<PAGE>
SEMI-ANNUAL REPORT
- -------------------------------------------
April 30, 1995
NEUBERGER&BERMAN
INCOME TRUST-SM-
Neuberger&Berman
ULTRA SHORT BOND TRUST
Neuberger&Berman
LIMITED MATURITY BOND TRUST
Neuberger&Berman
GOVERNMENT INCOME TRUST
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
THE TRUSTS
PRESIDENT'S LETTER 4
PERFORMANCE
HIGHLIGHTS 9
RATINGS SUMMARY 10
FINANCIAL STATEMENTS 12
FINANCIAL HIGHLIGHTS 20
PER SHARE DATA
Ultra Short Bond Trust 20
Limited Maturity Bond
Trust 21
Government Income Trust 22
THE PORTFOLIOS
SCHEDULE OF
INVESTMENTS 24
Ultra Short Bond
Portfolio 24
Limited Maturity Bond
Portfolio 28
Government Income
Portfolio 33
FINANCIAL STATEMENTS 36
FINANCIAL HIGHLIGHTS 44
DIRECTORY 45
OFFICERS AND
TRUSTEES 46
PORTFOLIO MANAGEMENT 46
</TABLE>
3
<PAGE>
PRESIDENT'S LETTER JUNE 20, 1995
Dear Shareholder,
When we last reported to you, in your Trust's October 1994 Annual Report,
interest rates had risen virtually worldwide due to signs of strength. It was
our belief that bonds were an attractive investment opportunity because their
prices were depressed.
Economic expansion has slowed during the six-month period ending April 30,
1995. Many analysts believe the economic environment will remain moderate in the
months ahead.
Recent economic data indicate that the economy expanded at a rate of 2.8% in
the first three months of 1995, as measured by the Gross Domestic Product (GDP).
This increase represents the slowest rate of growth since the summer of 1993.
The widely anticipated slowdown offers further evidence that the economy,
after a 4-year expansion, is braking at a steady rate -- the hoped for
"soft-landing." This current economic situation has been referred to as a
"Goldilocks World," where the porridge is not too hot and not too cold, but just
right. In other words, the current economic growth rate is not too much or too
little -- just about right!
Because of this relatively subdued economic environment, both the taxable and
municipal bond markets increased in value (bond prices increased, yields
decreased) from late November 1994 through April 1995. As you may know, bond
prices respond positively to a low
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTEREST RATES
IN PERCENT
30 YR TREASURY 3 MONTH TREASURY 12-22 YRS MUNICIPAL
BONDS BILL INDEX
<S> <C> <C> <C>
11/4/94 8.16 5.32 6.454
11/11/94 8.15 5.38 6.509
11/18/94 8.13 5.48 6.600
11/25/94 7.93 5.44 6.437
12/2/94 7.91 5.80 6.405
12/9/94 7.86 5.83 6.401
12/16/94 7.86 5.71 6.369
12/23/94 7.83 5.69 6.618
12/30/94 7.88 5.70 6.491
1/6/95 7.86 5.92 6.534
1/13/95 7.79 5.70 6.329
1/20/95 7.89 5.91 6.401
1/27/95 7.73 5.92 6.273
2/3/95 7.63 5.96 6.121
2/10/95 7.67 5.98 6.115
2/17/95 7.59 5.87 6.021
2/24/95 7.53 5.89 5.944
3/3/95 7.54 5.91 5.877
3/10/95 7.46 5.95 5.891
3/17/95 7.37 5.92 5.856
3/24/95 7.37 5.85 5.839
3/31/95 7.43 5.89 5.878
4/7/95 7.39 5.87 5.813
4/14/95 7.34 5.76 5.730
4/21/95 7.34 5.79 5.718
4/28/95 7.34 5.88 5.867
</TABLE>
SOURCE: BLOOMBERG FINANCIAL MARKETS -- 30 YEAR TREASURY BOND &
TREASURY BILLS
MERRILL LYNCH 12-22 YEAR MUNICIPAL BOND INDEX
4
<PAGE>
inflationary environment. With inflation at a relatively low rate, real yields
on bonds (the nominal stated bond yield minus the current rate of inflation)
offer an attractive return relative to inflation.
We will continue to monitor the economy, paying particular attention to the
operating rate of industry, home construction, and commodity prices. A
discussion of each Portfolio's investment strategy during the six-month period
covered by this Semi-Annual Report follows. We will continue to make every
effort to merit your confidence.
ULTRA SHORT BOND TRUST. During this reporting period, the Federal Open
Market Committee (FOMC) increased the Federal Funds rate by 100 basis points
from the October 1994 target of 5% to the current 6%. Since the last interest
rate increase in February 1995, bond maturities of 2 years and longer have
experienced lower yields and higher prices. This reflects the market's sentiment
that the Federal Reserve Board has acted prudently and headed off the "inflation
demon." However, money market maturities of 1 year and shorter have seen higher
yields during this same time period, resulting in the need to be cautious in the
maturity management of the Portfolio in our attempt to reduce the risk to
principal.
In addition, the weakening U.S. dollar, and the needed support received by
both the dollar and the Treasury market from foreign central banks, gave us
reason to be cautious. Therefore, our focus has been on adding value to the
Portfolio by diversifying into bond sectors which reward us with additional
yield, rather than purchasing longer-term securities. Although there has been a
limited supply of appealing bonds in some sectors, there has been heavy issuance
of short-term debt by U.S. Government Agencies, both domestic and foreign banks,
and corporations. We have reduced our Treasury positions to purchase these more
attractive yielding securities.
The flatter yield curve (representing the difference in yield between long-and
short-term maturities) has reinforced the market sentiment that inflation is
under control.
LIMITED MATURITY BOND TRUST. Since the beginning of the year, we have
witnessed a sharp reversal of 1994's bear market in bonds. Signs that the
economy is finally slowing have now convinced many bond market participants that
the Federal Reserve Board, after seven interest rate hikes, will not increase
interest rates further. This conviction has led
5
<PAGE>
to a substantial bond market rally. Yields on 2-year Treasury securities are
down over 100 basis points since the beginning of the year, causing bond prices
to increase and helping the stock market reach new highs.
While the bond and stock markets have been rallying, the U.S. dollar has been
plunging against the yen and the deutschemark. This has given us substantial
cause for concern. The rally in short-term Treasury bonds seems to be driven by
the purchase of Treasury securities by foreign central banks, which have
purchased dollars in support of the U.S. currency. The short end of the bond
market is now priced as though the next Federal Reserve Board policy change will
be to lower interest rates. With only 50 basis points between 2-year Treasury
bonds and Federal Funds rates, there is little room for error in the market. We
have maintained the dollar-weighted average maturity of the Portfolio at just
over 2 years during most of this period.
The corporate sector of the bond market has also increased in price relative
to other fixed income securities. Corporate bonds are measured by their spreads
(or yield differentials) to Treasury securities. When spreads are wide it pays
to invest in corporate bonds. But if the difference in the yield between
corporate bonds and Treasury securities is small and then widens or increases,
corporate bonds have historically underperformed comparable maturity Treasury
securities. Right now corporate bond spreads are tight, with nowhere to go but
wider. As a result, we have reduced our commitment to corporate bonds and are
looking for value in other sectors of the high quality bond market. Recent
purchases for the Portfolio have included 5-year balloon mortgages issued by
Federal Home Loan Mortgage Corporation (FHLMC), an agency of the U.S.
Government, and AAA-rated Asset-Backed Securities.
GOVERNMENT INCOME TRUST. We maintained a moderate dollar-weighted average
portfolio maturity, ranging from a high of 6.9 years to a low of 5.6 years,
throughout this reporting period. At the same time we have kept a cautious eye
on any possible change in the interest rate environment. The result of our
efforts has been the Trust's solid participation in the bond market rally.
We have continued to purchase U.S. Government Agency mortgage-backed
securities, which yield more than 1% over comparable maturity Treasury notes. In
addition, we have maintained a position in 5-year Treasury bonds, which are
among the best risk/reward securities
6
<PAGE>
in the market. At the same time, we added a few longer-term securities to offset
and protect us against prepayments of mortgage-backed securities, which may
occur if interest rates continue to decline and homeowners react by refinancing
their mortgages.
Sincerely,
/s/ Theresa A. Havell
Theresa A. Havell
President and Trustee
Neuberger&Berman Income Trust
7
<PAGE>
(This page has been left blank intentionally.)
8
<PAGE>
PERFORMANCE HIGHLIGHTS
<TABLE>
<CAPTION>
TOTAL RETURN ILLUSTRATION FOR PERIODS
ENDED 4/30/95
-------------------------------------
SIX
MONTH AVERAGE ANNUAL TOTAL
PERIOD RETURNS(1)
NEUBERGER&BERMAN INCEPTION ENDED SINCE
INCOME TRUST DATE* 4/30/95 1 YR 5 YR INCEPTION
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ULTRA SHORT BOND TRUST** 11/7/86 +2.89% +4.64% +4.98% +5.86%
LIMITED MATURITY BOND TRUST** 6/9/86 +3.54% +5.09% +7.00% +7.03%
GOVERNMENT INCOME TRUST** 7/6/93 +4.59% +4.23% N/A +2.79%
</TABLE>
1) Average annual total returns for periods ended April 30, 1995. Includes
reinvestment of all dividends and capital gain distributions. 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.
* Ultra Short Bond Trust, Limited Maturity Bond Trust, and Government Income
Trust started operating on September 7, 1993, August 30, 1993, and September
13, 1993, respectively. The Funds have identical investment objectives and
policies, and invest in the same Portfolios as other funds ("Sister Funds")
which are also managed by Neuberger&Berman Management Incorporated. The
performance information for the Funds prior to their commencement of
operations is for the Sister Funds and their predecessors.
** Neuberger&Berman Management Inc. voluntarily bears certain operating expenses
in excess of .75% per annum for Ultra Short Bond Trust (.65% prior to March
1, 1995), .80% per annum for Limited Maturity Bond Trust (.70% from May 1,
1994 to February 28, 1995 and .65% prior to May 1, 1994), and .85% per annum
for Government Income Trust (.75% prior to March 1, 1995). These arrangements
can be terminated upon 60 days' prior written notice. Absent such
reimbursements, the total returns for Ultra Short Bond Trust and Limited
Maturity Bond Trust would have been slightly less and for Government Income
Trust the total returns for the above stated periods would have been +3.71%,
+2.45%, and +1.03%, respectively.
9
<PAGE>
RATINGS SUMMARY
<TABLE>
<CAPTION>
DOLLAR-WEIGHTED
PERCENT OF AVERAGE
MOODY'S TOTAL PORTFOLIO
NEUBERGER&BERMAN RATINGS INVESTMENTS MATURITY
- --------------------------------------------------------------
<S> <C> <C> <C>
Ultra Short Bond Treasury 3.5% 0.7 years
Portfolio Agency 27.5
Aaa 24.7
Aa2 8.9
P-1 35.4
----
100.0%
Limited Maturity Treasury 17.0% 2.2 years
Bond Portfolio Agency 20.9
Aaa 16.0
Aa2, Aa3 6.4
A1, A2, A3 29.6
Baa2, Baa3 10.1
----
100.0%
Government Income Treasury 6.1% 6.4 years
Portfolio Agency 75.5
Aaa 5.6
Baa3 2.0
Not Rated 10.8
----
100.0%
</TABLE>
TREASURY - Securities issued by the U.S. Treasury. These securities are not
rated by Moody's.
AGENCY - U.S. Government Agency Securities. These securities are not rated by
Moody's. Some agency securities are not backed by the full faith and credit of
the U.S. Government.
MOODY'S INVESTORS SERVICE, INC. (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 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 issue.
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
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 some time in the future.
BAA - Bonds rated BAA are considered 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.
MOODY'S SHORT-TERM DEBT RATINGS:
Issuers rated PRIME-1 (P-1), or related supporting institutions, 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
10
<PAGE>
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; and well-established access
to a range of financial markets and assured sources of alternative liquidity.
NOTE: Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through Baa in its corporate bond ratings system. 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 issue ranks in the lower end of its generic rating
category.
11
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
Neuberger&Berman April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Income Trust
<TABLE>
<CAPTION>
LIMITED
ULTRA SHORT MATURITY GOVERNMENT
BOND TRUST BOND TRUST INCOME TRUST
---------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment in corresponding Portfolio, at
value (Note A) $1,494,471 $8,499,928 $ 71,664
Deferred organization costs (Note A) 36,820 35,197 35,459
Receivable for Trust shares sold 3,601 7,342 --
Receivable from administrator -- net (Note
B) 157,129 141,565 145,246
---------------------------------------------
1,692,021 8,684,032 252,369
---------------------------------------------
LIABILITIES
Dividends payable 13 885 --
Payable for Fund expenses (Note B) 108,576 112,181 94,219
Payable for Trust shares redeemed -- 3 --
Accrued organization costs (Note A) 54,796 52,721 52,471
Accrued expenses 26,298 26,987 33,002
---------------------------------------------
189,683 192,777 179,692
---------------------------------------------
NET ASSETS at value $1,502,338 $8,491,255 $ 72,677
---------------------------------------------
NET ASSETS consist of:
Par value $ 153 $ 897 $ 8
Paid-in capital in excess of par value 1,510,558 8,543,405 76,642
Accumulated net realized losses on
investment (8,124) (66,698) (3,753)
Net unrealized appreciation (depreciation)
in value of investment (249) 13,651 (220)
---------------------------------------------
NET ASSETS at value $1,502,338 $8,491,255 $ 72,677
---------------------------------------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 152,955 896,919 7,888
---------------------------------------------
NET ASSET VALUE, offering and redemption price per
share $9.82 $9.47 $9.21
---------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
STATEMENTS OF OPERATIONS
Neuberger&Berman For the Six Months Ended April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Income Trust
<TABLE>
<CAPTION>
LIMITED GOVERNMENT
ULTRA SHORT MATURITY INCOME
BOND TRUST BOND TRUST TRUST
---------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Investment income from corresponding Portfolio
(Note A) $39,497 $256,716 $ 2,262
---------------------------------------
Expenses:
Administration fee (Note B) 3,324 18,351 142
Amortization of deferred organization and
initial offering expenses (Note A) 5,402 5,431 5,142
Auditing fees 2,452 2,452 2,452
Custodian fees 5,000 5,000 5,000
Legal fees 3,449 3,541 3,846
Registration and filing fees 11,855 16,285 13,244
Shareholder reports 18,551 19,741 17,077
Shareholder servicing agent fees 8,540 8,822 8,316
Trustees' fees and expenses 139 523 17
Miscellaneous 779 997 733
Expenses from corresponding Portfolio (Note
A) 2,663 12,651 285
---------------------------------------
Total expenses 62,154 93,794 56,254
Deduct -- expenses reimbursed by
administrator (Note B) (57,591) (67,319) (56,030)
---------------------------------------
Total net expenses 4,563 26,475 224
---------------------------------------
Net investment income 34,934 230,241 2,038
---------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FOREIGN CURRENCY TRANSACTIONS, AND
FINANCIAL FUTURES CONTRACTS FROM CORRESPONDING
PORTFOLIO (NOTE A)
Net realized loss on investments (1,665) (53,467) (717)
Net realized loss on foreign currency
transactions -- -- (624)
Net realized loss on financial futures
contracts -- -- (11)
Change in net unrealized appreciation
(depreciation) of investments 5,679 88,253 1,988
Change in net unrealized depreciation of
financial futures contracts -- -- 5
---------------------------------------
Net gain on investments, foreign currency
transactions, and financial futures
contracts from corresponding Portfolio
(Note A) 4,014 34,786 641
---------------------------------------
Net increase in net assets resulting from
operations $38,948 $265,027 $ 2,679
---------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Neuberger&Berman
- ----------------------------------------------------------------------
Income Trust
<TABLE>
<CAPTION>
ULTRA SHORT
BOND TRUST
Six Months
Ended Year
April 30, Ended
1995 October 31,
(UNAUDITED) 1994
---------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 34,934 $ 29,787
Net realized loss on investments
sold, foreign currency
transactions, and financial
futures contracts from
corresponding Portfolio (Note A) (1,665) (5,520)
Change in net unrealized
appreciation (depreciation) of
investments and financial futures
contracts from corresponding
Portfolio (Note A) 5,679 (5,579)
---------------------------
Net increase (decrease) in net
assets resulting from operations 38,948 18,688
---------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (34,934) (29,787)
Tax return of capital -- --
---------------------------
Total distributions to shareholders (34,934) (29,787)
---------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 952,151 1,891,357
Proceeds from reinvestment of
dividends 34,877 29,618
Payments for shares redeemed (724,309) (848,423)
---------------------------
Net increase (decrease) from Trust
share transactions 262,719 1,072,552
---------------------------
NET INCREASE (DECREASE) IN NET ASSETS 266,733 1,061,453
NET ASSETS:
Beginning of period 1,235,605 174,152
---------------------------
End of period $1,502,338 $1,235,605
---------------------------
NUMBER OF TRUST SHARES:
Sold 97,165 191,992
Issued on reinvestment of dividends 3,559 3,015
Redeemed (73,944) (86,301)
---------------------------
Net increase (decrease) in shares
outstanding 26,780 108,706
---------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
LIMITED MATURITY GOVERNMENT
BOND TRUST INCOME TRUST
Six Months Six Months
Ended Year Ended Year
April 30, Ended April 30, Ended
1995 October 31, 1995 October 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
---------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 230,241 $ 142,663 $ 2,038 $ 3,448
Net realized loss on investments
sold, foreign currency
transactions, and financial
futures contracts from
corresponding Portfolio (Note A) (53,467) (13,498) (1,352) (2,469)
Change in net unrealized
appreciation (depreciation) of
investments and financial futures
contracts from corresponding
Portfolio (Note A) 88,253 (74,280) 1,993 (2,091)
---------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 265,027 54,885 2,679 (1,112)
---------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (230,241) (142,663) (2,038) (3,252)
Tax return of capital -- -- -- (196)
---------------------------------------------------------
Total distributions to shareholders (230,241) (142,663) (2,038) (3,448)
---------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 2,293,636 7,455,164 18,260 5,544
Proceeds from reinvestment of
dividends 228,390 142,832 2,028 3,455
Payments for shares redeemed (773,740) (902,302) (376) (27,493)
---------------------------------------------------------
Net increase (decrease) from Trust
share transactions 1,748,286 6,695,694 19,912 (18,494)
---------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 1,783,072 6,607,916 20,553 (23,054)
NET ASSETS:
Beginning of period 6,708,183 100,267 52,124 75,178
---------------------------------------------------------
End of period $8,491,255 $6,708,183 $ 72,677 $ 52,124
---------------------------------------------------------
NUMBER OF TRUST SHARES:
Sold 243,996 780,411 1,989 581
Issued on reinvestment of dividends 24,302 14,942 223 363
Redeemed (82,467) (94,326) (42) (2,778)
---------------------------------------------------------
Net increase (decrease) in shares
outstanding 185,831 701,027 2,170 (1,834)
---------------------------------------------------------
</TABLE>
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger&Berman April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Income Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Ultra Short Bond Trust ("Ultra Short"),
Neuberger&Berman Limited Maturity Bond Trust ("Limited Maturity"), and
Neuberger&Berman Government Income Trust ("Government Income") (collectively,
the "Funds") are separate series of Neuberger&Berman Income Trust (the
"Trust"), a Delaware business trust organized pursuant to a Trust Instrument
dated May 6, 1993. The Trust is registered as a diversified, open-end
management investment company under the Investment Company Act of 1940 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 series belong only to that series, and the liabilities
of each series are borne solely by that series, and no other.
Each Fund seeks to achieve its investment objective by investing all of
its net investable assets in its corresponding Portfolio of Income Managers
Trust (the "Portfolio") having the same investment objective and policies as
the Fund. The value of each Fund's investment in its corresponding Portfolio
reflects that Fund's proportionate interest in the net assets of that
Portfolio (1.69%, 2.76%, and .69%, for Ultra Short, Limited Maturity, and
Government Income, respectively, at April 30, 1995). The performance of each
Fund is directly affected by the performance of its corresponding Portfolio.
The financial statements of each Portfolio, including the schedule of
investments, are included elsewhere in this report and should be read in
conjunction with each Fund's financial statements.
2) PORTFOLIO VALUATION: Investments in each Portfolio of Income Managers Trust
are valued by Income Managers Trust as indicated in the notes following the
Portfolios' schedule of investments.
3) FEDERAL INCOME TAXES: Each series of the Trust is treated as a separate
entity for Federal income tax purposes. It is the policy of each Fund of the
Trust 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 taxable income (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, each Fund
paid no income taxes and no provision for Federal income taxes was required.
16
<PAGE>
4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Each Fund earns income, net of
Portfolio expenses, daily on its investment in its corresponding Portfolio.
It is the policy of each Fund to declare dividends from net investment income
on each business day; such dividends are paid monthly. Distributions from net
realized capital gains, if any, will be declared and paid annually after the
end of the fiscal year. To the extent that each Fund's net realized capital
gains, if any, can be offset by capital loss carryforwards ($29 and $6,430,
expiring in 2001 and 2002, respectively, for Ultra Short, $86 and $11,896,
expiring in 2001 and 2002, respectively, for Limited Maturity, and $116 and
$2,292, expiring in 2001 and 2002, respectively, for Government Income,
determined as of October 31, 1994), it is the policy of each Fund not to
distribute such gains.
Each 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.
5) ORGANIZATION EXPENSES: Expenses incurred by each Fund in connection with its
organization are being amortized by each Fund on a straight-line basis over a
five-year period. At April 30, 1995, the unamortized balance of such expenses
amounted to $36,820, $35,197, and $35,459, for Ultra Short, Limited Maturity,
and Government Income, respectively. The accrued organization costs are
payable to Neuberger&Berman Management Incorporated ("Management"), the
administrator to each Fund.
6) EXPENSE ALLOCATION: The Funds bear all costs of operations. Expenses incurred
with respect to any two or more Funds are allocated in proportion to the net
assets of such Funds, except where another more appropriate allocation of
expenses to each Fund can otherwise be made fairly. Expenses directly
attributable to a Fund are charged to that Fund.
7) OTHER: All net investment income and realized and unrealized capital gains
and losses of each Portfolio are allocated pro rata among its respective
Funds and any other investors in the Portfolio.
NOTE B -- ADMINISTRATION AND DISTRIBUTION FEES AND OTHER TRANSACTIONS
WITH AFFILIATES:
Each Fund retains Management as its administrator under an Administration
Agreement ("Agreement") dated as of July 12, 1993. Pursuant to this Agreement
each Fund pays Management an administration fee at the annual rate of .50% of
that Fund's average daily net assets. The Agreement provides that if with
respect to any fiscal year of each Fund, its total operating expenses plus its
pro rata portion of its
17
<PAGE>
corresponding Portfolio's operating expenses (including the fees payable to
Management but excluding interest, taxes, brokerage commissions, and
extraordinary expenses) ("Operating Expenses") exceed the most restrictive of
the expense limitations imposed by securities laws of the states in which such
Fund's shares are qualified for sale, the administration fees for that fiscal
year will be reduced by the amount of such excess, provided that Management has
no obligation to reimburse the Fund for any such expenses that exceed the
administration fee. The most restrictive expense limitation to which each Fund
is currently subject is 2 1/2% of the first $30 million of average daily net
assets, 2% of the next $70 million of average daily net assets, and 1 1/2% of
any additional average daily net assets. No reduction in the administration fee
as a result of the state expense limitation was required for the six months
ended April 30, 1995.
In addition, Management has voluntarily undertaken to reimburse each Fund for
its Operating Expenses which exceed, in the aggregate, .75% per annum for Ultra
Short (.65% prior to March 1, 1995), .80% per annum for Limited Maturity (.70%
from May 1, 1994 to February 28, 1995 and .65% prior to May 1, 1994), and .85%
per annum for Government Income (.75% prior to March 1, 1995) of their average
daily net assets. Each undertaking is subject to termination by Management upon
at least sixty (60) days' prior written notice to the Fund. For the six months
ended April 30, 1995, such excess expenses amounted to $57,591, $67,319, and
$56,030, for Ultra Short, Limited Maturity, and Government Income, respectively.
Since inception of the Funds, Management has voluntarily undertaken to pay
certain expenses of each Fund as an advance. Those expenses will be repaid by
the Funds to Management in the future, and are included under the caption
Payable for Fund expenses in the Statements of Assets and Liabilities.
All of the capital stock of Management is owned by individuals who are also
general partners of Neuberger&Berman, L.P. ("Neuberger"), a member firm of The
New York Stock Exchange and the sub-adviser to each Portfolio. Several
individuals who are officers and/or trustees of the Trust are also partners of
Neuberger and/or officers and/or directors of Management.
Each Fund also has a distribution agreement with Management, which receives
no compensation therefor and no commissions for sales or redemptions of shares
of beneficial interest of each Fund.
NOTE C -- INVESTMENT TRANSACTIONS:
During the six months ended April 30, 1995, additions and reductions in each
Fund's investment in its corresponding Portfolio were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
- ------------------------------------------------------------------------------
<S> <C> <C>
ULTRA SHORT $ 870,188 $ 655,556
LIMITED MATURITY 2,081,312 578,210
GOVERNMENT INCOME 25,751 8,608
</TABLE>
18
<PAGE>
NOTE D -- UNAUDITED FINANCIAL INFORMATION:
The financial information included in this interim report is taken from the
records of each Fund without audit by independent auditors. Annual reports
contain audited financial statements.
19
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Ultra Short Bond Trust
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of its corresponding
Portfolio's income and expenses. It should be read in conjunction with its
corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD FROM
APRIL 30, 1995 YEAR ENDED SEPTEMBER 7, 1993(1)
(UNAUDITED) OCTOBER 31, 1994 TO OCTOBER 31, 1993
---------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 9.79 $ 9.97 $ 10.00
---------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .25 .37 .05
Net Gains or Losses on
Securities (both realized
and unrealized) .03 (.18) (.03)
---------------------------------------------------------------------
Total From Investment
Operations .28 .19 .02
---------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.25) (.37) (.05)
---------------------------------------------------------------------
Net Asset Value, End of Period $ 9.82 $ 9.79 $ 9.97
---------------------------------------------------------------------
Total Return+ +2.89%(2) +1.92% +0.17%(2)
---------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period
(in millions) $ 1.5 $ 1.2 $ 0.2
---------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets(3) .69%(4) .65% .65%(4)
---------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets(3) 5.26%(4) 3.86% 2.98%(4)
---------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
20
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Limited Maturity Bond Trust
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of its corresponding
Portfolio's income and expenses. It should be read in conjunction with its
corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD FROM
APRIL 30, 1995 YEAR ENDED AUGUST 30, 1993(1)
(UNAUDITED) OCTOBER 31, 1994 TO OCTOBER 31, 1993
-------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 9.43 $ 9.97 $ 10.00
-------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .29 .54 .08
Net Gains or Losses on
Securities (both realized
and unrealized) .04 (.54) (.03)
-------------------------------------------------------------------
Total From Investment
Operations .33 -- .05
-------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.29) (.54) (.08)
-------------------------------------------------------------------
Net Asset Value, End of Period $ 9.47 $ 9.43 $ 9.97
-------------------------------------------------------------------
Total Return+ +3.54%(2) -0.01% +0.55%(2)
-------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period
(in millions) $ 8.5 $ 6.7 $ 0.1
-------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets(3) .72%(4) .70% .65%(4)
-------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets(3) 6.27%(4) 5.72% 4.99%(4)
-------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
21
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Government Income Trust
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of its corresponding
Portfolio's income and expenses. It should be read in conjunction with its
corresponding Portfolio's Financial Statements and notes thereto.
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD FROM
APRIL 30, 1995 YEAR ENDED SEPTEMBER 13, 1993(1)
(UNAUDITED) OCTOBER 31, 1994 TO OCTOBER 31, 1993
---------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 9.12 $ 9.95 $ 10.00
---------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .32 .62 .08
Net Gains or Losses on
Securities (both realized
and unrealized) .09 (.83) (.05)
---------------------------------------------------------------------
Total From Investment
Operations .41 (.21) .03
---------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.32) (.58) (.08)
Tax return of capital -- (.04) --
---------------------------------------------------------------------
Total Distributions (.32) (.62) (.08)
---------------------------------------------------------------------
Net Asset Value, End of Period $ 9.21 $ 9.12 $ 9.95
---------------------------------------------------------------------
Total Return+ +4.59%(2) -2.16% +0.28%(2)
---------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period
(in millions) $ 0.1 $ 0.1 $ 0.1
---------------------------------------------------------------------
Ratio of Expenses to
Average Net Assets(3) .79%(4) .75% .75%(4)
---------------------------------------------------------------------
Ratio of Net Investment
Income to Average Net
Assets(3) 7.18%(4) 6.46% 6.02%(4)
---------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
22
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger&Berman April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Income Trust
1) The date investment operations commenced.
2) Not annualized.
3) After reimbursement of expenses by the administrator as described in Note B
of Notes to Financial Statements. Had the administrator not undertaken such
action the annualized ratios to average net assets would have been:
<TABLE>
<CAPTION>
ULTRA SHORT
SIX MONTHS ENDED PERIOD FROM
APRIL 30, 1995 YEAR ENDED OCTOBER SEPTEMBER 7, 1993
(UNAUDITED) 31, 1994 TO OCTOBER 31, 1993
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expenses 2.50% 2.50% 2.50%
Net Investment Income 3.45% 2.01% 1.13%
</TABLE>
<TABLE>
<CAPTION>
LIMITED MATURITY
SIX MONTHS ENDED PERIOD FROM AUGUST
APRIL 30, 1995 YEAR ENDED OCTOBER 30, 1993 TO OCTOBER
(UNAUDITED) 31, 1994 31, 1993
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expenses 2.50% 2.50% 2.50%
Net Investment Income 4.49% 3.92% 3.14%
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT INCOME
SIX MONTHS ENDED PERIOD FROM
APRIL 30, 1995 YEAR ENDED OCTOBER SEPTEMBER 13, 1993
(UNAUDITED) 31, 1994 TO OCTOBER 31, 1993
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expenses 2.50% 2.50% 2.50%
Net Investment Income 5.47% 4.71% 4.27%
</TABLE>
4) Annualized.
+ 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 period,
and assumes dividends and capital gain distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Investment returns and principal may fluctuate and shares when
redeemed may be worth more or less than original cost. Total return would be
lower if Management had not reimbursed certain expenses.
23
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- ----------------------------------------------------------------------
Ultra Short Bond Portfolio
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
- ------------ ------- ------- ------------
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES (3.4%)
$ 3,000,000 U.S. Treasury Notes, 7 1/2%, due 1/31/97 (COST $3,014,620) TSY TSY $ 3,045,450
------------
U.S. GOVERNMENT AGENCY SECURITIES (23.4%)
1,960,000 Federal Home Loan Mortgage Corp., Discount Notes, 5.85%, due 5/1/95 AGY AGY 1,959,040
4,660,000 Federal Farm Credit Bank, Discount Notes, 5.83%, due 5/3/95 AGY AGY 4,656,225
2,000,000 Federal National Mortgage Association, Medium-Term Notes, 6.37%, due
11/14/95 AGY AGY 2,003,660
4,000,000 Student Loan Marketing Association, Floating Rate Notes, 5.48%, due
7/1/96 AGY AGY 3,983,880
1,300,000 Federal Home Loan Mortgage Corp., Notes, 7.555%, due 2/10/97 AGY AGY 1,313,351
3,000,000 Federal National Mortgage Association, Notes, 7 1/2%, due 2/12/97 AGY AGY 3,014,280
250,000 Federal Home Loan Bank, Floating Rate Notes, 4.547%, due 1/29/98 AGY AGY 238,750
500,000 Federal Home Loan Bank, Floating Rate Notes, 4.572%, due 2/25/98 AGY AGY 477,250
3,000,000 Federal Farm Credit Bank, Medium-Term Notes, 7.20%, due 7/1/99 AGY AGY 2,964,375
------------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES (COST $20,632,244) 20,610,811
------------
MORTGAGE-BACKED SECURITIES (7.5%)
1,443,423 Citicorp Mortgage Securities, Inc. REMIC CMO, Ser. 1993-8, Class A-1,
6 1/2%, due 5/25/04 Aaa AAA 1,423,070
1,823,542 Greentree Financial Corp. CMO, Ser. 1994-1, Class A-1, 5.60%, due
4/15/19 Aa2 AA 1,784,153
FEDERAL HOME LOAN MORTGAGE CORP.
194,822 REMIC CMO, Ser. 1078-GA, 6 1/2%, due 2/15/96 AGY AGY 194,382
723,812 REMIC ARM CMO, Ser. 1270-F, 6.475%, due 5/15/97 AGY AGY 722,487
</TABLE>
24
<PAGE>
April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Ultra Short Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
- ------------ ------- ------- ------------
<C> <S> <C> <C> <C>
$ 88,491 Mortgage Participation Certificates, 11 1/2%, due 2/1/00-5/1/00 AGY AGY $ 94,300
157,507 Mortgage Participation Certificates, 10 1/2%, due 6/1/00-11/1/00 AGY AGY 166,410
521,931 ARM Certificates, 6 7/8%, due 12/1/16 AGY AGY 524,625
712,090 ARM Certificates, 7 1/8%, due 3/1/17 AGY AGY 708,978
FEDERAL NATIONAL MORTGAGE ASSOCIATION
975,842 REMIC Trust, Ser. 1991-30, Class 30-E, 8 1/2%, due 3/25/09 AGY AGY 976,974
------------
TOTAL MORTGAGE-BACKED SECURITIES (COST $6,662,092) 6,595,379
------------
ASSET-BACKED SECURITIES (8.6%)
126,840 General Motors Acceptance Corp. Grantor Trust, Automobile Loan
Pass-Through Certificates, Ser. 1991-C, Class A, 5.70%, due 12/15/96 Aaa AAA 126,282
223,505 General Motors Acceptance Corp. Grantor Trust, Automobile Loan
Pass-Through Certificates, Ser. 1992-A, 5.05%, due 1/15/97 Aaa AAA 223,505
1,520,533 Nissan Auto Receivables Grantor Trust, Automobile Loan Pass-Through
Certificates, Ser. 1992-A, Class A, 5.30%, due 5/15/97 Aaa AAA 1,509,129
397,827 General Motors Acceptance Corp. Grantor Trust, Automobile Loan
Pass-Through Certificates, Ser. 1992-F, Class A, 4 1/2%, due 9/15/97 Aaa AAA 392,377
431,509 USAA Auto Loan Grantor Trust, Automobile Loan Pass-Through
Certificates, Ser. 1993-1, 3.90%, due 3/15/99 Aaa AAA 423,656
2,888,177 General Motors Acceptance Corp. Grantor Trust, Automobile Loan
Pass-Through Certificates, Ser. 1995-A, 7.15%, due 3/15/00 Aaa AAA 2,902,618
2,000,000 World Omni Automobile Lease Securitization Trust, Automobile Lease
Certificates, Ser. 1994-A, Class A, 6.45%, due 9/25/00 Aaa AAA 1,981,200
------------
TOTAL ASSET-BACKED SECURITIES (COST $7,567,691) 7,558,767
------------
</TABLE>
25
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- ----------------------------------------------------------------------
Ultra Short Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
- ------------ ------- ------- ------------
<C> <S> <C> <C> <C>
BANKS & FINANCIAL INSTITUTIONS (24.9%)
$ 5,000,000 Bank One, Chicago, N.A., Bank Notes, 5.40%, due 7/27/95 P-1 A-1+ $ 4,990,700
3,000,000 Societe Generale, Yankee C.D., 6.40%, due 9/11/95 P-1 A-1+ 3,000,930
2,000,000 PNC Bank, National Association, Short-Term Bank Notes, 6.39%, due
10/10/95 P-1 A-1 1,999,420
2,000,000 Citibank Canada, Domestic C.D., 7.62%, due 1/9/96 P-1 A-1 2,011,960
3,000,000 Westdeutsche Landesbank Girozentrale, Medium-Term Notes, 6 3/4%, due
3/13/96 Aa2 AA 3,002,100
3,000,000 Trust Company Bank, Atlanta, Georgia, Medium-Term Bank Notes, 6 1/2%,
due 3/21/96 Aa2 AA 3,002,160
4,000,000 Deutsche Bank A.G., Yankee C.D., 7.498%, due 1/21/97 Aaa AAA 4,034,160
------------
TOTAL BANKS & FINANCIAL INSTITUTIONS (COST $22,036,545) 22,041,430
------------
CORPORATE DEBT SECURITIES (14.2%)
4,000,000 Hanson Overseas B.V., Yankee Guaranteed Senior Notes, 5 1/2%, due
1/15/96 P-1 A-1 3,970,960
4,000,000 USAA Capital Corp., Medium-Term Notes, 4.70%, due 3/4/96 Aaa AAA 3,927,200
1,000,000 British Telecom Finance B.V., Guaranteed Bonds, 7 5/8%, due 9/30/96 Aaa AAA 1,011,290
3,600,000 Toyota Motor Credit Corp., Medium-Term Notes, 6.09%, due 6/13/97 Aaa AAA 3,591,720
------------
TOTAL CORPORATE DEBT SECURITIES (COST $12,573,499) 12,501,170
------------
CORPORATE COMMERCIAL PAPER (16.9%)
695,000 American Express Credit Corp., 5.96%, due 5/1/95 P-1 A-1 694,770(2)
3,315,000 Cargill, Inc., 5.85%, due 5/2/95 P-1 A-1+ 3,313,384(2)
1,000,000 Asset Securitization Cooperative Corp., 5.97%, due 5/15/95 P-1 A-1+ 997,347(2)
370,000 Corporate Asset Funding Co., Inc., 5.90%, due 5/15/95 P-1 A-1+ 368,945
</TABLE>
26
<PAGE>
April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Ultra Short Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
- ------------ ------- ------- ------------
<C> <S> <C> <C> <C>
$ 3,000,000 Swedish Export Credit Corp., 6.27%, due 5/16/95 P-1 A-1+ $ 2,990,970
630,000 Snap-On Inc., 5.94%, due 5/17/95 P-1 A-1+ 628,129(2)
2,000,000 General Electric Capital Corp., 5.94%, due 5/30/95 P-1 A-1+ 1,989,770(2)
2,000,000 ENEL, Inc., 6 1/2%, due 7/13/95 P-1 A-1+ 1,969,660
2,000,000 Hitachi America, Ltd., 6.16%, due 9/14/95 P-1 A-1+ 1,953,040
------------
TOTAL CORPORATE COMMERCIAL PAPER (COST $14,909,237) 14,906,015
------------
TOTAL INVESTMENTS (98.9%) (COST $87,395,928) 87,259,022(3)
Cash, receivables and other assets, less liabilities (1.1%) 999,884
------------
TOTAL NET ASSETS (100.0%) $ 88,258,906
------------
</TABLE>
27
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
------------ ------- ------- ---------------
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES (17.3%)
$ 925,000 U.S. Treasury Notes, 8 1/2%, due 8/15/95 TSY TSY $ 931,706
1,500,000 U.S. Treasury Notes, 6 3/4%, due 5/31/97 TSY TSY 1,503,900
9,950,000 U.S. Treasury Notes, 6 1/2%, due 8/15/97 TSY TSY 9,919,553
8,000,000 U.S. Treasury Notes, 7 3/8%, due 11/15/97 TSY TSY 8,123,760
11,660,000 U.S. Treasury Notes, 7 1/4%, due 2/15/98 TSY TSY 11,818,926
20,365,000 U.S. Treasury Notes, 7 3/4%, due 1/31/00 TSY TSY 21,056,392
---------------
TOTAL U.S. TREASURY SECURITIES (COST $52,629,738) 53,354,237
---------------
U.S. GOVERNMENT AGENCY SECURITIES (9.5%)
3,745,000 Federal Home Loan Mortgage Corp., Discount Notes, 5.98%, due 5/5/95 AGY AGY 3,740,731
6,720,000 Federal Home Loan Mortgage Corp., Discount Notes, 5.87%, due 5/19/95 AGY AGY 6,697,085
135,000 Federal National Mortgage Association, Discount Notes, 5.86%, due
5/19/95 AGY AGY 134,538
425,000 Federal Home Loan Bank, Discount Notes, 5.87%, due 5/22/95 AGY AGY 423,334
18,110,000 Federal Home Loan Mortgage Corp., Discount Notes, 5.85%, due 5/22/95 AGY AGY 18,039,552
165,000 Federal National Mortgage Association, Discount Notes, 5.87%, due
5/30/95 AGY AGY 164,137
---------------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES (COST $29,203,799) 29,199,377
---------------
MORTGAGE-BACKED SECURITIES (11.9%)
FEDERAL HOME LOAN MORTGAGE CORP.
10,000,000 Gold Balloon Payment Certificates, 7 1/2%, TBA, 5 Year Maturity AGY AGY 10,059,375
310,485 Mortgage Participation Certificates, 10 1/2%, due 10/1/00-12/1/00 AGY AGY 328,630
996,338 Mortgage Participation Certificates, 8 1/2%, due 10/1/01 AGY AGY 1,012,220
</TABLE>
28
<PAGE>
April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
------------ ------- ------- ---------------
<C> <S> <C> <C> <C>
$ 330,604 ARM Certificates, 7%, due 1/1/17 AGY AGY $ 332,981
230,855 ARM Certificates, 7 1/8%, due 2/1/17 AGY AGY 232,586
949,453 ARM Certificates, 7 1/8%, due 3/1/17 AGY AGY 945,304
505,415 ARM Certificates, 7 1/4%, due 10/1/17 AGY AGY 514,891
FEDERAL NATIONAL MORTGAGE ASSOCIATION
453,462 Balloon Payment, Certificates, 9%, due 3/1/97-8/1/98 AGY AGY 465,932
433,929 Balloon Payment, Certificates, 8 1/2%, due 9/1/97-11/1/98 AGY AGY 444,912
9,824,649 Balloon Payment, Certificates, 8%, due 9/1/01 AGY AGY 9,993,535
1,504,580 Mortgage Participation Certificates, 7%, due 9/1/03 AGY AGY 1,482,598
1,184,481 REMIC Floating Rate CMO, Ser. 1992-59F, 6.49375%, due 8/25/06 AGY AGY 1,186,755
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
262,686 Pass-Through Certificates, 12%, due 5/15/12-3/15/15 AGY AGY 295,768
6,639,376 Pass-Through Certificates, 10%, due 9/15/15-6/15/20 AGY AGY 7,141,512
1,940,847 Pass-Through Certificates, 9 1/2%, due 8/15/09-4/15/22 AGY AGY 2,043,964
---------------
TOTAL MORTGAGE-BACKED SECURITIES (COST $36,260,859) 36,480,963
---------------
ASSET-BACKED SECURITIES (15.4%)
631,047 General Motors Acceptance Corp. Grantor Trust, Automobile Loan
Pass-Through Certificates, Ser. 1991-C, 5.70%, due 12/15/96 Aaa AAA 628,271
617,740 General Motors Acceptance Corp. Grantor Trust, Automobile Loan
Pass-Through Certificates, Ser. 1992-D, 5.55%, due 5/15/97 Aaa AAA 614,466
935,024 Nissan Auto Receivables Grantor Trust, Automobile Loan Pass-Through
Certificates, Ser. 1992-B, 4.30%, due 9/15/97 Aaa AAA 918,287
</TABLE>
29
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
------------ ------- ------- ---------------
<C> <S> <C> <C> <C>
$ 867,788 World Omni Financial Corp. Grantor Trust, Automobile Loan Pass-Through
Certificates, Ser. 1992-A, 4 3/4%, due 1/15/98 Aaa AAA $ 853,730
5,000,000 Capital Auto Receivables Asset Trust, Ser. 1993-1, Class A-7, 5.35%,
due 2/17/98 Aaa AAA 4,944,000
1,330,662 Volvo Grantor Trust, Automobile Loan Pass-Through Certificates, Ser.
1992-A, 4.65%, due 6/15/98 Aaa AAA 1,312,032
5,000,000 MBNA Master Credit Card Trust, Ser. 1993-2A, Floating Rate
Certificates, 6.275%, due 7/15/98 Aaa AAA 5,001,500
3,825,822 Daimler-Benz Auto Grantor Trust, Ser. 1993-A, 3.90%, due 10/15/98 Aaa AAA 3,751,601
3,000,000 Ford Credit Master Trust, Automobile Loan Certificates, Ser. 1992-1, 6
7/8%, due 1/15/99 Aaa AAA 3,000,900
5,000,000 Ford Credit Auto Loan Master Trust, Automobile Loan Certificates, Ser.
1992-2, 7 3/8%, due 4/15/99 Aaa AAA 5,037,500
4,285,069 Case Equipment Loan Trust, Ser. 1993-B, Class A-1, 4.30%, due 5/15/99 Aaa AAA 4,189,940
4,591,229 General Motors Acceptance Corp. Grantor Trust, Automobile Loan
Pass-Through Certificates, Ser. 1994-A, Class A, 6.30%, due 6/15/99 Aaa AAA 4,564,141
7,601,170 Nissan Auto Receivables Grantor Trust, Automobile Loan Pass-Through
Certificates, Ser. 1994-A, Class A, 6.45%, due 9/15/99 Aaa AAA 7,556,324
5,000,000 MBNA Master Credit Card Trust II, Ser. 1994-D, Class A, Floating Rate
Certificates, 6.37%, due 3/15/00 Aaa AAA 5,000,000
---------------
TOTAL ASSET-BACKED SECURITIES (COST $47,785,832) 47,372,692
---------------
BANKS & FINANCIAL INSTITUTIONS (23.3%)
10,000,000 Wells Fargo & Co., Floating Rate, Medium-Term Notes, 6.4375%, due
5/1/95 A2 A- 10,000,000
</TABLE>
30
<PAGE>
April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
------------ ------- ------- ---------------
<C> <S> <C> <C> <C>
$ 7,000,000 Shawmut Bank, N.A., Bank Notes, 5 1/2%, due 6/30/95 A2 BBB+ $ 6,992,440
5,000,000 Kansallis-Osake-Pankki, Floating Rate, Yankee C.D., 7.0625%, due
5/3/96 A3 BBB 5,025,000
5,000,000 Union Bank of Finland Ltd., Global Notes, 5 1/4%, due 6/15/96 A3 BBB 4,913,800
5,000,000 State Bank of New South Wales, Eurodollar Notes, 8 1/2%, due 7/1/96 Aa2 AA 5,087,450
10,000,000 Society National Bank, Bank Notes, 6 7/8%, due 10/15/96 Aa3 A 10,008,200
5,000,000 Salomon Inc., Ser. D, Medium-Term Notes, 8.62%, due 2/17/97 A3 BBB+ 5,082,500
5,000,000 BankAmerica Corp., Medium-Term Notes, 6 7/8%, due 11/20/97 A2 A 4,943,900
10,000,000 Chemical Banking Corp., Corporate Notes, 6 5/8%, due 1/15/98 A2 A 9,856,400
5,000,000 Salomon Inc., Ser. C, Medium-Term Notes, 6 3/4%, due 2/15/00 A3 BBB+ 4,699,100
5,000,000 Skandinaviska Enskilda Banken, Yankee Notes, 8.45%, due 5/15/02 A3 BBB+ 5,136,100
---------------
TOTAL BANKS & FINANCIAL INSTITUTIONS (COST $73,201,575) 71,744,890
---------------
CORPORATE DEBT SECURITIES (24.7%)
5,000,000 Mobil Corp., Corporate Notes, 6 3/4%, due 10/1/95 Aa2 AA 5,009,650
5,000,000 International Paper Co., Notes, 9 5/8%, 10/15/95 A3 A- 5,074,200
3,000,000 General Electric Capital Corp., Medium-Term Notes, 8.67%, due 12/15/95 Aaa AAA 3,038,820
5,000,000 Hanson Overseas B.V., Yankee Guaranteed Senior Notes, 5 1/2%, due
1/15/96 A1 A+ 4,963,700
10,000,000 Chrysler Financial Corp., Corporate Notes, 6%, due 4/15/96 A3 A- 9,909,600
</TABLE>
31
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Limited Maturity Bond Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
------------ ------- ------- ---------------
<C> <S> <C> <C> <C>
$ 10,000,000 McDonnell-Douglas Corp., Floating Rate, Medium-Term Notes, 6.4944%,
due 5/28/96 Baa3 BBB $ 9,968,500
8,000,000 Discover Credit Corp., Medium-Term Notes, 7.97%, due 5/7/97 A2 BBB 8,147,680
9,000,000 P.H. Glatfelter Co., Corporate Notes, 5 7/8%, due 3/1/98 Baa2 BBB+ 8,623,080
3,000,000 Ford Motor Credit Co., Medium-Term Notes, 9.10%, due 5/4/98 A1 A+ 3,157,380
7,000,000 Boise Cascade Corp., Corporate Notes, 9 5/8%, due 7/15/98 Baa3 BB+ 7,036,050
5,600,000 Tenneco Inc., Medium-Term Notes, 10%, due 8/1/98 Baa2 BBB- 6,017,984
5,000,000 Rhone Poulenc S.A., Yankee Bonds, 7 3/4%, due 1/15/02 A3 BBB+ 5,002,100
---------------
TOTAL CORPORATE DEBT SECURITIES (COST $78,339,759) 75,948,744
---------------
TOTAL INVESTMENTS (102.1%) (COST $317,421,562) 314,100,903(3)
Liabilities, less cash, receivables and other assets [(2.1%)] (6,316,047)
---------------
TOTAL NET ASSETS (100.0%) $ 307,784,856
---------------
</TABLE>
32
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Government Income Portfolio
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
- ------------ ------- ------- ----------------
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES (6.3%)
$ 250,000 U.S. Treasury Notes, 8 7/8%, due 2/15/96 TSY TSY $ 254,990
400,000 U.S. Treasury Notes, 6 3/4%, due 6/30/99 TSY TSY 398,552
----------------
TOTAL U.S. TREASURY SECURITIES (COST $663,594) 653,542
----------------
U.S. GOVERNMENT AGENCY SECURITIES (3.6%)
25,000 Federal National Mortgage Association, Discount Notes, 5.84%, due
5/23/95 AGY AGY 24,898
50,000 Federal Farm Credit Bank, Discount Notes, 5.88%, due 6/9/95 AGY AGY 49,658
300,000 Federal Home Loan Mortgage Corp., Discount Notes, 5.86-5.97%, due
5/9/95-6/13/95 AGY AGY 298,237
----------------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES (COST $372,847) 372,793
----------------
MORTGAGE-BACKED SECURITIES (92.4%)
500,000 Kearney Street Real Estate Co., L.P. Secured Pay-Through Notes REMIC
CMO, Class C, 7.70%, due 7/15/01 BBB(4) BBB 497,900
144,342 Citicorp Mortgage Securities, Inc. REMIC CMO, Ser. 1993-8, Class A-1,
6 1/2%, due 5/25/04 Aaa AAA 142,307
250,000 Nomura Asset Securities Corp. Pass-Through Certificates REMIC CMO,
Ser. 1995 MDIII, Class A-4, 9.0146%, due 3/4/20 BBB(4) BBB 254,218
234,304 Capstead Securities Corp. REMIC CMO, Ser. 1992-10, 8 1/4%, due 7/25/23 AAA(4) AAA 236,647
FEDERAL HOME LOAN MORTGAGE CORP.
35,440 Multiclass Mortgage Participation Certificates Inverse Floater, Ser.
1139S, 13.04%, due 9/15/96 AGY AGY 35,506
110,625 Multiclass Mortgage Participation Certificates Inverse Floater, Ser.
1549L, 5.9688%, due 7/15/08 AGY AGY 54,439
1,000,000 REMIC CMO, Ser. 47F, 10%, due 6/15/20 AGY AGY 1,085,000
230,853 REMIC CMO, Ser. 1658, Class AG, 10%, due 4/15/21 AGY AGY 246,464
</TABLE>
33
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Government Income Portfolio (Cont'd)
<TABLE>
<CAPTION>
PRINCIPAL RATING
AMOUNT MOODY'S S&P VALUE(1)
- ------------ ------- ------- ----------------
<C> <S> <C> <C> <C>
$ 600,000 Gold Payment Certificates, 8 1/2%, TBA, 30 Year Maturity AGY AGY $ 608,813
FEDERAL NATIONAL MORTGAGE ASSOCIATION
3,622,285 REMIC CMO, Interest Only Strip, Ser. 1994 M1, Yielding 7%, due
10/25/03 AGY AGY 178,579
721,137 Balloon Payment, Certificates, 8%, due 1/1/10 AGY AGY 730,829
469,812 Mortgage Participation Certificates, 9 1/2%, due 7/1/12 AGY AGY 490,953
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
453,525 Pass-Through Certificates, 8.20%, due 1/15/19 AGY AGY 457,493
1,517,716 Pass-Through Certificates, 8 1/2%, due 3/15/22 AGY AGY 1,549,967
1,981,939 Pass-Through Certificates, 8%, due 2/15/23 AGY AGY 1,983,188
350,000 Pass-Through Certificates, 7%, TBA, 30 Year Maturity AGY AGY 362,578
RESOLUTION TRUST CORP.
192,165 Commercial Mortgage Pass-Through Certificates REMIC CMO, Ser.
1992-CHF, Class E, 8 1/4%, due 12/25/20 BBB(4) BB 177,166
455,942 Commercial Mortgage Pass-Through Certificates REMIC CMO ARM, Ser.
1992-C6, Class A-2, 7 1/8%, due 7/25/24 Aaa AAA(5) 460,786
----------------
TOTAL MORTGAGE-BACKED SECURITIES (COST $9,641,941) 9,552,833
----------------
CORPORATE DEBT SECURITIES (2.1%)
220,000 Boise Cascade Corp., Corporate Notes, 9 5/8%, due 7/15/98 (COST
$232,234) Baa3 BB+ 221,133
----------------
TOTAL INVESTMENTS (104.4%) (COST $10,910,616) 10,800,301(3)
Liabilities, less cash, receivables and other assets [(4.4%)] (459,057)
----------------
TOTAL NET ASSETS (100.0%) $ 10,341,244
----------------
</TABLE>
34
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Income Managers Trust
1) Investment securities of the Portfolio are valued daily by obtaining bid
price quotations from independent pricing services on selected securities
available in each service's data base. For all other securities requiring
daily quotations, bid prices are obtained from principal market makers in
those securities. Short-term investments with less than sixty days until
maturity at the time of purchase are valued at cost which, when combined with
interest earned, approximates market value.
2) At cost, which approximates market value.
3) At April 30, 1995, selected Portfolio information on a Federal income tax
basis was as follows:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION DEPRECIATION
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Neuberger&Berman
ULTRA SHORT BOND Portfolio $ 87,395,928 $ 121,112 $ 258,018 $ 136,906
Neuberger&Berman
LIMITED MATURITY BOND Portfolio 317,421,562 1,397,029 4,717,688 3,320,659
Neuberger&Berman
GOVERNMENT INCOME Portfolio 10,910,616 92,180 202,495 110,315
</TABLE>
4) Not rated by Moody's; the rating shown is from Fitch Investors Services, Inc.
5) Not rated by S&P; the rating shown is from Duff & Phelps, Inc.
SEE NOTES TO FINANCIAL STATEMENTS
35
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
LIMITED
ULTRA SHORT MATURITY GOVERNMENT
BOND BOND INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at value* (Note
A) -- see Schedule of Investments $ 87,259,022 $314,100,903 $ 10,800,301
Cash 14,235 3,570 33,351
Deferred organization costs (Note A) 6,082 16,827 9,931
Interest receivable 1,009,412 3,756,079 76,453
Prepaid expenses and other assets 3,656 16,568 2,203
Receivable for securities sold 12,849 50,578 410,862
-------------------------------------------
88,305,256 317,944,525 11,333,101
-------------------------------------------
LIABILITIES
Payable for securities purchased -- 10,053,125 971,812
Payable to investment manager (Note B) 17,072 59,065 2,708
Accrued expenses 29,278 47,479 17,337
-------------------------------------------
46,350 10,159,669 991,857
-------------------------------------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 88,258,906 $307,784,856 $ 10,341,244
-------------------------------------------
NET ASSETS consist of:
Paid-in capital $ 88,395,812 $311,105,515 $ 10,451,559
Net unrealized depreciation in value of
investments (136,906 ) (3,320,659 ) (110,315 )
-------------------------------------------
NET ASSETS $ 88,258,906 $307,784,856 $ 10,341,244
-------------------------------------------
*Cost of investments $ 87,395,928 $317,421,562 $ 10,910,616
-------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
36
<PAGE>
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
LIMITED
ULTRA SHORT MATURITY GOVERNMENT
BOND BOND INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income $2,660,795 $10,377,509 $ 393,545
-------------------------------------
Expenses:
Investment management fee (Note B) 113,786 374,376 17,083
Accounting fees 5,000 5,000 5,000
Amortization of deferred organization and
initial offering expenses (Note A) 934 2,595 1,525
Auditing fees 11,279 12,260 10,600
Custodian fees 35,074 85,934 9,049
Insurance expense 2,586 7,760 252
Legal fees 4,217 4,906 3,306
Trustees' fees and expenses 7,629 20,335 2,781
Miscellaneous 43 138 6
-------------------------------------
Total expenses 180,548 513,304 49,602
-------------------------------------
Net investment income 2,480,247 9,864,205 343,943
-------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FOREIGN CURRENCY TRANSACTIONS, AND
FINANCIAL FUTURES CONTRACTS
Net realized loss on investments sold (289,237 ) (4,067,636 ) (180,558 )
Net realized loss on foreign currency
transactions (Note A) -- -- (118,562 )
Net realized loss on financial futures
contracts (Note A) -- -- (1,779 )
Change in net unrealized depreciation of
investments 518,033 5,043,765 386,853
Change in net unrealized depreciation of
financial futures contracts (Note A) -- -- 1,187
-------------------------------------
Net gain on investments, foreign currency
transactions, and financial futures
contracts 228,796 976,129 87,141
-------------------------------------
Net increase in net assets resulting from
operations $2,709,043 $10,840,334 $ 431,084
-------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
37
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
ULTRA SHORT
BOND PORTFOLIO
Six Months
Ended Year
April 30, Ended
1995 October 31,
(UNAUDITED) 1994
--------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 2,480,247 $ 4,274,305
Net realized loss on investments
sold, foreign currency
transactions, and financial
futures contracts (289,237) (1,368,777)
Change in net unrealized
appreciation (depreciation) of
investments and financial futures
contracts 518,033 (608,217)
--------------------------
Net increase (decrease) in net
assets resulting from operations 2,709,043 2,297,311
--------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 9,414,572 34,813,829
Reductions (25,840,411) (39,468,962)
--------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests (16,425,839) (4,655,133)
--------------------------
NET INCREASE (DECREASE) IN NET ASSETS (13,716,796) (2,357,822)
NET ASSETS:
Beginning of period 101,975,702 104,333,524
--------------------------
End of period $ 88,258,906 $101,975,702
--------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
38
<PAGE>
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
LIMITED MATURITY GOVERNMENT
BOND PORTFOLIO INCOME PORTFOLIO
Six Months Six Months
Ended Year Ended Year
April 30, Ended April 30, Ended
1995 October 31, 1995 October 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 9,864,205 $ 19,589,439 $ 343,943 $ 711,778
Net realized loss on investments
sold, foreign currency
transactions, and financial
futures contracts (4,067,636) (4,909,960) (300,899) (528,076)
Change in net unrealized
appreciation (depreciation) of
investments and financial futures
contracts 5,043,765 (13,672,095) 388,040 (494,021)
------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations 10,840,334 1,007,384 431,084 (310,319)
------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 13,366,467 58,828,899 1,639,172 11,131,499
Reductions (32,546,424) (101,591,060) (2,842,504) (7,841,890)
------------------------------------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests (19,179,957) (42,762,161) (1,203,332) 3,289,609
------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (8,339,623) (41,754,777) (772,248) 2,979,290
NET ASSETS:
Beginning of period 316,124,479 357,879,256 11,113,492 8,134,202
------------------------------------------------------
End of period $307,784,856 $316,124,479 $10,341,244 $ 11,113,492
------------------------------------------------------
</TABLE>
39
<PAGE>
(This page has been left blank intentionally.)
40
<PAGE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1995 (Unaudited)
- ----------------------------------------------------------------------
Income Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Ultra Short Bond Portfolio ("Ultra Short"),
Neuberger&Berman Limited Maturity Bond Portfolio ("Limited Maturity"), and
Neuberger&Berman Government Income Portfolio ("Government Income")
(collectively, the "Portfolios") are separate series of Income Managers
Trust ("Managers Trust"), a New York common law trust organized as of
December 1, 1992. Managers Trust is registered as an open-end management
investment company under the Investment Company Act of 1940. Other regulated
investment companies sponsored by Neuberger&Berman Management Incorporated
("Management"), whose financial statements are not presented herein, also
invest in these and other Portfolios of Managers Trust.
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: Investments are valued as indicated in the notes
following the Portfolios' schedule of investments.
3) FOREIGN CURRENCY TRANSLATION: The accounting records of the Portfolios are
maintained in U.S. dollars. Foreign currency amounts are translated into
U.S. dollars at the current rate of exchange of such currency against the
U.S. dollar to determine the value of investments, other assets and
liabilities. Purchases and sales of securities, and income and expenses are
translated into U.S. dollars at the prevailing rate of exchange on the
respective dates of such transactions.
4) FINANCIAL FUTURES CONTRACTS: Ultra Short, Limited Maturity, and Government
Income may buy and sell financial futures contracts to hedge against the
effects of fluctuations in interest rates. At the time the Portfolio enters
into a financial futures contract, it is required to deposit with its
custodian a specified amount of cash or U.S. government 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 Portfolio 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
41
<PAGE>
closed out prior to delivery by offsetting purchases or sales of matching
financial futures contracts. When the contracts are closed, the Portfolio
recognizes a gain or loss. Risks of entering into futures contracts include
the possibility that there may be an illiquid market and/or that 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 Portfolio may cause the Portfolio 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 Portfolio. Also, the Portfolio's losses on its
transactions involving futures contracts may be deferred rather than being
taken into account currently in calculating such Portfolio's taxable income.
During the six months ended April 30, 1995, Government Income entered into
financial futures contracts. There were no open positions in financial
futures contracts at April 30, 1995.
5) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Interest income, including accretion of
discount, is recorded on the accrual basis. Realized gains and losses from
securities transactions are recorded on the basis of identified cost.
6) FEDERAL INCOME TAXES: Managers Trust intends to comply with the requirements
of the Internal Revenue Code of 1986, as amended. Each Portfolio 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 Portfolio
will be treated as a partnership for Federal income tax purposes and is
therefore not subject to Federal income tax.
7) ORGANIZATION EXPENSES: Expenses incurred by each Portfolio in connection
with its organization are being amortized by each Portfolio on a
straight-line basis over a five-year period. At April 30, 1995, the
unamortized balance of such expenses amounted to $6,082, $16,827, and $9,931
for Ultra Short, Limited Maturity, and Government Income, respectively.
8) EXPENSE ALLOCATION: The Portfolios bear all costs of operations. Expenses
incurred with respect to any two or more Portfolios are allocated in
proportion to the net assets of such Portfolios, except where another more
appropriate allocation of expenses to each Portfolio can otherwise be made
fairly. Expenses directly attributable to a Portfolio are charged to that
Portfolio.
42
<PAGE>
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
Each Portfolio retains Management as its investment manager under a
Management Agreement dated as of July 2, 1993. For such investment management
services, each Portfolio (except Government Income) pays Management a fee at the
annual rate of .25% of the first $500 million of that Portfolio's average daily
net assets, .225% of the next $500 million, .20% of the next $500 million, .175%
of the next $500 million, and .15% of average daily net assets in excess of $2
billion. Government Income pays Management a fee for investment management
services at the annual rate of .35% of the first $500 million of that
Portfolio's average daily net assets, .325% of the next $500 million, .30% of
the next $500 million, .275% of the next $500 million, and .25% of average daily
net assets in excess of $2 billion.
All of the capital stock of Management is owned by individuals who are also
general partners of Neuberger&Berman, L.P. ("Neuberger"), a member firm of The
New York Stock Exchange and the sub-adviser to each Portfolio. Several
individuals who are officers and/or trustees of Managers Trust are also partners
of Neuberger and/or officers and/or directors of Management.
NOTE C -- SECURITIES TRANSACTIONS:
During the six months ended April 30, 1995, there were purchase and sale
transactions (excluding short-term securities and financial futures contracts)
as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- -------------------------------------------------------------------------------
<S> <C> <C>
ULTRA SHORT $44,968,172 $56,369,616
LIMITED MATURITY 94,665,757 98,595,902
GOVERNMENT INCOME 11,731,893 13,632,133
</TABLE>
NOTE D -- UNAUDITED FINANCIAL INFORMATION:
The financial information included in this interim report is taken from the
records of each Portfolio without audit by independent auditors. Annual reports
contain audited financial statements.
43
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Income Managers Trust
<TABLE>
<CAPTION>
ULTRA SHORT LIMITED MATURITY GOVERNMENT
BOND PORTFOLIO BOND PORTFOLIO INCOME PORTFOLIO
Period Period Period
from from from
July 2, July 2, July 6,
1993 1993 1993
Six (Commencement Six (Commencement Six (Commencement
Months of Months of Months of
Ended Year Operations) Ended Year Operations) Ended Year Operations)
April Ended to April Ended to April Ended to
30, October October 30, October October 30, October October
1995 31, 31, 1995 31, 31, 1995 31, 31,
(UNAUDITED) 1994 1993 (UNAUDITED) 1994 1993 (UNAUDITED) 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE
NET ASSETS:
Expenses .40%(1) .38% .40%(1) .34%(1) .34% .33%(1) 1.02%(1) .93% 2.85%(1)
------------------------------------------------------------------------------------------------
Net Investment Income 5.45%(1) 3.98% 4.00%(1) 6.59%(1) 5.86% 5.53%(1) 7.05%(1) 6.34% 3.98%(1)
------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 85% 94% 46% 35% 102% 71% 111% 263% 119%
------------------------------------------------------------------------------------------------
Net Assets, End of Period
(in millions) $88.3 $102.0 $104.3 $307.8 $316.1 $357.9 $10.3 $11.1 $8.1
------------------------------------------------------------------------------------------------
</TABLE>
1) Annualized.
44
<PAGE>
DIRECTORY
INVESTMENT MANAGER, ADMINISTRATOR,
AND DISTRIBUTOR
Neuberger&Berman Management Incorporated
605 Third Avenue 2nd Floor
New York, NY 10158-0006
800-877-9700
Institutional Services 800-366-6264
SUB-ADVISER
Neuberger&Berman, L.P.
605 Third Avenue
New York, NY 10158-3698
CUSTODIAN AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Address correspondence to:
Neuberger&Berman Funds
Institutional Services
605 Third Avenue 2nd Floor
New York, NY 10158-0006
800-366-6264
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 M Street, NW
Washington, DC 20036-5891
Neuberger&Berman Management Inc., Neuberger&Berman Ultra Short Bond Trust,
Neuberger&Berman Limited Maturity Bond Trust, and Neuberger&Berman Government
Income Trust are service marks of Neuberger&Berman Management Inc.
- -C- 1995 Neuberger&Berman Management Inc.
45
<PAGE>
OTHER INFORMATION
OFFICERS AND TRUSTEES
Stanley Egener
CHAIRMAN OF THE BOARD AND TRUSTEE
Theresa A. Havell
PRESIDENT AND TRUSTEE
John Cannon
TRUSTEE
Charles DeCarlo
TRUSTEE
Barry Hirsch
TRUSTEE
Robert A. Kavesh
TRUSTEE
Harold R. Logan
TRUSTEE
William E. Rulon
TRUSTEE
Candace L. Straight
TRUSTEE
Daniel J. Sullivan
VICE PRESIDENT
Michael J. Weiner
VICE PRESIDENT
Richard Russell
TREASURER
Claudia A. Brandon
SECRETARY
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
C. Carl Randolph
ASSISTANT SECRETARY
PORTFOLIO MANAGEMENT
Theresa A. Havell
PRESIDENT AND TRUSTEE OF NEUBERGER&BERMAN
INCOME TRUST
PRESIDENT AND TRUSTEE OF INCOME
MANAGERS TRUST
MANAGER OF FIXED INCOME GROUP OF
NEUBERGER&BERMAN, L.P.
Josephine Mahaney
PORTFOLIO MANAGER OF NEUBERGER&BERMAN
ULTRA SHORT BOND PORTFOLIO
Margaret Didi Weinblatt
PORTFOLIO MANAGER OF NEUBERGER&BERMAN
LIMITED MATURITY BOND PORTFOLIO
Stephen A. White
PORTFOLIO MANAGER OF NEUBERGER&BERMAN
GOVERNMENT INCOME PORTFOLIO
46
<PAGE>
NEUBERGER&BERMAN MANAGEMENT INC.
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0006
SHAREHOLDER SERVICES
800.877.9700
212.476.8848 FAX
INSTITUTIONAL SERVICES
800.366.6264
Statistics and projections in this report are derived from sources
deemed to be reliable but cannot be regarded as a representation of
future results of the Funds. This report is prepared for the general
information of shareholders and is not an offer of shares of the
Funds. Shares are sold only through the currently effective prospectus,
which must precede or accompany this report.
[LOGO] PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS NBITS0020495
<PAGE>
