<PAGE>
As filed with the Securities and Exchange Commission on March 1, 1996
Registration No. 2-88566
Investment Company Act File No. 811-4255
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
---
Pre-Effective Amendment No.
---- ---
Post-Effective Amendment No. 19 X
---- ---
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
---
Amendment No. 19 X
---- ---
(Check appropriate box or boxes)
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST(1)
(Exact Name of Registrant as Specified in Charter)
605 THIRD AVENUE, 2ND FLOOR, NEW YORK, NEW YORK 10158-0006
(Address of Principal Executive Offices)
Registrant's Telephone Number: (212) 476-8800
--------------
Stanley Egener
c/o Neuberger&Berman Management Incorporated
605 Third Avenue, 2nd Floor
New York, New York 10158-0006
(Name and Address of Agent for Service)
Copies to:
Jeffrey S. Puretz, Esq.
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
It is proposed that this filing will become effective (check appropriate box)
[ ] Immediately upon filing pursuant to [ ] on pursuant
paragraph (b) --------------
to paragraph (b)
[ ] 60 days after filing pursuant to [X] on May 1, 1996 pursuant
to paragraph (a)(1) paragraph (a)(1)
[ ] 75 days after filing pursuant to [ ] on ____________ pursuant
paragraph (a)(2) to paragraph (a)(2) of
Rule 485
- -------------------------------
* Registrant has registered an indefinite number of shares of all series then
existing or subsequently established under the Securities Act of 1933
pursuant to Rule 24f-2 under the Investment Company Act of 1940, which it
expressly reaffirms. Registrant filed the notice required by Rule 24f-2
with respect to its fiscal year ended December 31, 1995, on February 27,
1996.
(1) Registrant is a "master/feeder fund." This Post-Effective Amendment No. 19
includes a signature page for the master fund, Advisers Managers Trust.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 495)
---------------------
Form N-1A Part A Item Prospectus Caption
- ---------------------- -------------------
1. Cover page.................. Cover Page
2. Synopsis.................... Expense
Information
3. Condensed Financial
Information................. Financial Highlights;
Performance Information
4. General Description of
Registrant.................. Investment Programs;
Special Information
Regarding Organization,
Captialization, and Other
Matters
5. Management of the Fund...... Management and
Administration
5A. Management's Discussion of
Fund Performance .......... To be provided in Registrant's
Annual Reports to Shareholders
6. Capital Stock and Other
Securities.................. Cover Page; Special
Information Regarding
Organization,
Capitalization and Other
Matters; Dividends, Other
Distributions & Tax
Status
7. Purchase of Securities
Being Offered............... Share Prices and Net
Asset Value; Distribution
and Redemption of Trust
Shares
8. Redemption or Repurchase.... Distribution and
Redemption of Trust
Shares; Special
Information Regarding
Organization,
Capitalization, and Other
Matters
9. Pending Legal Proceedings... Inapplicable
Statement of Additional
Form N-1A Part B Item Information Caption
- ---------------------- --------------------
10. Cover Page.................. Cover Page
11. Table of Contents.......... Table of Contents
12. General Information and
History..................... Special Information
Regarding Organization,
Capitalization and Other
Matters (Part A);
Investment Information
<PAGE>
13. Investment Objectives and
Policies.................... Investment Information
14. Management of the Fund...... Trustees and Officers;
Investment Management,
Advisory and
Administration Services
15. Control Persons and Principal
Holders of Securities....... Control Persons and
Principal Holders of
Securities
16. Investment Advisory and other
Services.................... Investment Management,
Advisory and
Administration Services;
Distribution
Arrangements; Reports to
Shareholders; Custodian;
Independent Auditors
17. Brokerage Allocation........ Portfolio Transactions
18. Capital Stock and other
Securities.................. Special Information
Regarding Organization,
Capitalization, and Other
Matters (Part A)
19. Purchase, Redemption and
Pricing of Securities
Being Offered............... Share Prices and Net
Asset Value (in Part A);
Distribution Arrange-
ments; Additional
Redemption Information
20. Tax Status.................. Additional Tax
Information
21. Underwriters................ Distribution Arrangements
22. Calculation of Performance
Data........................ Performance Information
23. Financial Statements........ Financial Statements
PART C
Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C to this Registration
Statement.
<PAGE>
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
Joint Prospectus
__________, 1996
<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, ARE MANAGED BY NEUBERGER&BERMAN MANAGEMENT INCORPORATED ("N&B
MANAGEMENT"). 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 ___.
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 _____________, 1996, 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.
<PAGE>
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: _____________, 1996
<PAGE>
TABLE OF CONTENTS PAGE
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Portfolios and Series . . . . . . . . . . . . . . . . . . . . . . . 1
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Neuberger&Berman Investment Approach . . . . . . . . . . . . . . . 3
EXPENSE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Selected Per Share Data and Ratios. . . . . . . . . . . . . . . . . . . 6
INVESTMENT PROGRAMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
AMT Liquid Asset Investments . . . . . . . . . . . . . . . . . . . . . 6
AMT Limited Maturity Bond Investments . . . . . . . . . . . . . . . . . 7
AMT Government Income Investments . . . . . . . . . . . . . . . . . . . 7
AMT Growth Investments . . . . . . . . . . . . . . . . . . . . . . . . 8
AMT Partners Investments . . . . . . . . . . . . . . . . . . . . . . . 8
AMT Balanced Investments . . . . . . . . . . . . . . . . . . . . . . . 9
AMT International Investments . . . . . . . . . . . . . . . . . . . . . 9
Short-Term Trading; Portfolio Turnover . . . . . . . . . . . . . . . . 10
Ratings of Securities . . . . . . . . . . . . . . . . . . . . . . . . . 11
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Other Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . 14
The Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
The Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SHARE PRICES AND NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . 16
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS. . . . . . . . . . . . . . . . 17
Dividends and Other Distributions . . . . . . . . . . . . . . . . . . . 17
Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SPECIAL CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
MANAGEMENT AND ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . 19
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . . 19
Investment Manager, Adviser, Administrator, Sub-Adviser and Distributor 19
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Expense Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . 23
Transfer and Dividend Paying Agent . . . . . . . . . . . . . . . . . . 23
i
<PAGE>
DISTRIBUTION AND REDEMPTION OF TRUST SHARES. . . . . . . . . . . . . . . . . 24
Distribution and Redemption of Trust Shares . . . . . . . . . . . . . . 24
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
DESCRIPTION OF INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 25
USE OF JOINT PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION. . . . . . . . . . . . . . . . . . . . . 33
APPENDIX A TO PROSPECTUS . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ii
<PAGE>
SUMMARY
The Portfolios and Series
On May 1, 1995 the Trust was reorganized into a master/feeder 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 __. For more details about each Series, its investments
and their risks, see "Investment Programs" on page __, "Ratings of Securities"
on page __, "Borrowings" on page __, and "Description of Investments" on
page __.
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 High-qaulity money market
consistent with safety and instruments of government and
liquidity non-government issuers
GROWTH PORTFOLIO Capital appreciation, without Common stocks
regard to income
LIMITED MATURITY BOND Highest current income Short-to-intermediate term debt
PORTFOLIO consistent with low risk to securities, primarily
principal and liquidity; and investment grade
secondarily, total return
-1-
<PAGE>
BALANCED PORTFOLIO Long-term growth and Common stocks and
reasonable current income short-to-intermediate term debt
without undue risk to principal securities, primarily
investment grade
PARTNERS PORTFOLIO Capital growth Common stocks and other equity
securities of established
companies
GOVERNMENT INCOME High level of current income and At least 65% in U.S.
PORTFOLIO total return, consistent with Government and Agency
safety of principal securities, with an emphasis on
U.S. Government
mortgage-backed securities; at
least 25% in mortgage-backed
and asset-backed securities
INTERNATIONAL Long-term capital appreciation Equity securities of issuers
PORTFOLIO by investing primarily in a organized and doing business
diversified portfolio of equity primarily outside the U.S.
securities of foreign issuers
</TABLE>
Risk Factors
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 and debt securities
rated below investment grade. 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.
-2-
<PAGE>
AMT Partners Investments may invest up to 15% of its net assets in corporate
debt securities rated below investment grade or comparable unrated securities.
AMT Limited Maturity Bond Investments may invest up the 10% of its net assets,
measured at the time of investment, in debt securities rated below investment
grade or comparable unrated securities. AMT Balanced Investments may invest up
to 10% of the debt securities portion of its investments, measured at the time
of investment, in 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 N&B Management
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. 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" in this Prospectus.
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
-3-
<PAGE>
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."
EXPENSE INFORMATION
[UPDATED EXPENSE INFORMATION FOR THE BALANCED PORTFOLIO OF REGISTRANT WILL BE
CONTAINED IN A POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT OF
REGISTRANT FILED ON OR BEFORE THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT]
This section gives you certain information about the expenses of the Balanced
Portfolio and its corresponding Series. See "Performance Information" for
important facts about the investment performance of the Balanced Portfolio,
after taking expenses into account. Information about expenses for the other
Portfolios is contained in the Trust's financial statements and has been
provided to the Life Companies for use in prospectuses that describe the
Variable Contracts.
-------------------------------------
-------------------------------------
Shareholder Transaction Expense
-------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
As shown by this table, you pay no transaction charges when you buy or sell
Portfolio shares.
Balanced Portfolio
------------------------------------------------------------------------
Sales Charge Imposed on Purchases NONE
Sales Charge Imposed On Reinvested Dividends NONE
Deferred Sales Charges NONE
Redemption Fees NONE
Exchange Fees NONE
--------------------------------------
--------------------------------------
Annual Portfolio Operating Expenses
(as percentage of average net assets)
--------------------------------------
--------------------------------------
-4-
<PAGE>
The following tables shows anticipated Annual Portfolio Operating Expenses,
which are paid out of the assets of the Balanced Portfolio and which include the
Portfolio's pro rate portion of the Operating Expenses of the Balanced Series.
These expenses are borne indirectly by Portfolio shareholders. The Balanced
Portfolio pays N&B management an administration fee based on the Portfolio's net
asset value. The Balanced Series pays N&B management a management fee, based on
the Balanced Series' average daily net assets; a pro rate portion of this fee is
borne indirectly by the Balanced Portfolio. Therefore, the table combines
management and administration fees. The Portfolios and Series also incur other
expenses for things such as accounting and legal fees, maintaining shareholder
records and furnishing shareholder statements and Portfolio reports. "Operating
Expenses" exclude interest, taxes, brokerage commissions, and extraordinary
expenses. The Portfolio's expenses are factored into its share prices and
dividends and are not charged directly to portfolio shareholders. For more
information, see "Management and Administration" in this Prospectus and the SAI.
Management and 12b-1 Other Total Operating
Administration Fees Fees Expenses Expenses
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Balanced Portfolio 0.85% None 0.19% 1.04%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Anticipated Annual Portfolio Operating Expenses for the Balanced Portfolio
are annualized projections based upon current administration fees for the
Portfolio and management fees for the Balanced Series, with "Other Expenses"
based on the Portfolio's expenses for the past fiscal year. The trustees of the
Trust believe that the aggregate per share expenses of the Balanced Portfolio
and the Balanced Series will be approximately equal to the expenses the
Portfolio would incur if its assets were invested directly in the type of
securities being held by the Balanced Series. The trustees of the Trust also
believe that investment in the Balanced Series by Investors in addition to the
Balanced Series. The trustees of the Trust also believe that investment in the
Balanced Series by investors in addition to the Balanced Portfolio may enable
the Balanced Series to achieve economies of scale which could reduce expenses.
In the future, it is possible that other feeder funds may invest in the Balanced
Series, and such other funds' expenses and, correspondingly, their returns, may
differ from those of the Balanced Portfolio.
To illustrate the effect of Operating Expenses, let's assume that the
Balanced Portfolio's annual return is 6% and that it had annual Operating
Expenses described in the table above. For every $1,000 you invested in the
Balanced Portfolio, you would have paid the following amounts of total expenses
if you closed your account at the end of each of the following time periods:
1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Balanced Portfolio $ $ $ $
-------- ------- -------- --------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
The assumption in this example of a 5% annual return is required by
regulations of the Securities and Exchange Commission applicable to all mutual
funds. The information in the table should not be considered a representation
of past or future expenses or rates of return; actual expenses or returns may be
greater or less than those shown.
-5-
<PAGE>
FINANCIAL HIGHLIGHTS
[UPDATED FINANCIAL HIGHLIGHTS WILL BE CONTAINED IN A POST-EFFECTIVE
AMENDMENT TO THE REGISTRATION STATEMENT OF REGISTRANT FILED ON OR
BEFORE THE EFFECTIVE DATE OF THIS POST-EFFECTIVE REGISTRATION
STATEMENT]
Selected Per Share Data and Ratios
The financial information in the following tables is for each Portfolio as
of December 31, 1995 and includes data related to each Portfolio's predecessor
fund before it was converted into a series of the Trust on May 1, 1995. See
"Special Information Regarding Organization, Capitalization and Other Matters"
in this Prospectus. This information for each Portfolio and 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" in this Prospectus. As of December 31, 1995, the
International Portfolio had not yet commenced investment operations.
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 __.
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
-6-
<PAGE>
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
duration 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 primarily
of 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 10% of its net assets, measured at the time of investment, in debt
securities rated below investment grade, or in comparable unrated securities.
Debt securities rated below Baa by Moody's Investors Services, Inc. ("Moody's")
and below BBB by Standard & Poor's ("S&P") are considered to be below investment
grade. Securities rated below investment grade as well as unrated securities
are often considered to be speculative and usually entail greater risk. AMT
Limited Maturity Bond Investments will invest in debt securities rated no lower
than B by Moody's or S&P. AMT Limited Maturity Bond Investments may invest up
to 5% of its net assets in municipal securities when N&B Management believes
such 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 duration may range up
to five years. For, more information on lower rated securities, see "Ratings of
Securities" in this Prospectus, "Fixed Income Securities" in the SAI, and
Appendix A of the SAI.
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.
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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
duration 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 duration 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.
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
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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 duration debt securities. AMT Balanced
Investments may invest up to 10% of the debt securities portion of its
investments, measured at the time of investment, in debt securities rated below
investment grade or in comparable unrated securities. Debt securities rated
below Baa by Moody's and below BBB by S&P are considered to be below investment
grade. Securities rated
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below investment grade as well as unrated securities are often considered to be
speculative and usually entail greater risk. AMT Balanced Investments will
invest in debt securities rated no lower than B by Moody's or S&P. For more
information on lower rated securities, see "Ratings of Securities" in this
Prospectus, "Fixed Income Securities" in the SAI, and Appendix A of the SAI.
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 N&B Management 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" in this Prospectus.
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" in this Prospectus.
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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 Series, and for the predecessors of
the various Series for the period prior to May 1, 1995, (except for AMT Liquid
Asset Investments and AMT International Investments) for 1995 and earlier years
are set forth under "Financial Highlights" in this Prospectus.
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).
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 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, BALANCED, LIMITED MATURITY BOND AND
PARTNERS INVESTMENTS). Debt securities rated lower than Baa by Moody's or BBB
by S&P are considered to be below investment grade. AMT International
Investments may invest up to 5% of its net assets in debt securities including
those rated below investment grade or comparable unrated securities. AMT
Limited Maturity Bond Investments may invest up to 10% of its net assets,
measured at the time of investment, in debt securities rated below investment
grade, but rated no lower
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than B by Moody's or S&P, or comparable unrated securities. AMT Balanced
Investments may invest up to 10% of the debt securities portion of its
investments, measured at the time of investment, in debt securities rated below
investment grade, but rated no lower than B by Moody's or S&P, or comparable
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 in accordance with the terms of the obligations.
Those debt securities 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 and a decline in prices of the issuer's lower-rated
securities. In the case of lower-rated securities structured as zero-coupon or
pay-in-kind securities, their market prices are affected to a greater extent by
interest rate changes, and therefore tend to be more volatile than securities
that pay interest periodically and in cash.
The market for lower-rated securities may be thinner and less active than
for higher-rated securities. The secondary market in which debt securities
rated below investment grade and comparable unrated securities are traded is
generally less liquid than the market for higher grade debt securities. Less
liquidity in the secondary trading market could adversely affect the price at
which a Series could sell a debt security rated below investment grade, or a
comparable unrated security, and could adversely affect the daily net asset
value of the Series' shares. At times of less liquidity, it may be more
difficult to value a debt security rated below investment grade, or a comparable
unrated security, because such valuation may require more research, and elements
of judgment may play a greater role in the valuation because there is less
reliable, objective data available. N&B Management 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 Appendix A 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 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
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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.
Duration
Duration is a measure of the sensitivity of debt securities to
changes in market interest rates, based on the entire cash flow associated
with the securities, including payments occurring before the final repayment
of principal. N&B Management utilizes duration as a tool in portfolio
selection instead of the more traditional measure known as "term to maturity"
in portfolio selection for AMT Limited Maturity Bond and Government Income
Investments and for the debt securities portion of AMT Balanced Investments.
"Term to maturity" measures only the time until a debt security provides its
final payment, taking no account of the pattern of the security's payments
prior to maturity. Duration incorporates a bond's yield, coupon interest
payments, final maturity and call features into one measure. Duration
therefore provides a more accurate measurement of a bond's likely price
change in response to a given change in market interest rates. The longer the
duration, the greater the bond's price movement will be as interest rates
change. For any fixed income security with interest payments occurring prior
to the payment of principal, duration is always less than maturity.
Futures, options and options on futures have durations which are
generally related to the duration of the securities underlying them. Holding
long futures or call option positions will lengthen a Fund's duration by
approximately the same amount as would holding an equivalent amount of the
underlying securities. Short futures or put options have durations roughly
equal to the negative duration of the securities that underlie these
positions, and have the effect of reducing portfolio duration by
approximately the same amount as would selling an equivalent amount of the
underlying securities.
There are some situations where even the standard duration
calculation does not properly reflect the interest rate exposure of a
security. For example, floating and variable rate securities often have final
maturities of ten or more years; however, their interest rate exposure
corresponds to the frequency of the coupon reset. Another example where the
interest rate exposure is not properly captured by duration is the case of
mortgage-backed securities. The stated final maturity of such securities is
generally 30 years, but current prepayment rates are critical in determining
the securities' interest rate exposure. In these and other similar
situations, N&B Management, where permitted, will use more sophisticated
analytical techniques that incorporate the economic life of a security into
the determination of its interest rate exposure.
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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.
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 as of
December 31, 1995 had 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
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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 as of December 31, 1995 had 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.
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 has
sponsored, with Neuberger&Berman, traditionally structured funds since 1950.
However, it has operated __ master funds and __ feeder funds since August 1993
and now operates __ master funds and __ 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
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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.
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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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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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.
The Trust and Managers Trust have received a ruling from the Internal
Revenue Service that each Portfolio, as an investor in a corresponding Series
of Managers Trust, will be deemed to own a proportionate share of the Series'
assets and income for purposes of determining whether the Portfolio 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).
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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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 received a ruling from the Internal Revenue Service
concluding 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.
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. 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 seven 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 $___
billion as of December 31, 1995.
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 $11.1 billion of assets as of
December 31, 1995. 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 $___ billion
of assets as of December 31, 1995. 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 -- Theresa A. Havell
and Josephine P. Mahaney. Ms. Mahaney has been a Senior Portfolio Manager in
the Fixed Income Group since 1984, an Assistant Vice President of N&B
Management from 1986 to 1994 and a Vice President of N&B Management since
November 1994.
AMT Limited Maturity Bond Investments and AMT Balanced Investments (debt
securities portion) -- Theresa A. Havell and Thomas G.
Wolfe.
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<PAGE>
Mr. Wolfe has been a Senior Portfolio Manager in the Fixed Income Group since
July 1993, Director of Fixed Income Credit Research since July 1993 and a Vice
President of N&B Management since October 1995. From November 1987 to June 1993
he was Vice President in the Corporate Finance Department of the Standard &
Poor's Rating Group.
AMT Government Income Investments -- Theresa A.
Havell and William H. Cunningham. Mr. Cunningham has been a member of the Fixed
Income Group since March 1993, a Senior Portfolio Manager in the Fixed Income
Group since June 1995 and a Vice President of N&B Management since October 1995.
From August 1989 to February 1993 he was a manager in the Corporate Finance,
Merger and Acquisitions and Capital Markets Groups for a major corporation.
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.
AMT International Investments -- Felix Rovelli
is primarily responsible for the day-to-day management of the portfolio
securities of the Series. Mr. Rovelli has been a Vice President at N&B
Management since November 1995. Previously, he was a Senior Vice
President-Senior Equity Portfolio Manager of BNP-N&B Global, from May 1994 to
November 1995, and a first vice president and portfolio manager of another
mutual fund that invested in international equity securities, from April 1990
to April 1994.
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.
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
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call options, and for those services receives brokerage commissions. In
effecting securities transactions, each Series seeks to obtain the best price
and execution of orders. 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 and
Neuberger&Berman 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. 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>
<S> <C> <C>
Management (Series) Administration (Portfolio)
GROWTH; PARTNERS; 0.55% of first $250 million 0.30%
BALANCED 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
</TABLE>
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<TABLE>
<S> <C> <C>
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
INTERNATIONAL 0.85% of first $250 million 0.30%
0.825% of next $250 million
0.80% of next $250 million
0.775% of next $250 million
0.75% of next $500 million
0.725% of next $1.5 billion
</TABLE>
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.
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 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 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.
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INTERNATIONAL PORTFOLIO AND ITS CORRESPONDING SERIES. From November 30, 1995
through December 31, 1996, N&B Management has voluntarily undertaken to
reimburse the Portfolio for its operating expenses and its pro rata share of its
corresponding Series' operating expenses, including, compensation to N&B
Management, but excluding taxes, interest, extraordinary expenses and brokerage
commissions, that exceed 1.70% of the Portfolio's average daily net asset value
("Portfolio Expense Limitation"). The Portfolio has in turn agreed to repay
through December 31, 1997, for the excess operating expenses previously
reimbursed to the Portfolio, so long as the Portfolio Expense Limitation is not
exceeded. 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
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
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, it is theoretically
possible that 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
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 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 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 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.
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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 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.
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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 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 fails 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 duration 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.
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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 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
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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 or duration). Each Series also may lend portfolio securities to
banks, brokerage firms, or institutional 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 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
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
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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,
CARS ("Certificates for Automobile Receivables"), credit card receivable
securities, and installment loan contracts. Although these securities may be
supported by letters of credit or other credit enhancements, 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
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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 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, AMT Liquid Asset Investments 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
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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, acting pursuant to guidelines established by the
trustees of Managers Trust, may determine that some restricted securities are
liquid.
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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.
<PAGE>
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
APPENDIX A TO PROSPECTUS
[TO BE UPDATED IN A POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT
OF REGISTRANT FILED ON OR BEFORE THE EFFECTIVE DATE OF THIS POST-EFFECTIVE
REGISTRATION STATEMENT]
TOTAL RETURN ANALYSIS USING CONSTANT
ASSET ALLOCATION S&P "500"/2 YR.
U.S. TREASURY NOTES
1960 - 1994
FIXED ASSET ALLOCATION COMPARISON TO 100%
S&P "500"/2 YR. TREASURY NOTES S&P "500" ALLOCATION
- ------------------------------------------------------------------------
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
<PAGE>
PART B
<PAGE>
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
Dated __________, 1996
The Balanced Portfolio, Government Income Portfolio, Growth Portfolio,
International Portfolio, Limited Maturity Bond Portfolio, Liquid Asset Portfolio
and Partners Portfolio (each a "Portfolio") of Neuberger&Berman Advisers
Management Trust ("Trust") offer shares pursuant to a Prospectus dated
__________, 1996 and invest all of their net investable assets in AMT Balanced
Investments, AMT Government Income Investments, AMT Growth Investments, AMT
International Investments, AMT Limited Maturity Bond Investments, AMT Liquid
Asset Investments and AMT Partners Investments (each a "Series"), respectively.
The Portfolios' Prospectus provides the basic information that an investor
ought to know before investing. A copy of the Prospectus may be obtained,
without charge, by writing the Trust at 605 Third Avenue, 2nd Floor, New York,
NY 10158-0006.
This Statement of Additional Information ("SAI") is not a prospectus and
should be read in conjunction with the Prospectus.
No person has been authorized to give any information or to make any
representations not contained in the Prospectus or in this SAI in connection
with the offering made by the Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by a Portfolio or its distributor. The Prospectus and this SAI do not
constitute an offering by a Portfolio or its distributor in any jurisdiction in
which such offering may not lawfully be made.
<PAGE>
TABLE OF CONTENTS
PAGE
INVESTMENT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Investment Policies and Limitations . . . . . . . . . . . . . . . . . . 1
Top-down approach to regional and country diversification . . . . . . . 9
Bottom-up approach to security selection. . . . . . . . . . . . . . . . 9
Currency Risk Management - AMT International Investments. . . . . . . . 10
Discussions with Portfolio Managers . . . . . . . . . . . . . . . . . . 10
Additional Investment Information . . . . . . . . . . . . . . . . . . . 15
CERTAIN RISK CONSIDERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 45
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
TRUSTEES AND OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . 53
INVESTMENT MANAGEMENT, ADVISORY AND ADMINISTRATION SERVICES. . . . . . . . . 54
Expense Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . 56
Management and Control of N&B Management. . . . . . . . . . . . . . . . 57
Sub-Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Investment Companies Advised. . . . . . . . . . . . . . . . . . . . . . 58
DISTRIBUTION ARRANGEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 62
ADDITIONAL REDEMPTION INFORMATION. . . . . . . . . . . . . . . . . . . . . . 62
Suspension of Redemptions . . . . . . . . . . . . . . . . . . . . . . . 62
DIVIDENDS AND OTHER DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . 63
ADDITIONAL TAX INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 63
Taxation of the Portfolios. . . . . . . . . . . . . . . . . . . . . . . 63
Taxation of the Series. . . . . . . . . . . . . . . . . . . . . . . . . 64
VALUATION OF PORTFOLIO SECURITIES. . . . . . . . . . . . . . . . . . . . . . 68
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
All Series (except AMT International Investments) . . . . . . . . . . . 68
AMT International Investments . . . . . . . . . . . . . . . . . . . . . 69
All Series. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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Portfolio Turnover. . . . . . . . . . . . . . . . . . . . . . . . . . . 74
REPORTS TO SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . 74
CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
LEGAL COUNSEL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
RATINGS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
A CONVERSATION WITH ROY NEUBERGER . . . . . . . . . . . . . . . . . . . B-1
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INVESTMENT INFORMATION
Each Portfolio is a separate series of the Trust, a Delaware business
trust registered with the Securities and Exchange Commission ("SEC") as an
open-end management investment company. Each Portfolio seeks its investment
objective by investing all of its net investable assets in the corresponding
Series of Advisers Managers Trust ("Managers Trust"), which has an investment
objective identical to, and a name similar to, that of the Portfolio. Each
Series, in turn, invests in accordance with an investment objective, policies
and limitations identical to those of its corresponding Portfolio. (The Trust
and Managers Trust, which also is an open-end management investment company, are
together referred to below as the "Trusts.") All Series of Managers Trust are
managed by Neuberger & Berman Management Incorporated ("N&B Management").
The following information supplements the discussion in the Prospectus of
the investment objective, policies, and limitations of each Portfolio and each
Series. Unless otherwise specified, those investment policies and limitations
are not fundamental. However, although any investment policy or limitation that
is not fundamental may be changed by the trustees of the Trust ("Portfolio
Trustees") or of Managers Trust ("Series Trustees") without shareholder
approval, each Portfolio intends to notify its shareholders before implementing
any material change in any non-fundamental policy or limitation. The
fundamental investment policies and limitations of a Portfolio or a Series may
not be changed without the approval of the lesser of (1) 67% of the total units
of beneficial interest ("shares") of the Portfolio or Series represented at a
meeting at which more than 50% of the outstanding Portfolio or Series shares are
represented or (2) a majority of the outstanding shares of the Portfolio or
Series. This vote is required by the Investment Company Act of 1940 ("1940
Act") and is referred to in this SAI as a "1940 Act majority vote." Whenever a
Portfolio is called upon to vote on a change in the investment objective or a
fundamental investment policy or limitation of its corresponding Series, the
Portfolio casts its votes thereon in proportion to the votes of its shareholders
at a meeting thereof called for that purpose.
INVESTMENT POLICIES AND LIMITATIONS
Each Portfolio has the following fundamental investment policy, to enable
it to invest in its corresponding Series:
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Notwithstanding any other investment policy of the Portfolio, the Portfolio
may invest all of its net investable assets (cash, securities and
receivables relating to securities) in an open-end management investment
company having substantially the same investment objective, policies, and
limitations as the Portfolio.
All other fundamental investment policies and limitations, and the
non-fundamental investment policies and limitations, of each Portfolio and
its corresponding Series are identical. Therefore, although the following
discusses the investment policies and limitations of the Series, it applies
equally to their corresponding Portfolios. Because each Portfolio invests all
of its net investable assets in its corresponding Series, however, a Series'
investment policies and limitations govern the type of investments in which the
corresponding Portfolio has an indirect interest.
For purposes of the investment limitation on concentration in particular
industries, N&B Management identifies the "issuer" of a municipal obligation
that is not a general obligation note or bond on the basis of the obligation's
characteristics. The most significant of these characteristics is the source of
funds for the payment of principal and interest on the obligation. If an
obligation is backed by an irrevocable letter of credit or other guarantee,
without which the obligation would not qualify for purchase under a Portfolio's
quality restrictions, an issuer of the letter of credit or the guarantee is
considered an issuer of the obligation. If an obligation meets the quality
restrictions of AMT Limited Maturity Bond Investments and AMT Balanced
Investments without credit support, the Series treats the commercial developer
or the industrial user, rather than the governmental entity or the guarantor, as
the issuer of the obligation, even if the obligation is backed by a letter of
credit or other guarantee.
Except for the limitation on borrowing, any investment policy or limitation
that involves a maximum percentage of securities or assets will not be
considered to be violated unless the percentage limitation is exceeded
immediately after, and because of, a transaction by a Series.
The Series' fundamental investment policies and limitations are as follows:
1. BORROWING. Each Series may not borrow money, except that a Series may
(i) borrow money from banks for temporary or emergency purposes and not for
leveraging or investment (except for AMT INTERNATIONAL INVESTMENTS which may
borrow for leveraging or investment, and AMT GOVERNMENT INCOME INVESTMENTS which
may borrow for any purpose, including to meet redemptions or increase the amount
available for investment) and (ii) enter into reverse repurchase agreements for
any purpose; provided that (i) and (ii) in combination do not exceed 33-1/3% of
the value of its total assets (including the amount borrowed) less liabilities
(other than borrowings). If at any time borrowings exceed 33-1/3% of the value
of a Series' total assets, the Series will reduce its borrowings
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within three days (excluding Sundays and holidays) to the extent necessary to
comply with the 33-1/3% limitation.
2. COMMODITIES. Each Series may not purchase physical commodities or
contracts thereon, unless acquired as a result of the ownership of securities or
instruments, but this restriction shall not prohibit a Series from purchasing
futures contracts or options (including options on futures (and, with respect to
AMT INTERNATIONAL INVESTMENTS, foreign currencies and forward contracts) but
excluding options or futures contracts on physical commodities) or from
investing in securities of any kind.
3. DIVERSIFICATION. Each Series may not, with respect to 75% of the value
of its total assets, purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government, or any of its agencies
or instrumentalities) if, as a result, (i) more than 5% of the value of the
Series' total assets would be invested in the securities of that issuer or (ii)
the Series would hold more than 10% of the outstanding voting securities of that
issuer.
4. INDUSTRY CONCENTRATION. Each Series may not purchase any security if,
as a result, 25% or more of its total assets (taken at current value) would be
invested in the securities of issuers having their principal business activities
in the same industry. This limitation does not apply to purchases of (i) the
securities issued or guaranteed by the U.S. Government, or its agencies or
instrumentalities, (ii) investments by all Series (except AMT PARTNERS
INVESTMENTS, AMT GOVERNMENT INCOME INVESTMENTS and AMT INTERNATIONAL
INVESTMENTS) in certificates of deposit or bankers' acceptances issued by
domestic branches of U.S. banks, or (iii) investments by AMT GOVERNMENT INCOME
INVESTMENTS in mortgage- and asset-backed securities (regardless of whether they
are issued or guaranteed by the U.S. Government or its agencies or
instrumentalities). Mortgage- and asset-backed securities are considered to be
a single industry.
5. LENDING. Each Series may not lend any security or make any other loan
if, as a result, more than 33-1/3% of its total assets (taken at current value)
would be lent to other parties, except in accordance with its investment
objective, policies, and limitations, (I) through the purchase of a portion of
an issue of debt securities or (ii) by engaging in repurchase agreements.
6. REAL ESTATE. (ALL SERIES EXCEPT AMT INTERNATIONAL INVESTMENTS). Each
Series may not purchase real estate unless acquired as a result of the ownership
of securities or instruments, but this restriction shall not prohibit a Series
from purchasing securities issued by entities or investment vehicles that own or
deal in real estate or interests therein, or instruments secured by real estate
or interests therein.
(AMT INTERNATIONAL INVESTMENTS). The Series may not invest any part of its
total assets in real estate or interests in real estate unless acquired as a
result of the ownership of securities or instruments, but this restriction shall
not prohibit the Series
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from purchasing readily marketable securities issued by entities or investment
vehicles that own or deal in real estate or interests therein or instruments
secured by real estate or interests therein.
7. SENIOR SECURITIES. Each Series may not issue senior securities, except
as permitted under the 1940 Act.
8. UNDERWRITING. Each Series may not underwrite securities of other
issuers, except to the extent that a Series, in disposing of portfolio
securities, may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 ("1933 Act").
For purposes of fundamental investment limitation number 3 above, as
applied to AMT GOVERNMENT INCOME INVESTMENTS, mortgage- and asset-backed
securities will not be considered to have been issued by the same issuer because
they have the same sponsor, and such securities issued by a finance or other
single purpose subsidiary of a corporation that are not guaranteed by the parent
corporation will be considered to be issued by an issuer separate from the
parent corporation.
The following non-fundamental investment policies and limitations apply to
the Series:
1. BORROWING. (ALL SERIES EXCEPT AMT GOVERNMENT INCOME INVESTMENTS AND
AMT INTERNATIONAL INVESTMENTS). Each Series may not purchase securities if
outstanding borrowings, including any reverse repurchase agreements, exceed 5%
of its total assets.
2. LENDING. Except for the purchase of debt securities and engaging in
repurchase agreements, each Series may not make any loans other than securities
loans.
3. INVESTMENTS IN OTHER INVESTMENT COMPANIES. (AMT PARTNERS INVESTMENTS,
AMT GOVERNMENT INCOME INVESTMENTS AND AMT INTERNATIONAL INVESTMENTS). Each
Series may not purchase securities of other investment companies, except to the
extent permitted by the 1940 Act and in the open market at no more than
customary brokerage commission rates. This limitation does not apply to
securities received or acquired as dividends, through offers of exchange, or as
a result of a reorganization, consolidation, or merger.
4. MARGIN TRANSACTIONS. Each Series may not purchase securities on margin
from brokers, except that a Series may obtain such short-term credits as are
necessary for the clearance of securities transactions. For all Series except
AMT LIQUID ASSET INVESTMENTS, margin payments in connection with transactions in
futures contracts and options on futures contracts shall not constitute the
purchase of securities on margin and shall not be deemed to violate the
foregoing limitation.
5. SHORT SALES. (AMT LIQUID ASSET INVESTMENTS, AMT GROWTH INVESTMENTS,
AMT LIMITED MATURITY BOND INVESTMENTS AND AMT PARTNERS INVESTMENTS). Each
Series may
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not sell securities short, unless it owns or has the right to obtain securities
equivalent in kind and amount to the securities sold (or, in the case of AMT
GROWTH INVESTMENTS, not more than 10% of the Series' net assets (taken at
current value) is held as collateral for such sale at any one time).
Transactions in futures contracts and options shall not constitute selling
securities short.
(AMT BALANCED INVESTMENTS). The Series will not engage in a short sale
(except a short sale against-the-box) if, as a result, the dollar amount of all
short sales will exceed 25% of its net assets, of if, as a result, the value of
securities of any one issuer in which the Series would be short will exceed 2%
of the value of the Series' net assets or 2% of the securities of any class of
any issuer. Transactions in futures contracts and options are not considered
short sales.
(AMT GOVERNMENT INCOME INVESTMENTS). The Series may not sell securities
short, unless it covers the short sale as required by current rules or positions
of the Securities and Exchange Commission and its staff, provided that the
Series may not sell securities short if (i) the dollar amount of the short sales
would exceed 5% of its net assets or (ii) the value of securities of an issuer
sold short by the Series would exceed the lesser of 2% of the Series' net assets
or 2% of a class of the issuer's outstanding securities. Transactions in
futures contracts and options shall not constitute selling securities short.
(AMT INTERNATIONAL INVESTMENTS). The Series will not engage in a short
sale (except a short sale against-the-box), if, as a result, the dollar amount
of all short sales will exceed 25% of its net assets, or if, as a result, the
value of securities of any one issuer in which the Series would be short will
exceed 2.0% of the value of the Series' net assets or 2.0% of the securities of
any class of any issuer. Transactions in forward foreign currency contracts,
futures contracts and options are not considered short sales.
6. OWNERSHIP OF PORTFOLIO SECURITIES BY OFFICERS AND TRUSTEES. Each
Series may not purchase or retain the securities of any issuer if, to the
knowledge of the Series' management, those officers and trustees of the Trusts
and officers and directors of N&B Management who each own individually more than
1/2 of 1% of the outstanding securities of such issuer, together own more than
5% of such securities.
7. UNSEASONED ISSUERS. Each Series may not purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than 5% of
the Series' total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three years
of continuous operation. For AMT GOVERNMENT INCOME INVESTMENTS, this restriction
does not apply to mortgage- and asset-backed securities.
8. ILLIQUID SECURITIES. Each Series may not purchase any security if, as
a result, more than 10% of its net assets would be invested in illiquid
securities. Illiquid securities
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include securities that cannot be sold within seven days in the ordinary course
of business for approximately the amount at which the Series has valued the
securities, such as repurchase agreements maturing in more than seven days.
9. RESTRICTED SECURITIES. (AMT INTERNATIONAL INVESTMENTS). The Series
may not purchase a security restricted as to resale if, as a result thereof,
more than 10% of the Series' total assets would be invested in restricted
securities. Securities that can be sold freely in the principal market in which
they are traded are not considered restricted, even if they cannot be sold in
the U.S.
10. WARRANTS. (AMT INTERNATIONAL INVESTMENTS AND AMT BALANCED
INVESTMENTS). Each Series may not invest more than 5% of its net assets in
warrants, whether or not such warrants are listed on the New York Stock Exchange
("NYSE") or the American Stock Exchange ("AmEx"), or more than 2% of its net
assets in unlisted warrants. For purposes of this limitation, warrants are
valued at the lower of cost or market value and warrants acquired by the Series
in units or attached to securities are deemed to be without value, even if the
warrants are later separated from the unit.
11. OIL AND GAS PROGRAMS. (AMT PARTNERS INVESTMENTS, AMT GOVERNMENT
INCOME INVESTMENTS, AMT INTERNATIONAL INVESTMENTS AND AMT BALANCED INVESTMENTS).
Each Series may not invest in participations or other direct interests in oil,
gas, or other mineral leases or exploration or development programs, (but each
of AMT PARTNERS INVESTMENTS and AMT INTERNATIONAL INVESTMENTS may purchase
securities of companies that own interests in any of the foregoing).
12. REAL ESTATE. (AMT GOVERNMENT INCOME INVESTMENTS, AMT INTERNATIONAL
INVESTMENTS AND AMT BALANCED INVESTMENTS). Each Series may not invest in real
estate limited partnerships.
13. INVESTMENTS IN ANY ONE ISSUER. (AMT GOVERNMENT INCOME INVESTMENTS).
The Series may not purchase the securities of any one issuer (other than
securities issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 5% of the Series' total assets
would be invested in the securities of that issuer.
(AMT INTERNATIONAL INVESTMENTS). At the close of each quarter of the
Series' taxable year, (i) no more than 25% of its total assets will be invested
in the securities of a single issuer, and (ii) with regard to 50% of its total
assets, no more than 5% of its total assets will be invested in the securities
of a single issuer. These limitations do not apply to U.S. government
securities, as defined for tax purposes.
14. PUTS, CALLS, STRADDLES, OR SPREADS. (AMT PARTNERS INVESTMENTS). The
Series may not invest in puts, calls, straddles, spreads, or any combination
thereof, except that the Series may (i) write (sell) covered call options
against portfolio securities having a
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market value not exceeding 10% of its net assets and (ii) purchase call options
in related closing transactions. The Series does not construe the foregoing
limitation to preclude it from purchasing or writing options on futures
contracts.
15. FOREIGN SECURITIES. (AMT PARTNERS INVESTMENTS). The Series may not
invest more than 10% of the value of its total assets in securities of foreign
issuers, provided that this limitation shall not apply to foreign securities
denominated in U.S. dollars.
RATING AGENCIES. As discussed in the Prospectus, each Series may purchase
securities rated by Standard & Poor's Ratings Group ("S&P"), Moody's Investors
Service, Inc. ("Moody's"), or any other nationally recognized statistical rating
organization ("NRSRO"). The ratings of an NRSRO represent its opinion as to the
quality of securities it undertakes to rate. Ratings are not absolute standards
of quality; consequently, securities with the same maturity, coupon, and rating
may have different yields. Among the NRSROs, the Series rely primarily on
ratings assigned by S&P and Moody's, which are described in Appendix A to this
SAI.
INTERNATIONAL INVESTING - AMT INTERNATIONAL INVESTMENTS. Equity portfolios
consisting solely of domestic investments have not enjoyed the higher returns
foreign opportunities can offer. For more than thirty years, for example, the
growth rate of many foreign economies has outpaced that of the U.S. While the
U.S. accounted for almost 66% of the world's total securities market
capitalization in 1970, it accounted for less than 45% of that total at the end
of 1993 - or less than half of the world's available stocks and bonds today
(source: Morgan Stanley Capital International).
Over time, a number of international equity markets have outperformed their
U.S. counterparts. Although there are no guarantees, foreign markets could
continue to provide attractive investment opportunities.
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AVERAGE ANNUAL TOTAL RETURN FOR 10 YEARS(1)
[TO BE UPDATED IN A POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT OF
THE REGISTRANT FILED ON OR BEFORE THE EFFECTIVE DATE OF THIS POST-EFFECTIVE
REGISTRATION STATEMENT]
U.S.A. 14.28%
----------------
AUSTRALIA 15.97%
-----------------
NORWAY 16.03%
------------------
JAPAN 16.86%
-------------------
UNITED KINGDOM 17.73%
--------------------
GERMANY 18.73%
---------------------
SPAIN 20.05%
------------------------
FRANCE 20.83%
-------------------------
BELGIUM 24.90%
----------------------------
HONG KONG 26.50%
------------------------------
------------------------------------------------------------
0.00% 10.00% 20.00% 30.00% 40.00%
- ------------------------
(1) Source: Lipper Analytical Services, Inc. For the period ended
12/31/94. Average annual total returns are measured in U.S. dollars and include
changes in share price, dividends paid and the gross effect of reinvesting
dividends. In some years, the average of international markets has
underperformed that of the U.S. market. The foreign countries shown above were
selected from the Morgan Stanley Capital International Europe, Australia, Far
East (EAFE-Registered Trademark-) Index, which is an unmanaged index of non-U.S.
equity market performance. The average annual total return of the EAFE-
Registered Trademark-Index was 17.89% for the ten-year period. This chart
reflects the past performance of the U.S. and major non-U.S. stock markets and
is not representative of future performance of those markets and is not intended
to represent past or future performance of the Portfolio. EAFE-Registered
Trademark- is the property of Morgan Stanley & Co. Incorporated.
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In addition, according to Morgan Stanley Capital International, the leading
companies in any given sector are not always U.S.-based. For example, 22 of the
largest 25 automobile companies are based outside the U.S. as are 20 of the top
25 banks.
A principal advantage of investing overseas is diversification. A
diversified portfolio gives investors the opportunity to pursue increased
overall return while reducing risk. It is prudent to diversify by taking
advantage of investment opportunities in more than one country's stock or bond
market. By investing in several countries through a worldwide portfolio,
investors can lower their exposure and vulnerability to weakness in any one
market. Investors should be aware, however, that international investing is not
a guarantee against market risk and may be affected by economic factors
described in the Prospectus, such as the prospects of individual companies, and
other risks such as currency fluctuations or controls, expropriation,
nationalization and confiscatory taxation.
Furthermore, for the individual investor, buying foreign stocks and bonds
can be difficult, involving many decisions. Accessing international markets is
complicated; few individuals have the time or resources to thoroughly evaluate
foreign companies and markets, or the ability to incur the high transaction
costs of direct investment in such markets. A mutual fund investing in foreign
securities offers an investor broad diversification at a relatively low cost.
AMT International Investments invests primarily in equity securities of
companies located in developed foreign economies, as well as in the "emerging
markets." In all cases the investment process of the Series' Investment Adviser
includes a combination of "top-down country allocation" and "bottom-up security
selection."
TOP-DOWN APPROACH TO REGIONAL AND COUNTRY DIVERSIFICATION
N&B Management uses extensive economic research to identify countries that
offer attractive investment opportunities, by analyzing factors such as Gross
Domestic Product growth rates, interest rate trends, and currency exchange
rates. Market valuations, combined with correlation and volatility comparisons,
provide N&B Management with a target allocation across 20 or more countries.
BOTTOM-UP APPROACH TO SECURITY SELECTION
N&B Management value-driven style seeks out attractively priced issues, by
concentrating on criteria such as a low price-to-earnings ratio relative to
earnings growth rate, balance sheet strength, low price to cash flow, and
management quality. Typically, over 100 individual issues will comprise the
portfolio. The portfolio will be comprised of medium- to large - capitalization
companies in relation to each individual national market.
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CURRENCY RISK MANAGEMENT - AMT INTERNATIONAL INVESTMENTS
Exchange rate movements and volatility are important factors in
international investing. N&B Management believes in actively managing the
Series' currency exposure, in an effort to capitalize on foreign currency trends
and to reduce overall portfolio volatility. Currency risk management is
performed separately from equity analysis. N&B Management intends to use a
combination of economic analysis to guide the Series' longer-term posture and
quantitative trend analysis to assist in timing decisions with respect to
whether (or when) to invest in instruments denominated in a particular foreign
currency, or whether or when to hedge particular foreign currencies in which
liquid foreign exchange markets exist.
DISCUSSIONS WITH PORTFOLIO MANAGERS
AN INTERVIEW WITH FELIX ROVELLI, PORTFOLIO MANAGER OF AMT INTERNATIONAL
INVESTMENTS
Q: Why should investors allocate a portion of their assets to
international markets?
A: First, an investor who does not invest internationally misses out on
more than two-thirds of the world's potential investment opportunities. The
U.S. stock market today represents less than one-half of the world's stock
market capitalization, and the U S. portion continues to shrink as other
countries around the world introduce or expand the size of their equity
markets. Privatizations of government-owned corporations, initial public
offerings, and the occasional creation of official stock exchanges in emerging
economies, continuously present new opportunities for capital in an expanding
global market.
Second, many foreign economies are in earlier stages of development than
ours and are growing fast. Economic growth can often mean potential for
investment growth.
Finally, international investing helps an investor increase
diversification and can reduce risk. Domestic and foreign markets generally do
not all move in the same direction, so gains in one market may offset losses in
another.
Q: Does international investing involve special risks?
A: Currency risk is one important risk presented by international
investing. Fluctuations in exchange rates can either add to or reduce an
investor's returns, a fact that anyone who invests in foreign markets should
keep in mind.
Other risks include, but are not limited to, greater market volatility,
less government supervision and availability of public information and the
possibility of adverse economic or political developments. The special risks of
foreign investing are discussed in greater detail in the Prospectus.
Q: What are some of the advantages of investing in an international fund?
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A: An international mutual fund can be a convenient way to invest
internationally and diversify assets among several markets to reduce risk.
Additionally, the considerable burden of obtaining timely, accurate and
comprehensive information about foreign economies and securities is left to
seasoned professional managers.
Q: What is your investment approach?
A: N&B Management seeks to capitalize on investments in countries where
positive economic and political factors are likely to produce above-average
returns. Studies have shown that the allocation of assets among countries is
typically the most important factor contributing to portfolio performance. N&B
Management believes that in the long term, a nation's economic growth and the
performance of its equity market are highly correlated. Therefore, N&B
Management will continuously evaluate the global economic outlook as well as
individual country data to guide country allocation. Our process also leads to
diversification across many countries, typically 20 or more, in an effort to
limit total portfolio risk.
N&B Management strives to invest in companies within the selected countries
that are in the best position to capitalize on such positive developments or
companies that are most attractively valued. N&B Management will usually
include in the Series' investments the securities of large-capitalization
companies in relation to each individual national market, as well as securities
of faster-growing, medium-sized companies that offer potentially higher returns
but are often associated with higher risk.
The criteria for security selection focuses on companies with leadership in
specific markets or niches within specific industries, which appear to exhibit
positive fundamentals, and seem undervalued relative to their earnings potential
or the worth of their assets. Typically, in emerging markets, N&B Management
will invest in relatively large, established companies which N&B Management
believes possess the managerial, financial, and marketing strength to exploit
successfully the growth of a dynamic economy. In more developed markets, such
as Europe and Japan, the Series may invest to a higher degree in medium-sized
companies. Medium-sized companies can often provide above average growth, and
are less followed by market analysts, a fact that sometimes leads to inefficient
valuation.
Finally, N&B Management will strive to limit total portfolio volatility and
increase returns by selectively hedging the Series' foreign currency exposure in
times when N&B Management expects the U.S. Dollar to strengthen.
Q: How do you perceive the current outlook?
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A: There is still an abundance of exciting investment opportunities around
the world. Many equity markets still have not reached the maturity stage of the
U.S. market and have much more room to grow. There are new markets opening up
to foreign investments and many changes are occurring in markets where equity
investments have traditionally commanded less attention than fixed-income
securities.
In addition, it appears that both Europe and Japan are currently at the
bottom of their economic cycles. In many economies, the current recession has
been the most severe of all recessions in the last five decades. With global
inflation still in check, many economies should continue to have lower interest
rates, which, coupled with a forecast of recovery in profits, could positively
impact stock market returns.
THERESA A. HAVELL AND THOMAS G. WOLFE: PORTFOLIO MANAGERS OF AMT LIMITED
MATURITY BOND INVESTMENTS AND AMT BALANCED INVESTMENTS (DEBT SECURITIES
PORTION); THERESA A. HAVELL AND WILLIAM C. CUNNINGHAM PORTFOLIO MANAGERS
OF AMT GOVERNMENT INCOME INVESTMENTS.
Investors are accustomed to thinking of yield or interest rate figures as
the same as total return on their investment, because savings accounts,
conventional money market funds, and CDs do indeed return the stated yield. But
bond funds are different -- bonds not only pay interest, they also fluctuate in
value. For example, a decline in prevailing levels of interest rates generally
increases the value of debt securities in a bond fund's portfolio, while an
increase in rates usually reduces the value of those securities. As a result,
interest rate fluctuations will affect a fund's net asset value (and total
return) but not the income received by the fund from its portfolio securities.
Both the yield and risk to principal usually increase as the maturity of the
bond increases.
So looking at yield alone carries high risk because the highest yielding
bonds historically tend to be the ones with the longest maturities. The risk to
principal in these bonds can be nearly as great as the risk in stocks and may
not produce the same reward.
What advice does Ms. Theresa Havell, the manager of the Fixed Income Group
of Neuberger & Berman, have for investors seeking the highest returns on their
fixed income investments? "Look beyond interest rates to total return," she
states unequivocally. Total return includes the yield from the bond and the
increase or decrease in the market value (price) of the bond.
"Once you consider the risk to principal, then total return is the only
concept that can measure what you are actually earning from your fixed income
securities," Ms. Havell says.
The Limited Maturity Bond Portfolio is intended for investors who seek the
highest current income with less net asset value fluctuations from interest rate
changes than that of a longer-term bond fund. Both the yield and risk to
principal usually increase as the
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maturity of the bond increases. The Portfolio's corresponding Series provides
active fixed income portfolio management through investment in securities with
an average weighted portfolio duration of no longer than five years. Studies of
bond returns have shown total returns were best in bonds having maturities of
two to five years. These limited duration bonds have historically provided the
best value in the bond market and outperformed both shorter- and longer-term
securities.
"Bonds of two-to-five year duration have yields that have historically
captured up to 95% of yields of longer bonds, but with substantially less price
volatility," Ms. Havell explains. That's why studies show that limited duration
bonds may provide the best value in the bond market.
"Fixed income securities should preserve capital and provide the highest
total return consistent with preservation of capital," says ,
manager of AMT Limited Maturity Bond Investments.
From time to time, however, due to changes in monetary and fiscal policies,
the government bond yield curve may tilt steeply, causing longer-term bonds to
offer significantly higher yields than shorter- or intermediate-term bonds. At
such times, investors may be rewarded with higher returns by investing in
longer-term bonds, either directly or through a fund such as the Government
Income Portfolio, says , manager of AMT Government Income Investments.
The Government Income Portfolio is designed for investors who seek a higher
level of income and total return than money market or short-to-intermediate bond
funds generally provide and are willing to accept more principal fluctuation in
order to achieve that objective. N&B Management follows a flexible investment
strategy depending on market conditions and interest rate trends. This
opportunistic strategy looks aggressively for opportunities to maximize income
and total return by adjusting the duration to take maximum advantage of interest
rates. The Government Income Portfolio may be a suitable complement to lower
risk, lower return bond funds and a complement to an equity fund portfolio. On
a risk level, longer-term bonds have a standard deviation between common stocks
(represented by the S&P "500" Composite Stock Price Index ("S&P 500 Index")) and
intermediate-term 5-year U.S. Treasury Bonds. Standard deviation is a
statistical measure of the degree to which the value of an individual security
may vary (or deviate) from the mean.
At times, N&B Management may use the concept of "duration" when describing
the investment program of AMT Government Income Investments. Duration is a
measure of the expected life of a fixed income security and is an indicator
of a security's price "volatility" or "risk" associated with changes in
interest rates. Whereas a debt security's "term to maturity" measures only
the time until the final payment thereon is made, its duration also takes into
account the present value of each payment thereunder expected to be received
through maturity.
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MARK R. GOLDSTEIN, PORTFOLIO MANAGER OF AMT GROWTH INVESTMENTS.
The investment objective of AMT Growth Investments is capital appreciation,
without regard to income. "The Series differs from the other Series in its
willingness to invest in stocks with price/earnings ratios or price-to-cash-flow
ratios that are reasonable relative to a company's growth prospects and that of
the general market," says Mark Goldstein, its portfolio manager. Mr. Goldstein
has consistently followed this approach as a portfolio manager at N&B
Management. He looks for stocks of financially sound companies with a special
market capability, a competitive advantage or product that makes them
particularly attractive over the long term, but likes to purchase them at a
reasonable price relative to their growth rates. Mr. Goldstein calls this
approach "GARP" -- growth at a reasonable price. "An investor shouldn't try to
beat the market by trading funds like stocks. The hardest thing to do -- but
the best thing to do -- is to put in some money when the market is down and keep
it there. That's how one really builds wealth over the long term -- a mutual
fund is a great long-term investment."
"We view value both on a relative and an absolute basis, so we may buy
stocks with somewhat higher multiples than the other Series," Mr. Goldstein
explains. "We also tend to stay more fully invested when we think the market is
attractive for quality growth companies. But we will get out of stocks into
cash when we think there are no reasonable values available."
MICHAEL M. KASSEN AND ROBERT I.GENDELMAN: CO-MANAGER OF AMT PARTNERS INVESTMENTS
"The investment objective of AMT Partners Investments is capital growth,"
says its co-manager Michael Kassen. "We want to make money in good markets and
not give up those gains during rough times."
"Our investors seek consistent performance and have a moderate risk
tolerance. They do know, however, that stock investments can provide the long-
term upside potential essential to meeting their long-term investment goals,
particularly a comfortable retirement and planning for a college education."
"We look for stocks that are undervalued in the market-place: stocks with
strong fundamentals such as low price-to-earnings ratios, consistent cash flow,
and support from asset values. If the market goes down, those stocks we elect
to hold, historically, go down less."
Mr. Kassen monitors stocks of medium-sized companies that often are not
closely scrutinized by other investors. He researches these companies in order
to determine if they will produce a new product, become an acquisition target,
or undergo a financial restructuring. Mr. Kassen also focuses on companies that
dominate certain markets because "market leaders tend to earn higher levels of
profits."
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ADDITIONAL INVESTMENT INFORMATION
Some or all of the Series, as indicated below, may make the following
investments, among others although they may not buy all of the types of
securities, or use all of the investment techniques, that are described.
REPURCHASE AGREEMENTS. (ALL SERIES). Repurchase agreements are agreements
under which a Series purchases securities from a bank that is a member of the
Federal Reserve System (or with respect to AMT International Investments, from
a foreign bank or a U.S. branch or agency of a foreign bank), or a securities
dealer, that agrees to repurchase the securities from the Series at a higher
price on a designated future date. Repurchase agreements generally are for a
short period of time, usually less than a week. No Series will enter into a
repurchase agreement with a maturity of more than seven business days if, as a
result, more than 10% of the value of its net assets would then be invested in
such repurchase agreements and other illiquid securities. A Series will enter
into a repurchase agreement only if (1) the underlying securities are of the
type (excluding maturity or duration limitations) that the Series' investment
policies and limitations would allow it to purchase directly, (2) the market
value of the underlying securities, including accrued interest, at all times
equals or exceeds the value of the repurchase agreement, and (3) payment for the
underlying securities is made only upon satisfactory evidence that the
securities are being held for the Series' account by the custodian or a bank
acting as the Series' agent.
SECURITIES LOANS. (ALL SERIES). In order to realize income, each Series
may lend portfolio securities with a value not exceeding 33-1/3% of its total
assets to banks, brokerage firms, or institutional investors judged creditworthy
by N&B Management. Borrowers are required continuously to secure their
obligations to return securities on loan from the Series by depositing
collateral, which will be marked to market daily, in a form determined to be
satisfactory by the Series Trustees and equal to at least 100% of the market
value of the loaned securities, which will also be marked to market daily. N&B
Management believes the risk of loss on these transactions is slight because, if
a borrower were to default for any reason, the collateral should satisfy the
obligation. However, as with other extensions of secured credit, loans of
portfolio securities involve some risk of loss of rights in the collateral
should the borrower fail financially.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. (ALL SERIES). Each Series
may invest in restricted securities, which are securities that may not be sold
to the public without an effective registration statement under the 1933 Act or,
if they are unregistered, may be sold only in a privately negotiated transaction
or pursuant to an exemption from registration. In recognition of the increased
size and liquidity of the institutional markets for unregistered securities and
the importance of institutional investors in the formation of capital, the SEC
has adopted Rule 144A under the 1933 Act, which is designed to further
facilitate efficient trading among institutional investors by permitting the
sale of certain unregistered securities to qualified institutional buyers. To
the extent privately
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placed securities held by a Series qualify under Rule 144A, and an institutional
market develops for those securities, the Series likely will be able to dispose
of the securities without registering them under the 1933 Act. To the extent
that institutional buyers become, for a time, uninterested in purchasing these
securities, investing in Rule 144A securities could have the effect of
increasing the level of a Series' illiquidity. N&B Management, acting under
guidelines established by the Series Trustees, may determine that certain
securities qualified for trading under Rule 144A are liquid. Foreign securities
that can be freely sold in the markets in which they are principally traded are
not considered by a Series to be restricted. Regulation S under the 1933 Act
permits the sale abroad of securities that are not registered for sale in the
U.S.
Where registration is required, a Series may be obligated to pay all or
part of the registration expenses, and a considerable period may elapse between
the decision to sell and the time the Series may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Series might obtain a less favorable
price than prevailed when it decided to sell. To the extent privately placed
securities, including Rule 144A securities, are illiquid, purchases thereof will
be subject to each Series' 10% limit on investments in illiquid securities.
Restricted securities for which no market exists are priced at fair value as
determined in accordance with procedures approved and periodically reviewed by
the Series Trustees.
REVERSE REPURCHASE AGREEMENTS. (ALL SERIES). A reverse repurchase
agreement involves a Series' sale of portfolio securities subject to its
agreement to repurchase the securities at a later date for a fixed price
reflecting a market rate of interest; these agreements are considered borrowings
for purposes of each Series' investment limitations and policies concerning
borrowings. While a reverse repurchase agreement is outstanding, a Series will
maintain with its custodian in a segregated account cash, U.S. Government or
Agency Securities, or other liquid, high-grade debt securities, marked to
market daily, in an amount at least equal to the Series' obligations under the
agreement. There is a risk that the contra-party to a reverse repurchase
agreement will be unable or unwilling to complete the transaction as scheduled,
which may result in losses to the Series.
BANKING AND SAVINGS INSTITUTION SECURITIES. (AMT LIQUID ASSET INVESTMENTS,
AMT LIMITED MATURITY BOND INVESTMENTS, AMT GOVERNMENT INCOME INVESTMENTS AND AMT
BALANCED INVESTMENTS). Each of these Series may invest in banking and savings
institution obligations, which include CDs, time deposits, bankers' acceptances,
and other short-term debt obligations issued by commercial banks and CDs, time
deposits, and other short-term obligations issued by savings institutions. CDs
are receipts for funds deposited for a specified period of time at a specified
rate of return; time deposits generally are similar to CDs, but are
uncertificated; and bankers' acceptances are time drafts drawn on commercial
banks by borrowers, usually in connection with international commercial
transactions. The CDs, time deposits, and bankers' acceptances in which a
Series invests typically are not covered by deposit insurance.
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These Series may invest in securities issued by a commercial bank or
savings institution only if (1) the bank or institution has total assets of at
least $1,000,000,000, (2) the bank or institution is on N&B Management's
approved list, (3) in the case of a U.S. bank or institution, its deposits are
insured by the Federal Deposit Insurance Corporation, and (4) in the case of a
foreign bank or institution, the securities are, in N&B Management's opinion, of
an investment quality comparable with other debt securities that may be
purchased by the Series. These limitations do not prohibit investments in
securities issued by foreign branches of U.S. banks that meet the foregoing
requirements. These Series (except AMT Government Income Investments) do not
currently intend to invest in any security issued by a foreign savings
institution.
LEVERAGE. (AMT INTERNATIONAL INVESTMENTS AND AMT GOVERNMENT INCOME
INVESTMENTS). Each of these Series may make investments when borrowings are
outstanding. Leveraging a Series creates an opportunity for increased net
income but, at the same time, creates special risk considerations. For example,
leveraging may exaggerate changes in the net asset value of Portfolio shares and
in the Portfolio's yield. Although the principal of such borrowings will be
fixed, a Series' assets may change in value during the time the borrowing is
outstanding. Leveraging will create interest expenses for a Series which can
exceed the income from the assets retained. To the extent the income derived
from securities purchased with borrowed funds exceeds the interest a Series will
have to pay, the Series' net income will be greater than it would be if
leveraging were not used. Conversely, if the income from the assets retained
with borrowed funds is not sufficient to cover the cost of leveraging, the net
income of the Series will be less than if leveraging were not used, and
therefore the amount available for distribution to stockholders as dividends
will be reduced. Reverse repurchase agreements which a Series does not fully
collateralize create leverage, a speculative factor, and will also be considered
as borrowings for purposes of the Series' investment limitations.
Generally, each of these Series does not intend to use leverage for
investment purposes. AMT International Investments may, however, use leverage
to purchase securities needed to close out short sales entered into for hedging
purposes and to facilitate other hedging transactions.
FOREIGN SECURITIES. (ALL SERIES). Each of the Series may invest in U.S.
dollar-denominated securities issued by foreign issuers (including governments,
quasi-governments and, with respect to AMT International Investments, banks) and
foreign branches of U.S. banks, including negotiable CDs, commercial paper and,
with respect to AMT International Investments, bankers' acceptances. These
investments are subject to each Series' quality and, in the case of each fixed
income Series, their maturity or duration standards.
While investments in foreign securities are intended to reduce risk by
providing further diversification (with respect to all Series but AMT
International Investments), such
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investments involve sovereign and other risks, in addition to the credit and
market risks normally associated with domestic securities. These additional
risks include the possibility of adverse political and economic developments
(including political instability) and the potentially adverse effects of
unavailability of public information regarding issuers, reduced governmental
supervision regarding financial markets, reduced liquidity of certain financial
markets, and the lack of uniform accounting, auditing, and financial standards
or the application of standards that are different or less stringent than those
applied in the U.S.
Each Series (except AMT Liquid Asset Investments) may invest in equity
(except AMT Government Income Investments and AMT Limited Maturity Bond
Investments), debt, or other income-producing securities (of issuers in
countries whose governments are considered stable by N&B Management that are
denominated in or indexed to foreign currencies, including, but not limited to,
(1) common and preferred stocks, with respect to all Series except AMT
Government Income Investments and AMT Limited Maturity Bond Investments (2)
convertible securities, with respect to AMT Balanced, Growth, Partners and
International Investments (3) warrants (subject to non-fundamental limitation
number 10), with respect to AMT International Investments (4) CDs, commercial
paper, fixed-time deposits, and bankers' acceptances issued by foreign banks,
(5) obligations of other corporations, and (6) obligations of foreign
governments, or their subdivisions, agencies, and instrumentalities,
international agencies, and supranational entities. Investing in these
securities includes the special risks associated with investing in non-U.S.
issuers described in the preceding paragraph and the additional risks of (1)
nationalization, expropriation, or confiscatory taxation, (2) adverse changes in
investment or exchange control regulations (which could prevent cash from being
brought back to the U.S.), and (3) expropriation or nationalization of foreign
portfolio companies. Additionally, dividends and interest payable on foreign
securities may be subject to foreign taxes, including taxes withheld from those
payments, and there are generally higher commission rates on foreign portfolio
transactions. Fixed commissions on foreign securities exchanges are generally
higher than negotiated commissions on U.S. exchanges, although each Series
endeavors to achieve the most favorable net results on portfolio transactions.
There is generally less government supervision and regulation of securities
exchanges, brokers, dealers and listed companies than in the U.S. Mail service
between the U.S. and foreign countries may be slower or less reliable than
within the United States, thus increasing the risk of delayed settlements of
portfolio transactions or loss of certificates for portfolio securities.
Prices of foreign securities and exchange rates for foreign currencies may
be affected by the interest rates prevailing in other countries. The interest
rates in other countries are often affected by local factors, including the
strength of the local economy, the demand for borrowing, the government's fiscal
and monetary policies, and the international balance of payments.
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Foreign securities often trade with less frequency and in less volume than
domestic securities and therefore may exhibit greater price volatility.
Additional costs associated with an investment in foreign securities may include
higher custodian fees than apply to domestic custodial arrangements, and
transaction costs of foreign currency conversions. Changes in foreign exchange
rates also will affect the value of securities denominated or quoted in
currencies other than the U.S. dollar.
Foreign markets also have different clearance and settlement procedures,
and in certain markets there have been times when settlements have been unable
to keep pace with the volume of securities transactions, making it difficult to
conduct such transactions. Such delays in settlement could result in temporary
periods when a portion of the assets of a Series is uninvested and no return is
earned thereon. The inability of a Series to make intended security purchases
due to settlement problems could cause a Series to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to a Series due to subsequent declines in
value of the portfolio securities, or, if a Series has entered into a contract
to sell the securities, could result in possible liability to the purchaser. In
addition, with respect to certain foreign countries, there is the possibility of
expropriation or confiscatory taxation, political or social instability, or
diplomatic developments which could affect a Series' investments in those
countries. Moreover, individual foreign economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross national
product, rate of inflation, capital reinvestment, resource self-sufficiency and
balance of payments position.
With respect to all Series except AMT International Investments and AMT
Liquid Asset Investments, in order to limit the risk inherent in investing in
foreign-currency-denominated securities, each Series may not purchase any such
security if after such purchase more than 10% of its total assets (taken at
market value) (except 25% with respect to AMT Limited Maturity Bond and
Government Income Investments) would be invested in such securities. Within
such limitation, however, a Series is not restricted in the amount it may invest
in securities denominated in any one foreign currency.
VARIABLE OR FLOATING RATE SECURITIES. (AMT LIQUID ASSET INVESTMENTS, AMT
LIMITED MATURITY BOND INVESTMENTS, AMT GOVERNMENT INCOME INVESTMENTS AND AMT
BALANCED INVESTMENTS). Variable rate securities provide for automatic
adjustment of the interest rate at fixed intervals (e.g., daily, monthly, or
semi-annually); floating rate securities provide for automatic adjustment of the
interest rate whenever some specified interest rate index changes. The interest
rate on variable and floating rate securities (collectively, "Variable Rate
Securities") ordinarily is determined by reference to a particular bank's prime
rate, the 90-day U.S. Treasury Bill rate, the rate of return on commercial paper
or bank CDs, an index of short-term tax-exempt rates or some other objective
measure. The Variable Rate Securities in which each Series invests frequently
permit the holder to demand payment of the securities' principal and accrued
interest at any time or at specified intervals not exceeding one year. The
demand feature usually is backed by a credit
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instrument (e.g., a bank letter of credit) from a creditworthy issuer and
sometimes by insurance from a creditworthy insurer. Without these credit
enhancements, the Variable Rate Securities might not meet the quality standards
applicable to obligations purchased by the Series. Accordingly, in purchasing
these securities, each Series relies primarily on the creditworthiness of the
credit instrument issuer or the insurer. A Series will not invest more than 5%
of its total assets in securities backed by credit instruments from any one
issuer or by insurance from any one insurer (excluding securities that do not
rely on the credit instrument or insurance for their rating, i.e., stand on
their own credit).
A Series can also buy fixed rate securities accompanied by demand features
or put options, permitting the Series to sell the security to the issuer or
third party at a specified price. A Series may rely on the creditworthiness of
issuers of puts in purchasing these securities.
In calculating its maturity or duration, each Series is permitted to treat
certain variable and floating rate securities as maturing on a date prior to the
date on which principal is due to be paid. In applying such maturity shortening
devices, N&B Management considers whether the interest rate reset is expected to
cause the security to trade at approximately its par value.
MORTGAGE-BACKED SECURITIES. (AMT LIQUID ASSET INVESTMENTS, AMT LIMITED
MATURITY BOND INVESTMENTS, AMT GOVERNMENT INCOME INVESTMENTS AND AMT BALANCED
INVESTMENTS). Mortgage-backed securities represent direct or indirect
participations in, or are secured by and payable from, pools of mortgage loans.
They may be 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 the Government National Mortgage Association ("GNMA"), the
Federal National Mortgage Association ("FNMA"), and the Federal Home Loan
Mortgage Corporation ("FHLMC"), or may be issued by private issuers.
Mortgage-backed securities may be issued in the form of collateralized
mortgage obligations ("CMOs") or mortgage-backed bonds. CMOs are obligations
fully collateralized directly or indirectly by a pool of mortgages on which
payments of principal and interest are passed through to the holders of the
CMOs, although not necessarily on a pro rata basis, on the same schedule as they
are received. Mortgage-backed bonds are general obligations of the issuer fully
collateralized directly or indirectly by a pool of mortgages. The mortgages
serve as collateral for the issuer's payment obligations on the bonds, but
interest and principal payments on the mortgages are not passed through either
directly (as with mortgage-backed "pass-through" securities issued or guaranteed
by U.S. Government agencies or instrumentalities) or on a modified basis (as
with CMOs). Accordingly, a change in the rate of prepayments on the pool of
mortgages could change the effective maturity of a CMO but not that of a
mortgage-backed bond (although, like many bonds, mortgage-backed bonds may be
callable by the issuer prior to maturity).
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Governmental, government-related, and private entities may create mortgage
loan pools to back mortgage pass-through and mortgage-collateralized investments
in addition to those described above. Commercial banks, savings institutions,
private mortgage insurance companies, mortgage bankers, and other secondary
market issuers, including securities broker-dealers and special purpose entities
(which generally are affiliates of the foregoing established to issue such
securities), also create pass-through pools of residential mortgage loans. In
addition, such issuers may be the originators and/or servicers of the underlying
mortgage loans as well as the guarantors of the mortgage-backed securities.
Pools created by non-governmental issuers generally offer a higher rate of
interest than government and government-related pools because of the absence of
direct or indirect government or agency guarantees. Timely payment of interest
and principal of these pools may be supported by various forms of insurance or
guarantees, including individual loan, title, pool, and hazard insurance, and
letters of credit. The insurance and guarantees are issued by governmental
entities, private insurers, and the mortgage poolers. Such insurance and
guarantees, as well as the creditworthiness of the issuers thereof will be
considered in determining whether a mortgage-backed security meets a Series'
investment quality standards. There can be no assurance that the private
insurers or guarantors can meet their obligations under the insurance policies
or guarantee arrangements.
A Series may buy mortgage-backed securities without insurance or
guarantees, if N&B Management determines that the securities meet the Series'
quality standards. A Series will not purchase mortgage-backed securities or any
other assets that, in N&B Management's opinion, are illiquid if, as a result,
more than 10% of the value of the Series' net assets will be illiquid. N&B
Management will, consistent with a Series' objective, policies and limitations,
and quality standards, consider making investments in new types of mortgage-
backed securities as such securities are developed and offered to investors.
Because many mortgages are repaid early, the actual maturity of many
mortgage-related securities is shorter than their stated final maturity. In
calculating its maturity or duration, a Series may apply certain industry
conventions regarding the maturity or duration of mortgage-backed instruments.
A change in market interest rates will affect the rate at which homeowners
prepay or refinance their mortgages and, consequently, will change the effective
maturities of most mortgage-related securities.
ASSET-BACKED SECURITIES. (AMT LIQUID ASSET INVESTMENTS, AMT LIMITED
MATURITY BOND INVESTMENTS, AMT GOVERNMENT INCOME INVESTMENTS AND AMT BALANCED
INVESTMENTS). These Series may purchase asset-backed securities, including
commercial paper. Asset-backed securities represent direct or indirect
participations in, or are secured by and payable from, pools of assets such as
motor vehicle installment sales contracts, installment loan contracts, leases of
various types of real and personal property, and receivables from revolving
credit (credit card) agreements. These assets are securitized through the use
of trusts and special purpose corporations. Payments
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or distributions of principal and interest on asset-backed securities may be
supported by credit enhancements, such as various forms of cash collateral
accounts or letters of credit. Like mortgage-related securities, asset-backed
securities are subject to the risk of prepayment. The risk that recovery on
repossessed collateral might be unavailable or inadequate to support payments on
asset-backed securities, however, is greater than is the case for mortgage-
backed securities.
Certificates for Automobile Receivables-SM- ("CARS-SM-") represent
undivided fractional interests in a trust whose assets consist of a pool of
motor vehicle retail installment sales contracts and security interests in the
vehicles securing the contracts. Payments of principal and interest on CARS-SM-
are "passed-through" monthly to certificate holders and are guaranteed up to
specified amounts by a letter of credit issued by a financial institution
unaffiliated with the trustee or originator of the trust. Underlying
installment sales contracts are subject to prepayment, which may reduce the
overall return to certificate holders. Certificate holders also may experience
delays in payment or losses on CARS-SM- if the full amounts due on underlying
installment sales contracts are not realized by the trust because of
unanticipated legal or administrative costs of enforcing the contracts, or
because of depreciation, damage, or loss of the vehicles securing the contracts,
or other factors.
Credit card receivable securities are backed by receivables from revolving
credit card agreements ("Accounts"). Credit balances on Accounts are generally
paid down more rapidly than are automobile contracts. Most of the credit card
receivable securities issued publicly to date have been pass-through
certificates. In order to lengthen the maturity of credit card receivable
securities, most such securities provide for a fixed period during which only
interest payments on the underlying Accounts are passed through to the security
holder and principal payments received on the Accounts are used to fund the
transfer to the pool of assets supporting the securities of additional credit
card charges made on the Accounts. Usually, the initial fixed period also may
be shortened upon the occurrence of specified events that signal a potential
deterioration in the quality of the assets backing the security, such as the
imposition of a cap on interest rates. The ability of the issuer to extend the
life of an issue of credit card receivable securities thus depends on the
continued generation of additional principal amounts in the underlying Accounts
and the non-occurrence of specified events. The nondeductibility of consumer
interest, as well as competitive and general economic factors, could adversely
affect the rate at which new receivables are created in an Account and conveyed
to an issuer, shortening the expected weighted average life of the related
security and reducing its yield. An acceleration in cardholders' payment rates
or any other event that shortens the period during which additional credit card
charges on an Account may be transferred to the pool of assets supporting the
related security could have a similar effect on its weighted average life and
yield.
Credit cardholders are entitled to the protection of state and federal
consumer credit laws, many of which give a holder the right to set off certain
amounts against
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balances owed on the credit card, thereby reducing amounts paid on Accounts. In
addition, unlike most other asset-backed securities, Accounts are unsecured
obligations of the cardholders.
DOLLAR ROLLS. (AMT LIMITED MATURITY BOND INVESTMENTS, AMT GOVERNMENT
INCOME INVESTMENTS AND AMT BALANCED INVESTMENTS). A "dollar roll" involves the
sale by a Series of securities for delivery in the current month and the Series'
simultaneously agreeing to repurchase substantially similar (same type and
coupon) securities on a specified future date from the same party. A "covered
roll" is a specific type of dollar roll for which there is an offsetting cash
position or a cash equivalent security position that matures on or before the
forward settlement date of the dollar roll transaction. These techniques are
considered borrowings for purposes of each Series' investment policies and
limitations concerning borrowings. There is a risk that the contra-party will
be unable or unwilling to complete the transactions as scheduled, which may
result in losses to each Series.
FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. (ALL SERIES EXCEPT AMT
LIQUID ASSET INVESTMENTS). Each Series may purchase securities (including, with
respect to AMT Limited Maturity Bond, Government Income and Balanced
Investments, mortgage-backed securities such as GNMA, FHMA, and FHLMC
certificates) on a when-issued basis, that is, by committing to purchase
securities (to secure an advantageous price and yield at the time of the
commitment) and completing the purchase by making payment against delivery of
the securities at a future date. AMT International Investments may purchase
securities on a when-issued basis or purchase or sell securities on a forward
commitment basis. These transactions involve a commitment by a Series to
purchase or sell securities at a future date (ordinarily one or two months
later). The price of the underlying securities (usually expressed in terms of
yield) and the date when the securities will be delivered and paid for (the
settlement date) are fixed at the time the transaction is negotiated. When-
issued purchases and forward commitment transactions are negotiated directly
with the other party, and such commitments are not traded on exchanges.
When-issued purchases and forward commitment transactions enable a Series
to "lock in" what the adviser believes to be an attractive price or yield on a
particular security for a period of time, regardless of future changes in
interest rates. For instance, in periods of rising interest rates and falling
prices, a Series might sell securities it owns on a forward commitment basis to
limit its exposure to falling prices. In periods of falling interest rates and
rising prices, a Series might purchase a security on a when-issued or forward
commitment basis and sell a similar security to settle such purchase, thereby
obtaining the benefit of currently higher yields.
The value of securities purchased on a when-issued or forward commitment
basis and any subsequent fluctuations in their value are reflected in the
computation of a Series' net asset value starting on the date of the agreement
to purchase the securities. A Series does not earn interest on the securities
it has committed to purchase until they
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are paid for and delivered on the settlement date. When a Series makes a
forward commitment to sell securities it owns, the proceeds to be received upon
settlement are included in a Series' assets. Fluctuations in the market value
of the underlying securities are not reflected in a Series' NAV as long as the
commitment to sell remains in effect. Settlement of when-issued purchases and
forward commitment transactions generally takes place within two months after
the date of the transactions, but a Series may agree to a longer settlement
period.
A Series will purchase securities on a when-issued basis or purchase or
sell securities on a forward commitment basis only with the intention of
completing the transaction and actually purchasing or selling the securities.
If deemed advisable as a matter of investment strategy, however, a Series may
dispose of or renegotiate a commitment after it has been entered into. A Series
also may sell securities it has committed to purchase before those securities
are delivered to the Series on the settlement date. A Series may realize a
capital gain or loss in connection with these transactions.
When a Series purchases securities on a when-issued basis, it maintains, in
a segregated account with its custodian, until payment is made, cash, U.S.
government securities, or other liquid, high-grade debt securities having an
aggregate market value equal to the amount of its purchase commitment. In the
case of a forward commitment to sell portfolio securities, the custodian will
hold the portfolio securities themselves in a segregated account while the
commitment is outstanding. These procedures are designed to ensure that a
Series will maintain sufficient assets at all times to cover its obligations
under when-issued purchases and forward commitments.
COVERED CALL (ALL SERIES EXCEPT AMT LIQUID ASSET INVESTMENTS) AND PUT (AMT
LIMITED MATURITY BOND INVESTMENTS, AMT GOVERNMENT INCOME INVESTMENTS, AMT
BALANCED INVESTMENTS AND AMT INTERNATIONAL INVESTMENTS) OPTIONS ON INDIVIDUAL
SECURITIES. AMT Limited Maturity Bond Investments, AMT Government Income
Investments and AMT Balanced Investments may write or purchase put and call
options on securities. Each of AMT Partners and AMT Growth Investments may
write or purchase covered call options on securities it owns valued at up to 10%
of its net assets. Generally, the purpose of writing and purchasing these
options is to reduce the effect of the securities' price fluctuations that
effect a Portfolio's NAV. AMT Limited Maturity Bond, Government Income and
Balanced Investments may also write covered call options to earn premium income.
AMT International Investments may write call options and purchase put
options on securities in order to hedge (I.E., write or purchase options to
reduce the effect of price fluctuations of securities held by the Series that
affect the Portfolio's NAV). The Series may also purchase or write put options,
purchase call options and write covered call options in an attempt to enhance
income.
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The obligation under any option terminates upon expiration of the option or
at an earlier time, when the writer offsets the option by entering into a
"closing purchase transaction" to purchase an option of the same series. If an
option is purchased by a Series and is never exercised, the Series will lose the
entire amount of the premium paid.
A Series will receive a premium for writing a put option, which will
obligate the Series to acquire a certain security at a certain price at any time
until a certain date if the purchaser of the option decides to sell such
security. The writer of the option may be obligated to purchase the security at
more than its current value.
When a Series purchases a put option, it pays a premium to the writer for
the right to sell a security to the writer for a specified amount at any time
until a certain date. A Series would purchase a put option in order to protect
itself against a decline in the market value of a security it owns.
When a Series writes a call option, it is obligated to sell a security to a
purchaser at a specified price at any time the purchaser requests, until a
certain date, for a premium. Each Series intends to write only "covered" call
options on securities it owns. So long as the obligation of the writer of the
call option continues, the writer may be assigned an exercise notice, requiring
it to deliver the underlying security against payment of the exercise price.
The writer may be obligated to deliver securities underlying an option at less
than the market price thereby giving up any additional gain on the security.
When a Series purchases a call option, it pays a premium for the right to
purchase a security from the writer at a specified price until a specified date.
A call option would be purchased by a Series in order to protect against an
increase in the price of the securities it intends to purchase or to offset a
previously written call option.
Portfolio securities on which call and put options may be written and
purchased by a Series are purchased solely on the basis of investment
considerations consistent with the Series' investment objective. The writing of
covered call options is a conservative investment technique believed to involve
relatively little risk (in contrast to the writing of "naked" or uncovered call
options, which a Series will not do), but is capable of enhancing a Series'
total return. When writing a covered call option, a Series, in return for the
premium, gives up the opportunity for profit from a price increase in the
underlying security above the exercise price, but conversely retains the risk of
loss should the price of the security decline. When writing a put option, a
Series, in return for the premium, takes the risk that it must purchase the
underlying security at an exercise price, which may be more than the current
market price of the security. If a call or put option that a Series has written
expires unexercised, the Series will realize a gain in the amount of the
premium; however, in the case of a call option, that gain may be offset by a
decline in the market value of the underlying security during the option period.
If the call or put option is exercised, the Series will realize a gain or loss
from the sale or purchase of the underlying security.
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Securities options are traded both on exchanges and in the over-the-
counter ("OTC") market. Exchange-traded options are issued by a clearing
organization affiliated with the exchange on which the option is listed; the
clearing organization in effect guarantees completion of every exchange-traded
option. In contrast, OTC options are contracts between a Series and its
counter-party with no clearing organization guarantee. Thus, when a Series
sells or purchases an OTC option, it generally will be able to "close out" the
option prior to its expiration only by entering into a "closing purchase
transaction" with the dealer to whom or from whom the Series originally sold or
purchased the option. There can be no assurance that a Series would be able to
liquidate an OTC option at any time prior to expiration. Unless a Series is
able to effect a closing purchase transaction in a covered OTC call option it
has written, it will not be able to liquidate securities used as cover until the
option expires or is exercised or different cover is substituted. In the event
of the counter-party's insolvency, a Series may be unable to liquidate its
option position and the associated cover. N&B Management monitors the
creditworthiness of dealers with which a Series may engage in OTC options, and
will limit a Series' counterparties in such transactions to dealers with a net
worth of at least $20 million as reported in their latest financial statements.
The assets used as cover (and held in a segregated account) for OTC options
sold or written by a Series will be considered illiquid for purposes of the non-
fundamental policies and limitations of the Series unless the OTC options are
sold to qualified dealers who agree that the Series may repurchase any OTC
option it writes at a maximum price to be calculated by a formula set forth in
the option agreement. The cover for an OTC call option written subject to this
procedure will be considered illiquid only to the extent that the maximum
repurchase price under the formula exceeds the intrinsic value of the option.
The premium received (or paid) by a Series when it writes (or purchases) a
call or put option is the amount at which the option is currently traded on the
applicable exchange, less (or plus) a commission. The premium may reflect,
among other things, the current market price of the underlying security, the
relationship of the exercise price to the market price, the historical price
volatility of the underlying security, the length of the option period, the
general supply of and demand for credit, and the general interest rate
environment. The premium received by a Series for writing a covered call or put
option is recorded as a liability on the Series' statement of assets and
liabilities. This liability is adjusted daily to the option's current market
value, which is the sales price on the option's last trade on that day before
the time the Series' NAV is computed or, in the absence of any trades thereof on
that day, the mean between the bid and ask prices as of that time.
Each Series pays the brokerage commissions in connection with purchasing or
writing options, including those used to close out existing positions. These
brokerage commissions normally are higher than those applicable to purchases and
sales of portfolio securities.
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Closing transactions are effected in order to realize a profit on an
outstanding option, to prevent an underlying security from being called, or to
permit the sale or the put of the underlying security. Furthermore, effecting a
closing transaction permits a Series to write another call option on the
underlying security with either a different exercise price or expiration date or
both. If a Series desires to sell a particular security on which it has written
a call option (or if it desires to protect itself against having to purchase a
security on which it has written a put option), it will seek to effect a closing
transaction prior to, or concurrently with, the sale (or purchase) of the
security. There is, of course, no assurance that a Series will be able to
effect closing transactions at favorable prices. If a Series cannot enter into
such a transaction, it may be required to hold a security that it might
otherwise have sold, (or purchase a security that it would not have otherwise
bought), in which case it would continue to be subject to market risk on the
security.
Options normally have expiration dates between three and nine months from
the date written. AMT International Investments may purchase both European-
style options and American-style options. European-style options are only
exercisable immediately prior to their expiration. American-style options, in
contrast, are exercisable at any time prior to their expiration date. The
exercise price of an option may be below, equal to, or above the current market
value of the underlying security at the time the option is written. From time
to time, a Series may purchase an underlying security for delivery in accordance
with an exercise notice of a call option assigned to it, rather than delivering
the security from its portfolio. In those cases, additional brokerage
commissions are incurred.
A Series will realize a profit or loss from a closing purchase transaction
if the cost of the transaction is less or more than the premium received from
writing the call or put option. However, because increases in the market price
of a call option generally reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset in whole or in part by appreciation of the underlying
security owned by a Series.
PUT AND CALL OPTIONS ON SECURITIES INDICES. (AMT INTERNATIONAL
INVESTMENTS). AMT International Investments may write or purchase put and call
options on securities indices for the purpose of hedging against the risk of
unfavorable price movements adversely affecting the value of the Series'
securities or securities the Series intends to buy. However, the Series
currently does not expect to invest a substantial portion of its assets in
securities index options. Unlike a securities option, which gives the holder
the right to purchase or sell a specified security at a specified price, an
option on a securities index gives the holder the right to receive a cash
"exercise settlement amount" equal to (i) the difference between the exercise
price of the option and the value of the underlying securities index on the
exercise date multiplied by (ii) a fixed "index multiplier."
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A securities index fluctuates with changes in the market values of the
securities included in the index. Options on stock indexes are currently traded
on the Chicago Board Options Exchange, the NYSE, the AmEx and foreign exchanges.
The Series may purchase put options in order to hedge against an
anticipated decline in securities market prices that might adversely affect the
value of the Series' portfolio securities. If the Series purchases a put option
on a securities index, the amount of the payment it would receive upon
exercising the option would depend on the extent of any decline in the level of
the securities index below the exercise price. Such payments would tend to
offset a decline in the value of the Series' portfolio securities. However, if
the level of the securities index increases and remains above the exercise price
while the put option is outstanding, the Series will not be able to exercise the
option profitably and will lose the amount of the premium and any transaction
costs. Such loss may be partially offset by an increase in the value of the
Series's portfolio securities.
The Series may purchase call options on securities indices in order to
participate in an anticipated increase in securities market prices. If the
Series purchases a call option on a securities index, the amount of the payment
it receives upon exercising the option depends on the extent of any increase in
the level of the securities index above the exercise price. Such payments
would, in effect, allow the Series to benefit from securities market
appreciation even though it may not have had sufficient cash to purchase the
underlying securities. Such payments may also offset increases in the price of
securities that the Series intends to purchase. If, however, the level of the
securities index declines and remains below the exercise price while the call
option is outstanding, the Series will not be able to exercise the option
profitably and will lose the amount of the premium and transaction costs. Such
loss may be partially offset by a reduction in the price the Series pays to buy
additional securities for its portfolio.
The Series may write securities index options in order to close out
positions in securities index options which it has purchased. These closing
sale transactions enable the Series immediately to realize gains or minimize
losses on its options positions. If the Series is unable to effect a closing
sale transaction with respect to options that it has purchased, it would have to
exercise the options in order to realize any profit and may incur transaction
costs upon the purchase or sale of underlying securities.
The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the options markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that cannot be reflected
in the options markets.
The effectiveness of hedging through the purchase of securities index
options will depend upon the extent to which price movements in the portion of
the securities portfolio being hedged correlate with price movements in the
selected securities index. Perfect correlation is not possible because the
securities held or to be acquired by the
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Series will not exactly match the composition of the securities indices on which
options are available. In addition, the purchase of securities index options
involves the risk that the premium and transaction costs paid by the Series in
purchasing an option will be lost as a result of unanticipated movements in
prices of the securities comprising the securities index on which the option is
based.
OTHER RISKS OF OPTIONS TRANSACTIONS. All securities index options
purchased by AMT International Investments will be listed and traded on an
exchange. There is no assurance that a liquid secondary market on a domestic or
foreign options exchange will exist for any particular exchange-traded option,
or at any particular time, and for some options no secondary market on an
exchange or elsewhere may exist. If the Series is unable to effect a closing
purchase transaction with respect to covered options it has written, it will not
be able to sell the underlying securities or dispose of assets held in a
segregated account until the options expire or are exercised. AMT International
Investments may purchase and sell both options that are traded on U.S. and
foreign exchanges and certain options traded in the OTC market in transactions
with broker-dealers who make markets in such options.
Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient interest in trading certain
options; (ii) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
its clearing organization may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market on that exchange (or in that class or series of options) would
cease to exist, although outstanding options on that exchange that had been
issued by the clearing organization as a result of trades on that exchange would
continue to be exercisable in accordance with their terms.
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The writing of options on
securities involves a risk that a portfolio will be required to sell or purchase
such securities at a price less favorable than the current market price and will
lose the benefit of appreciation or depreciation in the market price of such
securities.
The Series would incur brokerage commissions or spreads in connection with
its options transactions as well as for purchases and sales of underlying
securities. Brokerage commissions from options transactions are generally
higher than for portfolio
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securities transactions. The writing of options could result in a significant
increase in the Series' turnover rate.
INDEXED SECURITIES. (AMT LIMITED MATURITY BOND INVESTMENTS, AMT GOVERNMENT
INCOME INVESTMENTS, AMT INTERNATIONAL INVESTMENTS AND AMT BALANCED INVESTMENTS).
These Series may invest in securities linked to foreign currencies, interest
rates, commodities, indices, or other financial indicators ("indexed
securities"). Most indexed securities are short- to intermediate-term fixed
income securities whose value at maturity or interest rate rises or falls
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 thereon. However, some indexed securities
are more volatile than the underlying instrument itself.
FUTURES CONTRACTS AND OPTIONS THEREON. (AMT INTERNATIONAL INVESTMENTS, AMT
LIMITED MATURITY BOND INVESTMENTS, AMT GOVERNMENT INCOME INVESTMENTS AND AMT
BALANCED INVESTMENTS). AMT International Investments may enter into futures
contracts for the purchase or sale of individual securities and futures
contracts on securities indices which are traded on exchanges licensed and
regulated by the Commodity Futures Trading Commission ("CFTC") or on foreign
exchanges. Trading on foreign exchanges is subject to the legal requirements of
the jurisdiction in which the exchange is located and the rules of such foreign
exchange. AMT International Investments may purchase and sell futures for bona
fide hedging purposes and non-hedging purposes (I.E., in an effort to enhance
income) as defined in regulations of the CFTC.
AMT Limited Maturity Bond, Government Income and Balanced Investments may
purchase and sell interest-rate futures contracts and options thereon. These
Series engage in interest rate futures and options transactions in an attempt to
hedge against changes in securities prices resulting from expected changes in
prevailing interest rates, and they engage in foreign currency Futures and
options transactions in an attempt to hedge against expected changes in
prevailing currency exchange rates. Because the Futures markets may be more
liquid than the cash markets, the use of Futures permits a Series to enhance
portfolio liquidity and maintain a defensive position without having to sell
portfolio securities. These Series do not engage in transactions in futures or
options thereon for speculation; they view investment in (1) interest-rate
Futures and options thereon as a maturity or duration management device and/or
a device to reduce risk and preserve total return in an adverse interest rate
environment and (2) foreign currency Futures and options thereon as a means of
establishing more definitely the effective return on securities denominated in
foreign currencies held or intended to be acquired by them.
A futures contract on a security is a binding contractual commitment which,
if held to maturity, will result in an obligation to make or accept delivery of
securities having a
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standardized face value and rate of return during a particular month. By
purchasing futures on securities, a Series will legally obligate itself to
accept delivery of the underlying security and to pay the agreed price. By
selling futures on securities, the Series will legally obligate itself to make
delivery of the security and receive payment of the agreed price.
Open futures positions on securities are valued at the most recent
settlement price, unless such price does not reflect the fair value of the
contract, in which case the position will be valued by or under the direction of
the Trustees of Managers Trust.
Futures contracts on securities are not normally held to maturity but are
instead liquidated through offsetting transactions which may result in a profit
or loss. While futures contracts on securities entered into by a Series will
usually be liquidated in this manner, the Series may instead make or take
delivery of the underlying securities whenever it appears economically
advantageous for it to do so. A clearing corporation associated with the
exchange on which futures on securities are traded assumes responsibility for
closing out contracts and guarantees that, if a contract is still open, the sale
or purchase of securities will be performed on the settlement date.
Similarly, a securities index futures contact does not require the physical
delivery of securities, but merely provides for profits and losses resulting
from changes in the market value of the contract to be credited or debited at
the close of each trading day to the respective accounts of the parties to the
contract. On the contract's expiration date, a final cash settlement occurs and
the futures positions are simply closed out. Changes in the market value of a
particular securities index futures contract reflect changes in the specified
index of the securities on which the futures contract is based.
A Series sells futures contracts in order to offset a possible decline in
the value of its securities. When a futures contract is sold by a Series, the
value of the contract will tend to rise when the value of the Series' securities
declines and will tend to fall when the value of such securities increases. A
Series purchases future contracts in order to fix what is believed to be a
favorable price for securities a Series intends to purchase. If a futures
contract is purchased by a Series, the value of the contract will tend to change
together with changes in the value of such securities.
A Series may also purchase put and call options on futures contracts for
bona fide hedging and, with respect to AMT International Investments, non-
hedging purposes. A put option purchased by a Series would give it the right to
assume a position as the seller of a futures contract (assume a "short
position"). A call option purchased by a Series would give it the right to
assume a position as the purchaser of a futures contract (assume a "long
position"). The purchase of an option on a futures contract requires a Series
to pay a premium. In exchange for the premium, a Series becomes entitled to
exercise the benefits, if any, provided by the futures contract, but is not
required to take any actions under the contract. If the option cannot be
profitably exercised before it
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expires, the Series' loss will be limited to the amount of the premium and any
transaction costs.
In addition, a Series may write (sell) put and call options on futures
contracts for bona fide hedging and, with respect to AMT International
Investments, non-hedging purposes. The writing of a put option on a futures
contract generates a premium, which may partially offset an increase in the
price of securities that a Series intends to purchase. However, a Series
becomes obligated to purchase a futures contract, which may have a value lower
than the exercise price. Conversely, the writing of a call option on a futures
contract generates a premium which may partially offset a decline in the value
of a Series' assets. By writing a call option, a Series becomes obligated, in
exchange for the premium, to sell a futures contract, which may have a value
higher than the exercise price.
A Series may enter into closing purchase or sale transactions in order to
terminate a futures contract. A Series may close out an option which it has
purchased or written by selling or purchasing an offsetting option of the same
series. There is no guarantee that such closing transactions can be effected.
A Series' ability to enter into closing transactions depends on the development
and maintenance of a liquid market, which may not be available at all times.
Although futures and options transactions are intended to enable a Series
to manage interest rate, stock market or currency exchange risks, unanticipated
changes in interest rates, market prices or currency exchange rates could result
in poorer performance than if a Series had not entered into these transactions.
Even if N&B Management correctly predicts interest rate, market price or
currency rate movements, a hedge could be unsuccessful if changes in the value
of a Series' futures position did not correspond to changes in the value of its
investments. This lack of correlation between a Series' futures and securities
or currency positions may be caused by differences between the futures and
securities or currency markets or by differences between the securities
underlying the Series' futures position and the securities held by or to be
purchased for the Series. N&B Management will attempt to minimize these risks
through careful selection and monitoring of a Series' futures and options
positions. The ability to predict the direction of the securities markets,
interest rates and currency exchange rates involves skills different from those
used in selecting securities.
The prices of futures contracts depend primarily on the value or level of
the securities or indices on which they are based. Because there is a limited
number of types of futures contracts, it is likely that the standardized
futures contracts available to a Series will not exactly match the securities
the Series wishes to hedge or intends to purchase, and consequently will not
provide a perfect hedge against all price fluctuation. To compensate for
differences in historical volatility between positions a Series wishes to hedge
and the standardized futures contracts available to it, a Series may purchase or
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sell futures contracts with a greater or lesser value than the securities it
wishes to hedge or intends to purchase.
FOREIGN CURRENCY TRANSACTIONS. (ALL SERIES EXCEPT AMT LIQUID ASSET
INVESTMENTS). The Series may engage in foreign currency exchange transactions.
Foreign currency exchange transactions will be conducted either on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market,
or through entering into forward contracts to purchase or sell foreign
currencies ("forward contracts") (in amounts not exceeding 5% of each Series'
net assets, with respect to AMT Partners and Growth Investments). A Series may
enter into forward contracts in order to protect against uncertainty in the
level of future foreign currency exchange rates. AMT International Investments
may also enter forward contracts for non-hedging purposes. A forward contract
involves an obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days (usually less than one year) from the date
of the contract agreed upon by the parties, at a price set at the time of the
contract. These contracts are traded in the interbank market conducted directly
between traders (usually large commercial banks) and their customers. A forward
contract generally has no deposit requirement, and no commissions are charged at
any stage for trades. Although foreign exchange dealers do not charge a fee for
conversion, they do realize a profit based on the difference (the spread)
between the price at which they are buying and selling various currencies.
When a Series enters into a contract for the purchase or sale of a security
denominated in a foreign currency, it may wish to "lock in" the U.S. dollar
price of the security. By entering into a forward contract for the purchase or
sale, for a fixed amount of U.S. dollars, of the amount of foreign currency
involved in the underlying security transactions, a Series will be able to
protect itself against a possible loss. Such loss would result from an adverse
change in the relationship between the U.S. dollar and the foreign currency
during the period between the date on which the security is purchased or sold
and the date on which payment is made or received.
When N&B Management believes that the currency of a particular foreign
country may suffer a substantial decline against the U.S. dollar, it may also
enter into a forward contract to sell the amount of foreign currency for a fixed
amount of dollars which approximates the value of some or all of a Series'
securities denominated in such foreign currency. The precise matching of the
forward contract amounts and the value of the securities involved will not
generally be possible, since the future value of such securities denominated in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the forward contract is entered into and
the date it matures.
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, when N&B Management believes that there is a pattern of
correlation
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between the two currencies. AMT International Investments may also purchase and
sell forward contracts for non-hedging purposes when N&B Management anticipates
that the foreign currency will appreciate or depreciate in value, but securities
in that currency do not present attractive investment opportunities and are not
held in the Series' portfolio.
When a Series engages in forward contracts for hedging purposes, it will
not enter into forward contracts to sell currency or maintain a net exposure to
such contracts if their consummation would obligate the Series to deliver an
amount of foreign currency in excess of the value of the Series' portfolio
securities or other assets denominated in that currency. At the consummation of
the forward contract, a Series may either make delivery of the foreign currency
or terminate its contractual obligation to deliver by purchasing an offsetting
contract obligating it to purchase the same amount of such foreign currency at
the same maturity date. If the Series chooses to make delivery of the foreign
currency, it may be required to obtain such currency through the sale of
portfolio securities denominated in such currency or through conversion of other
assets of the Series into such currency. If the Series engages in an offsetting
transaction, it will incur a gain or a loss to the extent that there has been a
change in forward contract prices. Closing purchase transactions with respect
to forward contracts are usually made with the currency trader who is a party to
the original forward contract.
The Series are not required to enter into such transactions and will not do
so unless deemed appropriate by N&B Management.
Using forward contracts to protect the value of a Series' portfolio
securities against a decline in the value of a currency does not eliminate
fluctuations in the underlying prices of the securities. It simply establishes
a rate of exchange which can be achieved at some future point in time. The
precise projection of short-term currency market movements is not possible, and
short-term hedging provides a means of fixing the dollar value of only a portion
of a Series' foreign assets.
While a Series may enter forward contracts to reduce currency exchange rate
risks, transactions in such contracts involve certain other risks. Thus, while
a Series may benefit from such transactions, unanticipated changes in currency
prices may result in a poorer overall performance for the Series than if it had
not engaged in any such transactions. Moreover, there may be imperfect
correlation between a Series' portfolio holdings of securities denominated in a
particular currency and forward contracts entered into by the Series. Such
imperfect correlation may cause the Series to sustain losses which will prevent
the Series from achieving a complete hedge or expose the Series to risk of
foreign exchange loss.
An issuer of fixed income securities purchased by a Series may be domiciled
in a country other than the country in whose currency the instrument is
denominated. AMT International Investments may also invest in debt securities
denominated in the European
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Currency Unit ("ECU"), which is a "basket" consisting of a specified amount in
the currencies of certain of the member states of the European Community. The
specific amounts of currencies comprising the ECU may be adjusted by the Council
of Ministers of the European Community from time to time to reflect changes in
relative values of the underlying currencies. In addition, the Series may
invest in securities denominated in other currency "baskets." The market for
ECUs may become illiquid at times of uncertainty or rapid change in the European
currency markets, limiting the Series' ability to prevent potential losses.
A Series' activities in forward contracts, currency futures contracts and
related options and currency options (see below) may be limited by the
requirements of federal income tax law applicable to its corresponding Portfolio
for qualification as a regulated investment company ("RIC"). See "Additional
Tax Information."
CURRENCY FUTURES AND RELATED OPTIONS. (AMT INTERNATIONAL INVESTMENTS, AMT
LIMITED MATURITY BOND INVESTMENTS, AMT GOVERNMENT INCOME INVESTMENTS AND AMT
BALANCED INVESTMENTS). Each of these Series may enter into currency futures
contracts and options on such futures contracts in domestic and foreign markets.
Each of these Series may sell a currency futures contract or a call option, or
it may purchase a put option on such futures contract, if N&B Management
anticipates that exchange rates for a particular currency will fall. Such a
transaction will be used as a hedge (or, in the case of a sale of a call option,
a partial hedge) against a decrease in the value of a Series' securities
denominated in such currency. If N&B Management anticipates that exchange rates
will rise, a Series may purchase a currency futures contract or a call option to
protect against an increase in the price of securities which are denominated in
a particular currency and which the Series intends to purchase. AMT
International Investments may also purchase a currency futures contract, or a
call option thereon, for non-hedging purposes when N&B Management anticipates
that a particular currency will appreciate in value, but securities denominated
in that currency do not present an attractive investment and are not included in
the Series' portfolio. Each Series will use these futures contracts and related
options for hedging purposes and, with respect to AMT International Investments,
for non-hedging purposes as well (I.E., in an effort to enhance income) as
defined in CFTC regulations.
The sale of a currency futures contract creates an obligation by a Series,
as seller, to deliver the amount of currency called for in the contract at a
specified future time for a specified price. The purchase of a currency futures
contract creates an obligation by a Series, as purchaser, to take delivery of an
amount of currency at a specified future time at a specified price. Although
the terms of currency futures contracts specify actual delivery or receipt, in
most instances the contracts are closed out before the settlement date without
the making or taking of delivery of the currency. Closing out of a currency
futures contract is effected by entering into an offsetting purchase or sale
transaction. To close out a currency futures contract sold by a Series, the
Series may purchase a currency futures contract for the same aggregate amount of
currency and same delivery
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date. If the price in the sale exceeds the price in the offsetting purchase,
the Series is immediately paid the difference. Similarly, to close out a
currency futures contract purchased by a Series, the Series sells a currency
futures contract. If the offsetting sale price exceeds the purchase price, the
Series realizes a gain. Likewise, if the offsetting sale price is less than the
purchase price, the Series realizes a loss.
Unlike a currency futures contract, which requires the parties to buy and
sell currency on a set date, an option on a futures contract entitles its holder
to decide on or before a future date whether to enter into such a contract. If
the holder decides not to enter into the contract, the premium paid for the
option is lost. For the holder of an option, there are no daily payments of
cash for "variation" or "maintenance" margin payments to reflect the change in
the value of the underlying contract as there are by a purchaser or seller of a
currency futures contract.
A risk in employing currency futures contracts to protect against price
volatility of portfolio securities which are denominated in a particular
currency is that the prices of such securities subject to currency futures
contracts may not completely correlate with the behavior of the cash prices of
the Series' securities. The correlation may be distorted by the fact that the
currency futures market may be dominated by short-term traders seeking to profit
from changes in exchange rates. This would reduce the value of such contracts
used for hedging purposes over a short-term period. Such distortions are
generally minor and would diminish as the contract approached maturity. Another
risk is that N&B Management could be incorrect in its expectation as to the
direction or extent of various exchange rate movements or the time span within
which the movements take place. When a Series engages in the purchase of
currency futures contracts, an amount equal to the market value of the currency
futures contract (minus any required margin) will be deposited in a segregated
account of securities, cash, or cash equivalents to collateralize the position
and thereby limit the use of such futures contracts.
Put and call options on currency futures have characteristics similar to
those of other options. In addition to the risks associated with investing in
options on securities, however, there are particular risks associated with
transactions in options on currency futures. In particular, the ability to
establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market for such options.
OPTIONS ON FOREIGN CURRENCIES. (ALL SERIES EXCEPT AMT LIQUID ASSET
INVESTMENTS). Each of these Series may write and purchase covered call and put
options on foreign currencies (in amounts not exceeding 5% of each Series' net
assets, with respect to AMT Growth and Partners Investments) for the purpose of
protecting against declines in the U.S. dollar value of portfolio securities or
protecting the dollar equivalent of dividend, interest, or other payment on
those securities and against increases in the U.S. dollar cost of securities. A
decline in the dollar value of a foreign currency in which portfolio securities
are denominated will reduce the dollar value of such securities, even if their
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value in the foreign currency remains constant. In order to protect against
such decreases in the value of portfolio securities, a Series may purchase put
options on the foreign currency. If the value of the currency declines, a
Series will have the right to sell such currency for a fixed amount of dollars
which exceeds the market value of such currency. This would result in a gain
that may offset, in whole or in part, the negative effect of currency
depreciation on the value of the Series' securities denominated in that
currency.
Conversely, if a rise in the dollar value of a currency is projected for
those securities to be acquired, thereby increasing the cost of such securities,
a Series may purchase call options on such currency. If the value of such
currency increases, the purchase of such call options would enable the Series to
purchase currency for a fixed amount of dollars which is less than the market
value of such currency. Such a purchase would result in a gain that may offset,
at least partially, the effect of any currency-related increase in the price of
securities a Series intends to acquire. As in the case of other types of
options transactions, however, the benefit a Series derives from purchasing
foreign currency options will be reduced by the amount of the premium and
related transaction costs. In addition, if currency exchange rates do not move
in the direction or to the extent anticipated, a Series could sustain losses on
transactions in foreign currency options which would deprive it of a portion or
all of the benefits of advantageous changes in such rates.
A Series may also write options on foreign currencies for hedging purposes.
For example, if a Series anticipated a decline in the dollar value of foreign
currency denominated securities because of declining exchange rates, it could,
instead of purchasing a put option, write a call option on the relevant
currency. If the expected decline occurs, the option will most likely not be
exercised, and the decrease in value of portfolio securities will be offset by
the amount of the premium received by the Series.
Similarly, a Series could write a put option on the relevant currency,
instead of purchasing a call option, to hedge against an anticipated increase in
the dollar cost of securities to be acquired. If exchange rates move in the
manner projected, the put option will expire unexercised and allow the Series to
offset such increased cost up to the amount of the premium. However, as in the
case of other types of options transactions, the writing of a foreign currency
option will constitute only a partial hedge up to the amount of the premium, and
only if rates move in the expected direction. If unanticipated exchange rate
fluctuations occur, the option may be exercised and the Series would be required
to purchase or sell the underlying currency at a loss which may not be fully
offset by the amount of the premium. As a result of writing options on foreign
currencies, a Series also may be required to forego all or a portion of the
benefits which might otherwise have been obtained from favorable movements in
currency exchange rates. Certain options on foreign currencies are traded on the
OTC market and involve liquidity and credit risks that may not be present in the
case of exchange-traded currency options.
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AMT International Investments may purchase call options on currency for
non-hedging purposes when N&B Management anticipates that the currency will
appreciate in value, but the securities denominated in that currency do not
present attractive investment opportunities and are not included in the Series'
portfolio. AMT International Investments may write (sell) put and covered call
options on any currency in order to realize greater income than would be
realized on portfolio securities alone. However, in writing covered call
options for additional income, AMT International Investments may forego the
opportunity to profit from an increase in the market value of the underlying
currency. Also, when writing put options, AMT International Investments
accepts, in return for the option premium, the risk that it may be required to
purchase the underlying currency at a price in excess of the currency's market
value at the time of purchase.
AMT International Investments would normally purchase call options for non-
hedging purposes in anticipation of an increase in the market value of a
currency. AMT International Investments would ordinarily realize a gain if,
during the option period, the value of such currency exceeded the sum of the
exercise price, the premium paid and transaction costs. Otherwise the Series
would realize either no gain or a loss on the purchase of the call option. Put
options may be purchased by AMT International Investments for the purpose of
benefiting from a decline in the value of currencies which it does not own. The
Series would ordinarily realize a gain if, during the option period, the value
of the underlying currency decreased below the exercise price sufficiently to
more than cover the premium and transaction costs. Otherwise the Series would
realize either no gain or a loss on the purchase of the put option.
A call option written on foreign currency by a Series is "covered" if the
Series owns the underlying foreign currency subject to the call, or if it has an
absolute and immediate right to acquire that foreign currency without additional
cash consideration. This also would apply to additional cash consideration held
in a segregated account by its custodian, upon conversion or exchange of other
foreign currency held in its portfolio. A call option is also covered if a
Series holds a call on the same foreign currency for the same principal amount
as the call written where the exercise price of the call held is (a) equal to or
less than the exercise price of the call written or (b) greater than the
exercise price of the call written if the amount of the difference is
maintained by the Series in cash or liquid, high-grade debt securities in a
segregated account with its custodian.
LIMITATIONS ON TRANSACTIONS IN OPTIONS, FUTURES CONTRACTS AND FOREIGN
CURRENCY TRANSACTIONS. A Series is required to maintain margin deposits with
brokerage firms through which it effects futures contracts, and must deposit
"initial margin" each time it enters into a futures contract. Such "initial
margin" is usually equal to a percentage of the contract's value. In addition,
due to current industry practice, daily variation margin payments in cash are
required to reflect gains and losses on open futures contracts. As a result, a
Series may be required to make additional margin payments during the term of a
futures contract. A Series may not purchase or sell futures contracts
(including
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currency futures contracts) or related options on foreign or U.S. exchanges if
immediately thereafter the sum of the amounts of initial margin deposits on the
Series' existing futures contracts and premiums paid for options on futures
(excluding futures contracts and options on futures entered into for bona fide
hedging purposes and net of the amount the positions are "in the money") would
exceed 5% of the market value of the Series' total assets. In instances
involving the purchase of futures contracts or the writing of put options
thereon by a Series, an amount of cash, cash equivalents or securities
denominated in the appropriate currency equal to the market value of the futures
contracts and options (less any related margin deposits) will be deposited in a
segregated account with its custodian to collateralize the position, thereby
limiting the use of such futures contracts.
The extent to which a Series may enter into futures contracts and option
transactions may be limited by the requirements of federal income tax law
applicable to its corresponding Portfolio for qualification as a RIC. See
"Additional Tax Information." A Series generally will not enter into a forward
contract with a term of greater than one year. A Series may experience delays
in the settlement of its foreign currency transactions.
When a Series engages in forward contracts for the sale or purchase of
currencies, the Series will either cover its position or establish a segregated
account. The Series will consider its position covered if it has securities in
the currency subject to the forward contract, or otherwise has the right to
obtain that currency at no additional cost. In the alternative, the Series will
place cash which is not available for investment, liquid, high-grade debt
securities or other securities (denominated in the foreign currency subject to
the forward contract) in a separate account. The amounts in such separate
account will equal the value of the Series' total assets which are committed to
the consummation of foreign currency exchange contracts. If the value of the
securities placed in the separate account declines, the Series will place
additional cash or securities in the account on a daily basis so that the value
of the account will equal the amount of the Series' commitments with respect to
such contracts.
SHORT SALES (AMT INTERNATIONAL INVESTMENTS) AND SHORT SALES AGAINST-THE-
BOX (AMT PARTNERS INVESTMENTS, AMT GROWTH INVESTMENTS, AMT BALANCED INVESTMENTS
AND AMT INTERNATIONAL INVESTMENTS). AMT International Investments may enter
into short sales of securities to the extent permitted by the Series'
nonfundamental investment policies and limitations. Under applicable guidelines
of the staff of the SEC, if the Series engages in a short sale of the type
referred to in the Prospectus, it must put in a segregated account (not with the
broker) an amount of cash or U.S. government securities equal to the difference
between (1) the market value of the securities sold short at the time they were
sold short and (2) any cash or U.S. government securities required to be
deposited as collateral with the broker in connection with the short sale (not
including the proceeds from the short sale). In addition, until the Series
replaces the borrowed security, it must daily maintain the segregated account at
such a level that (3) the amount deposited in
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it plus the amount deposited with the broker as collateral will equal the
current market value of the securities sold short, and (4) the amount deposited
in it plus the amount deposited with the broker as collateral will not be less
than the market value of the securities at the time they were sold short.
The effect on the Series of engaging in short selling is similar to the
effect of leverage. Short selling may exaggerate changes in the Portfolio's
NAV and yield. Short selling may also produce higher than normal portfolio
turnover which may result in increased transaction costs to the Series and may
result in gains from the sale of securities deemed to have been held for less
than three months. Such gains must be limited in order for AMT International
Investments to qualify as a RIC. See "Additional Tax Information."
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.
FOREIGN CORPORATE AND GOVERNMENT DEBT SECURITIES. (ALL SERIES). Each
Series may invest in foreign corporate bonds and debentures and sovereign debt
instruments issued or guaranteed by foreign governments, their agencies or
instrumentalities.
Foreign debt securities are subject to risks similar to those of other
foreign securities. In addition, foreign debt securities are subject to the
risk of an issuer's inability to meet principal and interest payments on the
obligations ("credit risk") and are also subject to price volatility due to such
factors as interest rate sensitivity, market perception of the creditworthiness
of the issuer, and general market liquidity ("market risk"). Lower-rated
securities are more likely to react to developments affecting market and credit
risk than are more highly rated securities, which react primarily to movements
in the general level of interest rates. Debt securities 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. Pricing of thinly traded securities requires greater judgment than
pricing of securities for which market transactions are regularly reported. N&B
Management will invest in such securities only when it concludes that the
anticipated return to the Series and the Portfolio on such an investment
warrants exposure to the additional level of risk. A further description of the
ratings used by Moody's and S&P is included in the Appendix to the SAI.
Subsequent to its purchase by the Series, an issue of securities may cease to
be rated or its rating may be reduced. In such a case, N&B Management will make
a determination as to whether the Series should dispose of the downgraded
securities.
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CONVERTIBLE SECURITIES. (AMT INTERNATIONAL INVESTMENTS, AMT GROWTH
INVESTMENTS, AMT BALANCED INVESTMENTS AND AMT PARTNERS INVESTMENTS). A
convertible security entitles the holder to receive interest paid or accrued on
debt or the dividend paid on preferred stock until the convertible security
matures or is redeemed, converted or exchanged. Before conversion, convertible
securities ordinarily provide a stream of income with generally higher yields
than those of common stocks of the same or similar issuers, but lower than the
yield on non-convertible debt. Convertible securities are usually subordinated
to comparable-tier nonconvertible securities but rank senior to common stock in
a corporation's capital structure. The value of a convertible security is a
function of (1) its yield in comparison with the yields of other securities of
comparable maturity and quality that do not have a conversion privilege and (2)
its worth, at market value, if converted into the underlying common stock.
Convertible securities are typically issued by smaller capitalized
companies whose stock prices may be volatile. The price of a convertible
security often reflects such variations in the price of the underlying common
stock in a way that nonconvertible debt does not. A convertible security may be
subject to redemption at the option of the issuer at a price established in the
security's governing instrument. If a convertible security held by a Series is
called for redemption, the Series will be required to convert it into the
underlying common stock, sell it to a third party or permit the issuer to redeem
the security. Any of these actions could have an adverse effect on the fund's
ability to achieve its investment objective.
PREFERRED STOCK. (AMT INTERNATIONAL INVESTMENTS, AMT GROWTH INVESTMENTS,
AMT BALANCED INVESTMENTS AND AMT PARTNERS INVESTMENTS). Unlike interest
payments on debt securities, dividends on preferred stock are generally payable
at the discretion of the issuer's board of directors, although preferred
shareholders may have certain rights if dividends are not paid. Shareholders
may suffer a loss of value if dividends are not paid, and generally have no
legal recourse against the issuer. The market prices of preferred stocks are
generally more sensitive to changes in the issuer's creditworthiness than are
the prices of debt securities.
COMMERCIAL PAPER. (ALL SERIES). Commercial paper is a short-term debt
security issued by a corporation or bank for purposes such as financing current
operations. AMT Growth, Partners, Liquid Asset and International Investments may
invest only in commercial paper receiving the highest rating from S&P (A-1) or
Moody's (P-1), or deemed by N&B Management to be of equivalent quality. AMT
International Investments may invest in such commercial paper, as a defensive
measure, to maintain adequate liquidity or as needed for segregated accounts.
Each Series may invest in commercial paper that cannot be resold to the
public without an effective registration statement under the 1933 Act. While
such restricted securities are normally deemed illiquid, N&B Management, or with
respect to AMT International Investments, BNP-N&B Global, may in certain cases
determine that such
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paper is liquid, pursuant to guidelines established by Managers Trust's Board of
Trustees.
ZERO COUPON SECURITIES. (ALL SERIES). Each of these Series may invest in
zero coupon securities (up to 5% of its net assets, with respect to AMT Partners
Investments and AMT Limited Maturity Bond Investments), which are debt
obligations that do not entitle the holder to any periodic payment of interest
prior to maturity or specify a future date when the securities begin paying
current interest. Rather, they are issued and traded at a discount from their
face amount or par value, which discount varies depending on prevailing interest
rates, the time remaining until cash payments begin, the liquidity of the
security, and the perceived credit quality of the issuer.
The discount on zero coupon securities ("original issue discount") is taken
into account by each Series prior to the receipt of any actual payments.
Because each Portfolio must distribute to its shareholders substantially all of
its income (including its share of its corresponding Series' original issue
discount) for income tax purposes (see "Additional Tax Information"), a Series
may have to dispose of portfolio securities under disadvantageous circumstances
to generate cash, or may be required to borrow, to satisfy its corresponding
Portfolio's distribution requirements.
The market prices of zero coupon securities generally are more volatile
than the prices of securities that pay interest periodically and are likely to
respond to changes in interest rates to a greater degree than do other types of
debt securities having similar maturities and credit quality.
MUNICIPAL OBLIGATIONS. (AMT LIMITED MATURITY BOND INVESTMENTS AND AMT
BALANCED INVESTMENTS). Municipal obligations are issued by or on behalf of
states (as used herein, including the District of Columbia), territories and
possessions of the United States and their political subdivisions, agencies, and
instrumentalities; the interest on which 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 only by the income from a specific project, facility, or tax. Municipal
obligations also include industrial development and private activity bonds
which are issued by or on behalf of public authorities, but are not backed by
the credit of any governmental or public authority. "Anticipation notes", which
are also municipal obligations, 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.
The value of municipal obligations is dependent on the continuing payment
of interest and principal when due by the issuers of the municipal obligations
in which a Series invests (or, in the case of industrial development bonds, the
revenues generated
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by the facility financed by the bonds or, in certain other instances, the
provider of the credit facility backing the bonds). As with other fixed income
securities, an increase in interest rates generally will reduce the value of the
Series' investments in municipal obligations, whereas a decline in interest
rates generally will increase that value. 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.
INTEREST RATE PROTECTION TRANSACTIONS. (AMT GOVERNMENT INCOME INVESTMENTS).
AMT Government Income Investments may enter into interest rate swaps, caps,
floors, and collars. An interest rate swap involves an agreement between two
parties to exchange payments that are based, for example, on variable and fixed
rates of interest and that are calculated on the basis of a specified amount
(the "notional principal amount"). In an interest rate cap or floor
transaction, one party agrees to make payments to the other party when a
specified market interest rate goes above (in the case of a cap) or below (in
the case of a floor) a designated level on predetermined dates or during a
specified time period. An interest rate collar transaction involves both a cap
and a floor (that is, one party agrees to make payments to the other party when
a specified market interest rate goes outside a specified range).
The Series enters into these transactions only with banks and recognized
securities dealers believed by N&B Management to present minimal credit risks in
accordance with guidelines established by the Trustees, for the purpose of (1)
preserving a return or spread on a particular investment or portion of its
portfolio, (2) protecting against an increase in the price of securities it
anticipates purchasing at a later date, or (3) effectively fixing the rate of
interest it pays on borrowings. The Series uses interest rate protection
transactions as hedges and not as speculative investments; these transactions
are subject to risks comparable to those described herein with respect to other
hedging strategies. If the Series enters into such a transaction and N&B
Management incorrectly forecasts interest rates, market values, or other
economic factors, the Series would have been in a better position had it not
hedged at all. The Series does not treat these transactions as being subject to
its borrowing restrictions.
The Series will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap agreements. If
the Series enters into a swap agreement on a net basis, it will segregate assets
with a daily value at least equal to the excess, if any, of its accrued
obligations under the swap agreement over the accrued amount it is entitled to
receive under the agreement. If the Series enters into a swap agreement on
other than a net basis, it will segregate assets with a value equal to the full
amount of its accrued obligations under the agreement.
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The swap market has grown substantially in recent years, with a large
number of the participants utilizing standardized swap documentation. Swap
agreements are treated as liquid if they can be expected, in N&B Management's
judgment, to be able to be sold within seven days at approximately the price at
which they are valued. Caps, floors, and collars are more recent innovations
for which documentation is less standardized, and accordingly they are less
liquid than swaps.
SHORT-TERM TRADING. (AMT GOVERNMENT INCOME INVESTMENTS). AMT Government
Income Investments may engage in short-term trading. Securities may be sold in
anticipation of a market decline (a rise in interest rates) or purchased in
anticipation of a market rise (a decline in interest rates). In addition, a
security may be sold and another purchased at approximately the same time to
take advantage of what N&B Management believes to be a temporary disparity in
the normal yield relationship between the two securities. Yield disparities may
occur for reasons not directly related to the investment quality of particular
issues or the general movement of interest rates, such as changes in the overall
demand for or supply of various types of fixed income securities or changes in
the investment objectives of investors.
FIXED INCOME SECURITIES. (ALL SERIES). Each Series may invest in money
market instruments, U.S. Government or Agency securities, and corporate bonds
and debentures receiving one of the four highest ratings from S&P, Moody's, or
any other NRSRO or, if not rated by any NRSRO, deemed comparable by N&B
Management to such rated securities; in addition, AMT Partners Investments
may invest up to 15% of its net assets in corporate debt securities rated
below investment grade or comparable unrated securities. AMT Limited
Maturity Bond Investments may invest up to 10% of its net assets, measured at
the time of investment, in debt securities rated below investment grade, but
rated no lower than B by S&P or Moody's, or comparable unrated securities;
AMT Balanced Investments may invest up to 10% of the debt securities portion
of its investments, measured at the time of investment, in debt securities
rated below investment grade, but rated no lower than B by S&P or Moody's, or
comparable unrated securities. The ratings of an NRSRO represent its opinion
as to the quality of securities it undertakes to rate. Ratings are not
absolute standards of quality; consequently, securities with the same
maturity, coupon, and rating may have different yields. A Series relies on
the credit evaluations performed by N&B Management and on ratings assigned by
S&P and Moody's, which are described in Appendix A to this SAI.
Fixed income securities are subject to the risk of an issuer's inability to
meet principal and interest payments on the obligations ("credit risk") and also
may be subject to price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer, and
general market liquidity ("market risk"). Lower-rated securities are more
likely to react to developments affecting market and credit risk than are more
highly rated securities, which react primarily to movements in the general level
of interest rates. Subsequent to its purchase by a Series an issue of
securities may
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cease to be rated or its rating may be reduced, so that the securities would not
be eligible for purchase by the Series. In such a case, with respect to all
Series except AMT Liquid Asset Investments, N&B Management 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. With respect to AMT Liquid Asset Investments, N&B
Management will consider the need to dispose of such securities in accordance
with the requirements of Rule 2a-7.
CERTAIN RISK CONSIDERATIONS
Although each Series seeks to reduce risk by investing in a diversified
portfolio, diversification does not eliminate all risk. There can, of course,
be no assurance that any Series will achieve its investment objective, and an
investment in a Portfolio involves certain risks that are described in the
sections entitled "Investment Program" and "Description of Investments" in the
Prospectus and "Investment Information" in this SAI.
PERFORMANCE INFORMATION
A Portfolio's performance may be quoted in advertising in terms of yield or
total return if accompanied by performance of an insurance company's separate
account. Each Portfolio's performance figures are based on historical earnings
and are not intended to indicate future performance. The share price (except in
the case of the Liquid Asset Portfolio), yield and total return of each
Portfolio will vary, and an investment in the Portfolio, when redeemed, may be
worth more or less than the original purchase price.
YIELD CALCULATIONS
The Liquid Asset Portfolio may advertise its "current yield" and "effective
yield." The Portfolio's CURRENT YIELD is based on a seven-day period and is
computed by determining the net change (excluding capital changes) in the value
of a hypothetical account having a balance of one share at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from shareholder
accounts, and dividing the difference by the value of the account at the
beginning of the base period. The result is a "base period return," which is
then annualized -- that is, the amount of income generated during the seven-day
period is assumed to be generated each week over a 52-week period -- and shown
as an annual percentage of the investment.
The EFFECTIVE YIELD of the Portfolio is calculated similarly, but the base
period return is assumed to be reinvested. The assumed reinvestment is
calculated by adding 1 to the base period return, raising the sum to a power
equal to 365 divided by seven, and subtracting one from the result, according to
the following formula:
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EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1) (365/7)] - 1
For the seven calendar days ended December 31, 1995, the current yield of
the Liquid Asset Portfolio was ____%. For the same period, the effective yield
was ____%.
LIMITED MATURITY BOND PORTFOLIO AND GOVERNMENT INCOME PORTFOLIO. Each of
these Portfolios may advertise its "yield" based on a 30-day (or one-month)
period. This YIELD is computed by dividing the net investment income per share
earned during the period by the maximum offering price per share on the last day
of the period. The result then is annualized and shown as an annual percentage
of the investment.
The annualized yield for the Limited Maturity Bond Portfolio and the
Government Income Portfolio for the 30-day period ended December 31, 1995 was
____% and ____%, respectively.
TOTAL RETURN COMPUTATIONS. (All Portfolios except Liquid Asset and
International).
A Portfolio may advertise certain total return information. An average
annual compounded rate of return ("T") may be computed by using the redeemable
value at the end of a specified period ("ERV") of a hypothetical initial
investment of $1,000 ("P") over a period of time ("n") according to the formula:
P ( 1 + T) (n) = ERV
The average annual total return smooths out year-to-year variations and, in that
respect, differs from actual year-to-year results. Of course, past performance
cannot be a guarantee of future results. These calculations assume that all
dividends and distributions are reinvested.
The average annual total returns for the Growth Portfolio (and the
predecessor of the Growth Portfolio for the period prior to May 1, 1995) for the
one-, five-, and ten-year periods ended December 31, 1995, were -____%, ____%,
and _____%, respectively.
46
<PAGE>
The average annual total returns for the Limited Maturity Bond Portfolio
(and the predecessor of the Limited Maturity Bond Portfolio for the period prior
to May 1, 1995) for the one-, five-, and ten-year periods ended December 31,
1995, were -____%, ____%, and _____%, respectively.
The average annual total returns for the Balanced Portfolio (and the
predecessor of the Balanced Portfolio for the period prior to May 1, 1995) for
the one-year and five-year periods ended December 31, 1995, and for the period
from February 28, 1989 (commencement of operations), through December 31, 1995,
were - ____%, ____%, and ____%, respectively.
The total return for the Partners Portfolio (and the Predecessor of the
Partners Portfolio for the period prior to May 1, 1995) for the one year period
ended December 31, 1995 and for the period from March 22, 1994 (commencement of
operations) through December 31, 1995 was -____% and ____%, respectively.
The total return for the Government Income Portfolio (and the predecessor
of the Government Income Portfolio for the period prior to May 1, 1995) for the
one-year period ended December 31, 1995 and from March 22, 1994 (commencement of
operations) through December 31, 1995 was ____% and ____%, respectively.
N&B Management has reimbursed certain of the Portfolios and predecessor of
the Portfolios for certain expenses during the periods shown, which has the
effect of increasing total return.
Total returns quoted for the Portfolios include the effect of deducting a
Portfolio's expenses, but may not include charges and expenses attributable to
any particular insurance product. Since you can only purchase shares of a
Portfolio through a variable annuity or variable life insurance contract, you
should carefully review the prospectus of the insurance product you have chosen
for information on relevant charges and expenses. Excluding these charges from
quotations of a Portfolio's performance has the effect of increasing the
performance quoted. You should bear in mind the effect of these charges when
comparing a Portfolio's performance to that of other mutual funds.
COMPARATIVE INFORMATION
From time to time a Portfolio's performance may be compared with
(1) data (that may be expressed as rankings or ratings) published by
independent services or publications (including newspapers, newsletters,
and financial periodicals) that monitor the performance of mutual funds,
such as Lipper Analytical Services, Inc. ("Lipper"), C.D.A. Investment
Technologies, Inc. ("C.D.A."), Wiesenberger Investment Companies Service
("Wiesenberger"), Investment Company Data Inc., Morningstar, Inc.
47
<PAGE>
("Morningstar"), Micropal Incorporated, VARDS and quarterly mutual fund
rankings by MONEY, FORTUNE, FORBES, BUSINESS WEEK, PERSONAL INVESTOR, AND
U.S. NEWS & WORLD REPORT magazines, THE WALL STREET JOURNAL, NEW YORK
TIMES, KIPLINGERS PERSONAL FINANCE, AND BARRON'S NEWSPAPER, or
(2) recognized stock and other indices, such as the S&P 500 Composite
Stock Price Index ("S&P 500 Index"), S&P Small Cap 600 ("S&P 600"), S&P Mid
Cap 400 ("S&P 400"), Russell 2000 Stock Index, Dow Jones Industrial Average
("DJIA"), Wilshire 1750, NASDAQ, Value Line Index, U.S. Department of Labor
Consumer Price Index ("Consumer Price Index"), College Board Survey of
Colleges Annual Increases of College costs, Kanon Bloch's Family
Performance Index, the Barra Growth Index, the Barra Value Index, the EAFE-
Registered Trademark- Index, the Financial Times World XUS Index, and
various other domestic, international, and global indices. The S&P 500
Index is a broad index of common stock prices, while the DJIA represents a
narrower segment of industrial companies. The S&P 600 includes stocks that
range in market value from $27 million to $880 million, with an average of
$302 million. The S&P 400 measures mid-sized companies with an average
market capitalization of $1.2 billion. The EAFE-Registered Trademark-
Index is an unmanaged index of common stock prices of more than 900
companies from Europe, Australia, and the Far East translated into U.S.
dollars. The Financial Times World XUS Index is an index of 24
international markets, excluding the U.S. market. Each assumes reinvestment
of distributions and is calculated without regard to tax consequences or
the costs of investing. The Portfolios invest in different types of
securities from those included in some of these indices.
Evaluations of a Portfolio's performance and a Portfolio's total return and
comparisons may be used in advertisements and in information furnished to
present and prospective shareholders. The Portfolios may also be compared to
individual asset classes such as common stocks, small cap stocks, or Treasury
bonds, based on information supplied by Ibbotson and Sinquefield.
TRUSTEES AND OFFICERS
The following table sets forth information concerning the trustees and
officers of the Trusts, including their addresses and principal business
experience during the past five years. Some persons named as trustees and
officers also serve in similar capacities for other funds and their
corresponding portfolios, advised by Neuberger & Berman and N&B Management.
48
<PAGE>
<TABLE>
<CAPTION>
Positions Held with
Name, Address and Age the Trusts Principal Occupation(s) (2)
- --------------------- ------------------- ---------------------------
<S> <C> <C>
(1)
Stanley Egener* Chairman of the Partner of Neuberger & Berman;
Age: 61 Board (Chief President and Director of N&B
Executive Officer) Management; Chairman of the
and Trustee of Board, Chief Executive Officer,
each Trust and Trustee of other mutual
funds for which N&B
Management acts as
investment adviser, manager, or
administrator.
Faith Colish Trustee of each Attorney at law, Faith Colish, A
63 Wall Street Trust Professional Corporation.
24th Floor
New York, NY 10005
Age: 60
Walter G. Ehlers Trustee of each Consultant; Director of The Turner
6806 Suffolk Place Trust Corporation, A.B. Chance
Harvey Cedars, NJ 08008 Company, Crescent Jewelry,
Age 63 Inc.
Leslie A. Jacobson Trustee of each Counsel to Fried, Frank, Harris,
Hickory Kingdom Road Trust Shriver & Jacobson, attorneys at
Bedford, NY 10506 law; previously a partner of that
Age: 85 firm.
Robert M. Porter Trustee of each Retired September, 1991;
P.O. Box 33366 Trust Formerly Director of Customer
Kerrville, TX 78029-3366 Relations, Aetna Life & Casualty
Age: 70 Company.
Ruth E. Salzmann Trustee of each Retired; Director of John Deere
1556 Pine Street Trust Insurance Group; Actuarial
Stevens Point, WI 54481 Consultant.
Age: 76
49
<PAGE>
<CAPTION>
Positions Held with
Name, Address and Age the Trusts Principal Occupation(s) (2)
- --------------------- ------------------- ---------------------------
<S> <C> <C>
Peter P. Trapp* Trustee of each Consultant; Formerly Vice
777 Ridge Road Trust President, Sentry Insurance &
Stevens Point, WI 54481 Mutual Company, and President
Age: 51 and Chief Operating Office,
Sentry Investors Life Insurance
Company.
Lawrence Zicklin* President and Partner of Neuberger & Berman;
Age: 60 Trustee of each Director of N&B Management;
Trust President and Trustee of other
mutual funds and portfolios for
which N&B Management acts as
investment adviser, manager, or
administrator.
Daniel J. Sullivan Vice President of Senior Vice President of N&B
Age: 56 each Trust Management since 1992; prior
thereto, Vice President of N&B
Management; Vice President of
other mutual funds for which
N&B Management acts as
investment adviser, manager, or
administrator.
Michael J. Weiner Vice President and Senior Vice President and
Age: 49 Principal Financial Treasurer of N&B Management
Officer of each since 1992; prior thereto, Vice
Trust President and Treasurer of N&B
Management; Vice President and
Principal Financial Officer of
other mutual funds for which
N&B Management acts as
investment adviser, manager,
or administrator.
50
<PAGE>
<CAPTION>
Positions Held with
Name, Address and Age the Trusts Principal Occupation(s) (2)
- --------------------- ------------------- ---------------------------
<S> <C> <C>
Claudia A. Brandon Secretary of each Vice President of N&B
Age: 39 Trust Management; Secretary of other
mutual funds for which N&B
Management acts as investment
adviser, manager, or
administrator.
Richard Russell Treasurer and Vice President of N&B Manage-
Age: 49 Principal ment since 1993; prior thereto,
Accounting Officer Assistant Vice President of N&B
of each Trust Management; Treasurer or
Assistant Treasurer and Principal
Accounting Officer of other
mutual funds for which N&B
Management acts as
investment
adviser, manager, or
administrator.
Stacy Cooper-Shugrue Assistant Secretary Assistant Vice President of N&B Manage-
Age: 33 of each Trust Management since 1993; prior
thereto, an employee of N&B
Management; Assistant
Secretary of other mutual
funds
for which N&B Management
acts
as investment adviser, manager,
or administrator.
C. Carl Randolph Assistant Secretary Partner of Neuberger & Berman
Age: 58 of each Trust since 1992; employee thereof
since 1971; Assistant Secretary
of other mutual funds for which
N&B Management acts as
investment adviser, manager,
or
administrator.
Barbara DiGiorgio Assistant Treasurer Assistant Vice President of
Age: of each Trust N&B Management
Celeste Wischerth Assistant Treasurer Assistant Vice President of
Age: of each Trust N&B Management
</TABLE>
51
<PAGE>
_______________________
(1) Unless otherwise indicated, the business address of each listed person is
605 Third Avenue, New York, New York 10158.
(2) Except as otherwise indicated, each individual has held the position shown
for at least the last five years.
* Indicates an "interested person" of each Trust within the meaning of the 1940
Act. Messrs. Egener and Zicklin are interested persons by virtue of the fact
that they are officers and directors of N&B Management and partners of Neuberger
& Berman. Mr. Trapp is an interested person by virtue of the fact that he is an
officer of one of the Life Company shareholders of the Trust.
Each Trust's Declaration of Trust provides that it will indemnify the
Trustees and its officers against liabilities and expenses reasonably incurred
in connection with litigation in which they may be involved because of their
offices with the Trust, unless it is adjudicated that they engaged in bad faith,
wilful misfeasance, gross negligence, or reckless disregard of the duties
involved in their offices. In the case of settlement, such indemnification will
not be provided unless it has been determined -- by a court or other body
approving the settlement or other disposition, or by a majority of disinterested
Trustees, based upon a review of readily available facts, or in a written
opinion of independent counsel -- that such officers or Trustees have not
engaged in wilful misfeasance, bad faith, gross negligence, or reckless
disregard of their duties.
Trustees who are not officers or employees of N&B Management, Neuberger &
Berman and/or the Life Companies or any of their affiliates are paid trustees'
fees. For the year ended December 31, 1995, a total of $_______ in fees was
paid to the Trustees as a group by the predecessor to the Trust. The following
table shows 1995 compensation by Trustee.
52
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Pension or
Retirement Total
Benefits Accrued Estimated Compensation
Annual From Trust
Aggregate As Part of Benefits and Fund
Name of Person, Compensation Trust's Upon Complex
Position From Trust Expenses Retirement Paid to Trustees
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stanley Egener, None None None None
Chairman and Trustee
Faith Colish, $_____ None None $______
Trustee
Walter G. Ehlers, $_____ None None $______
Trustee
Leslie A. Jacobson, $_____ None None $______
Trustee
Robert M. Porter, $_____ None None $_____
Trustee
Ruth E. Salzmann, $_____ None None $_____
Trustee
Peter P. Trapp, None None None None
Trustee
Lawrence Zicklin, None None None None
President and Trustee
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Shares of the Portfolios are issued and redeemed in connection with
investments in and payments under certain variable annuity contracts and
variable life insurance policies (collectively, "Variable Contracts") issued
through separate accounts of life insurance companies (the "Life Companies").
Shares of the Balanced Portfolio are also offered directly to Qualified Plans.
As of _________, 1996, the separate accounts of the Life Companies were known to
the Board of Trustees and the management of the Trust to own of record all
shares of the Growth, Liquid Asset, Limited Maturity Bond, Partners,
53
<PAGE>
and Government Income Portfolios of the Trust and approximately ___% of the
shares of the Balanced Portfolio of the Trust. There were no shareholders of
the International Portfolio as of this same date. A Trustee of the Trust owns a
Variable Contract, the underlying Trust shares of which constitute less than 1%
of the total Trust shares issued and outstanding.
As of __________, 1996, the Liquid Asset Portfolio was controlled by
________________________ through their share ownership interests in the Liquid
Asset Portfolio; the Growth Portfolio was controlled by
_________________________________ through its share ownership interests in the
Growth Portfolio; the Limited Maturity Bond Portfolio was controlled by
_________________________________________________ through their respective share
ownership interests in the Limited Maturity Bond Portfolio; the Balanced
Portfolio was controlled by _____________________________ through their
respective share ownership interests in the Balanced Portfolio; the Partners
Portfolio was controlled by ________________ through its share ownership
interests in the Partners Portfolio; and the Government Income Portfolio was
controlled by ________________________________________________________________
through its share ownership interests in the Government Income Portfolio.
INVESTMENT MANAGEMENT, ADVISORY AND ADMINISTRATION SERVICES
ALL PORTFOLIOS AND THEIR CORRESPONDING SERIES
Neuberger & Berman is an investment management firm with headquarters in
New York. The firm's focus is on U.S. fixed income, equity and balanced fund
management. Total assets under management by Neuberger & Berman and its
affiliates were approximately $ billion as of December 31, 1995. Founded in
1939 to manage portfolios for high net worth individuals, the firm entered the
mutual fund management business in 1950, and began offering active management
for pension funds and institutions in the mid-1970's. Most money managers that
come to the Neuberger & Berman organization have at least fifteen years of
experience. Neuberger & Berman and N&B Management employ experienced
professionals that work in a competitive environment.
Because all of the Portfolios' net investable assets are invested in their
corresponding Series, the Portfolios do not need an investment manager. N&B
Management serves as each Series' investment manager pursuant to a Management
Agreement dated as of May 1, 1995 ("Management Agreement") that was approved by
the holders of the interests in all the Series on April 13, 1994.
The Management Agreement provides in substance that N&B Management will
make and implement investment decisions for the Series in its discretion and
will continuously develop an investment program for each Series's assets. The
Management
54
<PAGE>
Agreement permits N&B Management to effect securities transactions on behalf of
each Series through associated persons of N&B Management. The Management
Agreement also specifically permits N&B Management to compensate, through higher
commissions, brokers and dealers who provide investment research and analysis to
the Series, but N&B Management has no current plans to do so.
N&B Management provides to each Series, without cost, office space,
equipment, and facilities and personnel necessary to perform executive,
administrative, and clerical functions and pays all salaries, expenses, and fees
of the officers, trustees, and employees of Managers Trust who are officers,
directors, or employees of N&B Management. Two officers of N&B Management (who
also are partners of Neuberger & Berman), who also serve as directors of N&B
Management, presently serve as trustees and officers of the Trusts. See
"Trustees and Officers." N&B Management provides similar facilities and
services to each Portfolio pursuant to an administration agreement dated May 1,
1995 ("Administration Agreement"). Each Portfolio was authorized to become
subject to the Administration Agreement by vote of the Trustees on May 26, 1994,
and became subject to it on May 1, 1995.
Prior to May 1, 1995, N&B Management provided investment advisory and
administrative services to the predecessor of each Portfolio (except the
International Portfolio) under an Investment Advisory Agreement ("Prior
Agreement") with that Portfolio. As compensation for these services, the
predecessors to the Liquid Asset Portfolio and Limited Maturity Bond Portfolio
paid N&B Management a fee at the annual rate of 0.50% of the average daily net
assets of each of the two Portfolios; the predecessor to the Government Income
Portfolio paid N&B Management a fee at the annual rate of 0.60% of the average
daily net assets of the Portfolio; the predecessor to the Balanced Portfolio
paid N&B Management a fee at the annual rate of 0.70% of the average daily net
assets of the Portfolio; and the predecessors to the Growth and Partners
Portfolios paid N&B Management a fee at the rate of 0.70% of the first $250
million of average asset value, 0.675% of the next $250 million of average asset
value, 0.650% of the next $250 million of average asset value, 0.625% of the
next $250 million of average asset value and 0.60% of the average asset value in
excess of $1 billion. The fee rate paid by each predecessor Portfolio under its
Prior Agreement is 0.15% lower than the combined management and administrative
fees paid by the corresponding successor Portfolio and its corresponding Series
under the Management and Administration Agreements. For a description of the
Management and Administration fees currently in effect, see "Management and
Administration" in the Prospectus.
The Portfolios (and the predecessors of the Portfolios for the period prior
to May 1, 1995) paid advisory fees for the years ended December 31, 1993, 1994
and 1995 as follows. For the year ended December 31, 1993, N&B Management was
paid advisory fees as follows: $44,324, Liquid Asset Portfolio; $2,376,645,
Growth Portfolio; $1,304,236, Limited Maturity Bond Portfolio; and $879,956,
Balanced Portfolio. For the year ended December 31, 1994, N&B Management was
paid advisory fees as follows:
55
<PAGE>
$28,699, Liquid Asset Portfolio; $2,508,627 Growth Portfolio; $1,806,336,
Limited Maturity Bond Portfolio; $1,217,370, Balanced Portfolio; $4,752,
Government Income Portfolio; and $19,769, Partners Portfolio. For the year
ended December 31, 1995, N&B Management was paid advisory fees as follows:
$______, Liquid Asset Portfolio; $____________, Growth Portfolio; $_________,
Limited Maturity Bond Portfolio; $_________, Balanced Portfolio; $_________,
Government Income Portfolio; and $__________, Partners Portfolio.
The Management and Administration Agreements each continue until May 1,
1997 with respect to each Series or Portfolio, respectively. The Management
Agreement is renewable thereafter from year to year with respect to each Series,
so long as its continuance is approved at least annually (1) by the vote of a
majority of Managers Trust's Trustees who are not "interested persons" of N&B
Management or Managers Trust ("Independent Series Trustees"), cast in person at
a meeting called for the purpose of voting on such approval, and (2) by the vote
of a majority of Managers Trust's Trustees or by a 1940 Act majority vote of the
outstanding shares in that Series. After the first two years, the Administration
Agreement is renewable from year to year with respect to a Portfolio, so long as
its continuance is approved at least annually (1) by the vote of a majority of
the Portfolio Trustees who are not "interested persons" of N&B Management or the
Trust ("Independent Portfolio Trustees"), cast in person at a meeting called for
the purpose of voting on such approval, and (2) by the vote of a majority of the
Portfolio Trustees or by a 1940 Act majority vote of the outstanding shares in
that Portfolio. The Management Agreement is terminable with respect to a Series
without penalty on 60 days' written notice either by Managers Trust or by N&B
Management. The Administration Agreement is terminable with respect to a
Portfolio without penalty by N&B Management upon at least 120 days' prior
written notice to the Portfolio, and by the Portfolio if authorized by the
Portfolio Trustees, including a majority of the Independent Portfolio Trustees,
on at least 30 days' written notice to N&B Management. Each Agreement
terminates automatically if it is assigned.
EXPENSE REIMBURSEMENT
ALL PORTFOLIOS AND THEIR CORRESPONDING SERIES
As noted in the Prospectus under "Management and Administration -
Expenses," N&B Management has voluntarily undertaken to reimburse each Portfolio
for certain operating expenses (including, if necessary, the fees under the
Administration Agreement with respect to the Government Income, and Liquid Asset
and International Portfolios) and its pro rata share of its corresponding
Series' operating expenses (including, if necessary, its fees under the
Management Agreement with respect to the Government Income and Liquid Asset
Portfolios). A similar arrangement existed with respect to the predecessors of
these Portfolios. For the year ended December 31, 1995, N&B Management
reimbursed the Liquid Asset and Government Income Portfolio $_________ and
$_________, respectively. For the year or period ended December 31, 1994, N&B
Management reimbursed the predecessors of the Liquid Asset and Government Income
56
<PAGE>
Portfolios $785 and $11,752, respectively. No reimbursements were necessary for
the years ended December 31, 1993 for the predecessor fund of the Liquid Asset
Portfolio. The International Portfolio and AMT International Investments had
not yet commenced investment operations as of December 31, 1995.
As noted in the Prospectus under "Management and Administration -
Expenses," BNP-N&B Global and N&B Management have each voluntarily undertaken to
reimburse certain operating expenses of AMT International Investments (BNP-N&B
Global) and the International Portfolio (N&B Management), respectively. The
International Portfolio and AMT International Investments have not yet commenced
investment operations.
MANAGEMENT AND CONTROL OF N&B MANAGEMENT
The directors and officers of N&B Management, all of whom have offices
at the same address as N&B Management, are Richard A. Cantor, Chairman of the
Board and director; Stanley Egener, President and director; Theresa A.
Havell, Vice President and director; Irwin Lainoff, director; Marvin C.
Schwartz, director; Lawrence Zicklin, director; Daniel J. Sullivan, Senior
Vice President; Peter E. Sundman, Senior Vice President; Michael J. Weiner,
Senior Vice President; Claudia A. Brandon, Vice President; William
Cunningham, Vice President; Clara Del Villar, Vice President; Mark R.
Goldstein, Vice President; Farha-Joyce Haboucha, Vice President; Michael M.
Kassen, Vice President; Michael Lamberti, Vice President; Josephine P.
Mahaney, Vice President; Lawrence Marx III, Vice President; Ellen Metzger,
Vice President and Secretary; Janet W. Prindle, Vice President; Felix
Rovelli, Vice President; Richard Russell, Vice President; Kent C. Simons,
Vice President; Frederic Soule, Vice President; Judith M. Vale, Vice
President; Thomas Wolfe, Vice President; Andrea Trachtenberg, Vice President
of Marketing; Robert Conti, Treasurer; Patrick T. Byrne, Assistant Vice
President; Stacy Cooper-Shugrue, Assistant Vice President; Robert Cresci,
Assistant Vice President; Barbara DiGiorgio, Assistant Vice President;
Roberta D'Orio, Assistant Vice President; Joseph G. Galli, Assistant Vice
President; Robert Gendelman, Assistant Vice President; Leslie Holliday-Soto,
Assistant Vice President; Jody L. Irwin, Assistant Vice President; Carmen G.
Martinez, Assistant Vice President; Paul Metzger, Assistant Vice President;
Susan Switzer, Assistant Vice President; Susan Walsh, Assistant Vice
President; and Celeste Wischerth, Assistant Vice President. Messrs. Cantor,
Egener, Lainoff, Schwartz, Zicklin, Goldstein, Kassen, Marx, and Simons and
Mmes. Havell and Prindle are general partners of Neuberger & Berman.
Messrs. Egener and Zicklin are trustees and officers, and Messrs. Sullivan,
Weiner, and Russell and Mmes. Brandon, and Cooper-Shugrue, DiGiorgio and
Wischerth are officers, of each Trust. C. Carl Randolph, a general partner
of Neuberger & Berman, also is an officer of each Trust.
All of the outstanding voting stock in N&B Management is owned by persons
who are also general partners of Neuberger & Berman.
57
<PAGE>
SUB-ADVISER
N&B Management retains Neuberger & Berman, 605 Third Avenue, New York, NY
10158, as a sub-adviser with respect to each Series except the International
Series pursuant to a Sub-Advisory Agreement dated May 1, 1995. The Sub-Advisory
Agreement was authorized by the Portfolios' predecessors' shareholders on August
25, 1994 and was approved by the holders of the interests in each Series on
April 13, 1994.
The Sub-Advisory Agreement provides in substance that Neuberger & Berman
will furnish to N&B Management such investment recommendations and research
information, of the same type as Neuberger & Berman from time to time provides
to its partners and employees for use in managing client accounts, as N&B
Management reasonably requests. In this manner, N&B Management expects to have
available to it, in addition to research from other professional sources, the
capability of the research staff of Neuberger & Berman. This research staff
consists of approximately fourteen investment analysts, each of whom specializes
in studying one or more industries, under the supervision of research partners
who are also available for consultation with N&B Management. The Sub-Advisory
Agreement provides that the services rendered by Neuberger & Berman will be paid
for by N&B Management on the basis of the direct and indirect costs to
Neuberger & Berman in connection with those services. Neuberger & Berman also
serves as a sub-adviser for all of the other mutual funds advised by N&B
Management.
The Sub-Advisory Agreement continues until May 1, 1997, and is renewable
from year to year thereafter, subject to approval of its continuance in the same
manner as the Management Agreement. The Sub-Advisory Agreement is subject to
termination, without penalty, with respect to each Series by the Series
Trustees, by a 1940 Act majority vote of the outstanding Series shares, by N&B
Management, or by Neuberger & Berman on not less than 30 nor more than 60 days'
written notice. The Sub-Advisory Agreement also terminates automatically with
respect to each Series if it is assigned or if the Management Agreement
terminates with respect to the Series.
INVESTMENT COMPANIES ADVISED
Currently, N&B Management, an affiliate of Neuberger & Berman and the
administrator and distributor of the Portfolios, currently serves as investment
adviser or manager of the following investment companies with aggregate net
assets of approximately $___ billion, as of __________, 1996. Neuberger &
Berman acts as sub-adviser to these investment companies.
58
<PAGE>
Approximate Net
Assets at
Name , 1996
- ---- -----------------
Neuberger & Berman Cash Reserves . . . . . . . $___________
Portfolio (investment portfolio for
Neuberger & Berman Cash Reserves)
Neuberger & Berman Government Income . . . . . $___________
Portfolio (investment portfolio for
Neuberger & Berman Government Income
Fund and Neuberger & Berman Government
Income Trust)
Neuberger & Berman Government Money . . . . . $___________
Portfolio (investment portfolio for
Neuberger & Berman Government Money
Fund)
Neuberger & Berman Limited Maturity Bond . . $___________
Portfolio (investment portfolio for
Neuberger & Berman Limited Maturity
Bond Fund and Neuberger & Berman
Limited Maturity Bond Trust)
Neuberger & Berman Ultra Short Bond . . . . . $___________
Portfolio (investment portfolio for
Neuberger & Berman Ultra Short Bond
Fund and Neuberger & Berman Ultra Short
Bond Trust)
Neuberger & Berman Municipal Money . . . . . $___________
Portfolio (investment portfolio for
Neuberger & Berman Municipal Money Fund)
Neuberger & Berman Municipal Securities . . .
Portfolio (investment portfolio for
Neuberger & Berman Municipal Securities
Trust) $___________
Neuberger & Berman New York Insured . . . . . $___________
Intermediate Portfolio (investment portfolio
for Neuberger & Berman New York Insured
59
<PAGE>
Approximate Net
Assets at
Name , 1996
- ---- -----------------
Intermediate Fund)
Neuberger & Berman Genesis Portfolio . . . . . . $___________
(investment portfolio for Neuberger & Berman
Genesis Fund and Neuberger & Berman
Genesis Trust)
Neuberger & Berman Guardian Portfolio . . . . . $___________
(investment portfolio for Neuberger & Berman
Guardian Fund and Neuberger & Berman
Guardian Trust)
Neuberger & Berman Manhattan Portfolio . . . . $___________
(investment portfolio for Neuberger & Berman
Manhattan Fund and Neuberger & Berman
Manhattan Trust)
International Portfolio*. . . . . . . . . . . . $___________
(investment portfolio for Neuberger & Berman
International Fund)
Neuberger & Berman Partners Portfolio . . . . . . $___________
(investment portfolio for Neuberger & Berman
Partners Fund and Neuberger & Berman
Partners Trust)
Neuberger & Berman Focus Portfolio . . . . . . . $___________
(investment portfolio for Neuberger & Berman
Focus Fund and Neuberger & Berman Focus
Trust)
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Approximate Net
Assets at
Name , 1996
- ---- -----------------
Neuberger & Berman Socially Responsive . . . $___________
Portfolio (investment portfolio for Neuberger
& Berman Socially Responsive Fund,
Neuberger & Berman NYCDC Socially
Responsive Trust, and Neuberger & Berman
Socially Responsive Trust)
Neuberger & Berman Advisers Management $___________
Trust (six series). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In addition, Neuberger & Berman serves as investment adviser to two
investment companies, Plan Investment Fund, Inc. and AHA Investment Fund, Inc.,
with assets of $___________ and $___________, respectively, at ___________,
1996.
The investment decisions concerning each Series and the other funds and
portfolios referred to above (collectively, "Other N&B Funds") have been and
will continue to be made independently of one another. In terms of their
investment objectives, most of the Other N&B Funds differ from the Series. Even
where the investment objectives are similar, however, the methods used by the
Other N&B Funds and the Series to achieve their objectives may differ.
There may be occasions when a Series and one or more of the Other N&B Funds
will be contemporaneously engaged in purchasing or selling the same securities
from or to third parties. When this occurs, the transactions will be averaged
as to price and allocated as to amounts in accordance with a formula considered
to be equitable to the funds involved. Although in some cases this arrangement
could have a detrimental effect on the price or volume of the securities as to a
Series, in other cases it is believed that a Series's ability to participate in
volume transactions may produce better executions for it. In any case, it is
the judgment of the Series Trustees that the desirability of each Series having
its advisory arrangements with N&B Management outweighs any disadvantages that
may result from contemporaneous transactions. The investment results achieved
by all of the funds advised by N&B Management, Neuberger & Berman (as adviser
and sub-adviser) and BNP have varied from one another in the past and are likely
to vary in the future.
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DISTRIBUTION ARRANGEMENTS
N&B Management serves as the distributor ("Distributor") in connection with
the offering of each Portfolio's shares. In connection with the sale of its
shares, each Portfolio has authorized the Distributor to give only the
information, and to make only the statements and representations, contained in
the Prospectus and this SAI or that properly may be included in sales literature
and advertisements in accordance with the 1933 Act, the 1940 Act, and applicable
rules of self-regulatory organizations. Sales may be made only by the
Prospectus, which may be delivered either personally or through the mails. The
Distributor is the Portfolio's "principal underwriter" within the meaning of the
1940 Act and, as such, acts as agent in arranging for the sale of each
Portfolio's shares without sales commission or other compensation and bears all
advertising and promotion expenses incurred in the sale of the Portfolios'
shares. The Board of Trustees of the Trust has adopted a non-fee Distribution
Plan for each Portfolio of the Trust, which is described in the Prospectus.
The Trust, on behalf of each Portfolio, and the Distributor are parties to
a Distribution Agreement dated May 1, 1995, that continues until May 1, 1997.
The Distribution Agreement may be renewed annually thereafter if specifically
approved by (1) the vote of a majority of the Portfolio Trustees or a 1940 Act
majority vote of the Portfolio's outstanding shares and (2) the vote of a
majority of the Independent Portfolio Trustees, cast in person at a meeting
called for the purpose of voting on such approval. The Distribution Agreement
may be terminated by either party and will automatically terminate on its
assignment, in the same manner as the Management Agreement and the Investment
Advisory Agreement.
ADDITIONAL REDEMPTION INFORMATION
SUSPENSION OF REDEMPTIONS
The Portfolios are normally open for business each day the NYSE is open
("Business Day"). The right to redeem a Portfolio's shares may be suspended or
payment of the redemption price postponed (1) when the NYSE is closed (other
than weekend and holiday closings), (2) when trading on the NYSE is restricted,
(3) when an emergency exists as a result of which disposal by the Portfolio's
corresponding Series of securities owned by it is not reasonably practicable or
it is not reasonably practicable for that Series fairly to determine the value
of its net assets, or (4) for such other period as the SEC may by order permit
for the protection of a Portfolio's shareholders; provided that applicable SEC
rules and regulations shall govern as to whether the conditions prescribed in
(2) or (3) exist. If the right of redemption is suspended, shareholders may
withdraw their offers of redemption or they will receive payment at the NAV per
share in effect at the close of business on the first Business Day after
termination of the suspension.
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DIVIDENDS AND OTHER DISTRIBUTIONS
Each Portfolio distributes to its shareholders amounts equal to
substantially all of its proportionate share of its corresponding Series' net
investment income (after deducting expenses incurred directly by the Portfolio),
net capital gains (both long-term and short-term) and, with respect to all
Portfolios except the Liquid Asset Portfolio, net realized gains from foreign
currency transactions, if any. Each Portfolio calculates its net investment
income and NAV as of the close of regular trading on the NYSE on each Business
Day (currently 4:00 p.m. Eastern time). Shares of the Portfolios begin earning
income dividends on the Business Day after the proceeds of the purchase order
have been converted to "federal funds" and continue to earn dividends through
the Business Day they are redeemed. A Series' net investment income consists of
all income accrued on portfolio assets less accrued expenses; realized gains and
losses are reflected in a Series' NAV (and, hence, its corresponding Portfolio's
NAV) until they are distributed and are not included in net investment income.
With respect to the Government Income, Growth, Partners, Balanced, Limited
Maturity Bond and International Portfolios, dividends from net investment income
and distributions of net realized capital gains and net realized gains from
foreign currency transactions, if any, normally are paid once annually, 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 Liquid Asset 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.
ADDITIONAL TAX INFORMATION
TAXATION OF THE PORTFOLIOS
In order to continue to qualify for treatment as a RIC under the Internal
Revenue Code of 1986, as amended ("Code"), each Portfolio must distribute to its
shareholders for each taxable year at least 90% of its investment company
taxable income (consisting generally of net investment income, net short-term
capital gain, and, with respect to all Portfolios except the Liquid Asset
Portfolio, net gains from certain foreign currency transactions) ("Distribution
Requirement") and must meet several additional requirements. With respect to
each Portfolio, these requirements include the following: (1) the Portfolio
must derive at least 90% of its gross income each taxable year from dividends,
interest, payments with respect to securities loans, and gains from the sale or
other disposition of securities or foreign currencies, or other income
(including gains from options, futures, and forward contracts (collectively,
"Hedging Instruments")) derived with respect to its business of investing in
securities or those currencies ("Income Requirement"); (2) the Portfolio must
derive less than 30% of its gross income each taxable year from the sale or
other disposition of securities, or any of the following, that were held for
less than three
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months -- Hedging Instruments (other than those on foreign currencies), or
foreign currencies (or Hedging Instruments thereon) that are not directly
related to the Portfolio's principal business of investing in securities (or
options and futures with respect thereto) ("Short-Short Limitation"); and (3) at
the close of each quarter of the Portfolio's taxable year, (i) at least 50% of
the value of its total assets must be represented by cash and cash items, U.S.
Government securities, and other securities limited, in respect of any one
issuer, to an amount that does not exceed 5% of the value of the Portfolio's
total assets and does not represent more than 10% of the issuer's outstanding
voting securities, and (ii) not more than 25% of the value of its total assets
may be invested in securities (other than U.S. Government securities) of any one
issuer.
Certain funds managed by N&B Management have received a ruling from the
Internal Revenue Service ("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 satisfies the requirements
described above to qualify as a RIC. Although this ruling may not be relied on
as precedent by the Portfolios and the Series, N&B Management believes that the
reasoning thereof, and hence this conclusion, applies to them as well. The
Trust and Managers Trust, on behalf of each Portfolio and Series, have applied
to the Service for a similar ruling.
See the next section for a discussion of the tax consequences to the
Portfolios of distributions to them from the Series, investments by the Series
in certain securities, and (except for AMT Liquid Asset Investments) hedging
transactions engaged in by the Series.
TAXATION OF THE SERIES
Certain portfolios managed by N&B Management have received rulings from the
Service to the effect that, among other things, each such portfolio will be
treated as a separate partnership for federal income tax purposes and will not
be a "publicly traded partnership." Although these rulings may not be relied on
as precedent by the Series, N&B Management believe the reasoning thereof, and
hence this conclusion, apply to the Series as well. As a result, no Series will
be subject to federal income tax; instead, each investor in a Series, such as a
Portfolio, will be required to take into account in determining its federal
income tax liability its share of the Series' income, gains, losses, deductions,
and credits, without regard to whether it has received any cash distributions
from the Series. The Trust and Managers Trust, on behalf of each Series, have
applied to the Service for a private letter ruling to the same effect with
respect to the Series. A Series also will not be subject to Delaware or New York
income or franchise tax.
Because, as noted above, each Portfolio will be deemed to own a
proportionate share of its corresponding Series' assets and income for purposes
of determining
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whether the Portfolio satisfies the requirements to qualify for treatment as a
RIC, each Series intends to conduct its operations so that its corresponding
Portfolio will be able to satisfy all those requirements.
Distributions to a Portfolio from its corresponding Series (whether
pursuant to a partial or complete withdrawal or otherwise) will not result in
the Portfolio's recognition of any gain or loss for federal income tax purposes,
except that (1) gain will be recognized to the extent any cash that is
distributed exceeds the Portfolio's basis for its interest in the Series before
the distribution, (2) income or gain will be recognized if the distribution is
in liquidation of the Portfolio's entire interest in the Series and includes a
disproportionate share of any unrealized receivables held by the Series, (3)
loss will be recognized if a liquidation distribution consists solely of cash
and/or unrealized receivables and (4) gain (and, in certain situations, loss)
may be recognized on an in-kind distribution by the Portfolios. A Portfolio's
basis for its interest in its corresponding Series generally will equal the
amount of cash and the basis of any property the Portfolio invests in the
Series, increased by the Portfolio's share of the Series' net income and gains
and decreased by (a) the amount of cash and the basis of any property the Series
distributes to the Portfolio and (b) the Portfolio's share of the Series'
losses.
Dividends and interest received by a Series may be subject to income,
withholding, or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and foreign countries do not impose taxes on capital gains in respect
of investments by foreign investors.
AMT Balanced, Growth, Partners, and International Investments may invest in
the stock of "passive foreign investment companies" ("PFICs"). A PFIC is a
foreign corporation that, in general, meets either of the following tests: (1)
at least 75% of its gross income is passive or (2) an average of at least 50% of
its assets produce, or are held for the production of, passive income. Under
certain circumstances, if a Series holds stock of a PFIC, its corresponding
Portfolio (indirectly through its interest in the Series) will be subject to
federal income tax on a portion of any "excess distribution" received on the
stock or of any gain on disposition of the stock (collectively, "PFIC income"),
plus interest thereon, even if the Portfolio distributes the PFIC income as a
taxable dividend to its shareholders. The balance of the PFIC income will be
included in the Portfolio's investment company taxable income and, accordingly,
will not be taxable to it to the extent that income is distributed to its
shareholders.
If a Series invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund," then in lieu of its corresponding Portfolio's incurring the
foregoing tax and interest obligation, the Portfolio would be required to
include in income each year its pro rata share of the Series' pro rata share of
the qualified electing fund's annual ordinary earnings and net capital gain (the
excess of net long-term capital gain over net short-term capital loss) -- which
most likely would have to be distributed by the Portfolio to satisfy
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the Distribution Requirement -- even if those earnings and gain were not
received by the Series. In most instances it will be very difficult, if not
impossible, to make this election because of certain requirements thereof.
The "Tax Simplification and Technical Corrections Bill of 1993," passed in
May 1994 by the House of Representatives, would have substantially modified the
taxation of U.S. shareholders of foreign corporations, including eliminating the
provisions described above dealing with PFICS and replacing them (and other
provisions) with a regulatory scheme involving entities called "passive foreign
corporations." Three similar bills were passed by Congress in 1991 and 1992 and
vetoed. It is unclear at this time whether, and in what form, the proposed
modifications may be enacted into law.
Pursuant to proposed regulations, open-end RICs, such as the Portfolios,
would be entitled to elect to "mark-to-market" their stock in certain PFICs.
"Marking-to-market," in this context, means recognizing as gain for each taxable
year the excess, as of the end of that year, of the fair market value of each
such PFIC's stock over the adjusted basis in that stock (including mark-to-
market gain for each prior year for which an election was in effect).
The use by the Series (except AMT Liquid Asset Investments) of hedging
strategies, such as writing (selling) and purchasing Futures Contracts and
options and entering into forward contracts, involves complex rules that will
determine for income tax purposes the character and timing of recognition of the
gains and losses they realize in connection therewith. Income from foreign
currencies (except certain gains therefrom that may be excluded by future
regulations), and income from transactions in Hedging Instruments derived by a
Series with respect to its business of investing in securities or foreign
currencies, will qualify as permissible income for its corresponding Portfolio
under the Income Requirement. However, income from the disposition by a Series
of options and Futures Contracts (other than those on foreign currencies) will
be subject to the Short-Short Limitation for its corresponding Portfolio if they
are held for less than three months. Income from the disposition of foreign
currencies, and Hedging Instruments thereon, that are not directly related to a
Series' principal business of investing in securities (or options and Futures
with respect thereto) also will be subject to the Short-Short Limitation for its
corresponding Portfolio if they are held for less than three months.
If a Series (except AMT Liquid Asset Investments) satisfies certain
requirements, any increase in value of a position that is part of a "designated
hedge" will be offset by any decrease in value (whether realized or not) of the
offsetting hedging position during the period of the hedge for purposes of
determining whether its corresponding Portfolio satisfies the Short-Short
Limitation. Thus, only the net gain (if any) from the designated hedge will be
included in gross income for purposes of that limitation. A Series will
consider whether it should seek to qualify for this treatment for its hedging
transactions. To the extent a Series does not so qualify, it may be forced to
defer the closing out of
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certain Hedging Instruments beyond the time when it otherwise would be
advantageous to do so, in order for its corresponding Portfolio to continue to
qualify as a RIC.
Exchange-traded Futures Contracts and listed options thereon constitute
"Section 1256 Contracts." Section 1256 Contracts are required to be "marked-to-
market" (that is, treated as having been sold at market value) at the end of a
Series' taxable year. Sixty percent of any gain or loss recognized as a result
of these "deemed sales," and 60% of any net realized gain or loss from any
actual sales, of Section 1256 contracts are treated as long-term capital gain or
loss, and the remainder is treated as short-term capital gain or loss.
AMT Limited Maturity Bond Investments may invest in municipal bonds that
are purchased with market discount (that is, at a price less than the bond's
principal amount or, in the case of a bond that was issued with original issue
discount ("OID"), a price less than the amount of the issue price plus accrued
OID) ("municipal market discount bonds"). If a bond's market discount is less
than the product of (1) 0.25% of the redemption price at maturity times (2) the
number of complete years to maturity after the taxpayer acquired the bond, then
no market discount is considered to exist. Gain on the disposition of a
municipal market discount bond purchased by the Series after April 30, 1993
(other than a bond with a fixed maturity date within one year from its
issuance), generally is treated as ordinary (taxable) income, rather than
capital gain, to the extent of the bond's accrued market discount at the time of
disposition. Market discount on such a bond generally is accrued ratably, on a
daily basis, over the period from the acquisition date to the date of maturity.
In lieu of treating the disposition gain as above, the Series may elect to
include market discount in its gross income currently, for each taxable year to
which it is attributable.
AMT Partners, AMT Balanced and AMT Government Income Investments each may
acquire zero coupon or other securities issued with OID. As the holder of those
securities, each Series (and, through it, its corresponding Portfolio) must take
into account the OID that accrues on the securities during the taxable year,
even if no corresponding payment on the securities is received during the year.
Because each Portfolio annually must distribute substantially all of its income
(including its share of its corresponding Series' accrued OID) in order to
satisfy the Distribution Requirement, it may be required in a particular year to
distribute as a dividend an amount that is greater than its share of the total
amount of cash its corresponding Series actually receives. Those distributions
will be made from a Portfolio's (or its share of its corresponding Series') cash
assets or, if necessary, from the proceeds of the Series' sales of portfolio
securities. These actions are likely to reduce the Series' and Portfolios'
assets and may thereby increase its expense ratio and decrease its rate of
return. A Series may realize capital gains or losses from those sales, which
would increase or decrease its corresponding Series' investment company taxable
income and/or net capital gain. In addition, any such gains may be realized on
the disposition of securities held for less than three months. Because of the
Short-Short Limitation, any such gains would reduce
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a Series' ability to sell other securities or Hedging Instruments held for less
than three months that it might wish to sell in the ordinary course of its
portfolio management.
VALUATION OF PORTFOLIO SECURITIES
The Liquid Asset Portfolio relies on Rule 2a-7 under the 1940 Act to use
the amortized cost method of valuation to stabilize the purchase and redemption
price of its shares at $1.00 per share. This method involves the corresponding
Series valuing portfolio securities at their cost at the time of purchase and
thereafter assuming a constant amortization (or accretion) to maturity of any
premium (or discount), regardless of the impact of interest rate fluctuations on
the market value of the securities. The Liquid Asset Series uses that valuation
method to try to enable its corresponding Portfolio to so stabilize those
prices. Although the Portfolio's reliance on Rule 2a-7 and the Series' use of
that valuation method should enable the Portfolio, under most conditions, to
maintain a stable $1.00 share price, there can be no assurance they will be able
to do so. An investment in the Liquid Asset Portfolio is neither insured nor
guaranteed by the U.S. Government.
AMT International Investments invests primarily in securities of foreign
issuers which are traded on foreign exchanges or in other foreign markets.
Foreign securities may trade on days when the NYSE is closed, such as Saturdays
and U.S. national holidays. However, the International Portfolio's net asset
value ("NAV") will be determined only on the days when the NYSE is open for
trading. Therefore, the International Portfolio's NAV may be significantly
affected by such foreign trading on days when shareholders have no access to
redeem or purchase shares of the Portfolio.
PORTFOLIO TRANSACTIONS
ALL SERIES (EXCEPT AMT INTERNATIONAL INVESTMENTS)
Neuberger & Berman acts as each Series's principal broker in the purchase
and sale of portfolio securities and in connection with the writing of covered
call options on their securities. Transactions in portfolio securities for
which Neuberger & Berman serves as broker will be effected in accordance with
Rule 17e-1 under the 1940 Act.
Purchases and sales of portfolio securities generally are transacted with
the issuers, underwriters, or dealers serving as primary market-makers acting as
principals for the securities on a net basis. The Series usually do not pay
brokerage commissions for such purchases and sales. Instead, the price paid for
newly issued securities usually includes a concession or discount paid by the
issuer to the underwriter, and transactions placed through dealers serving as
market-makers reflect a spread between the bid and the asked prices from which
the dealer derives a profit.
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In purchasing and selling portfolio securities other than as described
above (for example, in the secondary market), each Series' policy is to seek
best execution at the most favorable prices through responsible broker-dealers
and, in the case of agency transactions, at competitive commission rates. In
selecting broker-dealers to execute transactions, N&B Management considers such
factors as the price of the security, the rate of commission, the size and
difficulty of the order, the reliability, integrity, financial condition, and
general execution and operational capabilities of competing broker-dealers, and
may consider the brokerage and research services they provide to the Series or
N&B Management. Under certain conditions, a Series may pay higher brokerage
commissions in return for brokerage and research services, although no Series
has a current arrangement to do so. In any case, each Series may effect
principal transactions with a dealer who furnishes research services, designate
any dealer to receive selling concessions, discounts, or other allowances, or
otherwise deal with any dealer in connection with the acquisition of securities
in underwritings.
AMT INTERNATIONAL INVESTMENTS
Neuberger & Berman 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.
ALL SERIES
During the years ended December 31, 1995, 1994 and 1993, the Growth
Portfolio's (and the predecessor of the Growth Portfolio for the period prior to
May 1, 1995) paid total brokerage commissions of $_______________, $410,537 and
$853,501 respectively, of which $_________, $321,277 and $707,176 respectively
were paid to Neuberger & Berman. Transactions in which that Portfolio used
Neuberger & Berman as broker comprised ______% and 83.4% respectively of the
aggregate dollar amount of transactions involving the payment of commissions,
and ____% and 78.3% respectively of the aggregate brokerage commissions paid by
it during the years ended December 31, 1995 and 1994. ____% of the $___________
paid to other brokers by that Portfolio during the year ended December 31, 1995
(representing commissions on transactions involving approximately
$_____________) and 87.1% of the $89,260 paid to other brokers by that Portfolio
during the year ended December 31, 1994 (representing commissions on
transactions involving approximately $33,414,132) was directed to those brokers
because of research services they provided. During the year ended December 31,
1995, the Portfolio acquired securities of the following of its Regular B/Ds:
________ _________________________________________________________; at that
date, that predecessor held the securities of its Regular B/Ds with an aggregate
value as follows:
During the years ended December 31, 1995, 1994 and 1993, the Balanced
Portfolio paid total brokerage commissions of $____________, $135,836 and
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$228,483 respectively, of which $___________, $107,420 and $190,263 respectively
were paid to Neuberger & Berman. Transactions in which that Portfolio used
Neuberger & Berman as broker comprised ______ % and 82.9% respectively of the
aggregate dollar amount of transactions involving the payment of commissions,
_____% and 79.1% respectively of the aggregate brokerage commissions paid by it
during the years ended December 31, 1995 and 1994. _____% of the $_______ paid
to other brokers by that Portfolio during the year ended December 31, 1995
(representing commissions on transactions involving approximately $_______) and
85.5% of the $28,416 paid to other brokers by that Portfolio during the year
ended December 31, 1994 (representing commissions on transactions involving
approximately $10,593,478) was directed to those brokers because of research
services they provided. During the year ended December 31, 1995, the Portfolio
acquired securities of the following of its Regular B/Ds:
____________________________________ __________________; at that date, that
Portfolio held the securities of its Regular B/Ds with an aggregate value as
follows: ____________________________________________.
During the year ended December 31, 1995 and the period March 22, 1994 to
December 31, 1994, the Partners Portfolio (and the predecessor of the Partners
Portfolio for the period prior to May 1, 1995) paid total brokerage commissions
of $_________ and $27,115 respectively of which $__________ and $26,321,
respectively were paid to Neuberger & Berman. Transactions in which that
Portfolio used Neuberger & Berman as broker comprised _____% and 97.4%
respectively of the aggregate dollar amount of transactions involving the
payment of commissions, and ____% and 97.1% respectively of the aggregate
brokerage commissions paid by it during the year ended December 31, 1995, and
the period ended December 31, 1994. ____% of the $____ paid to other brokers by
that Portfolio for the year ended December 31, 1995 (representing commissions on
transactions involving approximately $__________) and 91.5% of the $794 paid to
other brokers by that Portfolio during the period ended December 31, 1994
(representing commissions on transactions involving approximately $275,017) was
directed to those brokers because of research services they provided. During
the period ended December 31, 1995, the Portfolio acquired securities of the
following of its Regular B/Ds: ______________________________________; at that
date, that Portfolio held the securities of its Regular B/Ds with an aggregate
value as follows: _________________________________________.
During the year ended December 31, 1995, the Liquid Asset Portfolio
acquired securities of the following of its Regular B/Ds:
_______________________________________; at that date that Portfolio held the
securities of its Regular B/Ds with an aggregate value as follows:
__________________________________.
During the year ended December 31, 1995, the Limited Maturity Bond
Portfolio acquired securities of the following of its Regular B/Ds:
________________________________________; at that date that Portfolio held the
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securities of its Regular B/Ds with an aggregate value as follows:
______________________.
During the year ended December 31, 1995, the Government Income Portfolio
acquired securities of the following of its Regular B/Ds:
_____________________________; at that date that Portfolio held the securities
of its Regular B/Ds with an aggregate value as follows:
_______________________________.
Insofar as portfolio transactions of AMT Partners Investments result from
active management of equity securities, and insofar as portfolio transactions of
AMT Growth Investments result from seeking capital appreciation by selling
securities whenever sales are deemed advisable without regard to the length of
time the securities may have been held, it may be expected that the aggregate
brokerage commissions paid by those Series to brokers (including Neuberger &
Berman where it acts in that capacity) may be greater than if securities were
selected solely on a long-term basis.
Portfolio securities are from time to time loaned by AMT Growth, Partners
and International Investments to Neuberger & Berman in accordance with the terms
and conditions of an order issued by the Securities and Exchange Commission,
excepting such transactions from certain provisions of the 1940 Act which would
otherwise prohibit such transactions, subject to certain conditions. Among the
conditions of the order, securities loans made by each Series to Neuberger &
Berman must be fully secured by cash collateral. Under the order, the portion
of the income on cash collateral from securities loans involving Neuberger &
Berman which may be shared with that firm is determined with reference to the
concurrent arrangements between Neuberger & Berman and other non-affiliated
lenders with which it engages in similar transactions. In addition, where
Neuberger & Berman borrows securities from a Series in order to relend them to
others, Neuberger & Berman is required to pay over to the Series, on a quarterly
basis, certain "excess earnings" that Neuberger & Berman otherwise has derived
from the relending of securities borrowed from the Series. When Neuberger &
Berman desires to borrow a security which a Series has indicated a willingness
to lend, Neuberger & Berman must borrow such security from the Series rather
than from an unaffiliated lender unless an unaffiliated lender is willing to
lend such security on more favorable terms (as specified in the order) than the
Series. If a Series' expenses exceed its income in any securities loan
transaction with Neuberger & Berman, Neuberger & Berman must reimburse the
Portfolio for such loss.
Each Series may also lend securities to unaffiliated entities, including
brokers or dealers, banks and other recognized institutional borrowers of
securities, provided that cash or equivalent collateral, equal to at least 100%
of the market value of the securities loaned, is continuously maintained by the
borrower with the Series. During the time securities are on loan, the borrower
will pay the Series an amount equivalent to any dividends or interest paid on
such securities, and the Series may invest the cash collateral and earn income,
or it may receive an agreed upon amount of interest income from the
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borrower who has delivered equivalent collateral. These loans are subject to
termination at the option of the Series or the borrower. The Series may pay
reasonable administrative and custodial fees in connection with a loan and may
pay a negotiated portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker. The Series does not have the
right to vote securities on loan, but would terminate the loan and regain the
right to vote if that were considered important with respect to the investment.
In effecting securities transactions, each Series generally seeks to obtain
the best price and execution of orders. Commission rates, being a component of
price, are considered along with other relevant factors. Each Series may use
Neuberger & Berman as broker where, in the judgment of N&B Management, (which is
affiliated with Neuberger & Berman), the firm is able to obtain a price and
execution at least as favorable as other qualified brokers. To the Series'
knowledge, however, no affiliate of any Series receives give-ups or reciprocal
business in connection with its securities transactions. All brokerage
transactions with Neuberger & Berman (or any other affiliated broker-dealer)
will be conducted in accordance with Rule 17e-1 under the 1940 Act.
The use of Neuberger & Berman as a broker for a Series is subject to the
requirements of Section 11(a) of the Securities Exchange Act of 1934 ("Section
11(a)"). Section 11(a) prohibits members of national securities exchanges from
executing exchange transactions for accounts which they or their affiliates
manage, except in situations where they have obtained the express authorization
of the persons authorized to transact business for the account and comply with
certain annual reporting requirements. The Board of Trustees of the Series has
expressly authorized Neuberger & Berman to execute exchange transactions for the
Series, and Neuberger & Berman complies with the reporting requirements of
Section 11(a).
Under the 1940 Act, commissions paid by a Series to an Neuberger & Berman
in connection with a purchase or sale of securities offered on a securities
exchange may not exceed the usual and customary broker's commission.
Accordingly, it is each Series' policy that the commissions to be paid to
Neuberger & Berman must, in N&B Management's judgment be (1) at least as
favorable as those that would be charged by other brokers having comparable
execution capability and (2) at least as favorable as commissions
contemporaneously charged by Neuberger & Berman on comparable transactions for
its most favored unaffiliated customers, except for accounts for which Neuberger
& Berman acts as a clearing broker for another brokerage firm and customers of
Neuberger & Berman considered by a majority of the Independent Series Trustees
not to be comparable to the Series. The Series do not deem it practicable and
in their best interest to solicit competitive bids for commissions on each
transaction. However, consideration regularly is given to information
concerning the prevailing level of commissions charged on comparable
transactions by other brokers during comparable periods of time. The 1940 Act
generally prohibits Neuberger & Berman from acting
72
<PAGE>
as principal in the purchase or sale of securities for a Series's account,
unless an appropriate exemption is available.
A committee of Independent Series Trustees from time to time reviews, among
other things, information relating to the commissions charged by Neuberger &
Berman to the Series and to its other customers and information concerning the
prevailing level of commissions charged by other brokers having comparable
execution capability. In addition, the procedures pursuant to which Neuberger &
Berman effects brokerage transactions for the Series must be reviewed and
approved no less often than annually by a majority of the Independent Series
Trustees.
Each Series expects that it will continue to execute a portion of its
transactions through brokers other than Neuberger & Berman. In selecting those
brokers, N&B Management will consider the quality and reliability of brokerage
services, including execution capability and performance and financial
responsibility, and may consider the research and other investment information
provided by those brokers, and the willingness of particular brokers to sell the
Variable Contracts issued by the Life Companies.
A committee, comprised of N&B Management officers and partners of Neuberger
& Berman who are portfolio managers of some of the Series and Other N&B Funds
(collectively, "N&B Funds") and some of Neuberger & Berman's managed accounts
("Managed Accounts") evaluates semi-annually the nature and quality of the
brokerage and research services provided by other brokers and, based on this
evaluation, establishes a list and projected ranking of preferred brokers for
use in determining the relative amounts of commissions to be allocated to those
brokers. Ordinarily the brokers on the list effect a large portion of the
brokerage transactions for the N&B Funds and the Managed Accounts that are not
effected by Neuberger & Berman. However, in any semi-annual period, brokers not
on the list may be used, and the relative amounts of brokerage commissions paid
to the brokers on the list may vary substantially from the projected rankings.
These variations reflect the following factors, among others: (1) brokers not
on the list or ranking below other brokers on the list may be selected for
particular transactions because they provide better price and/or execution,
which is the primary consideration in allocating brokerage; and (2) adjustments
may be required because of periodic changes in the execution or research
capabilities of particular brokers, or in the execution or research needs of the
N&B Funds and/or the Managed Accounts; and (3) the aggregate amount of brokerage
commissions generated by transactions for the N&B Funds and the Managed Accounts
may change substantially from one semi-annual period to the next.
The commissions charged by a broker other than an Neuberger & Berman may be
greater than the amount another firm might charge if N&B Management determines
in good faith that the amount of those commissions is reasonable in relation to
the value of the brokerage and research services provided by the broker. N&B
Management believes that those research services provide the Series with
benefits by
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supplementing the research otherwise available to them. That research
information may be used by Neuberger & Berman and N&B Management in servicing
their respective funds and, in some cases, by Neuberger & Berman in servicing
the Managed Accounts. On the other hand, research information received by N&B
Management from brokers effecting portfolio transactions on behalf of the Other
N&B Funds and by Neuberger & Berman from brokers executing portfolio
transactions on behalf of the Managed Accounts may be used for the Series'
benefit.
Theresa A. Havell, Mark R. Goldstein and Michael M. Kassen, each of whom is
a general partner of Neuberger & Berman and a Vice President of N&B Management
(and, with respect to Ms. Havell, also a director of N&B Management),
Josephine P. Mahaney, Thomas Wolfe and William Cunningham, each of whom is an
employee of Neuberger & Berman and a Vice President of N&B Management, and
Robert I. Gendelman, who is an employee of Neuberger & Berman and an
Assistant Vice President of N&B Management, are the persons primarily
responsible for making decisions as to specific action to be taken with
respect to the investment portfolios of the Series (except AMT International
Investments). Each of them has full authority to take action with respect to
portfolio transactions and may or may not consult with other personnel of N&B
Management prior to taking such action.
Felix Rovelli, a Vice President of N&B Management, is the person
primarily responsible for making decisions as to specific action to be taken
with respect to the Series. He has full authority to take action with
respect to portfolio transactions and may or may not consult with other
personnel of N&B Management prior to taking such action.
PORTFOLIO TURNOVER
The portfolio turnover rate is the lesser of the cost of the securities
purchased or the value of the securities sold, excluding all securities,
including options, whose maturity or expiration date at the time of acquisition
was one year or less, divided by the average monthly value of such securities
owned during the year.
REPORTS TO SHAREHOLDERS
Shareholders of each Portfolio receive unaudited semi-annual financial
statements, as well as year-end financial statements audited by the independent
auditors for the Portfolio and for its corresponding Series. Each Portfolio's
report shows the investments owned by its corresponding Series and the market
values thereof and provides other information about the Portfolio and its
operations. In addition, the report contains the Portfolio's financial
statements, including the Portfolio's beneficial interest in its corresponding
Series.
74
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CUSTODIAN
Each Portfolio and Series has selected State Street Bank and Trust Company
("State Street"), 225 Franklin Street, Boston, Massachusetts 02110 as custodian
for its securities and cash.
INDEPENDENT AUDITORS
Each Portfolio and Series has selected ,
as the independent auditors who will audit its financial
statements.
LEGAL COUNSEL
Each Portfolio and Series has selected Dechert Price & Rhoads, 1500 K
Street, N.W., Suite 500, Washington, D.C. 20005 as legal counsel.
REGISTRATION STATEMENT
This SAI and the Prospectus do not contain all the information included in
the Trust's registration statement filed with the SEC under the 1933 Act with
respect to the securities offered by the Prospectus. Certain portions of the
registration statement have been omitted pursuant to SEC rules and regulations.
The registration statement, including the exhibits filed therewith, may be
examined at the SEC's offices in Washington, D.C.
Statements contained in this SAI and in the Prospectus as to the contents
of any contract or other document referred to are not necessarily complete, and
in each instance reference is made to the copy of the contract or other document
filed as an exhibit to the registration statement, each such statement being
qualified in all respects by such reference.
FINANCIAL STATEMENTS
[FINANCIAL STATEMENTS WILL BE PROVIDED IN A SUBSEQUENT POST-EFFECTIVE
AMENDMENT TO BE FILED ON OR PRIOR TO THE EFFECTIVE DATE OF THIS POST-EFFECTIVE
REGISTRATION STATEMENT]
75
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Appendix A
RATINGS OF SECURITIES
S&P CORPORATE BOND RATINGS:
AAA - Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A - Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in higher rated categories.
BB, B, CCC, CC, C - Bonds rated BB, B, CCC, CC, and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
PLUS (+) OR MINUS (-) - The ratings above may be modified by the addition
of a plus or minus sign to show relative standing within the major categories.
MOODY'S CORPORATE BOND RATINGS
Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or an exceptionally stable margin,
and principal is secure. Although the various protective elements are likely to
change, the changes that
A-1
<PAGE>
can be visualized are most unlikely to impair the fundamentally strong position
of the issuer.
Aa - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as "high
grade bonds." They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa-rated securities, fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present that make the long-term risks appear somewhat larger than in Aaa-rated
securities.
A - Bonds rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present that
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium grade obligations;
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. These bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba - Bonds rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B - Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period time may be small.
Caa - Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds rated Ca represent obligations that are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
C - Bonds rated C are the lowest rated class of bonds, and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
MODIFIERS - Moody's may apply numerical modifiers 1, 2, and 3 in each
generic rating classification described above. The modifier 1 indicates that
the security ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range
A-2
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ranking; and the modifier 3 indicates that the issuer ranks in the lower end of
its generic rating category.
S&P COMMERCIAL PAPER RATINGS
A-1 - This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+).
MOODY'S COMMERCIAL PAPER RATINGS
Issuers rated PRIME-1 (or related supporting institutions), also known as
P-1, have a superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity will normally be evidenced by the
following characteristics:
- -Leading market positions in well-established industries.
- -High rates of return on funds employed.
- -Conservative capitalization structures with moderate reliance on debt and ample
asset protection.
- -Broad margins in earnings coverage of fixed financial charges and high internal
cash generation.
- -Well-established access to a range of financial markets and assured sources
of alternate liquidity.
A-3
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Appendix B
A CONVERSATION WITH ROY NEUBERGER
B-1
<PAGE>
The Art of Investing:
A Conversation with Roy Neuberger
"I firmly believe that if you want to
manage your own money, you must be a
student of the market. If you are
unwilling or unable to do that, find
someone else to manage your money for you."
NEUBERGER & BERMAN
<PAGE>
[THIS PAGE IS BLANK - IT IS AN INSIDE PAGE OF THIS BROCHURE]
<PAGE>
[PICTURE OF ROY NEUBERGER]
During my more than sixty-five years of buying
and selling securities, I've been asked many questions
about my approach to investing. On the pages that
follow are a variety of my thoughts, ideas and
investment principles which have served me well over
the years. If you gain useful knowledge in the
pursuit of profit as well as enjoyment from these
comments, I shall be more than content.
\s\ Roy R. Neuberger
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<TABLE>
<CAPTION>
<S> <C>
YOU'VE BEEN ABLE TO CONDENSE SOME OF THE
CHARACTERISTICS OF SUCCESSFUL INVESTING INTO
FIVE "RULES." WHAT ARE THEY?
Rule #1: Be flexible. My philosophy has
necessarily changed from time to time because
of events and because of mistakes. My views
change as economic, political, and
technological changes occur both on and
sometimes off our planet. It is imperative
that you be willing to change your thoughts to
meet new conditions.
Rule #2: Take your temperament into account.
Recognize whether you are by nature very
speculative or just the opposite -- fearful,
timid of taking risks. But in any event --
Diversify your investments, Rule #3: Be broad-gauged. Diversify your
make sure that some of your investments, make sure that some of your
principal is kept safe, and principal is kept safe, and try to increase
try to increase your income your income as well as your capital.
as well as your capital.
[PICTURE OF ROY NEUBERGER]
- 2 -
<PAGE>
Rule #4: Always remember there are many ways to
skin a cat! Ben Graham and David Dodd did it by
understanding basic values. Warren Buffet
invested his portfolio in a handful of long-
term holdings, while staying involved with the
companies' managements. Peter Lynch chose to
understand, first-hand, the products of many
hundreds of the companies he invested in.
George Soros showed his genius as a hedge fund
investor who could decipher world currency
trends. Each has been successful in his own
way. But to be successful, remember to -
Rule #5: Be skeptical. To repeat a few well-
worn useful phrases:
A. Dig for yourself.
B. Be from Missouri.
C. If it sounds too good to be true, it
probably is.
IN YOUR 65 YEARS OF INVESTING ARE THERE ANY
GENERAL PATTERNS YOU'VE OBSERVED AS TO HOW THE
MARKET BEHAVES?
- 3 -
<PAGE>
Every decade that I've been involved with Wall
Street has a nuance of its own, an economic and
social climate that influences investors. But
generally, bull markets tend to be longer than
bear markets, and stock prices tend to go up
more slowly and erratically than they go down.
Bear markets tend to be shorter and of greater
intensity. The market rarely rises or declines
concurrently with business cycles longer than
six months.
AS A LEGENDARY "VALUE INVESTOR," HOW DO YOU
DEFINE VALUE INVESTING?
Value investing means finding the best values -
- either absolute or relative. Absolute means
a stock has a low market price relative to its
own fundamentals. Relative value means the
price is attractive relative to the market as a
whole.
COULD YOU DESCRIBE A STOCK WITH "GOOD VALUE"?
A classic example is a company that has a low
price to earnings ratio, a low price to book
ratio, free cash flow, a strong balance sheet,
undervalued corporate assets, unrecognized
earnings turnaround and is selling at a
discount to private market value.
- 4 -
<PAGE>
These characteristics usually lead to companies
that are under-researched and have a high
degree of inside ownership and entrepreneurial
management.
One of my colleagues at Neuberger & Berman says
he finds his value stocks either "under a
cloud" or "under a rock." "Under a cloud"
stocks are those Wall Street in general doesn't
like, because an entire industry is out of
favor and even the good stocks are being
dropped. "Under a rock" stocks are those Wall
Street is ignoring, so you have to uncover them
on your own.
ARE THERE OTHER KEY CRITERIA YOU USE TO JUDGE
STOCKS?
I'm more interested in longer-term trends in
earnings than short-term trends. Earnings
gains should be the product of long-term
strategies, superior management, taking
advantage of business opportunities and so on.
If these factors are in their proper place,
short-term earnings should not be of major
concern. Dividends are an important extra
because, if they're stable, they help support
the price of the stock.
WHAT ABOUT SELLING STOCKS?
- 5 -
<PAGE>
Most individual investors should invest for the
long term but not mindlessly. A sell
discipline, often neglected by investors, is
vitally important.
"One should fall in love One should fall in love with ideas, with
with ideas, with people or people, or with idealism. But in my book, the
with idealism. But in my last thing to fall in love with is a particular
book, the last thing to security. It is after all just a sheet of paper
fall in love with is a indicating a part ownership in a corporation
particular security." and its use is purely mercenary. If you must
love a security, stay in love with it until it
gets overvalued; then let somebody else fall in
love.
[PICTURE OF ROY NEUBERGER]
- 6 -
<PAGE>
ANY OTHER ADVICE FOR INVESTORS?
I firmly believe that if you want to manage
your own money, you must be a student of the
market. If you're unwilling or unable to do
that, find someone else to manage your money
for you. Two options are a well-managed no-
load mutual fund or, if you have enough assets
for separate account management, a money
manager you trust with a good record.
HOW WOULD YOU DESCRIBE YOUR PERSONAL INVESTING
STYLE?
Every stock I buy is bought to be sold. The
market is a daily event, and I continually
review my holdings looking for selling
opportunities. I take a profit occasionally on
something that has gone up in price over what
was expected and simultaneously take losses
whenever misjudgment seems evident. This
creates a reservoir of buying power that can be
used to make fresh judgments on what are the
best values in the market at that time. My
active investing style has worked well for me
over the years, but for most investors I
recommend a longer-term approach.
- 7 -
<PAGE>
I tend not to worry very must about the day to
day swings of the market, which are very hard
to comprehend. Instead, I try to be rather
clever in diagnosing values and trying to win
70 to 80 percent of the time.
YOU BEGAN INVESTING IN 1929. WHAT WAS YOUR
EXPERIENCE WITH THE "GREAT CRASH"?
The only money I managed in the Panic of 1929
was my own. My portfolio was down about 12
percent, and I had an uneasy feeling about the
market and conditions in general. Those were
the days of 10 percent margin. I studied the
lists carefully for a stock that was overvalued
in my opinion and which I could sell short as a
hedge. I came across RCA at about $100 per
share. It had recently split 5 for 1 and
appeared overvalued. There were no dividends,
little income, a low net worth and a weak
financial position. I sold RCA short in the
amount equal to the dollar value of my long
portfolio. It proved to be a timely and
profitable move.
HOW DID THE CRASH OF 1929 AFFECT YOUR INVESTING
STYLE?
- 8 -
<PAGE>
I am prematurely bearish when the market goes
up for a long time and everybody is happy
because they are richer. I am very bullish
when the market has gone down perceptibly and I
feel it has discounted any troubles we are
going to have.
HOW IMPORTANT ARE PSYCHOLOGICAL FACTORS TO
MARKET BEHAVIOR?
There are many factors in addition to economic
statistics or security analysis in a buy or
sell decision. I believe psychology plays an
important role in the Market. Some people
follow the crowd in hopes they'll be swept
along in the right direction, but if the crowd
is late in acting, this can be a bad move.
I like to be contrary. When things look bad, I
become optimistic. When everything looks rosy,
and the crowd is optimistic, I like to be a
seller. Sometimes I'm too early, but I
generally profit.
AS A RENOWNED ART COLLECTOR, DO YOU FIND
SIMILARITIES BETWEEN SELECTING STOCKS AND
SELECTING WORKS OF ART?
- 9 -
<PAGE>
Both are an art, although picking stocks is a
minor art compared with painting, sculpture or
"When things look bad, I literature. I started buying art in the 30s,
become optimistic. When and in the 40s it was a daily, almost hourly
everything looks rosy, and occurrence. My inclination to buy the works of
the crowd is optimistic, I living artists comes from Van Gogh, who sold
like to be a seller." only one painting during his lifetime. He died
in poverty, only then to become a legend and
have his work sold for millions of dollars.
[PICTURE OF ROY NEUBERGER]
There are more variables to consider now in
both buying art and picking stocks. In the
modern stock markets, the heavy use of futures
and options has changed the nature of the
investment world. In past times, the stock
market was much less complicated, as was the
art world.
Artists rose and fell on their own merits
without a lot of publicity and attention. As
more and more dealers are involved with
artists, the price of their work becomes
inflated. So I almost always buy works of
unknown, relatively undiscovered artists,
which, I suppose is similar to value investing.
- 10 -
<PAGE>
But the big difference in my view of art and
stocks is that I buy a stock to sell it and
make money. I never bought paintings or
sculptures for investment in my life. The
objective is to enjoy their beauty.
- 11 -
<PAGE>
WHAT DO YOU CONSIDER THE BUSINESS MILESTONES IN
YOUR LIFE?
Being a founder of Neuberger & Berman and
creating one of the first no-load mutual funds.
I started on Wall Street in 1929, and during
the depression I managed my own money and that
of my clientele. We all prospered, but I
wanted to have my own firm. In 1939 I became a
founder of Neuberger & Berman, and for about 10
years we managed money for individuals with
substantial financial assets. But I also
wanted to offer the smaller investor the
benefits of professional money management, so
in 1950 I created the Guardian Mutual Fund (now
known as the Neuberger & Berman Guardian Fund).
The Fund was kind of an innovation in its time
because it didn't charge a sales commission. I
thought the public was being overcharged for
mutual funds, so I wanted to create a fund that
would be offered directly to the public without
a sales charge. Now of course the "no-load"
fund business is a huge industry. I managed
the Fund myself for over 28 years.
[PICTURE OF ROY NEUBERGER]
- 12 -
<PAGE>
YOU'RE IN YOUR NINETIES AND STILL YOU GO INTO
THE OFFICE EVERY DAY TO MANAGE YOUR
INVESTMENTS. WHY?
I like the fun of being nimble in the stock
market, and I'm addicted to the market's
fascinations.
WHAT CLOSING WORDS OF ADVICE DO YOU HAVE ABOUT
INVESTING?
Realize that there are opportunities at all
times for the adventuresome investor. And stay
in good physical condition. It's a strange
thing. You do not dissipate your energies by
using them. Exercise your body and your brain
every day, and you'll do better in investments
and in life.
ROY NEUBERGER: A BRIEF BIOGRAPHY
Roy Neuberger is a founder of the investment
management firm Neuberger & Berman, and a
renowned value investor. He is also a
recognized collector of contemporary American
art, much of which he has given away to museums
and colleges across the country.
- 13 -
<PAGE>
During the 1920s, Roy studied art in
Paris. When he realized he didn't possess the
talent to become an artist, he decided to
collect art, and to support this passion, Roy
turned to investing -- a pursuit for which his
talents have proven more than adequate.
A TALENT FOR INVESTING
Roy began his investment career by joining
a brokerage firm in 1929, seven months before
the "Great Crash." Just weeks before "Black
Monday," he shorted the stock of RCA, thinking
it was overvalued. He profited from the
falling market and gained a reputation for
market prescience and stock selection that has
lasted his entire career.
NEUBERGER & BERMAN'S FOUNDING
Roy's investing acumen attracted many
people who wished to have him manage their
money. In 1939, at the age of 36, after
purchasing a seat on the New York Stock
Exchange, Roy founded Neuberger & Berman to
provide money management services to people who
lacked the time, interest or expertise to
manage their own assets.
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<PAGE>
NEUBERGER & BERMAN -- OVER FIVE DECADES OF
GROWTH
Neuberger & Berman has grown through the
years and now manages approximately $30 billion
of equity and fixed income assets, both
domestic and international, for individuals,
institutions, and its family of no-load mutual
funds. Today, as when the firm was founded,
Neuberger & Berman follows a value approach to
investing, designed to enable clients to
advance in good markets and minimize losses
when conditions are less favorable.
- 15 -
<PAGE>
Neuberger & Berman Management
Inc.[SERVICE MARK]
605 Third Avenue, 2nd Floor
New York, NY 10158-0006
Shareholder Services
(800) 877-9700
[COPYRIGHT SYMBOL]1995
Neuberger & Berman
PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS
</TABLE>
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<PAGE>
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
POST-EFFECTIVE AMENDMENT NO. 19 ON FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
- -------------------------------------------
(a) Financial Statements:
Included in Part A of this Post-Effective Amendment:
FINANCIAL HIGHLIGHTS for the periods indicated therein for the Liquid
Asset Portfolio, Limited Maturity Bond Portfolio, Growth Portfolio, Balanced
Portfolio, Partners Portfolio and Government Income Portfolio. [TO BE FILED IN A
SUBSEQUENT POST-EFFECTIVE AMENDMENT ON OR PRIOR TO THE EFFECTIVENESS OF THIS
POST-EFFECTIVE AMENDMENT]
Included in Part B of this Post-Effective Amendment:
The audited financial statements ended December 31, 1995 for Neuberger
& Berman Advisers Management Trust (with respect to the Liquid Asset Portfolio,
Limited Maturity Bond Portfolio, Growth Portfolio, Balanced Portfolio, Partners
Portfolio and Government Income Portfolio) and the report of the independent
auditors. [TO BE FILED IN A SUBSEQUENT POST-EFFECTIVE AMENDMENT ON OR PRIOR TO
THE EFFECTIVENESS OF THIS POST-EFFECTIVE AMENDMENT]
(b) Exhibits:
Exhibit
Number Description
------- -----------
(1) (a) Certificate of Trust. Incorporated by reference to Post-
Effective Amendment No. 16 to Registrant's Registration
Statement, File Nos. 2-88566 and 811-4255.
(b) Trust Instrument of Neuberger & Berman Advisers Management
Trust. Incorporated by reference to Post-Effective
Amendment No. 16 to Registrant's Registration Statement,
File Nos. 2-88566 and 811-4255.
(2) By-laws of Neuberger & Berman Advisers Management Trust.
Incorporated by reference to Post-Effective Amendment No. 16
to Registrant's Registration Statement, File Nos. 2-88566
and 811-4255.
<PAGE>
PART C - Other Information
Page 2
(3) Voting Trust Agreement. None.
(4) Specimen Share Certificate. (To be filed in a subsequent
post-effective amendment on or prior to the effectiveness of
this Post-Effective Amendment).
(5) (a) Form of Management Agreement Between Advisers Managers Trust
and Neuberger & Berman Management Incorporated.
Incorporated by reference to Post-Effective Amendment No. 16
to Registrant's Registration Statement, File Nos. 2-88566
and 811-4255.
(b) Form of Sub-Advisory Agreement Between Neuberger & Berman
Management Incorporated and Neuberger & Berman with Respect
to Advisers Managers Trust. Incorporated by reference to
Post-Effective Amendment No. 16 to Registrant's Registration
Statement File Nos. 2-88566 and 811-4255.
(6) Form of Distribution Agreement Between Neuberger & Berman
Advisers Management Trust and Neuberger & Berman Management
Incorporated. Incorporated by reference to Post-Effective
Amendment No. 16 to Registrant's Registration Statement File
Nos. 2-88566 and 811-4255.
(7) Bonus, Profit Sharing or Pension Plans. None.
(8) Custodian Contract Between Neuberger & Berman Advisers
Management Trust and State Street Bank and Trust Company.
(To be filed in a subsequent post-effective amendment on or
prior to the effectiveness of this Post-Effective
Amendment).
(9) (a) Transfer Agency Agreement Between Neuberger & Berman
Advisers Management Trust and State Street Bank and Trust
Company. (To be filed In a subsequent post-effective
amendment on or prior to the effectiveness of this
Post-Effective Amendment).
(b) Form of Administration Agreement Between Neuberger & Berman
Advisers Management Trust and Neuberger & Berman Management
Incorporated. Incorporated by reference to
<PAGE>
PART C - Other information
Page 3
Post-Effective Amendment No. 16 to Registrant's Registration
Statement, File Nos. 2-88566 and 811-4255.
(c) Fund Participation Agreements (To be filed in a subsequent
Post-effective amendment on or prior to the effectiveness of
this Post-Effective Amendment).
(10) Consent of Dechert Price & Rhoads (Filed Herewith.)
(11) Consent of Independent Auditors. (To be filed in a
subsequent post-effective amendment on or prior to the
effectiveness of this post-effective amendment).
(12) Financial Statements Omitted from Prospectus. None.
(13) Letter of Investment Intent. None.
(14) Prototype Retirement Plan. None.
(15) Form of Distribution Plan Pursuant to Rule 12b-1.
Incorporated by reference to Post-Effective Amendment No.
16 to Registrant's Registration Statement, File Nos.
2-88566 and 811-4255.
(16) Schedule of Computation of Performance Quotations.
Incorporated by reference to Post-Effective Amendment No.
18 to Registrant's Registration Statement, File Nos. 2-88566
and 811-4255.
(17) Financial Data Schedule (To be filed in a subsequent
post-effective amendment on or prior to the effectiveness of
this Post-Effective Amendment).
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
- -----------------------------------------------------------------------
As of February 26, 1996, separate accounts of Nationwide Life Insurance
Company owned approximately 38% of the outstanding shares of the Balanced
Portfolio of the Registrant, 69% of the outstanding shares of the Growth
Portfolio of the Registrant, 80% of the outstanding shares of the Limited
Maturity Bond Portfolio of the Registrant, and 48% of the outstanding shares
of the Partners Portfolio of the Registrant; separate accounts of Hartford
Life Insurance Company owned approximately 77% of the outstanding shares of
the Liquid Asset Portfolio of the Registrant; separate accounts of American
Skandia Life Assurance Corporation owned approximately 47% of the outstanding
shares of the Partners Portfolio of the Registrant; and separate accounts of
Security Life Insurance Company of Denver owned approximately 97% of the
outstanding shares of the Government Income Portfolio of the Registrant.
These insurance companies are required to vote fund shares in accordance
with instructions received from owners of variable annuity contracts funded by
separate accounts with respect to separate accounts of these insurance
companies that are registered with the Securities and Exchange Commission as
unit investment trusts.
<PAGE>
PART C - Other Information
Page 4
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
- -----------------------------------------
As of February 26, 1996, the number of record holders of the Portfolios
of the Registrant was as follows:
TITLE OF NUMBER OF RECORD
CLASS HOLDERS
-------- ----------------
Balanced Portfolio 42
Growth Portfolio 17
Liquid Assets Portfolio 4
Limited Maturity Bond Portfolio 24
Partners Portfolio 17
Government Income Portfolio 3
ITEM 27. INDEMNIFICATION
- -------------------------
A Delaware business trust may provide in its governing instrument for
indemnification of its officers and trustees from and against any and all claims
and demands whatsoever. Article IX, Section 2 of the Trust Instrument provides
that the Registrant shall indemnify any present or former trustee, officer,
employee or agent of the Registrant ("Covered Person") to the fullest extent
permitted by law against liability and all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or proceeding ("Action") in
which he becomes involved as a party or otherwise by virtue of his being or
having been a Covered Person and against amounts paid or incurred by him in
settlement thereof. Indemnification will not be provided to a person adjudged
by a court or other body to be liable to the Registrant or its shareholders by
reason of "willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office" ("Disabling
Conduct"), or not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Registrant. In the event of a
settlement, no indemnification may be provided unless there has been a
determination that the officer or trustee did not engage in Disabling Conduct
(i) by the court or other body approving the settlement; (ii) by at least a
majority of those trustees who are neither interested persons, as that term is
defined in the Investment Company Act of 1940, of the Registrant ("Independent
Trustees"), nor are parties to the matter based upon a review of readily
available facts; or (iii) by written opinion of independent legal counsel based
upon a review of readily available facts.
Pursuant to Article IX, Section 3 of the Trust Instrument, if any
present or former shareholder of any series ("Series") of the Registrant shall
be held personally liable solely by reason of his being or having been a
shareholder and not because of his acts or omissions or for some other reason,
the present or former shareholder (or his heirs, executors, administrators or
other legal representatives or in the case of any entity, its general successor)
shall be entitled out of the
<PAGE>
PART C - Other Information
Page 5
assets belonging to the applicable Series to be held harmless from and
indemnified against all loss and expense arising from such liability. The
Registrant, on behalf of the affected Series, shall, upon request by such
shareholder, assume the defense of any claim made against such shareholder for
any act or obligation of the Series and satisfy any judgment thereon from the
assets of the Series.
Section 9 of the Management Agreement between Advisers Managers Trust
and Neuberger & Berman Management Incorporated ("N&B Management") provides that
neither N&B Management nor any director, officer or employee of N&B Management
performing services for any series of Advisers Managers Trust (each a
"Portfolio") at the direction or request of N&B Management in connection with
N&B Management's discharge of its obligations under the Agreement shall be
liable for any error of judgment or mistake of law or for any loss suffered by a
Series in connection with any matter to which the Agreement relates; provided,
that nothing in the Agreement shall be construed (i) to protect N&B Management
against any liability to Advisers Managers Trust or a Series of Advisers
Managers Trust or its interest holders to which N&B Management would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of N&B Management's duties, or by reason of N&B Management's
reckless disregard of its obligations and duties under the Agreement, or (ii) to
protect any director, officer or employee of N&B Management who is or was a
Trustee or officer of Advisers Managers Trust against any liability to Advisers
Managers Trust or a Series or its interest holders to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
person's office with Advisers Managers Trust.
Section 1 of the Sub-Advisory Agreement between Advisers Managers
Trust and Neuberger & Berman, L.P. ("Sub-Adviser") provides that in the absence
of willful misfeasance, bad faith or gross negligence in the performance of its
duties, or of reckless disregard of its duties and obligations under the
Agreement, the Sub-Adviser will not be subject to liability for any act or
omission or any loss suffered by any Series of Advisers Managers Trust or its
interest holders in connection with the matters to which the Agreement relates.
Section 11 of the Distribution Agreement between the Registrant and
N&B Management provides that N&B Management shall look only to the assets of a
Portfolio for the Registrant's performance of the Agreement by the Registrant on
behalf of such Portfolio, and neither the Trustees nor any of the Registrant's
officers, employees or agents, whether past, present or future,
<PAGE>
PART C - Other Information
Page 6
shall be personally liable therefor.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("1933 Act") may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF ADVISER AND SUB-ADVISER
- -------------------------------------------------------------------
There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
director or officer of N&B Management and each partner of the Sub-Adviser is, or
at any time during the past two years has been, engaged for his or her own
account or in the capacity of director, officer, employee, partner or trustee.
NAME BUSINESS AND OTHER CONNECTIONS
------------------- -----------------------------------
Howard R. Berlin
Vice President(l), N&B Vice President and Director (2),
Management; Partner, Neuberger & Berman Partners Fund,
Neuberger & Berman, L.P. Inc. (5)
Claudia A. Brandon
Vice President, N&B Secretary, Neuberger & Berman
Management Advisers Management Trust (Delaware business
Trust); Secretary, Advisers Managers Trust;
Secretary, Neuberger & Berman Advisers Management
Trust (Massachusetts Business Trust) (4);
Secretary, Neuberger & Berman Genesis Fund,
Inc. (5); Secretary, Neuberger & Berman Guardian
Fund, Inc.; Secretary,
<PAGE>
PART C - Other Information
Page 7
NAME BUSINESS AND OTHER CONNECTIONS
------------------- -----------------------------------
Neuberger & Berman Manhattan Fund, Inc. (5);
Secretary, Neuberger & Berman Multi-Series Fund,
Inc. (5); Secretary, Neuberger & Berman Partners
Fund, Inc. (5); Secretary, Neuberger & Berman
Selected Sectors Fund, Inc. (5); Secretary,
Neuberger & Berman Income Funds; Secretary,
Neuberger & Berman Income Trust; Secretary,
Neuberger & Berman Equity Funds; Secretary,
Neuberger & Berman Equity Trust; Secretary,
Income Managers Trust; Secretary, Equity Managers
Trust; Secretary, Global Managers Trust;
Secretary, Neuberger & Berman Equity Assets.
Stacy Cooper-Shugrue
Assistant Vice President, Assistant Secretary, Neuberger & Berman Advisers
N&B Management Management Trust (Delaware Business Trust);
Assistant Secretary, Advisers Managers Trust;
Assistant Secretary, Neuberger & Berman Advisers
Management Trust (Massachusetts business trust)
(4); Assistant Secretary, Neuberger & Berman
Genesis Fund, Inc. (5); Assistant Secretary,
Neuberger & Berman Guardian Fund, Inc.; Assistant
Secretary, Neuberger & Berman Manhattan Fund,
Inc. (5); Assistant Secretary, Neuberger & Berman
Multi-Series Fund, Inc. (5); Assistant Secretary,
Neuberger & Berman Partners Fund, Inc. (5);
Assistant Secretary, Neuberger & Berman Selected
Sectors Fund, Inc. (5); Assistant Secretary,
Neuberger & Berman Income Funds; Assistant
Secretary, Neuberger & Berman Income Trust;
Assistant Secretary, Neuberger & Berman Equity
Funds; Assistant Secretary, Neuberger & Berman
Equity Trust; Assistant Secretary, Income Managers
Trust; Assistant Secretary, Equity Managers Trust;
Assistant
<PAGE>
PART C - Other Information
Page 8
NAME BUSINESS AND OTHER CONNECTIONS
------------------- -----------------------------------
Secretary, Global Managers Trust; Assistant
Secretary, Neuberger & Berman Equity Assets.
Barbara DiGiorgio Assistant Treasurer, Neuberger & Berman
Assistant Vice President Advisers Management Trust; Assistant Treasurer,
N&B Management Advisers Managers Trust
Stanley Egener
President and Director, Chairman of the Board and Trustee,
N&B Management; Partner, Neuberger & Berman Advisers Management Trust
Neuberger & Berman, L.P. (Delaware business trust); Chairman of the Board
and Trustee, Advisers Manager Trust; Chairman of
the Board and Trustee, Advisers Management Trust
(Massachusetts business trust) (4); Chairman of
the Board and Director, Neuberger & Berman Genesis
Fund, Inc. (5); Chairman of the Board and
Director, Neuberger & Berman Guardian Fund, Inc.;
Chairman of the Board and Director, Neuberger &
Berman Partners Fund, Inc. (5); Chairman of the
Board and Director, Neuberger & Berman Selected
Sectors Fund, Inc. (5); Chairman of the Board and
Trustee, Neuberger & Berman Income Funds; Chairman
of the Board and Trustee, Neuberger & Berman
Income Trust; Chairman of the Board and Trustee,
Neuberger & Berman Equity Funds; Chairman of the
Board and Trustee, Neuberger & Berman Equity
Trust; Chairman of the Board and Trustee, Income
Managers Trust; Chairman of the Board and Trustee,
Equity Managers Trust; Chairman of the Board and
Trustee, Global Managers Trust; Chairman of the
Board and Trustee, Neuberger & Berman Equity
Assets
Theodore P. Giuliano
Vice President, N&B Executive Vice President and Director,
Management (2); Partner, Neuberger & Berman,
<PAGE>
PART C - Other Information
Page 9
NAME BUSINESS AND OTHER CONNECTIONS
------------------- -----------------------------------
Neuberger & Berman L.P. Multi-Series Fund, Inc.; Executive Vice President
and Trustee, Neuberger & Berman Income Funds (3);
Executive Vice President and Trustee, Neuberger &
Berman Income Trust (3); Executive Vice President
and Trustee, Income Managers Trust (3)
Mark R. Goldstein
Vice President, N&B Vice President, Neuberger & Berman Manhattan
Management; Partner, Fund, Inc. (5); Vice President, Neuberger &
Neuberger & Berman, L.P. Berman Multi-Series Fund, Inc. (5)
Theresa A. Havell
Vice President and President and Director, Neuberger & Berman
Director, N&B Management; Multi-Series Fund, Inc. (5); President and
Partner, Neuberger & Trustee, Neuberger & Berman Income Funds;
Berman, L.P. President and Trustee, Neuberger & Berman Income
Trust; President and Trustee, Income Managers
Trust
Michael M. Kassen
Vice President, N&B President and Director (2), Neuberger & Berman
Management; Partner, Partners Fund, Inc.; Vice President, Neuberger
Neuberger & Berman, L. P. & Berman Multi-Series Fund, Inc. (5)
Irwin Lainoff Director (2), Neuberger & Berman Manhattan
Vice President (1) Fund, Inc.; Vice President and Director,
and Director, N&B Neuberger & Berman Genesis Fund, Inc. (5)
Management; Partner,
Neuberger & Berman, L.P.
Josephine Mahaney
Assistant Vice President Vice President, Neuberger & Berman
(2), Vice President, N&B Multi-Series Fund, Inc. (5)
Management
Roy R. Neuberger
Partner, Neuberger & Chairman Emeritus, Neuberger & Berman Genesis
Berman, L. P. Fund, Inc. (5); Chairman Emeritus, Neuberger &
Berman Guardian Fund, Inc.
<PAGE>
PART C - Other Information
Page 10
NAME BUSINESS AND OTHER CONNECTIONS
------------------- -----------------------------------
C. Carl Randolph Assistant Secretary, Neuberger & Berman Advisers
Partner, Neuberger & Management Trust (Delaware business trust);
Berman, L. P. Assistant Secretary, Neuberger & Berman Advisers
Management Trust (Massachusetts business trust)
(4); Assistant Secretary, Advisers Managers
Trust; Assistant Secretary, Neuberger & Berman
Genesis Fund, Inc. (5); Assistant Secretary,
Neuberger & Berman Guardian Fund, Inc.; Assistant
Secretary, Neuberger & Berman Manhattan Fund,
Inc. (5); Assistant Secretary, Neuberger & Berman
Multi-Series Fund, Inc. (5); Assistant Secretary
Neuberger & Berman Partners Fund, Inc. (5);
Assistant Secretary, Neuberger & Berman Selected
Sectors Fund, Inc. (5); Assistant Secretary,
Neuberger & Berman Income Funds; Assistant
Secretary, Neuberger & Berman Income Trust;
Assistant Secretary Neuberger & Berman Equity
Funds; Assistant Secretary, Neuberger & Berman
Equity Trust; Assistant Secretary, Income Managers
Trust; Assistant Secretary, Equity Managers Trust;
Assistant Secretary, Global Managers Trust;
Assistant Secretary, Neuberger & Berman Equity
Assets
Richard Russell
Vice President, N&B Treasurer, Neuberger & Berman Advisers Management
Management Trust (Delaware business trust); Treasurer,
Advisers Managers Trust; Treasurer, Neuberger &
Berman Advisers Management Trust (Massachusetts
business trust) (4); Assistant Treasurer,
Neuberger & Berman Genesis Fund, Inc. (5);
Assistant Treasurer, Neuberger & Berman Guardian
Fund, Inc.; Assistant Treasurer, Neuberger &
<PAGE>
PART C - Other Information
Page 11
NAME BUSINESS AND OTHER CONNECTIONS
------------------- -----------------------------------
Berman Manhattan Fund, Inc. (5); Assistant
Treasurer, Neuberger & Berman Multi-Series Fund,
Inc. (5); Assistant Treasurer, Neuberger & Berman
Partners Fund, Inc. (5); Assistant
Treasurer, Neuberger & Berman Selected
Sectors Fund, Inc.; Treasurer, Neuberger & Berman
Income Funds; Treasurer, Neuberger & Berman Income
Trust; Treasurer, Neuberger & Berman Equity Funds;
Treasurer, Neuberger & Berman Equity Trust;
Treasurer, Income Managers Trust; Treasurer,
Equity Managers Trust; Treasurer, Global Managers
Trust; Treasurer, Neuberger & Berman Equity Assets
Daniel J. Sullivan
Senior Vice President, Vice President, Neuberger & Berman Advisers
N&B Management Management Trust (Delaware business trust); Vice
President, Advisers Managers Trust; Vice
President, Advisers Management Trust
(Massachusetts business trust) (4); Vice
President; Neuberger & Berman Multi-Series Fund,
Inc. (5); Vice President, Neuberger & Berman
Partners Fund, Inc. (5); Assistant Treasurer,
Neuberger & Berman Selected Sectors Fund,
Inc. (5); Vice President, Neuberger & Berman
Income Funds; Vice President, Neuberger & Berman
Income Trust; Vice President, Neuberger & Berman
Equity Funds; Vice President, Neuberger & Berman
Equity Trust; Vice President, Income Managers
Trust; Vice President, Equity Managers Trust;
Vice President, Global Managers Trust; Vice
President, Neuberger & Berman Equity Assets
Michael J. Weiner
Senior Vice President and Vice President, Neuberger & Berman Advisers
Treasurer, N&B Management Management Trust
<PAGE>
PART C - Other Information
Page 12
NAME BUSINESS AND OTHER CONNECTIONS
------------------- -----------------------------------
(Delaware business trust);
Vice President, Advisers Managers Trust; Vice
President, Neuberger & Berman Advisers Management
Trust (Massachusetts business trust) (4);
Treasurer, Neuberger & Berman Genesis Fund, Inc.
(5); Treasurer, Neuberger & Berman Guardian Fund,
Inc.; Treasurer, Neuberger & Berman Manhattan
Fund, Inc. (5); Treasurer, Neuberger & Berman
Multi-Series Fund, Inc. (5); Treasurer,
Neuberger & Berman Partners Fund, Inc.; Treasurer,
Neuberger & Berman Selected Sectors Fund, Inc.
(5); Vice President, Neuberger & Berman Income
Funds; Vice President, Neuberger & Berman Income
Trust; Vice President, Neuberger & Berman Equity
Funds; Vice President, Neuberger & Berman Equity
Trust; Vice President, Income Managers Trust; Vice
President, Equity Managers Trust; Vice President,
Global Managers Trust; Vice President, Neuberger &
Berman Equity Assets
Celeste Wischerth
Assistant Vice President, Assistant Treasurer, Neuberger & Berman Advisers
N&B Management Management Trust; Assistant Treasurer, Advisers
Managers Trust
<PAGE>
PART C - Other Information
Page 13
NAME BUSINESS AND OTHER CONNECTIONS
------------------- -----------------------------------
Lawrence Zicklin
Director, N&B Management; President and Trustee, Neuberger & Berman
General Partner, Advisers Management Trust (Delaware business
Neuberger & Berman, L.P. trust); President and Trustee, Advisers Managers
Trust; President and Trustee, Neuberger & Berman
Advisers Management Trust (Massachusetts business
trust) (4); President and Trustee, Neuberger &
Berman Equity Funds; President and Trustee,
Neuberger & Berman Equity Trust; President and
Trustee, Equity Managers Trust; President, Global
Managers Trust: President and Trustee, Neuberger &
Berman Equity Assets; Director, Neuberger & Berman
Genesis Fund, Inc. (5); Director, Neuberger &
Berman Guardian Fund, Inc.; Director, Neuberger &
Berman Manhattan Fund, Inc. (5); Director,
Neuberger & Berman Partners Fund, Inc. (5);
Director, Neuberger & Berman Selected Sectors
Fund, Inc. (5)
The principal address of N&B Management, and of each of the companies
or other entities named above, is 605 Third Avenue, New York, New York 10158-
0006.
- ------------------------------
(1) Until January, 1994.
(2) Until November 4, 1994.
(3) Until June 22, 1994.
(4) Until April 30, 1995.
(5) Until July 11, 1995.
ITEM 29. PRINCIPAL UNDERWRITERS
- --------------------------------
(a) Neuberger & Berman Management Incorporated, the principal underwriter
distributing securities of the Registrant, is also the principal underwriter and
distributor for each of the following investment companies:
<PAGE>
PART C - Other Information
Page 14
Neuberger & Berman Equity Funds
Neuberger & Berman Equity Assets
Neuberger & Berman Equity Trust
Neuberger & Berman Income Funds
Neuberger & Berman Income Trust
Neuberger & Berman Management Incorporated or an affiliate thereof is
also the investment adviser to each of the above-named investment companies, or
the master funds in which they invest.
(b) Set forth below is information concerning the directors and officers
of the Registrant's principal underwriter. The principal business address of
each of the persons listed is 605 Third Avenue, New York, New York 10158-0006,
which is also the address of the Registrant's principal underwriter.
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ---- --------------------- ---------------------
Claudia A. Brandon Vice President Secretary
Patrick T. Byrne Assistant Vice President None
Richard A. Cantor Chairman of the Board and None
Director
Robert Conti Treasurer None
Stacy Cooper-Shugrue Assistant Vice President Assistant Secretary
Robert Cresci Assistant Vice President
William Cunningham Vice President None
Barbara DiGiorgio Assistant Vice President Assistant Treasurer
Roberta D'Orio Assistant Vice President None
Stanley Egener President and Director Chairman of the Board of
Trustees (Chief Executive
Officer)
Joseph G. Galli Assistant Vice President None
Robert I. Gendelman Assistant Vice President None
Mark R. Goldstein Vice President None
Farha-Joyce Haboucha Vice President None
Theresa A. Havell Vice President and Director None
Leslie Holliday-Soto Assistant Vice President None
<PAGE>
PART C - Other Information
Page 15
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ---- --------------------- ---------------------
Jody L. Irwin Assistant Vice President None
Michael M. Kassen Vice President None
Irwin Lainoff Director None
Michael Lamberti Vice President None
Josephine Mahaney Vice President None
Carmen G. Martinez Assistant Vice President None
Lawrence Marx III Vice President None
Ellen Metzger Vice President and None
Secretary
Paul Metzger Assistant Vice President None
Janet W. Prindle Vice President None
Felix Rovelli Vice President None
Richard Russell Vice President Treasurer (Principal
Accounting Officer)
Marvin C. Schwartz Director None
Kent C. Simons Vice President None
Frederic B. Soule Vice President None
Daniel J. Sullivan Senior Vice President Vice President
Peter E. Sundman Senior Vice President None
Susan Switzer Assistant Vice President None
Andrea Trachtenberg Vice President of Marketing None
Judith M. Vale Vice President None
Clara Del Villar Vice President None
Susan Walsh Assistant Vice President None
Michael J. Weiner Senior Vice President Vice President
(Principal Financial
Officer)
<PAGE>
PART C - Other Information
Page 16
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ---- --------------------- ---------------------
Celeste Wischerth Assistant Vice President Assistant Treasurer
Thomas Wolfe Vice President None
Lawrence Zicklin Director Trustee and President
(c) No commissions or compensation were received directly or indirectly
from the Registrant by any principal underwriter who was not an affiliated
person of the Registrant.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
- ------------------------------------------
All accounts, books and other documents required to be maintained by
Section 31 (a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder with respect to the Registrant are maintained at the
offices of State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, except for the Registrant's Trust Instrument and Bylaws,
minutes of meetings of the Registrant's Trustees and shareholders and the
Registrant's policies and contracts, which are maintained at the offices of the
Registrant, 605 Third Avenue, New York, New York 10158.
<PAGE>
PART C - Other Information
Page 17
ITEM 31. MANAGEMENT SERVICES
- -----------------------------
Other than as set forth in Parts A and B of this Registration
Statement, the Registrant is not a party to any management-related service
contract.
ITEM 32. UNDERTAKINGS
- ----------------------
(a) Not Applicable
(b) Not Applicable
(c) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to shareholders of
the Balanced, Government Income, Growth, International, Limited Maturity Bond,
Liquid Asset and/or Partners Portfolio of Neuberger&Berman Advisers Management
Trust, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Post-Effective Amendment No. 19 to its Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, and the State of New York on the 1st day of March, 1996.
NEUBERGER & BERMAN
ADVISERS MANAGEMENT TRUST
By: /s/LAWRENCE ZICKLIN
-----------------------------
Lawrence Zicklin
President
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 19 has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
/s/ STANLEY EGENER Chairman and Trustee MARCH 1, 1996
- --------------------- -------------
Stanley Egener
/s/LAWRENCE ZICKLIN President and Trustee MARCH 1, 1996
- --------------------- -------------
Lawrence Zicklin (Principal Executive Officer)
/s/MICHAEL J. WEINER Vice President MARCH 1, 1996
- --------------------- -------------
Michael J. Weiner (Principal Financial Officer)
/s/RICHARD RUSSELL Treasurer MARCH 1, 1996
- --------------------- -------------
Richard Russell (Principal Accounting Officer)
/s/FAITH COLISH Trustee MARCH 1, 1996
- --------------------- -------------
Faith Colish
/s/WALTER G. EHLERS Trustee MARCH 1, 1996
- --------------------- -------------
Walter G. Ehlers
Trustee
- --------------------- -------------
Leslie A. Jacobson
/s/ROBERT M. PORTER Trustee MARCH 1, 1996
- --------------------- -------------
Robert M. Porter
/s/RUTH E. SALZMANN Trustee MARCH 1, 1996
- --------------------- -------------
Ruth E. Salzmann
/s/PETER P. TRAPP Trustee MARCH 1, 1996
- --------------------- -------------
Peter P. Trapp
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, ADVISERS MANAGERS TRUST certifies that the
Registrant has duly caused this Post-Effective Amendment No. 19 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, and the State of New York on the 1st day of March, 1996.
ADVISERS MANAGERS TRUST
By: /s/LAWRENCE ZICKLIN
-------------------------
Lawrence Zicklin
President
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 19 has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
/s/STANLEY EGENER Chairman and Trustee MARCH 1, 1996
- ---------------------- -------------
Stanley Egener
/s/LAWRENCE ZICKLIN President and Trustee MARCH 1, 1996
- ---------------------- -------------
Lawrence Zicklin (Principal Executive Officer)
/s/MICHAEL J. WEINER Vice President MARCH 1, 1996
- ---------------------- -------------
Michael J. Weiner (Principal Financial Officer)
/s/RICHARD RUSSELL Treasurer MARCH 1, 1996
- ---------------------- -------------
Richard Russell (Principal Accounting Officer)
/s/FAITH COLISH Trustee MARCH 1, 1996
- ---------------------- -------------
Faith Colish
/s/WALTER G. EHLERS Trustee MARCH 1, 1996
- ---------------------- -------------
Walter G. Ehlers
Trustee
- ---------------------- -------------
Leslie A. Jacobson
/s/ROBERT M. PORTER Trustee MARCH 1, 1996
- ---------------------- -------------
Robert M. Porter
/s/RUTH E. SALZMANN Trustee MARCH 1, 1996
- ---------------------- -------------
Ruth E. Salzmann
/s/PETER P. TRAPP Trustee MARCH 1, 1996
- ---------------------- -------------
Peter P. Trapp
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
FILED
WITH
POST-EFFECTIVE AMENDMENT NO. 19
TO THE
REGISTRATION STATEMENT
OF
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
<PAGE>
INDEX TO EXHIBITS
(FOR POST-EFFECTIVE AMENDMENT NO. 19)
-------------------------------------
EXHIBIT NO.
UNDER PART C
OF FORM N-1A NAME OF EXHIBIT
- ------------ ---------------
10 Consent of Counsel
<PAGE>
EXHIBIT 10
CONSENT OF COUNSEL
<PAGE>
DECHERT PRICE & RHOADS
1500 K Street, N.W.
Suite 500
Washington, D.C. 20005
March 1, 1996
Neuberger&Berman Advisers Management Trust
605 Third Avenue
Second Floor
New York, New York 10158-0006
Re: Post-Effective Amendment No. 19 to Registration
Statement on Form N-1A for Neuberger&Berman
Advisers Management Trust (the "Trust")
(File Nos. 2-88566 and 811-4255)
----------------------------------------
Dear Sirs and Madams:
We hereby consent to the reference to our firm as counsel in each of the
Trust's Prospectus and Statement of Additional Information contained in the
Post-Effective Amendment No. 19 to the Trust's Registration Statement.
Very truly yours,
/s/Dechert Price & Rhoads
