As filed with the Securities and Exchange Commission on April 19, 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. 20 |X|
----
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 20 |X|
(Check appropriate box or boxes)
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST1
(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 [X] on May 1, 1996, pursuant to
to paragraph (b), or paragraph (b), or
[ ] 60 days after filing pursuant [ ] on (___________) pursuant to
to paragraph (a)(1), or paragraph (a)(1), or
[ ] 75 days after filing pursuant [ ] on (___________) pursuant to
to paragraph (a)(2), or 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.
20 includes a signature page for the master fund, Advisers Managers
Trust.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 495)
The enclosed materials relate to the Balanced Portfolio, Government
Income Portfolio, Growth Portfolio, International Portfolio, Limited Maturity
Bond Portfolio, Liquid Asset Portfolio and Partners Portfolio (collectively, the
"Portfolios"), each of which is a separate series of Neuberger&Berman Advisers
Management Trust (the "Registrant").
I. Joint Prospectus for Registrant's Portfolios
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,
Capitalization, 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 Regardin
Organization,
Capitalization, and Other
Matters
9. Pending Legal Proceedings... Inapplicable
<PAGE>
II. Prospectus for Registrant's Balanced Portfolio
Form N-1A Part A Item Prospectus Caption
1. Cover page.................. Cover Page
2. Synopsis.................... Inapplicable
3. Condensed Financial
Information................. Financial Highlights;
Performance Information
4. General Description of
Registrant.................. Investment Program;
Special Information
Regarding Organization,
Capitalization, 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
<PAGE>
III. Prospectus for Registrant's Balanced Portfolio (Qualified Plans)
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 Program;
Special Information
Regarding Organization,
Capitalization, 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; Appendix B - How
to Buy Shares
8. Redemption or Repurchase.... Distribution and
Redemption of Trust
Shares; Special
Information Regarding
Organization,
Capitalization, and Other
Matters; Appendix B - How
to Sell Shares
9. Pending Legal Proceedings... Inapplicable
<PAGE>
IV. Prospectus for Registrant's Government Income Portfolio
Form N-1A Part A Item Prospectus Caption
1. Cover page.................. Cover Page
2. Synopsis.................... Inapplicable
3. Condensed Financial
Information................. Financial Highlights;
Performance Information
4. General Description of
Registrant.................. Investment Program;
Special Information
Regarding Organization,
Capitalization, 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
V. Prospectus for Registrant's Growth Portfolio
Form N-1A Part A Item Prospectus Caption
1. Cover page.................. Cover Page
2. Synopsis.................... Inapplicable
<PAGE>
3. Condensed Financial
Information................. Financial Highlights;
Performance Information
4. General Description of
Registrant.................. Investment Program;
Special Information
Regarding Organization,
Capitalization, 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
VI. Prospectus for Registrant's Growth Portfolio (Aetna)
Form N-1A Part A Item Prospectus Caption
1. Cover page.................. Cover Page
2. Synopsis.................... Inapplicable
3. Condensed Financial
Information................. Financial Highlights;
Performance Information
4. General Description of
Registrant.................. Investment Program;
Special Information
Regarding Organization,
Capitalization, and Other
Matters
<PAGE>
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
VI. Prospectus for Registrant's International Portfolio
Form N-1A Part A Item Prospectus Caption
1. Cover page.................. Cover Page
2. Synopsis.................... Inapplicable
3. Condensed Financial
Information................. Financial Highlights;
Performance Information
4. General Description of
Registrant.................. Investment Program;
Special Information
Regarding Organization,
Capitalization, and Other
Matters
5. Management of the Fund...... Management and
Administration
5A. Management's Discussion of
Fund Performance............ Inapplicable
<PAGE>
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
VII. Prospectus for Registrant's Limited Maturity Bond Portfolio
Form N-1A Part A Item Prospectus Caption
1. Cover page.................. Cover Page
2. Synopsis.................... Inapplicable
3. Condensed Financial
Information................. Financial Highlights;
Performance Information
4. General Description of
Registrant.................. Investment Program;
Special Information
Regarding Organization,
Capitalization, 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
<PAGE>
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
VIII. Prospectus for Registrant's Liquid Asset Portfolio
Form N-1A Part A Item Prospectus Caption
1. Cover page.................. Cover Page
2. Synopsis.................... Inapplicable
3. Condensed Financial
Information................. Financial Highlights;
Performance Information
4. General Description of
Registrant.................. Investment Program;
Special Information
Regarding Organization,
Capitalization, 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
<PAGE>
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
IX. Prospectus for Registrant's Partners Portfolio
Form N-1A Part A Item Prospectus Caption
1. Cover page.................. Cover Page
2. Synopsis.................... Inapplicable
3. Condensed Financial
Information................. Financial Highlights;
Performance Information
4. General Description of
Registrant.................. Investment Program;
Special Information
Regarding Organization,
Capitalization, 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
<PAGE>
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
Part B
X. Joint Statement of Additional Information
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
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
<PAGE>
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>
<PAGE>
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
JOINT PROSPECTUS
MAY 1, 1996
NBAMT0010596
<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 24.
AN INVESTMENT IN THE LIQUID ASSET PORTFOLIO, AS IN ANY MUTUAL FUND, IS
NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT. ALTHOUGH THE LIQUID ASSET
PORTFOLIO SEEKS TO MAINTAIN A NET ASSET VALUE OF $1.00 PER SHARE, THERE IS NO
ASSURANCE THAT IT WILL BE ABLE TO DO SO.
Please read this Prospectus before investing in any of the Portfolios and
keep it for future reference. The Prospectus contains information about the
Portfolios that a prospective investor should know before investing. A Statement
of Additional Information ("SAI") about the Portfolios and the Series, dated May
1, 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 10158-0180.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
DATE OF PROSPECTUS: MAY 1, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 4
Management 5
The Neuberger&Berman Investment
Approach 5
EXPENSE INFORMATION 6
FINANCIAL HIGHLIGHTS 8
Selected Per Share Data and Ratios 8
INVESTMENT PROGRAMS 15
AMT Liquid Asset Investments 15
AMT Limited Maturity Bond
Investments 15
AMT Government Income Investments 16
AMT Growth Investments 16
AMT Partners Investments 17
AMT Balanced Investments 17
AMT International Investments 18
Short-Term Trading; Portfolio
Turnover 19
Ratings of Securities 19
Borrowings 20
Other Investments 21
Duration 22
PERFORMANCE INFORMATION 23
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 24
The Portfolios 24
The Series 24
SHARE PRICES AND NET ASSET
VALUE 27
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 28
Dividends and Other Distributions 28
Tax Status 28
SPECIAL CONSIDERATIONS 29
MANAGEMENT AND ADMINISTRATION 30
Trustees and Officers 30
Investment Manager, Administrator,
Sub-Adviser and Distributor 30
Expenses 32
Expense Limitation 33
Transfer and Dividend Paying Agent 33
DISTRIBUTION AND REDEMPTION OF
TRUST SHARES 34
Distribution and Redemption of
Trust Shares 34
Distribution Plan 34
DESCRIPTION OF INVESTMENTS 35
USE OF JOINT PROSPECTUS AND
STATEMENT
OF ADDITIONAL INFORMATION 42
APPENDIX A TO PROSPECTUS 43
</TABLE>
2
<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 24. For more details about each Series, its investments
and their risks, see "Investment Programs" on page 15, "Ratings of Securities"
on page 19, "Borrowings" on page 20, and "Description of Investments" on page
35.
Here is a summary of important features of the Portfolios and their
corresponding Series. You may want to invest in a variety of Portfolios to fit
your particular investment needs. Of course, there can be no assurance that a
Portfolio will meet its investment objective.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PRINCIPAL SERIES
ADVISERS MANAGEMENT TRUST OBJECTIVE INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIQUID ASSET PORTFOLIO Highest current income consistent High-quality money market instruments
with safety and liquidity of government and non-government
issuers
GROWTH PORTFOLIO Capital appreciation, without regard Common stocks
to income
LIMITED MATURITY BOND PORTFOLIO Highest current income consistent Short-to-intermediate term debt
with low risk to principal and securities, primarily investment
liquidity; and secondarily, total grade
return
BALANCED PORTFOLIO Long-term capital growth and Common stocks and short-to-
reasonable current income without intermediate term debt securities,
undue risk to principal primarily investment grade
PARTNERS PORTFOLIO Capital growth Common stocks and other equity
securities of established companies
GOVERNMENT INCOME PORTFOLIO High level of current income and At least 65% in U.S. Government and
total return, consistent with safety Agency securities, with an emphasis
of principal on U.S. Government mortgage-backed
securities; at least 25% in
mortgage-backed and asset-backed
securities
INTERNATIONAL PORTFOLIO Long-term capital appreciation by Equity securities of issuers
investing primarily in a diversified organized and doing business
portfolio of equity securities of primarily outside the U.S.
foreign issuers
</TABLE>
3
<PAGE>
Risk Factors
- --------------------------------------------------------------------------------
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.
AMT Partners Investments may invest up to 15% of its net assets, measured at
the time of investment, 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 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. From
time to time, the Series may invest a significant portion of its 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 likely to be 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" in this Prospectus.
4
<PAGE>
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 one of two basic investment approaches -- value and growth.
A value-oriented portfolio manager buys stocks that are selling for less than
their perceived market value. These include stocks that are currently
under-researched or are temporarily out of favor on Wall Street.
Portfolio managers identify value stocks in several ways. One of the most
common identifiers is a low price-to-earnings ratio -- that is, stocks selling
at multiples of earnings per share that are lower than that of the market as a
whole. Other criteria are high dividend yield, a strong balance sheet and
financial position, a recent company restructuring with the potential to realize
hidden values, strong management, and low price-to-book value (net value of the
company's assets).
While a value approach concentrates on undervalued securities in relation to
their fundamental economic value, a growth approach seeks out stocks of
companies that are projected to grow at above-average rates and may appear
poised for a period of accelerated earnings.
The growth portfolio manager is willing to pay a higher share price in the
hope that the stock's earnings momentum will carry the stock's price higher. As
a stock's price increases based on strong earnings, the stock's original price
appears 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 or under-researched. This strategy is called "growth at a reasonable
price."
Neuberger&Berman believes that, over time, securities that are undervalued
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.
In general, AMT Growth and Balanced Investments (equity portion) place a
greater emphasis on finding securities whose measures of fundamental value are
low in relation to the growth rate of their future earnings and cash flow, as
projected by the portfolio manager, and these Series are therefore willing to
invest in securities with prices that are somewhat higher multiples of earnings.
AMT Partners Investments places greater emphasis on a value-oriented investment
approach.
AMT International Investments uses an investment process that includes a
combination of country selection and individual security selection primarily
based on a value-driven investment approach.
While these approaches have 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" in this Prospectus.
5
<PAGE>
EXPENSE INFORMATION
This section gives you certain information about the expenses of the Balanced
Portfolio and its corresponding Series only. See "Performance Information" in
this Prospectus 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 Expenses
- --------------------------------------------------------------------------------
As shown by this table, you pay no transaction charges when you buy or sell
Portfolio shares.
<TABLE>
<CAPTION>
BALANCED
PORTFOLIO
- ---------------------------------------------------------
<S> <C>
Sales Charge Imposed on Purchases NONE
Sales Charge Imposed On Reinvested Dividends NONE
Deferred Sales Charges NONE
Redemption Fees NONE
Exchange Fees NONE
</TABLE>
Annual Portfolio Operating Expenses
(AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
The following tables shows annual Total Operating Expenses for the Balanced
Portfolio, which are paid out of the assets of the Balanced Portfolio and which
include the Portfolio's pro rata portion of the Operating Expenses of the
Balanced Series. These expenses are borne indirectly by Balanced Portfolio
shareholders. The Balanced Portfolio pays N&B Management an administration fee
based on the Portfolio's average daily net assets. The Balanced Series pays N&B
Management a management fee based on the Balanced Series' average daily net
assets; a pro rata portion of this fee is borne indirectly by the Balanced
Portfolio. Therefore, the table combines management and administration fees. The
Portfolio 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.
<TABLE>
<CAPTION>
MANAGEMENT AND TOTAL
ADMINISTRATION 12B-1 OTHER OPERATING
FEES FEES EXPENSES EXPENSES
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balanced Portfolio 0.85% None 0.19% 1.04%
</TABLE>
Total 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. "Management and Administration
Fees" have been restated to reflect current expenses. 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
6
<PAGE>
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. The expenses and, accordingly, the returns of other funds
that may invest in the Balanced Series, 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 5% and that it had annual Total 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:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balanced Portfolio $ 11 $ 33 $ 57 $ 127
</TABLE>
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.
7
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- --------------------------------------------------------------------------------
The financial information in the following tables is for each Portfolio
(except the International 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 its predecessor fund has been audited by its
respective independent auditors. You may obtain further information about each
Series (except AMT International Investments) and 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, AMT International Investments and the International
Portfolio had not yet commenced investment operations.
8
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Balanced Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Period from
February 28,
1989(3) to
Year Ended December 31, December 31,
1995(2) 1994 1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $14.51 $15.62 $14.90 $14.16 $11.72 $11.64 $10.00
-----------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .32 .30 .34 .40 .47 .49 .30
Net Gains or Losses on Securities
(both realized and unrealized) 3.06 (.80) .61 .72 2.16 (.27)(4) 1.34
-----------------------------------------------------------------------------
Total From Investment Operations 3.38 (.50) .95 1.12 2.63 .22 1.64
-----------------------------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.28) (.23) (.20) (.19) (.19) (.07) --
Distributions (from capital gains) (.09) (.38) (.03) (.19) -- (.07) --
-----------------------------------------------------------------------------
Total Distributions (.37) (.61) (.23) (.38) (.19) (.14) --
-----------------------------------------------------------------------------
Net Asset Value, End of Year $17.52 $14.51 $15.62 $14.90 $14.16 $11.72 $11.64
-----------------------------------------------------------------------------
Total Return+ +23.76 -3.36% +6.45% +8.06% +22.68% +1.95% +16.40%(5)
-----------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $144.4 $179.3 $161.1 $ 87.1 $ 28.3 $ 6.9 $ 0.6
-----------------------------------------------------------------------------
Ratio of Expenses to Average Net
Assets(7) .99% .91% .90% .95% 1.10% 1.35% 1.70%(6)
-----------------------------------------------------------------------------
Ratio of Net Investment Income to
Average Net Assets(7) 1.99% 1.91% 1.96% 2.33% 3.00% 4.00% 3.28%(6)
-----------------------------------------------------------------------------
Portfolio Turnover Rate(8) 21% 55% 114% 82% 69% 77% 58%
-----------------------------------------------------------------------------
</TABLE>
NOTES:
1) The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2) The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3) February 28, 1989 is the date shares of the Balanced Portfolio were first
sold to the separate accounts pursuant to the public offering of Trust
shares.
4) The amounts shown at this caption for a share outstanding throughout the year
may not accord with the change in aggregate gains and losses in securities
for the year because of the timing of sales and repurchases of Portfolio
shares in relation to fluctuating market values for the Portfolio.
5) Not annualized.
6) Annualized.
7) Since the commencement of operations, N&B Management voluntarily assumed
certain operating expenses of the Portfolio as described in Note B of Notes
to Financial Statements and in this Prospectus under "Expense Limitation."
Had N&B Management not undertaken such action, the annualized ratios of
expenses and net investment income to average daily net assets would have
been 2.78% and 2.20%, respectively, for the period from February 28, 1989 to
December 31, 1989. There was no reduction of expenses for the years ended
December 31, 1990 through and including 1995.
8) The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Balanced Investments from May 1, 1995 to
December 31, 1995 was 55%.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Portfolio during each
year, and assumes dividends and capital gain distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Total return figures would have been lower if N&B Management had not
reimbursed certain expenses. Investment returns and principal may fluctuate
and shares when redeemed may be worth more or less than original cost. The
total return information shown does not reflect expenses that apply to the
separate account or the related insurance policies, and the inclusion of these
charges would reduce the total return figures for all years shown. Qualified
Plans that are direct shareholders of the Portfolio are not affected by
insurance charges.
9
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Government Income Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Period from
Year Ended March 22, 1994(3)
December 31, to December 31,
1995(2) 1994
- --------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Year $10.15 $10.00
----------------------------------
Income From Investment Operations
Net Investment Income .70 .37
Net Gains or Losses on Securities (both realized
and unrealized) .46 (.22)
----------------------------------
Total From Investment Operations 1.16 .15
----------------------------------
Less Distributions
Dividends (from net investment income) (.38) --
----------------------------------
Net Asset Value, End of Year $10.93 $10.15
----------------------------------
Total Return+ +11.76% +1.50%(4)
----------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 2.2 $ 1.0
----------------------------------
Ratio of Expenses to Average Net Assets(6) 1.05% 1.09%(5)
----------------------------------
Ratio of Net Investment Income to Average Net
Assets(6) 5.71% 4.78%(5)
----------------------------------
Portfolio Turnover Rate(7) 2% 3%
----------------------------------
</TABLE>
NOTES:
1) The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2) The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3) The date investment operations commenced.
4) Not annualized.
5) Annualized.
6) Since the commencement of operations, N&B Management voluntarily assumed
certain operating expenses of the Portfolio as described in Note B of Notes
to Financial Statements and in this Prospectus under "Expense Limitation."
Had such action not been undertaken, the annualized ratios of expenses and
net investment income to average daily net assets would have been 4.21% and
2.55%, respectively, for the year ended December 31, 1995, and 2.57% and
3.30%, respectively, for the period ended December 31, 1994.
7) The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Government Income Investments for the period
from May 1, 1995 to December 31, 1995 was 64%.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Portfolio during each
year and assumes dividends and capital gain distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Investment returns and principal may fluctuate and shares when
redeemed may be worth more or less than original cost. Total return figures
would have been lower if N&B Management had not reimbursed certain expenses.
The total return information shown does not reflect expenses that apply to the
separate account or the related insurance policies, and the inclusion of these
charges would reduce the total return figures for all years shown.
10
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Growth Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding
throughout each year and other performance information derived from the
Financial Statements. It should be read in conjunction with its corresponding
Series' Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Year Ended December 31,
1995(2) 1994 1993 1992 1991 1990 1989 1988 1987 1986
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year $ 20.31 $24.28 $23.27 $21.47 $16.82 $20.28 $16.20 $12.86 $15.21 $13.38
-------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .01 .07 .13 .21 .31 .43 .43 .32 .34 .26
Net Gains or Losses on
Securities (both realized
and unrealized) 6.26 (1.11) 1.42 1.82 4.64 (2.04) 4.24 3.02 (.96) 1.73
-------------------------------------------------------------------------------------------------
Total From Investment
Operations 6.27 (1.04) 1.55 2.03 4.95 (1.61) 4.67 3.34 (.62) 1.99
-------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.05) (.12) (.17) (.23) (.30) (.29) (.27) -- (.48) (.09)
Distributions (from capital
gains) (.67) (2.81) (.37) -- -- (1.56) (.32) -- (1.25) (.07)
-------------------------------------------------------------------------------------------------
Total Distributions (.72) (2.93) (.54) (.23) (.30) (1.85) (.59) -- (1.73) (.16)
-------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 25.86 $20.31 $24.28 $23.27 $21.47 $16.82 $20.28 $16.20 $12.86 $15.21
-------------------------------------------------------------------------------------------------
Total Return+ +31.73% -4.99% +6.79% +9.54% +29.73% -8.19% +29.47% +25.97% -4.89% +14.94%
-------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $ 537.8 $369.3 $366.5 $304.8 $228.9 $118.8 $ 92.8 $ 48.7 $ 33.8 $ 31.6
-------------------------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets .90% .84% .81% .82% .86% .91% .97% .92% .89% 1.00%
-------------------------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets .04% .26% .52% .92% 1.43% 2.12% 2.10% 2.12% 2.05% 1.50%
-------------------------------------------------------------------------------------------------
Portfolio Turnover Rate(3) 9% 46% 92% 63% 57% 76% 105% 95% 87% 83%
-------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1) The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2) The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3) The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Growth Investments for the period from May 1,
1995 to December 31, 1995 was 35%.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Portfolio during each
year and assumes dividends and capital gain distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Investment returns and principal may fluctuate and shares when
redeemed may be worth more or less than original cost. The total return
information shown does not reflect expenses that apply to the separate account
or the related insurance policies, and inclusion of these charges would reduce
the total return figures for all periods shown.
11
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Limited Maturity Bond Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Year Ended December 31,
1995(2) 1994 1993 1992 1991 1990 1989 1988(3) 1987 1986
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year $14.02 $14.66 $14.33 $14.32 $13.62 $13.48 $13.01 $12.14 $13.62 $12.19
-------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .82 .78 .84 1.03 1.04 1.15 1.12 .92 1.00 1.01
Net Gains or Losses on
Securities (both realized
and unrealized) .65 (.80) .08 (.33) .43 (.10)(4) .20 (.05) (.60) .65
-------------------------------------------------------------------------------------------------
Total From Investment
Operations 1.47 (.02) .92 .70 1.47 1.05 1.32 .87 .40 1.66
-------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.78) (.55) (.52) (.66) (.77) (.91) (.85) -- (1.62) (.22)
Distributions (from capital
gains) -- (.07) (.07) (.03) -- -- -- -- (.26) (.01)
-------------------------------------------------------------------------------------------------
Total Distributions (.78) (.62) (.59) (.69) (.77) (.91) (.85) -- (1.88) (.23)
-------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $14.71 $14.02 $14.66 $14.33 $14.32 $13.62 $13.48 $13.01 $12.14 $13.62
-------------------------------------------------------------------------------------------------
Total Return+ +10.94% -.15% +6.63% +5.18% +11.34% +8.32% +10.77% +7.17% +2.89% +13.83%
-------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $238.9 $344.8 $343.5 $187.0 $ 83.0 $ 46.0 $ 31.5 $ 25.4 $ 19.0 $ 17.1
-------------------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets .71% .66% .64% .64% .68% .76% .88% 1.01% .99% 1.14%
-------------------------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets 5.99% 5.42% 5.19% 5.80% 6.61% 7.66% 8.11% 7.15% 7.36% 7.26%
-------------------------------------------------------------------------------------------------
Portfolio Turnover Rate(5) 27% 90% 159% 114% 77% 124% 116% 197% 24% 32%
-------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1) The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2) The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3) On May 2, 1988, the predecessor of the Portfolio changed its primary
investment objective to obtain the highest current income consistent with low
risk to principal and liquidity through investments in limited maturity debt
securities.
4) The amounts shown at this caption for a share outstanding throughout the
period may not accord with the change in aggregate gains and losses in
securities for the period because of the timing of sales and repurchases of
Portfolio shares in relation to fluctuating market values for the Portfolio.
5) The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Limited Maturity Bond Investments for the
period from May 1, 1995 to December 31, 1995 was 78%.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Portfolio during each
year and assumes dividends and capital gain distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Investment returns and principal may fluctuate and shares when
redeemed may be worth more or less than original cost. The total return
information shown does not reflect expenses that apply to the separate account
or the related insurance policies, and inclusion of these charges would reduce
the total return figures for all years shown.
12
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Liquid Asset Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Year Ended December 31,
1995(1) 1994 1993 1992 1991 1990 1989 1988 1987 1986
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ .9997 $1.0009 $1.0002 $1.0001 $ .9999 $ .9998 $ .9998 $1.0000 $1.0002 $1.0004
--------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .0493 .0328 .0233 .0320 .0547 .0730 .0826 .0648 .0550 .0557
Net Gains or Losses on
Securities .0003 -- .0014 .0002 .0002 .0001 -- (.0002) .0001 .0002
--------------------------------------------------------------------------------------------------
Total From Investment
Operations .0496 .0328 .0247 .0322 .0549 .0731 .0826 .0646 .0551 .0559
--------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.0493) (.0328) (.0233) (.0320) (.0547) (.0730) (.0826) (.0648) (.0550) (.0557)
Distributions (from
capital gains) -- (.0012) (.0007) (.0001) -- -- -- -- (.0003) (.0004)
--------------------------------------------------------------------------------------------------
Total Distributions (.0493) (.0340) (.0240) (.0321) (.0547) (.0730) (.0826) (.0648) (.0553) (.0561)
--------------------------------------------------------------------------------------------------
Net Asset Value, End of
Year $1.0000 $ .9997 $1.0009 $1.0002 $1.0001 $ .9999 $ .9998 $ .9998 $1.0000 $1.0002
--------------------------------------------------------------------------------------------------
Total Return+ +5.04% +3.46% +2.43% +3.25% +5.61% +7.55% +8.58% +6.68% +5.67% +5.76%
--------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $ 31.9 $ 5.3 $ 6.8 $ 25.4 $ 21.5 $ 21.5 $ 11.5 $ 9.3 $ 8.1 $ 2.4
--------------------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets(2) 1.01% 1.02% .88% .72% .74% .88% 1.00% 1.00% 1.00% 1.00%
--------------------------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets(2) 4.90% 3.28% 2.34% 3.19% 5.47% 7.30% 8.28% 6.52% 5.69% 5.33%
--------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1) The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
2) Since the commencement of operations, N&B Management or the principal
underwriter voluntarily assumed certain operating expenses of the Portfolio
as described in Note B of Notes to Financial Statements and in this
Prospectus under "Expense Limitation." Had such action not been undertaken,
the annualized ratios of expenses and net investment income to average daily
net assets would have been 1.25% and 4.66%, respectively, for the year ended
December 31, 1995, 1.03% and 3.27% in 1994, 1.03% and 8.25% in 1989, 1.25%
and 6.27% in 1988, 1.52% and 5.17% in 1987 and 2.74% and 3.59% in 1986,
respectively. There was no reduction of expenses for the years ended December
31, 1990 through and including 1993.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Portfolio during each
year and assumes dividends and capital gain distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Investment returns and principal may fluctuate and shares when
redeemed may be worth more or less than original cost. Total return figures
would have been lower if N&B Management had not reimbursed certain expenses.
The total return information shown does not reflect expenses that apply to the
separate account or the related insurance policies, and inclusion of these
charges would reduce the total return figures for all years shown.
13
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Partners Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding
throughout each year and other performance information derived from the
Financial Statements. It should be read in conjunction with its corresponding
Series' Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Period
from
March 22,
1994(3) to
Year Ended DECEMBER
DECEMBER 31, 1995(2) 31, 1994
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Year $ 9.77 $10.00
-------------------------------------
Income From Investment Operations
Net Investment Income .11 .03
Net Gains or Losses on Securities (both realized
and unrealized) 3.43 (.26)
-------------------------------------
Total From Investment Operations 3.54 (.23)
-------------------------------------
Less Distributions
Dividends (from net investment income) (.01) --
Distributions (from capital gains) (.07) --
-------------------------------------
Total Distributions (.08) --
-------------------------------------
Net Asset Value, End of Year $ 13.23 $ 9.77
-------------------------------------
Total Return+ +36.47% -2.30%(4)
-------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 207.5 $ 9.4
-------------------------------------
Ratio of Expenses to
Average Net Assets 1.09% 1.75%(5)
-------------------------------------
Ratio of Net Investment
Income to Average
Net Assets .97% .45%(5)
-------------------------------------
Portfolio Turnover Rate(6) 76% 90%
-------------------------------------
</TABLE>
NOTES:
1) The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2) The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3) The date investment operations commenced.
4) Not annualized.
5) Annualized.
6) The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Partners Investments for the period from May
1, 1995 to December 31, 1995 was 98%.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Portfolio during each
year and assumes dividends and capital gain distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Investment returns and principal may fluctuate and shares when
redeemed may be worth more or less than original cost. The total return
information shown does not reflect expenses that apply to the separate account
or the related insurance policies, and the inclusion of these charges would
reduce the total return figures for all years shown.
14
<PAGE>
INVESTMENT PROGRAMS
The investment policies and limitations of each Portfolio and its
corresponding Series are identical. Each Portfolio invests only in its
corresponding Series. Therefore, the following shows you the kinds of securities
in which each Series invests. For an explanation of some types of investments,
see "Description of Investments" on page 35.
Investment policies and limitations of the Portfolios and the Series are not
fundamental unless otherwise specified in this Prospectus or the SAI. While a
non-fundamental policy or limitation may be changed by the trustees of the Trust
or of Managers Trust without shareholder approval, the Portfolios intend to
notify shareholders before making any material change to such policies or
limitations. Fundamental policies and limitations may not be changed without
shareholder approval. There can be no assurance that the Series and the
Portfolios will achieve their objectives. Each Portfolio, by itself, does not
represent a comprehensive investment program.
Additional investment techniques, features, and limitations concerning the
Series' investment programs are described in the SAI.
AMT Liquid Asset Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Liquid Asset Investments and its
corresponding Portfolio is to provide the highest current income consistent with
safety and liquidity. This investment objective is fundamental and may not be
changed without the approval of the holders of a majority of the outstanding
shares of the Portfolio and Series.
AMT Liquid Asset Investments invests in a portfolio of debt instruments with
remaining maturities of 397 days or less and maintains a dollar-weighted average
portfolio maturity of not more than 90 days. The Series uses the amortized cost
method of valuation to enable the Portfolio to maintain a stable $1.00 share
price, which means that while Portfolio shares earn income, they should be worth
the same when the shareholder sells them as when the shareholder buys them. Of
course, there is no guarantee that the Portfolio will be able to maintain a
$1.00 share price.
AMT Liquid Asset Investments invests in high quality U.S. dollar-denominated
money market instruments of U.S. and foreign issuers, including governments and
their agencies and instrumentalities, banks and other financial institutions,
and corporations, and may invest in repurchase agreements with respect to these
instruments. The Series may invest 25% or more of its total assets in U.S.
Government and Agency securities or in certificates of deposit or bankers'
acceptances issued by domestic branches of U.S. banks.
AMT Limited Maturity Bond Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Limited Maturity Bond Investments and its
corresponding Portfolio is to provide the highest current income consistent with
low risk to principal and liquidity; and secondarily, total return. This
investment objective is fundamental and may not be changed without the approval
of the holders of a majority of the outstanding shares of the Portfolio and
Series.
AMT Limited Maturity Bond Investments invests in a diversified portfolio of
fixed and variable rate debt securities and seeks to increase income and
preserve or enhance total return by actively managing average portfolio 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
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 unrated securities determined to
be of comparable quality by N&B Management
15
<PAGE>
("comparable unrated securities"). Debt securities rated below Baa by Moody's
Investors Services, Inc. ("Moody's") and below BBB by Standard & Poor's Ratings
Group ("S&P") are considered to be below investment grade. Securities rated
below investment grade as well as comparable 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 or comparable unrated securities. AMT Limited Maturity Bond
Investments may invest up to 5% of its net assets, measured at the time of
investment, 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 four 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.
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 generally 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.
16
<PAGE>
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. The Series uses a "growth at a
reasonable price" 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 or cash flow) 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 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, measured at the time of investment, may
be invested in corporate debt securities rated below investment grade or in
unrated securities determined to be of comparable quality by N&B Management
("comparable unrated securities"). Securities rated below investment grade as
well as comparable 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, "Fixed Income Securities" in the
SAI, and Appendix A of 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 securities.
N&B Management has analyzed the total return performance and volatility over
the last 36 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 88.4% of the performance of the S&P
"500", with only 63.5% of the volatility. Those model balanced portfolios in
which 70% and 50% were allocated to the S&P "500" were able to achieve 91.6% and
85.1%, respectively, of the performance of
17
<PAGE>
the S&P "500", with only 72.4% and 54.9% 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
unrated securities determined to be of comparable quality by N&B Management
("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 below investment grade as well as comparable 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 or comparable unrated securities. 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, determined 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 Series' 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 more heavily in
certain countries than in others. From time to time, the Series may invest a
significant part of its assets in Japan. 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,
and may purchase foreign corporate and government debt securities.
Because the Portfolio, through its corresponding 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.
18
<PAGE>
Most of the securities held by the Portfolio 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 Portfolio may
use techniques such as options, futures, forward foreign currency exchange
contracts ("forward contracts"), and short selling, for hedging purposes and in
an attempt to realize income. The Portfolio may also use leverage to facilitate
transactions entered into by the Portfolio for hedging purposes. The use of
these strategies may entail special risks.
For more details about investments of the Series, see "Description of
Investments" in this Prospectus.
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 Portfolios and the Series, and for the
predecessors of the various Portfolios for the period prior to May 1, 1995,
(except for Liquid Asset Portfolio and International Portfolio) for 1995 and
earlier years are set forth under "Financial Highlights" in this Prospectus. The
portfolio turnover rates for the Series are set forth in the Trust's annual
report to shareholders.
It is anticipated that the annual portfolio turnover rate of AMT Government
Income Investments and AMT Partners Investments generally will exceed 100%. It
is anticipated that the annual portfolio turnover rate of AMT Growth Investments
and AMT Limited Maturity Bond Investments in some fiscal years may 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 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 under the Investment Company Act of
1940, will consider disposing of its securities.
19
<PAGE>
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 and debt securities determined to be of comparable quality by N&B
Management ("comparable unrated securities") are considered to be below
investment grade. AMT International Investments may invest up to 5% of its net
assets, measured at the time of investment, 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 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, measured at the time of investment, 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 AMT 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
20
<PAGE>
Series expects to borrow money. As a non-fundamental policy, none of these
Series may purchase portfolio securities if its outstanding borrowings,
including reverse repurchase agreements, exceed 5% of its total assets. Dollar
rolls are treated as reverse repurchase agreements.
AMT GOVERNMENT INCOME INVESTMENTS. AMT Government Income Investments, as a
fundamental policy, may borrow money from banks for any purpose, including to
meet redemptions and increase the amount available for investment, and enter
into reverse repurchase agreements (including dollar rolls) for any purpose, so
long as the aggregate amount of borrowings and reverse repurchase agreements
does not exceed one-third of the Series' total assets (including the amount
borrowed) less liabilities (other than borrowings). Leveraging (borrowing) to
increase amounts available for investment may exaggerate the effect on net asset
value of any increase or decrease in the market value of the securities of the
Series. Money borrowed for leveraging will be subject to interest costs which
may or may not be recovered by income and appreciation of the securities
purchased.
AMT INTERNATIONAL INVESTMENTS. AMT International Investments has a
fundamental policy that it may not borrow money, except that it may (1) borrow
money from banks and (2) enter into reverse repurchase agreements for any
purpose, so long as the aggregate amount of borrowings and reverse repurchase
agreements does not exceed one-third of the Series' total assets (including the
amount borrowed) less liabilities (other than borrowings).
The Series may borrow money from banks to facilitate transactions entered
into by the Series for hedging purposes, which is a form of leverage. This
leverage may exaggerate changes in the net asset value of the Portfolio's shares
and the gains and losses on the Series' investments. Leverage also creates
interest expenses; if those expenses exceed the return on transactions that
borrowings facilitate, the Series will be in a worse position than if it had not
borrowed. The use of derivatives in connection with leverage may create the
potential for significant losses. The Series may pledge assets in connection
with permitted borrowings.
ALL SERIES. Currently, the State of California imposes borrowing limitations
on variable insurance product 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 and Balanced Investments (fixed income portion only) may
adopt shorter weighted average duration than normal, and AMT Liquid Asset
Investments may adopt shorter weighted average maturity 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.
21
<PAGE>
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 AMT 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 Series' 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.
22
<PAGE>
PERFORMANCE INFORMATION
LIQUID ASSET PORTFOLIO. From time to time, the Liquid Asset Portfolio's
annualized "yield" and "effective yield" may be presented in advertisements and
sales literature. The Portfolio's "yield" represents an annualization of the
increase in value of an account (excluding any capital changes) invested in the
Portfolio for a specific seven-day period. The Portfolio's "effective yield"
compounds such yield for a year and thus is greater than the Portfolio's yield.
OTHER PORTFOLIOS. Performance information for each of the other Portfolios
may 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
dividends and distributions from net investment income and net realized gains,
respectively.
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.
23
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of the International Portfolio which as of December 31, 1995 had not yet
commenced investment operations. These conversions were approved by the
shareholders of the predecessors of the Portfolios in August 1994. Each
Portfolio invests all of its net investable assets in its corresponding Series,
in each case receiving a beneficial interest in that Series. The trustees of the
Trust may establish additional portfolios or classes of shares, without the
approval of shareholders. The assets of each Portfolio belong only to that
Portfolio, and the liabilities of each Portfolio are borne solely by that
Portfolio and no other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, 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. 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.
24
<PAGE>
PORTFOLIOS' INVESTMENT IN THE SERIES. Each Portfolio seeks to achieve its
investment objective by investing all of its net investable assets in its
corresponding Series having the same investment objective, policies, and
limitations as the Portfolio. Accordingly, each Series directly acquires its own
securities and its corresponding Portfolio acquires an indirect interest in
those securities. Historically, N&B Management, administrator to the Portfolios
and investment manager of all Series has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
28 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in a Series other than a Portfolio redeemed its interest in the Series,
the Series' remaining investors (including the Portfolio) might, as a result,
experience higher pro rata operating expenses, thereby producing lower returns.
Each Portfolio may withdraw its entire investment from its corresponding
Series at any time, if the trustees of the Trust determine that it is in the
best interests of the Portfolio and its shareholders to do so. A Portfolio might
withdraw, for example, if there were other investors in the Series with power
to, and who did by a vote of all investors (including the Portfolio), change the
investment objective, policies, or limitations of the Series in a manner not
acceptable to the trustees of the Trust. A withdrawal could result in a
distribution in kind of securities (as opposed to a cash distribution) by the
Series. That distribution could result in a less diversified portfolio of
investments for the Portfolio and could affect adversely the liquidity of the
Portfolio's investment portfolio. If a Portfolio decided to convert those
securities to cash, it usually would incur brokerage fees or other transaction
costs. If a Portfolio withdrew its investment from a Series, the trustees would
consider what action might be taken, including the investment of all of the
Portfolio's net investable assets in another pooled investment entity having
substantially the same investment objective as the Portfolio or the retention by
the Portfolio of its own investment manager to manage its assets in accordance
with its investment objective, policies, and limitations. The inability of the
Portfolio to find a suitable replacement could have a significant impact on
shareholders.
INVESTOR MEETINGS AND VOTING. Each Series normally will not hold meetings of
investors except as required by the 1940 Act. Each investor in a Series will be
entitled to vote in proportion to its relative beneficial interest in the
Series. On most issues subjected to a vote of investors, as required by the 1940
Act and other applicable law, a Portfolio will solicit proxies from its
shareholders and will vote its interest in the Series in proportion to the votes
cast by the Portfolio's shareholders. Pursuant to current interpretations of the
1940 Act, the Life Companies who are shareholders of the Portfolio will solicit
voting instructions from contract owners with respect to any matters that are
presented to a vote of Portfolio shareholders. If there are other investors in a
Series, there can be no assurance that any issue that receives a majority of the
votes cast by Portfolio shareholders will receive a majority of votes cast by
all Series investors; indeed, if other investors hold a majority interest in the
Series, they could have voting control of the Series.
25
<PAGE>
CERTAIN PROVISIONS. Each investor in a Series, including a Portfolio, will
be liable for all obligations of the Series, but not of the other Series.
However, the risk of an investor in a Series incurring financial loss on account
of such liability would be limited to circumstances in which the Series had
inadequate insurance and was unable to meet its obligations out of its assets.
Upon liquidation of a Series, investors would be entitled to share pro rata in
the net assets of the Series available for distribution to investors.
26
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of a Series, the market value of the securities the Series holds
plus cash and other assets; in the case of a Portfolio, its percentage interest
in its corresponding Series, multiplied by the Series' NAV, plus any other
assets). Each Portfolio's per share NAV is calculated by dividing its NAV by the
number of Portfolio shares outstanding and rounding the result to the nearest
full cent.
Each Portfolio and its corresponding Series calculate their NAVs as of the
close of regular trading on The New York Stock Exchange ("NYSE"), usually 4 p.m.
Eastern time. AMT Liquid Asset Investments, in accordance with Rule 2a-7 under
the 1940 Act, will use the amortized cost method of valuation to enable AMT
Liquid Asset Investments to try to maintain a stable NAV of $1.00 per share. AMT
Liquid Asset Investments values its securities at their cost at the time of
purchase and assumes a constant amortization to maturity of any discount or
premium.
AMT Limited Maturity Bond, Government Income, and Balanced Investments (debt
securities portion) generally 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.
27
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
Each of the Government Income, Growth, Partners, Balanced, Limited Maturity
Bond, and International Portfolios annually distributes substantially all of its
share of its corresponding Series' net investment income (net of the Portfolio's
expenses), net realized capital gains, and net realized gains from foreign
currency transactions, if any, normally in February.
The Liquid Asset Portfolio distributes to its shareholders substantially all
of its share of its corresponding Series' net investment income (net of the
Portfolio's expenses) and net realized capital gains. Income dividends are
declared daily for the Portfolio at the time its NAV is calculated and are paid
monthly, and net realized capital gains, if any, are normally distributed
annually in February.
The Portfolios offer their shares solely to separate accounts of the Life
Companies, except for the Balanced Portfolio which also offers its shares to
Qualified Plans. All dividends and other distributions are distributed to the
separate accounts (and, with respect to the Balanced Portfolio, to the Qualified
Plans) and will be automatically invested in Trust shares. Dividends and other
distributions made by a Portfolio to the separate accounts are taxable, if at
all, to the extent described in the prospectuses for the Variable Contracts.
Tax Status
- --------------------------------------------------------------------------------
Each Portfolio is treated as a separate entity for Federal income tax
purposes and intends to qualify annually 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 intends to distribute all of its net income and gains to its
shareholders each year.
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.
28
<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. See "Distribution and Redemption of Trust Shares" in this
Prospectus.
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 the increase in
the value of the Variable Contract. 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 calendar
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.
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, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Series will be managed with the intention of complying 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.
29
<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, 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 three
other investment companies. These funds had aggregate net assets of
approximately $11.9 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 portfolio
securities and the sale of covered call options. Neuberger&Berman and its
affiliates, including N&B Management, manage securities accounts that had
approximately $38.7 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 $11.1 billion of assets as
of December 31, 1995. Ms. Havell has had overall responsibility for the
activities of the Fixed Income Group since 1984.
The following members of the Fixed Income Group, along with Theresa A.
Havell, are primarily responsible for the day-to-day management of the listed
Series:
AMT Liquid Asset Investments -- 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. Ms. Mahaney has been primarily responsible for
AMT Liquid Asset Investments since January 1993.
AMT Limited Maturity Bond Investments and AMT Balanced Investments (debt
securities portion) -- Thomas G. Wolfe. Mr. Wolfe has been primarily responsible
for AMT Limited Maturity Bond Investments and AMT Balanced Investments (debt
securities portion) since October 1995. 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 Standard & Poor's Rating Group.
30
<PAGE>
AMT Government Income Investments -- William H. Cunningham. Mr. Cunningham
has been primarily responsible for AMT Government Income Investments since
October 1995. 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. He has had primary
responsibility for AMT Growth Investments and AMT Balanced Investments (equity
portion) since April 1993. 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. She has had primary responsibility for AMT Growth
Investments and AMT Balanced Investments (equity portion) 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. He has had
primary responsibility for AMT Partners Investments since March 1994. Mr.
Gendelman is a senior portfolio manager for Neuberger&Berman and an Assistant
Vice President of N&B Management since 1994. He has had primary responsibility
for AMT Partners Investments since October 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 and Robert Cresci. Mr. 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. Mr. Rovelli has had primary responsibility for
AMT International Investments since June 1994. Previously, he was a Senior Vice
President-Senior Equity Portfolio Manager of BNP-N&B Global Asset Management,
L.P., from May 1994 to October 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. Mr. Cresci is an Assistant Vice President of N&B
Management and was an Assistant Portfolio Manager of BNP-N&B Global Asset
Management, L.P., from May 1994 to October 1995. He previously served as an
assistant portfolio manager of another mutual fund that invested in
international equity securities from 1992 until May 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, to the
extent a broker is used in the purchase and sale of portfolio securities and in
the sale of covered 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. For more information, see the SAI.
31
<PAGE>
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&BermanFunds.
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 regulate 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>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
GROWTH; PARTNERS; BALANCED 0.55% of first $250 million 0.30%
0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
GOVERNMENT INCOME 0.35% of first $500 million 0.40%
0.325% of next $500 million
0.30% of next $500 million
0.275% of next $500 million
0.25% of over $2 billion
LIMITED MATURITY BOND; LIQUID ASSET 0.25% of first $500 million 0.40%
0.225% of next $500 million
0.20% of next $500 million
0.175% of next $500 million
0.15% of over $2 billion
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 over $1.5 billion
</TABLE>
32
<PAGE>
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.
Expense Limitation
- --------------------------------------------------------------------------------
ALL PORTFOLIOS AND THEIR CORRESPONDING SERIES (EXCEPT INTERNATIONAL
PORTFOLIO AND ITS CORRESPONDING SERIES). N&B Management has undertaken to limit
the Portfolios' expenses by reimbursing 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 expense limitation by N&B Management is to reduce operating
expenses of a Portfolio and its corresponding Series and thereby increase total
return.
INTERNATIONAL PORTFOLIO AND ITS CORRESPONDING SERIES. From November 30, 1995
through December 31, 1996, N&B Management has undertaken to limit the
Portfolio's expenses by reimbursing the Portfolio for 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, expenses borne by N&B Management
pursuant to the previous sentence, so long as the Portfolio Expense Limitation
is not exceeded. The effect of any expense limitation on 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.
33
<PAGE>
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.
34
<PAGE>
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 any or all of the types of securities or use any or 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. The use of hedging
or other techniques is discretionary and no representation is made that the risk
of any Series will be reduced by the techniques discussed in this section. 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, measured at the time of investment, in foreign
securities that are issued by non-United States entities. The 10% limitation
does not apply with respect to foreign securities that are denominated in U.S.
dollars, including ADRs. Foreign securities (including those denominated in U.S.
dollars and ADRs) are affected by political or economic developments in foreign
countries.
AMT International Investments may invest in ADRs, EDRs, GDRs, and IDRs. ADRs
(sponsored or unsponsored) are receipts typically issued by a U.S. bank or trust
company evidencing its ownership of the underlying foreign
35
<PAGE>
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 may 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 experienced a
severe recession, including a decline in real estate values and other events
that adversely affected the balance sheets of many financial institutions and
indicate that there may be structural weaknesses in the Japanese financial
system. The effects of this economic downturn may be felt for a considerable
period and are being exacerbated by the currency exchange rate. Japan is
undergoing a period of political instability, which may undercut its ability to
promptly resolve trading disputes with the U.S. Japan is heavily dependent on
foreign oil. Japan is located in a seismically active area, and severe
earthquakes may damage important elements of the country's infrastructure.
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, measured at the
time of investment, in U.S. dollar-denominated and non-U.S. dollar-denominated
corporate and government debt securities of foreign issuers. The Series may
invest in debt securities of any rating, including those rated below investment
grade and unrated securities.
FOREIGN CURRENCY TRANSACTIONS (ALL SERIES EXCEPT AMT LIQUID ASSET
INVESTMENTS). Each of these Series may enter into forward foreign currency
exchange contracts in order to protect against adverse changes in future foreign
currency exchange rates, to facilitate transactions in foreign securities and to
repatriate dividend or interest income
36
<PAGE>
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 try to reduce the risk of securities price changes and expected changes in
prevailing currency exchange rates (hedge) and 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
transactional expense, price volatility and a high degree of leverage. A Series
may engage in transactions in futures contracts and related options only as
permitted by regulations of the Commodity Futures Trading Commission.
AMT International Investments may enter into futures contracts and purchase
and sell options on such contracts on both the U.S. and foreign exchanges for
hedging and non-hedging purposes. AMT International Investments may (1) enter
into futures contracts on debt securities, interest rates, securities indices,
and currencies and (2) purchase and write options on futures contracts.
AMT International Investments may purchase and write put and call options on
foreign currencies for the purpose of protecting against declines in the dollar
value of foreign portfolio securities and against increases in the U.S. dollar
cost of foreign securities to be acquired. The Series may also use options on
foreign currencies to cross-hedge. In addition, the Series may purchase call or
put options on currencies for non-hedging purposes when the investment adviser
expects that the currency will appreciate or depreciate in value, but the
securities denominated in that currency do not present attractive investment
opportunities and are not held in the Series. Options on foreign
37
<PAGE>
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 transactional expense,
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 or forward commitment 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 or securities subject to a forward
commitment may decline or increase in value during the period from the Series'
investment commitment to the settlement of the purchase which may magnify
fluctuation in the Series' NAV.
INDEXED SECURITIES (AMT INTERNATIONAL, LIMITED MATURITY BOND, GOVERNMENT
INCOME AND BALANCED INVESTMENTS). Each of these Series may invest in indexed
securities whose value is linked to currencies, interest rates, commodities,
indices, or other financial indicators. Most indexed securities are
short-to-intermediate term fixed-income securities whose values at maturity or
interest rates rise or fall according to the change in one or more specified
underlying instruments. Indexed securities may be positively or negatively
indexed (i.e., their value may increase or decrease if the underlying instrument
appreciates), and may have return characteristics similar to direct investments
in the underlying instrument or to one or more options on the underlying
instrument. Indexed securities may be more volatile than the underlying
instrument itself.
REPURCHASE AGREEMENTS/SECURITIES LOANS (ALL SERIES). Each Series may enter
into repurchase agreements and lend securities from its portfolio. In a
repurchase agreement, a Series buys a security from a Federal Reserve member
bank (or with respect to AMT International Investments, from a foreign bank or
U.S. branch or agency of a foreign bank), or a securities dealer and
simultaneously agrees to sell it back at a higher price, at a specified date,
usually less
than a week later. The underlying securities must fall within the Series'
investment policies and limitations (but not
38
<PAGE>
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 to a bank or securities dealer
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 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 and duration 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-SM- ("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,
39
<PAGE>
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, measured at
the time of investment, 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 ordinarily invests primarily in common stocks, except AMT
Balanced Investments (debt portion), when market conditions warrant each may
invest in preferred stocks, securities convertible into or exchangeable for
common stocks, U.S. Government and Agency Securities, investment grade debt
securities, or money market instruments, or may retain assets in cash or cash
equivalents.
SHORT SELLING (AMT PARTNERS, GROWTH, BALANCED, AND INTERNATIONAL
INVESTMENTS). Each Series may attempt to limit exposure to a possible market
decline in the value of portfolio securities through short sales of securities
which the investment adviser believes possess volatility characteristics similar
to those being hedged and may use short sales in an attempt to realize gain. To
effect such a transaction, a Series will borrow a security from a brokerage firm
to make delivery to the buyer. A Series then is obligated to replace the
security borrowed by purchasing it at the market price at the time of
replacement. Until the security is replaced, a Series is required to pay to the
lender any accrued interest or dividend and may be required to pay a premium.
A Series will realize a gain if the security declines in price between the
date of the short sale and the date on which the Series replaces the borrowed
security. A Series will incur a loss if the price of the security increases
between those dates. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of any premium or interest the Series may be
required to pay in connection with a short sale. The successful use of short
selling may be adversely affected by imperfect correlation between movements in
the price of the security sold short and the securities being hedged. Short
selling may defer recognition of gains or losses into another tax period.
AMT Liquid Asset, Limited Maturity Bond, Partners, Growth, Balanced and
International Investments may make short sales against-the-box. A short sale is
"against-the-box" when, at all times during which a short position is open, the
Series owns an equal amount of such securities, or owns securities giving it the
right, without payment of future consideration, to obtain an equal amount of
securities sold short.
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
40
<PAGE>
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 creditworthiness 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 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. Efforts are underway that
may result in a "flat tax" or other restructuring of the federal income tax
system. These developments could reduce the value of all municipal securities,
or the securities of particular issuers.
RESTRICTED SECURITIES AND RULE 144A SECURITIES (ALL SERIES). Each 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.
41
<PAGE>
USE OF JOINT PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION
Each Portfolio and its corresponding Series acknowledges that it is solely
responsible for all information or lack of information about that Portfolio and
Series in this Prospectus or in the SAI, and no other Portfolio or Series is
responsible therefor. The trustees of the Trust and of Managers Trust have
considered this factor in approving each Portfolio's and Series' use of a single
combined Prospectus and combined SAI.
42
<PAGE>
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
APPENDIX A TO PROSPECTUS
TOTAL RETURN ANALYSIS USING CONSTANT
ASSET ALLOCATION S&P "500"/2 YR.
U.S. TREASURY NOTES
1960 - 1995
<TABLE>
<CAPTION>
FIXED ASSET ALLOCATION COMPARISON TO 100%
S&P "500"/2 YR. TREASURY NOTES S&P "500" ALLOCATION
- ------------------------------------------------------
<S> <C> <C>
100/0 (100% S&P
"500")
Return 10.73% 100.0%
Volatility 15.7% 100.0%
70/30
Return 9.83 91.61
Volatility 11.4 72.4
60/40
Return 9.49 88.44
Volatility 10.0 63.5
50/50
Return 9.13 85.08
Volatility 8.6 54.9
0/100
Return 7.01 65.32
Volatility 4.2 26.6
</TABLE>
43
<PAGE>
BALANCED PORTFOLIO
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
PROSPECTUS
MAY 1, 1996
NBAMT0140596
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
Balanced Portfolio
- --------------------------------------------------------------------------------
Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to meet
differing investment objectives and currently is comprised of seven separate
Portfolios, one of which is offered herein. 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").
THIS PROSPECTUS CONTAINS INFORMATION PERTAINING TO THE BALANCED PORTFOLIO
ONLY.
- --------------------------------------------------------------------------------
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. AMT BALANCED INVESTMENTS, THE BALANCED
PORTFOLIO'S CORRESPONDING SERIES, IS MANAGED BY NEUBERGER& BERMAN MANAGEMENT
INCORPORATED ("N&B MANAGEMENT"). AMT BALANCED INVESTMENTS INVESTS IN SECURITIES
IN ACCORDANCE WITH AN INVESTMENT OBJECTIVE, POLICIES, AND LIMITATIONS IDENTICAL
TO THOSE OF THE BALANCED PORTFOLIO. THE INVESTMENT PERFORMANCE OF THE BALANCED
PORTFOLIO WILL DIRECTLY CORRESPOND WITH THE INVESTMENT PERFORMANCE OF AMT
BALANCED INVESTMENTS. 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 14.
Please read this Prospectus before investing in the Balanced Portfolio and
keep it for future reference. The Prospectus contains information about the
Balanced Portfolio that a prospective investor should know before investing. A
Statement of Additional Information ("SAI") about the Portfolios and the Series,
dated May 1, 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 10158-0180.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
DATE OF PROSPECTUS: MAY 1, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 3
Management 3
The Neuberger&Berman Investment
Approach 4
FINANCIAL HIGHLIGHTS 5
Selected Per Share Data and Ratios 5
INVESTMENT PROGRAM 8
AMT Balanced Investments 8
Short-Term Trading; Portfolio
Turnover 9
Ratings of Securities 9
Borrowings 11
Other Investments 11
Duration 11
PERFORMANCE INFORMATION 13
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 14
The Portfolios 14
The Series 14
SHARE PRICES AND NET ASSET
VALUE 17
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 18
Dividends and Other Distributions 18
Tax Status 18
SPECIAL CONSIDERATIONS 19
MANAGEMENT AND ADMINISTRATION 20
Trustees and Officers 20
Investment Manager, Administrator,
Sub-Adviser and Distributor 20
Expenses 21
Expense Limitation 22
Transfer and Dividend Paying Agent 22
DISTRIBUTION AND REDEMPTION
OF TRUST SHARES 23
Distribution and Redemption of
Trust Shares 23
Distribution Plan 23
DESCRIPTION OF INVESTMENTS 24
USE OF JOINT PROSPECTUS AND
STATEMENT OF ADDITIONAL
INFORMATION 30
APPENDIX A TO PROSPECTUS 31
</TABLE>
2
<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 14. For more details about AMT Balanced Investments, its
investments and their risks, see "Investment Programs" on page 8, "Ratings of
Securities" on page 9, "Borrowings" on page 11, and "Description of Investments"
on page 24.
Here is a summary of important features of the Balanced Portfolio and AMT
Balanced Investments. Of course, there can be no assurance that the Balanced
Portfolio will meet its investment objective.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PRINCIPAL SERIES
ADVISERS MANAGEMENT TRUST OBJECTIVE INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BALANCED PORTFOLIO Long-term capital growth and Common stocks and short-to-
reasonable current income without intermediate term debt securities,
undue risk to principal primarily investment grade
</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 AMT Balanced Investments in foreign
securities, options and futures contracts, zero coupon bonds, and debt
securities rated below investment grade. With respect to the portion of the
assets of AMT Balanced Investments which is invested in fixed income securities,
the value of which 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 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.
Management
- --------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman as sub-adviser,
selects investments for AMT Balanced Investments. N&B Management also provides
administrative services to AMT Balanced Investments and the Balanced Portfolio
and acts as distributor of the shares of the Portfolio. See "Management and
Administration" in this Prospectus.
3
<PAGE>
The Neuberger&Berman Investment Approach
- --------------------------------------------------------------------------------
AMT Balanced Investments (equity portion) is managed using a growth-oriented
investment approach. This approach seeks out stocks of companies that are
projected to grow at above-average rates and may appear poised for a period of
accelerated earnings.
The growth portfolio manager is willing to pay a higher share price in the
hope that the stock's earnings momentum will carry the stock's price higher. As
a stock's price increases based on strong earnings, the stock's original price
appears 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 or under-researched. This strategy is called "growth at a reasonable
price."
In general, AMT Balanced Investments (equity portion) place a greater
emphasis on finding securities whose measures of fundamental value are low in
relation to the growth rate of their future earnings and cash flow, as projected
by the portfolio manager, and AMT Balanced Investments (equity portion) is
therefore willing to invest in securities with prices that are somewhat higher
multiples of earnings.
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" in this Prospectus.
4
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- --------------------------------------------------------------------------------
The financial information in the following table is for the Balanced
Portfolio as of December 31, 1995 and includes data related to the 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 the Balanced Portfolio and its
predecessor fund has been audited by its respective independent auditors. You
may obtain further information about AMT Balanced Investments and the
performance of the Balanced Portfolio at no cost in the Trust's annual report to
shareholders. Also, see "Performance Information" in this Prospectus.
5
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Balanced Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Period
from
February
28,
1989(3)
to
Year Ended December 31, DECEMBER
1995(2) 1994 1993 1992 1991 1990 31, 1989
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year 14.51 $15.62 $14.90 $14.16 $11.72 $11.64 $10.00
-----------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .32 .30 .34 .40 .47 .49 .30
Net Gains or Losses on Securities
(both realized and unrealized) 3.06 (.80) .61 .72 2.16 (.27)(4) 1.34
-----------------------------------------------------------------------
Total From Investment Operations 3.38 (.50) .95 1.12 2.63 .22 1.64
-----------------------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.28) (.23) (.20) (.19) (.19) (.07) --
Distributions (from capital gains) (.09) (.38) (.03) (.19) -- (.07) --
-----------------------------------------------------------------------
Total Distributions (.37) (.61) (.23) (.38) (.19) (.14) --
-----------------------------------------------------------------------
Net Asset Value, End of Year $17.52 $14.51 $15.62 $14.90 $14.16 $11.72 $11.64
-----------------------------------------------------------------------
Total Return+ +23.76 -3.36% +6.45% +8.06% +22.68% +1.95% +16.40%(5)
-----------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $144.4 $179.3 $161.1 $ 87.1 $ 28.3 $ 6.9 $ 0.6
-----------------------------------------------------------------------
Ratio of Expenses to Average Net Assets(7) .99% .91% .90% .95% 1.10% 1.35% 1.70%(6)
-----------------------------------------------------------------------
Ratio of Net Investment Income to Average Net
Assets(7) 1.99% 1.91% 1.96% 2.33% 3.00% 4.00% 3.28%(6)
-----------------------------------------------------------------------
Portfolio Turnover Rate(8) 21% 55% 114% 82% 69% 77% 58%
-----------------------------------------------------------------------
</TABLE>
NOTES:
1)The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2)The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3)February 28, 1989 is the date shares of the Balanced Portfolio were first sold
to the separate accounts pursuant to the public offering of Trust shares.
4)The amounts shown at this caption for a share outstanding throughout the year
may not accord with the change in aggregate gains and losses in securities for
the year because of the timing of sales and repurchases of Portfolio shares in
relation to fluctuating market values for the Portfolio.
5)Not annualized.
6)Annualized.
7)Since the commencement of operations, N&B Management voluntarily assumed
certain operating expenses of the Portfolio as described in Note B of Notes to
Financial Statements and in this Prospectus under "Expense Limitation." Had
N&B Management not undertaken such action, the annualized ratios of expenses
and net investment income to average daily net assets would have been 2.78%
and 2.20%, respectively, for the period from February 28, 1989 to December 31,
1989. There was no reduction of expenses for the years ended December 31, 1990
through and including 1995.
6
<PAGE>
8)The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Balanced Investments from May 1, 1995 to
December 31, 1995 was 55%.
+Total return based on per share net asset value reflects the effects of changes
in net asset value on the performance of the Portfolio during each year, and
assumes dividends and capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results. Total
return figures would have been lower if N&B Management had not reimbursed
certain expenses. Investment returns and principal may fluctuate and shares
when redeemed may be worth more or less than original cost. The total return
information shown does not reflect expenses that apply to the separate account
or the related insurance policies, and the inclusion of these charges would
reduce the total return figures for all years shown. Qualified Plans that are
direct shareholders of the Portfolio are not affected by insurance charges.
7
<PAGE>
INVESTMENT PROGRAM
The investment policies and limitations of the Balanced Portfolio and AMT
Balanced Investments are identical. The Balanced Portfolio invests only in AMT
Balanced Investments. Therefore, the following shows you the kinds of securities
in which AMT Balanced Investments invests. For an explanation of some types of
investments, see "Description of Investments" on page 24.
Investment policies and limitations of the Balanced Portfolio and AMT
Balanced Investments 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 Balanced Portfolio intends 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 AMT Balanced Investments and the Balanced Portfolio will achieve
their objectives. The Balanced Portfolio, by itself, does not represent a
comprehensive investment program.
Additional investment techniques, features, and limitations concerning AMT
Balanced Investments' investment program are described in the SAI.
AMT Balanced Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Balanced Investments and the Balanced
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 securities.
N&B Management has analyzed the total return performance and volatility over
the last 36 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 88.4% of the performance of the S&P
"500", with only 63.5% of the volatility. Those model balanced portfolios in
which 70% and 50% were allocated to the S&P "500" were able to achieve 91.6% and
85.1%, respectively, of the performance of the S&P "500", with only 72.4% and
54.9% 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
invest 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. This portion of the Series expects to be almost fully
invested in common stocks, often of companies that may be temporarily out of
favor in the market.
8
<PAGE>
The Series' aggressive growth investment program, with respect to its equity
portion, 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. The Series uses
a "growth at a reasonable price" 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 or cash flow) than
other Series. In addition, the equity portion of 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.
In the debt securities portion of its investments, AMT Balanced Investments
will invest in a diversified portfolio of fixed and variable rate debt
securities and seeks to increase income and preserve and enhance total return by
actively managing average portfolio duration in light of market conditions and
trends. The debt securities portion of the Series 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 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. Up to 5% of the debt securities
portion of the Series may be invested 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 four years. 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 unrated securities
determined to be of comparable quality by N&B Management ("comparable unrated
securities"). Debt securities rated below Baa by Moody's Investors Service, Inc.
("Moody's") and below BBB by Standard & Poor's Ratings Group ("S&P") are
considered to be below investment grade. Securities rated below investment grade
as well as comparable 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 or comparable unrated
securities. 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.
Short-Term Trading; Portfolio Turnover
- --------------------------------------------------------------------------------
Although AMT Balanced Investments does not purchase securities with the
intention of profiting from short-term trading, the Series may sell portfolio
securities prior to maturity when the investment adviser believes that such
action is advisable.
The portfolio turnover rates for the Balanced Portfolio and AMT Balanced
Investments, and for the predecessor of the Portfolio for the period prior to
May 1, 1995, are set forth under "Financial Highlights" in this Prospectus.
Ratings of Securities
- --------------------------------------------------------------------------------
HIGH QUALITY DEBT SECURITIES. High quality debt securities are securities
that have received a rating from at least one nationally recognized statistical
rating organization ("NRSRO"), such as S&P or 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.
9
<PAGE>
INVESTMENT GRADE DEBT SECURITIES. "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 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 the Series 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.
LOWER-RATED SECURITIES. Debt securities rated lower than Baa by Moody's or
BBB by S&P and debt securities determined to be of comparable quality by N&B
Management ("comparable unrated securities") are considered to be below
investment grade. 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. 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 the
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 the 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 the
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.
10
<PAGE>
Borrowings
- --------------------------------------------------------------------------------
AMT Balanced Investments 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). The Series does not expect to borrow money. As a
non-fundamental policy, the Series may not 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.
Currently, the State of California imposes borrowing limitations on variable
insurance product funds. To comply with these limitations, the 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, AMT Balanced Investments may 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 Balanced Investments (fixed income portion
only) may adopt shorter weighted average duration than normal.
To the extent that the 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 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 The Series' 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.
11
<PAGE>
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.
12
<PAGE>
PERFORMANCE INFORMATION
Performance information for the Balanced Portfolio may be presented from time
to time in advertisements and sales literature. The 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. The Portfolio's total return is quoted for the one-year period, the
five-year period and for the life of the Portfolio through the most recent
calendar quarter 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 dividends and
distributions from net investment income and net realized gains, respectively.
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 the 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 the Portfolio to various indices. Advertisements may also contain
the performance rankings assigned to the Portfolio or its adviser 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 Portfolio is a managed investment vehicle investing in
a wide variety of securities, the securities owned by the 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.
13
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of one Portfolio which as of December 31, 1995 had not yet commenced investment
operations. These conversions were approved by the shareholders of the
predecessors of the Portfolios in August 1994. Each Portfolio invests all of its
net investable assets in its corresponding Series, in each case receiving a
beneficial interest in that Series. The trustees of the Trust may establish
additional portfolios or classes of shares, without the approval of
shareholders. The assets of each Portfolio belong only to that Portfolio, and
the liabilities of each Portfolio are borne solely by that Portfolio and no
other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, 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 one Portfolio
which as of December 31, 1995 had not yet commenced investment operations)
invested all of its net investable assets (cash,
14
<PAGE>
securities, and receivables relating to securities) in a corresponding Series of
Managers Trust, receiving a beneficial interest in that Series. 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 investment manager of all Series has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
28 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in the 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 the 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 the 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
15
<PAGE>
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 the 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 the 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 the 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 the Series, investors would be entitled to share pro
rata in the net assets of the Series available for distribution to investors.
16
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of the 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.
The Balanced Portfolio and AMT Balanced Investments calculate their NAVs as
of the close of regular trading on The New York Stock Exchange ("NYSE"), usually
4 p.m. Eastern time.
AMT Balanced Investments (debt securities portion) generally values its
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 verifies 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 Balanced Investments (equity portion) values its 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. AMT Balanced
Investments values all other securities and assets, including restricted
securities, by a method that the trustees of Managers Trust believe accurately
reflects fair value.
17
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
The Balanced Portfolio annually distributes substantially all of its share of
AMT Balanced Investments' 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 Balanced Portfolio offers its shares to separate accounts of the Life
Companies and to Qualified Plans. All dividends and other distributions are
distributed to the separate accounts and 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 qualify annually 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 intends to distribute all of its net income and gains to its
shareholders each year.
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.
18
<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. See "Distribution and Redemption of Trust Shares" in this
Prospectus.
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 the increase in
the value of the Variable Contract. 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 calendar
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.
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, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Series will be managed with the intention of complying 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.
19
<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, Administrator, Sub-Adviser and Distributor
- --------------------------------------------------------------------------------
N&B Management serves as the investment manager of AMT Balanced Investments,
as administrator of the Balanced Portfolio, and as distributor of the shares of
the Balanced 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 Series of Managers Trust, 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 three
other investment companies. These funds had aggregate net assets of
approximately $11.9 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 to the extent a broker is used in the
purchase and sale of portfolio securities and the sale of covered call options.
Neuberger&Berman and its affiliates, including N&B Management, manage securities
accounts that had approximately $38.7 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 $11.1 billion of assets as
of December 31, 1995. Ms. Havell has had overall responsibility for the
activities of the Fixed Income Group since 1984.
Thomas G. Wolfe and Theresa A. Havell are primarily responsible for the
day-to-day management of AMT Balanced Investments (debt securities portion). Mr.
Wolfe has been primarily responsible for AMT Balanced Investments (debt
securities portion) since October 1995. 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 Standard & Poor's Rating Group.
Mark R. Goldstein and Susan Switzer are primarily responsible for the
day-to-day management of AMT Balanced Investments (equity portion). Mr.
Goldstein is a Vice President of N&B Management and a general partner of
Neuberger&Berman. He has had primary responsibility for AMT Balanced Investments
(equity portion) since April 1993. Previously he was a securities analyst and
portfolio manager with that firm. Susan Switzer has been an
20
<PAGE>
Assistant Vice President of N&B Management since March 1995, and a portfolio
manager for Neuberger&Berman since January 1995. She has had primary
responsibility for AMT Balanced Investments (equity portion) since January 1995.
Ms. Switzer was a research analyst and assistant portfolio manager for another
money management firm from 1989 to 1994.
N&B Management serves as distributor in connection with the offering of the
Balanced Portfolio's shares. In connection with the sale of the Portfolio's
shares, the 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 the 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.
Neuberger&Berman acts as the principal broker for AMT Balanced Investments to
the extent a broker is used in the purchase and sale of portfolio securities and
in the sale of covered call options, and for those services receives brokerage
commissions. In effecting securities transactions, AMT Balanced Investments
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 the Series will be adversely affected by
personal trading of employees, the Trust, Managers Trust, N&B Management, and
Neuberger&Berman have adopted policies that regulate 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
- --------------------------------------------------------------------------------
N&B Management provides investment management services to AMT Balanced
Investments 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 the Balanced
Portfolio that include furnishing similar facilities and personnel for the
Portfolio. With the Portfolio's consent, N&B Management is authorized to
subcontract some of its responsibilities under its administration agreement with
the Portfolio to third parties. For such administrative and investment
management services, N&B Management is paid the following fees:
Fees (AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
<S> <C> <C>
- ----------------------------------------------------------------------------------
BALANCED 0.55% of first $250 million 0.30%
0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
</TABLE>
21
<PAGE>
The Balanced 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. AMT Balanced Investments 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 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 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.
Expense Limitation
- --------------------------------------------------------------------------------
N&B Management has undertaken to limit the Balanced Portfolio's expenses by
reimbursing the Portfolio for its operating expenses and its pro rata share of
AMT Balanced Investments' operating expenses, excluding the compensation of N&B
Management, 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 expense limitation by N&B Management is to reduce operating
expenses of the Balanced Portfolio and AMT Balanced Investments and thereby
increase 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 Balanced Portfolio and in so
doing performs certain bookkeeping, data processing and administrative services.
All correspondence should be sent to State Street Bank & Trust Company, P.O. Box
1978, Boston, MA 02105. State Street provides similar services to AMT Balanced
Investments as the Series' transfer agent. State Street also acts as the
custodian of the Series' and the Portfolios' assets.
22
<PAGE>
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.
23
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Program" herein, AMT
Balanced Investments, as indicated below, may make the following investments,
among others, individually or in combination, although the Series may not
necessarily buy any or all of the types of securities or use any or all of the
investment techniques that are described. These investments may be limited by
the requirements with which the Series must comply if the Portfolio is to
qualify as regulated investment companies for tax purposes. The use of hedging
or other techniques is discretionary and no representation is made that the risk
of AMT Balanced Investments will be reduced by the techniques discussed in this
section. 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. 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. The 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, the 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. The 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. The Series 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 Balanced
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 Balanced Investments may invest up to 10% of the value of its total
assets, measured at the time of investment, 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.
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
24
<PAGE>
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, the 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.
FOREIGN CURRENCY TRANSACTIONS. The 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 or interest income received in foreign
currencies. The 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. The 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 the Series if the value of
the hedged currency increased.
The 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. The 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 the 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 the 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. The
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
25
<PAGE>
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.
The Series 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.
The Series also may try to reduce the risk of securities price changes and
expected changes in prevailing currency exchange rates (hedge) and may write
covered call options and purchase put options on debt securities in its
portfolio or on foreign currencies for hedging purposes or for the purpose of
producing income. The 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 transactional expense, price volatility and a high
degree of leverage. The Series may engage in transactions in futures contracts
and related options only as permitted by regulations of the Commodity Futures
Trading Commission.
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 transactional expense,
price volatility and a high degree of leverage. 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. In a when-issued or forward
commitment transaction, the 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, the Series may lose the
opportunity to obtain a favorable price and yield. When-issued securities or
securities subject to a forward commitment 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. The Series may invest in indexed securities whose value
is linked to currencies, interest rates, commodities, indices, or other
financial indicators. Most indexed securities are short-to-intermediate term
fixed-income securities whose values at maturity or interest rates rise or fall
according to the change in one or more specified underlying instruments. Indexed
securities may be positively or negatively indexed (i.e., their value may
increase or decrease if the underlying instrument appreciates), and may have
return characteristics similar to direct investments in the underlying
instrument or to one or more options on the underlying instrument. Indexed
securities may be more volatile than the underlying instrument itself.
26
<PAGE>
REPURCHASE AGREEMENTS/SECURITIES LOANS. The Series may enter into repurchase
agreements and lend securities from its portfolio. In a repurchase agreement,
the Series buys a security from a Federal Reserve member 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). The 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 AND DOLLAR ROLLS. In a reverse repurchase
agreement, the Series sells securities to a bank or securities dealer 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, the 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 the Series' assets and are forms of leverage.
N&B Management monitors the creditworthiness of parties to reverse repurchase
agreements and dollar rolls.
CONVERTIBLE SECURITIES. The 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. Mortgage-backed securities represent interests
in, or are secured by and payable from, pools of mortgage loans, including
collateralized mortgage obligations. These securities may be U.S. Government
mortgage-backed securities, which are issued or guaranteed by a U.S. Government
agency or instrumentality (though not necessarily backed by the full faith and
credit of the United States), such as GNMA, FNMA and FHLMC certificates. Other
mortgage-backed securities are issued by private issuers, generally originators
of and investors in mortgage loans, including savings associations, mortgage
bankers, commercial banks, investment bankers, and special purpose entities.
These private mortgage-backed securities may be supported by U.S. Government
mortgage-backed securities or some form of non-government credit enhancement.
Mortgage-backed securities may have either fixed or adjustable interest rates.
Tax or regulatory changes may adversely affect the mortgage securities market.
In addition, changes in the market's perception of the issuer may affect the
value of mortgage-backed securities. The rate of return on mortgage-backed
securities may be affected by prepayments of principal on the underlying loans,
which generally increase as interest rates decline; as a result, when interest
rates decline, holders of these securities normally do not benefit from
appreciation in market value to the same extent as holders of other non-callable
debt securities. N&B Management determines the effective life and duration 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.
27
<PAGE>
ASSET-BACKED SECURITIES. Asset-backed securities represent interests in, or
are secured by and payable from pools of assets, such as consumer loans,
CARS-SM- ("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 INVESTMENTS. When market conditions warrant the Series 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. The 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, the Series will borrow a security from a brokerage
firm to make delivery to the buyer. The 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, the Series is required to pay to
the lender any accrued interest or dividend and may be required to pay a
premium.
The 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. The Series will incur a loss if the price of the security increases
between those dates. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of any premium or interest the Series may be
required to pay in connection with a short sale. The successful use of short
selling may be adversely affected by imperfect correlation between movements in
the price of the security sold short and the securities being hedged. Short
selling may defer recognition of gains or losses into another tax period.
AMT Balanced Investments may make short sales against-the-box. A short sale
is "against-the-box" when, at all times during which a short position is open,
the Series own an equal amount of such securities, or own securities giving it
the right, without payment of future consideration, to obtain an equal amount of
securities sold short.
VARIABLE AND FLOATING RATE SECURITIES. 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 the 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. The Series may rely on such instrument or
the creditworthiness of the insurer in purchasing a variable or floating rate
security.
ZERO COUPON SECURITIES. Zero coupon securities do not pay interest
currently; instead, they are sold at a discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates change. In
calculating its daily income, the Series accrues a portion of the difference
between a zero coupon bond's purchase price and its face value.
MUNICIPAL OBLIGATIONS. 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
28
<PAGE>
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. Efforts are
underway that may result in a "flat tax" or other restructuring of the federal
income tax system. These developments could reduce the value of all municipal
securities, or the securities of particular issuers.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. 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.
29
<PAGE>
USE OF JOINT PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
Each Portfolio and its corresponding Series acknowledges that it is solely
responsible for all information or lack of information about that Portfolio and
Series in 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 SAI.
30
<PAGE>
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
APPENDIX A TO PROSPECTUS
TOTAL RETURN ANALYSIS USING CONSTANT
ASSET ALLOCATION S&P "500"/2 YR.
U.S. TREASURY NOTES
1960 - 1995
<TABLE>
<CAPTION>
FIXED ASSET ALLOCATION COMPARISON TO 100%
S&P "500"/2 YR. TREASURY NOTES S&P "500" ALLOCATION
<S> <C> <C>
- -----------------------------------------------------------------
100/0 (100% S&P "500")
Return 10.73% 100.0 %
Volatility 15.7 % 100.0 %
70/30
Return 9.83 91.61
Volatility 11.4 72.4
60/40
Return 9.49 88.44
Volatility 10.0 63.5
50/50
Return 9.13 85.08
Volatility 8.6 54.9
0/100
Return 7.01 65.32
Volatility 4.2 26.6
</TABLE>
31
<PAGE>
BALANCED PORTFOLIO (FOR QUALIFIED PLANS)
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
PROSPECTUS
MAY 1, 1996
NBAMT0170596
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
Balanced Portfolio
- --------------------------------------------------------------------------------
Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to meet
differing investment objectives and currently is comprised of seven separate
Portfolios, one of which is offered herein. 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").
THIS PROSPECTUS CONTAINS INFORMATION PERTAINING TO THE BALANCED PORTFOLIO
ONLY. THIS PROSPECTUS IS USED IN CONJUNCTION WITH THE SALE OF SHARES OF THE
BALANCED PORTFOLIO TO 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. AMT BALANCED INVESTMENTS, THE BALANCED
PORTFOLIO'S CORRESPONDING SERIES, IS MANAGED BY NEUBERGER&BERMAN MANAGEMENT
INCORPORATED ("N&B MANAGEMENT"). AMT BALANCED INVESTMENTS INVESTS IN SECURITIES
IN ACCORDANCE WITH AN INVESTMENT OBJECTIVE, POLICIES, AND LIMITATIONS IDENTICAL
TO THOSE OF THE BALANCED PORTFOLIO. THE INVESTMENT PERFORMANCE OF THE BALANCED
PORTFOLIO WILL DIRECTLY CORRESPOND WITH THE INVESTMENT PERFORMANCE OF AMT
BALANCED INVESTMENTS. 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 16.
Please read this Prospectus before investing in the Balanced Portfolio and
keep it for future reference. The Prospectus contains information about the
Balanced Portfolio that a prospective investor should know before investing. A
Statement of Additional Information ("SAI") about the Portfolios and the Series,
dated May 1, 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 10158-0180.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DATE OF PROSPECTUS: MAY 1, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 3
Management 3
The Neuberger&Berman Investment
Approach 4
EXPENSE INFORMATION 5
FINANCIAL HIGHLIGHTS 7
Selected Per Share Data and Ratios 7
INVESTMENT PROGRAM 10
AMT Balanced Investments 10
Short-Term Trading; Portfolio
Turnover 11
Ratings of Securities 12
Borrowings 13
Other Investments 13
Duration 13
PERFORMANCE INFORMATION 15
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 16
The Portfolios 16
The Series 16
SHARE PRICES AND NET ASSET
VALUE 19
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 20
Dividends and Other Distributions 20
Tax Status 20
SPECIAL CONSIDERATIONS 21
MANAGEMENT AND ADMINISTRATION 22
Trustees and Officers 22
Investment Manager, Administrator,
Sub-Adviser and Distributor 22
Expenses 23
Expense Limitation 24
Transfer and Dividend Paying Agent 24
DISTRIBUTION AND REDEMPTION OF
TRUST SHARES 25
Distribution and Redemption of
Trust Shares 25
Distribution Plan 25
DESCRIPTION OF INVESTMENTS 26
USE OF JOINT PROSPECTUS AND
STATEMENT OF ADDITIONAL
INFORMATION 32
APPENDIX A TO PROSPECTUS 33
APPENDIX B TO PROSPECTUS 34
</TABLE>
2
<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 16. For more details about AMT Balanced Investments, its
investments and their risks, see "Investment Program" on page 10, "Ratings of
Securities" on page 12, "Borrowings" on page 13, and "Description of
Investments" on page 26.
Here is a summary of important features of the Balanced Portfolio and AMT
Balanced Investments. Of course, there can be no assurance that the Balanced
Portfolio will meet its investment objective.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PRINCIPAL SERIES
ADVISERS MANAGEMENT TRUST OBJECTIVE INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BALANCED PORTFOLIO Long-term capital growth and Common stocks and short-to-
reasonable current income without intermediate term debt securities,
undue risk to principal primarily investment grade
</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 AMT Balanced Investments in foreign
securities, options and futures contracts, zero coupon bonds, and debt
securities rated below investment grade. With respect to the portion of the
assets of AMT Balanced Investments which is invested in fixed income securities,
the value of which 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 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.
Management
- --------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman as sub-adviser,
selects investments for AMT Balanced Investments. N&B Management also provides
administrative services to AMT Balanced Investments and the Balanced Portfolio
and acts as distributor of the shares of the Portfolio. See "Management and
Administration" in this Prospectus.
3
<PAGE>
The Neuberger&Berman Investment Approach
- --------------------------------------------------------------------------------
AMT Balanced Investments (equity portion) is managed using a growth-oriented
investment approach. This approach seeks out stocks of companies that are
projected to grow at above-average rates and may appear poised for a period of
accelerated earnings.
The growth portfolio manager is willing to pay a higher share price in the
hope that the stock's earnings momentum will carry the stock's price higher. As
a stock's price increases based on strong earnings, the stock's original price
appears 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 or under-researched. This strategy is called "growth at a reasonable
price."
In general, AMT Balanced Investments (equity portion) place a greater
emphasis on finding securities whose measures of fundamental value are low in
relation to the growth rate of their future earnings and cash flow, as projected
by the portfolio manager, and AMT Balanced Investments (equity portion) is
therefore willing to invest in securities with prices that are somewhat higher
multiples of earnings.
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" in this Prospectus.
4
<PAGE>
EXPENSE INFORMATION
This section gives you certain information about the expenses of the Balanced
Portfolio and AMT Balanced Investments. See "Performance Information" in this
Prospectus for important facts about the investment performance of the Balanced
Portfolio, after taking expenses into account.
Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
As shown by this table, you pay no transaction charges when you buy or sell
Portfolio shares.
<TABLE>
<CAPTION>
BALANCED
PORTFOLIO
<S> <C>
Sales Charge Imposed on Purchases NONE
Sales Charge Imposed On Reinvested Dividends NONE
Deferred Sales Charges NONE
Redemption Fees NONE
Exchange Fees NONE
</TABLE>
Annual Portfolio Operating Expenses
(AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
The following tables shows annual Total Operating Expenses for the Balanced
Portfolio, which are paid out of the assets of the Balanced Portfolio and which
include the Portfolio's pro rata portion of the Operating Expenses of AMT
Balanced Investments. These expenses are borne indirectly by Balanced Portfolio
shareholders. The Balanced Portfolio pays N&B Management an administration fee
based on the Portfolio's average daily net assets. AMT Balanced Investments pays
N&B Management a management fee based on the Series' average daily net assets; a
pro rata portion of this fee is borne indirectly by the Balanced Portfolio.
Therefore, the table combines management and administration fees. The Portfolio
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.
<TABLE>
<CAPTION>
TOTAL
MANAGEMENT AND 12B-1 OTHER OPERATING
ADMINISTRATION FEES FEES EXPENSES EXPENSES
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
BALANCED PORTFOLIO 0.85% None 0.19% 1.04%
</TABLE>
Total Operating Expenses for the Balanced Portfolio are annualized
projections based upon current administration fees for the Portfolio and
management fees for AMT Balanced Investments, with "Other Expenses" based on the
Portfolio's expenses for the past fiscal year. "Management and Administration
Fees" have been restated to reflect current expenses. The trustees of the Trust
believe that the aggregate per share expenses of the Balanced Portfolio and AMT
Balanced Investments 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 AMT Balanced Investments. The trustees of the Trust also believe that
investment in AMT Balanced Investments by investors in addition to the Balanced
Portfolio may enable
5
<PAGE>
AMT Balanced Investments to achieve economies of scale which could reduce
expenses. The expenses and, accordingly, the returns of other funds that may
invest in AMT Balance Investments 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 5% and that it had annual Total 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:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BALANCED PORTFOLIO $11 $33 $57 $127
</TABLE>
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.
6
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- --------------------------------------------------------------------------------
The financial information in the following table is for the Balanced
Portfolio as of December 31, 1995 and includes data related to the 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 the Balanced Portfolio and its
predecessor fund has been audited by its respective independent auditors. You
may obtain further information about AMT Balanced Investments and the
performance of the Balanced Portfolio at no cost in the Trust's annual report to
shareholders. Also, see "Performance Information" in this Prospectus.
7
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Balanced Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Period from
February 28,
1989(3) to
Year Ended December 31, December 31,
1995(2) 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year 14.51 $15.62 $14.90 $14.16 $11.72 $11.64 $10.00
---------------------------------------------------------
Income From Investment Operations
Net Investment Income .32 .30 .34 .40 .47 .49 .30
Net Gains or Losses on Securities
(both realized and unrealized) 3.06 (.80) .61 .72 2.16 (.27)(4) 1.34
---------------------------------------------------------
Total From Investment Operations 3.38 (.50) .95 1.12 2.63 .22 1.64
---------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.28) (.23) (.20) (.19) (.19) (.07) --
Distributions (from capital gains) (.09) (.38) (.03) (.19) -- (.07) --
---------------------------------------------------------
Total Distributions (.37) (.61) (.23) (.38) (.19) (.14) --
---------------------------------------------------------
Net Asset Value, End of Year $17.52 $14.51 $15.62 $14.90 $14.16 $11.72 $11.64
---------------------------------------------------------
Total Return+ +23.76 -3.36% +6.45% +8.06% +22.68% +1.95% +16.40%(5)
---------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $144.4 $179.3 $161.1 $ 87.1 $ 28.3 $ 6.9 $ 0.6
---------------------------------------------------------
Ratio of Expenses to Average Net Assets(7) .99% .91% .90% .95% 1.10% 1.35% 1.70%(6)
---------------------------------------------------------
Ratio of Net Investment Income to Average Net
Assets(7) 1.99% 1.91% 1.96% 2.33% 3.00% 4.00% 3.28%(6)
---------------------------------------------------------
Portfolio Turnover Rate(8) 21% 55% 114% 82% 69% 77% 58%
---------------------------------------------------------
</TABLE>
NOTES:
1)The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2)The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3)February 28, 1989 is the date shares of the Balanced Portfolio were first sold
to the separate accounts pursuant to the public offering of Trust shares.
4)The amounts shown at this caption for a share outstanding throughout the year
may not accord with the change in aggregate gains and losses in securities for
the year because of the timing of sales and repurchases of Portfolio shares in
relation to fluctuating market values for the Portfolio.
5)Not annualized.
6)Annualized.
7)Since the commencement of operations, N&B Management voluntarily assumed
certain operating expenses of the Portfolio as described in Note B of Notes to
Financial Statements and in this Prospectus under "Expense Limitation." Had
N&B Management not undertaken such
8
<PAGE>
action, the annualized ratios of expenses and net investment income to average
daily net assets would have been 2.78% and 2.20%, respectively, for the period
from February 28, 1989 to December 31, 1989. There was no reduction of
expenses for the years ended December 31, 1990 through and including 1995.
8)The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Balanced Investments from May 1, 1995 to
December 31, 1995 was 55%.
+Total return based on per share net asset value reflects the effects of changes
in net asset value on the performance of the Portfolio during each year, and
assumes dividends and capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results. Total
return figures would have been lower if N&B Management had not reimbursed
certain expenses. Investment returns and principal may fluctuate and shares
when redeemed may be worth more or less than original cost. The total return
information shown does not reflect expenses that apply to the separate account
or the related insurance policies, and the inclusion of these charges would
reduce the total return figures for all years shown. Qualified Plans that are
direct shareholders of the Portfolio are not affected by insurance charges.
9
<PAGE>
INVESTMENT PROGRAM
The investment policies and limitations of the Balanced Portfolio and AMT
Balanced Investments are identical. The Balanced Portfolio invests only in AMT
Balanced Investments. Therefore, the following shows you the kinds of securities
in which AMT Balanced Investments invests. For an explanation of some types of
investments, see "Description of Investments" on page 26.
Investment policies and limitations of the Balanced Portfolio and AMT
Balanced Investments 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 Balanced Portfolio intends 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 AMT Balanced Investments and the Balanced Portfolio will achieve
their objectives. The Balanced Portfolio, by itself, does not represent a
comprehensive investment program.
Additional investment techniques, features, and limitations concerning AMT
Balanced Investments' investment program are described in the SAI.
AMT Balanced Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Balanced Investments and the Balanced
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 securities.
N&B Management has analyzed the total return performance and volatility over
the last 36 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 88.4% of the performance of the S&P
"500", with only 63.5% of the volatility. Those model balanced portfolios in
which 70% and 50% were allocated to the S&P "500" were able to achieve 91.6% and
85.1%, respectively, of the performance of the S&P "500", with only 72.4% and
54.9% 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
invest 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. This portion of the Series expects to be almost fully
invested in common stocks, often of companies that may be temporarily out of
favor in the market.
10
<PAGE>
The Series' aggressive growth investment program, with respect to its equity
portion, 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. The Series uses
a "growth at a reasonable price" 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 or cash flow) than
other Series. In addition, the equity portion of 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.
In the debt securities portion of its investments, AMT Balanced Investments
will invest in a diversified portfolio of fixed and variable rate debt
securities and seeks to increase income and preserve and enhance total return by
actively managing average portfolio duration in light of market conditions and
trends. The debt securities portion of the Series 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 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. Up to 5% of the debt securities
portion of the Series may be invested 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 four years. 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 unrated securities
determined to be of comparable quality by N&B Management ("comparable unrated
securities"). Debt securities rated below Baa by Moody's Investors Service, Inc.
("Moody's") and below BBB by Standard & Poor's Ratings Group ("S&P") are
considered to be below investment grade. Securities rated below investment grade
as well as comparable 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 or comparable unrated
securities. 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.
Short-Term Trading; Portfolio Turnover
- --------------------------------------------------------------------------------
Although AMT Balanced Investments does not purchase securities with the
intention of profiting from short-term trading, the Series may sell portfolio
securities prior to maturity when the investment adviser believes that such
action is advisable.
The portfolio turnover rates for the Balanced Portfolio and AMT Balanced
Investments, and for the predecessor of the Portfolio for the period prior to
May 1, 1995, are set forth under "Financial Highlights" in this Prospectus.
11
<PAGE>
Ratings of Securities
- --------------------------------------------------------------------------------
HIGH QUALITY DEBT SECURITIES. High quality debt securities are securities
that have received a rating from at least one nationally recognized statistical
rating organization ("NRSRO"), such as S&P or 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.
INVESTMENT GRADE DEBT SECURITIES. "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 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 the Series 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.
LOWER-RATED SECURITIES. Debt securities rated lower than Baa by Moody's or
BBB by S&P and debt securities determined to be of comparable quality by N&B
Management ("comparable unrated securities") are considered to be below
investment grade. 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. 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 the
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.
12
<PAGE>
The value of the fixed income securities in which the 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 the
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
- --------------------------------------------------------------------------------
AMT Balanced Investments 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). The Series does not expect to borrow money. As a
non-fundamental policy, the Series may not 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.
Currently, the State of California imposes borrowing limitations on variable
insurance product funds. To comply with these limitations, the 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, AMT Balanced Investments may 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 Balanced Investments (fixed income portion
only) may adopt shorter weighted average duration than normal.
To the extent that the 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 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.
13
<PAGE>
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 the Series' 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.
14
<PAGE>
PERFORMANCE INFORMATION
Performance information for the Balanced Portfolio may be presented from time
to time in advertisements and sales literature. The 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. The Portfolio's total return is quoted for the one-year period, the
five-year period and for the life of the Portfolio through the most recent
calendar quarter 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 dividends and
distributions from net investment income and net realized gains, respectively.
All performance information presented for the Portfolios is based on past
performance and does not predict future performance. Further information
regarding the 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 the Portfolio to various indices. Advertisements may also contain
the performance rankings assigned to the Portfolio or its adviser 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 Portfolio is a managed investment vehicle investing in
a wide variety of securities, the securities owned by the 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.
15
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of one Portfolio which as of December 31, 1995 had not yet commenced investment
operations. These conversions were approved by the shareholders of the
predecessors of the Portfolios in August 1994. Each Portfolio invests all of its
net investable assets in its corresponding Series, in each case receiving a
beneficial interest in that Series. The trustees of the Trust may establish
additional portfolios or classes of shares, without the approval of
shareholders. The assets of each Portfolio belong only to that Portfolio, and
the liabilities of each Portfolio are borne solely by that Portfolio and no
other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, 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 one Portfolio
which as of December 31, 1995 had not yet commenced investment operations)
invested all of its net investable assets (cash,
16
<PAGE>
securities, and receivables relating to securities) in a corresponding Series of
Managers Trust, receiving a beneficial interest in that Series. 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 investment manager of all Series has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
28 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in the 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 the 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 the 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
17
<PAGE>
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 the 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 the 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 the 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 the Series, investors would be entitled to share pro
rata in the net assets of the Series available for distribution to investors.
18
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of the 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.
The Balanced Portfolio and AMT Balanced Investments calculate their NAVs as
of the close of regular trading on The New York Stock Exchange ("NYSE"), usually
4 p.m. Eastern time.
AMT Balanced Investments (debt securities portion) generally values its
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 verifies 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 Balanced Investments (equity portion) values its 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. AMT Balanced
Investments values all other securities and assets, including restricted
securities, by a method that the trustees of Managers Trust believe accurately
reflects fair value.
19
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
The Balanced Portfolio annually distributes substantially all of its share of
AMT Balanced Investments' 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 Balanced Portfolio offers its shares to separate accounts of the Life
Companies and to Qualified Plans. All dividends and other distributions are
distributed to the separate accounts and 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 qualify annually 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 intends to distribute all of its net income and gains to its
shareholders each year.
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.
20
<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. See "Distribution and Redemption of Trust Shares" in this
Prospectus.
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 the increase in
the value of the Variable Contract. 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 calendar
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.
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, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Series will be managed with the intention of complying 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.
21
<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, Administrator, Sub-Adviser and Distributor
- --------------------------------------------------------------------------------
N&B Management serves as the investment manager of AMT Balanced Investments,
as administrator of the Balanced Portfolio, and as distributor of the shares of
the Balanced 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 Series of Managers Trust, 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 three
other investment companies. These funds had aggregate net assets of
approximately $11.9 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 to the extent a broker is used in the
purchase and sale of portfolio securities and the sale of covered call options.
Neuberger&Berman and its affiliates, including N&B Management, manage securities
accounts that had approximately $38.7 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 $11.1 billion of assets as
of December 31, 1995. Ms. Havell has had overall responsibility for the
activities of the Fixed Income Group since 1984.
Thomas G. Wolfe and Theresa A. Havell are primarily responsible for the
day-to-day management of AMT Balanced Investments (debt securities portion). Mr.
Wolfe has been primarily responsible for AMT Balanced Investments (debt
securities portion) since October 1995. 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 Standard & Poor's Rating Group.
Mark R. Goldstein and Susan Switzer are primarily responsible for the
day-to-day management of AMT Balanced Investments (equity portion). Mr.
Goldstein is a Vice President of N&B Management and a general partner of
Neuberger&Berman. He has had primary responsibility for AMT Balanced Investments
(equity portion) since April 1993. Previously he was a securities analyst and
portfolio manager with that firm. Susan Switzer has been an
22
<PAGE>
Assistant Vice President of N&B Management since March 1995, and a portfolio
manager for Neuberger&Berman since January 1995. She has had primary
responsibility for AMT Balanced Investments (equity portion) since January 1995.
Ms. Switzer was a research analyst and assistant portfolio manager for another
money management firm from 1989 to 1994.
N&B Management serves as distributor in connection with the offering of the
Balanced Portfolio's shares. In connection with the sale of the Portfolio's
shares, the 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 the 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.
Neuberger&Berman acts as the principal broker for AMT Balanced Investments to
the extent a broker is used in the purchase and sale of portfolio securities and
in the sale of covered call options, and for those services receives brokerage
commissions. In effecting securities transactions, AMT Balanced Investments
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 the Series will be adversely affected by
personal trading of employees, the Trust, Managers Trust, N&B Management, and
Neuberger&Berman have adopted policies that regulate 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
- --------------------------------------------------------------------------------
N&B Management provides investment management services to AMT Balanced
Investments 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 the Balanced
Portfolio that include furnishing similar facilities and personnel for the
Portfolio. With the Portfolio's consent, N&B Management is authorized to
subcontract some of its responsibilities under its administration agreement with
the Portfolio to third parties. For such administrative and investment
management services, N&B Management is paid the following fees:
Fees (AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
<S> <C> <C>
- ----------------------------------------------------------------------------------
BALANCED 0.55% of first $250 million 0.30%
0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
</TABLE>
23
<PAGE>
The Balanced 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. AMT Balanced Investments 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 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 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.
Expense Limitation
- --------------------------------------------------------------------------------
N&B Management has undertaken to limit the Balanced Portfolio's expenses by
reimbursing the Portfolio for its operating expenses and its pro rata share of
AMT Balanced Investments' operating expenses, excluding the compensation of N&B
Management, 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 expense limitation by N&B Management is to reduce operating
expenses of the Balanced Portfolio and AMT Balanced Investments and thereby
increase 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 Balanced Portfolio and in so
doing performs certain bookkeeping, data processing and administrative services.
All correspondence should be sent to State Street Bank & Trust Company, care of
Boston Service, P.O. Box 8403, Boston, MA 02266-8403. State Street provides
similar services to AMT Balanced Investments as the Series' transfer agent.
State Street also acts as the custodian of the Series' and the Portfolios'
assets.
24
<PAGE>
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.
25
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Program" herein, AMT
Balanced Investments, as indicated below, may make the following investments,
among others, individually or in combination, although the Series may not
necessarily buy any or all of the types of securities or use any or all of the
investment techniques that are described. These investments may be limited by
the requirements with which the Series must comply if the Portfolio is to
qualify as regulated investment companies for tax purposes. The use of hedging
or other techniques is discretionary and no representation is made that the risk
of AMT Balanced Investments will be reduced by the techniques discussed in this
section. 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. 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. The 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, the 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. The 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. The Series 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 Balanced
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 Balanced Investments may invest up to 10% of the value of its total
assets, measured at the time of investment, 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.
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
26
<PAGE>
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, the 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.
FOREIGN CURRENCY TRANSACTIONS. The 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 or interest income received in foreign
currencies. The 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. The 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 the Series if the value of
the hedged currency increased.
The 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. The 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 the 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 the 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. The
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
27
<PAGE>
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.
The Series 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.
The Series also may try to reduce the risk of securities price changes and
expected changes in prevailing currency exchange rates (hedge) and may write
covered call options and purchase put options on debt securities in its
portfolio or on foreign currencies for hedging purposes or for the purpose of
producing income. The 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 transactional expense, price volatility and a high
degree of leverage. The Series may engage in transactions in futures contracts
and related options only as permitted by regulations of the Commodity Futures
Trading Commission.
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 transactional expense,
price volatility and a high degree of leverage. 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. In a when-issued or forward
commitment transaction, the 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, the Series may lose the
opportunity to obtain a favorable price and yield. When-issued securities or
securities subject to a forward commitment 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. The Series may invest in indexed securities whose value
is linked to currencies, interest rates, commodities, indices, or other
financial indicators. Most indexed securities are short-to-intermediate term
fixed-income securities whose values at maturity or interest rates rise or fall
according to the change in one or more specified underlying instruments. Indexed
securities may be positively or negatively indexed (i.e., their value may
increase or decrease if the underlying instrument appreciates), and may have
return characteristics similar to direct investments in the underlying
instrument or to one or more options on the underlying instrument. Indexed
securities may be more volatile than the underlying instrument itself.
28
<PAGE>
REPURCHASE AGREEMENTS/SECURITIES LOANS. The Series may enter into repurchase
agreements and lend securities from its portfolio. In a repurchase agreement,
the Series buys a security from a Federal Reserve member 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). The 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 AND DOLLAR ROLLS. In a reverse repurchase
agreement, the Series sells securities to a bank or securities dealer 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, the 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 the Series' assets and are forms of leverage.
N&B Management monitors the creditworthiness of parties to reverse repurchase
agreements and dollar rolls.
CONVERTIBLE SECURITIES. The 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. Mortgage-backed securities represent interests
in, or are secured by and payable from, pools of mortgage loans, including
collateralized mortgage obligations. These securities may be U.S. Government
mortgage-backed securities, which are issued or guaranteed by a U.S. Government
agency or instrumentality (though not necessarily backed by the full faith and
credit of the United States), such as GNMA, FNMA and FHLMC certificates. Other
mortgage-backed securities are issued by private issuers, generally originators
of and investors in mortgage loans, including savings associations, mortgage
bankers, commercial banks, investment bankers, and special purpose entities.
These private mortgage-backed securities may be supported by U.S. Government
mortgage-backed securities or some form of non-government credit enhancement.
Mortgage-backed securities may have either fixed or adjustable interest rates.
Tax or regulatory changes may adversely affect the mortgage securities market.
In addition, changes in the market's perception of the issuer may affect the
value of mortgage-backed securities. The rate of return on mortgage-backed
securities may be affected by prepayments of principal on the underlying loans,
which generally increase as interest rates decline; as a result, when interest
rates decline, holders of these securities normally do not benefit from
appreciation in market value to the same extent as holders of other non-callable
debt securities. N&B Management determines the effective life and duration 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.
29
<PAGE>
ASSET-BACKED SECURITIES. Asset-backed securities represent interests in, or
are secured by and payable from pools of assets, such as consumer loans,
CARS-SM- ("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 INVESTMENTS. When market conditions warrant the Series 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. The 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, the Series will borrow a security from a brokerage
firm to make delivery to the buyer. The 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, the Series is required to pay to
the lender any accrued interest or dividend and may be required to pay a
premium.
The 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. The Series will incur a loss if the price of the security increases
between those dates. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of any premium or interest the Series may be
required to pay in connection with a short sale. The successful use of short
selling may be adversely affected by imperfect correlation between movements in
the price of the security sold short and the securities being hedged. Short
selling may defer recognition of gains or losses into another tax period.
AMT Balanced Investments may make short sales against-the-box. A short sale
is "against-the-box" when, at all times during which a short position is open,
the Series own an equal amount of such securities, or own securities giving it
the right, without payment of future consideration, to obtain an equal amount of
securities sold short.
VARIABLE AND FLOATING RATE SECURITIES. 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 the 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. The Series may rely on such instrument or
the creditworthiness of the insurer in purchasing a variable or floating rate
security.
ZERO COUPON SECURITIES. Zero coupon securities do not pay interest
currently; instead, they are sold at a discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates change. In
calculating its daily income, the Series accrues a portion of the difference
between a zero coupon bond's purchase price and its face value.
MUNICIPAL OBLIGATIONS. 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
30
<PAGE>
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. Efforts are
underway that may result in a "flat tax" or other restructuring of the federal
income tax system. These developments could reduce the value of all municipal
securities, or the securities of particular issuers.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. 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.
31
<PAGE>
USE OF JOINT PROSPECTUS AND STATEMENT
OF ADDITIONAL INFORMATION
Each Portfolio and its corresponding Series acknowledges that it is solely
responsible for all information or lack of information about that Portfolio and
Series in 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 SAI.
32
<PAGE>
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
APPENDIX A TO PROSPECTUS
TOTAL RETURN ANALYSIS USING CONSTANT
ASSET ALLOCATION S&P "500"/2 YR.
U.S. TREASURY NOTES
1960 - 1995
<TABLE>
<CAPTION>
FIXED ASSET ALLOCATION COMPARISON TO 100%
S&P "500"/2 YR. TREASURY NOTES S&P "500" ALLOCATION
<S> <C> <C>
- -----------------------------------------------------------------
100/0 (100% S&P "500")
Return 10.73% 100.0 %
Volatility 15.7 % 100.0 %
70/30
Return 9.83 91.61
Volatility 11.4 72.4
60/40
Return 9.49 88.44
Volatility 10.0 63.5
50/50
Return 9.13 85.08
Volatility 8.6 54.9
0/100
Return 7.01 65.32
Volatility 4.2 26.6
</TABLE>
33
<PAGE>
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
APPENDIX B TO PROSPECTUS
BALANCED PORTFOLIO
THIS APPENDIX DESCRIBES CERTAIN PURCHASE, EXCHANGE AND
REDEMPTION RIGHTS WHICH ARE AVAILABLE SOLELY TO QUALIFIED PLANS
THAT ARE SHAREHOLDERS OF THE TRUST.
34
<PAGE>
HOW TO BUY SHARES
You can buy shares directly by mail, wire, or telephone, or through an
exchange of shares of another Neuberger& Berman Fund-SM-. Shares are purchased
at the next price calculated on a day the New York Stock Exchange ("NYSE") is
open, after your order is received and accepted. Prices for shares of all funds
are usually calculated as of 4 p.m. Eastern time.
Minimum investment requirements are shown below.
N&B Management, in its discretion, may waive the minimum investment
requirements.
By Mail
- --------------------------------------------------------------------------------
Send your check or money order payable to "Neuberger&Berman Funds" by mail
to:
Neuberger&Berman Funds
Boston Service Center
P.O. Box 8403
Boston, MA 02266-8403
or by overnight courier, U.S. Express Mail, or registered or certified mail to:
Neuberger&Berman Funds
c/o State Street Bank and Trust Company
2 Heritage Drive
North Quincy, MA 02171
Be sure to specify the name of the Portfolio. If this is your FIRST PURCHASE,
please send a minimum of $1,000 for shares of the Portfolio you want to buy.
Unless your check or money order is made payable on its face to Neuberger&
Berman Funds-SM-, it may not be accepted.
By Wire
- --------------------------------------------------------------------------------
Call 800-877-9700 before you wire money to buy shares. Your wire goes to
State Street Bank and Trust Company ("State Street") and must include your name,
the name of the Portfolio and your account number. The minimum for a FIRST
PURCHASE and for each ADDITIONAL PURCHASE of shares of the Portfolio by wire is
$1,000.
By Telephone
- --------------------------------------------------------------------------------
Call 800-877-9700 to buy shares of the Portfolio. The minimum for a FIRST
PURCHASE and for each ADDITIONAL PURCHASE of shares of the Portfolio by
telephone is $1,000. Your order may be canceled if your payment is not received
by the third business day after your order is placed (or the fifth business day
if you placed your order before June 1, 1995). In that case you could be liable
for any resulting losses or fees the Portfolio or its agents have incurred. To
recover those losses or fees, the Portfolio has the right to redeem shares from
your account. To meet the new three day deadline, you can wire payment, send a
check through overnight mail, or call 800-877-9700 for information on how to
make electronic transfers through your bank. Please refer to "Additional
Information on Telephone Transactions."
35
<PAGE>
By Exchanging Shares
- --------------------------------------------------------------------------------
Call 800-877-9700 for instructions on how to invest by exchanging shares of
another Neuberger&Berman Fund-SM- for shares of the Portfolio. To buy the
Portfolio shares by an exchange, both fund accounts must be registered in the
same name, address, and taxpayer ID number. The minimum for a FIRST PURCHASE and
for each ADDITIONAL PURCHASE of shares of the Portfolio by an exchange is $1,000
worth of shares of the other fund. For more details, see "Shareholder
Services -- Exchange Privilege."
Other Information
- --------------------------------------------------------------------------------
/ / You must pay for your shares in U.S. dollars by check or money order
(drawn on a U.S. bank), or by bank or federal funds wire transfer; cash
cannot be accepted.
/ / The Portfolio has the right to suspend the offering of its shares for a
period of time. The Portfolio also has the right to accept or reject a
purchase order in its sole discretion, including certain purchase orders
using the exchange privilege. See "Shareholder Services -- Exchange
Privilege."
/ / If you paid by check and your check does not clear, or if you ordered
shares by telephone and fail to pay for them, your purchase will be
canceled and you could be liable for any resulting losses or fees the
Portfolio or its agents have incurred. To recover those losses or fees,
the Portfolio has the right to bill you or to redeem shares from your
account.
/ / When you sign your application for the Portfolio account, you will be
certifying that your Social Security or other taxpayer ID number is
correct and whether you are subject to backup withholding. If you violate
certain federal income tax provisions, the Internal Revenue Service can
require the Portfolio to withhold 31% of your taxable distributions and
redemptions.
36
<PAGE>
HOW TO SELL SHARES
You can sell (redeem) all or some of your shares at any time by mail,
facsimile, or telephone. You can also sell shares by exchanging them for shares
of other Neuberger&Berman Funds-SM-; see "Shareholder Services -- Exchange
Privilege" for details.
Your shares are sold at the next price calculated on a day the NYSE is open,
after your sales order is received and accepted. Prices for shares are usually
calculated as of 4 p.m. Eastern time.
Unless otherwise instructed, the Portfolio will mail a check for your sales
proceeds, payable to the owner(s) shown on your account ("record owner"), to the
address shown on your account ("record address"). You may designate in your
Portfolio application a bank account to which, at your request, State Street
will wire your sales proceeds of $1,000 or more. State Street currently charges
a fee of $8.00 for each wire, payable to you. However, if you have one or more
accounts in the Neuberger&Berman Funds-SM- aggregating $250,000 or more in
value, you will not be charged for wire redemptions; your $8.00 fee will be paid
by N&B Management.
By Mail or Facsimile Transmission (Fax)
- --------------------------------------------------------------------------------
Write a redemption request letter with your name and account number, the
Portfolio's name, and the dollar amount or number of shares of the Portfolio you
want to sell, together with any other instructions, and send it by mail to:
Neuberger&Berman Funds
Boston Service Center
P.O. Box 8403
Boston, MA 02266-8403
or by overnight courier, U.S. Express Mail, or registered or certified mail to:
Neuberger&Berman Funds
c/o State Street Bank and Trust Company
2 Heritage Drive
North Quincy, MA 02171
or by facsimile, to redeem up to $50,000 worth of shares, to 212-476-8848. In
addition, if you have changed the record address by telephone or facsimile
(permitted beginning June 1, 1995), shares may not be redeemed by facsimile for
15 days after receipt of the address change. Please call 800-877-9700 to confirm
receipt and acceptance of your order submitted by facsimile.
Be sure to have all owners sign the request exactly as their names appear on
the account and include the certificate for your shares if you have one.
To protect you and the Portfolio against fraud, your signature on a
redemption request must have a SIGNATURE GUARANTEE if (1) you want to sell more
than $50,000 worth of shares, or (2) you want the redemption check to be made
out to someone other than the record owner, or (3) you want the check to be
mailed somewhere other than to the record address, or (4) you want the proceeds
to be wired to a bank account not named in your application or in your written
instruction with a signature guarantee. You can obtain a signature guarantee
from most banks, stockbrokers and dealers, credit unions, and other financial
institutions, but not from a notary public.
37
<PAGE>
For a redemption request sent by FACSIMILE, limited to not more than $50,000,
the redemption check may only be made out to the record owner and mailed to the
record address or the proceeds wired to a bank account named in your application
or in a written instruction from the record owner with a signature guarantee.
By Telephone
- --------------------------------------------------------------------------------
To sell shares worth at least $500, call 800-877-9700, giving your name and
account number, the name of the Portfolio, and the dollar amount or number of
shares you want to sell.
You can sell shares by telephone unless you have declined this service either
in your application or later by writing or by submitting an appropriate form to
State Street. In addition, if you have changed the record address by telephone
or facsimile (permitted beginning June 1, 1995), shares may not be redeemed by
telephone for 15 days after receipt of the address change.
Please refer to "Additional Information on Telephone Transactions."
Other Information
- --------------------------------------------------------------------------------
/ / Usually, redemption proceeds will be mailed to you on the next business
day, but in any case within three calendar days (under unusual
circumstances the Portfolio may take longer, as permitted by law). You
may also call 800-877-9700 for information on how to make and receive
electronic transfers through your bank.
/ / The Portfolio may delay paying for any redemption until it is reasonably
satisfied that the check used to buy shares has cleared, which may take
up to 15 days after the purchase date. So if you plan to sell shares
shortly after buying them, you may want to pay for the purchase with a
certified check or money order or by wire transfer.
/ / The Portfolio may suspend redemptions or postpone payments on days when
the NYSE is closed (besides weekends and holidays), when trading on the
NYSE is restricted, or as permitted by the Securities and Exchange
Commission.
/ / If, because you sold shares, your account balance with the Portfolio
falls below $1,000, the Portfolio has the right to close your account
after giving you at least 60 days' written notice to reestablish the
minimum balance. If you do not do so, the Portfolio may redeem your
remaining shares at their per share NAV on the date of redemption and
will send the redemption proceeds to you.
38
<PAGE>
ADDITIONAL INFORMATION ON TELEPHONE TRANSACTIONS
The Portfolio at any time can limit the number of its shares you can buy by
telephone or can stop accepting telephone orders. You can sell or exchange
shares by telephone, unless you have declined these services in your application
or by written notice to N&B Management or State Street, with your signature
guaranteed. The Portfolio or its agent follows reasonable
procedures -- requiring you to provide a form of personal identification when
you telephone, recording your telephone call, and sending you a written
confirmation of each telephone transaction -- designed to confirm that telephone
instructions are genuine. However, neither the Portfolio nor its agent is
responsible for the authenticity of telephone instructions or for any losses
caused by fraudulent or unauthorized telephone instructions if the Portfolio or
its agent reasonably believed that the instructions were genuine.
If you are unable to reach N&B Management by telephone (which might be the
case, for example, during periods of unusual market activity), consider sending
your transaction instructions by facsimile, overnight courier, or U.S. Express
Mail.
Exchange Privilege
- --------------------------------------------------------------------------------
To exchange your shares in the Portfolio for shares in another
Neuberger&Berman Fund-SM-, call 800-877-9700 between 8 a.m. and 4 p.m., Eastern
time, on any Monday through Friday (unless the NYSE is closed). You may also
effect an exchange by sending a letter to Neuberger&Berman Management
Incorporated, 605 Third Avenue, 2nd Floor, New York, NY 10158-0006, Attention:
[Name of fund], or by sending the letter by facsimile to 212-476-8848, giving
your name and account number, the name of the fund, the dollar amount or number
of shares you want to sell, and the name of the fund whose shares you want to
buy. Please call 800-877-9700 to confirm receipt and acceptance of your order
submitted by facsimile. You can use the telephone exchange privilege unless you
have declined it in your application or by later writing to N&B Management or
State Street. An exchange must be for at least $1,000 worth of shares, and if
the exchange is your FIRST PURCHASE in another mutual fund, it must be for at
least the minimum initial investment amount for that fund. Shares are exchanged
at their next prices calculated on a day the NYSE is open, after your exchange
order is received and accepted.
Please note the following about the exchange privilege:
/ / You can exchange shares only between accounts registered in the same
name, address, and taxpayer ID number.
/ / A telephone exchange order cannot be modified or canceled.
/ / You can exchange only into a mutual fund whose shares are eligible for
sale in your state under applicable state securities laws.
/ / An exchange may have tax consequences for you.
/ / Because excessive trading (including short-term "market timing" trading)
can hurt a fund's performance, a fund may refuse any exchange orders (1)
if they appear to be market-timing transactions involving significant
portions of a fund's assets or (2) from any shareholder account if the
shareholder has been advised that previous use of the exchange privilege
was considered excessive. Accounts under common ownership or control,
including those with the same taxpayer ID number, will be considered one
account for this purpose.
/ / The Portfolio or any fund may impose other restrictions on the exchange
privilege, or modify or terminate the privilege, but will try to give you
advance notice whenever it can reasonably do so.
Please refer to "Additional Information on Telephone Transactions."
39
<PAGE>
GOVERNMENT INCOME PORTFOLIO
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
PROSPECTUS
MAY 1, 1996
NBAMT0160596
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
Government Income Portfolio
- --------------------------------------------------------------------------------
Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to meet
differing investment objectives and currently is comprised of seven separate
Portfolios, one of which is offered herein. 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 one of the Portfolios
are also offered directly to qualified pension and retirement plans ("Qualified
Plans").
THIS PROSPECTUS CONTAINS INFORMATION PERTAINING TO THE GOVERNMENT INCOME
PORTFOLIO ONLY.
- --------------------------------------------------------------------------------
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. AMT GOVERNMENT INCOME INVESTMENTS, THE
GOVERNMENT INCOME PORTFOLIO'S CORRESPONDING SERIES, IS MANAGED BY
NEUBERGER&BERMAN MANAGEMENT INCORPORATED ("N&B MANAGEMENT"). AMT GOVERNMENT
INCOME INVESTMENTS INVESTS IN SECURITIES IN ACCORDANCE WITH AN INVESTMENT
OBJECTIVE, POLICIES, AND LIMITATIONS IDENTICAL TO THOSE OF THE GOVERNMENT INCOME
PORTFOLIO. THE INVESTMENT PERFORMANCE OF THE GOVERNMENT INCOME PORTFOLIO WILL
DIRECTLY CORRESPOND WITH THE INVESTMENT PERFORMANCE OF AMT GOVERNMENT INCOME
INVESTMENTS. 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 10.
Please read this Prospectus before investing in the Government Income
Portfolio and keep it for future reference. The Prospectus contains information
about the Government Income Portfolio that a prospective investor should know
before investing. A Statement of Additional Information ("SAI") about the
Portfolios and the Series, dated May 1, 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
10158-0180.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
DATE OF PROSPECTUS: MAY 1, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 3
Management 3
FINANCIAL HIGHLIGHTS 4
Selected Per Share Data and Ratios 4
INVESTMENT PROGRAM 6
AMT Government Income Investments 6
Short-Term Trading; Portfolio
Turnover 6
Ratings of Securities 7
Borrowings 7
Other Investments 8
Duration 8
PERFORMANCE INFORMATION 9
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 10
The Portfolios 10
The Series 10
SHARE PRICES AND NET ASSET
VALUE 13
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 14
Dividends and Other Distributions 14
Tax Status 14
SPECIAL CONSIDERATIONS 15
MANAGEMENT AND ADMINISTRATION 16
Trustees and Officers 16
Investment Manager, Administrator,
Sub-Adviser and Distributor 16
Expenses 17
Expense Limitation 18
Transfer and Dividend Paying Agent 18
DISTRIBUTION AND REDEMPTION
OF TRUST SHARES 19
Distribution and Redemption of
Trust Shares 19
Distribution Plan 19
DESCRIPTION OF INVESTMENTS 20
USE OF JOINT PROSPECTUS AND
STATEMENT OF ADDITIONAL
INFORMATION 25
</TABLE>
2
<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 10. For more details about AMT Government Income
Investments, its investments and their risks, see "Investment Program" on page
6, "Ratings of Securities" on page 7, "Borrowings" on page 7, and "Description
of Investments" on page 20.
Here is a summary of important features of the Government Income Portfolio
and its corresponding Series. 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>
GOVERNMENT INCOME PORTFOLIO High level of current income and At least 65% in U.S. Government and
total return, consistent with safety Agency securities, with an emphasis
of principal on U.S. Government mortgage-backed
securities; at least 25% in
mortgage-backed and asset-backed
securities
</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 AMT Government Income Investments in
foreign securities, options and futures contracts, zero coupon bonds and swap
agreements. AMT Government Income Investments invests in fixed income
securities, the value of which 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.
Management
- --------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman as sub-adviser,
selects investments for AMT Government Income Investments. N&B Management also
provides administrative services to AMT Government Income Investments and the
Government Income Portfolio and acts as distributor of the shares of the
Portfolio. See "Management and Administration" in this Prospectus.
3
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- --------------------------------------------------------------------------------
The financial information in the following table is for the Government Income
Portfolio as of December 31, 1995 and includes data related to the 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 the Government Income
Portfolio and its predecessor fund has been audited by its respective
independent auditors. You may obtain further information about AMT Government
Income Investments and the performance of the Government Income Portfolio at no
cost in the Trust's annual report to shareholders. Also, see "Performance
Information" in this Prospectus.
4
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Government Income Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Period from
March 22,
Year Ended 1994(3) to
December 31, December 31,
1995(2) 1994
<S> <C> <C>
- --------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $10.15 $10.00
----------------------------
Income From Investment Operations
Net Investment Income .70 .37
Net Gains or Losses on Securities (both realized
and unrealized) .46 (.22)
----------------------------
Total From Investment Operations 1.16 .15
----------------------------
Less Distributions
Dividends (from net investment income) (.38) --
----------------------------
Net Asset Value, End of Year $10.93 $10.15
----------------------------
Total Return+ +11.76% +1.50%(4)
----------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 2.2 $ 1.0
----------------------------
Ratio of Expenses to Average Net Assets(6) 1.05% 1.09%(5)
----------------------------
Ratio of Net Investment Income to Average Net
Assets(6) 5.71% 4.78%(5)
----------------------------
Portfolio Turnover Rate(7) 2% 3%
----------------------------
</TABLE>
NOTES:
1)The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2)The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3)The date investment operations commenced.
4)Not annualized.
5)Annualized.
6)Since the commencement of operations, N&B Management voluntarily assumed
certain operating expenses of the Portfolio as described in Note B of Notes to
Financial Statements and in this Prospectus under "Expense Limitation." Had
such action not been undertaken, the annualized ratios of expenses and net
investment income to average daily net assets would have been 4.21% and 2.55%,
respectively, for the year ended December 31, 1995, and 2.57% and 3.30%,
respectively, for the period ended December 31, 1994.
7)The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Government Income Investments for the period
from May 1, 1995 to December 31, 1995 was 64%.
+Total return based on per share net asset value reflects the effects of changes
in net asset value on the performance of the Portfolio during each year and
assumes dividends and capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results.
Investment returns and principal may fluctuate and shares when redeemed may be
worth more or less than original cost. Total return figures would have been
lower if N&B Management had not limited certain expenses. The total return
information shown does not reflect expenses that apply to the separate account
or the related insurance policies, and the inclusion of these charges would
reduce the total return figures for all years shown.
5
<PAGE>
INVESTMENT PROGRAM
The investment policies and limitations of the Government Income Portfolio
and AMT Government Income Investments are identical. The Government Income
Portfolio invests only in AMT Government Income Investments. Therefore, the
following shows you the kinds of securities in which AMT Government Income
Investments invests. For an explanation of some types of investments, see
"Description of Investments" on page 20.
Investment policies and limitations of the Government Income Portfolio and
AMT Government Income Investments 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 Government Income Portfolio intends 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 AMT Government Income Investments and the Government Income
Portfolio will achieve their objectives. The Government Income Portfolio, by
itself, does not represent a comprehensive investment program.
Additional investment techniques, features, and limitations concerning AMT
Government Income Investments' investment program are described in the SAI.
AMT Government Income Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Government Income Investments and the
Government Income Portfolio is to provide a high level of current income and
total return, consistent with safety of principal. This investment objective is
non-fundamental. The Portfolio intends to notify shareholders 30 days in advance
of making any material change to its investment objective.
AMT Government Income Investments invests in a diversified portfolio of fixed
and variable rate debt securities and seeks to increase income and preserve or
enhance total return by actively managing average portfolio 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.
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.
6
<PAGE>
The portfolio turnover rates for the Government Income Portfolio and AMT
Government Income Investments, and for the predecessor of the Government Income
Portfolio for the period prior to May 1, 1995, are set forth under "Financial
Highlights" in this Prospectus. It is anticipated that the annual portfolio
turnover rate of AMT Government Income 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. 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.
INVESTMENT GRADE DEBT SECURITIES. "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 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 AMT Government Income 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.
Borrowings
- --------------------------------------------------------------------------------
AMT Government Income Investments, as a fundamental policy, may borrow money
from banks for any purpose, including to meet redemptions and increase the
amount available for investment, and enter into reverse repurchase agreements
(including dollar rolls) for any purpose, so long as the aggregate amount of
borrowings and reverse repurchase agreements does not exceed one-third of the
Series' total assets (including the amount borrowed) less liabilities (other
than borrowings). Leveraging (borrowing) to increase amounts available for
investment may exaggerate the effect on net asset value of any increase or
decrease in the market value of the securities of the Series. Money borrowed for
leveraging will be subject to interest costs which may or may not be recovered
by income and appreciation of the securities purchased.
Currently, the State of California imposes borrowing limitations on variable
insurance product funds. To comply with these limitations, the 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.
7
<PAGE>
Other Investments
- --------------------------------------------------------------------------------
For temporary defensive purposes, AMT Government Income Investments may
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 Government Income
Investments may adopt shorter weighted average duration than normal.
To the extent that the 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 Government Income 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.
8
<PAGE>
PERFORMANCE INFORMATION
Performance information for the Government Income Portfolio may be presented
from time to time in advertisements and sales literature. The 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. The Portfolio's total return is quoted for the one-year
period and for the life of the Portfolio through the most recent calendar
quarter, 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 dividends and distributions
from net investment income and net realized gains, respectively.
All performance information presented for the Portfolio 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 the 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 the Portfolio to various indices. Advertisements may also contain
the performance rankings assigned the Portfolio or its adviser 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 Portfolio is a managed investment vehicle investing in
a wide variety of securities, the securities owned by the 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.
9
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of the International Portfolio which as of December 31, 1995 had not yet
commenced investment operations. These conversions were approved by the
shareholders of the predecessors of the Portfolios in August 1994. Each
Portfolio invests all of its net investable assets in its corresponding Series,
in each case receiving a beneficial interest in that Series. The trustees of the
Trust may establish additional portfolios or classes of shares, without the
approval of shareholders. The assets of each Portfolio belong only to that
Portfolio, and the liabilities of each Portfolio are borne solely by that
Portfolio and no other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, 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
10
<PAGE>
(cash, securities, and receivables relating to securities) in a corresponding
Series of Managers Trust, receiving a beneficial interest in that Series. 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 investment manager of all Series has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
28 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in the 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 the 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 the 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
11
<PAGE>
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 the 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 the 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 the 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 the Series, investors would be entitled to share pro
rata in the net assets of the Series available for distribution to investors.
12
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of the 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.
The Government Income Portfolio and AMT Government Income Investments
calculate their NAVs as of the close of regular trading on The New York Stock
Exchange ("NYSE"), usually 4 p.m. Eastern time.
AMT Government Income Investments generally values 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. AMT Government Income Investments
periodically verifies 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.
13
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
The Government Income Portfolio annually distributes substantially all of its
share of AMT Government Income Investments' 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 Government Income Portfolio offers its shares solely to separate accounts
of the Life Companies. All dividends and other distributions are distributed to
the separate accounts and will be automatically invested in Trust shares.
Dividends and other distributions made by the 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 qualify annually 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 intends to distribute all of its net income and gains to its
shareholders each year.
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.
14
<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. See "Distribution and Redemption of Trust Shares" in this
Prospectus.
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 the increase in
the value of the Variable Contract. 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 calendar
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.
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, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Series will be managed with the intention of complying 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.
15
<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, Administrator, Sub-Adviser and Distributor
- --------------------------------------------------------------------------------
N&B Management serves as the investment manager of AMT Government Income
Investments, as administrator of the Government Income Portfolio, and as
distributor of the shares of the Government Income 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 Series of Managers Trust, 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
three other investment companies. These funds had aggregate net assets of
approximately $11.9 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 to the extent a broker is used in the
purchase and sale of portfolio securities and the sale of covered call options.
Neuberger&Berman and its affiliates, including N&B Management, manage securities
accounts that had approximately $38.7 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 $11.1 billion of assets as
of December 31, 1995. Ms. Havell has had overall responsibility for the
activities of the Fixed Income Group since 1984.
William H. Cunningham and Theresa A. Havell are primarily responsible for the
day-to-day management of AMT Government Income Investments. Mr. Cunningham has
been primarily responsible for AMT Government Income Investments since October
1995. 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.
N&B Management serves as distributor in connection with the offering of the
Government Income Portfolio's shares. In connection with the sale of the
Portfolio's shares, the 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.
16
<PAGE>
The distributor is responsible only for information given and statements and
representations made in the 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.
Neuberger&Berman acts as the principal broker for AMT Government Income
Investments to the extent a broker is used in the purchase and sale of portfolio
securities and in the sale of covered call options, and for those services
receives brokerage commissions. In effecting securities transactions, AMT
Government Income Investments 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 the Series will be adversely affected by
personal trading of employees, the Trust, Managers Trust, N&B Management, and
Neuberger&Berman have adopted policies that regulate 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
- --------------------------------------------------------------------------------
N&B Management provides investment management services to AMT Government
Income Investments 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 the Government
Income Portfolio that include furnishing similar facilities and personnel for
the Portfolio. With the Portfolio's consent, N&B Management is authorized to
subcontract some of its responsibilities under its administration agreement with
the Portfolio to third parties. For such administrative and investment
management services, N&B Management is paid the following fees:
Fees (AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
<S> <C> <C>
- ----------------------------------------------------------------------------------
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>
The Government Income 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. AMT Government Income Investments 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 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
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.
17
<PAGE>
Expense Limitation
- --------------------------------------------------------------------------------
N&B Management has undertaken to limit the Government Income Portfolio's
expenses by reimbursing the Portfolio for its operating expenses and its pro
rata share of AMT Government Income Investments' operating expenses, including
the compensation of N&B Management, but excluding 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 expense limitation by N&B Management is to reduce operating
expenses of the Government Income Portfolio and AMT Government Income
Investments and thereby increase 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 Government Income Portfolio
and in so doing performs certain bookkeeping, data processing and administrative
services. All correspondence should be sent to State Street Bank & Trust
Company, P.O. Box 1978, Boston, MA 02105. State Street provides similar services
to AMT Government Income Investments as the Series' transfer agent. State Street
also acts as the custodian of and the Portfolios' assets.
18
<PAGE>
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.
19
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Program" herein, AMT
Government Income Investments, as indicated below, may make the following
investments, among others, individually or in combination, although the Series
may not necessarily buy any or all of the types of securities or use any or all
of the investment techniques that are described. These investments may be
limited by the requirements with which the Series must comply if the Portfolio
is to qualify as regulated investment companies for tax purposes. The use of
hedging or other techniques is discretionary and no representation is made that
the risk of AMT Government Income Investments will be reduced by the techniques
discussed in this section. 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. 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. The 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, the 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. The 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. The Series 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 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.
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
20
<PAGE>
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, the 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.
FOREIGN CURRENCY TRANSACTIONS. The 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 or interest income received in foreign
currencies. The 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. The 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 the Series if the value of
the hedged currency increased.
The 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. The 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 the 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 the 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. The
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.
The Series 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.
21
<PAGE>
The Series also may try to reduce the risk of securities price changes and
expected changes in prevailing currency exchange rates (hedge) and may write
covered call options and purchase put options on debt securities in its
portfolio or on foreign currencies for hedging purposes or for the purpose of
producing income. The 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 transactional expense, price volatility and a high
degree of leverage. The Series may engage in transactions in futures contracts
and related options only as permitted by regulations of the Commodity Futures
Trading Commission.
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 transactional expense,
price volatility and a high degree of leverage. 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. In a when-issued or forward
commitment transaction, the 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, the Series may lose the
opportunity to obtain a favorable price and yield. When-issued securities or
securities subject to a forward commitment 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. The Series may invest in indexed securities whose value
is linked to currencies, interest rates, commodities, indices, or other
financial indicators. Most indexed securities are short-to-intermediate term
fixed-income securities whose values at maturity or interest rates rise or fall
according to the change in one or more specified underlying instruments. Indexed
securities may be positively or negatively indexed (i.e., their value may
increase or decrease if the underlying instrument appreciates), and may have
return characteristics similar to direct investments in the underlying
instrument or to one or more options on the underlying instrument. Indexed
securities may be more volatile than the underlying instrument itself.
REPURCHASE AGREEMENTS/SECURITIES LOANS. The Series may enter into repurchase
agreements and lend securities from its portfolio. In a repurchase agreement,
the Series buys a security from a Federal Reserve member 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). The Series also may lend portfolio securities to
banks, brokerage firms, or institutional
22
<PAGE>
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 AND DOLLAR ROLLS. In a reverse repurchase
agreement, the Series sells securities to a bank or securities dealer 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, the 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 the Series' assets and are forms of leverage.
N&B Management monitors the creditworthiness of parties to reverse repurchase
agreements and dollar rolls.
MORTGAGE-BACKED SECURITIES. Mortgage-backed securities represent interests
in, or are secured by and payable from, pools of mortgage loans, including
collateralized mortgage obligations. These securities may be U.S. Government
mortgage-backed securities, which are issued or guaranteed by a U.S. Government
agency or instrumentality (though not necessarily backed by the full faith and
credit of the United States), such as GNMA, FNMA and FHLMC certificates. Other
mortgage-backed securities are issued by private issuers, generally originators
of and investors in mortgage loans, including savings associations, mortgage
bankers, commercial banks, investment bankers, and special purpose entities.
These private mortgage-backed securities may be supported by U.S. Government
mortgage-backed securities or some form of non-government credit enhancement.
Mortgage-backed securities may have either fixed or adjustable interest rates.
Tax or regulatory changes may adversely affect the mortgage securities market.
In addition, changes in the market's perception of the issuer may affect the
value of mortgage-backed securities. The rate of return on mortgage-backed
securities may be affected by prepayments of principal on the underlying loans,
which generally increase as interest rates decline; as a result, when interest
rates decline, holders of these securities normally do not benefit from
appreciation in market value to the same extent as holders of other non-callable
debt securities. N&B Management determines the effective life and duration 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. Asset-backed securities represent interests in, or
are secured by and payable from pools of assets, such as consumer loans,
CARS-SM- ("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.
SWAP AGREEMENTS. 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."
23
<PAGE>
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 creditworthiness 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. 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 the 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. The Series may rely on such instrument or
the creditworthiness of the insurer in purchasing a variable or floating rate
security.
ZERO COUPON SECURITIES. Zero coupon securities do not pay interest
currently; instead, they are sold at a discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates change. In
calculating its daily income, the Series accrues a portion of the difference
between a zero coupon bond's purchase price and its face value.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. 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.
24
<PAGE>
USE OF JOINT PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
Each Portfolio and its corresponding Series acknowledges that it is solely
responsible for all information or lack of information about that Portfolio and
Series in 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 SAI.
25
<PAGE>
GROWTH PORTFOLIO
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
PROSPECTUS
MAY 1, 1996
NBAMT0110596
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
Growth Portfolio
- --------------------------------------------------------------------------------
Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to meet
differing investment objectives and currently is comprised of seven separate
Portfolios, one of which is offered herein. 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 one of the Portfolios
are also offered directly to qualified pension and retirement plans ("Qualified
Plans").
THIS PROSPECTUS CONTAINS INFORMATION PERTAINING TO THE GROWTH PORTFOLIO ONLY.
- --------------------------------------------------------------------------------
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. AMT GROWTH INVESTMENTS, THE GROWTH
PORTFOLIO'S CORRESPONDING SERIES, IS MANAGED BY NEUBERGER&BERMAN MANAGEMENT
INCORPORATED ("N&B MANAGEMENT"). AMT GROWTH INVESTMENTS INVESTS IN SECURITIES IN
ACCORDANCE WITH AN INVESTMENT OBJECTIVE, POLICIES, AND LIMITATIONS IDENTICAL TO
THOSE OF THE GROWTH PORTFOLIO. THE INVESTMENT PERFORMANCE OF THE GROWTH
PORTFOLIO WILL DIRECTLY CORRESPOND WITH THE INVESTMENT PERFORMANCE OF AMT GROWTH
INVESTMENTS. 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 10.
Please read this Prospectus before investing in the Growth Portfolio and keep
it for future reference. The Prospectus contains information about the Growth
Portfolio that a prospective investor should know before investing. A Statement
of Additional Information ("SAI") about the Portfolios and the Series, dated May
1, 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 10158-0180.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
DATE OF PROSPECTUS: MAY 1, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 3
Management 3
The Neuberger&Berman Investment
Approach 3
FINANCIAL HIGHLIGHTS 5
Selected Per Share Data and Ratios 5
INVESTMENT PROGRAM 7
AMT Growth Investments 7
Short-Term Trading; Portfolio
Turnover 7
Ratings of Securities 8
Borrowings 8
Other Investments 8
PERFORMANCE INFORMATION 9
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 10
The Portfolios 10
The Series 10
SHARE PRICES AND NET ASSET
VALUE 13
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 14
Dividends and Other Distributions 14
Tax Status 14
SPECIAL CONSIDERATIONS 15
MANAGEMENT AND ADMINISTRATION 16
Trustees and Officers 16
Investment Manager, Administrator,
Sub-Adviser and Distributor 16
Expenses 17
Expense Limitation 18
Transfer and Dividend Paying Agent 18
DISTRIBUTION AND REDEMPTION
OF TRUST SHARES 19
Distribution and Redemption of
Trust Shares 19
Distribution Plan 19
DESCRIPTION OF INVESTMENTS 20
USE OF JOINT STATEMENT
OF ADDITIONAL INFORMATION 24
</TABLE>
2
<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 respective
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 10. For more details about AMT Growth
Investments, its investments and their risks, see "Investment Program" on page
7, "Ratings of Securities" on page 8, "Borrowings" on page 8 , and "Description
of Investments" on page 20.
Here is a summary of important features of the Growth Portfolio and its
corresponding Series. Of course, there can be no assurance that the Portfolio
will meet its investment objective.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PRINCIPAL SERIES
ADVISERS MANAGEMENT TRUST OBJECTIVE INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GROWTH PORTFOLIO Capital appreciation, without regard Common stocks
to income
</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 AMT Growth Investments in foreign
securities, options and futures contracts and zero coupon bonds.
Management
- --------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman as sub-adviser,
selects investments for AMT Growth Investments. N&B Management also provides
administrative services to AMT Growth Investments and the Growth Portfolio and
acts as distributor of the shares of the Portfolio. See "Management and
Administration" in this Prospectus.
The Neuberger&Berman Investment Approach
- --------------------------------------------------------------------------------
AMT Growth Investments is managed using a growth-oriented investment
approach. This approach seeks out stocks of companies that are projected to grow
at above-average rates and may appear poised for a period of accelerated
earnings.
The growth portfolio manager is willing to pay a higher share price in the
hope that the stock's earnings momentum will carry the stock's price higher. As
a stock's price increases based on strong earnings, the stock's original price
appears 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 or under-researched. This strategy is called "growth at a reasonable
price."
3
<PAGE>
In general, AMT Growth Investments places a greater emphasis on finding
securities whose measures of fundamental value are low in relation to the growth
rate of their future earnings and cash flow, as projected by the portfolio
manager, and AMT Growth Investments is therefore willing to invest in securities
with prices that are somewhat higher multiples of earnings.
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" in this Prospectus.
4
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- --------------------------------------------------------------------------------
The financial information in the following table is for the Growth Portfolio
as of December 31, 1995 and includes data related to the 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 the Growth Portfolio and its
predecessor fund has been audited by its respective independent auditors. You
may obtain further information about AMT Growth Investments and the performance
of the Growth Portfolio at no cost in the Trust's annual report to shareholders.
Also, see "Performance Information" in this Prospectus.
5
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Growth Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Year Ended December 31,
1995(2) 1994 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Year $20.31 $24.28 $23.27 $21.47 $16.82 $20.28 $16.20 $12.86 $15.21 $13.38
-------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .01 .07 .13 .21 .31 .43 .43 .32 .34 .26
Net Gains or Losses on
Securities
(both realized and
unrealized) 6.26 (1.11) 1.42 1.82 4.64 (2.04) 4.24 3.02 (.96) 1.73
-------------------------------------------------------------------------------------------------
Total From Investment
Operations 6.27 (1.04) 1.55 2.03 4.95 (1.61) 4.67 3.34 (.62) 1.99
-------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.05) (.12) (.17) (.23) (.30) (.29) (.27) -- (.48) (.09)
Distributions
(from capital gains) (.67) (2.81) (.37) -- -- (1.56) (.32) -- (1.25) (.07)
-------------------------------------------------------------------------------------------------
Total Distributions (.72) (2.93) (.54) (.23) (.30) (1.85) (.59) -- (1.73) (.16)
-------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $25.86 $20.31 $24.28 $23.27 $21.47 $16.82 $20.28 $16.20 $12.86 $15.21
-------------------------------------------------------------------------------------------------
Total Return+ +31.73% -4.99% +6.79% +9.54% +29.73% -8.19% +29.47% +25.97% -4.89% +14.94%
-------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $537.8 $369.3 $366.5 $304.8 $228.9 $118.8 $92.8 $48.7 $33.8 $31.6
-------------------------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets .90% .84% .81% .82% .86% .91% .97% .92% .89% 1.00%
-------------------------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets .04% .26% .52% .92% 1.43% 2.12% 2.10% 2.12% 2.05% 1.50%
-------------------------------------------------------------------------------------------------
Portfolio Turnover Rate(3) 9% 46% 92% 63% 57% 76% 105% 95% 87% 83%
-------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1)The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2)The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3)The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Growth Investments for the period from May 1,
1995 to December 31, 1995 was 35%.
+Total return based on per share net asset value reflects the effects of changes
in net asset value on the performance of the Portfolio during each year and
assumes dividends and capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results.
Investment returns and principal may fluctuate and shares when redeemed may be
worth more or less than original cost. The total return information shown does
not reflect expenses that apply to the separate account or the related
insurance policies, and inclusion of these charges would reduce the total
return figures for all periods shown.
6
<PAGE>
INVESTMENT PROGRAM
The investment policies and limitations of the Growth Portfolio and AMT
Growth Investments are identical. The Growth Portfolio invests only in AMT
Growth Investments. Therefore, the following shows you the kinds of securities
in which AMT Growth Investments invests. For an explanation of some types of
investments, see "Description of Investments" on page 20.
Investment policies and limitations of the Growth Portfolio and AMT Growth
Investments 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
Growth Portfolio intends 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 AMT
Growth Investments and the Growth Portfolio will achieve their objectives. The
Growth Portfolio, by itself, does not represent a comprehensive investment
program.
Additional investment techniques, features, and limitations concerning AMT
Growth Investments' investment program are described in the SAI.
AMT Growth Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Growth Investments and the Growth 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 generally 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. The Series uses a "growth at a
reasonable price" 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 or cash flow) 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.
Short-Term Trading; Portfolio Turnover
- --------------------------------------------------------------------------------
While AMT Growth Investments does not purchase securities with the intention
of profiting from short-term trading, it may sell portfolio securities prior to
maturity when the investment adviser believes that such action is advisable.
The portfolio turnover rates for the Growth Portfolio and AMT Growth
Investments, and for the predecessor of the Growth Portfolio for the period
prior to May 1, 1995, are set forth under "Financial Highlights" in this
Prospectus. It is anticipated that the annual portfolio turnover rate of AMT
Growth Investments in some fiscal years may exceed 100%.
7
<PAGE>
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. 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.
INVESTMENT GRADE DEBT SECURITIES. "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 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 AMT Growth 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.
Borrowings
- --------------------------------------------------------------------------------
AMT Growth Investments 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). The Series does not expect to borrow money. As a
non-fundamental policy, the Series may purchase portfolio securities if its
outstanding borrowings, including reverse repurchase agreements, exceed 5% of
its total assets.
Currently, the State of California imposes borrowing limitations on variable
insurance product 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, AMT Growth Investments may 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.
To the extent that the Series is invested in temporary defensive instruments,
it will not be pursuing its investment objective.
8
<PAGE>
PERFORMANCE INFORMATION
Performance information for the Growth Portfolio may be presented from time
to time in advertisements and sales literature. The 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, the
five-year period and ten-year period through the most recent calendar quarter
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 dividends and distributions from net
investment income and net realized gains, respectively.
All performance information presented for the Portfolio 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 Portfolio
which will take into account insurance-related charges and expenses under such
insurance policies and contracts. Further information regarding the 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 Portfolio is a managed investment vehicle
investing in a wide variety of securities, the securities owned by the 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.
9
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of one Portfolio which as of December 31, 1995 had not yet commenced investment
operations. These conversions were approved by the shareholders of the
predecessors of the Portfolios in August 1994. Each Portfolio invests all of its
net investable assets in its corresponding Series, in each case receiving a
beneficial interest in that Series. The trustees of the Trust may establish
additional portfolios or classes of shares, without the approval of
shareholders. The assets of each Portfolio belong only to that Portfolio, and
the liabilities of each Portfolio are borne solely by that Portfolio and no
other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, 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
10
<PAGE>
(cash, securities, and receivables relating to securities) in a corresponding
Series of Managers Trust, receiving a beneficial interest in that Series. 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 investment manager of all Series has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
28 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in a Series other than a Portfolio redeemed its interest in the Series,
the Series' remaining investors (including the Portfolio) might, as a result,
experience higher pro rata operating expenses, thereby producing lower returns.
Each Portfolio may withdraw its entire investment from its corresponding
Series at any time, if the trustees of the Trust determine that it is in the
best interests of the Portfolio and its shareholders to do so. A Portfolio might
withdraw, for example, if there were other investors in the Series with power
to, and who did by a vote of all investors (including the Portfolio), change the
investment objective, policies, or limitations of the Series in a manner not
acceptable to the trustees of the Trust. A withdrawal could result in a
distribution in kind of securities (as opposed to a cash distribution) by the
Series. That distribution could result in a less diversified portfolio of
investments for the Portfolio and could affect adversely the liquidity of the
Portfolio's investment portfolio. If a Portfolio decided to convert those
securities to cash, it usually would incur brokerage fees or other transaction
costs. If a Portfolio withdrew its investment from a Series, the trustees would
consider what action might be taken, including the investment of all of the
Portfolio's net investable assets in another pooled investment entity having
substantially the same investment objective as the Portfolio or the retention by
the Portfolio of its own investment manager to manage its assets in accordance
with its investment objective, policies, and limitations. The inability of the
Portfolio to find a suitable replacement could have a significant impact on
shareholders.
INVESTOR MEETINGS AND VOTING. Each Series normally will not hold meetings of
investors except as required by the 1940 Act. Each investor in a Series will be
entitled to vote in proportion to its relative beneficial interest in the
Series. On most issues subjected to a vote of investors, as required by the 1940
Act and other applicable law, a Portfolio will solicit proxies from its
shareholders and will vote its interest in the Series in proportion to the votes
cast by the
11
<PAGE>
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.
12
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of a Series, the market value of the securities the Series holds
plus cash and other assets; in the case of a Portfolio, its percentage interest
in its corresponding Series, multiplied by the Series' NAV, plus any other
assets). Each Portfolio's per share NAV is calculated by dividing its NAV by the
number of Portfolio shares outstanding and rounding the result to the nearest
full cent.
The Growth Portfolio and AMT Growth Investments calculate their NAVs as of
the close of regular trading on The New York Stock Exchange ("NYSE"), usually 4
p.m. Eastern time.
AMT Growth Investments values its 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. AMT Growth Investments values all other
securities and assets, including restricted securities, by a method that the
trustees of Managers Trust believe accurately reflects fair value.
13
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
The Growth Portfolio annually distributes substantially all of its share of
AMT Growth Investments' 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 Growth Portfolio offers its shares solely to separate accounts of the
Life Companies. All dividends and other distributions are distributed to the
separate accounts and will be automatically invested in shares. Dividends and
other distributions made by the 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 qualify annually 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 intends to distribute all of its net income and gains to its
shareholders each year.
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.
14
<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. See "Distribution and Redemption of Trust Shares" in this
Prospectus.
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 the increase in
the value of the Variable Contract. 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 calendar
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.
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, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Series will be managed with the intention of complying 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.
15
<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, Administrator, Sub-Adviser and Distributor
- --------------------------------------------------------------------------------
N&B Management serves as the investment manager of AMT Growth Investments, as
administrator of the Growth Portfolio, and as distributor of the shares of the
Growth 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
Series of Managers Trust, 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 three other investment companies. These
funds had aggregate net assets of approximately $11.9 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 portfolio
securities and the sale of covered call options. Neuberger&Berman and its
affiliates, including N&B Management, manage securities accounts that had
approximately $38.7 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.
Mark R. Goldstein and Susan Switzer are primarily responsible for the
day-to-day management of AMT Growth Investments. Mr. Goldstein is a Vice
President of N&B Management and a general partner of Neuberger&Berman. He has
had primary responsibility for AMT Growth Investments since April 1993.
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. She has
had primary responsibility for AMT Growth Investments since January 1995. Ms.
Switzer was a research analyst and assistant portfolio manager for another money
management firm from 1989 to 1994.
N&B Management serves as distributor in connection with the offering of the
Growth Portfolio's shares. In connection with the sale of the Portfolio's
shares, the Portfolio has authorized the distributor to give only such
information and to make only such statements and representations as are
contained in the representations made in the 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.
16
<PAGE>
Neuberger&Berman acts as the principal broker for AMT Growth Investments in
the purchase and sale of portfolio securities and in the sale of covered call
options, and for those services receives brokerage commissions. In effecting
securities transactions, AMT Growth Investments 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 regulate 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
- --------------------------------------------------------------------------------
N&B Management provides investment management services to AMT Growth
Investments 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 the Growth Portfolio
that include furnishing similar facilities and personnel for the Portfolio. With
the Portfolio's consent, N&B Management is authorized to subcontract some of its
responsibilities under its administration agreement with the Portfolio to third
parties. For such administrative and investment management services, N&B
Management is paid the following fees:
Fees (AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
<S> <C> <C>
- ----------------------------------------------------------------------------------
GROWTH 0.55% of first $250 million 0.30%
0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
</TABLE>
The Growth 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. AMT Growth Investments 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 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 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.
17
<PAGE>
Expense Limitation
- --------------------------------------------------------------------------------
N&B Management has undertaken to limit the Growth Portfolio's expenses by
reimbursing the Portfolio for its operating expenses and its pro rata share of
AMT Growth Investments' operating expenses, excluding the compensation of N&B
Management, taxes, interest, extraordinary expenses, brokerage commissions and
transaction costs, that exceed 1% of the Growth 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 expense limitation by N&B Management is to reduce operating
expenses of the Portfolio and the Series and thereby increase 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 Growth Portfolio and in so
doing performs certain bookkeeping, data processing and administrative services.
All correspondence should be sent to State Street Bank & Trust Company, P.O. Box
1978, Boston, MA 02105. State Street provides similar services to AMT Growth
Investments as the Series' transfer agent. State Street also acts as the
custodian of the Series' and the Portfolio's assets.
18
<PAGE>
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
one 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.
19
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Program" herein, AMT
Growth Investments may make the following investments, among others,
individually or in combination, although the Series may not necessarily buy any
or all of the types of securities or use any or all of the investment techniques
that are described. These investments may be limited by the requirements with
which the Series must comply if the Portfolio is to qualify as regulated
investment companies for tax purposes. The use of hedging or other techniques is
discretionary and no representation is made that the risk of AMT Growth
Investments will be reduced by the techniques discussed in this section. 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. 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. The 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, the 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. The 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. The Series 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.
The Series may each invest up to 10% of the value of its total assets,
measured at the time of investment, 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.
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
20
<PAGE>
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, the 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.
FOREIGN CURRENCY TRANSACTIONS. The 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 or interest income received in foreign
currencies. The 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. The 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.
The 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. The 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 the 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 the Series from adverse exchange rates,
they involve risk of loss if N&B Management fails to predict foreign currency
values correctly.
CALL OPTIONS. The 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.
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 transactional expense,
price volatility and a high degree of leverage. The writing of options could
result in significant increases in the Series' turnover rate.
21
<PAGE>
The primary risks in using call options are (1) imperfect correlation or no
correlation between changes in market value of the securities held by the Series
and the prices of the options; (2) possible lack of a liquid secondary market
for options and the resulting inability to close out an option when desired; (3)
the fact that the skills needed to use options are different from those needed
to select the Series' securities; (4) the fact that, although use of options 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. Options are
considered derivatives.
FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. In a when-issued or forward
commitment transaction, the 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, the Series may lose the
opportunity to obtain a favorable price and yield. When-issued securities or
securities subject to a forward commitment 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.
REPURCHASE AGREEMENTS/SECURITIES LOANS. The Series may enter into repurchase
agreements and lend securities from its portfolio. In a repurchase agreement,
the Series buys a security from a Federal Reserve member 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). The 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. In a reverse repurchase agreement, the Series
sells securities to a bank or securities dealer 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. 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 may increase the
fluctuation in the market value of the Series' assets and are forms of leverage.
N&B Management monitors the creditworthiness of parties to reverse repurchase
agreements.
CONVERTIBLE SECURITIES. The 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.
OTHER INVESTMENTS. The Series ordinarily invests primarily in common stocks,
when market conditions warrant the Series 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. The 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, the Series will
22
<PAGE>
borrow a security from a brokerage firm to make delivery to the buyer. The
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, the
Series is required to pay to the lender any accrued interest or dividend and may
be required to pay a premium.
The 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. The Series will incur a loss if the price of the security increases
between those dates. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of any premium or interest the Series may be
required to pay in connection with a short sale. The successful use of short
selling may be adversely affected by imperfect correlation between movements in
the price of the security sold short and the securities being hedged. Short
selling may defer recognition of gains or losses into another tax period.
The Series may make short sales against-the-box. A short sale is
"against-the-box" when, at all times during which a short position is open, the
Series owns an equal amount of such securities, or owns securities giving it the
right, without payment of future consideration, to obtain an equal amount of
securities sold short.
ZERO COUPON SECURITIES. Zero coupon securities do not pay interest
currently; instead, they are sold at a discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates change. In
calculating its daily income, the Series accrues a portion of the difference
between a zero coupon bond's purchase price and its face value.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. 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.
23
<PAGE>
USE OF JOINT 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 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 and combined SAI.
24
<PAGE>
AETNA GROWTH PORTFOLIO
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
PROSPECTUS
MAY 1, 1996
NBAMTAEG0596
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
Growth Portfolio
- --------------------------------------------------------------------------------
Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to meet
differing investment objectives and currently is comprised of seven separate
Portfolios, one of which is offered herein. 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 one of the Portfolios
are also offered directly to qualified pension and retirement plans ("Qualified
Plans").
THIS PROSPECTUS CONTAINS INFORMATION PERTAINING TO THE GROWTH PORTFOLIO ONLY.
- --------------------------------------------------------------------------------
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. AMT GROWTH INVESTMENTS, THE GROWTH
PORTFOLIO'S CORRESPONDING SERIES, IS MANAGED BY NEUBERGER&BERMAN MANAGEMENT
INCORPORATED ("N&B MANAGEMENT"). AMT GROWTH INVESTMENTS INVESTS IN SECURITIES IN
ACCORDANCE WITH AN INVESTMENT OBJECTIVE, POLICIES, AND LIMITATIONS IDENTICAL TO
THOSE OF THE GROWTH PORTFOLIO. THE INVESTMENT PERFORMANCE OF THE GROWTH
PORTFOLIO WILL DIRECTLY CORRESPOND WITH THE INVESTMENT PERFORMANCE OF AMT GROWTH
INVESTMENTS. 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 10.
Please read this Prospectus before investing in the Growth Portfolio and keep
it for future reference. The Prospectus contains information about the Growth
Portfolio that a prospective investor should know before investing. A Statement
of Additional Information ("SAI") about the Portfolios and the Series, dated May
1, 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 10158-0180.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
DATE OF PROSPECTUS: MAY 1, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 3
Management 3
The Neuberger&Berman Investment
Approach 3
FINANCIAL HIGHLIGHTS 5
Selected Per Share Data and Ratios 5
INVESTMENT PROGRAM 7
AMT Growth Investments 7
Short-Term Trading; Portfolio
Turnover 7
Ratings of Securities 8
Borrowings 8
Other Investments 8
PERFORMANCE INFORMATION 9
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 10
The Portfolios 10
The Series 10
SHARE PRICES AND NET ASSET
VALUE 13
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 14
Dividends and Other Distributions 14
Tax Status 14
SPECIAL CONSIDERATIONS 15
MANAGEMENT AND ADMINISTRATION 16
Trustees and Officers 16
Investment Manager, Administrator,
Sub-Adviser and Distributor 16
Expenses 17
Expense Limitation 18
Transfer and Dividend Paying Agent 18
DISTRIBUTION AND REDEMPTION
OF TRUST SHARES 19
Distribution and Redemption of
Trust Shares 19
Distribution Plan 19
DESCRIPTION OF INVESTMENTS 20
USE OF JOINT STATEMENT
OF ADDITIONAL INFORMATION 24
</TABLE>
2
<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 respective
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 10. For more details about AMT Growth
Investments, its investments and their risks, see "Investment Program" on page
7, "Ratings of Securities" on page 8, "Borrowings" on page 8 , and "Description
of Investments" on page 20.
Here is a summary of important features of the Growth Portfolio and its
corresponding Series. Of course, there can be no assurance that the Portfolio
will meet its investment objective.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PRINCIPAL SERIES
ADVISERS MANAGEMENT TRUST OBJECTIVE INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GROWTH PORTFOLIO Capital appreciation, without regard Common stocks
to income
</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 AMT Growth Investments in foreign
securities, options and futures contracts and zero coupon bonds.
Management
- --------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman as sub-adviser,
selects investments for AMT Growth Investments. N&B Management also provides
administrative services to AMT Growth Investments and the Growth Portfolio and
acts as distributor of the shares of the Portfolio. See "Management and
Administration" in this Prospectus.
The Neuberger&Berman Investment Approach
- --------------------------------------------------------------------------------
AMT Growth Investments is managed using a growth-oriented investment
approach. This approach seeks out stocks of companies that are projected to grow
at above-average rates and may appear poised for a period of accelerated
earnings.
The growth portfolio manager is willing to pay a higher share price in the
hope that the stock's earnings momentum will carry the stock's price higher. As
a stock's price increases based on strong earnings, the stock's original price
appears 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 or under-researched. This strategy is called "growth at a reasonable
price."
3
<PAGE>
In general, AMT Growth Investments places a greater emphasis on finding
securities whose measures of fundamental value are low in relation to the growth
rate of their future earnings and cash flow, as projected by the portfolio
manager, and AMT Growth Investments is therefore willing to invest in securities
with prices that are somewhat higher multiples of earnings.
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" in this Prospectus.
4
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- --------------------------------------------------------------------------------
The financial information in the following table is for the Growth Portfolio
as of December 31, 1995 and includes data related to the 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 the Growth Portfolio and its
predecessor fund has been audited by its respective independent auditors. You
may obtain further information about AMT Growth Investments and the performance
of the Growth Portfolio at no cost in the Trust's annual report to shareholders.
Also, see "Performance Information" in this Prospectus.
5
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Growth Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Year Ended December 31,
1995(2) 1994 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Year $20.31 $24.28 $23.27 $21.47 $16.82 $20.28 $16.20 $12.86 $15.21 $13.38
-------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .01 .07 .13 .21 .31 .43 .43 .32 .34 .26
Net Gains or Losses on
Securities
(both realized and
unrealized) 6.26 (1.11) 1.42 1.82 4.64 (2.04) 4.24 3.02 (.96) 1.73
-------------------------------------------------------------------------------------------------
Total From Investment
Operations 6.27 (1.04) 1.55 2.03 4.95 (1.61) 4.67 3.34 (.62) 1.99
-------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.05) (.12) (.17) (.23) (.30) (.29) (.27) -- (.48) (.09)
Distributions
(from capital gains) (.67) (2.81) (.37) -- -- (1.56) (.32) -- (1.25) (.07)
-------------------------------------------------------------------------------------------------
Total Distributions (.72) (2.93) (.54) (.23) (.30) (1.85) (.59) -- (1.73) (.16)
-------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $25.86 $20.31 $24.28 $23.27 $21.47 $16.82 $20.28 $16.20 $12.86 $15.21
-------------------------------------------------------------------------------------------------
Total Return+ +31.73% -4.99% +6.79% +9.54% +29.73% -8.19% +29.47% +25.97% -4.89% +14.94%
-------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $537.8 $369.3 $366.5 $304.8 $228.9 $118.8 $92.8 $48.7 $33.8 $31.6
-------------------------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets .90% .84% .81% .82% .86% .91% .97% .92% .89% 1.00%
-------------------------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets .04% .26% .52% .92% 1.43% 2.12% 2.10% 2.12% 2.05% 1.50%
-------------------------------------------------------------------------------------------------
Portfolio Turnover Rate(3) 9% 46% 92% 63% 57% 76% 105% 95% 87% 83%
-------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1)The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2)The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3)The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Growth Investments for the period from May 1,
1995 to December 31, 1995 was 35%.
+Total return based on per share net asset value reflects the effects of changes
in net asset value on the performance of the Portfolio during each year and
assumes dividends and capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results.
Investment returns and principal may fluctuate and shares when redeemed may be
worth more or less than original cost. The total return information shown does
not reflect expenses that apply to the separate account or the related
insurance policies, and inclusion of these charges would reduce the total
return figures for all periods shown.
6
<PAGE>
INVESTMENT PROGRAM
The investment policies and limitations of the Growth Portfolio and AMT
Growth Investments are identical. The Growth Portfolio invests only in AMT
Growth Investments. Therefore, the following shows you the kinds of securities
in which AMT Growth Investments invests. For an explanation of some types of
investments, see "Description of Investments" on page 20.
Investment policies and limitations of the Growth Portfolio and AMT Growth
Investments 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
Growth Portfolio intends 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 AMT
Growth Investments and the Growth Portfolio will achieve their objectives. The
Growth Portfolio, by itself, does not represent a comprehensive investment
program.
Additional investment techniques, features, and limitations concerning AMT
Growth Investments' investment program are described in the SAI.
AMT Growth Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Growth Investments and the Growth 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 generally 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. The Series uses a "growth at a
reasonable price" 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 or cash flow) 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.
Short-Term Trading; Portfolio Turnover
- --------------------------------------------------------------------------------
While AMT Growth Investments does not purchase securities with the intention
of profiting from short-term trading, it may sell portfolio securities prior to
maturity when the investment adviser believes that such action is advisable.
The portfolio turnover rates for the Growth Portfolio and AMT Growth
Investments, and for the predecessor of the Growth Portfolio for the period
prior to May 1, 1995, are set forth under "Financial Highlights" in this
Prospectus. It is anticipated that the annual portfolio turnover rate of AMT
Growth Investments in some fiscal years may exceed 100%.
7
<PAGE>
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. 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.
INVESTMENT GRADE DEBT SECURITIES. "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 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 AMT Growth 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.
Borrowings
- --------------------------------------------------------------------------------
AMT Growth Investments 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). The Series does not expect to borrow money. As a
non-fundamental policy, the Series may purchase portfolio securities if its
outstanding borrowings, including reverse repurchase agreements, exceed 5% of
its total assets.
Currently, the State of California imposes borrowing limitations on variable
insurance product 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, AMT Growth Investments may 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.
To the extent that the Series is invested in temporary defensive instruments,
it will not be pursuing its investment objective.
8
<PAGE>
PERFORMANCE INFORMATION
Performance information for the Growth Portfolio may be presented from time
to time in advertisements and sales literature. The 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, the
five-year period and ten-year period through the most recent calendar quarter
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 dividends and distributions from net
investment income and net realized gains, respectively.
All performance information presented for the Portfolio 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 Portfolio
which will take into account insurance-related charges and expenses under such
insurance policies and contracts. Further information regarding the 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 Portfolio is a managed investment vehicle
investing in a wide variety of securities, the securities owned by the 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.
9
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of one Portfolio which as of December 31, 1995 had not yet commenced investment
operations. These conversions were approved by the shareholders of the
predecessors of the Portfolios in August 1994. Each Portfolio invests all of its
net investable assets in its corresponding Series, in each case receiving a
beneficial interest in that Series. The trustees of the Trust may establish
additional portfolios or classes of shares, without the approval of
shareholders. The assets of each Portfolio belong only to that Portfolio, and
the liabilities of each Portfolio are borne solely by that Portfolio and no
other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, 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
10
<PAGE>
(cash, securities, and receivables relating to securities) in a corresponding
Series of Managers Trust, receiving a beneficial interest in that Series. 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 investment manager of all Series has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
28 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in a Series other than a Portfolio redeemed its interest in the Series,
the Series' remaining investors (including the Portfolio) might, as a result,
experience higher pro rata operating expenses, thereby producing lower returns.
Each Portfolio may withdraw its entire investment from its corresponding
Series at any time, if the trustees of the Trust determine that it is in the
best interests of the Portfolio and its shareholders to do so. A Portfolio might
withdraw, for example, if there were other investors in the Series with power
to, and who did by a vote of all investors (including the Portfolio), change the
investment objective, policies, or limitations of the Series in a manner not
acceptable to the trustees of the Trust. A withdrawal could result in a
distribution in kind of securities (as opposed to a cash distribution) by the
Series. That distribution could result in a less diversified portfolio of
investments for the Portfolio and could affect adversely the liquidity of the
Portfolio's investment portfolio. If a Portfolio decided to convert those
securities to cash, it usually would incur brokerage fees or other transaction
costs. If a Portfolio withdrew its investment from a Series, the trustees would
consider what action might be taken, including the investment of all of the
Portfolio's net investable assets in another pooled investment entity having
substantially the same investment objective as the Portfolio or the retention by
the Portfolio of its own investment manager to manage its assets in accordance
with its investment objective, policies, and limitations. The inability of the
Portfolio to find a suitable replacement could have a significant impact on
shareholders.
INVESTOR MEETINGS AND VOTING. Each Series normally will not hold meetings of
investors except as required by the 1940 Act. Each investor in a Series will be
entitled to vote in proportion to its relative beneficial interest in the
Series. On most issues subjected to a vote of investors, as required by the 1940
Act and other applicable law, a Portfolio will solicit proxies from its
shareholders and will vote its interest in the Series in proportion to the votes
cast by the
11
<PAGE>
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.
12
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of a Series, the market value of the securities the Series holds
plus cash and other assets; in the case of a Portfolio, its percentage interest
in its corresponding Series, multiplied by the Series' NAV, plus any other
assets). Each Portfolio's per share NAV is calculated by dividing its NAV by the
number of Portfolio shares outstanding and rounding the result to the nearest
full cent.
The Growth Portfolio and AMT Growth Investments calculate their NAVs as of
the close of regular trading on The New York Stock Exchange ("NYSE"), usually 4
p.m. Eastern time.
AMT Growth Investments values its 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. AMT Growth Investments values all other
securities and assets, including restricted securities, by a method that the
trustees of Managers Trust believe accurately reflects fair value.
13
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
The Growth Portfolio annually distributes substantially all of its share of
AMT Growth Investments' 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 Growth Portfolio offers its shares solely to separate accounts of the
Life Companies. All dividends and other distributions are distributed to the
separate accounts and will be automatically invested in shares. Dividends and
other distributions made by the 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 qualify annually 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 intends to distribute all of its net income and gains to its
shareholders each year.
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.
14
<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. See "Distribution and Redemption of Trust Shares" in this
Prospectus.
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 the increase in
the value of the Variable Contract. 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 calendar
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.
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, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Series will be managed with the intention of complying 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.
15
<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, Administrator, Sub-Adviser and Distributor
- --------------------------------------------------------------------------------
N&B Management serves as the investment manager of AMT Growth Investments, as
administrator of the Growth Portfolio, and as distributor of the shares of the
Growth 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
Series of Managers Trust, 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 three other investment companies. These
funds had aggregate net assets of approximately $11.9 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 portfolio
securities and the sale of covered call options. Neuberger&Berman and its
affiliates, including N&B Management, manage securities accounts that had
approximately $38.7 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.
Mark R. Goldstein and Susan Switzer are primarily responsible for the
day-to-day management of AMT Growth Investments. Mr. Goldstein is a Vice
President of N&B Management and a general partner of Neuberger&Berman. He has
had primary responsibility for AMT Growth Investments since April 1993.
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. She has
had primary responsibility for AMT Growth Investments since January 1995. Ms.
Switzer was a research analyst and assistant portfolio manager for another money
management firm from 1989 to 1994.
N&B Management serves as distributor in connection with the offering of the
Growth Portfolio's shares. In connection with the sale of the Portfolio's
shares, the Portfolio has authorized the distributor to give only such
information and to make only such statements and representations as are
contained in the representations made in the 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.
16
<PAGE>
Neuberger&Berman acts as the principal broker for AMT Growth Investments in
the purchase and sale of portfolio securities and in the sale of covered call
options, and for those services receives brokerage commissions. In effecting
securities transactions, AMT Growth Investments 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 regulate 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
- --------------------------------------------------------------------------------
N&B Management provides investment management services to AMT Growth
Investments 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 the Growth Portfolio
that include furnishing similar facilities and personnel for the Portfolio. With
the Portfolio's consent, N&B Management is authorized to subcontract some of its
responsibilities under its administration agreement with the Portfolio to third
parties. For such administrative and investment management services, N&B
Management is paid the following fees:
Fees (AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
<S> <C> <C>
- ----------------------------------------------------------------------------------
GROWTH 0.55% of first $250 million 0.30%
0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
</TABLE>
The Growth 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. AMT Growth Investments 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 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 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.
17
<PAGE>
Expense Limitation
- --------------------------------------------------------------------------------
N&B Management has undertaken to limit the Growth Portfolio's expenses by
reimbursing the Portfolio for its operating expenses and its pro rata share of
AMT Growth Investments' operating expenses, excluding the compensation of N&B
Management, taxes, interest, extraordinary expenses, brokerage commissions and
transaction costs, that exceed 1% of the Growth 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 expense limitation by N&B Management is to reduce operating
expenses of the Portfolio and the Series and thereby increase 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 Growth Portfolio and in so
doing performs certain bookkeeping, data processing and administrative services.
All correspondence should be sent to State Street Bank & Trust Company, P.O. Box
1978, Boston, MA 02105. State Street provides similar services to AMT Growth
Investments as the Series' transfer agent. State Street also acts as the
custodian of the Series' and the Portfolio's assets.
18
<PAGE>
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
one 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.
19
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Program" herein, AMT
Growth Investments may make the following investments, among others,
individually or in combination, although the Series may not necessarily buy any
or all of the types of securities or use any or all of the investment techniques
that are described. These investments may be limited by the requirements with
which the Series must comply if the Portfolio is to qualify as regulated
investment companies for tax purposes. The use of hedging or other techniques is
discretionary and no representation is made that the risk of AMT Growth
Investments will be reduced by the techniques discussed in this section. 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. 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. The 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, the 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. The 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. The Series 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.
The Series may each invest up to 10% of the value of its total assets,
measured at the time of investment, 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.
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
20
<PAGE>
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, the 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.
FOREIGN CURRENCY TRANSACTIONS. The 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 or interest income received in foreign
currencies. The 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. The 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.
The 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. The 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 the 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 the Series from adverse exchange rates,
they involve risk of loss if N&B Management fails to predict foreign currency
values correctly.
CALL OPTIONS. The 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.
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 transactional expense,
price volatility and a high degree of leverage. The writing of options could
result in significant increases in the Series' turnover rate.
21
<PAGE>
The primary risks in using call options are (1) imperfect correlation or no
correlation between changes in market value of the securities held by the Series
and the prices of the options; (2) possible lack of a liquid secondary market
for options and the resulting inability to close out an option when desired; (3)
the fact that the skills needed to use options are different from those needed
to select the Series' securities; (4) the fact that, although use of options 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. Options are
considered derivatives.
FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. In a when-issued or forward
commitment transaction, the 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, the Series may lose the
opportunity to obtain a favorable price and yield. When-issued securities or
securities subject to a forward commitment 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.
REPURCHASE AGREEMENTS/SECURITIES LOANS. The Series may enter into repurchase
agreements and lend securities from its portfolio. In a repurchase agreement,
the Series buys a security from a Federal Reserve member 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). The 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. In a reverse repurchase agreement, the Series
sells securities to a bank or securities dealer 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. 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 may increase the
fluctuation in the market value of the Series' assets and are forms of leverage.
N&B Management monitors the creditworthiness of parties to reverse repurchase
agreements.
CONVERTIBLE SECURITIES. The 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.
OTHER INVESTMENTS. The Series ordinarily invests primarily in common stocks,
when market conditions warrant the Series 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. The 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, the Series will
22
<PAGE>
borrow a security from a brokerage firm to make delivery to the buyer. The
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, the
Series is required to pay to the lender any accrued interest or dividend and may
be required to pay a premium.
The 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. The Series will incur a loss if the price of the security increases
between those dates. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of any premium or interest the Series may be
required to pay in connection with a short sale. The successful use of short
selling may be adversely affected by imperfect correlation between movements in
the price of the security sold short and the securities being hedged. Short
selling may defer recognition of gains or losses into another tax period.
The Series may make short sales against-the-box. A short sale is
"against-the-box" when, at all times during which a short position is open, the
Series owns an equal amount of such securities, or owns securities giving it the
right, without payment of future consideration, to obtain an equal amount of
securities sold short.
ZERO COUPON SECURITIES. Zero coupon securities do not pay interest
currently; instead, they are sold at a discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates change. In
calculating its daily income, the Series accrues a portion of the difference
between a zero coupon bond's purchase price and its face value.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. 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.
23
<PAGE>
USE OF JOINT 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 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 and combined SAI.
24
<PAGE>
INTERNATIONAL PORTFOLIO
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
PROSPECTUS
MAY 1, 1996
NBAMTINT0596
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
International Portfolio
- --------------------------------------------------------------------------------
Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to meet
differing investment objectives and currently is comprised of seven separate
Portfolios, one of which is offered herein. 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 one Portfolio are also
offered directly to qualified pension and retirement plans ("Qualified Plans").
THIS PROSPECTUS CONTAINS INFORMATION PERTAINING TO THE INTERNATIONAL
PORTFOLIO ONLY.
- --------------------------------------------------------------------------------
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. AMT INTERNATIONAL INVESTMENTS, THE
CORRESPONDING SERIES OF THE INTERNATIONAL PORTFOLIO, IS MANAGED BY
NEUBERGER&BERMAN MANAGEMENT INCORPORATED ("N&B MANAGEMENT"). AMT INTERNATIONAL
INVESTMENTS INVESTS IN SECURITIES IN ACCORDANCE WITH AN INVESTMENT OBJECTIVE,
POLICIES, AND LIMITATIONS IDENTICAL TO THOSE OF THE INTERNATIONAL PORTFOLIO. THE
INVESTMENT PERFORMANCE OF THE INTERNATIONAL PORTFOLIO WILL DIRECTLY CORRESPOND
WITH THE INVESTMENT PERFORMANCE OF AMT INTERNATIONAL INVESTMENTS. 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 10.
Please read this Prospectus before investing in the International Portfolio
and keep it for future reference. The Prospectus contains information about the
International Portfolio that a prospective investor should know before
investing. A Statement of Additional Information ("SAI") about the Portfolios
and the Series, dated May 1, 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 10158-0180.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
DATE OF PROSPECTUS: MAY 1, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 3
Management 4
The Neuberger&Berman Investment
Approach 4
FINANCIAL HIGHLIGHTS 5
INVESTMENT PROGRAM 6
AMT International Investments 6
Short-Term Trading; Portfolio
Turnover 7
Ratings of Securities 7
Borrowings 8
Other Investments 8
PERFORMANCE INFORMATION 9
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 10
The Portfolios 10
The Series 10
SHARE PRICES AND NET ASSET
VALUE 13
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 14
Dividends and Other Distributions 14
Tax Status 14
SPECIAL CONSIDERATIONS 15
MANAGEMENT AND ADMINISTRATION 16
Trustees and Officers 16
Investment Manager, Administrator,
Sub-Adviser and Distributor 16
Expenses 17
Expense Limitation 17
Transfer and Dividend Paying Agent 18
DISTRIBUTION AND REDEMPTION
OF TRUST SHARES 19
Distribution and Redemption of
Trust Shares 19
Distribution Plan 19
DESCRIPTION OF INVESTMENTS 20
USE OF JOINT PROSPECTUS AND
STATEMENT OF ADDITIONAL
INFORMATION 25
</TABLE>
2
<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 10. For more details about AMT International Investments,
its investments and their risks, see "Investment Program" on page 6, "Ratings of
Securities" on page 7, "Borrowings" on page 8, and "Description of Investments"
on page 20.
Here is a summary of important features of the International Portfolio and
AMT International Investments. Of course, there can be no assurance that the
International Portfolio will meet its investment objective.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PRINCIPAL SERIES
ADVISERS MANAGEMENT TRUST OBJECTIVE INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INTERNATIONAL PORTFOLIO Long-term capital appreciation by Equity securities of issuers
investing primarily in a diversified organized and doing business
portfolio of equity securities of primarily outside the U.S.
foreign issuers
</TABLE>
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 AMT International Investments in
foreign securities, options and futures contracts, zero coupon bonds and swap
agreements, and debt securities rated below investment grade. AMT International
Investments invests in fixed income securities, the value of which 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 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. From
time to time, the Series may invest a significant portion of its 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
3
<PAGE>
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 likely
to be 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 use of hedging or other techniques is
discretionary and no representation is made that the risk of AMT International
Investments will be reduced by the use of such techniques. 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" in this Prospectus.
Management
- --------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman as sub-adviser,
selects investments for AMT International Investments. N&B Management also
provides administrative services to AMT International Investments and the
International Portfolio and acts as distributor of the shares of the Portfolio.
See "Management and Administration" in this Prospectus.
The Neuberger&Berman Investment Approach
- --------------------------------------------------------------------------------
AMT International Investments uses an investment process that includes a
combination of country selection and individual security selection primarily
based on a value-driven investment approach. 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" in this Prospectus.
4
<PAGE>
FINANCIAL HIGHLIGHTS
As of December 31, 1995, AMT International Investments and the International
Portfolio had not yet commenced investment operations. Accordingly, financial
highlights are not available for the International Portfolio.
5
<PAGE>
INVESTMENT PROGRAM
The investment policies and limitations of the International Portfolio and
AMT International Investments are identical. The International Portfolio invests
only in AMT International Investments. Therefore, the following shows you the
kinds of securities in which AMT International Investments invests. For an
explanation of some types of investments, see "Description of Investments" on
page 20.
Investment policies and limitations of the International Portfolio and AMT
International Investments 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 International Portfolio intends 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 AMT International Investments and the International Portfolio
will achieve their objectives. The Portfolio, by itself, does not represent a
comprehensive investment program.
Additional investment techniques, features, and limitations concerning AMT
International Investments' investment programs are described in the SAI.
AMT International Investments
- --------------------------------------------------------------------------------
The investment objective of AMT International Investments and the
International 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, determined 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 Series' 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 more heavily in
certain countries than in others. From time to time, the Series may invest a
significant part of its assets in Japan. 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,
and may purchase foreign corporate and government debt securities.
Because the International Portfolio, through AMT International Investments,
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 Portfolio 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 Portfolio may
use techniques such as options, futures,
6
<PAGE>
forward foreign currency exchange contracts ("forward contracts"), and short
selling, for hedging purposes and in an attempt to realize income. The Portfolio
may also use leverage to facilitate transactions entered into by the Portfolio
for hedging purposes. The use of these strategies may entail special risks.
For more details about investments of the Series, see "Description of
Investments" in this Prospectus.
Short-Term Trading; Portfolio Turnover
- --------------------------------------------------------------------------------
Although AMT International Investments does not purchase securities with the
intention of profiting from short-term trading, the Series may sell portfolio
securities prior to maturity when the investment adviser believes that such
action is advisable.
Ratings of Securities
- --------------------------------------------------------------------------------
HIGH QUALITY DEBT SECURITIES. 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.
INVESTMENT GRADE DEBT SECURITIES. "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 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 the Series 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.
LOWER-RATED SECURITIES. Debt securities rated lower than Baa by Moody's or
BBB by S&P and debt securities determined to be of comparable quality by N&B
Management ("comparable unrated securities") are considered to be below
investment grade. AMT International Investments may invest up to 5% of its net
assets, measured at the time of investment, in debt securities including those
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
7
<PAGE>
could adversely affect the price at which the 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 the 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 the
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
- --------------------------------------------------------------------------------
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.
Currently, the State of California imposes borrowing limitations on variable
insurance product 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, 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 the Series is invested in temporary defensive instruments,
it will not be pursuing its investment objective.
8
<PAGE>
PERFORMANCE INFORMATION
Performance information for the International Portfolio may be presented from
time to time in advertisements and sales literature. The 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. The Portfolio's total return is quoted through the most recent calendar
quarter 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 dividends and distributions
from net investment income and net realized gains, respectively.
All performance information presented for the Portfolio 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.
Advertisements concerning the Trust may from time to time compare the
performance of the Portfolio to various indices. Advertisements may also contain
the performance rankings assigned the Portfolio or its adviser 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 Portfolio is a managed investment vehicle investing in
a wide variety of securities, the securities owned by the 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.
9
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of the International Portfolio which as of December 31, 1995 had not yet
commenced investment operations. These conversions were approved by the
shareholders of the predecessors of the Portfolios in August 1994. Each
Portfolio invests all of its net investable assets in its corresponding Series,
in each case receiving a beneficial interest in that Series. The trustees of the
Trust may establish additional portfolios or classes of shares, without the
approval of shareholders. The assets of each Portfolio belong only to that
Portfolio, and the liabilities of each Portfolio are borne solely by that
Portfolio and no other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, 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
10
<PAGE>
(cash, securities, and receivables relating to securities) in a corresponding
Series of Managers Trust, receiving a beneficial interest in that Series. 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 investment manager of all Series has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
28 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in the 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 the 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 the 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
11
<PAGE>
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 the 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 the 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 the 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 the Series, investors would be entitled to share pro
rata in the net assets of the Series available for distribution to investors.
12
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of the 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.
The International Portfolio and AMT International Investments calculate their
NAVs as of the close of regular trading on The New York Stock Exchange ("NYSE"),
usually 4 p.m. Eastern time.
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.
13
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
The International Portfolio annually distributes substantially all of its
share of AMT International Investments' 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 International Portfolio offers its shares solely to separate accounts of
the Life Companies. All dividends and other distributions are distributed to the
separate accounts and will be automatically invested in Trust shares. Dividends
and other distributions made by the 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 qualify annually 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 intends to distribute all of its net income and gains to its
shareholders each year.
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.
14
<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. See "Distribution and Redemption of Trust Shares" in this
Prospectus.
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 the increase in
the value of the Variable Contract. 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 calendar
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.
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, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Series will be managed with the intention of complying 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.
15
<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, Administrator, Sub-Adviser and Distributor
- --------------------------------------------------------------------------------
N&B Management serves as the investment manager of AMT International
Investments, as administrator of the International Portfolio, and as distributor
of the shares of the International 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 Series of Managers Trust, 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 three
other investment companies. These funds had aggregate net assets of
approximately $11.9 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.
Neuberger&Berman and its affiliates, including N&B Management, manage securities
accounts that had approximately $38.7 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.
Felix Rovelli and Robert Cresci are the portfolio managers of AMT
International Investments. Mr. Rovelli is primarily responsible for the
day-to-day management of the portfolio securities of AMT International
Investments. Mr. Rovelli has been a Vice President at N&B Management since
November 1995. Mr. Rovelli has had primary responsibility for AMT International
Investments since June 1994. Previously, he was a Senior Vice President-Senior
Equity Portfolio Manager of BNP-N&B Global Asset Management, L.P., from May 1994
to October 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. Mr. Cresci is an Assistant Vice President of N&B Management and was
an Assistant Portfolio Manager of BNP-N&B Global Asset Management, L.P., from
May 1994 to October 1995. He previously served as an assistant portfolio manager
of another mutual fund that invested in international equity securities from
1992 until May 1994.
N&B Management serves as distributor in connection with the offering of the
International Portfolio's shares. In connection with the sale of the Portfolio's
shares, the 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
16
<PAGE>
distributor is responsible only for information given and statements and
representations made in the 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.
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 the Series will be adversely affected by
personal trading of employees, the Trust, Managers Trust, N&B Management, and
Neuberger&Berman have adopted policies that regulate 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
- --------------------------------------------------------------------------------
N&B Management provides investment management services to AMT International
Investments 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 the International
Portfolio that include furnishing similar facilities and personnel for the
Portfolio. With the Portfolio's consent, N&B Management is authorized to
subcontract some of its responsibilities under its administration agreement with
the Portfolio to third parties. For such administrative and investment
management services, N&B Management is paid the following fees:
Fees (AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
<S> <C> <C>
- ----------------------------------------------------------------------------------
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 over $1.5 billion
</TABLE>
The International 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. AMT International Investments 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 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 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.
Expense Limitation
- --------------------------------------------------------------------------------
From November 30, 1995 through December 31, 1996, N&B Management has
undertaken to limit the International Portfolio's expenses by reimbursing the
Portfolio for its operating expenses and its pro rata share of AMT
17
<PAGE>
International Investments' 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, expenses borne by N&B Management pursuant to the
previous sentence, so long as the Portfolio Expense Limitation is not exceeded.
The effect of any expense limitation by N&B Management 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 International Portfolio and
in so doing performs certain bookkeeping, data processing and administrative
services. All correspondence should be sent to State Street Bank & Trust
Company, P.O. Box 1978, Boston, MA 02105. State Street provides similar services
to AMT International Investments as the Series' transfer agent. State Street
also acts as the custodian of the Series' and the Portfolios' assets.
18
<PAGE>
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
one 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.
19
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Program" herein, AMT
International Investments, as indicated below, may make the following
investments, among others, individually or in combination, although the Series
may not necessarily buy any or all of the types of securities or use any or all
of the investment techniques that are described. These investments may be
limited by the requirements with which the Series must comply if the Portfolio
is to qualify as regulated investment companies for tax purposes. The use of
hedging or other techniques is discretionary and no representation is made that
the risk of AMT International Investments will be reduced by the techniques
discussed in this section. 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. 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. The 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, the 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. The 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. The Series 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. The Series 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.
The Series 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
20
<PAGE>
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, the 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. The Series may invest a substantial portion of its
assets in securities of Japanese issuers. The performance of the Portfolio may
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
experienced a severe recession, including a decline in real estate values and
other events that adversely affected the balance sheets of many financial
institutions and indicate that there may be structural weaknesses in the
Japanese financial system. The effects of this economic downturn may be felt for
a considerable period and are being exacerbated by the currency exchange rate.
Japan is undergoing a period of political instability, which may undercut its
ability to promptly resolve trading disputes with the U.S. Japan is heavily
dependent on foreign oil. Japan is located in a seismically active area, and
severe earthquakes may damage important elements of the country's
infrastructure. 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. The Series may invest up
to 5% of its net assets, measured at the time of investment, in U.S.
dollar-denominated and non-U.S. dollar-denominated corporate and government debt
securities of foreign issuers. The Series may invest in debt securities of any
rating, including those rated below investment grade and unrated securities.
FOREIGN CURRENCY TRANSACTIONS. The 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 or interest income received in foreign
currencies. The 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. The Series may also enter into contracts to sell foreign
currencies to protect against a decline in
21
<PAGE>
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 the
Series if the value of the hedged currency increased.
The 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. The 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 the 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 the 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. 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.
The Series 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.
The Series 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, the Series 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 transactional expense,
22
<PAGE>
price volatility and a high degree of leverage. The Series 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. In a when-issued or forward
commitment transaction, the 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, the Series may lose the
opportunity to obtain a favorable price and yield. When-issued securities or
securities subject to a forward commitment 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. The Series may invest in indexed securities whose value
is linked to currencies, interest rates, commodities, indices, or other
financial indicators. Most indexed securities are short-to-intermediate term
fixed-income securities whose values at maturity or interest rates rise or fall
according to the change in one or more specified underlying instruments. Indexed
securities may be positively or negatively indexed (i.e., their value may
increase or decrease if the underlying instrument appreciates), and may have
return characteristics similar to direct investments in the underlying
instrument or to one or more options on the underlying instrument. Indexed
securities may be more volatile than the underlying instrument itself.
REPURCHASE AGREEMENTS/SECURITIES LOANS. The Series may enter into repurchase
agreements and lend securities from its portfolio. In a repurchase agreement,
the Series buys a security 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). The 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. In a reverse repurchase agreement, the Series
sells securities to a bank or securities dealer 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. 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 may increase the
fluctuation in the market value of the Series' assets and are forms of leverage.
N&B Management monitors the creditworthiness of parties to reverse repurchase
agreements.
23
<PAGE>
CONVERTIBLE SECURITIES. The 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.
OTHER INVESTMENT COMPANIES. The Series may invest up to 10% of its total
assets, measured at the time of investment, 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.
SHORT SELLING. The 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, the Series will borrow a security from a brokerage
firm to make delivery to the buyer. The 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, the Series is required to pay to
the lender any accrued interest or dividend and may be required to pay a
premium.
The 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. The Series will incur a loss if the price of the security increases
between those dates. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of any premium or interest the Series may be
required to pay in connection with a short sale. The successful use of short
selling may be adversely affected by imperfect correlation between movements in
the price of the security sold short and the securities being hedged. Short
selling may defer recognition of gains or losses into another tax period.
The Series may make short sales against-the-box. A short sale is
"against-the-box" when, at all times during which a short position is open, the
Series owns an equal amount of such securities, or own securities giving it the
right, without payment of future consideration, to obtain an equal amount of
securities sold short.
ZERO COUPON SECURITIES. Zero coupon securities do not pay interest
currently; instead, they are sold at a discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates change. In
calculating its daily income, the Series accrues a portion of the difference
between a zero coupon bond's purchase price and its face value.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. 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.
24
<PAGE>
USE OF JOINT PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION
Each Portfolio and its corresponding Series acknowledges that it is solely
responsible for all information or lack of information about that Portfolio and
Series in 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 SAI.
25
<PAGE>
LIMITED MATURITY BOND PORTFOLIO
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
PROSPECTUS
MAY 1, 1996
NBAMT0120596
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio
- --------------------------------------------------------------------------------
Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to meet
differing investment objectives and currently is comprised of seven separate
Portfolios, one of which is offered herein. 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 one of the Portfolios
are also offered directly to qualified pension and retirement plans ("Qualified
Plans").
THIS PROSPECTUS CONTAINS INFORMATION PERTAINING TO THE LIMITED MATURITY BOND
PORTFOLIO ONLY.
- --------------------------------------------------------------------------------
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. AMT LIMITED MATURITY BOND INVESTMENTS,
THE LIMITED MATURITY BOND PORTFOLIO'S CORRESPONDING SERIES, IS MANAGED BY
NEUBERGER&BERMAN MANAGEMENT INCORPORATED ("N&B MANAGEMENT"). AMT LIMITED
MATURITY BOND INVESTMENTS INVESTS IN SECURITIES IN ACCORDANCE WITH AN INVESTMENT
OBJECTIVE, POLICIES, AND LIMITATIONS IDENTICAL TO THOSE OF THE LIMITED MATURITY
BOND PORTFOLIO. THE INVESTMENT PERFORMANCE OF THE LIMITED MATURITY BOND
PORTFOLIO WILL DIRECTLY CORRESPOND WITH THE INVESTMENT PERFORMANCE OF AMT
LIMITED MATURITY BOND INVESTMENTS. 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 11.
Please read this Prospectus before investing in the Limited Maturity Bond
Portfolio and keep it for future reference. The Prospectus contains information
about the Limited Maturity Bond Portfolio that a prospective investor should
know before investing. A Statement of Additional Information ("SAI") about the
Portfolios and the Series, dated May 1, 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
10158-0180.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
DATE OF PROSPECTUS: MAY 1, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 3
Management 3
FINANCIAL HIGHLIGHTS 4
Selected Per Share Data and Ratios 4
INVESTMENT PROGRAM 6
AMT Limited Maturity Bond
Investments 6
Short-Term Trading; Portfolio
Turnover 7
Ratings of Securities 7
Borrowings 8
Other Investments 8
Duration 9
PERFORMANCE INFORMATION 10
SPECIAL INFORMATION REGARDING
ORGANIZATION,CAPITALIZATION,
AND OTHER MATTERS 11
The Portfolios 11
The Series 11
SHARE PRICES AND NET ASSET
VALUE 14
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 15
Dividends and Other Distributions 15
Tax Status 15
SPECIAL CONSIDERATIONS 16
MANAGEMENT AND ADMINISTRATION 17
Trustees and Officers 17
Investment Manager, Administrator,
Sub-Adviser and Distributor 17
Expenses 18
Expense Limitation 19
Transfer and Dividend Paying Agent 19
DISTRIBUTION AND REDEMPTION
OF TRUST SHARES 20
Distribution and Redemption of
Trust Shares 20
Distribution Plan 20
DESCRIPTION OF INVESTMENTS 21
USE OF JOINT STATEMENT
OF ADDITIONAL INFORMATION 26
</TABLE>
2
<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 respective
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 11. For more details about AMT
Limited Maturity Bond Investments, its investments and their risks, see
"Investment Program" on page 6, "Ratings of Securities" on page 7, "Borrowings"
on page 8, and "Description of Investments" on page 21.
Here is a summary of important features of the Limited Maturity Bond
Portfolio and its corresponding Series. Of course, there can be no assurance
that the Portfolio will meet its investment objective.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PRINCIPAL SERIES
ADVISERS MANAGEMENT TRUST OBJECTIVE INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIMITED MATURITY BOND PORTFOLIO Highest current income consistent Short-to-intermediate term debt
with low risk to principal and securities, primarily investment
liquidity; and secondarily, total grade
return
</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 AMT Limited Maturity Bond Investments
in foreign securities, options and futures contracts, zero coupon bonds, and
debt securities rated below investment grade. AMT Limited Maturity Bond
Investments invests in fixed income securities, the value of which 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.
Management
- --------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman as sub-adviser,
selects investments for AMT Limited Maturity Bond Investments. N&B Management
also provides administrative services to AMT Limited Maturity Bond Investments
and the Limited Maturity Bond Portfolio and acts as distributor of the shares of
the Portfolio. See "Management and Administration" in this Prospectus.
3
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- --------------------------------------------------------------------------------
The financial information in the following table is for the Limited Maturity
Bond Portfolio as of December 31, 1995 and includes data related to the
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 the Limited Maturity
Bond Portfolio and its predecessor fund has been audited by its respective
independent auditors. You may obtain further information about AMT Limited
Maturity Bond Investments and the performance of the Limited Maturity Bond
Portfolio at no cost in the Trust's annual report to shareholders. Also, see
"Performance Information" in this Prospectus.
4
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Limited Maturity Bond Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Year Ended December 31,
1995(2) 1994 1993 1992 1991 1990 1989 1988(3) 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Year $14.02 $14.66 $14.33 $14.32 $13.62 $13.48 $13.01 $12.14 $13.62 $12.19
--------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .82 .78 .84 1.03 1.04 1.15 1.12 .92 1.00 1.01
Net Gains or Losses on
Securities
(both realized and
unrealized) .65 (.80) .08 (.33) .43 (.10)(4) .20 (.05) (.60) .65
--------------------------------------------------------------------------------------------------
Total From Investment
Operations 1.47 (.02) .92 .70 1.47 1.05 1.32 .87 .40 1.66
--------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.78) (.55) (.52) (.66) (.77) (.91) (.85) -- (1.62) (.22)
Distributions (from capital
gains) -- (.07) (.07) (.03) -- -- -- -- (.26) (.01)
--------------------------------------------------------------------------------------------------
Total Distributions (.78) (.62) (.59) (.69) (.77) (.91) (.85) -- (1.88) (.23)
--------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $14.71 $14.02 $14.66 $14.33 $14.32 $13.62 $13.48 $13.01 $12.14 $13.62
--------------------------------------------------------------------------------------------------
Total Return+ +10.94% -.15% +6.63% +5.18% +11.34% +8.32% +10.77% +7.17% +2.89% +13.83%
--------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $238.9 $344.8 $343.5 $187.0 $83.0 $46.0 $31.5 $25.4 $19.0 $17.1
--------------------------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets .71% .66% .64% .64% .68% .76% .88% 1.01% .99% 1.14%
--------------------------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets 5.99% 5.42% 5.19% 5.80% 6.61% 7.66% 8.11% 7.15% 7.36% 7.26%
--------------------------------------------------------------------------------------------------
Portfolio Turnover Rate(5) 27% 90% 159% 114% 77% 124% 116% 197% 24% 32%
--------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1)The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2)The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3)On May 2, 1988, the predecessor of the Portfolio changed its primary
investment objective to obtain the highest current income consistent with low
risk to principal and liquidity through investments in limited maturity debt
securities.
4)The amounts shown at this caption for a share outstanding throughout the
period may not accord with the change in aggregate gains and losses in
securities for the period because of the timing of sales and repurchases of
Portfolio shares in relation to fluctuating market values for the Portfolio.
5)The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Limited Maturity Bond Investments for the
period from May 1, 1995 to December 31, 1995 was 78%.
+Total return based on per share net asset value reflects the effects of changes
in net asset value on the performance of the Portfolio during each year and
assumes dividends and capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results.
Investment returns and principal may fluctuate and shares when redeemed may be
worth more or less than original cost. The total return information shown does
not reflect expenses that apply to the separate account or the related
insurance policies, and inclusion of these charges would reduce the total
return figures for all years shown.
5
<PAGE>
INVESTMENT PROGRAM
The investment policies and limitations of the Limited Maturity Bond
Portfolio and AMT Limited Maturity Bond Investments are identical. The Limited
Maturity Bond Portfolio invests only in AMT Limited Maturity Bond Investments.
Therefore, the following shows you the kinds of securities in which AMT Limited
Maturity Bond Investments invests. For an explanation of some types of
investments, see "Description of Investments" on page 21.
Investment policies and limitations of the Limited Maturity Bond Portfolio
and AMT Limited Maturity Bond Investments 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 Limited Maturity Bond Portfolio intends 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 AMT Limited Maturity Bond
Investments and the Limited Maturity Bond Portfolio will achieve their
objectives. The Limited Maturity Bond Portfolio, by itself, does not represent a
comprehensive investment program.
Additional investment techniques, features, and limitations concerning AMT
Limited Maturity Bond Investments' investment program are described in the SAI.
AMT Limited Maturity Bond Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Limited Maturity Bond Investments and the
Limited Maturity Bond 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
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 unrated securities determined to
be of comparable quality by N&B Management ("comparable unrated securities").
Debt securities rated below Baa by Moody's Investors Services, Inc. ("Moody's")
and below BBB by Standard & Poor's Ratings Group ("S&P") are considered to be
below investment grade. Securities rated below investment grade as well as
comparable 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 or comparable unrated
securities. AMT Limited Maturity Bond Investments may invest up to 5% of its net
assets, measured at the time of investment, 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 four 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.
6
<PAGE>
Short-Term Trading; Portfolio Turnover
- --------------------------------------------------------------------------------
While AMT the Limited Maturity Bond Investments does not purchase securities
with the intention of profiting from short-term trading, it may sell portfolio
securities prior to maturity when the investment adviser believes that such
action is advisable.
The portfolio turnover rates for the Limited Maturity Bond Portfolio and AMT
Limited Maturity Bond Investments, and for the predecessor of the Portfolio for
the period prior to May 1, 1995, are set forth under "Financial Highlights" in
this Prospectus.
It is anticipated that the annual portfolio turnover rate of AMT Limited
Maturity Bond Investments in some fiscal years may 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. High quality debt securities are securities
that have received a rating from at least one nationally recognized statistical
rating organization ("NRSRO"), such as S&P or 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.
INVESTMENT GRADE DEBT SECURITIES. "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 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 the Series 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.
LOWER-RATED SECURITIES. Debt securities rated lower than Baa by Moody's or
BBB by S&P and debt securities determined to be of comparable quality by N&B
Management ("comparable unrated securities") are considered to be below
investment grade. 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 Moody's or S&P, 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
7
<PAGE>
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 the 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 Limited
Maturity Bond 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 the 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 the
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
- --------------------------------------------------------------------------------
AMT Limited Maturity Bond Investments 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). The Series does not expect to borrow money. As a
non-fundamental policy, the 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.
Currently, the State of California imposes borrowing limitations on variable
insurance product funds. To comply with these limitations, the 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, AMT Limited Maturity Bond Investments may
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
Investments may adopt shorter weighted average duration than normal.
To the extent that the Series is invested in temporary defensive instruments,
it will not be pursuing its investment objective.
8
<PAGE>
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 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 the Series' 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.
9
<PAGE>
PERFORMANCE INFORMATION
Performance information for the Limited Maturity Bond Portfolio may be
presented from time to time in advertisements and sales literature. The
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. The Portfolio's total return is quoted for
the one-year period, the five-year period and ten-year period through the most
recent calendar quarter 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 dividends and
distributions from net investment income and net realized gains, respectively.
All performance information presented for the Portfolio 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 the 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 the Portfolio to various indices. Advertisements may also contain
the performance rankings assigned the Portfolio or its adviser 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 Portfolio is a managed investment vehicle investing in
a wide variety of securities, the securities owned by the 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.
10
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of the one Portfolio which as of December 31, 1995 had not yet commenced
investment operations. These conversions were approved by the shareholders of
the predecessors of the Portfolios in August 1994. Each Portfolio invests all of
its net investable assets in its corresponding Series, in each case receiving a
beneficial interest in that Series. The trustees of the Trust may establish
additional portfolios or classes of shares, without the approval of
shareholders. The assets of each Portfolio belong only to that Portfolio, and
the liabilities of each Portfolio are borne solely by that Portfolio and no
other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, 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
11
<PAGE>
(cash, securities, and receivables relating to securities) in a corresponding
Series of Managers Trust, receiving a beneficial interest in that Series. 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 investment manager of all Series has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
28 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in the 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 the 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. The Series normally will not hold meetings of
investors except as required by the 1940 Act. Each investor in the 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
12
<PAGE>
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 the 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 the 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 the 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 the Series, investors would be entitled to share pro
rata in the net assets of the Series available for distribution to investors.
13
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of the 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.
The Limited Maturity Bond Portfolio and AMT Limited Maturity Bond Investments
calculate their NAVs as of the close of regular trading on The New York Stock
Exchange ("NYSE"), usually 4 p.m. Eastern time.
AMT Limited Maturity Bond Investments generally values its 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. AMT Limited Maturity Bond
Investments periodically verifies 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.
14
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
The Limited Maturity Bond Portfolio annually distributes substantially all of
its share of AMT Limited Maturity Bond Investments' 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 Limited Maturity Bond Portfolio offers its shares solely to separate
accounts of the Life Companies. All dividends and other distributions are
distributed to the separate accounts and will be automatically invested in Trust
shares. Dividends and other distributions made by the 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 qualify annually 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 intends to distribute all of its net income and gains to its
shareholders each year.
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.
15
<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. See "Distribution and Redemption of Trust Shares" in this
Prospectus.
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 the increase in
the value of the Variable Contract. 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 calendar
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.
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, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
The Series will be managed with the intention of complying 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.
16
<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, Administrator, Sub-Adviser and Distributor
- --------------------------------------------------------------------------------
N&B Management serves as the investment manager of AMT Limited Maturity Bond
Investments, as administrator of the Limited Maturity Bond Portfolio, and as
distributor of the shares of the Limited Maturity Bond 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 Series of Managers Trust, 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 three other investment companies. These funds had aggregate net assets of
approximately $11.9 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 to the extent a broker is used in the
purchase and sale of portfolio securities and the sale of covered call options.
Neuberger&Berman and its affiliates, including N&B Management, manage securities
accounts that had approximately $38.7 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 $11.1 billion of assets as
of December 31, 1995. Ms. Havell has had overall responsibility for the
activities of the Fixed Income Group since 1984.
Thomas G. Wolfe and Theresa A. Havell are primarily responsible for the
day-to-day management of AMT Limited Maturity Bond Investments. Mr. Wolfe has
been primarily responsible for AMT Limited Maturity Bond Investments since
October 1995. 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 Standard
& Poor's Rating Group.
N&B Management serves as distributor in connection with the offering of the
Limited Maturity Bond Portfolio's shares. In connection with the sale of the
Portfolio's shares, the 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.
17
<PAGE>
The distributor is responsible only for information given and statements and
representations made in the 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.
Neuberger&Berman acts as the principal broker for AMT Limited Maturity Bond
Investments to the extent a broker is used in the purchase and sale of portfolio
securities and in the sale of covered call options, and for those services
receives brokerage commissions. In effecting securities transactions, AMT
Limited Maturity Bond Investments 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 regulate 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
- --------------------------------------------------------------------------------
N&B Management provides investment management services to AMT Limited
Maturity Bond Investments 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 the Limited Maturity Bond Portfolio that include furnishing similar
facilities and personnel for the Portfolio. With the Portfolio's consent, N&B
Management is authorized to subcontract some of its responsibilities under its
administration agreement with the Portfolio to third parties. For such
administrative and investment management services, N&B Management is paid the
following fees:
Fees (AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
<S> <C> <C>
- ----------------------------------------------------------------------------------
LIMITED MATURITY BOND 0.25% of first $500 million 0.40%
0.225% of next $500 million
0.20% of next $500 million
0.175% of next $500 million
0.15% of over $2 billion
</TABLE>
The Limited Maturity Bond 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. AMT Limited Maturity Bond Investments 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 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 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.
18
<PAGE>
Expense Limitation
- --------------------------------------------------------------------------------
N&B Management has undertaken to limit the Limited Maturity Bond Portfolio's
expenses by reimbursing the Portfolio for its operating expenses and its pro
rata share of AMT Limited Maturity Bond Investments' operating expenses,
excluding the compensation of N&B Management, 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 expense limitation by N&B Management is to reduce operating
expenses of the Portfolio and the Series and thereby increase 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 Limited Maturity Bond
Portfolio and in so doing performs certain bookkeeping, data processing and
administrative services. 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 AMT Limited Maturity Bond Investments as the Series'
transfer agent. State Street also acts as the custodian of the Series' and the
Portfolio's assets.
19
<PAGE>
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
one 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.
20
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Program" herein, AMT
Limited Maturity Bond Investments may make the following investments, among
others, individually or in combination, although the Series may not necessarily
buy any or all of the types of securities or use any or all of the investment
techniques that are described. These investments may be limited by the
requirements with which the Series must comply if the Portfolio is to qualify as
regulated investment companies for tax purposes. The use of hedging or other
techniques is discretionary and no representation is made that the risk of AMT
Limited Maturity Bond Investments will be reduced by the techniques discussed in
this section. 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. 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. The 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, the 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. The 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. The Series 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. The Series 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.
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
21
<PAGE>
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, the 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.
FOREIGN CURRENCY TRANSACTIONS. The 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 or interest income received in foreign
currencies. The 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. The 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 the Series if the value of
the hedged currency increased.
The 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. The 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 the 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 the 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. The
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.
The Series 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.
The Series also may try to reduce the risk of securities price changes and
expected changes in prevailing currency exchange rates (hedge) and may write
covered call options and purchase put options on debt securities in its
portfolio
22
<PAGE>
or on foreign currencies for hedging purposes or for the purpose of producing
income. The 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 transactional expense, price volatility and a high degree of
leverage. The Series may engage in transactions in futures contracts and related
options only as permitted by regulations of the Commodity Futures Trading
Commission.
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 transactional expense,
price volatility and a high degree of leverage. 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. In a when-issued or forward
commitment transaction, the 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, the Series may lose the
opportunity to obtain a favorable price and yield. When-issued securities or
securities subject to a forward commitment 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. The Series may invest in indexed securities whose value
is linked to currencies, interest rates, commodities, indices, or other
financial indicators. Most indexed securities are short-to-intermediate term
fixed-income securities whose values at maturity or interest rates rise or fall
according to the change in one or more specified underlying instruments. Indexed
securities may be positively or negatively indexed (i.e., their value may
increase or decrease if the underlying instrument appreciates), and may have
return characteristics similar to direct investments in the underlying
instrument or to one or more options on the underlying instrument. Indexed
securities may be more volatile than the underlying instrument itself.
REPURCHASE AGREEMENTS/SECURITIES LOANS. The Series may enter into repurchase
agreements and lend securities from its portfolio. In a repurchase agreement,
the Series buys a security from a Federal Reserve member 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). The 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.
23
<PAGE>
REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS. In a reverse repurchase
agreement, the Series sells securities to a bank or securities dealer 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, the 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 the Series' assets and are forms of leverage.
N&B Management monitors the creditworthiness of parties to reverse repurchase
agreements and dollar rolls.
MORTGAGE-BACKED SECURITIES. Mortgage-backed securities represent interests
in, or are secured by and payable from, pools of mortgage loans, including
collateralized mortgage obligations. These securities may be U.S. Government
mortgage-backed securities, which are issued or guaranteed by a U.S. Government
agency or instrumentality (though not necessarily backed by the full faith and
credit of the United States), such as GNMA, FNMA and FHLMC certificates. Other
mortgage-backed securities are issued by private issuers, generally originators
of and investors in mortgage loans, including savings associations, mortgage
bankers, commercial banks, investment bankers, and special purpose entities.
These private mortgage-backed securities may be supported by U.S. Government
mortgage-backed securities or some form of non-government credit enhancement.
Mortgage-backed securities may have either fixed or adjustable interest rates.
Tax or regulatory changes may adversely affect the mortgage securities market.
In addition, changes in the market's perception of the issuer may affect the
value of mortgage-backed securities. The rate of return on mortgage-backed
securities may be affected by prepayments of principal on the underlying loans,
which generally increase as interest rates decline; as a result, when interest
rates decline, holders of these securities normally do not benefit from
appreciation in market value to the same extent as holders of other non-callable
debt securities. N&B Management determines the effective life and duration 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. Asset-backed securities represent interests in, or
are secured by and payable from pools of assets, such as consumer loans,
CARS-SM- ("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.
SHORT SELLING. The Series may make short sales against-the-box. A short sale
is "against-the-box" when, at all times during which a short position is open,
the Series owns an equal amount of such securities, or owns securities giving it
the right, without payment of future consideration, to obtain an equal amount of
securities sold short.
VARIABLE AND FLOATING RATE SECURITIES. 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 the
24
<PAGE>
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. The Series may rely on such
instrument or the creditworthiness of the insurer in purchasing a variable or
floating rate security.
ZERO COUPON SECURITIES. Zero coupon securities do not pay interest
currently; instead, they are sold at a discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates change. In
calculating its daily income, the Series accrues a portion of the difference
between a zero coupon bond's purchase price and its face value.
MUNICIPAL OBLIGATIONS. 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. Efforts are
underway that may result in a "flat tax" or other restructuring of the federal
income tax system. These developments could reduce the value of all municipal
securities, or the securities of particular issuers.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. 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.
25
<PAGE>
USE OF JOINT 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 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 SAI.
26
<PAGE>
LIQUID ASSETS PORTFOLIO
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
PROSPECTUS
MAY 1, 1996
NBAMT0130596
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
Liquid Asset Portfolio
- --------------------------------------------------------------------------------
Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to meet
differing investment objectives and currently is comprised of seven separate
Portfolios, one of which is offered herein. 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 one of the
Portfolios are also offered directly to qualified pension and retirement plans
("Qualified Plans").
THIS PROSPECTUS CONTAINS INFORMATION PERTAINING TO THE LIQUID ASSET
PORTFOLIO ONLY.
- --------------------------------------------------------------------------------
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. AMT LIQUID ASSET INVESTMENTS, THE LIQUID
ASSET PORTFOLIO'S CORRESPONDING SERIES, IS MANAGED BY NEUBERGER& BERMAN
MANAGEMENT INCORPORATED ("N&B MANAGEMENT"). AMT LIQUID ASSET INVESTMENTS INVESTS
IN SECURITIES IN ACCORDANCE WITH AN INVESTMENT OBJECTIVE, POLICIES, AND
LIMITATIONS IDENTICAL TO THOSE OF THE LIQUID ASSET PORTFOLIO. THE INVESTMENT
PERFORMANCE OF THE LIQUID ASSET PORTFOLIO WILL DIRECTLY CORRESPOND WITH THE
INVESTMENT PERFORMANCE OF AMT LIQUID ASSET INVESTMENTS. 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
9.
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 the Liquid Asset Portfolio
and keep it for future reference. The Prospectus contains information about the
Liquid Asset Portfolio that a prospective investor should know before investing.
A Statement of Additional Information ("SAI") about the Portfolios and the
Series, dated May 1, 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 10158-0180.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
DATE OF PROSPECTUS: MAY 1, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 3
Management 3
FINANCIAL HIGHLIGHTS 4
Selected Per Share Data and Ratios 4
INVESTMENT PROGRAM 6
AMT Liquid Asset Investments 6
Short-Term Trading 6
Ratings of Securities 6
Borrowings 7
Other Investments 7
PERFORMANCE INFORMATION 8
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 9
The Portfolios 9
The Series 9
SHARE PRICES AND NET ASSET
VALUE 12
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 13
Dividends and Other Distributions 13
Tax Status 13
SPECIAL CONSIDERATIONS 14
MANAGEMENT AND ADMINISTRATION 15
Trustees and Officers 15
Investment Manager, Administrator,
Sub-Adviser and Distributor 15
Expenses 16
Expense Limitation 17
Transfer and Dividend Paying Agent 17
DISTRIBUTION AND REDEMPTION
OF TRUST SHARES 18
Distribution and Redemption of
Trust Shares 18
Distribution Plan 18
DESCRIPTION OF INVESTMENTS 19
USE OF JOINT STATEMENT
OF ADDITIONAL INFORMATION 22
</TABLE>
2
<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 respective
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 9. For more details about AMT Liquid
Asset Investments, its investments and their risks, see "Investment Program" on
page 6, "Ratings of Securities" on page 6, "Borrowings" on page 7, and
"Description of Investments" on page 19.
Here is a summary of important features of the Liquid Asset Portfolio and its
corresponding Series. Of course, there can be no assurance that the Portfolio
will meet its investment objective.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PRINCIPAL SERIES
ADVISERS MANAGEMENT TRUST OBJECTIVE INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIQUID ASSET PORTFOLIO Highest current income consistent High-quality money market instruments
with safety and liquidity of government and non-government
issuers
</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 AMT Liquid Asset Investments in
foreign securities and zero coupon bonds. AMT Liquid Asset Investments invests
in fixed income securities, the value of which 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.
Management
- --------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman as sub-adviser,
selects investments for AMT Liquid Asset Investments. N&B Management also
provides administrative services to AMT Liquid Asset Investments and the Liquid
Asset Portfolio and acts as distributor of the shares of the Portfolio. See
"Management and Administration" in this Prospectus.
3
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- --------------------------------------------------------------------------------
The financial information in the following table is for Liquid Asset
Portfolio as of December 31, 1995 and includes data related to the 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 the Liquid Asset Portfolio and
its predecessor fund has been audited by its respective independent auditors.
You may obtain further information about AMT Liquid Asset Investments and the
performance of the Liquid Asset Portfolio at no cost in the Trust's annual
report to shareholders. Also, see "Performance Information" in this Prospectus.
4
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Liquid Asset Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Year Ended December 31,
1995(1) 1994 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------
Net Asset Value,
Beginning of Year $ .9997 $1.0009 $1.0002 $1.0001 $ .9999 $ .9998 $ .9998 $1.0000 $1.0002 $1.0004
--------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .0493 .0328 .0233 .0320 .0547 .0730 .0826 .0648 .0550 .0557
Net Gains or Losses on
Securities .0003 -- .0014 .0002 .0002 .0001 -- (.0002) .0001 .0002
--------------------------------------------------------------------------------------------------
Total From
Investment
Operations .0496 .0328 .0247 .0322 .0549 .0731 .0826 .0646 .0551 .0559
--------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.0493) (.0328) (.0233) (.0320) (.0547) (.0730) (.0826) (.0648) (.0550) (.0557)
Distributions (from
capital gains) -- (.0012) (.0007) (.0001) -- -- -- -- (.0003) (.0004)
--------------------------------------------------------------------------------------------------
Total Distributions (.0493) (.0340) (.0240) (.0321) (.0547) (.0730) (.0826) (.0648) (.0553) (.0561)
--------------------------------------------------------------------------------------------------
Net Asset Value, End of
Year $1.0000 $ .9997 $1.0009 $1.0002 $1.0001 $ .9999 $ .9998 $ .9998 $1.0000 $1.0002
--------------------------------------------------------------------------------------------------
Total Return+ +5.04% +3.46% +2.43% +3.25% +5.61% +7.55% +8.58% +6.68% +5.67% +5.76%
--------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of
Year (in millions) $31.9 $5.3 $6.8 $25.4 $21.5 $21.5 $11.5 $9.3 $8.1 $2.4
--------------------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net
Assets(2) 1.01% 1.02% .88% .72% .74% .88% 1.00% 1.00% 1.00% 1.00%
--------------------------------------------------------------------------------------------------
Ratio of Net
Investment Income to
Average Net
Assets(2) 4.90% 3.28% 2.34% 3.19% 5.47% 7.30% 8.28% 6.52% 5.69% 5.33%
--------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1)The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
2)Since the commencement of operations, N&B Management or the principal
underwriter voluntarily assumed certain operating expenses of the Portfolio as
described in Note B of Notes to Financial Statements and in this Prospectus
under "Expense Limitation." Had such action not been undertaken, the
annualized ratios of expenses and net investment income to average daily net
assets would have been 1.25% and 4.66%, respectively, for the year ended
December 31, 1995, 1.03% and 3.27% in 1994, 1.03% and 8.25% in 1989, 1.25% and
6.27% in 1988, 1.52% and 5.17% in 1987 and 2.74% and 3.59% in 1986,
respectively. There was no reduction of expenses for the years ended December
31, 1990 through and including 1993.
+Total return based on per share net asset value reflects the effects of changes
in net asset value on the performance of the Portfolio during each year and
assumes dividends and capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results.
Investment returns and principal may fluctuate and shares when redeemed may be
worth more or less than original cost. Total return figures would have been
lower if N&B Management had not reimbursed certain expenses. The total return
information shown does not reflect expenses that apply to the separate account
or the related insurance policies, and inclusion of these charges would reduce
the total return figures for all years shown.
5
<PAGE>
INVESTMENT PROGRAM
The investment policies and limitations of the Liquid Asset Portfolio and AMT
Liquid Asset Investments are identical. The Liquid Asset Portfolio invests only
in AMT Liquid Asset Investments. Therefore, the following shows you the kinds of
securities in which AMT Liquid Asset Investments invests. For an explanation of
some types of investments, see "Description of Investments" on page 19.
Investment policies and limitations of the Liquid Asset Portfolio and AMT
Liquid Asset Investments 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 Liquid Asset Portfolio intends 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 AMT Liquid Asset Investments and the Liquid Asset Portfolio will
achieve their objectives. The Liquid Asset Portfolio, by itself, does not
represent a comprehensive investment program.
Additional investment techniques, features, and limitations concerning AMT
Liquid Asset Investments' investment program are described in the SAI.
AMT Liquid Asset Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Liquid Asset Investments and the Liquid Asset
Portfolio is to provide the highest current income consistent with safety and
liquidity. This investment objective is fundamental and may not be changed
without the approval of the holders of a majority of the outstanding shares of
the Portfolio and Series.
AMT Liquid Asset Investments invests in a portfolio of debt instruments with
remaining maturities of 397 days or less and maintains a dollar-weighted average
portfolio maturity of not more than 90 days. The Series uses the amortized cost
method of valuation to enable the Portfolio to maintain a stable $1.00 share
price, which means that while Portfolio shares earn income, they should be worth
the same when the shareholder sells them as when the shareholder buys them. Of
course, there is no guarantee that the Portfolio will be able to maintain a
$1.00 share price.
AMT Liquid Asset Investments invests in high quality U.S. dollar-denominated
money market instruments of U.S. and foreign issuers, including governments and
their agencies and instrumentalities, banks and other financial institutions,
and corporations, and may invest in repurchase agreements with respect to these
instruments. The Series may invest 25% or more of its total assets in U.S.
Government and Agency securities or in certificates of deposit or bankers'
acceptances issued by domestic branches of U.S. banks.
Short-Term Trading
- --------------------------------------------------------------------------------
While AMT Liquid Asset Investments does not purchase securities with the
intention of profiting from short-term trading, it may sell portfolio securities
prior to maturity when the investment adviser believes that such action is
advisable.
Ratings of Securities
- --------------------------------------------------------------------------------
HIGH QUALITY DEBT SECURITIES. 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
6
<PAGE>
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.
If the quality of securities held by AMT Liquid Asset Investments
deteriorates so that the securities would no longer satisfy its standards, AMT
Liquid Asset Investments, in accordance with Rule 2a-7 under the Investment
Company Act of 1940, will consider disposing of its securities.
Borrowings
- --------------------------------------------------------------------------------
AMT Liquid Asset Investments 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). The Series does not expect to borrow money. As a
non-fundamental policy, the Series may purchase portfolio securities if its
outstanding borrowings, including reverse repurchase agreements, exceed 5% of
its total assets.
Currently, the State of California imposes borrowing limitations on variable
insurance product funds. To comply with these limitations, the 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, AMT Liquid Asset 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 Liquid Asset Investments
may adopt shorter weighted average maturity than normal.
To the extent that the Series is invested in temporary defensive instruments,
it will not be pursuing its investment objective.
7
<PAGE>
PERFORMANCE INFORMATION
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.
All performance information presented for the Portfolio 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 the 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 the Portfolio to various indices. Advertisements may also contain
the performance rankings assigned the Portfolio or its adviser 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 Portfolio is a managed investment vehicle investing in
a wide variety of securities, the securities owned by the 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.
8
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of one Portfolio which as of December 31, 1995 had not yet commenced investment
operations. These conversions were approved by the shareholders of the
predecessors of the Portfolios in August 1994. Each Portfolio invests all of its
net investable assets in its corresponding Series, in each case receiving a
beneficial interest in that Series. The trustees of the Trust may establish
additional portfolios or classes of shares, without the approval of
shareholders. The assets of each Portfolio belong only to that Portfolio, and
the liabilities of each Portfolio are borne solely by that Portfolio and no
other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, 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
9
<PAGE>
(cash, securities, and receivables relating to securities) in a corresponding
Series of Managers Trust, receiving a beneficial interest in that Series. 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 investment manager of all Series has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
28 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in the 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 the 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 the 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
10
<PAGE>
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 the 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 the 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 the 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 the Series, investors would be entitled to share pro
rata in the net assets of the Series available for distribution to investors.
11
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of the 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.
AMT Liquid Asset Investments, in accordance with Rule 2a-7 under the 1940
Act, will use the amortized cost method of valuation to enable the Series 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.
12
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
The Liquid Asset Portfolio distributes to its shareholders substantially all
of its share of AMT Liquid Asset Investments' 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 Liquid Asset Portfolio offers its shares solely to separate accounts of
the Life Companies. All dividends and other distributions are distributed to the
separate accounts and will be automatically invested in Trust shares. Dividends
and other distributions made by the 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 qualify annually 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 intends to distribute all of its net income and gains to its
shareholders each year.
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.
13
<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. See "Distribution and Redemption of Trust Shares" in this
Prospectus.
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 the increase in
the value of the Variable Contract. 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 calendar
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.
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, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Series will be managed with the intention of complying 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.
14
<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, Administrator, Sub-Adviser and Distributor
- --------------------------------------------------------------------------------
N&B Management serves as the investment manager of AMT Liquid Asset
Investments, as administrator of the Liquid Asset Portfolio and as distributor
of the shares of the Liquid Asset 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 Series of Managers Trust, 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 three
other investment companies. These funds had aggregate net assets of
approximately $11.9 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 to the extent a broker is used in the
purchase and sale of portfolio securities and the sale of covered call options.
Neuberger&Berman and its affiliates, including N&B Management, manage securities
accounts that had approximately $38.7 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 $11.1 billion of assets as
of December 31, 1995. Ms. Havell has had overall responsibility for the
activities of the Fixed Income Group since 1984.
Josephine P. Mahaney and Theresa A. Havell are primarily responsible for the
day-to-day management of AMT Liquid Asset Investments. 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. Ms. Mahaney has been primarily responsible for
AMT Liquid Asset Investments since January 1993.
N&B Management serves as distributor in connection with the offering of the
Liquid Asset Portfolio's shares. In connection with the sale of the Portfolio's
shares, the 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 the 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.
15
<PAGE>
Neuberger&Berman acts as the principal broker for AMT Liquid Asset
Investments to the extent a broker is used in the purchase and sale of portfolio
securities and in the sale of covered call options, and for those services
receives brokerage commissions. In effecting securities transactions, AMT Liquid
Asset Investments 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 the Series will be adversely affected by
personal trading of employees, the Trust, Managers Trust, N&B Management, and
Neuberger&Berman have adopted policies that regulate 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
- --------------------------------------------------------------------------------
N&B Management provides investment management services to AMT Liquid Asset
Investments 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 the Liquid Asset
Portfolio that include furnishing similar facilities and personnel for the
Portfolio. With the Portfolio's consent, N&B Management is authorized to
subcontract some of its responsibilities under its administration agreement with
the Portfolio to third parties. For such administrative and investment
management services, N&B Management is paid the following fees:
Fees (AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
<S> <C> <C>
- ----------------------------------------------------------------------
LIQUID ASSET 0.25% of first $500 million 0.40%
0.225% of next $500 million
0.20% of next $500 million
0.175% of next $500 million
0.15% of over $2 billion
</TABLE>
The Liquid Asset 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. AMT Liquid Asset Investments 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 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
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.
16
<PAGE>
Expense Limitation
- --------------------------------------------------------------------------------
N&B Management has undertaken to limit the Liquid Asset Portfolio's expenses
by reimbursing the Portfolio for its operating expenses and its pro rata share
of AMT Liquid Asset Investments operating expenses, including the compensation
of N&B Management, but excluding 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 expense limitation by N&B Management is to reduce operating
expenses of the Portfolio and the Series and thereby increase 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 Liquid Asset Portfolio and in
so doing performs certain bookkeeping, data processing and administrative
services. All correspondence should be sent to State Street Bank & Trust
Company, P.O. Box 1978, Boston, MA 02105. State Street provides similar services
to AMT Liquid Asset Investments as the Series' transfer agent. State Street also
acts as the custodian of the Series' and the Portfolios' assets.
17
<PAGE>
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
one 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.
18
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Program" herein, AMT
Liquid Asset Investments may make the following investments, among others,
individually or in combination, although the Series may not necessarily buy any
or all of the types of securities or use any or all of the investment techniques
that are described. These investments may be limited by the requirements with
which the Series must comply if the Portfolio is to qualify as regulated
investment companies for tax purposes. The use of hedging or other techniques is
discretionary and no representation is made that the risk of AMT Liquid Asset
Investments will be reduced by the techniques discussed in this section. 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. 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. The 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, the 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. The 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.
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
19
<PAGE>
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, the 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.
REPURCHASE AGREEMENTS/SECURITIES LOANS. The Series may enter into repurchase
agreements and lend securities from its portfolio. In a repurchase agreement,
the Series buys a security from a Federal Reserve member 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). The 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. In a reverse repurchase agreement, the Series
sells securities to a bank or securities dealer 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. 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 may increase the
fluctuation in the market value of the Series' assets and are forms of leverage.
N&B Management monitors the creditworthiness of parties to reverse repurchase
agreements.
MORTGAGE-BACKED SECURITIES. Mortgage-backed securities represent interests
in, or are secured by and payable from, pools of mortgage loans, including
collateralized mortgage obligations. These securities may be U.S. Government
mortgage-backed securities, which are issued or guaranteed by a U.S. Government
agency or instrumentality (though not necessarily backed by the full faith and
credit of the United States), such as GNMA, FNMA and FHLMC certificates. Other
mortgage-backed securities are issued by private issuers, generally originators
of and investors in mortgage loans, including savings associations, mortgage
bankers, commercial banks, investment bankers, and special purpose entities.
These private mortgage-backed securities may be supported by U.S. Government
mortgage-backed securities or some form of non-government credit enhancement.
Mortgage-backed securities may have either fixed or adjustable interest rates.
Tax or regulatory changes may adversely affect the mortgage securities market.
In addition, changes in the market's perception of the issuer may affect the
value of mortgage-backed securities. The rate of return on mortgage-backed
securities may be affected by prepayments of principal on the underlying loans,
which generally increase as interest rates decline; as a result, when interest
rates decline, holders of these securities normally do not benefit from
appreciation in market value to the same extent as holders of other non-callable
debt securities. N&B Management determines the effective life and duration 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. Asset-backed securities represent interests in, or
are secured by and payable from pools of assets, such as consumer loans,
CARS-SM- ("Certificates for Automobile Receivables"), credit card receivable
securities, and installment loan contracts. Although these securities may be
supported by letters of credit or other
20
<PAGE>
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.
SHORT SELLING. The Series may make short sales against-the box. A short sale
is "against-the-box" when, at all times during which a short position is open,
the Series owns an equal amount of such securities, or owns securities giving it
the right, without payment of future consideration, to obtain an equal amount of
securities sold short.
VARIABLE AND FLOATING RATE SECURITIES. 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 the 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. The 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, the
Series calculates the remaining maturity of variable and floating rate
instruments as provided in Rule 2a-7 under the 1940 Act.
ZERO COUPON SECURITIES. Zero coupon securities do not pay interest
currently; instead, they are sold at a discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates change. In
calculating its daily income, the Series accrues a portion of the difference
between a zero coupon bond's purchase price and its face value.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. 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.
21
<PAGE>
USE OF JOINT 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 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 SAI.
22
<PAGE>
PARTNERS PORTFOLIO
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
PROSPECTUS
MAY 1, 1996
NBAMT0150596
<PAGE>
Neuberger&Berman
ADVISERS MANAGEMENT TRUST
Partners Portfolio
- --------------------------------------------------------------------------------
Neuberger&Berman ADVISERS MANAGEMENT TRUST (the "Trust") is intended to meet
differing investment objectives and currently is comprised of seven separate
Portfolios, one of which is offered herein. 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 one of the Portfolios
are also offered directly to qualified pension and retirement plans ("Qualified
Plans").
THIS PROSPECTUS CONTAINS INFORMATION PERTAINING TO THE PARTNERS PORTFOLIO
ONLY.
- --------------------------------------------------------------------------------
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. AMT PARTNERS INVESTMENTS, THE PARTNERS
PORTFOLIO'S CORRESPONDING SERIES, IS MANAGED BY NEUBERGER&BERMAN MANAGEMENT
INCORPORATED ("N&B MANAGEMENT"). AMT PARTNERS INVESTMENTS INVESTS IN SECURITIES
IN ACCORDANCE WITH AN INVESTMENT OBJECTIVE, POLICIES, AND LIMITATIONS IDENTICAL
TO THOSE OF THE PARTNERS PORTFOLIO. THE INVESTMENT PERFORMANCE OF THE PARTNERS
PORTFOLIO WILL DIRECTLY CORRESPOND WITH THE INVESTMENT PERFORMANCE OF AMT
PARTNERS INVESTMENTS. 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 11.
Please read this Prospectus before investing in the Partners Portfolio and
keep it for future reference. The Prospectus contains information about the
Partners Portfolio that a prospective investor should know before investing. A
Statement of Additional Information ("SAI") about the Portfolios and the Series,
dated May 1, 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 10158-0180.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The purchaser of a Variable Contract should read this Prospectus in
conjunction with the prospectus for his or her Variable Contract.
DATE OF PROSPECTUS: MAY 1, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY 3
The Portfolios and Series 3
Risk Factors 3
Management 3
The Neuberger&Berman Investment
Approach 4
FINANCIAL HIGHLIGHTS 5
Selected Per Share Data and Ratios 5
INVESTMENT PROGRAM 7
AMT Partners Investments 7
Short-Term Trading; Portfolio
Turnover 7
Ratings of Securities 8
Borrowings 9
Other Investments 9
PERFORMANCE INFORMATION 10
SPECIAL INFORMATION REGARDING
ORGANIZATION, CAPITALIZATION,
AND OTHER MATTERS 11
The Portfolios 11
The Series 11
SHARE PRICES AND NET ASSET
VALUE 14
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAX STATUS 15
Dividends and Other Distributions 15
Tax Status 15
SPECIAL CONSIDERATIONS 16
MANAGEMENT AND ADMINISTRATION 17
Trustees and Officers 17
Investment Manager, Administrator,
Sub-Adviser and Distributor 17
Expenses 18
Expense Limitation 19
Transfer and Dividend Paying Agent 19
DISTRIBUTION AND REDEMPTION
OF TRUST SHARES 20
Distribution and Redemption of
Trust Shares 20
Distribution Plan 20
DESCRIPTION OF INVESTMENTS 21
USE OF JOINT PROSPECTUS
AND STATEMENT OF ADDITIONAL
INFORMATION 25
</TABLE>
2
<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 11. For more details about AMT Partners Investments, its
investments and their risks, see "Investment Program" on page 7, "Ratings of
Securities" on page 8, "Borrowings" on page 9, and "Description of Investments"
on page 21.
Here is a summary of important features of the Partners Portfolio and AMT
Partners Investments. Of course, there can be no assurance that the Portfolio
will meet its investment objective.
<TABLE>
<CAPTION>
NEUBERGER&BERMAN INVESTMENT PRINCIPAL SERIES
ADVISERS MANAGEMENT TRUST OBJECTIVE INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PARTNERS PORTFOLIO Capital growth Common stocks and other equity
securities of established companies
</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 AMT Partners Investments in foreign
securities, options, zero coupon bonds, and debt securities rated below
investment grade. AMT Partners Investments invests in fixed income securities,
the value of which 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 Partners Investments may invest up to 15% of its net assets, measured at
the time of investment, in corporate debt securities rated below investment
grade or comparable unrated securities. Securities rated below investment grade
as well as unrated securities are often considered to be speculative and usually
entail greater risk. For more information on lower-rated securities, see
"Ratings of Securities" in this Prospectus and "Fixed Income Securities" in the
SAI.
Management
- --------------------------------------------------------------------------------
N&B Management, with the assistance of Neuberger&Berman as sub-adviser,
selects investments for AMT Partners Investments. N&B Management also provides
administrative services to AMT Partners Investments and the Partners Portfolio
and acts as distributor of the shares of the Portfolio. See "Management and
Administration" in this Prospectus.
3
<PAGE>
The Neuberger&Berman Investment Approach
- --------------------------------------------------------------------------------
AMT Partners Investments is managed using the value-oriented investment
approach. A value-oriented portfolio manager buys stock that are selling for
less than their perceived market value. These include stocks that are currently
under-researched or are temporarily out of favor on Wall Street.
Portfolio managers identify value stocks in several ways. One of the most
common identifiers is a low price-to-earnings ratio -- that is, stocks selling
at multiples of earnings per share that are lower than that of the market as a
whole. Other criteria are high dividend yield, a strong balance sheet and
financial position, a recent company restructuring with the potential to realize
hidden values, strong management, and low price-to-book value (net value of the
company's assets).
Neuberger&Berman believes that, over time, securities that are undervalued
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.
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" in this Prospectus.
4
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
- --------------------------------------------------------------------------------
The financial information in the following table is for the Partners
Portfolio as of December 31, 1995 and includes data related to the Partners
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 the Partners
Portfolio and its predecessor fund has been audited by its respective
independent auditors. You may obtain further information about AMT Partners
Investments and the performance of the Partners Portfolio at no cost in the
Trust's annual report to shareholders. Also, see "Performance Information" in
this Prospectus.
5
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Partners Portfolio
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Series'
Financial Statements and notes thereto.(1)
<TABLE>
<CAPTION>
Period from
March 22,
Year Ended 1994(3) to
December 31, December 31,
1995(2) 1994
<S> <C> <C>
- -------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 9.77 $10.00
---------------------------------
Income From Investment Operations
Net Investment Income .11 .03
Net Gains or Losses on Securities
(both realized and unrealized) 3.43 (.26)
---------------------------------
Total From Investment Operations 3.54 (.23)
---------------------------------
Less Distributions
Dividends (from net investment income) (.01) --
Distributions (from capital gains) (.07) --
---------------------------------
Total Distributions (.08) --
---------------------------------
Net Asset Value, End of Year $ 13.23 $ 9.77
---------------------------------
Total Return+ +36.47% -2.30%(4)
---------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 207.5 $ 9.4
---------------------------------
Ratio of Expenses to Average Net Assets 1.09% 1.75%(5)
---------------------------------
Ratio of Net Investment Income to Average Net
Assets .97% .45%(5)
---------------------------------
Portfolio Turnover Rate(6) 76% 90%
---------------------------------
</TABLE>
NOTES:
1)The per share amounts which are shown have been computed based on the average
number of shares outstanding during each year.
2)The per share amounts and ratios which are shown reflect income and expenses,
including the Portfolio's proportionate share of the Series' income and
expenses.
3)The date investment operations commenced.
4)Not annualized.
5)Annualized.
6)The Portfolio transferred all of its investment securities into its Series on
April 28, 1995. After that date the Portfolio invested only in its Series and
that Series, rather than the Portfolio, engaged in securities transactions.
Therefore, after that date the Portfolio had no portfolio turnover rate. The
portfolio turnover rate for AMT Partners Investments for the period from May
1, 1995 to December 31, 1995 was 98%.
+Total return based on per share net asset value reflects the effects of changes
in net asset value on the performance of the Portfolio during each year and
assumes dividends and capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results.
Investment returns and principal may fluctuate and shares when redeemed may be
worth more or less than original cost. The total return information shown does
not reflect expenses that apply to the separate account or the related
insurance policies, and the inclusion of these charges would reduce the total
return figures for all years shown.
6
<PAGE>
INVESTMENT PROGRAM
The investment policies and limitations of the Partners Portfolio and AMT
Partners Investments are identical. The Partners Portfolio invests only in AMT
Partners Investments. Therefore, the following shows you the kinds of securities
in which AMT Partners Investments invests. For an explanation of some types of
investments, see "Description of Investments" on page 21.
Investment policies and limitations of the Partners Portfolio and AMT
Partners Investments 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 Partners Portfolio intends 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 AMT Partners Investments and the Partners Portfolio will achieve
their objectives. The Partners Portfolio, by itself, does not represent a
comprehensive investment program.
Additional investment techniques, features, and limitations concerning AMT
Partners Investments' investment program are described in the SAI.
AMT Partners Investments
- --------------------------------------------------------------------------------
The investment objective of AMT Partners Investments and the Partners
Portfolio is to seek capital growth. This investment objective is
non-fundamental. The Portfolio intends to notify shareholders 30 days in advance
of making any material change to its investment objective.
AMT Partners Investments invests primarily in common stocks of established
companies, using the value-oriented investment approach. The Series seeks
capital growth through an investment approach that is designed to increase
capital with reasonable risk. Its investment program seeks securities believed
to be undervalued based on strong fundamentals such as low price-to-earnings
ratios, consistent cash flow, and support from asset values.
Up to 15% of the Series' net assets, measured at the time of investment, may
be invested in corporate debt securities rated below investment grade or in
unrated securities determined to be of comparable quality by N&B Management
("comparable unrated securities"). Securities rated below investment grade as
well as comparable 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, "Fixed Income Securities" in the
SAI, and Appendix A of the SAI.
Short-Term Trading; Portfolio Turnover
- --------------------------------------------------------------------------------
Although AMT Partners Investments does not purchase securities with the
intention of profiting from short-term trading, the Series may sell portfolio
securities prior to maturity when the investment adviser believes that such
action is advisable.
The portfolio turnover rates for the Partners Portfolio and AMT Partners
Investments, and for the predecessor of the Partners Portfolio for the period
prior to May 1, 1995, are set forth under "Financial Highlights" in this
Prospectus. It is anticipated that the annual portfolio turnover rate of 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).
7
<PAGE>
Ratings of Securities
- --------------------------------------------------------------------------------
HIGH QUALITY DEBT SECURITIES. 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.
INVESTMENT GRADE DEBT SECURITIES. "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 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 the Series 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.
LOWER-RATED SECURITIES. Debt securities rated lower than Baa by Moody's or
BBB by S&P and debt securities determined to be of comparable quality by N&B
Management ("comparable unrated securities") are considered to be below
investment grade. AMT Partners Investments may invest up to 15% of its net
assets, measured at the time of investment, 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 the
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.
8
<PAGE>
The value of the fixed income securities in which the 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 the
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
- --------------------------------------------------------------------------------
AMT Partners Investments 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). The Series does not expect to borrow money. As a
non-fundamental policy, the Series may not purchase portfolio securities if its
outstanding borrowings, including reverse repurchase agreements, exceed 5% of
its total assets.
Currently, the State of California imposes borrowing limitations on variable
insurance product funds. To comply with these limitations, the 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, AMT Partners Investments may 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.
To the extent that the Series is invested in temporary defensive instruments,
it will not be pursuing its investment objective.
9
<PAGE>
PERFORMANCE INFORMATION
Performance information for the Partners Portfolio may be presented from time
to time in advertisements and sales literature. The 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. The Portfolio's total return is quoted for the one-year period and for
the life of the Portfolio through the most recent calendar quarter 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 dividends and distributions from net
investment income and net realized gains, respectively.
All performance information presented for the Portfolio 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 the 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 the Portfolio to various indices. Advertisements may also contain
the performance rankings assigned the Portfolio or its adviser 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 Portfolio is a managed investment vehicle investing in
a wide variety of securities, the securities owned by the 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.
10
<PAGE>
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS
The Portfolios
- --------------------------------------------------------------------------------
Each Portfolio is a separate series of the Trust, a Delaware business trust
organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company, commonly known as a mutual
fund. The Trust has seven separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of one Portfolio which as of December 31, 1995 had not yet commenced investment
operations. These conversions were approved by the shareholders of the
predecessors of the Portfolios in August 1994. Each Portfolio invests all of its
net investable assets in its corresponding Series, in each case receiving a
beneficial interest in that Series. The trustees of the Trust may establish
additional portfolios or classes of shares, without the approval of
shareholders. The assets of each Portfolio belong only to that Portfolio, and
the liabilities of each Portfolio are borne solely by that Portfolio and no
other.
DESCRIPTION OF SHARES. Each Portfolio is authorized to issue an unlimited
number of shares of beneficial interest (par value $0.001 per share). Shares of
each Portfolio represent equal proportionate interests in the assets of that
Portfolio only and have identical voting, dividend, redemption, liquidation, and
other rights. All shares issued are fully paid and non-assessable under Delaware
law, 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
11
<PAGE>
(cash, securities, and receivables relating to securities) in a corresponding
Series of Managers Trust, receiving a beneficial interest in that Series. 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 investment manager of all Series has sponsored, with Neuberger&Berman,
traditionally structured funds since 1950. However, it has operated 12 master
funds and 20 feeder funds since August 1993 and now operates 21 master funds and
28 feeder funds.
Each Portfolio's investment in its corresponding Series is in the form of a
non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the future, may permit other institutional investors, including but not
necessarily limited to the managed separate accounts of life insurance
companies, to invest in the Series. All investors will invest in the Series on
the same terms and conditions as the Portfolios and will pay a proportionate
share of the expenses of the Series. The Portfolios do not sell their shares
directly to members of the general public. Other investors in the Series would
not be required to sell their shares at the same offering price as a Portfolio,
could have a different administration fee and expenses than a Portfolio, and
might charge a sales commission. Therefore, Portfolio shareholders may have
different returns than shareholders in another entity that invests exclusively
in the Series.
A Portfolio's investment in its corresponding Series may be affected by the
actions of other large investors in the Series, if any. For example, if a large
investor in the 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 the 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 the 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
12
<PAGE>
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 the 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 the 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 the 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 the Series, investors would be entitled to share pro
rata in the net assets of the Series available for distribution to investors.
13
<PAGE>
SHARE PRICES AND NET ASSET VALUE
Each Portfolio's shares are bought or sold at a price that is the Portfolio's
net asset value ("NAV") per share. The NAVs for each Portfolio and its
corresponding Series are calculated by subtracting liabilities from total assets
(in the case of the 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.
The Partners Portfolio and AMT Partners Investments calculate their NAVs as
of the close of regular trading on The New York Stock Exchange ("NYSE"), usually
4 p.m. Eastern time.
AMT Partners Investments values its 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. AMT Partners Investments values all other
securities and assets, including restricted securities, by a method that the
trustees of Managers Trust believe accurately reflects fair value.
14
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
- --------------------------------------------------------------------------------
The Partners Portfolio annually distributes substantially all of its share of
AMT Partners Investments' 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 Partners Portfolio offers its shares solely to separate accounts of the
Life Companies. All dividends and other distributions are distributed to the
separate accounts and will be automatically invested in Trust shares. Dividends
and other distributions made by the 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 qualify annually 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 intends to distribute all of its net income and gains to its
shareholders each year.
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.
15
<PAGE>
SPECIAL CONSIDERATIONS
The Portfolios serve as the underlying investments for Variable Contracts
issued through separate accounts of the Life Companies which may or may not be
affiliated. See "Distribution and Redemption of Trust Shares" in this
Prospectus.
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 the increase in
the value of the Variable Contract. 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 calendar
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.
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, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Series will be managed with the intention of complying 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.
16
<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, Administrator, Sub-Adviser and Distributor
- --------------------------------------------------------------------------------
N&B Management serves as the investment manager of AMT Partners Investments,
as administrator of the Partners Portfolio, and as distributor of the shares of
the Partners 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 Series of Managers Trust, 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 three
other investment companies. These funds had aggregate net assets of
approximately $11.9 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 portfolio
securities and the sale of covered call options. Neuberger&Berman and its
affiliates, including N&B Management, manage securities accounts that had
approximately $38.7 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.
Michael M. Kassen and Robert I. Gendelman are primarily responsible for the
day-to-day management of AMT Partners Investments. 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. He has had primary responsibility for
AMT Partners Investments since March 1994. Mr. Gendelman is a senior portfolio
manager for Neuberger&Berman and an Assistant Vice President of N&B Management
since 1994. He has had primary responsibility for AMT Partners Investments since
October 1994. He was a portfolio manager for another mutual fund manager from
1992 to 1993 and was managing partner of an investment partnership from 1988 to
1992.
N&B Management serves as distributor in connection with the offering of the
Partners Portfolio's shares. In connection with the sale of the Portfolio's
shares, the 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
17
<PAGE>
distributor is responsible only for information given and statements and
representations made in the 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.
Neuberger&Berman acts as the principal broker for the Series in the purchase
and sale of portfolio securities and in the sale of covered call options, and
for those services receives brokerage commissions. In effecting securities
transactions, AMT Partners Investments 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 the Series will be adversely affected by
personal trading of employees, the Trust, Managers Trust, N&B Management, and
Neuberger&Berman have adopted policies that regulate 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
- --------------------------------------------------------------------------------
N&B Management provides investment management services to AMT Partners
Investments 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 the Partners
Portfolio that include furnishing similar facilities and personnel for the
Portfolio. With the Portfolio's consent, N&B Management is authorized to
subcontract some of its responsibilities under its administration agreement with
the Portfolio to third parties. For such administrative and investment
management services, N&B Management is paid the following fees:
Fees (AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADMINISTRATION
MANAGEMENT (SERIES) (PORTFOLIO)
<S> <C> <C>
- ----------------------------------------------------------------------------------
PARTNERS 0.55% of first $250 million 0.30%
0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
</TABLE>
The Partners 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. AMT Partners Investments 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 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 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.
18
<PAGE>
Expense Limitation
- --------------------------------------------------------------------------------
N&B Management has undertaken to limit the Partners Portfolio's expenses by
reimbursing the Portfolio for its operating expenses and its pro rata share of
AMT Partners Investments' operating expenses, excluding the compensation of N&B
Management, 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 expense limitation by N&B Management is to reduce operating
expenses of the Partners Portfolio and AMT Partners Investments and thereby
increase 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 Partners Portfolio and in so
doing performs certain bookkeeping, data processing and administrative services.
All correspondence should be sent to State Street Bank & Trust Company, P.O. Box
1978, Boston, MA 02105. State Street provides similar services to AMT Partners
Investments as the Series' transfer agent. State Street also acts as the
custodian of the Series' and the Portfolios' assets.
19
<PAGE>
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
one 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.
20
<PAGE>
DESCRIPTION OF INVESTMENTS
In addition to the securities referred to in "Investment Program" herein, AMT
Partners Investments, as indicated below, may make the following investments,
among others, individually or in combination, although the Series may not
necessarily buy any or all of the types of securities or use any or all of the
investment techniques that are described. These investments may be limited by
the requirements with which the Series must comply if the Portfolio is to
qualify as regulated investment companies for tax purposes. The use of hedging
or other techniques is discretionary and no representation is made that the risk
of AMT Partners Investments will be reduced by the techniques discussed in this
section. 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. 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. The 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, the 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. The 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. The Series 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 Partners Investments may invest up to 10% of the value of its total
assets, measured at the time of investment, 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.
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
21
<PAGE>
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, the 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.
FOREIGN CURRENCY TRANSACTIONS. The 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 or interest income received in foreign
currencies. The 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. The 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 the Series if the value of
the hedged currency increased.
The 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. The 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 the 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 the Series from adverse exchange rates,
they involve risk of loss if N&B Management fails to predict foreign currency
values correctly.
CALL OPTIONS. The 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.
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 transactional expense,
price volatility and a high degree of leverage. The writing of options could
result in significant increases in the Series' turnover rate.
22
<PAGE>
The primary risks in using call options are (1) imperfect correlation or no
correlation between changes in market value of the securities held by the Series
and the prices of the options; (2) possible lack of a liquid secondary market
for the options and the resulting inability to close out an option when desired;
(3) the fact that the skills needed to use options 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. Options
are considered derivatives.
FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. In a when-issued or forward
commitment transaction, the 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, the Series may lose the
opportunity to obtain a favorable price and yield. When-issued securities or
securities subject to a forward commitment 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.
REPURCHASE AGREEMENTS/SECURITIES LOANS. The Series may enter into repurchase
agreements and lend securities from its portfolio. In a repurchase agreement,
the Series buys a security from a Federal Reserve member 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). The 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. In a reverse repurchase agreement, the Series
sells securities to a bank or securities dealer 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. 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 may increase the
fluctuation in the market value of the Series' assets and are forms of leverage.
N&B Management monitors the creditworthiness of parties to reverse repurchase
agreements.
CONVERTIBLE SECURITIES. The 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.
OTHER INVESTMENTS. Although the Series ordinarily invests primarily in
common stocks, when market conditions warrant the Series 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. The 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, the Series will
23
<PAGE>
borrow a security from a brokerage firm to make delivery to the buyer. The
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, the
Series is required to pay to the lender any accrued interest or dividend and may
be required to pay a premium.
The 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. The Series will incur a loss if the price of the security increases
between those dates. The amount of any gain will be decreased, and the amount of
any loss increased, by the amount of any premium or interest the Series may be
required to pay in connection with a short sale. The successful use of short
selling may be adversely affected by imperfect correlation between movements in
the price of the security sold short and the securities being hedged. Short
selling may defer recognition of gains or losses into another tax period.
AMT Partners Investments may make short sales against-the-box. A short sale
is "against-the-box" when, at all times during which a short position is open,
the Series owns an equal amount of such securities, or own securities giving it
the right, without payment of future consideration, to obtain an equal amount of
securities sold short.
ZERO COUPON SECURITIES. Zero coupon securities do not pay interest
currently; instead, they are sold at a discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates change. In
calculating its daily income, the Series accrues a portion of the difference
between a zero coupon bond's purchase price and its face value.
RESTRICTED SECURITIES AND RULE 144A SECURITIES. 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.
24
<PAGE>
USE OF JOINT PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
Each Portfolio and its corresponding Series acknowledges that it is solely
responsible for all information or lack of information about that Portfolio and
Series in 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 SAI.
25
PART B
<PAGE>
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
Dated May 1, 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 May 1, 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 10158-0180.
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
INVESTMENT INFORMATION
Investment Policies and Limitations
Top-down approach to regional and country
diversification
Bottom-up approach to security selection
Currency Risk Management - AMT International
Investments
Discussions With Portfolio Managers
Additional Investment Information
CERTAIN RISK CONSIDERATIONS
PERFORMANCE INFORMATION
TRUSTEES AND OFFICERS
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
INVESTMENT MANAGEMENT, ADVISORY AND ADMINISTRATION SERVICES Expense
Limitation Management and Control of N&B Management Sub-Adviser
Investment Companies Advised
DISTRIBUTION ARRANGEMENTS
ADDITIONAL REDEMPTION INFORMATION
Suspension of Redemptions
DIVIDENDS AND OTHER DISTRIBUTIONS
ADDITIONAL TAX INFORMATION
Taxation of the Portfolios
Taxation of the Series
VALUATION OF PORTFOLIO SECURITIES
PORTFOLIO TRANSACTIONS
All Series (except AMT International Investments)
AMT International Investments
All Series
Portfolio Turnover
REPORTS TO SHAREHOLDERS
CUSTODIAN
INDEPENDENT AUDITORS
LEGAL COUNSEL
REGISTRATION STATEMENT
FINANCIAL STATEMENTS
Appendix A
RATINGS OF SECURITIES
Appendix B
A CONVERSATION WITH ROY NEUBERGER
<PAGE>
INVESTMENT INFORMATION
Each Portfolio is a separate series of the Trust, a Delaware
business trust registered with the Securities and Exchange Commission
("SEC") as a diversified, 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 a diversified, 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:
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 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 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,
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 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% of the value of the Series'
net assets or 2% 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 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 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 37% of that total at the end of 1994 - or less
than half of the dollar value 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.
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 United States, 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.
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?
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.
Over the past decade, one of the major indices of international
stocks outperformed the S&P 500 Index, which represents an average of
the prices of certain major U.S. stocks.
<PAGE>
If you had invested $10,000 in the international and U.S. stocks
comprising both indices ten years ago, here's what your investments
would have been worth as of June 30, 1995.1
Value of Avg.
investment annualized
total return
International stocks (EAFE) $45,587 16.38%
Domestic stocks (S&P 500) $39,131 14.62%
Of course, these historical results may not continue in the
future and cannot predict or reflect the performance of AMT
International Investments. In addition, investors should keep in mind
the added risks inherent in foreign markets, such as currency exchange
fluctuations, interest rates, and economic and political conditions,
all of which can lead to a greater degree of volatility than funds
that invest primarily in U.S. stocks.
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.
--------------------
1. Source: Ibbotson Associates. For the period ended
June 30, 1995. International stocks are represented by the
Morgan Stanley Capital International European, Australia, Far
East (EAFE) Index, an unmanaged index of non-U.S. equity
performance. Domestic stocks are represented by the Standard &
Poor's 500 Index, an unmanaged index of U.S. equity performance.
Indices do not take into account any fees and expenses of
investing in the individual securities that they track;
individuals cannot invest directly in any index. Average
annualized total returns are measured in U.S. dollars and include
changes in share price, dividends paid and the gross effect of
reinvesting dividends.
<PAGE>
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 focus 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?
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 recently
passed 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.
Timely Opportunity for Investors Looking for International
Bargains
"If you have most of your money in U.S. stocks, now may be a good
time to shift part of your portfolio abroad." The Wall Street Journal,
July 25, 1995.
While the U.S. stock market has been reaching new highs in recent
months, you may be able to find more bargains in international stocks
than you may locate on Wall Street. "Today, we are finding a large
supply of what we believe to be excellent companies whose stocks are
priced at very low levels," explains Felix Rovelli, portfolio manager
for AMT International Investments, a fund that invests in the stocks
of companies outside the United States.
"For the past year, " Rovelli continues, "the economies of many
countries have been growing, and the fundamentals of many selected
individual company stocks have looked strong. Yet because of concerns
-- over Mexico and the falling U.S. dollar, among other things --
international stock prices have lagged.
That is, until recently."
After facing setbacks in 1994 and earlier this year, plenty of
regions outside the United States have begun to bounce back.
In its June 1995 quarterly report on mutual funds, The Wall
Street Journal reported that stock markets in both emerging areas and
developed European countries rebounded strongly from April 1st to June
30th.2 (f/n July 7, 1995. Drawn from data supplied by
Lipper Analytical Services.)
What is causing this apparent turnaround? France, Italy, and
other European countries have been recovering from recessions. In
developing countries like Thailand and Malaysia, the economies have
been moving ahead at impressive growth rates of 6% to 10% annually --
over twice the U.S. rate.
AMT International Investments searches far and wide for the best
bargains outside the United States.
Without restrictions as to regions, portfolio manager Felix
Rovelli can exploit investment opportunities wherever and whenever
they arise -- in both developed and emerging economies. He invests in
the stocks of companies with solid fundamentals that he believes to be
undervalued and to have above-average potential for capital
appreciation.
Theresa A. Havell and Thomas G. Wolfe: Portfolio Managers of AMT
Limited Maturity Bond Investments and AMT Balanced Investments
(debt securities portion); and 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, L.P. 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 volatility and risk than
that of a longer-term bond fund. Both the yield and risk to principal
usually increase as the maturity of the bond increases. The
Portfolio's corresponding Series provides active fixed income
portfolio management through investment in securities with an average
portfolio duration of no longer than four years. Studies of historical
bond returns have shown that risk-adjusted total returns were best in
bonds having durations of two to five years. The bonds in this
duration range have provided significantly higher returns than
shorter-term securities and nearly the same return as longer-term
fixed income securities with far less volatility. The Portfolio
Managers attempt to increase the Series' value by actively managing
duration in response to interest rate trends and fundamental economic
developments. They seek to protect principal by shortening duration
when interest rates are rising and enhance returns by lengthening
duration in a falling interest rate market.
AMT Limited Maturity Bond Investments also enhances return and
limits risk by following a broadly diversified investment program
across the various sectors of the fixed income market. Over long
periods of time, corporate, mortgage- and asset-backed bonds have
provided higher returns than Treasury securities. Relying on extensive
internal research, the Portfolio Managers attempt to increase the
value of the Series by purchasing securities at significant yield
premiums to Treasury bonds. N&B Management uses sector weightings,
which are based on an analysis of the key factors that it believes
will impact the relative value and risk for each sector. These factors
include the economic cycle, credit quality trends and supply/demand
analysis for each security type. Within the sectors found attractive,
individual bonds are rigorously analyzed for credit, cash flow and
liquidity risk. Those that appear to offer attractive risk reward
ratios are purchased. While overall portfolio quality is high, N&B
Management believes that by careful evaluation of credit risk, the
Series benefits from the inclusion of lower- rated bonds with only
moderate incremental risk.
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.
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.
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 above-market historical growth rates,"
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 and into cash when we think there are no
reasonable values available."
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.
Michael M. Kassen and Robert I. Gendelman, Co-Managers of AMT
Partners Investments
"The investment objective of AMT Partners Investments is capital
growth," say its co-managers Michael Kassen and Robert Gendelman. "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
either in relation to strong current fundamentals, such as low
price-to-earnings ratios, consistent cash flow, and support from asset
values, or in relation to the growth of their future earnings, as
projected by N&B Management. If the market goes down, those stocks we
elect to hold, historically, go down less."
The co-portfolio managers monitor stocks of medium to large-
sized companies that often are not closely scrutinized by other
investors. The managers research these companies in order to determine
if they will produce a new product, become an acquisition target, or
undergo a financial restructuring.
What else catches Mr. Kassen's and Mr. Gendelman's eyes?
"We like managements that own their own stock. These companies
usually seek to build shareholder wealth by buying back shares or
making acquisitions that have a swift and positive impact on the
bottom line."
To increase the upside potential, the managers zero in on
companies that dominate their industries or their specialized niches.
Their reasoning? "Market leaders tend to earn higher levels of
profits."
AMT Partners Investments invests in a wide array of stocks, and
no single stock makes up more than a small fraction of the Series'
total assets. Of course, the Series' holdings are subject to change.
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 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.
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 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.
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 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).
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 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 ("CARS ") 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 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 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 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 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.
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.
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.
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."
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
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 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 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 contract 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 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 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 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 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 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 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.
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 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 Partners Investments, Growth Investments,
Balanced Investments and International Investments) and Short Sales
Against-the-Box (AMT Partners Investments, Growth Investments,
Balanced Investments, Liquid Asset Investments, Limited Maturity Bond
Investments and International Investments). AMT Partners, Growth,
Balanced, and 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 a 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 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
corresponding 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 the Series to qualify
as a RIC. See "Additional Tax Information."
AMT Liquid Asset, Limited Maturity Bond, Partners, Growth,
Balanced and International Investments may make short sales
against-the-box. A short sale is "against-the-box" when, at all times
during which a short position is open, the Series owns an equal amount
of such securities, or owns securities giving it the right, without
payment of future consideration, to obtain an equal amount of
securities sold short.
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.
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 may in certain cases determine that
such 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 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.
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
("Comparable Unrated Securities"); in addition, AMT Partners
Investments may invest up to 15% of its net assets, measured at the
time of investment, 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 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:
Effective Yield = [(Base Period Return + 1)superscript365/7] - 1
For the seven calendar days ended December 31, 1995, the current
yield of the Liquid Asset Portfolio was 4.74%. For the same period,
the effective yield was 4.85%.
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 5.19% and 5.33%, 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)superscript 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 31.73%, 13.69%, and 12.01%, respectively.
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 10.94%, 6.70%, and 7.61%,
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 23.76%, 11.04%, and
10.69%, respectively.
The average annual 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 36.47% and 17.54%, respectively.
The average annual 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 11.76% and 7.34%, respectively.
N&B Management has reimbursed certain of the Portfolios and
predecessors of the Portfolios for certain expenses during the periods
shown, which has the effect of increasing total return.
Average annual 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. ("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 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 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.
Positions Held
with the Trusts
Name, Address and Age Principal Occupation(s)
(1) (2)
Stanley Egener* Chairman of the Partner of
Age: 62 Board (Chief Neuberger&Berman;
Executive President and Director of
Officer) and N&B Management; Chairman
Trustee of each of the Board, Chief
Trust Executive Officer, and
Trustee of eight other mutual
funds for which N&B
Management acts as investment
manager, or administrator.
Faith Colish Trustee of each Attorney at law, Faith
63 Wall Street Trust Colish, A Professional
24th Floor Corporation.
New York, NY 10005
Age: 60
Walter G. Ehlers Trustee of each Consultant; Director of
6806 Suffolk Place Trust The Turner Corporation,
Harvey Cedars, NJ A.B. Chance Company,
08008 Crescent Jewelry, Inc.
Age 63
Leslie A. Jacobson Trustee of each Counsel to Fried, Frank,
Hickory Kingdom Road Trust Harris, Shriver &
Bedford, NY 10506 Jacobson, attorneys at
Age: 85 law; previously a partner
of that firm.
Robert M. Porter Trustee of each Retired September, 1991;
P.O. Box 33366 Trust Formerly Director of
Kerrville, TX 78029- Customer Relations, Aetna
3366 Life & Casualty Company.
Age: 70
Ruth E. Salzmann Trustee of each Retired; Director of John
1556 Pine Street Trust Deere Insurance Group;
Stevens Point, WI Actuarial Consultant.
54481
Age: 77
Peter P. Trapp* Trustee of each President, Ford Life
777 Ridge Road Trust Insurance Company since
Stevens Point, WI April, 1995; prior
54481 thereto, Consultant from
Age: 51 December, 1994 until
April, 1995; Formerly
Vice President, Sentry
Insurance & Mutual
Company, and President
and Chief Operating
Office, Sentry Investors
Life Insurance Company
until November, 1994.
Lawrence Zicklin* President and Partner of
Age: 60 Trustee of each Neuberger&Berman;
Trust Director of N&B
Management; President
and/or Trustee of five
other mutual funds and
portfolios for which N&B
Management acts as
investment manager or
administrator.
Daniel J. Sullivan Vice President Senior Vice President of
Age: 56 of each Trust N&B Management since
1992; prior thereto, Vice
President of N&B Management;
Vice President of eight other
mutual funds for which N&B
Management acts as investment
manager or administrator.
Michael J. Weiner Vice President Senior Vice President of
Age: 49 and Principal N&B Management since
Financial 1992; Treasurer of N&B
Officer of each Management from 1992 to
Trust 1996; prior thereto, Vice
President and Treasurer
of N&B Management; Vice
President and Principal
Financial Officer of
eight other mutual funds
for which N&B Management
acts as investment
manager or administrator.
Claudia A. Brandon Secretary of Vice President of N&B
Age: 39 each Trust Management; Secretary of
eight other mutual funds for
which N&B Management acts as
investment manager or
administrator.
Richard Russell Treasurer and Vice President of N&B
Age: 49 Principal Manage-ment since 1993;
Accounting prior thereto, Assistant
Officer of each Vice President of N&B
Trust Management; Treasurer or
Assistant Treasurer and
Principal Accounting Officer
of eight other mutual funds
for which N&B Management acts
as investment manager or
administrator.
Stacy Cooper-Shugrue Assistant Assistant Vice President
Age: 33 Secretary of of N&B Management since
each Trust 1993; prior thereto, an
employee of N&B
Management; Assistant
Secretary of eight other
mutual funds for which
N&B Management acts as
investment manager or
administrator.
C. Carl Randolph Assistant Partner of
Age: 58 Secretary Neuberger&Berman since
of each Trust 1992; employee
thereof since 1971; Assistant
Secretary of eight other
mutual funds for which N&B
Management acts as investment
manager or administrator.
Barbara DiGiorgio Assistant Assistant Vice President
Age: 37 Treasurer of of N&B Management since
each Trust 1993; prior thereto, an
employee of N&B
Management, and Assistant
Treasurer of other mutual
funds for which N&B
Management acts as
investment manager or
administrator since 1996.
Celeste Wischerth Assistant Assistant Vice President
Age: 35 Treasurer of of N&B Management since
each Trust 1994; prior thereto, an
employee of N&B
Management, and Assistant
Treasurer of other mutual
funds for which N&B
Management acts as
investment manager or
administrator since 1996.
-----------------------
(1) Unless otherwise indicated, the business address of each listed
person is 605 Third Avenue, New York, New York 10158-0180.
(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
until November 30, 1994 he was an officer of one of the Life
Company shareholders of the Trust.
The Trust's Trust Instrument and Managers Trust's Declaration of
Trust provides that they will indemnify the Trustees and their
officers against liabilities and expenses reasonably incurred in
connection with litigation in which they may be involved because of
their offices with the Trust or Advisers Trust, respectively, 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 $38,500 in fees was paid to the Trustees as a group by the
predecessor to the Trust. The following table shows 1995 compensation
by Trustee.
COMPENSATION TABLE
(1) (2) (3) (4) (5)
Pension or
Retirement Estimated
Benefits Annual Total
Aggregate Accrued As Benefits Compensation
Name of Person, Compensa- Part of Upon From
Position tion From Trust's Retire- Trust and
Trust (1) Expenses ment Fund
Complex
Paid to
Trustees
Stanley Egener, None None None None
Chairman and
Trustee
Faith Colish, $5,125 None None $39,500
Trustee
Walter G. $4,125 None None $ 7,500
Ehlers,
Trustee
Leslie A. $4,375 None None $15,000
Jacobson,
Trustee
Robert M. $5,125 None None $ 8,500
Porter,
Trustee
Ruth E. $5,125 None None $ 8,000
Salzmann,
Trustee
Peter P. Trapp, None None None None
Trustee
Lawrence None None None None
Zicklin,
President
and Trustee
(1) "Aggregate Compensation From Trust" is for the period from May 1
through December 31, 1995.
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 April
10, 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,
and Government Income Portfolios of the Trust and approximately 98% 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 April 10, 1996, separate accounts of the following Life
Companies owned of record or beneficially 5% or more of the Shares of
the following Portfolios:
Shares Percentage of
Outstanding Owned Shares Owned
Liquid Asset Portfolio
Hartford Life Insurance 10,267,202 76.7%
Company*
200 Hopmeadow
Simsbury, CT 06070
Sentry Life Insurance 3,039,348 22.7%
Company
1800 North Point Drive
Stevens Point, WI 54481
Partners Portfolio
Skandia Insurance Company* 9,495,971 44.1%
Nationwide Life Insurance* 911,132 49%
P.O. Box 182029
Columbus, OH 43218-2029
Government Income Portfolio
Security Life of Denver* 227,037 97.5%
8515 East Orchard Road
Englewood, CO 80111-5002
Growth Portfolio
Aetna Life Insurance and 4,337,071 18.6%
Annuity
151 Farmington Avenue
Hartford, CT 06156
Nationwide Life Insurance* 16,195,103 71.7%
P.O. Box 182029
Columbus, OH 43218-2029
Sentry Life Insurance 1,582,696 6.8%
Company
1800 North Point Drive
Stevens Point, WI 54481
Limited Maturity Bond
Portfolio
Nationwide Life Insurance* 14,543,162 81.1%
P.O. Box 182029
Columbus, OH 43218-2029
Life of Virginia 1,061,277 5.8%
6610 West Broad Street
Richmond, VA 23261
Penn Mutual Life Insurance 1,034,938 5.7%
Company
600 Dresher Road
Horsham, PA 19044
Balanced Portfolio
Hartford Life Insurance 1,270,340 11.5%
Company
200 Hopmeadow
Simsbury, CT 06070
Life of Virginia 2,367,996 21.4%
6610 West Broad Street
Richmond, VA 23261
Nationwide Life Insurance* 4,213,511 38%
P.O. Box 182029
Columbus, OH 43218-2029
Penn Mutual Life Insurance 1,914,930 17.4%
Company
600 Dresher Road
Horsham, PA 19044
Sentry Life Insurance 668,742 6%
1800 North Point Drive
Stevens Point, WI 54481
* Separate accounts of the Life Company owned 25% or more of the
outstanding shares of beneficial interest of the Portfolio, and
therefore may be presumed to "control" the Portfolio, as that
term is defined in the 1940 Act.
These Life Companies are required to vote Portfolio shares in
accordance with instructions received from owners of Variable
Contracts funded by separate accounts with respect to separate
accounts of these Life Companies that are registered with the
Securities and Exchange Commission as unit investment trusts.
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 $38.7 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 ("Management Agreement")
dated as of May 1, 1995 that was approved by the holders of the
interests in all the Series on April 13, 1994 (except with respect to
AMT International Investments). The Trustees of Managers Trust
approved the Management Agreement between AMT International Investment
and N&B Management on November 30, 1995.
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' assets. The Management 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, 0.65% 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 paid advisory, management and
administration fees in 1995. 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:
$28,699, Liquid Asset Portfolio; $2,508,627 Growth Portfolio;
$1,806,336, Limited Maturity Bond Portfolio; $1,217,370, Balanced
Portfolio. For the period ended December 31, 1994, N&B Management was
paid advisory fees of $4,752, Government Income Portfolio; and
$19,769, Partners Portfolio. For the year ended December 31, 1995, N&B
Management was paid investment management, advisory and administration
fees as follows (amounts for each Portfolio include management fees
paid by that Portfolio's corresponding Series for the period from May
1 to December 31, 1995): $73,935, Liquid Asset Portfolio; $4,086,084,
Growth Portfolio; $2,076,233, Limited Maturity Bond Portfolio;
$1,584,350, Balanced Portfolio; $10,555, Government Income Portfolio;
and $520,757, 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 Limitation
All Portfolios and their corresponding Series
As noted in the Prospectus under "Management and Administration -
Expenses," N&B Management has voluntarily undertaken to limit each
Portfolio's expenses by reimbursing each Portfolio for certain
operating expenses (including, if necessary, the fees under the
Administration Agreement with respect to the Government Income, 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 Portfolios $27,683 and $46,494, respectively.
For the year or period ended December 31, 1994, N&B Management
reimbursed the predecessors of the Liquid Asset and Government Income
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," N&B Management has undertaken to limits certain operating
expenses of AMT International Investments and the International
Portfolio, 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 B. 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, 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.
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
with respect to the International Portfolio, 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 was
authorized by the Trustees of Managers Trust with respect to AMT
International Investments on November 30, 1995.
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 $12.5 billion, as of
February 29, 1996. Neuberger&Berman acts as sub-adviser to these
investment companies.
Approximate Net
Assets at
Name February 29, 1996
Neuberger&Berman Cash Reserves . . . $435,293,674
Portfolio (investment portfolio for
Neuberger&Berman Cash Reserves)
Neuberger&Berman Government Money . . $283,946,594
Portfolio (investment portfolio for
Neuberger&Berman Government Money
Fund)
Neuberger&Berman Limited Maturity $310,263,741
Bond . .
Portfolio (investment portfolio for
Neuberger&Berman Limited Maturity
Bond Fund and Neuberger&Berman
Limited Maturity Bond Trust)
Neuberger&Berman Ultra Short Bond . . $102,834,031
Portfolio (investment portfolio for
Neuberger&Berman Ultra Short Bond
Fund and Neuberger&Berman Ultra
Short Bond Trust)
Neuberger&Berman Municipal Money . . $164,790,400
Portfolio (investment portfolio for
Neuberger&Berman Municipal Money
Fund)
Neuberger&Berman Municipal Securities $43,188,130
Portfolio (investment portfolio for
Neuberger&Berman Municipal
Securities Trust)
Neuberger&Berman New York Insured . . $10,706,803
Intermediate Portfolio (investment
portfolio for Neuberger&Berman New York
Insured Intermediate Fund)
Neuberger&Berman Genesis Portfolio . $164,033,750
(investment portfolio for
Neuberger&Berman Genesis Fund and
Neuberger&Berman Genesis Trust)
Neuberger&Berman Guardian Portfolio . $5,890,900,084
(investment portfolio for
Neuberger&Berman Guardian Fund,
Neuberger&Berman Guardian Trust and
Neuberger&Berman Guardian Assets)
Neuberger&Berman Manhattan Portfolio $661,756,636
(investment portfolio for Neuberger&Berman
Manhattan Fund, Neuberger&Berman
Manhattan Trust and Neuberger&Berman
Manhattan Assets)
Neuberger&Berman International $40,288,603
Portfolio . . . . . . . . . . . . . .
(investment portfolio for
Neuberger&Berman International Fund)
Neuberger&Berman Partners Portfolio . $1,874,645,431
(investment portfolio for
Neuberger&Berman Partners Fund,
Neuberger&Berman Partners Trust and
Neuberger&Berman Partners Assets)
Neuberger&Berman Focus Portfolio . . $1,146,121,805
(investment portfolio for
Neuberger&Berman Focus Fund,
Neuberger&Berman Focus Trust and
Neuberger&Berman Focus Assets)
Neuberger&Berman Socially Responsive . . $128,536,056
Portfolio (investment portfolio for
Neuberger&Berman Socially Responsive
Fund, Neuberger&Berman NYCDC
Socially Responsive Trust and
Neuberger&Berman Socially Responsive Trust)
Neuberger&Berman Advisers Managers $1,257,662,674
Trust (six series) . . . . . . . . .
In addition, Neuberger&Berman serves as investment adviser to
three investment companies, Plan Investment Fund, Inc., AHA Investment
Fund, Inc., and AHA Full Maturity with assets of $77,883,200,
$104,469,920, and $25,836,475, respectively, at February 29, 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, and Neuberger&Berman (as
adviser and sub-adviser) have varied from one another in the past and
are likely to vary in the future.
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.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each Portfolio distributes to its shareholders (primarily
insurance company separate accounts and Qualified Plans) 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). 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 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.
The Trust and Managers Trust have received a ruling from the
Internal Revenue Service ("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 satisfies the
requirements described above to qualify as a RIC.
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
Managers Trust has received a ruling from the Service to the
effect that, among other things, each Series will be treated as a
separate partnership for federal income tax purposes and will not be a
"publicly traded partnership." 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. 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 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, interest, and in some cases, capital gains 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.
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 as well as 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
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 that are not currently
effective, 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 (generally 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 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; however, in certain cases where the futures contract relates to
a foreign currency, the gain or loss may be ordinary rather than
capital.
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. 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. 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.
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 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.
Rules governing the tax aspects of swap agreements are in a
developing stage and are not entirely clear in certain respects.
Accordingly, while AMT Government Income Investments intends to
account for such transactions in a manner the Series deems to be
appropriate, the Internal Revenue Service might not accept such
treatment. If it did not, the status of the Government Income
Portfolio as a regulated investment company might be affected. The
Series and Portfolio intend to monitor developments in this area.
Certain requirements that must be met under the Code in order for the
Government Income Portfolio to qualify as a regulated investment
company may limit the extent to which the Series will be able to
engage in swap agreements.
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.
Each Portfolio and its corresponding Series calculate their NAVs as of
the close of regular trading on the NYSE, usually 4 p.m.
Eastern Time.
PORTFOLIO TRANSACTIONS
All Series (except AMT International Investments)
Neuberger&Berman acts as each Series's principal broker to the
extent a broker is used 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.
To the extent a broker is not used, 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.
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. Some of these research services may be
of value to N&B Management in advising its various clients (including
the Series) although not all of these services are necessarily used by
N&B Management in managing the Series. 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 broker 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, AMT
Growth Investments (and the predecessor of the Growth Portfolio for
the period prior to May 1, 1995) paid total brokerage commissions of
$721,943, $410,537 and $853,501 respectively, of which $466,157,
$321,277 and $707,176 respectively were paid to Neuberger&Berman.
Transactions in which that Series (and the predecessor of the Growth
Portfolio for the period prior to May 1, 1995) used Neuberger&Berman
as broker comprised 69.6% and 83.4% respectively of the aggregate
dollar amount of transactions involving the payment of commissions,
and 64.6% and 78.3% respectively of the aggregate brokerage
commissions paid by it during the years ended December 31, 1995 and
1994. 91.6% of the $255,776 paid to other brokers by that Series (and
the predecessor of the Growth Portfolio for the period prior to May 1,
1995) during the year ended December 31, 1995 (representing
commissions on transactions involving approximately $97,979,789) and
87.1% of the $89,260 paid to other brokers by the predecessor of the
Growth 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, that Series (and the
predecessor of the Growth Portfolio for the period prior to May 1,
1995) acquired securities of the following of its Regular
Broker-Dealers ("B/Ds"): Bear Stearns & Co. Inc., Exxon Asset
Management, Exxon Credit Corp., General Electric Capital Corp., and
Morgan Stanley & Co. Inc.; at that date, that Series held the
securities of its Regular B/Ds with an aggregate value as follows:
$4,571,250, Bear, Stearns & Co. Inc.; and $8,465,625, Morgan Stanley &
Co. Inc.
During the years ended December 31, 1995, 1994 and 1993, AMT
Balanced Investments (and the predecessor of the Balanced Portfolio
for the period prior to May 1, 1995) paid total brokerage commissions
of $218,734, $135,836 and $228,483 respectively, of which $154,773,
$107,420 and $190,263 respectively were paid to Neuberger&Berman.
Transactions in which that Series (and the predecessor of the Balanced
Portfolio for the period prior to May 1, 1995) used Neuberger&Berman
as broker comprised 75.1% and 82.9% respectively of the aggregate
dollar amount of transactions involving the payment of commissions,
70.8% and 79.1% respectively of the aggregate brokerage commissions
paid by it during the years ended December 31, 1995 and 1994. 91.1% of
the $63,961 paid to other brokers by that Series (and the predecessor
of the Balanced Portfolio for the period prior to May 1, 1995) during
the year ended December 31, 1995 (representing commissions on
transactions involving approximately $25,896,846) and 85.5% of the
$28,416 paid to other brokers by the predecessor of the Balanced
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 Series (and the
predecessor of the Balanced Portfolio for the period prior to May 1,
1995) acquired securities of the following of its Regular B/Ds: Bear,
Stearns & Co. Inc., Exxon Credit Corp., General Electric Capital
Corp., and Morgan Stanley & Co. Inc.; at that date, that Series held
the securities of its Regular B/Ds with an aggregate value as follows:
$795,000, Bear, Stearns & Co. Inc.; $10,000,000, Exxon Asset
Management Co.; $10,000,000, General Electric Capital Corp.; and
$1,370,625, Morgan Stanley & Co. Inc.
During the year ended December 31, 1995 and the period March 22,
1994 to December 31, 1994, the AMT Partners Investments (and the
predecessor of the Partners Portfolio for the period prior to May 1,
1995) paid total brokerage commissions of $457,962 and $27,115
respectively of which $307,520 and $26,321, respectively were paid to
Neuberger&Berman. Transactions in which that Series (and the
predecessor of the Partners Portfolio for the period prior to May 1,
1995) used Neuberger&Berman as broker comprised 68.5% and 97.4%
respectively of the aggregate dollar amount of transactions involving
the payment of commissions, and 67.2% 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. 96.0% of
the $150,442 paid to other brokers by that Series (and the predecessor
of the Partners Portfolio for the period prior to May 1, 1995) for the
year ended December 31, 1995 (representing commissions on transactions
involving approximately $75,234,281) and 91.5% of the $794 paid to
other brokers by the predecessor of the Partners 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, that Series (and the predecessor of the
Partners Portfolio for the period prior to May 1, 1995) acquired
securities of the following of its Regular B/Ds: Exxon Asset
Management, Exxon Credit Corp., General Electric Capital Corp., and
Salomon Brothers Inc.; at that date, that Series held none of the
securities of its Regular B/Ds.
During the year ended December 31, 1995, AMT Liquid Asset
Investments (and the predecessor of the Liquid Asset Portfolio for the
period prior to May 1, 1995) acquired securities of the following of
its Regular B/Ds: General Electric Capital Corp., Goldman Sachs & Co.,
Morgan (J.P.) Securities Inc., and First Chicago Capital Markets; at
that date that Series held securities of its Regular B/Ds with
aggregate value as follows: $1,597,199, Morgan (J.P.) Securities Inc.;
and $1,177,923, General Electric Capital Corp.
During the year ended December 31, 1995, AMT Limited Maturity
Bond Investments (and the predecessor of the Limited Maturity Bond
Portfolio for the period prior to May 1, 1995) acquired securities of
the following of its Regular B/Ds: Exxon Credit Corp., Morgan Stanley
& Co. Inc., and Salomon Brothers Inc.; at that date that Series held
securities of none of its Regular B/Ds.
During the year ended December 31, 1995, AMT Government Income
Investments (and the predecessor of the Government Income Portfolio
for the period prior to May 1, 1995) acquired securities of none of
its Regular B/Ds.
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 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
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 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 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
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 AMT International Investments. 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. If Mr. Rovelli is unavailable to perform his
responsibilities, Robert Cresci, who is an Assistant Vice President of
N&B Management, will assume responsibility for the portfolio of AMT
International Investments.
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.
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 Ernst & Young LLP, 200
Clarendon Street, Boston, MA 02116 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 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 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
The audited financial statements, notes to the audited financial
statements, and reports of the independent auditors contained in the
annual reports to shareholders of the Registrant for the fiscal year
ended December 31, 1995 for Neuberger&Berman Advisers Management Trust
(with respect to each of the Balanced Portfolio, Government Income
Portfolio, Growth Portfolio, Limited Maturity Bond Portfolio, Liquid
Asset Portfolio and Partners Portfolio), and for Advisers Managers
Trust (with respect to each of the AMT Balanced Investments, AMT
Government Income Investments, AMT Growth Investments, AMT Limited
Maturity Bond Investments, AMT Liquid Asset Investments and AMT
Partners Investments) are incorporated into this Statement of
Additional Information by reference.
<PAGE>
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
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 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.
<PAGE>
Appendix B
A CONVERSATION WITH ROY NEUBERGER
<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
<PAGE>
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 Rule #3: Be broad-gauged.
investments, Diversify your investments,
make sure that make sure that some of your
some of your principal is kept safe, and
principal is try to increase your income
kept safe, and as well as your capital.
try to increase
your income as
well as your
capital. [PICTURE OF ROY NEUBERGER]
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?
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.
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?
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 One should fall in love
in love with with ideas, with people, or
ideas, with with idealism. But in my
people or with book, the last thing to
idealism. But fall in love with is a
in my book, the particular security. It is
last thing to after all just a sheet of
fall in love paper indicating a part
with is a ownership in a corporation
particular and its use is purely
security." 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]
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.
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?
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?
Both are an art, although
picking stocks is a minor
"When things art compared with painting,
look bad, I sculpture or literature. I
become started buying art in the
optimistic. 30s, and in the 40s it was
When everything a daily, almost hourly
looks rosy, and occurrence. My inclination
the crowd is to buy the works of living
optimistic, I artists comes from Van
like to be a Gogh, who sold only one
seller." 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. 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.
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]
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.
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.
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.
Neuberger&Berman
Management
Inc.[SERVICE
MARK]
605 Third
Avenue, 2nd
Floor
New York, NY
10158-0180
Shareholder
Services
(800) 877-
9700
[COPYRIGHT
SYMBOL]1995
Neuberger&
Berman
PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS
<PAGE>
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
POST-EFFECTIVE AMENDMENT NO. 20 ON FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The audited financial statements, notes to the audited
financial statements, and reports of the independent auditors contained in the
annual reports to shareholders of the Registrant for the fiscal year ended
December 31, 1995 for Neuberger&Berman Advisers Management Trust (with respect
to each of the Balanced Portfolio, Government Income Portfolio, Growth
Portfolio, Limited Maturity Bond Portfolio, Liquid Asset Portfolio and Partners
Portfolio), and for Advisers Managers Trust (with respect to each of the AMT
Balanced Investments, AMT Government Income Investments, AMT Growth Investments,
AMT Limited Maturity Bond Investments, AMT Liquid Asset Investments and AMT
Partners Investments) are incorporated into the Statement of Additional
Information by reference.
Included in Part A of this Post-Effective Amendment:
FINANCIAL HIGHLIGHTS for each of the Balanced Portfolio,
Government Income Portfolio, Growth Portfolio, Limited Maturity Bond Portfolio,
Liquid Asset Portfolio and Partners Portfolio of Neuberger&Berman Advisers
Management Trust, for the periods indicated therein.
(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
<PAGE>
PART C - Other Information
Page 2
Nos. 2-88566 and 811-4255.
(3) Voting Trust Agreement. None.
(4) (a) Trust Instrument of Neuberger & Berman
Advisers Management Trust, Articles III, IV
and V. Incorporated by reference to Post-
Effective Amendment No. 16 to Registrant's
Registration Statement, File Nos. 2-88566
and 811-4255.
(b) By-laws of Neuberger & Berman Advisers
Management Trust, Articles V, VI and VIII.
Incorporated by reference to Post-Effective
Amendment No. 16 to Registrant's
Registration Statement, File Nos. 2-88566
and 811-4255.
(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. (Filed
herewith).
(9) (a) Transfer Agency Agreement Between Neuberger
&Berman Advisers Management Trust and State
Street Bank and Trust Company. (Filed
herewith).
<PAGE>
PART C - Other Information
Page 3
(b) Form of Administration 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.
(c) Form of Fund Participation Agreement (Filed
herewith).
(10) Consent of Dechert Price & Rhoads (Filed
herewith).
(11) Consent of Independent Auditors (filed
herewith).
(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 Schedules (Filed herewith).
Item 25. Persons Controlled By or Under Common Control with
Registrant
As of April 10, 1996, separate accounts of Nationwide Life Insurance
Company owned approximately 38% of the outstanding shares of the Balanced
Portfolio of the Registrant, 72% of the outstanding shares of the Growth
Portfolio of the Registrant, 81% of the outstanding shares of the Limited
Maturity Bond Portfolio of the Registrant, and 51% 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
<PAGE>
PART C - Other Information
Page 4
Liquid Asset Portfolio of the Registrant; separate accounts of Skandia
Insurance Company owned approximately 44% 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 life insurance and
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.
Item 26. Number of Holders of Securities
As of April 10, 1996, the number of record holders of the Portfolios of
the Registrant was as follows:
Title of Class Number of Record Holders
Balanced Portfolio 25
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
<PAGE>
PART C - Other Information
Page 5
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 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
<PAGE>
PART C - Other Information
Page 6
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 9.1 of the Administration Agreement between the
Registrant and N&B Management provides that N&B Management will not be liable to
the Registrant for any action taken or omitted to be taken by N&B Management in
good faith and with due care in accordance with such instructions, or with the
advice or opinion, of legal counsel for a Portfolio of the Trust or for the
Administrator in respect of any matter arising in connection with the
Administration Agreement. N&B Management shall be protected in acting upon any
such instructions, advice or opinion and upon any other paper or document
delivered by a Portfolio or such legal counsel which N&B Management believes to
be genuine and to have been signed by the proper person or persons, and N&B
Management shall not be held to have notice of any change of status or authority
of any officer or representative of the Trust, until receipt of written notice
thereof from the Portfolio. Section 12 of the Administration Agreement provides
that each Portfolio of the Registrant shall indemnify N&B Management and hold it
harmless from and against any and all losses, damages and expenses, including
reasonable attorneys' fees and expenses, incurred by N&B Management that result
from: (i) any claim, action, suit or proceeding in connection with N&B
Management's entry into or performance of the Agreement with respect to such
Portfolio; or (ii) any action taken or omission to act committed by N&B
Management in the performance of its obligations under the Agreement with
respect to such Portfolio; or (iii) any action of N&B Management upon
instructions believed in good faith by it to have been executed by a duly
authorized officer or representative of the Trust with respect to such
Portfolio; provided, that N&B Management will not be entitled to such
indemnification in respect of actions or omissions constituting negligence or
<PAGE>
PART C - Other Information
Page 7
misconduct on the part of N&B Management, or its employees, agents or
contractors. Amounts payable by the Registrant under this provision shall be
payable solely out of assets belonging to that Portfolio, and not from assets
belonging to any other Portfolio of the Registrant. Section 13 of the
Administration Agreement provides that N&B Management will indemnify each
Portfolio of the Registrant and hold it harmless from and against any and all
losses, damages and expenses, including reasonable attorneys' fees and expenses,
incurred by such Portfolio of the Registrant that result from: (i) N&B
Management's failure to comply with the terms of the Agreement; or (ii) N&B
Management's lack of good faith in performing its obligations under the
Agreement; or (iii) the negligence or misconduct of N&B Management, or its
employees, agents or contractors in connection with the Agreement. A Portfolio
of the Registrant shall not be entitled to such indemnification in respect of
actions or omissions constituting negligence or misconduct on the part of that
Portfolio or its employees, agents or contractors other than N&B Management,
unless such negligence or misconduct results from or is accompanied by
negligence or misconduct on the part of N&B Management, any affiliated person of
N&B Management, or any affiliated person of an affiliated person of N&B
Management.
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,
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.
<PAGE>
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 and Director (2),
Vice President(l), N&B Neuberger & Berman Partners Fund,
Management; Partner, Inc. (5)
Neuberger & Berman, L.P.
Claudia A. Brandon Secretary, Neuberger & Berman
Vice President, N&B Advisers Management Trust (Delaware
Management 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, Neuberger & Berman
Manhattan Fund, Inc. (5); Secretary,
Neuberger & Berman Multi-Series Fund,
Inc. (5); Secretary, Neuberger & Berman
Partners Fund, Inc.; 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 Secretary, Neuberger &
Assistant Vice President, Berman Advisers Management Trust
N&B Management (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 Secretary, Global Managers
Trust; Assistant Secretary, Neuberger
& Berman Equity Assets
Robert Cresci Assistant Portfolio Manager, BNP-N&B
Assistant Vice President, Global Asset Management L.P. (joint
N&B Management venture of Neuberger & Berman and
Banque Nationale de Paris) (6);
Assistant Portfolio Manager, Vontobel
(Swiss Bank) (7).
<PAGE>
Barbara DiGiorgio Assistant Treasurer, Neuberger &
Assistant Vice President, Berman Advisers Management Trust;
N&B Management Assistant Treasurer, Advisers
Managers Trust
<PAGE>
PART C - Other Information
Page 9
NAME BUSINESS AND OTHER CONNECTIONS
Stanley Egener Chairman of the Board and Trustee,
President and Director, Neuberger & Berman Advisers
N&B Management; Partner, Management Trust (Delaware business
Neuberger & Berman, L.P. 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
Robert I. Gendelman Senior Portfolio Manager, Harpel
Assistant Vice President, Advisors (8)
N&B Management
Theodore P. Giuliano Executive Vice President and
Vice President, N&B Director, Neuberger & Berman Multi-
Management (2); Partner, Series Fund, Inc.; Executive Vice
Neuberger & Berman, L.P. 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)
<PAGE>
NAME BUSINESS AND OTHER CONNECTIONS
Mark R. Goldstein Vice President, Neuberger & Berman
Vice President, N&B Manhattan Fund, Inc. (5); Vice
Management; Partner, President, Neuberger & Berman Multi-
Neuberger & Berman, L.P. Series Fund, Inc. (5)
Theresa A. Havell President and Director, Neuberger &
Vice President and Berman Multi-Series Fund, Inc. (5);
Director, N&B Management; President and Trustee, Neuberger &
Partner, Neuberger & Berman Income Funds; President and
Berman, L.P. Trustee, Neuberger & Berman Income
Trust; President and Trustee,
Income Managers Trust
Michael M. Kassen President and Director (2);
Vice President, N&B Neuberger & Berman Partners Fund,
Management; Partner, Inc.; Vice President, Neuberger &
Neuberger & Berman, L. P. Berman Multi-Series Fund, Inc. (5)
Irwin Lainoff Director (2), Neuberger & Berman
Vice President (1) and Manhattan Fund, Inc.; Vice
Director, N&B Management; President and Director, Neuberger &
Partner, Neuberger & Berman Genesis Fund, Inc. (5)
Berman, L.P.
Josephine Mahaney Vice President, Neuberger & Berman
Assistant Vice President Multi-Series Fund, Inc. (5)
(2), Vice President, N&B
Management
Roy R. Neuberger Chairman Emeritus, Neuberger &
Partner, Neuberger & Berman Genesis Fund, Inc. (5);
Berman, L. P. Chairman Emeritus, Neuberger &
Berman Guardian Fund, Inc.
C. Carl Randolph Assistant Secretary, Neuberger &
Partner, Neuberger & Berman Advisers Management Trust
Berman, L. P. (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
Secretary, Global Managers Trust;
Assistant Secretary, Neuberger &
Berman Equity Assets
Felix Rovelli Senior Vice President -- Senior
Vice President, Equity Portfolio Manager, BNP N&B
N&B Management Global Asset Management L.P. (joint
venture of Neuberger & Berman and
Banque Nationale de Paris) (6);
Portfolio Manager, Vontobel (Swiss
bank) (7)
Richard Russell Treasurer, Neuberger & Berman
Vice President, N&B Advisers Management Trust (Delaware
Management 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 & 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.
(5); 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 Vice President, Neuberger & Berman
Senior Vice President, Advisers Management Trust (Delaware
N&B Management 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 Vice President, Neuberger & Berman
Senior Vice President and Advisers Management Trust (Delaware
Treasurer, N&B Management 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. (5); 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
PART C - Other Information
Page 10
NAME BUSINESS AND OTHER CONNECTIONS
Celeste Wischerth Assistant Treasurer, Neuberger &
Assistant Vice President, Berman Advisers Management Trust;
N&B Management Assistant Treasurer, Advisers
Managers Trust
Lawrence Zicklin President and Trustee, Neuberger &
Director, N&B Management; Berman Advisers Management Trust
General Partner, (Delaware business trust);
Neuberger & Berman, L.P. 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)
<PAGE>
PART C - Other Information
Page 11
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
10158-0180.
(1) Until January, 1994.
(2) Until November 4, 1994.
(3) Until June 22, 1994.
(4) Until April 30, 1995.
(5) Until July 11, 1995.
(6) Until October 31, 1995.
(7) Until May, 1994.
(8) Until 1993.
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:
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
<PAGE>
PART C - Other Information
Page 12
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
Stacy Cooper-Shugrue Assistant Vice President Assistant Secretary
Robert Cresci Assistant Vice President None
William Cunningham Vice President None
Barbara DiGiorgio Assistant Vice President None
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
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
<PAGE>
PART C - Other Information
Page 13
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)
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
<PAGE>
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.
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, Limited Maturity Bond, Liquid Asset
and/or Partners Portfolio of Neuberger&Berman Advisers Management Trust, upon
request and without charge.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
FILED
WITH
POST-EFFECTIVE AMENDMENT NO. 20
TO THE
REGISTRATION STATEMENT
OF
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
<PAGE>
INDEX TO EXHIBITS
(for Post-Effective Amendment No. 20)
Exhibit No.
Under Part C
of Form N-1A Name of Exhibit
8 Custodian Contract Between
Neuberger&Berman Advisers
Management Trust and State
Street Bank and Trust
Company
9(a) Transfer Agency Agreement
Between Neuberger&Berman
Advisers Management
Trust and State Street Bank
and Trust Company
9(c) Form of Fund Participation
Agreement
10 Consent of Counsel
11 Consent of the Independent
Auditors
27 Financial Data Schedules
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment No. 20 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 17th day of April, 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. 20 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 April 17, 1996
Stanley Egener
/s/ Lawrence Zicklin President and Trustee April 17, 1996
Lawrence Zicklin (Principal Executive Officer)
/s/ Michael J. Weiner Vice President April 17, 1996
Michael J. Weiner (Principal Financial Officer)
/s/ Richard Russell Treasurer April 17, 1996
Richard Russell (Principal Accounting Officer)
/s/ Faith Colish Trustee April 17, 1996
Faith Colish
/s/ Walter G. Ehlers Trustee April 17, 1996
Walter G. Ehlers
Trustee
Leslie A. Jacobson
/s/ Robert M. Porter Trustee April 17, 1996
Robert M. Porter
/s/ Ruth E. Salzmann Trustee April 17, 1996
Ruth E. Salzmann
/s/ Peter P. Trapp Trustee April 17, 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 meets all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 20 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 17th day of April, 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. 20 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 April 17, 1996
Stanley Egener
/s/ Lawrence Zicklin President and Trustee April 17, 1996
Lawrence Zicklin (Principal Executive Officer)
/s/ Michael J. Weiner Vice President April 17, 1996
Michael J. Weiner (Principal Financial Officer)
/s/ Richard Russell Treasurer April 17, 1996
Richard Russell (Principal Accounting Officer)
/s/ Faith Colish Trustee April 17, 1996
Faith Colish
/s/ Walter G. Ehlers Trustee April 17, 1996
Walter G. Ehlers
Trustee
Leslie A. Jacobson
/s/ Robert M. Porter Trustee April 17, 1996
Robert M. Porter
/s/ Ruth E. Salzmann Trustee April 17, 1996
Ruth E. Salzmann
/s/ Peter P. Trapp Trustee April 17, 1996
Peter P. Trapp
EXHIBIT 8
CUSTODIAN CONTRACT
Between
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Employment of Custodian and Property to be Held by It.......... 1
2. Duties of the Custodian with Respect to Property of the
Fund Held By the Custodian in the United States................ 2
2.1 Holding Securities.................................... 2
2.2 Delivery of Securities................................ 2
2.3 Registration of Securities............................ 5
2.4 Bank Accounts......................................... 5
2.5 Availability of Federal Funds......................... 5
2.6 Collection of Income.................................. 6
2.7 Payment of Fund Monies................................ 6
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased.................................. 8
2.9 Appointment of Agents................................. 8
2.10 Deposit of Fund Assets in Securities Systems.......... 8
2.11 Fund Assets Held in the Custodian's Direct Paper
System................................................ 9
2.12 Segregated Account....................................10
2.13 Ownership Certificates for Tax Purposes...............11
2.14 Proxies...............................................11
2.15 Communications Relating to Portfolio Securities.......11
3. Duties of the Custodian with Respect to Property of the
Fund Held Outside of the United States.........................12
3.1 Appointment of Foreign Sub-Custodians.................12
3.2 Assets to be Held.....................................12
3.3 Foreign Securities Depositories.......................12
3.4 Agreements with Foreign Banking Institutions..........12
3.5 Access of Independent Accountants of the Fund.........13
3.6 Reports By Custodian..................................13
3.7 Transactions in Foreign Custody Account...............13
3.8 Liability of Foreign Sub-Custodians...................14
3.9 Liability of Custodian................................14
3.10 Reimbursement for Advances............................15
3.11 Monitoring Responsibilities...........................16
3.12 Branches of U.S. Banks................................16
3.13 Foreign Exchange Transactions.........................17
3.14 Tax Law...............................................17
4. Payments for Sales or Repurchases or Redemptions of the
Fund Shares of the Fund........................................18
5. Proper Instructions............................................19
6. Actions Permitted without Express Authority....................19
7. Evidence of Authority..........................................20
<PAGE>
8. Duties of Custodian with Respect to the Books of
Account and Calculation of Net Asset Value and Net
Income......................................................... 20
9. Records........................................................ 20
10. Opinion of Fund's Independent Accountant....................... 21
11. Reports to Fund by Independent Public Accountants.............. 21
12. Compensation of Custodian...................................... 21
13. Responsibility of Custodian.................................... 21
14. Effective Period, Termination and Amendment.................... 23
15. Successor Custodian............................................ 23
16. Interpretive and Additional Provisions......................... 24
17. Additional Funds............................................... 25
18. Massachusetts Law to Apply..................................... 25
19. Limitation of Trustee, Officer and Shareholder
Liability...................................................... 25
20. No Liability of Other Portfolios............................... 25
21. Confidentiality................................................ 25
22. Assignment..................................................... 26
23. Severability................................................... 26
24. Prior Contracts................................................ 26
25. Shareholder Communications Election............................ 26
<PAGE>
CUSTODIAN CONTRACT
This Contract between Neuberger & Berman Advisers Management Trust, a
Delaware business trust, having its principal place of business at 605 Third
Avenue, New York, New York 10158, hereinafter called the "Fund", and State
Street Bank and Trust Company, a Massachusetts trust company, having its
principal place of business at 225 Franklin Street, Boston, Massachusetts,
02110, hereinafter called the "Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund has issued shares in six portfolios, Balanced
Portfolio, Growth Portfolio, Liquid Asset Portfolio, Limited Maturity Portfolio,
Partners Portfolio, and Government Income Portfolio (such Portfolios together
with all other series subsequently established by the Fund and made subject to
this Contract in accordance with paragraph 17, being herein referred to as the
"Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the assets of
each Portfolio, including securities which the Fund, on behalf of the applicable
Portfolio, desires to be held in places within the United States ("domestic
securities") and securities it desires to be held outside the United States
("foreign securities") pursuant to the provisions of the Trust Instrument. The
Fund on behalf of each Portfolio agrees to deliver to the Custodian all
securities and cash of the Portfolios, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by the Portfolio(s) from time to time, and the cash consideration received
by it for such new or treasury shares of beneficial interest of the Fund
representing interests in the Portfolios ("Shares"), as may be issued or sold
from time to time. The Custodian shall not be responsible for any property of a
Portfolio held or received by the Portfolio and not delivered to the Custodian.
<PAGE>
Upon receipt of "Proper Instructions" (within the meaning of Article
5), the Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-custodians located in the United States, but only in
accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held By
the Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property to be held by
it in the United States, including all domestic securities owned by
such Portfolio, other than (a) securities which are maintained pursuant
to Section 2.10 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S. Department
of the Treasury, collectively referred to herein as "Securities System"
and (b) commercial paper of an issuer for which State Street Bank and
Trust Company acts as issuing and paying agent ("Direct Paper") which
is deposited and/or maintained in the Direct Paper System of the
Custodian pursuant to Section 2.11.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only
upon receipt of Proper Instructions from the Fund on behalf of the
applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
<PAGE>
5) To the issuer thereof or its agent when such securities
are called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or
other consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.9 or into the name
or nominee name of any sub-custodian appointed pursuant to
Article 1; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate
face amount or number of units; provided that, in any such
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against
a receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities
prior to receiving payment for such securities except as
may arise from the Custodian's own negligence or willful
misconduct;
8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization
or readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities,
the surrender thereof in the exercise of such warrants,
rights or similar securities or the surrender of interim
receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
10) For delivery in connection with any loans of securities made
by the Portfolio, but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
<PAGE>
authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and
a member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any
similar organization or organizations, regarding escrow
or other arrangements in connection with transactions by
the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits
in connection with transactions by the Portfolio of the
Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for a Portfolio, for delivery to such
Transfer Agent or to the holders of shares in connection
with distributions in kind, as may be described from time
to time in the currently effective prospectus and
statement of additional information of the Fund, related
to the Portfolio ("Prospectus"), in satisfaction of
requests by holders of Shares for repurchase or
redemption; and
15) For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions from the Fund on behalf
of the applicable Portfolio, a certified copy of a resolution
of the Board of Trustees or of the Executive Committee signed
by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities of the
Portfolio to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons
<PAGE>
to whom delivery of such securities shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, unless the Fund has authorized
in writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as
the Portfolio, or in the name or nominee name of any agent appointed
pursuant to Section 2.9 or in the name or nominee name of any
sub-custodian appointed pursuant to Article 1. All securities accepted
by the Custodian on behalf of the Portfolio under the terms of this
Contract shall be in "street name" or other good delivery form. If,
however, the Fund directs the Custodian to maintain securities in
"street name", the Custodian shall utilize its best efforts only to
timely collect income due the Fund on such securities and to notify the
Fund on a best efforts basis only of relevant corporate actions
including, without limitation, pendency of calls, maturities, tender or
exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio
of the Fund which shall contain only property held by the Custodian as
custodian for that Portfolio, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and shall hold
in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Portfolio, other than
cash maintained by the Portfolio in a bank account established and used
in accordance with Rule 17f-3 under the Investment Company Act of 1940.
Funds held by the Custodian for a Portfolio may be deposited by it to
its credit as Custodian in the Banking Department of the Custodian or
in such other banks or trust companies as it may in its discretion deem
necessary or desirable; provided, however, that every such bank or
trust company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust company
and the funds to be deposited with each such bank or trust company
shall on behalf of each applicable Portfolio be approved by vote of a
majority of the Board of Trustees of the Fund. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund
on behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf
of a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of
such Portfolio which are deposited into the Portfolio's account.
<PAGE>
2.6 Collection of Income. Subject to the provisions of Section
2.3, the Custodian shall collect on a timely basis all income and other
payments with respect to registered domestic securities held hereunder
to which each Portfolio shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely basis
all income and other payments with respect to bearer domestic
securities if, on the date of payment by the issuer, such securities
are held by the Custodian or its agent and shall credit such income, as
collected, to such Portfolio's custodian account. Without limiting the
generality of the foregoing, the Custodian shall detach and present for
payment all coupons and other income items requiring presentation as
and when they become due and shall collect interest when due on
securities held hereunder. Collection of income due each Portfolio on
securities loaned pursuant to the provisions of Section 2.2 (10) shall
be the responsibility of the Custodian so long as the securities are
registered and remain in the name of the Fund, the Custodian, or its
nominee, or in the Depository Trust Company account of the Custodian,
but otherwise shall be the responsibility of the Fund and the Custodian
will have no duty or responsibility in connection therewith, other than
to provide the Fund with such information or data as may be necessary
to assist the Fund in arranging for the timely delivery to the
Custodian of the income to which the Portfolio is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the
Fund on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options,
futures contracts or options on futures contracts for the
account of the Portfolio but only (a) against the
delivery of such securities or evidence of title to such
options, futures contracts or options on futures
contracts to the Custodian (or any bank, banking firm or
trust company doing business in the United States or
abroad which is qualified under the Investment Company
Act of 1940, as amended, to act as a custodian and has
been designated by the Custodian as its agent for this
purpose) registered in the name of the Portfolio or in
the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer; (b) in
the case of a purchase effected through a Securities
<PAGE>
System, in accordance with the conditions set forth in Section
2.10 hereof; (c) in the case of a purchase involving the
Direct Paper System, in accordance with the conditions set
forth in Section 2.11; (d) in the case of repurchase
agreements entered into between the Fund on behalf of the
Portfolio and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery
of the securities either in certificate form or through an
entry crediting the Custodian's account at the Federal Reserve
Bank with such securities or (ii) against delivery of the
receipt evidencing purchase by the Portfolio of securities
owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from
the Portfolio or (e) for transfer to a time deposit account of
the Fund in any bank, whether domestic or foreign; such
transfer may be effected prior to receipt of a confirmation
from a broker and/or the applicable bank pursuant to Proper
Instructions from the Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section
2.2 hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by
the Portfolio, including but not limited to the following
payments for the account of the Portfolio: interest,
taxes, management, accounting, transfer agent and legal
fees, and operating expenses of the Fund whether or not
such expenses are to be in whole or part capitalized or
treated as deferred expenses;
5) For the payment of any dividends on Shares of the
Portfolio declared pursuant to the governing documents of
the Fund;
6) For payment of the amount of dividends received in
respect of securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the
Portfolio, a certified copy of a resolution of the Board of
Trustees or of the Executive Committee of the Fund signed by
an officer of the Fund and certified by its Secretary or an
Assistant Secretary, specifying the amount of such payment,
setting forth the purpose for which such payment is to be
made, declaring such purpose to be a proper purpose, and
naming the person or persons to whom such payment is to be
made.
<PAGE>
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated otherwise in this Contract, in
any and every case where payment for purchase of domestic securities
for the account of a Portfolio is made by the Custodian in advance of
receipt of the securities purchased in the absence of specific written
instructions from the Fund on behalf of such Portfolio to so pay in
advance, the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by
the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, and its rules or regulations to act as a custodian,
as its agent to carry out such of the provisions of this Article 2 as
the Custodian may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by a Portfolio in a clearing agency
registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in the
Securities System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
2) The records of the Custodian with respect to securities
of the Portfolio which are maintained in a Securities
System shall identify by book-entry those securities
belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from
the Securities System that such securities have been
transferred to the Account, and (ii) the making of an
<PAGE>
entry on the records of the Custodian to reflect such payment
and transfer for the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the Securities
System that payment for such securities has been transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such transfer and payment for the
account of the Portfolio. Copies of all advices from the
Securities System of transfers of securities for the account
of the Portfolio shall identify the Portfolio, be maintained
for the Portfolio by the Custodian and be provided to the Fund
at its request. Upon request, the Custodian shall furnish the
Fund on behalf of the Portfolio confirmation of each transfer
to or from the account of the Portfolio in the form of a
written advice or notice and shall furnish to the Fund on
behalf of the Portfolio copies of daily transaction sheets
reflecting each day's transactions in the Securities System
for the account of the Portfolio;
4) The Custodian shall provide the Fund for the Portfolio with
any report obtained by the Custodian (or by any agent
appointed by the Custodian pursuant to Section 2.9) on the
Securities System's accounting system, internal accounting
control and procedures for safeguarding securities deposited
in the Securities System;
5) The Custodian shall have received from the Fund on behalf
of the Portfolio the certificate required by Article 14
hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting
from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure of
the Custodian or any such agent to enforce effectively such
rights as it may have against the Securities System; at the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claim against
the Securities System or any other person which the Custodian
may have as a consequence of any such loss or damage if and to
the extent that the Portfolio has not been made whole for any
such loss or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper System. The
Custodian may deposit and/or maintain securities owned by a
<PAGE>
Portfolio in the Direct Paper System of the Custodian subject to the
following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions from the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented in
an account ("Account") of the Custodian in the Direct Paper
System which shall not include any assets of the Custodian
other than assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian with respect to securities
of the Portfolio which are maintained in the Direct Paper
System shall identify by book-entry those securities
belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on
the records of the Custodian to reflect such payment and
transfer of securities to the account of the Portfolio.
The Custodian shall transfer securities sold for the
account of the Portfolio upon the making of an entry on
the records of the Custodian to reflect such transfer and
receipt of payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the
account of the Portfolio, in the form of a written advice
or notice, of Direct Paper on the next business day
following such transfer and shall furnish to the Fund on
behalf of the Portfolio copies of daily transaction
sheets reflecting each day's transaction in the
Securities System for the account of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on the Custodian's system of
internal accounting control as the Fund may reasonably request
from time to time.
2.12 Segregated Account. The Custodian shall upon receipt of
Proper Instructions from the Fund on behalf of each applicable
Portfolio establish and maintain a segregated account or
accounts for and on behalf of each such Portfolio, into which
account or accounts may be transferred cash and/or securities,
including securities maintained in an account by the Custodian
pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund on behalf of the
Portfolio, the Custodian and a broker-dealer registered under
the Exchange Act and a member of the NASD (or any futures
<PAGE>
commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon purchased
or sold by the Portfolio, (iii) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for
other proper corporate purposes, but only, in the case of clause (iv),
upon receipt of, in addition to Proper Instructions from the Fund on
behalf of the applicable Portfolio, a certified copy of a resolution of
the Board of Trustees or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate purposes.
2.13 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of each Portfolio held by
it and in connection with transfers of securities.
2.14 Proxies. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies,
without indication of the manner in which such proxies are to be voted,
and shall promptly deliver to the Portfolio such proxies, all proxy
soliciting materials and all notices relating to such securities.
2.15 Communications Relating to Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise
of call and put options written by the Fund on behalf of the Portfolio
and the maturity of futures contracts purchased or sold by the
Portfolio) received by the Custodian from issuers of the securities
being held for the Portfolio. With respect to
<PAGE>
tender or exchange offers, the Custodian shall transmit promptly to the
Portfolio all written information received by the Custodian from
issuers of the securities whose tender or exchange is sought and from
the party (or his agents) making the tender or exchange offer. If the
Portfolio desires to take action with respect to any tender offer,
exchange offer or any other similar transaction, the Portfolio shall
when reasonably possible notify the Custodian at least three business
days prior to the date on which the Custodian is to take such action
3. Duties of the Custodian with Respect to Property of the Fund
Held Outside of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for each
Portfolio's securities and other assets maintained outside the United
States the foreign banking institutions and foreign securities
depositories designated on Schedule A hereto ("foreign
sub-custodians"). Upon receipt of "Proper Instructions", as defined in
Section 5 of this Contract, together with a certified resolution of the
Fund's Board of Trustees, the Custodian and the Fund may agree to amend
Schedule A hereto from time to time to designate additional foreign
banking institutions and foreign securities depositories to act as
sub-custodian. Upon receipt of Proper Instructions, the Fund may
instruct the Custodian to cease the employment of any one or more such
sub-custodians for maintaining custody of a Portfolio's assets.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed upon
in writing by the Custodian and the Fund, assets of each Portfolio
shall be maintained in foreign securities depositories only through
arrangements implemented by the foreign banking institutions serving as
sub-custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the
provisions set forth in Section 3.4 hereof.
3.4 Agreements with Foreign Banking Institutions. Each agreement
with a foreign banking institution shall be substantially in
<PAGE>
3.5 Access of Independent Accountants of the Fund. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books
and records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the
performance of such foreign banking institution under its agreement
with the Custodian.
3.6 Reports By Custodian. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the
securities and other assets of each Portfolio held by foreign
sub-custodians, including but not limited to an identification of
entities having possession of each Portfolio's securities and other
assets and advice or notifications of any transfers of securities to or
from each custodial account maintained by a foreign banking institution
for the Custodian on behalf of each applicable Portfolio indicating, as
to securities acquired for a Portfolio, the identity of the entity
having physical possession of such securities.
3.7 Transactions in Foreign Custody Account. (a) Except as otherwise
provided in paragraph (b) of this Section 3.7, the provision of
Sections 2.2 and 2.7 of this Contract shall apply, mutatis mutandis to
the foreign securities of the Fund held outside the United States by
foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be effected in accordance with
the customary securities trading or securities processing practices and
<PAGE>
established procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering
securities to the purchaser thereof or to a dealer therefor (or an
agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such
purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian may
be maintained in the name of such entity's nominee to the same extent
as set forth in Section 2.3 of this Contract, and the Fund agrees to
hold any such nominee harmless from any liability as a holder of record
of such securities.
3.8 Liability of Foreign Sub-Custodians. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless,
the Custodian and the Fund from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the
Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a foreign banking
institution as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not been made
whole for any such loss, damage, cost, expense, liability or claim.
<PAGE>
like, in each case under circumstances where the Custodian and
State Street London Ltd. have exercised reasonable care.
3.10 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose for the benefit of a
Portfolio including the purchase or sale of foreign exchange or of
contracts for foreign exchange ("Advance"), or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the
performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful
misconduct ("Liability") then in such event property equal in value to
not more than 125% of such Advance and accrued interest on the Advance
or the anticipated amount of such Liability, held at any time for the
account of the appropriate Portfolio by the Custodian or sub-custodian
may be held as security for such Liability or for such Advance and
accrued interest on the Advance. The Custodian shall designate the
security or securities constituting security for an Advance or
Liability (the "Designated Securities") by notice in writing to the
Fund (which may be sent by tested telefax or telex). In the event the
value of the Designated Securities shall decline to less than 110% of
the amount of such Advance and accrued interest on the Advance or the
anticipated amount of such Liability, then the Custodian may designate
in the same manner an additional security for such obligation
("Additional Securities"), but the aggregate value of the Designated
Securities and Additional Securities shall not be in excess of 125% of
the amount of such Advance and the accrued interest on the Advance or
the anticipated amount of such Liability. At the request of the Fund,
on behalf of a Portfolio, the Custodian shall agree to substitution of
a security or securities which have a value equal to the value of the
Designated or Additional Securities which the Fund desires be released
from their status as security, and such release from status as security
shall be effective upon the Custodian and the Fund agreeing in writing
as to the identity of the substituted security or securities, which
shall thereupon become Designated Securities.
Notwithstanding the above, the Custodian shall, at the request of the
Fund, on behalf of a Portfolio, immediately release from their status
as security any or all of the Designated Securities or Additional
Securities upon the Custodian's receipt from such Portfolio of cash or
cash equivalents in an amount equal to 100% of the value of the
Designated Securities or Additional Securities that the Fund desires to
be released from their status as security pursuant to this Section. The
applicable Portfolio shall reimburse or indemnify the Custodian in
respect of a Liability and shall pay any Advances upon demand;
provided, however, that the Custodian first notified the Fund on behalf
<PAGE>
of the Portfolio of such demand for repayment, reimbursement or
indemnification. If, upon notification, the Portfolio shall fail to pay
such Advance or interest when due or shall fail to reimburse or
indemnify the Custodian promptly in respect of a Liability, the
Custodian shall be entitled to dispose of the Designated Securities and
Additional Securities to the extent necessary to obtain repayment,
reimbursement or indemnification. Interest, dividends and other
distributions paid or received on the Designated Securities and
Additional Securities, other than payments of principal or payments
upon retirement, redemption or repurchase, shall remain the property of
the Portfolio, and shall not be subject to this Section. To the extent
that the disposition of the Portfolio's property, designated as
security for such Advance or Liability, results in an amount less than
necessary to obtain repayment, reimbursement or indemnification, the
Portfolio shall continue to be liable to the Custodian for the
differences between the proceeds of the disposition of the Portfolio's
property, designated as security for such Advance or Liability, and the
amount of the repayment, reimbursement or indemnification due to the
Custodian and the Custodian shall have the right to designate in the
same manner described above an additional security for such obligation
which shall constitute Additional Securities hereunder.
3.11 Monitoring Responsibilities. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of
a material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or, in the
case of any foreign sub-custodian not the subject of an appropriate
exemptive order from the Securities and Exchange Commission, is
notified by such foreign sub-custodian that there appears to be a
substantial likelihood that its shareholders' equity will decline below
$200 million (U.S. dollars or the equivalent thereof) or that its
shareholders' equity has declined below $200 million (in each case
computed in accordance with generally accepted U.S. accounting
principles).
3.12 Branches of U.S. Banks. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of a
Portfolio's assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26(a) of said securities trading or securities processing
practices and securities trading or securities processing practices and
<PAGE>
Act. The appointment of any such branch as a sub-custodian
shall be governed by paragraph 1 of this Contract.
(b) Cash held for each Portfolio of the Fund in the United Kingdom
shall be maintained in an interest bearing account established for the
Fund with the Custodian's London branch, which account shall be subject
to the direction of the Custodian, State Street London Ltd. or both.
3.13 Foreign Exchange Transactions. (a) Upon receipt of Proper Instructions,
the Custodian shall settle foreign exchange contracts or options to
purchase and sell foreign currencies for spot and future delivery on
behalf of and for the account of a Portfolio with such brokers, banks
or trust companies other than the Custodian ("Currency Brokers") as the
Fund may determine and direct pursuant to Proper Instructions or as the
Custodian may select ("Transactions Other Than As Principal").
(b) The Custodian shall not be obligated to enter into foreign exchange
transactions as principal ("Transactions As Principal"). However, if
the Custodian has made available to the Fund its services as a
principal in foreign exchange transactions and subject to any separate
agreement between the parties relating to such transactions, the
Custodian shall enter into foreign exchange contracts or options to
purchase and sell foreign currencies for spot and future delivery on
behalf of and for the account of a Portfolio, with the Custodian as
principal.
(c) If, in a Transaction Other Than As Principal, a Currency Broker is
selected by the Fund, on behalf of a Portfolio, the Custodian shall
have no duty with respect to the selection of the Currency Broker, or,
so long as the Custodian acts in accordance with Proper Instructions,
for the failure of such Currency Broker to comply with the terms of any
contract or option. If, in a Transaction Other Than As Principal, the
Currency Broker is selected by the Custodian or if the Custodian enters
into a Transaction As Principal, the Custodian shall be responsible for
the selection of the Currency Broker and the failure of such Currency
Broker to comply with the terms of any contract or option.
(d) In Transactions Other Than As Principal and Transactions As
Principal, the Custodian shall be responsible for any transfer of cash,
the transmission of instructions to and from a Currency Broker, if any,
the safekeeping of all certificates and other documents and agreements
evidencing or relating to such foreign exchange transactions and the
maintenance of proper records as set forth in Section 9 of this
Contract.
3.14 Tax Law. Except to the extent that imposition of any tax
liability arises from State Street's failure to perform in
<PAGE>
accordance with the terms of this Section 3.14 or from the failure of
any sub-custodian to perform in accordance with the terms of the
applicable subcustody agreement, State Street shall have no
responsibility or liability for any obligations now or hereafter
imposed on each Portfolio by the tax law of the domicile of each
Portfolio or of any jurisdiction in which each Portfolio is invested or
any political subdivision thereof. It shall be the responsibility of
State Street to use due care to perform such steps as are required to
collect any tax refund, to ascertain the appropriate rate of tax
withholding and to provide such information and documents as may be
required to enable each Portfolio to receive appropriate tax treatment
under applicable tax laws and any applicable treaty provisions. Unless
otherwise informed by each Portfolio, State Street, in performance of
its duties under this Section, shall be entitled to apply categorical
treatment of each Portfolio according to the nationality of each
Portfolio, the particulars of its organization and other relevant
details that shall be supplied by each Portfolio. State Street shall be
entitled to rely on any information supplied by each Portfolio. State
Street may engage reasonable professional advisors disclosed to each
Portfolio by State Street, which may include attorneys, accountants or
financial institutions in the regular business of investment
administration and may rely upon advice received therefrom. It shall be
the duty of each Portfolio to inform State Street of any change in the
organization, domicile or other relevant fact concerning tax treatment
of each Portfolio and further to inform State Street if each Portfolio
is or becomes the beneficiary of any special ruling or treatment not
applicable to the general nationality and category of entity of which
each Portfolio is a part under general laws and treaty provisions.
4. Payments for Sales or Repurchases or Redemptions of the Fund
Shares of the Fund
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and to the Transfer
Agent of any receipt by the Custodian of payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Trust Instrument and any applicable votes of the Board of
Trustees of the Fund pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
<PAGE>
redemption or repurchase of their Shares. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and to the Transfer
Agent of any disbursement by the Custodian of payments for Shares of such
Portfolio. In connection with the redemption or repurchase of Shares of a
Portfolio, the Custodian is authorized upon receipt of instructions from the
Transfer Agent to wire funds to or through a commercial bank designated by the
redeeming shareholders. In connection with the redemption or repurchase of
Shares of the Fund, the Custodian shall honor checks drawn on the Custodian by a
holder of Shares, which checks have been furnished by the Fund to the holder of
Shares, when presented to the Custodian in accordance with such procedures and
controls as are mutually agreed upon from time to time between the Fund and the
Custodian.
5. Proper Instructions
Proper Instructions as used throughout this Contract means a writing
signed or initialled by two or more persons as the Board of Trustees shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved, including a specific statement of
the purpose for which such action is requested. Oral instructions will be
considered Proper Instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to be confirmed
in writing. Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by the Board of Trustees of the Fund
accompanied by a detailed description of procedures approved by the Board of
Trustees, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Fund and the
Custodian are satisfied that such procedures afford adequate safeguards for the
Portfolios' assets. For purposes of this Section, Proper Instructions shall
include instructions received by the Custodian pursuant to any three party
agreement which requires a segregated asset account in accordance with Section
2.12.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to
its duties under this Contract, provided that all such
payments shall be accounted for to the Fund on behalf of
the Portfolio;
2) surrender securities in temporary form for securities in
definitive form;
<PAGE>
3) endorse for collection, in the name of the Portfolio,
checks drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Portfolio except as otherwise directed by the Board of
Trustees of the Fund.
7. Evidence of Authority
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Custodian may receive and accept a certified copy of a vote of the Board of
Trustees of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Trustees pursuant to the Trust Instrument as described in such
vote, and such vote may be considered as in full force and effect until receipt
by the Custodian of written notice to the contrary.
8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
If, and to the extent requested by the Fund, the Custodian shall
cooperate with and supply necessary information to the entity or entities
appointed by the Board of Trustees of the Fund to keep the books of account of
each Portfolio and/or compute the net asset value per share of the outstanding
shares of each Portfolio or, if directed in writing to do so by the Fund on
behalf of the Portfolio, shall itself keep such books of account and/or compute
such net asset value per share. If so directed, the Custodian shall also
calculate daily the net income of the Portfolio as described in the Fund's
currently effective prospectus related to such Portfolio and shall advise the
Fund and the Transfer Agent daily of the total amounts of such net income and,
if instructed in writing by an officer of the Fund to do so, shall advise the
Transfer Agent periodically of the division of such net income among its various
components. The calculations of the net asset value per share and the daily
income of each Portfolio shall be made at the time or times described from time
to time in the Fund's currently effective prospectus related to such Portfolio.
9. Records
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the Investment
Company Act of 1940, with particular attention to Section 31 thereof and Rules
<PAGE>
31a-1 and 31a-2 thereunder. All such records shall be the property of the Fund
and shall at all times during the regular business hours of the Custodian be
open for inspection by duly authorized officers, employees or agents of the Fund
and employees and agents of the Securities and Exchange Commission. The
Custodian shall, at the Fund's request, supply the Fund with a tabulation of
securities owned by each Portfolio and held by the Custodian and shall, when
requested to do so by the Fund and for such compensation as shall be agreed upon
between the Fund and the Custodian, include certificate numbers in such
tabulations.
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio may from time to time request, to obtain from year
to year favorable opinions from the Fund's independent accountants with respect
to its activities hereunder in connection with the preparation of the Fund's
Form N-lA, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such commission.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each Portfolio at
such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this Contract;
such reports shall be of sufficient scope and in sufficient detail as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.
13. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it and to be signed by the proper party or parties, including any
<PAGE>
to be genuine futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
As a condition to the indemnification provided for in this Section 13,
if in any case the indemnifying party is asked to indemnify and hold the
indemnified party harmless, the indemnified party shall fully and promptly
advise the indemnifying party of all pertinent facts concerning the situation in
question, and shall use all reasonable care to identify, and promptly notify the
indemnifying party of, any situation which presents or appears likely to present
the probability of such a claim for indemnification against the indemnifying
party. The indemnifying party shall be entitled, at its own expense, to
participate in the investigation and to be consulted as to the defense of any
such claim, and in such event, the indemnified party shall keep the indemnifying
party fully and currently informed of all developments relating to such
investigation or defense. At any time, the indemnifying party shall be entitled
at its own expense to conduct the defense of any such claim, provided that the
indemnifying party: (a) reasonably demonstrates to the other party its ability
to pay the full amount of potential liability in connection with such claim and
(b) first admits in writing to the other party that such claim is one in respect
of which the indemnifying party is obligated to indemnify the other party
hereunder. Upon satisfaction of the foregoing conditions, the indemnifying party
shall take over complete defense of the claim, and the indemnified party shall
initiate no further legal or other expenses for which it shall seek
indemnification. The indemnified party shall in no case confess any claim or
make any compromise in any case in which the indemnifying party may be asked to
indemnify the indemnified party, except with the indemnifying party's prior
written consent.
If the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund or the Portfolio being liable for the payment
of money or incurring liability of some other form, the Fund on behalf of the
Portfolio, as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
<PAGE>
14. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall
continue in full force and effect with respect to each Portfolio until
terminated as hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than thirty (30) days after the date
of such delivery or mailing; provided, however that the Custodian shall not with
respect to a Portfolio act under Section 2.10 hereof in the absence of receipt
of an initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees of the Fund has approved the use of a particular Securities
System by such Portfolio as required by Rule 17f-4 under the Investment Company
Act of 1940, as amended and that the Custodian shall not with respect to a
Portfolio act under Section 2.11 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has approved the initial use- of the Direct Paper System by such
Portfolio and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Trustees has reviewed the use by such
Portfolio of the Direct Paper System; provided further, however, that the Fund
shall not amend or terminate this Contract in contravention of any applicable
federal or state regulations, or any provision of the Trust Instrument, and
further provided, that the Fund on behalf of one or more of the Portfolios may
at any time by action of its Board of Trustees (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements. Termination of the Contract with respect to
one Portfolio (but less than all of the Portfolios) will not constitute
termination of the Contract, and the terms of the Contract continue to apply to
the other Portfolios.
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio
held in a Securities System.
<PAGE>
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to transfer
to an account of such successor custodian all of the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust company
shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and
the Fund on behalf of each of the Portfolios, may from time to time agree on
such provisions interpretive of or in addition to the provisions of this
Contract as may in their joint opinion be consistent with the general tenor of
this Contract. Any such interpretive or additional provisions shall be in a
writing signed by both parties and shall be annexed hereto, provided that no
such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Trust Instrument of the
Fund. No interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.
<PAGE>
17. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to Balanced Portfolio, Growth Portfolio, Liquid Asset Portfolio,
Limited Maturity Portfolio, Partners Portfolio, and Government Income Portfolio
with respect to which it desires to have the Custodian render services as
custodian under the terms hereof, it shall so notify the Custodian in writing,
and if the Custodian agrees in writing to provide such services, such series of
Shares shall become a Portfolio hereunder.
18. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
19. Limitation of Trustee, Officer and Shareholder Liability
It is expressly agreed that the obligations of the Fund and each
Portfolio hereunder shall not be binding upon any of the Trustees, officers,
agents or employees of the Fund or upon the shareholders of any Portfolio
personally, but shall only bind the assets and property of the Fund, as provided
in its Trust Instrument. The execution and delivery of this Contract have been
authorized by the Trustees of the Fund, and this Contract has been executed and
delivered by an authorized officer of the Fund acting as such; neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the assets and property
of the Fund, as Provided in its Trust Instrument.
20. No Liability of Other Portfolios
Notwithstanding any other provision of this Contract, the parties agree
that the assets and liabilities of each Portfolio are separate and distinct from
the assets and liabilities of each other Portfolio and that no Portfolio shall
be liable or shall be charged for any debt, obligation or liability of any other
Portfolio, whether arising under this Contract or otherwise.
21. Confidentiality
The Custodian agrees that all books, records, information and data
pertaining to the business of the Fund which are exchanged or received pursuant
to the negotiation or carrying out of this Contract shall remain confidential,
shall not be voluntarily disclosed to any other person, except as may be
required by law, and shall not be used by the Custodian for any purpose not
directly related to the business of the Fund, except with the Fund's written
consent.
<PAGE>
22. Assignment
Neither the Fund nor the Custodian shall have the right to assign any
of its rights or obligations under this Contract without the prior written
consent of the other party.
23. Severability
If any provision of this Contract is held to be unenforceable as a
matter of law, the other terms and provisions hereof shall not be affected
thereby and shall remain in full force and effect.
24. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund on behalf of each of the Portfolios, or any
predecessor(s) thereto, and the Custodian relating to the custody of the Fund's
assets.
25. Shareholder Communications Election
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name,
address, and share positions.
NO [ ] The Custodian is not authorized to release the Fund's
name, address, and share positions.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of May 1, 1995.
ATTEST NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
__________________________ By ________________________________
ATTEST STATE STREET BANK AND TRUST COMPANY
__________________________ By ________________________________
Executive Vice President
<PAGE>
SCHEDULE A
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
The following foreign banking institutions and foreign securities
depositories have been approved by the boards of trustees of the above-mentioned
trusts for use by the indicated series of the trust as sub-custodians for the
securities and other assets:
Westpac Banking Corp. (Austraclear Ltd. and Reserve Bank
Information and Transfer System) (Australia)
GiroCredit Bank Aktiengesellschaft der Sparkassen (OEKB) (Austria)
Generale Bank (Banque Nationale de Belgique) (C.I.K.) (Belgium)
Canada Trustco Mortgage Company (CDS) (Canada)
Den Danske Bank (VP-Centralen) (Denmark)
Kansallis-Osake-Pankki (Central Share Register) (Finland)
Banque Paribas (SICOVAM and Banque de France) (France)
Berliner Handels-und Frankfurter Bank (Kassenverein) (Germany)
Standard Chartered Bank, Hong Kong (CCASS) (Hong Kong)
Bank of Ireland (Central Bank of Ireland and GSO) (Ireland)
Morgan Guaranty Trust Company (Banca d'Italia and Monte Titoli
S.p.A.) (Italy)
Sumitomo Trust & Banking Company (Bank of Japan) (Japan)
Euroclear (Luxembourg)
Euroclear (Malaysia)
Citibank, N.A.-Mexico (Banco de Mexico and INDEVAL) (Mexico)
MeesPierson N.V. (NECIGEF) (The Netherlands)
ANZ Banking Group (NZ) Ltd. (Austraclear N.Z.) (New Zealand)
Christiania Bank Og Kreditkasse (VPS) (Norway)
Euroclear (Central de Valores Mobiliarios) (Portugal)
Euroclear (CDP) (Singapore)
A - 1
<PAGE>
Banco Santander, S.A. (Banco de Espana and SCLV) (Spain)
Skandinaviska Enskilda Banken (VPC) (Sweden)
Union Bank of Switzerland (SEA) (Switzerland)
State Street London Limited (The Central Gilts Office and The
Central Moneymarkets Office) (United Kingdom)
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
- --------------------------------
Name:
Date: May 1, 1995
A - 2
EXHIBIT 9(a)
TRANSFER AGENCY AND SERVICE AGREEMENT
between
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
1. Terms of Appointment; Duties of the Bank................ 1
2. Fees and Expenses....................................... 4
3. Representations and Warranties of the Bank.............. 4
4. Representations and Warranties of the Fund.............. 5
5. Data Access and Proprietary Information................. 5
6. Indemnification......................................... 7
7. Covenants of the Fund and the Bank...................... 8
8. Termination of Agreement................................ 9
9. Additional Funds........................................ 10
10. Assignment.............................................. 10
11. Amendment............................................... 10
12. Massachusetts Law to Apply.............................. 10
13. Force Majeure........................................... 11
14. Consequential Damages................................... 11
15. Merger of Agreement..................................... 11
16. Limitations of Liability of the Trustees, Shareholders,
Officers, Employees and Agent........................... 11
17. Counterparts............................................ 11
18. Notices................................................. 11
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of May 1, 1995, by and between NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST, a Delaware business trust, having its principal office and
place of business at 605 Third Avenue, New York, New York 10158 (the "Fund"),
and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company having
its principal office and place of business at 225 Franklin Street, Boston,
Massachusetts 02110 (the "Bank").
WHEREAS, the Fund is authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Fund has issued shares in six portfolios, Balanced Portfolio,
Growth Portfolio, Liquid Asset Portfolio, Limited Maturity Portfolio, Partners
Portfolio, and Government Income Portfolio (each such Portfolio, together with
all other Portfolios subsequently established by the Fund and made subject to
this Agreement in accordance with Article 9, being herein referred to as a
"Portfolio", and collectively as the "Portfolios");
WHEREAS, the Fund on behalf of the Portfolios desires to appoint the Bank as its
transfer agent, dividend disbursing agent, custodian of certain retirement plans
and agent in connection with certain other activities, and the Bank desires to
accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this Agreement, the
Fund, on behalf of the Portfolios, hereby employs and appoints the Bank
to act as, and the Bank agrees to act as, the Fund's transfer agent for
authorized and issued shares of beneficial interest of the Fund
representing interests in each of the respective Portfolios ("Shares"),
dividend disbursing agent, custodian of certain retirement plans and
agent in connection with any accumulation, open-account or similar
plans provided to the shareholders of each of the respective Portfolios
of the Fund ("Shareholders") and set out in the currently effective
prospectus and statement of additional information ("prospectus") of
the Fund on behalf of the applicable Portfolio, including without
limitation any periodic investment plan or periodic withdrawal program.
1.2 The Bank agrees that it will perform the following services:
<PAGE>
(a) In accordance with procedures established from time to time by
agreement between the Fund on behalf of each of the
Portfolios, as applicable, and the Bank, the Bank shall:
(i) Receive for acceptance, orders for the
purchase of Shares, and promptly deliver
payment and appropriate documentation
thereof to the Custodian of the Fund
authorized pursuant to the Trust Instrument
of the Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the
appropriate number of Shares and hold such
Shares in the appropriate Shareholder
account;
(iii) Receive for acceptance redemption requests
and redemption directions and deliver the
appropriate documentation thereof to the
Custodian:
(iv) At the appropriate time as and when it
receives monies paid to it by the Custodian
with respect to any redemption, pay over or
cause to be paid over in the appropriate
manner such monies as instructed by the
redeeming Shareholders;
(v) Effect transfers of Shares by the registered
owners thereof upon receipt of appropriate
instructions;
(vi) Prepare and transmit (or credit to the
appropriate shareholder account) payments
for dividends and distributions declared by
the Fund on behalf of the applicable
Portfolio;
(vii) Issue replacement certificates for those
certificates alleged to have been lost,
stolen or destroyed upon receipt by the Bank
of indemnification satisfactory to the Bank
and protecting the Bank and the Fund, and
the Bank at its option, may issue
replacement certificates in place of
mutilated stock certificates upon
presentation thereof and without such
indemnity;
(viii) Maintain records of account for and advise
the Fund and its Shareholders as to the
foregoing; and
<PAGE>
(ix) Record the issuance of shares of the Fund
and maintain pursuant to SEC Rule 17Ad-10(e)
a record of the total number of shares of
each Portfolio which are authorized, based
upon data provided to it by the Fund, and
issued and outstanding. The Bank shall also
provide the Fund on a regular basis with the
total number of shares of each Portfolio
which are authorized and issued and
outstanding and shall have no obligation,
when recording the issuance of shares, to
monitor the issuance of such Shares or to
take cognizance of any laws relating to the
issue or sale of such Shares, which
functions shall be the sole responsibility
of the Fund.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), the Bank shall:
(i) perform the customary services of a transfer agent,
dividend disbursing agent, custodian of certain retirement
plans and, as relevant, agent in connection with accumulation,
open-account or similar plans (including without limitation
any periodic investment plan or periodic withdrawal program),
including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing
proxies, receiving and tabulating proxies, mailing Shareholder
reports and prospectuses to current Shareholders, withholding
taxes on U.S. resident and non-resident alien accounts,
preparing and filing U.S. Treasury Department Forms 1099 and
other appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders,
preparing and mailing confirmation forms and statements of
account to Shareholders for all purchases and redemptions of
Shares and other confirmable transactions in Shareholder
accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information
and (ii) provide a system which will enable the Fund to
monitor the total number of Shares of each Portfolio sold in
each State.
(c) In addition, the Fund shall (i) identify to the Bank in
writing those transactions and assets to be treated as exempt
from blue sky reporting for each State and (ii) verify the
establishment of transactions for each State on the system
prior to activation and thereafter monitor the daily activity
of each Portfolio for each State. The responsibility of the
Bank for the Fund's blue sky State registration status is
solely limited to the initial establishment of transactions
subject to blue sky compliance by the Fund and the reporting
of such transactions to the Fund as provided above.
<PAGE>
(d) Procedures as to who shall provide certain of these services
in Section 1 may be established from time to time by agreement
between the Fund on behalf of each Portfolio and the Bank per
the attached service responsibility schedule. The Bank may at
times perform only a portion of these services and the Fund or
its agent may perform these services on the Fund's behalf.
(e) The Bank shall provide additional services on behalf of the
Fund (i.e., escheatment services) which may be agreed upon in
writing between the Fund and the Bank.
2. Fees and Expenses
2.1 For the performance by the Bank pursuant to this Agreement, the Fund,
on behalf of each Portfolio agrees to pay the Bank an annual
maintenance fee for each Shareholder account as set out in the initial
fee schedule attached hereto. Such fees and out-of-pocket expenses and
advances identified under Section 2.2 below may be changed from time to
time subject to mutual written agreement between the Fund and the Bank.
2.2 In addition to the fee paid under Section 2.1 above, the Fund, on
behalf of the applicable Portfolio, agrees to reimburse the Bank for
out-of-pocket expenses, including but not limited to confirmation
production, postage, forms, telephone, microfilm, microfiche,
tabulating proxies, records storage, or advances incurred by the Bank
for the items set out in the fee schedule attached hereto. In addition,
any other expenses incurred by the Bank at the request or with the
consent of the Fund, will he reimbursed by the Fund on behalf of the
applicable Portfolio.
2.3 The Fund, on behalf of the applicable Portfolio, agrees to pay all fees
and reimbursable expenses within five days following the mailing of the
respective billing notice. Postage for mailing of dividends, proxies,
Fund reports and other mailings to all Shareholder accounts shall be
advanced to the Bank by the Fund at least seven (7) days prior to the
mailing date of such materials.
3. Representations and Warranties of the Bank
The Bank represents and warrants to the Fund that:
3.1 It is a trust company duly organized and existing and in good standing
under the laws of the Commonwealth of Massachusetts.
<PAGE>
3.2 It is duly qualified to carry on its business in the Commonwealth of
Massachusetts.
3.3 It is empowered under applicable laws and by its Charter and By-Laws to
enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
4. Representations and Warranties of the Fund
The Fund represents and warrants to the Bank that:
4.1 It is a business trust duly organized and existing and in good standing
under the laws of Delaware.
4.2 It is empowered under applicable laws and by its Trust Instrument and
By-Laws to enter into and perform this Agreement.
4.3 All corporate proceedings required by said Trust Instrument and By-Laws
have been taken to authorize it to enter into and perform this
Agreement.
4.4 It is an open-end management investment company registered under the
Investment Company Act of 1940, as amended.
4.5 A registration statement under the Securities Act of 1933, as amended,
on behalf of each of the Portfolios is currently effective and will
remain effective, and appropriate state securities law filings have
been made and will continue to be made, with respect to all Shares of
the Fund being offered for sale.
5. Data Access and Proprietary Information
5.1 The Fund acknowledges that the computer programs, screen formats,
report formats (except such screen formats and report formats as may be
necessary to respond to shareholder problems or inquiries), interactive
design techniques, and documentation manuals furnished to the Fund by
the Bank as part of the Fund's ability to access certain Fund-related
data ("Customer Data") maintained by the Bank on data bases under the
control and ownership of the Bank or other third party ("Data Access
Services") constitute copyrighted, trade secret, or other proprietary
information (collectively, "Proprietary Information") of substantial
value to the Bank or other third party. In no event shall Proprietary
<PAGE>
Information be deemed Customer Data. The Fund agrees to treat all
Proprietary Information as proprietary to the Bank and further agrees
that it shall not divulge any Proprietary Information to any person or
organization except as may be provided hereunder. Without limiting the
foregoing, the Fund agrees for itself and its employees and agents:
(a) to access Customer Data solely from locations as may be
designated in writing by the Bank and solely in accordance
with the Bank's applicable user documentation;
(b) to refrain from copying or duplicating in any way the
Proprietary Information;
(c) to refrain from obtaining unauthorized access to any portion
of the Proprietary Information, and if such access is
inadvertently obtained, to inform in a timely manner of such
fact and dispose of such information in accordance with the
Bank's instructions;
(d) to honor all reasonable written requests made by the Bank to
protect at the Bank's expense the rights of the Bank in
Proprietary Information at common law, under federal copyright
law and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 5. The obligations of this Section shall
survive any earlier termination of this Agreement.
5.2 If the Fund notifies the Bank that any of the Data Access Services do
not operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely
manner to correct such failure. Organizations from which the Bank may
obtain certain data included in the Data Access Services are solely
responsible for the contents of such data and the Fund agrees to make
no claim against the Bank arising out of the contents of such
third-party data, including, but not limited to, the accuracy thereof.
DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS,
AS AVAILABLE BASIS. THE BANK EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT
THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
5.3 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (i) effect
the transfer or movement of cash or Shares or (ii) transmit Shareholder
information or other information (such transactions constituting a
"COEFI"), then in such event the Bank shall be entitled to rely on the
validity and authenticity of such instruction without undertaking any
further inquiry as long as such instruction is undertaken in conformity
with security procedures established by the Bank from time to time.
<PAGE>
6. Indemnification
6.1 The Bank shall not be responsible for, and the Fund shall on behalf of
the applicable Portfolio indemnify and hold the Bank harmless from and
against, any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to:
(a) All actions of the Bank or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or
willful misconduct.
(b) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation
or warranty of the Fund hereunder.
(c) The reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or services
which (i) are received by the Bank or its agents or
subcontractors, and (ii) have been prepared, maintained or
performed by the Fund or any other person or firm on behalf of
the Fund including but not limited to any previous transfer
agent or registrar.
(d) The reasonable reliance on, or the carrying out by the Bank or
its agents or subcontractors of any instructions or requests
of the Fund on behalf of the applicable Portfolio.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares
be registered in such state or in violation of any stop order
or other determination or ruling by any federal agency or any
state with respect to the offer or sale of such Shares in such
state.
6.2 The Bank shall indemnify and hold the Fund and each Portfolio thereof
harmless from and against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or
attributed to any action or failure or omission to act by the Bank, its
employees or agents, as a result of the lack of good faith, negligence
or willful misconduct of the Bank, its employees or agents.
<PAGE>
6.3 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the
Bank under this Agreement, and the Bank and its agents or
subcontractors shall not be liable and shall be indemnified by the Fund
on behalf of the applicable Portfolio for any action taken or omitted
by it in good faith in reasonable reliance upon such instructions or
upon the opinion of such counsel. The Bank, its agents and
subcontractors shall be protected and indemnified in acting in good
faith upon any paper or document furnished by or on behalf of the Fund,
reasonably believed to be genuine and to have been signed by the proper
person or persons, or upon any instruction, information, data, records
or documents provided the Bank or its agents or subcontractors by
machine readable input, telex, CRT data entry or other similar means
authorized by the Fund, and shall not be held to have notice of any
change of authority of any person, until receipt of written notice
thereof from the Fund. The Bank, its agents and subcontractors shall
also be protected and indemnified in recognizing stock certificates
which are reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Fund, and the proper countersignature
of any former transfer agent or former registrar, or of a co-transfer
agent or co-registrar.
6.4 In order that the indemnification provisions contained in this Section
6 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification
shall promptly notify the Fund of such assertion, and shall keep the
other party advised with respect to all developments concerning such
claim. The party who may be required to indemnify shall have the option
to participate with the party seeking indemnification in the defense of
such claim or to defend against said claim in its own name or in the
name of the other party. The party seeking indemnification shall in no
case confess any claim or make any compromise in any case in which the
other party may be required to indemnify it except with the other
party's prior written consent.
7. Covenants of the Fund and the Bank
7.1 The Fund shall on behalf of each Portfolio promptly furnish to the Bank
the following:
(a) A certified copy of the resolution of the Trustees of the Fund
authorizing the appointment of the Bank and the execution and
delivery of this Agreement.
(b) A copy of the Trust Instrument and By-Laws of the Fund and all
amendments thereto.
<PAGE>
7.2 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices,
if any; and for the preparation or use, and for keeping account of,
such certificates, forms and devices.
7.3 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, the Bank agrees that all such
records prepared or maintained by the Bank relating to the services to
be performed by the Bank hereunder are the property of the Fund and
will be preserved, maintained and made available in accordance with
such Section and Rules, and will be surrendered promptly to the Fund on
and in accordance with its request.
7.4 The Bank and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged
or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law.
7.5 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the
Fund and to secure instructions from an authorized officer of the Fund
as to such inspection. The Bank reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its
counsel that it may be held liable for the failure to exhibit the
Shareholder records to such person.
7.6 Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Portfolio of the Fund are
separate and distinct from the assets and liabilities of each other
Portfolio and that no Portfolio shall be liable or shall be charged for
any debt, obligation or liability of any other Portfolio, whether
arising under this Agreement or otherwise.
8. Termination of Agreement
8.1 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other.
8.2 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
borne by the Fund on behalf of the applicable Portfolio(s).
Additionally, the Bank reserves the right to charge for any other
reasonable expenses associated with such termination.
<PAGE>
9. Additional Funds
In the event that the Fund establishes one or more Portfolios of Shares
in addition to Balanced Portfolio, Growth Portfolio, Liquid Asset
Portfolio, Limited Maturity Portfolio, Partners Portfolio, and
Government Income Portfolio with respect to which it desires to have
the Bank render services as transfer agent under the terms hereof, it
shall so notify the Bank in writing, and if the Bank agrees in writing
to provide such services, such series of Shares shall become a
Portfolio hereunder.
10. Assignment
10.1 Except as provided in Section 10.3 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party
without the written consent of the other party.
10.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
10.3 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data
Services, Inc., a Massachusetts corporation ("BFDS") which is duly
registered as a transfer agent pursuant to Section 17A(c)(l) of the
Securities Exchange Act of 1934, as amended ("Section 17A(c)(1)"), (ii)
a BFDS subsidiary duly registered as a transfer agent pursuant to
Section 17A(c)(l) or (iii) a BFDS affiliate; provided, however, that
the Bank shall be as fully responsible to the Fund for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
11. Amendment
This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of
the Trustees of the Fund.
12. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth
of Massachusetts.
<PAGE>
13. Force Majeure
In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment
or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not be
liable for damages to the other for any damages resulting from such
failure to perform or otherwise from such causes.
14. Consequential Damages
Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement.
15. Merger of Agreement
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
16. Limitations of Liability of the Trustees, Shareholders, Officers,
Employees and Agent
A copy of the Trust Instrument of the Fund is on file with the
Secretary of the State Of Delaware. The parties agree that neither the
Shareholders, Trustees, officers, employees nor any agent of the Fund
(other than the transfer agent) shall be liable hereunder and that the
parties to this Agreement other than the Fund shall look solely to the
Fund property for the performance of this Agreement or payment of any
claim under this Agreement.
17. Counterparts
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
18. Notices
All notices, requests, consents and other communications hereunder
(collectively "communications") shall be in writing and shall be
personally delivered or mailed, first class postage prepaid,
<PAGE>
(a) if to the Fund, to
Neuberger & Berman Advisers Management Trust
605 Third Avenue
New York, N.Y. 10158
Attention: Michael J. Weiner
Vice President
(b) if to the Bank, to
Boston Financial Data Services, Inc.
Two Heritage Drive
North Quincy, MA 02171
Attn: Paul Alsama
or such other address as either party shall have furnished to the other
in writing; provided that any communication may be sent by "tested"
telex or any other form of electronic transmission capable of producing
a permanent record and agreed upon by the parties in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
ATTEST: NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
BY: _______________________________
ATTEST: STATE STREET BANK AND TRUST COMPANY
BY: _______________________________
Executive Vice President
<PAGE>
STATE STREET BANK & TRUST COMPANY
FUND SERVICE RESPONSIBILITIES
Service Performed Responsibility
1. Receive orders for the purchase of Bank Fund
Shares.
X X
(if in (if by phone)
2. Issue Shares and hold Shares in writing)
Shareholders accounts.
X
3. Receive redemption requests.
4. Effect transactions 1-3 above X X
directly with broker-dealers. (if in (if by phone)
writing)
5. Pay over monies to redeeming (2 is always
Shareholders. BFDS)
6. Effect transfers of Shares. X
7. Prepare and transmit dividends and X
distributions.
X
8. Issue Replacement Certificates.
9. Reporting of abandoned property. X
10. Maintain records of account. X
11. Maintain and keep a current and X
accurate control book for each
issue of securities.
12. Mail proxies. X
13. Mail Shareholder reports. X
14. Mail prospectuses to current X
Shareholders.
15. Withhold taxes on U.S. resident X
and non-resident alien accounts.
16. Prepare and file U.S. Treasury X
Department forms.
17. Prepare and mail account and X
confirmation statements for
Shareholders.
<PAGE>
18. Provide Shareholder account X X
information.
19. Blue Sky reporting. X X
* Such services are more fully described in Section 1.2 (a), (b) and (c) of the
Agreement.
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
BY: _______________________________
ATTEST:
STATE STREET BANK AND TRUST COMPANY
BY: _______________________________
ATTEST:
EXHIBIT 9(c)
Form of Fund Participation Agreement
<PAGE>
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the ___ day of __________, ____, by and
between NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST ("TRUST"), a Delaware
business trust, ADVISERS MANAGERS TRUST ("MANAGERS TRUST"), a New York common
law trust, NEUBERGER & BERMAN MANAGEMENT INCORPORATED ("N&B MANAGEMENT"), a New
York corporation, and _________________________ ("LIFE COMPANY"), a life
insurance company organized under the laws of the State of
- -------------------.
WHEREAS, TRUST and MANAGERS TRUST are registered with the Securities
and Exchange Commission ("SEC") under the Investment Company Act of 1940, as
amended ("`40 Act") as open-end, diversified management investment companies;
and
WHEREAS, TRUST is organized as a series fund comprised of several
portfolios ("Portfolios"), the currently available of which are listed on
Appendix A hereto; and
WHEREAS, MANAGERS TRUST is organized as a series fund, comprised of
several portfolios ("Series"), the currently operational of which are listed on
Appendix A hereto; and
WHEREAS, each Portfolio of TRUST will invest all of its net investable
assets in a corresponding Series of MANAGERS TRUST; and
WHEREAS, TRUST was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts of such life
insurance companies ("Participating Insurance Companies") and also offers its
shares to certain qualified pension and retirement plans; and
WHEREAS, TRUST has received an order from the SEC, dated May 5,1995
(File No. 812-9164), granting Participating Insurance Companies and their
separate accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a)
and 15(b) of the '40 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder,
to the extent necessary to permit shares of the Portfolios of the TRUST to be
sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated life insurance companies and
certain qualified pension and retirement plans (the "Order"); and
WHEREAS, LIFE COMPANY has established or will establish one or more
separate accounts ("Separate Accounts") to offer Variable Contracts and is
desirous of having TRUST as one of the underlying funding vehicles for such
Variable Contracts; and
WHEREAS, N&B MANAGEMENT is registered with the SEC as an investment
adviser under the Investment Advisers Act of 1940 and
<PAGE>
as a broker-dealer under the Securities Exchange Act of 1934, as
amended; and
WHEREAS, N&B MANAGEMENT is the administrator and distributor of the
shares of each Portfolio of TRUST and investment manager of the corresponding
Series of MANAGERS TRUST; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase shares of TRUST to fund the
aforementioned Variable Contracts and TRUST is authorized to sell such shares to
LIFE COMPANY at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, LIFE
COMPANY, TRUST, MANAGERS TRUST and N&B MANAGEMENT agree as follows:
Article I. SALE OF TRUST SHARES
1.1 TRUST agrees to make available to the Separate Accounts of LIFE
COMPANY shares of the selected Portfolios as listed on Appendix B for investment
of purchase payments of Variable Contracts allocated to the designated Separate
Accounts as provided in TRUST's Prospectus.
1.2 TRUST agrees to sell to LIFE COMPANY those shares of the selected
Portfolios of TRUST which LIFE COMPANY orders, executing such orders on a daily
basis at the net asset value next computed after receipt by TRUST or its
designee of the order for the shares of TRUST. For purposes of this Section 1.2,
LIFE COMPANY shall be the designee of TRUST for receipt of such orders from LIFE
COMPANY and receipt by such designee shall constitute receipt by TRUST; provided
that TRUST receives notice of such order by 9:30 a.m. New York time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which TRUST calculates its net asset
value pursuant to the rules of the SEC.
1.3 TRUST agrees to redeem for cash, on LIFE COMPANY's request, any
full or fractional shares of TRUST held by LIFE COMPANY, executing such requests
on a daily basis at the net asset value next computed after receipt by TRUST or
its designee of the request for redemption. For purposes of this Section 1.3,
LIFE COMPANY shall be the designee of TRUST for receipt of requests for
redemption from LIFE COMPANY and receipt by such designee shall constitute
receipt by TRUST; provided that TRUST receives notice of such request for
redemption by 9:30 a.m. New York time on the next following Business Day.
1.4 TRUST shall furnish, on or before the ex-dividend date,
notice to LIFE COMPANY of any income dividends or capital gain
<PAGE>
distributions payable on the shares of any Portfolio of TRUST. LIFE COMPANY
hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares of the
Portfolio. TRUST shall notify LIFE COMPANY of the number of shares so issued as
payment of such dividends and distributions.
1.5 TRUST shall make the net asset value per share for the selected
Portfolio(s) available to LIFE COMPANY on a daily basis as soon as reasonably
practicable after the net asset value per share is calculated but shall use its
best efforts to make such net asset value available by 6:30 p.m. New York time.
If TRUST provides LIFE COMPANY with materially incorrect share net asset value
information through no fault of LIFE COMPANY, LIFE COMPANY on behalf of the
Separate Accounts, shall be entitled to an adjustment to the number of shares
purchased or redeemed to reflect the correct share net asset value. Any material
error in the calculation of net asset value per share, dividend or capital gain
information shall be reported promptly upon discovery to LIFE COMPANY.
1.6 At the end of each Business Day, LIFE COMPANY shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day. Using these unit values, LIFE COMPANY shall process each such
Business Day's Separate Account transactions based on requests and premiums
received by it by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m. New York time) to determine the net dollar amount
of TRUST shares which shall be purchased or redeemed at that day's closing net
asset value per share. The net purchase or redemption orders so determined shall
be transmitted to TRUST by LIFE COMPANY by 9:30 a.m. New York Time on the
Business Day next following LIFE COMPANY's receipt of such requests and premiums
in accordance with the terms of Sections 1.2 and 1.3 hereof.
1.7 If LIFE COMPANY's order requests the purchase of TRUST shares, LIFE
COMPANY shall pay for such purchase by wiring federal funds to TRUST or its
designated custodial account on the day the order is transmitted by LIFE
COMPANY. If LIFE COMPANY's order requests a net redemption resulting in a
payment of redemption proceeds to LIFE COMPANY, TRUST shall wire the redemption
proceeds to LIFE COMPANY by the next Business Day, unless doing so would require
TRUST to dispose of portfolio securities or otherwise incur additional costs,
but in such event, proceeds shall be wired to LIFE COMPANY within seven days and
TRUST shall notify the person designated in writing by LIFE COMPANY as the
recipient for such notice of such delay by 3:00 p.m. New York Time the same
Business Day that LIFE COMPANY transmits the redemption order to TRUST. If LIFE
COMPANY's order requests the application of redemption proceeds from the
redemption of shares to the purchase of shares of another fund administered or
distributed by N&B MANAGEMENT, TRUST
<PAGE>
shall so apply such proceeds the same Business Day that LIFE COMPANY transmits
such order to TRUST.
1.8 TRUST agrees that all shares of the Portfolios of TRUST will be
sold only to Participating Insurance Companies which have agreed to participate
in TRUST to fund their Separate Accounts and/or to certain qualified pension and
other retirement plans, all in accordance with the requirements of Section
817(h) of the Internal Revenue Code of 1986, as amended ("Code") and Treasury
Regulation 1.817-5. Shares of the Portfolios of TRUST will not be sold directly
to the general public.
1.9 TRUST may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of the 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 Board of Trustees of TRUST, acting in good faith and
in light of its fiduciary duties under federal and any applicable state laws,
deemed necessary and in the best interests of the shareholders of such
Portfolios.
Article II. REPRESENTATIONS AND WARRANTIES
2.1 LIFE COMPANY represents and warrants that it is an insurance
company duly organized and in good standing under the laws of
____________________ and that it has legally and validly established each
Separate Account as a segregated asset account under such laws, and that
____________________, the principal underwriter for the Contracts, is registered
as a broker-dealer under the Securities Exchange Act of 1934.
2.2 LIFE COMPANY represents and warrants that it has registered or,
prior to any issuance or sale of the Variable Contracts, will register each
Separate Account as a unit investment trust ("UIT") in accordance with the
provisions of the '40 Act and cause each Separate Account to remain so
registered to serve as a segregated asset account for the Variable Contracts,
unless an exemption from registration is available.
2.3 LIFE COMPANY represents and warrants that the Variable Contracts
will be registered under the Securities Act of 1933 (the "`33 Act") unless an
exemption from registration is available prior to any issuance or sale of the
Variable Contracts and that the Variable Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and further that the sale of the Variable Contracts shall comply in all material
respects with state insurance law suitability requirements.
2.4 LIFE COMPANY represents and warrants that the Variable Contracts
are currently and at the time of issuance will be treated as life insurance,
<PAGE>
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify TRUST immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.
2.5 TRUST represents and warrants that the Portfolio shares offered and
sold pursuant to this Agreement will be registered under the '33 Act and sold in
accordance with all applicable federal and state laws, and TRUST shall be
registered under the '40 Act prior to and at the time of any issuance or sale of
such shares. TRUST shall amend its registration statement under the '33 Act and
the '40 Act from time to time as required in order to effect the continuous
offering of its shares. TRUST shall register and qualify its shares for sale in
accordance with the laws of the various states only if and to the extent deemed
advisable by TRUST.
2.6 TRUST represents and warrants that each Portfolio will comply with
the diversification requirements set forth in Section 817(h) of the Code, and
the rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify LIFE COMPANY immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance within the grace period afforded by
Regulation 1.817-5.
2.7 TRUST represents and warrants that each Portfolio invested in by
the Separate Account is currently qualified as a "regulated investment company"
under Subchapter M of the Code, that it will make every effort to maintain such
qualification and will notify LIFE COMPANY immediately upon having a reasonable
basis for believing it has ceased to so qualify or might not so qualify in the
future.
Article III. PROSPECTUS AND PROXY STATEMENTS
3.1 TRUST shall prepare and be responsible for filing with the SEC and
any state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of TRUST.
TRUST shall bear the costs of registration and qualification of shares of the
Portfolios, preparation and filing of the documents listed in this Section 3.1
and all taxes to which an issuer is subject on the issuance and transfer of its
shares.
3.2 TRUST will bear the printing costs (or duplicating costs with
respect to the statement of additional information) and mailing costs associated
with the delivery of the following TRUST
<PAGE>
(or individual Portfolio) documents, and any supplements thereto, to existing
Variable Contract owners of LIFE COMPANY:
(i) prospectuses and statements of additional
information;
(ii) annual and semi-annual reports; and
(iii) proxy materials.
LIFE COMPANY will submit any bills for printing, duplicating
and/or mailing costs, relating to the TRUST documents described above, to TRUST
for reimbursement by TRUST. LIFE COMPANY shall monitor such costs and shall use
its best efforts to control these costs. LIFE COMPANY will provide TRUST on a
semi-annual basis, or more frequently as reasonably requested by TRUST, with a
current tabulation of the number of existing Variable Contract owners of LIFE
COMPANY whose Variable Contract values are invested in TRUST. This tabulation
will be sent to TRUST in the form of a letter signed by a duly authorized
officer of LIFE COMPANY attesting to the accuracy of the information contained
in the letter. If requested by LIFE COMPANY, the TRUST shall provide such
documentation (including a final copy of the TRUST's prospectus as set in type
or in camera-ready copy) and other assistance as is reasonably necessary in
order for LIFE COMPANY to print together in one document the current prospectus
for the Variable Contracts issued by LIFE COMPANY and the current prospectus for
the TRUST. Should LIFE COMPANY wish to print any of these documents in a format
different from that provided by TRUST, LIFE COMPANY shall provide Trust with
sixty (60) days' prior written notice and LIFE COMPANY shall bear the cost
associated with any format change.
3.3 TRUST will provide, at its expense, LIFE COMPANY with the following
TRUST (or individual Portfolio) documents, and any supplements thereto, with
respect to prospective Variable Contract owners of LIFE COMPANY:
(i) camera-ready copy of the current prospectus
for printing by the LIFE COMPANY;
(ii) a copy of the statement of additional
information suitable for duplication;
(iii) camera-ready copy of proxy material suitable
for printing; and
(iv) camera-ready copy of the annual and semi-
annual reports for printing by the LIFE
COMPANY.
<PAGE>
3.4 TRUST will provide LIFE COMPANY with at least one complete copy of
all prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to the Portfolios promptly after the
filing of each such document with the SEC or other regulatory authority. LIFE
COMPANY will provide TRUST with at least one complete copy of all prospectuses,
statements of additional information, annual and semi-annual reports, proxy
statements, exemptive applications and all amendments or supplements to any of
the above that relate to a Separate Account promptly after the filing of each
such document with the SEC or other regulatory authority.
Article IV. SALES MATERIALS
4.1 LIFE COMPANY will furnish, or will cause to be furnished, to TRUST
and N&B MANAGEMENT, each piece of sales literature or other promotional material
in which TRUST, MANAGERS TRUST or N&B MANAGEMENT is named, at least fifteen (15)
Business Days prior to its intended use. No such material will be used if TRUST,
MANAGERS TRUST or N&B MANAGEMENT objects to its use in writing within ten (10)
Business Days after receipt of such material.
4.2 TRUST and N&B MANAGEMENT will furnish, or will cause to be
furnished, to LIFE COMPANY, each piece of sales literature or other promotional
material in which LIFE COMPANY or its Separate Accounts are named, at least
fifteen (15) Business Days prior to its intended use. No such material will be
used if LIFE COMPANY objects to its use in writing within ten (10) Business Days
after receipt of such material.
4.3 TRUST and its affiliates and agents shall not give any information
or make any representations on behalf of LIFE COMPANY or concerning LIFE
COMPANY, the Separate Accounts, or the Variable Contracts issued by LIFE
COMPANY, other than the information or representations contained in a
registration statement or prospectus for such Variable Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in reports of the Separate Accounts or reports prepared for
distribution to owners of such Variable Contracts, or in sales literature or
other promotional material approved by LIFE COMPANY or its designee, except with
the written permission of LIFE COMPANY.
4.4 LIFE COMPANY and its affiliates and agents shall not give any
information or make any representations on behalf of TRUST or concerning TRUST
other than the information or representations contained in a registration
statement or prospectus for TRUST, as such registration statement and prospectus
may be amended or supplemented from time to time, or in sales literature or
<PAGE>
other promotional material approved by TRUST or its designee, except with the
written permission of TRUST.
4.5 For purposes of this Agreement, the phrase "sales literature or
other promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for use, in
a newspaper, magazine or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures or other
public media), sales literature (such as any written communication distributed
or made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts, or
reprints or excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications distributed
or made generally available to some or all agents or employees, registration
statements, prospectuses, statements of additional information, shareholder
reports and proxy materials, and any other material constituting sales
literature or advertising under National Association of Securities Dealers, Inc.
rules, the '40 Act or the '33 Act.
Article V. POTENTIAL CONFLICTS
5.1 The Board of Trustees of TRUST and MANAGERS TRUST (the "Boards")
will monitor TRUST and MANAGERS TRUST, respectively, (collectively the "Funds"),
for the existence of any material irreconcilable conflict between the interests
of the Variable Contract owners of Participating Insurance Company Separate
Accounts investing in the Funds. A material irreconcilable conflict may arise
for a variety of reasons, including: (a) state insurance regulatory authority
action; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling, or
any similar action by insurance, tax, or securities regulatory authorities; (c)
an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of the Funds are being managed; (e) a difference
in voting instructions given by variable annuity and variable life insurance
contract owners or by contract owners of different Participating Insurance
Companies; or (f) a decision by a Participating Insurance Company to disregard
voting instructions of Variable Contract owners.
5.2 LIFE COMPANY will report any potential or existing conflicts to
the Boards. LIFE COMPANY will be responsible for assisting each appropriate
Board in carrying out its responsibilities under the Conditions set forth in the
notice issued by the SEC for the Funds on April 12, 1995 (the "Notice")
(Investment Company Act Release No. 21003), which LIFE COMPANY has reviewed, by
providing each appropriate Board with all information reasonably necessary for
it to consider any issues raised. This responsibility includes, but is not
<PAGE>
limited to, an obligation by LIFE COMPANY to inform each appropriate Board
whenever Variable Contract owner voting instructions are disregarded by LIFE
COMPANY. These responsibilities will be carried out with a view only to the
interests of the Variable Contract owners.
5.3 If a majority of the Board of a Fund or a majority of its
disinterested trustees or directors, determines that a material irreconcilable
conflict exists, affecting the LIFE COMPANY, LIFE COMPANY, at its expense and to
the extent reasonably practicable (as determined by a majority of disinterested
trustees or directors), will take any steps necessary to remedy or eliminate the
irreconcilable material conflict, including: (a) withdrawing the assets
allocable to some or all of the Separate Accounts from the Funds or any series
thereof and reinvesting those assets in a different investment medium, which may
include another series of TRUST or MANAGERS TRUST, or another investment company
or submitting the question as to whether such segregation should be implemented
to a vote of all affected Variable Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., Variable Contract owners
of one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected Variable Contract owners the option of
making such a change; and (b) establishing a new registered management
investment company or managed separate account. If a material irreconcilable
conflict arises because of LIFE COMPANY's decision to disregard Variable
Contract owner voting instructions, and that decision represents a minority
position or would preclude a majority vote, LIFE COMPANY may be required, at the
election of the relevant Fund, to withdraw its Separate Account's investment in
such Fund, and no charge or penalty will be imposed as a result of such
withdrawal. The responsibility to take such remedial action shall be carried out
with a view only to the interests of the Variable Contract owners.
For the purposes of this Section 5.3, a majority of the disinterested
members of the applicable Board shall determine whether or not any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the relevant Fund or N&B MANAGEMENT (or any other investment adviser of the
Funds) be required to establish a new funding medium for any Variable Contract.
Further, LIFE COMPANY shall not be required by this Section 5.3 to establish a
new funding medium for any Variable Contract if any offer to do so has been
declined by a vote of a majority of Variable Contract owners materially affected
by the irreconcilable material conflict.
5.4 Any Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to LIFE COMPANY.
<PAGE>
5.5 No less than annually, LIFE COMPANY shall submit to the Boards such
reports, materials or data as such Boards may reasonably request so that the
Boards may fully carry out the obligations imposed upon them by these
Conditions. Such reports, materials, and data shall be submitted more frequently
if deemed appropriate by the applicable Boards.
Article VI. VOTING
6.1 LIFE COMPANY will provide pass-through voting privileges to all
Variable Contract owners so long as the SEC continues to interpret the '40 Act
as requiring pass-through voting privileges for Variable Contract owners. This
condition will apply to UIT- Separate Accounts investing in TRUST and to managed
separate accounts investing in MANAGERS TRUST to the extent a vote is required
with respect to matters relating to MANAGERS TRUST. Accordingly, LIFE COMPANY,
where applicable, will vote shares of a Fund held in its Separate Accounts in a
manner consistent with voting instructions timely received from its Variable
Contract owners. LIFE COMPANY will be responsible for assuring that each of its
Separate Accounts that participates in any Fund calculates voting privileges in
a manner consistent with other participants as defined in the Conditions set
forth in the Notice ("Participants"). The obligation to calculate voting
privileges in a manner consistent with all other Separate Accounts investing in
a Fund will be a contractual obligation of all Participants under the agreements
governing participation in the Funds. Each Participant will vote shares for
which it has not received timely voting instructions, as well as shares it owns,
in the same proportion as its votes those shares for which it has received
voting instructions.
6.2 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the '40
Act or the rules thereunder with respect to mixed and shared funding on terms
and conditions materially different from any exemptions granted in the Order,
then TRUST, MANAGERS TRUST and/or the Participants, as appropriate, shall take
such steps as may be necessary to comply with Rule 6e-2 and Rule 6e-3(T), as
amended, and Rule 6e-3, as adopted, to the extent such Rules are applicable.
Article VII. INDEMNIFICATION
7.1 Indemnification by LIFE COMPANY. LIFE COMPANY agrees to indemnify
and hold harmless TRUST, MANAGERS TRUST, N&B MANAGEMENT and each of their
Trustees, directors, officers, employees and agents and each person, if any, who
controls TRUST or MANAGERS TRUST or N&B MANAGEMENT within the meaning of Section
15 of the '33 Act (collectively, the "Indemnified Parties" for purposes of this
Article VII) against any and all losses, claims, damages, liabilities
<PAGE>
(including amounts paid in settlement with the written consent of LIFE COMPANY,
which consent shall not be unreasonably withheld) or litigation (including legal
and other expenses), to which the Indemnified Parties may become subject under
any statute, regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of TRUST's shares or the
Variable Contracts and:
(a) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the Registration
Statement or prospectus for the Variable Contracts or contained in the
Variable Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in
conformity with information furnished to LIFE COMPANY by or on behalf
of TRUST for use in the registration statement or prospectus for the
Variable Contracts or in the Variable Contracts or sales literature
(or any amendment or supplement) or otherwise for use in connection
with the sale of the Variable Contracts or TRUST shares; or
(b) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration
statement, prospectus or sales literature of TRUST not supplied by
LIFE COMPANY, or persons under its control) or wrongful conduct of
LIFE COMPANY or persons under its control, with respect to the sale or
distribution of the Variable Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or
sales literature of TRUST or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to TRUST by or on behalf of LIFE
COMPANY; or
<PAGE>
(d) arise as a result of any failure by LIFE COMPANY to substantially
provide the services and furnish the materials under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any representation
and/or warranty made by LIFE COMPANY in this Agreement or arise out of
or result from any other material breach of this Agreement by LIFE
COMPANY.
7.2 LIFE COMPANY shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
TRUST, whichever is applicable.
7.3 LIFE COMPANY shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified LIFE COMPANY in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify LIFE COMPANY of any
such claim shall not relieve LIFE COMPANY from any liability which it may have
to the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, LIFE COMPANY shall be entitled to participate at
its own expense in the defense of such action. LIFE COMPANY also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from LIFE COMPANY to such party of LIFE
COMPANY's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and LIFE
COMPANY will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
7.4 Indemnification by N&B MANAGEMENT. N&B MANAGEMENT agrees to
indemnify and hold harmless LIFE COMPANY and each of its directors, officers,
employees, and agents and each person, if any, who controls LIFE COMPANY within
the meaning of Section 15 of the '33 Act (collectively, the "Indemnified
Parties" for the purposes
<PAGE>
of this Article VII) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of N&B MANAGEMENT
which consent shall not be unreasonably withheld) or litigation (including legal
and other expenses) to which the Indemnified Parties may become subject under
any statute, or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of TRUST's shares or the
Variable Contracts and:
(a) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement
or prospectus or sales literature of TRUST (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to N&B MANAGEMENT or
TRUST by or on behalf of LIFE COMPANY for use in the registration
statement or prospectus for TRUST or in sales literature (or any
amendment or supplement) or otherwise for use in connection with the
sale of the Variable Contracts or TRUST shares; or
(b) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration
statement, prospectus or sales literature for the Variable Contracts
not supplied by N&B MANAGEMENT or persons under its control) or
wrongful conduct of TRUST or N&B MANAGEMENT or persons under their
control, with respect to the sale or distribution of the Variable
Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or
sales literature covering the Variable Contracts, or any amendment
thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to LIFE
COMPANY for inclusion therein by or on behalf of TRUST; or
<PAGE>
(d) arise as a result of (i) a failure by TRUST to substantially provide
the services and furnish the materials under the terms of this
Agreement; or (ii) a failure by a Portfolio(s) invested in by the
Separate Account to comply with the diversification requirements of
Section 817(h) of the Code; or (iii) a failure by a Portfolio(s)
invested in by the Separate Account to qualify as a "regulated
investment company" under Subchapter M of the Code; or
(e) arise out of or result from any material breach of any representation
and/or warranty made by N&B MANAGEMENT in this Agreement or arise out
of or result from any other material breach of this Agreement by N&B
MANAGEMENT.
7.5 N&B MANAGEMENT shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
LIFE COMPANY.
7.6 N&B MANAGEMENT shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified N&B MANAGEMENT in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify N&B MANAGEMENT of
any such claim shall not relieve N&B MANAGEMENT from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, N&B MANAGEMENT shall be entitled to participate
at its own expense in the defense thereof. N&B MANAGEMENT also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party named in
the action. After notice from N&B MANAGEMENT to such party of N&B MANAGEMENT's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and N&B MANAGEMENT
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
<PAGE>
Article VIII. TERM; TERMINATION
8.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
8.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of LIFE COMPANY or TRUST at any time from the date
hereof upon 180 days' notice, unless a shorter time is agreed to by
the parties;
(b) At the option of LIFE COMPANY, if TRUST shares are not reasonably
available to meet the requirements of the Variable Contracts as
determined by LIFE COMPANY. Prompt notice of election to terminate
shall be furnished by LIFE COMPANY, said termination to be effective
ten days after receipt of notice unless TRUST makes available a
sufficient number of shares to reasonably meet the requirements of the
Variable Contracts within said ten-day period;
(c) At the option of LIFE COMPANY, upon the institution of formal
proceedings against TRUST by the SEC, or any other regulatory body,
the expected or anticipated ruling, judgment or outcome of which
would, in LIFE COMPANY's reasonable judgment, materially impair
TRUST's ability to meet and perform Trust's obligations and duties
hereunder. Prompt notice of election to terminate shall be furnished
by LIFE COMPANY with said termination to be effective upon receipt of
notice;
(d) At the option of TRUST, upon the institution of formal proceedings
against LIFE COMPANY by the SEC, the National Association of
Securities Dealers, Inc., or any other regulatory body, the expected
or anticipated ruling, judgment or outcome of which would, in TRUST's
reasonable judgment, materially impair LIFE COMPANY's ability to meet
and perform its obligations and duties hereunder. Prompt notice of
election to terminate shall be furnished by TRUST with said
termination to be effective upon receipt of notice;
(e) In the event TRUST's shares are not registered, issued or sold in
accordance with applicable state or federal law, or such law precludes
the use of such shares as the underlying investment medium of Variable
Contracts issued or to be issued by LIFE COMPANY. Termination shall be
effective upon such occurrence without notice;
<PAGE>
(f) At the option of TRUST if the Variable Contracts cease to qualify as
annuity contracts or life insurance contracts, as applicable, under
the Code, or if TRUST reasonably believes that the Variable Contracts
may fail to so qualify. Termination shall be effective upon receipt of
notice by LIFE COMPANY;
(g) At the option of LIFE COMPANY, upon TRUST's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of LIFE COMPANY within ten days after written notice of
such breach is delivered to TRUST;
(h) At the option of TRUST, upon LIFE COMPANY's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of TRUST within ten days after written notice of such
breach is delivered to LIFE COMPANY;
(i) At the option of TRUST, if the Variable Contracts are not registered,
issued or sold in accordance with applicable federal and/or state law.
Termination shall be effective immediately upon such occurrence
without notice;
(j) In the event this Agreement is assigned without the prior written
consent of LIFE COMPANY, TRUST, MANAGERS TRUST and N&B MANAGEMENT,
termination shall be effective immediately upon such occurrence
without notice.
8.3 Notwithstanding any termination of this Agreement pursuant to
Section 8.2 hereof, TRUST at its option may elect to continue to make available
additional TRUST shares, as provided below, for so long as TRUST desires
pursuant to the terms and conditions of this Agreement, for all Variable
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, if TRUST so elects to make additional TRUST shares available, the
owners of the Existing Contracts or LIFE COMPANY, whichever shall have legal
authority to do so, shall be permitted to reallocate investments in TRUST,
redeem investments in TRUST and/or invest in TRUST upon the payment of
additional premiums under the Existing Contracts. In the event of a termination
of this Agreement pursuant to Section 8.2 hereof, TRUST and N&B MANAGEMENT, as
promptly as is practicable under the circumstances, shall notify LIFE COMPANY
whether TRUST elects to continue to make TRUST shares available after such
termination. If TRUST shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect and
thereafter either TRUST or LIFE COMPANY may terminate the Agreement, as so
continued pursuant to this Section 8.3, upon sixty (60) days prior written
notice to the other party.
<PAGE>
8.4 Except as necessary to implement Variable Contract owner initiated
transactions, or as required by state insurance laws or regulations, LIFE
COMPANY shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to LIFE COMPANY's assets held in the Separate
Accounts), and LIFE COMPANY shall not prevent Variable Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Variable Contracts, until thirty (30) days after the LIFE COMPANY shall have
notified TRUST of its intention to do so.
Article IX. NOTICES
Any notice hereunder shall be given by registered or certified mail
return receipt requested to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.
If to TRUST, MANAGERS TRUST or N&B MANAGEMENT:
Neuberger & Berman Management Incorporated
605 Third Avenue
New York, NY 10158-0006
Attention: Ellen Metzger, General Counsel
If to LIFE COMPANY:
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article X. MISCELLANEOUS
10.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
10.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
<PAGE>
10.3 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
10.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York. It
shall also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the SEC granting exemptive
relief therefrom and the conditions of such orders.
10.5 The parties agree that the assets and liabilities of each Series
are separate and distinct from the assets and liabilities of each other Series.
No Series shall be liable or shall be charged for any debt, obligation or
liability of any other Series. No Trustee, officer or agent shall be personally
liable for such debt, obligation or liability of any Series or Portfolio and no
Portfolio or other investor, other than the Portfolio or other investors
investing in the Series which incurs a debt, obligation or liability, shall be
liable therefor.
10.6 Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
National Association of Securities Dealers, Inc. and state insurance regulators)
and shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
10.7 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
10.8 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by TRUST,
MANAGERS TRUST, N&B MANAGEMENT and the LIFE COMPANY.
<PAGE>
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Fund Participation Agreement as of the date and year
first above written.
NEUBERGER & BERMAN
ADVISERS MANAGEMENT TRUST
By:________________________________
Name:
Title:
ADVISERS MANAGERS TRUST
By:________________________________
Name:
Title:
NEUBERGER & BERMAN
MANAGEMENT INCORPORATED
By:________________________________
Name:
Title:
LIFE COMPANY
By:________________________________
Name:
Title:
<PAGE>
Appendix A
Neuberger & Berman Advisers Corresponding Series of
Management Trust and its Series Advisers Managers Trust (Series)
Portfolios)
Balanced Portfolio AMT Balanced Investments
Government Income Portfolio AMT Government Income Investments
Growth Portfolio AMT Growth Investments
Limited Maturity Bond Portfolio AMT Limited Maturity Bond Investments
Liquid Asset Portfolio AMT Liquid Asset Investments
Partners Portfolio AMT Partners Investments
<PAGE>
Appendix B
Separate Accounts Selected Portfolios
EXHIBIT 10
Consent of Counsel
<PAGE>
DECHERT PRICE & RHOADS
1500 K Street, N.W.
Suite 500
Washington, D.C. 20005
April 17, 1996
Neuberger&Berman Advisers Management Trust
605 Third Avenue
Second Floor
New York, New York 10158-0006
Re: Post-Effective Amendment No. 20 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. 20 to the Trust's Registration Statement.
Very truly yours,
/s/ Dechert Price & Rhoads
EXHIBIT 11
Consent of the Independent Auditors
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" in each Prospectus and "Reports to Shareholders", "Independent
Auditors" and "Financial Statements" in the Statement of Additional Information
in Post-Effective Amendment Number 20 to the Registration Statement (Form N-1A
No. 2-88566) of Neuberger & Berman Advisers Management Trust, and to the
incorporation by reference of our reports dated January 19, 1996 on the Liquid
Asset Portfolio, Growth Portfolio, Limited Maturity Bond Portfolio, Balanced
Portfolio, Government Income Portfolio and Partners Portfolio, six of the series
comprising Neuberger & Berman Advisers Management Trust, and on AMT Liquid Asset
Investments, AMT Growth Investments, AMT Limited Maturity Bond Investments, AMT
Balanced Investments, AMT Government Income Investments and AMT Partners
Investments, six of the series comprising Advisers Managers Trust, included in
the 1995 Annual Reports to Shareholders of Neuberger & Berman Advisers
Management Trust.
ERNST & YOUNG LLP
Boston, Massachusetts
April 15, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Liquid Asset Portfolio Annual Report and is qualified in its entirety by
reference to such document.
</LEGEND>
<CIK> 0000736913
<NAME> NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
<SERIES>
<NUMBER> 01
<NAME> LIQUID ASSET PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 32,216
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 32,216
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 337
<TOTAL-LIABILITIES> 337
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,880
<SHARES-COMMON-STOCK> 31,880
<SHARES-COMMON-PRIOR> 5,285
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 31,879
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 695
<OTHER-INCOME> 0
<EXPENSES-NET> (119)
<NET-INVESTMENT-INCOME> 576
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 576
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (576)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 32,993
<NUMBER-OF-SHARES-REDEEMED> (6,866)
<SHARES-REINVESTED> 468
<NET-CHANGE-IN-ASSETS> 26,595
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 147
<AVERAGE-NET-ASSETS> 11,754
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Growth Portfolio Annual Report and is qualified in its entirety by
reference to such document.
</LEGEND>
<CIK> 0000736913
<NAME> NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
<SERIES>
<NUMBER> 02
<NAME> GROWTH PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 600,810
<RECEIVABLES> 1,053
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 601,863
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 64,041
<TOTAL-LIABILITIES> 64,041
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 406,977
<SHARES-COMMON-STOCK> 20,798
<SHARES-COMMON-PRIOR> 18,180
<ACCUMULATED-NII-CURRENT> 132
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 48,309
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 82,404
<NET-ASSETS> 537,822
<DIVIDEND-INCOME> 4,265
<INTEREST-INCOME> 522
<OTHER-INCOME> 0
<EXPENSES-NET> (4,606)
<NET-INVESTMENT-INCOME> 181
<REALIZED-GAINS-CURRENT> 48,306
<APPREC-INCREASE-CURRENT> 79,635
<NET-CHANGE-FROM-OPS> 128,122
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (951)
<DISTRIBUTIONS-OF-GAINS> (12,739)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,958
<NUMBER-OF-SHARES-REDEEMED> (8,997)
<SHARES-REINVESTED> 657
<NET-CHANGE-IN-ASSETS> 168,514
<ACCUMULATED-NII-PRIOR> 836
<ACCUMULATED-GAINS-PRIOR> 12,808
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 921
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,606
<AVERAGE-NET-ASSETS> 513,221
<PER-SHARE-NAV-BEGIN> 20.31
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 6.26
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> (.67)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.86
<EXPENSE-RATIO> .90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Limited Maturity Bond Portfolio Annual Report and is qualified in its
entirety by reference to such document.
</LEGEND>
<CIK> 0000736913
<NAME> NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
<SERIES>
<NUMBER> 03
<NAME> LIMITED MATURITY BOND PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 325,623
<RECEIVABLES> 5,745
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 331,368
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 92,470
<TOTAL-LIABILITIES> 92,470
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 222,774
<SHARES-COMMON-STOCK> 16,244
<SHARES-COMMON-PRIOR> 24,591
<ACCUMULATED-NII-CURRENT> 20,477
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (6,956)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,603
<NET-ASSETS> 238,898
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 23,185
<OTHER-INCOME> 0
<EXPENSES-NET> (2,468)
<NET-INVESTMENT-INCOME> 20,717
<REALIZED-GAINS-CURRENT> 1,865
<APPREC-INCREASE-CURRENT> 13,119
<NET-CHANGE-FROM-OPS> 35,701
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (19,650)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,484
<NUMBER-OF-SHARES-REDEEMED> (19,275)
<SHARES-REINVESTED> 1,444
<NET-CHANGE-IN-ASSETS> (105,939)
<ACCUMULATED-NII-PRIOR> 19,410
<ACCUMULATED-GAINS-PRIOR> (8,821)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 577
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,468
<AVERAGE-NET-ASSETS> 346,012
<PER-SHARE-NAV-BEGIN> 14.02
<PER-SHARE-NII> .82
<PER-SHARE-GAIN-APPREC> .65
<PER-SHARE-DIVIDEND> (.78)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.71
<EXPENSE-RATIO> .71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Balanced Portfolio Annual Report and is qualified in its entirety by
reference to such document.
</LEGEND>
<CIK> 0000736913
<NAME> NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
<SERIES>
<NUMBER> 04
<NAME> BALANCED PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 203,321
<RECEIVABLES> 104
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 203,425
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 59,004
<TOTAL-LIABILITIES> 59,004
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 105,370
<SHARES-COMMON-STOCK> 8,244
<SHARES-COMMON-PRIOR> 12,352
<ACCUMULATED-NII-CURRENT> 3,819
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 21,105
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,127
<NET-ASSETS> 144,421
<DIVIDEND-INCOME> 1,015
<INTEREST-INCOME> 4,853
<OTHER-INCOME> 0
<EXPENSES-NET> (1,941)
<NET-INVESTMENT-INCOME> 3,927
<REALIZED-GAINS-CURRENT> 21,146
<APPREC-INCREASE-CURRENT> 15,924
<NET-CHANGE-FROM-OPS> 40,997
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,411)
<DISTRIBUTIONS-OF-GAINS> (1,096)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,410
<NUMBER-OF-SHARES-REDEEMED> (5,822)
<SHARES-REINVESTED> 304
<NET-CHANGE-IN-ASSETS> (34,854)
<ACCUMULATED-NII-PRIOR> 3,295
<ACCUMULATED-GAINS-PRIOR> 1,064
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 419
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,941
<AVERAGE-NET-ASSETS> 196,921
<PER-SHARE-NAV-BEGIN> 14.51
<PER-SHARE-NII> .32
<PER-SHARE-GAIN-APPREC> 3.06
<PER-SHARE-DIVIDEND> (.28)
<PER-SHARE-DISTRIBUTIONS> (.09)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.52
<EXPENSE-RATIO> .99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Partners Portfolio Annual Report and is qualified in its entirety by
reference to such document.
</LEGEND>
<CIK> 0000736913
<NAME> NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
<SERIES>
<NUMBER> 05
<NAME> PARTNERS PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 142,403
<RECEIVABLES> 65,191
<ASSETS-OTHER> 9
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 207,603
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 61
<TOTAL-LIABILITIES> 61
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 191,795
<SHARES-COMMON-STOCK> 15,687
<SHARES-COMMON-PRIOR> 960
<ACCUMULATED-NII-CURRENT> 600
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9,230
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,917
<NET-ASSETS> 207,542
<DIVIDEND-INCOME> 903
<INTEREST-INCOME> 375
<OTHER-INCOME> 0
<EXPENSES-NET> 677
<NET-INVESTMENT-INCOME> 601
<REALIZED-GAINS-CURRENT> 9,230
<APPREC-INCREASE-CURRENT> 6,086
<NET-CHANGE-FROM-OPS> 15,917
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (14)
<DISTRIBUTIONS-OF-GAINS> (98)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16,798
<NUMBER-OF-SHARES-REDEEMED> (2,082)
<SHARES-REINVESTED> 11
<NET-CHANGE-IN-ASSETS> 198,163
<ACCUMULATED-NII-PRIOR> 13
<ACCUMULATED-GAINS-PRIOR> 98
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 38
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 677
<AVERAGE-NET-ASSETS> 62,208
<PER-SHARE-NAV-BEGIN> 9.77
<PER-SHARE-NII> .11
<PER-SHARE-GAIN-APPREC> 3.43
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> (.07)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.23
<EXPENSE-RATIO> 1.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted
from the
Government Income Portfolio Annual Report and is qualified in its
entirety by reference to such
document.
</LEGEND>
<CIK> 0000736913
<NAME> NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
<SERIES>
<NUMBER> 06
<NAME> GOVERNMENT INCOME PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 2,194
<RECEIVABLES> 46
<ASSETS-OTHER> 9
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,249
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 57
<TOTAL-LIABILITIES> 57
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,051
<SHARES-COMMON-STOCK> 201
<SHARES-COMMON-PRIOR> 102
<ACCUMULATED-NII-CURRENT> 83
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 7
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 51
<NET-ASSETS> 2,192
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 100
<OTHER-INCOME> 0
<EXPENSES-NET> (16)
<NET-INVESTMENT-INCOME> 84
<REALIZED-GAINS-CURRENT> 7
<APPREC-INCREASE-CURRENT> 74
<NET-CHANGE-FROM-OPS> 165
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (39)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 110
<NUMBER-OF-SHARES-REDEEMED> (15)
<SHARES-REINVESTED> 4
<NET-CHANGE-IN-ASSETS> 1,159
<ACCUMULATED-NII-PRIOR> 38
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 62
<AVERAGE-NET-ASSETS> 1,473
<PER-SHARE-NAV-BEGIN> 10.15
<PER-SHARE-NII> .70
<PER-SHARE-GAIN-APPREC> .46
<PER-SHARE-DIVIDEND> (.38)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.93
<EXPENSE-RATIO> 1.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted
from the
AMT Liquid Asset Investments Annual Report and is qualified in
its
entirety by reference to such document.
</LEGEND>
<CIK> 0000925980
<NAME> ADVISERS MANAGERS TRUST
<SERIES>
<NUMBER> 01
<NAME> AMT LIQUID ASSET INVESTMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 32,205
<INVESTMENTS-AT-VALUE> 32,205
<RECEIVABLES> 7
<ASSETS-OTHER> 20
<OTHER-ITEMS-ASSETS> 3
<TOTAL-ASSETS> 32,235
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 19
<TOTAL-LIABILITIES> 19
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,680
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 536
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 32,216
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 592
<OTHER-INCOME> 0
<EXPENSES-NET> (56)
<NET-INVESTMENT-INCOME> 536
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 536
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 26,174
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 25
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 56
<AVERAGE-NET-ASSETS> 15,032
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .55<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
AMT Growth Investments Annual Report and is qualified in its entirety by
reference to such document.
</LEGEND>
<CIK> 0000925980
<NAME> ADVISERS MANAGERS TRUST
<SERIES>
<NUMBER> 02
<NAME> AMT GROWTH INVESTMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 507,019
<INVESTMENTS-AT-VALUE> 589,423
<RECEIVABLES> 16,436
<ASSETS-OTHER> 108
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 605,967
<PAYABLE-FOR-SECURITIES> 4,758
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 399
<TOTAL-LIABILITIES> 5,157
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 475,744
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 1,187
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 41,475
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 82,404
<NET-ASSETS> 600,810
<DIVIDEND-INCOME> 3,116
<INTEREST-INCOME> 296
<OTHER-INCOME> 0
<EXPENSES-NET> (2,225)
<NET-INVESTMENT-INCOME> 1,187
<REALIZED-GAINS-CURRENT> 41,475
<APPREC-INCREASE-CURRENT> 45,724
<NET-CHANGE-FROM-OPS> 88,387
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 88,387
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,026
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,225
<AVERAGE-NET-ASSETS> 566,103
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .59<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
AMT Limited Maturity Bond Investments Annual Report and is qualified in
its entirety by reference to such document.
</LEGEND>
<CIK> 0000925980
<NAME> ADVISERS MANAGERS TRUST
<SERIES>
<NUMBER> 03
<NAME> AMT LIMITED MATURITY BOND INVESTMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 320,499
<INVESTMENTS-AT-VALUE> 323,102
<RECEIVABLES> 2,590
<ASSETS-OTHER> 87
<OTHER-ITEMS-ASSETS> 3
<TOTAL-ASSETS> 325,782
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 159
<TOTAL-LIABILITIES> 159
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 305,311
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 14,618
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,090
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,604
<NET-ASSETS> 325,623
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15,349
<OTHER-INCOME> 0
<EXPENSES-NET> (731)
<NET-INVESTMENT-INCOME> 14,618
<REALIZED-GAINS-CURRENT> 3,090
<APPREC-INCREASE-CURRENT> 4,989
<NET-CHANGE-FROM-OPS> 22,697
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (33,191)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 577
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 731
<AVERAGE-NET-ASSETS> 343,715
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .32<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
AMT Balanced Investments Annual Report and is qualified in its entirety by
reference to such document.
</LEGEND>
<CIK> 0000925980
<NAME> ADVISERS MANAGERS TRUST
<SERIES>
<NUMBER> 04
<NAME> AMT BALANCED INVESTMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 156,214
<INVESTMENTS-AT-VALUE> 170,341
<RECEIVABLES> 33,108
<ASSETS-OTHER> 54
<OTHER-ITEMS-ASSETS> 5
<TOTAL-ASSETS> 203,508
<PAYABLE-FOR-SECURITIES> 33
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 154
<TOTAL-LIABILITIES> 187
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 176,675
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 3,240
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 17,911
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,495
<NET-ASSETS> 203,321
<DIVIDEND-INCOME> 697
<INTEREST-INCOME> 3,417
<OTHER-INCOME> 0
<EXPENSES-NET> (874)
<NET-INVESTMENT-INCOME> 3,240
<REALIZED-GAINS-CURRENT> 17,911
<APPREC-INCREASE-CURRENT> 5,495
<NET-CHANGE-FROM-OPS> 26,646
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 17,213
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 754
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 874
<AVERAGE-NET-ASSETS> 204,215
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .64<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
AMT Partners Investments Annual Report and is qualified in its entirety
by reference to such document.
</LEGEND>
<CIK> 0000925980
<NAME> ADVISERS MANAGERS TRUST
<SERIES>
<NUMBER> 05
<NAME> AMT PARTNERS INVESTMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 137,601
<INVESTMENTS-AT-VALUE> 143,518
<RECEIVABLES> 1,404
<ASSETS-OTHER> 24
<OTHER-ITEMS-ASSETS> 14
<TOTAL-ASSETS> 144,960
<PAYABLE-FOR-SECURITIES> 2,467
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 90
<TOTAL-LIABILITIES> 2,557
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 128,268
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 760
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8,299
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,076
<NET-ASSETS> 142,403
<DIVIDEND-INCOME> 838
<INTEREST-INCOME> 304
<OTHER-INCOME> 0
<EXPENSES-NET> (382)
<NET-INVESTMENT-INCOME> 760
<REALIZED-GAINS-CURRENT> 8,299
<APPREC-INCREASE-CURRENT> 5,076
<NET-CHANGE-FROM-OPS> 14,135
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 142,403
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 313
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 382
<AVERAGE-NET-ASSETS> 84,669
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .67<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the AMT
Government Income Investments Annual Report and is qualified in its entirety by
reference to such document.
</LEGEND>
<CIK> 0000925980
<NAME> ADVISERS MANAGERS TRUST
<SERIES>
<NUMBER> 06
<NAME> AMT GOVERNMENT INCOME INVESTMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 2,285
<INVESTMENTS-AT-VALUE> 2,336
<RECEIVABLES> 65
<ASSETS-OTHER> 19
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 2,442
<PAYABLE-FOR-SECURITIES> 212
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36
<TOTAL-LIABILITIES> 248
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,080
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 54
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 54
<NET-ASSETS> 2,194
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 74
<OTHER-INCOME> 0
<EXPENSES-NET> (20)
<NET-INVESTMENT-INCOME> 54
<REALIZED-GAINS-CURRENT> 6
<APPREC-INCREASE-CURRENT> 54
<NET-CHANGE-FROM-OPS> 114
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,086
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 20
<AVERAGE-NET-ASSETS> 1,689
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 1.77<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Annualized.
</FN>
</TABLE>
