<PAGE>
GUARDIAN PORTFOLIO
NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST
ANNUAL REPORT
DECEMBER 31, 1998
NMAAR1101298
<PAGE>
PORTFOLIO MANAGERS' COMMENTARY
Neuberger Berman Advisers Management Trust December 31, 1998
- --------------------------------------------------------------------------------
AMT Guardian Portfolio
PORTFOLIO MANAGERS KEVIN RISEN AND RICK WHITE FOCUS ON "FIRST RATE" COMPANIES
IN INDUSTRIES THAT ARE CURRENTLY OUT OF FAVOR. RECOGNIZING THAT "CHEAP" STOCKS
ARE NOT NECESSARILY UNDERVALUED, THEY SEEK WELL MANAGED, FINANCIALLY SOUND
COMPANIES TRADING AT FUNDAMENTALLY ATTRACTIVE PRICES RELATIVE TO THEIR LONG-TERM
EARNINGS GROWTH POTENTIAL. BY CONCENTRATING THE PORTFOLIO IN HIGH-QUALITY WALL
STREET "ORPHANS", THE PORTFOLIO MANAGEMENT TEAM ATTEMPTS TO CONSISTENTLY TAKE
ADVANTAGE OF OPPORTUNITIES CREATED BY INVESTORS' OVERREACTION TO REAL OR
PERCEIVED PROBLEMS.
We are pleased to report that in its first complete year of operations, the
AMT Guardian Portfolio outperformed the S&P 500* and doubled the Russell 1000
Value Index's* return. We are particularly proud that our bottom-up value
discipline excelled in a market that clearly favored growth strategies.
It was an up and down and then up again year for the portfolio. Strong
first-half returns were eroded in the third quarter as global economic weakness
and a worldwide financial and credit market meltdown punished our cyclical and
financial stock holdings. Financial stocks (banks, broker/asset managers, and
insurance companies) rebounded strongly in the fourth quarter as the investor
hysteria triggered by the collapse of the Russian ruble and the Long Term
Capital Management fiasco subsided. Technology-oriented cyclical stocks like
semiconductor and semiconductor equipment manufacturers also rallied as demand
for PCs and more sophisticated computer systems exceeded consensus estimates.
Our healthcare holdings, primarily HMOs, contributed to strong fourth quarter
returns after being market laggards through the first three quarters. Cyclical
companies in the basic materials and non-technology capital goods sectors never
fully recovered from third quarter declines and in general, restrained portfolio
returns. Although the short term earnings picture for industrial cyclicals
remains cloudy, we believe much of the bad news is discounted in severely
depressed stock prices.
The AMT Guardian portfolio reflects our value discipline. At the close of
this reporting period, the portfolio traded at approximately 19 times our 1999
earnings estimates. This compares to the S&P 500's multiple of about 24 times
1999 earnings forecasts. Although we can't be certain our earnings estimates
will prove accurate, we believe our portfolio holdings' average earnings growth
will compare favorably with that of the S&P this year.
Of course, this does not necessarily imply we will once again beat this
widely followed market benchmark. Interestingly, S&P earnings only grew by 2-3%
in 1998, while the Index rose 28.5%. This "excess" return can be attributed to
price/earnings multiple expansion spawned by declining interest rates. We doubt
we will see the same kind of multiple expansion in the year ahead. That means
stocks will be driven more by earnings in 1999. This leads us to valuations. It
appears to us that the "mega-cap" growth stocks that have been driving S&P 500
returns are priced as if mid- to high-teens earnings growth in 1999 is a sure
thing, whereas our portfolio holdings are valued as if comparable earnings
growth is a long shot. We think that ours is the more prudent approach.
We are stock pickers, not economists or market timers. Having said this, we
realize many shareholders are interested in our current market outlook. We will
oblige with some brief comments. We believe that the U.S. economy has not
collapsed. The Federal Reserve and central banks around the world have adopted
monetary policies that should help stimulate global economic growth. We believe
that inflation does not appear to be a threat and interest rates should remain
relatively stable. Finally, merger and acquisition activity, which has been
providing a strong
A-2
<PAGE>
tailwind for stocks, may intensify in the year ahead. All these factors are
positive for equities. The wild cards are earnings and valuations. If earnings
meet consensus expectations, the market can move higher. If earnings disappoint,
we may see valuations shrink from their current lofty levels.
Regardless of what the market has in store for us in the year ahead, we
believe owning high-quality companies trading at discounted valuations will
continue to be a rewarding investment strategy.
Sincerely,
/s/ Kevin Risen /s/ Rick White
Kevin Risen and Rick White
PORTFOLIO CO-MANAGERS
*The S&P 500 Index is an unmanaged index generally considered to be
representative of stock market activity. The Russell 1000-Registered Trademark-
Index measures the performance of the 1,000 largest companies in the Russell
3000-Registered Trademark- Index (which measures the performance of the 3,000
largest U.S. companies based on total market capitalization). The Russell 1000
Index represents approximately 89% of the total market capitalization of the
Russell 3000 Index. The Russell 1000 Value Index measures the performance of
those Russell 1000 companies with lower price-to-book ratios and lower
forecasted growth values. 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 directly in any index. Data about the
performance of these indices are prepared or obtained by Neuberger Berman
Management Inc.-Registered Trademark- and include reinvestment of all dividend
and capital gain distributions. The Portfolio invests in many securities not
included in the above-described indices.
The composition, industries and holdings are subject to change. The Series is
invested in a wide array of securities and no single holding makes up more than
a small fraction of its total assets.
Past performance is no guarantee of future results and shares when redeemed may
be worth more or less than their original cost.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance can be
expected to vary from those of the other mutual funds.
A-3
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman Advisers Management Trust December 31, 1998
- --------------------------------------------------------------------------------
Guardian Portfolio
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GUARDIAN PORTFOLIO S&P 500
<S> <C> <C>
11/3/97 $10,000 $10,000
12/31/97 $10,520 $10,653
12/31/98 $13,851 $13,692
AVERAGE ANNUAL TOTAL RETURN(1)
GUARDIAN PORTFOLIO S&P 500(2)
1 YEAR +31.67% +28.52%
LIFE OF FUND +32.20% +31.14%
</TABLE>
Neuberger Berman Advisers Management Trust Guardian Portfolio-SM- (the
"Fund") commenced operations on 11/3/97.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in the Fund and the return on the investment
both will fluctuate, and redemption proceeds may be higher or lower than an
investor's original cost.
2. The S&P 500 Index is an unmanaged index generally considered to be
representative of overall stock market activity. 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 directly in any
index. Data about the performance of this index are prepared or obtained by
Neuberger Berman Management Inc.-Registered Trademark- and include reinvestment
of all dividends and capital gain distributions. The Series invests in many
securities not included in the above-described index.
Performance data are historical and include changes in share price and
reinvestment of dividends and capital gain distributions. Performance numbers
are net of all Fund operating expenses, but do not include any insurance charges
or other expenses imposed by your insurance company's variable annuity or
variable life insurance policy. If this performance information included the
effect of the insurance charges and other expenses, performance numbers would be
lower.
B-1
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger Berman Advisers Management Trust
- --------------------------------------------------------------------------------
Guardian Portfolio
<TABLE>
<CAPTION>
December 31,
1998
--------------
<S> <C>
ASSETS
Investment in Series, at value (Note A) $ 74,220,545
Receivable for Trust shares sold 172,133
Deferred organization costs (Note A) 8,337
--------------
74,401,015
--------------
LIABILITIES
Payable for Trust shares redeemed 256,740
Accrued expenses 25,210
Payable to administrator -- net (Note B) 7,078
--------------
289,028
--------------
NET ASSETS at value $ 74,111,987
--------------
NET ASSETS consist of:
Par value $ 5,354
Paid-in capital in excess of par value 75,474,002
Accumulated undistributed net investment
income 289,382
Accumulated net realized losses on
investment (5,837,320)
Net unrealized appreciation in value of
investment 4,180,569
--------------
NET ASSETS at value $ 74,111,987
--------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 5,354,093
--------------
NET ASSET VALUE, offering and redemption price per
share $13.84
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-2
<PAGE>
STATEMENT OF OPERATIONS
Neuberger Berman Advisers Management Trust
- --------------------------------------------------------------------------------
Guardian Portfolio
<TABLE>
<CAPTION>
For the
Year Ended
December 31,
1998
------------
<S> <C>
INVESTMENT INCOME
Investment income from Series (Note A) $ 653,772
------------
Expenses:
Administration fee (Note B) 108,862
Shareholder reports 28,899
Custodian fees 10,000
Amortization of deferred organization and
initial offering expenses (Note A) 2,119
Trustees' fees and expenses 1,748
Legal fees 986
Auditing fees 573
Registration and filing fees 29
Miscellaneous 551
Expenses from Series (Notes A & B) 259,558
------------
Total expenses 413,325
Expenses reimbursed by administrator and
reduced by custodian fee expense offset
arrangement (Note B) (50,452)
------------
Total net expenses 362,873
------------
Net investment income 290,899
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
FROM SERIES (NOTE A)
Net realized loss on investment securities (7,712,707)
Net realized gain on financial futures
contracts 1,876,576
Change in net unrealized appreciation of
investment securities and financial futures
contracts 4,162,581
------------
Net loss on investments from Series (Note
A) (1,673,550)
------------
Net decrease in net assets resulting from
operations $(1,382,651)
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger Berman Advisers Management Trust
- --------------------------------------------------------------------------------
Guardian Portfolio
<TABLE>
<CAPTION>
Period from
November 3,
1997
(Commencement
of
Year Operations)
Ended to
December 31, December 31,
1998 1997
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 290,899 $ 459
Net realized loss on investments
from Series (Note A) (5,836,131) (1,189)
Change in net unrealized
appreciation of investments from
Series (Note A) 4,162,581 17,988
-----------------------------
Net increase (decrease) in net
assets resulting from operations (1,382,651) 17,258
-----------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,976) --
-----------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 109,277,613 550,096
Proceeds from reinvestment of
dividends 1,976 --
Payments for shares redeemed (34,350,295) (34)
-----------------------------
Net increase from Trust share
transactions 74,929,294 550,062
-----------------------------
NET INCREASE IN NET ASSETS 73,544,667 567,320
NET ASSETS:
Beginning of year 567,320 --
-----------------------------
End of year $ 74,111,987 $ 567,320
-----------------------------
Accumulated undistributed net
investment income at end of year $ 289,382 $ 459
-----------------------------
NUMBER OF TRUST SHARES:
Sold 7,993,108 53,906
Issued on reinvestment of dividends 162 --
Redeemed (2,693,080) (3)
-----------------------------
Net increase in shares outstanding 5,300,190 53,903
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger Berman Advisers Management Trust December 31, 1998
- --------------------------------------------------------------------------------
Guardian Portfolio
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Guardian Portfolio (the "Fund") is a separate operating series of
Neuberger Berman Advisers Management Trust (the "Trust"), a Delaware business
trust organized pursuant to a Trust Instrument dated May 23, 1994. The Fund
had no operations until November 3, 1997, other than matters relating to its
organization and registration as a series of the Trust. The Trust is
currently comprised of seven separate operating series (the "Funds"). The
Trust is registered as a diversified, open-end management investment company
under the Investment Company Act of 1940, as amended, and its shares are
registered under the Securities Act of 1933, as amended. The trustees of the
Trust may establish additional series or classes of shares without the
approval of shareholders.
The assets of each fund belong only to that fund, and the liabilities of
each fund are borne solely by that fund and no other.
The Fund seeks to achieve its investment objective by investing all of its
net investable assets in AMT Guardian Investments (the "Series"), a series of
Advisers Managers Trust having the same investment objective and policies as
the Fund. The value of the Fund's investment in the Series reflects the
Fund's proportionate interest in the net assets of the Series (100% at
December 31, 1998). The performance of the Fund is directly affected by the
performance of the Series. The financial statements of the Series, including
the Schedule of Investments, are included elsewhere in this report and should
be read in conjunction with the Fund's financial statements.
2) PORTFOLIO VALUATION: The Fund records its investment in the Series at value.
Investment securities held by the Series are valued as indicated in the notes
following the Series' Schedule of Investments.
3) FEDERAL INCOME TAXES: The Funds are treated as separate entities for Federal
income tax purposes. It is the policy of the Fund to continue to qualify as a
regulated investment company by complying with the provisions available to
certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of investment company
taxable income and net capital gains (after reduction for any amounts
available for Federal income tax purposes as capital loss carryforwards)
sufficient to relieve it from all, or substantially all, Federal income
taxes. Accordingly, the Fund paid no Federal income taxes and no provision
for Federal income taxes was required.
4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund earns income, net of
Series expenses, daily on its investment in the Series. Income dividends and
distributions from net realized capital gains, if any, are normally
distributed in February. Income dividends and capital gain distributions to
shareholders are recorded on the ex-dividend date. To the extent the Fund's
net realized capital gains, if any, can be offset by capital loss
carryforwards ($4,490,172, expiring in 2006, determined as of December 31,
1998), it is the policy of the Fund not to distribute such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains.
B-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont'd)
Neuberger Berman Advisers Management Trust December 31, 1998
- --------------------------------------------------------------------------------
Guardian Portfolio
5) ORGANIZATION EXPENSES: Expenses incurred by the Fund in connection with its
organization are being amortized by the Fund on a straight-line basis over a
five-year period. At December 31, 1998, the unamortized balance of such
expenses amounted to $8,337.
6) EXPENSE ALLOCATION: Expenses directly attributable to a fund are charged to
that fund. Expenses not directly attributed to a fund are allocated, on the
basis of relative net assets, to each of the Funds.
7) OTHER: All net investment income and realized and unrealized capital gains
and losses of the Series are allocated pro rata among the Fund and any other
investors in the Series.
NOTE B -- ADMINISTRATION FEES, DISTRIBUTION ARRANGEMENTS, AND OTHER TRANSACTIONS
WITH AFFILIATES:
Fund shares are issued and redeemed in connection with investments in and
payments under certain variable annuity contracts and variable life insurance
policies issued through separate accounts of life insurance companies.
The Fund retains Neuberger Berman Management Incorporated ("Management") as
its administrator under an Administration Agreement ("Agreement"). Pursuant to
this Agreement the Fund pays Management an administration fee at the annual rate
of 0.30% of the Fund's average daily net assets. The Fund indirectly pays for
investment management services through its investment in the Series (see Note B
of Notes to Financial Statements of the Series).
Effective May 1, 1995, the trustees of the Trust adopted a non-fee
distribution plan for each series of the Trust.
Management has voluntarily undertaken to limit the Fund's expenses by
reimbursing the Fund for its operating expenses plus its pro rata share of its
Series' operating expenses (including the fees payable to Management, but
excluding interest, taxes, brokerage commissions, extraordinary expenses, and
transaction costs) ("Operating Expenses") which exceed, in the aggregate, 1% per
annum of the Fund's average daily net assets (the "Expense Limitation"). This
undertaking is subject to termination by Management upon at least 60 days' prior
written notice to the Fund. For the year ended December 31, 1998, such excess
expenses amounted to $50,071. The Fund has agreed to repay Management through
December 31, 1999, for its excess Operating Expenses previously reimbursed by
Management, so long as its annual Operating Expenses during that period do not
exceed its Expense Limitation.
All of the capital stock of Management is owned by individuals who are also
principals of Neuberger Berman, LLC ("Neuberger"), a member firm of The New York
Stock Exchange and sub-adviser to the Series. Several individuals who are
officers and/or trustees of the Trust are also principals of Neuberger and/or
officers and/or directors of Management.
The Series has an expense offset arrangement in connection with its custodian
contract. In addition, in connection with the Securities Lending Agreement
between the Series and Morgan Stanley & Co. Incorporated ("Morgan"), Morgan has
agreed to reimburse the Series for transaction costs incurred on security
lending transactions charged by the custodian. The impact of these arrangements,
respectively, reflected in the Statement of Operations under the caption
Expenses from Series, was a reduction of $309 and $72.
NOTE C -- INVESTMENT TRANSACTIONS:
During the year ended December 31, 1998, additions and reductions in the
Fund's investment in its Series amounted to $102,739,538 and $27,803,723,
respectively.
B-6
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman Advisers Management Trust
- --------------------------------------------------------------------------------
Guardian Portfolio(1)
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 Series' Financial
Statements and notes thereto.(2)
<TABLE>
<CAPTION>
Period from
Year Ended November 3, 1997(3)
December 31, to December 31,
1998 1997
----------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Year $10.52 $10.00
----------------------------------
Income From Investment Operations
Net Investment Income .11 .01
Net Gains or Losses on Securities
(both realized and unrealized) 3.22(4) .51
----------------------------------
Total From Investment Operations 3.33 .52
----------------------------------
Less Distributions
Dividends (from net investment
income) (.01) --
----------------------------------
Net Asset Value, End of Year $13.84 $10.52
----------------------------------
Total Return(5) +31.67% +5.20%(6)
----------------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $ 74.1 $ 0.6
----------------------------------
Ratio of Gross Expenses to Average
Net Assets(7) 1.00% 1.06%(8)
----------------------------------
Ratio of Net Expenses to Average Net
Assets(9) 1.00% 1.00%(8)
----------------------------------
Ratio of Net Investment Income to
Average Net Assets .80% .98%(8)
----------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-7
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger Berman Advisers Management Trust December 31, 1998
- --------------------------------------------------------------------------------
Guardian Portfolio
1) The per share amounts and ratios which are shown reflect income and expenses,
including the Fund's proportionate share of the Series' income and expenses.
2) The per share amounts which are shown have been computed based on the average
number of shares outstanding during each fiscal period.
3) The date investment operations commenced.
4) The amounts shown at this caption for a share outstanding may not accord with
the change in aggregate gains and losses in securities for the fiscal period
because of the timing of sales and repurchases of Fund shares in relation to
fluctuating market values for the Fund.
5) Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Fund during each fiscal
period and assumes dividends and other 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 would
have been lower if Management had not reimbursed certain expenses. The total
return information shown does not reflect charges and other expenses that
apply to the separate account or the related insurance policies, and the
inclusion of these charges and other expenses would reduce the total return
for all fiscal periods shown.
6) Not annualized.
7) The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
8) Annualized.
9) After reimbursement of expenses by Management as described in Note B of Notes
to Financial Statements. Had Management not undertaken such action the
annualized ratios of net expenses to average daily net assets would have
been:
<TABLE>
<CAPTION>
Period from
Year Ended November 3, 1997
December 31, to December 31,
1998 1997
- ------------------------------------------------------------------------------------
<S> <C> <C>
Net Expenses 1.14% 30.06%
-----------------------------------
</TABLE>
B-8
<PAGE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Guardian Portfolio
We have audited the accompanying statement of assets and liabilities of
Guardian Portfolio, one of the series constituting the Neuberger Berman Advisers
Management Trust (the "Trust"), as of December 31, 1998, and the related
statement of operations for the year then ended, and the statement of changes in
net assets and the financial highlights for each of the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Guardian Portfolio of Neuberger Berman Advisers Management Trust at December 31,
1998, the results of its operations for the year then ended, and the changes in
its net assets and the financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting principles.
[SIGNATURE]
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
January 29, 1999
B-9
<PAGE>
SCHEDULE OF INVESTMENTS
Advisers Managers Trust December 31, 1998
- --------------------------------------------------------------------------------
AMT Guardian Investments
<TABLE>
<CAPTION>
Number Market
of Shares Value(1)
- ---------- -----------
<C> <S> <C>
COMMON STOCKS (73.8%)
AGRICULTURE (0.9%)
10,600 Potash Corp. of Saskatchewan $ 677,075
-----------
AUTOMOTIVE (7.4%)
31,700 Cabot Corp. 885,619
35,000 General Motors 2,504,687
14,800 Lear Corp. 569,800(2)
44,900 LucasVarity PLC ADR 1,504,150
-----------
5,464,256
-----------
BANKING (6.5%)
14,400 Bank One 735,300
11,100 BankAmerica Corp. 667,387
27,600 BankBoston Corp. 1,074,675
34,700 Chase Manhattan 2,361,769
-----------
4,839,131
-----------
CAPITAL GOODS (1.1%)
45,000 Republic Services 829,687(2)
-----------
CONSUMER GOODS & SERVICES (4.2%)
73,400 Cendant Corp. 1,399,187(2)
17,000 Kimberly-Clark 926,500
6,700 Xerox Corp. 790,600
-----------
3,116,287
-----------
ENERGY (0.6%)
21,000 Conoco Inc. 438,375(2)
-----------
FINANCIAL SERVICES (14.4%)
27,000 Associates First Capital 1,144,125
23,500 Capital One Financial 2,702,500
5,900 Citigroup Inc. 292,050
66,000 Conseco, Inc. 2,017,125
45,000 Countrywide Credit Industries 2,258,437
23,500 Hartford Financial Services
Group 1,289,563
14,000 Morgan Stanley Dean Witter 994,000
-----------
10,697,800
-----------
FOOD & TOBACCO (3.3%)
9,000 McDonald's Corp. 689,625
33,100 Philip Morris 1,770,850
-----------
2,460,475
-----------
HEALTH CARE (8.7%)
20,600 Aetna Inc. 1,619,675
13,100 American Home Products 737,694
<CAPTION>
Number Market
of Shares Value(1)
- ---------- -----------
<C> <S> <C>
15,000 PacifiCare Health Systems
Class B $ 1,192,500(2)
20,000 Tenet Healthcare 525,000(2)
27,000 Wellpoint Health Networks 2,349,000(2)
-----------
6,423,869
-----------
INDUSTRIAL GOODS & SERVICES (4.5%)
9,000 Amerada Hess 447,750
22,200 Lyondell Chemical 399,600
27,000 Millennium Chemicals 536,625
9,000 Mobil Corp. 784,125
11,200 Texaco, Inc. 592,200
12,000 Waste Management 559,500
-----------
3,319,800
-----------
INSURANCE (1.6%)
12,000 Allstate Corp. 463,500
14,300 Nationwide Financial Services 739,131
-----------
1,202,631
-----------
RETAIL (2.6%)
40,000 Furniture Brands International 1,090,000(2)
17,500 Payless ShoeSource 829,063(2)
-----------
1,919,063
-----------
TECHNOLOGY (11.3%)
14,000 3Com Corp. 627,375(2)
10,500 Applied Materials 448,219(2)
31,000 Compaq Computer 1,300,063
12,100 Hewlett-Packard 826,581
4,100 IBM 757,475
14,000 Micron Technology 707,875
5,200 Oracle Corp. 224,250(2)
36,000 Rational Software 954,000(2)
10,000 Sun Microsystems 856,250(2)
20,000 Teradyne, Inc. 847,500(2)
10,000 Texas Instruments 855,625(2)
-----------
8,405,213
-----------
TELECOMMUNICATIONS (4.5%)
10,700 Airtouch Communications 771,738(2)
11,500 AT&T Corp. 865,375
24,200 MCI WorldCom 1,736,350(2)
-----------
3,373,463
-----------
</TABLE>
B-10
<PAGE>
SCHEDULE OF INVESTMENTS (Cont'd)
Advisers Managers Trust December 31, 1998
- --------------------------------------------------------------------------------
AMT Guardian Investments
<TABLE>
<CAPTION>
Number Market
of Shares Value(1)
- ---------- -----------
<C> <S> <C>
TRANSPORTATION (2.2%)
15,000 Continental Airlines Class B $ 502,500(2)
22,000 Northwest Airlines 562,375(2)
10,000 US Airways Group 520,000(2)
-----------
1,584,875
-----------
TOTAL COMMON STOCKS (COST
$51,407,190) 54,752,000
-----------
<CAPTION>
Principal
Amount
- ----------
<C> <S> <C>
U.S. TREASURY SECURITIES
(23.2%)
$17,360,000 U.S. Treasury Bills,
4.35%-4.53%, due
1/21/99-4/1/99 (COST
$17,251,057) 17,251,053
-----------
REPURCHASE AGREEMENTS (4.0%)
2,940,000 State Street Bank and Trust
Co. Repurchase Agreement,
4.50%, due 1/4/99, dated
12/31/98, Maturity Value
$2,941,470, Collateralized by
$2,140,000 U.S. Treasury
Bonds, 8.50%, due 2/15/20
(Collateral Value $3,029,771)
(COST $2,940,000) 2,940,000(3)
-----------
<CAPTION>
Principal Market
Amount Value(1)
- ---------- -----------
<C> <S> <C>
SHORT-TERM INVESTMENTS (2.4%)
$1,816,366 N&B Securities Lending Quality
Fund, LLC (COST $1,816,366) $ 1,816,366(3)
-----------
TOTAL INVESTMENTS (103.4%)
(COST $73,414,613) 76,759,419(4)
Liabilities, less cash,
receivables and other assets
[(3.4%)] (2,538,873)
-----------
TOTAL NET ASSETS (100.0%) $74,220,546
-----------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
B-11
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
Advisers Managers Trust December 31, 1998
- --------------------------------------------------------------------------------
AMT Guardian Investments
1) Investment securities of the Series are valued at the latest sales price;
securities for which no sales were reported, unless otherwise noted, are
valued at the mean between the closing bid and asked prices. The Series
values all other securities by a method the trustees of Advisers Managers
Trust believe accurately reflects fair value. Foreign security prices are
furnished by independent quotation services expressed in local currency
values. Foreign security prices are translated from the local currency into
U.S. dollars using current exchange rates. Short-term debt securities with
less than 60 days until maturity may be valued at cost which, when combined
with interest earned, approximates market value.
2) Non-income producing security.
3) At cost, which approximates market value.
4) At December 31, 1998, the cost of investments for Federal income tax purposes
was $73,925,999. Gross unrealized appreciation of investments was $5,707,334
and gross unrealized depreciation of investments was $2,873,914, resulting in
net unrealized appreciation of $2,833,420, based on cost for Federal income
tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS
B-12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Advisers Managers Trust
- --------------------------------------------------------------------------------
AMT Guardian Investments
<TABLE>
<CAPTION>
December 31,
1998
--------------
<S> <C>
ASSETS
Investments in securities, at market value*
(Note A) -- see Schedule of Investments $ 76,759,419
Cash 5,163
Receivable for securities sold 72,323
Dividends and interest receivable 57,637
Receivable for variation margin (Note A) 40,800
Deferred organization costs (Note A) 10,852
Prepaid expenses and other assets 708
--------------
76,946,902
--------------
LIABILITIES
Payable for collateral on securities loaned
(Note A) 1,816,366
Payable for securities purchased 851,002
Payable to investment manager (Note B) 32,886
Accrued expenses 26,102
--------------
2,726,356
--------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 74,220,546
--------------
NET ASSETS consist of:
Paid-in capital $ 70,039,977
Net unrealized appreciation in value of
investment securities and financial futures
contracts 4,180,569
--------------
NET ASSETS $ 74,220,546
--------------
*Cost of investments $ 73,414,613
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-13
<PAGE>
STATEMENT OF OPERATIONS
Advisers Managers Trust
- --------------------------------------------------------------------------------
AMT Guardian Investments
<TABLE>
<CAPTION>
For the
Year Ended
December 31,
1998
------------
<S> <C>
INVESTMENT INCOME
Income:
Dividend income $ 369,407
Interest income 289,662
Foreign taxes withheld (Note A) (5,297)
------------
Total income 653,772
------------
Expenses:
Investment management fee (Note B) 199,662
Custodian fees (Note B) 40,953
Accounting fees 10,000
Auditing fees 2,743
Amortization of deferred organization and
initial offering expenses (Note A) 2,408
Trustees' fees and expenses 1,763
Legal fees 796
Insurance expense 166
Miscellaneous 1,067
------------
Total expenses 259,558
Expenses reduced by custodian fee expense
offset arrangement (Note B) (381)
------------
Total net expenses 259,177
------------
Net investment income 394,595
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investment securities
sold (7,712,707)
Net realized gain on financial futures
contracts (Note A) 1,876,576
Change in net unrealized appreciation of
investment securities and financial futures
contracts (Note A) 4,162,581
------------
Net loss on investments (1,673,550)
------------
Net decrease in net assets resulting from
operations $(1,278,955)
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Advisers Managers Trust
- --------------------------------------------------------------------------------
AMT Guardian Investments
<TABLE>
<CAPTION>
Period from
November 3,
1997
(Commencement
of
Year Operations)
Ended to
December 31, December 31,
1998 1997
-----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) $ 394,595 $ (3,529)
Net realized loss on investments (5,836,131) (1,189)
Change in net unrealized
appreciation of investments 4,162,581 17,988
-----------------------------
Net increase (decrease) in net
assets resulting from operations (1,278,955) 13,270
-----------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 102,739,538 550,450
Reductions (27,803,723) (34)
-----------------------------
Net increase in net assets resulting
from transactions in investors'
beneficial interests 74,935,815 550,416
-----------------------------
NET INCREASE IN NET ASSETS 73,656,860 563,686
NET ASSETS:
Beginning of year 563,686 --
-----------------------------
End of year $ 74,220,546 $ 563,686
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Advisers Managers Trust December 31, 1998
- --------------------------------------------------------------------------------
AMT Guardian Investments
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: AMT Guardian Investments (the "Series") is a separate operating
series of Advisers Managers Trust ("Managers Trust"), a New York common law
trust organized as of May 24, 1994. The Series had no operations until
November 3, 1997, other than matters relating to its organization and
registration as a series of Managers Trust. Managers Trust is currently
comprised of seven separate operating series. Managers Trust is registered
as a diversified, open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act").
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.
2) PORTFOLIO VALUATION: Investment securities are valued as indicated in the
notes following the Series' Schedule of Investments.
3) FINANCIAL FUTURES CONTRACTS: The Series may buy and sell financial futures
contracts to hedge against changes in securities prices resulting from
changes in prevailing interest rates. At the time the Series enters into a
financial futures contract, it is required to deposit with its custodian a
specified amount of cash or liquid securities, known as "initial margin,"
ranging upward from 1.1% of the value of the financial futures contract
being traded. Each day, the futures contract is valued at the official
settlement price of the board of trade or U.S. commodity exchange on which
such futures contract is traded. Subsequent payments, known as "variation
margin," to and from the broker are made on a daily basis as the market
price of the financial futures contract fluctuates. Daily variation margin
adjustments, arising from this "mark to market," are recorded by the Series
as unrealized gains or losses.
Although some financial futures contracts by their terms call for actual
delivery or acceptance of financial instruments, in most cases the contracts
are closed out prior to delivery by offsetting purchases or sales of
matching financial futures contracts. When the contracts are closed, the
Series recognizes a gain or loss. Risks of entering into futures contracts
include the possibility there may be an illiquid market and/or a change in
the value of the contract may not correlate with changes in the value of the
underlying securities.
For Federal income tax purposes, the futures transactions undertaken by
the Series may cause the Series to recognize gains or losses from marking to
market even though its positions have not been sold or terminated, may
affect the character of the gains or losses recognized as long-term or
short-term, and may affect the timing of some capital gains and losses
realized by the Series. Also, the Series' losses on transactions involving
futures contracts may be deferred rather than being taken into account
currently in calculating the Series' taxable income.
At December 31, 1998, open positions in financial futures contracts were
as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION OPEN CONTRACTS POSITION APPRECIATION
---------------------------------------------------------------
<S> <C> <C> <C>
March 1999 48 S&P 500 Futures Long $835,763
</TABLE>
At December 31, 1998, the Series had deposited $1,000,000 U.S. Treasury
Bills, 4.35%, due 4/1/99, in a segregated account to cover margin
requirements on open financial futures contracts.
B-16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont'd)
Advisers Managers Trust December 31, 1998
- --------------------------------------------------------------------------------
AMT Guardian Investments
4) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Series
becomes aware of the dividends. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, including accretion of original issue discount,
where applicable, and accretion of discount on short-term investments, is
recorded on the accrual basis. Realized gains and losses from securities
transactions are recorded on the basis of identified cost.
5) FEDERAL INCOME TAXES: Managers Trust intends to comply with the requirements
of the Internal Revenue Code. Each series of Managers Trust also intends to
conduct its operations so that each of its investors will be able to qualify
as a regulated investment company. Each series will be treated as a
partnership for Federal income tax purposes and is therefore not subject to
Federal income tax.
6) FOREIGN TAXES: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
7) ORGANIZATION EXPENSES: Expenses incurred by the Series in connection with
its organization are being amortized by the Series on a straight-line basis
over a five-year period. At December 31, 1998, the unamortized balance of
such expenses amounted to $10,852.
8) EXPENSE ALLOCATION: Expenses directly attributable to a series are charged
to that series. Expenses not directly attributed to a series are allocated,
on the basis of relative net assets, to each of the series of Managers
Trust.
9) SECURITY LENDING: Securities loans involve certain risks in the event a
borrower should fail financially, including delays or inability to recover
the lent securities or foreclose against the collateral. The investment
manager, under the general supervision of Managers Trust's Board of
Trustees, monitors the creditworthiness of the parties to whom the Series
makes security loans. The Series will not lend securities on which covered
call options have been written, or lend securities on terms which would
prevent investors from qualifying as a regulated investment company. Prior
to June 1, 1998, the Series made securities loans to Neuberger Berman, LLC
("Neuberger"), the Series' principal broker and sub-adviser. These loans
were made in accordance with an exemptive order issued by the Securities and
Exchange Commission under the 1940 Act. The Series received cash as
collateral against the lent securities, which was maintained at not less
than 100% of the market value of the lent securities during the period of
the loan. The Series received income earned on the lent securities and a
portion of the income earned on the cash collateral. During the year ended
December 31, 1998, the Series lent securities to Neuberger. Effective June
1, 1998, the Series entered into a Securities Lending Agreement with Morgan
Stanley & Co. Incorporated ("Morgan"). The Series receives cash collateral
equal to at least 100% of the current market value of the loaned securities.
The Series invests the cash collateral in the N&B Securities Lending Quality
Fund, LLC ("investment vehicle"), which is managed by State Street Bank and
Trust Company pursuant to guidelines approved by Managers Trust's investment
manager. Income earned on the investment vehicle is paid to Morgan monthly.
The Series receives a fee, payable monthly, negotiated by the Series and
Morgan, based on the number and duration of the lending transactions. At
December 31, 1998, the value of the securities loaned and the value of the
collateral were $1,780,750 and $1,816,366, respectively.
B-17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont'd)
Advisers Managers Trust December 31, 1998
- --------------------------------------------------------------------------------
AMT Guardian Investments
10) REPURCHASE AGREEMENTS: The Series may enter into repurchase agreements with
institutions that the Series' investment manager has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Series
requires that the securities purchased in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable the Series to
obtain those securities in the event of a default under the repurchase
agreement. The Series monitors, on a daily basis, the value of the
securities transferred to ensure that their value, including accrued
interest, is greater than amounts owed to the Series under each such
repurchase agreement.
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
The Series retains Neuberger Berman Management Incorporated ("Management") as
its investment manager under a Management Agreement. For such investment
management services, the Series pays Management a fee at the annual rate of
0.55% of the first $250 million of the Series' average daily net assets, 0.525%
of the next $250 million, 0.50% of the next $250 million, 0.475% of the next
$250 million, 0.45% of the next $500 million, and 0.425% of average daily net
assets in excess of $1.5 billion.
All of the capital stock of Management is owned by individuals who are also
principals of Neuberger, a member firm of The New York Stock Exchange and
sub-adviser to the Series. Neuberger is retained by Management to furnish it
with investment recommendations and research information without added cost to
the Series. Several individuals who are officers and/or trustees of Managers
Trust are also principals of Neuberger and/or officers and/or directors of
Management.
The Series has an expense offset arrangement in connection with its custodian
contract. In addition, in connection with the Securities Lending Agreement
between the Series and Morgan, Morgan has agreed to reimburse the Series for
transaction costs incurred on security lending transactions charged by the
custodian. The impact of these arrangements, respectively, reflected in the
Statement of Operations under the caption Custodian fees, was a reduction of
$309 and $72.
NOTE C -- SECURITIES TRANSACTIONS:
During the year ended December 31, 1998, there were purchase and sale
transactions (excluding short-term securities and financial futures contracts)
of $117,614,984 and $58,980,000, respectively.
During the year ended December 31, 1998, brokerage commissions on securities
transactions amounted to $158,418, of which Neuberger received $77,154, and
other brokers received $81,264.
In addition, Neuberger's share of the total interest income earned for the
year ended December 31, 1998, from the collateralization of securities loaned to
or through Neuberger was $0.
B-18
<PAGE>
FINANCIAL HIGHLIGHTS
Advisers Managers Trust
- --------------------------------------------------------------------------------
AMT Guardian Investments
<TABLE>
<CAPTION>
Period from
Year Ended November 3, 1997(1)
December 31, to December 31,
1998 1997
----------------------------------
<S> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(2) .71% 9.59%(3)
----------------------------------
Net Expenses .71% 9.53%(3)
----------------------------------
Net Investment Income (Loss) 1.09% (7.55%)(3)
----------------------------------
Portfolio Turnover Rate 197% 12%
----------------------------------
Net Assets, End of Year (in millions) $74.2 $0.6
----------------------------------
</TABLE>
1) The date investment operations commenced.
2) The Series is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
3) Annualized.
B-19
<PAGE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Board of Trustees of
Advisers Managers Trust and
Owners of Beneficial Interest of AMT Guardian Investments
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of AMT Guardian Investments, one of the
series constituting the Advisers Managers Trust (the "Trust"), as of December
31, 1998, and the related statement of operations for the year then ended, and
the statement of changes in net assets and the financial highlights for each of
the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1998, by correspondence with the custodian
and brokers or other appropriate auditing procedures where replies from brokers
were not received. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of AMT
Guardian Investments of Advisers Managers Trust at December 31, 1998, the
results of its operations for the year then ended, and the changes in its net
assets and the financial highlights for each of the periods indicated therein,
in conformity with generally accepted accounting principles.
[SIGNATURE]
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
January 29, 1999
B-20
