<PAGE>
As filed with the Securities and Exchange Commission on January 15, 1997
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. 21 |X|
----
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 21 |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
Lawrence Zicklin
c/o Neuberger&Berman Management Incorporated
605 Third Avenue, 2nd Floor
New York, New York 10158-0006
(Name and Address of Agent for Service)
Copies to:
Jeffrey S. Puretz, Esq.
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
It is proposed that this filing will become effective (check appropriate box)
[ ] Immediately upon filing pursuant to [ ] on _____________ pursuant to
paragraph (b) paragraph (b)
[ ] 60 days after filing pursuant to [ ] on ______________ pursuant to
paragraph (a)(1), or paragraph (a)(1)
[X] 75 days after filing pursuant to [ ] on ___________ pursuant to
paragraph (a)(2) or paragraph (a)(2)of Rule 485
* Registrant has elected to register an indefinite number of shares of
all series under the Securities Act of 1933 pursuant to Rule 24f-2
under the Investment Company Act of 1940. Registrant filed the notice
required by Rule 24f-2 with respect to its fiscal year ended December
31, 1995, on February 27, 1997 and will file the notice required by
Rule 24f-2 with respect to its fiscal year ended December 31, 1997 on
or before February 28, 1997.
1 Registrant is a "master/feeder fund." This Post-Effective Amendment
No. 21 includes a signature page for the master fund,
Advisers Managers Trust.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 495)
Form N-1A Part A Item Prospectus Caption
1. Cover page.................. Cover Page
2. Synopsis.................... Expense Information
3. Condensed Financial
Information................. Financial Highlights;
Performance Information
4. General Description of
Registrant.................. Investment Programs;
Special Information
Regarding Organization,
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
Statement of Additional
Form N-1A Part B Item Information Caption
10. Cover Page.................. Cover Page
11. Table of Contents.......... Table of Contents
<PAGE>
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
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 Post-Effective Amendment.
<PAGE>
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
Joint Prospectus
May 1, 1997
<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 eight
separate Portfolios: Balanced Portfolio, Government Income Portfolio, Growth
Portfolio, International Portfolio, Limited Maturity Bond Portfolio, Liquid
Asset Portfolio, Partners Portfolio and Genesis Portfolio. While each portfolio
(each a "Portfolio" and collectively, "Portfolios") issues its own class of
shares, which in some instances have rights separate from other classes of
shares, the Trust is one entity with respect to certain important items (e.g.,
certain voting rights).
Shares of the Trust are offered to life insurance companies ("Life
Companies") for allocation to certain of their variable separate accounts
established for the purpose of funding variable annuity contracts and variable
life insurance policies ("Variable Contracts"). Shares of the Balanced Portfolio
are also offered directly to qualified pension and retirement plans ("Qualified
Plans").
- ----------------------------------------
Each Portfolio invests all of its net investable assets in its
corresponding series (each a "Series") of Advisers Managers Trust ("Managers
Trust"), an open-end management investment company. All Series of Managers Trust
are managed by Neuberger&Berman Management Incorporated ("N&B Management"). Each
Series invests in securities in accordance with an investment objective,
policies, and limitations identical to those of its corresponding Portfolio. The
investment performance of each Portfolio will directly correspond with the
investment performance of its corresponding Series. This "master/feeder fund"
structure is different from that of many other investment companies which
directly acquire and manage their own portfolios of securities. For more
information on this unique structure that you should consider, see "Special
Information Regarding Organization, Capitalization, and Other Matters" on page
__.
An investment in the Liquid Asset Portfolio, as in any mutual fund, is
neither insured nor guaranteed by the U.S. Government. Although the Liquid Asset
Portfolio seeks to maintain a net asset value of $1.00 per share, there is no
assurance that it will be able to do so.
Please read this Prospectus before investing in any of the Portfolios
and keep it for future reference. The Prospectus contains information about the
Portfolios that a prospective investor should know before investing. A Statement
of Additional Information ("SAI") about the Portfolios and the Series, dated May
1, 1997, 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, or by calling the Trust at
800-877-9700.
The SEC maintains an internet site at http://www.sec.gov that contains
the Prospectus, SAI, material incorporated by reference, and other information
regarding the Portfolios and the Series.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED BY, ANY BANK OR OTHER DEPOSITORY INSTITUTION. SHARES ARE NOT
<PAGE>
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, 1997
<PAGE>
TABLE OF CONTENTS PAGE
SUMMARY ................................................................. 1
The Portfolios and Series........................................ 1
Risk Factors..................................................... 2
Management....................................................... 3
The Neuberger&Berman Investment Approach ........................ 3
EXPENSE INFORMATION....................................................... 5
FINANCIAL HIGHLIGHTS...................................................... 7
Selected Per Share Data and Ratios............................... 7
INVESTMENT PROGRAMS....................................................... 20
AMT Liquid Asset Investments .................................... 20
AMT Limited Maturity Bond Investments ........................... 20
AMT Government Income Investments ............................... 21
AMT Growth Investments .......................................... 22
AMT Partners Investments ........................................ 22
AMT Balanced Investments ........................................ 22
AMT International Investments ................................... 23
AMT Genesis Investments.......................................... 24
Short-Term Trading; Portfolio Turnover........................... 25
Ratings of Securities............................................ 25
Borrowings ...................................................... 27
Other Investments ............................................... 28
Duration ........................................................ 28
PERFORMANCE INFORMATION................................................... 29
SPECIAL INFORMATION REGARDING ORGANIZATION,
CAPITALIZATION, AND OTHER MATTERS......................................... 31
The Portfolios .................................................. 31
The Series ...................................................... 32
SHARE PRICES AND NET ASSET VALUE.......................................... 33
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS............................. 34
Dividends and Other Distributions ............................... 34
Tax Status ...................................................... 34
SPECIAL CONSIDERATIONS.................................................... 35
MANAGEMENT AND ADMINISTRATION............................................. 36
Trustees and Officers ........................................... 36
Investment Manager, Administrator, Sub-Adviser and Distributor... 36
Expenses ........................................................ 39
Expense Limitation............................................... 40
Transfer and Dividend Paying Agent .............................. 41
<PAGE>
DISTRIBUTION AND REDEMPTION OF TRUST SHARES............................... 41
Distribution and Redemption of Trust Shares ..................... 41
Distribution Plan ............................................... 41
SERVICES ................................................................. 42
DESCRIPTION OF INVESTMENTS................................................ 42
USE OF JOINT PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION....................................... 51
APPENDIX A TO PROSPECTUS.................................................. 52
- ii -
<PAGE>
SUMMARY
The Portfolios and Series
Each Portfolio of the Trust invests in a corresponding Series of
Managers Trust that, in turn, invests in securities in accordance with an
investment objective, policies, and limitations that are identical to those of
the Portfolio. The trustees of the Trust believe that this "master/feeder fund"
structure may benefit shareholders. For more information about the organization
of the Portfolios and the Series, including certain features of the
master/feeder fund structure, see "Special Information Regarding Organization,
Capitalization, and Other Matters" on page __. For more details about each
Series, its investments and their risks, see "Investment Programs" on page __,
"Ratings of Securities" on page __, "Borrowings" on page __, and "Description of
Investments" on page __.
Here is a summary of important features of the Portfolios and their
corresponding Series. You may want to invest in a variety of Portfolios to fit
your particular investment needs. Of course, there can be no assurance that a
Portfolio will meet its investment objective.
<TABLE>
<S> <C> <C>
Neuberger&Berman Investment Principal Series
Advisers Management Trust Objective Investments
BALANCED PORTFOLIO Long-term capital growth and Common stocks and
reasonable current income short-to-intermediate term debt
without undue risk to principal securities, primarily investment
grade
GOVERNMENT INCOME High level of current income At least 65% in U.S.
PORTFOLIO and total return, consistent Government and Agency
with safety of principal securities, with an emphasis on
U.S. Government
mortgage-backed securities; at
least 25% in mortgage-backed
and asset-backed securities
GROWTH PORTFOLIO Capital appreciation, without Common stocks
regard to income
INTERNATIONAL Long-term capital appreciation Equity securities of issuers
PORTFOLIO by investing primarily in a organized and doing business
diversified portfolio of equity primarily outside the U.S.
securities of foreign issuers
LIQUID ASSET PORTFOLIO Highest current income High-quality money market
consistent with safety and instruments of government and
liquidity non-government issuers
- 1 -
<PAGE>
LIMITED MATURITY BOND Highest current income Short-to-intermediate term debt
PORTFOLIO consistent with low risk to securities, primarily investment
principal and liquidity; and grade
secondarily, total return
PARTNERS PORTFOLIO Capital growth Common stocks and other
equity securities of established
companies
GENESIS PORTFOLIO Broadly diversified, small-cap Common stocks of companies
value fund with small market capitalization
(up to $1.5 billion)
</TABLE>
Risk Factors
An investment in any Portfolio involves certain risks, depending upon the
types of investments made by its corresponding Series. Special risk factors
apply to investments, which may be made by certain Series, in foreign
securities, options and futures contracts, zero coupon bonds and swap
agreements, and debt securities rated below investment grade. For those Series
investing in fixed income securities, the value of such securities is likely to
decline in times of rising interest rates and rise in times of falling interest
rates. In general, the longer the maturity of a fixed income security, the more
pronounced is the effect of a change in interest rates on the value of the
security.
AMT Government Income Investments invests at least 25% of its total assets in
mortgage-backed and asset-backed securities, may engage in lending portfolio
securities and other investment techniques, and may borrow for leverage. The
investment program of AMT Government Income Investments is intended to protect
principal by focusing on the credit quality of the issuers. Principal may,
however, be at risk due to market rate fluctuations. See "Borrowings" in this
Prospectus.
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
- 2 -
<PAGE>
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.
AMT Genesis Investments seeks capital appreciation by investing primarily in
common stocks of companies with small market capitalizations. Small
capitalization company stocks have higher risk and volatility than stocks of
companies with larger market capitalizations, because most are not as broadly
traded as stocks of companies with larger capitalizations and their prices thus
may fluctuate more widely and abruptly. Small capitalization company stocks have
usually declined more than larger capitalization stocks in declining markets.
Management
N&B Management, with the assistance of Neuberger&Berman, LLC
("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, Genesis and Balanced Investments (equity portion) are each
managed using one of two basic investment approaches--value or 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
- 3 -
<PAGE>
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
than securities purchased by the other Series. AMT Partners and Genesis
Investments place 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.
- 4 -
<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.
Balanced Portfolio
Sales Charge Imposed on Purchases NONE
Sales Charge Imposed On Reinvested Dividends NONE
Deferred Sales Charges NONE
Redemption Fees NONE
Exchange Fees NONE
=======================================================
Annual Portfolio Operating Expenses
(as percentage of average 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.
Management and 12b-1 Other Total Operating
Administration Fees Fees Expenses Expenses
================================================================================
Balanced Portfolio 0.__% None 0.__% ____%
================================================================================
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
- 5 -
<PAGE>
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 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:
1 Year 3 Years 5 Years 10 Years
===============================================================================
Balanced Portfolio $__ $__ $__ $___
===============================================================================
The assumption in this example of a 5% annual return is required by
regulations of the Securities and Exchange Commission applicable to all mutual
funds. The information in the table should not be considered a representation of
past or future expenses or rates of return; actual expenses or returns may be
greater or less than those shown.
- 6 -
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
The financial information in the following tables is for each Portfolio
(except the International and Genesis Portfolios) as of December 31, 1996 and,
where applicable, includes data related to each Portfolio's predecessor fund
before it was converted into a series of the Trust on May 1, 1995. See "Special
Information Regarding Organization, Capitalization and Other Matters" in this
Prospectus. This information for each Portfolio and predecessor fund has been
audited by its respective independent auditors. You may obtain further
information about each Series (except AMT International and Genesis Investments)
and the performance of each Portfolio (except the International and Genesis
Portfolios) at no cost in the Trust's annual report to shareholders. Also, see
"Performance Information" in this Prospectus. As of December 31, 1996, AMT
International and Genesis Investments and the International and Genesis
Portfolios had not yet commenced investment operations.
[Per Share Data for the year ended December 31, 1996 to be included in
a Post-Effective Amendment filed upon or prior to the effectiveness of this
Post-Effective Amendment]
- 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>
<S> <C> <C> <C> <C>
Year Ended December 31,
1996(2) 1995(2) 1994 1993
- --------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year 14.51 $15.62 $14.90
- --------------------------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .32 .30 .34
Net Gains or Losses on Securities
(both realized and unrealized) 3.06 (.80) .61
------------------------------------------------------
Total From Investment Operations 3.38 (.50) .95
- --------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment income) (.28) (.23) (.20)
Distributions (from capital gains) (.09) (.38) (.03)
------------------------------------------------------
Total Distributions (.37) (.61) (.23)
- --------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $17.52 $14.51 $15.62
- --------------------------------------------------------------------------------------------------
Total Return* +23.76 3.36% +6.45%
- --------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $144.4 $179.3 $161.1
------------------------------------------------------
Ratio of Expenses to
Average Net Assets(7) .99% .91% .90%
------------------------------------------------------
Ratio of Net Investment
Income to Average Net Assets(7) 1.99% 1.91% 1.96%
------------------------------------------------------
Portfolio Turnover Rate(8) 21% 55% 114%
------------------------------------------------------
</TABLE>
- 8 -
<PAGE>
<TABLE>
<CAPTION>
Balanced Portfolio
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Period from
February 28, 1989(3)
to
Year Ended December 31, December 31, 1989
1992 1991 1990
- -------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $14.16 $11.72 $11.64 $10.00
- -------------------------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .40 .47 .49 .30
Net Gains or Losses on Securities
(both realized and unrealized) .72 2.16 (.27)(4) 1.34
----------------------------------------------------------
Total From Investment Operations 1.12 2.63 .22 1.64
- -------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.19) (.19) (.07)
Distributions (from capital gains) (.19) (.07)
----------------------------------------------------------
Total Distributions (.38) (.19) (.14)
- -------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $14.90 $14.16 $11.72 $11.64
- -------------------------------------------------------------------------------------------------
Total Return* +8.06% +22.68 +1.95 +16.40%(5)
- -------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $87.1 $28.3 $6.9 $0.6
----------------------------------------------------------
Ratio of Expenses to
Average Net Assets(7) .95% 1.10% 1.35% 1.70%(6)
----------------------------------------------------------
Ratio of Net Investment
Income to Average Net Assets(7) 2.33% 3.00% 4.00% 3.28%(6)
----------------------------------------------------------
Portfolio Turnover Rate(8) 82% 69% 77% 58%
----------------------------------------------------------
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
- 9 -
<PAGE>
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%, and from January 1, 1996 to December 31, 1996 was
_____%.
* 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.
- 10 -
</TABLE>
<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>
<S> <C> <C>
Year Ended Period from
December 31, March 22, 1994(3) to
1996(2) 1995(2) December 31, 1994
- --------------------------------------------------------------------------------
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%
---------------------------------------
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.
- 11 -
<PAGE>
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 or AMT
Government Income Investments for the period from May 1, 1995 to
December 31, 1995 was 64%, and from January 1, 1996 to December 31,
1996 was _____%.
* 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.
- 12 -
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
Growth Portfolio
<TABLE>
<S> <C> <C> <C> <C> <C>
Year Ended December 31,
1996(2) 1995(2) 1994 1993 1992
- -----------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $20.31 $24.28 $23.27 $21.47
- -----------------------------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .01 .07 .13 .21
Net Gains or Losses on Securities
(both realized and unrealized) 6.26 (1.11) 1.42 1.82
--------------------------------------------------------------
Total From Investment Operations 6.27 (1.04) 1.55 2.03
- -----------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.05) (.12) (.17) (.23)
Distributions (from capital
gains) (.67) (2.81) (.37) -
--------------------------------------------------------------
Total Distributions (.72) (2.93) (.54) (.23)
- -----------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $25.86 $20.31 $24.28 $23.27
- -----------------------------------------------------------------------------------------------------
Total Return* +31.73% -4.99% +6.79% +9.54%
- -----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $537.8 $369.3 $366.5 $304.8
--------------------------------------------------------------
Ratio of Expenses to
Average Net Assets .90% .84% .81% .82%
--------------------------------------------------------------
Ratio of Net Investment
Income to Average
Net Assets .04% .26% .52% .92%
--------------------------------------------------------------
Portfolio Turnover Rate(3) 9% 46% 92% 63%
--------------------------------------------------------------
</TABLE>
- 13 -
<PAGE>
<TABLE>
Growth Portfolio
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31,
1991 1990 1989 1988 1987
- ---------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $16.82 $20.28 $16.20 $12.86 $15.21
- ---------------------------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .31 .43 .43 .32 .34
Net Gains or Losses on Securities
(both realized and unrealized) 4.64 (2.04) 4.24 3.02 (.96)
---------------------------------------------------------------
Total From Investment Operations 4.95 (1.61) 4.67 3.34 (.62)
- ---------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.30) (.29) (.27) (.48)
Distributions (from capital gains) (1.56) (.32) (1.25)
---------------------------------------------------------------
Total Distributions (.30) (1.85) (.59) (1.73)
- ---------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $21.47 $16.82 $20.28 $16.20 $12.86
- ---------------------------------------------------------------------------------------------------
Total Return* +29.73% -8.19% +29.47% +25.97% -4.89%
- ---------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $228.9 $118.8 $92.8 $48.7 $33.8
---------------------------------------------------------------
Ratio of Expenses to
Average Net Assets .86% .91% .97% .92% .89%
---------------------------------------------------------------
Ratio of Net Investment
Income to Average Net Assets 1.43% 2.12% 2.10% 2.12% 2.05%
---------------------------------------------------------------
Portfolio Turnover Rate(3) 57% 76% 105% 95% 87%
---------------------------------------------------------------
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%, and from January 1, 1996 to December 31, 1996 was _____%.
* 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.
- 14 -
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
<TABLE>
<CAPTION>
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)
<S> <C> <C> <C> <C> <C>
Year Ended December 31,
1996(2) 1995(2) 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $14.02 $14.66 $14.33 $14.32
- ---------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .82 .78 .84 1.03
Net Gains or Losses on Securities
(both realized and unrealized) .65 (.80) .08 (.33)
---------------------------------------------------------------------------------------------
Total From Investment Operations 1.47 (.02) .92 .70
- ---------------------------------------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.78) (.55) (.52) (.66)
Distributions (from capital gains) (.07) (.07) (.03)
---------------------------------------------------------------------------------------------
Total Distributions (.78) (.62) (.59) (.69)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $14.71 $14.02 $14.66 $14.33
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return* +10.94% .15% +6.63% +5.18%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $238.9 $344.8 $343.5 $187.0
---------------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets .71% .66% .64% .64%
---------------------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average
Net Assets 5.99% 5.42% 5.19% 5.80%
---------------------------------------------------------------------------------------------
Portfolio Turnover Rate(5) 27% 90% 159% 114%
---------------------------------------------------------------------------------------------
- 15 -
</TABLE>
<PAGE>
<TABLE>
Limited Maturity Bond Portfolio
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31,
1991 1990 1989 1988(3) 1987
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $13.62 $13.48 $13.01 $12.14 $13.62
- -----------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income 1.04 1.15 1.12 .92 1.00
Net Gains or Losses on Securities
(both realized and unrealized) .43 (.10)(4) .20 (.05) (.60)
-----------------------------------------------------------------------------------------
Total From Investment Operations 1.47 1.05 1.32 .87 .40
- -----------------------------------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.77) (.91) (.85) (1.62)
Distributions (from capital gains) (.26)
-----------------------------------------------------------------------------------------
Total Distributions (.77) (.91) (.85) (1.88)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $14.32 $13.62 $13.48 $13.01 $12.14
- ----------------------------------------------------------------------------------------------------------------------------
Total Return* +11.34% +8.32% +10.77% +7.17% +2.89%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $83.0 $46.0 $31.5 $25.4 $19.0
-----------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets .68% .76% .88% 1.01% .99%
-----------------------------------------------------------------------------------------
Ratio of Net Investment
Income to Average
Net Assets 6.61% 7.66% 8.11% 7.15% 7.36%
-----------------------------------------------------------------------------------------
Portfolio Turnover Rate(5) 77% 124% 116% 197% 24%
-----------------------------------------------------------------------------------------
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%, and from January 1, 1996 to December 31, 1996 was
_____%.
* 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.
</TABLE>
- 16 -
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
<TABLE>
<CAPTION>
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.
<S> <C> <C> <C> <C> <C>
Year Ended December 31,
1996(1) 1995(1) 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year .9997 $1.0009 $1.0002 $1.0001
- -----------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .0493 .0328 .0233 .0320
Net Gains or Losses on Securities .0003 - .0014 .0002
--------------------------------------------------------------------
Total From Investment Operations .0496 .0328 .0247 .0322
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.0493) (.0328) (.0233) (.0320)
Distributions (from capital gains) - (.0012) (.0007) (.0001)
--------------------------------------------------------------------
Total Distributions (.0493) (.0340) (.0240) (.0321)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $1.000 $.9997 $1.0009 $1.0002
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return* +5.04% +3.46% +2.43% +3.25%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $31.9 $5.3 $6.8 $25.4
--------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets(2) 1.01% 1.02% .88% .72%
--------------------------------------------------------------------
Ratio of Net Investment Income
to Average Net Assets(2) 4.90% 3.28% 2.34% 3.19%
--------------------------------------------------------------------
</TABLE>
- 17 -
<PAGE>
<TABLE>
<CAPTION>
Liquid Asset Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1991 1990 1989 1988 1987
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $.9999 $.9998 $.9998 $1.0000 $1.0002
- -----------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .0547 .0730 .0826 .0648 .0550
Net Gains or Losses on Securities .0002 .0001 - (.0002) .0001
------------------------------------------------------------------------------------
Total From Investment Operations .0549 .0731 .0826 .0646 .0551
- -----------------------------------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.0547) (.0730) (.0826) (.0648) (.0550)
Distributions (from capital gains) (.0003)
------------------------------------------------------------------------------------
Total Distributions (.0547) (.0730) (.0826) (.0648) (.0553)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $1.0001 $.9999 $.9998 $.9998 $1.0000
- -----------------------------------------------------------------------------------------------------------------------------
Total Return* +5.61% +7.55% +8.58% +6.68% +5.67%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $21.5 $21.5 $11.5 $9.3 $8.1
------------------------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets(2) .74% .88% 1.00% 1.00% 1.00%
------------------------------------------------------------------------------------
Ratio of Net Investment Income
to Average Net Assets(2) 5.47% 7.30% 8.28% 6.52% 5.69%
------------------------------------------------------------------------------------
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.
</TABLE>
- 18 -
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman Advisers Management Trust
<TABLE>
<CAPTION>
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)
<S> <C> <C> <C>
Period from
Year Ended December 3 March 22, 1994(3) to
1996(2) 1995(2) December 31, 1994
- ----------------------------------------------------------------------------------------------------------------------------------
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%
-----------------------------------------------------------------------------
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%, and from January 1, 1996 to December 31, 1996 was
-----%.
* 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.
</TABLE>
- 19 -
<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 __.
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.
- 20 -
<PAGE>
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.
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.
- 21 -
<PAGE>
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 of small-,
medium-, and large-capitalization companies 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.
The Series' growth investment program involves greater risks and share
price volatility than programs that invest in more undervalued securities.
Small-capitalization company stocks are subject to the risks described with
respect to the investment program of AMT Genesis Investments.
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
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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 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.
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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. 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.
AMT Genesis Investments
The investment objective of AMT Genesis Investments and its
corresponding Portfolio is to seek capital appreciation.
AMT Genesis Investments invests primarily in common stocks of companies
with small market capitalizations ("small-cap companies"). Market capitalization
means the total market value of a company's outstanding common stock. The Series
regards companies with market capitalizations of up to $1.5 billion at the time
of the Series' investment as small-cap companies. Companies whose market
capitalizations exceed $1.5 billion after purchase continue to be considered
small-cap companies for purposes of the Series' investment policies. There is no
necessary correlation between market capitalization and the financial attributes
- -- such as levels of assets, revenues or income -- commonly used to measure the
size of a company.
Studies indicate that the market values of small-cap company stocks,
such as those included in the Russell 2000 Index and the Wilshire 1750 Index or
quoted on Nasdaq, have a cyclical relationship with larger capitalization
stocks. Over the last 30 years, small-cap company stocks have outperformed
larger capitalization stocks about two-thirds of the time, even though small-cap
stocks have usually declined more than larger capitalization stocks in declining
markets. There can be no assurance that this pattern will continue.
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Small-cap company stocks generally are considered to offer greater
potential for appreciation than securities of companies with larger market
capitalizations. Most small-cap company stocks pay low or no dividends, and the
Series seeks long-term appreciation, rather than income. Small-cap company
stocks also have higher risk and volatility, because most are not as broadly
traded as stocks of companies with larger capitalizations and their prices thus
may fluctuate more widely and abruptly. Small-cap company securities are also
less researched and often overlooked and undervalued in the market.
The Series tries to enhance the potential for appreciation and limit
the risk of decline in the value of its securities by employing the
value-oriented investment approach. The Series seeks securities that appear to
be underpriced and are issued by companies with proven management, sound
finances, and strong potential for market growth. To reduce risk, the Series
diversifies its holdings among many companies and industries. The Series focuses
on the fundamentals of each small-cap company, instead of trying to anticipate
what changes might occur in the stock market, the economy, or the political
environment. This approach differs from that used by many other funds investing
in small-cap company stocks. Those funds often buy stocks of companies they
believe will have above-average earnings growth, based on anticipated future
developments. In contrast, the Series' securities are generally selected with
the belief that they are currently undervalued, based on existing conditions.
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 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, International Portfolio and Genesis
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 and in the notes under "Financial
Highlights" in this Prospectus.
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
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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.
LOWER-RATED SECURITIES (AMT INTERNATIONAL, BALANCED, LIMITED MATURITY BOND AND
PARTNERS INVESTMENTS). Debt securities rated lower than Baa by Moody's and 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,
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objective data available. N&B Management will invest in such securities only
when it concludes that the anticipated return to the Portfolio on such an
investment warrants exposure to the additional level of risk. A further
description of Moody's and S&P's ratings is included in Appendix A to the SAI.
The value of the fixed income securities in which a Series may invest,
measured in the currency in which they are denominated, is likely to decline in
times of rising interest rates. Conversely, when rates fall, the value of a
Series' fixed income investments may rise. The longer the period remaining to
maturity, the more pronounced is the effect of interest rate changes on the
value of a security.
Borrowings
ALL SERIES (EXCEPT AMT GOVERNMENT INCOME AND INTERNATIONAL INVESTMENTS).
Each of the Series has a fundamental policy that it may not borrow money, except
that it may (1) borrow money from banks for temporary or emergency purposes and
not for leveraging or investment and (2) enter into reverse repurchase
agreements for any purpose, so long as the aggregate amount of borrowings and
reverse repurchase agreements does not exceed one-third of the Series' total
assets (including the amount borrowed) less liabilities (other than borrowings).
None of these Series expects to borrow money. As a non-fundamental policy, none
of these Series may purchase portfolio securities if its outstanding borrowings,
including reverse repurchase agreements, exceed 5% of its total assets. Dollar
rolls are treated as reverse repurchase agreements.
AMT GOVERNMENT INCOME INVESTMENTS. AMT Government Income Investments, as a
fundamental policy, may borrow money from banks for any purpose, including to
meet redemptions and 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
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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.
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
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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.
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.
PERFORMANCE OF A FUND COMPARABLE TO THE GENESIS PORTFOLIO AND AMT GENESIS
INVESTMENTS. AMT Genesis Investments and its corresponding Portfolio have
investment objectives, policies, limitations and strategies substantially
similar to those of, and the same portfolio manager as, another mutual fund
managed by N&B Management - Neuberger&Berman Genesis Fund (and its corresponding
master series), and the predecessor of Neuberger&Berman Genesis Fund. The
following table shows the average annual total returns of Neuberger&Berman
Genesis Fund and its predecessor for the 1-year and 5-year periods and since
inception for the period ended December 31, 1996. The table also shows a
comparison with the Russell 2000 Index, an unmanaged index of securities of the
2,000 issuers having the smallest capitalization in the Russell 3000 Index,
representing about 11% of the Russell 3000's total market capitalization, which
is pertinent to Neuberger&Berman Genesis Fund.
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AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS
ENDED DECEMBER 31, 1996
1 Year 5 Years Since Inception
------ ------- ---------------
Neuberger&Berman Genesis Fund 29.86% 16.41% 14.54% (9/27/88)
Russell 2000 16.49% 15.64% N/A
PERFORMANCE OF FUNDS COMPARABLE TO THE INTERNATIONAL PORTFOLIO AND AMT
INTERNATIONAL INVESTMENTS. AMT International Investments and its corresponding
Portfolio have investment objectives, policies, limitations and strategies
substantially similar to those of, and the same portfolio manager as, another
mutual fund managed by N&B Management - Neuberger&Berman International Fund (and
its corresponding master series). The following table shows the average annual
total returns of Neuberger&Berman International Fund for the 1-year period and
since inception for the period ended December 31, 1996. The table also shows a
comparison with the Morgan Stanley Capital International Europe, Australia, Far
East Index (the "EAFE Index"), an unmanaged index of non-U.S. equity market
performance, which is pertinent to the Neuberger&Berman International Fund.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS
ENDED DECEMBER 31, 1996
1 Year Since Inception
Neuberger&Berman International Fund 11.73% 8.55% (6/15/94)
EAFE Index 8.19% 5.67%
Prior to the inception of Neuberger&Berman International Fund, the manager
of its corresponding master series, Felix Rovelli, was the manager of Vontobel
EuroPacific Fund ("EuroPacific Fund") and of Penn Series International Equity
Fund ("International Equity Fund") (collectively, the "Other Funds"), each
registered open-end management investment companies which had an investment
objective, policies, limitations and strategies substantially similar to those
of AMT International Investments and its corresponding Portfolio. Mr. Rovelli
has advised the Trust that he used the same analytical methods when identifying
potential investments for the Other Funds as he uses for AMT International
Investments, that he was primarily responsible for the day-to-day management of
the Other Funds, and that no other person played a significant role in managing
the Other Funds. The composite average annual total return for the Other Funds,
and the performance of the EAFE Index, for a period that approximates Mr.
Rovelli's tenure as portfolio manager of one or both of the Other Funds, was as
follows:
AUGUST 1, 1990
TO APRIL 30, 1994
Other Funds* 6.42%
EAFE Index 5.20%
* Mr. Rovelli was the portfolio manager of EuroPacific Fund from July 6,
1990, to April 30, 1994, and was the portfolio manager of International
Equity Fund from its inception on November 2, 1992, to April 30, 1994.
International Equity Fund is an underlying investment vehicle for
insurance
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company separate accounts funding variable annuity contracts and
variable life insurance contracts.
The figures for the comparable mutual funds depicted above reflect each
such fund's expense ratios, and do not reflect any sales charges imposed in
connection with investment in those funds or, in the case of International
Equity Fund, any expenses or charges that apply to insurance company variable
annuity or variable life insurance contracts. Although the objectives, polices,
limitations and strategies of AMT Genesis Investments and its corresponding
Portfolio (the "AMT Genesis Funds") are substantially similar to those of
Neuberger&Berman Genesis Fund and its corresponding master series, the AMT
Genesis Funds are distinct mutual funds from the mutual funds they are compared
to and may have different fees, expenses, investment returns, portfolio
holdings, and risk/return characteristics than such mutual funds. Similarly,
although the objectives, polices, limitations and strategies of AMT
International Investments and its corresponding Portfolio (the "AMT
International Funds") are substantially similar to Neuberger&Berman
International Fund and its corresponding master series, the AMT International
Funds are distinct mutual funds from the mutual funds they are compared to and
may have different fees, expenses, investment returns, portfolio holdings, and
risk/return characteristics than such mutual funds. Historical performance of
substantially similar mutual funds is not indicative of future performance of
the AMT Genesis Funds or the AMT International Funds.
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 eight separate Portfolios. The predecessors of all
Portfolios were converted into the Portfolios on May 1, 1995, with the exception
of the International Portfolio and the Genesis Portfolio which as of December
31, 1996 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.
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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 eight separate Series. On May 1, 1995, each Portfolio (other than the
International Portfolio and the Genesis Portfolio which as of December 31, 1996
had not yet commenced investment operations) invested all of their 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.
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 __ master funds and
__ feeder funds.
Each Portfolio's investment in its corresponding Series is in the form
of a non-transferable beneficial interest. Members of the general public may not
purchase a direct interest in the Series. Currently, each Portfolio is the sole
investor in its corresponding Series. It is possible that one or more Series, in
the 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
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could result in a less diversified portfolio of investments for the Portfolio
and could affect adversely the liquidity of the Portfolio's investment
portfolio. If a Portfolio decided to convert those securities to cash, it
usually would incur brokerage fees or other transaction costs. If a Portfolio
withdrew its investment from a Series, the trustees would consider what action
might be taken, including the investment of all of the Portfolio's net
investable assets in another pooled investment entity having substantially the
same investment objective as the Portfolio or the retention by the Portfolio of
its own investment manager to manage its assets in accordance with its
investment objective, policies, and limitations. The inability of the Portfolio
to find a suitable replacement could have a significant impact on shareholders.
INVESTOR MEETINGS AND VOTING. Each Series normally will not hold meetings of
investors except as required by the 1940 Act. Each investor in a Series will be
entitled to vote in proportion to its relative beneficial interest in the
Series. On most issues subjected to a vote of investors, as required by the 1940
Act and other applicable law, a Portfolio will solicit proxies from its
shareholders and will vote its interest in the Series in proportion to the votes
cast by the Portfolio's shareholders. Pursuant to current interpretations of the
1940 Act, the Life Companies who are shareholders of the Portfolio will solicit
voting instructions from contract owners with respect to any matters that are
presented to a vote of Portfolio shareholders. If there are other investors in a
Series, there can be no assurance that any issue that receives a majority of the
votes cast by Portfolio shareholders will receive a majority of votes cast by
all Series investors; indeed, if other investors hold a majority interest in the
Series, they could have voting control of the Series.
CERTAIN PROVISIONS. Each investor in a Series, including a Portfolio, will be
liable for all obligations of the Series, but not of the other Series. However,
the risk of an investor in a Series incurring financial loss on account of such
liability would be limited to circumstances in which the Series had inadequate
insurance and was unable to meet its obligations out of its assets. Upon
liquidation of a Series, investors would be entitled to share pro rata in the
net assets of the Series available for distribution to investors.
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
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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, Genesis, 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.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAX STATUS
Dividends and Other Distributions
Each of the Government Income, Growth, Partners, Genesis, 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, also 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
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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.
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.
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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.
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 principals 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 eight 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 $_____ billion as of December 31, 1996.
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 $_____ billion of assets as of December 31, 1996. All of the
voting stock of N&B Management is owned by individuals who are principals of
Neuberger&Berman.
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Theodore Giuliano is a principal of Neuberger&Berman. Mr. Giuliano is
the Manager of the Fixed Income Group of Neuberger&Berman, which he helped to
establish in 1984. The Fixed Income Group manages fixed income accounts that had
approximately $ billion of assets as of December 31, 1996.
Mr. Giuliano, along with Josephine P. Mahaney with respect to AMT
Liquid Asset Investments, Thomas G. Wolfe with respect to AMT Limited Maturity
Bond Investments and the debt securities portion of AMT Balanced Investments,
and William H. Cunningham with respect to AMT Government Income Investments,
shares primary responsibility for the day-to-day management of the fixed income
Series of Mangers Trust.
The following members of the Fixed Income Group, along with Mr.
Giuliano, 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.
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 principal 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 principal 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
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two private investment partnerships from 1988 to 1990. He has had primary
responsibility for AMT Partners Investments since March 1994. Mr. Gendelman is
principal of Neuberger&Berman and has been 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. 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.
AMT Genesis Investments -- Judith M. Vale. Ms. Vale has been a member of
Neuberger&Berman's Small Cap Group since 1992, a Vice President of N&B
Management since November 1994 and a principal of Neuberger&Berman since July
1996. She has primarily responsibility for the day-to-day management of AMT
Genesis Investments. Ms. Vale was a portfolio manager for another investment
management group from 1990 to 1992.
N&B Management serves as distributor in connection with the offering of
each Portfolio's shares. In connection with the sale of each Portfolio's shares,
each Portfolio has authorized the distributor to give only such information and
to make only such statements and representations as are contained in the
Portfolio's Prospectus. The distributor is responsible only for information
given and statements and representations made in a Portfolio's Prospectus and is
not responsible for any information given or any statements or representations
made by the Life Companies or by brokers or salespersons in connection with
Variable Contracts.
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.
The principals 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
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
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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:
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Fees (as percentage of average daily net assets)
Management Administration
(Series) (Portfolio)
GROWTH; PARTNERS; 0.55% of first $250 million 0.30%
BALANCED 0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
GOVERNMENT INCOME 0.35% of first $500 million 0.40%
0.325% of next $500 million
0.30% of next $500 million
0.275% of next $500 million
0.25% of over $2 billion
LIMITED MATURITY BOND; 0.25% of first $500 million 0.40%
LIQUID ASSET 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
GENESIS 0.85% of the first $250 million 0.30%
0.80% of next $250 million
0.75% of next $250 million
0.70% of next $250 million
0.65% of over $1 billion
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Each Portfolio bears all expenses of its operations other than those borne by
N&B Management as administrator of the Portfolio and as distributor of its
shares. Each Series bears all expenses of its operations other than those borne
by N&B Management as investment manager of the Series. These expenses include,
but are not limited to, for the Portfolios and the Series, legal and accounting
fees and compensation for trustees who are not affiliated with N&B Management;
for the Portfolios, transfer agent fees and the cost of printing and sending
reports and proxy materials to shareholders; and for the Series, custodial fees
for securities. Any expenses which are not directly attributable to a specific
Series are allocated on the basis of the net assets of the respective Series.
Expense Limitation
ALL PORTFOLIOS AND THEIR CORRESPONDING SERIES (EXCEPT GENESIS AND
INTERNATIONAL PORTFOLIOS AND THEIR CORRESPONDING SERIES). N&B Management has
voluntarily 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, in the aggregate, 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.
INTERNATIONAL PORTFOLIO AND ITS CORRESPONDING SERIES. N&B Management has
voluntarily undertaken until May 1, 1998 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, in the aggregate, 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, 1999, 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.
GENESIS PORTFOLIO AND ITS CORRESPONDING SERIES. N&B Management has voluntarily
undertaken until May 1, 1998 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, in the aggregate, 1.25% of the Portfolio's average daily net asset
value ("Portfolio Expense Limitation"). The Portfolio has in turn agreed to
repay through December 31, 1999, 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 is to reduce operating
expenses of a Portfolio and its corresponding 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 Portfolios and in so doing
performs certain bookkeeping, data processing and administrative services.
Qualified Plan participants investing in the Balanced Portfolio should send all
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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.
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
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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.
SERVICES
N&B Management may use its assets and resources, including its profits from
administration fees paid by a Portfolio, to pay Life Companies for services
rendered to current and prospective owners of Variable Contracts. These may
include the provision of support services such as providing information about
the Trust and the Portfolios, the delivery of Trust documents, and other
services. Any such payments are made by N&B Management, and not by the Trust,
and N&B Management does not receive any separate fees for such expenses.
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 (5% in the case of AMT Genesis Investments) 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.
INFLATION-INDEXED SECURITIES (AMT LIMITED MATURITY BOND AND BALANCED
INVESTMENTS). The Series may invest in U.S. Treasury securities whose principal
value is adjusted daily in accordance with changes to the Consumer Price Index.
Interest is calculated on the basis of the
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current adjusted principal value. The prices of inflation-indexed securities
decline in periods of deflation, but holders at maturity receive no less than
par. If inflation is lower than expected over the life of the security, the
Series may earn less on it than on a conventional bond. Any increase in
principal value is taxable in the year the increase occurs, even though holders
do not receive cash representing the increase until the security matures.
Changes in market interest rates from causes other than inflation will likely
affect the market prices of inflation-indexed securities in the same manner as
conventional bonds.
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, Genesis 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 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
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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 foreign
currency exchange rates, to facilitate transactions in foreign securities and to
repatriate dividend or interest income received in foreign currencies. A Series
may enter into contracts to purchase foreign currencies to protect against an
anticipated rise in the U.S. dollar price of securities it intends to purchase.
A Series may also enter into contracts to sell foreign currencies to protect
against a decline in value of its foreign currency denominated portfolio
securities due to a decline in the value of foreign currencies against the U.S.
dollar. Contracts to sell foreign currency could limit any potential gain which
might be realized by a Series if the value of the hedged currency increased.
AMT International Investments may also enter into forward foreign currency
exchange contracts for non-hedging purposes when N&B Management anticipates that
a 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 N&B Management
believes that there is a pattern of correlation between the two currencies.
Cross-hedges may result in losses if the currency used to hedge does not
perform similarly to the currency in which the securities are denominated.
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
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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 10% limitation does not apply to
AMT International Investments. 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
writing 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 on currencies,
debt securities, interest rates, and securities indices, and may 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 to protect 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 N&B Management expects that a 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 may be traded on U.S. or 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.
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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 a 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. When a Series uses Hedging Instruments, the
Series will place cash or appropriate liquid securities in a segregated account,
or will "cover" its position to the extent required by SEC staff policy.
Futures, options and forward foreign currency contracts are considered
derivatives. Losses that may arise from certain futures transactions are
potentially unlimited.
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 two 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.
The value of indexed securities may increase or decrease if the underlying
instrument appreciates, and indexed securities may have return characteristics
similar to direct investments in the underlying instrument or to one or more
options on the underlying instrument. Indexed securities may be more volatile
than the underlying instrument itself.
REPURCHASE AGREEMENTS/SECURITIES LOANS (ALL SERIES). Each Series may enter into
repurchase agreements and lend securities from its portfolio. In a repurchase
agreement, a Series buys a security from a Federal Reserve member bank (or with
respect to AMT International Investments, from a foreign bank or U.S. branch or
agency of a foreign bank), or a securities dealer and simultaneously agrees to
sell it back at a higher price, at a specified date, usually less than a week
later. The underlying securities must fall within the Series' investment
policies and limitations (but not limitations as to maturity or duration). Each
Series also may lend portfolio securities to banks, brokerage firms, or
institutional investors to earn income. Costs, delays or losses could result if
the selling party to a repurchase agreement
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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 higher price. During the period before the repurchase, the Series continues to
receive principal and interest payments on the securities. The Series will place
cash or appropriate liquid securities in a segregated account to cover its
obligations under reverse repurchase agreements. 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)
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("Certificates for Automobile Receivables"), credit card receivable securities,
and installment loan contracts. Although these securities may be supported by
letters of credit or other credit enhancements, payment of interest and
principal ultimately depends upon individuals paying the underlying loans. The
risk that recovery on repossessed collateral might be unavailable, or inadequate
to support payments on asset-backed securities is greater than in the case of
mortgage-backed securities.
OTHER INVESTMENT COMPANIES (AMT INTERNATIONAL INVESTMENTS). AMT International
Investments may invest up to 10% of its total assets, 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, GENESIS AND BALANCED INVESTMENTS).
Although each of these Series ordinarily invests primarily in common stocks,
except AMT Balanced Investments (debt securities 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. The value of fixed-income securities in
which the Series may invest is likely to decline in times of rising market
interest rates. Conversely, when rates fall, the value of a Series' fixed income
investments is likely to rise.
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 N&B Management believes possess volatility characteristics similar to
those being hedged and may use short sales in an attempt to realize gain. To
effect a short sale, 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
dividends and may be required to pay a premium or interest.
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.
AMT Liquid Asset, Limited Maturity Bond, Partners, Growth, Balanced, Genesis 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. Short selling against-the-box may defer recognition of
gains and losses into a later tax period.
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SWAP AGREEMENTS (AMT GOVERNMENT INCOME INVESTMENTS). To help enhance the value
of its portfolio or manage its exposure to different types of investments, the
Series may enter into interest rate, currency, and mortgage swap agreements and
may purchase and sell interest rate "caps," "floors," and "collars."
In a typical interest rate swap agreement, one party agrees to make regular
payments equal to a floating interest rate on a specified amount (the "notional
principal amount") in return for payments equal to a fixed interest rate on the
same amount for a specified period. If a swap agreement provides for payment in
different currencies, the parties may also agree to exchange the notional
principal amount. Mortgage swap agreements are similar to interest rate swap
agreements, except the notional principal amount is tied to a reference pool of
mortgages.
In a cap or floor, one party agrees, usually in return for a fee, to make
payments under particular circumstances. For example, the purchaser of an
interest rate cap has the right to receive payments to the extent a specified
interest rate exceeds an agreed level; the purchaser of an interest rate floor
has the right to receive payments to the extent a specified interest rate falls
below an agreed level. A collar entitles the purchaser to receive payments to
the extent a specified interest rate falls outside an agreed range.
Swap agreements, including caps and floors, may involve leverage and may be
highly volatile; depending on how they are used, they may have a considerable
impact on the Series' performance. Swap agreements involve risks depending upon
the other party's 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
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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.
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.
- 51 -
<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 - 1996
FIXED ASSET ALLOCATION COMPARISON TO 100%
S&P "500"/2 YR. TREASURY NOTES S&P "500" ALLOCATION
- --------------------------------------------------------------------------------
100/0 (100% S&P "500")
Return _____% 100.0%
Volatility ____% 100.0%
70/30
Return ____ ______
Volatility ____ ____
60/40
Return ____ _____
Volatility ____ ____
50/50
Return ____ _____
Volatility ___ ____
0/100
Return ____ _____
Volatility ___ ____
- 52 -
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NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
Dated May 1, 1997
The Balanced Portfolio, Government Income Portfolio, Growth Portfolio,
International Portfolio, Limited Maturity Bond Portfolio, Liquid Asset
Portfolio, Partners Portfolio and Genesis Portfolio (each a "Portfolio") of
Neuberger&Berman Advisers Management Trust ("Trust") offer shares pursuant to a
Prospectus dated May 1, 1997 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, Liquid Asset Investments, AMT Partners Investments and AMT Genesis
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, or by calling the Trust at 800-877-9700.
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.
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TABLE OF CONTENTS
Page
INVESTMENT INFORMATION.................................................. 1
Investment Policies and Limitations............................ 1
Top-down approach to regional and country diversification...... 8
Bottom-up approach to security selection....................... 8
Currency Risk Management....................................... 8
Additional Investment Information.............................. 18
CERTAIN RISK CONSIDERATIONS............................................. 49
PERFORMANCE INFORMATION................................................. 49
TRUSTEES AND OFFICERS................................................... 53
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES..................... 59
INVESTMENT MANAGEMENT, ADVISORY AND ADMINISTRATION SERVICES............. 62
Expense Limitation............................................. 64
Management and Control of N&B Management....................... 65
Sub-Adviser.................................................... 65
Investment Companies Advised................................... 66
DISTRIBUTION ARRANGEMENTS............................................... 69
ADDITIONAL REDEMPTION INFORMATION....................................... 70
Suspension of Redemptions...................................... 70
DIVIDENDS AND OTHER DISTRIBUTIONS....................................... 71
ADDITIONAL TAX INFORMATION.............................................. 72
Taxation of the Portfolios..................................... 72
Taxation of the Series......................................... 73
VALUATION OF PORTFOLIO SECURITIES....................................... 77
PORTFOLIO TRANSACTIONS.................................................. 78
All Series (except AMT International Investments).............. 78
AMT International Investments.................................. 79
All Series..................................................... 79
Portfolio Turnover............................................. 85
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TABLE OF CONTENTS
Page
REPORTS TO SHAREHOLDERS................................................. 85
CUSTODIAN............................................................... 85
INDEPENDENT AUDITORS.................................................... 86
LEGAL COUNSEL........................................................... 86
REGISTRATION STATEMENT.................................................. 86
FINANCIAL STATEMENTS.................................................... 86
Appendix A..............................................................A-1
RATINGS OF SECURITIES..........................................A-1
Appendix B..............................................................B-1
A CONVERSATION WITH ROY NEUBERGER..............................B-1
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INVESTMENT INFORMATION
Each Portfolio is a separate series of the Trust, a Delaware business
trust registered with the Securities and Exchange Commission ("SEC") as 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. 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
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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.
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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").
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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, with the exception of AMT Genesis Investments:
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. Each Series may not
purchase securities of other investment companies, except to the extent
permitted by the 1940 Act and in the open market at no more than customary
brokerage commission rates. This limitation does not apply to securities
received or acquired as dividends, through offers of exchange, or as a result of
a reorganization, consolidation, or merger.
4. Margin Transactions. Each Series may not purchase securities on
margin from brokers, except that a Series may obtain such short-term credits as
are necessary for the clearance of securities transactions. For all Series
except AMT Liquid Asset Investments, margin payments in connection with
transactions in futures contracts and options on futures contracts shall not
constitute the purchase of securities on margin and shall not be deemed to
violate the foregoing limitation.
5. Short Sales. (AMT Liquid Asset Investments, AMT Growth Investments,
AMT Limited Maturity Bond Investments, and AMT Partners Investments). Each
Series may 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, 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 futures contracts and options are not considered
short sales.
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(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,
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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 Series 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.
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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.
Discussions With Portfolio Managers
An Interview with Felix Rovelli, Portfolio Manager of 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
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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
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.
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
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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.
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.
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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.
Q: Compared to the stock market in the United States, are there
more anomalies in security pricing abroad?
A: Well, the rest of the world is not as well followed as the
United States. So you'll find more anomalies. At the same time, though, the
Level of analysis of companies around the world is improving every day, and the
gap in coverage is narrowing.
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What never changes is the psychology of the investor -- you regularly
see either despair or euphoria in different sectors of every international
market. That, I think, creates opportunities to find undiscovered gems at
extraordinarily cheap prices.
These opportunities can come from, say, uncertainty over an election
going one way or another. Investors may see the outcome as totally disastrous
for a country -- or as totally euphoric. Then, reality sets in, and things are
never as bleak or as wonderful as they had been painted.
Q: Do you integrate ideas from Neuberger & Berman's research and
the domestic portfolio managers?
A: Oh, sure. As everyone knows, the world is becoming smaller, and
certain industries are becoming global (or have become global). Whether one
thinks about technology, pharmaceuticals, medical devices, or the automobile
industry, it's really become one world market. So it's crucial for me to have
good knowledge about both the United States and the areas outside the United
States where these companies dominate.
Theodore Giuliano and Thomas G. Wolfe: Portfolio Managers of AMT Limited
Maturity Bond Investments and AMT Balanced Investments (debt securities
portion); and Theodore Giuliano 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 Mr. Theodore Guiliano, the manager of the Fixed Income
Group of Neuberger&Berman, LLC. have for investors seeking the highest returns
on their fixed income investments? "Look beyond interest rates to total return,"
he states unequivocally. Total return includes the yield from the bond and the
increase or decrease in the market value (price) of the bond.
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"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," Mr. Guiliano 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
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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.
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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.
Judith M. Vale, Portfolio Manager of AMT Genesis Investments
AMT Genesis Investments is dedicated to small-capitalization stocks
(companies with total market value of outstanding common stock of up to $1.5
billion at the time the Series invests). AMT Genesis Investments is devoted to
the same value principles as the other equity funds managed by N&B Management.
"I buy small-cap stocks with solid earnings today, not just promises for
tomorrow," says its portfolio manager Judith Vale.
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"Many people think that small-capitalization stock funds are
predominantly invested in high-risk companies. That is not necessarily the case.
AMT Genesis Investments looks for the same fundamentals in small-capitalization
stocks as our other funds look for in stocks of larger companies. We stick to
the areas we understand. I'm looking for the most persistent earnings growth at
the lowest multiple." Ms. Vale looks for well-established companies with
entrepreneurial management and sound finances. She also looks for catalysts to
exposing value, such as management changes and new product lines. Often, these
are firms that have suffered temporary setbacks or undergone a restructuring.
"Our motto is `boring is beautiful,'" explains Ms. Vale. "Instead of
investing in trendy, high-priced stocks that tend to hurt shareholders on the
downside, we look for little-known, solid, growing companies whose stocks we
believe are wonderful bargains."
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An Interview with Judith Vale
Q: If I already own a large-cap stock fund, why should I consider
investing in a small-cap fund as well?
A: Look at how fast a sapling grows compared to, say, a mature
tree. Much of the same can be true about companies. It's possible for a
smaller company to grow 50% faster than an IBM or a Coca-Cola.
So, many small-cap stocks offer superior growth potential. Consider the
cereal you eat, the detergent you use, the coffee you drink -- and imagine if
you had invested in these products before they became household names. If you
had invested only in the blue-chip companies of the day, you would have missed
out on these opportunities.
Of course, I'm not advocating investing in a portfolio consisting only
of small-cap stock funds. It pays to diversify. Let's look back 25 years. While
past performance cannot indicate future performance, small-cap stocks have
outperformed larger-cap stocks in 16 out of the 25 years. Which means larger-cap
stocks have done better the rest of the time.1
Q: AMT Genesis Investments is classified as a "small-cap value
fund." To many people, "small-cap value" is an oxymoron. Can you clarify the
Series' investment approach?
A: I under the confusion. After all, a lot of people equate "small-cap"
with "growth." They also equate "value" with "cheap." At AMT Genesis
Investments, I'm 100% behind finding growing small-cap companies -- what I
believe are highly profitable companies with solid records and promising
futures. So where do I part company with managers who follow a "small-cap
growth" style? It comes down to how much growth and at what price. Small-cap
growth investors seem willing to pay a premium for vastly
- --------
1 Results are on a total return basis and include reinvestment of all dividends
and capital gain distributions. Small-cap stocks are represented by the fifth
capitalization quintile of stocks on the NYSE from 1971 to 1981 and performance
of the Dimensional Fund Advisors (DFA) Small Company Fund from 1982 to present.
Larger-cap stocks are represented by the S&P "500" Index, an unmanaged group of
stocks. Please note that indices do not take into account any fees or expenses
of investing in the individual securities that they track. Data about these
indices are prepared or obtained by N&B Management. The Portfolio may invest in
many securities not included in the above-described indices. Source: Stocks,
Bonds, Bill and Inflation 1996 YearbookTM, Ibbotson Associates, Chicago
(annually updates work by Roger G. Ibbotson and Rex A.
Sinquefield). Used with permission. All rights reserved.
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superior growth. This results in two problems: a) growth tends to be
discounted by the premium valuations, and b) the growth expectations are so high
as to be unsustainable. In my opinion, superior yet more stable returns can be
purchased at significant discounts. They may be found in mundane, perhaps even
boring, industries. Remember, the same glamorous appeal that attracts so many
growth investors also attracts competitors.
In that respect, I'm a "value" manager. Yet I'd like to make this point
clear: Low price-to-earnings multiples, in and of themselves, cannot justify a
"buy" decision. When I search for growing, high-quality small-cap companies
selling at what I feel are bargain prices, I ask myself: Is the company cheap
for a good reason? Or, does it have the financial muscle and the management
talent to make it into the big leagues?
Q: Let's turn to specifics. What criteria do you use to decide
which small-cap companies make the cut -- and which ones don't?
A: Over the course of my involvement with small-cap companies for 16
years, I've seen hundreds that flourished and just as many that failed to
deliver on their early promises. What made the difference? While every case is
unique, here are a few important traits of the winners.
First of all, a successful small-cap company normally produces high
returns. In practice, this means the business has a number of barriers to entry.
Perhaps the company has a technology that's hard to duplicate. Or maybe it can
make a product at a substantially lower cost than anyone else. Unlike most
businesses, it has an advantage that allows it to continue earning above-market
returns.
In addition to having a competitive edge, a successful small-cap
company should generate healthy cash flow. With excess cash, a company has the
ability to finance its own growth without diluting the ownership stake of
existing stockholders by issuing more shares.
No small-cap company can grow without having the right people on board.
That's why I spend so much time meeting the CEOs and CFOs of small-cap
companies. While I question the managers about future plans and strategies, I
spend as much time evaluating them as people. Do they seem honest and capable?
Or do they puff up their case? Making portfolio decisions is a lot about making
character judgments -- who has the stuff to manage a growing company, and who
doesn't.
The risks involved in seeking capital appreciation from investments
primarily in companies with small market capitalization are set forth in the
Prospectus.
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Additional Investment Information
Some or all of the Series, as indicated below, may make the following
investments, among others although they may not buy all of the types of
securities, or use all of the investment techniques, that are described.
Repurchase Agreements. (All Series). Repurchase agreements are
agreements under which a Series purchases securities from a bank that is a
member of the Federal Reserve System (or with respect to AMT International
Investments, from a foreign bank or a U.S. branch or agency of a foreign bank),
or a securities dealer, that agrees to repurchase the securities from the Series
at a higher price on a designated future date. Repurchase agreements generally
are for a short period of time, usually less than a week. No Series will enter
into a repurchase agreement with a maturity of more than seven business days if,
as a result, more than 10% (5% in the case of AMT Genesis Investments) 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. If AMT
International Investors enters into a repurchase agreement subject to foreign
law and the counter-party defaults, that Series may not enjoy protections
comparable to those provided to certain repurchase agreements under U.S.
bankruptcy law and may suffer delays and losses in disposing of the collateral
as a result.
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 Trustees of Managers Trust (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
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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% (5% in the case of AMT Genesis Investments) 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
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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.
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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 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 foreign currency denominated 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
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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.
Individual foreign economies may differ favorably or unfavorably from the U.S.
economy in such respects as gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency, and balance of payments position.
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.
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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.
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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.
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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(sm)") represent
undivided fractional interests in a trust whose assets consist of a pool of
motor vehicle retail installment sales contracts and security interests in the
vehicles securing the contracts. Payments of principal and interest on CARS(sm)
are "passed-through" monthly to certificate holders and are guaranteed up to
specified amounts by a letter of credit issued by a financial institution
unaffiliated with the trustee or originator of the trust. Underlying installment
sales contracts are subject to prepayment, which may reduce the overall return
to certificate holders. Certificate holders also may experience delays in
payment or losses on CARS(sm) if the full amounts due on underlying installment
sales contracts are not realized by the trust because of unanticipated legal or
administrative costs of enforcing the contracts, or because of depreciation,
damage, or loss of the vehicles securing the contracts, or other factors.
Credit card receivable securities are backed by receivables from
revolving credit card agreements ("Accounts"). Credit balances on Accounts are
generally paid down more rapidly than are automobile contracts. Most of the
credit card receivable securities issued publicly to date have been pass-through
certificates. In order to lengthen the maturity of credit card receivable
securities, most such securities provide for a fixed period during which only
interest payments on the underlying Accounts are passed through to the security
holder and principal payments received on the Accounts are used to fund the
transfer to the pool of assets supporting the securities of additional credit
card charges made on the Accounts. Usually, the initial fixed period also may be
shortened
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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
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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.
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Covered Call Options (All Series except AMT Liquid Asset Investments)
and Put Options on Individual Securities. (AMT Limited Maturity Bond
Investments, AMT Government Income Investments, AMT Balanced Investments and AMT
International Investments). 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, AMT Genesis
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. A Series receives a premium for writing the call
option. 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 Series may be
obligated to deliver securities underlying an option at less than the market
price thereby giving up any additional gain on the security.
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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.
If a call option that a Portfolio has written expires unexercised, the
Portfolio will realize a gain in the amount of the premium; however, that gain
may be offset by a decline in the market value of the underlying security during
the option period. If the call option is exercised, the Portfolio will realize a
gain or loss from the sale 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'
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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.
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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; however, the Series could be in a less advantageous
position than had it not written the call option.
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.
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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. (AMT International Investments).
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
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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.
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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
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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.
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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.
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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
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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."
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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 (i.e., in an effort to enhance
income) 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.
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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
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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.
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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.
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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, Mid-Cap 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
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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,
Mid-Cap 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, AMT Genesis Investments and AMT Partners
Investments). Each Series may invest in convertible securities. 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
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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 debt securities are subject to each Series'
investment policies and limitations concerning fixed-income investments.
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, AMT Genesis Investments and AMT Partners
Investments). These Series may invest in preferred stock. 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.
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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
46
<PAGE>
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,
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<PAGE>
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
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<PAGE>
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)(supercript)365/7]-1
49
<PAGE>
For the seven calendar days ended December 31, 1996, the current yield
of the Liquid Asset Portfolio was ____%. For the same period, the effective
yield was ____%.
Limited Maturity Bond Portfolio and Government Income Portfolio. Each
of these Portfolios may advertise its "yield" based on a 30-day (or one-month)
period. This yield is computed by dividing the net investment income per share
earned during the period by the maximum offering price per share on the last day
of the period. The result then is annualized and shown as an annual percentage
of the investment.
The annualized yield for the Limited Maturity Bond Portfolio and the
Government Income Portfolio for the 30-day period ended December 31, 1996 was
____% and ____%, respectively.
Total Return Computations. (All Portfolios except Liquid Asset and
International).
A Portfolio may advertise certain total return information. An average
annual compounded rate of return ("T") may be computed by using the redeemable
value at the end of a specified period ("ERV") of a hypothetical initial
investment of $1,000 ("P") over a period of time ("n") according to the formula:
P(1+T)[supercript]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, 1996, were _____%, _____%,
and _____%, 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, 1996, were _____%, ____%, and ____%, respectively.
The average annual total returns for the Balanced Portfolio (and the
predecessor of the Balanced Portfolio for the period prior to May 1, 1995) for
the one-year and five-year periods ended December 31, 1996, and for the period
from February 28, 1989
50
<PAGE>
(commencement of operations), through December 31, 1996, were _____%, _____%,
and ____%, 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, 1996 and for the period from March 22,
1994 (commencement of operations) through December 31, 1996 was _____% and
_____%, 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, 1996 and from March 22,
1994 (commencement of operations) through December 31, 1996 was _____% and
____%, 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
51
<PAGE>
(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(R) 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(R) 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.
52
<PAGE>
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.
<TABLE>
<S> <C> <C>
Positions Held with
Name, Address and Age (1) the Trusts Principal Occupation(s) (2)
- --------------------- ---------------------- -----------------------
Stanley Egener* Chairman of the Principal of Neuberger&Berman;
Age: 63 Board, Chief President and Director of N&B
Executive Officer Management; Chairman of the
and Trustee of each Board, Chief Executive Officer,
Trust 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 Colish, A
63 Wall Street Trust Professional Corporation.
24th Floor
New York, NY 10005
Age: 61
Walter G. Ehlers Trustee of each Consultant; Director of The Turner
6806 Suffolk Place Trust Corporation, A.B. Chance
Harvey Cedars, NJ 08008 Company, Crescent Jewelry, Inc.
Age: 64
Leslie A. Jacobson Trustee of each Counsel to Fried, Frank, Harris,
Hickory Kingdom Road Trust Shriver & Jacobson, attorneys at
Bedford, NY 10506 law; previously a partner of that
Age: 86 firm.
Robert M. Porter Trustee of each Retired September, 1991;
P.O. Box 33366 Trust Formerly Director of Customer
Kerrville, TX 78029-3366 Relations, Aetna Life & Casualty
Age: 71 Company.
53
<PAGE>
Ruth E. Salzmann Trustee of each Retired; Director of John Deere
1556 Pine Street Trust Insurance Group; Actuarial
Stevens Point, WI 54481 Consultant.
Age: 78
Peter P. Trapp Trustee of each President, Ford Life Insurance
777 Ridge Road Trust Company since April, 1995; prior
Stevens Point, WI 54481 thereto, Consultant from
Age: 52 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 Principal of Neuberger&Berman;
Age: 61 Trustee of each Director of N&B Management;
Trust 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 of Senior Vice President of N&B
Age: 57 each Trust 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.
54
<PAGE>
Michael J. Weiner Vice President and Senior Vice President of N&B
Age: 50 Principal Financial Management since 1992;
Officer of each Treasurer of N&B Management
Trust from 1992 to 1996; prior thereto,
Vice President and Treasurer of
N&B Management; and Treasurer
of certain mutual funds for which
N&B Management acted as
investment adviser; 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 each Vice President of N&B
Age: 40 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 Manage-
Age: 50 Principal ment since 1993; prior thereto,
Accounting Officer Assistant Vice President of N&B
of each Trust Management; 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 Secretary Assistant Vice President of N&B
Age: 34 of each Trust Management since 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.
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<PAGE>
C. Carl Randolph Assistant Secretary Principal of Neuberger&Berman
Age: 59 of each Trust since 1992; prior thereto,
employee of Neuberger&Berman;
Assistant Secretary of eight other
mutual funds for which N&B
Management acts as investment
manager or administrator.
Barbara DiGiorgio Assistant Treasurer Assistant Vice President of N&B
Age: 38 of each Trust Management since 1993; prior
thereto, employee of N&B
Management; Assistant Treasurer
of eight other mutual funds for
which N&B Management acts as
investment manager or
administrator since 1996.
Celeste Wischerth Assistant Treasurer Assistant Vice President of N&B
Age: 36 of each Trust Management since 1994; prior
thereto, employee of N&B
Management; Assistant Treasurer
of eight 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 principals of Neuberger&Berman.
56
</TABLE>
<PAGE>
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, 1996, a total of $58,750 in fees
was paid to the Trustees as a group by the Trust and a total of $52,000 in fees
was paid to the Trustees as a group by Managers Trust. The following table shows
1996 compensation by Trustee.
57
<PAGE>
<TABLE>
COMPENSATION TABLE
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Pension or
Retirement Total
Benefits Accrued Estimated Compensation
Aggregate As Part of Annual From Trust and
Name of Person, Compensation Trust's Benefits Upon Fund Complex
Position From Trust(1) Expenses Retirement Paid to Trustees
- --------------------------------------------------------------------------------------------------------------------------------
Stanley Egener, None None None None
Chairman and Trustee
Faith Colish, $9,250 None None $50,000
Trustee
Walter G. Ehlers, $10,250 None None $19,500
Trustee
Leslie A. Jacobson, $9,250 None None $18,500
Trustee
Robert M. Porter, $10,500 None None $20,000
Trustee
Ruth E. Salzmann, $9,500 None None $19,000
Trustee
Peter P. Trapp, $2,500 None None $5,000
Trustee
Lawrence Zicklin, None None None None
President and Trustee
(1) "Aggregate Compensation From Trust" and "Total Compensation From Trust and
Fund Complex Paid to Trustees" is for the period from January 1 through
December 31, 1996.
58
</TABLE>
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
[to be updated by amendment]
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 ___________, 1997 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 __% of the shares of
the Balanced Portfolio of the Trust. There were no shareholders of the
International Portfolio or Genesis 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 __________, 1997, separate accounts of the following Life
Companies owned of record or beneficially 5% or more of the Shares of the
following Portfolios:
Percentage of
Shares Outstanding
Owned Shares Owned
Liquid Asset Portfolio
Hartford Life Insurance ________ ____%
Company*
200 Hopmeadow
Simsbury, CT 06070
Sentry Life Insurance Company ________ ____%
1800 North Point Drive
Stevens Point, WI 54481
Partners Portfolio
Skandia Insurance Company* ________ ____%
P.O. Box 883
Shelton, CT 06484
Nationwide Life Insurance* ________ ____%
P.O. Box 182029
Columbus, OH 43218-2029
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<PAGE>
Percentage of
Shares Outstanding
Owned Shares Owned
Government Income Portfolio
Security Life of Denver* _______ ____%
8515 East Orchard Road
Englewood, CO 80111-5002
Growth Portfolio
Aetna Life Insurance and Annuity _______ ____%
151 Farmington Avenue
Hartford, CT 06156
Nationwide Life Insurance* _______ ____%
P.O. Box 182029
Columbus, OH 43218-2029
Sentry Life Insurance Company _______ ____%
1800 North Point Drive
Stevens Point, WI 54481
Limited Maturity Bond Portfolio
Nationwide Life Insurance* _______ ____%
P.O. Box 182029
Columbus, OH 43218-2029
Life of Virginia _______ ____%
6610 West Broad Street
Richmond, VA 23261
Penn Mutual Life Insurance _______ ____%
Company
600 Dresher Road
Horsham, PA 19044
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<PAGE>
Balanced Portfolio
Hartford Life Insurance Company _______ ____%
200 Hopmeadow
Simsbury, CT 06070
Life of Virginia _______ ____%
6610 West Broad Street
Richmond, VA 23261
Nationwide Life Insurance* _______ ____%
P.O. Box 182029
Columbus, OH 43218-2029
Penn Mutual Life Insurance _______ ____%
Company
600 Dresher Road
Horsham, PA 19044
Sentry Life Insurance _______ ____%
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.
61
<PAGE>
INVESTMENT MANAGEMENT, ADVISORY AND ADMINISTRATION SERVICES
All Portfolios and their corresponding Series
[to be updated by amendment]
Neuberger&Berman is an investment management firm with headquarters in
New York. The firm's focus is on U.S. fixed income, equity and balanced fund
management. Total assets under management by Neuberger&Berman and its affiliates
were approximately $____ billion as of December 31, 1996. 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 and AMT Genesis
Investments). The Trustees of Managers Trust approved the Management Agreement
between AMT International Investments and N&B Management on November 30, 1995,
and between AMT Genesis Investments and N&B Management on November 21, 1996.
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
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<PAGE>
on May 26, 1994, and became subject to it on May 1, 1995, except that the
Genesis Portfolio became subject to the Administration Agreement on November 21,
1996.
Prior to May 1, 1995, N&B Management provided investment advisory and
administrative services to the predecessor of each Portfolio (except the
International Portfolio and the Genesis 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.
During the fiscal years ended December 31 1996, 1995, and 1994, the
Portfolios and their corresponding Series (for the period beginning May 1, 1995)
and the predescessors of the Portfolios (for the period prior to May 1, 1995)
paid management and administration fees by the Portfolios and the Series. For
the year ended December 31, 1996, N&B Management was paid management and
administration fees as follows (amounts for each Portfolio include management
fees paid by that Portfolio's corresponding Series): $ , Liquid Asset Portfolio;
$ , Growth Portfolio; $
, Limited Maturity Bond Portfolio; $ , Balanced Portfolio; $ , Government
Income Portfolio; and $ , Partners Portfolio. For the year ended December 31,
1995, N&B Management was paid management and administration fees as follows
(amounts for each Portfolio include management fees paid by that Portfolio's
corresponding Series from May 1, 1995 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. For the year ended December 31, 1994, N&B
Management was paid management 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.
The Management and Administration Agreements each continue until _____
_________, 19___ 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
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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 trustees of the Trust (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 [to be updated by amendment]
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, 1996, N&B Management reimbursed: _______________________. 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, and the Genesis Portfolio and AMT
Genesis Investments had not yet commenced investment operations as of December
31, 1996.
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
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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; Theodore P.
Guiliano, Vice President and director; Michael M. Kassen, Vice President and
director; Irwin Lainoff, 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;
Patrick T. Byrne, Vice President; William Cunningham, Vice President; Clara Del
Villar, Vice President; Mark R. Goldstein, Vice President; Michael Lamberti,
Vice President; Josephine P. Mahaney, Vice President; Lawrence Marx III, Vice
President; Ellen Metzger, Vice President and Secretary; Paul Metzger, Vice
President; 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; Susan Walsh, Vice
President; Thomas Wolfe, Vice President; Andrea Trachtenberg, Vice President of
Marketing; Robert Conti, Treasurer; Stacy Cooper-Shugrue, Assistant Vice
President; Barbara DiGiorgio, Assistant Vice President; Roberta D'Orio,
Assistant Vice President; Joseph G. Galli, Assistant Vice President; Robert
I. Gendelman, Assistant Vice President; Leslie Holliday-Soto, Assistant Vice
President; Jody L. Irwin, Assistant Vice President; Carmen G. Martinez,
Assistant Vice President; Susan Switzer, Assistant Vice President; Joseph S.
Quirk, Assistant Vice President; Kevin L. Risen, Assistant Vice President;
Celeste Wischerth, Assistant Vice President; Kim Marie Zamot, Assistant Vice
President; and Loraine Olavarria, Assistant Secretary. Messrs. Cantor, Egener,
Giuliano, Lainoff, Zicklin, Goldstein, Kassen, Marx, and Simons and Mmes.
Prindle and Vale are principals 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 principal 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 principals of Neuberger&Berman.
Sub-Adviser
N&B Management retains Neuberger&Berman LLC ("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 and the Genesis 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.
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The Sub-Advisory Agreement was authorized by the Trustees of Managers Trust with
respect to AMT International Investments on November 30, 1995, and with respect
to AMT Genesis Investments on November 21, 1996.
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 _____________, 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.
The Series are subject to certain limitations imposed on all advisory
clients of Neuberger&Berman (including the Series, Other N&B Funds, and other
accounts) and personnel of Neuberger&Berman and its affiliates. These include,
for example, limits that may be imposed in certain industries or by certain
companies, and policies of Neuberger&Berman that limit the aggregate purchases,
by all accounts under management, of outstanding shares of public companies.
Investment Companies Advised [to be updated by amendment]
N&B Management currently serves as investment adviser or manager of the
following investment companies with aggregate net assets of approximately $___
billion, as of December 31, 1996. Neuberger&Berman acts as sub-adviser to these
investment companies.
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Approximate Net
Assets at
Name February , 1997
Neuberger&Berman Cash Reserves . . . . . . . $___________
Portfolio (investment portfolio for
Neuberger&Berman Cash Reserves)
Neuberger&Berman Government Money . . . . $___________
Portfolio (investment portfolio for
Neuberger&Berman Government Money
Fund)
Neuberger&Berman Limited Maturity Bond . . $___________
Portfolio (investment portfolio for
Neuberger&Berman Limited Maturity
Bond Fund and Neuberger&Berman
Limited Maturity Bond Trust)
Neuberger&Berman Ultra Short Bond . . . . . . $___________
Portfolio (investment portfolio for
Neuberger&Berman Ultra Short Bond
Fund and Neuberger&Berman Ultra Short
Bond Trust)
Neuberger&Berman Municipal Money . . . . . . $___________
Portfolio (investment portfolio for
Neuberger&Berman Municipal Money Fund)
Neuberger&Berman Municipal Securities . . . . $___________
Portfolio (investment portfolio for
Neuberger&Berman Municipal Securities
Trust)
Neuberger&Berman New York Insured . . . . . $___________
Intermediate Portfolio (investment portfolio
for Neuberger&Berman New York Insured
Intermediate Fund)
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Neuberger&Berman Genesis Portfolio . . . . . . $___________
(investment portfolio for Neuberger&Berman
Genesis Fund and Neuberger&Berman
Genesis Trust)
Neuberger&Berman Guardian Portfolio . . . . . $___________
(investment portfolio for Neuberger&Berman
Guardian Fund, Neuberger&Berman
Guardian Trust and Neuberger&Berman
Guardian Assets)
Neuberger&Berman Manhattan Portfolio . . . . $___________
(investment portfolio for Neuberger&Berman
Manhattan Fund, Neuberger&Berman
Manhattan Trust and Neuberger&Berman
Manhattan Assets)
Neuberger&Berman International Portfolio...... $___________
(investment portfolio for Neuberger&Berman
International Fund)
Neuberger&Berman Partners Portfolio . . . . . $___________
(investment portfolio for Neuberger&Berman
Partners Fund, Neuberger&Berman
Partners Trust and Neuberger&Berman
Partners Assets)
Neuberger&Berman Focus Portfolio . . . . . . . $___________
(investment portfolio for Neuberger&Berman
Focus Fund, Neuberger&Berman Focus
Trust and Neuberger&Berman Focus Assets)
Neuberger&Berman Socially Responsive . . . $___________
Portfolio (investment portfolio for
Neuberger&Berman Socially Responsive Fund,
Neuberger&Berman NYCDC Socially
Responsive Trust and Neuberger&Berman
Socially Responsive Trust)
Neuberger&Berman Advisers Managers. . . . . . $___________
Trust (six series)
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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 $___________________, $____________________,
and $__________________, respectively, at _____________________, 1997.
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
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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 ___________.
The Distribution Agreement may be renewed annually thereafter if specifically
approved by (1) the vote of a majority of the Portfolio Trustees or a 1940 Act
majority vote of the Portfolio's outstanding shares and (2) the vote of a
majority of the Independent Portfolio Trustees, cast in person at a meeting
called for the purpose of voting on such approval. The Distribution Agreement
may be terminated by either party and will automatically terminate on its
assignment, in the same manner as the Management Agreement and the Investment
Advisory Agreement.
ADDITIONAL REDEMPTION INFORMATION
Suspension of Redemptions
The Portfolios are normally open for business each day the NYSE is open
("Business Day"). The right to redeem a Portfolio's shares may be suspended or
payment of the redemption price postponed (1) when the NYSE is closed (other
than weekend and holiday closings), (2) when trading on the NYSE is restricted,
(3) when an emergency exists as a result of which disposal by the Portfolio's
corresponding Series of securities owned by it is not reasonably practicable or
it is not reasonably practicable for that Series fairly to determine the value
of its net assets, or (4) for such other period as the SEC may by order permit
for the protection of a Portfolio's shareholders; provided that applicable SEC
rules and regulations shall govern as to whether the conditions prescribed in
(2) or (3) exist. If the right of redemption is suspended, shareholders may
withdraw their offers of redemption or they will receive payment at the NAV per
share in effect at the close of business on the first Business Day after
termination of the suspension.
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Redemptions in Kind
Each Portfolio reserves the right, under certain conditions, to honor
any request for redemption (or a combination of requests from the same
shareholder in any 90-day period) exceeding $250,000 or 1% of the net assets of
the Portfolio, whichever is less, by making payment in whole or in part in
securities valued as described under "Share Prices and Net Asset Value" in the
Prospectus. If payment is made in securities, a shareholder generally will incur
brokerage expenses or other transaction costs in converting those securities
into cash and will be subject to fluctuation in the market prices of those
securities until they are sold. The Portfolios do not redeem in kind under
normal circumstances, but would do so when the Trust's Trustees determined that
it was in the best interests of a Portfolio's shareholders as a whole.
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.
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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.
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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.
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AMT Balanced, Growth, Partners, Genesis 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).
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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
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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.
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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.
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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 (other than the
substantial portion of the portfolio transactions of AMT Genesis Investments
that involves securities traded on the OTC market; AMT Genesis Investments
purchases and sells OTC securities in principal transactions with dealers who
are the principal market makers for such 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.
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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 [to be updated by amendment]
During the years ended December 31, 1996, 1995 and 1994, 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 and
$410,537, respectively, of which $_________, $466,157 and $321,277, 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 ____% and 69.6% respectively of the
aggregate dollar amount of transactions involving the payment of commissions,
and 64.6% and ____% respectively of the aggregate brokerage commissions paid by
it during the years ended December 31, 1996 and 1995. _____% of the $_______
paid to other brokers by that Series during the year ended December 31, 1996
(representing commissions on transactions involving approximately $__________)
and 91.6% of the $255,776 paid to other brokers by the predecessor of the Growth
Portfolio (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 $97,079,789) was directed to those
brokers because of research services they provided. During the year ended
December 31, 1996, that Series acquired securities of the following of its
Regular Broker-Dealers ("B/Ds"): _____________________; at that date, that
Series held the securities of its Regular B/Ds with an aggregate value as
follows: ______________________.
During the years ended December 31, 1996, 1995 and 1994, 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 and
$135,836 respectively, of which $__________, $154,773 and $107,420 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 _____% and 75.1% respectively of the
aggregate dollar amount of transactions involving the payment of commissions,
____% and 70.8% respectively of the aggregate brokerage commissions paid by it
during the years ended December 31, 1996 and 1995. ____% of the $_________ paid
to brokers by that series during the year ended December 31, 1996 (representing
commissions on transactions of approximately $_______), and 91.1% of the $63,961
paid to other brokers by that Series (and the
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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) was directed to those brokers
because of research services they provided. During the year ended December 31,
1996, the Series acquired securities of the following of its Regular B/Ds:
__________________________; at that date, that Series held the securities of its
Regular B/Ds with an aggregate value as follows:
- ------------------------------.
During the year ended December 31, 1996 and 1995 and the period March
22, 1994 to December 31, 1994, 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 years
ended December 31, 1996 and 1995, and the period ended December 31, 1994. ____%
of the $________ paid to brokers by that series during the year ended December
31, 1996 (representing commissions on transactions of approximately $________),
and 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) was directed to those brokers because of
research services they provided. During the period ended December 31, 1996, that
Series acquired securities of the following of its Regular B/Ds:
_______________________; at that date, that Series held securities of its
Regular B/Ds with aggregate value as follows:
- -----------------------.
During the year ended December 31, 1996, AMT Liquid Asset Investments
acquired securities of the following of its Regular B/Ds:
______________________________; at that date that Series held securities of its
Regular B/Ds with aggregate value as follows:
- -------------------------------.
During the year ended December 31, 1996, AMT Limited Maturity Bond
Investments acquired securities of the following of its Regular B/Ds:
______________________________; at that date that Series held securities of its
Regular B/Ds with aggregate value as follows:
- -----------------------------------.
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During the year ended December 31, 1996, AMT Government Income
Investments acquired securities of the following of its Regular B/Ds:
____________________________; at that date the series held securities of its
Regular B/Ds as follows:
- ---------------------------------------.
Insofar as portfolio transactions of AMT Partners Investments result
from active management of equity securities, and insofar as portfolio
transactions of AMT Growth Investments result from seeking capital appreciation
by selling securities whenever sales are deemed advisable without regard to the
length of time the securities may have been held, it may be expected that the
aggregate brokerage commissions paid by those Series to brokers (including
Neuberger&Berman where it acts in that capacity) may be greater than if
securities were selected solely on a long-term basis.
Portfolio securities are from time to time loaned by AMT Growth,
Partners and International Investments to Neuberger&Berman in accordance with
the terms and conditions of an order issued by the Securities and Exchange
Commission, excepting such transactions from certain provisions of the 1940 Act
which would otherwise prohibit such transactions, subject to certain conditions.
Among the conditions of the order, securities loans made by each Series to
Neuberger&Berman must be fully secured by cash collateral. Under the order, the
portion of the income on cash collateral from securities loans involving
Neuberger&Berman which may be shared with that firm is determined with reference
to the concurrent arrangements between Neuberger&Berman and other non-affiliated
lenders with which it engages in similar transactions. In addition, where
Neuberger&Berman borrows securities from a Series in order to relend them to
others, Neuberger&Berman is required to pay over to the Series, on a quarterly
basis, certain "excess earnings" that Neuberger&Berman otherwise has derived
from the relending of securities borrowed from the Series. When Neuberger&Berman
desires to borrow a security which a Series has indicated a willingness to lend,
Neuberger&Berman must borrow such security from the Series rather than from an
unaffiliated lender unless an unaffiliated lender is willing to lend such
security on more favorable terms (as specified in the order) than the Series. If
a Series' expenses exceed its income in any securities loan transaction with
Neuberger&Berman, Neuberger&Berman must reimburse the Portfolio for such loss.
Each Series may also lend securities to unaffiliated entities,
including brokers or dealers, banks and other recognized institutional borrowers
of securities, provided that cash or equivalent collateral, equal to at least
100% of the market value of the securities loaned, is continuously maintained by
the borrower with the Series. During the time securities are on loan, the
borrower will pay the Series an amount equivalent to any dividends or interest
paid on such securities, and the Series may invest the cash collateral
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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
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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.
To ensure that accounts of all investment clients, including a
Portfolio, are treated fairly in the event that Neuberger & Berman receives
transaction instructions regarding a security for more than one investment
account at or about the same time, Neuberger & Berman may combine orders placed
on behalf of clients, including advisory accounts in which affiliated persons
have an investment interest, for the purpose of negotiating brokerage
commissions or obtaining a more favorable price. Where appropriate, securities
purchased or sold may be allocated, in terms of amount, to a client according to
the proportion that the size of the order placed by that account bears to the
aggregate size of orders simultaneously placed by the other accounts, subject to
de minimis exceptions. All participating accounts will pay or receive the same
price.
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
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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.
Theodore P. Guiliano, Mark R. Goldstein and Michael M. Kassen, each of
whom is a principal of Neuberger&Berman and a Vice President of N&B Management
(and, with respect to Mr. Guiliano, also a director of N&B Management),
Josephine P. Mahaney, Thomas Wolfe, Judith Vale 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.
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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.
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.
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INDEPENDENT AUDITORS
Each Portfolio and Series has selected ____________________ as the
independent auditors who will audit its financial statements.
LEGAL COUNSEL
Each Portfolio and Series has selected Dechert Price & Rhoads, 1500 K
Street, N.W., Suite 500, Washington, D.C. 20005 as legal counsel.
REGISTRATION STATEMENT
This SAI and 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
[To be provided in a Post-Effective Amendment prior to or on the
effectiveness of this Post-Effective Amendment No. 21 to the Trust's
Registration Statement.]
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Appendix A
RATINGS OF SECURITIES
S&P corporate bond ratings:
AAA - Bonds rated AAA have the highest rating assigned by S&P. Capacity
to pay interest and repay principal is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the higher rated issues only in small degree.
A - Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB - Bonds rated BBB are regarded as having an adequate capacity to
pay principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in higher rated categories.
BB, B, CCC, CC, C - Bonds rated BB, B, CCC, CC, and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and C the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
Plus (+) or Minus (-) - The ratings above may be modified by the
addition of a plus or minus sign to show relative standing within the major
categories.
A-1
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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.
A-2
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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.
A-3
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Appendix B
A CONVERSATION WITH ROY NEUBERGER
B-1
<PAGE>
The Art of Investing:
A Conversation with Roy Neuberger
"I firmly believe that if you want
to manage your own money, you must
be a student of the market. If you
are unwilling or unable to do that,
find someone else to manage your
money for you."
NEUBERGER&BERMAN
B-2
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[THIS PAGE IS BLANK - IT IS AN INSIDE PAGE OF THIS BROCHURE]
B-3
<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
B-4
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<CAPTION>
<S> <C>
YOU'VE BEEN ABLE TO
CONDENSE SOME OF THE
CHARACTERISTICS OF
SUCCESSFUL INVESTING INTO
FIVE "RULES." WHAT ARE
THEY?
Rule #1: Be flexible. My
philosophy has necessarily
changed from time to time
because of events and
because of mistakes. My
views change as economic,
political, and
technological changes occur
both on and sometimes off
our planet. It is
imperative that you be
willing to change your
thoughts to meet new
conditions.
Rule #2: Take your
temperament into account.
Recognize whether you are
by nature very speculative
or just the opposite --
fearful, timid of taking
risks. But in any event --
B-5
<PAGE>
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.
B-6
<PAGE>
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"?
B-7
<PAGE>
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?
B-8
<PAGE>
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.
B-9
<PAGE>
[PICTURE OF ROY NEUBERGER]
B-10
<PAGE>
ANY OTHER ADVICE FOR
INVESTORS?
* I firmly believe that if you want to manage
your own money, you must be a student of the
market. If you're unwilling or unable to do
that, find someone else to manage your money
for you. Two options are a well-managed
no-load mutual fund or, if you have enough
assets for separate account management, a
money manager you trust with a good record.
HOW WOULD YOU DESCRIBE YOUR
PERSONAL INVESTING STYLE?
Every stock I buy is bought to be sold. The
market is a daily event, and I continually
review my holdings looking for selling
opportunities. I take a profit occasionally
on something that has gone up in price over
what was expected and simultaneously take
losses whenever misjudgment seems evident.
This creates a reservoir of buying power that
can be used to make fresh judgments on what
are the best values in the market at that
time. My active investing style has worked
well for me over the years, but for most
investors I recommend a longer-term approach.
B-11
<PAGE>
I tend not to worry very must about the day
to day swings of the market, which are very
hard to comprehend. Instead, I try to be
rather clever in diagnosing values and trying
to win 70 to 80 percent of the time.
YOU BEGAN INVESTING IN
1929. WHAT WAS YOUR
EXPERIENCE WITH THE "GREAT
CRASH"?
The only money I managed in the Panic of 1929
was my own. My portfolio was down about 12
percent, and I had an uneasy feeling about
the market and conditions in general. Those
were the days of 10 percent margin. I studied
the lists carefully for a stock that was
overvalued in my opinion and which I could
sell short as a hedge. I came across RCA at
about $100 per share. It had recently split 5
for 1 and appeared overvalued. There were no
dividends, little income, a low net worth and
a weak financial position. I sold RCA short
in the amount equal to the dollar value of my
long portfolio. It proved to be a timely and
profitable move.
HOW DID THE CRASH OF 1929
AFFECT YOUR INVESTING
STYLE?
B-12
<PAGE>
I am prematurely bearish when the market goes
up for a long time and everybody is happy
because they are richer. I am very bullish
when the market has gone down perceptibly and
I feel it has discounted any troubles we are
going to have.
HOW IMPORTANT ARE
PSYCHOLOGICAL FACTORS TO
MARKET BEHAVIOR?
There are many factors in addition to
economic statistics or security analysis in a
buy or sell decision. I believe psychology
plays an important role in the Market. Some
people follow the crowd in hopes they'll be
swept along in the right direction, but if
the crowd is late in acting, this can be a
bad move.
I like to be contrary. When things look bad,
I become optimistic. When everything looks
rosy, and the crowd is optimistic, I like to
be a seller. Sometimes I'm too early, but I
generally profit.
AS A RENOWNED ART COLLECTOR, DO YOU FIND
SIMILARITIES BETWEEN SELECTING STOCKS AND
SELECTING WORKS OF ART?
B-13
<PAGE>
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.
B-14
<PAGE>
But the big difference in my view of art and
stocks is that I buy a stock to sell it and
make money. I never bought paintings or
sculptures for investment in my life. The
objective is to enjoy their beauty.
B-15
<PAGE>
WHAT DO YOU CONSIDER THE
BUSINESS MILESTONES IN YOUR
LIFE?
Being a founder of Neuberger&Berman and
creating one of the first no-load mutual
funds. I started on Wall Street in 1929, and
during the depression I managed my own money
and that of my clientele. We all prospered,
but I wanted to have my own firm. In 1939 I
became a founder of Neuberger&Berman, and for
about 10 years we managed money for
individuals with substantial financial
assets. But I also wanted to offer the
smaller investor the benefits of professional
money management, so in 1950 I created the
Guardian Mutual Fund (now known as the
Neuberger&Berman Guardian Fund). The Fund was
kind of an innovation in its time because it
didn't charge a sales commission. I thought
the public was being overcharged for mutual
funds, so I wanted to create a fund that
would be offered directly to the public
without a sales charge. Now of course the
"no-load" fund business is a huge industry. I
managed the Fund myself for over 28 years.
[PICTURE OF ROY NEUBERGER]
B-16
<PAGE>
YOU'RE IN YOUR NINETIES AND STILL YOU GO INTO
THE OFFICE EVERY DAY TO MANAGE YOUR
INVESTMENTS. WHY?
I like the fun of being nimble in the stock
market, and I'm addicted to the market's
fascinations.
WHAT CLOSING WORDS OF
ADVICE DO YOU HAVE ABOUT
INVESTING?
Realize that there are opportunities at all
times for the adventuresome investor. And
stay in good physical condition. It's a
strange thing. You do not dissipate your
energies by using them. Exercise your body
and your brain every day, and you'll do
better in investments and in life.
ROY NEUBERGER: A BRIEF
BIOGRAPHY
Roy Neuberger is a founder of the investment
management firm Neuberger&Berman, and a
renowned value investor. He is also a
recognized collector of contemporary American
art, much of which he has given away to
museums and colleges across the country.
B-17
<PAGE>
During the 1920s, Roy studied art in
Paris. When he realized he didn't possess the
talent to become an artist, he decided to
collect art, and to support this passion, Roy
turned to investing --a pursuit for which his
talents have proven more than adequate.
A TALENT FOR INVESTING
Roy began his investment career by
joining a brokerage firm in 1929, seven
months before the "Great Crash." Just weeks
before "Black Monday," he shorted the stock
of RCA, thinking it was overvalued. He
profited from the falling market and gained a
reputation for market prescience and stock
selection that has lasted his entire career.
NEUBERGER&BERMAN'S FOUNDING
Roy's investing acumen attracted
many people who wished to have him manage
their money. In 1939, at the age of 36, after
purchasing a seat on the New York Stock
Exchange, Roy founded Neuberger&Berman to
provide money management services to people
who lacked the time, interest or expertise to
manage their own assets.
B-18
<PAGE>
NEUBERGER&BERMAN -- OVER
FIVE DECADES OF GROWTH
Neuberger&Berman has grown through
the years and now manages approximately $30
billion of equity and fixed income assets,
both domestic and international, for
individuals, institutions, and its family of
no-load mutual funds. Today, as when the firm
was founded, Neuberger&Berman follows a value
approach to investing, designed to enable
clients to advance in good markets and
minimize losses when conditions are less
favorable.
B-19
<PAGE>
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
================================================================================
B-20
</TABLE>
<PAGE>
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
POST-EFFECTIVE AMENDMENT NO. 21 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, 1996 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 to be filed in a subsequent Post-Effective Amendment
upon or prior to the effectiveness of this Post- Effective Amendment No. 21 to
the Registrant's Registration Statement.
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.
<PAGE>
PART C - Other Information
Page 2
(c) Schedule to Trust Instrument designating
current Portfolios of Neuberger & Berman
Advisers Management Trust.*
(2) By-laws of Neuberger & Berman Advisers
Management Trust. Incorporated by reference
to Post-Effective Amendment No. 16 to
Registrant's Registration Statement, File
Nos. 2-88566 and 811-4255.
(3) Voting Trust Agreement. None.
(4) (a) Trust Instrument of Neuberger & Berman
Advisers Management Trust, Articles IV, V
and VI. 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 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.
(c) Schedule designating current Series of
Advisers Managers Trust subject to the
Management Agreement.*
(d) Schedule designating current Series of
Advisers Managers Trust subject to the Sub-
Advisory Agreement.*
(6) (a) Form of Distribution Agreement Between
Neuberger & Berman Advisers Management Trust
<PAGE>
PART C - Other Information
Page 3
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) Schedule designating current Portfolios of
Neuberger & Berman Advisers Management Trust
subject to the Distribution Agreement.*
(7) Bonus, Profit Sharing or Pension Plans.
None.
(8) (a) Custodian Contract Between Neuberger &
Berman Advisers Management Trust and State
Street Bank and Trust Company. Incorporated
by reference to Post-Effective Amendment No.
20 to Registrant's Registration Statement
File Nos. 2-88566 and 811-4255.
(b) Schedule designating current Portfolios of
Neuberger & Berman Advisers Management Trust
subject to the Custodian Contract.*
(9) (a) Transfer Agency Agreement Between Neuberger
&Berman Advisers Management Trust and State
Street Bank and Trust Company. Incorporated
by reference to Post-Effective Amendment No.
20 to Registrant's Registration Statement,
File Nos. 2-88566 and 811-4255.
(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.
Incorporated by reference to Post-Effective
Amendment No. 20 to Registrant's
Registration Statement, File Nos. 2-88566
and 811-4255.
(d) Schedule designating current Portfolios of
Neuberger & Berman Advisers Management Trust
subject to the Transfer Agency Agreement.*
(e) Schedule designating current Portfolios of
Neuberger & Berman Advisers Management Trust
subject to the Administration Agreement.*
<PAGE>
PART C - Other Information
Page 4
(10) (a) Consent of Dechert Price & Rhoads (filed
herewith).
(b) Opinion of Dechert, Price &
Rhoads. Incorporated by reference to
Registrant's Rule 24f-2 Notice for the Year
Ended December 31, 1995, File No. 2-88566.
(11) Consent of Independent Auditors. None.
(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.*
* To be filed by amendment.
Item 25. Persons Controlled By or Under Common Control with
Registrant
As of December 31, 1996, separate accounts of Nationwide Life Insurance
Company owned approximately 38% of the outstanding shares of the Balanced
Portfolio of the Registrant, 68% of the outstanding shares of the Growth
Portfolio of the Registrant, 82% of the outstanding shares of the Limited
Maturity Bond Portfolio of the Registrant, and 50% of the outstanding shares of
the Partners Portfolio of the Registrant; separate accounts of Hartford Life
Insurance Company owned approximately 79% of the outstanding shares of the
Liquid Asset Portfolio of the Registrant; separate accounts of Skandia Insurance
Company and Skandia Life Assurance Company owned approximately 43% of the
outstanding shares of the Partners Portfolio of the Registrant;
<PAGE>
PART C - Other Information
Page 5
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 Portfolio 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.
Registrant is organized in a master/feeder fund structure, and
technically may be considered to control the master fund in which it invests,
Advisers Managers Trust.
Item 26. Number of Holders of Securities
As of December 31, 1996, the number of record holders of the Portfolios
of the Registrant was as follows:
Title of Class Number of Record Holders
Balanced Portfolio 24
Growth Portfolio 19
Liquid Assets Portfolio 4
Limited Maturity Bond Portfolio 27
Partners Portfolio 17
Government Income Portfolio 3
Item 27. Indemnification
A Delaware business trust may provide in its governing
instrument for indemnification of its officers and trustees from and against any
and all claims and demands whatsoever. Article IX, Section 2 of the Trust
Instrument provides that the Registrant shall indemnify any present or former
trustee, officer, employee or agent of the Registrant ("Covered Person") to the
fullest extent permitted by law against liability and all expenses reasonably
incurred or paid by him in connection with any claim, action, suit or proceeding
("Action") in which he becomes involved as a party or otherwise by virtue of his
being or having been a Covered Person and against amounts paid or incurred by
him in settlement thereof. Indemnification will not be provided to a person
adjudged by a court or other body to be liable to the Registrant or its
shareholders by reason of "willful misfeasance, bad faith, gross negligence or
reckless
<PAGE>
PART C - Other Information
Page 6
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
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
<PAGE>
PART C - Other Information
Page 7
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
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
<PAGE>
PART C - Other Information
Page 8
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.
Item 28. Business and Other Connections of Adviser and Sub-Adviser
<PAGE>
PART C - Other Information
Page 9
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.
<TABLE>
<S> <C>
NAME BUSINESS AND OTHER CONNECTIONS
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) (1); 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) (1);
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.
<PAGE>
PART C - Other Information
Page 10
Barbara DiGiorgio Assistant Treasurer, Neuberger &
Assistant Vice President, Berman Advisers Management Trust
N&B Management (Delaware business trust);
Assistant Treasurer, Advisers
Managers Trust; Assistant
Secretary, Neuberger & Berman
Income Funds; Assistant Treasurer,
Neuberger & Berman Income Trust;
Assistant Treasurer, Neuberger &
Berman Equity Funds; Assistant
Treasurer, Neuberger &
Berman Equity Trust; Assistant
Treasurer, Income Managers Trust;
Assistant Treasurer, Equity
Managers Trust; Assistant
Treasurer, Global Managers Trust;
Assistant Treasurer, Neuberger &
Berman Equity Assets.
Stanley Egener Chairman of the Board and Trustee,
President and Director, Neuberger & Berman Advisers
N&B Management; Management Trust (Delaware business
Principal, Neuberger & trust); Chairman of the Board and
Berman, LLC Trustee, Advisers Manager Trust;
Chairman of the Board and Trustee,
Neuberger & Berman Advisers
Management Trust (Massachusetts
business trust) (1); 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.
<PAGE>
PART C - Other Information
Page 11
Theodore P. Giuliano President and Trustee, Neuberger &
Vice President and Berman Income Funds; President and
Director, N&B Trustee, Neuberger & Berman Income
Management; Principal, Trust; President and Trustee,
Neuberger & Berman, LLC Income Managers Trust.
C. Carl Randolph Assistant Secretary, Neuberger &
Principal, Neuberger & Berman Advisers Management Trust
Berman, LLC (Delaware business trust);
Assistant Secretary, Advisers
Managers Trust; Assistant
Secretary, Neuberger & Berman
Advisers Management Trust
(Massachusetts business trust) (1);
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) (2).
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) (1); 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.
<PAGE>
PART C - Other Information
Page 12
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, Neuberger & Berman
Advisers Management Trust
(Massachusetts business trust) (1);
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.
Susan Switzer Portfolio Manager, Mitchell
Assistant Vice President, Hutchins Asset Management, Inc.,
N&B Management 1285 Avenue of the Americas, New
York, New York 10019 (3).
Michael J. Weiner Advisers Management Trust (Delaware
Senior Vice President business trust); Vice President,
N&B Management Advisers Managers Trust; Vice
Vice President, Neuberger & Berman President, Neuberger & Berman
Advisers Management Trust
(Massachusetts business trust) (1);
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.
<PAGE>
PART C - Other Information
Page 13
Celeste Wischerth Assistant Treasurer, Neuberger &
Assistant Vice President, Berman Advisers Management Trust
N&B Management (Delaware business trust);
Assistant Treasurer, Advisers
Managers Trust; Assistant
Treasurer, Neuberger & Berman
Income Funds; Assistant Treasurer,
Neuberger & Berman Income Trust;
Assistant Treasurer, Neuberger &
Berman Equity Funds; Assistant
Treasurer, Neuberger & Berman
Equity Trust; Assistant Treasurer,
Income Managers Trust; Assistant
Treasurer, Equity Managers Trust;
Assistant Treasurer, Global
Managers Trust; Assistant
Treasurer, Neuberger & Berman
Equity Assets.
Lawrence Zicklin President and Trustee, Neuberger &
Director, N&B Management; Berman Advisers Management Trust
Principal, Neuberger & (Delaware business trust);
Berman, LLC President and Trustee, Advisers
Managers Trust; President and
Trustee, Neuberger & Berman
Advisers Management Trust
(Massachusetts business trust) (1);
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.
</TABLE>
The principal address of N&B Management, Neuberger & Berman,
LLC and of each of the investment companies named above, is 605 Third Avenue,
New York, New York 10158-0180.
(1) Until April 30, 1995.
(2) Until October 31, 1995.
(3) 1994.
Item 29. Principal Underwriters
<PAGE>
PART C - Other Information
Page 14
(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 is also the
investment adviser to the master funds in which each of the above-named
investment companies 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
10158-0180, 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 Vice President None
Richard A. Cantor Chairman of the Board and None
Director
Robert Conti Treasurer None
Stacy Cooper-Shugrue Assistant Vice President Assistant Secretary
William Cunningham Vice President None
Clara Del Villar Vice President None
Barbara DiGiorgio Assistant Vice President Assistant Treasurer
Roberta D'Orio Assistant Vice President None
Stanley Egener President and Director Chairman of the Board
of Trustees (Chief
Executive Officer)
Joseph G. Galli Assistant Vice President None
Robert I. Gendelman Assistant Vice President None
<PAGE>
PART C - Other Information
Page 15
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
Mark R. Goldstein Vice President None
Theodore P. Giuliano Vice President and Director None
Leslie Holliday-Soto Assistant Vice President None
Jody L. Irwin Assistant Vice President None
Michael M. Kassen Vice President and Director 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 Vice President None
Loraine Olavarria Assistant Secretary None
Janet W. Prindle Vice President None
Joseph S. Quirk Assistant Vice President None
Kevin L. Risen Assistant Vice President None
Felix Rovelli Vice President None
Richard Russell Vice President Treasurer (Principal
Accounting Officer)
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
<PAGE>
PART C - Other Information
Page 16
Susan Switzer Assistant Vice President None
Andrea Trachtenberg Vice President of Marketing None
Judith M. Vale Vice President None
Susan Walsh 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
Kim Marie Zamot Assistant Vice President None
Lawrence Zicklin Director Trustee and President
(Principal Executive
Officer)
(c) No commissions or compensation were received directly or indirectly
from the Registrant by any principal underwriter who was not an affiliated
person of the Registrant.
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be maintained by
Section 31 (a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder with respect to the Registrant are maintained at the
offices of State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, except for the Registrant's Trust Instrument and Bylaws,
minutes of meetings of the Registrant's Trustees and shareholders and the
Registrant's policies and contracts, which are maintained at the offices of the
Registrant, 605 Third Avenue, New York, New York 10158.
All accounts, books and other documents required to be maintained by
Section 31 (a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder with respect to the Advisers Managers Trust are
maintained at the offices of State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110, except for the Advisers Managers Trust's
Trust Instrument and Bylaws, minutes of meetings of the Advisers Managers
Trust's Trustees and shareholders and
<PAGE>
PART C - Other Information
Page 17
the Advisers Managers Trust's policies and contracts, which are maintained at
the offices of the Advisers Managers Trust, 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
upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Post-Effective Amendment No. 21 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 14th day of January, 1997.
NEUBERGER & BERMAN
ADVISERS MANAGEMENT TRUST
By: /s/ Lawrence Zicklin
Lawrence Zicklin
President, Trustee and Principal
Executive Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 21 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 January 14, 1997
Stanley Egener
/s/ Lawrence Zicklin President and Trustee November 21, 1996
Lawrence Zicklin (Principal Executive Officer)
/s/ Michael J. Weiner Vice President January 14, 1997
Michael J. Weiner (Principal Financial Officer)
/s/ Richard Russell Treasurer January 14, 1997
Richard Russell (Principal Accounting Officer)
/s/ Faith Colish Trustee January 14, 1997
Faith Colish
/s/ Walter G. Ehlers Trustee January 14, 1997
Walter G. Ehlers
/s/ Leslie A. Jacobson Trustee January 14, 1997
Leslie A. Jacobson
/s/ Robert M. Porter Trustee January 14, 1997
Robert M. Porter
/s/ Ruth E. Salzmann Trustee January 14, 1997
Ruth E. Salzmann
/s/ Peter P. Trapp Trustee January 14, 1997
Peter P. Trapp
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, ADVISERS MANAGERS TRUST certifies that the
Registrant has duly caused this Post-Effective Amendment No. 21 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 14th day of January, 1997.
ADVISERS MANAGERS TRUST
By: /s/ Lawrence Zicklin
Lawrence Zicklin
President, Trustee and
Principal Executive Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 21 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 January 14, 1997
Stanley Egener
/s/ Lawrence Zicklin President and Trustee November 21, 1996
Lawrence Zicklin (Principal Executive Officer)
/s/ Michael J. Weiner Vice President January 14, 1997
Michael J. Weiner (Principal Financial Officer)
/s/ Richard Russell Treasurer January 14, 1997
Richard Russell (Principal Accounting Officer)
/s/ Faith Colish Trustee January 14, 1997
Faith Colish
/s/ Walter G. Ehlers Trustee January 14, 1997
Walter G. Ehlers
/s/ Leslie A. Jacobson Trustee January 14, 1997
Leslie A. Jacobson
/s/ Robert M. Porter Trustee January 14, 1997
Robert M. Porter
/s/ Ruth E. Salzmann Trustee January 14, 1997
Ruth E. Salzmann
/s/ Peter P. Trapp Trustee January 14, 1997
Peter P. Trapp
<PAGE>
Exhibit 10(a)
DECHERT PRICE & RHOADS
1500 K Street , N.W.
Suite 500
Washington, D.C. 20005
(202) 626-3300
January 14, 1997
Neuberger&Berman Advisers Management Trust
605 Third Avenue
Second Floor
New York, New York 10158-0006
Re: Post-Effective Amendment No. 21 to the
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
Post-Effective Amendment No. 21 to the Trust's Registration Statement.
Very truly yours,
/s/ Dechert Price & Rhoads
