<PAGE>
<PAGE>
ANNUAL REPORT
- --------------------------------------------
October 31, 1995
NEUBERGER&BERMAN
MUNICIPAL FUNDS -SM-
NEUBERGER&BERMAN
MUNICIPAL MONEY FUND
NEUBERGER&BERMAN
MUNICIPAL SECURITIES TRUST
NEUBERGER&BERMAN
NEW YORK INSURED INTERMEDIATE FUND
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
THE FUNDS
PRESIDENT'S LETTER 4
RATINGS SUMMARY 7
GROWTH OF A DOLLAR
CHARTS
COMPARISON OF A
$10,000 INVESTMENT
Municipal Securities
Trust 9
New York Insured
Intermediate Fund 10
FINANCIAL STATEMENTS 12
FINANCIAL HIGHLIGHTS
PER SHARE DATA
Municipal Money Fund 20
Municipal Securities
Trust 21
New York Insured
Intermediate Fund 22
REPORT OF
INDEPENDENT AUDITORS 24
THE PORTFOLIOS
SCHEDULE OF
INVESTMENTS
Municipal Money
Portfolio 26
Municipal Securities
Portfolio 36
New York Insured
Intermediate Portfolio 40
FINANCIAL STATEMENTS 44
FINANCIAL HIGHLIGHTS 51
REPORT OF
INDEPENDENT AUDITORS 52
DIRECTORY 53
OFFICERS AND
TRUSTEES 54
</TABLE>
3
<PAGE>
PRESIDENT'S LETTER December 18, 1995
Dear Shareholders,
Shortly after our October 1994 Annual Report, the bond market sprang back
after 12 months of sustained capital losses. It's been on an upward tack ever
since November 1994, causing one of the strongest bond rallies in over a decade.
The Federal Reserve Board (the "Fed") crafted the current fixed income
environment carefully. The Fed, led by Chairman Alan Greenspan, effectively
voted the bond market out of the high interest-rate quagmire of 1994. This was
the beginning of a succession of well-calculated decisions not to raise rates
that set the bond market back on a positive trend. Then in July the Fed cut the
discount rate by 0.25% (the first cut in about two years). Not only did the
easing of interest rates lay the groundwork for a dual bull market for bonds and
stocks, but they also served your Neuberger&Berman fixed income funds well.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
YIELDS ON U.S. TREASURY BONDS
<S> <C> <C>
Plotted Weekly
30-year bonds 3-year bonds
10/28/94 7.958% 7.033%
11/04 8.159% 7.310%
11/11 8.149% 7.387%
11/18 8.131% 7.523%
11/25 7.931% 7.427%
12/02 7.906% 7.571%
12/09 7.859% 7.663%
12/16 7.854% 7.694%
12/23 7.827% 7.801%
12/30 7.881% 7.784%
1/6/95 7.860% 7.773%
01/13 7.792% 7.506%
01/20 7.891% 7.664%
01/27 7.730% 7.375%
02/03 7.626% 7.286%
02/10 7.669% 7.445%
02/17 7.586% 7.190%
02/24 7.528% 6.971%
03/03 7.541% 7.016%
03/10 7.462% 6.930%
03/17 7.368% 6.790%
03/24 7.364% 6.727%
03/31 7.431% 6.892%
04/07 7.390% 6.744%
04/14 7.335% 6.606%
04/21 7.333% 6.535%
04/28 7.336% 6.696%
05/05 7.018% 6.279%
05/12 6.989% 6.299%
05/19 6.917% 6.288%
05/26 6.748% 6.036%
06/02 6.529% 5.634%
06/09 6.726% 6.070%
06/16 6.616% 5.821%
06/23 6.501% 5.676%
06/30 6.618% 5.858%
07/07 6.524% 5.611%
07/14 6.604% 5.782%
07/21 6.962% 6.090%
07/28 6.900% 6.053%
08/04 6.909% 6.034%
08/11 6.990% 6.199%
08/18 6.897% 6.218%
08/25 6.704% 5.968%
09/01 6.616% 5.891%
09/08 6.587% 5.903%
09/15 6.480% 5.808%
09/22 6.584% 5.920%
09/29 6.501% 5.920%
10/06 6.420% 5.787%
10/13 6.304% 5.714%
10/20 6.361% 5.780%
10/27 6.356% 5.706%
</TABLE>
SOURCE: BLOOMBERG FINANCIAL MARKETS
By your Funds' fiscal year-end of October 31, 1995, the economy remained
tempered by a host of moderate indicators: Gross Domestic Product (GDP) grew
4.0% over the 12-month period, inflation hovered in check near 3% for the year
(dipping to 2.8% by October), unemployment averaged a low 5.6%, and consumer
confidence remained high. These figures highlighted the U.S. economy's ability
to stifle inflation without choking off economic growth.
The rate at which yields on the benchmark 30-year Treasury bond has been
falling has generally decreased since summer. After falling
4
<PAGE>
dramatically from a high of 8.2% in the fourth quarter of 1994 to 6.6% by June
30, 1995, it dropped to around 6.3% by October's end. Due to a moderate level of
economic expansion through July, the Fed halted rate cuts from August through
October. During the hiatus on rate cuts, long-term bond yields crept up to about
7% in early August, then drifted back down as signs of economic weakness
surfaced again. This classic "push-pull" scenario of gently rising and falling
rates was consistent with the slow growth, low inflation "soft landing" the Fed
had planned for the U.S. economy all along.
The bond sectors have turned in a mixed performance heading into autumn.
Mortgage-backed security prices have backed off slightly from late summer
(prices decreased, yields increased) due to prepayment fears; adjustable rate
mortgages (ARMs) were showing minor losses in October, with only slightly
positive performance in Government Mortgages and GNMAs.* Homeowners typically
begin a wave of mortgage refinancing as interest rates come down. Foreign bonds
have begun to cool due to a sharply rising U.S. dollar. Government and corporate
debt obligations, however, continued to increase in value as your Funds' fiscal
year came to a close. With inflation under control, the real yield on bonds (the
nominal stated yield minus the current rate of inflation) continued to offer an
attractive return.
We strive to merit your confidence, and remain committed to providing
consistent performance. A discussion of each Portfolio's strategy over the
12-month period of the Annual Report follows.
MUNICIPAL MONEY FUND The Municipal Money Fund continued to offer stability
and moderate returns throughout the fiscal year ended October 31, 1995. The
short-term market continues to witness steady demand as tax reform concerns led
to more defensive investment strategies. Municipal Money's dollar-weighted
average portfolio maturity ranged from a high of 63.0 days to a low of 36.7 days
during the fiscal year. The current and effective (compounded) yields for
Municipal Money Fund for the 7 days ended October 31, 1995 were 3.35% and 3.41%,
respectively. This can be translated into tax equivalent current and effective
(compounded) yields of 5.55% and 5.70%, respectively for an investor in the
highest federal income tax bracket.**
MUNICIPAL SECURITIES TRUST While fundamental factors such as low inflation,
moderate economic growth, budget deficit reduction plans and a stable dollar
have created a positive environment for the
*Source: IBC Bond Fund Report for November 3, 1995, reflecting bond prices and
performance through 10/31/95.
5
<PAGE>
fixed-income markets year to date, the atmosphere surrounding the municipal bond
area has been a bit more volatile during the Federal Legislative process.
Certain sectors of the market, such as Health Care Facilities, Educational
Institutions/Student Loans and Housing Authorities, have been directly affected
by proposed legislation. Legislative proposals would shift the responsibilities
and costs of Federal programs to the state and local level, and the question
remains as to their ability to shoulder the additional expense. As a result,
credit selection which is always a crucial factor in dictating performance has
become more critical than ever.
Interest rates in the two to ten year maturity range have dropped from
approximately 70 to 100 basis points in the 12 months since your last Annual
Report and the portfolio's dollar-weighted average maturity has been increased
from 7.7 years to 8.3 years in response to this fixed income rally. We feel that
market fears over flat tax proposals have been premature and high quality
tax-exempt securities still offer considerable value to investors in the higher
tax brackets.
NEW YORK INSURED INTERMEDIATE FUND The municipal market has had a tremendous
rally over the past 12 months and we feel there are opportunities to maximize
after-tax returns in this sector. Insured state issues such as those of New
York, have performed particularly well in this environment due to their high
grade status (AAA), liquidity advantages and diminishing supply. While the
Orange County debacle and flat tax concerns have created some volatility in the
marketplace throughout the year, municipal bonds have offered considerable
relative value and we have kept the portfolio's dollar-weighted average maturity
sufficiently exposed to take advantage of the positive trends.
Sincerely,
/s/ Theresa A. Havell
Theresa A. Havell
President and Trustee
Neuberger&Berman Income Funds
**Tax-equivalent yield is the taxable yield that an investor would have had to
receive in order to realize the same level of yield after federal taxes at the
highest federal tax rate, 39.6%, assuming that all of the Fund's income is
exempt from federal income taxes.
There is no assurance that Municipal Money Fund will be able to maintain a
stable net asset value of $1.00 per share. The value of the Fund's shares,
like the share values of all other mutual funds, is neither insured nor
guaranteed by the U.S. Government. The return on an investment in Municipal
Money Fund will fluctuate. Results represent past performance and do not
indicate future results.
6
<PAGE>
RATINGS SUMMARY
The following table shows the ratings distribution and dollar-weighted
average portfolio maturity for each Portfolio as of October 31, 1995. Ratings
distribution and average maturity may change in the future.
<TABLE>
<CAPTION>
DOLLAR-WEIGHTED
PERCENT OF TOTAL AVERAGE PORTFOLIO
NEUBERGER&BERMAN MOODY'S RATINGS INVESTMENTS MATURITY
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Municipal Money Portfolio Aaa 9.3% 49.3 days
Aa .6
P-1 24.5
MIG-1/VMIG-1 46.7
N/R 18.9
-----
100.0%
Municipal Securities Portfolio Aaa 59.3% 8.3 years
Aa, Aa1 34.1
A, A1 6.6
-----
100.0%
New York Insured Intermediate Portfolio Aaa 65.9% 6.2 years
Baa1 13.9
P-1 4.4
VMIG-1 7.9
N/R 7.9
-----
100.0%
</TABLE>
MOODY'S INVESTORS SERVICE, INC. (MOODY'S) CORPORATE BOND RATINGS:
Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or exceptionally stable margin, and
principal is secure. Although the various protective elements are likely to
change, the changes that can be visualized are most unlikely to impair the
fundamentally strong position of the issue.
Aa - Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group, they comprise what are generally known as "high-grade
bonds." They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa-rated securities, fluctuation of protective
elements may be of greater amplitude, or there may be other elements present
that make the long-term risks appear somewhat larger than in Aaa-rated
securities.
A - Bonds rated A possess many favorable investment attributes and are
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present that
suggest a susceptibility to impairment some time in the future.
Baa - Bonds rated Baa are considered medium-grade obligations (i.e., they are
neither highly protected nor poorly secured). Interest payments and principal
security appear adequate for the present, but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
These bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
7
<PAGE>
MOODY'S SHORT-TERM DEBT RATINGS:
Issuers rated PRIME-1 (P-1), or related supporting institutions, have a superior
capacity for repayment of short-term promissory obligations. PRIME-1 repayment
capacity will normally be evidenced by the following characteristics: leading
market positions in well-established industries; high rates of return on funds
employed; conservative capitalization structures with moderate reliance on debt
and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternative liquidity.
MOODY'S SHORT-TERM LOAN RATINGS:
Issuers rated MIG-1/VMIG-1 - This designation denotes best quality. There is
present strong protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.
N/R - Not rated by Moody's.
NOTE: Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through Baa in its corporate bond ratings system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
8
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman October 31, 1995
- ----------------------------------------------------------------------
Municipal Securities Trust
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Average Annual Total Return*
<TABLE>
<CAPTION>
Municipal Lehman
Securities Trust Index
<S> <C> <C>
1 Year +10.35% +12.69%
5 Year +6.72% +8.14%
Life of Fund +6.70% +7.58%
</TABLE>
Average Annual Total Return*
<TABLE>
<CAPTION>
Municipal
Securities Trust Lehman Index
<S> <C> <C>
7/9/87 10000 10000
10/31/87 9885 9810
1988 10861 10849
1989 11572 11532
1990 12381 12420
1991 13422 13773
1992 14325 14871
1993 15943 16639
1994 15534 16301
1995 17141 18368
</TABLE>
Life of Municipal Securities Trust is from 7/9/87.
The tax equivalent annualized yield for Municipal Securities Trust is 6.80%
for the thirty days ended 10/31/95 (based on an annualized yield of 4.11% and
assuming a federal tax rate of 39.6%). A portion of the income of Municipal
Securities Trust may be subject to the federal alternative minimum tax for
certain investors.
Neuberger&Berman Management Inc. voluntarily bears certain operating expenses
of the Fund in excess of 0.65% per annum of average daily net assets. This
arrangement can be terminated upon 60 days' notice. Please see the Fund's
Financial Highlights for prior years' expense ratios. Absent such reimbursement,
the annualized and tax equivalent yields for the thirty days ended 10/31/95
would have been 3.86% and 6.39%, respectively. Absent such reimbursement, the
average annual total returns for the period 7/9/87 to 10/31/95, for the five
years ended 10/31/95 and for the one year ended 10/31/95 would have been +5.55%,
+6.21%, and +10.01%, respectively.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Fund and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The Lehman 7-Year General Obligation Index is an unmanaged total return
performance benchmark for the intermediate-term, 7-year, investment grade
General Obligations (State and Local) tax-exempt bond market. Please note that
indices do not take into account any fees and expenses of investing in the
individual securities that they track, and that individuals cannot invest
directly in any index. These data are derived by Neuberger&Berman Management
Inc. and include reinvestment of all dividends and capital gain distributions.
9
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman October 31, 1995
- ----------------------------------------------------------------------
New York Insured Intermediate Fund
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Average Annual Total Return*
<TABLE>
<CAPTION>
New York Insured Lehman
Intermediate Fund Index
<S> <C> <C>
1 Year 12.88% 12.69%
Life of Fund 4.30% 4.46%
</TABLE>
Average Annual Total Return*
<TABLE>
<CAPTION>
New York Insured Lehman
Intermediate Fund Index
<S> <C> <C>
2/1/94 10000 10000
10/31/94 9536 9577
1995 10765 10791
</TABLE>
Life of New York Insured Intermediate Fund is from 2/1/94.
The tax equivalent annualized yield for New York Insured Intermediate Fund is
7.50% for the thirty days ended 10/31/95 (based on an annualized yield of 3.98%
and assuming a combined federal, New York State, and New York City tax rate of
46.9%). A portion of the income of New York Insured Intermediate Fund may be
subject to the federal alternative minimum tax for certain investors.
Neuberger&Berman Management Inc. voluntarily bears certain operating expenses
of the Fund in excess of 0.65% per annum of average daily net assets. This
arrangement can be terminated after February 29, 1996. Absent such
reimbursement, the annualized and tax equivalent yields for the thirty days
ended 10/31/95 would have been 3.08% and 5.80%, respectively. Absent such
reimbursement, the average annual total returns for the period 2/1/94 to
10/31/95 and for the one year ended 10/31/95 would have been +3.25% and +11.72%,
respectively.
*"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Fund and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
The Lehman 7-Year General Obligation Index is an unmanaged total return
performance benchmark for the intermediate-term, 7-year, investment grade
General Obligations (State and Local) tax-exempt bond market. Please note that
indices do not take into account any fees and expenses of investing in the
individual securities that they track, and that individuals cannot invest
directly in any index. These data are derived by Neuberger&Berman Management
Inc. and include reinvestment of all dividends and capital gain distributions.
10
<PAGE>
(This page left blank intentionally.)
11
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
Neuberger&Berman October 31, 1995
- ----------------------------------------------------------------------
Income Funds
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL MUNICIPAL INSURED
MONEY SECURITIES INTERMEDIATE
(000'S OMITTED EXCEPT PER SHARE AMOUNTS) FUND TRUST FUND
------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $ 161,094 $ 44,420 $ 11,517
Deferred organization costs (Note A) -- -- 26
Receivable for Trust shares sold 74 -- --
Receivable from administrator -- net (Note
B) -- -- 12
------------------------------------------------
161,168 44,420 11,555
------------------------------------------------
LIABILITIES
Dividends payable 5 54 20
Payable for Trust shares redeemed 270 1 10
Payable to administrator -- net (Note B) 35 3 --
Accrued expenses 51 42 30
------------------------------------------------
361 100 60
------------------------------------------------
NET ASSETS at value $ 160,807 $ 44,320 $ 11,495
------------------------------------------------
NET ASSETS consist of:
Par value $ 161 $ 4 $ 1
Paid-in capital in excess of par value 160,747 44,568 11,792
Accumulated net realized losses on
investment (101) (1,110) (346)
Net unrealized appreciation in value of
investment -- 858 48
------------------------------------------------
NET ASSETS at value $ 160,807 $ 44,320 $ 11,495
------------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 160,908 4,092 1,149
------------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $1.00 $10.83 $10.01
------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
STATEMENTS OF OPERATIONS
Neuberger&Berman For the Year Ended October 31, 1995
- ----------------------------------------------------------------------
Income Funds
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL MUNICIPAL INSURED
MONEY SECURITIES INTERMEDIATE
(000'S OMITTED) FUND TRUST FUND
------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $ 5,971 $ 2,249 $ 561
------------------------------------------
Expenses:
Administration fee (Note B) 393 114 29
Amortization of deferred organization and
initial offering expenses (Note A) -- -- 8
Auditing fees 8 8 8
Custodian fees 10 10 10
Legal fees 3 4 8
Registration and filing fees 20 28 --
Service fees (Note B) 15 4 1
Shareholder reports 16 19 36
Shareholder servicing agent fees 32 30 4
Trustees' fees and expenses 16 8 6
Miscellaneous 1 3 1
Expenses from corresponding Portfolio (Note
A) 553 204 98
------------------------------------------
Total expenses 1,067 432 209
Deduct -- expenses reimbursed by
administrator (Note B) -- (145) (134)
------------------------------------------
Total net expenses 1,067 287 75
------------------------------------------
Net investment income 4,904 1,962 486
------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FINANCIAL FUTURES CONTRACTS FROM CORRESPONDING
PORTFOLIO (NOTE A)
Net realized loss on investments (25) (305) (95)
Net realized loss on financial futures
contracts -- (372) --
Change in net unrealized appreciation
(depreciation) of investments -- 2,886 938
------------------------------------------
Net gain (loss) on investments and
financial futures contracts from
corresponding Portfolio (Note A) (25) 2,209 843
------------------------------------------
Net increase in net assets resulting from
operations $ 4,879 $ 4,171 $ 1,329
------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Neuberger&Berman
- ----------------------------------------------------------------------
Income Funds
<TABLE>
<CAPTION>
MUNICIPAL
MONEY
FUND
Year
Ended
October 31,
(000'S OMITTED) 1995 1994
--------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 4,904 $ 3,332
Net realized gain (loss) on
investments sold and financial
futures contracts from
corresponding Portfolio (Note A) (25) 5
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) -- --
--------------------------
Net increase (decrease) in net
assets resulting from operations 4,879 3,337
--------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (4,904) (3,332)
Net realized gain on investments -- --
Excess of net realized gain on
investments -- --
--------------------------
Total distributions to shareholders (4,904) (3,332)
--------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 219,086 192,425
Proceeds from reinvestment of
dividends and distributions 4,853 3,312
Payments for shares redeemed (213,408) (227,037)
--------------------------
Net increase (decrease) from Trust
share transactions 10,531 (31,300)
--------------------------
NET INCREASE (DECREASE) IN NET ASSETS 10,506 (31,295)
NET ASSETS:
Beginning of year 150,301 181,596
--------------------------
End of year $ 160,807 $ 150,301
--------------------------
NUMBER OF TRUST SHARES:
Sold 219,086 192,425
Issued on reinvestment of dividends
and distributions 4,853 3,312
Redeemed (213,408) (227,037)
--------------------------
Net increase (decrease) in shares
outstanding 10,531 (31,300)
--------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
- ----------------------------------------------------------------------
Income Funds
<TABLE>
<CAPTION>
NEW YORK INSURED
INTERMEDIATE
FUND
MUNICIPAL
SECURITIES Period from
TRUST February 1,
1994
(Commencement
of
Year Year Operations)
Ended Ended to
October 31, October 31, October 31,
1995 1994 1995 1994
---------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 1,962 $ 3,452 $ 486 $ 465
Net realized gain (loss) on
investments sold and financial
futures contracts from
corresponding Portfolio (Note A) (677) (433) (95) (251)
Change in net unrealized
appreciation (depreciation) of
investments from corresponding
Portfolio (Note A) 2,886 (4,761) 938 (890)
---------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 4,171 (1,742) 1,329 (676)
---------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,962) (3,452) (486) (465)
Net realized gain on investments -- (1,152) -- --
Excess of net realized gain on
investments -- (93) -- --
---------------------------------------------------------
Total distributions to shareholders (1,962) (4,697) (486) (465)
---------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 9,877 61,454 4,195 23,595
Proceeds from reinvestment of
dividends and distributions 1,227 1,701 190 76
Payments for shares redeemed (20,106) (110,849) (8,459) (7,804)
---------------------------------------------------------
Net increase (decrease) from Trust
share transactions (9,002) (47,694) (4,074) 15,867
---------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (6,793) (54,133) (3,231) 14,726
NET ASSETS:
Beginning of year 51,113 105,246 14,726 --
---------------------------------------------------------
End of year $ 44,320 $ 51,113 $ 11,495 $ 14,726
---------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 947 5,677 437 2,401
Issued on reinvestment of dividends
and distributions 117 158 20 8
Redeemed (1,956) (10,320) (900) (817)
---------------------------------------------------------
Net increase (decrease) in shares
outstanding (892) (4,485) (443) 1,592
---------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger&Berman October 31, 1995
- ----------------------------------------------------------------------
Income Funds
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Municipal Money Fund ("Municipal Money"),
Neuberger&Berman Municipal Securities Trust ("Municipal Securities Trust"),
and Neuberger&Berman New York Insured Intermediate Fund ("New York Insured
Intermediate") (collectively, the "Funds") are separate series of
Neuberger&Berman Income Funds (the "Trust"), a Delaware business trust
organized pursuant to a Trust Instrument dated December 23, 1992. The Trust
is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and its shares
are registered under the Securities Act of 1933, as amended (the "1933 Act").
New York Insured Intermediate had no operations until February 1, 1994 other
than matters relating to its organization and registration as an open-end
management investment company under the 1940 Act, and registration of its
shares under the 1933 Act and state law. The trustees of the Trust may
establish additional series or classes of shares without the approval of
shareholders.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
Each Fund seeks to achieve its investment objective by investing all of
its net investable assets in its corresponding Portfolio of Income Managers
Trust (the "Portfolio") having the same investment objective and policies as
the Fund. The value of each Fund's investment in its corresponding Portfolio
reflects that Fund's proportionate interest in the net assets of that
Portfolio (100% for each Fund at October 31, 1995). The performance of each
Fund is directly affected by the performance of its corresponding Portfolio.
The financial statements of each Portfolio, including the schedule of
investments, are included elsewhere in this report and should be read in
conjunction with each Fund's financial statements.
It is the policy of Municipal Money to maintain a continuous net asset
value per share of $1.00; the Fund has adopted certain investment, valuation,
and dividend and distribution policies, which conform to general industry
practice, to enable it to do so. However, there is no assurance the Fund will
be able to maintain a stable net asset value per share.
2) PORTFOLIO VALUATION: Investments in each Portfolio of Income Managers Trust
are valued by Income Managers Trust as indicated in the notes following the
Portfolios' schedule of investments.
3) FEDERAL INCOME TAXES: Each series of the Trust is treated as a separate
entity for Federal income tax purposes. It is the policy of each Fund of the
Trust to continue
16
<PAGE>
to qualify as a regulated investment company by complying with the provisions
available to certain investment companies, as defined in applicable sections
of the Internal Revenue Code, and to make distributions of taxable income
(after reduction for any amounts available for Federal income tax purposes as
capital loss carryforwards) sufficient to relieve it from all, or
substantially all, Federal income taxes. Accordingly, each Fund paid no
Federal income taxes and no provision for Federal income taxes was required.
4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Each Fund earns income, net
of Portfolio expenses, daily on its investment in its corresponding
Portfolio. It is the policy of each Fund to declare dividends from net
investment income on each business day; such dividends are paid monthly.
Distributions from net realized capital gains, if any, will be declared and
paid annually after the end of the fiscal year. To the extent that each
Fund's net realized capital gains, if any, can be offset by capital loss
carryforwards ($75,365 and $25,578 expiring in 1997 and 2003, respectively,
for Municipal Money, $433,301 and $676,750 expiring in 2002 and 2003,
respectively, for Municipal Securities Trust, and $240,090 and $94,248
expiring in 2002 and 2003, respectively, for New York Insured Intermediate,
determined as of October 31, 1995), it is the policy of each Fund not to
distribute such gains.
Each Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains.
5) ORGANIZATION EXPENSES: Expenses incurred by New York Insured
Intermediate in connection with its organization are being amortized on a
straight-line basis over a five-year period. At October 31, 1995, the
unamortized balance of such expenses amounted to $25,884.
6) EXPENSE ALLOCATION: The Funds bear all costs of operations. Expenses incurred
by the Trust with respect to any two or more Funds are allocated in
proportion to the net assets of such Funds, except where another more
appropriate allocation of expenses to each Fund can otherwise be made fairly.
Expenses directly attributable to a Fund are charged to that Fund.
7) OTHER: All net investment income and realized and unrealized capital gains
and losses of each Portfolio are allocated pro rata among its respective
Funds and any other investors in the Portfolio.
17
<PAGE>
NOTE B -- ADMINISTRATION AND DISTRIBUTION FEES AND OTHER TRANSACTIONS
WITH AFFILIATES:
Each Fund retains Neuberger&Berman Management Incorporated ("Management") as
its administrator under an Administration Agreement ("Agreement") dated as of
May 1, 1995. Pursuant to this Agreement each Fund pays Management an
administration fee at the annual rate of .27% (.25% prior to May 1, 1995) of
that Fund's average daily net assets and indirectly pays for investment
management services through its investment in its corresponding Portfolio. (See
Note B of Notes to Financial Statements of the Portfolios.) The Agreement
provides that if with respect to any fiscal year of each Fund, its total
operating expenses plus its pro rata portion of its corresponding Portfolio's
operating expenses (including the fees payable to Management but excluding
interest, taxes, brokerage commissions, and extraordinary expenses) ("Operating
Expenses") exceed the most restrictive of the expense limitations imposed by
securities laws of the states in which such Fund's shares are qualified for
sale, the administration fees for that fiscal year will be reduced by the amount
of such excess, provided that Management has no obligation to reimburse the Fund
for any such expenses that exceed the administration fee. The most restrictive
expense limitation to which Municipal Money and Municipal Securities Trust are
currently subject is 2 1/2% of the first $30 million of average daily net
assets, 2% of the next $70 million of average daily net assets, and 1 1/2% of
any additional average daily net assets. No reduction in the administration fee
as a result of any state expense limitation was required for the year ended
October 31, 1995.
In addition, Management has voluntarily undertaken to reimburse Municipal
Securities Trust and New York Insured Intermediate for their Operating Expenses
which exceed, in the aggregate, .65% per annum of their average daily net assets
(the "Expense Limitation"). This undertaking is subject to termination by
Management upon at least sixty (60) days' prior written notice for Municipal
Securities Trust, and after February 29, 1996 for New York Insured Intermediate.
For the year ended October 31, 1995, such excess expenses amounted to $145,086
and $134,192 for Municipal Securities Trust and New York Insured Intermediate,
respectively. New York Insured Intermediate has agreed to repay Management
through October 31, 1998, for its excess Operating Expenses previously
reimbursed by Management, so long as its annual Operating Expenses during that
period do not exceed the Expense Limitation.
All of the capital stock of Management is owned by individuals who are also
general partners of Neuberger&Berman, L.P. ("Neuberger"), a member firm of The
New York Stock Exchange and the sub-adviser to each Portfolio. Several
individuals who are officers and/or trustees of the Trust are also partners of
Neuberger and/or officers and/or directors of Management.
Under a service agreement, which was in effect through April 30, 1995, each
Fund had retained Management to provide certain shareholder, shareholder-related
18
<PAGE>
and other services not furnished by the shareholder servicing agent. Pursuant to
the service agreement each Fund paid Management a monthly fee at the annual rate
of .02% of the average daily net assets of the Fund as compensation for such
services. For the period from November 1, 1994 to April 30, 1995, Municipal
Money, Municipal Securities Trust, and New York Insured Intermediate paid
$15,415, $4,376, and $1,226, respectively, for such services. As of May 1, 1995,
the service agreement and the administration agreement were combined into a
single agreement with a fee of .27%.
Each Fund also has a distribution agreement with Management, which receives
no compensation therefor and no commissions for sales or redemptions of shares
of beneficial interest of each Fund.
NOTE C -- INVESTMENT TRANSACTIONS:
During the year ended October 31, 1995, additions and reductions in each
Fund's investment in its corresponding Portfolio were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
------------ ------------
<S> <C> <C>
MUNICIPAL MONEY $195,151,132 $189,912,854
MUNICIPAL SECURITIES TRUST 6,874,507 18,070,520
NEW YORK INSURED INTERMEDIATE 3,850,529 8,400,339
</TABLE>
19
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Fund
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1995(1) 1994(1) 1993(1) 1992 1991 1990 1989 1988 1987 1986
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ .9995 $ .9996 $ .9995 $ .9989 $ .9989 $ .9989 $ .9993 $ .9995 $ 1.0000 $ 1.0000
-----------------------------------------------------------------------------------------------------------
Income From
Investment
Operations
Net Investment
Income .0324 .0204 .0184 .0263 .0432 .0539 .0591 .0478 .0388 .0447
Net Gains or
Losses on
Securities (.0001) (.0001) .0001 .0006 -- -- (.0004) (.0002) (.0005) --
-----------------------------------------------------------------------------------------------------------
Total From
Investment
Operations .0323 .0203 .0185 .0269 .0432 .0539 .0587 .0476 .0383 .0447
-----------------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from
net investment
income) (.0324) (.0204) (.0184) (.0263) (.0432) (.0539) (.0591) (.0478) (.0388) (.0447)
-----------------------------------------------------------------------------------------------------------
Net Asset Value, End
of Year $ .9994 $ .9995 $ .9996 $ .9995 $ .9989 $ .9989 $ .9989 $ .9993 $ .9995 $ 1.0000
-----------------------------------------------------------------------------------------------------------
Total Return+ +3.29% +2.06% +1.86% +2.66% +4.40% +5.53% +6.07% +4.89% +3.95% +4.56%
-----------------------------------------------------------------------------------------------------------
Ratios/Supplemental
Data
Net Assets, End
of Year (in
millions) $ 160.9 $ 150.3 $ 181.6 $ 195.6 $ 173.9 $ 190.6 $ 204.8 $ 184.5 $ 226.1 $ 231.4
-----------------------------------------------------------------------------------------------------------
Ratio of
Expenses to
Average Net
Assets .71% .73% .74% .67% .66% .67% .74% .69% .71% .72%
-----------------------------------------------------------------------------------------------------------
Ratio of Net
Investment
Income to
Average Net
Assets 3.24% 2.02% 1.85% 2.63% 4.34% 5.41% 5.91% 4.76% 3.90% 4.29%
-----------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
20
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Securities Trust
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
PERIOD FROM
JULY 9,
1987(2)
TO OCTOBER
YEAR ENDED OCTOBER 31, 31,
1995(1) 1994(1) 1993(1) 1992 1991 1990 1989 1988 1987
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 10.26 $ 11.12 $ 10.53 $ 10.39 $ 10.14 $ 10.09 $ 10.08 $ 9.73 $ 10.00
---------------------------------------------------------------------------------------------------
Income From
Investment
Operations
Net Investment
Income .47 .46 .48 .54 .58 .64 .63 .59 .15
Net Gains or
Losses on
Securities
(both realized
and unrealized) .57 (.73) .68 .14 .25 .05 .01 .35 (.27)
---------------------------------------------------------------------------------------------------
Total From
Investment
Operations 1.04 (.27) 1.16 .68 .83 .69 .64 .94 (.12)
---------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from
net investment
income) (.47) (.46) (.48) (.54) (.58) (.64) (.63) (.59) (.15)
Distributions
(from capital
gains) -- (.12) (.09) -- -- -- -- -- --
Distributions
(in excess of
capital gains) -- (.01) -- -- -- -- -- -- --
---------------------------------------------------------------------------------------------------
Total
Distributions (.47) (.59) (.57) (.54) (.58) (.64) (.63) (.59) (.15)
---------------------------------------------------------------------------------------------------
Net Asset Value, End
of Year $ 10.83 $ 10.26 $ 11.12 $ 10.53 $ 10.39 $ 10.14 $ 10.09 $ 10.08 $ 9.73
---------------------------------------------------------------------------------------------------
Total Return+ +10.35% -2.57% +11.30% +6.72% +8.41% +6.99% +6.55% +9.88% -1.15%(3)
---------------------------------------------------------------------------------------------------
Ratios/Supplemental
Data
Net Assets, End
of Year (in
millions) $ 44.3 $ 51.1 $ 105.2 $ 37.0 $ 25.5 $ 14.1 $ 10.5 $ 9.8 $ 6.7
---------------------------------------------------------------------------------------------------
Ratio of
Expenses to
Average Net
Assets(4) .65% .65% .62% .50% .50% .50% .50% .50% .50%(5)
---------------------------------------------------------------------------------------------------
Ratio of Net
Investment
Income to
Average Net
Assets(4) 4.45% 4.24% 4.33% 5.16% 5.61% 6.28% 6.26% 5.90% 5.29%(5)
---------------------------------------------------------------------------------------------------
Portfolio
Turnover
Rate(6) -- -- 35% 46% 10% 42% 17% 23% 0%
---------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
21
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
New York Insured Intermediate Fund
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of its corresponding
Portfolio's income and expenses. It should be read in conjunction with its
corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED FEBRUARY 1, 1994(2)
OCTOBER 31, 1995 TO OCTOBER 31, 1994
------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Year $ 9.25 $ 10.00
------------------------------------------
Income From Investment Operations
Net Investment Income .41 .29
Net Gains or Losses on Securities (both realized and unrealized) .76 (.75)
------------------------------------------
Total From Investment Operations 1.17 (.46)
------------------------------------------
Less Distributions
Dividends (from net investment income) (.41) (.29)
------------------------------------------
Net Asset Value, End of Year $ 10.01 $ 9.25
------------------------------------------
Total Return+ +12.88% -4.63%(3)
------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 11.5 $ 14.7
------------------------------------------
Ratio of Expenses to Average Net Assets(4) .66% .65%(5)
------------------------------------------
Ratio of Net Investment Income to Average Net Assets(4) 4.24% 4.10%(5)
------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
22
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger&Berman October 31, 1995
- ----------------------------------------------------------------------
Income Funds
1)The per share amounts and ratios which are shown reflect income and expenses,
including each Fund's proportionate share of its corresponding Portfolio's
income and expenses.
2)The date investment operations commenced.
3)Not annualized.
4)After reimbursement of expenses by the administrator as described in Note B of
Notes to Financial Statements. Had the administrator not undertaken such
action the annualized ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
PERIOD FROM JULY
YEAR ENDED OCTOBER 31, 9, 1987 TO
MUNICIPAL SECURITIES TRUST 1995 1994 1993 1992 1991 1990 1989 1988 OCTOBER 31, 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------- ------- ------- ------- ------- ------- ------- ------- ---
Expenses .98% .82% 1.04% 1.16% 1.38% 1.67% 2.50% 2.00% 1.50%
------- ------- ------- ------- ------- ------- ------- ------- ---
Net Investment Income 4.12% 4.07% 3.91% 4.50% 4.73% 5.11% 4.26% 4.40% 4.29%
------- ------- ------- ------- ------- ------- ------- ------- ---
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED FEBRUARY 1, 1994
NEW YORK INSURED INTERMEDIATE OCTOBER 31, 1995 TO OCTOBER 31, 1994
<S> <C> <C>
--- ---
Expenses 1.83% 1.53%
--- ---
Net Investment Income 3.07% 3.22%
--- ---
</TABLE>
5)Annualized.
6)The Fund transferred all of its investment securities into Neuberger&Berman
Municipal Securities Portfolio on July 2, 1993. After that date the Fund
invested only in Neuberger&Berman Municipal Securities Portfolio and that
Portfolio, rather than the Fund, engaged in securities transactions.
Therefore, after that date the Fund had no portfolio turnover rate. Portfolio
turnover rates for periods ending after July 2, 1993 are included elsewhere in
Neuberger&Berman Municipal Securities Portfolio's Financial Highlights.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of each Fund during each year
and assumes dividends and capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results.
Investment returns and principal may fluctuate and shares when redeemed may be
worth more or less than original cost. For Municipal Securities Trust and New
York Insured Intermediate, total return would have been lower if Management
had not reimbursed certain expenses.
23
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees of
Neuberger&Berman Income Funds and
Shareholders of:
Neuberger&Berman Municipal Money Fund
Neuberger&Berman Municipal Securities Trust and
Neuberger&Berman New York Insured Intermediate Fund
We have audited the accompanying statements of assets and liabilities of the
Neuberger&Berman Municipal Money Fund, Neuberger&Berman Municipal Securities
Trust, and Neuberger&Berman New York Insured Intermediate Fund, three of the
series comprising Neuberger&Berman Income Funds (the "Trust"), as of October 31,
1995, and the related statements of operations for the year then ended, the
statements of changes in net assets and financial highlights for each of the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above mentioned series of Neuberger&Berman Income Funds at October 31,
1995, the results of their operations for the year then ended, the changes in
their net assets and financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting principles.
[SIGNATURE]
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
December 1, 1995
24
<PAGE>
(This page left blank intentionally.)
25
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Portfolio
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
TAX-EXEMPT
SECURITIES -- PRE-REFUNDED
BACKED BY U.S. GOVERNMENT
SECURITIES (5.9%)
2,500 Cobb Co. (GA) Wtr. & Swr. Ref.
& Imp. Rev., Ser. 1985, 9.50%,
due 7/1/08 P/R 7/1/96 Aaa AAA $ 2,641
1,000 Commonwealth of Massachusetts
Ref. G.O., Ser. 1986 A,
7.125%, due 10/1/05 P/R
10/1/96 Aaa 1,048
1,150 Minnesota Ref. G.O., 7.00%,
due 8/1/99 P/R 8/1/96 Aaa 1,176
2,000 Palm Beach Co. (FL) Solid
Waste Au. Imp. Ref. Rev., Ser.
1985, 10.00%, due 12/1/05 P/R
12/1/95 Aaa AAA 2,049
1,000 Tacoma (WA) Elec. Sys. Ref.
Rev. (Dept. of Pub. Util.,
Light Div.), Ser. 1985,
9.375%, due 1/1/15 P/R 1/1/96 Aaa A+ 1,027
1,500 Washington Ref. G.O., Ser.
1986 D, 8.00%, due 9/1/06 P/R
9/1/96 Aaa AAA 1,551
-------------
9,492
-------------
MUNICIPAL NOTES (8.4%)
1,000 Dekalb Co. (GA) TANS, 5.00%,
due 12/29/95 MIG-1 SP-1+ 1,001
2,000 Milwaukee (WI) RANS, Ser. A,
5.50%, due 2/22/96 MIG-1 SP-1+ 2,005
1,000 Summit Co. (OH) Var. Purp.
Limited Tax G.O. BANS, Ser.
1995 A, 5.00%, due 3/7/96 MIG-1 SP-1 1,001
1,000 University of Cincinnati (OH)
BANS, Ser. K-1, 5.00%, due
3/21/96 MIG-1 SP-1+ 1,001
1,500 Dane Co. (WI) G.O. Notes, Ser.
1995 A, 5.75%, due 5/1/96 Aaa 1,510
1,000 Michigan Muni. Bond Au. Rev.
Notes, Ser. 1995 A, 5.00%, due
5/3/96 SP-1+ 1,004
1,010 Commonwealth of Massachusetts
G.O., Ser. 1995 A, 4.25%, due
6/12/96 MIG-1 SP-1 1,012
1,000 Michigan Muni. Bond Au. Rev.
Notes, Ser. B, 4.50%, due
7/3/96 SP-1+ 1,005
2,000 Texas TRANS, Ser. A, 4.75%,
due 8/30/96 MIG-1 SP-1+ 2,011
2,000 Palm Beach (FL) Sch. Dist.
TANS, 4.50%, due 9/27/96 SP-1+ 2,011
-------------
13,561
-------------
</TABLE>
26
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
TAX-EXEMPT
SECURITIES -- BACKED BY
INSURANCE (1.2%)
FINANCIAL GUARANTY INSURANCE CO.
$ 2,000 Connecticut Spec. Assessment
Unemployment Comp. Adv. Fund
Rev., Ser. 1993 C, 3.90%, due
11/15/01 Putable 7/1/96 VMIG-1 A-1+ $ 2,000
-------------
TAX-EXEMPT
SECURITIES -- BACKED BY
LETTERS OF CREDIT (1.0%)
MORGAN GUARANTY TRUST CO.
1,600 Chicago (IL) G.O. Notes, Ser.
1995 A, 3.75%, due 5/1/96 VMIG-1 A-1+ 1,600
-------------
TAX-EXEMPT
SECURITIES -- OTHER (3.9%)
2,000 Board of Regents of the Univ.
of Texas Sys. Perm. Univ. Fund
Ref. Rev., Ser. 1988, 6.60%,
due 7/1/96 Aaa AA+ 2,036
1,000 Maryland CDA Dept. of Hsg. &
Comm. Dev. (Single-Family
Prog.), 9th Ser. 1994, 5.375%,
due 4/1/19 Putable 11/29/95 VMIG-1 1,000
1,750 Minneapolis (MN) G.O. Tax
Anticipation Cert. (Sch. Dist.
#1, Minnesota Sch. Dist.
Credit Enhancement Prog.),
Ser. 1995, 5.75%, due 1/25/96 MIG-1 SP-1+ 1,753
1,000 Shelby Co. (TN) Ref. G.O.,
Ser. 1992 A, 4.90%, due 3/1/96 Aa AA+ 1,002
500 St. Paul (MN) Ind. Sch. Dist.
625 G.O. Tax Anticipation
Cert. (Minnesota Sch. Dist.
Credit Enhancement Proj.),
Ser. 1995 A, 5.375%, due
3/28/96 MIG-1 502
-------------
6,293
-------------
TAX-EXEMPT CASH EQUIVALENT
SECURITIES (14.9%)
2,000 Becker (MN) PCR (Northern
States Pwr. Co. -- Sherburne
Co. Generating Sta. Unit #3
Proj.), Ser. 1993 A, 3.70%,
TECP due 12/7/95 VMIG-1 A-1+ 2,000
1,200 Butler Co. (KS) Solid Waste
Disp. Fac. Rev. (Texaco
Refining & Mktg. Inc. Proj.),
Ser. A, 4.10%, VRDN due 8/1/24 VMIG-1 A-1 1,200
1,500 Carlton (WI) PCR (Wisconsin
Pwr. & Light Co. Proj.), Ser.
1988, 4.10%, VRDN due 8/1/15 P-1 AA 1,500
</TABLE>
27
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 100 Decatur (AL) IDB Solid Waste
Disp. Rev. (Amoco Chemical Co.
Proj.), 4.05%, VRDN due 5/1/25 VMIG-1 A-1+ $ 100
2,900 Gulf Coast (TX) IDA Marine
Term. Rev. (Amoco Oil Co.
Proj.), Ser. 1993, 4.05%, VRDN
due 4/1/28 VMIG-1 A-1+ 2,900
3,900 Gulf Coast (TX) Waste Disp.
Au. Ref. Rev. (Amoco Oil Co.
Proj.), Ser. 1994, 4.05%, VRDN
due 8/1/23 VMIG-1 A-1+ 3,900
200 Harris Co. (TX) Ind. Dev.
Corp. PCR (Exxon Proj.), Ser.
1987, 4.05%, VRDN due 8/15/27 A-1+ 200
400 Hillsborough Co. (FL) IDA PCR
(Tampa Elec. Co. Proj.), Ser.
1993, 4.00%, VRDN due 11/1/20 VMIG-1 A-1+ 400
1,800 Lincoln Co. (WY) PCR (Exxon
Proj.), Ser. 1985 & 1987 B,
3.90% & 4.10%, VRDN due 8/1/15
& 7/1/17 Aaa A-1+ 1,800
1,200 Jackson Co. (MS) Ind. Sewage
Fac. Rev. (Chevron U.S.A. Inc.
Proj.), Ser. 1994, 4.05%, VRDN
due 12/15/24 P-1 1,200
800 Minneapolis (MN) Comm. Dev.
Agcy. Ref. PCR (Northern
States Pwr. Co. Proj.), Ser.
1985, 4.00%, VRDN due 3/1/11 P-1 A-1+ 800
2,100 Oak Creek (WI) PCR (Wisconsin
Elec. Pwr. Co. Proj.), Ser.
1986, 4.00%, VRDN due 8/1/16 P-1 AA 2,100
3,900 Southwestern (IL) Dev. Au.
Solid Waste Disp. Rev. (Shell
Oil Co. Wood River Proj.),
Ser. 1991 & 1992, 4.05%, VRDN
due 8/1/21 & 4/1/22 VMIG-1 A-1+ 3,900
2,000 Texas Pub. Fin. Au. Rev., Ser.
B, 3.75%, TECP due 11/2/95 P-1 A-1+ 2,000
-------------
24,000
-------------
TAX-EXEMPT CASH EQUIVALENT
SECURITIES -- BACKED BY
LETTERS OF CREDIT (65.4%)
ABN -- AMRO BANK
1,600 Phenix Co. (AL) IDB Env. Imp.
Rev. (Mead Coated Board
Proj.), 3.80%, TECP due
11/28/95 P-1 1,600
900 Prince George's Co. (MD) Ref.
Rev. (Frank Parsons Paper Co.,
Inc. Fac.), Ser. 1987, 3.85%,
VRDN due 1/1/13 P-1 A-1+ 900
</TABLE>
28
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
BANK OF AMERICA
$ 500 California Hlth. Fac. Au.
Hosp. Rev. (N.T. Enloe Mem.
Hosp.), Ser. 1985 A, 3.65%,
VRDN due 1/1/16 A-1+ $ 500
1,300 Coconino Co. (AZ) Poll. Ctrl.
Corp. PCR (Arizona Pub. Svc.
Co. Navajo Proj.), Ser. 1994
A, 4.10%, VRDN due 10/1/29 P-1 A-1+ 1,300
1,000 Maricopa Co. (AZ) PCR (Arizona
Pub. Svc. Co. Palo Verde
Proj.), Ser. 1994 E, 3.95%,
VRDN due 5/1/29 P-1 A-1+ 1,000
BANQUE INDOSUEZ-FRANCE
300 Brunswick & Glynn Cos. (GA)
Dev. Au. (Jekyll Dev. Assoc.,
L.P. Proj.), Ser. 1985, 3.95%,
VRDN due 12/1/15 VMIG-1 A-1 300
BANQUE PARIBAS
900 Dade Co. (FL) Solid Waste IDR
(Montenay-Dade, Ltd. Proj.),
Ser. 1989 & 1990 A, 4.15%,
VRDN due 12/1/10 & 12/1/13 VMIG-1 A-1 900
600 Robbinsdale (MN) IDR (Unicare
Homes Inc. Proj.), Ser. 1984,
4.00%, VRDN due 10/1/14 A-1 600
BARCLAYS BANK INT'L., LTD.
4,700 Florida HFA Hsg. Rev. (Ashley
Lake Park II Proj.), Ser. 1989
J, 4.00%, VRDN due 12/1/11 VMIG-1 AA 4,700
CANADIAN IMPERIAL BANK OF COMMERCE
2,000 Albuquerque (NM) Gross
Receipts/Lodgers' Tax Ref.
Rev., Ser. 1991 A, 3.95%, VRDN
due 7/1/22 VMIG-1 A-1+ 2,000
2,595 Memphis (TN) Arpt. Au. Rev.
(Shelby Co. Arpt.), 3.90% &
3.95%, TECP due 12/8/95 &
2/7/96 P-1 A-1 2,595
1,925 Rhode Island Port Au. Econ.
Dev. Corp. Elec. Energy Fac.
Ref. Rev. (Newport Elec. Corp.
Proj.), Ser. 1994, 3.95%, VRDN
due 9/1/11 VMIG-1 A-1+ 1,925
COMMERZ BANK
3,100 Houston (TX) Arpt. Sys. Rev.,
Ser. A, 3.75% & 3.80%, TECP
due 1/16/96 & 1/17/96 P-1 A-1+ 3,100
COMMONWEALTH BANK OF AUSTRALIA
1,000 Pendleton Co. (KY) Lease Rev.
(Kentucky Assoc. of Cos.
Leasing Trust Prog.), Ser.
1989, 3.90%, TECP due 11/7/95 A-1+ 1,000
</TABLE>
29
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
CREDIT COMMERCIAL DE FRANCE
$ 450 Elkhart Co. (IN) Econ. Dev.
Rev. (Pace Amer. Inc. Proj.),
4.25%, VRDN due 1/1/13 VMIG-1 $ 450
300 Indiana Emp. Dev. Comm. Econ.
Dev. Rev. (Metal Svcs. &
Supply Inc.), 4.25%, VRDN due
1/1/13 VMIG-1 300
500 Indiana Emp. Dev. Comm. Econ.
Dev. Rev. (Mobel Proj.), Ser.
1988, 4.25%, VRDN due 1/1/14 VMIG-1 500
50 Indiana Emp. Dev. Comm. Econ.
Dev. Rev. (Southern Indiana
Rehabilitation Svc. Inc.),
4.25%, VRDN due 1/1/14 VMIG-1 50
170 Indiana Emp. Dev. Comm. Econ.
Dev. Rev. (Triangle Ventures),
Ser. 1988, 4.25%, VRDN due
1/1/14 VMIG-1 170
600 Mississippi Bus. Fin. Corp.
IDR (Air Cruisers Co., Inc.
Proj.), Ser. 1989 C, 4.10%,
VRDN due 10/1/04 P-1 600
200 South Carolina Jobs Econ. Dev.
Au. (Brown Packing Inc.), Ser.
1988 B, 4.20%, VRDN due 4/1/99 VMIG-1 200
300 South Carolina Jobs Econ. Dev.
Au. (Kent Mfg. Proj.), Ser.
1988 A, 4.10%, VRDN due 4/7/99 VMIG-1 300
50 South Carolina Jobs Econ. Dev.
Au. (Mar-Mac Mfg. Co.), Ser.
1988 A, 4.20%, VRDN due 4/7/99 VMIG-1 50
350 South Carolina Jobs Econ. Dev.
Au. (Regal-Beloit Corp.), Ser.
1987 A, 4.10%, VRDN due 5/7/01 P-1 350
100 South Carolina Jobs Econ. Dev.
Au. (Sudan & Delta Prop.),
Ser. A, 4.20%, VRDN due 1/1/04 VMIG-1 100
450 South Carolina Jobs Econ. Dev.
Au. (Phoenix Finishing Proj.),
Ser. 1988 B, 4.20%, VRDN due
4/1/04 VMIG-1 450
700 South Carolina Jobs Econ. Dev.
Au. (Osmose Wood Preserving),
Ser. B, 4.10%, VRDN due
12/1/04 P-1 700
400 South Carolina Jobs Econ. Dev.
Au. (Edens 321 Partnership),
Ser. 1987 A, 4.20%, VRDN due
11/7/07 P-1 400
</TABLE>
30
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 600 South Carolina Jobs Econ. Dev.
Au. (Florence RHF Hsg. Inc.),
Ser. 1987 A, 4.00%, VRDN due
11/7/07 P-1 $ 600
CREDIT LOCAL DE FRANCE
2,000 South Carolina Jobs Econ. Dev.
Au. Hosp. Facs. Rev. (Baptist
Healthcare Sys.), 3.85%, VRDN
due 8/1/12 VMIG-1 A-1+ 2,000
CREDIT LYONNAIS
1,000 San Antonio (TX) Hsg. Fin.
Corp. Multi-Family Hsg. Rev.
(Braesview Apts. Proj.), Ser.
1990, 4.10%, VRDN due 11/1/20 A-1+ 1,000
CREDIT SUISSE BANK
1,200 Hubbard Co. (MN) Solid Waste
Disp. Rev. (Potlatch Corp.
Proj.), Ser. 1990, 4.05%, VRDN
due 8/1/14 A-1+ 1,200
500 Montgomery Co. (TX) Ind. Dev.
Corp. IDR (Tile Corp.), Ser.
1986 B, 4.10%, VRDN due
12/1/03 A-1+ 500
900 Salt Lake City (UT) Arpt.
Rev., Ser. 1994 A, 4.00%, VRDN
due 6/1/98 VMIG-1 A-1+ 900
1,000 Wake Co. (NC) Ind. Fac. &
Poll. Ctrl. Fin. Au. PCR
(Carolina Pwr. & Light Co.
Proj.), Ser. 1985 A, 3.85%,
VRDN due 5/1/15 P-1 A-1+ 1,000
600 Warren Co. (AR) Solid Waste
Disp. Rev. (Potlatch Corp.
Proj.), 4.05%, VRDN due 4/1/12 A-1+ 600
DEUTSCHE BANK
1,500 Gillette (WY) Ref. PCR
(PacifiCorp Proj.), 3.85%,
TECP due 11/6/95 P-1 A-1+ 1,500
2,600 New Hampshire IDA PCR
(Connecticut Light & Pwr. Co.
Proj.), Ser. 1986, 4.05%, VRDN
due 11/1/16 VMIG-1 2,600
200 Ohio Air Quality Dev. Au. (The
Mead Corp. Proj.), Ser. 1986
A, 3.80%, VRDN due 10/1/01 A-1+ 200
DOW CHEMICAL CORP.
1,360 Brazos (TX) River Harbor Ind.
Dev. Corp. (Dow Chemical Co.
Proj.), Ser. 1986, 3.85%, TECP
due 11/29/95 P-1 A-1 1,360
1,400 Brazos (TX) River Harbor
Navigation Dist. PCR (Brazoria
Co., Dow Chemical Co. Proj.),
Ser. 1988, 3.90%, TECP due
12/8/95 P-1 A-1 1,400
</TABLE>
31
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 800 Brazos (TX) River Harbor
Navigation Dist. Rev.
(Brazoria Co., Dow Chemical
Co. Proj.), Ser. 1993, 4.10%,
VRDN due 5/1/23 P-1 A-1 $ 800
1,700 Michigan Strategic Fund, Ser.
A-2, 3.75%, TECP due 12/6/95 P-1 A-1 1,700
2,000 Michigan Strategic Fund PCR
(Dow Chemical Co. Proj.), Ser.
1985 & 1988, 3.55% & 3.95%,
TECP due 11/6/95 & 2/6/96 P-1 A-1 2,000
500 New Jersey Econ. Dev. Au. (El
Dorado Term. Co. Proj.-Dow
Chemical Co., Lessee), Ser.
1984 A, 4.00%, VRDN due 5/1/01 P-1 A-1 500
100 West Baton Rouge Parish (LA)
Ind. Dist. #3 Rev. (Dow
Chemical Co. Proj.), 4.10%,
VRDN due 12/1/23 P-1 A-1 100
GENERAL ELECTRIC CAPITAL CORP.
2,100 Mt. Vernon (IN) Solid Waste
Disp. PCR (General Elec. Co.
Proj.), Ser. 1989, 3.70% &
3.90%, TECP due 12/8/95 &
2/9/96 P-1 A-1+ 2,100
HARRIS TRUST & SAVINGS
1,000 Illinois Dev. Fin. Au. IDR
(Grayhill Inc. Proj.), Ser. C,
4.10%, VRDN due 2/1/05 P-1 A-1+ 1,000
4,100 Indiana Dev. Fin. Au. Rev.
(Red Gold Inc. Proj.), Ser. A,
4.10%, VRDN due 6/30/09 A-1+ 4,100
LASALLE NATIONAL BANK
6,700 Village of Bolingbrook (IL)
Will & Dupage Cos.
Multi-Family Hsg. Redev. Rev.
(Amberton Apts.), Ser. 1994,
4.10%, VRDN due 11/1/19 A-1+ 6,700
MORGAN GUARANTY TRUST CO.
400 Charleston Co. (SC) Ind. Ref.
Rev. (Massey Coal Term., S.C.
Corp. Proj.), Ser. 1982,
3.95%, VRDN due 1/1/07 P-1 400
1,385 Daviess Co. (KY) Solid Waste
Disp. Fac. Rev. (Scott Paper
Co. Proj.), Ser. 1993 A,
4.05%, VRDN due 12/1/23 VMIG-1 A-1+ 1,385
1,100 New York Energy Res. & Dev.
Au. PCR (Niagara Mohawk Pwr.
Corp. Proj.), Ser. 1987 B,
3.95%, VRDN due 7/1/27 A-1+ 1,100
1,000 Port of Kalama (WA) Pub. Corp.
Port Fac. Rev. (ConAgra, Inc.
Proj.), 3.80%, VRDN due 1/1/04 A-1+ 1,000
</TABLE>
32
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 1,200 Southwest Higher Ed. Au. (TX)
Ref. Rev. (Southern Methodist
Univ. Proj.), Ser. 1985,
3.90%, VRDN due 7/1/15 VMIG-1 $ 1,200
NATIONAL WESTMINSTER BANK
2,000 Carbon Co. (PA) IDA Res. Rec.
Rev. (Panther Creek Partners
Proj.), Ser. A, 3.85%, TECP
due 11/8/95 P-1 A-1+ 2,000
3,200 Marion Co. Comm. (WV) Solid
Waste Disp. Fac. Rev. (Grant
Town Cogeneration Proj.), Ser.
1990 A-D, 4.05% & 4.10%, VRDN
due 10/1/17 VMIG-1 A-1+ 3,200
1,000 Rhode Island Std. Loan Au.
Std. Loan Prog. Rev., 1st Ser.
1995, 4.10%, VRDN due 7/1/19 A-1+ 1,000
1,075 Texas Small Bus. Ind. Dev.
Corp. (Texas Pub. Fac. Cap.
Access Prog.), Ser. 1986,
3.95%, VRDN due 7/1/26 VMIG-1 1,075
NORWEST BANK
800 New Ulm (MN) Hosp. Ref. Rev.
(Hlth. Central Sys. Proj.),
Ser. 1985, 3.85%, VRDN due
8/1/14 A-1+ 800
PNC BANK
400 Florida HFA Multi-Family Hsg.
Rev. (Falls of Venice Proj.),
Ser. E, 4.05%, VRDN due
12/1/11 P-1 A-1 400
ROYAL BANK OF CANADA
1,200 Lone Star (TX) Arpt. Imp. Au.,
Ser. A-3, 3.90%, VRDN due
12/1/14 VMIG-1 1,200
SOCIETE GENERALE
1,900 Chicago (IL) O'Hare Int'l.
Arpt. Spec. Fac. Rev.
(Compagnie Nationale Air
France Proj.), Ser. 1990,
4.05%, VRDN due 5/1/18 A-1+ 1,900
1,000 Illinois Toll Highway Au. Toll
Highway Ref. Rev., Ser. 1993
B, 3.85%, VRDN due 1/1/10 VMIG-1 A-1+ 1,000
100 Indianapolis (IN) Multi-Family
Ref. Rev. (Canal Square
Proj.), Ser. 1989, 3.85%, VRDN
due 12/1/15 VMIG-1 100
STUDENT LOAN MARKETING ASSOC.
200 Colorado Std. Oblig. Bond Au.
Std. Loan Rev., Ser. 1993 A,
3.85%, VRDN due 7/1/99 VMIG-1 A-1+ 200
300 Nebraska Higher Ed. Loan
Prog., Inc. Std. Loan Prog.
Rev., Ser. 1986 A, 4.00%, VRDN
due 12/1/16 A-1+ 300
</TABLE>
33
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 1,600 Panhandle Plains (TX) Higher
Ed. Au., Inc. Std. Loan Rev.,
Ser. 1995 A, 4.00%, VRDN due
6/1/25 VMIG-1 $ 1,600
2,000 Pennsylvania Higher Ed.
Assoc., Ser. 1988 B, 4.00%,
VRDN due 7/1/18 VMIG-1 A-1+ 2,000
SUN BANK
2,000 Orange Co. (FL) Hlth. Fac. Au.
Rev. (SHCC Svcs., Inc. Proj.),
Ser. 1992, 3.85%, VRDN due
12/1/23 VMIG-1 2,000
SWISS BANK CORP.
1,000 Brazos (TX) River Au. Ref. PCR
(Texas Util. Elec. Co. Proj.),
Ser. 1995 C, 4.05%, VRDN due
6/1/30 VMIG-1 A-1+ 1,000
900 Hapeville (GA) Dev. Au. IDR
(Hapeville Hotel Ltd.), 4.10%,
VRDN due 11/1/15 P-1 AA+ 900
1,200 Pennsylvania Energy Dev. Au.
Rev. (B & W Ebensburg Proj.),
Ser. 1986, 4.00%, VRDN due
12/1/11 VMIG-1 1,200
3,800 Port of Port Arthur (TX)
Navigation Dist. of Jefferson
Co. PCR (Star Enterprise
Proj.), Ser. 1994, 4.05%, VRDN
due 4/1/14 A-1+ 3,800
TORONTO DOMINION BANK
2,000 Clark Co. (NV) Arpt. Sys. Sub.
Lien Rev., Ser. 1995 A-1,
3.85%, VRDN due 7/1/25 VMIG-1 A-1+ 2,000
120 Wisconsin Hlth. Fac. Au.
(Franciscan Healthcare
Inc. -- Sys. Fin.), Ser.
1985 A-2, 3.80%, VRDN due
1/1/16 VMIG-1 A-1+ 120
TRUST CO. BANK-ATLANTA
2,000 Fulco (GA) Hosp. Au. (St.
Joseph's Hosp. of Atlanta
Proj.), Ser. 1989, 3.80%, TECP
due 1/17/96 VMIG-1 A-1 2,000
UNION BANK OF SWITZERLAND
1,705 Des Moines (IA) Comm. Dev.
Rev. (Capitol Center III
Proj.), Ser. 1985, 3.90%, VRDN
due 12/1/15 VMIG-1 1,705
200 Indiana Emp. Dev. Comm. Econ.
Dev. Rev. (K & F Ind. Inc.),
4.25%, VRDN due 1/1/14 VMIG-1 200
2,000 Missouri Env. Imp. & Energy
Res. Au. PCR (Union Elec.
Proj.), Ser. 1985 A, 3.80%,
TECP due 11/6/95 P-1 A-1+ 2,000
</TABLE>
34
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
Municipal Money Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 400 New Hampshire Ind. Dev. Au.
PCR (Connecticut Light & Pwr.
Co. Proj.), Ser. 1988, 4.05%,
VRDN due 8/1/18 A-1+ $ 400
1,700 Sunshine State (FL)
Governmental Fin. Comm. Rev.,
Ser. 1986, 3.80%, TECP due
12/5/95 VMIG-1 1,700
WEST DEUTSCHE LANDESBANK
2,500 Sweetwater Co. (WY) Env. Imp.
Rev. (PacifiCorp Proj.), Ser.
1990 A, 3.90%, TECP due
11/3/95 & 11/6/95 VMIG-1 A-1+ 2,500
WESTPAC BANKING CORP.
1,000 Chicago (IL) O'Hare Int'l.
Arpt. Fac. Rev. (Gen. Arpt.
2nd Lien), Ser. 1984 A, 4.05%,
VRDN due 1/1/15 VMIG-1 A-1 1,000
-------------
105,285
-------------
TAX-EXEMPT CASH EQUIVALENT
SECURITIES -- BACKED BY
INSURANCE (0.7%)
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
400 Sayre (PA) Healthcare Fac. Au.
(VHA of PA Inc., Cap. Asset
Fin. Prog.), Ser. 1985 A,
3.85%, VRDN due 12/1/20 Aaa A-1 400
FINANCIAL GUARANTY INSURANCE CO.
500 Pinellas Co. (FL) Healthcare
Fac. Au. Ref. Rev. (Bayfront
Med. Ctr. Inc. Proj.), 3.90%,
VRDN due 6/1/09 VMIG-1 A-1 500
MUNICIPAL BOND INVESTORS ASSURANCE CORP.
188 Clermont (OH) Hosp. Fac. Rev.
(Mercy Healthcare Sys.,
Province of Cincinnati), Ser.
1985 B, 3.80%, VRDN due
12/1/15 VMIG-1 A-1+ 188
-------------
1,088
-------------
TOTAL INVESTMENTS (101.4%) 163,319
Liabilities, less cash,
receivables and other assets
[(1.4%)] (2,225 )
-------------
TOTAL NET ASSETS (100.0%) $ 161,094
-------------
</TABLE>
35
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Securities Portfolio
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
TAX-EXEMPT
SECURITIES -- PRE-REFUNDED
BACKED BY U.S. GOVERNMENT
SECURITIES (5.1%)
$1,000 Harris Co. (TX) Toll Road
Rev., Ser. A, 6.50%, due
8/15/17 P/R 8/15/02 Aaa $ 1,127
1,000 Massachusetts Wtr. Res. Au.
Gen. Rev., Ser. 1992 A, 6.50%,
due 7/15/21 P/R 7/15/02 Aaa AAA 1,126
-------------
2,253
-------------
TAX-EXEMPT
SECURITIES -- BACKED BY
INSURANCE (28.5%)
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
1,000 Florida Dept. of Env.
Protection Preservation 2000
Rev., Ser. 1995 A, 5.50%, due
7/1/07 Aaa AAA 1,037
1,000 Harris Co. (TX) Toll Road Sr.
Lien Ref. Rev., Ser. 1994,
4.30%, due 8/15/00 Aaa AAA 996
1,000 New York City (NY) Muni.
Assist. Corp. Ref. Rev., Ser.
D, 5.25%, due 7/1/02 Aaa AAA 1,038
750 West Geauga (OH) Local Sch.
Dist. Unlimited Tax G.O., Ser.
1994, 5.25%, due 11/1/02 Aaa AAA 778
FINANCIAL GUARANTY INSURANCE CO.
1,000 Collier Co. (FL) Wtr. & Swr.
Dist. Ref. Rev., Ser. 1994 B,
5.25%, due 7/1/13 Aaa AAA 971
1,000 Dade Co. (FL) Wtr. & Swr. Sys.
Rev., 6.25%, due 10/1/06 Aaa 1,110
325 Metropolitan (DC) Arpts. Au.
Arpt. Sys. Rev., Ser. 1990 A,
6.90%, due 10/1/99 Aaa AAA 352
750 New York Dorm. Au. Ed. Fac.
Rev. (State Univ.), Ser. 1993
B, 5.20%, due 5/15/03 Aaa AAA 778
MUNICIPAL BOND INVESTORS ASSURANCE CORP.
1,000 Commonwealth of Pennsylvania
G.O., (Ref. & Projects), 2nd
Ser. 1994, 5.20%, due 6/15/04 Aaa AAA 1,029
1,000 Connecticut Special Tax Oblig.
Ref. Rev. (Trans.
Infrastructure Purp.), Ser.
1993 A, 5.40%, due 9/1/09 Aaa 1,008
</TABLE>
36
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
Municipal Securities Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 1,000 Nebraska Inv. Fin. Au. Hosp.
Rev. (Nebraska Methodist Hlth.
Sys., Inc.), Ser. 1991, 7.00%,
due 3/1/06 Aaa AAA $ 1,127
1,000 Puerto Rico Elec. Pwr. Au.
Pwr. Ref. Rev., Ser. W, 6.50%,
due 7/1/05 Aaa AAA 1,129
1,000 Rhode Island Clean Wtr.
Protection Fin. Agcy. PCR
(Revolving Fund Pooled Loan
Issue), Ser. 1993 A, 9.20%,
due 10/1/03 Aaa AAA 1,292
-------------
12,645
-------------
TAX-EXEMPT SECURITIES -- OTHER
(68.3%)
1,000 Baltimore Co. (MD) Metro.
Dist. G.O., 64th Issue, 4.25%,
due 8/1/02 Aaa AA+ 985
1,400 Big Stone Gap (VA) Redev. &
Hsg. Au. Correctional Fac.
Lease Rev. (Wallens Ridge Dev.
Proj.), Ser. 1995, 5.10%, due
9/1/00 Aa AA 1,438
1,060 Brownwood (TX) Independent
Sch. Dist. Unlimited Tax Sch.
Bldg. & Ref. G.O. (Brown Co.,
Texas), Ser. 1994, Zero
Coupon, Yielding 5.90% &
6.10%, due 2/15/02 & 2/15/04 Aaa 742
1,000 California Ed. Fac. Au. Rev.
(Univ. of So. Cal. Proj.),
Ser. 1989 B, 6.80%, due
10/1/99 Aa AA 1,093
750 Cincinnati (OH) Std. Loan
Funding Corp. Std. Loan Ref.
Rev., Ser. 1992 C, 6.10%, due
7/1/02 Aaa 791
1,000 Commonwealth of Massachusetts
Ref. G.O., Ser. 1995 A, 6.25%,
due 7/1/04 A1 A+ 1,100
500 Commonwealth of Virginia
Trans. Rev. (No. Virginia
Trans. Dist. Prog.), Ser. 1993
C, 4.60%, due 5/15/01 Aa AA 503
2,000 Georgia G.O., Ser. 1994 D &
1995 C, 6.80% & 7.25%, due
8/1/00 & 7/1/04 Aaa AA+ 2,289
1,970 Honolulu (HI) City & Co. G.O.,
Ser. 74, Zero Coupon, Yielding
5.95%, due 1/1/13 Aa 733
</TABLE>
37
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Municipal Securities Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 1,000 Jacksonville (FL) Elec. Au.
(St. John's River Pwr. Park
Sys.), 4th Crossover Ser.,
6.375%, due 10/1/99 Aa1 AA $ 1,076
1,500 Maryland Comm. Dev. Admin.
Dept. Hsg. & Comm. Dev. Rev.
(Single-Family Prog.), 3rd
Ser., 5.15%, due 4/1/08 Aa 1,474
500 Maryland Nat'l. Cap. Park &
Planning Comm. (Prince
George's Co.), Ser. J2, 6.90%,
due 7/1/99 Aa AA 544
1,000 Maryland St. & Local Fac. Loan
G.O., 2nd Ser. 1989 T, 6.40%,
due 7/15/98 Aaa AAA 1,060
400 Maryland St. & Local Fac. Loan
Imp. & Ref. G.O., 3rd Ser.
1990 W, 6.60%, due 7/15/00 Aaa AAA 439
1,300 Maryland Wtr. Quality Fin.
Admin. Ref. Rev. (Revolving
Loan Fund), Ser. 1995 A,
5.50%, due 9/1/11 Aa AA 1,306
1,000 Mecklenburg Co. (NC) Pub. Imp.
G.O., Ser. 1994, 5.50%, due
4/1/12 Aaa AAA 1,021
1,000 Minnesota Ref. G.O., 5.20%,
due 8/1/00 Aa1 AA+ 1,038
215 Mississippi Higher Ed. Assist.
Corp. Std. Loan Rev., Ser.
1993 C, 6.05%, due 9/1/07 A 222
150 Missouri Env. Imp. & Energy
Res. Au. Wtr. PCR (State
Revolving Fund Prog. -
Multiple Participant Series),
Ser. 1994 A, 4.70%, due 7/1/98 Aa 152
395 Nevada Hsg. Div. Single-Family
Prog. Ref. Rev. (Fed. Ins. or
Gtd. Mtge. Loans), Ser. 1993
R, 5.20%, due 4/1/01 A1 AA 399
500 New Jersey Bldg. Au. Rev.,
Ser. 1994, 5.00%, due 6/15/11 Aa AA- 476
750 New York City (NY) IDA Spec.
Fac. Rev. (Term One Group
Assoc., L.P. Proj.), Ser.
1994, 6.00%, due 1/1/15 A A 736
</TABLE>
38
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
Municipal Securities Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 1,000 New York Dorm. Au. Rev.
(Columbia Univ.), Ser. 1994 A,
4.00%, due 7/1/00 Aaa AA+ $ 987
1,000 Omaha (NE) Pub. Pwr. Dist.
Elec. Sys. Rev., Ser. 1993 E,
4.60%, due 2/1/06 Aa AA 970
500 Omaha (NE) Var. Purp. G.O.,
Ser. 1990, 7.00%, due 5/1/99 Aaa AAA 545
500 Phoenix (AZ) Waste Wtr. Sys.
Ref. Rev., Ser. 1993, 4.95%,
due 7/1/03 A1 AA 509
1,000 Platte River (CO) Pwr. Au.
Rev., Ser. AA, 6.60%, due
6/1/02 Aa A+ 1,055
1,000 Port of Portland (OR) Ref.
G.O., Ser. A, 4.50%, due
3/1/05 Aa AA+ 969
1,000 Seattle (WA) Muni. Light &
Pwr. Ref. Rev., Ser. 1993,
4.90%, due 11/1/03 Aa AA 1,013
2,000 South Carolina Cap. Imp.
Unlimited Tax G.O., Ser. A,
5.00%, due 3/1/02 Aaa AA+ 2,062
1,000 Utah Bldg. G.O., Ser. 1991 G,
5.50%, due 7/1/98 Aaa AAA 1,036
480 Utah Hsg. Fin. Agcy.
Single-Family Mtge. Purchase
Ref. Rev., Ser. 1993 A, 5.40%,
due 1/1/03 & 7/1/03 Aa 487
1,000 Washington Motor Vehicle Fuel
Tax G.O., Ser. D, 6.50%, due
9/1/01 Aa AA 1,099
-------------
30,349
-------------
TOTAL INVESTMENTS (101.9%)
(COST $44,389) 45,247(4)
Liabilities, less cash,
receivables and other assets
[(1.9%)] (827)
-------------
TOTAL NET ASSETS (100.0%) $ 44,420
-------------
</TABLE>
39
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
New York Insured Intermediate Portfolio
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
TAX-EXEMPT
SECURITIES -- PRE-REFUNDED
BACKED BY U.S. GOVERNMENT
SECURITIES (1.8%)
$ 185 New York Local Gov't. Assist.
Corp., Ser. 1991 A, 7.00%, due
4/1/16 P/R 4/1/01 Aaa AAA $ 211
-------------
TAX-EXEMPT
SECURITIES -- BACKED BY
INSURANCE (63.4%)
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
275 William Floyd (NY) Union Free
Sch. Dist. (The
Mastics-Moriches-Shirley),
4.80%, due 12/1/03 Aaa AAA 277
FINANCIAL GUARANTY INSURANCE CO.
455 Babylon (NY) Waste Fac. G.O.,
Ser. 1993, 4.40%, due 8/1/03 Aaa AAA 448
500 Chautauqua Co. (NY) Var. Purp.
G.O., Ser. 1991, 6.40%, due
9/15/04 Aaa AAA 561
435 New York City (NY) G.O., Ser.
1990 I, 6.90%, due 8/15/98 Aaa AAA 465
300 New York City (NY) Muni.
Assist. Corp., Ser. 1991 A,
6.60%, due 7/1/01 Aaa AAA 331
450 North Hempstead (NY) Ref.
G.O., Ser. 1992 B, 5.90%, due
4/1/04 Aaa AAA 491
550 Suffolk Co. (NY) Ind. Dev.
Agcy. Rev. (S.W. Swr. Sys.),
Ser. 1994, 4.70%, due 2/1/04 Aaa AAA 547
470 Triborough Bridge & Tunnel Au.
(NY) Spec. Oblig., Ser. 1992,
5.80%, due 1/1/02 Aaa AAA 502
FINANCIAL SECURITY ASSURANCE CORP.
500 New York Med. Care Fac. Fin.
Agcy. Imp. Ref. Rev. (Mental
Hlth. Svcs.), Ser. 1993 F,
4.75%, due 8/15/04 Aaa AAA 493
MUNICIPAL BOND INVESTORS ASSURANCE CORP.
500 Broome Co. (NY) Cert. of
Participation (Pub. Safety
Fac.), Ser. 1994, 4.50%, due
4/1/01 Aaa AAA 499
485 Buffalo (NY) Sch. G.O., Ser.
1994 B, 5.05%, due 2/1/04 &
2/1/05 Aaa AAA 495
</TABLE>
40
<PAGE>
October 31, 1995
- --------------------------------------------------------------------------------
New York Insured Intermediate Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 390 Eldred (NY) Central Sch.
Dist., Ser. 1994, 4.50%, due
12/15/05 Aaa AAA $ 377
200 New York City (NY) Muni.
Assist. Corp., Ser. 57, 7.25%,
due 7/1/08 Aaa AAA 208
300 New York Dorm. Au. Rev. (Leake
& Watts Svcs. Inc.), Ser.
1994, 5.10%, due 7/1/02 Aaa AAA 308
300 New York Thruway Au. (Local
Hwy. & Bridge Svc. Contract),
Ser. A, 5.125%, due 1/1/06 Aaa AAA 303
415 Oyster Bay (NY) Pub. Imp. Ref.
G.O., 5.40%, due 2/15/03 Aaa AAA 436
300 Warren Co. (NY) Pub. Imp.
G.O., Ser. 1993 A, 4.40%, due
11/15/07 Aaa AAA 282
270 Puerto Rico Elec. Pwr. Au.
Pwr. Ref. Rev., Ser. W, 5.00%,
due 7/1/04 Aaa AAA 275
-------------
7,298
-------------
TAX-EXEMPT
SECURITIES -- OTHER (13.8%)
500 New York Thruway Au. (Local
Hwy. & Bridge Svc. Contract),
Ser. 1991, 7.00%, due 1/1/03 Baa1 BBB 547
500 New York Urban Dev. Corp.
Proj. Rev. (Columbia Univ.
Ctr. for Computers,
Microelectronics and
Telecommunications Grant),
Ser. 1994, 4.75% & 4.875%, due
1/1/02 & 1/1/03 Baa1 BBB 488
500 Puerto Rico Pub. Bldg. Au.
Ref. Rev., Ser. J, 6.50%, due
7/1/03 Baa1 A 553
-------------
1,588
-------------
</TABLE>
41
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman October 31, 1995
- --------------------------------------------------------------------------------
New York Insured Intermediate Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL VALUE(3)
AMOUNT RATING(2) (000'S
(000'S OMITTED) SECURITY(1) MOODY'S S&P OMITTED)
- --------------- ------------------------------ ----------- --------- -------------
<C> <S> <C> <C> <C>
TAX-EXEMPT CASH EQUIVALENT
SECURITIES -- BACKED BY
LETTERS OF CREDIT (12.2%)
TORONTO DOMINION BANK
$ 300 New York Energy Res. & Dev.
Au. PCR (Niagara Mohawk Pwr.
Corp. Proj.), Ser. 1985 A,
3.85%, VRDN due 7/1/15 A-1+ $ 300
500 New York Energy Res. & Dev.
Au. PCR (Niagara Mohawk Pwr.
Corp. Proj.), Ser. 1985 B,
3.85%, VRDN due 12/1/25 P-1 500
UNION BANK OF SWITZERLAND
600 Babylon (NY) IDA Res. Rec.
Rev. (Babylon Proj.), 3.85%,
VRDN due 12/1/24 A-1+ 600
-------------
1,400
-------------
TAX-EXEMPT CASH EQUIVALENT
SECURITIES -- BACKED BY
INSURANCE (7.8%)
FINANCIAL GUARANTY INSURANCE CO.
400 New York City (NY) G.O., Ser.
1993 B, 4.00%, VRDN due
10/1/21 VMIG-1 A-1+ 400
MUNICIPAL BOND INVESTORS ASSURANCE CORP.
500 New York City (NY) G.O., Ser.
1995 B, 4.00%, VRDN due
8/15/04 VMIG-1 A-1+ 500
-------------
900
-------------
TOTAL INVESTMENTS (99.0%)
(COST $11,349) 11,397 (4)
Cash, receivables and other
assets, less liabilities
(1.0%) 120
-------------
TOTAL NET ASSETS (100.0%) $ 11,517
-------------
</TABLE>
42
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
October 31, 1995
- ----------------------------------------------------------------------
Income Managers Trust
1)These municipal securities meet the two, three, and four highest ratings for
Neuberger&Berman Municipal Money Portfolio, Neuberger&Berman Municipal
Securities Portfolio, and Neuberger&Berman New York Insured Intermediate
Portfolio, respectively, assigned by Moody's Investors Service, Inc. or
Standard & Poor's Corporation or, where not rated, are determined by the
Portfolio's investment manager to be of comparable quality within guidelines
approved by the Trustees of Income Managers Trust. Approximately 73%, 34%, and
86% of the municipal securities held by Neuberger&Berman Municipal Money
Portfolio, Neuberger&Berman Municipal Securities Portfolio, and Neuberger&
Berman New York Insured Intermediate Portfolio, respectively, have credit
enhancement features backing them, which the Portfolios rely on, such as
letters of credit, insurance, or guarantees. Without these credit enhancement
features the securities may or may not meet the quality standards of the
Portfolios. Pre-refunded bonds are supported by securities in escrow issued or
guaranteed by the U.S. Government, its agencies, or instrumentalities. The
amount escrowed is sufficient to pay the periodic interest due and the
principal of these bonds. Putable bonds give the Portfolios the right to put
back the issue on the date specified.
2)Credit ratings are unaudited.
3)Investment securities of Neuberger&Berman Municipal Money Portfolio are
valued at amortized cost, which approximates Federal income tax cost.
Investment securities of Neuberger&Berman Municipal Securities Portfolio and
Neuberger&Berman New York Insured Intermediate Portfolio are valued daily by
obtaining bid price quotations from an independent pricing service on all
securities available in the service's data base. For all other securities
requiring daily quotations, bid prices are obtained from principal market
makers in those securities.
4)At October 31, 1995, selected Portfolio information on a Federal income tax
basis was as follows:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
NEUBERGER&BERMAN COST APPRECIATION DEPRECIATION APPRECIATION
------------ --------------- ------------- ---------------
<S> <C> <C> <C> <C>
MUNICIPAL SECURITIES PORTFOLIO $ 44,389,000 $ 958,000 $ 100,000 $ 858,000
NEW YORK INSURED INTERMEDIATE
PORTFOLIO 11,360,000 98,000 61,000 37,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
43
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1995
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL MUNICIPAL INSURED
MONEY SECURITIES INTERMEDIATE
(000'S OMITTED) PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at value* (Note
A) -- see Schedule of Investments $ 163,319 $ 45,247 $ 11,397
Cash 36 70 12
Deferred organization costs (Note A) 8 3 11
Interest receivable 1,245 584 130
Prepaid expenses and other assets 5 2 --
Receivable for securities sold 800 -- --
-------------------------------------------
165,413 45,906 11,550
-------------------------------------------
LIABILITIES
Payable for securities purchased 4,226 1,438 --
Payable to investment manager (Note B) 32 10 2
Accrued expenses 61 38 31
-------------------------------------------
4,319 1,486 33
-------------------------------------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 161,094 $ 44,420 $ 11,517
-------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 161,094 $ 43,562 $ 11,469
Net unrealized appreciation in value of
investments -- 858 48
-------------------------------------------
NET ASSETS $ 161,094 $ 44,420 $ 11,517
-------------------------------------------
*Cost of investments $ 163,319 $ 44,389 $ 11,349
-------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
44
<PAGE>
STATEMENTS OF OPERATIONS
For the Year Ended October 31, 1995
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL MUNICIPAL INSURED
MONEY SECURITIES INTERMEDIATE
(000'S OMITTED) PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income $ 5,971 $ 2,249 $ 561
------------------------------------------
Expenses:
Investment management fee (Note B) 379 110 29
Accounting fees 10 10 10
Amortization of deferred organization and
initial offering expenses (Note A) 3 1 3
Auditing fees 30 22 22
Custodian fees 97 38 15
Insurance expense 7 3 1
Legal fees 11 12 12
Trustees' fees and expenses 16 8 6
------------------------------------------
Total expenses 553 204 98
------------------------------------------
Net investment income 5,418 2,045 463
------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FINANCIAL FUTURES CONTRACTS
Net realized loss on investments sold (25) (305) (95)
Net realized loss on financial futures
contracts (Note A) -- (372) --
Change in net unrealized appreciation
(depreciation) of investments -- 2,886 938
------------------------------------------
Net gain (loss) on investments and
financial futures contracts (25) 2,209 843
------------------------------------------
Net increase in net assets resulting from
operations $ 5,393 $ 4,254 $ 1,306
------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
45
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
MUNICIPAL
MONEY
PORTFOLIO
Year
Ended
October 31,
(000'S OMITTED) 1995 1994
--------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 5,418 $ 3,928
Net realized gain (loss) on
investments sold and financial
futures contracts (25) 5
Change in net unrealized
appreciation (depreciation) of
investments -- --
--------------------------
Net increase (decrease) in net
assets resulting from operations 5,393 3,933
--------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 195,151 164,863
Reductions (189,913) (200,098)
--------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 5,238 (35,235)
--------------------------
NET INCREASE (DECREASE) IN NET ASSETS 10,631 (31,302)
NET ASSETS:
Beginning of year 150,463 181,765
--------------------------
End of year $ 161,094 $ 150,463
--------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
46
<PAGE>
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
NEW YORK
INSURED
INTERMEDIATE
PORTFOLIO
Period from
MUNICIPAL February 1,
SECURITIES 1994
PORTFOLIO (Commencement
of
Year Year Operations)
Ended Ended to
October 31, October 31, October 31,
1995 1994 1995 1994
---------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 2,045 $ 3,653 $ 463 $ 445
Net realized gain (loss) on
investments sold and financial
futures contracts (677) (433) (95) (251)
Change in net unrealized
appreciation (depreciation) of
investments 2,886 (4,761) 938 (890)
---------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 4,254 (1,541) 1,306 (696)
---------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 6,875 44,656 3,851 23,018
Reductions (18,071) (96,098) (8,400) (7,562)
---------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests (11,196) (51,442) (4,549) 15,456
---------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (6,942) (52,983) (3,243) 14,760
NET ASSETS:
Beginning of year 51,362 104,345 14,760 --
---------------------------------------------------------
End of year $ 44,420 $ 51,362 $ 11,517 $ 14,760
---------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
- ----------------------------------------------------------------------
Income Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Municipal Money Portfolio ("Municipal
Money"), Neuberger&Berman Municipal Securities Portfolio ("Municipal
Securities"), and Neuberger&Berman New York Insured Intermediate Portfolio
("New York Insured Intermediate") (collectively, the "Portfolios") are
separate series of Income Managers Trust ("Managers Trust"), a New York
common law trust organized as of December 1, 1992. Managers Trust is
registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"). New York Insured
Intermediate commenced operations on February 1, 1994. Other regulated
investment companies sponsored by Neuberger&Berman Management Incorporated
("Management"), whose financial statements are not presented herein, also
invest in Managers Trust.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
2) PORTFOLIO VALUATION: Investments are valued as indicated in the notes
following the Portfolios' schedule of investments.
3) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Interest income, including accretion of
discount and amortization of premium (adjusted for original issue discount,
where applicable), is recorded on the accrual basis. Realized gains and
losses from securities transactions are recorded on the basis of identified
cost.
4) FEDERAL INCOME TAXES: Managers Trust intends to comply with the
requirements of the Internal Revenue Code of 1986, as amended. Each Portfolio of
Managers Trust also intends to conduct its operations so that each of its
investors will be able to qualify as a regulated investment company. Each
Portfolio will be treated as a partnership for Federal income tax purposes
and is therefore not subject to Federal income tax.
5) ORGANIZATION EXPENSES: Expenses incurred by each Portfolio in connection
with its organization are being amortized by each Portfolio on a
straight-line basis over a five-year period. At October 31, 1995, the
unamortized balance of such expenses amounted to $7,850, $2,778, and $11,028
for Municipal Money, Municipal Securities, and New York Insured Intermediate,
respectively.
6) EXPENSE ALLOCATION: The Portfolios bear all costs of operations. Expenses
incurred by Managers Trust with respect to any two or more Portfolios are
allocated
48
<PAGE>
in proportion to the net assets of such Portfolios, except where another more
appropriate allocation of expenses to each Portfolio can otherwise be made
fairly. Expenses directly attributable to a Portfolio are charged to that
Portfolio.
7) FINANCIAL FUTURES CONTRACTS: Municipal Securities and New York Insured
Intermediate may buy and sell financial futures contracts to hedge against the
effects of fluctuations in interest rates. At the time a Portfolio enters
into a financial futures contract, it is required to deposit with its
custodian a specified amount of cash or U.S. government securities, known as
"initial margin," ranging upward from 1.1% of the value of the financial
futures contract being traded. Each day, the futures contract is valued at
the official settlement price of the board of trade or U.S. commodity
exchange on which such futures contract is traded. Subsequent payments, known
as "variation margin," to and from the broker are made on a daily basis as
the market price of the financial futures contract fluctuates. Daily
variation margin adjustments, arising from this "mark to market," are
recorded by the Portfolio as unrealized gains or losses.
Although some financial futures contracts by their terms call for actual
delivery or acceptance of financial instruments, in most cases the contracts
are closed out prior to delivery by offsetting purchases or sales of matching
financial futures contracts. When the contracts are closed, the Portfolio
recognizes a gain or loss. Risks of entering into futures contracts include
the possibility that there may be an illiquid market and/or that a change in
the value of the contract may not correlate with changes in the value of the
underlying securities.
For Federal income tax purposes, the futures transactions undertaken may
cause a Portfolio to recognize gains or losses from marking to market even
though its positions have not been sold or terminated, may affect the
character of the gains or losses recognized as long-term or short-term and
may affect the timing of some capital gains and losses realized by the
Portfolio. Also, the Portfolio's losses on its transactions involving futures
contracts may be deferred rather than being taken into account currently in
calculating such Portfolio's taxable income. During the year ended October
31, 1995, Municipal Securities entered into financial futures contracts.
There were no open positions in financial futures contracts at October 31,
1995.
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
Each Portfolio retains Management as its investment manager under a
Management Agreement ("Agreement") dated as of July 2, 1993 (February 1, 1994
with respect to New York Insured Intermediate). For such investment management
services, each Portfolio pays Management a fee at the annual rate of .25% of the
first $500 million of that Portfolio's average daily net assets, .225% of the
next $500 million, .20% of the next $500 million, .175% of the next $500
million, and .15% of average daily net assets in excess of $2 billion.
49
<PAGE>
All of the capital stock of Management is owned by individuals who are also
general partners of Neuberger&Berman, L.P. ("Neuberger"), a member firm of The
New York Stock Exchange and the sub-adviser to each Portfolio. Neuberger is
retained by Management to furnish it with investment recommendations and
research information without cost to each Portfolio. Several individuals who are
officers and/ or trustees of Managers Trust are also partners of Neuberger
and/or officers and/or directors of Management.
Each Portfolio has an expense offset arrangement included in its custodian
contract. The impact of this arrangement on each Portfolio's custodian expense,
reflected in the Statement of Operations, is less than .02% of the Portfolio's
average daily net assets.
NOTE C -- SECURITIES TRANSACTIONS:
During the year ended October 31, 1995, there were purchase and sale
transactions (excluding short-term securities and financial futures contracts)
as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- ---------------------------------------------------------------
<S> <C> <C>
MUNICIPAL SECURITIES $ 28,442,816 $ 34,884,983
NEW YORK INSURED INTERMEDIATE 1,819,881 6,603,685
</TABLE>
All securities transactions for Municipal Money were short-term.
50
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
NEW YORK
MUNICIPAL MUNICIPAL INSURED
MONEY SECURITIES INTERMEDIATE
PORTFOLIO PORTFOLIO PORTFOLIO
Period Period Period
from from from
July 2, July 2, February
1993 1993 1, 1994
(Commencement (Commencement (Commencement
of of Year of
Operations) Operations) Ended Operations)
Year Ended to October Year Ended to October October to October
October 31, 31, October 31, 31, 31, 31,
1995 1994 1993 1995 1994 1993 1995 1994
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .36% .36% .36%(1) .46% .40% .42%(1) .85% .82%(1)
---------------------------------------------------------------------------------------------
Net Investment Income 3.57% 2.38% 2.20%(1) 4.63% 4.47% 4.21%(1) 4.05% 3.92%(1)
---------------------------------------------------------------------------------------------
Portfolio Turnover Rate -- -- -- 66% 127% 25% 17% 96%
---------------------------------------------------------------------------------------------
Net Assets, End of Year (in
millions) $161.1 $150.5 $181.8 $44.4 $51.4 $104.3 $11.5 $14.8
---------------------------------------------------------------------------------------------
</TABLE>
1) Annualized.
51
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees of
Income Managers Trust and
Owners of Beneficial Interest of:
Neuberger&Berman Municipal Money Portfolio
Neuberger&Berman Municipal Securities Portfolio and
Neuberger&Berman New York Insured Intermediate Portfolio
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the Neuberger&Berman Municipal Money
Portfolio, Neuberger&Berman Municipal Securities Portfolio, and Neuberger&Berman
New York Insured Intermediate Portfolio, three of the series comprising Income
Managers Trust (the "Trust"), as of October 31, 1995, and the related statements
of operations for the year then ended, the statements of changes in net assets
and financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above mentioned series of Income Managers Trust at October 31, 1995, the
results of their operations for the year then ended, the changes in their net
assets and financial highlights for each of the periods indicated therein, in
conformity with generally accepted accounting principles.
[SIGNATURE]
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
December 1, 1995
52
<PAGE>
DIRECTORY
INVESTMENT MANAGER, ADMINISTRATOR
AND DISTRIBUTOR
Neuberger&Berman Management Incorporated
605 Third Avenue 2nd Floor
New York, NY 10158-0180
800-877-9700
Institutional Services 800-366-6264
SUB-ADVISER
Neuberger&Berman, L.P.
605 Third Avenue
New York, NY 10158-3698
CUSTODIAN AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Address correspondence to:
Neuberger&Berman Funds
Boston Service Center
P.O. Box 8403
Boston, MA 02266-8403
800-225-1596
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 M Street, NW
Washington, DC 20036-5891
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
Neuberger&Berman Management Inc., Neuberger&Berman Municipal Money Fund,
Neuberger&Berman Municipal Securities Trust, and Neuberger&Berman New York
Insured Intermediate Fund are service marks of Neuberger& Berman Management Inc.
- -C- 1995 Neuberger&Berman Management Inc.
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OFFICERS AND TRUSTEES
Stanley Egener
CHAIRMAN OF THE BOARD AND TRUSTEE
Theresa A. Havell
PRESIDENT AND TRUSTEE
John Cannon
TRUSTEE
Charles DeCarlo
TRUSTEE
Barry Hirsch
TRUSTEE
Robert A. Kavesh
TRUSTEE
Harold R. Logan
TRUSTEE
William E. Rulon
TRUSTEE
Candace L. Straight
TRUSTEE
Daniel J. Sullivan
VICE PRESIDENT
Michael J. Weiner
VICE PRESIDENT
Richard Russell
TREASURER
Claudia A. Brandon
SECRETARY
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
C. Carl Randolph
ASSISTANT SECRETARY
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NEUBERGER&BERMAN MANAGEMENT INC.
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
INSTITUTIONAL SERVICES
800.366.6264
Statistics and projections in this report are derived from sources
deemed to be reliable but cannot be regarded as a representation of
future results of the Funds. This report is prepared for the general
information of shareholders and is not an offer of shares of the Funds.
Shares are sold only through the currently effective prospectus, which
must precede or accompany this report.
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WITH SOY BASED INKS NBMFAR001095
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