NEUBERGER BERMAN
INCOME FUNDS(REGISTERED)
Supplement to the Statement of Additional Information dated March 2, 1998
The paragraph discussing Neuberger Berman HIGH YIELD Bond Fund under the section
entitled "Overview of Each Fund; Bond Funds" is replaced by the following
paragraphs:
HIGH YIELD may be appropriate for equity investors seeking to rebalance
their portfolios, or for those investors looking for higher rates of return and
willing to take on more risk. Given the recent volatility of the equity market,
the Fund may be appropriate for those investors seeking to diversify their
portfolios with a high-yield income component, especially those who don't want
to experience any unexpected fluctuations of the stock market. This volatility
has already prompted investors to pour billions of dollars into high-yield
bonds.
The Fund seeks high current income and, secondarily, capital growth by
investing primarily in lower-rated debt securities. These securities are
expected to generate higher returns than investment grade fixed-income
securities. The Fund may be more volatile, because the performance of high-yield
bonds is linked to the financial health of the overall market. With this in
mind, the portfolio management team attempts to select securities of companies
with promising upside potential. The Fund is a well-diversified portfolio of
securities that must first pass the intensive, time-tested selection process
that Neuberger Berman applies to the security selection in all of its stock
funds. In selecting securities, the Fund's management team looks for issuers
with steady cash flows, strong management, solid track records, and an ability
to cover their financial obligations. The team then chooses bonds that it
believes are trading at prices and yields undervalued by the market.
This Supplement is dated January 7, 1999.
