<PAGE>
NEUBERGER & BERMAN
ADVISERS MANAGEMENT TRUST
Joint Prospectus
May 1, 1995
NBAMT0010595
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
- -------------------------------------------------------------------------------
Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to meet
differing investment objectives and currently is comprised of seven separate
Portfolios: Balanced Portfolio, Government Income Portfolio, Growth Portfolio,
International Portfolio, Limited Maturity Bond Portfolio, Liquid Asset Portfolio
and Partners Portfolio. While each portfolio (each a "Portfolio" and
collectively, "Portfolios") issues its own class of shares, which in some
instances have rights separate from other classes of shares, the Trust is one
entity with respect to certain important items (e.g., certain voting rights).
Shares of the Trust are offered to life insurance companies ("Life
Companies") for allocation to certain of their variable separate accounts
established for the purpose of funding variable annuity contracts and variable
life insurance policies ("Variable Contracts"). Shares of the Balanced Portfolio
are also offered directly to qualified pension and retirement plans ("Qualified
Plans").
- --------------------------------------------------------------------------------
EACH PORTFOLIO INVESTS ALL OF ITS NET INVESTABLE ASSETS IN ITS CORRESPONDING
SERIES (EACH A "SERIES") OF ADVISERS MANAGERS TRUST ("MANAGERS TRUST"), AN
OPEN-END MANAGEMENT INVESTMENT COMPANY. ALL SERIES OF MANAGERS TRUST, EXCEPT FOR
AMT INTERNATIONAL INVESTMENTS, ARE MANAGED BY NEUBERGER&BERMAN MANAGEMENT
INCORPORATED ("N&B MANAGEMENT"). AMT INTERNATIONAL INVESTMENTS IS ADVISED BY
BNP-N&B GLOBAL ASSET MANAGEMENT L.P. ("BNP-N&B GLOBAL"), A COMPANY JOINTLY OWNED
BY NEUBERGER& BERMAN, L.P. ("NEUBERGER&BERMAN") AND BANQUE NATIONALE DE PARIS
("BNP"). EACH SERIES INVESTS IN SECURITIES IN ACCORDANCE WITH AN INVESTMENT
OBJECTIVE, POLICIES, AND LIMITATIONS IDENTICAL TO THOSE OF ITS CORRESPONDING
PORTFOLIO. THE INVESTMENT PERFORMANCE OF EACH PORTFOLIO WILL DIRECTLY CORRESPOND
WITH THE INVESTMENT PERFORMANCE OF ITS CORRESPONDING SERIES. THIS "MASTER/FEEDER
FUND" STRUCTURE IS DIFFERENT FROM THAT OF MANY OTHER INVESTMENT COMPANIES WHICH
DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIOS OF SECURITIES. FOR MORE
INFORMATION ON THIS UNIQUE STRUCTURE THAT YOU SHOULD CONSIDER, SEE "SPECIAL
INFORMATION REGARDING ORGANIZATION, CAPITALIZATION, AND OTHER MATTERS" ON PAGE
20.
AN INVESTMENT IN THE LIQUID ASSET PORTFOLIO, AS IN ANY MUTUAL FUND, IS
NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT. ALTHOUGH THE LIQUID ASSET
PORTFOLIO SEEKS TO MAINTAIN A NET ASSET VALUE OF $1.00 PER SHARE, THERE IS NO
ASSURANCE THAT IT WILL BE ABLE TO DO SO.
Please read this Prospectus before investing in any of the Portfolios and
keep it for future reference. The Prospectus contains information about the
Portfolios that a prospective investor should know before investing. A Statement
of Additional Information ("SAI") about the Portfolios and the Series, dated May
1, 1995, is on file with the Securities and Exchange Commission. The SAI is
incorporated herein by reference (so it is legally considered a part of this
Prospectus). You can obtain a free copy of the SAI by writing the Trust at 605
Third Avenue, 2nd Floor, New York, NY 10158-0006.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
DATE OF PROSPECTUS: MAY 1, 1995
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 4
Management 4
The Neuberger&Berman Investment
Approach 5
FINANCIAL HIGHLIGHTS 6
INVESTMENT PROGRAMS 13
AMT Liquid Asset Investments 13
AMT Limited Maturity Bond
Investments 13
AMT Government Income Investments 14
AMT Growth Investments 14
AMT Partners Investments 15
AMT Balanced Investments 15
AMT International Investments 16
Short-Term Trading; Portfolio
Turnover 16
Ratings of Securities 17
Borrowings 17
Other Investments 18
PERFORMANCE INFORMATION 19
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 20
The Portfolios 20
The Series 20
SHARE PRICES AND NET ASSET
VALUE 23
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 24
Dividends and Other Distributions 24
Tax Status 24
SPECIAL CONSIDERATIONS 25
MANAGEMENT AND ADMINISTRATION 26
Trustees and Officers 26
Investment Manager, Adviser,
Administrator,
Sub-Adviser and Distributor 26
Expenses 28
Fees 28
Expense Reimbursement 29
Transfer and Dividend Paying Agent 30
DISTRIBUTION AND REDEMPTION
OF TRUST SHARES 31
Distribution and Redemption of
Trust Shares 31
Distribution Plan 31
DESCRIPTION OF INVESTMENTS 32
USE OF JOINT PROSPECTUS AND
STATEMENT
OF ADDITIONAL INFORMATION 39
APPENDIX A 40
</TABLE>
2
<PAGE>
SUMMARY
The Portfolios and Series
- --------------------------------------------------------------------------------
The Trust was recently reorganized into a new structure. Each Portfolio of
the Trust invests in a corresponding Series of Managers Trust that, in turn,
invests in securities in accordance with an investment objective, policies, and
limitations that are identical to those of the Portfolio. The trustees of the
Trust believe that this "master/feeder fund" structure may benefit shareholders.
For more information about the organization of the Portfolios and the Series,
including certain features of the master/feeder fund structure, see "Special
Information Regarding Organization, Capitalization, and Other Matters" on page
20. For more details about each Series, its investments and their risks, see
"Investment Programs" on page 13, "Ratings of Securities" on page 17,
"Borrowings" on page 17, and "Description of Investments" on page 32.
Here is a summary of important features of the Portfolios and their
corresponding Series. You may want to invest in a variety of Portfolios to fit
your particular investment needs. Of course, there can be no assurance that a
Portfolio will meet its investment objective.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PRINCIPAL SERIES
ADVISERS MANAGEMENT TRUST OBJECTIVE INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIQUID ASSET PORTFOLIO Highest current income consistent High-quality money market instruments
with safety and liquidity of government and non-government
issuers
GROWTH PORTFOLIO Capital appreciation, without regard Common stocks
to income
LIMITED MATURITY BOND PORTFOLIO Highest current income consistent Short-to-intermediate term debt
with low risk to principal and securities, at least investment grade
liquidity; and secondarily, total
return
BALANCED PORTFOLIO Long-term capital growth and Common stocks and short-to-
reasonable current income without intermediate term debt securities, at
undue risk to principal least investment grade
PARTNERS PORTFOLIO Capital growth Common stocks and other equity
securities of established companies
GOVERNMENT INCOME PORTFOLIO High level of current income and At least 65% in U.S. Government and
total return, consistent with safety Agency securities, with an emphasis
of principal on U.S. Government mortgage-backed
securities; at least 25% in
mortgage-backed and asset-backed
securities
INTERNATIONAL PORTFOLIO Long-term capital appreciation by Equity securities of issuers
investing primarily in a diversified organized and doing business
portfolio of equity securities of primarily outside the U.S.
foreign issuers
</TABLE>
3
<PAGE>
Risk Factors
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An investment in any Portfolio involves certain risks, depending upon the
types of investments made by its corresponding Series. Special risk factors
apply to investments, which may be made by certain Series, in foreign
securities, options and futures contracts, zero coupon bonds and swap
agreements. For those Series investing in fixed income securities, the value of
such securities is likely to decline in times of rising interest rates and rise
in times of falling interest rates. In general, the longer the maturity of a
fixed income security, the more pronounced is the effect of a change in interest
rates on the value of the security.
AMT Government Income Investments invests at least 25% of its total assets in
mortgage-backed and asset-backed securities, may engage in lending portfolio
securities and other investment techniques, and may borrow for leverage. The
investment program of AMT Government Income Investments is intended to protect
principal by focusing on the credit quality of the issuers. Principal may,
however, be at risk due to market rate fluctuations.
AMT Partners Investments may invest up to 15% of its net assets in corporate
debt securities rated below investment grade or comparable unrated securities.
Securities rated below investment grade as well as unrated securities are often
considered to be speculative and usually entail greater risk. For more
information on lower-rated securities, see "Ratings of Securities" in this
Prospectus and "Fixed Income Securities" in the SAI.
AMT International Investments seeks long-term capital appreciation by
investing primarily in a diversified portfolio of equity securities of issuers
organized and doing business principally outside the U.S. The strategy of the
Series' investment adviser, BNP-N&B Global, is to select attractive investment
opportunities outside the U.S., allocating the assets among economically mature
countries and emerging industrialized countries. The Series will invest
primarily in equity securities of medium to large capitalization companies
traded on foreign exchanges. The Series may invest up to 50% of its total assets
in Japan and is likely to invest at least 25% of its total assets in Japan.
Because the Portfolio, through the Series, invests primarily in foreign
securities, it may be subject to greater risks and higher expenses than equity
funds that invest primarily in securities of U.S. issuers. Such risks may be
even greater in emerging industrialized and less developed countries. The risks
of investing in foreign securities include, but are not limited to, possible
adverse political and economic developments in a particular country, differences
between foreign and U.S. regulatory systems, and foreign securities markets that
are smaller and less well regulated than those in the U.S. There is often less
information publicly available about foreign issuers, and many foreign countries
do not follow the financial accounting standards used in the U.S. Most of the
securities held by the Series are denominated in foreign currencies, and the
value of these investments can be adversely affected by fluctuations in foreign
currency values. Some foreign currencies can be volatile and may be subject to
governmental controls or intervention. The Series may use techniques such as
options, futures, forward foreign currency exchange contracts and short selling,
for hedging and in an attempt to realize income. The Series may also use
leverage to facilitate transactions entered into by the Series for hedging
purposes. The use of these strategies may entail special risks. See "Borrowings"
and "Description of Investments."
Management
- --------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman as sub-adviser,
selects investments for all Series, except AMT International Investments.
BNP-N&B Global selects investments for AMT International Investments. N&B
Management also provides administrative services to the Series and the
Portfolios and acts as distributor of the shares of all Portfolios. See
"Management and Administration."
4
<PAGE>
The Neuberger&Berman Investment Approach
- --------------------------------------------------------------------------------
While each Series has its own investment objective, policies and limitations,
AMT Growth, Partners and Balanced Investments (equity portion) are each managed
using the value-oriented investment approach used since 1939 by
Neuberger&Berman, its sub-adviser. Under this approach, Neuberger&Berman's
portfolio managers identify securities they consider to be undervalued in
relation to recognized measures of fundamental economic value, such as earnings,
cash flow, tangible book value and asset value. A security may be considered
undervalued if the ratio of its share price to one or more of these measures of
fundamental value is low in absolute terms, low in relation to historical data
for the security, or low in relation to the securities of other companies in the
same or similar businesses, or in the case of AMT Growth Investments and AMT
Balanced Investments (equity portion), low in relation to the growth rate of its
earnings. Sometimes this happens when a particular company or industry is
temporarily out of favor with the market. Portfolio managers also look for such
factors as a strong balance sheet and financial position, a recent company
restructuring with the potential to realize hidden values, strong management,
and earnings potential not yet recognized in the marketplace. Neuberger&Berman
believes that, over time, securities that are undervalued relative to a
company's basic worth are more likely to appreciate in price and be subject to
less risk of price decline than securities whose market prices have already
reached their perceived economic value. This approach also contemplates selling
portfolio securities when they are considered to have reached their potential.
Neuberger&Berman's value-oriented investment approach generally seeks to
provide consistently good performance with reduced share price volatility and
lower risk to capital, rather than to follow alternative investment philosophies
that may sometimes provide greater returns, but with higher risks. It is based
on the belief that successful investing requires development of and adherence to
a strong discipline and a commitment to limiting losses in an unfavorable
market. While this approach has resulted in solid returns over the long term,
there can be no assurance that these results will be achieved in the future. For
more information, see "Performance Information."
5
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- --------------------------------------------------------------------------------
The financial information in the following tables is for each Portfolio's
predecessor fund as of December 31, 1994 and includes data related to each
Portfolio (except the International Portfolio) before it was converted into a
series of the Trust on May 1, 1995. See "Special Information Regarding
Organization, Capitalization and Other Matters." This information for each
predecessor fund has been audited by its respective independent auditors. You
may obtain further information about the performance of each Portfolio (except
the International Portfolio) at no cost in the Trust's annual report to
shareholders. Also, see "Performance Information." The International Portfolio
has not yet commenced investment operations.
6
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Balanced Portfolio
- --------------------------------------------------------------------------------
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 the Financial Statements and
notes thereto.(1)
<TABLE>
<CAPTION>
PERIOD
FROM
2/28/89(2)
YEAR ENDED DECEMBER 31, TO
1994 1993 1992 1991 1990 12/31/89
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $15.62 $14.90 $14.16 $ 11.72 $11.64 $ 10.00
-----------------------------------------------------------
Income From Investment Operations
Net Investment Income .30 .34 .40 .47 .49 .30
Net Gains or Losses on Securities
(both realized and unrealized) (.80) .61 .72 2.16 (.27)(3) 1.34
-----------------------------------------------------------
Total From Investment Operations (.50) .95 1.12 2.63 .22 1.64
-----------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.23) (.20) (.19) (.19) (.07) --
Distributions (from capital gains) (.38) (.03) (.19) -- (.07) --
-----------------------------------------------------------
Total Distributions (.61) (.23) (.38) (.19) (.14) --
-----------------------------------------------------------
Net Asset Value, End of Year $14.51 $15.62 $14.90 $ 14.16 $11.72 $ 11.64
-----------------------------------------------------------
Total Return+ -3.36% +6.45% +8.06% +22.68% +1.95% +16.40%(4)
-----------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $179.3 $161.1 $ 87.1 $ 28.3 $ 6.9 $ 0.6
-----------------------------------------------------------
Ratio of Expenses to Average Net Assets(6) .91% .90% .95% 1.10% 1.35% 1.70%(5)
-----------------------------------------------------------
Ratio of Net Income to Average Net Assets(6) 1.91% 1.96% 2.33% 3.00% 4.00% 3.28%(5)
-----------------------------------------------------------
Portfolio Turnover Rate 55% 114% 82% 69% 77% 58%
-----------------------------------------------------------
</TABLE>
NOTES:
1) The per share amounts which are shown have been computed based on the average
number of shares outstanding during each period.
2) February 28, 1989 is the date shares of the Balanced Portfolio were first
sold to the separate accounts pursuant to the public offering of Trust
shares.
3) The amounts shown at this caption for a share outstanding throughout the
period may not accord with the change in aggregate gains and losses in the
portfolio securities for the period because of the timing of sales and
repurchases of portfolio shares in relation to fluctuating market values for
the portfolio.
4) Not annualized.
5) Ratios are annualized.
6) Since the commencement of operations, the Distributor voluntarily assumed
certain operating expenses of the Trust as described in Note B of Notes to
Financial Statements. Had such action not been undertaken, the ratios of
expenses and investment income -- net to average daily net assets on an
annualized basis would have been 2.78% and 2.20% for the year ended December
31, 1989, respectively. There was no reduction of expenses for the years
ended December 31, 1990 through and including 1994.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Trust 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. The total return information shown
above does not reflect expenses that apply to the separate account or the
related insurance policies, and the inclusion of these charges would reduce
the total return figures for all periods shown. Qualified Plans that are
direct shareholders of the Portfolio are not affected by insurance charges.
7
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Government Income Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the Financial
Statements. It should be read in conjunction with the Financial Statements and
notes thereto.(1)
<TABLE>
<CAPTION>
PERIOD
FROM
3/22/94(2)
TO
12/31/94
<S> <C>
- ----------------------------------------------------------------
Net Asset Value, Beginning of Period $10.00
----------
Income From Investment Operations
Net Investment Income .37
Net Gains or Losses on Securities (both realized
and unrealized) (.22)
----------
Total From Investment Operations .15
----------
Net Asset Value, End of Period $10.15
----------
Total Return+ +1.50%(3)
----------
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $ 1.0
----------
Ratio of Expenses to Average Net Assets(5) 1.09%(4)
----------
Ratio of Net Income to Average Net Assets(5) 4.78%(4)
----------
Portfolio Turnover Rate 3%
----------
</TABLE>
NOTES:
1) The per share amounts which are shown have been computed based on the average
number of shares outstanding during the period.
2) The date investment operations commenced.
3) Not annualized.
4) Ratios are annualized.
5) Since the commencement of operations, the Distributor voluntarily assumed
certain operating expenses of the Trust as described in Note B of Notes to
Financial Statements. Had such action not been undertaken, the ratios of
expenses and investment income -- net to average daily net assets on an
annualized basis would have been 2.57% and 3.30%, respectively, for the
period from March 22, 1994 to December 31, 1994.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Trust during the period,
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. The total return information shown
above does not reflect expenses that apply to the separate account or the
related insurance policies, and the inclusion of these charges would reduce
the total return figures for all periods shown.
8
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Growth Portfolio
- --------------------------------------------------------------------------------
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 the Financial Statements and
notes thereto.(1)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Year $24.28 $23.27 $21.47 $16.82 $20.28 $16.20 $12.86 $15.21 $13.38 $10.37
-------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .07 .13 .21 .31 .43 .43 .32 .34 .26 .43
Net Gains or Losses on
Securities (both realized
and unrealized) (1.11) 1.42 1.82 4.64 (2.04) 4.24 3.02 (.96) 1.73 2.70
-------------------------------------------------------------------------------------------------
Total From Investment
Operations (1.04) 1.55 2.03 4.95 (1.61) 4.67 3.34 (.62) 1.99 3.13
-------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.12) (.17) (.23) (.30) (.29) (.27) -- (.48) (.09) (.11)
Distributions (from capital
gains) (2.81) (.37) -- -- (1.56) (.32) -- (1.25) (.07) (.01)
-------------------------------------------------------------------------------------------------
Total Distributions (2.93) (.54) (.23) (.30) (1.85) (.59) -- (1.73) (.16) (.12)
-------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $20.31 $24.28 $23.27 $21.47 $16.82 $20.28 $16.20 $12.86 $15.21 $13.38
-------------------------------------------------------------------------------------------------
Total Return+ -4.99% +6.79% +9.54% +29.73% -8.19% +29.47% +25.97% -4.89% +14.94% +30.30%
-------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $369.3 $366.5 $304.8 $228.9 $118.8 $ 92.8 $ 48.7 $ 33.8 $ 31.6 $ 13.7
-------------------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets(2) .84% .81% .82% .86% .91% .97% .92% .89% 1.00% 1.50%
-------------------------------------------------------------------------------------------------
Ratio of Net Income to
Average Net Assets(2) .26% .52% .92% 1.43% 2.12% 2.10% 2.12% 2.05% 1.50% 3.04%
-------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 46% 92% 63% 57% 76% 105% 95% 87% 83% 72%
-------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1) The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2) Since the commencement of operations, the Distributor or principal
underwriter voluntarily assumed certain operating expenses of the Trust as
described in Note B of Notes to Financial Statements. Had such action not
been undertaken, the ratios of expenses and investment income -- net to
average daily net assets on an annualized basis would have been 2.92% and
1.62% in 1985, respectively. There was no reduction of expenses for the years
ended December 31, 1986 through and including 1994.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Trust 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. The total return information shown
above does not reflect expenses that apply to the separate account or the
related insurance policies, and inclusion of these charges would reduce the
total return figures for all periods shown.
9
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Limited Maturity Bond Portfolio
- --------------------------------------------------------------------------------
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 the Financial Statements and
notes thereto.(1)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1993 1992 1991 1990 1989 1988(2) 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Year $14.66 $14.33 $14.32 $13.62 $13.48 $13.01 $12.14 $13.62 $12.19 $10.71
-------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .78 .84 1.03 1.04 1.15 1.12 .92 1.00 1.01 .94
Net Gains or Losses on
Securities (both realized
and unrealized) (.80) .08 (.33) .43 (.10)(3) .20 (.05) (.60) .65 .61
-------------------------------------------------------------------------------------------------
Total From Investment
Operations (.02) .92 .70 1.47 1.05 1.32 .87 .40 1.66 1.55
-------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.55) (.52) (.66) (.77) (.91) (.85) -- (1.62) (.22) (.07)
Distributions (from capital
gains) (.07) (.07) (.03) -- -- -- -- (.26) (.01) --
-------------------------------------------------------------------------------------------------
Total Distributions (.62) (.59) (.69) (.77) (.91) (.85) -- (1.88) (.23) (.07)
-------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $14.02 $14.66 $14.33 $14.32 $13.62 $13.48 $13.01 $12.14 $13.62 $12.19
-------------------------------------------------------------------------------------------------
Total Return+ -0.15% +6.63% +5.18% +11.34% +8.32% +10.77% +7.17% +2.89% +13.83% +14.51%
-------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $344.8 $343.5 $187.0 $ 83.0 $ 46.0 $ 31.5 $ 25.4 $ 19.0 $ 17.1 $ 7.9
-------------------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets(4) .66% .64% .64% .68% .76% .88% 1.01% .99% 1.14% 1.50%
-------------------------------------------------------------------------------------------------
Ratio of Net Income to
Average Net Assets(4) 5.42% 5.19% 5.80% 6.61% 7.66% 8.11% 7.15% 7.36% 7.26% 7.40%
-------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 90% 159% 114% 77% 124% 116% 197% 24% 32% 21%
-------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1) The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2) On May 2, 1988, the Portfolio changed its primary investment objective to
obtain the highest current income consistent with low risk to principal and
liquidity through investments in limited maturity debt securities.
3) The amounts shown at this caption for a share outstanding throughout the
period may not accord with the change in aggregate gains and losses in the
portfolio securities for the period because of the timing of sales and
repurchases of portfolio shares in relation to fluctuating market values for
the portfolio.
4) Since the commencement of operations, the Distributor or principal
underwriter voluntarily assumed certain operating expenses of the Trust as
described in Note B of Notes to Financial Statements. Had such action not
been undertaken, the ratios of expenses and investment income -- net to
average daily net assets on an annualized basis would have been 3.37% and
5.53% in 1985, respectively. There was no reduction of expenses for the years
ended December 31, 1986 through and including 1994.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Trust 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. The total return information shown
above does not reflect expenses that apply to the separate account or the
related insurance policies, and inclusion of these charges would reduce the
total return figures for all periods shown.
10
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Liquid Asset Portfolio
- --------------------------------------------------------------------------------
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 the Financial Statements and
notes thereto.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Year $1.0009 $1.0002 $1.0001 $ .9999 $ .9998 $ .9998 $1.0000 $1.0002 $1.0004 $1.0000
--------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .0328 .0233 .0320 .0547 .0730 .0826 .0648 .0550 .0557 .0676
Net Gains or Losses on
Securities -- .0014 .0002 .0002 .0001 -- (.0002) .0001 .0002 .0004
--------------------------------------------------------------------------------------------------
Total From Investment
Operations .0328 .0247 .0322 .0549 .0731 .0826 .0646 .0551 .0559 .0680
--------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.0328) (.0233) (.0320) (.0547) (.0730) (.0826) (.0648) (.0550) (.0557) (.0676)
Distributions (from
capital gains) (.0012) (.0007) (.0001) -- -- -- -- (.0003) (.0004) --
--------------------------------------------------------------------------------------------------
Total Distributions (.0340) (.0240) (.0321) (.0547) (.0730) (.0826) (.0648) (.0553) (.0561) (.0676)
--------------------------------------------------------------------------------------------------
Net Asset Value, End of
Year $ .9997 $1.0009 $1.0002 $1.0001 $ .9999 $ .9998 $ .9998 $1.0000 $1.0002 $1.0004
--------------------------------------------------------------------------------------------------
Total Return+ +3.46% +2.43% +3.25% +5.61% +7.55% +8.58% +6.68% +5.67% +5.76% +6.95%
--------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $ 5.3 $ 6.8 $ 25.4 $ 21.5 $ 21.5 $ 11.5 $ 9.3 $ 8.1 $ 2.4 $ .9
--------------------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets(1) 1.02% .88% .72% .74% .88% 1.00% 1.00% 1.00% 1.00% 1.00%
--------------------------------------------------------------------------------------------------
Ratio of Net Income to
Average Net Assets(1) 3.28% 2.34% 3.19% 5.47% 7.30% 8.28% 6.52% 5.69% 5.33% 6.69%
--------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1) Since the commencement of operations, the Distributor or principal
underwriter voluntarily assumed certain operating expenses of the Trust as
described in Note B of Notes to Financial Statements. Had such action not
been undertaken, the ratios of expenses and investment income -- net to
average daily net assets on an annualized basis would have been 1.03% and
3.27% for the year ended December 31, 1994, 1.03% and 8.25% in 1989, 1.25%
and 6.27% in 1988, 1.52% and 5.17% in 1987, 2.74% and 3.59% in 1986, and
9.95% and (2.26%) in 1985, respectively. There was no reduction of expenses
for the years ended December 31, 1990 through and including 1993.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Trust 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. The total return information shown
above does not reflect expenses that apply to the separate account or the
related insurance policies, and inclusion of these charges would reduce the
total return figures for all periods shown.
11
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Partners Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the Financial
Statements. It should be read in conjunction with the Financial Statements and
notes thereto.(1)
<TABLE>
<CAPTION>
PERIOD
FROM
3/22/94(2)
TO
12/31/94
<S> <C>
- ----------------------------------------------------------------
Net Asset Value, Beginning of Period $10.00
----------
Income From Investment Operations
Net Investment Income .03
Net Gains or Losses on Securities (both realized
and unrealized) (.26)
----------
Total From Investment Operations (.23)
----------
Net Asset Value, End of Period $ 9.77
----------
Total Return+ -2.30%(3)
----------
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $ 9.4
----------
Ratio of Expenses to Average Net Assets 1.75%(4)
----------
Ratio of Net Income to
Average Net Assets .45%(4)
----------
Portfolio Turnover Rate 90%
----------
</TABLE>
NOTES:
1) The per share amounts which are shown have been computed based on the average
number of shares outstanding during the period.
2) The date investment operations commenced.
3) Not annualized.
4) Ratios are annualized.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Trust during the period,
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. The total return information shown
above does not reflect expenses that apply to the separate account or the
related insurance policies, and the inclusion of these charges would reduce
the total return figures for all periods shown.
12
<PAGE>
INVESTMENT PROGRAMS
The investment policies and limitations of each Portfolio and its
corresponding Series are identical. Each Portfolio invests only in its
corresponding Series. Therefore, the following shows you the kinds of securities
in which each Series invests. For an explanation of some types of investments,
see "Description of Investments" on page 32.
Investment policies and limitations of the Portfolios and the Series are not
fundamental unless otherwise specified in this Prospectus or the SAI. While a
non-fundamental policy or limitation may be changed by the trustees of the Trust
or of Managers Trust without shareholder approval, the Portfolios intend to
notify shareholders before making any material change to such policies or
limitations. Fundamental policies and limitations may not be changed without
shareholder approval. There can be no assurance that the Series and the
Portfolios will achieve their objectives. Each Portfolio, by itself, does not
represent a comprehensive investment program.
Additional investment techniques, features, and limitations concerning the
Series' investment programs are described in the SAI.
AMT Liquid Asset Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Liquid Asset Investments and its
corresponding Portfolio is to provide the highest current income consistent with
safety and liquidity. This investment objective is fundamental and may not be
changed without the approval of the holders of a majority of the outstanding
shares of the Portfolio and Series.
AMT Liquid Asset Investments invests in a portfolio of debt instruments with
remaining maturities of 397 days or less and maintains a dollar-weighted average
portfolio maturity of not more than 90 days. The Series uses the amortized cost
method of valuation to enable the Portfolio to maintain a stable $1.00 share
price, which means that while Portfolio shares earn income, they should be worth
the same when the shareholder sells them as when the shareholder buys them. Of
course, there is no guarantee that the Portfolio will be able to maintain a
$1.00 share price.
AMT Liquid Asset Investments invests in high quality U.S. dollar-denominated
money market instruments of U.S. and foreign issuers, including governments and
their agencies and instrumentalities, banks and other financial institutions,
and corporations, and may invest in repurchase agreements with respect to these
instruments. The Series may invest 25% or more of its total assets in U.S.
Government and Agency securities or in certificates of deposit or bankers'
acceptances issued by domestic branches of U.S. banks.
AMT Limited Maturity Bond Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Limited Maturity Bond Investments and its
corresponding Portfolio is to provide the highest current income consistent with
low risk to principal and liquidity; and secondarily, total return. This
investment objective is fundamental and may not be changed without the approval
of the holders of a majority of the outstanding shares of the Portfolio and
Series.
AMT Limited Maturity Bond Investments invests in a diversified portfolio of
fixed and variable rate debt securities and seeks to increase income and
preserve or enhance total return by actively managing average portfolio maturity
in light of market conditions and trends.
AMT Limited Maturity Bond Investments invests in a diversified portfolio of
short-to-intermediate-term U.S. Government and Agency securities and debt
securities issued by financial institutions, corporations, and others, of at
least investment grade. These securities include mortgage-backed and
asset-backed securities, repurchase agreements with respect to U.S. Government
and Agency securities, and foreign investments. AMT Limited Maturity Bond
Investments may invest up to 5% of its net assets in municipal securities when
N&B Management believes such
13
<PAGE>
securities may outperform other available issues. The Series may purchase and
sell covered call and put options, interest-rate futures contracts, and options
on those futures contracts and may engage in lending portfolio securities. The
Series' dollar-weighted average portfolio maturity may range up to five years.
AMT Government Income Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Government Income Investments and its
corresponding Portfolio is to provide a high level of current income and total
return, consistent with safety of principal. This investment objective is non-
fundamental. The Portfolio intends to notify shareholders 30 days in advance of
making any material change to its investment objective.
AMT Government Income Investments invests in a diversified portfolio of fixed
and variable rate debt securities and seeks to increase income and preserve or
enhance total return by actively managing average portfolio maturity in light of
market conditions and trends.
AMT Government Income Investments invests at least 65% of its total assets in
U.S. Government and Agency securities, with an emphasis on U.S. Government
mortgage-backed securities. In addition, the Series invests at least 25% of its
total assets in mortgage-backed securities (including U.S. Government
mortgage-backed securities) and asset-backed securities. The Series may also
invest in investment grade debt securities, including foreign investments and
securities issued by financial institutions and corporations, and may purchase
and sell covered call and put options, interest-rate and foreign currency
futures contracts, and options on those futures contracts. Although there are no
restrictions on the maturity composition of its portfolio of securities, the
Series anticipates that it normally will invest in intermediate-term and
longer-term securities, but will remain flexible to respond to market conditions
and interest rate trends. The Series may engage in lending portfolio securities,
short-term trading, purchasing forward commitments on securities, and repurchase
agreements, and may use leverage. The investment program of the Series is
intended to protect principal by focusing on the credit quality of the issuers.
Principal may, however, be at risk due to market rate fluctuations.
AMT Growth Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Growth Investments and its corresponding
Portfolio is to seek capital appreciation without regard to income. This
investment objective is fundamental and may not be changed without the approval
of the holders of a majority of the outstanding shares of the Portfolio and
Series.
AMT Growth Investments invests in securities believed to have the maximum
potential for long-term capital appreciation. It does not seek to invest in
securities that pay dividends or interest, and any such income is incidental.
The Series expects to be almost fully invested in common stocks, often of
companies that may be temporarily out of favor in the market.
The Series' aggressive growth investment program involves greater risks and
share price volatility than programs that invest in more conservative
securities. Moreover, the Series does not follow a policy of active trading for
short-term profits. Accordingly, the Series may be more appropriate for
investors with a longer-range perspective. While the Series uses the
Neuberger&Berman value-oriented investment approach, when N&B Management
believes that particular securities have greater potential for long-term capital
appreciation, the Series may purchase such securities at prices with higher
multiples to measures of economic value (such as earnings) than other Series. In
addition, the Series focuses on companies with strong balance sheets and
reasonable valuations relative to their growth rates. It also diversifies its
investments into many companies and industries.
14
<PAGE>
AMT Partners Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Partners Investments and its corresponding
Portfolio is to seek capital growth. This investment objective is
non-fundamental. The Portfolio intends to notify shareholders 30 days in advance
of making any material change to its investment objective.
AMT Partners Investments invests primarily in common stocks of established
companies, using the value-oriented investment approach. The Series seeks
capital growth through an investment approach that is designed to increase
capital with reasonable risk. Its investment program seeks securities believed
to be undervalued based on strong fundamentals such as low price-to-earnings
ratios, consistent cash flow, and support from asset values.
Up to 15% of the Series' net assets may be invested in corporate debt
securities rated below investment grade or in comparable unrated securities.
Securities rated below investment grade as well as unrated securities are often
considered to be speculative and usually entail greater risk. For more
information on lower rated securities, see "Ratings of Securities" in this
Prospectus and "Fixed Income Securities" in the SAI.
AMT Balanced Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Balanced Investments and its corresponding
Portfolio is long-term capital growth and reasonable current income without
undue risk to principal. This investment objective is fundamental and may not be
changed without the approval of the holders of a majority of the outstanding
shares of the Portfolio and Series.
N&B Management anticipates that the Series' investments will normally be
managed so that approximately 60% of the Series' total assets will be invested
in common stocks and the remaining assets will be invested in debt securities.
However, depending on N&B Management's views regarding current market trends,
the common stock portion of the Series' investments may be adjusted downward to
as low as 50% or upward to as high as 70%. At least 25% of the Series' assets
will be invested in fixed income senior securities.
N&B Management has analyzed the total return performance and volatility over
the last 35 years of the Standard & Poor's "500" Composite Stock Price Index
("S&P 500"), an unmanaged average widely considered as representative of general
stock market performance. It has compared the performance and volatility of the
S&P "500" to that of several model balanced portfolios, each consisting of a
different fixed allocation of the S&P "500" and U.S. Treasury Notes having
maturities of 2 years. The comparison reveals that the model balanced portfolio
in which 60% was allocated to the S&P "500" (with the remaining 40% in 2-year
U.S. Treasury Notes) was able to achieve 90.0% of the performance of the S&P
"500", with only 63.3% of the volatility. Those model balanced portfolios in
which 70% and 50% were allocated to the S&P "500" were able to achieve 92.7% and
86.9% of the performance of the S&P "500", with only 72.3% and 54.7% of the
volatility, respectively. While the underlying securities in the model balanced
portfolios are not identical to the anticipated investments by AMT Balanced
Investments and represent past performance, N&B Management believes that the
results of its analysis show the potential benefits of a balanced investment
approach. A chart setting forth the study appears as Appendix A to this
Prospectus.
In the common stock portion of its investments, AMT Balanced Investments will
utilize the same approach and investment techniques employed by N&B Management
in managing AMT Growth Investments, by investing in a combination of common
stocks that N&B Management believes have the maximum potential for long-term
capital appreciation. This portion of the Series does not seek to invest in
securities that pay dividends or interest, and any such income is incidental. In
the debt securities portion of its investments, AMT Balanced Investments will
utilize the same approach and investment techniques employed by N&B Management
in managing AMT Limited Maturity Bond Investments, by investing in a diversified
portfolio of limited maturity debt securities.
15
<PAGE>
AMT International Investments
- --------------------------------------------------------------------------------
The investment objective of AMT International Investments and its
corresponding Portfolio is to seek long-term capital appreciation by investing
primarily in a diversified portfolio of equity securities of foreign issuers.
This investment objective is non-fundamental. Foreign issuers are issuers
organized and doing business principally outside the U.S. and include non-U.S.
governments, their agencies, and instrumentalities.
The Series will invest primarily in equity securities of medium-to-large
capitalization companies, in relation to their respective national markets,
traded on foreign exchanges. The Series normally invests in at least three
foreign countries. The strategy of the Series' investment adviser, BNP-N&B
Global, is to select attractive investment opportunities outside the U.S.,
allocating the assets among investments in economically mature countries and
emerging industrialized countries. At least 65% of the Series' total assets
normally will be invested in equity securities of foreign issuers. The Series
may invest up to 35% of its total assets in Japan and is likely to invest at
least 25% of its total assets in Japan. Because the Portfolio, through the
Series, invests primarily in foreign securities, it may be subject to greater
risks and higher expenses than equity funds that invest primarily in securities
of U.S. issuers. See "Description of Investments."
The Series may also invest in foreign securities in the form of American
Depositary Receipts (ADRs), European Depositary Receipts (EDRs), Global
Depositary Receipts (GDRs), International Depositary Receipts (IDRs) or other
similar securities representing an interest in securities of foreign issuers.
In addition, the Series may purchase and sell options on foreign currencies,
may buy and sell forward foreign currency exchange contracts and contracts for
the future delivery of foreign currencies, and may purchase and sell options on
such futures contracts both for hedging purposes and in an attempt to enhance
income. The Series may write and purchase options on securities and securities
indices and purchase and sell futures contracts and related options (1) in an
effort to manage cash flow and remain fully invested, instead of or in addition
to buying and selling stocks, or (2) in an effort to hedge against a decline in
the value of securities owned by it or an increase in the price of securities
which it plans to purchase. The Series may also purchase securities on a
when-issued or forward commitment basis and engage in portfolio securities
lending.
In addition, the Series may purchase foreign corporate and government debt
securities. The Series may also sell securities short for hedging purposes or in
an effort to realize gains. The Series may enter into repurchase agreements with
respect to any security in which it can invest.
For more details about investments of the Series, see "Description of
Investments."
Short-Term Trading; Portfolio Turnover
- --------------------------------------------------------------------------------
AMT Government Income Investments may engage in short-term trading to a
substantial degree to take advantage of anticipated changes in interest rates.
This investment policy may be considered speculative. Although none of the other
Series purchases securities with the intention of profiting from short-term
trading, each Series may sell portfolio securities prior to maturity when the
investment adviser believes that such action is advisable.
The portfolio turnover rates for the predecessors of the various Series
(except for AMT Liquid Asset Investments and AMT International Investments) for
1994 and earlier years are set forth under "Financial Highlights."
It is anticipated that the annual portfolio turnover rate of AMT Government
Income and AMT Partners Investments generally will exceed 100%.
Turnover rates in excess of 100% may result in higher costs (which are borne
directly by the Series) and a possible increase in short-term capital gains (or
losses).
16
<PAGE>
Ratings of Securities
- --------------------------------------------------------------------------------
HIGH QUALITY DEBT SECURITIES (ALL SERIES). High quality debt securities are
securities that have received a rating from at least one nationally recognized
statistical rating organization ("NRSRO"), such as Standard & Poor's Ratings
Group ("S&P") or Moody's Investors Service, Inc. ("Moody's"), in one of the two
highest rating categories (the highest category in the case of commercial paper)
or, if not rated by any NRSRO, such as U.S. Government and Agency securities,
have been determined by N&B Management to be of comparable quality. If a
security has been rated by two or more NRSROs, at least two of them must have
given the security a high quality rating in order for AMT Liquid Asset
Investments to invest in that security.
INVESTMENT GRADE DEBT SECURITIES (ALL SERIES EXCEPT AMT LIQUID ASSET
INVESTMENTS). "Investment grade" debt securities are those receiving one of the
four highest ratings from Moody's, S&P, or another NRSRO or, if unrated by any
NRSRO, deemed comparable by N&B Management (or BNP-N&B Global, with respect to
AMT International Investments) to such rated securities ("Comparable Unrated
Securities") under guidelines established by the Trustees of Managers Trust.
Moody's deems securities rated in its fourth highest category (Baa) to have
speculative characteristics; a change in economic factors could lead to a
weakened capacity of the issuer to repay.
If the quality of securities held by any Series (other than AMT Liquid Asset
Investments) deteriorates so that the securities would no longer satisfy its
standards, the Series will engage in an orderly disposition of the downgraded
securities to the extent necessary to ensure that the Series' holdings of such
securities will not exceed 5% of the Series' net assets. AMT Liquid Asset
Investments, in accordance with Rule 2a-7, will consider disposing of its
securities.
LOWER-RATED SECURITIES (AMT INTERNATIONAL AND PARTNERS INVESTMENTS). AMT
International Investments may invest up to 5% of its net assets in debt
securities including those rated below investment grade and unrated securities.
AMT Partners Investments may invest up to 15% of its net assets in debt
securities rated below investment grade or Comparable Unrated Securities.
Securities rated below investment grade ("junk bonds") are deemed by Moody's and
S&P (or foreign statistical rating organizations) to be predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal.
Those in the lowest rating categories may involve a substantial risk of
default or may be in default. Changes in economic conditions or developments
regarding the individual issuer are more likely to cause price volatility and
weaken the capacity of the issuers of such securities to make principal and
interest payments than is the case for higher grade debt securities. An economic
downturn affecting the issuer may result in an increased incidence of default.
The market for lower-rated securities may be thinner and less active than for
higher-rated securities. N&B Management (or BNP-N&B Global, with respect to AMT
International Investments) will invest in such securities only when it concludes
that the anticipated return to the Portfolio on such an investment warrants
exposure to the additional level of risk. A further description of Moody's and
S&P's ratings is included in the Appendix to the SAI.
The value of the fixed income securities in which a Series may invest,
measured in the currency in which they are denominated, is likely to decline in
times of rising interest rates. Conversely, when rates fall, the value of a
Series' fixed income investments may rise. The longer the period remaining to
maturity, the more pronounced is the effect of interest rate changes on the
value of a security.
Borrowings
- --------------------------------------------------------------------------------
(ALL SERIES EXCEPT AMT GOVERNMENT INCOME AND INTERNATIONAL INVESTMENTS).
Each of the Series has a fundamental policy that it may not borrow money, except
that it may (1) borrow money from banks for temporary or emergency purposes and
not for leveraging or investment and (2) enter into reverse repurchase
agreements for any purpose, so long as the aggregate amount of borrowings and
reverse repurchase agreements does not exceed one-third
17
<PAGE>
of the Series' total assets (including the amount borrowed) less liabilities
(other than borrowings). None of these Series expects to borrow money. As a
non-fundamental policy, none of these Series may purchase portfolio securities
if its outstanding borrowings, including reverse repurchase agreements, exceed
5% of its total assets. Dollar rolls are treated as reverse repurchase
agreements.
(AMT GOVERNMENT INCOME INVESTMENTS). AMT Government Income Investments, as a
fundamental policy, may borrow money from banks for any purpose, including to
meet redemptions and increase the amount available for investment, and enter
into reverse repurchase agreements (including dollar rolls) for any purpose, so
long as the aggregate amount of borrowings and reverse repurchase agreements
does not exceed one-third of the Series' total assets (including the amount
borrowed) less liabilities (other than borrowings). Leveraging (borrowing) to
increase amounts available for investment may exaggerate the effect on net asset
value of any increase or decrease in the market value of the securities of the
Series. Money borrowed for leveraging will be subject to interest costs which
may or may not be recovered by income and appreciation of the securities
purchased.
(AMT INTERNATIONAL INVESTMENTS). AMT International Investments has a
fundamental policy that it may not borrow money, except that it may (1) borrow
money from banks and (2) enter into reverse repurchase agreements for any
purpose, so long as the aggregate amount of borrowings and reverse repurchase
agreements does not exceed one-third of the Series' total assets (including the
amount borrowed) less liabilities (other than borrowings).
The Series may borrow money from banks to facilitate transactions entered
into by the Series for hedging purposes, which is a form of leverage. This
leverage may exaggerate changes in the net asset value of the Portfolio's shares
and the gains and losses on the Series' investments. Leverage also creates
interest expenses; if those expenses exceed the return on transactions that
borrowings facilitate, the Series will be in a worse position than if it had not
borrowed. The use of derivatives in connection with leverage may create the
potential for significant losses. The Series may pledge assets in connection
with permitted borrowings.
(ALL SERIES). Currently, the State of California imposes borrowing
limitations on variable insurance products funds. To comply with these
limitations, each Series, as a matter of operating policy, has undertaken that
it will not borrow more than 10% of its net asset value when borrowing for any
general purpose and will not borrow more than 25% of its net asset value when
borrowing as a temporary measure to facilitate redemptions. For these purposes,
net asset value is the market value of all investments or assets owned less
outstanding liabilities at the time that any new or additional borrowing is
undertaken.
Other Investments
- --------------------------------------------------------------------------------
For temporary defensive purposes, all Series (except AMT International
Investments) may each invest up to 100% of its total assets in cash and cash
equivalents, U.S. Government and Agency Securities, commercial paper and certain
other money market instruments, as well as repurchase agreements collateralized
by the foregoing. Also, for temporary defensive purposes, AMT Limited Maturity
Bond, Government Income, Liquid Asset and Balanced Investments (fixed income
portion only) may also adopt shorter weighted average maturities than normal.
For temporary defensive purposes, AMT International Investments may invest up
to 100% of its total assets in short-term foreign and U.S. investments such as
cash or cash equivalents, commercial paper, short-term bank obligations,
government and agency securities and repurchase agreements. The Series may also
invest in such instruments to ensure adequate liquidity or to provide collateral
to be held in segregated accounts.
To the extent that a Series is invested in temporary defensive instruments,
it will not be pursuing its investment objective.
18
<PAGE>
PERFORMANCE INFORMATION
LIQUID ASSET PORTFOLIO. From time to time, the Liquid Asset Portfolio's
annualized "yield" and "effective yield" may be presented in advertisements and
sales literature. The Portfolio's "yield" represents an annualization of the
increase in value of an account (excluding any capital changes) invested in the
Portfolio for a specific seven-day period. The Portfolio's "effective yield"
compounds such yield for a year and thus is greater than the Portfolio's yield.
OTHER PORTFOLIOS. Performance information for each of the other Portfolios
may also be presented from time to time in advertisements and sales literature.
A Portfolio's "yield" is calculated by dividing the Portfolio's annualized net
investment income during a recent 30-day period by the Portfolio's net asset
value on the last day of the period. A Portfolio's total return is quoted for
the one-year period and, where applicable, the five-year period and ten-year
period through the most recent calendar quarter (or for the life of the
Portfolio, if less than ten years) and is determined by calculating the change
in value of a hypothetical $1,000 investment in the Portfolio for each of those
periods. Total return calculations assume reinvestment of all Portfolio
distributions from net investment income and net realized gains.
All performance information presented for the Portfolios is based on past
performance and does not predict future performance. Any Portfolio performance
information presented will also include or be accompanied by performance
information for the Life Company separate accounts investing in the Trust which
will take into account insurance-related charges and expenses under such
insurance policies and contracts. Further information regarding each Portfolio's
performance is presented in the Trust's annual report to shareholders, which is
available without charge by calling 800-366-6264.
Advertisements concerning the Trust may from time to time compare the
performance of one or more Portfolios to various indices. Advertisements may
also contain the performance rankings assigned certain Portfolios or their
advisers by various publications and statistical services. Any such comparisons
or rankings are based on past performance and the statistical computations
performed by publications and services, and are not necessarily indications of
future performance. Because the Portfolios are managed investment vehicles
investing in a wide variety of securities, the securities owned by a Portfolio
will not match those making up an index. 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 in any index.
19
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995; these conversions
were approved by the shareholders of the predecessors of the Portfolios in
August, 1994, with the exception of the International Portfolio which is a new
Portfolio which has not yet commenced investment operations. Each Portfolio
invests all of its net investable assets in its corresponding Series, in each
case receiving a beneficial interest in that Series. The trustees of the Trust
may establish additional portfolios or classes of shares, without the approval
of shareholders. The assets of each Portfolio belong only to that Portfolio, and
the liabilities of each Portfolio are borne solely by that Portfolio and no
other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable, and
shareholders have no preemptive or other right to subscribe to any additional
shares.
SHAREHOLDER MEETINGS. The trustees of the Trust do not intend to hold annual
meetings of shareholders of the Portfolios. The trustees will call special
meetings of shareholders of a Portfolio only if required under the 1940 Act or
in their discretion or upon the written request of holders of 10% or more of the
outstanding shares of that Portfolio entitled to vote. Pursuant to current
interpretations of the 1940 Act, the Life Companies will solicit voting
instructions from Variable Contract owners with respect to any matters that are
presented to a vote of shareholders of that Portfolio.
CERTAIN PROVISIONS OF THE TRUST INSTRUMENT. Under Delaware law, the
shareholders of a Portfolio will not be personally liable for the obligations of
any Portfolio; a shareholder is entitled to the same limitation of personal
liability extended to shareholders of corporations. To guard against the risk
that Delaware law might not be applied in other states, the Trust Instrument
requires that every written obligation of the Trust or a Portfolio contain a
statement that such obligation may be enforced only against the assets of the
Trust or Portfolio and provides for indemnification out of Trust or Portfolio
property of any shareholder nevertheless held personally liable for Trust or
Portfolio obligations, respectively.
The Series
- --------------------------------------------------------------------------------
Each Series is a separate series of Managers Trust, a New York common law
trust organized as of May 24, 1994. Managers Trust is registered under the 1940
Act as a diversified, open-end management investment company. Managers Trust has
seven separate series. On May 1, 1995, each Portfolio (other than the
International Portfolio which has not yet commenced investment operations)
invested all of its net investable assets (cash, securities, and receivables
relating to securities) in a corresponding Series of Managers Trust, receiving a
beneficial interest in that Series. This investment was authorized by the
shareholders of the predecessors of these Portfolios in August, 1994. 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.
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<PAGE>
PORTFOLIOS' INVESTMENT IN THE SERIES. Each Portfolio seeks to achieve its
investment objective by investing all of its net investable assets in its
corresponding Series having the same investment objective, policies, and
limitations as the Portfolio. Accordingly, each Series directly acquires its own
securities and its corresponding Portfolio acquires an indirect interest in
those securities. Historically, N&B Management, administrator to the Portfolios
and AMT International Investments and investment manager of all Series, except
AMT International Investments, has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 22 master funds and
31 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in a Series other than a Portfolio redeemed its interest in the Series,
the Series' remaining investors (including the Portfolio) might, as a result,
experience higher pro rata operating expenses, thereby producing lower returns.
Each Portfolio may withdraw its entire investment from its corresponding
Series at any time, if the trustees of the Trust determine that it is in the
best interests of the Portfolio and its shareholders to do so. A Portfolio might
withdraw, for example, if there were other investors in the Series with power
to, and who did by a vote of all investors (including the Portfolio), change the
investment objective, policies, or limitations of the Series in a manner not
acceptable to the trustees of the Trust. A withdrawal could result in a
distribution in kind of securities (as opposed to a cash distribution) by the
Series. That distribution could result in a less diversified portfolio of
investments for the Portfolio and could affect adversely the liquidity of the
Portfolio's investment portfolio. If a Portfolio decided to convert those
securities to cash, it usually would incur brokerage fees or other transaction
costs. If a Portfolio withdrew its investment from a Series, the trustees would
consider what action might be taken, including the investment of all of the
Portfolio's net investable assets in another pooled investment entity having
substantially the same investment objective as the Portfolio or the retention by
the Portfolio of its own investment manager to manage its assets in accordance
with its investment objective, policies, and limitations. The inability of the
Portfolio to find a suitable replacement could have a significant impact on
shareholders.
INVESTOR MEETINGS AND VOTING. Each Series normally will not hold meetings of
investors except as required by the 1940 Act. Each investor in a Series will be
entitled to vote in proportion to its relative beneficial interest in the
Series. On most issues subjected to a vote of investors, as required by the 1940
Act and other applicable law, a Portfolio will solicit proxies from its
shareholders and will vote its interest in the Series in proportion to the votes
cast by the Portfolio's shareholders. Pursuant to current interpretations of the
1940 Act, the Life Companies who are shareholders of the Portfolio will solicit
voting instructions from contract owners with respect to any matters that are
presented to a vote of Portfolio shareholders. If there are other investors in a
Series, there can be no assurance that any issue that receives a majority of the
votes cast by Portfolio shareholders will receive a majority of votes cast by
all Series investors; indeed, if other investors hold a majority interest in the
Series, they could have voting control of the Series.
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<PAGE>
CERTAIN PROVISIONS. Each investor in a Series, including a Portfolio, will
be liable for all obligations of the Series, but not of the other Series.
However, the risk of an investor in a Series incurring financial loss on account
of such liability would be limited to circumstances in which the Series had
inadequate insurance and was unable to meet its obligations out of its assets.
Upon liquidation of a Series, investors would be entitled to share pro rata in
the net assets of the Series available for distribution to investors.
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<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of a Series, the market value of the securities the Series holds
plus cash and other assets; in the case of a Portfolio, its percentage interest
in its corresponding Series, multiplied by the Series' NAV, plus any other
assets). Each Portfolio's per share NAV is calculated by dividing its NAV by the
number of Portfolio shares outstanding and rounding the result to the nearest
full cent.
Each Portfolio and its corresponding Series calculate their NAVs as of the
close of regular trading on The New York Stock Exchange ("NYSE"), usually 4 p.m.
Eastern time. AMT Liquid Asset Investments, in accordance with Rule 2a-7 under
the 1940 Act, will use the amortized cost method of valuation to enable AMT
Liquid Asset Investments to try to maintain a stable NAV of $1.00 per share. AMT
Liquid Asset Investments values its securities at their cost at the time of
purchase and assumes a constant amortization to maturity of any discount or
premium.
AMT Limited Maturity Bond, Government Income, and Balanced Investments (debt
securities portion) value their securities on the basis of bid quotations from
independent pricing services or principal market makers, or, if quotations are
not available, by a method that the trustees of Managers Trust believe
accurately reflects fair value. The Series periodically verify valuations
provided by the pricing services. Short-term securities with remaining
maturities of less than 60 days are valued at cost which, when combined with
interest earned, approximates market value.
AMT Growth, Partners, and Balanced Investments (equity portion) value their
equity securities (including options) listed on the NYSE, the American Stock
Exchange, other national exchanges, or the NASDAQ market, and other securities
for which market quotations are readily available, at the latest sale price on
the day NAV is calculated. If there is no sale of such a security on that day,
that security is valued at the mean between its closing bid and asked prices.
The Series value all other securities and assets, including restricted
securities, by a method that the trustees of Managers Trust believe accurately
reflects fair value.
Equity securities held by AMT International Investments are valued at the
last sale price on the principal exchange or in the principal over-the-counter
market in which such securities are traded, as of the close of business on the
day the securities are being valued, or if there are no sales, at the last
available bid price. Debt obligations held by AMT International Investments are
valued at the last available bid price for such securities, or if such prices
are not available, at prices for securities of comparable maturity, quality, and
type. Foreign securities are translated from the local currency into U.S.
dollars using current exchange rates. AMT International Investments values all
other types of securities and assets, including restricted securities and
securities for which market quotations are not readily available, by a method
that the trustees of Managers Trust believe accurately reflects fair value. AMT
International Investments portfolio securities are listed primarily on foreign
exchanges which may trade on days when the NYSE is closed. As a result, the NAV
of the International Portfolio may be significantly affected on days when
shareholders have no access to the Portfolio.
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<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
Each of the Government Income, Growth, Partners, Balanced, Limited Maturity
Bond, and International Portfolios annually distributes substantially all of its
share of its corresponding Series' net investment income (net of the Portfolio's
expenses), net realized capital gains, and net realized gains from foreign
currency transactions, if any, normally in February.
The Liquid Asset Portfolio distributes to its shareholders substantially all
of its share of its corresponding Series' net investment income (net of the
Portfolio's expenses) and net realized capital gains. Income dividends are
declared daily for the Portfolio at the time its NAV is calculated and are paid
monthly, and net realized capital gains, if any, are normally distributed
annually in February.
The Portfolios offer their shares solely to separate accounts of the Life
Companies, except for the Balanced Portfolio which also offers its shares to
Qualified Plans. All dividends and other distributions are distributed to the
separate accounts (and, with respect to the Balanced Portfolio, to the Qualified
Plans) and will be automatically invested in Trust shares. Dividends and other
distributions made by a Portfolio to the separate accounts are taxable, if at
all, to the extent described in the prospectuses for the Variable Contracts.
Tax Status
- --------------------------------------------------------------------------------
Each Portfolio is treated as a separate entity for Federal income tax
purposes and intends to continue to qualify for treatment as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended ("Code"), so that it will be relieved of Federal income tax on that part
of its investment company taxable income (generally consisting of net investment
income, net short-term capital gain and net gains from certain foreign currency
transactions) and net capital gain (the excess of net long-term capital gain
over net short-term capital loss) that is distributed to its shareholders. Each
Portfolio distributes all of its net income and gains to its shareholders.
Certain funds managed by N&B Management have received a ruling from the
Internal Revenue Service that each such fund, as an investor in a corresponding
series of an open-end management investment company (in a master/ feeder fund
structure similar to that involving the Portfolios and the Series), will be
deemed to own a proportionate share of the series' assets and income for
purposes of determining whether the fund qualifies as a regulated investment
company. That ruling also concluded that each such series will be treated as a
separate partnership for Federal income tax purposes and will not be a "publicly
traded partnership," with the result that none of those series will be subject
to federal income tax (and, instead, each investor therein will take into
account in determining its Federal income tax liability its share of the series'
income, gains, losses, deductions and credits). Although that ruling may not be
relied on as precedent by the Portfolios and the Series, they believe the
reasoning thereof and, hence, this conclusion applies as well to them. The Trust
and Managers Trust, on behalf of each Portfolio and Series, have applied to the
Internal Revenue Service for a similar ruling.
The foregoing is only a summary of some of the important Federal income tax
considerations generally affecting the Portfolios and their shareholders; see
the SAI for a more detailed discussion. Prospective shareholders are urged to
consult their tax advisers.
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<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. (See "Distribution and Redemption of Trust Shares".)
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of segregated asset accounts that fund contracts such as the
Variable Contracts (that is, the assets of the Series), which are in addition to
the diversification requirements imposed on the Portfolios by the 1940 Act and
Subchapter M. Failure to satisfy those standards would result in imposition of
Federal income tax on a Variable Contract owner with respect to earnings
allocable to the Variable Contract prior to the receipt of payments thereunder.
Section 817(h)(2) provides that a segregated asset account that funds contracts
such as the Variable Contracts is treated as meeting the diversification
standards if, as of the close of each quarter, the assets in the account meet
the diversification requirements for a regulated investment company and no more
than 55% of those assets consist of cash, cash items, U.S. Government securities
and securities of other regulated investment companies. There is an exception
for securities issued by the Treasury Department in connection with variable
life insurance policies.
The Treasury Regulations amplify the diversification standards set forth in
Section 817(h) and provide an alternative to the provision described above.
Under the regulations, an investment portfolio will be deemed adequately
diversified if (i) no more than 55% of the value of the total assets of the
portfolio is represented by any one investment; (ii) no more than 70% of such
value is represented by any two investments; (iii) no more than 80% of such
value is represented by any three investments; and (iv) no more than 90% of such
value is represented by any four investments. For purposes of these Regulations
all securities of the same issuer are treated as a single investment, and each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Series will be managed in such a manner as to comply with these
diversification requirements. It is possible that, in order to comply with these
requirements, less desirable investment decisions may be made which would affect
the investment performance of a Portfolio.
Section 817 of the Code and the Treasury Regulations thereunder do not
currently address variable contract diversification in the context of a
master/feeder fund structure. As described under "Tax Status" above, the Trust
and Managers Trust have applied to the Internal Revenue Service for a ruling
relating to certain tax issues in connection with the conversion of the Trust to
the master/feeder fund structure. As part of this request, the Trust and
Managers Trust have requested that the Internal Revenue Service rule that the
"look-through" rule of Section 817, which would permit the segregated asset
accounts to look through to the underlying assets of the Series, will be
available for the variable contract diversification test. Unavailability of the
"look-through" rule would preclude compliance with the diversification
requirements. There can be no assurance that the Internal Revenue Service will
issue the requested ruling.
Currently, the State of California imposes diversification requirements on
variable insurance products funds investing in non-U.S. securities. Under these
requirements, a fund investing at least 80% of its assets in non-U.S. securities
must be invested in at least five countries; less than 80% but at least 60%, in
at least four countries; less than 60% but at least 40%, in at least three
countries; and less than 40% but at least 20%, in at least two countries, except
that up to 35% of a fund's assets may be invested in securities of issuers
located in any of the following countries: Australia, Canada, France, Japan, the
United Kingdom or Germany. The Trust and Managers Trust intend to comply with
the California diversification requirements, to the extent applicable.
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<PAGE>
MANAGEMENT AND ADMINISTRATION
Trustees and Officers
- --------------------------------------------------------------------------------
The trustees of the Trust and the trustees of Managers Trust, who are
currently the same individuals, have overall responsibility for the operations
of each Portfolio and each Series, respectively. The SAI contains general
background information about each trustee and officer of the Trust and of
Managers Trust. The officers of the Trust and of Managers Trust who are officers
and/or directors of N&B Management and/or partners of Neuberger&Berman serve
without compensation from the Portfolios or the Series. The trustees of the
Trust and of Managers Trust, including a majority of those trustees who are not
"interested persons" (as defined in the 1940 Act) of any Portfolio, have adopted
written procedures reasonably appropriate to deal with potential conflicts of
interest, including, if necessary, creating a separate board of trustees of
Managers Trust.
Investment Manager, Adviser, Administrator, Sub-Adviser and
Distributor
- --------------------------------------------------------------------------------
ALL PORTFOLIOS AND THEIR CORRESPONDING SERIES (EXCEPT INTERNATIONAL
PORTFOLIO AND ITS CORRESPONDING SERIES). N&B Management serves as the investment
manager of each Series, as administrator of each Portfolio and as distributor of
the shares of each Portfolio. N&B Management and its predecessor firms have
specialized in the management of no-load mutual funds since 1950. In addition to
serving the six Series, N&B Management currently serves as investment manager or
investment adviser of other mutual funds. Neuberger&Berman, which acts as sub-
adviser for the Series and other mutual funds managed by N&B Management, also
serves as investment adviser of two investment companies. These funds had
aggregate net assets of approximately $7.4 billion as of December 31, 1994.
As sub-adviser, Neuberger&Berman furnishes N&B Management with investment
recommendations and research information without added cost to the Series.
Neuberger&Berman is a member firm of the NYSE and other principal exchanges and
acts as the Series' principal broker in the purchase and sale of their
securities. Neuberger& Berman and its affiliates, including N&B Management,
manage securities accounts that had approximately $29 billion of assets as of
December 31, 1994. All of the voting stock of N&B Management is owned by
individuals who are general partners of Neuberger&Berman.
Theresa A. Havell is a general partner of Neuberger&Berman and a director and
Vice President of N&B Management. Ms. Havell is the Manager of the Fixed Income
Group of Neuberger&Berman, which she established in 1984. The Fixed Income Group
manages fixed income accounts that had approximately $9.9 billion of assets as
of December 31, 1994. Ms. Havell has overall responsibility for the activities
of the Fixed Income Group, providing guidance and reviewing portfolio strategy
and structure.
The following members of the Fixed Income Group are primarily responsible for
the day-to-day management of the listed Series:
AMT Liquid Asset Investments -- Josephine Mahaney, who has been a Senior
Portfolio Manager in the Fixed Income Group since 1984 and a Vice President of
N&B Management since November 1994.
AMT Limited Maturity Bond Investments and AMT Balanced Investments (debt
securities portion) -- Margaret Didi Weinblatt, who has been a Senior Portfolio
Manager in the Fixed Income Group since 1986 and a Vice President of N&B
Management since November 1994.
AMT Government Income Investments -- Stephen A. White, who has been a Senior
Portfolio Manager in the Fixed Income Group since April 1993 and a Vice
President of N&B Management since November 1994. Prior to April 1993, he was a
portfolio manager of several large mutual funds managed by another prominent
investment adviser.
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The following is a list of the equity Series of Managers Trust, together with
information about individuals who are primarily responsible for the day-to-day
management of these Series:
AMT Growth Investments and AMT Balanced Investments (equity portion) -- Mark
R. Goldstein and Susan Switzer. Mr. Goldstein is a Vice President of N&B
Management and a general partner of Neuberger&Berman. Previously he was a
securities analyst and portfolio manager with that firm. Susan Switzer has been
an Assistant Vice President of N&B Management since March, 1995, and a portfolio
manager for Neuberger&Berman since January 1995. Ms. Switzer was a research
analyst and assistant portfolio manager for another money management firm from
1989 to 1994.
AMT Partners Investments -- Michael M. Kassen and Robert I. Gendelman. Mr.
Kassen is a Vice President of N&B Management and a general partner of
Neuberger&Berman. Mr. Kassen was an employee of N&B Management from 1990 to
December 1992. He was a portfolio manager of several large mutual funds managed
by another prominent investment adviser from 1981 to 1988 and was general
partner of two private investment partnerships from 1988 to 1990. Mr. Gendelman
is a senior portfolio manager for Neuberger&Berman and an Assistant Vice
President of N&B Management since 1994. He was a portfolio manager for another
mutual fund manager from 1992 to 1993 and was managing partner of an investment
partnership from 1988 to 1992.
N&B Management serves as distributor in connection with the offering of each
Portfolio's shares. In connection with the sale of each Portfolio's shares, each
Portfolio has authorized the distributor to give only such information and to
make only such statements and representations as are contained in the
Portfolio's Prospectus. The distributor is responsible only for information
given and statements and representations made in a Portfolio's Prospectus and is
not responsible for any information given or any statements or representations
made by the Life Companies or by brokers or salespersons in connection with
Variable Contracts.
INTERNATIONAL PORTFOLIO AND ITS CORRESPONDING SERIES. BNP-N&B Global, a
partnership jointly owned by BNP and Neuberger&Berman, serves as investment
adviser of the Series. BNP-N&B Global was formed as a joint venture of BNP and
Neuberger&Berman in May, 1994, combining the experience of two long-established
firms to provide investment advisory services. The investment adviser will
benefit from the expertise available to it from Neuberger&Berman and BNP. Such
expertise includes economic analysis, foreign exchange analysis, securities
analysis, and portfolio management. BNP-N&B Global has its headquarters in New
York. The partnership, which is registered as an investment adviser with the
U.S. Securities and Exchange Commission, was formed to provide asset management
services to institutions and high net worth individuals.
BNP is one of the largest banks in the world. BNP (and its predecessor firms)
have engaged in commercial banking since 1848. BNP is one of the world's leading
comprehensive service commercial banks. As of December 31, 1994, BNP had
consolidated net equity of approximately $9.0 billion. BNP has recently been
privatized and enjoys an AA rating from all major credit rating agencies.
Neuberger&Berman was established in 1939 as a money management firm.
Neuberger&Berman is a member firm of the NYSE and other principal exchanges.
N&B Management serves as the administrator of the Series and the Portfolio,
and as distributor of the shares of the Portfolio.
Felix Rovelli is primarily responsible for the day-to-day management of the
portfolio securities of the Series. Mr. Rovelli has been a Senior Vice
President-Senior Equity Portfolio Manager of BNP-N&B Global since May 1994. He
previously served as first vice president and portfolio manager of another
mutual fund that invested in international equity securities, from April 1990 to
April 1994.
ALL PORTFOLIOS AND THEIR CORRESPONDING SERIES. Neuberger&Berman acts as the
principal broker for all Series, except AMT International Investments, in the
purchase and sale of portfolio securities and in the sale of covered call
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<PAGE>
options, and for those services receives brokerage commissions. In effecting
securities transactions, each Series seeks to obtain the best price and
execution of orders. Neuberger&Berman and BNP-International Financial Services
Corporation may act as brokers for AMT International Investments in the purchase
and sale of portfolio securities and in the purchase and sale of options, and
for those services would receive brokerage commissions. In effecting securities
transactions, the Series seeks to obtain the best price and execution of orders.
For more information, see the SAI.
The partners and employees of Neuberger&Berman and officers and employees of
N&B Management, together with their families, have invested over $100 million of
their own money in Neuberger&Berman Funds.
To mitigate the possibility that a Series will be adversely affected by
personal trading of employees, the Trust, Managers Trust, N&B Management,
Neuberger&Berman and BNP-N&B Global have adopted policies that restrict
securities trading in personal accounts of the portfolio managers and others who
normally come into possession of information on portfolio transactions. These
policies comply, in all material respects, with the recommendations of the
Investment Company Institute.
Expenses
- --------------------------------------------------------------------------------
ALL PORTFOLIOS AND THEIR CORRESPONDING SERIES (EXCEPT INTERNATIONAL
PORTFOLIO AND ITS CORRESPONDING SERIES). N&B Management provides investment
management services to each Series that include, among other things, making and
implementing investment decisions and providing facilities and personnel
necessary to operate the Series. N&B Management provides administrative services
to each Portfolio that include furnishing similar facilities and personnel for
the Portfolio. With the Portfolio's consent, N&B Management is authorized to
subcontract some of its responsibilities under its administration agreement with
the Portfolio to third parties. For such administrative and investment
management services, N&B Management is paid the following fees:
Fees (AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
GROWTH; PARTNERS; BALANCED 0.55% of first $250 million 0.30%
0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
GOVERNMENT INCOME 0.35% of first $500 million 0.40%
0.325% of next $500 million
0.30% of next $500 million
0.275% of next $500 million
0.25% of over $2 billion
LIMITED MATURITY BOND; LIQUID ASSET 0.25% of first $500 million 0.40%
0.225% of next $500 million
0.20% of next $500 million
0.175% of next $500 million
0.15% of over $2 billion
</TABLE>
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Each Portfolio bears all expenses of its operations other than those borne by
N&B Management as administrator of the Portfolio and as distributor of its
shares. Each Series bears all expenses of its operations other than those borne
by N&B Management as investment manager of the Series. These expenses include,
but are not limited to, for the Portfolios and the Series, legal and accounting
fees and compensation for trustees who are not affiliated with N&B Management;
for the Portfolios, transfer agent fees and the cost of printing and sending
reports and proxy materials to shareholders; and for the Series, custodial fees
for securities. Any expenses which are not directly attributable to a specific
Series are allocated on the basis of the net assets of the respective Series.
INTERNATIONAL PORTFOLIO AND ITS CORRESPONDING SERIES. BNP-N&B Global
provides investment advisory services to AMT International Investments that
include, among other things, making and implementing investment decisions. N&B
Management provides administrative services and facilities and personnel
necessary to operate the Series and the Portfolio. N&B Management provides these
administrative services to the Series and the Portfolio under administration
agreements. For such administrative services, the Portfolio pays N&B Management
a fee at the annual rate of 0.63% of the Portfolio's average daily net assets.
With the Portfolio's consent, N&B Management is authorized to subcontract some
of its responsibilities under its administration agreement with the Portfolio to
third parties. For such administrative services, the Series pays N&B Management
a fee at the annual rate of 0.10% of the first $250 million of the Series'
average daily net assets, 0.08% of the next $250 million; 0.06% of the next $250
million; and 0.04% of average net assets in excess of $750 million. The minimum
fee is $100,000 per annum. For investment advisory services, the Series pays
BNP-N&B Global a fee at the annual rate of 0.50% of the first $250 million of
the Series' average daily net assets; 0.475% of the next $250 million; 0.45% of
the next $250 million; and 0.425% of average daily net assets in excess of $750
million.
The Portfolio bears all expenses of its operations other than those borne by
N&B Management as administrator of the Portfolio and as distributor of its
shares. The Series bears all expenses of its operations other than those borne
by BNP-N&B Global as investment adviser of the Series and by N&B Management as
administrator of the Series. These expenses include, but are not limited to, for
the Portfolio and the Series, legal and accounting fees, and compensation for
trustees who are not affiliated with BNP-N&B Global or N&B Management; for the
Portfolio, transfer agent fees and printing and sending reports and proxy
materials to shareholders; and for the Series, custodial fees for securities.
Expense Reimbursement
- --------------------------------------------------------------------------------
ALL PORTFOLIOS AND THEIR CORRESPONDING SERIES (EXCEPT INTERNATIONAL
PORTFOLIO AND ITS CORRESPONDING SERIES). N&B Management has voluntarily
undertaken to reimburse each Portfolio for its operating expenses and its pro
rata share of its corresponding Series' operating expenses, excluding the
compensation of N&B Management (with respect to all Portfolios but the Liquid
Asset Portfolio and the Government Income Portfolio), taxes, interest,
extraordinary expenses, brokerage commissions and transaction costs, that exceed
1% of the Portfolio's average daily net asset value. This undertaking is subject
to termination on 60 days' prior written notice to the Portfolio.
The effect of any reimbursement by N&B Management is to reduce operating
expenses of a Portfolio and its corresponding Series and thereby increase total
return.
INTERNATIONAL PORTFOLIO AND ITS CORRESPONDING SERIES. From May 1, 1995
through December 31, 1996, BNP-N&B Global has voluntarily undertaken to
reimburse the Series for its operating expenses, including investment advisory
and administration fees, but excluding taxes, interest, extraordinary expenses
and brokerage commissions, that exceed 0.70% per annum of the Series' average
daily net assets ("Series Expense Limitation"). The Series has in turn agreed to
repay BNP-N&B Global through December 31, 1997, for the excess operating
expenses BNP-N&B Global previously reimbursed to the Series, so long as neither
the Portfolio Expense Limitation nor the Series Expense Limitation is exceeded.
Commencing May 1, 1995 and ending December 31, 1996, N&B Management has
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voluntarily undertaken to reimburse the Portfolio for its operating expenses,
including administration fees and the Portfolio's pro rata share of the
operating expenses of the Series, but excluding certain other expenses, that
exceed 1.70% per annum of the Portfolio's average daily net assets ("Portfolio
Expense Limitation"), after reimbursement, if any, by BNP-N&B Global for the
Series' excess operating expenses. The Portfolio has in turn agreed to repay N&B
Management through December 31, 1997, for the excess operating expenses N&B
Management previously reimbursed to the Portfolio, so long as the Portfolio's
annual operating expenses during that period do not exceed the Portfolio Expense
Limitation. The effect of any reimbursement of the Portfolio or Series would be
to reduce the Portfolio's expenses and thereby increase its total return.
Transfer and Dividend Paying Agent
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State Street Bank and Trust Company ("State Street"), Boston, Massachusetts,
acts as transfer and dividend paying agent for the Portfolios and in so doing
performs certain bookkeeping, data processing and administrative services.
Qualified Plan participants investing in the Balanced Portfolio should send all
correspondence to State Street, care of Boston Service Center, P.O. Box 8403,
Boston, MA 02266-8403. All other correspondence should be sent to State Street
Bank & Trust Company, P.O. Box 1978, Boston, MA 02105. State Street provides
similar services to the Series as the Series' transfer agent. State Street also
acts as the custodian of the Series' and the Portfolios' assets.
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DISTRIBUTION AND REDEMPTION OF TRUST SHARES
Distribution and Redemption of Trust Shares
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Shares of the Trust are issued and redeemed in connection with investments in
and payments under the Variable Contracts issued through separate accounts of
the Life Companies which may or may not be affiliated with the Trust. Shares of
the Balanced Portfolio of the Trust are also offered directly to Qualified
Plans. Shares of the Trust are purchased and redeemed at net asset value.
The Boards of Trustees of the Trust and Managers Trust have undertaken to
monitor the Trust and Managers Trust, respectively, for the existence of any
material irreconcilable conflict between the interests of the Variable Contract
owners of the Life Companies and to determine what action, if any, should be
taken in the event of a conflict. The Life Companies and N&B Management are
responsible for reporting any potential or existing conflicts to the Boards. Due
to differences of tax treatment and other considerations, the interests of
various Variable Contract owners participating in the Trust and Managers Trust
and the interests of Qualified Plans investing in the Trust and Managers Trust
may conflict. If such a conflict were to occur, one or more Life Company
separate accounts or Qualified Plans might withdraw its investment in the Trust.
This might force the Trust to sell portfolio securities at disadvantageous
prices.
Redemptions will be effected by the separate accounts to meet obligations
under the Variable Contracts and by the Qualified Plans. Contract owners do not
deal directly with the Trust with respect to acquisition or redemption of
shares. The trustees of the Trust may refuse to sell shares of any Portfolio to
any person, or suspend or terminate the offering of shares of any Portfolio if
such action is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the trustees acting in good faith and in light
of their fiduciary duties under federal and any applicable state laws, necessary
in the best interests of the shareholders of such Portfolio.
Distribution Plan
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The Board of Trustees of the Trust has adopted a non-fee Distribution Plan
for each Portfolio of the Trust.
The Distribution Plan recognizes that N&B Management may use its assets and
resources, including its profits from administration fees paid by a Portfolio,
to pay expenses associated with the distribution of Portfolio shares. However,
N&B Management will not receive any separate fees for such expenses. To the
extent that any payments made by a Portfolio should be deemed to be indirect
financing of any activity primarily intended to result in the sale of shares of
the Portfolio within the context of Rule 12b-1 under the 1940 Act, then such
payments shall be deemed to be authorized by the Distribution Plan.
Under the Distribution Plan, the Portfolio will require N&B Management to
provide the Trust with quarterly reports of the amounts expended in connection
with financing any activity primarily intended to result in the sale of
Portfolio shares, and the purpose for which such expenditure was made. The
Distribution Plan may be terminated as to a particular Portfolio at any time by
a vote of a majority of the independent trustees of the Trust or by a vote of a
majority of the outstanding voting securities of that Portfolio. The
Distribution Plan does not require N&B Management to perform any specific type
or level of distribution activities or to incur any specific level of expenses
for activities primarily intended to result in the sale of shares of the
Portfolio.
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DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Programs" herein,
some or all of the Series, as indicated below, may make the following
investments, among others, individually or in combination, although a Series may
not necessarily buy all of the types of securities or use all of the investment
techniques that are described. These investments may be limited by the
requirements with which the Series must comply if the Portfolios are to qualify
as regulated investment companies for tax purposes. For additional information
on the following investments and on other types of investments the Series may
make, see the SAI.
U.S. GOVERNMENT AND AGENCY SECURITIES (ALL SERIES). U.S. Government
securities are obligations of the U.S.Treasury backed by the full faith and
credit of the United States. U.S. Government Agency securities are issued or
guaranteed by U.S. Government agencies, instrumentalities, or other U.S.
Government-sponsored enterprises, such as the Government National Mortgage
Association ("GNMA"), Federal National Mortgage Association ("FNMA"), Federal
Home Loan Mortgage Corporation ("FHLMC"), Student Loan Marketing Association,
Tennessee Valley Authority, and various federally chartered or sponsored banks.
Agency securities may be backed by the full faith and credit of the United
States, the issuer's ability to borrow from the U.S. Treasury, subject to the
Treasury's discretion in certain cases, or only by the credit of the issuer.
U.S. Government and Agency securities include certain mortgage-backed
securities. The market prices of U.S. Government securities are not guaranteed
by the government and generally fluctuate with changing interest rates.
ILLIQUID SECURITIES (ALL SERIES). Each Series may invest up to 10% of its
net assets in securities that are illiquid, in that they cannot be expected to
be sold within seven days at approximately the price at which they are valued.
Due to the absence of an active trading market, a Series may experience
difficulty in valuing or disposing of illiquid securities. N&B Management, and
with respect to AMT International Investments, BNP-N&B Global, determines the
liquidity of the Series' securities, under supervision of the trustees of
Managers Trust. Securities which are freely tradeable in their country of origin
or in their principal market will not be considered illiquid securities even if
they are not registered for sale in the U.S.
FOREIGN SECURITIES (ALL SERIES). All Series may invest in U.S.
dollar-denominated foreign securities. Foreign securities are those of issuers
organized and doing business principally outside the U.S., including non-U.S.
governments, their agencies, and instrumentalities. All Series, except AMT
Liquid Asset Investments, may also invest in foreign securities denominated in
or indexed to foreign currencies, which may also be affected by the fluctuation
of the foreign currencies relative to the U.S. dollar, irrespective of the
performance of the underlying investment. N&B Management (or BNP-N&B Global with
respect to AMT International Investments) considers these factors in making
investments for the Series. AMT Limited Maturity Bond, Balanced, International
and Government Income Investments may enter into forward foreign currency
contracts or futures contracts (agreements to exchange one currency for another
at a future date) and related options to manage currency risks and to facilitate
transactions in foreign securities. Although these contracts can protect the
Series from adverse exchange rate changes, they involve a risk of loss if N&B
Management, or BNP-N&B Global with respect to AMT International Investments,
fails to predict foreign currency values correctly.
AMT Growth, Partners and Balanced Investments may each invest up to 10% of
the value of its total assets in foreign securities that are issued by
non-United States entities. The 10% limitation does not apply with respect to
foreign securities that are denominated in U.S. dollars, including ADRs. Foreign
securities (including those denominated in U.S. dollars and ADRs) are affected
by political or economic developments in foreign countries.
AMT International Investments may invest in ADRs, EDRs, GDRs, and IDRs. ADRs
(sponsored or unsponsored) are receipts typically issued by a U.S. bank or trust
company evidencing its ownership of the underlying foreign securities. Most ADRs
are denominated in U.S. dollars and are traded on a U.S. stock exchange. Issuers
of the
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securities underlying unsponsored ADRs are not contractually obligated to
disclose material information in the U.S. and, therefore, there may not be a
correlation between such information and the market value of the unsponsored
ADR. EDRs and IDRs are receipts typically issued by a European bank or trust
company evidencing its ownership of the underlying foreign securities. GDRs are
receipts issued by either a U.S. or non-U.S. banking institution evidencing its
ownership of the underlying foreign securities and are often denominated in U.S.
dollars.
Investments in foreign securities could be affected by factors generally not
thought to be present in the U.S. Such factors include, but are not limited to,
varying custody, brokerage and settlement practices; difficulty in pricing some
foreign securities; less public information about issuers of securities; less
governmental regulation and supervision over issuance and trading of securities;
the unavailability of financial information or the difficulty of interpreting
financial information prepared under foreign accounting standards; less
liquidity and more volatility in foreign securities markets; the possibility of
expropriation; the imposition of foreign withholding and other taxes; political,
social, or diplomatic developments; limitations on the movement of funds or
other assets of the Series between different countries; difficulties in invoking
legal process abroad and enforcing contractual obligations; and the difficulty
of assessing economic trends in foreign countries. Investment in foreign
securities also involves higher brokerage and custodian expenses than does
investment in domestic securities.
In addition, investing in securities of foreign companies and governments may
involve other risks which are not ordinarily associated with investing in
domestic securities. These risks include changes in currency exchange rates and
currency exchange control regulations or other foreign or U.S. laws or
restrictions applicable to such investments or devaluations of foreign
currencies. A decline in the exchange rate would reduce the value of certain
portfolio securities irrespective of the performance of the underlying
investment. In addition, a Series may incur costs in connection with conversion
between various currencies. Investments in depositary receipts (whether or not
denominated in U.S. dollars) may be subject to exchange controls and changes in
rates of exchange with the U.S. dollar because the underlying security is
usually denominated in foreign currency. All of the foregoing risks may be
intensified in emerging industrialized and less developed countries.
JAPANESE INVESTMENTS (AMT INTERNATIONAL INVESTMENTS). AMT International
Investments may invest a substantial portion of its assets in securities of
Japanese issuers. The performance of the Portfolio will therefore be
significantly affected by events affecting the Japanese economy and the exchange
rate between the Japanese yen and the U.S. dollar. Japan has recently
experienced a severe recession, including a decline in real estate values that
adversely affected the balance sheets of many financial institutions. The
effects of this economic downturn may be felt for a considerable period. Japan
is undergoing a period of political instability, which may undercut its ability
to resolve promptly trading disputes with the U.S. Japan is heavily dependent on
foreign oil. Japanese economic prospects may be affected by the political and
military situations of its near neighbors, notably North and South Korea, China
and Russia.
FOREIGN CORPORATE AND GOVERNMENT DEBT SECURITIES (AMT INTERNATIONAL
INVESTMENTS). The Series may invest up to 5% of its net assets in U.S.
dollar-denominated and non-U.S. dollar-denominated corporate and government debt
securities of foreign issuers. The Series may invest in debt securities of any
rating, including those rated below investment grade and unrated securities.
FOREIGN CURRENCY TRANSACTIONS (ALL SERIES EXCEPT AMT LIQUID ASSET
INVESTMENTS). Each of these Series may enter into forward foreign currency
exchange contracts in order to protect against adverse changes in future foreign
currency exchange rates, to facilitate transactions in foreign securities and to
repatriate dividend income received in foreign currencies. A Series may enter
into contracts to purchase foreign currencies to protect against an anticipated
rise in the U.S. dollar price of securities it intends to purchase. A Series may
also enter into contracts to sell foreign
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currencies to protect against a decline in value of its foreign currency
denominated portfolio securities due to a decline in the value of foreign
currencies against the U.S. dollar. Contracts to sell foreign currency could
limit any potential gain which might be realized by a Series if the value of the
hedged currency increased.
A Series may also enter into forward foreign currency exchange contracts for
non-hedging purposes when the investment adviser anticipates that the foreign
currency will appreciate or depreciate in value, but securities denominated in
that currency do not present attractive investment opportunities and are not
held in the Series. A Series may also engage in cross-hedging by using forward
contracts in one currency to hedge against fluctuations in the value of
securities denominated in a different currency if the investment adviser
believes that there is a pattern of correlation between the two currencies.
If a Series enters into a forward currency exchange contract to sell foreign
currency, it may be required to place cash or high grade liquid debt securities
in a segregated account in an amount equal to the value of the Series' total
assets committed to the consummation of the forward contract. Although these
contracts can protect a Series from adverse exchange rates, they involve risk of
loss if N&B Management, and BNP-N&B Global for AMT International Investments,
fail to predict foreign currency values correctly.
PUT AND CALL OPTIONS, FUTURES CONTRACTS, OPTIONS ON FUTURES CONTRACTS (ALL
SERIES EXCEPT AMT LIQUID ASSET INVESTMENTS). Each of these Series may try to
reduce the risk of securities price changes (hedge) or generate income by
writing (selling) covered call options against securities held in its portfolio
having a market value not exceeding 10% of its net assets and may purchase call
options in related closing transactions. The purchaser of a call option acquires
the right to buy a portfolio security at a fixed price during a specified
period. The maximum price the seller may realize on the security during the
option period is the fixed price. The seller continues to bear the risk of a
decline in the security's price, although this risk is reduced by the premium
received for the option.
AMT Limited Maturity Bond, Government Income, and Balanced Investments also
may try to manage portfolio maturity by (1) entering into interest-rate futures
contracts traded on futures exchanges and (2) purchasing and writing options on
futures contracts.
AMT Limited Maturity Bond, Government Income, and Balanced Investments also
may write covered call options and purchase put options on debt securities in
their portfolios or on foreign currencies for hedging purposes or for the
purpose of producing income. Each of these Series will write call options on a
security or currency only if it holds that security or currency or has the right
to obtain the security or currency at no additional cost. These investment
practices involve certain risks, including price volatility and a high degree of
leverage. A Series may engage in transactions in futures contracts and related
options only as permitted by regulations of the Commodity Futures Trading
Commission.
AMT International Investments may enter into futures contracts and purchase
and sell options on such contracts on both the U.S. and foreign exchanges for
hedging and non-hedging purposes. AMT International Investments may (1) enter
into futures contracts on debt securities, interest rates, securities indices
and currencies and (2) purchase and write options on futures contracts.
AMT International Investments may purchase and write put and call options on
foreign currencies for the purpose of protecting against declines in the dollar
value of foreign portfolio securities and against increases in the U.S. dollar
cost of foreign securities to be acquired. The Series may also use options on
foreign currencies to cross-hedge. In addition, the Series may purchase call or
put options on currencies for non-hedging purposes when the investment adviser
expects that the currency will appreciate or depreciate in value, but the
securities denominated in that currency do not present attractive investment
opportunities and are not held in the Series. Options on foreign
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currencies to be written or purchased by the Series will be traded on U.S. and
foreign exchanges or over-the-counter. Options on foreign currencies which are
traded in the over-the-counter market may be considered to be illiquid
securities and subject to the restriction on illiquid securities. (See "Illiquid
Securities," above.)
To realize greater income than would be realized on portfolio securities
transactions alone, AMT International Investments may write call and put options
on any securities in which it may invest or options on any securities index
based on securities in which the Series may invest. The Series will not write a
call option on a security or currency unless it owns the underlying security or
currency or has the right to obtain it at no additional cost.
The writing and purchasing of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions including price volatility and a high
degree of leverage. AMT International Investments pays brokerage commissions or
spreads in connection with its options transactions, as well as for purchases
and sales of underlying securities or currency. The writing of options could
result in significant increases in the Series' turnover rate.
The primary risks in using put and call options, futures contracts and
options on futures contracts, and forward foreign currency contracts or options
on foreign currencies ("Hedging Instruments") are (1) imperfect correlation or
no correlation between changes in market value of the securities held by the
Series and the prices of the Hedging Instruments; (2) possible lack of a liquid
secondary market for Hedging Instruments and the resulting inability to close
out a Hedging Instrument when desired; (3) the fact that the skills needed to
use Hedging Instruments are different from those needed to select the Series'
securities; (4) the fact that, although use of these instruments for hedging
purposes can reduce the risk of loss, they also can reduce the opportunity for
gain, or even result in losses, by offsetting favorable price movements in
hedged investments; and (5) the possible inability of the Series to purchase or
sell a security at a time that would otherwise be favorable for it to do so, or
the possible need for the Series to sell a security at a disadvantageous time,
due to its need to maintain "cover" or to segregate securities in connection
with its use of these instruments. Futures, options and forward foreign currency
contracts are considered derivatives.
FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES (ALL SERIES EXCEPT AMT LIQUID
ASSET INVESTMENTS). In a when-issued transaction, a Series commits to purchase
securities in order to secure an advantageous price and yield at the time of the
commitment and pays for the securities when they are delivered at a future date
(generally within three months). If the seller fails to complete the sale, a
Series may lose the opportunity to obtain a favorable price and yield.
When-issued securities may decline or increase in value during the period from
the Series' investment commitment to the settlement of the purchase which may
magnify fluctuation in the Series' NAV.
INDEXED SECURITIES (AMT INTERNATIONAL, LIMITED MATURITY BOND, GOVERNMENT
INCOME AND BALANCED INVESTMENTS). Each of these Series may invest in indexed
securities whose value is linked to currencies, interest rates, commodities,
indices, or other financial indicators. Most indexed securities are
short-to-intermediate term fixed-income securities whose values at maturity or
interest rates rise or fall according to the change in one or more specified
underlying instruments. Indexed securities may be positively or negatively
indexed (i.e., their value may increase or decrease if the underlying instrument
appreciates), and may have return characteristics similar to direct investments
in the underlying instrument or to one or more options on the underlying
instrument. Indexed securities may be more volatile than the underlying
instrument itself.
REPURCHASE AGREEMENTS/SECURITIES LOANS (ALL SERIES). Each Series may enter
into repurchase agreements and lend securities from its portfolio. In a
repurchase agreement, a Series buys a security from a Federal Reserve member
bank (or with respect to AMT International Investments, from a foreign bank or
U.S. branch or agency of a foreign bank), or a securities dealer and
simultaneously agrees to sell it back at a higher price, at a specified date,
usually less than a week later. The underlying securities must fall within the
Series' investment policies and limitations (but not limitations as to
maturity). Each Series also may lend portfolio securities to banks, brokerage
firms, or institutional
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investors to earn income. Costs, delays or losses could result if the selling
party to a repurchase agreement or the borrower of portfolio securities becomes
bankrupt or otherwise defaults. N&B Management and, with respect to AMT
International Investments, BNP-N&B Global, monitors the creditworthiness of
sellers and borrowers.
REVERSE REPURCHASE AGREEMENTS (ALL SERIES) AND DOLLAR ROLLS (AMT LIMITED
MATURITY BOND, GOVERNMENT INCOME AND BALANCED INVESTMENTS). In a reverse
repurchase agreement, a Series sells securities and at the same time agrees to
repurchase the same securities at a later date at a fixed price. During the
period before the repurchase, the Series continues to receive principal and
interest payments on the securities. In a dollar roll, a Series sells securities
for delivery in the current month and simultaneously contracts to repurchase
substantially similar (same type and coupon) securities on a specified future
date from the same party. During the period before the repurchase, the Series
forgoes principal and interest payments on the securities. The Series is
compensated by the difference between the current sales price and the forward
price for the future purchase (often referred to as the "drop"), as well as by
the interest earned on the cash proceeds of the initial sale. Reverse repurchase
agreements and dollar rolls may increase the fluctuation in the market value of
a Series' assets and are forms of leverage. N&B Management (or BNP-N&B Global
with respect to AMT International Investments) monitors the creditworthiness of
parties to reverse repurchase agreements and dollar rolls.
CONVERTIBLE SECURITIES (AMT INTERNATIONAL, PARTNERS, GROWTH AND BALANCED
INVESTMENTS). Each of these Series may invest in convertible securities. A
convertible security is a bond, debenture, note, preferred stock, or other
security that may be converted into or exchanged for a prescribed amount of
common stock of the same or a different issuer within a particular period of
time at a specified price or formula. Many convertible securities are rated
below investment grade, or, are unrated.
MORTGAGE-BACKED SECURITIES (AMT LIQUID ASSET, LIMITED MATURITY BOND,
GOVERNMENT INCOME, AND BALANCED INVESTMENTS). Mortgage-backed securities
represent interests in, or are secured by and payable from, pools of mortgage
loans, including collateralized mortgage obligations. These securities may be
U.S. Government mortgage-backed securities, which are issued or guaranteed by a
U.S. Government agency or instrumentality (though not necessarily backed by the
full faith and credit of the United States), such as GNMA, FNMA and FHLMC
certificates. Other mortgage-backed securities are issued by private issuers,
generally originators of and investors in mortgage loans, including savings
associations, mortgage bankers, commercial banks, investment bankers, and
special purpose entities. These private mortgage-backed securities may be
supported by U.S. Government mortgage-backed securities or some form of
non-government credit enhancement. Mortgage-backed securities may have either
fixed or adjustable interest rates. Tax or regulatory changes may adversely
affect the mortgage securities market. In addition, changes in the market's
perception of the issuer may affect the value of mortgage-backed securities. The
rate of return on mortgage-backed securities may be affected by prepayments of
principal on the underlying loans, which generally increase as interest rates
decline; as a result, when interest rates decline, holders of these securities
normally do not benefit from appreciation in market value to the same extent as
holders of other non-callable debt securities. N&B Management determines the
effective life of mortgage-backed securities based on industry practice and
current market conditions. If N&B Management's determination is not borne out in
practice, it could positively or negatively affect the value of the Series when
market interest rates change. Increasing market interest rates generally extend
the effective maturities of mortgage-backed securities.
ASSET-BACKED SECURITIES (AMT LIQUID ASSET, LIMITED MATURITY BOND, GOVERNMENT
INCOME, AND BALANCED INVESTMENTS). Asset-backed securities represent interests
in, or are secured by and payable from pools of assets, such as consumer loans,
CARSSM ("Certificates for Automobile ReceivablesSM"), credit card receivable
securities, and installment loan contracts. Although these securities may be
supported by letters of credit or other credit enhancements,
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payment of interest and principal ultimately depends upon individuals paying the
underlying loans. The risk that recovery on repossessed collateral might be
unavailable, or inadequate to support payments on asset-backed securities is
greater than in the case of mortgage-backed securities.
OTHER INVESTMENT COMPANIES (AMT INTERNATIONAL INVESTMENTS). AMT
International Investments may invest up to 10% of its total assets in the shares
of other investment companies. Such investment may be the most practical or only
manner in which the Series can participate in certain foreign markets because of
the expenses involved or because vehicles for investing in certain countries may
not be available at the time the Series is ready to make an investment. As a
shareholder in an investment company, the Series would bear its pro rata share
of that investment company's expenses. Investment in investment companies may
involve the payment of substantial premiums above the value of such issuers'
portfolio securities. The Series does not intend to invest in such funds unless,
in the judgment of the investment adviser, the potential benefits of such
investment justify the payment of any applicable premium or sales charge.
OTHER INVESTMENTS (AMT PARTNERS, GROWTH, AND BALANCED INVESTMENTS). Although
each of these Series invests primarily in common stocks, except AMT Balanced
Investments (debt portion), when market conditions warrant each may invest in
preferred stocks, securities convertible into or exchangeable for common stocks,
U.S. Government and Agency Securities, investment grade debt securities, or
money market instruments, or may retain assets in cash or cash equivalents.
SHORT SELLING (AMT PARTNERS, GROWTH, BALANCED, AND INTERNATIONAL
INVESTMENTS). Each Series may attempt to limit exposure to a possible market
decline in the value of portfolio securities through short sales of securities
which the investment adviser believes possess volatility characteristics similar
to those being hedged and may use short sales in an attempt to realize gain. To
effect such a transaction, a Series will borrow a security from a brokerage firm
to make delivery to the buyer. A Series then is obligated to replace the
security borrowed by purchasing it at the market price at the time of
replacement. Until the security is replaced, a Series is required to pay to the
lender any accrued interest or dividend and may be required to pay a premium.
A Series will realize a gain if the security declines in price between the
date of the short sale and the date on which the Series replaces the borrowed
security. A Series will incur a loss if the price of the security increases
between those dates. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of any premium or interest the Series may be
required to pay in connection with a short sale. The successful use of short
selling may be adversely affected by imperfect correlation between movements in
the price of the security sold short and the securities being hedged. Short
selling may defer recognition of gains or losses into another tax period.
AMT Partners, Growth, Balanced and International Investments may make short
sales against-the-box, in which the Series sells short securities it owns or has
the right to obtain without payment of additional consideration.
SWAP AGREEMENTS (AMT GOVERNMENT INCOME INVESTMENTS). To help enhance the
value of its portfolio or manage its exposure to different types of investments,
the Series may enter into interest rate, currency, and mortgage swap agreements
and may purchase and sell interest rate "caps," "floors," and "collars."
In a typical interest rate swap agreement, one party agrees to make regular
payments equal to a floating interest rate on a specified amount (the "notional
principal amount") in return for payments equal to a fixed interest rate on the
same amount for a specified period. If a swap agreement provides for payment in
different currencies, the parties may also agree to exchange the notional
principal amount. Mortgage swap agreements are similar to interest rate swap
agreements, except the notional principal amount is tied to a reference pool of
mortgages.
In a cap or floor, one party agrees, usually in return for a fee, to make
payments under particular circumstances. For example, the purchaser of an
interest rate cap has the right to receive payments to the extent a specified
interest
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rate exceeds an agreed level; the purchaser of an interest rate floor has the
right to receive payments to the extent a specified interest rate falls below an
agreed level. A collar entitles the purchaser to receive payments to the extent
a specified interest rate falls outside an agreed range.
Swap agreements, including caps and floors, may involve leverage and may be
highly volatile; depending on how they are used, they may have a considerable
impact on the Series' performance. Swap agreements involve risks depending upon
the other party's credit-worthiness and ability to perform, as well as the
Series' ability to terminate its swap agreements or reduce its exposure through
offsetting transactions. Swap agreements may be illiquid. The swap market is
relatively new and is largely unregulated. Swap agreements are generally
considered "derivatives."
VARIABLE AND FLOATING RATE SECURITIES (AMT BALANCED, GOVERNMENT INCOME,
LIMITED MATURITY BOND AND LIQUID ASSET INVESTMENTS). Variable and floating rate
securities have interest rate adjustment formulas that help to stabilize their
market value. Many of these instruments carry a demand feature which permits a
Series to sell them during a determined time period at par value plus accrued
interest. The demand feature is often backed by a credit instrument, such as a
letter of credit, or by a creditworthy insurer. A Series may rely on such
instrument or the creditworthiness of the insurer in purchasing a variable or
floating rate security. For purposes of determining its dollar-weighted average
maturity, each Series calculates the remaining maturity of variable and floating
rate instruments as provided in Rule 2a-7 under the 1940 Act.
ZERO COUPON SECURITIES (ALL SERIES). Zero coupon securities do not pay
interest currently; instead, they are sold at a discount from their face value
and are redeemed at face value when they mature. Because zero coupon bonds do
not pay current income, their prices can be very volatile when interest rates
change. In calculating its daily income, a Series accrues a portion of the
difference between a zero coupon bond's purchase price and its face value.
MUNICIPAL OBLIGATIONS (AMT LIMITED MATURITY BOND AND BALANCED INVESTMENTS).
Municipal obligations are issued by or on behalf of states, the District of
Columbia, and U.S. territories and possessions and their political subdivisions,
agencies, and instrumentalities. The interest on municipal obligations is exempt
from federal income tax. Municipal obligations include "general obligation"
securities, which are backed by the full taxing power of a municipality, and
"revenue" securities, which are backed by the income from a specific project,
facility, or tax. Municipal obligations also include industrial development and
private activity bonds -- the interest on which may be a tax preference item for
purposes of the federal alternative minimum tax -- which are issued by or on
behalf of public authorities and are not backed by the credit of any
governmental or public authority. "Anticipation notes" are issued by
municipalities in expectation of future proceeds from the issuance of bonds, or
from taxes or other revenues, and are payable from those bond proceeds, taxes,
or revenues. Municipal obligations also include tax-exempt commercial paper,
which is issued by municipalities to help finance short-term capital or
operating requirements. Current efforts to restructure the federal budget and
the relationship between the federal government and state and local governments
may impact the financing of some issuers of municipal securities. Some states
and localities are experiencing substantial deficits and may find it difficult
for political or economic reasons to increase taxes. Both of these factors could
affect the ability of an issuer of municipal securities to meet its obligations.
RESTRICTED SECURITIES AND RULE 144A SECURITIES (ALL SERIES). The Series may
invest in restricted securities and Rule 144A securities. Restricted securities
cannot be sold to the public without registration under the Securities Act of
1933 ("1933 Act"). Unless registered for sale, these securities can be sold only
in privately negotiated transactions or pursuant to an exemption from
registration. Restricted securities are generally considered illiquid. Rule 144A
securities, although not registered, may be resold only to qualified
institutional buyers in accordance with Rule 144A under the 1933 Act.
Unregistered securities may also be sold abroad pursuant to Regulation S under
the 1933 Act. N&B Management (or BNP-N&B Global with respect to AMT
International Investments), acting pursuant to guidelines established by the
trustees of Managers Trust, may determine that some restricted securities are
liquid.
38
<PAGE>
USE OF JOINT PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION
Each Portfolio and its corresponding Series acknowledges that it is solely
responsible for all information or lack of information about that Portfolio and
Series in this Prospectus or in the SAI, and no other Portfolio or Series is
responsible therefor. The trustees of the Trust and of Managers Trust have
considered this factor in approving each Portfolio's and Series' use of a single
combined Prospectus and combined SAI.
39
<PAGE>
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
APPENDIX A TO PROSPECTUS
TOTAL RETURN ANALYSIS USING CONSTANT
ASSET ALLOCATION S&P "500"/2 YR.
U.S. TREASURY NOTES
1960 - 1994
<TABLE>
<CAPTION>
FIXED ASSET ALLOCATION COMPARISON TO 100%
S&P "500"/2 YR. TREASURY NOTES S&P "500" ALLOCATION
- ------------------------------------------------------
<S> <C> <C>
100/0 (100% S&P
"500")
Return 10.06% 100.0%
Volatility 15.3% 100.0%
70/30
Return 9.33 92.74
Volatility 11.1 72.3
60/40
Return 9.05 89.96
Volatility 9.7 63.3
50/50
Return 8.74 86.88
Volatility 8.4 54.7
0/100
Return 6.90 68.59
Volatility 4.2 27.3
</TABLE>
40
