfolio manager for the Fund. He is a Director of Standish, and has been
with the firm in various capacities since 1984.

The Fund is obligated by its investment management contract to pay annual
management fee to The Managers Funds LLC of 0.50% of the average daily net
assets of the Fund. The Managers Funds LLC, in turn, pays a portion of
this fee to Standish.

26
<PAGE>

BOND FUND

FUND FACTS

Objective: High current income

Investment Focus: Fixed-income securities

Benchmark: Lehman Bros. Govt/Corp Index

Ticker Symbol: MGFIX

Objective

The Fund's objective is to achieve a high level of current income from a
diversified portfolio of fixed-income securities.

Principal Investment Strategies

Under normal market conditions, the Fund invests at least 65% of its total
assets in securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and in investment grade corporate bonds and
mortgage-related and other asset-backed securities. Investment grade
securities are rated at least in the BBB/Baa major rating category by
Standard & Poor's Corporation or Moody's Investors Services, Inc. (or a
similar rating from any nationally recognized statistical rating
organization). From time to time, the Fund may invest in unrated bonds,
which are considered by the asset manager to be of comparable quality.
Debt securities held by the Fund may have any remaining maturity.
Occasionally, the Fund may purchase only the interest or principal
component of a mortgage-related security. Up to 10% of the total assets of
the Fund may be invested in non-U.S. dollar-denominated instruments,
including eurodollar-denominated instruments.

The Fund's assets currently are managed by a single asset manager. The
asset manager primarily selects investments with the goal of enhancing the
Fund's overall yield and total return and lowering volatility, relative to
the benchmark. It uses credit analysis and internally developed investment
techniques to evaluate numerous financial criteria relating to debt
securities. By doing this, the asset manager attempts to capitalize on
inefficiencies in the debt securities markets. As a result, the Fund may,
at times, emphasize one type of debt security rather than another.

The asset manager does not manage this Fund to maintain any given average
annual duration and may invest in securities with remaining maturities of
up to 40 years. At times, the Fund's average duration may be longer than
that of the benchmark, so that the Fund is more sensitive to changes in
interest rates than the benchmark. A security is typically sold if the
asset manager believes the security is overvalued based on its credit,
sector and duration.

Should I invest in this Fund?

This Fund may be suitable if you:

Are seeking an opportunity for additional
returns through fixed-income securities in
your investment portfolio

Are willing to accept a moderate risk investment

27
<PAGE>

Have an investment time horizon of four years or more

This Fund may not be suitable if you:

Are seeking stability of principal

Are investing a conservative risk investment

PORTFOLIO MANAGEMENT OF THE FUND

Loomis, Sayles & Company, L.P. ("Loomis, Sayles") manages the entire Fund
and has managed the Fund since May 1984.

Loomis, Sayles, located at One Financial Center, Boston, Massachusetts, was
founded in 1926. As of December 31, 1999, Loomis, Sayles had assets under
management of approximately $67.6 billion. Daniel J. Fuss is the portfolio
manager for the Fund. He is a Managing Director of Loomis, Sayles, a
position he has held since 1976.

The Fund is obligated by its investment management contract to pay an
annual management fee to The Managers Funds LLC of 0.625% of the average
daily net assets of the Fund. The Managers Funds LLC, in turn, pays a
portion of this fee to Loomis, Sayles.

28
<PAGE>

GLOBAL BOND FUND

FUND FACTS

Objective: Income and capital appreciation

Investment Focus: High-quality foreign and domestic fixed-income
securities

Benchmark: Salomon World Govt. Bond Index

Ticker Symbol: MGGBX

Objective

The Fund's objective is to achieve income and capital appreciation through
a portfolio of high quality foreign and domestic fixed-income securities.

Principal Investment Strategies

Under normal market conditions, the Fund invests at least 65% of its total
assets in securities issued or guaranteed by the U.S. and foreign
governments, their agencies or instrumentalities, supranational
organizations such as the World Bank and the United Nations, and in
investment grade U.S. and foreign corporate bonds. Investment grade
securities are rated at least in the BBB/Baa major rating category by
Standard & Poor's Corporation or Moody's Investors Services, Inc. (or a
similar rating from any nationally recognized statistical rating
organization). From time to time, the Fund may invest in unrated bonds,
which are considered by the asset manager to be of comparable quality.
Debt securities held by the Fund may have any remaining maturity. The Fund
may hold instruments denominated in any currency, including eurodollar-
denominated instruments. The Fund is "non-diversified," which means that
it can invest more of its assets in the securities of a single issuer than
a diversified fund.

The Fund's assets currently are managed by a single asset manager. The
asset manager primarily selects investments with the goal of enhancing the
Fund's overall yield and total return and lowering volatility, relative to
the benchmark. It uses credit analysis and internally developed investment
techniques to evaluate numerous financial criteria relating to debt
securities. In addition, the asset manager will typically utilize forward
foreign currency contracts in order to adjust the Fund's allocation in
foreign currencies. By doing this, the asset manager attempts to capitalize
on inefficiencies in the global debt securities and currencies markets.

The asset manager does not manage this Fund to maintain any given average
annual duration. This gives the manager flexibility to invest in securities
with any remaining maturity as market conditions change. A security is
typically sold if the asset manager believes the security is overvalued
based on its credit, country and duration.

Should I invest in this Fund?

This Fund may be suitable if you:

Are seeking an opportunity for returns
through global fixed-income securities in
your investment portfolio

Are willing to accept a moderate risk
investment

Have an investment time horizon of three years or more

29
<PAGE>

This Fund may not be suitable if you:

Are seeking stability of principal

Are seeking a conservative risk investment

Are uncomfortable with currency and
political risk

Portfolio Management of the Fund

Rogge Global Partners, plc. ("Rogge") manages the entire Fund and has
managed the Fund since April 1994.

Rogge, located at Sion Hill, 56 Victoria Embankment, London, England, was
founded in 1984. As of December 31, 1999, Rogge had assets under
management of approximately $6.1 billion. Olaf Rogge is the portfolio
manager for the Fund. He is a Managing Director of Rogge, a position he
has held since 1984.

The Fund is obligated by its investment management contract to pay an
annual management fee to The Managers Funds LLC of 0.70% of the average
daily net assets of the Fund. The Managers Funds LLC, in turn, pays a
portion of this fee to Rogge.

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MONEY MARKET FUND

FUND FACTS

Objective: Maximize current income; maintain liquidity

Investment Focus: U.S. dollar-denominated money market securities

Benchmark: 3-Month Treasury bill

Ticker Symbol: MGMXX

Objective

The Fund's objective is to maximize current income and maintain a high
level of liquidity.

Principal Investment Strategies

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 that 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. Although keeping the weighted average maturity this short helps
the Fund in its pursuit of a stable $1.00 share price, it is possible to
lose money by investing in this Fund.

Additionally, money market funds take steps to protect investors against
credit risk. Under its investment guidelines, the Fund maintains stricter
credit risk standards than required for money market funds under federal
law.

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"
or "the Money Market Fund" to mean the feeder fund and the Portfolio taken
together. The Portfolio accepts investments from other feeder funds, and
the feeder funds bear the 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.
The Fund and The Prime Money Market Portfolio expect to maintain consistent
objectives. If they do not, the Fund will withdraw from the 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
investment manager, invest in a different master portfolio, or take other
appropriate action.

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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

Portfolio Management of the Fund

J.P. Morgan Investment Management Inc. ("JPMIM"), formerly Morgan Guaranty
Trust Company of New York ("Morgan"), 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 was the investment manager. JPMIM, located at
522 Fifth Avenue, New York, New York, was founded in 1913. As of December
31, 1999, JPMIM had assets under management of $349 billion. Mark Settles,
Vice President, and John Donohue, Vice President, lead the portfolio
management team. Mr. Settles and Mr. Donohue have 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 Portfolio. The Portfolio pays a management fee of 0.20%
on the first $1 billion of the average daily net assets of the Portfolio
and 0.10% of the average daily net assets in excess of $1 billion.

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MANAGERSCHOICE

The ManagersChoicer Program

ManagersChoice is a unique, comprehensive investment program consisting of
several model portfolios using investments in various Funds in The Managers
Funds family of mutual funds. Your investment advisor will work with you to
select a portfolio to help achieve your goals in the context of your
tolerance for risk.

Summary of the Program

ManagersChoice offers you:

Access to institutional investment managers.

Selection among these investment advisory firms based on continuous
evaluation and monitoring to ensure that performance standards are met.

Diversification of investment assets on three different levels:

Level 1
Within no-load mutual funds. Mutual funds offer you
diversification of risk and reward by investing in a pool of
securities.

Level 2
Among investment advisors. ManagersChoice models utilize
multiple managers by asset class and style, allowing you to
benefit from their varying perspectives.

Level 3
Among asset classes and investment objectives,
ManagersChoice provides you with portfolio strategies based on
varying time, objective and risk parameters.

ManagersChoice is an asset allocation program which is only available
through investment professionals. For more information on this program,
contact your advisor or visit our website at www.managersfunds.com. Please
be aware that an Advisor may charge additional fees and expenses for
participation in this program.

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ADDITIONAL PRACTICES/RISKS

Other Securities and Investment Practices

The following is a description of some of the other securities and
investment practices of the Funds.

Restricted and Illiquid Securities
Each Fund may purchase restricted or illiquid securities. Any securities
that are thinly traded or whose resale is restricted can be difficult to
sell at a desired time and price. Some of these securities are new and
complex and trade only among institutions; the markets for these securities
are still developing, and may not function as efficiently as established
markets. Owning a large percentage of restricted or illiquid securities
could hamper a Fund's ability to raise cash to meet redemptions. Also,
because there may not be an established market price for these securities,
a Fund may have to estimate their value. This means that their valuation
(and, to a much smaller extent, the valuation of the Fund) may have a
subjective element.

Repurchase Agreements
Each Fund may buy securities with the understanding that the seller will
buy them back with interest at a later date. If the seller is unable to
honor its commitment to repurchase the securities, the Fund could lose
money.

Foreign Securities
Each Fund may purchase foreign securities. Foreign securities generally
are more volatile than their U.S. counterparts, in part because of higher
political and economic risks, lack of reliable information and fluctuations
in currency exchange rates. These risks are usually higher in less
developed countries.

In addition, foreign securities may be more difficult to resell and the
markets for them less efficient than for comparable U.S. securities. Even
where a foreign security increases in price in its local currency, the
appreciation may be diluted by the negative effect of exchange rates when
the security's value is converted to U.S. dollars. Foreign withholding
taxes also may apply, and errors and delays may occur in the settlement
process for foreign securities.

International Exposure
Many U.S. companies in which the Funds may invest generate significant
revenues and earnings from abroad. As a result, these companies and the
prices of their securities may be affected by weaknesses in global and
regional economies and the relative value of foreign currencies to the U.S.
dollar. These factors, taken as a whole, may adversely affect the price of
the Funds' shares.

Initial Public Offerings
Each Fund may invest in initial public offerings. To the extent that it
does so, the performance of the Fund may be significantly affected by such
investments.

Defensive Investing
During unusual market conditions, each Fund may place up to 100% of its
total assets in cash or quality short-term debt securities. To the extent
that a Fund does this, it is not pursuing its objective.

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Derivatives
Each Fund may invest in derivatives. Derivatives, a category that includes
options and futures, are financial instruments whose value derives from
another security, and index or a currency. Each Fund may use derivatives
for hedging (attempting to offset a potential loss in one position by
establishing an interest in an opposite position) or to attempt to increase
return. This includes the use of currency-based derivatives for
speculation (investing for potential income or capital gain).

While hedging can guard against potential risks, it adds to the Fund's
expenses and can eliminate some opportunities for gains. There is also a
risk that a derivative intended as a hedge may not perform as expected.
The Funds are not obligated to hedge and may not do so.

The main risk with derivatives is that some types can amplify a gain or
loss, potentially earning or losing substantially more money than the
actual cost of the derivative.

With some derivatives, whether used for hedging or speculation, there is
also the risk that the counterparty may fail to honor its contract terms,
causing a loss for the Fund.

High-Yield Bonds
Each Fund may invest a limited portion of its total assets in high-yield
bonds. High-yield bonds are debt securities rated below BBB- by Standard &
Poor's Corporation or Baa3 by Moody's Investors Services, Inc. (or a
similar rating by any nationally recognized statistical rating
organization). To the extent that a Fund invests in high-yield bonds, it
takes on certain risks:

the risk of a bond's issuer defaulting on principal or interest
payments is greater than on higher quality bonds

issuers of high-yield bonds are less secure financially and are more
likely to be hurt by interest rate increases and declines in the
health of the issuer or the economy.

Short-Term Trading
Short-term trading can increase a Fund's transaction costs and may increase
your tax liability. Although the investment strategies of the asset
managers for the Funds ordinarily do not involve trading securities for
short-term profits, any of them sell any security at any time it believes
best, which may result in short-term trading.

When-Issued Securities
Each Fund may invest in securities prior to their date of issue. These
securities could fall in value by the time they are actually issued, which
may be any time from a few days to over a year.

Zero (or Step) Coupons
Each Fund may invest in zero (or step) coupons. A zero coupon security is
a debt security that is purchased and traded at discount to its face value
because it pays no interest for some or all of its life. Interest,
however, is reported as income to the Fund, which is required to distribute
to shareholders an amount equal to the amount reported. Those
distributions may require the Fund to liquidate portfolio securities at a
disadvantageous time.

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<PAGE>

A Few Words About Risk

In the normal course of everyday 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.

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.

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.

Despite statistics, the risks of any action are different for every
person and may change as a person's circumstances change;

Everybody's perception of reward is different; and

High risk does not in itself imply high reward.

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.

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.

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.

In Principal Risk Factors, the principal risks of investing in the Fund are
detailed. The following are descriptions of some of the additional risks
that the investment manager of the Fund may take to earn investment
returns. This is not a comprehensive list and the risks discussed below are
only certain of the risks to which your investments are exposed.

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<PAGE>

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 investment managers to
invest assets. Investment 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.

Prepayment Risk Many bonds have call provisions which allow the
debtors to pay them back before maturity. This is
especially true with mortgage securities, which can be paid
back anytime. Typically debtors prepay their debt when it
is to their advantage (when interest rates drop making a new
loan at current rates more attractive), and thus likely to
the disadvantage of bond holders. Prepayment risk will vary
depending on the provisions of the security and current
interest rates relative to the interest rate of the debt.

Because of prepayment risk, most investors estimate the
prepayments which they expect for a bond or portfolio and
invest accordingly. Extension risk represents the
possibility that as conditions change debtors will slow
their capital payments thus extending the duration of the
securities beyond expectations.

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 less likely 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.

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 that 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.

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<PAGE>

About Your Investment

FINANCIAL HIGHLIGHTS

The Financial Highlights tables are intended to help you understand each
Fund's financial performance for the past five fiscal years (or since
the Fund's inception). 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 the
Fund. It assumes reinvestment of all dividends and distributions. This
information, derived from each Fund's Financial Statements, has been
audited by PricewaterhouseCoopers LLP, whose report is included in the
Funds' Annual Reports, which are available upon request. Because the
Small Company Fund had not commenced operations as of the date of this
Prospectus, there is no "Financial Highlights" for the Fund.

38
<PAGE>
YOUR ACCOUNT

As an investor, you pay no sales charges to invest in the Funds. Furthermore, you pay no charges to
transfer within the Fund family or even to redeem out of the 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. The Fund's NAV is calculated at the close of regular business of the NYSE, usually
4:00 p.m. Eastern Standard 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 be impacted on
days when investors may not be able to purchase or redeem Fund shares.

The Fund's investments are valued based on market values. If market quotations are not readily available for
any security, the value of the security will be based on an evaluation of its fair value, pursuant to procedures
established by the Board of Trustees.

Minimum Investments in the Funds

Cash investments in the 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 the
Fund or the Custodian bank will be accepted.

The following table provides the minimum initial and additional investments in any Fund directly or through ManagersChoice:
Managers ManagersChoice

Initial Additional Initial Additional
Investment Investment Investment Investment

Regular Accounts $2,000 $100 $50,000 $500
Traditional IRA 500 100 50,000 500
Roth IRA 500 100 50,000 500
Education IRA 500 100 50,000 500
SEP IRA 500 100 50,000 500
SIMPLE IRA 500 100 50,000 500

The Funds may, in their discretion, waive the minimum initial and additional investment amounts at any time.

A Traditional IRA is an individual retirement account. Contributions may be deductible at certain income levels and earnings are
tax-deferred while your withdrawals and distributions are taxable in the year that they are made.

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 conditions must be met in order to qualify.

You should consult your tax professional for more information on IRA accounts.

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<PAGE>
HOW TO PURCHASE SHARES

Managers

By Mail: To open your account, complete and sign the appropriate application and make your
check payable to The Managers Funds. Mail the check and account application to:

The Managers Funds
c/o BFDS, Inc.
P.O. Box 8517
Boston, MA 02266-8517

To purchase additional shares, write a letter of instruction (or complete your
investment stub). Send a check and investment stub or written instructions to the above address. Please
include your account number and Fund name on the check.

By Telephone: After establishing this option on your account, call a client service representative
during normal business hours, 8 a.m. to 6 p.m. Eastern Standard Time, at (800) 252-0682.

By Wire: Call the Fund at (800) 252-0682. Instruct your bank to wire the money to State Street Bank
and Trust Company, Boston, MA 02101; ABA #011000028; BFN-The Managers Funds A/C
9905-001-5, FBO shareholder name, account number and Fund name. Please be aware that your
bank may charge you a fee for this service.

ManagersChoice

By Mail: To open your account, complete and sign the appropriate application and make your
check payable to The Managers Funds. Mail the check and account application to:

The Managers Funds
c/o PFPC Brokerage Services, Inc.
P.O. Box 61487
King of Prussia, PA 19406-0897

To purchase additional shares, write a letter of instruction (or complete your investment stub).
Send a check and investment stub or written instructions to the above address. Please include
your account number and Portfolio name on the check.

By Telephone: After establishing this option on your account, call a client service representative
during normal business hours, 9 a.m. to 5 p.m. Eastern Standard Time, at (800) 358-7668.

By Wire: Call the Fund at (800) 358-7668. Instruct your bank to wire the money to Mellon
Bank; ABA #011001234; BFN-The Managers Funds A/C 04-5810, FBO shareholder name, account number
and Portfolio name. Please be aware that your bank may charge you a fee for this service.

*A redemption made within 15 days of a purchase made by check may be delayed if such check has not cleared.

Through Broker-Dealers and Other Financial Intermediaries:
It is important to keep in mind that if you invest through a third-party such as a bank, broker-dealer or other fund
distribution organizations rather than directly with us, the policies, fees and minimum investment amounts may
be different than those described in this material. The Funds also participate in No-Transaction Fee programs
with many national brokerage firms, and may pay fees to these firms for participation in such programs.

45
<PAGE>

HOW TO REDEEM SHARES

You may sell your shares at any time. Your shares will be sold at the NAV next calculated after the
Funds' Transfer Agent receives your order. Orders received after the close of regular business of the
NYSE (usually 4:00 p.m. Eastern Standard Time) will receive the NAV per share determined at the
close of trading on the next NYSE trading day.

Redemptions of $25,000 or more require a signature guarantee or Medallion Guarantee.
A signature guarantee and a Medallion Guarantee helps to protect against fraud. You can obtain one
from most banks and securities dealers. A notary public cannot provide a signature guarantee or a Medallion
Guarantee. In joint accounts, both signatures must be guaranteed.

Managers

By Mail: Write a letter of instruction containing:
- the name of the Fund(s)
- the account number(s)
- dollar amount or number of shares to be redeemed
- the name(s) on the account
- the signature(s) of all account owners
- your daytime telephone number

and mail the written instructions to The Managers Funds, c/o Boston Financial Data
Services, Inc., P.O. Box 8517, Boston, MA 02266-8517.

By Telephone: After establishing this option on your account, call a client service
representative during normal business hours, 8 a.m. to 6 p.m. Eastern Standard Time, at (800) 252-0682.

Telephone redemptions are available only for redemptions which are below $25,000.

ManagersChoice

By Mail: Write a letter of instruction containing:
- the name of the Portfolio(s)
- the account number(s)
- dollar amount or number of shares to be redeemed
- the name(s) on the account
- the signature(s) of all account owners
- your daytime telephone number

and mail the written instructions to The Managers Funds, c/o PFPC Brokerage Services, Inc.,
P.O. Box 61487, King of Prussia, PA 19406-0897.

By Telephone: After establishing this option on your account, call a client service representative
during normal business hours, 9 a.m. to 5 p.m. Eastern Standard Time, at (800) 358-7668.

Telephone redemptions are available only for redemptions which are below $25,000 per
Fund or $100,000 per Portfolio.
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INVESTOR SERVICES

Automatic Investments Allows you to make automatic purchases of $100 per Fund directly from a designated bank account.

Automatic Reinvestment Plan Allows your dividends and capital gain distribution to be reinvested in additional shares of any
Fund in the Fund family. You can elect to receive dividends in cash.

Automatic Withdrawal Plan Allows you to make automatic monthly withdrawals of $100 or more per Fund. Withdrawals by
check are normally completed on the 25th day of each month. If the 25th day of any month is a weekend or a holiday, the
withdrawal will be completed on the next business day.

Checkwriting Privileges Available to investors in the Money Market Fund. Call us at (800) 835-3879 for more information.
This privilege is not available for ManagersChoice shareholders.

Exchange Privilege Allows you to exchange your shares of the Funds for shares of any of our Funds. There is no
fee associated with this privilege. Be sure to read the Prospectus for any Fund that you are exchanging into. You can
request your exchange in writing, by telephone (if elected on the application) or through your investment advisor, bank
or investment professional. This privilege is not available for ManagersChoice shareholders.

Individual Retirement Available to you at no additional cost. Call us at (800) 835-3879 for more
Accounts information and an IRA kit.

ManagersChoice
Statement Fee An annual fee of $35.00 will be deducted from any ManagersChoice account that is less than $250,000.

Systematic Exchange Plan Allows you to make automatic monthly exchanges from one Fund to any of our Funds.
Exchanges are completed on the 15th 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 day of any month is a weekend or holiday, the exchange
will be completed on the next business day.

Systematic Purchase Plan Allows you to make automatic monthly deposits of $500 or more per ManagersChoice
Portfolio directly from a designated bank account.

Systematic Withdrawal Plan Allows you to make automatic monthly withdrawals of $500 or more per ManagersChoice
Portfolio. Withdrawals by check are normally completed on the 25th day of each month. If the 25th day of any month is a
weekend or a holiday, the withdrawal will be completed on the next business day

THE FUNDS AND THEIR POLICIES

The Funds reserve the right to:

redeem the balance of 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 Securities and Exchange Commission;

change its 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 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; and

impose exchange or redemption fees or otherwise change the terms of your exchange privileges.

ACCOUNT STATEMENTS

You will receive quarterly and yearly statements detailing your account activity.
All investors (other than IRA accounts) will also receive a Form 1099-DIV in January, detailing
the tax characteristics of any dividends and distributions that are received on their account, whether
taken in cash or additional shares. You will also receive confirmations after each trade executed in your account.

DIVIDENDS AND DISTRIBUTIONS

Income dividends, if any, for each of the Equity Funds, with the exception of the
Income Equity Fund, are normally declared and paid annually. Income dividends,
if any, for the Income Equity Fund are normally declared and paid quarterly. Capital
gain distributions, if any, for each of the Equity Funds are normally declared and paid
annually in December.

Income dividends, if any, for the Income Funds, with the exception of the Global Bond Fund,
are normally declared and paid monthly. Income dividends, if any, for the Global Bond Fund
are normally declared and paid annually. Capital gain distributions, if any, for each of the Income
Funds are normally declared and paid annually in December.

Income dividends and capital gain distributions, if any, for the Money Market Fund are normally
declared daily and paid monthly on the third to the last business day.

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.

48
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TAX INFORMATION

Please be aware that the following tax information is general and refers only 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 consultant about the status of your distributions from the Funds.

All dividends and short-term capital gain 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 a Fund's
shares for shares of another Fund will be treated as a sale of a 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 and 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.

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; or

fail to certify that they are exempt from withholding\

</TABLE>